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Such further or other relief as the Court deems appropriate. The Tribunal's decision was made in excess of its jurisdiction in that the decision is unreasonable. However at the hearing on 13 March 2005, the Minister conceded that, if the applicant was able to make out the grounds upon which he sought to rely in the application for review before this Court, jurisdictional error would be established. Accordingly it is common ground that the application before the Court is not precluded by the provisions of s 474 of the Act. The Tribunal found against the applicant on this point. The applicant is a national of the United States of America. On 15 April 2002 the applicant was married to Ms Gloria Thompson, an Australian citizen. The following day, 16 April 2002, the applicant applied for a Partner (Temporary) Visa (Class UK) Subclass 820 and a Partner (Residence) Visa (Class BS) Subclass 801 at the Brisbane Regional Office of the Department of Immigration and Multicultural and Indigenous Affairs ('the Department'), with Ms Thompson as his Australian sponsor. The Partner (Temporary) Visa (Class UK) (Subclass 820) was granted on or about 30 May 2002, pending a decision on the Partner (Residence) Visa (Class BS) (Subclass 801). 6 On 17 December 2003 the Department received a letter from Ms Thompson advising that her relationship with the applicant had ended, and that she was withdrawing her sponsorship of the applicant. 7 On 19 December 2003, it appears an incident occurred where, during an argument with the applicant, Ms Thompson threw wine at the applicant, and brought a wine glass into contact with his body. It appears that the wine glass broke, and both the applicant and Ms Thompson sustained cuts. In a Statutory Declaration taken 6 May 2004, the applicant stated that he attended a police station on 22 December 2003 and reported the incident. 8 It seems that during January 2004 the applicant and Ms Thompson sought marriage counselling. However on 6 February 2004 Ms Thompson again wrote to the Department advising that the marriage was over, and that she was again withdrawing her sponsorship of the applicant under the Migration Regulations . 9 On 13 April 2004 Acting Magistrate Beutel heard an application by the applicant, to which Ms Thompson (referred to as Gloria Russell in that application) was the respondent, for a domestic violence order pursuant to the Domestic Violence Family Protection Act 1989 (Qld). The learned Magistrate delivered his decision on 14 April 2004. 10 The incident involving the wine glass to which I have referred above was a basis of the application. 13 'Domestic violence' as defined in s 11 (1) Domestic Violence Family Protection Act 1989 (Qld) includes wilful injury, wilful damage to another person's property, intimidation or harassment of the other person, indecent behaviour to the person without consent, and a threat to commit any of those acts. 14 I note that the making of a domestic violence order under Domestic Violence Family Protection Act 1989 (Qld) does not itself mean that an offence has been committed, by anyone. That legislation plainly distinguishes between domestic violence orders, and offences that involve domestic violence. This distinction may be seen, for example, in ss 4(6), 16(3), 30(1), 62 Domestic Violence Family Protection Act 1989 (Qld). A person against whom a domestic violence order is made is a respondent, and it is open to the police to charge a respondent who is the subject of a domestic violence order with an offence if appropriate (s 18). Further, in order for a court to be satisfied of a matter under the Domestic Violence Family Protection Act 1989 (Qld), the Court need only be satisfied of the matter on the balance of probabilities (s 9). 15 Notwithstanding the withdrawal of Ms Thompson's sponsorship, the applicant continued his application for a permanent resident visa. 17 The applicant before me has applied for a visa in sub-class 801 in Sch 2. The regime permits an applicant, who is the holder of a temporary visa, to continue to apply for a permanent resident visa on the basis of the relationship with a sponsoring spouse, notwithstanding the ending of the relationship. So, for example, if a sponsoring spouse dies before an applicant is granted a permanent resident visa, the applicant may nonetheless satisfy the criteria under subcl 801.22(5). 18 In this case, the criteria which must be satisfied are those contained in subclause 801.22(6). Accordingly, in order for the applicant to satisfy the criteria in subcl 801.22(6), he needs to establish that he has suffered domestic violence committed by Ms Thompson. 20 Regulation 1.23 defines when, for the purposes of the Regulations, a person is taken to have suffered domestic violence, and when another person, referred to as 'the alleged perpetrator' is taken to have committed domestic violence. The delegated officer considered the possible relevance of other subclauses, but found that they also did not assist the applicant. Accordingly, the applicant's visa application was refused. This decision was communicated to the applicant by the Department in a letter dated 21 September 2004. 23 In considering subcl 1.23 (1)(e) Migration Regulations , the Tribunal noted that the hearing before Acting Magistrate Beutel whereby the applicant had sought a domestic violence order had not resulted in a conviction against Ms Thompson. Accordingly, that aspect of the subclause was not satisfied. 24 The other issue for consideration was whether the determination of the learned Magistrate was a 'finding of guilt against the alleged perpetrator in respect of an offence of violence against the alleged victim' as required by subcl 1.23(1)(e). The Tribunal accepted that the learned Magistrate had found there was one act of domestic violence committed by Ms Thompson against the applicant, but was not satisfied that the findings made by Acting Magistrate Beutel in relation to the incident met the conditions stipulated in reg 1.23(1)(e) (Migration Review Tribunal Decision Record, 5 August 2005, par 42). The Tribunal considers that the aspect of Regulation 1.23(1)(e), for which the visa applicant seeks to rely, i.e. Recording a finding of guilt, is a reference to criminal proceedings where a judge or magistrate has found that the elements of the offence are proved (to a criminal standard of proof, 'beyond reasonable doubt', but has declined to record a conviction. The Tribunal is not satisfied that Regulation 1.23(1)(e) is applicable in civil proceedings for an application for a domestic violence order, where the Magistrate makes certain findings, but declines to grant the order. However, the applicant has not sought to rely on reg 1.23(1)(g). The reason for this is that the applicant has submitted that 'finding of guilt' means a finding of the occurrence of acts or omissions which constitute an offence of violence, apparently irrespective of the formality of conviction or a guilty verdict. Counsel submitted that in such circumstances reg 1.23(1)(e) Migration Regulations would be attracted, because there had been a finding of guilt 'in the relevant sense' (TS p 21 par 5). 29 In my view, that cannot be. To say that a person could be acquitted of an offence under the criminal law, but nonetheless 'found guilty' in the context of an offence of violence for the purposes of the Migration Regulations , stretches the limits of the interpretation of the words 'finding of guilt', and indeed exposes a fundamental flaw in the applicant's argument. 30 An important case in the context of interpreting both 'guilt' and 'finding of guilt' is Eastman v Director of Public Prosecutions [2003] HCA 28 ; (2003) 214 CLR 318, which involved an interpretation of s 475 Crimes Act 1900 (ACT). In the context of criminal offences, 'guilt' is referable to a curial determination. It is the conviction recording the jury's verdict that establishes the "guilt" of the prisoner. Like Bishop Berkeley who "maintained that material objects only exist through being perceived", the lawyer maintains that "guilt" exists in a criminal law context only when it is perceived as the (326) of a conviction. To assert otherwise is to deny the presumption of innocence, a presumption that operates until the entry of a conviction rebuts it. In my view this was accepted by all judges in Eastman v Director of Public Prosecutions . 32 Regulation 1.23(1)(e) distinguishes between the conviction of an alleged perpetrator of an offence of violence, and recording a finding of guilt against the alleged perpetrator of an offence of violence. In my view the explanation for this distinction is simple. In the Penalties and Sentences Act 1992 (Qld) for example, s 12 gives courts a discretion to record or not record a conviction as provided by that Act. In considering whether or not to record a conviction, a court is required to have regard to all the circumstances of the case, including the nature of the offence, the offender's character and age, and the impact that recording the conviction will have on the offender's economic or social wellbeing or chances of finding employment (s 12(2)). This legislation is reproduced in similar terms in other jurisdictions: see for example s 8 Sentencing Act 1991 (Vic), s 10 Crimes (Sentencing Procedure) Act 1999 (NSW), s 16 Criminal Law (Sentencing) Act 1988 (SA), s 39 Sentencing Act 1995 (WA), s 9 Sentencing Act 1997 (Tas), s 17 Crimes (Sentencing) Act 2005 (ACT), s 8 Sentencing Act (NT) . Regulation 1.23(1)(e) recognises that person may be found guilty of an offence without a conviction being recorded against their name. The prerequisite to both situations however is that a person has been charged with a criminal offence. 33 Accordingly, 'recording a finding of guilt' is an action open to a court in dealing with an accused charged with a criminal offence. In my view the learned Magistrate, in making a finding of fact in the context of an application for a domestic violence order requiring proof on the balance of probabilities, and which did not in any way involve criminal charges in respect of an offence of violence or otherwise, was not recording a finding of guilt in respect of an offence of violence committed by Ms Thompson or anyone else. The applicant has not established that he has suffered from domestic violence as defined by s 1.23 (1)(e), and therefore has not satisfied the criteria in subcl 801.22 (6) Migration Regulations . As a result, the application fails. I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier J. | refusal of visa where relationship between applicant and sponsoring spouse had ceased whether applicant had suffered domestic violence by sponsoring spouse whether finding of fact by magistrate in unrelated proceedings that act of domestic violence had occurred was 'finding of guilt' for purposes of migration regulations migration |
On that day the Federal Magistrate made an order dismissing the applicant's application for review of a decision of the Refugee Review Tribunal which was signed on 21 December 2005 and handed down on 17 January 2006. In that decision, the Refugee Review Tribunal ('RRT') affirmed a decision of the delegate of the Minister not to grant the applicants protection visas. 2 The applicants are a family consisting of husband, wife and children who are citizens of the Republic of Korea. The first applicant ('the applicant') arrived in Australia on 25 October 2002 and the other applicants arrived in Australia on 20 January 2003. On 20 June 2003 the applicant husband lodged an application for a Protection (Class XA) visa with the Department of Immigration and Multicultural Affairs under the Migration Act 1958 (Cth) ('the Act'). Only the applicant has made claims in the protection visa application and the other applicants rely on membership of his family unit. 3 The applicant claims he has a well-founded fear of persecution for reason of his being a union leader and by reason of his ties in the Workers Union in South Korea. 4 On 24 June 2003 a delegate of the Minister for Immigration and Multicultural Affairs refused to grant a Protection visa. On 11 July 2005 the applicants applied to the RRT for a review of that decision. The applicant and his son gave evidence before the RRT on 26 October 2005. On 7 November 2005 the RRT wrote to the applicants, pursuant to s 424A of the Act, inviting them to comment on information the RRT considered would be the reason or part of the reason for affirming the decision of the delegate. On 28 November 2005 the applicants responded to that invitation. The RRT affirmed the delegate's decision on 21 December 2005 in a decision handed down on 17 January 2006. 5 The RRT considered the applicant's claims of persecution for reasons of political opinion and membership of a particular social group, namely 'union supporters' or 'union members'. The RRT rejected the applicant's claims as it was satisfied the applicant was not a witness of truth and gave four reasons for this finding. First, the applicant had remained in Australia illegally for nearly three years between December 1999 and September 2002. When he returned to Korea in 2002 he obtained a new passport which contained a variation in the spelling of his name. He explained the change of spelling because a friend had filled out his child's birth certificate in Australia and had misspelt his name. That explanation was rejected by the RRT because the RRT observed that the applicant's passport was issued prior to the birth certificate. Secondly, the applicant told the RRT he owned a business in 1991, had made a lot of money and went bankrupt due to the economic crisis, which was inconsistent with the applicant's response to the RRT's letter sent pursuant to s424A of the Act which asserted that the applicant suffered discrimination in employment due to his involvement with the worker's union movement. Thirdly, the RRT did not consider it plausible that the applicant was detained and tortured by police and accused of co-operating in espionage with South Korea and while able to exit and enter Korea as often as the applicant had. Finally, the RRT considered that the applicant's return to South Korea twice indicated a lack of subjective fear. 6 Not only did the RRT find that the applicant was not a witness of truth, it was also satisfied that the applicant had 'created his claims in order to obtain the visa sought'. 7 Whilst the RRT was satisfied that the applicant was a member of a union until 1991, it was not satisfied that the applicant was a union activist after that date or that, because he was a unionist, he was unable to find employment in South Korea or that he was investigated for union activities. 8 The RRT rejected the applicant's complaint that he was unable to find employment as a result of which he came to Australia. It rejected his claim that he left South Korea fearing persecution and found that he came to Australia for business and/or employment purposes. 9 The RRT considered the applicant's situation if he were to return to South Korea in the foreseeable future. It found that there was no evidence to suggest that persons who were union members until 1991 would be treated unfairly in South Korea. 10 The RRT also considered the claims that the applicant's children have adapted to Australia and there was 'unfairness' in South Korea. However, the RRT found it did not have discretion in relation to humanitarian issues. 11 On the basis of the evidence, the RRT was not satisfied that applicant's claims gave rise to a real chance of persecution now or in the reasonably foreseeable future. 12 On 23 February 2006 the applicant sought judicial review of the RRT's decision in the Federal Magistrates Court. The applicant asserted that there was a denial of justice; that the RRT did not fully review the supporting documents; and that the applicant's arguments were true and genuine but not accepted. 13 On 14 August 2006 the Federal Magistrate dismissed the applicant's application. His Honour found that the RRT had written to the applicant under provisions of s 424A of the Act and had set out why it had concerns about the credibility of the applicant's case. Furthermore, the RRT adopted procedures that were fair and did give reasons why it rejected the applicant's claims. 14 His Honour pointed out that the third claim made before him only went to the merits of the RRT decision and amounted to a challenge to factual findings. The Federal Magistrate did not find any evidence of jurisdictional error. 15 The applicant filed his application for an extension of time on 18 October 2006. The application was accompanied by an affidavit and a draft notice of appeal. In his affidavit the applicant deposed that he did not receive the judgment and 'picked it up myself at Federal Court Registry'. He said that he was told that the Court had sent it to his previous address but he had notified the Court (meaning presumably the Federal Magistrates Court) of the change of address before the hearing. He deposed that the RRT had denied him procedural fairness by ignoring parts of his claims and failing to carefully assess the documents. RRT ignored parts of my claims in the statement attached to my application. RRT did not carefully assessed (sic) my documents and made an (sic) prejudicial decision on my application. 18 Order 52 rule 15 of the Federal Court Rules provides that a notice of appeal should be filed and served within 21 days after the date when the judgment appealed from was pronounced. In this case, the notice of appeal should have been filed on or before 4 September 2006. This application was more than six weeks after the time for the filing of the notice of appeal had expired. 19 Order 52 rule 15(2) allows the Court 'for special reasons' 'at any time' to grant leave to file and serve a notice of appeal. 20 To establish that special reasons exist, the applicant must show that this case can be distinguished from the usual course: Jess v Scott (1986) 12 FCR 187. Another relevant factor is the explanation for the delay. Further, in considering the second and third factors mentioned above, it may be necessary to have regard to the merits of the appeal. If the applicant has little or no prospect of success, then that would be a reason for refusing an extension. If, on the other hand, the appeal raises a matter of some importance or appears to have some prospect of success, that would be a reason absent any prejudice to the respondent for extending time. 22 The judgment in this matter was given ex tempore. The applicant was present when judgment was delivered. He was aware on the date on which the order was made that his application for review had been dismissed. No evidence has been adduced as to when he changed his address or when the judgment was collected from the Federal Magistrates Court. Whilst the length of the delay is not great, the explanation for the delay is not satisfactory. 23 The Minister can point to no prejudice if an extension of time were granted. 24 If time were not extended, the applicant would lose the opportunity of this Court considering the reasons for judgment of the Federal Magistrate. However, that loss should be put in context. The applicant has already had the advantage of an administrative review by the RRT. He has also had the advantage of a judicial review of that administrative review in the Federal Magistrates Court. In those circumstances, he has had a merits review in the RRT and a review of the RRT's procedures in the Federal Magistrates Court. 25 It is relevant, for the reasons given, to have regard to the prospects of the applicant succeeding on the appeal. 26 In my opinion, the proposed notice of appeal, which raises three limbs, has little or no prospects of success. The RRT complied with its obligation in relation to s 424A(1). It provided a hearing which was fair. It is right, as the applicants claim, that the RRT rejected all of the applicants' claims but it gave extensive reasons for doing so. No particulars are given of the jurisdictional error identified in the first or second limb of the ground. The third limb seeks a merits review. 27 The ground does not raise any criticism of the Federal Magistrate's reasons. As this is an appeal from a Federal Magistrate, error must be shown in his reasons. He has carried out a careful review of the proceedings before the RRT and has articulated clearly the reasons why the application for judicial review should be dismissed. 28 I am not satisfied that the proposed ground of appeal has any real prospects of success if an extension of time were granted and the appeal heard. 29 On this application, the applicant contended that he had been treated unfairly. He said that it was unfair to base this decision on an American decision which was 13 years old. He was there referring to background information by way of country information which was relied upon by the Tribunal. Amongst a number of pieces of information relied upon by the Tribunal is a cable dated 22 July 1994 relating to trade union leaders in South Korea. It was a piece of country information relied upon by the RRT for its determination that the applicant would not be treated unfairly if he were to return to South Korea. 30 The other matter which was raised by the applicant related to his family. He said that he was presently suffering hardship because a condition attaching to his visa meant that he could not work. He also said that if he and his family were to return to South Korea that would be unfair to him and his children. He pointed out that three of his children had been born in Australia. 31 The matters to which the applicant referred are, of course, extremely important to him and his family. They are, unfortunately from the applicant's point of view, not matters to which the Court can have regard in determining the matter before it. 32 I would refuse the application for an extension of time within which to appeal. The title of the first respondent be amended to be the Minister for Immigration and Citizenship. 2. The application for an extension of time within which to appeal is refused. 3. The applicant must pay the first respondent's costs of the application. | application for extension of time to file notice of appeal consideration of 'special reasons' no special reason application dismissed. migration |
That group was involved in the production, distribution and sale of tea tree oil and its products. Initially Mr Gulson's company, The Triad Health Products Group of Companies Pty Ltd, held 70.4% of the shares in BGR, Mr Bax's company, The Food Improvers Pty Ltd held 22.2% and Mr Reece's company, Karcor Holdings Pty Ltd, held 7.4%. Sometime shortly after the beginning of July 1999, Mr Gulson caused Triad to transfer 7.4% of the shares in BGR to Cordato Partners (Services) Pty Limited, a company controlled by his law school friend and a solicitor, Mr Tony Cordato. 2 Mr Bax, Mr Gulson and Mr Reece carried out the functions of the senior management of the businesses, which were known as Main Camp, after the takeover. They did so in accordance with a business plan which Mr Bax prepared. Mr Cordato provided the business with legal services, but did not play a role as a director or executive. In July 1999 each of Triad, Food Improvers and Karcor entered into consultancy agreements, which Mr Cordato had drafted, with a Main Camp company. In July 2000 replacement consultancy agreements were made with BGR. All the consultancy agreements provided for the payment to each consultant company of $20,833.33 per month for, inter alia, the provision of services by its respective principal. 3 In March 2001 the consultancy fees ceased to be paid. There is a substantial issue as to the terms on which that occurred. Mr Bax and Mr Reece say that invoicing of the fees was suspended but that in the future invoices could be rendered and payments would be made for services provided if and when the Main Camp group could afford to pay. Mr Gulson and Mr Cordato say that there was no arrangement deferring rendering, or for the payment of, consultancy fees if they had not been invoiced contemporaneously with the provision of the services. Later, after a dispute in 2002, Mr Reece relinquished his shareholding. The holdings of the remaining three shareholders from then on were Triad 68%, Food Improvers 24% and Cordato 8% of the shares in BGR. 4 After Mr Reece's departure, Jim Gobert, an expert in the use of and applications of tea tree oil products, took up the role of marketing manager of the group as an employee, but not as a shareholder or partner. 5 Eventually in about mid 2003, the payment of consultancy fees recommenced, but at much reduced rates, though there were increases later. Mr Bax's and Mr Gulson's companies received consultancy fees thereafter. 6 In early 2005 Mr Bax, Mr Gulson and Mr Gobert were planning an overseas trip to market tea tree oil. Mr Gobert was also to have discussions with European regulators about standards that were then being contemplated that would affect the sale of tea tree products within the European Commission. They arrived in Europe in the latter part of May 2005. Mr Gulson began to exhibit quite erratic behaviour as a result of a psychiatric condition which he had and which worsened during this time. 7 On 29 May 2005, in circumstances which I will describe in more detail below, Mr Gulson, without any prior discussion with Mr Bax, summarily dismissed Mr Gobert in London for no good reason on the eve of important meetings with an Israeli customer. Mr Bax then said that he could no longer work with Mr Gulson and refused to do so. Mr Gulson attended the meetings with the Israeli customer that had been scheduled the next day. All three men made their way home, Messrs Bax and Gobert travelling together and Mr Gulson separately. Mr Gulson returned and immediately went to the Main Camp plantation in Northern New South Wales. His erratic behaviour became more and more pronounced and caused alarm to the plantation manager, Mr Williams, and staff. 8 On 8 June 2005 Mr Gulson met in Sydney with Mr Cordato and Mr Bax. Mr Gulson was adamant that Mr Gobert would not be reinstated, although Mr Bax had already re-employed him. Mr Bax said that he would not work with Mr Gulson. Mr Cordato was at that time trying to hold what was obviously a highly fractious position together as best he could so that the parties could co-operate to effect the sale of the Main Camp undertaking and an orderly dissolution of the business relationship. However, on 10 June 2005 Mr Gulson caused an extraordinary general meeting of BGR to be called for 1 July 2005. The business of that meeting was to remove Mr Bax as a director, ratify Mr Gulson's summary dismissal of Mr Gobert, and his termination of Food Improvers' consultancy agreement. Because Mr Gulson's shareholding was sufficient, the July meeting proceeded to do so with Mr Cordato's support. In the meantime, Mr Gulson had been admitted to the Northside Clinic psychiatric hospital for treatment for his condition which had by then become quite unstable. Thereafter, Mr Gulson and Mr Cordato substantively exercised control over the direction of BGR to the exclusion of Mr Bax. In mid July 2005 Food Improvers and Mr Bax commenced these proceedings. 9 In mid September the 2005 the parties met and agreed to appoint an agent for sale of the Main Camp business. After the meeting Mr Bax prepared two suggested methods of distribution one of which involved a recognition that Food Improvers was owed $500,000 for consultancy fees and that after payment of this amount, the balance of the net proceeds of sale of the Main Camp plantation and business would be distributed to the shareholders by BGR as a fully franked dividend. After that distribution the shareholders would repay their loan accounts, which were substantial, and BGR would then make a further fully franked dividend. This became known as 'option B'. Correspondence ensued in which Mr Cordato, acting as the solicitor for all of the defendants, confirmed that the distribution would be made in accordance with option B. 10 But once the sale had been completed, without notice to Mr Bax, the distribution was ultimately made simply on the basis of shareholding entitlements without any payment recognizing Mr Bax's claim for consultancy fees. Earlier, when the Main Camp sale was about to be settled, Mr Cordato's solicitors' firm, Cordato Partners, issued 16 accounts totalling about $135,000 in respect of matters in which his firm had acted since 1999. Those accounts were paid very promptly from the sale proceeds. 11 The proceedings have been conducted with considerable feeling on all sides. Mr Cordato was more of a silent investor. In this quasi partnership, Mr Bax was the managing director or chief executive, Mr Gulson was the corporate counsel and company secretary and Mr Reece, originally, was to be involved in running the Main Camp farm and marketing its products. Mr Gobert succeeded to Mr Reece's functions but not his equity. • Mr Gulson used his controlling shareholding in BGR and the ultimate alliance of Mr Cordato, to engage in oppressive conduct within the meaning of s 232 of the Corporations Act 2001 (Cth). That conduct began with the summary dismissal in London of Mr Gobert in the middle of the overseas trip and then Mr Gulson's use of his majority shareholding to exclude Mr Bax from any role in BGR contrary to the quasi-partnership. Mr Gulson used his voting power to impose his will at the meeting of 1 July 2005, with Mr Cordato's support. • Mr Gulson and Mr Cordato used and are using the resources of BGR to pay Cordato Partners for all of their companies' litigation costs against Mr Bax. They have excluded him from important decisions as to the terms of sale and the making of the distribution following the sale of Main Camp business, having previously represented to him that option B would be the method of distribution of the sale. • Mr Gulson continues to cause BGR to pay Triad a consultancy fee of $20,833 each month. • Mr Cordato and his firm ought not to act as solicitor for all of the defendants because it is oppressive or he has a conflict of interest and lack of independence. • The parties actually entered into a contract to cause the distribution of the proceeds of Main Camp sale to be made in accordance with the methodology in option B. He had been a fellow of CPA Australia (an association of chartered accountants) since the early 1980s. Prior that he held senior managerial roles, including chief financial officer of a publicly listed trust. That involved the growing of tea trees, distillation of tea tree oil, selling the tea tree oil and the supply of tea tree mulch. Some other agricultural activities were also conducted on the property including the running of cattle, growing of soy beans, barley and timber. • Main Camp Corporation Pty Limited purchased tea-tree oil from Main Camp Holdings. It sold Main Camp branded tea tree oil to domestic and international customers. • SNP Natural Products Pty Limited purchased non-branded tea tree oil from Main Camp Holdings and third parties together with Australian native herbs and spices. It on sold its own branded tea tree oil products and Australian native herbs and spices. SNP also conducted all head office operations with the BGR Group and its sales and marketing. • Advanced Technology Research Pty Limited, was a non operating entity which held claims against the failed Australian Rural Group Limited (in liq). • Business and Research Management Limited, known as BARM, was an also non operating entity which an outstanding objection against the Australian Taxation Office for a tax refund of about $9.2 million. Mr Bax presented a paper entitled 'Strategic and Short Term Business Plan for the Control and Operation of the Main Star One Group' in anticipation of BGR's imminent completion of the take over. The plan referred to the Main Star One Group's complex corporate structure and unique processes of operations. One objective was to seek the co-operation of Mr Glen Stotter, who was a principal in the management of the Main Star One Group. Mr Bax emphasized that the staff of the Main Star One Group had quickly to form the view that BGR was professional in its manner and was acting in the staff's and the investors' best interests. There had been extensive litigation concerning the Main Star One Group in the 1990s (see the judgments of Hill J in Natural Extracts Pty Limited v Stotter (1997) 24 ACSR 110; [1997] FCA 471 and Hely J in Natural Extracts Pty Limited (now called Benchmark Essential Oils Pty Limited (in liq)) v Stotter [1998] FCA 1636). 16 The plan recorded that the appointment of an appropriate managing director was critical in order to provide a clear and unequivocal statement to staff and external parties. The managing director had to liaise directly with Mr Stotter and be seen by investors in the tax schemes for tea tree oil products as a suitable person to take over his role. Mr Bax proposed that he be the managing director of the Group. He, Mr Gulson and Mr Reece were each to hold the position of director of BGR and each would have specific areas of responsibility. The plan proposed that all executive directors would report to the managing director, but they would all have equal say on a business direction and planning issues. The latter class of decisions would be made at board meetings. A number of strategies for the running of the business was proposed and a short term business plan was outlined. 17 The plan proposed that each of the three would have particular responsibilities which reflected the skills that he brought separately to the business. Mr Bax was have responsibility for all financial and administrative functions, liaising with Mr Stotter, licensed dealers and investors and dealing with future acquisition proposals. Mr Gulson was to be general counsel, having responsibility for all commercial legal matters pertaining to the operations of the group, settlement of outstanding litigation, company secretarial functions, government relations and managing special assets. He was also designated to have responsibility for insurance (although in the event he did not, but nothing turns on this). Mr Reece was to have responsibility for agricultural, operational and technical matters, relations with consultants acting on the various projects of the group, commercialization of research investments known as 'Budplan' products, supervision of the Main Camp plantation and the sales of tea tree oil and related products. 18 Mr Bax spoke to his plan after the others had read it in Mr Reece's office. He said that he had met with all the senior executives and directors of the Main Star One Group and they were concerned about its future. He noted his previous experiences as chief executive officer and in senior management of other businesses and proposed that he be appointed as managing director of BGR and all of its subsidiaries. He then explained Mr Gulson's role based on his legal background as a solicitor, should be as company secretary. Mr Bax envisaged that Mr Gulson would be able to use his connections with various government departments which he had developed when he was with New South Wales Farmers and he could concentrate on running of the BARM litigation with the Australian Tax Office and potential investor groups. That litigation involved a claim by BARM, a subsidiary of the group, for a refund of many millions of dollars. It is yet to be heard by a judge of the Court. 19 Mr Bax proposed that Mr Reece's role be to develop the markets for the sale of the products, look after the Main Camp farm, and pursue the commercialization of the research from the Budplan projects. 20 Both Mr Gulson and Mr Reece agreed with Mr Bax's proposals. They decided to hold regular weekly management meetings. They all agreed to hold regular board meetings because there were two non listed public companies in the group as well as other finance companies. They agreed that they would appoint a chairman at each meeting to handle the role and that there was no need for a permanent position of chairman to be filled. Mr Gulson observed that was a good idea that a chairman could be appointed at meetings from whomever was present because of the travel commitments each of them would have. I reject their evidence. Each was an unsatisfactory witness on this matter. Although there was no formal appointment of Mr Bax as managing director by any board resolution, once BGR assumed control of the group on 2 July 1999, Mr Bax began to act as managing director with the knowledge of Mr Cordato, Mr Gulson and Mr Reece. The group required a managing director or chief executive to run it. He continued in that role until June 2005. Throughout this time, he was recognised by the staff and external parties who dealt with the BGR group as managing director or chief executive. His name appeared in correspondence with third parties, including the group's financiers and customers, in the capacity of managing director. His business cards were printed with his capacity so described. 22 Mr Reece, who had no reason to be favourable to any party in the litigation, confirmed that Mr Bax was recognised as and acted as managing director throughout Mr Reece's time with BGR. Mr Williams also confirmed this was so up to June 2005. 23 In evidence, Mr Gulson agreed that when the three partners took over the Main Camp business in July 1999 the 45 to 50 staff needed to know who was the 'boss', managing director or chief executive officer, and that all three directors had agreed at that time Mr Bax was to be managing director. In early June 2005 Mr Gulson began calling himself 'interim managing director' in correspondence. On 7 June 2005 Mr Gulson drafted a letter for Mr Cordato to review before Mr Gulson sent it to Mr Bax's solicitors. Mr Gulson referred to having letters on file from 'the former managing director'. I find that this description not only reflected how Mr Gulson saw Mr Bax but also the reality that Mr Bax was the managing director of BGR and its group. 24 Mr Cordato gave evidence about a meeting with Mr Bax and Mr Gulson on 8 June 2005 when they discussed Mr Williams' fax of that day addressed to Mr Bax as CEO. There, Mr Williams had complained of Mr Gulson's irrational behaviour the previous day and its impact on the staff and business of Main Camp. Mr Cordato said that whole fax concerned him. He told both Mr Bax and Mr Gulson that this could not continue and '... somebody's got to sort him [Mr Williams] out and calm him down'. Mr Cordato said that Mr Bax had responsibility for sorting out the way in which Mr Gulson was behaving towards Mr Williams because Mr Bax brought Mr Williams' fax into the meeting and '.... he was the CEO'. Mr Cordato sought to downplay Mr Bax's role by describing it as that of chief financial officer when he knew that was a false description. As his evidence showed, he had no basis for that description which he volunteered despite his knowledge that Mr Bax was regarded by the plantation manager, represented on business cards and to the staff as managing director or chief executive officer. Indeed Mr Cordato said Mr Bax had been acting as such for two or three years. I do not believe the limitation he put in that evidence. I find that Mr Cordato knew that Mr Bax was the managing director and chief executive officer from about the time BGR took over the Main Camp business. 26 The reason for Mr Cordato's expectation that Mr Bax should 'sort out' Mr Williams was that the former was the managing director in Mr Cordato's mind, and had always been so. And, as he said, he did nothing himself to 'sort out' Mr Gulson although he recognised that Mr Gulson then appeared agitated and to have periods of irrationality. I find that Mr Cordato was conscious Mr Gulson was behaving in the way which Mr Williams described and Mr Cordato endeavoured, at the meeting on 8 June 2005, to have Mr Bax's authority with the staff restored so that Mr Gulson's disruptive behaviour would not threaten their investment in the business. 27 In closing address the defendants conceded that the parties conducted their affairs in the way that had been contemplated in the meeting in Mr Reece's office in June 1999 and that a quasi partnership existed between Mr Bax, Mr Gulson and Mr Reece from that point forward. The defendants also then conceded that Mr Bax, as a matter of fact, acted as managing director or chief executive officer of the group, notwithstanding that there was no formal appointment to that office. Each of the three had his agreed role. The respective corporate vehicle of each was paid an equal consultancy fee equally through and each regarded his performance of a significant management role as important to his place in the overall business. 28 I am satisfied that Mr Bax acted as managing director of BGR and the group with the knowing consent of Mr Gulson and Mr Reece and the knowledge of Mr Cordato until the events of June 2005. Each of Mr Bax, Mr Gulson and Mr Reece performed in substance the roles assigned to them in Mr Bax's plan. 29 Having seen and heard each of them, I am confident that they each sought to co-operate with one another in the running of the business and, until the circumstances involving Mr Reece's ceasing to be a part of the partnership, treated each other as partners. Subsequently until 29 May 2005 Mr Bax and Mr Gulson treated each other as partners. And they made all significant decisions jointly and worked co-operatively in the operation of the business notwithstanding the disparity between the respective sizes of their companies' shareholdings in BGR, or the presence of Mr Cordato's company as another minor shareholder. That agreement provided that the consultant (Food Improvers) was entitled to a consultancy fee of $20,833.33 payable monthly in advance from 5 July 1999 unless otherwise agreed (cl 4.1). A similar consultancy agreement was entered into by Main Star One Holdings with Karcor and Mr Reece. I infer that a similar position applied to Triad and Mr Gulson even though the actual consultancy agreement was not in evidence. 31 New consultancy agreements replaced these from 1 July 2000. They were between BGR and each of the principals and their respective service companies. The BGR consultancy agreements contained a provision for the payment of consultancy fees which was relevantly identical to that in cl 4.1 in the earlier agreements. The consultancy fee payable under cl 4.1 was exclusive of GST (which commenced to be payable from 1 July 2000). The consultant was required to charge GST and show it separately on an invoice issued to BGR at the end of each month so that the amount payable would include GST (cl 10.11). There was an initial term of one year, but the agreements were to continue afterwards unless terminated by three months' notice in writing or in accordance with a right of BGR to terminate the consultancy immediately provided in cl 9. It also required a high level of working capital to operate the 4,500 hectare Main Camp plantation which had 55 million tea-trees planted and a staff of approximately 25. The market for tea-tree oil was at that time over supplied and the price for tea-tree oil decreased from $45 per kilo in 1999 to about $24 per kilo in 2003. 33 In about October 2000 four new tractors were required to be leased each which would cost approximately $440,000. Leasing finance initially, was not approved. The group's cash position tightened and in about December 2000 Mr Bax called a meeting with Mr Gulson and Mr Reece at his office in Phillip Street, Sydney in which Mr Bax told the others that his examination of the current and future levels of expenditure against projected incomes revealed cash flow problems. He told them of the need to fund the test cases, and the difficulties that running a table grape farm at Jabiru, in the Northern Territory, meant that business could not be operated at a profit because of obligations under a prospectus and the disputes with Australian Rural Group. Moreover, he pointed out the deteriorating market price of tea-tree oil and suggested that in the next few months BGR would need a cash injection of several hundred thousand dollars. He suggested that it would be up to the three of them to provide financial support because the business was basically managing projects which was not something a financier would find attractive. Then, critically, in March 2001 Mr Bax called Messrs Gulson and Reece to another meeting in their offices in Phillip Street Sydney. 35 Mr Bax said that the time had come and that the business needed another $500,000 according to his calculations. It was not turning around and the price of tea-tree oil was still going down. He said it was a shareholder issue. Mr Gulson asked what that meant. Mr Bax said that BGR could not sustain consultancy fees for the three of them. He suggested that they repay some fees and that should be done in effect in proportion to their shareholdings. Thus, he suggested that Mr Gulson should repay $315,000, Mr Reece $37,000 and Mr Bax $111,000 inclusive of GST. Mr Reece said that seemed fair to him. Mr Gulson noted it obliged him to contribute a lot. Mr Bax pointed out that he was the largest shareholder. 36 Mr Gulson observed that he would have to borrow funds and pay interest and that they should be able to charge interest back to the company. Mr Bax said in evidence that Mr Gulson also asserted that the consultancy fees should be brought up to date as soon as possible. Mr Gulson said because they all would be borrowing and have no income from consultancy fees, the company should pay interest. Mr Bax agreed with that. Mr Reece said that he could not borrow money and that he would want his consultancy fees brought up to date as soon as possible. Mr Bax said that there was no need for them to continue to put in more invoices for their consultancy fees because BGR had no money to pay it. Any invoices would involve their companies becoming liable to tax although they would not have been paid. So, he suggested they stop issuing invoices. The others agreed. 37 Mr Reece had no reason to give evidence favouring one party against the other in these proceedings. His account was that Mr Bax said that they would have to suspend the consultancy fees rather than cancelling them. Mr Bax pointed out that if the fees were cancelled Mr Reece, for one, would only obtain remuneration or reward by way of distribution on the basis of shareholding. That would mean that Mr Gulson would earn nine times more than Mr Reece although Mr Reece was working for the group full time. And Mr Reece said there was mention of the fact that when the group got on top of things they would be reimbursed. 38 Mr Gulson contradicted Mr Bax's and Mr Reece's account of this meeting. He said that Mr Bax had told them that consultancy fees would cease to be paid from then and that they had to lend BGR $500,000 in proportion to their shareholdings. Mr Gulson denied that Mr Bax referred to returning consultancy fees. 39 In the event, a number of steps was taken in March 2001 and following by BGR's directors and members to offer the group financial support. First, the BGR creditors ledger shows that each of the three consultants paid back consultancy fees. This was done by credit notes which were dated 1 March 2001 and the payments to BGR on 23 March 2001 of $183,333.30 by Triad, $111,000.00 by Food Improvers and $37,000 by Karcor as recorded in BGR's creditors ledger. No corresponding entries occurred for Cordato Partners Services. Secondly, Mr Gulson approached Mr Cordato and arranged for him to contribute $37,000. BGR's general ledger recorded loans being made on 23 March 2001 by Triad of $116,666.70 and on 26 March 2001 by Cordato Partners Services of $37,000. 40 Thus in late March 2001 Triad paid a total of $300,000 to BGR, Food Improvers paid a total of $111,000 and Karcor and Cordato Partners Services had paid $37,000. These payments in late March 2001 provided a cash injection of $485,000.00 Thus Triad contributed 61.9% of that sum, Food Improvers, 22.9% while Karcor and Cordato Partners Services each contributed 7.6%. 41 Next, on 7 May 2001, BGR's general ledger records that Triad made a further loan of $157,500 (70.89%) and Food Improvers lent $55,500 (Ex 2; 4/120.1.3) of a total of $222,250. 42 Last, on 8 June 2001, BGR's general ledger shows that Triad lent $40,000 (46.5%) Food Improvers lent $20,000, (23.3%) Karcor lent $8,000 (9.3%) and on 13 June 2001 Cordato Partners Services lent $18,000 (20.9%) totalling a further $86,000. 43 Of the total of the loans made in May and June 2001 ($308,250), Triad contributed 64.1%, Food Improvers 24.5%, Karcor 5.6% and Cordato Partners Services 5.8%. I am not satisfied that anyone remembered the precise conversations or reasons why the amounts paid in the period between March and June 2001 were paid in the proportions or way in which they are recorded in BGR's books but nothing turns on this. Thus, in the three months to June 2001, the shareholders had paid $793,250 to BGR. Triad's share of the total payments by each shareholder represented 62.7% in respect of its 63% of the shares. Food Improvers had paid 23.5% compared to its shareholding of 22.2% and Karcor and Cordato Partners Services had paid 6.8% and 6.9% respectively as against their 7.4% shareholdings. Of that, $331,333.30 was recorded in BGR's creditor's ledger as a repayment of consulting fees. Moreover, the three executives had ceased to render, through their companies, any invoices for consultancy fees, representing an ongoing notional contribution of $20,833.33 each per month on top of the amounts of fees repaid. 44 I infer that each of the shareholders made total payments in the three months to June 2001 in approximate proportion to their shareholdings in order to provide needed cash to BGR. So, Mr Bax said in cross-examination, it was tax effective for the three consultants to return as much as they could by crediting consultancy fees previously earned. This meant that they would not have to pay company tax on the fees returned. On the other hand, it is improbable that Mr Bax, Mr Gulson and Mr Reece were repaying those fees, once for all rather than lending notionally the equivalent sum. The basis asserted by Mr Gulson would have meant that they could never reverse the repayment were BGR's fortunes to recover. That would have resulted in each of the executives making a gift to BGR not only of the work which they had done up to then but also of what they had been paid for it. I am satisfied that Mr Bax, Mr Gulson and Mr Reece intended and understood that the consultancy fees which were repaid in March 2001 were always intended to be returned to the consultants if the BGR group could afford to do so in future. 45 Subsequently, on 22 September 2005, Mr Bax, Mr Cordato and Mr Gulson met with BGR's taxation accountant, Joe Lombardo of KPMG, Accountants at KPMG's offices to discuss possible distributions of the proceeds of sale of Main Camp. I will return to this meeting below, but Mr Lombardo gave evidence that early in the meeting the following exchange occurred. There are consultancy fees owed to each of us'. The admission by Mr Gulson that substantial consultancy fees were owing is consistent with Mr Bax's and Mr Reece's evidence as to what occurred in March 2001 when the payment of the fees was discussed. Option A recorded that over $1,000,000 before interest was owed to each of Triad and Food Improvers as consultancy fees. And Mr Lombardo noted that when the discussion turned to option B, which recorded $500,000 as consultancy fees and interest payable to Food Improvers alone, he said that it seemed as if that sum had been agreed upon. Mr Gulson was nodding in apparent agreement when the $500,000 sum was raised by Mr Bax as due and he, Mr Lombardo, proceeded on that basis. 47 I have no hesitation in accepting Mr Lombardo's evidence as accurate and reliable and prefer it wherever it conflicts with Mr Cordato's or Mr Gulson's. Mr Lombardo had no reason to favour any party in his recollection. He had cause to remember the discussion. He was trying to dissuade Mr Bax from structuring Food Improvers receipt of the sale proceeds to include any sum for consultancy fees because it would be taxable, unlike a payment of the same sum as dividend (in light of the BGR group's franking credit position). 48 I am satisfied that at the meetings which occurred in March 2001, Mr Bax, Mr Gulson and Mr Reece decided that it would be pointless for any of them to cause their service companies to continue to issue monthly tax invoices since the BGR Group did not have sufficient cash with which to pay their consultancy fees. Accordingly, each of them continued to work full time in the management of the group in the expectation that if and when its fortunes turned around through their efforts, they would be entitled to render invoices for the work they had performed in the preceding period, including the period for which they had repaid the fees previously earned. 49 In the meantime they (through their service companies) drew down on their loan accounts with BGR as and when they needed funds to meet their living expenses. This had the consequence that they did not receive income and, thus were not liable to pay tax on the loan receipts. Had their service companies rendered tax invoices each month and accrued the consultancy fees as a debt payable by BGR, the consequences would have been that those companies would have incurred tax liabilities due to the receipt of 'income' on an accrual basis and for GST. BGR would have incurred a corresponding liability, also on an accrual basis. That would have reduced its profitability in its financial statements which could be shown to third parties, such as the group's financiers, and, neither the partners nor BGR would have benefited at all. By suspending the issuing of tax invoices until BGR's fortunes improved, the partners were supporting the fortunes of their enterprise without incurring pointless tax liabilities in respect of money that they knew would not be received at that time. 50 Likewise, in the first half of 2001 each partner saw it as important to support the group in the meantime by return of some of their consultancy fees and by providing loans to BGR in proportion to their shareholding. The commercial rationale for coming to this conclusion is, in my view, compelling. There was no sense in Mr Bax or Mr Reece in particular, working full time for the group during the period of cash flow difficulties after forsaking once for all any entitlement to be paid for that work given that they obviously thought that they could turn the group's fortunes around. They were prepared to take the risk of working without secure remuneration during that period for the potential benefits that they would be paid for their past work when BGR was in a position to do so. Only if, despite this work, BGR failed, had they accepted the risk of not being paid at all for their work. 51 Mr Gulson's evidence was that, in effect, his co-partners had agreed to forego all right to receive any further remuneration until the group's fortunes improved. He asserted that the right to fees had been cancelled not suspended. It has suited his financial position since the events of mid 2005 to contend, but I do not accept that he believed that this occurred. Nor do I believe that Mr Gulson understood what was happening in the meetings in March 2001 in that way. It makes no commercial sense. There would be no rational reason why, if the group recovered its fortunes, the partners would not have wanted to reward themselves for the period in which they worked to bring about that result. Quite the contrary, it would have been unfair as between the partners that Mr Gulson's equity of almost two-thirds of the shares would have benefited from the large amount of free work provided by his co-partners in a disproportionate amount to their rewards. 52 Indeed, Mr Reece's equity of 7.4% would have been improved by exactly the same amount as Mr Cordato's company's in circumstances where Mr Reece was working full time for nothing in the interests of BGR and Mr Cordato was not working in that way at all. Moreover, Mr Cordato retained the right to render professional fees. The behaviour of Mr Gulson in approving payment of Cordato Partners' legal fees in January 2006 reflected a recognition that those who supported the group through its cash flow difficulties would be paid for their work. Mr Cordato rendered professional fees in respect of work in progress and other matters which he had conducted over the whole of the period between July 1999 and January 2006 in sixteen separate accounts issued on 24 and 25 January 2006. He did that when the proceeds from the Main Camp sale were about to be distributed. 53 Mr Gulson gave evidence that he had agreed much earlier with Mr Cordato that the latter should defer rendering his fees until such time as BGR could afford it. Before a short adjournment in the hearing, Mr Cordato denied that he had made such an agreement. Following that adjournment Mr Cordato revealed, grudgingly, under cross-examination, that Mr Gulson had spoken to him in the toilet and sought to remind him that he had agreed with Mr Bax to a deferral of the rendering of his fees. Mr Gulson gave no evidence to deny that he behaved in this way. It was in Mr Gulson's interest to establish an agreement by Mr Cordato so as to justify the later payment of Mr Cordato's fees, the rendering of which had been deferred until the BGR group was in a position to pay them as to distinguish his position from that of the executive directors in respect of their entitlement to uninvoiced consultancy fees. Mr Cordato told Mr Gulson in the toilet that he had never made such an agreement. 54 Mr Cordato, as an experienced litigation solicitor, was aware of the inappropriateness of this discussion while he was under cross-examination. When first asked about the discussion he said he did not believe it was about the evidence he was giving, then that he could not remember. That was disingenuous of him. Asked 'what were his [Mr Gulson's] words' he responded 'You were there', before finally divulging what Mr Gulson suggested to him. I can understand that the incident was embarrassing to him, but Mr Cordato was evasive and far from candid in respect of this incident. Mr Cordato sought to glean from counsel what had been overheard before he was prepared to give his own version of the toilet discussion. To his credit, Mr Cordato told Mr Gulson that his suggested evidence was wrong. But this incident and Mr Cordato's response to its revelation in the witness box caused me to have considerable reservations about his reliability. The incident also showed that Mr Gulson was prepared to seek to influence Mr Cordato's evidence to bolster his case. 55 The defendants argued that at the time of his dismissal Mr Reece never claimed the right to any deferred consultancy fees. Mr Reece explained that he was distressed and did not raise any issue in relation to unpaid consultancy fees at the meeting with Mr Bax and Mr Gulson on 17 May 2002 where his services were terminated. He said that he did not discuss anything at the meeting because he was so shocked. He never raised any claim for unpaid consultancy fees later. He had no funds and knew he would have had to pursue the matter, in effect, through lawyers whom he could not afford. Moreover, while he was still a shareholder he knew that the group did not have funds. He said he assumed that the group would eventually, when it became more affluent, make payments that had been due earlier. ---- You mean you are saying that I worked all that time for nothing. --- They were suspended. That was what happened. Otherwise, I ... would never get any funds. Mr Bax asserted that he said to Mr Reece that his also meant that there would be no claims for consultancy fees unpaid to Karcor and that Mr Reece agreed. Mr Gulson denies any mention was made of consultancy fees and he also relied on notes of the meeting taken by Ms Wee. Mr Bax had reservations about the completeness and accuracy of those notes. Suffice to say that the notes conclude enigmatically with Mr Reece being recorded as having 'enquired about his value of shares' without any further notation. It is likely that there was discussion about this topic which Ms Wee's notes do not record. Given that Mr Reece was being removed and that he asked about the value of his shares, I am satisfied that Mr Bax referred to the assignment of the shares, the forgiveness of the loan to Karcor and to the parties all walking away. 57 However, I am not persuaded that any one specifically referred to consultancy fees which had not been invoiced since March 2001. It is likely, and I find, that Mr Reece thought he could still claim these but that, because of the 'walk away' proposal both Mr Bax and Mr Gulson understood that those consultancy fees were not to be claimed by Karcor or Mr Reece. A reasonable person in the position of the parties would have understood that Mr Reece agreed to the 'walk away' proposal and thus lost any legal right for Karcor to claim consultancy fees: ( Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] ). 58 Ultimately, Karcor's 74 shares were bought back by BGR. Its loan account was then about $290,000 in debit. Mr Reece signed the share transfer to BGR in November 2003. Mr Reece said he believed the extinguishment of his loan account was a settlement for transfer of his shares and that consultancy fees were never mentioned, but his belief is irrelevant because of the agreement I have found was made in May 2002. The buy back was effected formally in February 2004 and 74 replacement shares were allocated to the remaining BGR shareholders. Karcor's loan account balance owed to BGR was extinguished by the remaining shareholders assuming responsibility for it in proportion to their shareholding. After this, Mr Bax, through Food Improvers, held a 24% interest BGR, Mr Gulson, through Triad a 68% interest and Mr Cordato through Cordato Partners Services, an 8% interest. 59 The defendants argued that after the sale of one investment (Jabiru Table Grapes) in 2004, the group received cash funds and $695,000 was paid to the shareholders. That payment was made in approximately, but not exactly, the proportions of the shareholdings. They argued that this indicated that when BGR had the capacity it did not use surplus cash to pay consultancy fees. However, no distribution was made as a dividend or as a payment of consultancy fees. Instead, interest free loans were made through the BGR shareholders' loan accounts to the three shareholders in proportions not exactly matching their shareholding (Mr Bax's company receiving about 33% of the distribution). 60 None of the parties was able to give any explanation why the proportions used for those loans were out of alignment with the relevant shareholdings. These loans following the sale of a capital asset do not support the defendants' contention. At best they are neutral facts. It would be likely that when capital assets were sold, the shareholders would receive a return of the capital in proportion to their shareholding. The need to suspend the payment of monthly consultancy fees was caused because the group's income generating activities and cash flows did not support those payments. 61 When the cash flows returned to a sufficient level reduced consultancy fees commenced to be paid. The size of those payments increased as the cash flow situation improved. From July 2003 consultancy fees (exclusive of GST) of $8,000 per month were paid to Mr Bax's and Mr Gulson's companies out of cash flows. That was maintained until August 2004 when the amount increased to $10,000 a month and from December 2004 to $15,000 per month. The parties appear to have distinguished between rewarding the two active partners, Mr Bax and Mr Gulson, for their work by using cash out of revenues and rewarding the shareholders by advancing interest free loans of surplus capital. 62 The defendants argued that if Food Improvers and Karcor were able to invoice later for consultancy fees they would have engaged in a fraud on the minority by failing to record the liability in BGR's accounts and the accrued entitlement in their own accounts. They made, but withdrew an assertion that it was also a fraud on the revenue. Mr Bax said Food Improvers accounted on a cash basis. That meant that it did not have to bring to account any fees not actually paid to it. And cl 4.1 of the consultancy agreement contemplated that the time for payment of the fee could be 'otherwise agreed between the parties', while cl 10.11 envisaged that a tax invoice would be issued to BGR monthly. Cordato Partners Services was not the victim of a fraud on the minority by any failure to accrue unpaid consultancy fees. 63 I am of opinion that the parties agreed in March 2001 that BGR's liability for payment of the consultancy fees which would otherwise become due under cl 4.1 would be made subject to a condition that BGR be able to pay before the consultant were entitled to issue tax invoices. Thus, if BGR were never in a position to pay, it had no liability to do so. Similar arrangements are familiar to lawyers who agrees to a 'no win, no pay' contingency fee with clients. Here, Mr Bax, Mr Gulson and Mr Reece agreed to risk their fees, and to make substantial loans, with Mr Cordato, in the hope that BGR would recover. There was no fraud on the minority in not accruing any liability in BGR's accounts for consultancy fees which had not been invoiced. Indeed, Mr Cordato never sought to correct the same accounts over the years before January 2006 to reflect his firm's unbilled work in progress. 64 There was no consideration given by BGR for a release from its liability under the consultancy agreements to pay the monthly fees. For Food Improvers to give up the right to receive over $20,000 per month required, as a matter of contractual analysis, some form of consideration. The defendants never identified what the consideration was for each of the partners still to provide services at the level and rate that he had been given before this supposed agreement yet to abandon any right to be paid. Their argument leads to a commercially absurd result and reflects convenient self interest. It is inconsistent with their conduct in and after the meeting with Mr Lombardo and the rendering by Mr Cordato, with Mr Gulson's agreement, in January 2006 of unbilled fees for over six years work when the proceeds of Main Camp were about to be received. 65 I am satisfied that in March 2001 Mr Bax, Mr Gulson and Mr Reece did agree to defer the rendering of invoices for consultancy fees until the group could pay and they did not intend to or effectively give up their rights to invoice BGR at a later time for the work that had already been or was to be performed during the period when the group could not pay them at all or in full. I find that the partners agreed to pay interest on the funds borrowed by them which they on lent to BGR. I am satisfied that Mr Gulson's account was not reliable because it is inconsistent with the contemporaneous accounting records of BGR and the evidence of Mr Bax. (Ex 1). The payments made by Triad, Food Improvers and Karcor in March 2001 included substantial sums refunding consultancy fees which I also accept Mr Bax's and Mr Reece's evidence as to the meeting of March 2001. It follows that Food Improvers is entitled to invoice and claim those fees at the rate of $20,833.33 plus GST for the period in which they were not paid in full. After Mr Reece left, Mr Gobert took over his position as the group sales manager. Mr Gobert was an acknowledged world expert in tea-tree oil and its products. Mr Bax accompanied, and provided support for, Mr Gobert on his overseas visits to customers in the European Union and the United States of America. In contrast, Mr Bax had not travelled overseas with Mr Gulson since 2000. 67 In April 2005 Mr Gulson advised Mr Gobert that he was proposing to draw up a draft long term supply contract between the Main Camp group and an Israeli customer Biomor, for discussion at the proposed meetings with Biomor representatives and Main Camp's Israeli distributor, Schlomo Steinberg of Petrus Chemicals in London. 68 On 17 May 2005 Mr Gobert met with Mr Bax and Mr Gulson at BGR's offices in Sydney to discuss the draft Biomor contract. During the meeting Mr Gulson broke the news that he was leaving for overseas the next day to go to Singapore and that he would arrive in Newcastle, England, on 23 May. Mr Gulson referred to a two page document which he had prepared saying that it was the 'contract' for the Biomor meeting in London. Mr Gobert queried whether, after four weeks, the two pages were all that Mr Gulson had prepared. Mr Gulson said that Mr Cordato had let them down on the matter and that he had to prepare the document himself. Mr Bax and Mr Gobert proposed several amendments to the draft and they prepared the next version of the heads of agreement and covering email to Biomor which was attached to Mr Bax's email to Mr Gulson of 17 May 2005. Mr Gulson asked for the email addresses of the Biomor executives and of Mr Steinberg so that he could have his wife send them the revised draft in advance of the London meeting. 69 Mr Gulson did not use computers, but his wife, who was a successful businesswoman, helped him with his email and other correspondence. She sent and received email and correspondence for Mr Gulson, even when he was overseas and she remained in Sydney. When one of BGR's staff, Ms Bevan, provided to Mr Gulson her handwritten transcription of the email addresses for the Israeli recipients she made a number of errors. The consequence was that when Mrs Gulson sent the emails, none of the intended Israeli recipients received them and, as events happened, they arrived in London without any knowledge of what was in the draft heads of agreements. 70 When they met in Newcastle, England, on 22 May 2005 Mr Gobert mentioned to Mr Bax that he had received an email about the Biomor draft from Mrs Gulson before he left Australia. He told Mr Bax that it was almost the same as what they had advised Mr Gulson except for a few changes. Mr Bax was happy that they had something. Mr Gobert had a new laptop computer with him but he was unable, because of some technical problem, to receive any email while in Europe. Mr Gobert had printed in Sydney a copy of Mr Gulson's email and he had put it in his luggage, but the luggage had been lost in transit and was only delivered two days later. By that time, Mr Gobert and Mr Bax appear to have forgotten about that email. Mr Bax did not see it until 31 May 2005. 71 In late May 2005, Mr Gobert had a meeting in Brussels with a regulatory body (the Scientific Committee for Cosmetic Products) comprised of a group of experts who reviewed the toxicology of raw materials. They met to discuss a proposed European Commission regulation of tea tree oil products. Representatives of two of Main Camp's largest customers, Christopher Dean, of TP Health, and Ken Shephard, the senior counsel of the American company, Melaleuca Inc, also participated in the SCCP meeting. Next, Mr Gobert was to address a major industry meeting in London about tea tree oil's status under the proposed regulations. There were also planned discussions with major customers in the United Kingdom and then in the United States. He gave evidence about a number of instances of inappropriate and odd behaviour which Mr Gulson exhibited during the time which they spent together in the days leading up to 29 May 2005. During a meeting on 26 May with Mr Bax, Mr Gulson, Mr Lawson, together with Unifect's sales manager, Ms Marsh, at the headquarters of a large potential customer for tea-tree oil, Mr Gulson appeared to be anxious to get away. Whilst Ms Marsh was in the middle of her presentation, Mr Gulson stood up and, without any prior warning, brought the meeting to an end, to Mr Lawson's and Ms Marsh's puzzlement. 73 Mr Lawson described obsessional behaviour of Mr Gulson's after he saw some non-safety matches in a pub. This led to Mr Gulson trying to get out of a moving car in heavy Friday afternoon traffic and crossing a divided road looking for a supermarket. Mr Lawson gave a number of other instances of Mr Gulson's inappropriate comments and behaviour around his family, including making loud, insulting and racially biased comments at a restaurant in respect of a woman dressed in traditional Muslim dress and others of non-Caucasian appearance who passed by saying 'They look like terrorists to me .. they're definitely terrorists'. He began smoking a large Havana cigar in the non-smoking restaurant and refused to put it out. He told stories relating to his use of illegal drugs and his being supposedly 'banged up for a while in South America with Ronnie Biggs' (the notorious Great Train Robber). 74 On a later occasion, in the Lawson's kitchen, Mr Gulson asked their 16 year old daughter 'do you know what 'wank' means? ' Mr Gulson was oblivious to the embarrassment his comments and behaviour were causing to Mr Lawson's family. Taken in isolation, each incident Mr Lawson described could perhaps be viewed by some persons as a momentary lapse, social clumsiness or the effects of too many drinks. But, Mr Gulson seemed to Mr Lawson, as he wrote to Mr Bax on 3 June 2005 '... to be unbalanced and totally out of control'. 75 In cross-examination there was little challenge to Mr Lawson's factual description of Mr Gulson's behaviour, although it was sought to suggest that he was biased because of his conduct in sending an email 'wanted' poster of Mr Gulson in insulting language and subsequently going into business with Mr Bax and Mr Gobert. The email showed that Mr Lawson was himself capable of inappropriate behaviour in response to Mr Gulson's. I am satisfied however, that Mr Lawson gave a reliable account of Mr Gulson's conduct. No doubt he found Mr Gulson on the occasion of his English visit to be socially very difficult. This behaviour was symptomatic of his then unknown psychiatric disorder. Mr Lawson appears to have been provoked to later react but not to give inaccurate evidence. Nor did his the subsequent business relationship with Mr Bax and Mr Gobert affect the reliability of Mr Lawson's evidence. I formed the view that Mr Lawson was an honest witness and I have no reason to doubt his account. They then went at Mr Gulson's request to Cowdray Park, so that he could look at polo. Mr Gulson watched a polo match alone. While waiting outside the polo game, Mr Gobert updated his presentation slides based on what had happened at the meetings he had attended on the trip. He did not work specifically on the Biomor presentation. Mr Bax made a number of attempts to persuade Mr Gulson to return to the car so they could get to the Renaissance Hotel at Heathrow near London where they were to stay and hold the Biomor meetings but Mr Gulson insisted on watching the whole game, which concluded at about 5pm. 77 In the car on the way to the Renaissance Hotel there was a discussion in which Mr Gobert said that he was concerned about some of the points that Mr Gulson had left in the email to Biomor with the draft heads of agreement. There was a discussion about Mr Gulson's proposal which concluded with Mr Gulson stating that he had taken an executive decision and was not going to change the draft. They arrived at the hotel at about 6-6.15pm Mr Gulson came to Mr Gobert's room at about 6.30pm just after the latter had finished returning the hire car and suggested they have a drink before dinner but Mr Gobert was unavailable. 78 Shortly after, Mr Bax and Mr Gulson met in the foyer of the hotel with Biomor's Peter Tirosh, his son Ziv Tirosh, Danny Neifeld and Zvi Paster. Mr Gobert joined them a little later. All were chatting. Mr Gulson enquired whether the Biomor representatives had received the documents he had sent. They said that they had not received anything from him. Mr Gulson stood up and said that they had been sent several days before but they reiterated that nothing had been received. Mr Gulson, who was by then a little agitated, said he would go to his room and ring his wife, and left. Mr Gobert, at the time, did not think about the fact that he had a copy in his luggage. 79 The others left to go to a nearby restaurant. About 10 or 15 minutes later Mr Steinberg arrived at the restaurant. Mr Gulson joined the table soon after saying that his wife was faxing the documents to the hotel. During dinner Mr Gulson drank some wine and several glasses of grappa. After dinner, the whole party returned to the hotel foyer except for Mr Gulson who began speaking to a table of young women in the restaurant. He rejoined the others in the foyer a short while later with photocopies, made by the hotel, of the two page draft heads of agreement. The Israelis each said that they had never seen the document. Mr Gulson said that the covering email or header was missing and that he would ring his wife to fax it. He made a telephone call and a little while later distributed copies of the covering email which his wife had sent on 20 May 2005. Mr Neifeld said that the reason he had not received the email was because his email address was not there. Mr Steinberg said that his company's name in the email address was spelt incorrectly. Peter Tirosh said that his email address was also incorrect. 80 Mr Gulson became very angry and shouted: 'Are you calling me incompetent? ' at all present. At the time there were quite a lot of people present in the lobby unconnected with the BGR and Biomor representatives. Mr Neifeld said: 'No: it is just a little mistake. Don't worry'. Mr Gulson then turned on Mr Gobert saying: 'It's all your fault. Your staff have given me the wrong addresses --- they are incompetent and you are managing them poorly'. Mr Gobert, understandably, was quite embarrassed by this abuse in front of the customers and other people in the lobby. Mr Gulson blamed Mr Gobert for not getting the correct email addresses for the Israelis. In cross-examination, Mr Gobert denied both that he had any knowledge that Mrs Gulson had made such attempts and that Mr Gulson had raised this topic with him on the evening of 29 May. I accept Mr Gobert's evidence. As Mr Gobert said when confronted with Mr Gulson's account, if Mrs Gulson had a problem she could have easily told her husband rather than continuing to get no response. Notably, Mrs Gulson, though available, was not called. I infer that her evidence would not have assisted the defendants' case ( Jones v Dunkel (1959 ) [1959] HCA 8 ; 101 CLR 298). 82 In evidence, Mr Gulson asserted that he had been unable to communicate with his wife by telephone while he was in Southdown, England before arriving at Heathrow, 'because there wasn't that facility'. I do not accept that evidence. His itinerary had telephone and fax numbers for the Southdown hotel. Even if a landline phone was not available (which I am not satisfied was the case), he had his mobile phone with him. Mr Gulson asserted that he did not use his mobile phone except in emergencies, and it was off most of the time (coincidentally, his mobile phone rang while he was in the witness box). He could have contacted his wife by telephone, or she him, at any time during the trip. He also acknowledged that he probably spoke to his wife when he first arrived in Newcastle, England. Of course, by then the email problem had emerged so Ms Gulson could have raised it. Moreover, Mr Gulson had no difficulty telephoning his wife twice earlier on the night of 29 May 2005. 83 Although in Mr Gulson's account he said that Mr Gobert had told him in the conversation that Christopher Dean had offered Mr Gobert a job, Mr Gobert denied this. Mr Gulson said that he told Mr Gobert that he had not been really performing in terms of sale prices and suggested that he take the job with Mr Dean. He accused Mr Gobert of raising for the third time in the past year that he had been offered the job and asked what was going on. He said that Mr Gobert had responded that he was merely letting him know. I think that in all conscience, you should leave the rest of the trip to John and myself. It is designed to improve his own case. Soon after these events on the evening of 29 May he phoned each of Mr Cordato and Mr Williams and said he had sacked Mr Gobert. Mr Gulson also told Mr McGilvray on the next day that he had sacked Mr Gobert. When he was in the Caritas Centre on 4 July 2005 he told the doctors that he recently had to sack employees who were undermining him in front of others and this was a spontaneous decision. None of these conversations referred to Mr Gobert resigning or suggested anything other than his sacking. --- Well, I mean there's [an] issue there of constructive dismissal isn't there [? ] So maybe he didn't take it as that and it only occurred to me after I had --- did the affidavits, I thought this could be constructive dismissal, but anyway, be that as it may, it's there. And, you know, that's what happened. I'm sorry, I can't change my words, the words were what I recalled when I did the affidavit, but I pondered about it later. Yet, when he gave his evidence he sought to attribute fault to Mr Gobert, in the sense of the latter resigning during the trip, so as to justify his own position in the proceedings. I didn't want somebody on board who you have to constantly got to wonder, "What's he going to do in three months time? What's he going to do in four months time or nine months time? --- Look, you can draw the lines, you know. I'm not silly. --- Yes. --- No. And I think elsewhere in my affidavit I said so --- said so. I am asking you in the witness box, you had no doubt after that conversation with Jim Gobert that you had sacked him? --- Correct. --- At that time correct. Rather I accept Mr Gobert's evidence that when Mr Gulson sought to take Mr Gobert away to the side to a bar, along the way, in front of a large number of people in the foyer, Mr Gulson, who was red faced and making threatening gestures with his hands, started shouting at Mr Gobert. Mr Gulson addressed a number of insulting profanities to Mr Gobert in the course of the conversation accusing him of having a bad attitude and undermining Mr Gulson's authority. Mr Gobert responded that Mr Gulson was behaving on the trip like a spoilt child and should grow up. He reminded Mr Gulson that if it were not for him, they would not be having the opportunity with Biomor (it being a customer which Mr Gobert had cultivated). Mr Gulson continued his profane diatribe saying that, in effect, it was his company and he would do whatever he wanted to do with it. Mr Gobert broke away saying that he was not wasting his time talking to Mr Gulson when he was behaving in that way and that he would join the others. It was only later, as I set out below, that Mr Gobert was sacked by Mr Gulson. Mr Gulson joined them shortly afterwards. In Mr Gulson's account he 'stormed off back to the part of the foyer' where the others were sitting. 90 In the foyer Mr Gulson said to Mr Gobert that he was incompetent and irresponsible and was undermining the integrity of the company. Mr Gobert asked why. Mr Gulson said that he and Mr Bax were a couple of clowns and they had contributed nothing to the Biomor meeting. Mr Bax retorted that the Biomor documents (which Mr Gulson had distributed that evening) were basically what he and Mr Gobert had drafted before leaving Australia. Mr Gulson said Mr Bax should not speak to him like that and that it was his (expletive) company and that he would do whatever he liked. Mr Gobert said that Mr Gulson should stop being so immature and grow up. He said that Mr Dean said he was very impressed with the work that Mr Gobert had done (in response to the accusation of incompetence) and would like to work closer with him. He asked whether Mr Gulson would like him (Mr Gobert) to pursue that further. Mr Gulson said that he would warn Mr Dean to stop being so unprofessional to be poaching his staff and that Mr Gobert was totally unprofessional. He then told Mr Gobert that he was dismissed and he should get out now and have nothing further to do with the company. Mr Bax and Mr Steinberg were speechless. 91 During this encounter Mr Gulson was red faced, shouting, using obscenities and making threatening gestures. Mr Gobert and Mr Bax were concerned Mr Gulson might assault Mr Gobert. Mr Gobert then got up, walked out, sat on a garden wall outside and then called his wife in Australia. You've destroyed six years of hard work with your foul mouth. I just can't work with you any more Fred. Our partnership is over. After a while, they went back inside and Mr Bax noticed Mr Gulson and Mr Steinberg were in the bar area. Mr Gulson was sitting back having a scotch and smoking a cigar with his feet up on the table. Mr Steinberg was also having a scotch. Mr Steinberg approached them and Mr Gulson got up and started to walk towards them as well. Mr Gobert, noticing this, said that he was going to his room and left. Mr Steinberg suggested that they all have a drink but Mr Bax declined a drink. Mr Bax repeated that he could not believe what Mr Gulson had just done, that Mr Gobert was the technical expert of the company and Mr Gulson had just dismissed him. Mr Bax enquired as to the point of going on with the trip when everything they were going to talk about was technical, requiring Mr Gobert's services and there was no-one who could fill in for Mr Gobert. Mr Steinberg indicated that he was going to catch a train to central London and hoped that the two could sort things out. He left. 93 Mr Gulson then said: 'Well that went well' and smirked. How do you think we're going to keep our customers without Jim? Jim is the lynchpin between Main Camp and all our customers. He's the one who expanded our customer base. People rely on [him] for technical expertise. He's always talking to them, meeting them and is considered, I think probably, a world expert in tea tree oil because ... of what he was doing with the SCCP. Look, we're no better than any other tea tree producer now. We haven't got any technical expertise. All we're doing is selling oils. Biomor can get oil from anywhere. They don't have to get it from us. But what they wanted us for is to assist them with their regulatory processes they had to go through in the EU and Jim Gobert's technical knowledge because he is helping them with their local consultant in Australia as well, for getting registration in Australia for their products. All we're going to do now is compete on price. We've got nothing else to differentiate ourselves from other players. We had all the expertise and now its gone. He got up and returned to his room. 94 I am satisfied from the contemporaneous material, including Mr Gobert's subsequent handwritten letters which he sent from overseas to Australia, and his and Mr Bax's accounts of the same events on the night of 29 May 2005 that Mr Gulson was in an irrational and uncontrolled rage, which was due to his rapidly deteriorating mental condition. I am also satisfied that Mr Gulson, despite the rage, was conscious that he had sacked Mr Gobert on the spot. His ultimate concession, during cross-examination, that there had to come a time when one could say 'Well, go' demonstrated this. It suited Mr Gulson's case to assert that Mr Gobert withdrew from the trip at that time by resigning. I do not believe Mr Gulson was telling me the truth in his asserted account. After all, it was his evidence that Mr Gobert '... was the lynchpin for the Israeli meetings'. Having had the benefit of seeing and hearing him in the witness box and assessing his evidence against independent material, as well as that of Mr Bax and Mr Gobert, I prefer the evidence of the latter two wherever there is a conflict with Mr Gulson. 95 Mr Gobert had nothing to do with his own cessation of employment. There was no legal basis for the dismissal. And, it is notable that this critical decision was taken unilaterally, by Mr Gulson, without any consultation with his partner, Mr Bax. He said he could not attend the Biomor or other meetings and that Mr Gulson was shouting at him in the lobby and calling him by profanities. He said that he had never been publicly abused like that and that there were no grounds for sacking him. Mr Cordato said that Mr Gulson had already called him and that he had not said anything about the incident but was very odd and sounded guilty about something. Mr Gobert said that he had sent a fax to his assistant, Ms Bevan, and asked her to send a copy to Mr Cordato. He was going to arrange to return as soon as possible. 97 Mr Bax sent an email to Mr Cordato stating that there was no further relationship between himself and Mr Gulson. He said that in his opinion Mr Gulson had become extremely irresponsible and uncontrollable. He set out an account of the previous evening's events, noted that Mr Gulson had told them that he could run the business by himself, which was exactly what would occur as no-one would work for him. He said that he could not see how the situation was recoverable and that Mr Gobert and he were returning home on the next available flight. Mr Cordato responded by email saying that unfortunately if the directors were divided, the enterprise had to be sold while it had enterprise value. He noted that it would obviously be beneficial, and probably vital, if both Mr Bax and Mr Gobert remained pending the sale. That sale had to be the whole of the undertaking. 98 The next morning, Mr Bax also telephoned Mr Cordato and told him that he and Mr Gulson had had a major confrontation the previous evening. He said that Mr Gulson had been abusive to Mr Gobert and that he (Mr Bax) had said that their relationship or partnership was now over. Mr Cordato said that he had already received telephone calls from both Mr Gobert and Mr Gulson and knew what he was talking about. He said that he had sent an email to Mr Bax. 99 The next morning in London, Mr Steinberg joined Mr Bax and Mr Gobert in the latter's room. Mr Gobert told them not to discuss anything commercially sensitive in front of him because his employment had been terminated. 100 Mr Williams, the Main Camp plantation manager, received two telephone calls from Mr Gulson on 30 May 2005. He said that Mr Gulson was mumbling and very incoherent. In the first call Mr Gulson told him that he had sacked Mr Bax and Mr Gobert. He asked Mr Gulson what he was talking about but could not get any sensible or comprehensible response. About 4 hours later Mr Gulson rang him back again mumbling and speaking incoherently. He told Mr Williams he was in a taxi cab in the early hours of the morning in London. Mr Gulson sounded to him to be either drunk or mentally unwell. At various parts of this conversation Mr Gulson told him that Mr Bax and Mr Gobert had misled him and that he had just sacked them both. He said that he would be the new managing director and would send a fax to Mr Williams. He said that he would be closing the Sydney office and moving everyone up to the farm which would save him a lot of money and the money would all come to him. 101 From Mr Williams's oral evidence it became clear that he was confused as to dates and had a tendency to telescope different occasions or conversations into one another. Mr Williams struck me as an honest witness. He obviously did not like Mr Gulson and felt very strongly about his behaviour. However, I am satisfied that the substance of his evidence as to his experience and observation of Mr Gulson's behaviour and conversations in late May and June 2005 is reliable. 102 Later, on 30 or 31 May 2005, Mr Gulson telephoned Bill McGilvray who was fast asleep in Australia at about 2 or 3 am Australian time. The two had known each other for a number of years and Mr McGilvray had his own business of buying and selling, among other oils, tea tree oil and which he operated from near the Main Camp plantation. Mr Gulson was difficult to follow and gave no explanation for calling Mr McGilvray at that hour. Mr Gulson said he had just done a big deal for a lot of tea tree oil and that he had some issues with Mr Gobert about not, somehow, following the deal. He told Mr McGilvray that he had sacked Mr Gobert. He had never rung Mr McGilvray before this to tell him of deals he had done. 103 On 30 May Mr Gobert sent a number of faxes to Mr Cordato. He noted that he wanted to have some written reasons as to why he had been dismissed. He wanted Mr Gulson to cease defaming him. He also wrote on 30 May to Ms Bevan asking her to contact all customers telling them that unfortunately he would not be able to meet them. He asked her to liaise with Mr Gulson and customers as to which customers Mr Gulson would meet for the rest of the trip and to do so urgently so that the business was not disadvantaged. He referred to the fact that he could not get emails on the trip and asked that he not be sent any company related information directly. 104 On the next day, Mr Gobert faxed Mr Cordato saying that despite the nature of his employment termination, he would have been willing to show Mr Gulson the presentations for the major customers that he had not previously seen, but that Mr Gulson had made no attempt to contact him prior to his departure for Australia even though they were in adjoining rooms. He noted that there were some key issues that needed to be addressed, which had been previously been discussed with Mr Gulson. He went through each of the major customers and issues that appeared to be important to advance the BGR group's interests in discussions with them so that Mr Gulson, if he used the material, would have the assistance of Mr Gobert's insights into what should happen. In that fax he disclosed that he had received an employment offer from a Main Camp customer. In cross-examination he acknowledged that this was Mr Neifeld of Biomor. He again complained about Mr Gulson's behaviour and defamatory comments about him. He reminded Mr Cordato that Mr Gulson would need to be aware of a deadline for a submission to TP Health. 105 Also on 31 May Mr Gobert sent another fax to Mr Cordato indicating that his place on the technical and safety committee was vacant and asked whether Mr Gulson wanted to fill the vacancy himself or let the decision be made by the Australian Tea Tree Industry Association. He said that he took this view because the BGR group had paid for his attendance at Brussels and did not think that he would be paid for attending the further meeting. He again pointed to the urgent commercial issues that faced the group. 106 Mr Gobert's actions were those of a professional and concerned employee and appeared to me to be genuinely felt. He seems to have been torn between his loyalty for the Main Camp business and his reaction to the abusive behaviour to which he had been subjected by Mr Gulson. In his letter of 15 June 2005 Mr Gulson said that Mr Gobert had been 'bagging' the company, its staff and certain senior executives. No particulars were given of this allegation. Mr Gobert said that Mr Gulson made up these allegations. I prefer his evidence to Mr Gulson's. 107 In final address the defendants accepted that Mr Gulson had constructively dismissed Mr Gobert in the Renaissance Hotel foyer on 29 May 2005. It was more than a constructive dismissal. Mr Gobert was sacked summarily and without justification by Mr Gulson. I am of opinion that Mr Gulson was mentally unwell at the time and that his condition subsequently deteriorated. However by 29 May 2005 he was having periods of considerable irrationality in which he was very forceful and aggressive. Earlier he had exhibited peculiar behaviour when with Mr Lawson and his family and on the afternoon of 29 May 2005, his insistence on going to and remaining at a polo game without attempting to assist Mr Bax or Mr Gobert to prepare for the dinner meeting with the Biomor representatives was odd. Mr Gulson's reactions to the failure of his wife's emails to reach the Israeli gentlemen was also quite odd. 108 I am of opinion that the reason Mr Gobert went on the overseas trip with Mr Gulson and Mr Bax was because Mr Gobert was viewed by both of them as being an essential participant in the trip. Had Mr Gulson had any substantive reservation about Mr Gobert's performance such as would warrant him being terminated, for example, his proffered excuse that Mr Gobert was not negotiating sales of bulk tea tree oil at high enough prices, he would not have been taken on the trip. The effort, time and expenditure for the trip was substantial. Mr Gulson would have considered that he had placed at risk the commercial reputation of the Main Camp business internationally, had he had reservations about Mr Gobert before the trip, at a time when the group was still experiencing cash flow difficulties. Mr Gulson's behaviour was extraordinary. It involved abusing Mr Gobert publicly in the hotel foyer and summarily dismissing him, allegedly because Mr Gobert said that he had been offered another job. I do not believe Mr Gulson's evidence on this matter. 109 In final submissions the defendants argued that Mr Gulson's summary dismissal of Mr Gobert was justified because he did not accept responsibility for Ms Bevan's mistranscription of the Israeli email addresses, his lack of commitment and because he had not achieved higher prices for Main Camp's tea tree oil. No attempt was made to address the termination provisions of Mr Gobert's employment agreement (2/481) to demonstrate how any of this alleged conduct could warrant summary dismissal in London on 29 May 2005. 110 The email address mix up was not the fault of Mr Gobert. He was highly committed to the group's business. If a failure to achieve higher prices were a genuine concern of Mr Gulson's, Mr Gobert would not have been taken on the trip. He did nothing on the trip to affect adversely prices and thus could not have been summarily dismissed when and as he was. Indeed, if this ground had any basis, the decision to take Mr Gobert on the trip and have him participate in all the planned meetings waived the 'right' to rely on it. The defendants' argument for his dismissal is specious and without any substance. 111 The defendants also argued that Mr Bax had lost any legitimate expectation to be involved in BGR's management after Mr Gobert's dismissal because he said he could no longer work with Mr Gulson, and he refused Mr Gulson's offer to discuss things after the dismissal. They said an objective bystander would realise 'blow ups' were common and he could not refuse to discuss matters or continue with the trip or allege 'unfair prejudice' to his minority position. And, they argued '[o]verhearing a few profanities does not alter this position. ' Moreover they argued that Mr Bax should have discussed matters with Mr Gulson and was wrong not to have done so. 112 This overlooks the fact that Mr Gulson persisted in his resolve to dismiss Mr Gobert and continue on the trip without him even though his expertise was needed and the customers were expecting him. Mr Gulson never resiled from that position. He never apologised for his objectively inappropriate behaviour towards Mr Gobert and Mr Bax and his exclusion of Mr Bax from the 'decision' to dismiss Mr Gobert. Nor would a reasonable person consider that Mr Gulson was offering to consult with Mr Bax or seek or respect his views as to the further conduct of the overseas trip, meetings with customers or the management of BGR or the group. Mr Bax had been presented with a fait accompli. Mr Gulson appeared to require him to accept the radical change he had wrought and to proceed with the trip accordingly. This betrayed a detachment from reality symptomatic of Mr Gulson's mental condition in mid 2005. The submission is equally unreal. 113 After sacking Mr Gobert in front of Mr Steinberg and Mr Bax, Mr Gulson smirkingly said to Mr Bax 'well, that went well'. Mr Bax's reaction to such inappropriate conduct by Mr Gulson was quite understandable. Mr Gulson's behaviour over the previous few days obviously had had some impact on Mr Bax. In the middle of an overseas trip Mr Gulson had sacked an executive whom he knew was a key person not only in the business but also on the trip, without even consulting Mr Bax in advance. This action demonstrated that the partnership at that time was not workable. Mr Gulson had arrogated to himself the running of the group. He had taken a significant decision without involving his fellow director with whom he was travelling. The decision whether to dismiss Mr Gobert in any event, let alone in the middle of the trip when both Mr Bax and Mr Gulson were there, could not have been, in light of the history of their relationship, the prerogative of one of them alone. 114 It is unsurprising that Mr Bax regarded the partnership as over at that time. By his conduct, Mr Gulson had shown this to Mr Bax. While Mr Gulson in his evidence asserted that he had complained that Mr Bax had not given him the opportunity of hearing his reasons for dismissing Mr Gobert, I think that Mr Bax was honest and reasonable in saying that he could not work with him. Mr Bax's reaction was one a reasonable businessman in the position of quasi partnership the two men then had is likely to have had. Mr Gulson had taken a decision vital to the future of the group in an irrational rage. The conduct was very public. It followed earlier, erratic and inappropriate behaviour by Mr Gulson in Mr Bax's presence, including the incidents described by Mr Lawson. It was also undermining of Mr Bax's authority in front of Mr Gobert and Mr Steinberg. It was followed by Mr Gulson asserting that what he had done 'went well' when he had created a commercial crisis. 115 The defendants criticised Mr Bax for failing to attend the meetings with Biomor on the next day during which Mr Gulson negotiated a new contract. They said he ignored his obligations as a senior executive and partner in the business. However, Mr Bax could not be expected to continue as if nothing had happened. Mr Gobert's technical expertise was not going to be available. Mr Gulson was liable to behave in the increasingly irrational way which he had exhibited over the preceding days. By accompanying Mr Gulson, Mr Bax could be perceived as associating himself with the former's conduct. Moreover, Mr Bax could justifiably feel a sense of betrayal of trust by Mr Gulson in the way in which he had treated not just Mr Gobert but himself. 117 Mr Bax, Mr Cordato and Mr Gobert met on the morning of 6 June 2005. Mr Cordato said that Mr Gobert was a vital part of the BGR group and should remain a part of it in order to preserve value for the enterprise. Following this meeting Mr Bax signed a variation of Mr Gobert's employment contract increasing his notice period from 3 to 24 months' to ensure he had an incentive to stay and to establish the business after the events of 29 May 2005. Mr Bax saw this as giving Mr Gobert security in his position. Mr Bax did not discuss the new notice period with Mr Cordato or Mr Gulson because he thought it was within his powers as managing director to write it. Mr Gobert agreed to the new provisions. 118 In early June Mrs Gulson rang Mr Williams and told him that her husband was on his way home from England and was coming straight up to the plantation. She said he would explain what had happened. On his return Mr Gulson went straight to the plantation on 7 June 2005. Mr Williams showed Mr Gulson his fax to Mr Bax of 7 June 2005. Mr Gulson reacted by going into a rage and began ranting incoherently, evincing his unhappiness about the sending of the fax. 119 On 7 or 8 June 2005 Mr Bax and Mr Cordato had a discussion in which Mr Bax informed Mr Cordato that two substantial payments had been received from customers totalling about $700,000. Mr Bax said that he wanted to pay all creditors that were due for payment at that time. He said that given Mr Gulson's current state of mind he did not want large amounts of cash in the bank accounts when Mr Gulson returned as he, Mr Bax, was concerned that the cash might be diverted to Mr Gulson. Mr Cordato responded that that was a good idea and that the leases should be paid three months in advance. Mr Bax replied that that was not possible as the leases were paid on a monthly cycle. 120 There then was a minor controversy between Mr Cordato and Mr Bax as to what Mr Cordato said about having his own accounts paid. Mr Bax's account was that Mr Cordato said that he would bring all his accounts up to date with BGR. He then invited Mr Bax to come with him to see Ms Fleming, the book keeper of Cordato Partners, who could print off all unbilled accounts. Mr Cordato said that the conversation related to printing out copies of his firm's outstanding accounts or tax invoices, as opposed to any unbilled accounts. According to Mr Bax he and Mr Cordato went to Ms Fleming's office and Mr Cordato asked her to print off all unbilled amounts due from the BGR Group and give them to Mr Bax who would arrange for them to be paid. Mr Cordato and Ms Fleming said that Mr Cordato asked for the outstanding bills to be printed off and provided to Mr Bax. In any event Cordato Partners' outstanding bills, as opposed to their unbilled work in progress, were provided to Mr Bax and he arranged for their payment. 121 I am satisfied that Mr Cordato and Ms Fleming understood that in the discussion Mr Bax requested the invoices which had already been rendered by Cordato Partners to the BGR companies, but had not then been paid. However, Mr Bax thought he was asking for all of Cordato Partners' unbilled work in progress. I think that the differences in recollection are due to the participants in these conversations being at cross purposes. Mr Bax may have been seeking to have all the unrendered accounts provided, whereas Mr Cordato and Ms Fleming understood him to be asking for the accounts that had already been rendered but had not been paid to be printed off again so that payment could be arranged immediately. I do not think that anything in substance turns on this. No doubt Mr Bax was later concerned in light of his understanding of what had transpired in January 2006 that Cordato Partners had rendered 16 invoices and received payment of nearly $135,000 more than what he had arranged to be paid in June 2005. 122 Early in the morning on 8 June 2005 Mr Williams sent Mr Bax a further fax which said that Mr Gulson had totally lost his senses and was not rational in what he was saying. Mr Williams wrote that he felt Mr Gulson was on a path to destroy the Main Camp business, and 'was destroying the credibility of (sic) all staff within the business'. Mr Williams expressed concern that Mr Gulson's behaviour was affecting how the Main Cap business was perceived in the local community and throughout the world through its business partners. Mr Bax emphasised that he could not work with Mr Gulson. That is hardly surprising. Mr Bax had then received Mr Williams' two faxes. Mr Cordato summarized the result of the meeting on 8 June 2005 in an email to both Mr Gulson and Mr Bax. First, he noted that Mr Gulson would be reviewing Mr Gobert's contract, taking legal advice on it and referring back if he wished to take action on the advice. Secondly, Mr Cordato noted that there would be no organizational changes in terms of personnel, duties or work places, other than in respect of Mr Gobert for the time being. And, Mr Cordato said in evidence that at the end of the meeting they all agreed that Food Improvers' consultancy agreement for the provision of Mr Bax's services would continue in place and Mr Bax's functions and responsibilities would be the same as in the past. I am satisfied that this was all agreed at that meeting. 124 However, at 23:57 on the evening of 9 June 2005 Mr Gulson sent a fax to Mr Cordato, Mr Bax, Mr Williams, BGR's accountant (Ms Mirjana Bojanovic) and Ms Wee, a former employee of the group, who was then in Singapore. The fax was dated the next day. It referred to the fruitful discussion that had been held on Wednesday (8 June) concerning the transition of management control within the BGR group. It recorded that Mr Bax would continue to hold the appellation of managing director subject to the terms of his consultancy agreement and Mr Gulson would take the appellation of chairman and executive director in preparation for the earliest succession. It noted that Mr Bax had agreed, as had he, that they would put the group's best interests first and that it was unlikely in his view that the problems which arose on the day of the negotiations of the Biomor contract would occur again. The fax then referred to Mr Bax being asked to provide and, required Mr Gobert to provide, identification of all contacts they had had with persons in a business relationship with the group in the previous week. Mr Gulson referred to an email which had been circulated by Mr Lawson and others showing Mr Gulson as the subject of a 'wanted' poster. (Mr Gulson was understandably quite upset by this unflattering portrayal albeit he did not have any insight into his own role in causing Mr Lawson to indulge in this insulting and undignified behaviour. ) Mr Gulson's fax continued by stating that the recipients should reassure customers and others '... that it is business as usual at Main Camp and that the only thing that has happened is that [Mr Bax's] ceasing of involvement is occurring on a faster timetable than he had indicated to us all over the last twelve months'. 125 In the context of the events in which it was written, the fax has an air of unreality, being in places emollient and in others provocative. It was composed and sent without any involvement of Mr Bax or Mr Cordato. The fax conveys the impression that Mr Gulson, who signed it as chairman and executive director, was entitled to make Mr Bax answer to his directions. Mr Gulson had no such authority over Mr Bax. The letter alleged that there had been intentional disobedience, serious breach of duty and wilful neglect in the discharge of Food Improvers' and Mr Bax's obligations under the consultancy agreement by refusing to participate with Mr Gulson in important negotiations with Petrus and Biomor London the previous week. Also, on that day Allens Arthur Robinson, served Food Improvers with a notice of general meeting of BGR to be held on 1 July 2005. The business of the meeting was to remove Mr Bax as director of BGR and ratify the actions of Mr Gulson as chairman in terminating the employment of Mr Gobert and BGR's consultancy agreement with Food Improvers. 127 Allens Arthur Robinson wrote to Mr Gobert, on Mr Gulson's instructions, that he was to be dismissed under his employment agreement dated 1 July 2004 because of his serious and wilful misconduct, and conduct which, in BGR's reasonable opinion, would detrimentally affect his business 'by you refusing to participate with Mr Gulson in important negotiations with Petrus and Biomor, Israeli incorporated companies, in London last week'. The stated reason was untrue to Mr Gulson's knowledge because he had summarily dismissed Mr Gobert and told him to go home. 128 The instructions to the solicitors do not appear to have been rational, however Mr Gulson may have appeared to those to whom he spoke. And he caused those letters to be sent within hours of his earlier fax referring to 'business as usual'. Nothing had happened in between to warrant such a radical change of mind. In his mentally distressed state Mr Gulson was using, and evincing an intention to continue to use, his powers as the controlling shareholder to exclude Mr Bax from their partnership and management of their joint enterprise. And, Mr Gulson, was using this power to advance his own interests to the detriment of Mr Bax's. 129 Over the ensuing weeks Mr Gulson's behaviour became even more irrational. He had Allens Arthur Robinson write to Mr Bax's solicitors on 22 June 2005 asserting that they had been validly retained by BGR via Mr Gulson and that the instructions given by Mr Gulson, including as to the termination of the consultancy agreement between BGR, Mr Bax and Food Improvers 'were made in consultation with and with the agreement of Mr Cordato'. Two matters flow from that assertion. First, Mr Cordato was not then a director of BGR, although he was a shareholder, so his involvement in the management of the partnership would have been a change made without Mr Bax's involvement. Secondly, Mr Cordato in evidence denied that he had agreed with those steps being taken as at 10 June 2005. I accept Mr Cordato's evidence that he had had no involvement with Mr Gulson's decision or instructions reflected in the three letters dated 10 June 2005 sent by Allens Arthur Robinson. Only later in June 2005, did he decide to side with Mr Gulson. 130 In late June 2005 Mr Bax, Mr Gobert and Mr Lawson decided to set up a new company. They caused Unifect International Pty Limited to be incorporated as an Australian company. Mr Bax's wife, Mr Gobert and Mr Lawson were its directors. Mr Gulson enquired about possible replacements for Mr Gobert and Mr McGilvray put himself forward as a consultant. A few days later Mr Gulson offered him a position as Main Camp's sales and marketing executive. They agreed to meet during the Primex show. They agreed Mr McGilvray would continue to run his own business and act as a consultant in an executive capacity for Main Camp. 132 Mr McGilvray was known to Mr Gulson and Mr Cordato to be in competition with Main Camp for the sale of tea tree oil, although on a much smaller scale. He disclosed his customer list and then later, on 8 July 2005 would sign a confidentiality clause in respect of Main Camp's commercially sensitive information as part of his and his company's (A-Oil Pty Ltd) consultancy agreement. Mr McGilvray was allowed by Mr Gulson, with Mr Cordato's knowledge, to retain the right to carry on his own business while he acted as Mr Gobert's replacement. Mr McGilvray did not have Mr Gobert's technical expertise but he had marketing experience. He said that he had offered to transfer his existing business customers to Main Camp if 'we can get Main Camp up and running properly' although the evidence did not reveal the criteria by which this would be addressed. The contract dated 8 July 2005 for his consultancy, through A-Oil, has no such provision. But Mr McGilvray saw this and his own sense of ethics as meeting any potential difficulties with what would otherwise be a conflict of interest and duty. In that letter he referred to the fact that Mr Bax had been able to keep Mr Gulson away from valued staff and the company over the previous 5 years in which Mr Bax had been the CEO. He referred to Mr Gulson's ego as destroying the professional credibility of all the staff and employees. He sent a copy of that letter to Mr Anderson of Elders, the group's financier, as well as to Messrs Bax, Cordato and Gulson. 135 On 15 June 2005 Mrs Gulson went with her husband to see Dr Newman Harris, his treating psychiatrist. Dr Harris described Mr Gulson's mental condition from the time of that consultation in his report of 30 June 2005. He had seen Mr Gulson first in June 2000 and had last seen him in March 2004. On 15 June 2005 Mr Gulson was plainly more elevated than Dr Harris had seen him in the past. She said that some day he '... will go over the top and hurt someone'. And she also said he was bullying, overtalking and would 'only [have things] his way'. She recorded that he had been emotionally and verbally abusive and that he could not be reasoned with. She recorded that the family were all walking on eggshells and that Mr Gulson had 'nil communication skills'. There were rules for him and then rules for everyone else. She said he was speeding in the car and threatening people. 137 In the next weeks Mr Gulson continued to manifest symptoms of his illness. Mr Williams, whose evidence I accept, described Mr Gulson's odd appearance and behaviour at the time of the Primex Show in Casino around 16 to 18 June 2005 and his drinking and threatening behaviour towards staff at Main Camp. When Mr Gulson returned to Main Camp on about 22 June 2005 Mr Williams described how he continued to act in a bizarre and threatening manner. 138 In the meantime Dr Harris saw Mr and Mrs Gulson on 20 June 2005. The doctor recorded in his notes incidents involving Mr Gulson's driving in a manner which was irresponsible and highly dangerous. Mrs Gulson referred to her fear he might become violent and the overbearing behaviour he was exhibiting. Mr Gulson refused to be hospitalised even though Dr Harris had raised the possibility of compulsorily detaining him. Dr Harris noted he agreed to go to Main Camp, where, as I have found, his behaviour deteriorated. 139 Throughout Mr Gulson's visits in June 2005 the staff at Main Camp plantation continued to express concern to Mr Williams about being able to cope with him and his behaviour. They also expressed concerns to him about what would happen in the absence of Mr Bax and Mr Gobert. Mr Williams felt concerned about the business. 140 On 23 June 2005 Mr Williams sent a fax to Mr Bax and Mr Cordato noting that Mr Gulson had been acting in a totally irrational and uncontrollable rage and had displayed aggression towards the employees of the company. Mr Williams said he had grave fears for the staff and employees and that Mr Gulson had admitted to him that he had a serious mental problem and was seeking medical help to control the illness. He said that Mr Gulson had guns on the property and feared for the safety of employees at work and the safety of employees and their families who lived on the property and was seriously concerned for the safety of the staff. 141 On 27 June 2005 Mrs Gulson wanted to have Mr Gulson 'scheduled' by Dr Harris (under s 21(1) of the Mental Health Act 1990 (NSW)). That would have had the effect of making him an involuntary patient of a mental hospital. Instead, Mr Gulson agreed to attend the Northside Clinic, a psychiatric hospital, voluntarily. By 28 June, when he was admitted to the Northside Clinic, Dr Harris had written a schedule and alerted the local mental health team. He was moments from faxing the schedule to them for action. Mr Cordato knew that Mr Gulson has been admitted to the Northside Clinic when he voted on 1 July 2005. He asserted that this was because he perceived in the days after 10 June 2005, that Mr Bax and Mr Gobert had mismanaged the business. He claimed that when he voted at the BGR meeting on 1 July 2005 in favour of ratifying Mr Gulson's termination of Mr Gobert's services that that was in the group's best interests. This, he said, was because of conversations he had had with Mr McGilvray and he had 'seen a few financial records of the company and I considered that the sales and marketing program wasn't working effectively'. He knew that Mr Gulson had selected that financial information which included mostly sales reports. 144 Mr Cordato said he formed the view that he should vote to ratify Mr Gobert's termination after discussion with Mr McGilvray and his review of the financial material Mr Gulson had selected. Mr Cordato said he considered the sale prices Mr Bax and Mr Gobert were selling the tea tree oil for were the result of a flawed strategy and this justified his vote in relation to Mr Gobert. However, he asserted that he did not know enough about the industry to be able to answer the question of whether people bargained for the price at which a sale of oil occurred. This showed that Mr Cordato allowed himself to be easily persuaded into backing Mr Gulson without any serious ability on his part to analyse what he was being told about commercial issues by Mr McGilvray or Mr Gulson. Mr McGilvray had, and had disclosed, his own conflict of interest and duty. 145 On his evidence Mr Cordato did not even know how prices in the industry were set. Yet he concluded that Mr Bax and Mr Gobert had a flawed strategy while Mr Gulson, whose mental state was evidently very disturbed, had a better one. Mr Cordato knew that Mr Gulson had no rational basis for summarily dismissing Mr Gobert and had given instructions to Allens Arthur Robinson to write to Mr Gobert on 10 June 2005 asserting falsely, that Mr Gobert's sacking by Mr Gulson was justified because Mr Gobert had 'refused to participate with Mr Gulson' in the Biomor negotiations. Indeed, before the letter was sent, Mr Chilton of Allens Arthur Robinson had spoken with Mr Cordato and told him the reasons for the resolutions which were in the letters of 10 June 2005. Mr Cordato said he was 'a bit taken aback' and, in relation to Mr Bax's position '... a little bit lost for words when I was given the reasons by Mr Chilton'. Even though he knew Mr Gulson had told him of his sacking Mr Gobert in London, he did not draw this to Mr Chilton's attention whom he knew was acting on instructions that Mr Gobert should have continued the trip. Mr Cordato gave this evidence. --- I didn't raise it. --- The Triad Health Products group of companies is a - is a family company in which Mr Gulson and his wife are joint directors and I believe they're joint shareholders. His wife had given the proxy and it's -well, as far as I was concerned, her instructions were as - I could see it was - the whole meeting was regularised because she was representing and instructing on behalf of the Triad Health Products group of companies. Is that right? --- Yes, I saw that is in the best interests. Is that right? --- Yes, that's correct. --- Now, I guess your Honour's assuming that, you know, his condition was "disturbed", in your words, throughout but he wasn't, he was - there - he was rational a lot of the time but disturbed at other times. I - I saw it but there was a parting of the ways, that Fred's wife was well capable of making decisions and she had decided to go ahead with the meeting and that was that and being the majority shareholder, one has to take a little bit of heed of what the majority shareholder thinks and that's what I did. --- What I knew the majority shareholder thought. --- I didn't see it as my place to - to stamp any authority, I mean 8 per cent is just a trivial amount, a trivial share-holding and it doesn't even have a blocking interest let alone a decisive interest . He assumed, wrongly, that she was a director and shareholder of Triad on 1 July 2005, when only Mr Gulson was. As Mr Cordato said, he took heed of what the majority shareholder thought. I am of opinion that Mr Cordato sided with Mr Gulson and voted in favour of the resolutions be proposed because he saw it as in his own financial interests to do so. Mr Chilton had Triad's proxy. Mr Cordato was elected as chair. The resolutions were carried over Food Improvers' dissent. Mr Bax then resigned as a director of all the BGR group companies. 148 The defendants argued that Mr Bax could not complain of being excluded from the management of BGR because he voluntarily resigned from all the other directorships of BGR's subsidiaries. This argument does not recognise that, first, Mr Bax had been removed as a director of BGR in which Food Improvers had a shareholding. Secondly, the meeting had just confirmed the termination of Food Improvers' consultancy agreement, this denying Mr Bax remuneration for any work he may do. The express reasons for the resolutions were false. Thirdly, he was susceptible of being removed immediately from any of those directorships at Mr Gulson's behest. Fourthly, once he was not on the board of the parent company, BGR, Mr Bax's ability to exercise the powers of a partner or executive in the business of BGR as parent of the group had been removed. His powers as a director of these companies were limited. He had, in that position, no authority over staff or to deal with the group's creditors, customers or financiers as he previously had done when managing director or chief executive. Fifthly, Mr Gobert was not to be employed, contrary to Mr Bax's wishes, and had no consultancy agreement in place. Lastly, Mr Gulson had made plain that he would use his voting power to impose his will. 149 Moreover, Mr Cordato had sided with Mr Gulson and Mr Gulson's previous irrational and mentally disturbed conduct was likely to continue. Having lost his position as a director of BGR and Mr Gulson's recognition of him as an equal partner in the business, together with his contractual right (through Food Improvers' consultancy) to income, Mr Bax had no reason to remain as director of the subsidiaries. There he would have had all the responsibilities and potential liabilities, including for insolvent trading, and only formal powers under the Corporations Act 2001 (Cth), to conduct the business of subsidiaries. Mr Gulson and Mr Cordato had demonstrated by no later than the meeting of 1 July 2005 that Mr Bax had lost his position as an equal partner. 150 In those circumstances, the basis on which Mr Bax and Mr Gulson conducted BGR's affairs after Mr Reece's departure had been radically changed. Mr Bax had been stripped of his position as a partner in BGR itself and chief executive of the BGR group. His continued participation in the group's, but not BGR's affairs, in an unremunerated position held at Mr Gulson's pleasure would have been a very diminished role. In those circumstances I do not consider it appropriate to draw any adverse inference against Mr Bax for resigning the other directorships after the meeting had carried the resolutions proposed by Mr Gulson. --- That's correct. --- And that was before certain correspondence was drawn to my attention. --- First of all a letter from Haywards to me, copies the staff up at the plantation had sent down the reward whatever, and I got through various other members of staff plaintive letters of what a bugger Fred Gulson is. I thought this is a planned smear campaign. I thought a number of the letters were puerile, I thought the reward poster was - and to be sent to all staff, was most inappropriate. It had been sent to me, that's fine. So it was fairly destructive and I thought to myself, this is going to go on and on and on and I'm not going to be a party to engaging in such school boy type activities. And I was also concerned that we had our plantation manager writing letters which were singularly unhelpful and overstepping the line and I could just see this going on and on and on so I thought the best way to do this is to take John out of the operational arm by BGR and leave him as a director for all the other companies, including the companies that had the assets, but that's how I left it. --- Well, it would leave him - you know, those land holding company and whatever, there wouldn't be that day to day involvement that he would have as a consultant but he would still have equal, you know, as a director, one of two directors, control over the assets, the trading assets and the land, you know, $9 million plus, so it was only removing him from his consultancy agreement, formalising that and removing him as a director of one of 12 companies, being the holding company, with all the other companies involved. Now, he chose not to be involved. --- Simply because I wanted to deal with the consultancy agreement and formalise that properly and then make sure, you know, that he's got no further - whatever activities he wanted to engage in to destabilise the company, that he was doing that not on BGRs premises, but I didn't have a problem with him being a director of all of the remaining companies, including the ones with the assets, because he could deal with that arm's length with somebody like Tony Cordato or somebody else present, but not on a day to day. Not with this correspondence and things coming through. That affidavit was sworn in the proceedings to resist applications made by the plaintiffs to Hely J for interlocutory relief. Mr Gulson said that on 3 July 2005 he '... checked into the Caritas Centre. At that time I was under extreme stress and on recommendation it was decided that it was in my best interests to rest and receive dedicated medical attention. My condition was, and I wish it remained [sic], a private matter'. 153 He also said that his stay at the Caritas Centre 'was welcome and beneficial' and that on 12 July 2005 when his family returned from an overseas trip he left the Centre and had resumed his ordinary activities. 154 On 2 July 2005 Mr Gulson was scheduled under s 21 of the Mental Health Act 1990 (NSW) i.e. made an involuntary patient. That was because he had disappeared from the Northside Clinic and went to stay at a hotel in the city. The police came to the hotel early in the morning and he was taken away to the Caritas Centre. It was false to say he 'checked into' the Caritas Centre, which conveyed volition on his part. 155 On 4 July 2005, doctors at the Caritas Centre recorded a history in which Mr Gulson told them that recently he 'has had to sack employees that were undermining him in front of others. This was a spontaneous decision'. (This was obviously reference to Mr Bax and Mr Gobert) It was also recorded that he thought his medication was working. 156 At a discharge interview on 12 July 2005 with his family and his treating doctors, Mr Gulson said he believed that he was at a turning point and felt optimistic about things. Dr Richardson advised him and the family to take a break from business for a couple of months and that he should not travel or be involved in anything complex, including business dealings for a few months. Despite that advice, Mr Gulson went straight back to the affairs of BGR. Moreover that advice was not revealed in his affidavit of 20 July 2005 which portrayed Mr Gulson as fit for the work he had resumed. 157 After I ruled on 10 July 2006 (see The Food Improvers Pty Ltd v BGR Corporation Pty Ltd [2006] FCA 1238) , that the plaintiffs should be able to have access to documents produced on subpoenas they had issued seeking information about Mr Gulson's treatment by Dr Harris and the Caritas Centre, Mr Gulson swore an affidavit on 30 July 2006. I seek to refer to paragraph 18 of my affidavit sworn 20 July 2005 to correct and amplify some of the matters referred to therein. I consulted Dr Newman Harris, psychiatrist on or about 15 June 2005. I voluntarily admitted myself into the Northside Clinic at Greenwich where I was seen by Dr Newman Harris on 28 June 2005. I was subsequently admitted to Caritas on 2 July 2005 and discharged from there on 12 July 2005'. Mr Gulson said that he did not recall whether Dr Harris told him that if he did not check himself in voluntarily, he would schedule him. Mr Gulson also recalled that his wife had told him that if he did not check himself into an institution for his mental care she would leave him taking their children with her. He regarded that as a strong inducement to admit himself on 28 June 2005. He also agreed Dr Harris may have suggested to Mr Gulson that he be admitted to hospital on 15 or 20 June 2005. Given his disturbed mental state at the time, including his lack of sleep, Mr Gulson's memory of that time is likely to have been affected, as he accepted. 159 While the matter may have been of some considerable personal embarrassment and distressing to raise both in affidavits and in open court, Mr Gulson was fully aware of the importance of being honest in his evidence. At one stage earlier in his career he had been admitted to practice as a lawyer. He also knew that it was important to tell the truth in his affidavit of 20 July 2005 because it would be used before Hely J to resist interlocutory relief. Notwithstanding this, Mr Gulson provided an account of his medical treatment which was incomplete. While he may have been suffering from effects of his condition on 20 July 2005 so that one could understand his lack of candour in the affidavit he swore that day, on 30 July 2006, Mr Gulson was fully aware of the issue in the proceedings that was raised concerning his mental health and his consequent behaviour in May 2005 and following. He said that he was seeking to 'correct and amplify some of the matters referred to in his affidavit of 20 July 2005 on this issue' but the economy of his revelation in both affidavits hid the nature and extent of his real condition. In July 2005, Mr Gulson may not have had sufficient insight into his own condition to appreciate that, or the extent to which, manifestations of his condition had affected him and his relations with others including Mr Bax over the preceding two moths. But by 30 July 2006 he gave a carefully crafted 'correction' and 'amplification' which was revealing for its lack of candour. 160 The account of 30 July 2006 on close reading reveals that he used the word 'voluntary' in relation to the admission to the Northside Clinic, but simply said that he was 'admitted' to Caritas. Absent background knowledge of the circumstances of his admission to the Caritas Centre, the omission of the word 'voluntary' in the account is not particularly amplificatory or corrective especially since the word 'admitted' was used. The significance of the fact that Mr Gulson was 'scheduled' under s 21 of the Mental Health Act 1990 (NSW) is that it reflected the seriousness of his mental condition and his own inability to be relied on to remain an ordinary member of the community and participate in business matters while suffering from his mental disturbance. Indeed, Mr Gulson had consulted, while in the Caritas centre with Mr Cordato with a view to taking proceedings to secure his release. In cross-examination Mr Gulson was evasive about his involuntary admission to the Caritas Centre. He said he had discussed the phrasing of his earlier (20 July 2005) affidavit on this topic with his then solicitors, at Allens Arthur Robinson, and believed what it said was truthful and accurate but then made a claim for privilege which was not challenged. I have difficulty accepting this evidence. However, Mr Gulson was clearly mentally sick at the time and I find that his evidence was unreliable on this point, rather than deliberately dishonest. 161 Mr Gulson's conduct in relation to the use of his evidence in his affidavits as to his own mental condition and his subsequent attempt to correct and amplify his earlier evidence, reveal that he was conscious of the impact that this may have on the assessment of his contemporaneous conduct and credibility. Mr Gulson's lack of candour about this, although perfectly understandable in human terms because of its embarrassment to him, detracts from the reliability of his evidence. It suited him to give the account he did in his affidavit when resisting claims for interlocutory relief based on his behaviour in mid 2005. I was not impressed by his veracity in this regard. They decided to appoint Mr McGrath as the agent for sale of Main Camp. There had been some discussions shortly before this between the parties. Mr Bax had been providing assistance to the Main Camp group by restructuring some of its financial accounts for the purposes of providing a financial information package to potential tenderers following assurances by Mr Gulson at a meeting at Main Camp plantation on 31 August 2005 that he would be consulted in the sale process. Those assurances were repeated at the meeting on 12 September 2005. 163 After Mr McGrath left, Mr Gulson said that he wanted Mr Bax to come back as the director. Mr Bax declined the request and Mr Cordato said that he could understand Mr Bax's position and did not see the need to press ahead with Mr Gulson's proposal. Mr Gulson did not mention anything about the reinstatement of Food Improver's consultancy agreement if Mr Bax did come back as a director of BGR. Nor did he suggest that Mr Bax would resume his previous position as managing director. 164 Mr Gulson acknowledged in evidence that Mr Bax had provided most helpful financial projections and figures in the process of arranging the sale of Main Camp plantation. No remuneration was given to Mr Bax for that work. Mr Gulson said that that was because Mr Bax did not ask to be paid. He did not offer to reinstate Food Improvers' consultancy agreement or to pay fees to Mr Bax should he return as a director. Mr Gulson's explanation was that if Mr Bax came back as a director it would be 'obvious' that the consultancy agreement would be reinstated. Mr Gulson asserted that it was common sense that that was what he meant. He asserted that he would not have said to Mr Bax 'Come back as a director, work on the sale and get nothing. First, as he said, he did not pay or offer to pay Mr Bax for the work he did on the sale. Rather he expected Mr Bax to ask for payment. Secondly, the offer of a directorship of BGR which Mr Gulson made to Mr Bax was not a return to the position before June 2005 in which Mr Bax would hold office as managing director and have a consultancy agreement. I am of opinion that Mr Bax acted reasonably in rejecting the offer because it would have left him in a much reduced position compared to that which he had enjoyed as an equal partner prior to June 2005. 166 During the meeting of 12 September Mr Cordato opposed paying Triad and Food Improvers any consultancy fees. He became quite agitated and said that he would not agree to any consultancy fees being paid to them. Mr Bax noted the then draft deed of agreement for settlement of the dispute provided that both Mr Gulson and he, through their respective companies, were to be paid the same amount for consultancy fees plus interest and that Triad would receive more interest than Food Improvers. He noted that after payment of those fees, the balance was to be distributed by way of fully franked dividends. Mr Cordato threw his pen down on the table and turned aggressively to Mr Bax saying that he did not care, he was not approving BGR paying any consulting fees or interest to Mr Bax. He said that those amounts were not in the management accounts of BGR or the accounts prepared by KPMG. Mr Bax replied that the amounts were not in the accounts because accruing the fees would have made the accounts far worse than they were and it would mean that both Mr Gulson's and his companies would have had to take up the accrued income which would be treated as assessable even though they had not received any funds. He said that the accounts prepared by KPMG were special purpose accounts. They were prepared to support the BGR group's tax return based on the management accounts and had not been altered. Accordingly the special purpose accounts did not contain all the disclosures that would be made in statutory accounts which was why they were called 'special purpose' accounts. 167 Mr Cordato again threw his pen down on the table and said that if the consulting fees were not in the accounts then he had been misled as a shareholder. Mr Bax replied that Mr Cordato knew very well the difficult trading conditions that the group had faced. He said that Mr Cordato had drafted the consultancy agreements and that BGR could not meet his obligations to pay the fees. Mr Cordato reiterated that he was not agreeing to any payments being made to Mr Bax and that was it. He said that any distributions were to be made according to the shareholdings. Mr Gulson remained silent throughout this exchange and the meeting ended. There is no mention of these fees anywhere in the group's books of account. I do not accept Mr Gulson's evidence about this. He must have been fully aware that Mr Bax was claiming over a million dollars in consultancy fees once any information about the proceedings had been given to him following his discharge from hospital on 12 July 2005. Besides having Mr Cordato as a source of information he had had Allens Arthur Robinson act for Triad and BGR in the proceedings and then Kemp Strang. Moreover, negotiations for settlement of the proceedings were taking place. It is inconceivable that Mr Gulson had no knowledge of Mr Bax's claim for consultancy fees or their quantum. Moreover, Mr Cordato, in his evidence denied saying at the 12 September meeting that the claim was all news to him and that the first time the issue popped up was in the solicitor's drafts. As he said 'I am certain I didn't say that. I knew all about the other fees. Mr Bax had prepared two scenarios, which came to be called options A and B, for the distribution of the proceeds of sale among the shareholders of BGR and faxed these to Mr Lombardo on 20 September 2005. Option A contemplated that each of Triad and Food Improvers would be paid consultancy fees totalling $1,040,849 together with interest on those fees of $276,001. Option B provided for the payment to Food Improvers of $500,000 for consultancy fees including interest and then for the distribution of the balance of the proceeds of sale of Main Camp without any accounting for consultancy fees for Triad or the balance due to Food Improvers. After he had spoken to Mr Gulson about the two options, Mr Bax also sent a copy of this fax to him. A meeting was arranged at KPMG for 22 September 2005. Mr Bax told Mr Gulson that the preferred scenario, following discussions with Mr Lombardo, was option B. I have already described part of this meeting. During the course of the meeting, Mr Bax explained that option B provided that his consultancy fees would be fixed at $500,000. Mr Gulson nodded his head in agreement. Mr Bax explained that the way option B worked was that the amount of consultancy fees and interest ($500,000) would be paid to Food Improvers. The balance of the sale proceeds would then be distributed by way of fully franked dividends to each of the shareholders in accordance with its shareholding proportion. On receipt of those fully franked dividends, each shareholder would repay its shareholder's loan account (this would restore a very substantial amount of cash to BGR, which would then be available for distribution). Mr Bax explained that BGR would then pay a further dividend from the cash it then had. Each of options A and B showed the steps involved in this methodology based on an assumption that the net proceeds of the sale of Main Camp would be about $6.345 million. 172 In both options, all the dividends were fully franked because BGR had sufficient franking credits to enable that to occur. However, in option A, each of Triad and Food Improvers had to pay 30% company tax on the amounts of consultancy fees and interest which they were to receive, so that the net sum ultimately distributed to each, after tax, would be about $3.6 million (or 65% of the assumed amount available for distribution of $6.345 million) for Triad, $1.4 million (or 25%) for Food Improvers and $515,000 (or 9%) for Cordato Partners Services. 173 In option B the figures were different. This was because Triad would receive the whole of its proceeds as dividends, and only Food Improvers would receive $500,000 in respective of consultancy fees, Triad, in option B, would receive about $4.1 million (or 67%), Food Improvers would receive $1.35 million (or 22%) and Cordato would receive about $700,000 (or 11%). 174 Mr Bax pointed out that option B provided for total cash paid to each of the three shareholders in BGR being more in than option A. Mr Gulson asked how Mr Bax arrived at the $6.345 million dollars as the net proceeds of sale. Mr Bax said that he had estimated the figures based on the sale price of $9 million plus debtors, in the value of cattle and the sale of stock, less the liabilities. He said that the figures were only estimates and that the actual figures would be used when they were available. He then said that the $500,000 (for Food Improver's consultancy fee) was fixed and that he would be happy with that amount. Mr Cordato expressed agreement with option B as did Mr Gulson. Mr Gulson's contemporaneous note of that meeting contained the notation 'option B works'. 175 Thereafter, the discussion turned to the mechanics of how the sale proceeds could be dealt with in the most tax effective way. As noted above, Mr Lombardo urged Mr Bax against receiving any monies by way of consultancy fees, since they would be taxable but Mr Bax resisted that suggestion. 176 In giving their evidence of Mr Bax's explanation during the meeting of 22 September 2005 of how option B worked, each of Mr Cordato and Mr Gulson, in the witness box, did not appear to understand the commercially simple rationale of the document. Each attempted to reconstruct what Mr Bax had said but in a way which showed that he had no real memory of his explanation and each had no accounting understanding of how option B worked. Nonetheless, I am satisfied, from Mr Lombardo's and Mr Bax's evidence that both Mr Cordato and Mr Gulson fully understood, at the meeting of 22 September 2005, that option B provided that Food Improvers be paid $500,000 in respect of consulting fees as a compromise before any distribution of profits, repayment of shareholders loans and further distributions would be made, and that each agreed that the method would be used. 177 In final submissions the defendants asserted that the method of distribution made on 23 February 2006 had been agreed prior to the meeting with Mr Lombardo. They asserted that Mr Bax, Mr Cordato and Mr Gulson met shortly in KPMG's foyer before going up to see Mr Lombardo. Mr Gulson made no mention of this earlier meeting in his first affidavit account of meeting with Mr Lombardo sworn on 16 March 2006. In his second account sworn on 4 May 2006 he said nothing to indicate that the $500,000 used in option B would not be paid; to the contrary his account was that Mr Bax said he wanted to receive his part of the distribution using that methodology. 178 Mr Gulson denied Mr Lombardo's account of the meeting in his affidavit sworn on 11 September 2006. In oral evidence he referred to a meeting in KPMG's foyer in which Mr Bax said he wanted to take the $500,000 in option B 'out of my share of the proceeds'. In cross-examination he asserted that Mr Bax said the $500,000 was to come out of his pro rata share. Mr Cordato's affidavit of 8 May 2006 makes no mention of a meeting in KPMG's foyer before seeing Mr Lombardo but reaffirms that he $500,000 in option B was part of the methodology proposed by Mr Bax for distribution. Mr Bax denied any discussion occurred in the foyer. 179 I accept the evidence of Mr Bax and Mr Lombardo that Mr Bax explained in the meeting with Mr Lombardo that he wanted $500,000 paid in respect of consultancy fees under option B before the balance of the sale proceeds was distributed and Mr Cordato and Mr Gulson did not object to that. This account is supported by the negotiations on the draft agreement and the repeated assertions by Cordato Partners in later correspondence up to January 2006 that the distribution would be in accordance with Option B. 180 I do not accept the evidence of Mr Cordato and Mr Gulson that any qualification was made before, at or after the meeting with Mr Lombardo as to how option B would operate. I find that at the time Mr Cordato and Mr Gulson knew that option B necessarily operated by paying the $500,000 to Food Improvers before the balance of the net proceeds of the sale of Main Camp was distributed according to shareholding proportions. 182 On 7 October 2005 the plaintiffs' solicitors, sent Kemp Strang and Cordato Partners a further draft deed of agreement which incorporated the distribution of the proceeds of sale, when received, in accordance with option B. In the draft deed, there was an express term that consultancy fees and interest due to Food Improvers and Mr Bax of $500,000 plus GST from July 2000 to the date of the receipt of the proceeds would be paid out of the proceeds of sale (cl 4(a)(viii)). There was also a clause providing for a release from any further claim for consultancy fees by Food Improvers and Mr Bax upon payment of that $500,000 plus GST (cl 4(c)). Option B was included as a Schedule as the contractual example of how payments contemplated by the deed were to be made (cl 4(f); Schedule 3). Neither Mr Cordato nor Mr Gulson attended to responding to Haywards draft deed for some time. 183 On 17 November 2005 Cordato Partners replied on their own behalf and on behalf of Mr Cordato personally with suggested amendments. However Cordato Partners charged BGR for writing the letter and I am satisfied that the letter was written on behalf of all of the defendants. In any event, the letter extensively reviewed the provisions of the draft deed, but did not comment on any of the provisions relating to the $500,000 consultancy fee payment, other than to renumber the schedule in which option B appeared. On 23 November 2005 Haywards responded and attached a marked up draft deed which incorporated many of the changes, leaving unchanged the consultancy fee provisions to which I have referred. The price was $9 million. Mr Bax's solicitors sought details from Cordato Partners (who by then acted for all the defendants) of the sale the next day, and again on 5 January 2006. None were provided. He had not been consulted on the terms of the sale. 185 Haywards on 5 January 2006 sought details of what the distribution of the proceeds would be from Cordato Partners. Cordato Partners responded the next day saying that BGR proposed to make a distribution 'along the lines set out in schedule 3 of the draft deed of agreement. Although not all terms of the deed agreement have been agreed, there is no dispute regarding schedule 3, which we note was prepared by your client. ' They referred to the fact that KPMG would be consulted in the next week as to the methodology for the distribution. Schedule 3 was, of course, option B. However, Haywards, on 9 January 2006 attached a copy of option B to their letter and asked for an express confirmation that it was that method of distribution to which Cordato Partners were referring. On 11 January 2006, Cordato Partners responded saying that there were no longer any settlement discussions on foot and that BGR was proceeding with the sale of Main Camp in accordance with the contract. In this respect we confirm that the schedule to which we refer in our letter of 6 January 2006 is the schedule you attach to your letter of 9 January 2006. They said that BGR was awaiting advice from KPMG in relation to the level of franking credits available before a distribution was made of the sale proceeds. It was intended, Cordato Partners said, that the distribution would be made as a dividend on a fully franked basis subject to advice that there were sufficient franking credits available. The reference to an interest payment in the letter could only be construed as a reference to option B. Haywards responded on 1 February 2006 confirming that they understood the proposal was to distribute funds in accordance with option B and invited the payment of the consultancy fees and interest of $500,000 forthwith. 188 Next, on 23 February 2006 without any consultation, BGR, under Mr Gulson's hand, wrote to Food Improvers advising that an interim dividend of $3,500,000 had been declared and was payable as at 22 February 2006. Food Improver's share was $423,841.20 cash after repayment of its shareholder's loan account of $1,483,541. A distribution schedule was attached. Food Improvers was credited with franking credits of $817,449.51. The distribution schedule provided that Triad would be credited with a cash payment of about $2.56 million, after repayment of its loan account of $2.8 million, and Cordato Partners Services would be credited with a dividend of $510,747 after repayment of its loan account of $125,067. This was, clearly, radically different to what had been proposed in option B. 189 Mr Gulson asserted that he had not taken any interest in the details of the draft settlement deeds and had never read the provisions relating to the payment of a consultancy fee to Food Improvers, and despite the fact that in early October 2005, when Haywards circulated the draft deed incorporating option B, Kemp Strang were acting as BGR's solicitors, he made no enquiries about it. I do not believe Mr Gulson. He attended the meeting with Mr Lombardo, and had discussions with Mr Bax. I am of opinion that it is highly unlikely that Mr Gulson was as disinterested as he sought to portray in his evidence. Rather, he was conscious in giving evidence that the distribution actually made on 22 February 2006 was very different from what he had represented would occur. He agreed that he would have read at least one of the draft deeds that passed between the solicitors during the period following 7 October, including the provisions of cl 4. He said that he would not have paid much attention to what happened in the deed. Given that on 3 November 2005 Mr Gulson had written personally on BGR's behalf to Haywards saying that he was considering the draft deed which the shareholders had discussed on several occasions, I am not prepared to believe his assertions that he was not aware of the contents of the draft deeds relating to the payment of consultancy fees. 190 Mr Gulson asserted that his letter on 3 November 2005 was 'what one does in these sort of situations is you need to buy time. ' He then said that he had had discussions with Mr Bax about settlement and knew that the draft deed needed further work, but asserted that 'that was far as it went'. When asked how he knew that the draft deed needed further work, he said that Mr Cordato had advised him. It means being a little bit more generous ... with the facts'. 191 I formed the view that he was being untruthful as to his knowledge of the draft deed and its contents and was seeking to avoid a finding that he had indicated agreement with option B. If what he wrote to Haywards on 3 November was 'stretching it a bit' then that in itself reflects badly on Mr Gulson's credibility and honesty in any event. However, I am not satisfied that he was being untruthful in the letter, as opposed to in the witness box. The course of the correspondence between the solicitors in the period between October 2005 and January 2006 satisfies me that Mr Gulson was fully aware of and, at that stage, had expressed his agreement to a distribution in which $500,000 in respect of consultancy fees and interest would be paid first to Food Improvers before the balance of the proceeds, after payment of external creditors, would be distributed to the shareholders. 193 In their defence of 6 March 2006, prepared by Mr Cordato, all the defendants, except Cordato Partners Services, asserted that they had entered into an agreement as to the distribution of the proceeds of sale of Main Camp, after payment of creditors and satisfaction of all financial agreements secured by guarantee and that that agreement had been carried out by the distribution that had been made on 22 February 2006. On 8 March 2006 Haywards sought particulars of that agreement. On 16 March 2006 Cordato Partners referred to the correspondence of 6, 9 and 11 January 2006 and option B as constituting the written part of the agreement. It was then asserted that no amount had been agreed to be paid by way of consultancy fees. 194 The further amended defences filed later assert that an agreement had been reached for distribution to be made to the shareholders of BGR from the proceeds of Main Camp station 'along these lines'. It was then asserted that the 'lines' were that the external creditors would be satisfied, an amount would be available for distribution to be paid in accordance with shareholding entitlement after repayment of loan accounts and using tax advice to find the most tax effective means. 195 For the reasons that I have given, I am of opinion that the negotiations culminating in the letter of 11 January 2006 all proceeded upon the basis that the method of distribution would be in accordance with option B, and that that included a payment, before any dividend, of $500,000 to Food Improvers by way of consultancy fees and interest thereon. The defendants' alleged contract is untenable because it, first, ignores the correspondence adopting option B and, secondly, asserts that option B was 'agreed' but then spells out an 'agreement' which does not reflect option B. No consideration for Food Improvers giving up the $500,000 or its other rights to consultancy fees is pleaded to support that contract. There is no evidence that the plaintiffs knew of, let alone, agreed to the terms which the defendants plead as a contract. 196 I am also of opinion that the correspondence on which the plaintiffs rely does not give rise to a legally binding agreement. Rather, Haywards sought in their letter of 5 January 2006 an identification of BGR's intentions as to the method of distribution failing which they would take steps to protect Food Improvers' interests. Cordato Partners' response of 6 January set out those intentions, which were to proceed with the distribution in accordance with option B. On 9 January 2006 Haywards responded asking what the defendants' position was with respect to execution of the draft Deed and seeking confirmation that the distribution that was proposed would be in accordance with option B. The response of 11 January 2006 from Cordato Partners indicated, clearly, that settlement negotiations were no longer on foot but that option B was the intended method of distribution. 197 I am not satisfied that this correspondence can be read as giving rise to a legally enforceable contract to distribute in accordance with option B. Rather, Haywards sought and received an indication of the intention which the defendants had for distribution. At the time the January letters were written, the intention of the defendants was to distribute in accordance with option B. But I do not consider that these letters were anything more than representations of an intention, as opposed to a promise, to distribute in accordance with the intention. And, I am of opinion that Haywards' letter of 1 February 2006 confirms that the preceding correspondence was not understood as giving rise to a contract. Whilst reserving their rights with respect to those matters pleaded in the present Federal Court proceedings, and notwithstanding the absence of a concluded agreement between the parties, our clients are content for the distribution to be made in accordance with the example distribution at this stage. The fact that in their letter of 11 January 2006, Cordato Partners stated that settlement negotiations were no longer on foot, indicated that there had been no concluded agreement beforehand and whatever consensus had been reached on option B, it was not a legally binding consensus. Mr Bax remained personally liable on some guarantees he had given to creditors of the group. Mr Gulson assumed sole executive control. He increased the amount which Triad was paid under the consultancy agreements to the sum of $20,000 per month commencing in September 2005, following a conversation between Mr Gulson and Mr Cordato in which Mr Gulson asked for the increase and Mr Cordato agreed. Triad continued to draw its monthly fee following completion of the sale of Main Camp plantation. 200 Mr Gulson asserted that the work he undertook justified the increase. He said he was working full time, at times it was very stressful and that he was doing at least the work of two people. He created a document which purported to set out an itemised description, month by month of the work which he claimed to have done. 201 The document he prepared covered what he said was the work undertaken between June 2005 and 5 April 2006. For June 2005 a page of activities was listed. These included attending Allens Arthur Robinsons, a two day attendance at Main Camp with Mr McGilvray and Mr Williams on a proposed marketing plan designed specifically to lift the per kilo selling price of tea-tree oil (about which neither Mr McGilvray or Mr Williams gave evidence). He also included an item 'attending to daily statutory filings'. When his attention was drawn to that in cross-examination, simply responded 'Yeah yeah, that's a nonsense; that's wrong, it is and shouldn't have been there. ' He then suggested that the entry was to be read as attending to statutory filings. When asked what that involved he said that this was material 'inputted by a computer, check it off, check that it's accurate and press the button'. He was challenged that he did not do that and responded 'Yes I did, and before I could use a computer I had our accountant check it off. ' The statutory filings which were made by members of the group during the period were the subject of a Notice to Produce. This became an exhibit in the proceedings (Exhibit N) and consisted of over fifty business activity statements and instalment activity statements prepared for various companies within the group by the group's accountant, Ms Bojanovic. All but one were signed by Ms Bojanovic, the exception being a business activity statement of BGR signed by Mr Gulson on 13 December 2005. The statements covered the period between July 2005 and October 2006. I am not satisfied that Mr Gulson did any work on these statements. He was not an accountant. Nor is he proficient in fiscal matters to do with the business (which was why Mr Bax handled such matters). 202 Next Mr Gulson was asked about his assertion of spending considerable time with Minter Ellison in discussing issues relating to the BARM litigation. When cross-examined about that claim, he said that he would probably have dealt with Minter Ellison at least once or twice a fortnight in a detailed way and would otherwise deal with one of its taxation partners, Mr Aitken, in a more relaxed way over coffee because he was trying to keep the bills down. However in Minter Ellison's timesheets for the period between July 2005 and August 2006 Mr Gulson's name is referred to on less than ten occasions, five of which related to discussions in June 2006 and one in relation to attendances in August 2006. Mr Gulson asserted that times he spent with Mr Aitken were not recorded because Mr Aitken did not charge for that time, although he was the partner in charge and his name appeared on the top of the timesheets. However, a number of the entries in which Mr Gulson's name appeared in the timesheets involved Mr Aitken. I do not accept Mr Gulson's evidence that he had one to two meetings or dealings per fortnight with Minter Ellison during this period. 203 Among other entries which Mr Gulson propounded in his exhibit so as to justify his increase in consultancy fees, were attendances with Kemp Strang, solicitors, (who were acting for BGR and Triad in the litigation,) meeting with Mr Bax concerning a proposal for sale of the property 'and other matters'. I accept that Mr Gulson's executive responsibilities increased with Mr Bax's departure. But during June and July 2005 I infer that Mr Gulson was unable to spend anything like the amount of time he had previously or would in the future spend on the business because of his mental illness and hospitalisation. 204 By the time that the sale of Main Camp plantation had been completed, there was very little substantial work for Mr Gulson to do. This is borne out by Mr Gulson's letter of 22 March 2006 from BGR to the Australian Competition and Consumer Commission (Exhibit F). Until 23 January 2006 (when it was sold) Main Camp Holdings owned the land known as Main Camp station and now has no business activities. Main Camp Corporation sold essential oils sourced from the Main Camp station in consequent upon the sale of the property, is winding down its business activities. Mr Gulson caused the consultancy fees to be paid to Triad in advance on at least two occasions. Thus on 7 February 2006, following the sale of Main Camp plantation, consultancy fees for the three months February, March and April 2006 were paid to Triad. On 21 March 2006 the consultancy fees for May 2006 were paid to Triad. Thus $80,000 (exclusive of GST) had been paid to Triad for the four months ended May 2006 in respect of BGR's virtually non-existent business at that time. I am not satisfied that there was any bona fide business reason why such payments should have been made in advance or why they should have been made and continued at the rate of $20,000 per month at a time when BGR group's business was, effectively, merely that of a holding company. These payments, of course, were made without Mr Bax's or Food Improvers' consent and had the effect of running down the cash available for payment to shareholders. These now amount to several hundred thousand dollars. 207 Mr Cordato caused his solicitor's firm, Cordato Partners, to invoice BGR in respect of work performed on behalf of BGR shareholders, Triad and Cordato Partners Services, in defending the litigation. Mr Cordato asserted that he had made an error in charging BGR for work done on behalf of his own company, Cordato Partners Services, because he kept no separate timesheets for that work. I do not accept his evidence. It is clear from reviewing Mr Cordato's accounts, that he regarded BGR as the only source of payment of his company's (Cordato Partners Services) legal fees. Mr Gulson caused those accounts to be paid. Mr Gulson also asserted this was an error but I do not accept that evidence. Likewise BGR was billed for work performed in defending Triad's interests in the litigation. Mr Cordato again asserted this was a mistake and could be corrected. I do not accept that he made a mistake. 208 Mr Cordato also charged BGR for drafting his own affidavit of 21 July 2005. He had no record at all of any work which he performed for Cordato Partners Services which has not been charged to BGR. His firm also charged BGR for attendances at Court on his company's behalf and for drafting his company's defences and affidavits sworn by him. 209 An issue in the litigation involved the participation of Mr Cordato's firm as solicitors on the record for the defendants. Had Mr Cordato seen any distinction between his own personal interests and the personal interests of Mr Gulson, through their respective companies, from those of BGR, Mr Cordato would have kept proper timesheets and billed those matters separately. The fact that no separation was made and bills were rendered to and paid by BGR for work done, including, for example, Mr Cordato drafting Cordato Partners Services' defences, demonstrates that both Mr Cordato and Mr Gulson were misusing their position as persons in control of BGR to have it fund their own defences of the litigation. In contrast, both Mr Cordato and Mr Gulson were aware that when Kemp Strang acted in late 2005, their fee notes, were addressed to Triad and not BGR. Nonetheless, after Kemp Strang ceased to act, BGR paid Kemp Strang's fees. Mr Gulson's rationalisation for this was that it was appropriate that BGR pay the fees. When Mr Gulson requested him to act Mr Cordato said that there was a potential conflict of interest were he to do so. Mr Gulson said that Allens Arthur Robinson had considered the issue of conflict as between the BGR group companies when they took instructions. Subsequently, he gave Mr Cordato a copy of that firm's letter of 20 July 2005 in which they said that they acted for BGR and its subsidiaries. Allens Arthur Robinson did not claim to act for Triad. I have given a number of instances above of circumstances in which Mr Gulson appeared to me to be deliberately misleading or unreliable. Whether this is a symptom of some unresolved psychiatric condition or whether it is a symptom of Mr Gulson's attempt to look after his own financial interests, it leads me to the conclusion that his evidence was generally unreliable. Mr Gulson sought to say what he believed would suit his own interests in the proceedings and to justify his own position, in the manner of an advocate, rather than a rencounter of facts. His demeanour and manner changed from time to time in the witness box in the sense that at times he appeared to be extremely alert and focused while at others he was quite detached. At times he was not prepared to make ready concessions of obvious matters, some of which I have set out above. --- Oh, look, this is - we're a corporation, you know? This is not about what one person does, and one person doesn't do. It's a corporation. The corporation lives on, regardless of whether Jim's there in control of sales and marketing, or whether I'm there. I'm really sorry, but, you know, there's no specialties here. While in a manner of strict legal theory, and I appreciate Mr Gulson has legal training, what he said was correct, the comment was made during the course of cross-examination dealing with his very personal interaction with Mr Gobert on 29 May 2005. 213 Mr Cordato was also a witness who, unfortunately, I found unreliable. He had a material financial interest in the litigation through his beneficial holding in Cordato Partners Services. He was also, from the outset of the dispute, likely to be a material witness as to disputed issues of fact in relation to conversation he had had with Mr Bax, Mr Gulson and later Mr Lombardo. He agreed that when he swore his affidavit of 8 May 2006 he realised both he and Mr Bax were directly in conflict in respective of various conversations in which they were both participants. Nonetheless, having accepted that he was an experienced solicitor in commercial litigation, he proceeded to draft not only his own affidavit in relation to those conversations but also Mr Gulson's affidavit in relation to the same conversations in which all three were present. Mr Cordato certified compliance of those affidavits under O 14 r 2 of the Federal Court Rules . And, he acted as the defendants' solicitor on the record. 214 When his attention was drawn to r 19 of the Solicitors Rules made under the Legal Profession Act 2004 (NSW) he sought to ascribe to that rule a construction which I am unable to understand. --- I wouldn't put it in such strong language. --- There is a solicitors practice rule which I've - which I read a while ago so I can't be quoted on it, but to the effect that when a solicitor is to be - to give evidence in litigation they should not be conducting the matter, and I think - they shouldn't be personally conducting the matter, they are entitled to have someone in their office to do so, so I believe that what you're getting at here is, "justify defend his conduct. " The way I read it is that I'm required to give evidence in these proceedings, so reading it that way I should not be objectively - purporting to give assistance to the client or to the court by --- I should not be the solicitor actually conducting the proceedings if I'm to be independent in that respect. --- I supervise the conduct of the proceedings. I wouldn't say I'm intimately involved. --- I have settled the defences, yes, but I haven't drafted them of - entirely of my own accord and I've had instructions on them. --- I have drafted my affidavits and another - probably two others. You've in fact helped draft Mr Gulson's affidavits in the proceedings, haven't you? --- Yes, I have. You will agree with that? --- Yes, I have. --- Yes, I have. You are a witness about material matters in these proceedings, aren't you? --- Yes. However, he had drafted pleadings and a number of affidavits in the proceedings. It seems to suggest both. But the way I have read the Rules is that provided one does not --- one has an instructing solicitor, which I have, and doesn't take any part in instructions in the Court proceedings, then it is permissible to do so. I am unable to understand how Mr Cordato rationalised his conduct in accordance with r 19. I am prepared to accept that he considered the rule and gave it a construction under which he could continue to act. I do not think that Mr Cordato was setting out deliberately to breach r 19 but I cannot see any reasonable basis for his interpretation. The rule in terms prohibits not just appearance as an advocate, but also acting as solicitor, in the same situation. 217 By the time he had drafted his affidavit of 8 May 2006, it was obvious to him, as he said, that he would have to give evidence material to the determination of contested issues of fact before the Court. These were in relation to disputed conversations with Mr Bax. And he agreed that this material issue affected him, through his beneficial interest in Cordato Partners Services, in a significant financial way. He also knew that his integrity was in issue in the sense that he and Mr Bax gave different versions of conversations, including that of 22 September 2005 in the meeting with Mr Lombardo and Mr Gulson. I just continued to act. I didn't think about it at the time. Mr Cordato ignored the obvious problem unthinkingly. His continued participation in the proceedings as solicitor on the record and actively drafting affidavits and defences for himself and Mr Gulson was the result of his misconstruction of r 19, his determination to continue to act and obtuseness. I do not think that Mr Cordato made a dishonest misconstruction of r 19. Rather, he was wilfully blind in the view that he took of the rule. The requirement of rule 19 was that Mr Cordato could not continue to act when he knew, as he did on 8 May 2006, that he would be required to give evidence material to the determination of contested issues between himself, Mr Gulson and Mr Bax. Rule 19 is pellucidly clear. 219 I have been quite concerned about Mr Cordato's evidence because it must be assessed in light of the fact that the plaintiffs had sought orders enjoining him from acting and had put on a motion at the time his affidavit of 8 May 2006 was being prepared seeking to have that issue resolved immediately. Written submissions were prepared by the plaintiffs and served on Mr Cordato's firm. He said that he did not read them. Again, that is an answer which has caused me difficulty, but I think it is consistent with the above attitude Mr Cordato adopted to his own position. WAS MR BAX'S REACTION TO THE EVENTS OF 29 MAY 2005 A RUSE? The argument seems to have been based on a suggestion that the business had a facility limit with Elders of $1,080,000 which had been temporarily extended to $1,380,000 until 31 August 2005 and which Mr Bax must have appreciated could not be repaid. 221 Mr Bax pointed out the group also had a Commonwealth Bank account. No financial analysis or expert evidence was tendered to support the defendants' suggestion. Mr Bax could simply have asked Mr Gulson to dissolve their partnership. No advantage was suggested to Mr Bax in cross-examination or submissions, for Mr Bax to have staged his departure in the way it occurred. No reason was suggested by the defendants why Mr Bax would want to provoke litigation in which Mr Gulson had, and he did not have, access to the group's funds in circumstances where Mr Gulson had the majority shareholding. 222 The group had substantial net assets, as was shown by the fact that over $6,000,000 was available for distribution after payment of creditors from the sale of Main Camp about six months later. Mr Bax had given personal guarantees to finance companies for some of the group's liabilities. Abandoning his position would mean that he could be exposed to those creditors, if there were default under their facilities. 223 The defendants (other than Cordato Partners Services) also denied in their pleaded defence that Mr Gulson acted abusively on 29 May 2005 in the Renaissance Hotel and that he had terminated Mr Gobert's employment. Moreover, they pleaded that the plaintiff's allegations 'were made as a ruse to deflect responsibility for the refusal by Jim Gobert and John Bax to continue with the travel arrangements made to visit customers and potential customers ...' (Defence [43]). Mr Gulson verified that defence. For the reasons I have given this defence had no substance. In their final submissions the defendants abandoned the pleaded allegation of a ruse, no doubt because it was unsustainable. Yet they persisted with a contention that Mr Gulson had no option but to terminate Mr Bax's consultancy. That ignored what Mr Cordato had suggested to both Mr Bax and Mr Gulson in his email of 30 May 2005 that it '... would be obviously beneficial (probably vital) if [Mr Bax and Mr Gobert] remained pending the sale' of the business, in light of the breakdown in relations. 224 I find that Mr Bax did not engineer his own departure from the group and that he was genuine in his spontaneous reaction to what Mr Gulson did in sacking Mr Gobert on 29 May 2005. I am of opinion that the defendants' contention is baseless. 225 Mr Gulson asserted that Mr Bax had a discussion with him in early 2005 as they were discussing the fit out of BGR's new offices, which were to be located next to Cordato Partners. Mr Gulson said that Mr Bax said he was thinking of winding down his involvement in the business later in 2005. I accept Mr Bax's denial of that assertion. 226 The defendants also asserted that after Mr Gobert's sacking became known to Main Group's customers, he and Mr Bax orchestrated a campaign against to undermine Mr Gulson and to set up their own commercial opportunities with those customers. Mr Lawson, the Biomor representatives and Murray Hunter, managing director of Perlis Essential Oils of Malaysia all wrote to Mr Bax expressing appreciation of him and Mr Gobert and either distancing themselves from, or complaining of, Mr Gulson's inappropriate behaviour in his dealings with them. I do not consider that this evidences any disentitling or wrongful conduct by Mr Bax. He had seen Mr Gulson's behaviour and actions on the night of 29 May 2005 as destroying their partnership. Friends and contacts which he and Mr Gobert had made over the years were entitled to get their side of the story and to express their own views. The defendants sought to place this in the context of an argument that Mr Bax 'abdicated his responsibilities in London' and for the rest of the planned trip by refusing to participate after 29 May 2005. This argument has no substance. Mr Gulson had shown he was impossible to work with at this time. The medical and factual evidence to which I have referred above makes plain how ill he was and how that affected his ability to relate to others. 227 Mr Gulson's behaviour on the night of the 29 May 2005 was seen by Mr Bax as destructive of their partnership. That view was honest and reasonable. The defendants' submission in effect, required Mr Bax to ignore Mr Gulson's unilateral sacking of Mr Gobert and to acquiesce in a 'business as usual' stance when what Mr Gulson was doing was very unusual. The basis of the claim under s 232 is that the conduct of BGR's affairs was either contrary to the interests of the members as a whole or oppressive to, unfairly prejudicial to, or, unfairly discriminatory against, Food Improvers whether in its capacity as a member or any other capacity. In considering what a company's affairs are, s 53 of the Act provides a very wide, but not exhaustive, definition. Thus, the promotion, formation, membership and control of BGR are relevant, as is its internal management its share ownership and the power of persons to exercise or to control the exercise of rights to vote attached its shares (s 53(a) , (c), (e) and (f)). 229 The Court has considerable powers to make orders designed to remedy a situation in which a plaintiff is able to establish the grounds provided under s 232. Thus s 233 enables the Court to make an order that the company be wound up, or if that is not appropriate to appoint a receiver or a receiver or manager of any or all of its property, regulate the conduct of its affairs in the future, order the purchase of shares or order a person to do a specified act. 230 The second statutory basis upon which the plaintiffs claim relief is an order under s 461(1)(k). That provides that the Court may order the winding up of BGR if it is of opinion that it is just and equitable to do so. Where an application is made by a member in the position of Food Improvers as a contributory (because of its position as a shareholder) on the just and equitable ground, the Court is obliged to make the order for winding up if it is of the opinion that the plaintiffs are entitled to that relief and in the absence of any other remedy it would be just and equitable to do so, unless there is some other remedy available to the plaintiffs and that they are acting unreasonably in seeking to have the winding up order made instead of pursuing that other remedy (s 467(4)). The defendants have not suggested that, in the event that the plaintiffs are able to prove their case, they are acting unreasonably in seeking have BGR wound up. However the plaintiffs have applied, under s 233(h) for a receiver to be appointed to BGR as a preferred alternative. As I have found, that is how the three men proceeded until Mr Reece's departure. Thereafter, Mr Bax and Mr Gulson operated as partners. Mr Cordato's role was confined to that of an external lawyer and a silent investor. 232 The remedies provided for oppression and the winding up on the just and equitable ground which the Corporations Act 2001 (Cth) and its predecessors have for many years provided are distinct. But, considerations relevant to each remedy can overlap because s 232(a) identifies the conduct of the company's affairs as being a relevant criterion for the ascertainment of whether what is complained of is either contrary to the interests of the members as a whole or oppressive within the meaning of s 232(e). The Court is invited to enquire into what the relationship between the members was in much the same way as it is required to assess their relationship for the purposes of determining whether it is just and equitable to wind the company up. 233 In his seminal speech in Ebrahimi v Westbourne Galleries Ltd [1973] AC 360 at 380B Lord Wilberforce pointed out that a company however small and however domestic is a company and not a partnership or even a quasi partnership. He said, however, that it was through the just and equitable clause (now s 461(1)(k)) that obligations, common to partnership relations, may come in. He continued by pointing out that the just and equitable ground is available if the member can point to and prove some special underlying obligation of his fellow member or members in good faith, or confidence, that so long as the business continues he shall be entitled to management participation, an obligation so basic that, if broken, the conclusion must be that the association must be dissolved ( Ebrahimi [1973] AC at 380E). 234 Lord Wilberforce said that the principles on which the member may do this had been worked out by the Courts in partnership situations. Earlier in his speech, he pointed out that the just and equitable ground enables the Court to subject the exercise of legal rights to equitable considerations. He said that these considerations were of a personal character between one individual and another which may make it unjust or inequitable, to insist on legal rights or to exercise them in a particular way. Lord Wilberforce said that it would be impossible and wholly undesirable to define the circumstances in which those considerations may arise and pointed to the fact that merely because a company was a small one or a private company was not enough to bring those into play. 235 If the association were purely a commercial one in which it could safely be said that the basis of the association was adequately and exhaustively laid down in the company's constitution, equitable considerations need have no part ( Ebrahimi [1973] AC at 379 C-E). Such conduct is capable of being unfairly prejudicial to a member within the meaning of s 232(e): Dynasty Pty Ltd v Coombs (1995) 59 FCR 122 at 135D per Spender, O'Loughlin and Branson JJ. Their Honours went on to apply what Lord Wilberforce said in Ebrahami [1973] AC at 379 which I have set out above on the question of the existence of quasi partnership ( Dynasty 59 FCR at 138 B-D). They took the view the act of removing a quasi partner as a director could be significant evidence of oppression ( Dynasty 59 FCR at 138 E-F; see also Smith Martis Cork & Rajan Pty Ltd v Benjamin Corporation Pty Ltd (2004) 207 ALR 136 at 149-150 [105]-[107] per Wilcox, Marshall and Jacobson JJ). 237 In In re A Company [1999] UKHL 24 ; [1999] 1 WLR 1092 at 1098D-1102B Lord Hoffmann discussed the interplay of the just and equitable concept in the analogue of s 461(1)(k) and 'unfair' in the analogue of s 232(e). He pointed out that although fairness was a notion that could be applied to all kinds of activities, its content would depend upon the context in which it was being used ( In re A Company [1999] 1 WLR at 1098F). Of course, there will be decisions in any association, such as a partnership or company, which one or more members find to be prejudicial or discriminatory against them. But the emphasis in establishing a ground for an order under s 232(e) is that the conduct be unfairly prejudicial or discriminatory or be oppressive ( Wayde v New South Wales Rugby League Ltd [1985] HCA 68 ; (1985) 180 CLR 459 at 467-468 per Mason ACJ, Wilson, Deane and Dawson JJ). Thus, the bona fide and proper exercise of a power under a company's constitution for the purpose for which it was conferred is unlikely to be found to establish unfair prejudice or unfair discrimination against a member under s 232(e) ( Wayde 180 CLR at 467). 238 In Tay Bok Choon v Tahansan Sdn Bhd [1987] 1 WLR 413 at 417H-418A the Privy Council held that where a person has been led to believe, even in the absence of any express assurance, that he or she would participate in the management of a company, he or she would in any event be entitled to a seat on the board so long as he or she continued to hold his shares. Their Lordships said that although no specific undertakings may have been given, an obligation could be implied or inferred from the conduct of the parties to allow the person to participate in the management and to be a director '...unless by withdrawal of his support or for some other good reason a change in management and control became necessary. The context of which their Lordships were speaking, in my opinion, was one in which the withdrawal of support by the director claiming a remedy under the just and equitable ground or for oppression occurred as a free and voluntary act. Where the relationship between the parties breaks down, and the plaintiff is not at fault, the substratum of their mutual endeavour may be removed so as to make it appropriate to grant relief under ss 233 or 461 (1)(k). I do not understand their Lordships to suggest otherwise. A broad discretion is conferred by these provisions on the court to remedy instances in which relations break down among those who have combined to run a business through a corporate structure. This is necessary because of the wide variety of circumstances in which such disputes can arise. Courts have cautioned against the creation of hard and fast rules to govern the application of the broad discretionary remedies in the legislation (see Ebrahami [1973] AC at 374-375, applied by Gummow and Hayne JJ and Vigolo v Boston [2005] HCA 11 ; (2005) 221 CLR 191 at 217-218 [71] ). They both recognised that Mr Gulson's company, Triad, held a substantial majority of voting power, but the substratum on which the two had acted over the preceding years was that each treated the other as a partner with an equal say in the management of BGR on business direction and, planning issues and Mr Bax was managing director, even though not formally appointed as such. They were both prepared to and did work for a substantial period for no guaranteed remuneration from March 2001, when large sums, representing consultancy fees, had been repaid and further payments suspended. These factors demonstrated that neither man (or his corporate vehicle) was looking to strict legal rights under BGR's constitution as the sole source of the regulation of their relationship in the conduct of BGR's affairs. 241 Mr Bax's plan, which had been agreed in 1999, was that each of the then three executives, and later two, would have equal say in the management of BGR. That was essential to the efforts being made by each of them. And, the recognition in the consultancy agreements that each would be equally rewarded for their work was also a key feature in their relationship. The equal reward for their work was, of course, distinct from the ultimately unequal distribution or burden which would occur when there was a need to resort to the use of shareholding to measure either benefit or obligation. Thus, in early 2001, when each of the investors was called upon to make loans to BGR, they did so in accordance with their approximate proportionate shareholding. Likewise, when BGR came to pay dividends they would have anticipated that it would do so in accordance with shareholding. However, each investor in BGR was aware that the three executives had consultancy agreements. Once payment of fess under those agreements ceased, or was made at a reduced rate, each investor could not have considered that the unpaid fees were foregone so as potentially to increase the ultimate amount available to be distributed as dividends at the unpaid executives' expense. The dividends were to come after the remuneration of each of the partners who had worked to generate such profits or assets as might be distributed by way of dividend. It would be unfair having regard to the way in which BGR's affairs had been conducted since mid 1999 to distribute, in the absence of agreement to do so, a dividend among the members in proportion to shareholding where the three executives' companies had been left unremunerated or inadequately remunerated, according to the consultancy agreements they had made for remuneration, in the period in which what was being distributed as a dividend had been earned or gained. 242 On 29 May 2005 the personal relationship between Mr Bax and Mr Gulson deteriorated so that Mr Bax said he could no longer work with Mr Gulson. Were they in partnership, it would be clear that the loss of mutual trust and confidence at that point would have meant that the partnership had been brought to an end. I am satisfied that is just and equitable to order the winding up of BGR because of the destruction on 29 May 2005 of the mutual trust and confidence that occurred between Mr Bax and Mr Gulson, the latter being joined shortly afterwards by Mr Cordato when sides were taken. Mr Bax had given up his position as chief executive officer of the Ink Group in order to take on his position as managing director of BGR. For the next six years he managed BGR and its subsidiaries. But he was confronted on 29 May with Mr Gulson, regrettably mentally unwell, but also belligerently insisting on sacking Mr Gobert in the middle of their overseas trip. Mr Gulson's behaviour was such as would have undermined anyone's trust and confidence in his ability to cooperate in the running of the enterprise. 243 I am satisfied that Mr Bax bona fide believed he could no longer work with Mr Gulson as a result of Mr Gulson's conduct and that Mr Bax acted honestly and reasonably in forming that view. Indeed, within two weeks Mr Gulson's wife was in a similar position, ultimately threatening to leave him with their children unless he admitted himself to hospital for treatment of his mental condition. His behaviour in this period was, regrettably, affected by his illness. That behaviour was destructive of the mutual trust and confidence he and Mr Bax had hitherto enjoyed. It involved the assertion of Mr Gulson's will and his attempt to dominate. In addition, he assigned false reasons for calling the meeting of BGR on 1 July 2005. While Mr Cordato says he was not consulted, he made no attempt to deal with Mr Gulson about the falsity of those reasons of which he knew (such as the fact that Mr Gobert had not refused to participate further in the overseas trip but had been summarily dismissed by Mr Gulson on the night of 29 May 2005). Moreover, Mr Cordato was well aware of Mr Gulson's deteriorating mental condition, but chose to do nothing about it. By saying that he took heed of what the majority shareholder thought he abdicated control to Mr Gulson. 244 Thereafter, both Mr Cordato and Mr Gulson used their powers to direct BGR in such a way that Mr Bax was entirely excluded from his previous position as an equal partner in the business' direction and planning and managing director. The circumstances in which BGR had been formed and run up to 29 May 2005 radically changed from that night. Mr Gulson's decision to dismiss a critical employee in the middle of the overseas trip without any consultation and to persist in what was an untenable basis for his dismissal showed that he was no longer able to be dealt with by Mr Bax in the way that they had related to each other before this happened. Then, Mr Gulson chose to break the deadlock he had created on the board by the exercise of Triad's majority shareholder's powers to remove Mr Bax and to cancel Food Improvers' consultancy agreement. 245 I am of the opinion that conduct warrants the making of an order under s 461(1)(k) because it is just and equitable that BGR be wound up. 246 However, it is necessary to consider whether some other remedy might be available of a less drastic kind under s 233 (see s 467(4)). In Fexuto Pty Ltd v Bosnjak Holdings Pty Ltd (2001) 37 ACSR 672 at 687 [89]-[90] per Spigelman CJ, 772 [570]-[571] per Priestley JA and 792 [691] per Fitzgerald JA, the Court of Appeal of the Supreme Court of New South Wales held that the existence of irreconcilable differences among persons involved in what is, in effect, a partnership, conducted through a company, applies both to applications for winding up on the just and equitable ground and also to oppression suits. Spigelman CJ pointed out ( Fexuto 37 ACSR at 687 [89] --- [90]), if the court decided the person excluded was the one responsible for the breakdown in the relationship, he or she would not be entitled to claim to have suffered oppression under s 232. That is not this case. Mr Bax's conduct was understandable and reactive to Mr Gulson's. If fault is to be attributed in the breakdown of the relationship, it is to Mr Gulson for the way he behaved in the Heathrow Hotel and afterwards. That conduct was destructive of and confirmatory of the destruction of the previous relationship of mutual trust and confidence. Mr Cordato later came to participate in association with Mr Gulson in that destructiveness. 247 As Priestley JA said in Fexuto 37 ACSR at 772 [571], putting in quasi partnership terms what happened from 29 May 2005, the majority shareholder and director changed the previous management regime against the opposition of the minority director and shareholder. He held that this entitled the minority to a remedy and that in ordinary partnership situations the remedy was dissolution of the partnership. Priestley JA pointed out that the remedy available under the analogue of ss 232 and 233 was broader than simply a winding up. He had found that oppression in that case had occurred by a change in the previous way in which the business had been conducted, where all the partners or directors jointly engaged in direct management of the company ( Fexuto 37 ACSR at 772 [569]). 248 Even if oppression of, or unfair prejudice or unfair discrimination against Food Improvers (either as a member of BGR or the partnership or as the provider of Mr Bax's services under the consultancy agreement) were not established solely by what occurred on the evening of 29 May 2005, Mr Gulson's later determination to use his voting power to exclude, first, Mr Bax as a director of BGR and, secondly, Food Improvers from the benefits of both his directorship and the consultancy agreement on the knowingly false basis upon which it was asserted that Mr Gobert's contact should be terminated or its termination affirmed, was oppressive of, unfairly prejudicial and unfairly discriminatory against Mr Bax and Food Improvers. When Mr Cordato sided with Mr Gulson and they both voted in favour of the resolutions on 1 July 2005, the oppression of Food Improvers was manifest. 249 Mr Bax was excluded from any management role in BGR. Mr Gulson commenced to pay Triad an increased consultancy fee. He and Mr Cordato initially consulted with Mr Bax about the sale of Main Camp plantation, but later negotiated the sale without Mr Bax's involvement and refused to inform him of the details of its terms apart from the price. 250 Mr Gulson and Mr Cordato used their majority powers to have BGR pay for all of the legal fees involved in Triad's and Cordato Partners Services' defence of these proceedings. They caused Cordato Partners to receive not only its fees for this work but also substantial fees for previously unbilled work once the proceeds of sale of Main Camp were received. There was no basis on which the expenditure of BGR's funds for the defence by Triad and Cordato Partners Services of these proceedings could be seen as being in the best interests of the members as a whole. It was plain to Mr Cordato and Mr Gulson that the relationship with Mr Bax had broken down. The resistance to the making of an order under s 461(1)(k) or s 233 for winding up BGR appears to have been initially based on an assertion that Mr Gobert had resigned and that he and Mr Bax had refused to participate further in the planned activities on the trip. That assertion was unsustainable because it was false to Mr Gulson's and Mr Cordato's knowledge. They also sought to argue, without justification, that Mr Bax was not entitled to be the managing director of BGR, he could be removed as a director and Food Improvers' consultancy could be terminated for the false reasons put forward in the notice of the 1 July 2005 meeting. 251 Next it was asserted that Mr Bax had voluntarily sought to bring the relationship to an end so that Mr Gulson was merely formalising matters on 1 July 2005 by forcing through his resolutions at the meeting of BGR. Given that both he and Mr Cordato were well aware of his mental illness and the impact that that illness was having on Mr Gulson's relationships, the failure, at least, to pause and reflect that Mr Bax had a legitimate reason for not being able to continue to work with Mr Gulson resulted in a persistence by Mr Cordato and Mr Gulson in pursuing this litigation. 252 Although he had been promised, as had been his right as a quasi partner, the right to be informed and consulted in the sale process, Mr Bax was excluded from discussions about or negotiations for the ultimate purchase of Main Camp plantation. For months the plaintiffs were told that a distribution would be made in accordance with option B. Instead, they were confronted with a fait accompli when a different form of distribution was made without any further consultation in February 2006. 253 Moreover, hundreds of thousands of dollars of BGR's funds have been spent in the defence of these proceedings so that Mr Gulson's and Mr Cordato's companies, Triad and Cordato Partners Services can resist orders being made that affect them in their personal capacity as shareholders. The expenditure of BGR's money in their defence of these proceedings was unjustifiable. There will be cases where a trustee or fiduciary is entitled to spend trust money in the defence of an attack of upon his or her own conduct. But the present case does not warrant since a conclusion. I have found a number of instances in which each of Mr Cordato and Mr Gulson has acted in the management or conduct of BGR's affairs in his or their own interests rather than those of BGR. And in some of those instances I did not accept their evidence or have positively disbelieved it. 254 Moreover, Mr Cordato acted in these proceedings as solicitor for all the defendants in circumstances where no reasonable solicitor in his position could possibly have acted. He was precluded by the application of r 19 of the Solicitors Rules from acting, certainly by no later than 8 May 2006, but probably considerably earlier. But in any event, Mr Cordato's financial interest in the success of the defendants' case meant that he was unable to act with the independence which a solicitor on the record must have as part of the relationship between an officer of the court and the court in the presentation and conduct of litigation: Kallinicos v Hunt [2005] NSWSC 1181 ; (2005) 64 NSWLR 561 at 512 [76] , 584-585 [86], 586 [91] per Brereton J. As Brereton J said, a solicitor should not act where a fair minded and reasonable observer would think that his or her independence and objectivity as a solicitor would be compromised. The scrutiny which the solicitor's conduct would attract in litigation, his or her knowledge of the instructions in relation to the subject matter in which he or she might be a material witness are relevant factors in this regard. ( Kallinicos 64 NSWLR at 586 [91]). Mr Cordato was a material witness on important conversations; he charged BGR for the personal costs for which Triad and Cordato Partners Services were liable and he continued to act oblivious of the motion to enjoin him from doing so. He prepared Mr Gulson's affidavits including those parts dealing with disputed conversations, such as with Mr Lombardo, to which both Mr Cordato and Mr Gulson were party. That conduct put him in an impossible position. However much, by his own lights, he may have tried to put Mr Gulson's account objectively and uninfluenced by Mr Cordato's own recollection he could not do so in the way a person who was independent could have. And, of course, Mr Cordato's account is likely, even if only subconsciously, to have been influenced by what he had learned in taking Mr Gulson's affidavits. 255 The distribution in February 2006 did not recognise the need to make any payment to Mr Bax and Food Improvers for the work that he had been done during the periods in which consultancy fees had been refunded and later when they were either left unpaid or paid at a reduced rate. This was unfair prejudice to Food Improvers. Mr Cordato's legal firm was permitted by Mr Gulson to bill and be paid in January 2006 for all its unbilled work in progress throughout BGR's existence. Yet, Mr Cordato was not even working in the business of BGR to generate the asset that was ultimately realised on the sale of the Main Camp plantation business. 256 The affairs of BGR have been taken over by Mr Cordato and Mr Gulson and run in a way which favours their companies' interests and disadvantages Mr Bax's. Mr Cordato made no attempt to dissect from the fees he rendered to BGR those which were referable wholly to his own personal and his company's interests. Nor did he attempt to do so in respect of the personal interests of Mr Gulson and Triad. Instead, both Mr Cordato and Mr Gulson, deliberately, decided to use BGR's money to pay for the whole of the defence costs. I do not believe their evidence to the effect that the expenditure for the personal purposes of Mr Cordato or Cordato Partners Services was unintended. Mr Cordato kept no records to enable separate fees to be rendered because he did not need to do so. He considered he was entitled to use BGR's money to defend his own personal and his company's interests including his reputation, so far as it was attacked in the case. Mr Gulson had no reason to disapprove of Mr Cordato's fees being paid by BGR because Triad's fees were too. Likewise, Mr Gulson saw his interests as being those of BGR, which is why he caused the fees that Kemp Strang had rendered to Triad to be paid by BGR. Mr Cordato's lack of independence was one contributing factor which permitted that to occur. 257 These have been hard fought and expensive proceedings. Mr Cordato and Mr Gulson continued to pay not only all of the defendants' legal costs using BGR's resources. They knew Mr Bax had to fund his own case. Triad continued to be paid $20,000 per month after February 2006, sometimes in advance, even though the work Mr Gulson has done in that period does not merit any payment of this order, as his letter of 22 March 2006 to the Australian Competition and Consumer Commission makes clear. 258 In Re DG Brims & Sons Pty Limited (1995) 16 ACSR 559 at 591-592, Byrne J in the Supreme Court of Queensland said the use of company funds in defending the proceedings on behalf of the majority shareholders was unfair and infringed the basal principle that the powers and the funds of a company may be used only for the purposes of the company. He said that where the essential dispute was between the shareholders, company funds should not have been used to defend the majority. Here, the essential dispute was between the shareholders and the funds of BGR should not have been employed to pay for a defence of the majority. 259 For all these reasons, I am of opinion that the conduct of BGR's affairs is contrary to the interests of its members as a whole and is oppressive to, unfairly prejudicial to or unfairly discriminatory against Food Improvers. It was not sought to restrain Cordato Partners from acting on behalf of Triad or Cordato Partners Services. The hearing of that motion was concurrent with the trial. Cordato Partners is not a party to the proceedings, and was not made a party to the motion. No relief is sought in the third further amended application or the further amended statement of claim against Cordato Partners. 261 As I have found, it was inappropriate for Mr Cordato to act in the proceedings or to continue acting, particularly after he swore his affidavit of 8 May 2006. The motion and the submissions made in support of it were served on him prior to his swearing that affidavit. He said that he chose not to read the submissions. I find that behaviour on his part, if it is true, to be extraordinary. A solicitor who is aware another party to proceedings seeks personally to enjoin him or her from acting in the proceedings cannot reasonably refuse to turn his or her mind to why that argument was being made, even if the person making it were perceived to be vexatious. Where the solicitor's integrity could be called into question as an officer of the court, were the relief granted, it would ordinarily be incumbent on his or her to familiarise himself or herself with the reasons why the person sought to have him or her cease to act or attack his or her integrity in the proceedings. And, once that familiarisation had occurred, it would be necessary for the solicitor to turn his or her mind to the question of whether there was substance in the application. If so, he or she ought to obtain independent advice on it, if he or she thought the application could be resisted. 262 Mr Cordato's insouciance to the application made against him was professionally unsatisfactory. It was an abnegation of his obligation to the Court to act independently as the solicitor on the record. Difficult as it is to believe that he did not read the submissions, I have concluded that I should not reject his explanation because it is consistent with his wrongheaded behaviour. He chose, wrongly, to ignore the obvious problem, no doubt taking comfort in his misconstruction of r 19. 263 After the hearing had concluded both sides and Mr Cordato made written submissions on the question of Mr Cordato's continuing to act. The plaintiffs apparently had insisted that counsel who appeared at the trial for the defendants be not permitted to make those submissions. Senior counsel was retained to make submissions on behalf of Mr Cordato and his firm. Senior counsel submitted that the attempt to remove Mr Cordato as solicitor for the defendants was made too late, was without substance and was inconsistent with the position taken by Haywards in their letter of 15 May 2006 that Mr Cordato's continuing to act was further evidence of oppression. Senior counsel pointed to Brereton J's statement in Kallinicos 64 NSWLR at 582 [76] that the jurisdiction is to be regarded as exceptional and is to be exercised with caution. 264 The fact that the plaintiffs only then insisted on someone other than those who had appeared hitherto in making these submissions, although the basis of such insistence is not clear to me, demonstrated a belated realisation on the plaintiffs' part of the inappropriateness of their motion. It was directed to restraining Cordato Partners, as opposed to restraining the defendants. Cordato Partners was not a party to the proceedings or to the motion. That firm had not been served formally and it was not separately represented at the hearing or on any other occasion save for the submissions made by senior counsel. Mr Cordato gave evidence as a witness, and as the controlling mind of Cordato Partners Services, the third defendant, but not as a party to the proceedings personally; nor did he appear for Cordato Partners. Had the motion sought to restrain the relevant defendants from engaging Cordato Partners, it may have been possible to hear and determine it, although, as a person affected by the order, Cordato Partners should have been joined and they could have applied to be joined. 265 I am not satisfied that the proceedings have been conducted appropriately as a vehicle for determining in the inherent jurisdiction of the court the disqualification of Cordato Partners from acting. I have expressed views about the inappropriateness of Mr Cordato's conduct, but having regard to the way in which the matter developed and the very late realisation by both sides as to the need for independent representation of Cordato Partners, I do not think it appropriate at this stage to make any orders against the firm or its principal Mr Cordato. For the reasons I have given it is inappropriate for Mr Cordato and his firm to continue to act for the defendants. That being so, I do not think it necessary for me to do anything further. WHAT ORDERS SHOULD BE MADE? 269 An order for specific performance of an agreement to distribute in accordance with option B is not appropriate because no contact so to distribute was made. But it is not the end of the matter. Both Triad and Food Improvers are entitled to render invoices so as to be paid over $1 million each in consultancy fees which had not been invoiced. Food Improvers has established that it is entitled to receive interest from BGR on its loan of $111,000. The plaintiffs' position is that they wish Food Improvers to receive only $500,000 by way of a payment for the consultancy fees forgone. Likewise, Mr Gulson has indicated that he and Triad do not wish to receive any consultancy fees. As the difference between options A and B showed, Triad was fiscally better off by receiving only dividends which would be fully franked together with the corresponding imputation credits. And, Mr Lombardo gave advice that that was best for both Triad's and Food Improvers' positions. 270 The negotiations in September 2005 and all the correspondence up to the time of the distribution on 22 February 2006 demonstrated that all the shareholders were content to have a payment of $500,000 made in respect of Food Improvers' entitlement to consultancy fees and thereafter a distribution made in accordance with the balance of option B. Having regard to the oppression which I have found in respect of the way Food Improvers has been treated, I am of opinion that it would be appropriate to make an order requiring BGR, Triad and Cordato Partners Services to cause the payment of a tax invoice for $500,000 plus GST, when issued by Food Improvers, in respect of the compromise of its entitlement to consultancy fees payable by BGR. Although the plaintiffs have also claimed that Food Improvers, should receive three months consultancy fees in lieu of notice for the wrongful termination of the consultancy agreement, I am of opinion that Mr Bax's and Food Improvers' conduct in September 2005 and thereafter in offering to accept payment of $500,000 plus GST for those fees under option B makes it appropriate that only that sum be ordered to be paid. The $500,000 was a compromise figure. Had it been paid, each party would have considered that to have finalised all of Food Improvers' entitlements to fees under the consultancy agreement. 271 The dividend paid on 22 February 2006 should be set aside and BGR should be required to give effect to a distribution in accordance with the mechanism in option B. That is, the $500,000 consultancy fee plus GST should be paid to Food Improvers by BGR and then a dividend paid to its shareholders which would be used to repay their loan accounts. The amounts so received by BGR would then fund a second dividend to its shareholders. It may be possible for the parties to agree some payments between them of net amounts instead of this, in light of the fact that the earlier payments have been made. Food Improvers will also be entitled to have the dividends paid to it by BGR treated as fully franked. 272 I am of opinion that an order should be made that a substantial proportion of the legal fees paid for the defendants' conduct of the proceedings should be borne by the second and third defendants. I propose to hear the parties as to the appropriate form of that relief. I will give the defendants an opportunity to make submissions as to whether the proportions should be 95% or a lesser sum. I should indicate that my preliminary view is that in the order of 90% of the fees payable up to the 31 July 2005 might properly be borne by BGR and that thereafter the substantial part of the proceedings appears to have been conducted for the benefit and defence of the positions of Triad and Cordato Partners Services. Although they contend that the defence of the claim to consultancy fees was for the benefit of BGR, I am of opinion that the dominant purpose of that defence was to benefit Triad and Cordato Partners Services at the expense of Food Improvers. In addition I have found that Mr Gulson did not believe that the entitlement to claim consultancy fees had ever been cancelled. In those circumstances the persistence in the defence was oppressive of Food Improvers. 273 In relation to the consultancy fees paid to Triad after July 2005, I find that Mr Gulson did perform some substantial work in the management of BGR. Mr Gulson's decision to sell on the terms on which Main Camp plantation was sold has not been challenged, so that it is accepted that his work achieved a considerable benefit for all the shareholders, albeit, by excluding Mr Bax from the decision making process. I can see no justification for Triad's consultancy fees at the rate of $20,000 per month having been established on the evidence after 28 February 2006. In my opinion it is oppressive of Food Improvers for Triad to continue to be paid at that rate. Given that Mr Gulson was performing work up to then I am inclined to the view that Triad should be remunerated at the rate agreed between him and Mr Bax before Mr Bax's exclusion, that is $16,000 per month plus GST. Accordingly, an order should be made that Triad should repay the amounts exceeding what I have set out above as an appropriate sum. The plaintiffs indicated, through unchallenged expert evidence, that valuers could value those shares. Since the evidence is that there is no substantive business being carried on by BGR or its subsidiaries, I am of opinion that no purpose would be served in making such an order and that the interests of the parties will be better served by an order winding up BGR. The process of valuation would be expensive and at the end of the process there would be no guarantee that, after a further hearing, the orders would be given a practical operation. Any order for purchase, or buying back, of shares would require the purchaser to pay Food Improvers some time in the future. The final resolution of this dispute should not be postponed. SHOULD A RECEIVER BE APPOINTED? They noted that none of those companies is now particularly active. Mr Prentice pointed out that a number of the debtors outstanding at the time he had prepared his report of September 2006 had subsequently been collected and so the work involved in a liquidation was somewhat reduced. Each gave varying estimates of the costs which a court ordered liquidation would involve. It is not necessary for me to resolve that factor. At the end of the day there was broad agreement on those costs other than those associated with the liquidation of BARM. That was because of the complication of the ongoing and unresolved litigation with the Australian Tax Office in which a refund of over $9 million is sought. Both experts agreed that a liquidator would need to become quite involved in that litigation because of the potential for personal liability were it unsuccessful. To the extent that they differ, I prefer Mr Smith's methodology because it addressed the detailed tasks which a liquidator would need to undertake. Mr Prentice, on the other hand, formed a broad brush estimate based on his experience. I do not mean to criticise Mr Prentice for that approach but simply to prefer Mr Smith's clearer and more closely justified method of arriving at his result. Both experts gave their evidence with complete professional detachment and undertook the task of assisting the court as one would expect from two such experienced professionals. 276 The plaintiffs have not given any detailed explanation as to why a receiver of BGR would be appropriate or preferable to a court appointed liquidator. On the evidence BGR has no ongoing business apart from realising its assets. The impact of appointment of a receiver or a liquidator would not appear to make any substantial difference to that exercise. A court appointed liquidator would enable BGR's affairs to be wound up, including the use of the liquidator's controlling shareholding in each of the other subsidiaries which are parties to appoint the liquidator or a nominee as a director and remove Mr Gulson and Mr Cordato or any other persons as directors. Again, a liquidator would be in a position to make an assessment, once he or she were appointed to the board of BARM, as to how that company's litigation with the Australian Tax Office should be conducted. It will be necessary to have cooperation from Mr Gulson and Mr Bax in the running of that litigation, but given the potential benefit each stands to gain from a successful outcome, I am confident that each will be willing to cooperate with an independent third party in its pursuit. There was no evidence as to the cost of the receiver being any less than that of a court appointed liquidator or of any other benefit of a receiver. Indeed, Mr Prentice said that a court appointed receiver of a solvent company sometimes increases costs and does not necessarily resolve the issue. 277 I will hear the parties on whether it is preferable to have a liquidator rather than a receiver appointed. I cannot see on the material now before me any benefit in having a receiver as opposed to a liquidator. A liquidator will bring finality to the affairs of the parties, which in my opinion, is necessary. A receiver may leave other matters unresolved in circumstances where I do not see the parties as being able themselves to resolve them. While each of a receiver or a liquidator can make an application to the court for directions, my preliminary opinion is that an order for the winding up of BGR should be made and the liquidator will then have a discretion as to the appropriate method of bringing to an end the affairs of the other companies in the group by virtue of the liquidator's control of them BGR's shareholdings. In the meantime, it is necessary to order that each of BGR and the fourth, fifth, sixth, seventh and eighth defendants be restrained from entering into any transactions or making any decisions, including in relation to the BARM litigation otherwise than in the ordinary course of business, so that a liquidator can consider what ought to be done about the composition of the boards and the continuing affairs of each of those companies. If they are unable to do so, then the other defendants, should pay any difference in the amount the plaintiffs are able to recover from Triad and Cordato Partners Services and the amount at which the costs are taxed. 279 The plaintiffs have sought a special order in respect of the costs of Mr Lawson who came to Sydney to be cross-examined. The costs associated with Mr Lawson's evidence will be the plaintiffs' costs in the proceedings and be recoverable on a taxation. I see no need for any special order. 280 In their final submissions the plaintiffs asked for an order vacating an order made by Hely J on 22 July 2005 when refusing interlocutory relief. He ordered that they pay the then defendants' costs of the amended interlocutory application up to but not including 22 July 2005. The defendants have not addressed that claim but, having regard to the false impression which Mr Gulson's affidavit of 20 July 2005 created as to his mental condition, I would be inclined, subject to hearing submissions from the defendants, to vacate Hely J's order as to costs. 281 The plaintiffs will have to bring in short minutes of order to give effect to matters in these reasons on which I have indicated I will hear them further. To the extent that either party wishes to make submissions about matters which I have said I will hear the parties on, those submissions should be filed and served on or before 4.00 pm on 13 February 2007. I will order the proceedings to stand over for making of further orders on 14 February 2007. I certify that the preceding two hundred and eighty one (281) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | membership, rights and remedies members' remedies and internal disputes oppressive or unfair conduct what constitutes conduct of, or relating to directions where closely held corporation whether majority shareholder engaged in oppressive conduct within the meaning of s 232 of the corporations act 2001 (cth) whether winding up just and equitable under s 461(1)(k) of the corporations act 2001 (cth) removal of minority shareholder from position of director exclusion from decision-making and cessation of payment for work performed in executive capacity destruction of quasi-partnership relationship company paying for legal fees for majority in defence of minority claim jurisdiction inherent jurisdiction officers and processes of court restraining solicitors from acting right of audience solicitor a material witness beneficial pecuniary interest in outcome of litigation where motion to enjoin solicitor from acting filed and solicitor continued to act solicitors proceedings on behalf of client solicitor a material witness evidence and conduct likely to be scrutinised beneficial pecuniary interest in outcome of litigation where motion to enjoin solicitor from acting filed and solicitor continued to act corporations practice legal practitioners |
The application sought various forms of relief, both interlocutory and final for the alleged misuse, by the Respondents, of the Applicants' confidential information. The individual Respondents were employees of the Second Applicant which is a wholly-owned subsidiary of the First Applicant. It was alleged that, whilst employed by the Second Applicant, the individual Respondents set up the First Respondent as a vehicle through which they might enter into competition against the Second Applicant in the production of labels. The Applicants claimed that the individual Respondents had removed confidential and commercially sensitive information from the offices of the Second Applicant and had sought to, and in some instances succeeded in, persuading some of the Second Applicant's customers to transfer their business to the First Respondent. On 31 July 2009 interim injunctions were granted which restrained the Respondents from using certain information, claimed by the Applicants to be confidential, and requiring them to deliver up any such material in their possession to an independent expert. These orders were extended following an interlocutory hearing held on 11 August 2009. At that time various directions were given, including a direction that the Respondents file their defences on or before 1 September 2009. The proceeding was commenced in the Victoria District Registry of the Court. Both the head office and the registered office of each Applicant is in Victoria. Each of the individual Respondents is domiciled in Western Australia. By Notice of Motion dated 11 August 2009 the Respondents have sought orders under O 10 r 1(2)(f) of the Federal Court Rules ("the Rules") that this proceeding be transferred to the Western Australian District Registry of the Court. The application is opposed by the Applicants. The affidavit evidence filed by the Respondents devotes greatest attention to the difficulties, financial and otherwise, which it is apprehended the individual Respondents will confront were the trial of the proceeding to be held away from Perth and, particularly, in Melbourne. They all live in Perth and would be greatly inconvenienced were they required to go to Melbourne to give evidence and provide instructions in the course of a trial. The ongoing business activities of the First Respondent would be severely prejudiced were the individual Respondents to be away from their workplaces in Perth for any protracted period. Concern was also expressed about the manner in which pre-trial matters such as discovery, inspection and the resolution of contested privilege claims might be resolved were the proceeding not transferred to the Western Australian District Registry. Where the proceeding is so transferred, the Registrar at the proper place from which the proceeding is transferred shall transmit all documents in his charge relating to the proceeding to the Registrar at the proper place to which the proceeding is transferred. The Court has registries in each of the capital cities and the States and Territories. It should be exercised flexibly having regard to the circumstances of the particular case. It would be regrettable and unwise if the Court were to circumscribe the general power conferred by s 48 with inflexible rules or impose inelastic constraints upon its exercise. As the power may be exercised subject to conditions, the Court or judge is in a position to mould orders under the section to take account of the many and varied circumstances that arise in particular cases. The factors which the Court is entitled to take into account in considering whether one city is more appropriate than another for interlocutory hearings or for the trial itself are numerous. The Court must weigh those factors in each case. Residence of parties and of witnesses, expense to parties, the place where the cause of action arose and the convenience of the Court itself are some of the factors that may be relevant in particular circumstances. A party commences a proceeding by filing an application in a particular registry of the Court. If that party or another party wishes to have the proceeding conducted or continued in another place he may apply to the Court for an order under s 48 or O 10 r 1(2)(f) or O 30, r 6 as the case may be. There is no onus of proof in the strict sense to be discharged by the party seeking to conduct or continue the proceedings elsewhere. It should be noted that the Court may exercise its powers under O 30, r 6 either on the application of a party or on its own motion. The Court must, however, be satisfied, after considering all relevant matters, that there is sound reason to direct that the proceeding be conducted or continued elsewhere. Its starting point is that the proceeding has been commenced at a particular place. Why should it be changed? On the one hand, if the party who commenced the proceeding chose that place capriciously the Court would be justified in giving no weight to the choice of place. At the other end of the scale, a proceeding may have continued for some time at the place of commencement with many steps having been taken there, for example, filing and pleadings and affidavits, discovery and inspection. Due weight would be given by the Court to such matters before directing that the proceeding should continue at a different place. Ultimately the test is: where can the case be conducted or continued most suitably bearing in mind the interests of all parties, the ends of justice in the determination of the issues between them, and the most efficient administration of the Court. It cannot and should not, in our opinion, be defined more closely or precisely. Not surprisingly the Respondents place reliance on cases, such as BWK Elders (Australia) Pty Ltd v Westgate Wool Co Pty Ltd (No 6) [2002] FCA 807 and Intercoal Ltd v Tarong Energy Corporation Ltd [2006] FCA 85 in which the Court granted applications to transfer; and the Applicants drew attention to cases such as Australian Competition and Consumer Commission v Pauls Ltd [2002] FCA 71 and Australian Competition and Consumer Commission v Virgin Mobile Australia Pty Ltd [2002] FCA 1239 in which transfer applications were refused. These decisions are of limited assistance given the wide range of variables which confronted the judges who decided them. They included the questions of whether pleadings had closed and whether the witnesses to be called at trial were known at the time at which the application was made. As National Mutual makes clear the Court has an unfettered discretion which is to be exercised in the interests of justice in the circumstances of the case in which the application is made. The Applicants' solicitors and counsel are based in Melbourne. They have chosen to commence the proceeding in the Victoria District Registry. In exercising the discretion conferred on the Court by s 48 and O 10 it is necessary that I consider whether, at this stage of the proceeding, the status quo should be disturbed. I can readily understand why the Respondents assert that it would be highly inconvenient to them and damaging to the interests of the First Respondent for them to have to travel to Melbourne to give evidence and instructions. Their evidence and submissions, however, are founded on a number of assumptions which may or may not prove to be correct. It is conceivable that a trial may not be necessary. The dispute, might, for example, be resolved through negotiations between the parties or mediation. Whilst the material presently before the Court suggests that, if a trial takes place, most of the witnesses will be residents of Perth, no concluded view of the domicile of most of the witnesses will be possible until the issues in dispute are defined. The number and identity of witnesses will not be able to be determined until the pre-trial process is much further advanced. Much less will it be possible to judge which witnesses will be required for cross-examination and how long their evidence is likely to take. It may be that, once that point is reached, it will be appropriate for an order to be made under O 30 of the Rules fixing the place of trial at Perth. It may or may not be necessary to consider whether evidence should also be heard at another place such as Melbourne. The application must, however, be determined having regard to the present state of the proceeding. For the moment it is resident in the Victoria District Registry and allocated to my docket. I have had the opportunity of considering extensive affidavits and I have made a range of interlocutory orders. I have thereby acquired a good deal of information relating to the issues in the case and have formed views as to the appropriate management of the pre-trial stages of the case. Were I to transfer it to the Western Australian District Registry at this time it would be necessary for another judge to have to retread the ground which I have already covered. There are, plainly, issues relating to discovery and inspection which will, most conveniently, be attended to through the Western Australian District Registry in Perth. That is not a reason for transferring the proceeding at this stage. In my view the considerations which informed the decision of French J in Lamb v Hogs' Breath Co Pty Ltd (No. 1) [2007] FCA 49 are (with some changes to place names and a minor omission) equally apposite in the present circumstances. So far as the interlocutory processes are concerned, unless some unusual circumstances occur, it matters little whether the proceeding is in the Perth or [Melbourne] Registry because in either event the party not in the home Registry will be able to participate by way of video-link or even teleconference. The Court also has the facility for the electronic filing of submissions and the like and the conduct of litigation, in part, through that. The question of travel between Perth and [Melbourne], raised by the parties is, in my opinion, of little relevance at this stage of the proceeding. The question of transfer does not impact on the question of the place of the trial nor, ultimately, the judge who conducts the trial. While ordinarily the docket judge will hear the trial of the action which he or she has been managing, it is not unusual for there to be cases in which the trial is allocated to another judge for reasons of convenience. So it might be that if this case were not to be transferred but it were thought that it would be most conveniently heard and determined in [Perth], a judge from the [Western Australia] Registry could hear the case without having been involved in the pre-trial case management. Much will depend upon the geographical distribution of the witnesses and it may be that part of the trial will be conducted in one centre and part in another. It is too early to make a determination about that. Those are all case management matters which can be dealt with in due course. This will not disadvantage any party. The first two hearings were conducted in Melbourne. The hearing of the present application has taken place in Perth this morning. On each occasion the representatives of the parties who were not present in Court were heard by video-link. There is no reason why such arrangements cannot continue to be made. The Respondents' concern relating to the inspection of documents can be met by a regime under which that inspection takes place in Perth. If need be the facilities of the local Registry can be made available. The Respondents' application will, therefore, be refused, without prejudice to their right to renew the application should circumstances change or when the proceeding is ready for trial. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | application of o 10 r 1(2)(f) application of s 48 of the federal court of australia act 1976 (cth) whether proceeding should be transferred where all respondents are domiciled in another place practice and procedure |
The first is the amalgamation of the life insurance business of MLC Lifetime Company Limited ('Lifetime') with part of the life insurance business of MLC Limited ('MLC') ('the Lifetime Scheme'). The second is the amalgamation of the life insurance business of National Australia Financial Management Limited ('National') with part of the life insurance business of MLC ('the National Scheme'). These are the reasons for making those orders. 2 Confirmation of the schemes is required by s 190(1)(b) of the Act. That section provides that '[n] o part of the life insurance business of a life company may be...amalgamated with the business of another life company...except under a scheme confirmed by the Court '. The applicants are ' life companies ' within the meaning of the Act. They applied to the Court for confirmation of the schemes pursuant to s 193(1) of the Act. 3 National Australia Bank Limited ('NAB') is the ultimate parent company of the applicants. The evidence of Ian Crow and John Reid, directors of Lifetime, is that the purpose of the schemes is to simplify the NAB Group's life insurance business by the two amalgamations whereby: • Each Lifetime policy and National policy (other than certain reinsurance policies entered into by Lifetime) will become a life insurance policy referable to an MLC statutory fund. • All assets referable to those policies will become assets of the relevant MLC statutory fund. • The policy liabilities in respect of those policies, all other liabilities of Lifetime's general and ordinary branch, and all other liabilities of National's statutory funds will become policy liabilities and other liabilities of the relevant MLC statutory fund. One means adopted to achieve this objective is the regime in Pt 9 of the Act for supervision of the transfer or amalgamation of life insurance businesses by the Court (s 3(2)(f) ; Re Royal & Sun Alliance Life Assurance Ltd [2000] FCA 1259 ; (2000) 104 FCR 37 at [3] ). 5 In exercising its supervisory jurisdiction under Pt 9 of the Act, the Court has a discretion to refuse a scheme or confirm it with or without modification (s 194). Confirmation of a scheme pursuant to s 194 is not a mere formality ( ANZ Life Assurance Company Limited and ING Life Limited [2005] FCA 806 at [4] ). The Court must have regard to the object of protecting the interests of policy holders ( Re Royal at [3]). It must ensure that the scheme will not be prejudicial to the interests of policy holders and that policy holders are properly safeguarded ( NULIFE Insurance Ltd v Norwich Union Life Australia Ltd [2005] FCA 1635 at [24] ). The purpose of the steps is to ensure that details of a scheme are brought to the attention of the Australian Prudential Regulation Authority ('APRA'), the public and affected policy holders. The steps are to be completed before the Court is moved for orders ( Re Royal at [10]; Re Armstrong Jones Life Assurance Ltd (1997) 74 FCR 160 at 163). 7 Evidence was adduced and comprehensive written submissions advanced by the applicants to establish their compliance with the procedural steps. I was satisfied that the steps were undertaken and it is necessary to refer to three matters only. 8 First, s 191(2)(c) of the Act required an approved summary of each scheme to be given to every affected policy holder. On 17 August 2006, I made orders pursuant to s 191(5) of the Act dispensing with the requirement that the applicants send summaries of the schemes to MLC policy holders affected by the Lifetime Scheme or the National Scheme or to Lifetime and National policy holders for whom the applicants had no current mailing address ( MLC Lifetime Company Limited and MLC Limited [2006] FCA 1259 (' MLC Lifetime (No 1) '). Between 21 August 2006 and 25 August 2006, approved summaries of the schemes were sent by post to Lifetime and National policy holders other than those for whom the applicants held no current address. It follows that s 191(2)(c) of the Act was complied with. 9 Secondly, s 191(2)(b) of the Act and the Regulations required the applicants to publish Notices of Intention ('Notices') to seek confirmation of each scheme in a form approved by APRA. The Regulations required the Notices to be published in the Commonwealth Gazette and ' one or more newspapers, approved by APRA , circulating in each State and Territory in which there is a register of life policies that includes the relevant policy of an affected policy owner ' (reg 9.02(1)). The Notices were to be published before the schemes were released for public inspection (reg 9.02(3)). 10 The schemes were released for public inspection on 21 August 2006. Notices in respect of the schemes were published in the Commonwealth Gazette and 12 newspapers approved by APRA on 18 August 2006 and 19 August 2006. However, owing to a miscommunication, the Notices were not published in the Daily Telegraph (one of the approved newspapers) until one day after the schemes were released for public inspection. 11 I did not consider that delay to be fatal to the applications ( Re Royal at [18]; Re Armstrong Jones Life Assurance Ltd (1997) 74 FCR 160 at 162). The Notices were published in New South Wales in three other approved newspapers prior to the public inspection period. Public inspection of the schemes was also extended in New South Wales from 8 September 2006 to 12 September 2006 to compensate for the delay in publication in the Daily Telegraph . For these reasons, I was satisfied that the delay did not adversely affect policy holders. 12 Thirdly, the applicants informed the Court that, in two newspapers, an incorrect telephone information number was included in the Lifetime Scheme Notice. While it is unfortunate that this error occurred, I was also satisfied that it did not adversely affect policy holders. The correct telephone number was listed elsewhere in the Notice and contact details for the applicants' solicitors were also included. The public inspection details in the Notice were correct, as were two website addresses provided where a copy of the scheme, the scheme summary, and the actuary reports could be obtained. I was satisfied that an affected policy holder who saw the Notice would have readily been able to obtain further information about the Lifetime Scheme. The other, Mr Kevin Allport, is the appointed actuary of MLC, Lifetime and National pursuant to s 93 of the Act. As I noted in MLC Lifetime (No 1) at [7] and elaborate upon below, the overall conclusion of the actuaries is that the schemes will have no adverse effect on policy holders. The schemes are conditional on the appointed actuary certifying, immediately before the schemes take effect, that there has been no material change affecting the applicants' solvency and capital adequacy positions since 30 June 2006. As at 21 September 2006, the evidence of the appointed actuary was that there has been no material change in the applicants' circumstances. 14 Copies of the schemes and the actuaries' reports were provided to APRA in accordance with the Act and the Regulations. APRA is a significant participant in proceedings for confirmation of a scheme ( Re Royal [24]). It informed the Court that it has no objection to the implementation of either scheme. That was a factor of material significance in the exercise of the Court's discretion to confirm the schemes under s 194 of the Act ( The Application of Commonwealth Life Ltd [2003] FCA 637 at [13] ). 15 Significantly, the costs of the schemes will not be borne by policy holders. 16 Lifetime and National will continue to exist after the schemes are implemented and have given undertakings to the Court to maintain their current telephone and email addresses for at least 12 months. The appointed actuary's conclusion is that MLC policy holders will not be adversely affected as a result of the schemes. His conclusion is supported by the independent actuary, who concluded that the benefit expectations of MLC policy holders will not be adversely affected by the schemes and the schemes should not materially affect their security. 18 The evidence of Steve Tucker, a director of MLC, is that a Committee of the Board of Directors of MLC resolved to authorise the schemes in the expectation that: • A marginal reduction in expenses and anticipated efficiencies arising from the schemes will assist MLC to maintain premiums, charges and fees at competitive levels. • MLC policy holders will enjoy the additional security of a larger life insurance company with greater overall amounts held in its statutory fund. As with MLC policy holders, the appointed actuary's conclusion is that Lifetime and National policy holders will not be adversely affected as a result of the schemes. The independent actuary's view is that the benefit expectations of Lifetime and National policy holders will not be adversely affected by the schemes and that the schemes should not materially affect their security. 20 The evidence of Mr Crow is that a Committee of the Board of Directors of Lifetime resolved to authorise the Lifetime Scheme in the expectation that: • Efficiencies resulting from the Lifetime Scheme will marginally reduce ongoing administration and governance costs, resulting in marginally higher profits and ultimately marginally higher bonuses to Lifetime's ordinary branch policy holders. • The security of participating Lifetime policy holder returns will increase. • Lifetime's direct branch policyholders will enjoy the additional security of a larger life insurance company with greater overall amounts held in its statutory funds. 21 The evidence of William Webster, a director of National, is that a Committee of the Board of Directors of National resolved to authorise the National Scheme in the expectation that: • Efficiencies resulting from the National Scheme will marginally reduce ongoing administration and governance costs to allow for premiums, charges and fees to be charged to National policy holders at competitive levels. • The larger size of the MLC funds will allow for a greater level of diversification of management styles and exposure to asset classes, thereby resulting in an improved risk and return profile for National policy holders. • National policy holders will enjoy the additional security of a larger life insurance company with greater overall amounts held in its statutory fund. Her primary concern, as I understood it, was that MLC policies would not cover contingencies covered prior to the schemes. A second concern raised by Ms Monaghan was that MLC life insurance assets and liabilities would be mixed with general insurance assets and liabilities to the detriment of MLC policy holders. 24 Confirmation of the schemes was sought on the basis that the terms and conditions of MLC policies would remain unchanged and the actuarial evidence is that the security benefits, investment returns, unit price and reasonable expectations of MLC policy holders will be unaffected. On that basis, I was satisfied that MLC policy holders would not be adversely affected by reason of the matters raised by Ms Monaghan. His primary concern related to the suspension of the practice of policy holders drawing and repaying loans against the value of their policies as a result of the Lifetime Scheme. According to Mr Bray, Lifetime personnel informed him in July 2006 that the practice of granting such loans had been suspended. He sought an adjournment of these proceedings pending the provision by MLC and Lifetime of a statement explaining why the granting of loans had been suspended and whether that practice would be reinstated in the future. 26 In response to Mr Bray's concerns, Mr Reid gave evidence that Lifetime's decision to suspend the practice of granting these loans was wholly unrelated to the Lifetime Scheme. He explained that the decision was made in response to management concerns that the practice of entering loans may not comply with regulatory requirements. He also explained that the Lifetime board's current policy is that the granting of loans will be reinstated if those regulatory concerns can be overcome. 27 Mr Reid's evidence as to the policies of the Lifetime board is not evidence of the policies of the MLC board. However, it is condition of the Lifetime Scheme that MLC will maintain, subject to periodic review, the policies of the Lifetime board in place at the time the scheme takes effect (cl 6). As was confirmed by the applicants' solicitor, this would include Lifetime's policy of reinstating policy loans if regulatory concerns can be overcome. On that basis, I was satisfied that confirmation of the Lifetime Scheme will not affect the likelihood of the practice of granting policy loans being reinstated. 28 Mr Bray also submitted to the Court that he held general concerns regarding the standards of communication between Lifetime and MLC and policy holders. In particular, Mr Bray noted that neither Lifetime nor MLC had disclosed to Lifetime policy holders that the effect of the Lifetime Scheme was to reverse an earlier scheme, confirmed by the Court in 1997, whereby MLC transferred part of its life insurance business to Lifetime. Mr Bray did not suggest that the interests of Lifetime policy holders would be prejudiced by reason of the Lifetime Scheme reversing the earlier scheme. 29 The evidence of Mr Crow is that the benefits identified in 1997 for separating the life insurance business of MLC and Lifetime diminished following the acquisition of MLC and Lifetime by the NAB Group in June 2000. Mr Crow's evidence is that the policies written by MLC and Lifetime have become increasingly similar. I was satisfied by the explanation given for the reversal of the earlier scheme and that policy holders were not adversely affected by Lifetime's failure to give them specific notice of that fact. His concern related to a decline in bonuses paid to him under a policy issued to him in 1972 and whether that decline would continue, or worsen, as a result of the Lifetime Scheme. 31 The evidence of the appointed actuary is that the investment strategy, investments, investment earnings and approach to determining bonus rates adopted by Lifetime will be unaffected by the implementation of the Lifetime Scheme. His conclusion is that the reasonable expectations of Lifetime policy holders in respect of benefits payable will be unaffected by the Lifetime Scheme. Accordingly, I was satisfied Lifetime policy members would not be prejudiced in relation to the bonuses payable to them following implementation of the Lifetime Scheme. APRA does not oppose the schemes and policy holders will not bear the cost of their implementation. In these circumstances, I was satisfied that the interests of owners and prospective owners of life insurance policies were protected and orders to confirm the Lifetime Scheme and the National Scheme were made. | schemes to amalgamate life insurance business failure to comply strictly with certain procedural steps did not adversely affect policy holders terms and conditions of policies to remain unchanged actuarial evidence that neither transferring nor receiving policy holders adversely affected no objection to implementation of the schemes by apra schemes confirmed insurance |
Substituted service was also sought. The matter was listed for and heard on 8 May 2008. On the day before the hearing, solicitors for Mr Barry Waller, the examinee's father and for Wainter Pty Ltd (Wainter) sent the plaintiff an outline of submissions in support of a foreshadowed application for 'leave to appear in opposition to' the application. 2 Counsel for Mr Waller and Wainter duly applied for leave to be heard. The application was opposed by the plaintiff. I provisionally heard the application and submissions in opposition but expressly reserved the right to decline the application for leave to appear. 3 My decision on the application was reserved. On 26 May 2008 reasons were delivered in support of orders adjourning the plaintiff's application and dismissing the application by counsel for Mr Waller and Wainter for leave to be heard ( Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 [2008] FCA 762). 4 On receipt of additional evidence, on 19 June 2008 I allowed the plaintiff's application. Although there has been a further application by the examinee to set aside the order for service out of Australia and substituted service, that application has been dismissed. Argument in that application was heard on 1 July 2008. I delivered a judgment dismissing that application and declining to reserve that issue to the Full Court on 2 July 2008 ( Freehills, in the matter of New Tel Limited (in liq) ACN 009 068 955 (No 2) [2008] FCA 1006)). 5 The plaintiff's opposition to Mr Waller and Wainter having leave to appear was successful, even though (on a provisional basis) I heard the application and the opposition on 8 May 2008. There is no doubt that the duration of the hearing was increased by virtue of the unsuccessful application. Some research prior to the application and the presentation of argument at the hearing was both necessary and effective in opposition to the application for leave to be heard. The question is whether in the circumstances raised by Mr Waller and Wainter, the plaintiff should be compensated by a costs order only in relation to that additional work over and above its ex parte application. 6 There is a discretion at large to order costs under s 43 of the Federal Court of Australia Act 1976 (Cth). The section provides a 'broad and ample power' which ought not be read down otherwise than in accordance with accepted principle: Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179 per Finn J at [3]. 7 It is 'accepted principle' that costs ordinarily follow the event and a successful litigant receives his costs unless there are special circumstances which would justify any other order: Ritter v Godfrey [1920] 2 KB 47. The plaintiff asserts that there are no special circumstances (see Jamal v Secretary, Department of Health (1988) 14 NSWLR 252 at 271). 8 In response, it is argued that a costs order should not be made against Mr Waller and Wainter on the basis that there are special circumstances. Those special circumstances are said to include the fact that submissions made for Mr Waller and Wainter led to a conclusion that the plaintiff had failed to satisfy the requirement of providing evidence as to the law of the foreign country. 9 It is true that I did not immediately grant the plaintiff's application to make an application for service out of the jurisdiction on 8 May 2008 but rather adjourned the application on the basis that additional evidence should be supplied. However, having adjourned the application and the additional evidence being supplied, the application succeeded. I did not, as Mr Waller and Wainter suggested I should do when it first came on for hearing on 8 May 2008, dismiss the application at that stage or any stage. 10 Despite the fact that Mr Waller and Wainter raised the foreign law point, it does not necessarily follow, especially with leave to appear being refused, that the plaintiff should not receive the usual costs order. That submission rather assumes that the Court will robotically rubber stamp an ex parte application. As I made clear in my reserved reasons at [24], the application raised some serious questions concerning service in a foreign jurisdiction. 11 Mr Waller and Wainter also contend that the other special circumstances which warrant a departure from the normal rule is that there was a failure to make full and fair disclosure on the part of the plaintiff. A conclusion to that effect would be quite inconsistent with the conclusion I expressed in my reasons. It cannot be sustained. The justification for the submission is that the plaintiff changed the order in which it pursued its application having been influenced by the written submissions of Mr Waller and Wainter provided the previous day. A change in the order of address, even a change in the order of relief which is sought is not a failure to make full and fair disclosure. 12 The plaintiff has also drawn my attention to the decision in Onefone Australia Pty Ltd v One.Tel Ltd [2007] NSWSC 1320 where Barrett J in similar circumstances made a costs order of the nature it seeks. The circumstances were similar as contended but there were differences. The obvious difference is that Mr Waller and Wainter did raise the foreign law evidence point. That point whether raised by them or the Court was the cause of the adjournment. 13 In contrast Mr Waller and Wainter have sought to cast their position as being more comparable to the invited 'contradictor' in Ricegrowers Co-operative Ltd and Another v ABC Containerline NV and Others (1996) 138 ALR 480. Again there are some similarities with that case but more important differences. The contradictor in that case was invited to be heard (no doubt for good reason) but was a proposed party to that litigation. Further, its submissions fully succeeded, not only on the service point but also on a pre-action discovery point and possibly on a joinder point which, in contrast to the present situation, were all determined in favour of the 'contradictor'. 14 Finally Mr Waller and Wainter contend that it is inappropriate that they should be subjected to an adverse costs order when they have not had been permitted to view the additional affidavit filed by the plaintiff setting out the foreign law evidence. I do not accept that submission. The costs order sought and which I propose ordering is confined to costs referable to the application for leave to be heard on 8 May 2008 and to this debate. Having refused the application for leave to be heard on 26 May 2008, the subsequent evolution of the ex parte matter has no bearing on the costs determination for the earlier application. 15 In all the circumstances, I consider that the appropriate disposition is that Mr Waller and Wainter pay the plaintiff's costs of and incidental to their application to be heard on 8 May 2008 including costs of their submissions in relation to this costs order. I will so order. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | application for leave to appear opposed and refused application adjourned to enable further evidence to be provided whether any special circumstances why successful opponent to application for leave should not have costs no reason costs |
The relevant requirements for grant of the spouse visa sought are found under Reg 1.15 of the Migration Regulations 1994 (Cth) (the Regulations). On 23 June 1993 he married his former Turkish wife, from whom he was divorced in Turkey on 3 February 2003. On 28 January 2005 the appellant married in Australia his present wife, who is an Australian citizen, and she is the sponsor. On 28 February 2005 the appellant, under the sponsorship of his wife, applied to the first respondent for a Partner (Temporary) (Class UK Visa) and a Partner Residence Class BS Visa. On 30 April 2005 a delegate of the Minister refused to grant the visas and on 11 May 2005 the appellant applied to the Tribunal for review of the delegate's decision. On 1 June 2006 the Tribunal conducted a hearing at which it heard evidence by the appellant, his sponsoring wife and seven witnesses with the assistance of an interpreter, in the presence of the appellant's then registered migration agent. On 1 November 2006 the Tribunal decided to affirm the delegate's decision to refuse the visas, and on 22 November 2006 it handed down its first decision. On 20 December 2006 the appellant applied to the Federal Magistrate's Court for relief against the Tribunal's first decision, and on 4 May 2007 and by consent the Federal Magistrate's Court set aside the Tribunal's first decision. Further correspondence ensued between the Tribunal and the appellant's migration agent and on 6 September 2007 the Tribunal conducted a further hearing with the consequence that, on 29 November 2007, the Tribunal affirmed the decision not to grant the spouse visas. On 14 December 2007 the Tribunal handed down the decision and gave its decision record and statement of reasons and on 11 January 2008 the appellant applied to the Federal Magistrate's Court for review and this application was dismissed on 3 October 2008. This appeal is from the judgment of the Federal Magistrate. The Tribunal however considered that these findings in the appellant's favour, although based on strong evidence, were outweighed by other non-mandatory considerations which essentially went to the credibility of the appellant and his spouse. As a consequence the Tribunal did not accept the submissions of the appellant and his wife as to their relationship, and found that the relationship was not only not genuine, but was contrived by them for migration purposes. The matters which the Tribunal took into account as overriding the strong cumulative effect of the favourable mandated considerations were as follows: firstly, that the appellant had made applications in 2003 and 2004 for temporary business visas, after the divorce in 2003 from his first wife in Turkey, and had given his status as "married" in relation to these applications. The Tribunal considered this indicated that the appellant always considered himself as married to his first wife and that either this discredited his claim to be the genuine spouse of his second wife, or alternatively that he disingenuously stated he was married in order to get a grant of the business visas then sought. Secondly, the Tribunal was not satisfied that the primary purpose of the appellant visiting Australia in February 2003 and 2004 was "business" as he alleged. Again this finding goes to credit, and the Tribunal drew the inference that the appellant and his first wife were still in a "spousal relationship" although technically they were divorced. Thirdly, the Tribunal did not accept that a genuine misunderstanding caused the sponsor wife to believe that the children of the appellant's first marriage were not his biological children. The Tribunal also found that the sponsor had an "unnatural degree of disinterest" in the applicant's ex-wife and his children. These countervailing circumstances were considered by the Tribunal to be not merely peripheral, but to go to the heart of the question of whether the marriage was exclusive and genuine. In my opinion, for reasons given below, the matters referred to in [13] above are both peripheral and irrelevant. On application for review the Federal Magistrate considered that none of these grounds were made out and took the view that the decision of the Tribunal turned on findings of fact and assignment of weight, which were matters essentially for the Tribunal and that the Court was not entitled to review the matter on its merits. If the statute expressly states the considerations to be taken into account, it will often be necessary for the court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors... are not expressly stated, they must be determined by implication from the subject-matter, scope and purpose of the Act. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable. So too in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits. In determining this question, the Regulations require the Tribunal to consider all the circumstances of the relationship. More specific guidance is given in that four particular aspects of the relationship are referred to in the Regulations, namely: the financial aspects; the nature of the household; the social aspects; and the nature of the commitment. These are clearly intended to be of central importance. Essentially, these specific considerations are objective in the sense that they are not simply matters of impression or subjective opinion but are particularised and can be verified by documents, facts and evidence. By way of illustration, the requirement that regard be had to the nature of a person's commitment is to be determined by reference to a series of specific matters, which include the duration of the relationship, the period of living together, the degree of companionship and their perception, and those of others, of the nature of the relationship. The statement in sub-reg (5) that the fact of living together at the same address for 6 months or more is strong evidence of a genuine relationship illustrates the central importance of objective facts. In the present case these objective factors were all found to have weighed very strongly in favour of the appellant, and this was readily accepted by the Tribunal without any substantial reservation. The strength of this evidence favourable to the appellant is emphasised in several places in the Tribunal reasons for decision. It is also important to note, in relation to the mandatory considerations in sub-reg (3), that they are concerned with and focus directly on the relationship of the parties during a specific period , that is to say from the time of the application, on 28 February 2005, to the time of decision, on 29 November 2007, a period of more than 33 months. The emphasis is not specifically directed to considerations of events before the sponsor and the appellant began to live together in December 2004, and this emphasis is important in considering whether circumstances are relevant or irrelevant to the central issue as to the genuineness of the relationship. It is not necessarily inconsistent with a genuine marriage relationship that it was entered into by one or both parties with a view to material benefit or advancement , as for example with the hope of becoming eligible to reside in a particular country. The true test, we would suggest the only test, is whether at the time at which the matter has to be decided it can be said that the parties have a mutual commitment to a shared life as husband and wife to the exclusion of others. ' (Emphasis added. It also indicates that the fact that a relationship may be seen to confer a benefit as to residence entitlement does not of itself mean that the relationship is not genuine. In reaching its conclusion as to these countervailing matters, the Tribunal referred to 'matters of concern in the evidence' which were regarded by it as going to 'the heart of whether the marriage is exclusive and genuine'. One important consideration, by way of example, which very strongly supported the appellant's case was the fact that the sponsor and the appellant had participated in an expensive, difficult and time-consuming IVF program and incurred very substantial debts arising to over $10,000 as a consequence. They had gone to considerable lengths to implement the program, and embryo transplants had taken place on two occasions, one in 2006 and one in 2007. The commitment which this evidences, when reinforced by the other mandatory considerations, calls for powerful, cogent evidence to the contrary before rejecting the appellant's case as to the genuineness of the relationship. The first of the matters 'of concern' referred to by the Tribunal was that after the Turkish divorce on 3 February 2003, (but well before the appellant married the sponsor on 28 January 2005), the appellant had made two visa applications in which he said he was "married. " These applications were made in 2003 and 2004 in relation to trips to Australia said to be for business purposes. The Tribunal was not satisfied with the appellant's explanations for referring to himself as "married" in these business visa applications after he had been divorced in Turkey. However, these statements occurred many months before the applicant married the sponsor in February 2005. The Tribunal reasoned that these references to "marriage" either directly undermined the genuineness of his marriage to the relationship with the sponsor or at least reflected doubt on the genuineness of his marriage in 2005. The reasons do not explain how this conclusion is open or was reached. Two further observations can be made about this matter. Firstly, there is no definite finding on this matter. Although there is a suggestion of lying, the matter is left hanging and a statement is made to the effect that at least the appellant's credibility may be in doubt as a result of these matters of concern. It is not indicated how the appellant's lack of credibility in this matter assists in forming the conclusion that all the "favourable" features of the relationship were "contrived. " The fact of the reference to marriage in the earlier visa applications does not in my view provide any basis for an inference that the later marriage was not genuine. There is no explanation given as to why or in what way these statements bore on the marriage many months later, in circumstances where the appellant and the sponsor had been living together for over 33 months in the relevant period. The evidence indicates they lived together on a continuing basis and there is nothing to suggest that they are not living together at the present time in February 2009, which is a period considerably longer of course than the 6 months referred to in sub-reg(5) of the Regulations. In relying on these statements in the visa applications therefore, the Tribunal has taken into account matters irrelevant to the question of the genuineness of the marriage. The facts were too insignificant and remote from the central question to be relevant. Accordingly, the Tribunal has taken into account an irrelevant matter when striking a balance between the considerations bearing on the question of the genuineness of the relationship which began February 2004, after the appellant had ceased his relationship with his former Turkish wife on the evidence. The second matter relied on by the Tribunal was that in relation to the "business trips" of the appellant, the first wife accompanied the appellant on one occasion, and applied to come but did not accompany the appellant on the second occasion after the Turkish divorce. However this was well before the appellant had met the sponsor. The Tribunal drew the inference from this circumstance that because the ex-wife came with the appellant to Australia in 2003, the first marriage relationship was still on foot, despite the parties technically being divorced. Whilst this circumstance might partially cast some shadow on the general credibility of the appellant, it could not be inferred affirmatively from this circumstance that the later marriage in 2005 to the sponsor was contrived or that the relationship was not genuine and continuing, having regard to the powerful contrary evidence. Again, no attempt was made in the reasons for decision to specify the reasoning on which the inference was based that the marriage was not genuine. The inference drawn by the Tribunal was that 'without a business case the inference can be drawn that they (first wife and appellant) were still in a spousal relationship even although technically divorced. ' This simply does not follow. The lack of a 'business case' does not reasonably cast doubt on the relationship which began later. This inference is only open in relation to a period substantially before the meeting and marriage with the second wife. The issue to be resolved is the relationship with the sponsor after relations with his former wife had ceased in December 2003. The evidence is clear that there is no suggestion of any on-going relationship between the appellant and his ex-wife after the appellant met, courted and married the sponsor. The accepted fact was that the first wife finally moved out in December 2003 or January 2004. The observations in relation to the business trips after the Turkish divorce on the part of the Tribunal are so remote in time and relevance from the commencement of the marriage and the later on-going relationship between the appellant and the spouse during the relevant period that they cannot be said in any probative sense to support and inference as to the non-genuine nature of the second marriage. It is a further irrelevant factor which was taken into account. A third matter relied on by the Tribunal to outweigh the strong evidence in the appellant's favour was the belief expressed by the sponsor wife that the children of the applicant's first marriage were not his biological children. This was said to have been 'inadequately explained' and an observation is made by the Tribunal that the prior wife had 'an unnatural degree of disinterest in the personal details of the appellant's former wife and her children'. There is no evidence on which to base the assertion that this perceived lack of interest was 'of an unnatural degree,' whatever that may mean, nor does it on its face call for any explanation. The statement is pure speculation and it cannot support an inference of the non-genuineness of the marriage. On its face it is not improbable that a second wife may wish to disassociate herself from a former wife's relationship with her husband, by not expressing interest in the former wife or her off-spring. There is simply no evidence to support the view that this is 'unnatural' and is therefore a ground for discounting the force of the favourable mandatory considerations. This is a further irrelevant consideration wrongly taken into account by the Tribunal. Again, there is no attempt to explain the ways in which these factors, either taken alone or considered cumulatively, cut down the extremely strong, objective evidence on the mandatory factors that the marriage is not genuine. It is not insignificant that the Tribunal also seeks to diminish the weight of the IVF evidence by asserting that 'it is not rare for two people to deliberately have a child without an intention to be spouses. ' There is no indication of any evidence to support this conclusion. It is an irrelevant observation because it is a generalised comment and it fails to take into account all the other particular favourable elements in support of the appellant's case. The fact of the IVF program and the effort and expense involved is not diminished simply by an assertion that some people want to have children together outside of marriage. A further indicator that the decision-maker has erred, in a jurisdictional sense, is the Tribunal's finding that the entire relationship was contrived over many years for migration purposes. The consequence of such a finding is that it involves finding that the parties' financial integration of their affairs, the joint ownership of the home, the joint liability for accounts, the period of co-habitation, the social recognition of the relationship, the conduct of the parties, the observations of their friends and the onerous and expensive IVF program, were all deliberately undertaken with intent to give a false impression as to the nature of their relationship for migration purposes. There is no evidence or material which could possibly sustain this conclusion. For the above reasons, I therefore consider that in reaching the decision in the present case the Tribunal member has taken into account a number of irrelevant considerations, and that this constitutes jurisdictional error. Alternatively, whilst I appreciate the reluctance of courts to reach a conclusion that a decision is so unreasonable that no reasonable Tribunal could reach it, I consider the evidence in the present case so sufficiently strong as to justify this conclusion. Accordingly, for the above reasons, the appeal ought to be allowed. The decisions of the Federal Magistrate and of the Migration Review Tribunal should be set aside, and the matter be remitted to the Tribunal for further consideration in accordance with law. The first respondent is to pay the costs of the appellant in this appeal and before the Federal Magistrate. I would add that I am greatly indebted to both counsel for their assistance, and especially to Mr Krohn for his excellent written and oral submissions on behalf of the appellant which have greatly assisted the presentation of the appellant's case. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | spouse visa whether the appellant is in a genuine marriage relationship with sponsor for the purposes of reg 1.15a of the migration regulations 1994 (cth) whether the parties had a mutual commitment to a shared life as husband and wife to the exclusion of all others whether the marriage was contrived for migration purposes strong evidence found by the tribunal in support of the appellant's visa application outweighed by perceived countervailing matters whether the tribunal's decision was infected by jurisdictional error by taking into account irrelevant matters or failing to take into account relevant matters, or due to gross unreasonableness migration |
However, that is in the title in Form 54A of the Forms in the Federal Court Rules , and repeated in the body of that Form. The applicant applies for an extension of time in which to file and serve a notice of appeal from the judgment of the Federal Magistrate Smith given on 20/April/2007 at Sydney. An extension of time is required because a notice of appeal was not filed and served within the time limited by Order 52 rule 15. The grounds of the application appear in the attached affidavit. 8 It is not the case, as the Form recites, that an extension of time is required because "a notice of appeal was not filed and served within the time limited by O 52 r 15": leave is required because a notice of appeal was not filed and served within the time limited by O 52 r 15. 9 Because the only basis relied on in opposition to the grant of leave is that the proposed appeal is without merit, it is necessary to have detailed regard to the history of the matter. 10 The applicant is a national of Tanzania born on 4 March 1970. The decision of the Migration Review Tribunal (the Tribunal) shows that she applied for permanent residence on spouse grounds on 27 July 2000. The visa application form completed by the applicant incorporated an application for a permanent visa, a Partner (Residence) (Class BS) visa, which normally cannot be granted until two years have elapsed since the lodgement of the application, and an application for a temporary visa, a Partner (Temporary) (Class UK) visa, which can be granted immediately, to permit stay until a decision is made on the permanent visa. This process is intended to test whether the relationship is continuing, two years after the visa application, before permanent residence is confirmed. The delegate's decisions to refuse to grant the visas were made on 12 June 2003. Regulation 1.15A contains the test to be applied to determine whether one person is the 'spouse' of another person, whether in a married or a de facto relationship. In forming an opinion whether a married relationship or de facto relationship exists, the Tribunal must take into account the considerations set out in subregulation 1.15A(3). These considerations relate to all of the circumstances of the relationship including, in particular, the financial aspects of the relationship, the nature of the household, the social aspects of the relationship and nature of the persons' commitment to each other. The Tribunal has considered all of the evidence regarding the aspects of the relationship including the evidence of the history of the relationship since the time of application. For the reasons above, the Tribunal is not satisfied that at the time of application the review applicant and the nominator were in a genuine and continuing relationship. The Tribunal is not satisfied that at the time of application they were mutually committed to a shared life together as husband and wife to the exclusion of all others. 54. The Tribunal accordingly finds that the review applicant and the nominator are not in a married relationship as described in subregulation 1.15A(1A). The Tribunal finds that the review applicant is not the spouse of the nominator at the time of application in accordance with regulation 1.15A. The Tribunal finds that the review applicant does not meet subclause 820.211(2). The review applicant stated in her application form that she was living at the same address as the nominator in Woolloomooloo. She told the Tribunal that she lived at that address but also spent time with her sister because of the sister's medical problems, and because she used to baby sit her sister's child. The nominator told the Department in a statement dated 26 July 2000 that he shared the place at Woolloomooloo with a friend, and had done so for 10 months, and that the review applicant spends time with him there. There is evidence of a card addressed to the review applicant and nominator at the Woolloomooloo address, and a car registration in both names showing this address. The Tribunal is not satisfied that the evidence establishes that the review applicant and the nominator established a household together at the Woolloomooloo address. 37. The evidence regarding the parties' subsequent living arrangements is that the review applicant was in Africa from October 2000 until late April 2001, during which period the review applicant resided with her sister in Blacktown. After the nominator returned to Australia in April 2001 he stated that he resided in Woolloomooloo, whereas the review applicant continued to reside with her sister. Evidence has been submitted that the review applicant and the nominator then resided together in Hurstville from 19 May 2001 until November 2001. The Tribunal has considered the evidence that the lease was initially in the nominator's and Ms Bumbabu's name, and that the review applicant's name appears to have been added at a later stage. The Tribunal has considered the review applicant's comments at hearing that she did view the property with the nominator prior to renting it, but this evidence is not consistent with her subsequent statements that the nominator and Ms Bumbabu viewed the property and decided it should be rented. It is also not consistent with the evidence from the real estate agent that the nominator and Ms Bambubu viewed the property. The Tribunal notes that when the Department contacted the review applicant and nominator at that address, the answering machine gave the names of the nominator and Ms Bumbabu only. The Tribunal has considered the review applicant's comments regarding this, but is not satisfied that they adequately explain the absence of any reference to the review applicant in the answering machine message. 38. The Tribunal has considered the other evidence regarding cohabitation at the Hurstville address, including documents showing the review applicant's name at the Hurstville address. The Tribunal accepts that the review applicant may have spent some time at the Hurstville address with the nominator. The Tribunal is not satisfied on balance however that the evidence establishes that the review applicant and the nominator established a household together at the address in Hurstville. The handwritten name of the applicant is consistent with the account of the signing of the rental agreement deposed to by Ms Bumbabu, as is the "signature of tenant". Again, there is no explicit reference to the Notice of Claim to the Department of Fair Trading by all three in respect of the Hurstville premises. A Westpac statement of a joint bank account for the period 29 March to 27 April 2001 was in evidence. There was no evidence as to the period during which this joint account was operated. There are receipts for the joint purchase of furniture dated 7 June 2001 and 27 August 2001, as well as for clothing, on 28 August 2001, in joint names; a receipt for jewellery, as well as a tenancy agreement in respect of the unit at 24/5-9 Fourth Avenue, Blacktown, New South Wales 2148, for six months for the period 4 October 2002 and ending on 3 April 2003 in the name of the applicant and her husband. 17 There is no doubt that the applicant and the nominator were married to each other in Sydney on 16 July 2000. The applicant's visa application was on 27 July 2000. 18 In addition to the consideration of the requirements in subregulation 1.15A(1A), there was a claim by the applicant to the Tribunal based on domestic violence. After the Tribunal had received the statutory declaration from Marie France Bumbabu from the nominator, and a further statutory declaration of the applicant dated 24 March 2005, the Tribunal invited the applicant to provide further comments, as well as information in press reports that the nominator had been diagnosed with HIV in 1999, which the nominator did not, prior to, or after the marriage, divulge to the applicant. In November 2003 the review applicant submitted evidence that the nominator was in custody awaiting trial on a criminal charge. In May 2004 the review applicant submitted that because of the pending charges against the nominator of 2 counts of knowingly infecting a person with HIV, she would be claiming to be a victim of domestic violence. She stated in a statutory declaration dated 3 May 2004, that she had visited the nominator in prison on a number of occasions since the end of March 2003. She learned in April 2004 of the charges against the nominator regarding knowingly infecting persons with HIV, and now felt that she could not resume cohabitation with the nominator. In regard to the time of application criteria for the visa in clause 820.211, the issue of domestic violence is relevant only in relation to subclauses 820.211(8) and (9) ... the Tribunal finds the review applicant does not satisfy other requirements of the relevant subclauses 820.211(8) or (9), as the review applicant was the holder of a substantive visa at time of application and did not hold a Subclass 300 visa. The Tribunal therefore has not considered the issue of domestic violence in relation to subclauses 820.211(8) and (9). The Tribunal has found above that the review applicant does not satisfy subclauses 820.211(2) --- (9) at the time of application. The Tribunal therefore finds that the review applicant does not satisfy clause 820.211, an essential criterion for the grant of a Subclass 820 visa. (Emphasis added). The nominator has spent large amounts of time overseas and the applicant appears to be residing permanently with her sister, Hadija Ally in Blacktown. It was argued that by taking any such events into consideration, the Tribunal made a jurisdictional error such as is described in Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179. What was important, however, was that the Tribunal should only address evidence of later events to consider whether they confirmed the existence or otherwise at 27 July 2000 of a marriage in which the parties had "mutual commitment to a shared life as husband and wife" and a relationship which at that time was "genuine and continuing". The Tribunal would have erred if, when addressing item 820.211(2)(a) in the light of subsequent events, it addressed the wrong question, such as whether subsequent events showed that the marriage over its whole period or at a later date lacked the elements required by reg.1.15A. (Emphasis added). His Honour concluded that the discussion by the Tribunal of "the parties' subsequent living arrangements" focused on the inconclusive nature of the evidence as to cohabitation at the Woolloomooloo accommodation. The correctness of this finding, and whether the use of later events was only to illuminate the nature of the relationship at the time of the application is, in my opinion, at least arguable. 31 I have set out the history of the various steps in this litigation to provide the basis for my conclusion that the proposed appeal for which leave is sought is not unarguable. 32 The only question presently before the Court is whether leave to appeal should be granted. There is, on such an application, always a temptation to reach a view as to the probable outcome of any proposed appeal. 33 I have referred, somewhat extensively, to the basis for the claim concerning whether the Tribunal's consideration of subsequent events meant that it had failed to address the right question, and, in particular, whether, in truth, the Tribunal's consideration of those later events were used by the Tribunal only to illuminate what was said by his Honour to be the equivocal or inconclusive nature of the evidence of cohabitation at the Woolloomooloo address, as Smith FM seemed to conclude. 34 There are, however, other possible arguable grounds on this application. It is said by counsel for the applicant that the applicant relied on the provisions of the Act that relates to "Domestic Violence, which occurred in the marital relationship, but was completely ignored or disregarded by the Federal Magistrate and the Tribunal. These were, in my opinion, almost entirely attacks on the merits of the factual assessments reached by the Tribunal. However, the Tribunal was required to address impressionistic criteria which were particularly difficult to apply to the present case. In this situation a court of judicial review must bear in mind its duty "to leave the decision of that fact to the public body to whom Parliament has entrusted the decision-making power save in a case where it is obvious that the public body, consciously or unconsciously, are acting perversely" ( Puhlhofer v Hillingdon London Borough Council [1986] UKHL 1 ; [1986] AC 484 at 518, quoted in Minister for Immigration & Multicultural Affairs v Eschetu [1999] HCA 21 ; (1999) 197 CLR 611 at [41] ). Counsel's arguments did not cause me to arrive at such a judgment in this case. The Federal Magistrate erred by accepting MRT's "impressionistic criteria", which revealed a misconception of the law and therefore consciously or unconsciously acted perversely. It is arguable that the proposition, stated by the Federal Magistrate that a court of judicial review can only interfere in the facts of this case if it was obvious that the Tribunal or the delegate consciously or unconsciously was acting perversely , relying on the observation of Lord Brightman in Puhlhofer v Hillingdon London Borough Council [1986] UKHL 1 ; [1986] AC 484 at 518, is an overstatement of what Lord Brightman said. 43 The fact that an appeal is unlikely to succeed is a different question from whether an appeal has any prospect of success or is arguable. 44 Consistent with the judgment of the Full Court in Jess v Scott (1986) 12 FCR 187, I am satisfied that there are special reasons for granting leave to appeal in the present case. 45 I am not to be taken from the observations set out earlier that there are strong grounds for thinking that the proposed appeal will be successful. However, the unusual factual circumstances of this case and the detailed analysis by Smith FM to the proper use of later facts in respect of the factual question to be determined at an earlier time, persuade me that the appeal is not "doomed to fail". Technical default as to filing within time should not be an unscaleable hurdle where possible injustice might result in the absence of the grant of leave. That application was unsuccessfully opposed by the first respondent. 48 In the circumstances, it is appropriate to order that there be no order as to the costs of the application for leave to appeal. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | application for leave to file and serve notice of appeal whether special reasons for granting leave consideration of proper use of later facts in respect of a factual question to be determined at an earlier time where appeal not without merit and leave granted practice and procedure |
Senator Brown has almost concluded his case. During the course of Senator Brown's case the respondent, Forestry Tasmania, interposed a witness who is ordinarily resident in Canada. That witness was Mr Meggs. 2 During Mr Meggs' cross-examination, counsel for Senator Brown called for the production of certain documents which Mr Meggs referred to in his evidence. Counsel for Forestry Tasmania resisted that call. They claim that the documents were immune from production because of legal professional privilege and/or client legal privilege. Witnesses called by Senator Brown have given evidence about a Population Viability Analysis carried out in relation to the eagle. 4 Dr Read is an employee of Forestry Tasmania. He has prepared an affidavit containing his expert opinion. That affidavit was filed by Forestry Tasmania as part of the evidence it then intended to rely upon in the proceeding. The affidavit, to which no objection is taken, will form the evidence in chief of Dr Read when he is called to give evidence. 5 Counsel for Senator Brown cross-examined Mr Meggs about his email correspondence with Dr Read concerning the PVA. Counsel made a call for two emails from Dr Read to Mr Meggs and for two files attached to an email of 31 October 2005. 6 Dr Read's emails request Mr Meggs to provide "feedback" on a draft affidavit prepared by Dr Read. The files attached to the 31 October 2005 email include Dr Read's notes or commentary on the affidavit of a witness called by Senator Brown dealing with the PVA. Privilege at common law or under the Evidence Act ? It contended that they are privileged from production under the common law and under ss 118 and 119 of the Evidence Act 1995 (Cth). 8 Forestry Tasmania relied upon the common law concept of legal professional privilege as referred to in The Daniels Corporation International Pty Ltd and Another v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 at 552 to 553. It contended that the emails and attachments are "communications" prepared for the purpose of obtaining legal advice or form part of its lawyer's investigations for the purpose of this proceeding. 9 Counsel for Forestry Tasmania submitted that the Evidence Act does not apply to its objections to produce the documents called for by Senator Brown. They referred to Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1, where the High Court observed that the statutory privilege was confined to the adducing of evidence during the course of a hearing. They say that at common law, legal professional privilege extends beyond the course of the hearing to pre-trial issues such as discovery disputes. 10 In any event, counsel for Forestry Tasmania contended that "the common law and the statutory tests yield the same conclusion in relation to the protection of the documents called for from production. Order 33 rule 11(5) of the Rules of Court extends the operation of ss 118 and 119 of the Evidence Act to orders for the production of documents in circumstances where the call for production is made in the course of evidence being adduced before the Court; see Collins Debden Pty Ltd v Cumberland Stationery Co Pty Ltd [2005] FCA 1194 at [6] , per Lindgren J. Does s 118 apply? 13 The documents, the subject of the current call for production, have been described by Mr McDonald (the in-house lawyer for Forestry Tasmania) as being prepared for the purpose of communication between Dr Read and Mr Meggs, to have Mr Meggs critically review affidavits of two witnesses called by Senator Brown, as well as Dr Read's affidavit. 14 The documents are not communications between a lawyer and a client but between two witnesses for the purpose of assisting each other to prepare their affidavits for use in the proceeding. Accordingly, s 118 does not apply to give the documents privileged status. Does s 119 apply? 16 Section 117(1) contains a definition of "confidential communication". Further, Mr McDonald had no involvement in the communications other than suggesting they occur. They were purely between Mr Meggs and Dr Read. Neither of those gentlemen have told the Court that they considered their communications to be confidential. On the contrary, Mr Meggs openly discussed the existence of the communications during his cross-examination. 18 The documents are not immune from production under s 119 of the Act. At the very least Forestry Tasmania has not discharged its onus of making out its claim for privilege. 19 Counsel for Forestry Tasmania made a series of submissions in relation to the construction of O 33 r 11(5) and in particular, its effect on the operation of s 118 and 119 of the Evidence Act . 33 r. 11 is a code, and "means" in sub-r.(5) is given its literal meaning, sub-r.(5) is ultra vires the rulemaking power of the Court and void. Order 33 rule 11 applies at the stage where evidence is being adduced in conjunction with ss 118 and 119 by extending their operation. 21 Whether O 33 r 11, in conjunction with ss 118 and 119 , is a code is beside the point. It applies according to its terms. It is to ask the wrong question to inquire whether O 33 r 11 preserves the common law because its terms are not directed to that point. 22 Counsel for Forestry Tasmania referred to the judgment of the Full Court in Seven Network Ltd and Another v News Ltd and Others [2005] FCAFC 125 ; (2005) 144 FCR 379 in support of the submission that O 33 r 11(5) did not operate in conjunction with the Evidence Act to apply to a call for documents during the course of a trial. 23 Counsel's reliance on Seven Network is misplaced. The documents in question in the current proceedings were called for during the conduct of the hearing. Accordingly, O 33 r 11 applies to them and O 33 r 13 may be availed of to compel their production; see Branson J at [17]. 24 Counsel for Forestry Tasmania also referred to the rule making power of this Court under s 59 of the Federal Court of Australia Act 1976 (Cth). That section empowers Judges of this Court or a majority of them to make rules of Court "making provision for or in relation to the practice and procedure to be followed in the Court". Order 33 rule 11 is within the rule making power of this Court set out in s 59 of the Federal Court of Australia Act . Order 33 rule 11 is a provision concerning practice and procedure. That is because the relevant communications are not from or to a legal adviser for the dominant purpose of providing legal services to a client in connection with legal proceedings. They are communications between witnesses designed to assist each other in the preparation of their witness statements. At the very least I am not convinced that they are plainly wrong. Accordingly, I will follow it in preference to any contrary approach in State courts. 29 Further, an imputed waiver arises given that the documents relate to the issue of the impartiality of Dr Read and Mr Meggs. In these circumstances it would be unfair to Senator Brown not to require the production of the documents. This is especially so in circumstances where Forestry Tasmania has produced other emails in respect of drafts of Mr Meggs' affidavit. 30 Consequently, there has been intentional disclosure of other like communications of a not materially different quality such that if these documents were ever privileged they should no longer retain that status; see Ryder v Frohlich [2005] NSWSC 1342 at [16] per Barrett J. 31 Forestry Tasmania has produced drafts of Mr Meggs' affidavit which are now exhibits in the proceeding. These exhibits raise issues not materially different to the issues raised by the documents sought to be produced, that is, the formation of expert opinion and the independence or otherwise of that opinion. Premature objection? I agree with counsel for Senator Brown that there is no point in postponing determination of this issue. I am prepared to assume that Dr Read's affidavit will be read. The respondent's claim for privilege in respect of the production of the documents called for during Mr Meggs' evidence, but not produced by the respondent, is dismissed. | privilege legal professional documents referred to in evidence call for production during cross-examination documents not communication between a lawyer and client but between two witnesses to assist each other in preparation of their witness statements whether privilege at common law or under the evidence act 1995 (cth) whether imputed waiver of privilege by reason of intentional disclosure of other like communications legal professional documents referred to in evidence call for production during cross-examination documents not communication between a lawyer and client but between two witnesses to assist each other in preparation of their witness statements whether privilege at common law or under the evidence act 1995 (cth) whether imputed waiver of privilege by reason of intentional disclosure of other like communications privilege legal professional documents referred to in evidence call for production during cross-examination documents not communication between a lawyer and client but between two witnesses to assist each other in preparation of their witness statements whether privilege at common law or under the evidence act 1995 (cth) whether imputed waiver of privilege by reason of intentional disclosure of other like communications practice and procedure privilege evidence |
Notice of that termination, dated 11 December 2008, and of the reasons for that decision were, in accordance with s 46PH(2) of the HREOC Act, issued by the delegate. On 5 January 2009 the applicant filed an application in this Court under s 46PO(1) of the HREOC Act alleging unlawful discrimination. The respondent to the application was named as State of New South Wales, Department of Education and Training ('the State'). By notice of motion filed on 20 February 2009 the State moved for summary dismissal of the proceeding and on 20 March 2009 Emmett J dismissed the proceeding: Croker v Department of Education and Training (NSW) [2009] FCA 350. That Act apparently provides that the Commission may use and act under the name TAFE Commission. Whether or not the applicant has a valid claim against the TAFE Commission is a matter about which I am presently unable to express any view. It may be that the applicant will commence a fresh proceeding against the TAFE Commission. However, unless any such proceeding discloses some basis for relief, which is certainly not disclosed in the present application, any such further proceeding would suffer the same fate. The applicant commenced the present proceeding against the respondent by application, together with a Form 167 (O 81, r 5 of the Federal Court Rules ('the Rules')), both filed in this Court on 26 May 2009. Section 46PO(2) of the HREOC Act requires an application to this Court to be made within 28 days after the issue of the notice under s 46PH(2), or within such further time as the Court allows. The 28 days expired on 9 January 2009 so that the applicant requires an extension of time within which to make his originating application. Subsequently, on 8 July 2009, the respondent filed a notice of motion seeking a stay or summary dismissal of the proceeding pursuant to O 20 r 5(1)(a) or (b) of the Rules; in the alternative, summary judgment in favour of the respondent pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) ('the Act'); in the alternative, that the applicant's 'Application and Claim' be struck out pursuant to O 11 r 16 of the Rules; in the alternative, that the applicant provide security for costs in the sum of $20,000 or such other sum ordered by the Court by a fixed time and date, that the proceeding be stayed until such time as the applicant provided such security and that if such security was not forthcoming by the time and date so fixed, the proceeding be dismissed. Additionally, the respondent sought an order pursuant to O 46 r 7A of the Rules, that the applicant not institute any proceeding against the respondent relating to the subject matter of the present proceeding except with the leave of the Court. When the motion came on for hearing, I indicated to the parties that I did not think O 11 r 6 of the Rules enabled me to strike out the applicant's 'Application and Claim' even if I was minded to do so; that rule was concerned with the striking out of pleadings and could not be relied upon to strike out the applicant's originating application. Second, I indicated that until I determined the applicant's application for an extension of time in which to file his originating application, the orders and alternative orders sought on the motion were premature, even though there were common underlying issues as between the exercise of the Court's discretion as to whether an extension of time should be granted and whether or not to make the primary orders for relief sought in the motion. I therefore proceeded to hear the applicant's application for an extension of time to file his originating application in the Court outside the 28 days prescribed by s 46PO(2) of the HREOC Act. It provides: Do you need an extension of time? On 8 July 2009 the applicant filed an affidavit sworn the same day setting out in chronological order a number of events which he deposed 'procrastinated the filing of the second application' after the dismissal of his application for leave to appeal from the judgment of Emmett J was dismissed on 30 April 2009. ) 5/5/2009 at 10:15am I attended the SSAT application No. ) 7/5/2009 at 10:00am I attended the AAT conference No. ) 25/5/2009 I attended Sydney Institute Technology class. ) to costs a fresh application could be brought under the Disability Discrimination Act [1992] (Cth). ) physical and financial disability also procrastinated the application. However, the respondent argued that there is no proper explanation for the delay in the period 1 May 2009 to 26 May 2009. The events/matters which in paras (4) and (6) of the applicant's affidavit sworn and filed on 8 July 2009 are, according to the respondent, bare chronological entries which do not inform one of their relevance to an explanation for the delay. For example, in para (4) there are five entries which might be regarded as health related, being references to attending general practitioners, the dental hospital, a podiatrist and Clinical Immunology at RPAH, but these do not inform one that poor health prevented the applicant from filing the application in a timely manner. In para (6)(iii) of his affidavit, the applicant contends that 'physical and financial disability' was a factor in the late filing of the application. According to the respondent, this bare assertion, without more, does not inform one as to the reason for the delay. In the relevant period, the applicant attended classes at the Sydney Institute of Technology and was also able to appear at the Social Security Appeals Tribunal on 5 May 2009 and at the Administrative Appeals Tribunal on 7 May 2009, presumably for the purposes of proceedings in which he was involved. According to the respondent, this indicates that the applicant was not restricted in carrying out daily activities. There is no evidence that 'business commitments' prevented the applicant from filing his application in a timely manner. The respondent submitted that the applicant is very experienced in Court and Tribunal matters. The Court should infer that the applicant is well aware of the time limits which apply to Court proceedings. In Croker v Philips Electronics Australia Limited [2000] FCA 1731 , the applicant made an unsuccessful application for an extension of time within which to seek leave to appeal. A similar unsuccessful application was made before Buchanan J in the recent application for leave to appeal from the decision of Emmett J: Croker v Department of Education and Training (NSW) [2009] FCA 431. The respondent submitted that it is incumbent upon the applicant to provide a satisfactory explanation for the entirety of the period of delay. It submitted that the applicant has not adequately or at all provided an explanation for the delay in filing the application for the period 1 May to 26 May 2009. I agree that the respondent's explanation for the delay is totally unsatisfactory. On the other hand, having regard to the extent of the delay, as a stand alone consideration, I would not regard it as so great as to warrant a refusal to exercise my discretion to extend time for the applicant to file his originating application. But there are other matters to be taken into account. However, the absence of prejudice is not sufficient to allow an extension of time: Bahonko at [53]. In consequence, the respondent submitted that it is not in the interests of justice to grant the applicant an extension of time to file his originating application. 5 , 6 , 11 and 22 of the Disability Discrimination Act 1992 by failing to accept the applicant's application for re-enrolment in the day time full time mode of the diploma in Website Development. 5 , 6 , 11 and 22 of the Disability Discrimination Act 1992 by limiting the applicant's access to the evening time part time mode of the diploma in Website Development. 5 , 6 , 11 and 22 of the Disability Discrimination Act 1992 by filing a response to the applicant's complaint in the Human Rights and Equal Opportunity Commission knowing that the information or statements were false and misleading in material particulars and in contravention of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) s. 46PN. However, the applicant does not explain how it is alleged that his disability led to his exclusion from enrolment. The respondent further observed that the same defect infected the applicant's earlier application dismissed by Emmett J. It may be that there is some basis upon which the applicant can indicate that he has been discriminated against. There is no basis in the material before me so far to suggest he will be able to do that but I am not prepared to preclude his making an attempt to do so. However, as I have said, if he does commence a fresh proceeding in relation to alleged discrimination in connection with his enrolment for the Diploma and does not specify with specific clarity the basis upon which it is alleged that his rejection was on the basis of his disability, that proceeding should also be dismissed as having no prospects of success. However, I am not in a position to pre-empt what might be done if such a proceeding is commenced. I therefore decline to make the order sought by the State. There is nothing in either of them to suggest that the applicant's disability led to his exclusion from enrolment. If I was to grant the applicant an extension of time to file his originating application, the respondent's motion for summary dismissal of the proceeding pursuant to O 20 r 5(1)(a) or (b) of the Rules would inevitably succeed for the same reasons alluded to by Emmett J in the earlier proceeding. In those circumstances, there is no utility in acceding to the applicant's application for an extension of time and it therefore must be refused 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 Edmonds. | application for an extension of time pursuant to s 46po(2) of the human rights and equal opportunity commission act 1986 (cth) whether there is any explanation for delay whether there is any prejudice to the respondent if extension is granted whether the applicant has an arguable case the applicant did not provide an adequate explanation for the entire period of delay nor does the applicant have an arguable case application for extension of time refused. practice & procedure |
The products were manufactured in Australia by Fortron. They included anti freeze, brake cleaner, carburettor cleaner, cooling system flush, degreasers and other similar products. 2 In proceedings commenced in this Court on 9 December 2005 Fortron alleges that in breach of its distributorship arrangements, Gammar began importing competing products supplied by another company, Treblex Automotive Products Pty Ltd (Treblex) controlled by Kenneth Jones, a former executive of Fortron. Fortron alleges that Gammar has marketed Treblex products under Fortron labels in pursuit of what it describes as a "Substituted Product Scheme" through sub-distributors in Thailand. These proceedings are brought against a variety of respondents in connection with the scheme and alleges breaches by Gammar of its distributorship obligations. 3 The detail of Fortron's allegations are set out in the judgment delivered on 14 September 2006 in relation to its application for leave to serve Gammar out of the jurisdiction in Thailand --- Fortron Automotive Treatments Pty Ltd v Jones [2006] FCA 1239. 4 In the amended statement of claim, Fortron alleges that Versalife was known as Gold Leaf Enterprises Pty Ltd until 18 February 2005. Until that date it carried on business as a formulator and manufacturer of specialty chemicals. From time to time it supplied certain chemicals to Fortron. It is referred to in the amended statement of claim, somewhat confusingly, as "Gold Leaf Australia". Peter Allen Matthews was a director of Versalife at all material times. His wife, Donna Lorraine Matthews, was a director from April 1989 to April 2003. 5 Fortron alleges that by no later than 1995 Mr Jones, was responsible for the purchase, on behalf of Fortron, of chemicals from Versalife for inclusion in automotive treatment products formulated by Fortron. It alleges that in that capacity, by no later than 1999, he had developed a close working relationship with Mr and Mrs Matthews. 6 According to Fortron Mr and Mrs Matthews knew, by no later than 29 June 1999, of the existence and of the material terms of the distribution agreement between Fortron and Gammar. It is said they also knew of the Substituted Product Scheme and of the preparedness of the twelfth respondent, Phanu Changlor, to assist Mr Jones in its implementation. During the period that followed, Versalife is said to have supplied automotive treatment products to Mr Jones and, alternatively, to Treblex for export to Gammar and to have itself exported automotive treatment products directly to Gammar. This was in circumstances in which Mr and Mrs Matthews were said to have been fully aware of the Substituted Product Scheme. 8 It is also alleged that Versalife traded from Australia in automotive treatment products in Thailand and intentionally misrepresented that automotive treatment products supplied by Versalife but labelled Fortron were genuine Fortron products. It thereby engaged in misleading or deceptive conduct. It is said to have thereby caused damage to Fortron in Thailand and Australia. Mr and Mrs Matthews are said to have been personally involved in the implementation of the Substituted Product Scheme and directly or indirectly concerned in or a party to Versalife's contravention of s 52 of the Trade Practices Act 1974 (Cth) (the Act). 9 Versalife and Mr and Mrs Matthews, by motion filed on 14 September 2006, seek an order that the proceedings be dismissed as against themselves pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) and, alternatively, O 20 r 2(1) of the Federal Court Rules . They also ask for an order for costs. In the alternative they ask that the evidence of Mr Matthews be taken de bene esse . No affidavit in reply was filed by Fortron. 11 In his affidavit Mr Matthews says he was at all material times the managing director of Gold Leaf Enterprises which changed its name to Versalife on 18 February 2005. He said that he had no knowledge of any of the matters mentioned in [52] of the amended statement of claim either by 29 June 1999 as alleged, or at any time until he read of those matters in the statement of claim. 12 Mr Matthews also says that he has been diagnosed with metastatic malignant melanoma and attached a copy of a referral from his general practitioner to his neurosurgeon which set out his conditions. He does not have a well-defined life expectancy. When originally diagnosed in December 2003 he was advised by his doctor that it was unlikely he would survive longer than nine months and that the chances of him surviving for five years was less than 10%. Recent scans show no observable tumour activity and he is currently strong enough to give evidence. He says, however, that this may change at any time due to the aggressive and unpredictable nature of the disease for which there is no cure. The report indicates that he has suffered from melanoma with metastases in the small bowel and liver and in the brain. He has undergone surgery for the brain tumours. That surgery was evidently carried out on 25 July 2005. 13 Mrs Matthews says that she was a director of the former Gold Leaf Enterprises until 23 April 2003. She also denies having any knowledge of any of the matters mentioned in [52] of the amended statement of claim, either by 29 June 1999 or as alleged at any time until she read of them. She says that neither Mr Jones nor any other person informed her of any of the matters mentioned in [52] of the amended statement of claim in or about the first half of 1999 as alleged or at all. It is submitted that the allegations made are analogous to allegations of dishonesty or fraud or at least intentional wrong-doing. The particulars in [52] allege that Mr Jones orally informed Mr and Mrs Matthews of the matters therein in or about the first half of 1999. That is the only basis which is advanced to support the allegation of knowledge. Mr and Mrs Matthews have denied that allegation on oath. Fortron has elected not to file any affidavit evidence to support the allegation, not even by admissible hearsay. It is submitted that on the material before the Court there is no evidence to support the allegation of knowledge. 16 It is further submitted on behalf of Versalife and Mrs Matthews that the proceedings should be dismissed under O 20 r 2(1) on the basis that no reasonable cause of action is disclosed or the proceedings are frivolous or vexatious or an abuse of process. To the extent necessary, they also rely on s 31A(2) of the Federal Court Act and say that the application has no reasonable prospects of success as against them. 17 Counsel for Fortron submits that the affidavits do not go far enough to permit the Court to determine that there is no prospect of Versalife and the Matthews being held liable for any of the causes of action pleaded against them. He points out that their contention involves the proposition that even if the discussion particularised in [52] never took place, the Court could not find at trial that they knew of the matters pleaded in that paragraph. He submits that that was a matter to be determined at trial after all the evidence is in and all the witnesses have been cross examined. 18 Counsel points out that Mr and Matthews do not deny in their affidavits that they consented to the use of their company name. Nor do they deny that during the period from 1999 to 2000 they knowingly assisted Mr Jones in his personal capacity and as a director of Treblex with the implementation of the Substituted Product Scheme. 19 The question which has to be answered in an application for judgment under s 31A is whether the party against whom the application is made has any "reasonable prospect" of successfully prosecuting or defending "the proceeding" or the "part of the proceeding" in issue. That question is not to be answered by a finding that a party's statement of claim or defence fails to disclose a reasonable cause of action or defence. A pleading may be rectified by amendment so as to raise a reasonable cause of action or defence. It follows that a finding that a pleading should be struck out under O 20 does not mean there must be judgment against the party whose pleading it is. There may yet, by amendment, be a reasonable prospect of successfully prosecuting or defending that proceeding. 20 In order to secure judgment under s 31A it must be shown that the party prosecuting or defending the proceeding has no reasonable prospect of success. This judgment can be made, by reference to pleadings, where there is a defect in the pleadings which cannot be cured. Alternatively, it may be a judgment made by reference to evidence put on in support of an application under s 31A which reasonably excludes the possibility that facts essential to the success of the claim or defence will be able to be established. For example, if a cause of action depends critically for its success upon the presence of the defendant at a particular place, at a particular time and the defendant is able to show, on affidavit, that he or she was not at that place at the particular time and there is no evidence to contradict that "alibi" then the judgment may be made that the proceeding has no reasonable prospect of success. In such a case judgment may be given for the defendant. Alternatively, if a defence is pleaded which depends critically for its success upon the defendant's denial that it was a party to a contract, then an affidavit by the applicant exhibiting the contract with the defendant's signature on it, supported by affidavits from witnesses to the execution of the contract by the defendant may be sufficient to support a judgment under s 31A. Of course, if the defendant were to file an affidavit in reply indicating that the material in the applicant's affidavit evidence was disputed, then it is unlikely that a finding could be made that the defendant had no reasonable prospect of success. 21 Section 31A is not a vehicle for simply striking out parts of pleadings that are deficient. Section 31A allows for "judgment" or nothing. Alternative remedies with respect to deficient pleadings must be found in the rules of Court. I do not consider that affidavits at this level of generality and essentially seeking to refute a particular of relevant knowledge go far enough to establish that the applicant has no reasonable prospect of success in the proceedings against them. For that reason I will dismiss their motion insofar as it seeks dismissal of the application. The bar is higher under O 20 r 2 and I will not dismiss the proceedings under that Rule. 23 The second limb of the motion relates to the taking of evidence on commission or prior to trial from Mr Matthews having regard to the uncertain state of his health. I will certainly accede to that proposal and will give directions to enable it to occur after hearing from the parties as to the appropriate time at which such evidence might be taken. I will however give directions for the evidence of the seventh respondent to be taken on commission. | application for summary judgment summary dismissal of proceedings against certain respondents application of s 31a of the federal court of australia act inapplicability to applications to strike out parts of pleadings nature of "reasonable prospect" assessment required affidavit of respondents denying relevant knowledge affidavit unanswered generality of affidavit affidavit material insufficient to demonstrate no reasonable prospect of success motion for summary dismissal dismissed practice and procedure |
The provisions are protective in nature. Their principal objects are to ensure that potential investors are given sufficient information to enable them to determine whether they should invest in a scheme, that following an investment the investors are given periodic reports about the scheme's financial performance and that those who control the scheme will act honestly, with due diligence and in accordance with the scheme's constitution. One aspect of this regulation is the requirement that schemes be registered. If things go wrong, there is provision for a scheme to be wound up. Even an unregistered scheme may be wound up. The power to make that order is found in s 601EE(1). The consequences of a winding up order are not described. Nor does the legislation provide guidance regarding the manner by which the winding up should take place. By s 601EE(2) parliament has left it to the court to "make any order it considers appropriate for the winding up of the scheme. " This case raises for consideration, and not for the first time, the ambit of the court's power under this subsection. 2 There are two kinds of managed investment scheme: see the definition in s 9. Only one is relevant in this case. It is a scheme which, according to the definition, has three "features" viz: (1) People contribute money or money's worth to acquire rights (the rights are referred to as "interests") to benefits produced by the scheme; (2) The contributions are to be pooled or used in a common enterprise to produce financial benefits or benefits arising from interests in property for the contributors or those claiming through them (all of whom are called "members"); and (3) Members do not have day to day control over the operation of the scheme. A scheme, then, is the combination of these things necessarily connected by design. The scheme may also include those things or attributes that "contribute to the coherence and completeness" of the three essential elements: Australian Securities and Investments Commission v Takaran Pty Ltd [2002] NSWSC 834 ; (2002) 43 ACSR 46, 51. The definition goes on to exclude various arrangements, but none of them are of present relevance. 3 This suit is brought by ASIC to wind up two allegedly unregistered managed investment schemes established by the same promoters. Each involves an investment in a retirement village; in one case an actual village and in the other a prospective village. In most important respects each arrangement (to use a neutral expression) follows the same format. It will be sufficient, therefore, to describe one in detail and then to point to the essential differences between that arrangement and the other. The scheme I will describe is referred to in many of the documents as The Mews Village or The Mews Retirement Village. The other is called The Rosedale Retirement Village. 4 By way of background, the promoters of the schemes described their purpose as being to establish and operate a top-quality resort style retirement village with facilities for respite care. The idea was to develop and sell self-contained and fully serviced units and townhouses to people over the age of 55 years. The village was to be located on land purchased from another company associated with the promoters. Investors would put up the deposit with the balance to be raised by loans from the vendor. A management company controlled by the promoters would operate the village. After payment of a management fee, the profit would go to the investors. The key attraction to investors was the expectation that they would be entitled to deduct from their assessable income not only the amount of their investment but also their proportionate share of the loan taken to pay the balance of the purchase price. 5 The Mews Village was to be established on a 28 hectare parcel of land at Lot 4, Railway Parade, Upper Swan, a semi-rural area on the outskirts of Perth. The land was registered in the name of the third defendant, Western Retirement Village Management Pty Ltd. By a contract dated 18 April 2000 WRVM agreed to sell the land to the fourth defendant, The Mews Village Nominees Pty Limited, for $93,425,000. Other agreements to which Mews Village Nominees is a party show that it entered into the contract as "bare nominee" for a group of investors described as "Investor Partners". The contract of sale provided for the payment of a deposit of $18,048,000 with the balance to be paid by a loan from the vendor secured by a mortgage over the land. The purchase price was not the exchange value of the land. The price far exceeded that value. This came about because under the contract the vendor was required to construct the village. The building work was to take place in two stages over several years. Most of the deposit was raised from the investors who were grouped into several partnerships. The balance was provided by the vendor under a non-recourse loan agreement. The agreement required the loan to be repaid out of the fees payable by residents of the village. In the event of default the vendor could only look to the land for payment. 6 I indicated that the investors were grouped into several partnerships. The principal partnership is styled The Mews Village Partnership and has 14 "Investor Partners". It was established by a partnership agreement dated 18 April 2000. The parties to this agreement appear to be the Investor Partners (although no provision is made for them to execute the agreement) and two companies associated with the promoters, Mews Retirement Nominees Pty Ltd and the first defendant, GDK Financial Solutions Pty Ltd. The partnership business is described as "the development and operation of retirement village facilities [at Lot 4, Railway Parade, Upper Swan]". GDK was appointed to manage the partnership's business. Mews Retirement Nominees was appointed to hold the partnership property as "bare trustee for the partnership". 7 Several Investor Partners acquired their interest in and held their share of the partnership capital for other investors who had also come together as partners. The parties have referred to them as sub-partnerships. By way of example, one of the Investor Partners, Village Mews Nominees Pty Ltd, which holds a 2.73 per cent interest in The Mews Village Partnership, acquired its interest for The Village Mews Partnership, which is a partnership of 5 investors. Each sub-partnership has a manager, yet again a company controlled by the promoters. 8 The Mews Retirement Village was to be managed by WRVM. To this end a Marketing Management and Profit Share Agreement was entered into between Mews Village Nominees (the purchaser of the Upper Swan land) and WRVM. Only an unsigned copy of the agreement is in evidence. The copy does not indicate clearly the identity of the contracting parties. The front page suggests that the agreement is between WRVM and The Mews Retirement Nominees Pty Ltd which, it will be remembered, is the "bare nominee" of The Mews Village Partnership. A schedule records that the agreement is between WRVM and The Mews Retirement Village Nominees Pty Ltd. Notwithstanding those references, the body of the agreement shows that the agreement was between WRVM and Mews Village Nominees. The sealing clause is the latter company's name. A recital describes it as the purchaser of the Upper Swan land. Moving on, the only substantive provision of the agreement to which reference should be made is the management fee which is set at 40 per cent of the profit derived by the village plus a commission of 1 per cent of the fees received from residents. This suggests that not much was to go to the investors, although one should not lose sight of the substantial tax advantage they derived from entering into the scheme. 9 Notwithstanding the complex series of agreements, and the subscription by investors of capital in the order of $8 million, The Mews Retirement Village did not get off the ground. All that has happened is that The Mews Retirement Nominees paid the purchase price for the Upper Swan land using the investors' capital and loan funds obtained from the vendor. Despite receiving the purchase price, WRVM has not transferred the land to the purchaser: It remains registered as the proprietor of the land. Nor has WRVM carried out the building works which by the contract of sale it had promised to do. I assume it did not have the funds to undertake the work. There has been no accounting to investors for any of the money they contributed, despite many requests for information. The investors have simply been left in the dark. 10 There is no hope of the development going ahead, at least while it remains in the hands of its present controllers. GDK has been wound up. There is an unresolved dispute over the control of Mews Village Nominees. Attempts have been made (I cannot say whether they were successful) to remove Mews Village Nominees as trustee and replace it with Equitable Overseers Pty Ltd. It is possible that the partnership manager, WRVM, has also been replaced as manager by Equitable Overseers. To be blunt, things are in a mess and it will take a good deal of time and great expense to sort them out. 11 Turning to The Rosedale Retirement Village, this comprises an existing aged care facility village operating at Deaves Road, Cooranbong, New South Wales. The property was owned by Peridon Group Pty Ltd, another promoter company. An adjoining parcel of land was owned by the fifth defendant, Peridon Management Pty Ltd (in liq). By contracts made on 18 April 2000 both properties were sold to the sixth defendant, Rosedale Village Nominees Pty Ltd (rec and mgr apptd), for $40,113,191. The deposit of $7,926,558 was raised from investors and the balance funded by loans from the vendors. Rosedale Village Nominees has taken a transfer only of the land purchased from Peridon Group. Peridon Management is still registered as the proprietor of the land it sold to Rosedale Village Nominees. Both parcels of land are burdened by mortgages to secure the loans from the vendors. The mortgages are subject to challenge in the New South Wales Supreme Court. I know nothing about the litigation. 12 The Deaves Road property and the existing operation were purchased on behalf of a partnership called The Rosedale Village Partnership which had been established by a partnership agreement dated 18 April 2000. The two Investor Partners are Talisker Skye Pty Ltd, with a 95.37 per cent interest in the partnership, and Allturn Pty Ltd, which holds the balance. The sixth defendant, Rosedale Village Nominees, a party to the partnership agreement, was appointed to hold the partnership property on trust for the Investor Partners. GDK was appointed to manage the partnership. The manager of the Rosedale Retirement Village is Peridon Management. The remuneration payable for its services is substantially the same as that payable to WRVM for the management of The Mews Retirement Village. 13 Each Investor Partner holds its interest in the partnership on trust for a partnership of investors. In the case of Talisker Skye, the partnership was established by an agreement dated 18 April 2000 and is styled the Talisker Skye Partnership. Allturn holds its interest for the Allturn Partnership. Some members of the Talisker Skye Partnership are trustees for other investors, who have formed several sub-partnerships. The second defendant, Windsor Village Management Pty Ltd, is the manager of each sub-partnership. 14 The contract with Rosedale Village Nominees required the vendors to carry out building works to create a village that would comprise 215 two-bedroom apartments, 184 three-bedroom apartments and 90 assisted care facilities. None of that work has been done. The investors have not been given any explanation. They are unable to get any information from the manager of The Rosedale Retirement Village or from the managers of their respective partnerships. Perhaps one reason --- I am sure not the only reason --- is that the managers have been removed and replaced by incorporated associations. I have also been told that Rosedale Village Nominees may have been replaced by Rosedale Action Incorporated as the trustee of the Deaves Road land. In any event, Rosedale Village Nominees is in receivership, although the appointment of receivers is being challenged. Peridon Management is in liquidation. 15 It is not in dispute that each of the arrangements I have described is a managed investment scheme for the purpose of the Corporations Act . This conclusion could hardly be in dispute. Each element of the definition has been satisfied. Taking those elements in turn, by each arrangement: (1) investors contributed money to acquire a right to a proportion of the profits from the operation of the retirement village; (2) the contributions were pooled to make up the deposit for the purchase of the property on which each village was to be constructed or operated; and (3) none of the investors had (or was to have) control over the day to day operations of either the construction or operation of the village; all control was ceded to managers. That is more than sufficient to bring the arrangements within the definition. 16 Contrary to the Corporations Act , neither scheme was registered. Nor did they comply with many of the other requirements for managed investment schemes. Thus it was accepted on all sides that each scheme had to be wound up. ASIC seeks orders to that effect under s 601EE(1). But despite the apparent consensus there are several objections to the orders being made. The principal objection, which if correct would render the application unnecessary, is that the schemes have already been wound up. For reasons I will come to, none of the objections can be sustained and winding up orders will be made. It will be necessary therefore to consider what orders, if any, should be made under s 601EE(2) for carrying out the winding up. To that end it is appropriate to say something about the nature of a winding up of a managed investment scheme. 17 When a winding up order is made in respect of a company the statutory regime that is brought into operation has been succinctly described by McPherson SPJ in Re Crust 'N' Crumb Bakers (Wholesale) Pty Ltd [1992] 2 Qd R 76, 78. He said that "[w]inding up is a process that consists of collecting the assets [of the company], realising and reducing them to money, dealing with proofs of creditors [of the company] by admitting or rejecting them, and distributing the net proceeds, after providing for costs and expenses, to the persons entitled. " Obviously this is a description, albeit brief, of what flows by reason of statute from a winding up order. 18 An order for the winding up of an unregistered managed investment scheme does not bring about the same consequences. At least the order will not automatically produce those consequences. The reason is simple. No statutory procedure for the winding up is brought into play when the order is made. What then, one might ask, is the effect of a winding up order? It is, I think, appropriate when answering this question to act on the premise which I hope is uncontroversial that a winding up order must produce some consequence. Every order of a court settles some party's rights or obligations, duties or liabilities. When a winding up order is made it must affect the rights or obligations of, at least, the investors. In the kind of scheme with which we are dealing, the order may also affect the rights and obligations of other persons, for example the trustee and managers. 19 In my view the effect of the order is that each investor is immediately entitled to insist that steps be taken to wind up the scheme. I will put to one side for a moment what those steps should be. The order also means that save for the purposes of its winding up, the scheme should not continue in operation. Accordingly, to the extent that any agreement requires the scheme to continue, that agreement is overridden by the order. Whether or not the order is an event that frustrates the agreement so that the rights and obligations of the parties come to an end, is a difficult question that I need not resolve. Further, in my view the winding up order also prevents any person involved in the scheme from imposing new obligations on the investors or affecting their interest in the scheme property, save to the extent this will occur in the course of the winding up. 20 Although the winding up order permits investors to insist that steps be taken for the scheme to be brought to an end, if all the investors are in agreement the winding up need not follow the same steps as the winding up of a company. If the scheme has failed, the company model is likely to be the only appropriate method for the winding up. I think that is what Keane JA must have had in mind when he said in Mier v F N Management Pty Ltd (2005) 56 ACSR 93, 97-98 that the winding up of a managed investment scheme should follow the same path as the winding up of a company. But this will not always be appropriate, especially when the scheme is a successful commercial venture. In that event all that might be required is a reorganisation or reconstruction that will alter the relationship between the parties to ensure that their continued association is lawful. This was recognised in Warne v GDK Financial Solutions Pty Ltd; Billingham v Parbery [2006] NSWSC 259. See also Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd (2003) 47 ACSR 52. 21 Whenever it is necessary to work out how to effect the winding up of an unregistered managed investment scheme, several questions will arise, viz: Precisely what is being wound up? What assets are to be collected and dealt with, whether by realisation or otherwise? Which creditors (if any) are to be paid out? How are the persons entitled to share in the scheme assets to be identified? 22 In this case the first question - What is being wound up? - can be answered by reference to the elements of the scheme, most of which have already been identified. In each case investors formed partnerships, subscribed money which was pooled and, together with borrowed money, applied on their behalf by managers toward the purchase by a trustee of an asset --- in one case land and in the other land and an operating business. In a broad sense the scheme comprises the relationships established by the various agreements that gave rise to those transactions. However, the only part of the overall scheme that I intend to wind up at this point is that part of the arrangement by which scheme property is held on trust by a trustee and managed by a manager. It is not my intention to bring to an end all the agreements that make up the scheme. Once the scheme property is disposed of or dealt with in some way that takes it out of the hands of the trustee and away from the control of a manager, the unregistered scheme should be at an end. 23 As regards the other agreements, it is not necessary for them immediately to be discharged. The position is that none of them were illegal when made: Karl Suleman Enterprizes Pty Ltd (in liq) v Babanour (2004) 49 ACSR 612. Of course, the destruction of the scheme by a winding up order will affect those obligations under the agreements that require the scheme to, or assume that it will, continue. Those obligations will not survive the winding up order. On the other hand all other obligations should remain in place, at least for the time being. 24 On this aspect I have in mind in particular the partnership agreements. The scheme can be wound up leaving those agreements in place. But in due course each partnership will have to be dissolved. Viewed in isolation the partnerships themselves may constitute an unregistered managed investment scheme. However that may be, at present it is not possible to dissolve the partnerships for none of the partners are parties and in their absence it is not appropriate to order a dissolution: Waters v Taylor (1807) 15 Ves 10; 33 ER 658; Ex parte Ford (1801) 7 Ves 617; 32 ER 248. The proper thing to do is to stand over that issue. If ASIC or any investor intends to move for a dissolution that should be done either on notice to the partners or by joining them as parties: Victoria v Sutton [1998] HCA 56 ; (1998) 195 CLR 291, 316-8. When the partnerships are dissolved it will be necessary to rule upon the partners' respective entitlements. Some of the partners, in particular those associated with the promoters, appear not to have put up any capital and for that reason may not following dissolution be entitled to share in the proceeds. 25 It will also be necessary to consider what should be done with the contracts of sale, loan agreements and mortgages. I do not know enough of the facts to have formed any view, but it is possible that some of these transactions are vulnerable to attack. I note for example that the amount of the loans may need to be reduced on account of the failure of the vendors to carry out the promised building works. As presently advised I cannot see how the vendors can avoid some kind of set-off against their respective loans. But that is a matter for another day. All I need do is to reserve liberty to any party to make an application in relation to those agreements. 26 The next issue to consider is what procedure should be adopted for the winding up. This is not a case where the appropriate mechanisms, whatever they may be, can be worked out by the parties themselves, or by their representatives: Compare Lyon v Haynes (1843) 5 Man & G 504; 134 ER 661 where a banking company governed by 7 Geo 4 c 46, was voluntarily dissolved. The winding up of these schemes must be administered by the court. In a practical sense this can only be achieved by the appointment of an officer of the court to implement the winding up. The appropriate officer is a receiver. 27 Although the origins of receivership are obscure, the appointment of sequestrators, receivers of rents and profits and committees dates back to at least the mid 1600s: G Spence , 'The equitable jurisdiction of the Court of Chancery' vol 1, 673. Originally receivers were appointed to protect and preserve property for the benefit of those interested in it. Later they were also appointed to collect property for sale and to distribute the proceeds to all claimants who proved their claim. Disputed claims were adjudicated by the court. By the 1800s receivers were also appointed to manage property under their control, especially if the property was a business to be sold as a going concern: In Re Manchester and Mitford Railway Company; ex parte Cambrian Railway Company (1880) 14 Ch D 645; Taylor v Neate (1888) 39 Ch D 538. 28 The order appointing a receiver must identify the property which the receiver is to take into his possession or else refer to the pleadings or some other document that describes the property: Crow v Wood (1850) 13 Beav 271, 273; 51 ER 104, 105; Hawkes v Holland [1881] WN 128; Seton on Decrees, vol 1, p 738. There also needs to be a direction that the person in possession give up possession to the receiver. In the absence of that direction, the person in possession may not be required to give over possession to the receiver ( Freeman v Trimble (1906) 6 SR (NSW) 133) or at least might not be cited for contempt for his refusal to do so. It is also usual for the order to require any person who has them to deliver up those books and records relating to the property that the receiver may need: Fripp v The Chard Railway Co (1867) 11 Hare 241; 68 ER 1264. 29 On his appointment, the receiver is an officer of the court, not of the party at whose instance he is appointed: In Re Flowers & Co [1897] 1 QB 14. His authority is to act in the manner directed by the court. Thus, for example, in the absence of an order, the receiver has no right to sell any property in his possession. That is, a power of sale will not be implied from the mere appointment: Australian Industry Development Corp v Co-operative Farmers & Graziers Direct Meat Supply Ltd (1978) 3 ACLR 543. But it is not necessary for every act to be authorised by a prior order. For instance the old rule was that a receiver could not pay any expenses in the absence of an order: Fletcher v Dodd (1789) 1 Ves 85; 30 ER 242. Since the 1880s, however, it has been accepted that a receiver can meet all expenses incurred by him in the absence of any order and the reasonableness of those expenses will be determined when the receiver passes his accounts: Tempest v Ord (1816) Mer 55; 35 ER 861. Still, it is prudent for the order to specify what payments the receiver can make and what contracts he can enter into. In a case where the receiver is appointed to run a business there should be an order that he can employ staff and maintain a bank account. He should also be ordered to keep strict accounts and immediately report to the court if the business is operating at a loss. 30 It is important to appreciate that the property which the receiver is directed to take into his possession does not vest in him by virtue of his appointment: Re Satoris's Estate [1892] 1 Ch 11. For that reason the receiver is not entitled to sue in his own name for a debt due to the person whose property is the subject of the receiving order: Re Sacker (1888) 22 QBD 179. If an action is to be brought it must be in the name of the person entitled to the property. 31 I will appoint a receiver to take possession of the scheme assets in so far as they are presently known; in the case of the Mews scheme, the land at Lot 4, Railway Parade, Upper Swan and in relation to the Rosedale scheme, the land and business at Deaves Road, Cooranbong as well as the adjacent land. The order will describe the land by reference to its title particulars. The receiver will be given power to manage the existing Rosedale Retirement Village business. If the receiver encounters any difficulty in taking possession of either property or the business, I will direct that he make any necessary application to the court. The usual position is that the application should be made by a party ( Parker v Dunn (1848) 8 Beav 497; 50 ER 195) but that is often too time consuming. Of course, any application which the receiver may make should be on notice to the parties. 32 The receiver will be directed to find a buyer for the properties of which he takes possession. He will not, however, be authorised to sell the properties, save under a contract that is conditional upon court approval. For one thing the beneficial owners of the properties are not before the court and I do not know whether they have notice of this proceeding. I suspect most do not. In their absence a sale order probably could not be made. Even were I to have the power, I would not make an order unless the beneficial owners were on notice that a sale was sought. 33 For another thing, before the properties are capable of being sold it will be necessary to determine the rights of prior encumbrancers, and there appear to be several claimants. The winding up order is not intended to affect the rights, interests and remedies of any person who has a prior interest over any of the properties. Certainly the appointment of a receiver will not affect those rights ( Waters v Taylor (1807) 15 Ves 10; 33 ER 658) except, of course, where the right concerns possession. The claims of prior encumbrancers will have to be adjudicated before there is a sale. Indeed, dependent upon the outcome of the adjudication, there may be no sale. 34 Lastly, the investors may not want the properties sold. The parties have informed me that attempts are being made to put together a "rescue package" of a kind that will allow the investors to take direct control over the assets. The investors will be given the opportunity to pursue that course but they will need to act quickly, for I will not allow the winding up to be delayed for any significant period. 35 In addition to being appointed receiver over the Mews scheme assets and receiver and manager of the Rosedale scheme assets and given the powers I have mentioned, the question arises whether the receiver should be given any additional powers. ASIC has referred me to several cases where a receiver of a managed investment scheme has been given all the powers that a liquidator of a company has under s 477 of the Corporations Act as if the scheme were a company. It submits that s 601EE(2) is the source of power to make such an order. 36 In my view, there are three reasons why the order should not be made. In summary they are, first, that the receiver already has most of the powers he needs and does not need many of the s 477 powers to carry out his task; second, that several of the s 477 powers are not appropriately given to the receiver; and, finally, that the order, mistakenly in my view, assumes that the receiver can be given all the powers of a liquidator. 37 As to the first point, I have already referred to some powers of a receiver that exist by virtue of his appointment. The appointment will allow him to take possession of the property identified in the order. He will be able to insure the property and keep it under repair: In Re Graham [1895] 1 Ch 66. If the receiver recovers any cash it may be invested, although it might be prudent to first obtain an order. If the receiver is required to sell property he can employ a solicitor, agent or auctioneer for that purpose without further order. Where a receiver is appointed to manage a concern, he needs no special power to operate the business. On the other hand, a prudent receiver may want some orders along the lines I have mentioned, for example the power to employ staff, engage agents, operate a bank account and the like. 38 As to the second point, s 477 confers a power of sale on a liquidator. I have indicated that the receiver should not be given that power. Any sale should be under the court's control. Section 477 also permits a liquidator to distribute property to the persons entitled to it. That is not an appropriate power to confer on a receiver. It is another matter over which the court should retain control. The section gives a liquidator power to compromise claims made by creditors. Except for very small claims, it is not appropriate for the receiver to compromise claims. This is not to suggest that the receiver will have no role in relation to claims against property in his possession. There will be an order that any claim by a person asserting an interest in the property should be presented to the receiver. The claim should be made in a like manner to a proof of debt in a bankruptcy or liquidation. The receiver must accept or reject the claim, after assessing its validity. It is appropriate that a time be placed both on presenting claims and dealing with them. If it turns out that any claim is disputed by the receiver, it will be adjudicated by the court. Any claim allowed by the receiver must be approved by the court before it is discharged out of the property in the receiver's control. The approval will take place when the court makes an order for the distribution of the proceeds. If there are small claims the receiver can apply for permission to compromise them. In all likelihood that permission will be granted. 39 The last point is the most difficult. Among the powers given to a liquidator by s 477 is the power to inspect the books of the company in liquidation: see s 477(3). A person who refuses to allow the liquidator to inspect the books is guilty of an offence. In my opinion, this power cannot be conferred on the receiver. The first difficulty is that having regard to the way these schemes are structured there probably is no person on whom the obligation would attach. Even if "the scheme" is to be substituted for "the company" in the relevant provisions that will not spell out whose books the receiver is entitled to inspect - the former trustee, one of the old managers, any of the new managers? For the relevant sections to work in respect of these schemes they would need to be redrafted, and parliament is the institution that drafts statutes. 40 There is, in any event, a more substantial difficulty. It is that, in my view, s 601EE(2) does not permit the court to impose new duties or obligations on any person. This issue is brought into sharp focus when consideration is given to ASIC's request that the receiver be directed to carry out an investigation into various aspects of the schemes, with power to compel not only the parties to the suit but also third parties to provide whatever information the receiver needs to further that investigation. What ASIC wants is for the receiver to carry out an investigation that will identify all scheme assets, all debts incurred during the operation of each scheme and all contributions in cash or in kind made by the investors. In addition, in relation to the Rosedale scheme, ASIC wants the receiver to prepare for the investors a report that will contain not only that information but also details of all borrowings secured against the scheme land, how the borrowed money was applied, what claims there are against the scheme assets and whether the scheme is solvent. The object of this report is to enable the investors to decide how the scheme should be wound up. 41 The problem with ASIC's proposal is that a receiver has no power of inquiry, in the sense that he cannot require any person to provide him with any information or any documents, save those documents which he is required to take into his possession: In Re Manchester and Milford Railway Company; ex parte Cambrian Railway Company (1880) 14 Ch D 645, 655. Perhaps for this reason courts have made orders conferring upon the receiver of a managed investment scheme the power to compulsorily acquire information from third parties. There are instances for example where a receiver has been directed to conduct an investigation into specific topics and the promoter, manager or trustee of scheme property has been ordered to make all relevant books and records available to the receiver. On occasion it has been ordered that the directors, officers, servants and agents of the promoter, manager or trustee (as the case may be) provide on oath any information requested of them. There are even examples of an order that a receiver may apply for a summons under s 596A to examine any person about the affairs of the scheme. That section permits a person to be examined about the affairs of a company in administration or to a company that is being wound up. The order is fashioned so that the section applies to a managed investment scheme. 42 The courts making those orders have assumed that the requisite power is found in s 601EE(2). I accept that this section gives the court a very broad power. In Australian Securities and Investments Commission v Commercial Nominees of Australia Limited (2002) 42 ACSR 240, 243 Barratt J said that under s 601EE(2): "[T]he court has jurisdiction to settle or prescribe any aspect or element of the basis for winding up or the winding up process which it is necessary to supply because that element cannot be obtained from any other source. " In Australian Securities and Investments Commission v Takaran Pty Ltd (No 2) (2002) 43 ACSR 334, 338 he said that: "[T]he power [under s 601EE(2)] extends ... not only to the imposition of an appropriate winding up regime at inception but also to the making, as and when needed after inception, of such further orders as are needed in connection with the due conduct and completion of the winding up. " Indeed, in Australian Securities and Investments Commission v Atlantic 3 Financial (Aust) Pty Ltd (No 3) [2004] 1 Qd R 591, Mullins J said that the power conferred by the section is almost without restriction. 43 For my own part, however, 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. This principle has been described by Lord Steyn as "the principle of legality" ( R v Secretary of State to the Home Department; Ex parte Pierson [1997] UKHL 37 ; [1998] AC 539, 587). It can be traced as far back as the sixteenth century ( Stradling v Morgan (1560) 1 Plowd 199, 204-205; 75 ER 305, 312-315) and has been regularly affirmed by the High Court from as early as 1908 ( Potter v Minahan [1908] HCA 63 ; (1908) 7 CLR 277, 304 per O'Connor J) to very recently. 44 For example, in Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476, 492 Gleeson CJ said: "[C]ourts do not impute to the legislature an intention to abrogate or curtail fundamental rights or freedoms unless such an intention is clearly manifested by unmistakable and unambiguous language. General words will rarely be sufficient for that purpose. What courts will look for is a clear indication that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment. " Similarly, in Al-Kateb v Godwin [2004] HCA 37 ; (2004) 219 CLR 562, 577 the Chief Justice said: "Courts do not impute to the legislature an intention to abrogate or curtail certain human rights or freedoms ... unless such an intention is clearly manifested by unambiguous language, which indicates that the legislature has directed its attention to the rights or freedoms in question, and has consciously decided upon abrogation or curtailment. " In these cases, the High Court was construing provisions that, respectively, purported to have the effect of restricting the subject's access to the courts and authorising the subject's indefinite detention as an "unlawful non-citizen. " The principle applies to other rights: see, for example, Ex parte Yerger 8 Wall 85 (1869) at 102-3, recently affirmed by the United States Supreme Court in Hamdan v Rumsfeld 126 S Ct 2749, 2764 (2006) (right to appeal); Melbourne Corp v Barry [1922] HCA 56 ; (1922) 31 CLR 174 (right to take part in processions); Pyneboard Pty Ltd v Trade Practices Commission [1983] HCA 9 ; (1983) 152 CLR 328 (privilege against self-incrimination); Clunies Ross v Commonwealth [1984] HCA 65 ; (1984) 155 CLR 193, 201 (property rights); Brown v Classification Review Board (1998) 154 ALR 67, 83 (freedom of expression); Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543, 560 (right to legal professional privilege). It also applies to legislation which purports to impose previously nonexistent obligations: Amalgamated Television Services Pty Ltd v Australian Broadcasting Tribunal (1989) 88 ALR 287, 304 ff and Grech v Bird [1936] HCA 59 ; (1936) 56 CLR 228 (obligation to provide a statutory declaration); O'Brien v Gillies (1990) 69 NTR 1, 4 (obligation to provide a blood test). See also: J J Spigelman, 'Principle of Legality and the Clear Statement Principle' (2005) 79(12) ALJ 769; P D Finn, 'Statutes and the Common Law' (1992) 22 UWALR 7. 45 It is simply not possible to read into s 601EE(2) the power to do what the courts have done. Obligations cannot be imposed by the court unless its power to do so is expressed "with irresistible clearness" ( Potter v Minahan [1908] HCA 63 ; (1908) 7 CLR 277, 304, approved in Bropho v State of Western Australia [1990] HCA 24 ; (1990) 171 CLR 1, 17). 46 A further reason, if one is needed, is provided by consideration of the consequences of a failure to comply with the court-imposed obligation. In a winding up of a company, the statute imposes the duties of disclosure and prescribes the punishment for their breach. But if the duty is to be created by the court, a failure to comply would amount to contempt. A regulatory offence would be turned into criminal conduct. 47 Moreover, in almost all cases a scheme can be wound up without any need to compulsorily acquire information. The assets of the scheme will almost always be easily identified. Creditors who wish to be paid out of scheme assets must prove their claim by providing appropriate evidence. In any event, in most cases there will not be 'creditors' of the scheme. There may be potential claimants on the scheme property as an asset out of which certain debts must be discharged. For instance, in this case the scheme property is trust property. The trustee has incurred expenses in the course of carrying out its duties and has a right to be indemnified out of the trust property in respect of any personal liability incurred in the performance of its duties. It is also entitled to be reimbursed for expenses it has paid out. Those rights are a first charge on the trust property. To make good any claim for indemnity or reimbursement the trustee will be required to provide the appropriate details. If there are any surplus assets to be divided between the investors they will have to substantiate their claims. In these circumstances it could not be said that if the power to require a third party to provide information is not implied, the purpose of the division will be defeated. 48 The only case in which the power of the court has been discussed is Australian Securities and Investments Commission v Mercorella (No 2) [2006] FCA 763. There, in an ex tempore judgment, Mansfield J decided that s 601EE(2) authorised the court to require a person to attend for oral examination under Part 5.9 of the Corporations Act . Mansfield J said that this had been decided by Mier v F N Management Pty Ltd (2005) 56 ACSR 93. He referred to the judgment of Keane JA, with whom the other judges agreed. In his judgment Keane JA pointed out that in Re Stacks Managed Investments Ltd (2005) 54 ACSR 466 White J reviewed the authorities in which a receiver of a managed investment scheme had been given the same powers as a liquidator of a company. In the course of so doing, White J raised the prospect that there was no power for such an order, but declined to express an opinion on the matter. On my reading of his judgment, Keane JA did not take the matter any further. That is, he did not express his own opinion on the correctness or otherwise of the cases to which White J had referred. He did suggest, however, that s 601EE(2) was confined to making orders of a procedural kind. With great respect, I think that Mansfield J misstated the ratio of Mier . In this state of affairs, there is no considered opinion of a court which I am required to follow. 49 I mention in passing that on one view the decision in Australian Securities and Investments Commission v Commercial Nominees of Australia Ltd (2002) 42 ACSR 240 supports the contention that s 601EE(2) can be used to create new rights. In that case Barrett J said (at 244) that the subsection ought be regarded as "the source of jurisdiction to prescribe, by order, the appropriate basis of distribution of surplus and for the completion of the winding up". It is the statement that the court has power to deal with the surplus that caught my attention. It is not clear precisely what Barrett J had in mind but his statement might be taken to mean that the court could order that the net proceeds of the realisation of scheme assets be distributed in a way that is inconsistent with the legal or equitable rights in respect of that property. I do not think that this is what Barrett J intended, but if it is then, regrettably, I would disagree. I prefer the view of Justice Holmes in William Filene's Sons Company v Weed, Receivers of William S Butler & Company, Inc. 245 US 597, 602 (1917) that "when the courts without statute take possession of all the assets of a corporation under a bill like the present and so make it impossible to collect debts except from the court's hands, they have no warrant for excluding creditors, or for introducing supposed equities other than those determined by the contracts that the debtor was content to make and the creditors to accept. Each manager and each trustee is an accounting party. The action for an account is one of the oldest actions known to the law. It appears to have developed, at common law, as early as the twelfth century as a method to force manorial bailiffs to account to their landowners for money received or income derived from the management of the land. The modern equitable action of account, which has all but superseded the common law action, imposes the duty to account more broadly than the common law. Accounts can be required for purely equitable demands or of legal demands that are ancillary to other equitable relief. Thus all fiduciaries are accounting parties: Makepeace v Rogers (1865) 34 LJCh 396; Le Mesurier v Connor (1926) 29 WALR 66. Accounts can be ordered also when the transactions between the parties are too complex to be resolved in legal demands ( O'Connor v Spaight (1804) 1 Sch & Lef 305). That the remedy is available in a broad category of cases was made plain in North-Eastern Railway Company v Martin (1848) 2 Ph 758, 762; 41 ER 1136, 1138 where Lord Cottenham said: "It is ... impossible with precision to lay down rules or establish definitions as to the cases in which it may be proper for this court to exercise this jurisdiction. The infinitely varied transactions of mankind would be found continually to baffle such rules, and to escape from such definitions. It is, therefore, necessary for this Court to reserve to itself a large discretion, in the exercise of which due regard must be had, not only to the nature of the case, but to the conduct of the parties. In the past the inquiries were undertaken by the Master. The cases in which the Master was directed to make inquiries were so numerous and various in their nature that they are impossible to categorise: Daniell's Chancery Practice (1871) vol 2, 1215. Examples of the kinds of inquiries that have been ordered are to be found in Seton on Decrees . For the purposes of both the taking of accounts and the inquiry the plaintiff can obtain discovery from the defendant: Wormsley v Sturt (1856) 22 Beav 398; 52 ER 1161; S J Stoljar, 'The Transformations of Account' (1964) 80 LQR 203, 222. The discovery can include the delivery of interrogatories: Saunders v Jones (1877) 7 Ch D 435. To obtain the information required of him, the accounting party is obliged to make due and proper inquiries of its servants, agents, bankers or solicitors: Bank of Russian Trade Ltd v British Screen Productions Ltd [1930] 2 KB 90; Alliott v Smith [1895] 2 Ch 111. In some cases the plaintiff is able to compel the accounting party to testify under oath on any disputed matter relating to the accounts as they appear in the verified accounts: Wormsley v Sturt (1856) 22 Beav 398; 52 ER 1161; Re Lord's Estate (1866) 2 Eq Rep 605. There is also authority for the proposition that the accounting party's employees can be cross-examined as well: Story , Commentaries on Equity Jurisprudence (14th ed, 1918) SS 1262 n 3. On this basis it might also be possible to examine former employees. 52 Interestingly, in Fry v Oddy [1998] VSCA 26 ; [1999] 1 VR 557, 578 Ormiston J noted that the "inquisitorial" nature of the jurisdiction entitles a judge to direct that a third party make the inquiries that will produce the information necessary to complete the accounts. The combination of this rule and s 601EE(2) would permit me to delegate the task to a receiver. 53 I will invite ASIC to propose the form of accounts and inquiries that should be ordered and what directions should be given for them to be undertaken. There will, however, be a stay on those orders. The usual rule is that accounts are ordered only when all necessary parties (that is all parties who will be bound by the accounts) have been joined or have been given notice of the order. A stay will enable steps to be taken to join the relevant persons or put them on notice. 54 Before leaving the topic of receivers there are two further observations I wish to make. The first concerns the receiver obtaining the views of investors in the Rosedale scheme how they wish the winding up of their scheme to proceed. ASIC suggests that the receiver be directed to convene a meeting of investors to take their views. I agree. In a case such as this the meeting need not be structured as formally as ASIC proposes. The investors' views could be taken on a show of hands with some calculation of the value of their contributions. But the receiver need not go to much trouble in that regard. What each investor considers is due to him will suffice for my purposes. After all, nothing that the investors decide will be binding. 55 The second observation relates to the provision of security by the receiver. It has not been suggested that the receivers should provide security. This is somewhat surprising because in the ordinary case the court will not dispense with the requirement. That is so even when the parties consent to the dispensation: Manners v Fuze (1847) 11 Beav 30; 50 ER 727. The cases in which courts have dispensed with the requirement seem generally to be restricted to those where: (a) the receiver has been appointed without remuneration ( Gardner v Blane (1842) 1 Hare 381; 66 ER 1080); (b) an official liquidator is appointed as receiver (eg Joseph v Joseph (unreported, QSC, de Jersey CJ, 22 April 1998) --- a discretionary factor which has been elevated to a rule of law; (c) the scope of the receivership is so limited that security is not required ( Hyde v Warden (1876) 1 Ex D 309); and (d) the receiver shows that he has sufficient assets to cover his potential liability as receiver: Kerr & Hunter on Receivers and Administrators (18th ed, 2005), 124. For reasons I have not been able to ascertain, no court appointing a receiver to wind up a managed investment scheme has required the provision of security. The issue has not even been discussed. Perhaps all the managed investment scheme cases fall within category (b), but that is not clear. Even if this is so the dispensation should not be automatic. Investors in unregistered managed investment schemes have as much need for protection from the risks of receivership as any other person whose property is taken into custody by court order. However that may be, I do not think it appropriate for me to follow a different course. I will dispense with security and as required by the rules, the order will record that fact. One day the proprietary of this approach will be sorted out by an appeal court. 56 Now I can deal with the grounds upon which the winding up orders were opposed. Mr Levet, who appears for Rosedale Village Nominees and also purports to appear on behalf of Mews Village Nominees, submitted there is no power to wind up the schemes or to appoint a receiver to their assets. There are two planks upon which his argument is constructed. The first is that each scheme had already been wound up by order of the Supreme Court of the Australian Capital Territory. The second argument is that the conditions for the exercise of the statutory power to wind up had not been triggered. 57 By way of background, the person currently behind both Rosedale Village Nominees and Mews Village Nominees is Mr Shiels QC. Through a company, E O Finance Pty Ltd, Mr Shiels is also an investor in the Rosedale Retirement Village. Mr Shiels may or may not have an interest in Swan Western Incorporated, which is an investor in the Mews Retirement Village. At any rate, in mid-2005, E O Finance Pty Ltd purporting to represent all Investor Partners in the Talisker Skye Partnership brought an action in the ACT Supreme Court to wind up the Talisker Syke Partnership on the ground that it was an unregistered managed investment scheme. According to the affidavit filed in support of the application, the Talisker Skye Partnership was established by an agreement of 18 April 2000; the first defendant, Rosedale Action Incorporated, was appointed manager of the partnership; and, the second defendant, Rosedale Talisker Incorporated, held the partnership assets on trust for the partners. 58 The action did not come on for trial. Instead on 12 August 2005 it was disposed of by consent orders. The activities carried on by the first and second defendants known as the Talisker Skye Partnership ("the Talisker scheme") be wound up as an unregistered managed investment scheme pursuant to s 601EE of the Corporations Act 2001 (Cth). Mr William Rangott of Rangott and Slavin be appointed to wind up the Talisker scheme. Mr William Rangott have all the powers outlined in section 477 of the Corporations Act 2001 (Cth) as are necessary to fulfil his role and as if the winding up was a liquidation of a solvent company ordered by the Court. Mr William Rangott distribute, whether in specie or otherwise, the assets of the Talisker Skye Partnership to the persons ultimately entitled thereto in his proper opinion. The parties pay their own costs in relation to this action. First, the precise "activity" ordered to be wound up is not described. One is not much better informed upon reading the affidavit. Paragraph 4 states that the plaintiff is an investor in the Talisker Skye Partnership which is thereafter referred to as the Talisker Skye Scheme. Paragraph 36 states that the Talisker Skye Scheme "was organised as a partnership, pursuant to an agreement dated 18 April 2000, to buy and develop aged care accommodation. " Paragraph 37 states that the scheme has, among others, the following features: the partners contributed money as consideration to acquire rights and benefits to be produced by the scheme; those moneys were pooled to buy the aged care accommodation at Rosedale; and, the partners do not have day to day control over the operation of the aged care accommodation. Little else is explained. 60 Second, because of the brevity of its language it is nearly impossible to determine the effect of the order. Doing the best I can, I am of the view that the order operates only to wind up the Talisker Skye Partnership established by the partnership agreement of 18 April 2000. That is what the order in terms purports to do, though not by reference to the agreement. My preferred construction is confirmed when regard is had to the affidavit, although I am by no means persuaded that it is permissible to go to the affidavit for that purpose. I say this because the order was made by consent and it is unlikely that the judge read the affidavit. If the order does not wind up the partnership it has no operative effect. Importantly for present purposes, in my view the order does not wind up the Rosedale scheme that I have described. 61 On 12 October 2005, the Supreme Court of the Australian Capital Territory wound up the Mews Village Partnership. The action in which that order was made was brought by Swan Western Incorporated. The affidavit filed in the proceeding states that Swan Western acquired its interest in the partnership from the second plaintiff, Lionheart Management Pty Ltd. The defendants to the action were Mews Village Nominees, Equitable Overseers, GDK Partnership Management, Villager Mews Nominees, E O Finance Pty Ltd and Rosedale Action Incorporated. The second to sixth defendants were sued as investor partners. The activities carried on by the first and second defendants known as The Mews Village Partnership ("The Mews Village Scheme") be wound up as an unregistered managed investment scheme pursuant to s 601EE of the Corporations Act 2001 (Cth). For like reasons in my opinion the winding up order did not wind up the Mews scheme as I have described it. If the order has any effect it is to wind up the Mews Village partnership, though I accept that winding up that partnership would bring the Mews scheme to an end. 62 Be that as it may, the ACT orders do not prevent me from winding up the Mews scheme and the Rosedale scheme, even though there may be some overlap in the case of the former scheme. It is, nevertheless, important that I do not in any way cut across the ACT orders. To guarantee this will not occur I intend to exclude from the operation of the orders I make so much of each scheme (if any) as has been wound up by the ACT Supreme Court. That will avoid any undermining of the ACT orders. 63 To make sure no confusion is caused by the subsistence of two sets of orders relating at least nominally to the same scheme, as well as to assist in the implementation of the ACT orders, two steps should be taken. The first is to have the same person responsible for each winding up. The second is to give this person the same powers and duties to implement each order. Once that is done each scheme will be wound up, under one or other or both orders. 64 The first step is to discharge Mr Rangott from his appointment to wind up the partnerships the subject of the ACT orders and replace him with the receiver to be appointed to wind up the two schemes. ASIC has applied for his discharge and Mr Rangott says that he does not wish to retain the position. This is not surprising as he has taken no step toward carrying out his task. I suspect that part of his difficulty results from the form of the ACT orders. It would be almost impossible for Mr Rangott to know what to do. 65 In the ordinary case, the application for discharge should be made to the ACT Supreme Court: Acehill Investments Pty Ltd v Incitec Ltd [2002] SASC 344. But it is clear that I have power to discharge Mr Rangott. The power derives from the combined effect of ss 581 and 1337G of the Corporations Act . By s 581 the Supreme Court of each State as well as the Federal Court has concurrent jurisdiction in civil matters arising under the Corporations Act . By s 1337G those courts are required to "act in aid of, and be auxiliary to, each other". In Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1 the Full Court held that as a consequence of these provisions each court having jurisdiction under the Corporations Act can exercise that jurisdiction notwithstanding that some part of the matter has been, or is being, litigated in another court. See also Sydlow Pty Ltd (in liq) v T G Kotselas Pty Ltd (1996) 144 ALR 159; Dewina Trading Sdn Bhd v Ion International Pty Ltd (1996) 141 ALR 317; Sihota v Pacific Sands Motel Pty Ltd [2003] NSWSC 119 ; (2003) 56 NSWLR 721; Dwyer v Hindal Corporate Pty Ltd (2005) 52 ACSR 335; Maamari v Ringwood & Ply Pty Ltd [2005] NSWSC 40 ; (2005) 52 ACSR 370. 66 Mr Levet referred me to several authorities from the United States which he said supported the proposition that once the ACT Supreme Court had the two schemes before it no other court had jurisdiction to deal with them. The cases to which he referred, and others to which he did not refer, hold that when a court has taken property into its possession, for example by appointing a receiver or issuing mesne process, the property is withdrawn from the jurisdiction of all other courts. The leading cases are: Covell v Heyman 111 US 176 (1884); Farmers' Loan and Trust Company v Lake Street Elevated Railroad Company 177 US 51 (1900); Penn General Casualty Co v Pennsylvania; ex rel Schnader 294 US 189 (1935); Propper v Clark 337 US 472 (1949); Wabash Railroad Company v Adelbert College of the Western Reserve University 208 US 38 (1908); Railroad Commission of Texas v Pullman Co 312 US 496 (1941). In United States v Bank of New York & Trust Co 296 US 463 (1936) Hughes CJ summarised the principle in these terms: "[I]n proceedings in rem or quasi in rem ] the court first assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of ... other [courts]. " It is the court which first acquired jurisdiction that has power to hear all controversies relating to that property or to determine to what extent some other court can interfere with its jurisdiction: Lion Bonding & Surety Co v Karatz 262 US 77 (1923). 67 In England there is a related principle which, at least according to Taylor v Carryl 61 US 583 (1857), may be the foundation of the United States jurisprudence. In Payne v Drewe (1804) 4 East 523, 545; 102 ER 931, 939 Lord Ellenborough said: "It appears to me, therefore, not to be contradictory to any cases nor any principles of law, and to be mainly conducive to public convenience and to the prevention of fraud and vexatious delay in these matters, to hold that where there are several authorities equally competent to bind the goods of a party, when executed by the proper officer, that they shall be considered as effectually and for all purposes bound by the authority which first actually attaches upon them in point of execution, and under which an execution shall have been first executed. " Campbell J, delivering the opinion of the court in Taylor , said that "this rule ... regulates the relations and maintains harmony among the various superior courts of law and of chancery in Great Britain. " Put simply, the rule is that a court will not interfere with the possession of property by another court. For this reason, in 13 Coromandel Place Pty Ltd v CL Custodians Pty Ltd (in liq) (1999) 30 ACSR 377 I held that once a receiver had been appointed by a court (in that case the Supreme Court of Victoria) it was not appropriate for another court to appoint a receiver in respect of the same property. It is worth noting that in Salt v Cooper (1880) 16 Ch D 544, 554 Jessell MR said that if it were necessary to do so, a second receiver could be appointed but with a direction that he not act until the first receiver had been discharged. See also: Aston v Heron (1834) 2 My & K 290; 39 ER 993 and In Re Hutton [1969] 2 Ch 201 in relation to a claim in one court against a receiver appointed by another court. 68 These cases show that the position in Australia and England is not the same as in the United States. We do not subscribe to the view that the court first assuming jurisdiction over property has exclusive jurisdiction in respect of any issue that might arise with respect to that property. Here and in England each court with concurrent jurisdiction in respect of any property may proceed with any claim brought before it, taking care as a matter of courtesy not to interfere with the processes of another court. A party's rights with respect to that property may be affected by a judgment obtained in one court as a result of the principles of issue estoppel and res judicata. 69 In any event, there are several reasons why the United States rule can have no application to the instant proceeding. The first is that the rule is a judge-made rule and must give way to any statutory provision to a contrary effect. The combined effect of ss 581 and 1337G would override the rule in company cases. Second, the rule only applies if the first proceeding is in rem or quasi rem , a reference to a proceeding by way of attachment or garnishment: Penn General Casualty Co v Pennsylvania; ex rel Schnader 294 US 189 (1935). A proceeding for the winding up of a company is a proceeding in rem : Topfelt Pty Ltd v State Bank of New South Wales (1993) 120 ALR 155, 171. But an action for the winding up of a partnership is not: Kirkpatrick v Christensen 206 P 2d 577 (1949). Nor by analogy is a proceeding for winding up under s 601EE , provided the plaintiff does not seek to deal with scheme property. 70 The second objection to the winding up orders depends upon the wording of s 601EE(1). That subsection provides that "[i]f a person operates a managed investment scheme in contravention" of the Act, one of several identified persons may apply for the scheme to be wound up. Mr Levet says that on the facts as I have described them there is not a person "operat[ing]" either scheme and so none can be wound up. As is apparent, the premise for the argument is that each scheme is dormant. In this circumstance, so it is said, the scheme cannot be wound up. Presumably, so far as interested parties are concerned, the scheme is to remain in its dormant state until some action outside the Corporations Act is taken to bring it to an end. 71 As regards the Rosedale scheme the premise is, of course, false. There is an operating retirement village. It has residents. They are being cared for and paying for the service. Whatever meaning is to be given to the word "operate" the Rosedale Village is in "opera[tion]". As regards the Mews Village, the position is not as straightforward but, in my opinion, it is also relevantly in operation. There are investors who have an interest in the scheme property. There is scheme property which is held by a trustee. The trustee has duties and obligations as regards the trust property. The scheme has a manager with duties and obligations. The existence of scheme property, investors with a beneficial interest in the property and trustees and managers with obligations with regard to the property means, in my view, that for the purposes of the subsection there is a scheme in operation. 72 This brings me to the last contested issue, which is whether Mews Village Nominees and Rosedale should be wound up. ASIC seeks the winding up of these companies under s 461(1)(j) --- that it is just and equitable that they be wound up. 73 It is, I think, imperative that the companies be wound up. My reasons, not in order of importance, are as follows. Each company is under the control of Mr Shiels --- he is or claims to be the sole director of each --- and he is quite ill. He is so ill that he could not swear an affidavit in this action, leaving that job to his son, Benjamin, one of the secretaries. This suggests that he is unable properly to perform his duties as director. Neither company has any assets --- at least Benjamin Shiels has not deposed to there being any. There is therefore no practical reason why they should remain in existence. It would certainly aid the winding up of the schemes if each company were wound up. If a winding up order is made, a liquidator would have statutory powers of investigation which could be employed to assist in the winding up of each scheme but in particular the Rosedale scheme. 74 I also think that the observations of Owen J in Australian Securities and Investments Commission v Chase Capital Management Pty Ltd (2001) 36 ACSR 778, 796 are apposite. There, in somewhat similar circumstances, Owen J said that "having decided that the schemes should be wound up, the case for the companies to be placed in liquidation becomes compelling. It would inject an air of unreality if the schemes were wound up without the corporate entities that had been part of the operation not also being made the subject of a formal administration. [The failure to do so] would increase the overall costs of the finalisation [of the winding up of the schemes] and would not be in the interests of the creditors. " This passage has been approved in Australian Securities and Investments Commission v Pegasus Leveraged Options Group (2002) 41 ACSR 561; Australian Securities and Investments Commission v Edwards (2004) 22 ACLC 1469; Australian Securities and Investments Commission v McDougall (2006) 229 ALR 158. 75 In opposing the winding up orders Mr Levet submitted, without referring to any facts, that if made, the windings up would likely injure the rights of innocent third parties, dissipate money and would not achieve anything. There is no basis for this submission. No person's rights will be affected and, at the least, the windings up will assist in the process of ascertaining material facts needed for the windings up. 76 Finally on this aspect, Mr Levet argued that a winding up order would amount to an acquisition of property other than on just terms and he sought an order for compensation under s 1350. This argument has no substance and I decline to make any compensation order. 77 ASIC should bring in short minutes of order to give effect to these reasons. I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | managed investment schemes unregistered scheme winding up court ordered effect of "winding up" procedure for winding up receiver appointed powers of receiver whether powers should be the same as those of a company liquidator order for accounts managers and trustees of managed investment scheme whether accounting parties accounts and inquiries when ordered whether inquiry can be delegated by court to a receiver nature of inquiry receivers and managers security obligation to provide when obligation may be dispensed with courts concurrent jurisdiction whether federal court has power to discharge receiver appointed by a supreme court corporations equity practice and procedure |
2 It is submitted for the respondent that this proceeding has already "commenced" and cannot be "commenced" again under Pt IVA. It is put on behalf of the applicants that the matter is covered by authority and, in particular, the decision of O'Connor J in Finance Sector Union of Australia v Commonwealth Bank of Australia [1999] FCA 59 ; (1999) 89 FCR 417, that decision having been referred to with approval by Tamberlin J in Sreika v Cardinal Financial Securities Limited [2000] FCA 1647. The respondent submits that the decision in Sreika [2007] FCA 1647 can be distinguished because the history of the proceeding was different, it having been intended to have been commenced as a representative proceeding --- it was, thus, simply a question of a wrong form being used. 3 It seems to me that the decision of O'Connor J is directly in point. It also seems to me that the distinction sought to be drawn in relation to Sreika [2007] FCA 1647 is unconvincing. If the point made by the present respondent is correct, and a proceeding is only commenced once, then I do not think that Sreika [2007] FCA 1647 can be distinguished in the way to which counsel for the respondent refers. It is also clear enough that the basic proposition which is in issue here was in issue in those cases. It was not as if the decisions were made without regard to there having been a question to be determined. Quite what the actual substance of the argument was in those cases is not to the point. I should say that those cases are referred to in the commentaries as authorities for the proposition that there can be conversion of an existing proceeding to a Pt IVA proceeding. Thus, in order to accede to the respondent's opposition to this amendment based upon lack of power, I would have to find that both of those decisions were plainly wrong. 4 The argument presented for the respondent has much to commend it. The approach, slightly over simplified, is that you can only have one "commencement" of a proceeding --- once commenced, always commenced. It is said that it makes no sense at all that something can be commenced more than once. A reading of s 33C of the Act in the light of s 33A supports the respondent's position, without a very subtle reading of both sections. Also, the other provisions of Pt IVA seem to me to assume that a proceeding under that Part cannot also be a proceeding of another nature. That is not to say that Pt IVA is a complete code for the conduct of the case, but it is to say that a Pt IVA proceeding is sui juris and not to be joined with any other kind of proceeding. That last point is not something which arises at this stage of the case. 5 However, without reproducing all of the arguments put by the applicants, it does not seem that they can make good their argument unless the view is taken that s 33C does not, as counsel put it, amount to a procedural definition of how things are to take place, but rather describes what must have taken place for the proceeding to be under the Part. Put another way, if the amendment here is granted, then a proceeding under Pt IVA , which does not exist at the moment, will exist and so be "commenced" once the amendment is made. To so conclude does not raise the question as to whether or not the backdating of an amendment to the commencement of the proceeding is part of that process. 6 I cannot say that that the applicants' argument is without merit. It may well be correct. It does not appear to have been referred to in terms by O'Connor J or by Tamberlin J who have, rather, concentrated upon what might be called the practicalities of the situation. Because of the brevity of the reasoning, particularly in Finance Sector Union [1999] FCA 59 ; 89 FCR 417, it cannot be said that this basis could not have been behind it. Therefore, I am not able to conclude that the decisions relied upon by the applicants are clearly wrong, although I have considerable doubt about their correctness. In view of that conclusion, I allow the amendment. Whether or not the applicants wish to pursue the amendment is a matter for them. 7 There is no doubt that, in general principle, the parties seeking an amendment should pay the costs occasioned by that amendment. However, this is an unusual situation for the reasons that have been mentioned. The costs of the motion up to today should be borne by the applicants, but the costs of today should be their costs in the cause. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | whether an existing proceeding can be converted into a pt iva representative proceeding by way of amendment practice and procedure |
The respondent was made bankrupt on 19 March 2002, and was discharged from bankruptcy on 20 July 2005. The trustee was the trustee of his estate. The appellants also appeal against a judgment of the same court, given on 28 February 2008, which dealt with the costs of the parties in the substantive proceeding. The Supreme Court proceeding referred to had been commenced in August 1999 by the respondent by his father, by his brother, and by their company, Bufalo Corporation Pty Ltd ("Bufalo Corp"), against the now appellants. 3 The appellants (as I shall for the sake of convenience describe them) were, on their own application, joined as respondents to the proceeding in the Federal Magistrates Court. The basis of their interest was, it seems, threefold. First, as respondents in the Supreme Court, they would have been affected if the respondent were, as the result of the assignment which he sought, enabled to re-commence the prosecution of the proceeding in that court. Secondly, they (the appellants) sought the assignment to themselves, rather than to the respondent, of the choses in action (doubtless with a view to ensuring that that proceeding was never again prosecuted against them). Thirdly, as creditors who had proved in the respondent's bankruptcy, they had an interest in the way the trustee disposed of assets of the estate. 4 In the period leading to the commencement of the proceeding in the Federal Magistrates Court, the respondent had been engaged in negotiations with the trustee as to the terms upon which the choses in action might be assigned to him. The trustee was not satisfied with any of the terms proposed by the respondent, and had refused to assign. The appellants supported the trustee, and contended that it should not be ordered to make the assignment requested by the respondent. The trustee and the appellants were successful: the Federal Magistrate made no order (save as to costs) other than that the respondent's application be dismissed. Yet the appellants have appealed (or have purported to appeal) from that judgment. 5 In order to understand why the appellants now seek to challenge what appears to have been a successful outcome for them, it is necessary to say something about the nature of the appellants' case before the Federal Magistrate. They went further than merely to provide support for the trustee's decision to refuse to assign the choses of action. They contended that the causes of action which underlay the choses were "hopeless" in the sense that there was no prospect that the Supreme Court proceeding could produce a successful outcome for whoever had title to prosecute it. They submitted that the power of the trustee to assign an asset of a former bankrupt could not, or at least should not, be used where the asset was a chose in action which was manifestly hopeless. A claim with no reasonable prospect of success would be a frivolous one, and the prosecution of such a claim would be vexatious. As earlier noted, in most cases it will not be clear that an alleged claim has no reasonable prospect of success. However when a clear case arises, the trustee as an officer of the Court, and the Court itself, in the public interest, should not allow the assignment to occur, even where an immediate sum of money is offered as consideration that would benefit the estate of the bankrupt. Importantly, the appellants applied (orally, it seems) to the Federal Magistrate for an order that the trustee be directed never to assign the choses in action to the respondent. 6 The Federal Magistrate held that the choses in action --- while they had rather obvious difficulties --- were not hopeless. Thus his Honour refused to make the order sought by the appellants. In his reasons for judgment, his Honour made it clear that the trustee should not feel inhibited on account of hopelessness from engaging in future negotiations with the respondent for the assignment of the choses in action. The appellants contend that the hopelessness point was judicially determined against them by the Federal Magistrate, and that they have both standing and an entitlement to appeal: see Driclad Pty Ltd v Commissioner of Taxation (1968) 121 CLR 45 , 64-65 and Landsal Pty Ltd (in liq) v REI Building Society (1993) 113 ALR 643 , 651-652. 7 A question which arises at the outset is whether the appellants have an appeal as of right at all. The respondent contends that they do not. It is submitted on his behalf that the order made by the Federal Magistrate was interlocutory, and that an appeal lies only by leave: see Federal Court of Australia Act 1976 (Cth), s 24(1A). It is convenient to turn immediately to that question. 8 In Freeman v National Australia Bank Ltd [2004] FCAFC 318 the Full Court held that an order made by a Judge of the court dismissing a bankrupt's application under s 178 of the Bankruptcy Act for an order that his trustee be required to commence proceedings against the bank was interlocutory. Freeman was not legally represented, and the Full Court provided no explanation as to why the order in that case was interlocutory. But their Honours did refer (without elaboration) to Hall v The Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423. There it was held that an order refusing an application for an extension of time within which to commence proceedings against the nominal defendant was interlocutory. In a judgment with which Owen J agreed, Taylor J regarded as "unexceptionable" the test stated by Alverstone CJ in Bozson v Altrincham Urban District Council [1903] 1 KB 547, 548-549, namely, whether the order sought to be appealed from finally disposed of the rights of the parties (117 CLR at 439-440). No doubt its practical effect was that any further application would have been fruitless unless supported by additional relevant facts but the order made by the Full Court did not of its own force conclude his right to bring an action. (117 CLR at 443). One may take it, therefore, that the Full Court in Freeman considered that the order made at first instance in that case did not finally dispose of the rights of the parties in the sense explained in Hall . 9 However, what is not clear from the judgment in Freeman is whether their Honours took the view that all applications under s 178 of the Bankruptcy Act were, of their nature, interlocutory (because they could not finally dispose of the rights of the parties), or whether their view was limited to the particular application in that case. I was not referred to any other occasion upon which it has been held that an order made under s 178 is, of its nature, interlocutory. Such would represent a very extreme position. The wide range of circumstances in which s 178 may be invoked was referred to by French J in Macchia v Nilant [2001] FCA 7 ; (2001) 110 FCR 101 , 114-116 [36]-[38]. By the terms of the section, it is necessary only that some person be affected by an act, omission or decision of the trustee. The act etc does not have to be such as would determine --- or even affect --- the rights or obligations of the person. The act etc might be such as has, when done by the trustee, a purely instrumental or administrative character but which, when reviewed by a Ch III court under s 178 , demonstrates its "chameleon quality of becoming judicial" ( Macchia , 110 FCR at 115 [38]). On the other hand, it is also well within the contemplation of s 178 that the court may be called upon to ascertain and declare legal rights in the most conventional sense. For example, a trustee might be proposing to sell an item of property which he or she believes to be part of the bankrupt estate. A third party may assert ownership of, or an interest in, the property. The determination of such a dispute by a court, in a way that led to a declaration as to the ownership of the property or as to the nature of the trustee's interest in it, would almost inevitably involve a disposition of the rights of the parties in the sense intended in Hall . By contrast, the actual decision made by the court at first instance in Freeman could not be regarded as disposing of any rights. 10 I do not believe that Freeman stands for the proposition that every order made on an application under s 178 of the Bankruptcy Act will, of its nature, be interlocutory. Had the Full Court intended to articulate such an absolute proposition, I consider that their Honours would have done so in terms. When their Honours said that the decision then purportedly under appeal was interlocutory, they meant, in my view, no more than that the decision not to compel the trustee to commence proceedings against the bank was interlocutory. 11 Returning to the present case, the act of the trustee with respect to which the respondent applied under s 178 was the trustee's refusal to assign the choses in action defined by reference to the Supreme Court proceeding. That refusal did not affect the existence of the choses as assets of the estate. Neither, as the Federal Magistrate made clear, did it preclude the respondent from negotiating with the trustee for such an assignment on terms which may have been more attractive to the trustee. As between the respondent and the trustee, all that happened below is that the Federal Magistrate ruled, in effect, that he would not interfere to alter how the trustee was otherwise disposed to administer the estate. It is hard to see how his Honour finally disposed of any rights existing as between these parties. 12 As between the appellants and the trustee, the Federal Magistrate rejected the former's application that the latter never assign the choses in action to the respondent. It is likewise hard to see how this finally disposed of the rights of the appellants at all, save in the narrow (and, in the context of the distinction between interlocutory and final orders, irrelevant) sense that it meant that the application actually made would fail. Indeed, his Honour's decision did not deal with the rights of the appellants at all; nor even with the rights of the trustee apropos the appellants. The appellants did not assert a right to the property in question. The proceeding did not even involve a refusal by the trustee to assign to them. They were parties, and were permitted to make an application, only because they had a legitimate interest in how the trustee dealt with that property. Such an interest, however, is a thing quite different from a legal right in the sense intended in Hall . 13 However, the appellants put the proposition that the decision of the Federal Magistrate dealt with their rights in an alternative, and somewhat more sophisticated, way. They submitted that the Federal Magistrate's holding that the choses in action were not hopeless, and that an assignment to the respondent should not be restrained on that ground alone, was itself a judicial determination by which they were bound. Never again, they submitted, would they be able to resist such an assignment on the hopelessness ground. Further, if ever the Supreme Court proceeding came to be litigated again, and they (the appellants, the respondents in that proceeding) sought summary judgment on the ground that no reasonable cause of action was disclosed, the question would have to be regarded as res judicata because of the judgment of the Federal Magistrate. It was in this sense, according to the appellants, that that judgment disposed of their rights. 14 I consider that each of the premises upon which the appellants' submission is based is unsound. As to the major premise, I do not agree that the refusal by the Federal Magistrate to order that the choses in action not be assigned involved a determination which would thereafter make the question whether the respondent had a reasonable or viable cause of action in the Supreme Court proceeding res judicata . In essence, the task of the Federal Magistrate was to consider whether it was just and equitable to require the trustee not to assign. His Honour was not persuaded that it was. That was the question which his Honour answered. It was the res which became judicata by his Honour's judgment. In not being persuaded that the choses in action were hopeless, his Honour was judicially determining nothing. No more so was this circumstance a binding judicial determination than the corresponding one whereby a court rules on an application for summary judgment that a case has reasonable prospects of success. At most, here the Federal Magistrate was recognising that the choses in action had such prospects, or, more accurately perhaps, that the contrary had not been established. In no sense have the appellants' rights been finally disposed of by the judgment they seek to challenge. 15 As to the minor premise, even if the Federal Magistrate might be regarded as having judicially determined a particular question which related to the prospects of the Supreme Court proceeding, I do not consider that it would follow that his Honour's order should thereby be regarded as final rather than interlocutory. There will be many unarguably interlocutory occasions when a court is called upon to make a legal determination of some kind. For example, when considering the balance of convenience on an application for an interlocutory injunction, it is not uncommon for the court to be required to determine an incidental legal point which relates to the parties' obligations towards each other. The fact that such a determination is made --- and not merely on a prima facie case basis --- would not convert the occasion into a non-interlocutory one simply because parties are bound by the determination. In the present case, the question arising under s 24(1A) of the Federal Court Act is whether the judgment is interlocutory. The "judgment" in this sense is the order made by the Federal Magistrate. That the appellants sought to obtain a different order by reference to a particular legal proposition which was decided against them is not sufficient, in my opinion, to make the order dismissing the respondent's application a final, rather than an interlocutory, one. 16 In the circumstances, and for the reasons stated above, I take the view that the judgment of the Federal Magistrates Court was an interlocutory one, and that leave to appeal is required. The appeal must therefore be dismissed as incompetent. The appellants conditionally applied for leave. The questions which arise on such an application are whether the judgment below is attended by sufficient doubt to warrant its reconsideration on appeal and, if so, whether substantial injustice would result if leave to appeal were refused, supposing the judgment below to be wrong: see Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 , 398-399. 17 Dealing first with the question of sufficient doubt, the starting point must be the identification of the choses in action which the respondent wished to have assigned to himself. That takes one to the Third Amended Statement of Claim in the Supreme Court proceeding, the subject matter of which, according to the respondent, gave content to the choses. Here there is an immediate complication. The respondent was not a party to that pleading. As I have said, the proceeding was commenced in August 1999, and on 18 November 1999 the then applicants, including the respondent, filed their Second Amended Statement of Claim. However, no further statement of claim had been filed by 19 March 2002, when the respondent became bankrupt. This is because the [trustee] failed to make an election within 28 days of receipt of your letter dated 8 May 2002 giving notice of the proceeding and requesting that an election be made. However, the liquidator of Bufalo Corp adopted the Supreme Court proceeding and, in April 2004, it was that company alone that filed the Third Amended Statement of Claim. That pleading, which was before the Federal Magistrate, involved a complete re-casting of the Second Amended Statement of Claim, and contained no claim for relief on behalf of the respondent. 18 Notwithstanding that circumstance, counsel for the respondent submitted both before the Federal Magistrate and in this court that it was the subject matter identified in the Third Amended Statement of Claim, rather than the actual claims of the respondent then extant (ie as set out in the Second Amended Statement of Claim) which gave content to the choses in action. I was cautioned by counsel for the appellants not to be beguiled into treating a chose in action of the company's as a chose in action of the respondent's. That caution was both valid and, in the complex and at times confusing sea of allegations that were made in both sets of pleadings, justified. I propose to be guided by it. Subject to it, however, the starting point must still be the Third Amended Statement of Claim. 19 It seems that, in 1998, interests associated with Bufalo Corp and the first appellant proposed to develop various properties for use as aged care facilities. In relation to some of these properties, it was alleged that Bufalo Corp would carry out building works pursuant to joint venture agreements. However, one property was in a different category: a supported residential service at 57 Raglan Street, Sale. That property was owned by Confalo Enterprises Pty Ltd ("Confalo"), and the business conducted there --- called "Manor Gardens Retirement Home" --- was owned by Newpark Pty Ltd ("Newpark"). The respondent and one Frank Cotronea ("Cotronea") held the shareholding in each of these companies, and were the directors of them. The respondent and Cotronea fell out, the result of which was that both companies went into liquidation. According to the pleading, in October 1998 the respondent's father discussed the Raglan Street property with the second appellant, and informed him that the respondent intended to purchase Cotronea's interest in Confalo and Newpark. The second appellant proposed that the first appellant should be permitted to purchase that interest, so that it and Bufalo Corp would then in effect be equal shareholders in those companies. It is not apparent from the pleading how the agreement of 23 October 1998 gave effect to so much of the earlier proposal as provided for the first appellant to acquire a 50% shareholding in Confalo and Newpark. 21 The Third Amended Statement of Claim then deals with the engagement of a solicitor to represent Bufalo Corp, the respondent, his brother and his father (to which and to whom I shall refer as "the Bufalo parties"). Peter Mark Darrer ("Darrer"), of the firm Darrer Muir Fleiter was recommended by the first appellant. As alleged, Darrer was in fact the (or a) solicitor for the first appellant throughout and, although ostensibly attending to the interests of the Bufalo parties, was in reality serving the first appellant. It is alleged that it was from the first appellant, rather than the Bufalo parties, that Darrer received his instructions as to the formal documentation for the transfer of ownership in the Raglan Street property and business. It is alleged that the first appellant did not instruct Darrer as to the agreement of 23 December 1998. It is alleged that Darrer attended a meeting (as did the respondent, "later", as alleged) at the office of the first appellant's solicitors at which agreement was apparently reached with Cotronea and the liquidators for Confalo and Newpark. After that, the first appellant "advanced funds", and effectively took over the conduct of the Manor Gardens Retirement Home. On about 22 January 1999, the Bufalo parties attended at the first appellant's office and executed a suite of documents --- all dated 21 December 1998 it seems --- to give legal effect to the financing and like arrangements that had been agreed to. Those documents included a loan deed between the first appellant and the respondent, a mortgage by the respondent of the shares held by him in Confalo and Newpark in favour of the first appellant, guarantees and indemnities given by the respondent's brother and father, a debenture charge by Bufalo Corp in favour of the first appellant, a mortgage by Bufalo Corp of its shares in Confalo and Newpark in favour of the first appellant and other documents. 22 A significant aspect of the allegations in the Third Amended Statement of Claim is that the Bufalo parties believed that the documents they executed on 22 January 1999 reflected the agreement of 23 October 1998, that they assumed that the first appellant would have arranged for effect to be given to that agreement in good faith, that they also assumed that Darrer was acting for them and in their interests and had approved, as proper to be executed by them, the documents which they did execute on 22 January 1999. It is alleged, however, that those documents did not reflect the agreement of 23 October 1998 in a number of respects. In part these relate to the fact that those documents had the effect that the first appellant acquired a 51% interest in Confalo and Newpark without being obliged to pay Bufalo Corp or the respondent anything. In part it is said that there ought to have been a documentation of what was said to be an obligation on the first appellant and Bufalo Corp to borrow on the security of the Raglan Street property to allow the respondent to repay his loan from the first appellant. 23 The pleading alleges that settlement of the transfers of shares in Confalo and Newpark occurred as agreed with the liquidators on 2 March 1999. However, also in the first half of 1999, relations between the parties soured and all joint ventures and similar arrangements were terminated. On 29 June 1999, the first appellant asserted that the documents executed on 22 January 1999 remained binding, and that unless Bufalo Corp and the respondent performed their obligations thereunder, the first appellant would enforce the guarantee, the debenture charge and the mortgage of securities. On 1 July 1999, the first appellant gave notices to pay under the loan deed and guarantees to the respondent as borrower and to Bufalo Corp and the respondent's brother and father as guarantors. On 7 July 1999, the first appellant gave notices to pay to the respondent pursuant to the mortgage of his shares in Confalo and Newpark and to Bufalo Corp pursuant to the debenture charge, each demanding payment of the sum of $1,129,004.64. 24 The balance of the Third Amended Statement of Claim in the Supreme Court proceeding is substantially concerned with the grievances and claims of Bufalo Corp, including allegations against the receiver and manager appointed to it by the first appellant in August 2000. The relief sought in that proceeding was extensive. The equitable jurisdiction of the Supreme Court was invoked in many respects. A fundamental aspect was Bufalo Corp's challenge to the documents executed on 22 January 1999, to the extent that they related to that company. A declaration that those documents were invalid, alternatively an order setting them aside, was sought. 25 In the proceeding before the Federal Magistrate, the respondent was pressed to particularise the choses in action which he sought to have assigned to himself. Pursuant to a direction by his Honour, on 8 August 2007 the respondent's solicitors sent correspondence which indicates that their client proposed to sue in conspiracy, conversion, deceit, fraud, misrepresentation (both at common law and under legislation), negligence, unconscionable conduct (including pursuant to legislation) and breach of contract. They identified many paragraphs of the Third Amended Statement of Claim (travelling well beyond the scope of the summary set out above) as containing the "facts and wrongful conduct" on which their client would rely. 26 Although not referred to in the Third Amended Statement of Claim or the respondent's solicitor's letter, the fact is that the respondent did not repay the loan which, according to the appellants, arose under the loan agreement executed on 22 January 1999. The first appellant moved to enforce its securities, constituted by the mortgages of the respondent's shares in Confalo and Newpark. On 18 August 2000, the first appellant applied in the Supreme Court (in a separate proceeding) for orders that share transfers in its favour be registered. It obtained those orders. 6668 of 1999 in this Court [ie the Supreme Court proceeding]. In consequence the provisions of the instrument operated to entitle the plaintiff as attorney of the secondnamed defendant to execute as transferor the transfer of his share in the firstnamed defendant and oblige him to procure registration of the transfer. The Court is satisfied that his and the thirdnamed defendant's refusal to register the transfer was without just cause. 27 In September 2004 (about five months after the service of the Third Amended Statement of Claim by Bufalo Corp), the appellants sought orders in the Supreme Court proceeding that the claims of the respondent, his father and his brother be dismissed. On 29 October 2004, Mandie J ordered that the proceeding by those persons as against the then respondents (including the now appellants) be dismissed. That order was made in the absence of the trustee and of the respondent. On 20 September 2006, Hargrave J ordered that the respondents by counterclaim (including the respondent) file and serve, by 4:00pm on 22 September 2006, "any application that the order of the Honourable Justice Mandie made 29 October 2004 be set aside". The respondent made no such application. 28 The Federal Magistrate identified the bases upon which the appellants submitted that the causes of action underlying the choses in action were hopeless, namely, res judicata , the operation of s 5 of the Limitation of Actions Act 1958 (Vic) ("the Limitation of Actions Act "), issue estoppel and abuse of process. According to his Honour, the res judicata point was based upon the dismissal of the respondent's action in the Supreme Court by Mandie J on 29 October 2004. There was some uncertainty as to the basis upon which Mandie J had dismissed the action, since his Honour provided no reasons. By their Interlocutory Process dated 14 September 2004, the appellants sought a declaration that the proceeding was deemed to have been abandoned pursuant to s 60(3) of the Bankruptcy Act and an order that the proceeding of the respondent be dismissed, but Mandie J ordered only that the proceeding be dismissed. The Federal Magistrate was not satisfied that Mandie J's judgment constituted a judicial determination of the substance of the respondent's action, and was not prepared to hold, therefore, that the order made the choses in action res judicata . In these circumstances, I am of the view that it cannot be said that the proceeding in the Supreme Court is res judicata. 29 The appellants also contended before the Federal Magistrate that any new action by the respondent on the choses in action which he sought to have assigned to him would be statute-barred. His Honour dealt with this point at two levels. First, he referred to the provisions of r 46.08 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("Rules of the Supreme Court"), which provides for the setting aside of an order affecting a person where the person did not attend the hearing of the application upon which the order was made. According to his Honour below, if the respondent made such an application, and succeeded, the existing Supreme Court proceeding would be revived, and there would be no issue with respect to any limitation period. The appellants pointed out to his Honour that Hargreave J had fixed a time within which any application under r 46.08 should be made by the respondent. It may be difficult, but it is not for this court to evaluate that where the obligation placed on me is to determine whether the applicant's case is manifestly hopeless. I note that the onus of proof in this regard falls squarely on the respondents, and in that regard they have failed. Secondly, he said that the "strength and merits" of the appellants' limitations points were best left to the Supreme Court, should the trustee ever determine to assign the choses in action to the respondent. 30 The appellants' issue estoppel point depended upon the orders made by Senior Master Mahony on 18 August 2000. They submitted to the Federal Magistrate that the existence and enforceability of the loan agreement, and of the securities provided by the respondent in that regard, were fundamental to the choses in action which he sought to have assigned to him. They contended that the Senior Master's order, and the endorsement to which I have referred, involved a direct judicial determination of issues which were fundamental to the choses in action, and that the respondent was bound by them. I note the whole basis of proceedings in the Supreme Court is to challenge the transfer of shares in related companies that were offered as security for the alleged loan which, should the challenge be successful, would result, in effect, in setting aside Master Mahoney's orders made that day. In addition, as highlighted by counsel for [the respondent], the nature of the process undertaken by Master Mahoney could be properly described as simply putting the [first appellant] in a position where it could enforce the mortgages if it was so entitled. ... The Master it would appear left open the question of entitlement, which is an issue that goes to the subject of the Supreme Court litigation. Once again, the [appellants] bear the onus of proof in this regard, and once again they fail. 31 According to the Federal Magistrate, the appellants' point as to abuse of process was not really a separate point at all, but, rather, involved the proposition that, because the causes of action upon which the respondent proposed to rely were hopeless, in the sense of being doomed to fail, it would be an abuse of process for the trustee to make the assignments which he sought. Because of the way that his Honour dealt with the appellants' other points, he was against them in this respect also. 32 In their application for leave to appeal, the appellants' first, and fundamental, ground was that the Federal Magistrate was in error not to have determined the issue whether the choses in action were statute-barred. It was not, they contended, sufficient for his Honour to say that such matters were "best left to the Supreme Court". His Honour did not make it clear in exactly what respect the point was controversial (since it seems to be common ground that the causes of action had arisen by August 1999 at the latest), but, in this court, counsel for the respondent drew my attention to the relief sought, or proposed to be sought, by the respondent in the Supreme Court proceeding, which included remedies of an equitable kind. He submitted that the Limitation of Actions Act did not apply directly to claims for such remedies. Counsel for the appellants argued that the causes of action upon which the respondent proposed to sue would inevitably be regarded as analogous to corresponding actions at law, and that they would be held to be statute-barred under s 5(8). I do not regard that proposition as at all self-evident. I was not addressed in detail as to the approach which the Supreme Court would take under s 5(8) to a claim to set aside a document, the execution of which is alleged to have been attended by unconscionable conduct on the part of a joint venturer, nor as to the extent to which any time limit applies to a proceeding in which remedies under s 87 of the Trade Practices Act 1974 (Cth) are sought. These reservations, however, are strictly beside the point. What matters here is that the extent to which equitable claims are to be treated in the same way as the claims at law to which they are said to be analogous is a matter which can only be decided on the facts of the case in question, and by the court called upon to determine whether a limitation period applies. In advance of such a determination, it is not possible for another court to hold that a particular period of limitation would inevitably be held to apply by analogy, and that therefore any attempt to litigate the underlying causes of action would be bound to fail. This is presumably the kind of matter that the Federal Magistrate had in mind when he observed that questions arising under the Limitation of Actions Act were best resolved by the Supreme Court. I agree. 33 It follows that, so far as the limitations point is concerned, I take the view that the Federal Magistrate's judgment is not attended by sufficient doubt to warrant reconsideration on appeal. However, there was another means by which the respondent could, his counsel submitted, avoid what would otherwise be the operation of the Limitation of Actions Act. It was said that the respondent could apply under r 46.08 of the Rules of the Supreme Court to have Mandie J's order dismissing the proceeding set aside. As I have said, the Federal Magistrate accepted that submission. Before me, counsel for the appellants submitted that his Honour was in error to have done so. Since the r 46.08 point arose only as a possible means by which the respondent might effectively sidestep the Limitation of Actions Act, and was in that sense an alternative to reliance upon s 5(8) thereof, it is strictly unnecessary for me to deal with it. However, in deference to the very detailed argument which I received on the point, I shall briefly address the merits of it. 34 The appellants contended that any attempt to revive the Supreme Court proceeding under r 46.08 would inevitably fail. It was submitted that the Federal Magistrate had erred in not deciding this question for himself. It is to be noted that r 46.08 gives a Judge of the Supreme Court a discretion to set aside an order made in the absence of a party. My attention was drawn by the appellants to the judgment of Kaye J in Winn v Blueprint Printing Pty Ltd [2007] VSC 397. In addition, any such application must be made without undue delay and issues of prejudice to the respondent are relevant .... It was submitted that any application by the respondent under r 46.08 could not succeed when account is taken of the discretionary considerations to which Kaye J referred. With reference to the second such consideration, the appellants submitted that the respondent could on no view be regarded as having an arguable case that a different order might well have been made if he (or the trustee on his behalf) had appeared before Mandie J on 29 October 2004. 35 As I understand it, the appellants' case in this respect is that, the trustee having abandoned the Supreme Court proceeding (pursuant to the admitted operation of s 60(3) of the Bankruptcy Act ), there could, as a matter of law, have been no outcome other than that the proceeding be dismissed. The appellants' submission requires consideration of the nature and consequences of such an abandonment. (3) If the trustee does not make such an election within 28 days after notice of the action is served upon him or her by a defendant or other party to the action, he or she shall be deemed to have abandoned the action. The respondent to the appeal should not be left to seek what may turn out to be an inadequate order for security for costs. It is also in the interests of the orderly administration of the estate of the bankrupt that it be for the trustee to decide whether appeals of the nature involved here be instituted or continued. I read this passage as recognising that it is a policy of s 60 that a respondent to a proceeding previously commenced by a bankrupt should not be subjected to the risk of sustaining further costs in that proceeding. It follows, in my view, that the abandonment of such a proceeding under subs (3) should, as a matter of law, be regarded as bringing it to an end finally, without any prospect of revival. If it were possible, notwithstanding such an abandonment, for the trustee of a bankrupt estate (or the bankrupt himself or herself after discharge) to apply for the reinstatement of the proceeding, the respondent could never confidently close the file, as it were. 36 However, in the present case the Federal Magistrates opined that it was "trite law that a proceeding dismissed because of abandonment can be revived". His Honour did not provide any authority for that proposition. His Honour may have had in mind the principle to which Drummond J referred in Re Gargan [1995] FCA 663. That is to say, the cause of action survives the abandonment of the action. Drummond J was unable to accept as a true statement of the law an obiter dictum by Pincus JA and White J in Theissbacher v MacGregor Garrick & Co [1993] 2 Qd R 223, 230 to the effect that an abandonment under s 60(3) of the Bankruptcy Act "[destroyed] the trustee's right to pursue the action absolutely". Counsel for the appellants in the present case submitted that Drummond J had failed to appreciate the distinction between the action to which s 60(3) refers (ie the proceeding) and the underlying cause of action. It was only the former, according to counsel, that Pincus JA and White J were referring to when they said that the right to pursue the action was destroyed absolutely. I accept that submission, and note that it finds support in the judgment of Katz J in Campbell v Metway Leasing Ltd (2001) 188 ALR 100. To the extent that the respondent in the present case should be understood as contending that s 60(3) would not affect the existence or integrity of such underlying cause of action that he may have, it is clear that that would not suit his purpose, as the bringing of a fresh action would encounter the very problems under the Limitation of Actions Act that recourse to r 46.08 would be designed to avoid. 37 For these reasons I have reservations about the Federal Magistrate's acceptance of the respondent's proposition that such limitations problems as he might otherwise encounter could be sidestepped by applying to have Mandie J's order set aside. In that respect, I consider that the appellants have succeeded in casting sufficient doubt on his Honour's reasons to justify reconsideration on appeal. However, as I have held above, I would not reach the same conclusion with respect to the respondent's reliance on s 5(8) of the Limitation of Actions Act. 38 For the sake of completeness, I shall mention also what the appellants submitted with respect to the other discretionary considerations to which Kaye J referred in Winn . The appellants submitted that the trustee was aware of the appellants' application before Mandie J, and apparently made a conscious decision not to attend. They submitted that there had been "inordinate delay" on the part of the respondent. In this respect, the appellants referred to the order made by Hargreave J on 1 September 2006 in the Supreme Court proceeding, and to the respondent's failure to make an application under r 46.08 within the time limited thereby. It was also said that the appellants would be prejudiced by the granting of any application to have the orders of Mandie J set aside, because of the effect which the passage of time had on the memory of witnesses, the age and health of the second appellant, and the first appellant having acted on the costs orders made by Mandie J on 29 October 2004 by lodging a proof of debt for its costs. 39 On their face, these appear to be persuasive reasons to anticipate that the Supreme Court would be most unlikely to set aside the orders made by Mandie J. However, at the end of the day, whether the Supreme Court does so will be a matter which lies in the discretion of the Judge before whom an application is made. I do not think that the trustee must necessarily be regarded as having acted wrongly to decline to anticipate the exercise of that discretion, or that the Federal Magistrate necessarily erred by taking a similar approach. It is quite possible that the principles to which Kaye J referred would speak somewhat differently, or at least with a different emphasis, in a situation in which the person who later comes to be entitled to the relevant choses in action was not, at the time of the making of the orders sought to be set aside, in a position to participate because of his or her bankruptcy. I appreciate that the respondent must be taken to be bound by the acts and decisions of the trustee in relevant respects, but that proposition does not necessarily, in my view, entirely exclude the prospect that a Judge of the Supreme Court may view the non-attendance of the respondent (or of the trustee) in a light different from that which would be cast upon a similar application in a non-bankruptcy context. 40 The appellants also submitted that it was the trustee, rather than the respondent, who would have the right to apply under r 46.08 (since the choses in action were presently vested in the trustee). That is true, but it begs the question. The issue is whether, if the choses were assigned to the respondent, an application by him under r 46.08 would necessarily fail. If they were so assigned, he would then have standing to apply under that rule. The appellants also submitted that the respondent had never sought the assignment to himself of the right to make an application under r 46.08. For the same reason, however, such a right is appurtenant to the choses themselves: the respondent would have the right if he became the assignee of the choses. 41 The appellants' final point in support of their application for leave to appeal was that the Federal Magistrate had been in error in not ruling that the orders made by Senior Master Mahony on 18 August 2000 set up an issue estoppel with respect to the validity and enforceability of the securities which the respondent had given in relation to the loan which he (ostensibly at least) secured from the first appellant. As I understand the appellants' case, it is that, if such an issue estoppel had been recognised by the Federal Magistrate, it would inevitably have led to the conclusion that a core element of the choses in action which the respondent sought to have assigned was utterly without prospects. The Federal Magistrate recognised that the orders made by the Senior Master might "reflect a difficulty" in the respondent's case, but his Honour was not certain that that case was "fatally flawed and hopeless". His Honour noted that the whole basis of the Supreme Court proceeding was to challenge the transfer of shares that were offered as security, and that such a challenge, if successful, would effectively result in "setting aside Master Mahony's orders made that day". 42 This point of the appellants is not that an action by the respondent in reliance upon the choses in action sought to be assigned would not lie at all. It is that a particular issue, or set of issues, in such an action would inevitably be decided against the respondent. Even if that proposition is correct, it would, in my view, require a considerable leap therefrom to reach the point at which it might be said that any such action would clearly have no reasonable prospect of success. Moreover, although presently identified rather generally, it is apparent that the claims that might be open to the respondent if he followed the approach taken in the Third Amended Statement of Claim have the potential to travel well beyond the matters dealt with by the Senior Master. The view may be taken that the validity and enforceability of the securities upon which the first appellant proceeded before the Senior Master are not inconsistent with the kind of equitable remedies that the respondent presumptively seeks against the appellants for their alleged role in procuring him to execute the documents upon which those securities were based. 43 It may be, with respect, that the Federal Magistrate was stretching a long bow when he effectively upheld the respondent's position on the issue estoppel point on the basis that the whole object of the action contemplated would be to have Senior Master Mahony's orders set aside. I suppose it is within the realm of the kind of litigation that the respondent has foreshadowed that those orders might be set aside on the ground that they had been procured by fraud, but counsel for the respondent did not so submit in this court. Rather than follow the approach of the Federal Magistrate, I take the view that, even if those orders stand (and perhaps all the more so because they stand) the respondent has shown that he has causes of action which have the potential to be viable in equity and which cannot be dismissed as hopeless. The result is that I do not regard the Federal Magistrate's conclusion, as distinct from his reasoning, on the issue estoppel point as attended by sufficient doubt to warrant reconsideration on appeal. 44 For reasons which I have attempted to explain above, only with respect to the availability of r 46.08 am I persuaded that the judgment of the Federal Magistrate in the present case was attended by sufficient doubt to justify reconsideration on appeal. That point, however, arose as one of two arguments, put by the respondent in the alternative, in response to the appellants' point that the choses in action were statute-barred. As I have held that there is insufficient doubt about the way that the Federal Magistrate dealt with the respondent's other point, the r 46.08 point becomes effectively moot. Overall, the appellants have not established that his Honour's judgment is attended by sufficient doubt to warrant reconsideration on appeal. 45 However, since the matter was comprehensively argued before me, I shall say something briefly on the subject of substantial injustice. The essence of the appellants' case was that the Federal Magistrate was in error not to have held that the Supreme Court proceeding, if hereafter prosecuted by the respondent, would have absolutely no prospect of succeeding. But this very proposition, if sound, is the proposition which would entitle the appellants to summary judgment in the Supreme Court. That being so, the refusal of the Federal Magistrate to make the orders which the appellants sought could not have worked any substantial injustice upon them. They remained, and they remain, able to advance the same arguments before the Supreme Court and, if those arguments are as sound as they submitted here, they will succeed. As I have made clear in an earlier section of these reasons, I do not accept the appellants' proposition that, upon an application for summary judgment, the Supreme Court would regard the matter as res judicata . Accordingly, were I of the view that, in some respects, the judgment of the Federal Magistrate was attended by sufficient doubt to warrant reconsideration on appeal, I would not have been satisfied that substantial injustice would be visited upon the appellants if leave to appeal were refused. 46 For the above reasons, I propose to order that the application for leave to appeal be dismissed. The appellants should pay the costs of the respondent and of the trustee (if any) of that application and of their incompetent appeal. That application came to the attention of the appellants' solicitors on 23 February 2007. They subsequently foreshadowed an intention to seek to be joined as respondents to the application. By letter dated 2 March 2007, the respondent's solicitors stated that, until the appellants' solicitors had set out on oath the basis upon which they asserted that their client was entitled to be joined as a party, and had issued their application in that regard, they (the respondent's solicitors) were unable to indicate whether their client consented to the application for joinder. An application for joinder was filed on behalf of the appellants in the Federal Magistrates Court on 2 March 2007, and was supported by their solicitor's affidavit affirmed on the same day. In that affidavit, the solicitor explained the nature and progress of the Supreme Court proceeding, and exhibited copies of the first appellant's proofs of debt in the respondent's bankruptcy. He said that, if joined as parties to the proceeding (ie in the Federal Magistrates Court), the appellants would seek orders that the respondent's application be dismissed. 48 The s 178 application came before the Federal Magistrate on 5 March 2007. The appellants were represented, and advanced their arguments as to why they should be joined to the proceeding. There was, it seems, at that time a proposal that the choses in action might be assigned by the trustee to the first appellant, which gave rise to some discussion as to the advisability of adjourning the proceeding to permit that proposal to be developed. Counsel for the respondent indicated a reluctance to incur costs in litigation against the appellants if, at the end of the day, the trustee was going to make an assignment to them. He indicated that the respondent would not "do a deal with the official trustee" without the appellants having the opportunity to be heard. The Federal Magistrate said that he had "no doubt" that the appellants should be joined for the reasons advanced on their behalf, but wondered whether there would be some advantage in adjourning the matter of the joinder, and the question of the procedural directions provisionally sought by the appellants, pending resolution of the question whether the trustee would assign the choses in action to the appellants in any event. In the result, his Honour adjourned the proceeding until 8 May 2007. Without question, the interveners [ie the appellants] are entitled to be joined. They have a clear interest in the outcome and are directly affected. However, in balancing the facts and circumstances, particularly the fact that it has been suggested that it may resolve between the interveners and the Official Trustee in the next 3 to 4 weeks, perhaps it is appropriate to allow that to take place before the joinder. If that happens, there could be significantly changed circumstances, and further proceedings, which can be dealt with by orders. 49 The hearing of the respondent's application resumed not on 8 May 2007, but on 8 June 2007. On that occasion, counsel for the respondent asserted that the appellants had "no legitimate interest in those choses in action". The Federal Magistrate referred to his previous indication that the appellants should be joined to the proceeding. He said they had "a significant interest in the outcome of it all". Counsel for the trustee said that the appellants should be joined. Counsel for the respondent opposed the joinder. They are my instructions, your Honour, at least at this stage ion [sic] any event. It may be that on the next occasion they can --- no, I withdraw that, your Honour. They are my instructions, your Honour. They also have an interest as to the outcome of the matter, which interest ought to be afforded an opportunity of being represented at the hearing. To deny them that opportunity would be potentially the cause of some injustice to the proper conduct of the matter that, in my view, requires them to be joined as parties to the proceeding, and I do intend to join then, as set out in Mr Warren's proposed order. On the same day, the Federal Magistrate made an order that the appellants be joined as parties to the proceeding. His Honour also ordered that the respondent file and serve particulars of the choses in action which he sought to have assigned to him. His Honour set the proceeding down for hearing on 13 August 2007, with an estimate of two days. 50 The proceeding was next mentioned before the Federal Magistrate on 3 August 2007, apparently at the initiative of the appellants. Their purpose was to complain about the sufficiency of the respondent's particulars of the choses in action which he sought to have assigned to him, as provided in accordance with the orders made by his Honour on 8 June 2007. Counsel for the respondent contended that he had complied with the order. So that would save time ultimately in the running of the hearing. In saying that though of course I think it is right and proper that a party to a proceedings [sic] ought to have a clear identification of the issues they have to answer. 51 Also on 3 August 2007, a deal of time was occupied with an application by the respondent for the adjournment of the date previously fixed for the substantive hearing of the application, 13 August 2007, upon the ground, it seems, that his counsel would not have the opportunity to put himself in full command of the materials in the case within the time allowed, particularly, as I read his submissions, if his client were to be ordered to provide the particulars of the choses in action which the appellants had sought. To get a final hearing date in the court at the moment of any duration is an extremely difficult thing. Parties are meant to organise their affairs around final hearing dates. There appears to be no good reason in my view why the particulars now been [sic] sought weren't provided in the first instance. Even today there is resistance to providing them where I believe it's quite clear that they need to be provided and there is a reliance on what has already been given by way of response to the orders I made even today, which is far from adequate. The denial of natural justice in my view is an argument that can't be sustained. As I said, the final hearing date has been fixed, all the parties were aware of that. The orders haven't been complied with in their spirit and form that I made in relation to providing details of the choses in action, the issues centred around the identification of choses in action that I articulated last night. M Blogg [sic] was very anxious to understand what it was that he was meant to assign. It was clearly identified yet it has come to this that it now has to be again addressed. I have allowed extra time asked for by Mr Wilson to Wednesday, 8 August. To my mind the issues, as I understand it, as [sic] are not that complex. It wouldn't take much to master that which is required to provide the detail. I think there is some merit in focussing at the moment on exactly what the issues are and I clarified that and I think that 8 August is ample time to do that. This is an application where the applicant is dragging his feet, so to speak, and is now asking for the indulgence of the court to extend the hearing date. For reasons of proper management of the court's list, for reasons that I have already alluded to --- that I believe there is ample time to address this quite simple issue in my view. There might be an extensive history of litigation in other courts but that to my mind makes the issue much easier to identify. So be it as it may I intend not to grant an adjournment. In the result, his Honour adhered to 13 August 2007 as the date for the hearing of the respondent's substantive application under s 178. 52 The respondent's application came on before the Federal Magistrate on 13 August 2007. At the commencement of the hearing, his Honour was informed by counsel for the respondent that the respondent had applied for leave to appeal against the order that he provide particulars of the choses in action which he sought to have assigned. Counsel for the respondent referred also to an affidavit on behalf of the trustee which had only recently been received, in which the deponent referred to conditions upon which the trustee might be willing to transfer the choses in action. A third matter which was mentioned to his Honour was that the respondent had recently served upon the other parties notices to produce relating, it seems, to the content of the negotiations between the trustee and the appellants with respect to the possible assignment of the choses in action to them. Each of these circumstances was a justification for the submission then made on behalf of the respondent that the hearing of the application under s 178 should not then proceed, but should be adjourned. This made it necessary for his Honour to receive submissions from the trustee and the appellants as to the matters raised by the respondent, and as to their attitude to the conduct of the application generally. In the course of that, counsel for the appellants spent some time explaining to the Federal Magistrate what was the basis of the submission, which they proposed to make, that the choses in action were "hopeless", as they described them. Both the appellants and the trustee asserted that the particulars provided by the respondent on 8 August 2007 (see par 25 above) were inadequate, but were prepared to continue with the hearing nonetheless. The position of the respondent, at base, was that it would be "quite improper to proceed today whilst the application for leave is on foot and the only matter that can be properly dealt with is the matter of the notices to produce". 53 The matters to which I have just compendiously referred occupied the Federal Magistrate until the luncheon adjournment on 13 August 2007. Before rising, his Honour indicated that he would give his "decision on the matter" at 2:15pm. When he resumed after lunch, counsel for the appellants made further submissions, as a result of some work they had done during the adjournment. Those submissions related to the question whether the Federal Magistrate should decline to proceed simply because an application for leave to appeal from an interlocutory judgment had been filed. At 3:13pm, the Federal Magistrate gave judgment upon the procedural questions which had been raised before him. The terms of his Honour's reasons are not before the court, but what his Honour did was to set aside the respondent's notices to produce and to refuse to adjourn the further hearing of the proceeding. His Honour did not commence to hear the respondent's application then and there, but indicated that he would do so the following day. 54 The substantive hearing of the respondent's s 178 application commenced on 14 August 2007, and concluded the following day. The Federal Magistrate reserved his judgment. 55 In his judgment on the substantive application given on 14 December 2007, the Federal Magistrate reserved to the appellants and the respondent liberty to apply with respect to the matter of costs. (3) The second and third respondents pay the applicant's costs of and incidental to their application to be joined to the proceeding and two-thirds of the applicant's costs of and incidental to the hearing. He held the respondent responsible for none of the costs incurred by the appellants. 56 The appellants challenged the orders at a number of levels. At the highest level, they submitted that the position for which they contended in the proceeding before the Federal Magistrate (that the trustee should not be required to assign the choses in action to the respondent) had prevailed, and that their costs should be paid by the respondent upon the principle that costs follow that event. Alternatively, they challenged four particular aspects of these orders. First, they challenged so much of the orders that required them to pay any of the trustee's costs, arguing that neither the trustee nor the respondent had contended for such an outcome. Secondly, they challenged so much of the orders as required them to pay the costs of their successful application to be joined as parties. They pointed out that the respondent opposed that application, and was unsuccessful in doing so. Thirdly, they challenged the Federal Magistrate's conclusion that their unsuccessful argument as to the hopelessness of the choses in action was responsible for two-thirds of the time occupied at the hearing on 13, 14 and 15 August 2007. Fourthly, they challenged the Federal Magistrate's omission to require the respondent to pay their costs in any respect, even for those interlocutory hearings which were rendered necessary by the respondent's "unreasonable actions", or in relation to which the respondent lost on a discrete point. 57 Both parties to the costs appeal accepted that the decision of the Federal Magistrate involved the exercise of a discretion, and would be interfered with on appeal only upon the identification of some error made in the exercise of that discretion, such as acting upon a wrong principle, taking account of extraneous or irrelevant matters, mistaking the facts, failing to take account of a material consideration, or the like: House v The King [1936] HCA 40 ; (1936) 55 CLR 499 , 504-505. In conducting their case on appeal, the appellants sought to bring themselves within the constraints of these principles. 58 There is, in my view, no substance in the omnibus submission that the Federal Magistrate ought to have given the appellants their costs generally, simply upon the basis that they were a party to a proceeding in which the respondent had failed to secure the remedy which he sought. The proceeding before his Honour was much more complex than that. His Honour rightly recognised that there were different questions of real substance which contributed to the complexity of the matters with which the parties had to deal, and to the time occupied in the proceeding, both within the hearing and elsewhere. Further, as the appellants made clear in their appeal on substantive matters, although the only order made by the Federal Magistrate was that the s 178 application be dismissed, his Honour effectively dismissed also the appellants' application for a direction that the trustee not assign the choses in action to the respondent. In this sense, it is a considerable over-simplification to contend that the respondent was alone in being a losing party as a result of the determination of the s 178 application by the Federal Magistrate. His Honour's choice to deal with the matter of costs other than by requiring the respondent, as the nominal losing party, to pay the costs of all other parties was, in my view, not only open to him as a matter of discretion but an obviously appropriate course to adopt. 59 Turning to the particular aspects of his Honour's orders as to which the appellants made complaint, the first relates to his Honour's requirement that the appellants pay the trustee's costs in two respects --- the costs of their application for joinder and two-thirds of the costs of the hearing. To the extent that those aspects relate to the axis of controversy between the appellants and the respondent, I shall deal with them below, but I would hold now that the fact that neither the trustee nor the respondent applied for the appellants to pay the costs of the trustee should not be regarded as a circumstance precluding his Honour from making the orders that he did. The trustee sought that its costs be paid, and, according to his Honour, the other parties did not resist that position. The respondent was the party who initiated the application against the trustee, and who, prima facie, ought to have paid the trustee's costs when his application failed. But, as I have indicated, there were several layers to the issues dealt with by his Honour. It was well within the scope of his discretion, if otherwise he were minded to require the appellants to pay costs in relation to issues upon which they had failed, for his Honour to apply that conclusion to the trustee's, as well as to the respondent's, costs. Strictly perhaps, the question might have been resolved in accordance with Bullock v The London General Omnibus Co [1907] 1 KB 264, but, had it been, the result would not have differed in substance from that arising under the orders in fact made by his Honour. 60 The appellants' next point relates to his Honour's treatment of their application to be joined as parties in the proceeding. Principally, the respondents argued that the choses-in-action sought to be assigned were hopeless for various reasons as set out in the judgment. The carriage of the proceeding at the hearing was principally done by the respondents in pursuit of the assertion of hopelessness. Their contentions in this regard proved unsuccessful. It is not unfair to say that in pursuit of the principal interests of the respondents the proceeding took, in my view, two days more than it needed. The position of the trustee was clear and the justiciable issue between the parties was narrow. The involvement of the respondents, in my view, unnecessarily expanded the issues and prolonged the hearing. The respondents joined the proceeding, in circumstances where it was not necessary, in order to prosecute their own interests. As a consequence they should bear the costs themselves of their own joinder. It was an expense and an involvement the respondents assessed as being necessary in their own interests, and they should carry the burden of the costs associated with it. Any argument that the applicant should bear their costs associated with the resisted application to join, in my view, is without substance. I am bound to say, with respect, that the Federal Magistrate here appears to have been guided by considerations which were irrelevant to the question of costs with respect to the hearing and disposition of the appellants' application for joinder. I do not consider it to be a relevant factor that, because of the appellants' participation, the proceeding took two days longer than was needed. Perhaps the more important aspect, however, is his Honour's reliance upon the circumstance, as he perceived it, that the appellants had joined the proceeding in order to prosecute their own interests where that joinder, or their participation generally, was not "necessary". 61 His Honour did not identify from where he derived the criterion of necessity, or why it came to be appropriate to resolve the question as to who should pay the costs of the appellants' application for joinder. There are, it seems to me, two possibilities. His Honour might have had in mind r 11.01(1) of the Federal Magistrates Court Rules 2001 (Cth), under which "a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding". If so, the pertinent fact was that his Honour had joined the appellants to the proceeding, in what he appears to have regarded as a fairly clear case. If his Honour is to be regarded as implicitly referring to r 11.01(1) in his recourse to the concept of necessity, he ought, in my respectful view, have recognised that his joinder of the appellants implied that their participation was necessary in the circumstances. As it happens, I think it unlikely that his Honour was implicitly referring to r 11.01(1). The appellants' application for joinder arose under r 11.03, which gives a broad discretionary power not limited to the mandatory circumstances prescribed by r 11.01(1). When his Honour made the order joining the appellants, at least so far as the evidence before this court discloses, he made no reference to the notion of necessity. 62 The other possibility is that his Honour might have had in mind the principle by reference to which an unsuccessful intervener might be ordered to pay all or some part of the costs of other parties to a proceeding. However, it is not appropriate to apply that general rule without qualification. If a successful intervener is not entitled to his costs where his interests are adequately protected by an existing party to the action, it would be inequitable for an unsuccessful intervener to be liable to costs in like circumstances. However, an unsuccessful intervener might be liable for costs if his intervention has substantially extended the hearing or put the successful party to unnecessary cost. In such circumstances, the intervener might be liable to pay a portion of the successful party's costs, that portion being determined by the extent to which the hearing has been lengthened by the intervention. Such a rule is consistent with the principle that, generally speaking, an intervener must take the action as he finds it. I would make two comments about the relevance of that principle to the circumstances of the present case. First, the appellants were not interveners: they were parties. Secondly, City of Burnside commences with the recognition that, normally, costs should follow the event, and qualifies that (in the case of an intervener) by adding an additional requirement that the successful party has been put to unnecessary cost. In the present case, the essence of the question was whether the Federal Magistrate should have regarded as "the event" the opposed application for joinder (in which case the appellants should have had their costs thereof), the outcome of the proceeding as a whole (in which case the appellants should again have had their costs thereof) or the fate of the substantial argument advanced by the appellants (in which case they should have paid the costs of the other parties). None of these issues, it seems to me with respect, either obliged or entitled his Honour to dispose of the costs point by reference to his view, formed after the event, as to the necessity for the appellants to have been joined as parties to the proceeding. 63 As I read the reasons of the Federal Magistrate, that view involved no more than that, in order to advance their own interests, the appellants had themselves joined to the proceeding and then ran a series of arguments which failed. I do not consider that to be a sufficient basis upon which to mulct the appellants in costs beyond those which would, in his Honour's discretion, be payable by them as parties which lost on those arguments. I cannot accept the criticism implicit in his Honour's reasons that the appellants should never have been parties at all. At the time of joinder, the Federal Magistrate appears to have regarded it as self-evident that the appellants had a legitimate interest in the proceeding, and were to be regarded as proper parties thereto. It is true that their propositions with respect to hopelessness were not accepted, but that does not, in my view, justify the Federal Magistrate in propounding that their participation had, from the outset, been unnecessary. Further, for the reasons already set out, I take the view that the notion of necessity, in the context used by his Honour, was jurisprudentially irrelevant to the question whether the appellants should pay the other parties' costs of their application to be joined. In the circumstances, I take the view that his Honour's discretion did miscarry with respect to the disposition of that question. 64 That conclusion requires me to consider for myself how that question should be resolved. I was not referred to any authority on the matter, but I am disposed to think that, where a person, not already a party to a proceeding, seeks to become a respondent thereto, and does so in the protection of his or her own interests, he or she should meet the costs incurred by any existing party to the proceeding in the determination of his or her application for joinder. Such a conclusion may not be appropriate, I recognise, in a case where it is clear that someone who ought to have been a respondent has, by design or culpable oversight, been omitted from the proceeding in the first place. But this was not such a case. The respondent was, in my view, entitled to challenge the conduct of the trustee under s 178 without joining the appellants. There was nothing in the facts disclosed to the court which ought to have put the respondent on notice, originally, that it would have been unfair or unjust to omit the appellants from participation in the proceeding. Upon becoming aware of the proceeding, the appellants were entitled to seek to be joined as respondents, but I can think of no reason why the then existing parties should be out of pocket as the result of such an initiative on their part. 65 That is not the end of the matter, of course, since the appellants rely upon the fact that the respondent actively opposed their application to be joined, caused themselves (and the trustee) to incur additional costs as a result of that opposition, and then lost the point. The court is at something of a disadvantage in assessing the merits of the appellants' submission in this respect. It is true that the appellants had, by correspondence, first invited the respondent to recognise the appropriateness of them being joined to the proceeding. It is also true that, on being invited to do so by the respondent, the appellants had gone on their solicitor's affirmation as to the circumstances upon which they would rely in this regard. However, when the matter was first dealt with by the Federal Magistrate on 5 March 2007, I note that, according to the transcript, counsel for the respondent pointed out that the appellants' application had been short-served. This point was, apparently, regarded by counsel for the appellants as something of a technical one, and possibly even as opportunistically made, but I do not have the benefit of knowing what the Federal Magistrate thought of it. The transcript which has been placed before the court omits the terms of his Honour's reasons for judgment on that day, and the summary of the hearing set out in the affidavit of the appellants' solicitor affirmed on 6 June 2007 omits reference to so much of his Honour's reasons as dealt with the issue of short-service. 66 It seems clear that the appellants' application to be joined as parties, which was served on Friday 2 March 2007 and was returnable on Monday 5 March 2007, was short-served: see Federal Magistrates Court Rules , rr 4.08 and 6.19(a). However opportunistically counsel for the respondent relied on that circumstance, the fact is that he did so and, so far as the materials before this court reveal, the appellants did not seek to justify the short service. Accordingly, I consider that the appellants should pay so much of the respondent's costs as related to the hearing of their application for joinder on 5 March 2007. The trustee did not take the short service point, and did not oppose the joinder. In those circumstances, I consider that its costs of 5 March 2007, to the extent that they related to the appellants' application, should be paid by the appellants. 67 The next time the matter came before the Federal Magistrate was on 8 June 2007, when his Honour ordered that the appellants be added as parties to the proceeding. Notwithstanding the passage of three months since the appellants had made their application for joinder, the respondent's opposition thereto was quite undeveloped and, I would have to say, devoid of substance. I agree with the Federal Magistrate that, from the outset, the case for joinder was an obvious one. I consider that the respondent's opposition to it was unreasonable. I propose to order that the respondent pay so much of the appellants' costs as related to the hearing of their application for joinder on 8 June 2007. 68 The next matter concerns the way in which the Federal Magistrate dealt with the costs of the hearing on 13, 14 and 15 August 2007. To an extent, his Honour had anticipated how he would rule in relevant respects in the passage which I have set out in par 60 above. There, his Honour expressed the view that the participation of the appellants caused the proceeding to take two days more than were needed. Whilst there is some merit in this, the reality was that the respondents sought to be joined in circumstances that ultimately proved unjustified. Their involvement caused an unnecessary prolongation of the hearing. I am not persuaded that I should make any adjustment in my assessment because the first day was occupied by argument between the applicant and the respondents on the merit of the notice. The respondents, therefore, should bear the trustee's costs to the extent of two-thirds of the costs associated with and incidental to the actual hearing. In addition, the respondents should pay the trustee's costs of and incidental to the respondents' application to be joined, such as they might be. In this respect, the appellants did not contend that the Federal Magistrate had taken an irrelevant circumstance into account. Rather, it was submitted on their behalf that his Honour was factually wrong to have concluded that two of the three days of the hearing were occupied upon the appellants' "hopelessness" point. 69 The appellants argued that the first day of the hearing (13 August 2007) was wholly or substantially concerned with procedural matters raised by the respondent with respect to which he failed. As will be apparent from what I have set out in pars 52 - 53 above, there is considerable force in that submission. Rather than commence the prosecution of his own application on the morning of 13 August, the respondent sought to have the hearing adjourned, substantially because he had filed an application for leave to appeal from the Federal Magistrate's earlier direction that he provide particulars. He also moved upon notices to produce which had been served on his behalf, and which were set aside. The hearing of the substantive application did not commence until the following day, largely, it seems, on account of these unsuccessful manoeuvres by the respondent. The appellants then say that the hearing occupied two days, and accept that it would have finished within a single day if they had not been parties and made the submissions which they did. On any view, however, according to the appellants, the hearing would have occupied that day. In the result, only one day should have been attributed by his Honour to the unsuccessful arguments advanced by them. 70 At this point I should say that it would rarely be appropriate to interfere with a discretionary costs order where the only criticism that could be made of it was that the maker did not recognise that the party who was ultimately unsuccessful had succeeded on some points. Generally, "the event" which costs follow is the result of the determination of the application or proceeding as a whole, not the determination of various points raised, usually in the alternative, in the course of argument. But here there were two ultimate outcomes which the appellants sought. One was the rejection of the respondent's application, in which respect they succeeded. The other was an order that the choses in action not be assigned to the respondent at all, in which respect they failed. The Federal Magistrate's approach to the matter of the costs of the 3-day hearing recognised those two elements. So the issue is not whether his Honour was in error to have required the appellants, as the losing parties, to pay all the respondent's costs. His Honour did not do that. The issue is whether his Honour was in error in the basis and justification of the apportionment which he undertook. 71 As appears from the passage of the Federal Magistrate's reasons set out in par 68 above, his Honour did consider the appellants' proposition that the whole of the first day was occupied with the respondent's notice to produce. How did his Honour deal with that argument? He recognised that there was "some merit" in it, but said that "the reality" was that the appellants had sought to be joined "in circumstances that ultimately proved unjustified". With respect to his Honour, this observation was irrelevant to the appellants' point. I consider it to have been an error on his Honour's part to have dealt with the matter of apportionment by reference only to the ultimate failure of the main part of the appellants' arguments. That failure was a given: the question with which his Honour was presently concerned was the extent to which the hearing was prolonged by the need to deal with those arguments. His Honour appeared to have no difficulty with the factual proposition that the first day was occupied by issues for which the respondent was wholly responsible. I agree with that view, and would add, in addition to the respondent's notice to produce, a reference to the submission made on his behalf that the proceeding should be adjourned by reason of his having lodged an application for leave to appeal. In those circumstances, it is, with respect to the Federal Magistrate, impossible to see the sense in his view, strongly expressed though it was, that the hearing was extended by two days by reason of the arguments raised by the appellants. 72 For the reasons indicated above, I accept the appellants' submission that the Federal Magistrate erred in concluding that the time occupied by the hearing was two days longer than would otherwise have been the case, because of the participation of, and the arguments advanced by, the appellants. Specifically, I cannot accept the circumstance that his Honour described as "the reality" as a justification for such a conclusion. That "reality" was, in my respectful view, irrelevant to the matter under consideration. I accept the appellants' case on appeal that they were responsible for a prolongation of the hearing by one day only, and that the costs orders made by the Federal Magistrate ought to have reflected that factor. 73 There remains the question of the appellants' own costs, and the extent to which those costs should have been ordered to be paid by the respondent. For their own reasons, the respondents chose to pursue what they thought was in their best interest in circumstances where it was unnecessary. The determination of the justiciable issue could have been done without the respondents' involvement. There should be no order, in those circumstances, in favour of the respondents for costs against the applicant. In the same vain [sic], the applicant also incurred costs unnecessarily because of the respondents' involvement. The respondents should pay the costs of the applicant to that degree. In that regard they were proved wrong and to that extent the costs follow the event. That is to say, they bear their own costs and should pay all costs associated with the joinder proceedings, including the applicant's and the trustee's, and two-thirds of the costs of the applicant and trustee in relation to the hearing. The applicant should pay the trustee's costs of and incidental to the proceeding, save for those properly payable by the respondents as set out above. 74 Taking first the interlocutory hearings before the Federal Magistrate, I have already dealt with 5 March and 8 June 2007 to the extent that those hearings related to the appellants' application for joinder. The hearing on 3 August 2007 was called on by the appellants in order to complain about the sufficiency of the respondent's particulars. The Federal Magistrate made an order generally in favour of the appellants, but reserved costs. Ultimately, he ordered neither the appellants nor the respondent to pay the other's costs of that day. Although, in one sense, the appellants then prevailed, they did so in relation to a matter upon which, in his Honour's view, they ultimately failed. Nothing put to me by the appellants has persuaded me that his Honour was in error not to have ordered the respondent to pay the appellants' costs of 3 August 2007. 75 Turning to the hearing on 13, 14 and 15 August 2007, the essence of the appellants' complaint was that, having apportioned responsibility for the costs of the hearing on a 2/3 --- 1/3 basis as he did, the Federal Magistrate omitted to make an order which would have represented the other side of the coin, as it were, and required the respondent to pay some proportion of the appellants' costs. For my own part, I cannot find the place in the Federal Magistrate's reasons where his Honour specifically considered that question. His Honour dealt with "the costs associated with or incidental to the interlocutory proceedings concerning the joinder of the [appellants]. " His Honour also treated the appellants as the unsuccessful party in a number of respects, who should pay the costs of the successful party on the basis that costs follow the event. A consequence, according to the Federal Magistrate, was that the appellants should "bear their own costs", presumably generally. As appears from passages to which I have referred, his Honour was influenced generally by his view that what he described as "the involvement" of the appellants "was unnecessary, prolonged the hearing and ultimately proved to be of no value". 76 With respect to the Federal Magistrate, I would say two things about his Honour's implicit disposition of the question of the appellants' costs of the hearing. First, I would reiterate what I have said above, namely that the question of the necessity for the appellants to be parties to the proceeding should not have been regarded as relevant to the issue of costs, or to the extent to which that issue depended upon an identification of the "event" for the purposes of the usual rule. Neither can I understand how a judgment by his Honour as to the "value" of the appellants' participation should have been regarded as relevant. Secondly, I would have to say that I cannot find in his Honour's reasons any recognition either that the appellants, then legitimately parties to the proceeding, were for their own part detained by a day of the hearing which was occupied by unsuccessful procedural manoeuvres on the part of the respondent or that an aspect of their case (not the principal aspect, admittedly) was to support the trustee in resisting the order which the respondent sought under s 178 of the Bankruptcy Act, a resistance in which they ultimately prevailed. Each of these circumstances ought, in my view, to have been regarded not only as relevant, but also as quite fundamental, to the Federal Magistrate's discretionary determination of the costs question which arose before him. I consider, with respect, that it was an error on his Honour's part not to have taken these considerations into account and to have placed them on the scales for such value as they had. 77 Again I am required to decide for myself what order should have been made with respect to the appellants' costs of the 3-day hearing before the Federal Magistrate. Consistently with what I have decided in par 71 above, I consider that the respondent should be regarded as the losing party with respect to the notional single day which was occupied on his s 178 application (ie absent the additional time required to deal with the "hopeless" point advanced by the appellants). I consider also that it is as clear as may be that the first day of the hearing was effectively wasted by procedural applications made unsuccessfully by the respondent. The appellants were, at the time, a party to the proceeding in every sense, and were, in accordance with normal principles, entitled to have their costs for those two days. 78 For the above reasons, I propose to order that the costs appeal be allowed to the extent necessary to reflect my conclusions that the respondent should pay the appellants' costs of so much of the interlocutory hearing on 8 June 2007 as related to the appellants' application for joinder (and that the appellants should not pay the respondent's costs thereof) and that the apportionment of liability for the costs of the hearing on 13, 14 and 15 August 2007 should reflect the view, which I take, that the respondent's losing claim was responsible for two-thirds, and the appellants' losing claim was responsible for one-third, of the time occupied by that hearing. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | property of bankrupt estate included choses in action whether proceedings on choses in action would inevitably fail whether choses in action "hopeless" whether trustee wrong to contemplate assignment of choses in action. decision by trustee in bankruptcy not to assign choses in action judgment of federal magistrates court of australia with respect to such decision under s 178 of bankruptcy act 1966 decision allowed to stand whether right of appeal to federal court of australia from judgment whether leave to appeal required whether judgment finally disposed of rights of parties. costs interlocutory applications disposed of favourably to party which was ultimately unsuccessful final hearing concerned with various issues party partly successful and partly unsuccessful apportionment of costs whether magistrate's discretion miscarried. bankruptcy and insolvency practice and procedure practice and procedure |
He sought review of that decision, again unsuccessfully, in the Administrative Appeals Tribunal. He now has appealed to this Court under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). The question of law said to arise on the appeal is whether the Tribunal applied the wrong test in determining that his circumstances brought him within the exclusionary provisions of s 24(2)(a) of the VE Act. I am satisfied that it did not and that the appeal must be dismissed. At the time of his application for a special rate of pension, he was in receipt of a pension at the general rate it being accepted that he suffered from post-traumatic stress disorder (PTSD) and other war-caused disabilities. 6 After his resignation he early obtained employment in a sequence of clubs culminating in 1998 in his appointment as general manager of the Marion Sports and Recreation Club. He was in that position responsible for the bar, finances, gaming, catering, clubhouse re-development and liaison with the local city council. 7 It was his own evidence that for some years prior to February 2003 he had difficulties with pathological gambling and had been seeking the help of a psychologist for this problem. He gambled during work hours and up to $1,500 a day. In his capacity as general manager he instructed the book keeper of the Club to make some payments to him in respect of future entitlements to long service leave and, seemingly, some salary. When the executive committee of the Club heard his explanation of this and of his problem, it gave him the ultimatum that, if he did not resign, his services would be terminated. He resigned his employment with effect from 28 February 2003. 8 Shortly thereafter he completed an application to the Repatriation Commission for acceptance of "anxiety/stressed" as war-caused. 9 A witness statement Mr Cadd provided to the Tribunal indicated that, between 2003 and 2006, he applied for employment without success. The statement listed a large number of primarily hotels and clubs which he approached for employment. He did not get a job nor, as he indicated in his evidence to the Tribunal, was he ever given a particular reason for this. In consequence, he accepted in cross-examination that he had not performed remunerative work since March 2003. By 2006 his applications included the advice that he was not able to work more than 8 hours per week because of his then medical condition. That advice to prospective employers reflected the opinion in a report of a psychiatrist, Dr Ewer, of 20 April 2005 that his impairments were such as to make him unfit for paid employment as he could not work eight hours per week. Dr Ewer diagnosed his overall impairment then as being 70 per cent attributable to PTSD and 30 per cent to Major Depressive Disorder. The same report indicated that the PTSD had "just emerged in the last year" and in 2005 should be considered as "temporary". 10 The medical evidence accepted by the Tribunal was that of Dr Ewer who provided some number of reports on Mr Cadd dating from 2003. Dr Ewer's report dated 8 April 2003 recorded diagnoses of pathological gambling and adjustment disorder with depressed mood. Dr Ewer's report dated 5 August 2003 again records diagnoses of pathological gambling, this time in remission, and alcohol dependence in remission. The same report records some features of PTSD, but states that Mr Cadd does not satisfy the diagnostic criteria necessary for PTSD. Dr Ewer's report of 8 April 2004 stated that Mr Cadd was suffering from a major depressive disorder. It also stated that Mr Cadd did not satisfy the diagnostic criteria for PTSD. It was not until his report of 20 April 2005 that Dr Ewer reported that Mr Cadd had developed a number of additional symptoms so that, as of 20 April 2005, Mr Cadd did satisfy the diagnostic criteria for PTSD. In his most recent report dated 17 July 2007 Dr Ewer addressed the issue of depression and its cause. His longstanding alcohol misuse probably contributed to him becoming depressed. His gambling losses were another substantial cause of his depression. His marital disharmony was another substantial cause of his depression. It is also probable that the emerging Post-Traumatic Stress Disorder symptoms contributed to his depression. Further the parties accept the Tribunal in this case correctly characterised that type of work in Mr Cadd's case as "a club manager". (ii) The Repatriation Commission conceded that Mr Cadd was prevented, because of his war-caused conditions, from continuing to undertake work as a club manager. The Tribunal found in accordance with Dr Ewer's evidence that from some stage during the assessment period (ie the period from the application day to the date when the application or claim was determined: VE Act s 19(9)) his PTSD disability alone would prevent employment for more than eight hours per week. (iii) In considering whether s 24(1)(c) was satisfied the Tribunal indicated the decisive issue was, as it is in this application, whether the exclusionary provisions of s 24(2)(a)(i) applied to Mr Cadd's circumstances. It held that it did. In Repatriation Commission v Van Heteren [2003] FCA 888 ; (2003) 75 ALD 703 Finn J considered the relevance of the deeming provisions of s 24(2)(a)(i). It in fact presupposes that he or she may well not be: cf 24(1)(b). And because of the deemed 'no loss' provisions of s 24(2)(a)(i) which apply where the veteran has ceased to engage in remunerative work for reasons other than his or her war-caused conditions, it requires an examination of the reasons why the veteran ceased work. In this case the expert medical opinion evidence provided by Dr Ewer was to the effect that the applicant was not suffering from PTSD at the time he resigned from work at the Club, that is in February 2003. Mr Cadd suggested that his resignation did not indicate that he had ceased to engage in remunerative work. It was argued that Mr Cadd had hoped to find other work and acted in accordance with that desire by lodging applications for employment. It was suggested therefore that although a reason other than the accepted disability of PTSD was the operative factor in causing Mr Cadd's cessation of employment with the Club, he did not ceased to engage in remunerative work at that time as he looked for other positions. 37. The Tribunal accepts that in some circumstances a person's last date of work performance may not be considered the date he ceased to engage in remunerative work. It may be for instance that a person's mode of employment might be to engage in a series of contracts with different principals. Simply because one contract comes to an end and another has not yet commenced does not mean that the person has ceased to engage in remunerative work. 38. However, in my view it could not be said that Mr Smith had ceased to engage in remunerative work within the meaning of s 24(2)(a)(i) at the time when he was discharged from the RAAF. In applying this paragraph of the VE Act, the first step is to identify the time when the veteran has ceased to engage in remunerative work. As mentioned above, it is clear from the authorities that it is not appropriate under s 24(1)(c) to consider the cessation of particular employment with a particular employer. In my opinion, under s 24(2)(a) it is necessary to consider whether a state of affairs has been reached where it can be said that the veteran is no longer engaged in remunerative work. In Re Smith , Deputy President Jarvis found that Mr Smith had not ceased to engage in remunerative work following his dismissal from the RAAF. In that case Mr Smith later found other employment. 39. The Tribunal finds that Mr Cadd had been engaged as a manager of the Flagstaff Hill Golf Club from March 1994 until December 1998 and then as a manager of the Marion Sports and Community Club from December 1998 until he resigned that position in late February 2003. The Tribunal has considered all of the medical evidence contained in the material. Dr Ewer has been the psychiatrist who has reported on Mr Cadd's psychiatric state since his year of resignation from the Club and who has provided the most recent report, in 2007. The Tribunal has had the benefit of these reports, together with the oral evidence provided by Dr Ewer. Where Dr Ewer's opinions differ from the opinions of other doctors contained in the material, the Tribunal prefers the evidence of Dr Ewer. On Dr Ewer's evidence, the Tribunal finds that in 2003, the year Mr Cadd resigned from the Club, his psychiatric symptoms were not such as to allow a diagnosis of PTSD to be made. The diagnoses made by Dr Ewer in 2003 were, in April, pathological gambling and adjustment disorder with depressed mood and in August, again pathological gambling, this time in remission, together with adjustment disorder with depressed mood and alcohol dependence, also in remission. 40. The Tribunal notes that Mr Cadd had never found employment after he resigned from the Club in February 2003. The Tribunal notes Mr Cadd's oral evidence that he now considers that he has been unfit for any employment since his resignation from the Club. 41. The Tribunal has considered Mr Cadd's evidence to the effect that he attempted to find employment after his resignation from the Club. However, on balance, the Tribunal finds that with effect from 1 March 2003, that is the day after Mr Cadd resigned his employment with the Club, Mr Cadd had "ceased to engage in remunerative work" . The effect of this finding is that, pursuant to s 24(2)(a) of the VE Act, Mr Cadd is deemed not to satisfy the second limb of s 24(1)(c), that is he shall not be taken to be "suffering a loss of salary or wages, or of earnings on his or her own account" by reason of his incapacity from accepted disabilities. ... [C]onsequently Mr Cadd does not qualify for payment of pension at the special rate. For the same reasons, Mr Cadd does not satisfy requirements for the immediate rate of pension (s 23 of the VE Act). Put shortly, the applicant's contention is that the Tribunal misapplied the law by focussing on why Mr Cadd ceased a particular job and not upon why, if it was the case, he ceased to be engaged in remunerative employment. An indication of that focus and error, it is said, is the apparent significance the Tribunal attributed to Mr Cadd's 2005 view with hindsight that he had been unfit for any employment since his resignation. 14 The respondent's case is that the applicant has mischaracterised the Tribunal's reasoning and that, fairly considered, that reasoning reveals that the Tribunal asked and answered the correct question, ie whether a state of affairs had been reached such that it could properly be said that Cadd was no longer engaged in remunerative work. The Tribunal, it is said, considered all of the medical evidence but particularly Dr Ewer's reports from 2003 (see reasons [39]) and Mr Cadd's evidence (see reasons [40] and [41]) and found, in effect, that he ceased to engage in remunerative work on his resignation for reasons related to conditions from which he then suffered which were not war caused. 15 For my own part, and conscious of the frame of mind to be brought to bear by a reviewing court in judicial review proceedings: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271-272; I am satisfied that on a fair reading of the Tribunal's decision it cannot fairly be said to have misapprehended and thus misapplied the test in s 24(2)(a)(i) of the VE Act. There can be no doubt that the Tribunal understood and asked itself the question required to be asked when considering whether in the circumstances a veteran ceased to engage in remunerative work for reasons other than his war-caused incapacity and disease. As the respondent correctly contends, the Tribunal addressed the evidence --- both medical and of Mr Cadd --- that related to that question. In light (i) of the events which occurred since he ceased to have remunerative work in February 2003, ie his persistent inability to get work; (ii) of his medical condition at February 2003 until the onset of PTSD in 2004; and (iii) of his own appreciation, albeit for the most part in retrospect, of his fitness for work (but compare his 18 March 2003 application noted by the Tribunal (at [13] of its reasons)), the conclusion that Mr Cadd ceased to engage in remunerative work for a reason other than incapacity from war-caused condition was one that clearly was open to it. 16 I accept, as I earlier indicated, that the reasons given for this conclusion were economically expressed but they are discernible. At best the appeal seeks a review on the merits of the Tribunal's decision. Such is not permissible. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | meaning of "ceasing to engage in remunerative work" in s 24(2)(a)(i) veterans' entitlements act 1986 (cth) aat member applied the correct test veterans' entitlements |
He arrived in Australia on 28 May 2006. He arrived in this country lawfully. On 22 June 2006 he applied for a protection visa. That application was refused on 15 September 2006 by a delegate of the Minister for Immigration and Citizenship (MIC). The appellant then applied to the Refugee Review Tribunal (the Tribunal) for review of the delegate's decision. On 7 December 2006, the Tribunal affirmed the decision not to grant the appellant a protection visa. The appellant then applied to the Federal Magistrates Court for judicial review of the Tribunal's decision. On 10 May 2007, the Federal Magistrates Court dismissed his application. On 28 May 2007 the appellant filed a notice of appeal against the decision of the Federal Magistrates Court. 2 The appellant applied for a protection visa on the basis that he feared persecution, if he returned to India, by reason of his homosexuality. He said that he had developed a homosexual relationship with a fellow student at school. This relationship continued throughout his time at university. For a while it was not public. At university he was an active member of the Congress Party. He said that in 2003 he participated in a Gay Rights march. He claimed that some years before that time he and his friend had been observed kissing and had been photographed by someone. That was 1997, which was his first year at university. 3 In answer to questions put by the Tribunal it seems that he had no problems between 1997 until 2003, when he participated in the rally. He claimed that it was only after the Gay Rights rally, or march, that he started to experience difficulties by reason of his homosexuality. It became widely known that he was homosexual. His family lost face with various Hindu organisations to which they belonged. People threw stones at the house. He said that he and his friend applied to the police for protection. They thought the police might be able to have a word with some of the local Hindu clubs, however, they said there was nothing they could do. 4 He said he began to be ostracised at the university. He left his volunteer work with the Congress Party at the end of 2004. He stayed at home for a time working in the family business. He told the Tribunal that he felt guilty about the fact that his family was suffering from harassment. He said that early in 2005 he was assaulted by some Hindus and decided to leave India. He went to Singapore, Malaysia and Thailand. However he returned from those countries to India. He only had short-term visitor's visas to each place. He said that friends told him that Australia and New Zealand were safe and he, therefore, applied for an Australian visa. Initially he was rejected. With the help of a travel agent he then took some fake wedding photos and pretended he was going to Australia on his honeymoon. The agent obtained a visa for the appellant on 7 March 2006, however he did not travel to Australia until the end of May. 5 The Tribunal, in its findings, accepted that he was a citizen of India and that homosexuals in India constitute a particular social group. The Tribunal noted that he and his friend had been observed and photographed kissing each other in first year university in 1997, but experienced no problems arising from that. There were no claims that he had suffered any serious physical harm as a result of what he said happened after 2003. He remained at university, working for the Congress Party for 18 months after things had started to go wrong. This was a voluntary position, he chose to remain. He also remained at his family home for three years after 2003, although he had a nine day visit to South East Asia in mid-2005. The Tribunal did not believe that he was looking for refuge in South East Asia. His visas for Singapore, Malaysia and Thailand were for longer times than the actual times he stayed. He voluntarily re-entered India and returned to his family home. The Tribunal had doubts about his story of seeking protection from the police. He did not tell the Tribunal why his parents did not complain to the police about stone-throwing at their house. The Tribunal accepted that he felt guilty about the effects of his relationship on his parents and sister. 6 The Tribunal considered whether the harm that he had suffered, since taking part in the Gay Rights rally, amounted to persecution. The Tribunal found that it did not. He had not been harassed by the police. His civil and political rights had not been impeded. Indeed, he was able to maintain his relationship with his friend and neither he, nor his friend, had been ostracised by their families. The Tribunal was not satisfied that any serious harm had befallen the appellant. It concluded that the chance of serious harm amounting to persecution, in the future, was remote. On that basis, the Tribunal was satisfied that he did not qualify as a refugee under the Refugees' Convention. 7 The learned magistrate, in his decision, reviewed the various grounds raised by the appellant. The grounds were difficult to follow. They alleged various failures to comply with provisions of the Migration Act 1958 (Cth) (the Act) . They asserted breach of the rules of natural justice and bad faith on behalf of the Tribunal. They alleged a failure to apply the relevant test in relation to the possibility of the appellant relocating within India. There was a reference to the Tribunal's failure to use independent country information, quoted by the appellant. The Tribunal was said to have applied the wrong test. 8 The appellant complained that the Tribunal required independent evidence before accepting his claims. The learned magistrate pointed out that it had not done that. The Tribunal was also said to have made contradictory findings and to have acted illogically. All of these grounds were rejected. 9 In his notice of appeal to this Court, the appellant said that the learned magistrate failed to consider legal and factual errors made by the Tribunal. There was a general complaint that the learned magistrate failed to consider that the Tribunal decision was unjust. The appellant complained that the Tribunal had emphasised irrelevant questions in the oral evidence and ignored his political profile. He also complained that there was a lack of procedural fairness in his case. 10 Having reviewed both the reasons for decision of the Tribunal and the reasons of the Court below, none of these matters are made out in my opinion. The appeal will be dismissed with costs. When judgment was delivered counsel for the first respondent sought an order for costs fixed at $2,000. I required the presentation of some evidence to support that sum. An affidavit has since been filed indicating that the total cost incurred by the first respondent in connection with this proceeding exceed $4,000. On that basis I will fix the costs in the amount of $2,000. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | judicial review appeal from decision of federal magistrate decision dismissing application for judicial review of refugee review tribunal decision alleged failure to consider legal and factual errors by tribunal alleged injustice and want of procedural fairness no viable grounds appeal dismissed migration |
The Tribunal had affirmed the earlier decision of a delegate of the Minister for Immigration and Multicultural Affairs communicated by letter dated 11 April 2003 whereby the appellant was refused the grant of a protection visa. 2 The appellant is a citizen of India. He claimed to have a well-founded fear of persecution by Indian intelligence police and authorities by reason of their belief that he was a Kashmiri militant. The appellant purports to have given evidence before an inquiry into the publicised so-called Brakpora incident, which according to independent country information, occurred in India on 3 April 2000. Media reports were said to have widely condemned personnel of the Special Operations Group (SOG) of the Jammu and Kashmir Police Force and Central Police Force (CRPF) for the incident. Their respective members were accused of firing on a procession of Muslim protesters in the village of Brakpora, which is located in the Anantnag district of Kashmir, and in relation to which incident nine lives were lost and fifteen others were injured. The protesters were reported to have been marching towards the office of the Deputy Commissioner in Anantnag with the objective of demanding an inquiry into the deaths earlier on 25 March 2000 of five men, described as 'foreign militants' and who were said to have been responsible for the massacre of thirty-five Sikhs in Chattisinshpora on 20 March 2000. Protesters were said to have been local villagers who were identified by security personnel, and who disappeared on the 24 March 2000. The appellant claimed that he witnessed this incident, involving as it did men in blue uniforms who were firing on people nearby. The appellant asserted moreover that he was asked by a human rights organisation to give evidence at an inquiry undertaken subsequently into the incident, having been approached by that organisation per medium of the transport company for whom he undertook work. The appellant also claimed that someone from the transport company told him he was 'wanted' by the authorities as a Kashmiri militant, and that his truck licence number was recorded as identifying him. 3 The Tribunal found that the appellant's evidence lacked the extent of detail to be reasonably expected from a person who had experienced the circumstances which the appellant had claimed. The appellant was further found to have given inadequate and unconvincing responses to the Tribunal's queries as to apparent inconsistencies between the appellant's recollection of the relevant events and the independent country information placed before the Tribunal. The Tribunal also pointed, to what it described as unconvincing, the request of a human rights organisation which was said to have requested him to testify at an inquiry into the foregoing incident, observing that it was inconceivable that all of the claimed threats were conveyed by means of messages communicated to the appellant by third parties, during which the appellant remained 'interference free'. The Tribunal emphasised that the appellant did not testify to experiencing difficulty in acquiring a visa for the purpose of and in otherwise departing from India, notwithstanding his claim that he was being sought by the authorities as a Kashmiri militant. 4 For essentially the above reasons, the Tribunal determined that it was not satisfied that the appellant was a person of interest to the authorities in India. Moreover some of the appellant's earlier claims were in the Tribunal's view not substantiated by independent country information. For instance the independent country information indicated that no person had previously been recorded as being targeted by reason of having given evidence before the commission of inquiry into the incident in which he was allegedly involved. In addition the appellant admitted to the Tribunal that he had come to Australia in order to have a better life and to support his relatives and children living back in India, his relatives including to my understanding his wife and mother of his children. Consequently the Tribunal was satisfied that the appellant did not a have a genuine subjective fear of persecution, and that there was no basis for the appellant's claims that he had a well-founded fear of persecution if he returned to India now or in the foreseeable future. Firstly, the incident at Brakpora (B) occurred in April 2002. Secondly, the only incident involving the killing of 5 people was the earlier incident at Chattisinghpora (C) and finally it was this latter incident which occurred not in the second week in March 2000. The Applicant replied that he did not know anything about the earlier incident in C. He continued by giving names of number of people who had been killed in 2001. He claimed that those people had been fellow truck drivers. This being the reason or part of the reason for refusing the Applicant's application for review made to the Tribunal. Those inconsistencies were described by her Honour as material to the Tribunal's reasoning in the course of its determination of issues concerning the credibility of the appellant's claims, in particular in relation to the time and place of the alleged incident, though not necessarily concerning inconsistencies between the appellant's oral evidence and his written statement, each of which was tendered by him to the Tribunal. The Federal Magistrate held that the decision was thus a privative clause decision unaffected by jurisdictional error. 7 The notice of appeal to the Federal Court raised the following two grounds of appeal. The first was somewhat unspecifically to the effect that the Federal Magistrate erred by failing to address the appellant's case, and properly and adequately address in particular what was asserted to be jurisdictional error on the part of the Tribunal, whereby, according to the appellant's submission, it found the appellant's oral testimony given at the Tribunal hearing to be adverse to and inconsistent with the appellant's statement of claim. That failure was submitted by the appellant to be contrary to s 424A(1) of the Act and to constitute jurisdictional error. The second was that the Federal Magistrate erred in law, and failed to judicially review the appellant's claims purportedly made under s 414 of the Act, by coming to the conclusion that the only adverse findings of the Tribunal related to the contradiction between the independent country information and the appellant's claims. The generality of that purported reliance upon s 414 did not add significantly to the appellant's purported reliance upon s 424A(1) of the Act thereof as not having been allegedly complied with by the Minister. Firstly, the incident at Brakpora (B) occurred in April 2000. Secondly, the only incident involving the killing of 5 people was the earlier incident at Chatisinghpora (C) and finally it was this latter incident which occurred not in the second week of March 2000. The Applicant replied that he did not know anything about the earlier incident at C. He continued by giving names of number of people who had been killed in 2001. He claimed that those people had been fellow truck drivers. 9 In relation to the first alleged ground of jurisdictional error, the appellant invoked generally the decision of the High Court in SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162, and in particular what was said by the High Court at [68] (McHugh J), and thereafter in the reasons for judgment of a Full Federal Court in SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214, and in particular what was emphasised by Allsop J at [216]. However the appellant did not invoke specifically or with precision the operation of the process required by s 424A(1) in the circumstances of this case, assuming that any such course was open for adoption. In that regard as Allsop J emphasised in the passage above cited, '[o]ne always needs to analyse and interpret the reasons 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', and further that '[t]he 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...' . Those tasks were not undertaken by the appellant on the present appeal with precision or at all. He stated 5 people were killed. The Tribunal asked when the incident at Brakpora (B) happened and the applicant replied the second week of March 2000. Accordingly the appellant submitted that such adverse information relied on by the Tribunal came 'under the jurisdiction of s 424A(1) of the Migration Act '. 11 The Minister submitted that in making its decision, the Tribunal referred to inconsistencies between the 'account which the appellant gave at the hearing and the reports about the two incidents in the country information (and, more particularly, to his "unconvincing" attempts to resolve those inconsistencies)', rather than exploring, as the appellant contends, any purported inconsistency between two versions of events put forward by the appellant. There is force in the Minister's submission and I am persuaded that Emmett FM was correct in concluding that there was no jurisdictional error arising from a breach of s 424A(1) by the Tribunal. The authorities have made it clear that such information falls squarely within [s] 424(3)(a) and is not therefore subject to the requirements of [s] 424A(1). The appellant also submitted that '... s 424A(3)(b)... is not covered by [s] 424A(1)(a)... [t]he adverse information used by the Tribunal was the creation of the Tribunal itself'. It is apparent that in the context of the present proceedings, s 424A(3)(a) is directly on point, and that her Honour's reference to s 424(3)(a) , rather than s 424A(3)(a) , was merely a typographical error. The Minister was also correct in its further submission that the Full Federal Court decision of VJAF v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 178 provides 'clear authority [for the proposition] that "country information" is within the scope of s 424A(3)(a) and thus excluded from s 424A(1) '. 14 Clearly in my view, her Honour approached the issues purportedly tendered on the appeal to the Federal Magistrates Court correctly and in accordance with the operation of s 424A as has been described in the authorities. The appellant's submissions were unable to point to any material aspect of her Honour's findings below in order to distil legal error in her Honour's reasoning or findings for which the appellant seemingly sought to contend. 15 The reality of the submission of the appellant, I would infer below and in any event on the present appeal, constituted at best an exercise in merits review, and inclusively so in relation to his misconceived resort to the purport of s 424A. As was rightly pointed out by the Federal Magistrate below, '... the Tribunal made no reference to any inconsistency existing between the summary adopted by the Applicant and anything else referred to in the Applicant's statement in support of his protection visa application'. The submissions of the appellant reflected rather an unfortunate trend in advocacy in migration cases in the form of a broadly but misconceived invocation of the operation of s 424A , and especially in particular in relation to the purport of sub-section (1) of s 424A. 16 The appeal must be dismissed with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | misconceived invocation of s 424a(1) of migration act migration |
Such orders were formerly described as an Anton Piller order. 2 Those orders were executed on 12 December 2007. During the course of the execution of those orders it became apparent that the number of computers at the premises of the Third and Fourth Respondents was such that copies of the hard drives of those computers could not be completed within the time specified in the order. 3 It is understood that the Third and Fourth Respondents have cooperated with the execution of the orders and are continuing to cooperate with making computers available to the Applicants. (d) If it will not be possible for the independent computer expert to make a complete copy of any computer hard drive or other storage media at the premises before 6 pm on Thursday, 13 December 2007 the independent computer expert may remove the computer, computer hard drives or other storage media to make a complete copy of that removed item at the premises of the independent computer expert. 5 When that Motion came before me I declined to make the variation of the order then sought. There was uncertainty in the evidence then relied upon as to whether the Third and Fourth Respondents were consenting to an order removing the computers in their entirety or merely consenting to the removal of the hard drives within those computers. In any event, given the apparent cooperation of the Third and Fourth Respondents and the absence of any evidence that, if the variation was not made, the evidence would be destroyed, it was not considered that any further order was then justified. 6 Orders made pursuant to O 25B of the Federal Court Rules are draconian in nature and such orders will only be made if they are necessary for the preservation of evidence that would otherwise be destroyed or made unavailable: see Federal Court Rules 1979 (Cth), O 25B r 3(c)(ii). See also Addison Wesley Longman Australia Pty Ltd v Copy Stop Pty Ltd [2004] FCA 1518. 7 Junior counsel for the Applicants on 13 December 2007 quite properly accepted that the variation sought was not premised upon any current apprehension of any real possibility that evidence would now be destroyed. The absence of such evidence would make it inappropriate to make an order at the outset: see, eg, AAA Embroidery & Screen Printing Pty Ltd v Dan [2006] FCA 1846. The absence of such evidence at the time that a variation of an order is sought equally renders it inappropriate to invoke O 25B. 8 Today there has been an appearance for all Respondents. Short minutes of orders have been filed which inter alia seek to substantially implement the variation as previously sought in the Motion . The variation of the orders as now sought, it is considered, should be made, but not pursuant to O 25B. The orders as previously made pursuant to O 25B have served their purpose. Order 25B should only be invoked when the Court can be " satisfied " of the requirements set forth in O 25B r 3. As at today's date the Court cannot be " satisfie d" of the requirements set forth in O 25B r 3(c)(ii). 9 Order 25B r 4 makes apparent that nothing in O 25B " diminishes the inherent, implied or statutory jurisdiction of the Court to make a search orde r." The source of the power to vary the order previously made is either O 25 r 2 of the Federal Court Rules 1979 (Cth) or s 23 of the Federal Court of Australia Act 1976 (Cth). Accordingly, it is considered appropriate to vary the orders previously made. 10 The Court makes orders in accordance with the short minutes of order dated 14 December 2007 save for Order 2(b) and Order 3. Those orders are not pressed by the Applicants. Upon the undertakings in Schedule A being given to the Court, the Independent Solicitor be granted leave to uplift all electronic copies of computer hard drives and storage media ('electronic copies') produced to the Court today in accordance with Order 20(e) of the orders of the Court of 11 December, 2007 ('Orders') and to deliver all such electronic copies to the Independent Computer Expert for the purpose of the Independent Computer Expert recovering and examining the electronic copies to search for the listed things (as defined in the orders) in accordance with written instructions provided by the Applicants' solicitors and, if requested, by the Respondents' solicitors, in each case copied to all other solicitors. 2. 3. 4. Upon the undertakings in Schedule A being given to the Court, the operation of the Orders as against the Third and Fourth Respondents be extended until 5:00 pm on 18 December 2007. 6. The time for compliance by the Independent Computer Expert with Order 20(e) of the orders in relation to copies or digital copies of the computer hard drive or other storage media removed from the Tuckwood Drafting Premises after 6:00pm, 13 December 2007 be extended to 6:00pm, 20 December 2007. 8. The time for compliance by the Independent Solicitor with Order 20(f) of the orders in relation to copies or digital copies of the computer hard drive or other storage media removed from the Tuckwood Drafting Premises after 6:00pm, 13 December 2007 be extended to on or prior to 9:30am, 21 December 2007. The Applicants be granted leave to issue subpoenas for production in the form annexed to the Affidavit of Astrid Van Esch sworn 7 December, 2007. The proceedings be adjourned to 9:30am, 21 December 2007 for mention. 11. Costs be reserved. 12. Liberty to any party to apply. (2) The applicants will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding. (3) The applicants will insure the things removed from the premises against loss or damage for an amount that reasonably appears to the applicant to be their full value. (2) The applicant's solicitor will use his or her best endeavours to act in conformity with the order and to ensure that the order is executed in a courteous and orderly manner and in a manner that minimises disruption to the respondent. (3) The applicants' solicitor will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding. (5) The applicants' solicitor will use best endeavours to follow all directions of the independent solicitor. (2) At or before the hearing on 21 December 2007, the independent solicitor will provide a further written report to the Court on the carrying out of Orders 6 and 7 and provide a copy to the applicant's solicitors and to the respondent or the respondent's solicitors. The report will attach a copy of any list made pursuant to the order and a copy of any report received from an independent computer expert. (3) The independent solicitor will use best endeavours to ensure that members of the search party act in conformity with Orders 6 and 7 and that Orders 6 and 7 are executed in a courteous and orderly manner and in a manner that minimises disruption to the respondents, and will give such reasonable directions to other members of the search party as are necessary or convenient for the execution of the order. (4) The independent solicitor will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding. (2) The independent computer expert will not, without leave of the Court, use any information, document or thing obtained as a result of the execution of this order for the purpose of any civil or criminal proceeding, either within or outside Australia, other than this proceeding. (3) The independent computer expert will use best endeavours to follow all directions of the independent solicitor. | order 25b subsequent variation no continuing fear of evidence being destroyed search order |
2 Those proceedings were commenced by the present Applicant as " Prosecutor ". The " Defendants " included members of the Parliament of New South Wales, the President of the New South Wales Guardianship Tribunal, the Protective Commissioner, the New South Wales Public Guardian and the Public Guardian Regional Officer. 3 The " Prosecutor " alleged that acts by some or all of the " Defendants " perverted the course of justice and constituted offences under s 43(1) of the Crimes Act 1914 (Cth). 4 The trial judge dismissed the proceedings for want of jurisdiction. 5 The application presently before the Court is a Notice of Motion seeking leave to appeal and was filed on 14 April 2008. Leave is required pursuant to s 24(1A) of the Federal Court of Australia Act 1976 (Cth) because an order for the dismissal of proceedings for want of jurisdiction is interlocutory in character, at least where the order does not necessarily finally dispose of the rights of the parties: Mentyn v Westpac Banking Corporation [2004] FCAFC 149 at [3] . Whatever other rights the present Applicant may have as against the " Defendants " remain and are not affected by the decision now in issue. 6 The discretion conferred by s 24(1A) is an " unfettered discretion " and is in " unqualified terms ": Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 at 399. Relevant to the exercise of the discretion, however, is whether the decision of the primary judge is attendant with sufficient doubt to warrant it being considered on appeal and whether substantial injustice would result if leave were refused. 7 Rather than considering that the decision of the primary judge may be attendant with some doubt such as to warrant it being further considered on appeal, it is considered that the decision of the primary judge was clearly correct. The primary judge was clearly correct in observing in the context of s 43(1) of the Crimes Act 1914 (Cth) that " none of the Defendants appears to have been acting ' in relation to the judicial power of the Commonwealth' . " His Honour was also clearly correct in observing that this Court is a statutory court and that such jurisdiction as is conferred by s 39B(1A)(c) of the Judiciary Act 1903 (Cth) is subject to an exception, namely jurisdiction to entertain a matter arising under a law made by the Parliament " other than a matter in respect of which a criminal prosecution is instituted or any other criminal matter ". The expression " criminal matter " is to be given its traditional meaning: Commonwealth of Australia v Lyon [2003] FCAFC 284 at [50] , [2003] FCAFC 284 ; 133 FCR 265 at 277---8. The proceedings sought to be pursued by the " Prosecutor " clearly fell within the concluding words of s 39B(1A)(c). 8 It should further be noted that an Affidavit filed in support of the application asserts ( inter alia ) that "[t] he Judge has displayed a continual legacy of Bias " and an assertion that " The Judge has opted out of Judicial accountability by passing out risponsabilty [sic] to the fact that he refused to hear the proceedings before him in order to further pervert the course of Justice ". There is no basis for any such assertion. A litigant who is unrepresented may understandably feel a sense of disgruntlement when losing a case, being circumstances in which a legal representative is not available to explain why proceedings should never have been commenced or why an argument did not prevail; but an unrepresented litigant has no licence to make unfounded assertions. 9 At the outset of the hearing of the application for leave to appeal, the Applicant sought an adjournment of the hearing in order to enable a notice to be given pursuant to s 78B of the Judiciary Act 1903 (Cth). The Summons as filed refers to what is identified as the " Kable Principle " and further refers to "[p] erverting the Course of Justice by making representations not specifically defined in the Crimes Act 1914 (Cth) in respect of the Judicial Power of the Commonwealth ". 10 It is not considered that s 78B(1) imposes any constraint upon this Court now determining the application for leave to appeal. Section 78B " contemplates ... a constitutional question which is a live issue in the proceedings ": Amrit Lal Narain v Parnell (1986) 9 FCR 479 at 489 per Burchett J. The section " does not impose a duty on the Court not to proceed pending the issue of notices to the Attorneys-General in every case in which the Constitution is mentioned " or in which a principle arising under the Constitution is asserted by a party: Deputy Commissioner of Taxation v Warrick (No 2) [2004] FCA 918 at [103] , [2004] FCA 918 ; 56 ATR 371 at 396, [2004] ATC 4779 per French J. Any Constitutional issue sought to be raised by the Applicant is not considered to be a " live issue " in the proceedings. 11 The application to adjourn the proceedings to enable a notice to be given pursuant to s 78B was thus refused. 12 Reliance was also placed on behalf of the Respondents upon the application for leave having been filed out of time. Had there been a basis upon which leave would otherwise have been granted, any extension of time necessary to have facilitated the appeal would have been granted. The application for leave to appeal, as contained in the Notice of Motion filed on 14 April 2008, be refused. 2. The Applicant to pay the costs of the Respondents of and incidental to the hearing of the application. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick . | federal court of australia act 1976 (cth) s 24(1a) application for leave to appeal against an interlocutory decision decision of primary judge clearly correct application refused judiciary act 1903 (cth) s 78b notices no " live issue " arising under the constitution practice and procedure |
For the reasons given below, the Court will make a declaration pursuant to the OHS Act in these terms. The parties acknowledge that the Court should also impose a pecuniary penalty for the respondent's contravention of the OHS Act, as it has the power to do pursuant to cl 4 of Sch 2, Pt 1 of the OHS Act. However, the parties are not agreed as to the appropriate range of pecuniary penalty. Thus, the primary issue for determination in this proceeding is the determination of the appropriate pecuniary penalty to be imposed on the respondent in respect of its contravention of the OHS Act. Statements by a number of employees of the respondent and others have been received into evidence at the hearing of this proceeding and support the facts as agreed. The respondent is and was at all material times a non-Commonwealth licensee as defined under s 5 of the OHS Act. The respondent is a national business which owns and operates several facilities under the provisions of the OHS Act. The respondent was at all material times the owner and operator of a facility located at Kalgoorlie which, amongst other things, provides track maintenance services in the Kalgoorlie and surrounding areas. The respondent was at all material times the operator of a worksite at Koolyanobbing railway siding (Koolyanobbing), located twenty five kilometres from Southern Cross in Western Australia. On 15 November 2007, the respondent assigned eight employees, otherwise known as Team 305, to repair four rail tracks at Koolyanobbing (incident site). Team 305 consisted of: Dwyer was employed by the respondent as a Track Maintainer Level 3 pursuant to the John Holland Rail Pty Ltd Rail Maintenance Agreement 2006 - 2009 (the JHR Agreement). He was a qualified thermit welder. At the time of the incident, Geissmann was employed by the Respondent as a Track Maintainer Level 7. Geissmann was a qualified welder and the assigned supervisor of Team 305. Geissmann's position description included supervisory duties. Bartlett was employed by the respondent as a Track Maintainer Level 6 pursuant to the JHR Agreement. Under the JHR Agreement, a Level 6 Track Maintainer is required to perform leading hand duties and have the ability to supervise a work team. Bartlett had been a supervisor for and a leading hand of a team of employees, otherwise known as Team 307. He was a qualified thermit welder with over 10 years experience. Bartlett usually worked with Team 307, but had been sent to work with Team 305 approximately 5 weeks before the incident. Solomon Gela was employed by the respondent as a Track Maintainer Level 1 under the JHR Agreement. He had been employed for approximately 8 weeks. In order to repair the four rails, Team 305 was required to use Aluminothermic (thermit) welding techniques (the works). Thermit welding is a process whereby superheated liquid metal filler is used to join rails. Once the superheated filler metal comes into contact with the alloys within the rails, it melts to form a join. As the molten metal cools it solidifies to form a weld. As part of the works, Team 305 was required to use a friction saw (saw) to make a cut in each rail so as to allow enough space for the molten material to form a weld. In order for the saw to operate, it must have sufficient pre-mixed two-stroke fuel in its fuel tank. The task of refuelling a saw (task) requires one person to pour two-stroke petrol from a jerry can into the fuel compartment of the saw. Handling petrol is, by its nature, an activity which carries risk to the extent that it has the potential to cause injury to any person carrying out the task or any person in close proximity to the saw. There are numerous safety directions set out in the respondent's Refuelling Plant and Equipment on Trackwork Sites (Rail-2-126 dated January 2006) which detail the appropriate manner in which the task can be carried out safely. Included in the directions is the requirement for the saw to be removed from the rail track and placed on the ground and away from potential ignition sources prior to refuelling. Prior to work commencing at the incident site at about 7am on 15 November 2007 a pre-work briefing was held. At around 11am, after completing three welds, Geissmann split Team 305 into two groups of four employees. The first group was directed to complete the works (first group) at the incident site. The first group included: The second group (second group) was directed to work at another worksite located fifteen kilometres away from the incident site (second worksite). Prior to leaving the incident site, Bartlett was assigned to act as Team Supervisor. Although accounts differ as to how this came about, it is clear that by the time Geissmann left the incident site, Bartlett became the supervisor of the first group. At approximately 11.15am, Geissmann and the second group left the incident site to travel to the second worksite. At the time of the incident, Geissmann was not present at the incident site. By approximately 11.30am, the first group had finished the third thermit weld and was waiting for it to cool. Approximately twenty minutes later, Dwyer and Gela started to prepare in order to complete the fourth thermit weld. As Dwyer and Gela placed the saw onto the track adjacent to the third thermit weld, Bartlett asked Dwyer to check whether there was enough fuel in the saw. Dwyer opened the fuel cap and noticed that the saw was low on fuel. Dwyer asked Gela to retrieve the jerry can containing pre-mixed two-stroke fuel (jerry can) which was on the ground on the left side of the gang truck. While Gela was retrieving the jerry can, Dwyer remained with the saw which was still clamped onto the rail track. From his experience as a thermit welder, Dwyer was aware that the industry practice and John Holland Rail practice was to remove the saw away from the heat source and refuel it at another location. On this occasion, Dwyer believed that it would be safe to refuel the saw whilst it remained clamped onto the rail track. Gela picked up the jerry can and walked back towards Dwyer. Gela placed the jerry can on the ground approximately two meters away from Dwyer and the saw. Both Bartlett and Dwyer were aware that pressure would build up in the jerry can containing petrol and that the cap had to be released slowly. Gela was not aware of the build up of pressure and the appropriate procedure to release that pressure. Upon seeing Dwyer and Gela about to refuel the saw near the newly completed weld, Bartlett instructed them to be careful. Bartlett said to Dwyer not to refuel the saw near the rail track. Bartlett was aware that the saw should be removed from the track before refuelling. Dwyer thought that it would be safe to refuel the friction saw from where he was standing. Dwyer advised Bartlett that it would be fine. Bartlett did nothing further to prevent Dwyer. Gela removed the cap from the jerry can. As the jerry can was under pressure, fuel spurted out onto Dwyer and the recently finished third weld. The fuel caught alight setting Dwyer's clothing on fire. The flames travelled back towards Gela and the jerry can. The jerry can caught on fire. Gela suffered singed hair and small blisters on the ends of his fingers. Gela threw the jerry can on the ground to his left. The jerry can landed on its side in close proximity to the gang truck. As the jerry can was on its side, fuel continued to spill out. Gela ran to the gang truck to splash water on his hands and arms. The jerry can continued to burn as it lay on the ground in close proximity to the gang truck, which contained oxy-acetylene equipment in the back. Due to the close proximity of the burning jerry can, the drawbar system of the truck was scorched. Bartlett ran to the gang truck and pulled all the hoses connected to the oxy-acetylene equipment away from the flames. Bartlett instructed Hall to drive the gang truck forward away from the burning jerry can. Gela tried to use one of the water extinguishers stored on the gang truck, but it did not work. Gela used bottled water to put out the jerry can fire. As a result of the fire, Dwyer's shirt catching on fire, Dwyer sustained second degree burns to twenty percent of his body in that he sustained burns to his torso, arms and hands. Dwyer was provided with first aid at the incident site. Several attempts were made to contact Geissmann by radio. Eventually, Bartlett was able to speak with Geissmann to advise him of the incident. Geissmann returned to the incident site and drove Dwyer to Southern Cross Hospital which was located approximately thirty minutes away. Dwyer was subsequently transferred by the Royal Flying Doctors to the Burns Unit at the Royal Perth Hospital for further medical treatment. On 15 November 2007, Mr Mark Watson, Regional Safety Manager at John Holland Pty Ltd notified the applicant of the incident. At approximately 6.20pm on 15 November 2007, the applicant issued the respondent with an oral "Do Not Disturb" direction pursuant to s 45A of the OHS Act. The respondent complied with the direction. Dwyer remained at the Burns Unit at the Royal Perth Hospital for approximately three weeks. During this time, Dwyer underwent several skin graft procedures. Following the incident, Comcare investigators and representatives of the respondent attended the site and took a number of photographs. Key witnesses were interviewed by the applicant by way of a tape/digital recording made on 19 November 2007, 6 December 2007 and 13 December 2007. On or about 20 February 2008, Dwyer was deemed fit by his treating doctors to return to work on restricted duties. On or about 24 March 2008, Dwyer was deemed fit by his treating doctors to return to work on full duties. On 5 August 2008, the applicant issued the respondent with an Improvement Notice (No. 3626IN01) pursuant to s 47 of the OHS Act. The respondent complied with the Improvement Notice, and provided all other required assistance to the applicant. On 18 November 2008, the applicant commenced proceedings against the respondent in this Court pursuant to s 77 of the OHS Act. In this instance, the applicant says that the seriousness arises out of the circumstances in which the injuries occurred and the nature of the injuries sustained to Dwyer, and to a much lesser extent, Gela. The potential for greater harm to both Dwyer and Gela and also other workers present at the incident site is also said, by the applicant, to be of significance. The applicant contends the specific factual circumstances at the time of the incident disclose that no proper job safety analysis for the task was undertaken in advance to identify the risks in carrying out the thermit welding and to enable a safe procedure to be adopted. The applicant says that the nearest appropriately qualified supervisor was 15 kilometres away from the incident site at the time of the accident. The applicant says neither Dwyer nor Gela had been trained or adequately trained to safely perform the refuelling process. The applicant says the exposure of risk to workers from a lack of suitable training was compounded by a lack of appropriate supervision at the time of the incident. The applicant says this demonstrates a significant breach of the employer's obligation to protect and safeguard its workers from serious harm. In relation to the injuries suffered by Dwyer, the applicant points out they were so severe that he underwent a skin graft procedure, followed by a lengthy period in hospital and rehabilitation before resuming full time employment. The applicant also emphasises that there was a potential for much greater harm than actually occurred in that there were a number of other flammable substances on the rear of a nearby truck. If these flammable substances had ignited, the applicant says there was potentially a grave risk to all the other workers present at the incident site at the time of the accident. The applicant emphasises that the incident did not arise from a momentary lapse by the respondent, it was known by the respondent that the thermit welding task was required to be undertaken. All aspects of the task including the requirements regarding fuel could not be safely undertaken in circumstances where there had been no adequate training provided and there was inadequate supervision. The applicant emphasises that the injuries sustained by Dwyer and Gela could have been prevented by the implementation of simple and well known precautions to deal with the risk of injury, specifically: The applicant says there was an element of forseeability to the possibility of serious injury occurring. The applicant says this is evidenced in part by a procedure document that was in the respondent's possession at the relevant time headed "Refuelling Plant and Equipment on Trackwork Sites" which specifically recognised that if the equipment is "of a type that creates potential ignition sources, such as rail saws, grinders and so on ... take the piece of equipment to be refuelled at least 10 metres away from the location". The applicant says there was at least a degree of recklessness and arguably negligence in allowing further welding to be carried out in the manner that it was. That is, it was reckless to allow workers untrained in the refuelling task, to perform this activity as part of the thermit weld activities in the manner that they did without supervision, training or proper or effective instruction to them during the performance of the task. The applicant says the penalty should be imposed that: The applicant notes that the maximum civil penalty in this case is equivalent to the sum of the $242,000.00. In the circumstances, the applicant suggests that a penalty in the range of $80,000.00 to $120,000.00 would be appropriate. The procedures provided included a procedure dated January 2006 covering the assessment, identification and control of risks arising from the task of refuelling plant and equipment. That procedure warned that refuelling was an inherently hazardous task with the risks of fire/explosion/pollution. The procedure covered both petrol and diesel and stated that diesel was a lesser hazard. The procedure for refuelling, referred to above, specified among other things that the equipment to be refuelled should be placed in a specified area referred to as a "dump" that was located: The procedure also addressed the question of handling jerry cans carefully. The procedure also provided for fire emergency. The respondent says the crew undertaking the actual task of thermit welding at the incident site were competent to do so. Supervision was also provided to the crew. The truck being used that day was provided with fire extinguishers and a first aid kit. The fire extinguishers were routinely checked by an external provider. The equipment on the truck was also checked weekly. The crew were also provided with personal protective equipment. The respondent says that it was appropriate for Geissmann, supervisor of the work to be undertaken, to split the employees into two crews and to place Bartlett in charge of the crew at the incident site. The respondent says the decision of Geissmann to put Bartlett in charge was not unreasonable, given the extent of the qualifications and experience of Bartlett. The respondent says there is no factual basis to support the assertion by the applicant in its written submissions that Dwyer was not suitably trained and competent to undertake refuelling. Gela was not expected to carry out the refuelling. The facts show that on the day, he was asked to bring the jerry can to Dwyer. The persons on the team undertaking the welding work were both competent to do so and experienced. The training and experience extended to the refuelling of the rail saw. The respondent points to the fact that a pre-work briefing had been held while Geissmann was the supervisor. However, the respondent acknowledges that this did not extend to refuelling practices. The respondent acknowledges that the facts show that the procedures the respondent had provided to its employees in relation to refuelling were not followed in that: The respondent also acknowledges that its procedures in place prior to the incident were silent as to the potential risk of a build up of pressure in a jerry can holding a petrol mix and how the pressure is to be released. The respondent emphasises that at all relevant times it was aware of the risks associated with refuelling of plant and equipment provided to its employees for work. It says the procedures it had provided prior to the incident, if followed that day, would have prevented the incident. The respondent accepts, however, as part of the admission of the contravention that the procedure it provided was not enforced by the acting supervisor (Bartlett) on the day and that its obligations to secure the safety of employees under the OHS Act was not complied with as a result of that admission. The respondent says, however, that no deliberate contravention occurred. The respondent asks the Court to take account of the significant measures the respondent had in place at the time of the incident to reduce risks associated with refuelling and also to have regard to the knowledge of the procedure by both Bartlett and Dwyer on the day to remove the equipment from potential ignition sources. The respondent submits that the factual matters referred to support the view that the circumstances leading to the incident were an "aberration" of an otherwise safe system of work. The respondent says there is no factual basis for the applicant to assert that the manner of the thermit welding work carried out by the employees on the day, contrary to its procedures, was known or accepted by the respondent such that its contravention was to any degree reckless and negligent. The respondent also draws attention to the following facts in relation to the submission of the applicant that there was a potential for even greater harm to arise out of the contravention. When Gela threw the jerry can away, the facts show it continued to burn and landed in close proximity to the back of the truck where oxy-acetylene equipment and other substances were stored. To determine the potential for the substances stored in the truck to catch alight as a result of the burning jerry can, it is necessary to take account of the following: The respondent says the jerry can held approximately 10 litres of petrol mix and appears to have burnt out within a short period. The respondent asserts that the amount of fuel in the jerry can and the location where it landed relative to the truck were insufficient to cause a risk of the other substances catching alight. The respondent also points to actions taken by the respondent following the incident in mitigation of the contravention. Dwyer was given first aid and transferred for medical treatment. He was assisted in his return to work and resumed full time duties as of 24 March 2008, some four months after the incident. After the incident a large number of actions were taken by the respondent to address any omissions in its safety system and procedures relating to the refuelling of equipment, such as the rail saw. Training was provided to employees, safety alerts were issued and other steps taken. The respondent also says that in determining penalty it is relevant to note that there had been no previous similar incident such that the respondent should have been on notice of the nature of the risks that presented themselves that day. The respondent also points to the size and scope of its operations in Western Australia. It is the employer of a large workforce, many of them carry out the work of rail maintenance. The respondent has in place a multi layered and complex safety system for which it has provided a significant budget. The respondent also points to the fact that it has no prior record of contravening the OHS Act. In all of these circumstances, the respondent contends that in assessing penalty it is not necessary for the Court to consider a penalty designed to achieve specific deterrence. The respondent in that sense may be considered a good corporate citizen which has expressed contrition, cooperated fully with the applicant's investigation and indeed commenced its own investigation voluntarily immediately following the incident. The respondent submits that the Court should consider the imposition of a pecuniary penalty in the range of $20,000.00 to $70,000.00. It reflects the more recent type of occupational health and safety legislation found in the various States of Australia, although there are some significant differences. The OHS Act primarily provides for civil enforcement of breach of duties imposed on employers, although criminal proceedings may be brought for a contravention of the Act in certain cases. Section 16 of the OHS Act imposes duties on employers in relation to their employees. Note: An employer who breaches subsection (1) may be subject to civil action or a criminal prosecution (see Schedule 2). (e) to provide to the employees, in appropriate languages, the information, instruction, training and supervision necessary to enable them to perform their work in a manner that is safe and without risk to their health. Under the OHS Act, it has additional functions and powers. These include under Pt 4, Div 2 of the Act the power to appoint investigators who may under s 41 conduct investigations, amongst other things, concerning the breach or possible breach of the Act or Regulations or concerning an accident or dangerous occurrence that has happened in the performing of work for an employer. These investigators may be members of the staff of Comcare or other duly appointed investigators. The Safety, Rehabilitation and Compensation Commission is established under the Safety, Rehabilitation and Compensation Act 1988 . It also has functions and powers under the OHS Act in relation to investigations (under s 41(3)) and to give directives, issue prohibition notices and improvement notices and to conduct public inquiries. Section 12 of the OHS Act confers functions on the Commission additional to those conferred by the Safety, Rehabilitation and Compensation Act 1988 . Section 12A(1) of the OHS Act provides that the additional functions conferred on the Commission do not include the specific functions conferred on Comcare under the Act. Section 77(1) of the OHS Act provides that proceedings for a breach of the Act or Regulations may be instituted by Comcare or by an investigator. (2) The pecuniary penalty must not exceed the amount stated in the table to be the maximum penalty in relation to the provision concerned. (3) The penalty is a civil debt payable to the Commonwealth. Comcare may enforce the order as if it were an order made in civil proceedings against the person to recover a debt owed by the person. The debt arising from the order is taken to be a judgment debt. (4) In spite of the provisions of any other law, if a penalty is imposed under this clause, a court must not direct that a person serve a sentence of imprisonment in default of the payment of the penalty. [The penalty table is excluded]. Clause 8 provides that the court must apply the rules of evidence and procedure for civil matters in proceedings for a declaration of contravention or a pecuniary penalty order. Clause 9 provides that a court must not make a declaration of contravention or a pecuniary penalty order against a person for a contravention if the person has been convicted of an offence constituted by conduct that is substantially the same as the conduct constituting the contravention. Schedule 2 provides for further remedial actions including injunctions (cl 14), remedial orders (cl 15), undertakings (cl 16). Part 2 of Sch 2 provides for criminal prosecutions in certain cases including breach of s 16(1) of the OHS Act, but only where the breach causes death or serious bodily harm and the person was either negligent as to whether that breach would cause death or serious bodily harm or was reckless as to whether that breach would cause death or serious bodily harm. In this proceeding --- which is a civil proceeding --- as noted above, the respondent consents to the making by the Court of a declaration of contravention in respect of its breach of s 16(1) of the OHS Act by failing to take all reasonably practicable steps to protect the health and safety at work of its employees in specified ways. The applicant, Comcare, is prepared to consent also to the Court making a declaration of contravention in those terms. Having regard to the agreed facts set out above, the Court considers that in relation to the incident at Koolyanobbing on 15 November 2007, the respondent did not take all reasonably practicable steps to protect the health and safety at work of its employees, as required to do so by s 16(1) of the OHS Act. In those circumstances, the Court would make a declaration of contravention in the terms proposed by the parties. The applicant also seeks the imposition of a pecuniary penalty under cl 4 of Sch 2. While the parties are not agreed as to the appropriate range of penalty for contravention, the respondent does not contend that a pecuniary penalty is not appropriate and should not be imposed. In the circumstances, plainly a pecuniary penalty is appropriate. The various remedies available in civil proceedings brought under Pt 1 of Sch 2 of the OHS Act are all designed to enable the objects of the Act to be realised. To put the matter directly, the inclusion of Sch 2 in the OHS Act emphasises a legislative intention that contravention of the occupational, health and safety principles and duties created by the Act should be sanctioned, in appropriate cases, by civil or criminal orders. In the present case, the purpose of a civil pecuniary penalty, if imposed, is to deter the particular offender from offending again, as well as having the effect of generally deterring other employers from acting in a similar way. The imposition of a pecuniary penalty may be considered to have the advantage of reminding a particular employer of the importance of complying with the duties imposed on them by the OHS Act, as well as reminding other employers of the potential consequences should they fail to comply with the requirements of the Act. The imposition of an appropriate penalty is also calculated to give the community, and in particular relevant employees, confidence that the OHS Act is taken seriously. When it comes to assessing what level of pecuniary penalty should be imposed, the courts have over a number of years, in a number of different regulatory settings, developed criteria that are considered relevant to the formulation of the quantum of a civil pecuniary penalty. Accordingly, in Comcare v Commonwealth [2007] FCA 662 ; (2007) 163 FCR 207 , Madgwick J at [116] emphasised that the overriding principle in assessing penalty is that the amount of the penalty should reflect the Court's view of the seriousness of the offending conduct in all the relevant circumstances. At [119] --- [123], Madgwick J considered that guidance in assessing the amount of pecuniary penalty under the OHS Act could be gained from a consideration of decisions relating to penalty under State occupational health and safety laws. In Comcare v Commonwealth of Australia [2009] FCA 700 , North J at [69] --- [71] accepted and adopted the approach to assessing the penalty suggested by Madgwick J in this case. Madgwick J at [120] considered that decisions relating to the New South Wales legislation identify a number of considerations that are relevant, including: With respect, like North J, I agree with the observations of Magdwick J and consider these are all relevant criteria to the assessment of a civil pecuniary penalty under the OHS Act. However, I also concur with North J, in his emphasis of the overriding caution expressed by Flick J in Comcare v Post Logistics Australasia Pty Ltd [2008] FCA 1987 ; (2008) 178 IR 200 , where His Honour said that care must be taken to ensure that any listing of potentially relevant considerations do not themselves become an impermissible substitute for considering the terms of the legislation in issue or an unnecessary constraint upon a discretion conferred in otherwise unconfined terms. I should also add that I consider it is relevant to the assessment of a pecuniary penalty to acknowledge, where it is the case, an admission of contravention and particularly an early admission by a respondent of its liability to the imposition of a remedy under the OHS Act. Where, for example, a respondent in a proceeding such as these early on acknowledges fault and willingness to accept a declaration of contravention, then the respondent will ordinarily be entitled to additional consideration in the assessment of the penalty. In some contexts this process is termed giving credit or "discount" on penalty. There is no statutory entitlements to such credit or a discount but it serves public policy in that it encourages a respondent to act responsibly, and may achieve a reduction in the public resources that would otherwise be required to prosecute the proceedings against the respondent. In this case, counsel for the parties generally accept that the approach outlined by Madgwick J to the assessment of a pecuniary penalty is relevant in this case, and that in an appropriate case the pecuniary penalty should take into account any admission of contravention, particularly an early admission of contravention. Indeed as can be seen from the contentions of the parties set out above, each party has framed its contentions by reference to these various criteria. In this case, there is no doubt that the offending conduct was serious. Leaving aside for the moment the consequences of the offending conduct, the employee Dwyer, called upon the employee Gela, to bring from the truck the jerry can full of two stroke fuel so that he (Dwyer) could refuel the rail saw. The work generally was being supervised by the employee, Bartlett. When Dwyer called upon Gela to bring the jerry can to him, Dwyer was aware that the industry practice and John Holland Rail practice was to remove the saw away from the heat source, being the recently welded rail, and refuel it at another location. However, Dwyer remained with the saw which was still clamped onto the rail track. For some reason Dwyer believed it would not be unsafe to refuel the saw whilst it remained clamped onto the rail track. Gela placed the jerry can on the ground approximately two metres away from Dwyer, the saw and the weld. He did this notwithstanding that both Bartlett and Dwyer were aware that pressure would or could build up in the jerry can containing the petrol and that the cap had to be released slowly. Gela was not aware of the possibility of build up of pressure and the appropriate procedure to release that pressure. Neither Bartlett nor Dwyer made any mention of this to him. However, upon seeing Dwyer and Gela about to refuel the saw near the newly completed weld on the rail, Bartlett did in fact instruct them to be careful. Moreover, Bartlett said to Dwyer not to refuel the saw near the rail track. Bartlett was aware that the saw should be removed from the track before refuelling. Dwyer on the other hand thought it would be safe to refuel the saw from where he was standing. Accordingly, Dwyer advised Bartlett that it would be fine. Bartlett then did nothing further to prevent Dwyer from refuelling, notwithstanding he was supervising this work activity. Gela then removed the cap from the jerry can and, as set out in detail earlier, the fuel spurted out onto Dwyer and onto the recently finished third weld. The fuel caught alight, setting Dwyer's clothing on fire, and the flames travelled back towards Gela and the jerry can. The jerry can caught on fire. Gela suffered singed hair and small blisters on the end of his fingers. Gela threw the jerry can onto the ground to his left. It landed on its side in close proximity to the gang truck. At that point the jerry can was on its side and fuel continued to spill out. Gela ran to the gang truck to splash water on his hands and arms. The jerry can continued to burn as it lay on the ground in close proximity to the gang truck, which contained oxy-acetylene equipment. Due to the close proximity of the burning jerry can, the draw bar system at the rear of the truck was scorched. Bartlett at this point ran to the truck and pulled off all the hoses connected to the oxy-acetylene equipment so that they could not come into contact with the flames. Bartlett then instructed another employee, Hall, to drive the truck forward away from the burning jerry can. While this was happening Gela tried to use one of the water extinguishers stored on the truck, but it did not work. He finished up using bottled water to put out the jerry can fire. He did not use a fire blanket, the recommended way of dealing with fire in such circumstances. As a result, Dwyer's shirt catching on fire, Dwyer sustained second degree burns to 20% of his body in that he sustained burns to his torso, arms and hands. The Court received, in evidence, photographs of the second degree burns suffered by Dwyer. Plainly they were quite severe. Between Dwyer's neck and navel, the burning was widespread. His left arm below the elbow was also severely burnt and he also suffered burns on the lower part of his back. His right and left hands were also badly burned. The additional evidence, in the form of statements made at relevant times by employees suggests that Dwyer, who was trained to conduct thermit welding had never seen the formal documentary procedures of the respondent concerning refuelling. However, he did know he should not refuel in proximity to a heat source, such as the recently completed weld. In that regard, he did not need to have brought to his attention the written procedure of the respondent because he was aware of this requirement. Bartlett, who had been left in charge of the crew working at the incident site (even though on the face of it more experienced supervisors were available but had gone off with Geissmann and the other crew to a site some 15 kilometres away) was also aware of the requirement not to refuel in proximity to a heat source. Indeed, Bartlett was aware of the documentary procedure of the respondent in this regard. For some inexplicable reason, he allowed Dwyer and Gela to proceed with the refuelling of the saw near the heat source. There can be little doubt, in my view, that while Bartlett may have had some training in respect of the respondent's occupational health and safety procedures, he had had insufficient training. Any well trained supervisor, in those circumstances, would have insisted that Dwyer not proceed to refuel the saw while the saw was clamped to the rail and near the recently made weld. He would have insisted on strict compliance by Dwyer with the requirements of the respondent and completed the refuelling at least some 10 metres from any heat source, not only for Dwyer's sake, but for that of all men working at the site. In my view, if Bartlett had been well trained as a supervisor he would also have warned Gela, who plainly was not experienced, to be careful specifically because fumes or vapour or liquid might be emitted under pressure from the jerry can if he were to open it too quickly. Therefore, to the extent that Bartlett was considered by Geissmann to be a person who could be put in charge of the team working at the incident site, it seems that Geissmann's judgment was poor. Whilst he might have had, as he stated in his statement he did have, reason to "trust" Bartlett, it seems that Bartlett did not have the degree of training, experience and knowledge of the importance of the procedures that one would have expected of a properly trained supervisor. Consequently, it seems to me that the respondent's contravention with its own laid down procedures was a serious one. The working environment was not, at the time of the incident, a safe one. Risks were introduced, particularly in the handling of plant and substances. The evidence suggests that Bartlett, Dwyer and Gela were all insufficiently trained or supervised in relation to the refuelling process that led up to the incident to fully appreciate the risks their conduct posed to all those working at the site. While there had been a prework briefing that morning before the incident, the question of refuelling was not raised or discussed. The actual injuries suffered by Dwyer, in particular, emphasise that the contravention was indeed serious. They are injuries, of course, that could have been suffered by any of the men working at the site that morning. That the incident could have been far worse is, in my view, demonstrable. While the respondent points to the fact that the available fuel left in the jerry can once it was thrown by Gela near the truck should be considered insufficient to have caused ignition of other flammable substances on the tray of the truck, the risk of those flammable substances catching fire or exploding was manifest. That much occurred to Bartlett as he immediately rushed to the truck and removed the hoses from the oxy-acetylene equipment from the truck's tray. He also arranged for the employee, Hall, to move the truck out of harms way. It is not necessary in my view for the applicant to prove that there would have been ignition of flammable materials on the tray of the truck if this action had not been undertaken. It is enough to recognise that there was a real risk of that happening. The fact that flames scorched the draw bar system at the rear of the truck, which is shown by the photographs in evidence, is sufficient evidence of that risk. In summary, there is no doubt that the contravention was of itself serious and the consequences of the contravention were serious and might have been more drastic but for the immediate action taken by Bartlett as outlined. The seriousness of the offending conduct, in all the circumstances, suggest that a significant pecuniary penalty should be imposed. In my view, it is also clear that the risk of injury was foreseeable even if the precise cause or circumstances of exposure to risk were not foreseeable. However, I think it may be said in this case that the precise cause or circumstances of exposure to risk were in fact foreseeable. The respondent in its own published procedure had made it clear that refuelling --- which is something that is done regularly in the course of the respondent's business --- should not occur near a heat source. Commonsense would rather suggest that, without it having to be written down. Indeed Dwyer was aware of that, without having to have read the written down procedure of the respondent in that regard. To open a jerry can of fuel at 11am near a heat source, one would have thought, is an inherently dangerous thing to do and would have been appreciated by all concerned. It was certainly a foreseeable risk that fire might occur and that people in the vicinity might be seriously injured. However, it is to the respondent's credit that it had at that time identified the foreseeable risk and included it in its procedures. Plainly, there was a rule within the respondent's sphere of operation that refuelling should not occur within ten metres of a heat source. The real problem was, however, that Bartlett seems not to have been sufficiently trained to act as an effective supervisor in relation to the enforcement of this procedure. Dwyer, it seems, and Gela was not specifically trained in that regard at all. While the evidence shows that Dwyer was well trained as a thermit welder, there is little evidence to suggest that he was fully aware of the safety procedures. He knew enough however, to know he should not have been refuelling the saw whilst it was clamped to the rail near the recently completed third weld. Nonetheless, this is not a case where it can be said that the employer is guilty of systemic failure to appropriately address a known or foreseeable risk. The evidence suggests that this type of problem, arising from a refuelling process, had not occurred before on the respondent's work sites. Nonetheless, as noted, the respondent was aware of the problem, as one would expect it to be. In a case such as the present it is appropriate to impose a penalty that provides not only for general deterrence, but also for specific deterrence. I am not persuaded that this is a case where there is no reason to impose a pecuniary penalty to achieve specific deterrence. Whilst the respondent on the materials before the Court, is shown to be a responsible employer which takes seriously its responsibilities to provide a safe system of work for its employees, the fact is that its endeavours have been shown to be wanting in this specific instance. In my view it is important that the respondent, through the imposition of an appropriate pecuniary penalty, have brought home to it the extreme seriousness of the obligations imposed on it by the OHS Act and how significant the consequences of their breach can be. I accept that the respondent has acted responsibly both before and after the incident. Immediately after the incident, without being required to do so, it immediately commenced an investigation into the incident. It took all appropriate steps to support the affected employees. It has since engaged consultants to advise it on how to improve its procedures and practices and has reviewed its safety procedures. It has held workshops and issued alert bulletins. However, as I have noted above, the respondent's procedures seems to have fallen down particularly badly in this case because Bartlett, who the respondent says was in a position to supervise, plainly did not fully appreciate the responsibilities that fell upon him. The conduct of the respondent's employee signifies a failure on the respondent's part to communicate and enforce its own internal procedures concerning safety in the work place in this case. A specific deterrent is plainly called for. It also goes without saying that a general deterrent is required. Employers must generally be aware that the Parliament intends that the duties and responsibilities created by the OHS Act must be complied with and that onerous penalties will be imposed in the case of serious breach. It should also be said that this is not an inadvertent breach. Those supervising and carrying out the work at the site when the incident occurred, knew what they were doing. Whilst this is not a case where the Court is bound to observe that this was an accident waiting to happen, it was at least, in the circumstances, an accident that was very likely to happen in all the circumstances. In my view, the objective seriousness of the offence of itself also calls for a substantial penalty to indicate the social and industrial policies of the legislation and its range of penalties. I do not consider that, in this case, the penalty that I assess should be subject to some additional credit or "discount" for an early admission of contravention. Not until quite recently, after the proceeding was programmed to a contested hearing on the question of liability of the contravention, did the respondent through its solicitors indicate that it would consent to a declaration of contravention being made by the Court. However, the fact that the respondent eventually signified its admission of contravention should be taken into account. As noted above, counsel on behalf of the respondent suggests that a pecuniary penalty in the range of $20,000.00 to $70,000.00 would be appropriate. By contrast, the applicant suggests, having regard to penalties imposed in a number of other OHS cases, that the penalty might be in the range of $80,000.00 to $120,000.00. There is no particular "tariff" when it comes to the assessment of a pecuniary penalty in cases such as this. As noted above, the seriousness of the contravention is the overriding consideration. The facts of each case must be separately considered. The object of the legislation must be firmly kept in mind. The maximum pecuniary penalty that might be imposed in this case is equivalent to $242,000.00. I note that in Comcare v Commonwealth of Australia [2007] FCA 662 a penalty of $198,000.00 was imposed. In Comcare v National Gallery of Australia [2007] FCA 1548 , a pecuniary penalty of $20,000.00 was imposed. In Comcare v Postal Logistics Australasia Pty Limited [2008] FCA 1987 ; (2008) 178 IR 200 a pecuniary penalty of $165,000.00 was imposed. In Comcare v Commonwealth of Australia [2009] FCA 700 , a pecuniary penalty of $210,000.00 was imposed. Save in the National Gallery case, which was a minor matter on any view, the other three pecuniary penalties were imposed where the consequences of contravention were the death of an employee. Whilst death did not ensue in this case, it was, as I have explained above, still a case where the offending conduct had a high degree of seriousness. Having regard to the seriousness of the offending conduct and its consequences, but also taking into account the prior good record of the respondent and its admission of contravention, I do not consider it is appropriate to impose a pecuniary penalty at or near the top of the scale. I do however, consider a penalty towards the middle of the scale is appropriate. I am satisfied that a pecuniary penalty of 1136 penalty units (out of a maximum of 2200 penalty units) which is equivalent to the sum of $124,960.00, should be imposed. Pursuant to cl 4 of Sch 2 of the said Act the respondent pay to the Commonwealth of Australia a penalty of 1136 penalty units, equating to $124,960.00. The respondent to pay the applicant's taxed costs, if not previously agreed. I will hear from counsel as to the terms of the final orders to be made. I certify that the preceding one hundred and ninety-two (192) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | occupational health and safety breach of duty of employer to take all reasonably practicable steps to protect the health and safety of the employer's employees serious offending conduct declaration of contravention made pecuniary penalty imposed industrial law |
A minute of proposed amended statement of claim was filed on 23 January 2008. The amended statement of claim, in terms of the minute, was filed on 11 March 2008. In the meantime the proposed amended statement of claim had become the subject of motions to strike it out in whole or in part. The parties filed written submissions on the motions which were supplemented by short oral argument on 11 March 2008. 2 While the outline of the applicant's case appears from the amended statement of claim it is embedded in embarrassing and at times most unreadably complex pleading. The statement of claim as it presently stands will be more of a hindrance than an assistance to the efficient conduct of these proceedings. It will be struck out and the applicant required to file a substituted pleading. In this Court, those pre-trial directions will almost invariably include; firstly, a direction for the preparation of a trial bundle identifying the documents that are to be adduced in evidence in the course of the trial; secondly, the exchange well prior to trial of non-expert witness statements so that non-expert witnesses will customarily give their evidence-in-chief only by the adoption of that written statement; thirdly, the exchange of expert reports well in advance of trial and a direction that those experts confer prior to trial; fourthly, the exchange of chronologies; and fifthly, the exchange of written submissions. Those processes leave very little opportunity for surprise or ambush at trial and, it is my view, that pleadings today can be approached in that context and therefore in a rather more robust manner, than was historically the case; confident in the knowledge that other systems of pre-trial case management will exist and be implemented to aid in defining the issues and apprising the parties to the proceedings of the case that has to be met. 4 The definition of issues generally does not occur as a result of the preparation of the trial bundle or the exchange of witness statements or expert reports. It may emerge from the exchange of written submissions but absent pleadings or a statement of facts and contentions or issues that is very late in the day. The invocation, by counsel for the applicant in this case of a "robust approach" does not avail to sustain a statement of claim which obscures rather than clarifies the issues in the case. The allegations are set out in a narrative form. They are only allegations. The summary does not involve any finding by the Court. 6 Wainter Pty Ltd (Wainter) sues Freehills, a firm of legal practitioners and one of its partners, David Woolfe. It also sues Peter Malone, a director of New Tel Ltd (New Tel) which carried on the business of providing telecommunications primarily in the way of mobile phone services. Wainter names, albeit not as a respondent, Paul Evans, who was a director of New Tel from 27 September 1996 to 16 August 2001. From 23 June 2000 he was a partner in Freehills. Another person named as a director of Wainter after 10 September 1996 is Barry Granville Waller (s/c 1-6). 7 Between September 2001 and January 2002 Wainter owned 35 million shares in Cable & Telecoms Ltd (C & T). It also had 20 million options to acquire shares in that company. Its shareholding represented 39.8% of issued C & T shares and about 55.7% of issued C & T options. On or about 11 April 2000 Wainter agreed to sell to C & T all of its shares in UDC Group Pty Ltd. This was constituted by a document dated 11 April 2000. It was later amended. The parties to it were Wainter, C & T, Barry Waller and Christine Margaret Waller (s/c 8 and 9). 8 Under the UDC sale agreement C & T was required to pay Wainter $4 million plus interest of which $1,500,000 was paid at settlement and a further sum of $437,500 on or about 25 January 2001, leaving a net balance owing by C & T to Wainter of $3,562,500. 70 million shares if its market capitalisation reached $100 million on or before 30 September 2002. 2. 75 million shares if its market capitalisation reached $200 million by 30 September 2002. The primary sum owing under the UDC Sale agreement, namely $3,562,500 was referred to in the amended statement of claim as "the Debt". The additional contingent elements of the consideration were designated "the Associated Rights" (s/c 10). 9 In November 2000 C & T agreed with a company called Total Television Australia Ltd (TTA) and Yes Television (Europe) Ltd (Yes TV) that TTA would have the right to use and exploit in Australia and New Zealand interactive television services, content and technologies developed and owned by Yes TV. Particulars of the agreement are provided by reference to six documents (s/c 13). As a result of the agreement TTA intended to provide interactive services in Australia and New Zealand using Video on Demand (VOD) technology developed by Yes TV and content it had developed or to which it had rights. (s/c 14) In February 2001 TTA made an agreement with Trans ACT Capital Communications Pty Ltd (Trans ACT) for distribution by TTA of services over a broadband communications network developed in Canberra by Trans ACT (s/c 15). Particulars of this agreement are given. It is also pleaded, although out of sequence that, after August 2001, C & T owned 8,000 shares in TTA comprising 80% of that company's total issued shares and that Yes TV owned 2,000 shares in TTA constituting 20% of its total share issue (s/c 11 and 12). 10 In or about September 2001 New Tel proposed to make a bid to acquire all of the issued shares in C & T (s/c 16). It engaged Freehills and Deloitte Touche Thomatsu (Deloittes) to undertake a due diligence investigation in connection with the preparation of a Bidder's Statement (s/c 17). A Due Diligence Committee (the Committee) was established comprising, inter alia, Mr Malone on behalf of New Tel, Mr Woolfe and Ms Alexander on behalf of Freehills and representatives of Deloittes and KPMG (s/c 18). Mr Woolfe was appointed as chairman (s/c 19). In his capacity as a partner of Freehills and as chairman of the Committee he attended various meetings of the Committee in October and November 2001 and had some 42 additional meetings and telephone conversations each of which is particularised (s/c 20). 11 Mr Woolfe reviewed an Information Memorandum about TTA and participated in the preparation of the final report of the Committee dated 28 November 2001 and in the preparation of questionnaires to be completed by representatives of New Tel. He reviewed completed questionnaires in October 2001, conducted interviews and participated in the preparation and review of records of interviews. He was involved in the preparation of the Bidder's Statement, approved its final version and gave legal advice about aspects of the proposed bid (s/c 20). 12 Wainter alleges that Mr Woolfe was aware, on or prior to 27 November 2001 of a number of matters of concern which he either did not follow up with inquiries or which he actively suppressed (s/c 21). These included the effect of the C & T acquisition on New Tel's business, on its cash reserves and the need to raise additional capital. He is also said to have been aware of concerns about the integration of New Tel's business with that which it had acquired from another company, WorldxChange Pty Ltd in May 2001. The implementation was proving difficult. These concerns were expressed, inter alia, by Mr Wright the chief engineer of New Tel and Mr Bailey, its chief financial officer. The statement of claim also says Mr Woolfe was aware of statements by Mr Malone about the amount of money it needed to roll out TTA's interactive business, some $30 million based on 60 key centres covering 20 million Australians and a timeframe of about five years to provide VOD services across Australia. Mr Malone reported in Mr Woolfe's presence that $5 million might be sufficient to complete the Trans ACT roll out and that New Tel might not proceed on the same business model as TTA. Inconsistencies are said to have been apparent between the concerns expressed by Messrs Wright and Bailey and statements made by Mr Amzalak, the vice president sales and marketing of New Tel and Mr Piercy, the company secretary (s/c 21). 13 Mr Woolfe is said to have been aware that comments in the Bidder's Statement to the effect that New Tel and C & T business assets were complementary were not borne out by the interview process and his reviews of the records of interview. He was aware that New Tel had suffered a loss of $51 million for the year ended 30 June 2001, that there was a net decrease in its cash of $40 million and that it was New Tel's intention to bundle the VOD services with New Tel's existing telephony products and services. Wainter claims that Mr Woolfe did not do anything to reconcile the inconsistencies and concerns or cause any inquiries to be made of New Tel or any other party (s/c 22). Moreover, it alleges, he actively suppressed the concerns expressed by Mr Wright (s/c 23). 14 New Tel experienced difficulties in raising capital between February and July 2001 (s/c 24). Mr Woolfe was aware, in about July 2001, of the difficulties which New Tel had and was experiencing in that respect (s/c 25). 15 On 26 November 2001 New Tel offered to purchase the C & T Debt from Wainter. The consideration offered was 2 million options to acquire shares issued in New Tel together with the sum of $1 (s/c 26). On 27 November 2001 Mr Waller, as a director of Wainter, took part in a telephone conversation or conversations with Mr Woolfe and Mr Malone. In the course of that conversation or conversations Mr Woolfe or Mr Malone told Mr Waller that if Wainter did not forego the Debt New Tel would not proceed with the bid. When Mr Waller asked why Wainter should consider foregoing the Debt, they said that the company would receive more than the value of the Debt through the extra value that the New Tel shares would acquire following its acquisition of C & T. Absent such agreement the takeover would not proceed and Wainter would have no New Tel shares. Wainter would be better off financially because of the greater value of the package resulting from the New Tel takeover of C & T. Mr Woolfe and/or Mr Malone allegedly told Mr Waller that they wanted an answer to the proposal as a matter of urgency (s/c 28). In a telephone call later on 27 November 2001 Mr Waller told Messrs Woolfe and Malone that based on what they said to him Wainter would accept the offer (s/c 29). There is an alternative pleading that Mr Waller confirmed on 27 November 2001 that he had received the New Tel offer to Wainter (dated 26 November 2001), that he was authorised by Wainter to accept the offer, and that Wainter did accept the offer (s/c 32). These comprised the various things previously pleaded (in paragraphs 21 to 25 of the statement of claim) and a list of some 15 other material circumstances existing at that time. It is said that virtually none of these matters were disclosed to Wainter by Freehills or Mr Woolfe or Mr Malone before 28 November 2001 and alternatively before 20 December 2001 (s/c 33 and 34). 19 Wainter alleges that had the pleaded telephone conversation and alternative telephone conversations not occurred or had there been disclosure of the various material circumstances pleaded, Wainter would not have accepted the offer (s/c 36). Wainter would have retained the benefit of the Debt, its shares in C & T and its options to acquire shares in C & T and the associated rights (s/c 37). 20 New Tel lodged its Bidder's Statement on or about 29 November 2001 with the Australian Securities and Investments Commission (s/c 38). The statement was approved by Mr Woolfe in his capacity as chairman of the Committee and as a partner of Freehills and by Mr Malone (s/c 39). The bid was made on 14 December 2001 (s/c 40). A copy of the Bidder's Statement was provided to Wainter on or about that date (s/c 41). 21 Various express statements contained in the Bidder's Statement are set out in the statement of claim (s/c 42). It was possible, alternatively it was likely to be possible, for New Tel to offer customers a "bundled" packaged of the products and services provided by New Tel and the VOD services. 2. The technologies involved in the products and services provided by New Tel were compatible with, or alternatively, were likely to be compatible with, the VOD services. 3. It was possible, alternatively, it was likely to be possible, for New Tel to raise sufficient capital to fund the development and roll out of the business of TTA and the VOD services. 4. New Tel intended to implement the Trans ACT rollout (s/c 43). The Bidder's Statement did not disclose the various matters pleaded in paragraphs 21 to 35 or 33 apart from three specified matters (s/c 21.8, 21.10 and 33.9). 22 Wainter accepted the New Tel offer pursuant to the bid for New Tel to purchase all of its shares and options in C & T (s/c 45). Had the Bidder's Statement not made the various express statements pleaded or the representations derived from them or had the various material circumstances been disclosed to Wainter or the telephone conversation(s) not occurred, then Wainter would not have accepted New Tel's bid (s/c 46). Had it not accepted, the bid would have been unsuccessful and Wainter would have retained the benefit of the Debt, its shares in C & T and its options to acquire shares in C & T and the Associated Rights (s/c 47). It was wound up on a creditors' resolution on 13 January 2003 and the administrators were appointed as liquidators (s/c 49). A winding up order was made by the Supreme Court of New South Wales on 3 March 2003 and on that date Mr Hall was appointed official liquidator (s/c 50). Wainter says that it will not, and alternatively, it is unlikely that it will receive any dividend from the liquidation of New Tel in its capacity as a shareholder of the company (s/c 51). 24 The statement of claim goes through the various express representations pleaded and characterises each of them as false, misleading and/or deceptive (s/c 53 to 57). It also says that there were no reasonable grounds for the making of such of the representations as related to future matters. These are identified by reference to paragraphs 30 and 43.1 to 43.4 inclusive (s/c 52). 25 At all times from 26 November 2001 to 20 December 2001 Messrs Woolfe and Malone and Mr Evans are said to have been aware of various matters set out in the pleading (s/c 58-60) For that reason, and pursuant to the provisions of the Partnership Act 1895 (WA), the Trade Practices Act 1974 (Cth) (the TPA), the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) Freehills was aware or is taken to have been aware of various of the pleaded matters (s/c 61 and 62). New Tel is also said to have been aware of various matters (s/c 63). Each of Freehills, Mr Woolfe and Mr Malone is said to have engaged in the conduct attributed to them in trade or commerce. 26 The express representations in a telephone conversation are said to have contravened various provisions of the TPA (including s 52) , the Corporations Act and the ASIC Act. Contraventions are alleged against Mr Woolfe, Mr Malone and New Tel. 27 As to the various non-disclosures alleged, these are said to have constituted contraventions of the TPA and other statutory provisions by Freehills, Mr Woolfe, Mr Malone and New Tel. The representations in the Bidder's Statement are said to have constituted contraventions by the same parties (sc 76). The non-disclosure of matters to Wainter prior to its acceptance of the bid is said to have involved contraventions by the respondents and by New Tel. 28 Accessorial liability is asserted against Freehills in relation to contraventions by the other respondents and New Tel and on a similar basis against Mr Woolfe and Mr Malone. 29 Wainter says it suffered loss or damage comprising, inter alia, the loss of the Debt, the loss of opportunity for its repayment, the loss of issued shares in C & T and of a controlling interest in C & T, the loss of options to acquire issued shares in C & T and the loss of the Associated rights. The relief claimed comprises damages, compensation and interest. I have also read the submissions of the parties. There is a plethora of objections relating to points of pleading and points of law. As earlier indicated, while the general outline of Wainter's case is visible, it is immersed in an embarrassment of unnecessary and, at times, almost incomprehensible pleading which in my opinion renders the whole statement of claim a hindrance to the efficient progress of this case. It is not for this Court to go through the document paragraph by paragraph to tell the pleader how the job should be done. The Court should not have to do that. I will however refer to some of the difficulties in the pleading to exemplify the problem. 31 I should say in so doing that I do not accept the respondents' submission that a party, pleading that a statement as to a future matter was made without reasonable grounds, is required to plead the basis upon which it is said that the statement lacked reasonable grounds. Where s 51A of the TPA is invoked, the burden of proof of showing that there were reasonable grounds for the statement falls upon the respondents if it is established that the statement was made. I will not deal with points of law about the application of the various statutory bases upon which vicarious liability is, in effect, asserted. These are best dealt with in the relevant factual setting. No one of them seems to be fatal to the overall claim. 32 One element of the case appears to arise from the non-disclosure of various matters by Woolfe and Malone to Wainter. The non-disclosure is pleaded in paragraph 34. It covers "matters pleaded in paragraphs 21-35 and 33". 33 The pleading in paragraph 21 sets out matters of which Mr Woolfe was said to have been aware "As a result of undertaking or participating in the activities pleaded at paragraph 20 ... and other related work ...". Paragraph 20 pleads Mr Woolfe's involvement as chairman of the Committee, his attendance at particular meetings of the Committee and his participation in some 42 meetings and telephone calls over the period from 18 September 2001 to 29 November 2001. It pleads his review of the Information Memorandum regarding TTA, the preparation of the final report of the Committee, the preparation and review of questionnaires, the conduct of interviews and the participation in the preparation of and review of records of the interviews. It refers to his participation in the preparation of the Bidder's Statement and the provision of legal advice. Mr Woolfe's awareness of specific matters set out in paragraph 21 is, on the face of it, based upon all of the facts pleaded in paragraph 20 without discrimination notwithstanding that for each fact of which he is said to have been aware there are many matters in paragraph 20 which are irrelevant to it. 34 The non-disclosure of the various matters mentioned in paragraph 21 is attributed to both Messrs Woolfe and Malone in paragraph 34. There is nothing in the pleading in paragraph 20 or 21 to assert that Mr Malone was aware of the matters of which Mr Woolfe was aware or the facts upon which any such awareness was based. This is subject to paragraph 21.4 to 21.6 which related to Mr Woolfe's awareness of statements made by Mr Malone. There is in paragraph 59 a global pleading of a whole variety of matters set out in earlier paragraphs of the statement of claim of which Mr Malone is said to have been aware. The basis for that awareness is not explained. That pleading is evidently in support of the allegation in paragraph 63 that New Tel was aware or was to be taken to have been aware of the matters pleaded in those paragraphs. 35 Paragraph 34, read with paragraph 22, alleges that none of the respondents disclosed to Wainter that Mr Woolfe had failed to reconcile inconsistencies and/or contradictions between statements made by Mr Malone, Amazalak and Mr Piercy on the one hand and Mr Bailey and Mr Wright on the other. Mr Malone's awareness of these omissions by Mr Wright only appears in the statement of claim in the global plea in paragraph 59 and no basis for it is pleaded. Nor is it alleged, except in that unsatisfactory way, that he knew of Mr Woolfe's failure to make inquiries as alleged in paragraph 22.3 into whether New Tel's expectations in respect of the acquisition of C & T were reliable and verifiable. 36 When paragraph 34 is read with paragraph 25, it alleges, inter alia, that Mr Malone failed to disclose that Mr Woolfe was aware of the difficulties that New Tel had experienced and was experiencing in raising capital. Also allegedly not disclosed to Wainter by any of the respondents were the other "material circumstances" pleaded in paragraph 33. Among these matters were the practices of New Tel in providing minutes of directors' meetings that did not fully disclose the material matters discussed at the meetings. It is not pleaded that Mr Woolfe was aware of any of the matters pleaded in paragraphs 33.2 to 33.9 inclusive. These examples indicate the unsatisfactory character of the pleading in paragraph 34. 37 Paragraph 44 raises a further non-disclosure case alleging that the Business Statement did not disclose "any of the matters pleaded in paragraphs 21 to 25 or 33 above". This does not include the matters pleaded in subparagraphs 21.8 to 21.10 and 33.9. That Mr Wright had not been fully briefed or consulted with regarding C & T, the VOD services, New Tel's acquisition of C & T or New Tel's intentions in relation to C & T post acquisition (21.1.11). 2. That Mr Bailey had expressed various concerns in his response to a questionnaire and in the course of interview (21.2). 3. That Mr Bailey had not been fully briefed or consulted with in respect of C & T, the VOD services, New Tel's acquisition of C & T or New Tel's intentions regarding C & T post acquisition (21.2.8). 4. That Mr Malone had made a number of statements in his interview, in the course of a meeting on 22 October 2001 and in his response to the questionnaire (21.4, 21.5 and 21.6). It can hardly be the applicant's case that the Bidder's Statement failed to disclose that Mr Wright or Mr Bailey were inadequately briefed on certain matters or that Mr Malone had made certain statements in questionnaires and on other occasions. 38 When paragraph 44 is read with paragraph 22 it appears to be a further complaint by Wainter that the Bidder's Statement did not disclose Mr Woolfe's failure to reconcile inconsistencies and contradictions of which he had become aware through the due diligence process or to make or cause to be made inquiries of New Tel about the extent to which its intentions or expectations were reliable and/or verifiable. Paragraph 44 read with paragraph 23 complains that the Bidder's Statement did not disclose Mr Woolfe's "active suppression" of various matters. And read with paragraph 25, paragraph 44 appears to complain that the Bidder's Statement did not disclose that Mr Woolfe was aware of the difficulties New Tel experienced in raising capital. 39 The preceding examples suffice to demonstrate the unsatisfactory nature of this part of the pleading. 40 There is then the pleading of the falsity of representations said to have been made in the Bidder's Statement. The particulars of falsity appear at paragraphs 54 and following. It suffices to refer to the first of them to demonstrate their character. These particulars of falsity are repeated for each of the pleaded representations in the Bidder's Statement. They do not make sense. 41 I do not propose to go any further into the depths of this inadequate document. It is incumbent upon the applicant to plead a clear case against each of the respondents and to do so economically and succinctly and by reference to material facts and no others. In my opinion the statement of claim cannot be saved by striking out superfluous paragraphs. It requires a wholesale reworking. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | sufficiency statement of claim outline of case disclosed substantial deficiencies in pleading statement of claim struck out substituted statement of claim directed practice and procedure |
In support of his motion Mr Siminton invoked the inherent and/or implied jurisdiction of the Court and O 20 r 2 of the Federal Court Rules . He argued that the proceedings had been brought for an improper purpose, that they had been brought without any basis in law and that they had been brought "unconstitutionally". In that regard, he invoked s 51(xxxi) of the Constitution (no acquisition of property other than on just terms). 2 Tracey J ordered that Mr Siminton's application be dismissed with costs on 6 October 2006. His Honour gave reasons for that decision in the form of a "ruling" delivered on that same day: Australian Prudential Regulation Authority v David Robert Siminton (No 4) [2006] FCA 1339. He noted that a number of the matters raised by Mr Siminton had been agitated before another judge of this Court, Merkel J, earlier this year: Australian Prudential Regulation Authority v Siminton (No 2) [2006] FCA 336. However, Tracey J also noted that Mr Siminton had raised what his Honour described as a "novel complaint", namely that the proceeding had been brought unconstitutionally because it was said to provide for the acquisition of Mr Siminton's property by APRA, or the Commonwealth, without just terms. 3 Tracey J set out his reasons for dismissing Mr Siminton's application at [3]-[8] of his ruling. He rejected the contention that the various interlocutory processes engaged in by APRA constituted evidence of a collateral purpose which rendered the proceeding an abuse of process. He noted that the constitutional argument had not been raised in Mr Siminton's defence to the proceeding. He declined to deal with the merits of that argument, saying simply that if it had any substance, it could be raised at the trial. Finally, his Honour rejected a submission that there was "no evidence" to support the allegations made by APRA, noting that this same claim had been made before Merkel J, and failed. When it was said by Mr Siminton that APRA had not, in the intervening period, supplied evidence to fill the void that allegedly existed in its case (namely, the lack of any evidence to demonstrate that Mr Siminton had carried on a "banking business" as defined in s 5 of the Banking Act 1959 (Cth)), his Honour replied that APRA was not under any obligation to supply such evidence. The time for it to be supplied would be when the matter was being readied for trial. If it turned out that there was no evidence to support APRA's claims, Mr Siminton could then move for summary judgment. 4 The principles upon which leave to appeal from an interlocutory judgment will be granted are clear. They are set out in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. 5 I have been provided with a draft notice of appeal upon which Mr Siminton proposes to rely if leave to appeal is granted. It raises what Tracey J described as the "no evidence" ground. However, it also contends that his Honour erred in construing s 65A of the Banking Act , and, in addition, raises the s 51(xxxi) constitutional ground. 6 It was submitted by Mr Sharp, who appeared on behalf of Mr Siminton this morning before me, that leave to appeal should be granted because Tracey J had erred in rejecting the "no evidence" ground. Mr Sharp referred to a "concession" by counsel for APRA before Sundberg J, who granted the original interlocutory injunction in this matter in December 2005, that APRA at that time had no evidence of any actual lending by Mr Siminton's "bank", but only evidence of an intention to lend in the future. It was submitted that there could not be a contravention of s 7 of the Banking Act without both receipt of depositors' money, and lending of that money. 7 In response, Mr Hibble, on behalf of APRA, submitted that APRA had evidence of lending, and would produce that evidence in accordance with any timetable laid down by Tracey J. He submitted that Mr Sharp's application was premature, and that whatever may have been said to Sundberg J, in the course of an urgent application for interlocutory relief, should not be regarded as APRA's actual position in the primary proceeding. 8 In my view, Tracey J's conclusion that this issue should await the filing of evidence by APRA was not attended with sufficient doubt to warrant the grant of leave to appeal. Indeed, I consider that conclusion to be plainly correct. APRA has pleaded, in paragraph 5(a) of its Statement of Claim, that between January 2004 and "the present" Mr Siminton "has loaned money to members of the public", as well as pleading in paragraph 5(b) that he had "stated an intention to loan money to members of the public". If APRA cannot produce evidence to support the allegation contained in paragraph 5(a), that may mean that its claim against Mr Siminton for having contravened s 7 of the Banking Act will fail, and that point can be addressed by way of an application for summary judgment. However, at this stage, it would be quite wrong to stay or dismiss this proceeding simply because APRA has not yet produced this evidence. 9 Mr Sharp submitted that APRA had been under a duty not to plead facts for which there was no evidence available. That states the principle too narrowly. The duty is not to allege facts unless there is a proper basis for making that allegation. A genuine belief, on reasonable grounds, that admissible evidence will be forthcoming to support an allegation can be sufficient to justify its being made. I am not persuaded that there is an adequate basis for inferring some impropriety on the part of APRA in its early pleading in this matter. 10 Mr Sharp's submission regarding the proper construction of s 65A , and particularly the term "damages" in s 65A(11) , seems to me to be without merit. I see no reason why statutory damages of the kind contemplated in that provision should not encompass restitution of monies paid by depositors who were misled by Mr Siminton's use of the term "bank" in connection with his business. That is not to say that any such depositors were misled. It may be, as Mr Sharp submitted, that they all went into this venture with their eyes entirely wide open. If that is so, the assurances given by APRA regarding the ultimate disposition of the funds presently frozen provide adequate safeguard for Mr Siminton's interests, as well as those of participating depositors. 11 Mr Sharp's constitutional argument may, or may not, have merit. I agree with Tracey J that the time for that argument to be raised is after the affidavits have been filed, and all interlocutory processes have been completed. There should be a proper defence drawn, relying upon s 51(xxxi), and proper opportunity for submissions. At this stage, I am not persuaded that Tracey J's approach to this issue was attended with any error. Accordingly, I would not grant leave to appeal on this point. 12 Nor would I grant leave to appeal upon the basis of the matters raised by an offer made by Mr Siminton to settle the proceeding on terms set out in a letter dated 30 August 2006. APRA's rejection of that offer in no way renders the primary proceeding an abuse of process. 13 It follows that I would refuse leave to appeal from Order 1 of the Orders made by Tracey J on 6 October 2006, dismissing Mr Siminton's notice of motion dated 27 September 2006. 14 I should add that Mr Sharp also sought to agitate the correctness, or otherwise of a further order made by Tracey J on 6 October 2006, requiring Mr Siminton to report to the Nunawading Police Station each Thursday between 9 am and 5 pm commencing on 12 October 2006. That order was not the subject of the formal application for leave to appeal before me today. However, APRA did not object to my dealing with Mr Sharp's challenge to that order. Indeed, APRA indicated that it did not object to my vacating the order entirely, having regard to the fact that Mr Siminton presently is not facing any charge of contempt, and is not in immediate danger of imprisonment. In those circumstances, I am prepared to vacate that order, and will do so. | application for leave to appeal from an interlocutory judgment dismissing motion to stay or summarily dismiss proceeding whether interlocutory judgment attended with sufficient doubt to warrant leave being granted. practice and procedure |
Pursuant to s 19 of the Act, the second respondent determined that the applicant was eligible for surrender to the United States of America. Her Honour ordered under s 19(9) of the Act that the applicant be committed to prison to await surrender or release. The orders sought by the applicant included that the provisional arrest warrant issued under s 19(9) be quashed and that he be released from custody. He subsequently served a sentence of imprisonment in Australia and was released on parole on 17 March 2005. On the day of his release, he was arrested under a provisional arrest warrant which had been issued by a magistrate under s 12 of the Act. The applicant has been remanded in custody since that time. 3 On 12 May 2005, the Minister for Justice and Customs signed a notice of receipt of extradition request under s 16(1) of the Act ('the notice'), which stated that an extradition request had been received from the United States. On the same date, the applicant was served with the notice and extradition documents from the United States. The extradition offences specified in the notice were certain drug offences in contravention of the United States Code. 4 On 24 November 2005, the second respondent conducted a hearing pursuant to s 19 of the Act. 'The Magistrate erred in considering that the applicant had a reasonable time in which to prepare for the conduct of the s 19 proceedings, as required by s 19(1)(d) of the Act, and thus a jurisdictional fact necessary before the Magistrate could commence the proceedings did exist. 'The Magistrate committed a jurisdictional error by denying the Applicant procedural fairness in the s 19 proceedings. 'The Magistrate erred in applying s 19(2)(c) of the Act by failing to consider whether exposure to being convicted of two offences in the United States of America, arising from the same conduct, would be possible in Australia and, if not, whether this offended the principle of dual criminality. The issue arose in the following way during the hearing on 24 November 2005. Counsel appearing for the United States submitted that it was necessary for the second respondent to be satisfied about the matters referred to in s 19(1). Those matters were variously described as jurisdictional facts or preconditions of which the second respondent must be satisfied before embarking upon the hearing. Counsel handed the second respondent a copy of the Act and relevant regulations which led the second respondent to ask of the applicant whether he had a copy of the Act. He replied that he did. The second respondent then asked him whether he was ready to have the matter heard and determined. The applicant indicated that he was ready. 9 Counsel for the United States took the second respondent to the terms of s 19(1)(a), (b) and (c) or the matters they raised. Counsel then commenced to address paragraph s 19(1)(d). The second respondent invited comment from the applicant. The applicant indicated that he wished to make submissions and then referred to his circumstances. Those submissions were that he was classified as an "extreme high risk prisoner", he had had no access to a law library, nor to computers or welfare workers, and was not able to have law books or legal materials sent in to him. He submitted that, in those circumstances, he had had no way of preparing for the case. The second respondent asked the applicant whether he had made an application for legal aid. The applicant replied that he had and that his application had been refused, although it had taken five months for that decision to be made. The second respondent then suggested that he was indicating that he would never have enough time to prepare, to which he replied affirmatively and said that it was impossible to be prepared "under these conditions". 10 The second respondent then expressed her conclusion about whether the applicant had had reasonable time in which to prepare for the conduct of the proceedings. Mr Brock has submitted that he would never been in a position or would never have enough time given the nature of the matter [sic] in which he is currently being held in custody, that he has not had access to the law library and he has no way of preparing for his case, and that legal aid has been refused. What I of course have to be satisfied of is whether he has had a reasonable time in which to prepare for the conduct of the proceedings. The time factor is such that he has been aware - the documents have been served upon him some six months ago now and that certainly is a reasonable time in which to prepare for the proceedings. There may be other factors which have impacted upon Mr Brock which has caused him not to be able to prepare and, as he says, never be able to prepare, but time certainly is not one of those factors and he has - I am satisfied that Mr Brock has had reasonable time in which to prepare for the conduct. I am therefore satisfied that the jurisdictional issues which are raised in section 19(1) have been satisfied. On that view, the second respondent focused only on the time that had elapsed between the provision of the extradition documents and the hearing and divorced that fact from the specific considerations raised by the applicant about his circumstances in detention. 12 What the paragraph raises for consideration is whether the person on remand has had reasonable time to prepare. That is not determined in the abstract by simply identifying the period which has elapsed between the provision of the extradition documents and the time of the hearing. The circumstances of the person on remand during that period would often inform the question of whether there had been reasonable time. To take an extreme example, a person in remand may have been provided with the documents, but within days seriously injured in a motor vehicle accident and rendered unconscious. That person may then have been in a coma for weeks and thereafter unable, any realistic sense, to consider the material for several further months. Those circumstances would be relevant when considering whether that person had had reasonable time to prepare. In the present case, the facts asserted by the applicant about his inability to access resources relevant to his preparation, were relevant though what weight they were to be given, is an entirely different matter. 13 However, the remarks of the second respondent should not be scrutinised as if they were considered reasons for judgment in curial proceedings. They were observations made ex tempore by a magistrate who was exercising an administrative function. It is apt that they be approached in the same way that a Court would approach the decision of an administrative decision maker. Notwithstanding these circumstances, her Honour took the view that a considerable period of time had elapsed and that, on balance, she considered the applicant had had a reasonable time in which to prepare. Viewed this way, the second respondent addressed the issue raised by s 19(1)(d) and formed a view which was open on the material. 15 Some further observations can be made in relation to the material which the applicant provided to the second respondent. The applicant's claims of not having access to a law library, not being able to have law books sent to him overstated his predicament. It is true that a decision had been made that he was not allowed access to the library. However, a note recording that decision (which was included in the material provided by the applicant to the second respondent) stated that an inmate in the applicant's position could request through staff for books to be made available. 16 It was also contended on behalf of the applicant that he had been denied procedural fairness. Counsel for the applicant conceded at the hearing that the facts and reasoning underpinning that submission were the same as those concerning the alleged error attending the second respondent's consideration of the matter raised by s 19(1)(d). Accordingly, my rejection of the argument concerning statutory provision carries with it the rejection of the argument concerning the denial of procedural fairness, if it was an argument open to the applicant. The applicant has not demonstrated an error on the part of the second respondent in considering the matter raised by s 19(1)(d). 17 One further matter remains to be mentioned. Counsel for the applicant relied on the judgment of the Full Court in Knauder v Moore [2002] FCAFC 404 ; (2002) 127 FCR 327. In that matter, the primary Judge concluded that the fugitive had been denied procedural fairness but went on to consider, in the review, whether the fugitive was eligible for surrender. In the appeal, Allsop J (Mansfield J agreeing) concluded there had been a denial of procedural fairness, with Conti J reaching the same conclusion. However, all members of the Full Court concluded that the primary Judge had erred in considering whether the fugitive was eligible for surrender. 18 With respect to their Honours, it is not entirely clear how issues of procedural fairness can arise in a review under s 21. The Act mandates that the magistrate be satisfied that the fugitive had reasonable time in which to prepare. At least if it was a contentious point, I would be inclined to the view that in a review, the Court would have to consider whether the fugitive had had a reasonable time to prepare for the review. It seems more likely that the Act would require that issue to be determined by reference to the time at which the review was undertaken rather than the time at which the matter was before the Magistrate. 19 It is doubtful, in my opinion, that an application under s 21 of the Act exposes the magistrate's decision to scrutiny by reference to the various grounds of judicial review arising under statute or at common law. That is not to say that proceedings relying on such grounds could not be commenced in this Court. While the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act') has no application to decisions under the Act (see s 3 and cl (r) of Sch 1 of the ADJR Act), it appears that alternative modes of challenge are available: see the observations of Kirby J in Pasini v United Mexican States [2002] HCA 3 ; (2002) 209 CLR 246 at [95] . 20 The application is dismissed with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | review of magistrate's decision that applicant was eligible for surrender where magistrate found that jurisdictional facts in s 19(1) of the extradition act 1988 (cth) were satisfied whether applicant had 'reasonable time in which to prepare' for purposes of s 19(1)(d) 'the person ... had reasonable time in which to prepare for the conduct of such proceedings'' extradition words and phrases |
2 The Appellants arrived in Australia on 7 December 2006 and applied on 18 December 2006 for Protection (Class XA) Visas. The wife's application is dependent upon the success or failure of her husband's application. 3 Neither application as made to the Department of Immigration and Multicultural and Indigenous Affairs provides any detailed factual account. The husband's application thus answers a question " Why did you leave that country? " by stating " Because of my religion and [a] political conspiracy against me ". The form of application thereafter stated: " Please look into my statement ". A statement provided also referred to bomb blasts that had occurred in Mumbai and the difficult situation encountered by the husband " because I was employer and having both castes people like Hindus and Muslims as my workers in my factory ". 4 The husband's application was refused by a delegate of the Respondent Minister in February 2007. 5 An application for review was thereafter lodged with the Refugee Review Tribunal. The Tribunal invited the Appellants to appear before the Tribunal but there was no reply to that invitation. The Tribunal by way of a decision signed on 19 April 2007 affirmed the decision not to grant the Protection (Class XA) Visas. In its decision the Tribunal noted that there was no onus of proof upon the now Appellants but further observed that it was no part of the Tribunal's task to make out the case for a claimant. The failure of the now Appellants to appear before the Tribunal, it was observed, left the Tribunal " with claims which are untested and stated in the most general terms ". 6 The Federal Magistrates Court dismissed an application seeking to impugn the decision of the Tribunal. The present proceedings are an appeal against the decision of the Federal Magistrates Court. (2A) The Tribunal is not obliged under this section to give particulars of information to an applicant, nor invite the applicant to comment on or respond to the information, if the Tribunal gives clear particulars of the information to the applicant, and invites the applicant to comment on or respond to the information, under section 424AA. 8 The appeal is considered to be without substance for either of two reasons. 9 First, the " certain adverse information used by the Tribunal " has not been identified. The proceedings before the Tribunal did not involve, as do many applications for review, an assessment of competing accounts of factual events. But no breach can be established unless the particular " information " which it is claimed needs to be the subject of an invitation to comment upon or respond to can be first identified. 10 The First Appellant appeared unrepresented before this Court this morning but did have the benefit of an interpreter. Other than expressing a desire to stay longer in Australia, he provided no assistance as to the " certain adverse information " to which his Notice of Appeal refers. Indeed, it was unclear whether the complaint was directed to the use of information already provided or whether the complaint was more directed to the lack of an opportunity to provide further information. If the latter, it is considered that adequate opportunity has already been extended in which to provide information. 11 Second, the " information " considered by the Tribunal and the " information " which it ultimately considered did not make out the Applicant's case was that in fact supplied by the Applicant. Such " information " is not " information that the Tribunal considers would be the reason, or part of the reason, for affirming the decision that is under review " within the meaning of s 424A(1)(a). 12 The contents of such " information ", as was observed in SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [17] , [2007] FCA 26 ; 235 ALR 609 at 615 by Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ, " if ... believed ... would, one might have thought, have been a relevant step towards rejecting, not affirming, the decision under review . " Moreover, it was the inadequacy of the materials provided by the now Appellants that was the " reason " for the Tribunal's decision. Where it is the Tribunal's " disbelief of the appellant's evidence arising from inconsistencies therein, it is difficult to see how such disbelief could be characterised as constituting 'information' within the meaning of para (a) of s 424A(1) ": SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [18] , [2007] FCA 26 ; 235 ALR 609 at 616. 13 No question arises in the present proceedings of the Tribunal ascribing to particular information provided by an applicant a significance or relevance of which an applicant may have been unaware: VAF v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 123 at [26] ---[28], [2004] FCAFC 123 ; 206 ALR 471 at 477---8 per Finn and Stone JJ. And no question arises as to a particular significance or relevance being attached to " information " provided to the Tribunal, as opposed to " information " provided for the purposes of the visa application: Minister for Immigration & Multicultural Affairs v Al Shamry [2001] FCA 919 , 110 FCR 27. The " reason " for the Tribunal's decision was simply the inadequacy of any of the materials provided by the now Appellant. It remains for the first named applicant to satisfy the Tribunal that all of the statutory elements are made out. Although the concept of onus of proof is not appropriate to administrative inquiries and decision-making the relevant facts of the individual case will have to be supplied by the applicants themselves in as much detail as is necessary to enable the decision maker to establish the relevant facts. The Tribunal is not required to make the applicants' case for them. Nor is the Tribunal required to accept uncritically any and all of the allegations made by applicants. ( MIEA v Guo & Anor [1997] HCA 22 ; (1997) 191 CLR 559 at 596, Nagalingam v MILGEA [1992] FCA 470 ; (1992) 38 FCR 191 , Prasad v MIEA [1985] FCA 47 ; (1985) 6 FCR 155 at 169-70. The Tribunal was unable to explore with the first named applicant who the "antisocial elements' were that threatened him, when he was threatened, how he was threatened, whether he reported the threats to the police and, if so, what action the police took, who the people were he suspects attacked him, when he was attacked, how he was attacked, whether there were any witnesses present, whether he reported the attack to the police and, if so, what action the police took, whether he had considered relocation within India and what is likely to happen to him if he were to return to India in the foreseeable future. The information that the first named applicant has submitted does not provide the necessary detail for the Tribunal to be satisfied as to the veracity of his claims or that he has a well founded fear of persecution. Further the Tribunal has not been able to discuss with the first named applicant independent country information which may be relevant to his particular claims. In these circumstances the Tribunal is unable to be satisfied that the first named applicant has a well founded fear of persecution for reasons of his political opinion or any other Convention based reason. It was not relying on information communicated to or received by the Tribunal but setting out its thought processes. It would be an inadequate and misleading statement to say that the information was the reason or part of the reason for the decision. It was the lack of the requested further assistance and explanation that was the reason. 16 The appeal should thus be dismissed. Appeal dismissed. 2. The Appellants to pay the costs of the First Respondent of and incidental to the appeal. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | migration act 1958 (cth) information supplied by appellants not 'information' for the purposes of s 424a(1) information supplied not sufficient to make out a case migration |
These reasons should be read in conjunction with those in Morrison . 2 Mr Morrison is the sole director, company secretary and sole shareholder of Morrison Clothing. The Order required Mr Morrison, both on his own behalf and on behalf of Morrison Clothing, to give discovery of the documents requested by the applicant (in its Request for Categories of Documents to be Discovered dated 9 August 2007) by serving a list of documents required to be disclosed and an affidavit verifying the list of documents on or before 19 October 2007. I concluded that the brief affidavit filed by Mr Morrison did not comply with the Order and that Mr Morrison's conduct was not merely casual, accidental or unintentional but constituted wilful disobedience of the Court's order. 3 The applicant seeks an order that Mr Morrison be fined $50,000.00 for his contempt. No penalty is sought against Morrison Clothing, which is now in liquidation. 4 It is now well established that the Court has power to impose a fine for contempt of Court: see s 31 of the Federal Court of Australia Act 1976 (Cth) and Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 ; BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] FCA 336 ; Australian Competition and Consumer Commission v Dynacast (Int) Pty Ltd (2007) ATPR 42-156 ; Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118 ; (2006) 152 FCR 129. This is the way in which the Court preserves respect for its role and the rule of law. Without the enforcement of court orders the whole process of adjudication becomes a hollow exercise. If a losing party can defy the orders of the Court then such disobedience renders futile, in the perception of the community, the remedy secured by the successful party. Orders are not made simply to suggest or advise persons that they ought to keep to the law as proclaimed but to ensure that the law is carried out as determined by the decision pursuant to which the order is made. Defiance of court orders diminishes the authority of courts and removes the incentive of parties, if such conduct is left unpunished, to comply with the requirements of the courts. See also Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd [2002] FCA 949 ; (2002) 121 FCR 24 at 54; Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2003] FCA 1501 ; (2003) 204 ALR 537 at 540. 8 The findings of contempt followed a pattern of disregard for the Court's orders by Mr Morrison and Morrison Clothing. Notably Morrison Clothing has failed to file a defence, in defiance of an order of the Court that it do so. It has failed to appear at four directions hearings and two Court-ordered mediations. The contempt hearing was adjourned from November 2007, to December 2007, and then to February 2008 for the benefit of Mr Morrison and Morrison Clothing. Despite this, Mr Morrison and Morrison Clothing did not appear at the hearing in February, nor was any material filed on behalf of Mr Morrison or Morrison Clothing. The matter was finally heard in April 2008. Mr Morrison appeared on his own behalf and on behalf of Morrison Clothing. During the hearing Mr Morrison was permitted to give oral evidence. He denied that he or Morrison Clothing were in contempt and offered no apology. 9 Mr Morrison was solely responsible for the company's failure to comply with the Order. He has taken no steps to purge the contempt. 10 A penalty hearing was held on 10 October 2008. Again, Mr Morrison did not appear; nor did anyone appear on behalf of Morrison Clothing. No material was filed on behalf of Mr Morrison or Morrison Clothing. While the Court is aware that Morrison Clothing is in liquidation, the Court has no knowledge of Mr Morrison's personal circumstances or his financial means. The Court is not aware of any prior convictions of Mr Morrison or Morrison Clothing. 11 In my view, the failure by Mr Morrison to comply with the Order and the lack of any contrition on the part of Mr Morrison assumes particular significance in light of the subject matter of the principal proceeding and the effect of the contempt on the administration of justice. 12 In the principal proceeding, the applicant sought the imposition of penalties against Morrison Clothing pursuant to s 719 of the Workplace Relations Act 1996 (Cth) ("the WR Act ") for breaches of clauses 46 and 48 of the Clothing Trades Award 1999 . Clauses 46 and 48 regulate the terms and conditions of outworkers. The Award is intended to regulate the use of outworkers in the clothing industry to ensure that outworkers receive their minimum entitlements. The relevant provisions of the Award were specifically designed to remedy the exploitation of this vulnerable group of workers: see Clothing Trades Award 1982 Print R2749 and cf the observations of Marshall J in Textile Clothing and Footwear Union of Australia v Southern Cross Clothing Pty Ltd [2006] FCA 325 . The work records of Morrison Clothing are essential for the applicant to prove its case. The failure of Mr Morrison to provide discovery of the work records has severely limited the ability of the applicant to continue the proceedings. As the applicant submits, if Mr Morrison is permitted to ignore the Order he is able to circumvent the outworkers' regulatory regime. In those circumstances, and particularly in light of the objectives of that regime, the amount of the penalty should be sufficient to deter Mr Morrison and others from conduct designed to circumvent the legislative protections which are provided for outworkers. 14 For the forgoing reasons, I consider that it is appropriate that Mr Morrison be fined $10,000.00. 15 During the penalty hearing, I raised with counsel for the applicant whether any penalty imposed against Mr Morrison might be lessened if Mr Morrison provided discovery within a specified time frame. The applicant opposed this course of action. Nonetheless, I am prepared to give Mr Morrison one final opportunity to purge his contempt by making discovery. I propose that he should be given a period of 30 days from the date on which the order is pronounced to purge his contempt by filing a comprehensive affidavit of discovery in accordance with the Order which remains in force. If he files such an affidavit within the time prescribed, the amount of the fine will be reduced. If he does not purge his contempt in this manner, Mr Morrison will be required to pay the full amount of the fine imposed. The Courts have recognised that parties who prosecute contempt proceedings are performing a public duty and that it is appropriate that a costs order be made so they are not out of pocket: see BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] FCA 336. 17 As the principal proceeding was a matter arising under the WR Act it is necessary to consider whether the contempt proceeding was also a matter arising under that Act, in which case s 824 would prevent the Court from ordering Mr Morrison and/or Morrison Clothing from paying the applicant's costs of the motion. It is well established that a motion for contempt is separate and distinct from the principal proceeding: see Real Tech Systems Integration Pty Ltd v Meuross (1998) 82 FCR 150 at 151 referring to O'Shea v O'Shea (1890) 15 PD 59. In National Union of Workers v Davids Distribution Pty Ltd [1999] FCA 1109 ; (1999) 91 FCR 513 the National Union of Workers appealed against a finding of contempt by Smart J of the Supreme Court of New South Wales. A Full Court of this Court said (at 522 --- 523) that the contempt proceeding was not a matter arising under the WR Act , and therefore s 347 (the predecessor of s 824) did not stand in the way of a costs order. See also Welfare v Birdon Sands Pty Ltd (1997) 79 FCR 220 at 235 and Gregory v Philip Morris Ltd (1987) 74 ALR 300 at 308. It is clear on the authorities that s 824 of the WR Act does not apply to contempt proceedings. 18 In my view, the costs order proposed by the applicant is appropriate in the circumstances of this case. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | penalty hearing considerations relevant to penalty contempt found to be wilful fine imposed contempt |
It allows for discovery to identify a respondent, discovery from a prospective respondent, discovery from a non-party, inspection of discovered documents and inspection, measurement, photocopying, preservation, custody and detention of property, the taking of samples, carrying out of experiments etc. (cf. Order 17 rule 1 of the Rules in respect of inter-partes proceedings which have already been commenced). 2 Order 15A rule 2 ensures that a person providing discovery under Order 15A is not required to produce documents which, on the ground of privilege, the person could not be required to produce. Division 2 of that Order deals with inspection and includes rules 10 --- 14. All documents (including but not limited to, correspondence and notes of any discussions between the Respondent or any officer, servant or agent of the Department of Communications, Information Technology and the Arts (the Department ) and OPEL Networks Pty Limited ( OPEL )) relating to the possibility of any applicant for funding under the Broadband Connect Infrastructure Program (the Program ) being able to submit an application seeking more than $600 million of funding, or being provided with funding in excess of $600 million, either under the Program or in addition to funding available under the Program. All applications made by OPEL for funding under the Program and for any additional funding for its proposed infrastructure projects as described in the media release entitled "Australia Connected: Fast affordable broadband for all Australians" issued by the Respondent on 18 June 2007. All documents recording the decision to award funding under the Program to OPEL. The party has in his possession ... the documents enumerated in Schedule 1. However, in relation to the issues which are germane to the determination of an Order 15A rule 6 application, it is well established that the applicant's evidence may be tested and that a prospective respondent may tender evidence going to those issues. This subsidy model has already resulted in more than one million extra broadband connections in Australia. In regional Australia in (sic) can break down the tyranny of distance and help deliver essential health and education services through telemedicine and e-learning services," Senator Coonan said. The overwhelming majority of the 69 responses strongly supported the Government's proposed alternative infrastructure-based approach outlined in the EOI," Senator Coonan said. The Government intends to use the substantial funding it has allocated under the Connect Australia package to revitalise communities in rural, regional and remote Australia. The opportunity to provide a response to the EOI was available to all interested parties, including carriers and service providers. As a result, the Australian Government is now implementing a Broadband Connect Infrastructure Program and is seeking applications for funding from interested parties on a competitive basis in accordance with these guidelines. The intent is to collectively provide sustainable wholesale broadband services as widely as possible across the geographic areas covered under the existing Broadband Connect program in order to provide broadband access to currently under-served areas and premises. Funding will not be provided to support the ongoing operation of networks established through the program. Only one funding round will be held. Depending on the nature of the applications received, the Australian Government may not allocate any or all available funds. Funding will support infrastructure that will service under-served areas or premises that otherwise would not get timely access to metro-comparable services through commercial investment alone. This is because under-served premises are located throughout regional, rural and remote areas, including in regional and rural cities and towns as a result of technology impairments (e.g. RIMs and pair gains). It is expected that proposed projects would cover at least 95 per cent of under-served premises within the target coverage area. In relation to geographic areas this means that proposed projects must offer coverage across the populated parts of contiguous regional areas, given that under-served premises are generally located throughout such populated areas. Should the Australian Government be unable to finalise a funding agreement (or any other required documentation) with a preferred applicant, the Australian Government may, at its sole discretion, decide to grant funding to another applicant and invite that applicant to finalise a funding agreement and any other required documentation. It is the Australian Government's preference that the funding entity be fully responsible for all of the obligations in the funding agreement, regardless of whether there are in fact other organisations (project participants) involved in the roll-out of infrastructure and/or the provision of services. It is not a requirement that assets purchased with the financial support of the Australian Government be vested in the funding recipient, with whom the Australian Government executes a funding agreement. The letter recorded that the Prime Minister had on 18 June 2007 announced that the Government intended to enter into a funding agreement with OPEL Networks Pty Ltd. The letter indicated that the OPEL Networks proposal was considered to offer the Government the 'best value for money'. 16 By a letter dated 19 July 2007 the Group General Counsel of Telstra wrote to the Minister and drew attention to an announcement 'Australia Connected: Fast affordable broadband for all Australians' in which the Minister had apparently stated that the Australian Government had awarded to a consortium of Singtel Optus and Elders (OPEL) 'a total of $958 million in funding from the Broadband Connect Infrastructure program ... and an additional funding allocation'. The Guidelines also stated that the basic principles underlying the selection process were to ensure that "all applicants are treated in a fair and equitable manner" and that the Government would "notify all applicants ... of any changes to [the] guidelines". Accordingly, Telstra's application was excluded from further consideration at the completion of benchmarking (by decision of the assessment panel on or about 14 February 2007). not until after OPEL's selection as preferred applicant), DCITA and OPEL also explored options to extend coverage of the OPEL solution to a greater number of under-served premises if additional funding was to be provided. OPEL was requested to provide a separate proposal in relation to the relevant additional benefits and coverage. On 5 June 2007 the Government agreed to OPEL's additional proposal. Paragraphs 1 --- 5 and 8 --- 10 inclusive of the Notice to Produce dated 22 August 2007 (Exhibit AM2) issued by the respondent, be set aside. The costs of the motion be costs in the Order 15A rule 6 Amended Application filed 9 August 2007. Such further or other order as the Court deems fit. 22 On 10 August 2007 the Minister served a Notice to Produce in accordance with Order 33 rule 12 of the Rules upon Telstra. Order 33 deals with 'EVIDENCE: GENERAL'. One example where affidavits were filed was Conrock Ltd v CSR Ltd (1990) 96 ALR 690. In that case, Pincus J finally made no order for costs against the respondent, notwithstanding that the applicant was successful. The affidavits went to the question of confidentiality of documents as well as a claim that compliance with the pre-action discovery would be oppressive and onerous. In Legent Corp v Fundi Software Services Pty Ltd (unreported, Federal Court, Lockhart J, No G134 of 1992, 13 July 1992), affidavit evidence was filed by both the applicant and respondent and cross-examination was foreshadowed. However, the matter settled. Justice Lockhart observed (at 7) that the parties could not necessarily assume that they would have a right to cross-examine. His Honour cites no authority for this proposition. Perhaps what his Honour meant was that the Court would control, in its discretion, the extent of cross-examination, having regard to the issue between the parties. One can only speculate. It seems that Gummow J in Aitken v Neville Jeffress Pidler Pty Ltd (1991) 33 FCR 418 allowed the issue of a notice to produce and that it was answered. Likewise, it would seem that a notice to produce was issued in Legent and in CGU [ CGU Insurance Ltd v Malaysia International Shipping Corp Berhad [2001] FCA 681] . It is not clear from the report of Aitken or Legent that any argument was directed at the question whether a notice to produce could issue and in those circumstances it is difficult to treat these cases as authority for the view that there is power to issue a notice. On the other hand, it is perhaps not irrelevant that it is only since CCA Beverages [ CCA Beverages (Adelaide) Ltd v Hansford (unreported Federal Court, S G58 of 1991, O'Loughlin J, 15 November 1991)] that there was thought to be a difficulty with that power. 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. 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. A potential abuse of process might have arisen were Telstra to have issued a Notice to Produce to the Minister requiring the production of the very documents which a discovery order may identify. 26 Telstra's objection to the Minister's Notice to Produce urged that 'none of the documents sought in the Notice are relevant to the issues in the present proceeding'. 27 The Minister's original Notice to Produce dated 10 August 2007 called for the production of documents covered by 16 separate paragraphs. By a Notice of Motion filed 14 August 2007 Telstra sought an order that the initial Notice to Produce dated 10 August 2007 be set aside. 28 On the return date for the Notice of Motion filed 14 August 2007 the Minister informed the Court of her intention to inform Telstra in writing by no later than 4:15 pm on 17 August 2007 whether she required Telstra to respond to the initial Notice to Produce dated 10 August 2007 or whether she would withdraw that Notice to Produce and serve a fresh Notice to Produce. The Minister through her counsel indicated that any fresh Notice to Produce would be served no later than 4:15 pm on 17 August 2007. 29 The Minister did not press for compliance with her initial Notice to Produce. 30 On 21 August 2007 an order was made by consent that Telstra's Notice of Motion filed 14 August 2007 seeking relief in respect of the Minister's initial Notice to Produce dated 10 August 2007 be dismissed with no order as to costs. 31 By that time the Minister had served upon Telstra a fresh Notice to Produce dated 17 August 2007 which called for the production by Telstra of documents covered by 12 separate paragraphs. 32 On 21 August 2007 leave was granted to Telstra to file in Court a fresh Notice of Motion dated 20 August 2007 returnable instanter seeking to set aside the Minister's second Notice to Produce issued on 17 August 2007. The hearing of that Notice of Motion commenced on 21 August 2007 and concluded on 22 August 2007. Telstra read two affidavits of Geoffrey Edward Healy, a partner at Freehills, the solicitors for Telstra, sworn 20 and 21 August 2007 respectively and also an affidavit of Paul Smith sworn 2 August 2007 upon which Telstra intended to rely at the hearing of its Amended Application filed 9 August 2007 for discovery in accordance with Order 15A rule 6 of the Rules, which is presently fixed for hearing on 13 September 2007. 33 On 22 August 2007 the Minister served a third form of Notice to Produce dated 22 August 2007 on Telstra seeking the production before the Court on 22 August 2007 or such other date as the Court may direct of documents covered by 12 separate paragraphs. The third Notice to Produce became Exhibit AM2 on the hearing of Telstra's Motion. Leave was granted to Telstra to amend its Notice of Motion dated 20 August 2007 to confine it to one seeking to set aside paragraphs 1 to 5 and 8 to 10 inclusive of the Minister's third Notice to Produce. 34 Along the way, Dr J E Griffiths SC, senior counsel for Telstra, produced two redacted forms of Notice to Produce with which Telstra was prepared to comply but agreement was not reached between the parties on the scope of an appropriate Notice to Produce. 35 A copy of the Minister's third Notice to Produce dated 22 August 2007 (Ex AM2) is attached to these reasons for judgment as Appendix 'A'. 36 In the light of the narrowing by the Minister of the requirement for the production of documents in accordance with paragraphs 6, 7, 11 and 12, Telstra has withdrawn its objection to the production of documents in response to those paragraphs as recorded in the Minister's third form of Notice to Produce (Ex AM2). 37 This leaves for consideration the documents covered by paragraphs 1 --- 5 and 8 which Telstra contends lack relevance and the production of which Telstra submits would be oppressive. All documents recording or referring to any consideration (including any decisions made in relation thereto) by Telstra as to whether or not it had sufficient information to commence proceedings for relief (other than the present proceedings for preliminary discovery) against the Minister for Communications, Information Technology and The Arts or the Commonwealth in relation to the BCIP. 39 By the handing up in Court of a draft form of Notice to Produce at about 11:36 am on 22 August 2007 Telstra indicated, through its counsel, its willingness to comply with such a Notice to Produce. All documents recording or referring to Telstra being in a position to decide to commence a legal challenge or legal proceedings, as referred to in paragraph 9 above. All documents recording or referring to any decision made by Telstra as to whether or not it had sufficient information to commence proceedings for relief (other than the present proceedings for preliminary discovery) against the Minister for Communications, Information Technology and The Arts or the Commonwealth in relation to the BCIP. 41 Eli Lilly Australia Pty Limited apparently wrote a letter dated 16 April 1996 to pharmacists throughout Australia in relation to Alphapharm Pty Limited's anti-depressant drug 'Zactin' and Eli Lilly Australia Pty Limited's competing anti-depressant drug 'Prozac', which had been on the market for a much longer time than Zactin. Alphapharm Pty Limited complained to Eli Lilly Australia Pty Limited about the letter. Eli Lilly Australia Pty Limited's solicitors responded to the effect that their client had in its possession material which fully supported the allegations. This led Alphapharm Pty Limited to apply for an order pursuant to Order 15A rule 6 of the Rules for discovery by Eli Lilly Australia Pty Limited of such material so that Alphapharm Pty Limited would be able to decide whether to commence a proceeding in the Court against Eli Lilly Australia Pty Limited alleging that the letter was misleading or deceptive in contravention of s 52 of the Trade Practices Act 1974 (Cth). Paragraphs 6 (a) and 6 (c) pose an objective test, the opening words "there is" in each paragraph signifying "there exists"; but the "insufficiency test" of para 6 (b) has both subjective and objective aspects. Although I need not explore the subjective aspect fully, it seems clear that if the evidence went so far as to show that a particular applicant was already able to decide to commence a proceeding by, for example, showing that the applicant had in fact decided to do so, para 6 (b) would not be satisfied even though the information available did not satisfy the objective aspect of the insufficiency test referred to below. The fact that a particular applicant genuinely feels unable, because of a lack of information, to decide to commence a proceeding does not, without more, satisfy para 6 (b); the objective aspect of the paragraph requires it to be shown as an objective fact that the applicant lacks "sufficient information to enable a decision to be made whether to commence a proceeding". In my view, the objective aspect of para 6 (b) invokes a notion of "reasonable sufficiency", the question raised being whether it is reasonable that the applicant for an order be required to take its decision without having the information to become available from inspection of the document or documents of which discovery is sought. If the insufficiency test is satisfied, a second question will arise, namely, whether the Court's discretion should be exercised in favour of the making of an order. The questions posed by rule 6 and referred to above are to be answered in the context of an adversary system of forensic contest in which a proposed respondent is ordinarily entitled to withhold its evidence, certainly prior to the commencement of proceedings. The questions are also to be answered in the light of the nature of the "cause of action" contemplated and the range of information potentially available in respect of a cause of action of that kind. Contrary to a submission of Eli Lilly, in my opinion rule 6 is not necessarily rendered unavailable by the fact that the applicant already has available evidence establishing a prima facie case for the granting of relief. This is made clear by the reference in para (a) to the existence of "reasonable cause to believe that the applicant has ... the right to obtain relief ..." (emphasis supplied). It would impose an artificial constraint on rule 6 , not supported by its terms or purpose, to exclude, a priori , all cases in which the insufficiency of the information possessed by the applicant to enable a decision to be made whether to litigate is due to a matter of "defence" which would defeat the prima facie case. Rule 6 does not provide a means by which an applicant will be enabled to have available to it every document which would assist it in deciding whether to litigate. If that were the intention, paras (a) and (c) would stand alone and the additional condition set out in para (b) would not be necessary. Paragraph 6 (b) contemplates that after making all reasonable inquiries, the applicant has come up against a problem, namely, that it is lacking a piece of information or pieces of information reasonably necessary to enable it to decide whether to commence a proceeding. It asserted that production could not be required of documents recording or referring to consideration by Telstra as to whether it should commence a legal challenge or legal proceedings, but it acknowledged that documents recording or referring to its ability to decide whether to commence such a challenge or proceedings would properly be amenable to a Notice to Produce calling for their production. 44 It seems to me that an assertion that a subpoena and/or a notice to produce should be set aside if it calls for the production of documents which do not answer the description of being 'relevant', involves a misconception as to what the proper function of a subpoena and/or notice to produce is. 45 Relevance may well be a yardstick by which the admissibility into evidence of documents, that may have been produced under a subpoena or in response to a notice to produce, is to be decided (see ss 55 - 58 of the Evidence Act 1995 (Cth)). Furthermore, it may bear upon whether access to documents that have been produced to the Court in response to a subpoena or under a notice to produce should be afforded to a party seeking such access. However, such considerations are not determinative of whether a subpoena or notice to produce or part thereof should be set aside. 46 As Moffitt P, with whose judgment Hutley and Glass JJA agreed, said in Waind v Hill and National Employers' Mutual General Association Ltd. (1978) 1 NSWLR 376 ('Waind's case') at 381 there are three steps involved in dealing with subpoenas and documents that may be produced thereunder. Indeed, on a correct view, there are three steps. The first is obeying the subpoena, by the witness bringing the documents to the court and handing them to the judge. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. It is the third step which alone provides material upon which ultimate decision in the case rests. In these three steps the stranger and the parties have different rights, and the function of the judge differs. At this stage the person producing the documents may state that he objects to them being handed to a party seeking access to them for inspection. Documents should not go beyond the judge against the objection of the owner, unless there is valid reason to do so. Subject to matters such as confidentiality, it is for the judge, as part of the second step, to determine whether the documents appear relevant in the sense that they relate to the subject matter of the proceedings, in which event the judge will permit inspection by one or both parties at an appropriate time. The question of their admissibility without more, in accordance with the rules of evidence, does not then arise (per Moffitt P in Waind's case at 382 --- 385 cf per Sackville J in Seven Network Limited v News Limited (No 11) [2006] FCA 174 at [6] ). 48 The ultimate question of whether any documents are ruled to be relevant and/or admissible is left to the third stage of receiving evidence. As part of the second step inspection may be allowed, notwithstanding that a given document is not admissible as it stands, and notwithstanding that the party seeking inspection has not given any undertaking to tender it or use it in cross-examination (per Moffitt P in Waind's case at 385). 49 If a person wishes to resist production to the court of documents under a subpoena or in response to a notice to produce, objection should be taken as part of what Moffitt P describes as 'the first step'. 51 If a subpoena is used for the purpose of discovery and calls upon the subpoenaed party to make a judgment as to which of his or her documents relate to issues between the parties it will be oppressive. A subpoena or a notice to produce addressed to a party will also be oppressive if it is so worded as to require the addressee to engage in such a discovery process (per Moffitt P in Waind's case at 381-2 and per Jordan CJ in Small's case at 574). 52 A subpoena or notice to produce will not necessarily be objectionable because it is labelled as a 'fishing exercise'. Because a party who issues a subpoena or notice to produce is unaware of the precise description of a particular document or whether a particular document or documents are in the possession of the party subpoenaed or subjected to the notice to produce, or even whether such a document or documents exist or is unaware of the contents of such a document or documents, does not mean that a subpoena or notice to produce will be taken to have been improperly issued and amenable to being set aside as part of the first step described by Moffitt P (see per Moffitt P in Waind's case at 378 and 382). 53 Where a subpoena or notice to produce is addressed to a party, it is still necessary that it should state with reasonable particularity the documents which are to be produced (per Jordan CJ in Small's case at 574). 54 In his illustration of a subpoena, the issue of which would be oppressive and render it amenable to being set aside, Moffitt P contemplated a requirement that the branch of a bank produce all cheques received by it in a particular year in order to find, if it existed, a cheque of the opponent in a false name (see Waind's case at 382). 55 In my opinion the documents, the production of which is sought under paragraphs 9 and 10 of the Minister's third Notice to Produce (Ex AM2), are defined with reasonable particularity such that the Notice to Produce is not oppressive. They have sufficient apparent relevance to the issues arising under Order 15A rule 6 of the Rules to allow the Notice to Produce to stand. In my opinion it would be an improper exercise of the Court's power to restrict the reach of paragraphs 9 and 10 in the Minister's third Notice to Produce to those documents which Telstra would be willing to produce were the Notice to Produce confined to the documents identified in paragraphs 9, 9A and 10 of Telstra's draft form of Notice to Produce. Neither paragraph 9 nor paragraph 10 of the Minister's third Notice to Produce (Ex AM2) should be set aside. 56 In relation to the documents sought under paragraphs 1 --- 5 inclusive and 8 of the Minister's third Notice to Produce (Ex AM2) I am satisfied that the documents sought have been identified with reasonable particularity. 57 Given the terms of Mr Smith's affidavit sworn 2 August 2007, upon which Telstra intends to rely on the hearing of its Amended Application under Order 15A rule 6 , I consider the documents identified in the said paragraphs to have sufficient apparent relevance to be amenable to a notice to produce at this stage. Senior counsel for Telstra was at pains to explain that much of what was contained in Mr Smith's affidavit was there simply to provide background and had only tangential relevance. This cri de coeur does not mean that the Minister may not challenge the factual background which is relevant to those issues which need to be addressed objectively and/or subjectively on the hearing of the Order 15A rule 6 application and to which Lindgren J made reference in Alphapharm . 58 As to the scope of the requirement imposed by the said paragraphs, it is appropriate to observe that the Minister's third Notice to Produce dated 22 August 2007 is significantly scaled down from the requirement sought to be imposed by the Minister's second Notice to Produce dated 17 August 2007. Plainly, the Minister has had regard to much of the material to which Mr Healy deposed in his affidavit sworn 20 August 2007 in narrowing down her requirement. 60 Having regard to the narrowing both in terms of date and in terms of management level, I do not consider the requirements imposed upon Telstra by the Minister's third Notice to Produce dated 22 August 2007 (Ex AM2) to be oppressive. 61 In the circumstances, I would not be disposed to set aside any of paragraphs 1 --- 5 or 8 --- 10 of the Minister's third Notice to Produce. Accordingly, Telstra's Notice of Motion dated 20 August 2007 which was filed in Court on 21 August 2007 and subsequently amended on 22 August 2007 should be dismissed. | use of notices to produce in applications for discovery by a prospective respondent under o15a r6 whether fishing constitutes oppression the necessary distinction between 'apparent relevance' and 'relevance leading to admissibility' in the document production process practice and procedure subpoenas and notices to produce |
He moved to Australia in 1989 to live permanently with his mother. From September 1994, he has held a Transitional Special Category Visa (Subclass TY 444). On 15 March 1999 in the District Court of NSW Mr Aporo pleaded guilty to and was convicted of two counts of assault, one count of Assault Officer in Execution of Duty (Police Officer) and one count of Intimidate Witness. The sentencing judge, English DCJ, had regard to a statement of facts, apparently without objection. Mr Aporo was legally represented. On appeal, Mr Aporo was sentenced to two years imprisonment with a non-parole period of one year and six months. On 11 March 2005, at Manly Local Court, Mr Aporo was convicted of two counts of Assault Occasioning Actual Bodily Harm and one count of Common Assault. He was sentenced to 12 months imprisonment with a nine month non-parole period. On 12 March 2007, at Central Local Court, Mr Aporo was convicted of seven counts of Shoplifting and sentenced to 12 months imprisonment with a nine month non-parole period, which was to commence from 20 June 2006. On 19 March 2007, Mr Aporo was released from Silverwater Correctional Centre. On 28 March 2007, by way of a letter, Mr Aporo was put on notice that the Minister for Immigration and Citizenship ('the Minister') intended to consider cancelling Mr Aporo's visa under s 501(2) of the Migration Act 1958 (Cth) ('the Act'). This section provides that the Minister may cancel a person's visa if the Minister reasonably suspects that the person does not pass the character test and the person does not satisfy the Minister that he or she passes the test. The letter referred to the fact that included in the information that would be relied upon to assess whether to exercise the discretion to cancel the visa were Mr Aporo's Australian Federal Police Criminal History dated 16 March 2007, his Record of Conviction, Sentences and Appeals, a report from his parole officer, Mr Murdoch, a Pre-Sentence report and English DCJ's sentencing remarks in the District Court. Enclosed with the letter was a copy of Ministerial Direction No 21. Mr Aporo was informed that he had the opportunity to comment and provide further information. He was told to ensure that his response addressed each and every topic that he felt was relevant to his circumstances. A further letter was written on 10 May 2007 in which Mr Aporo was again told of the opportunity to provide comments and any further information. It is apparent from documents dated 22 May 2007 and 31 May 2007 that Ms Hunt from the Department of Immigration and Citizenship spoke to Mr Aporo. Mr Aporo confirmed receipt of the 28 March 2007 letter and said that he was in the process of completing the personal details form and submitting a response. He said that he had not submitted it because he is dyslexic and had to wait for his mother to return from overseas to help him read, understand and complete the form. Ms Hunt spoke to Mr Murdoch who also said that Mr Aporo was dyslexic and may have difficulties completing the form. Ms Hunt advised Mr Aporo that instead of him completing the form, she would conduct a phone interview where she could ask him the questions on the form, record his responses and then forward him a copy of the completed form to confirm or deny the answers and information. She also advised him that he had the opportunity to provide any additional information. The interview was conducted on 1 June 2007 over one hour and 15 minutes. Ms Hunt enclosed the completed personal details form with a letter to Mr Aporo dated 1 June 2007. That letter also gave Mr Aporo the opportunity to provide any additional information to be taken into consideration by the Minister when deciding whether or not to cancel Mr Aporo's visa. Mr Murdoch told Ms Hunt on 30 May 2007 that he would submit his report ' in the next couple of days ' and that Mr Aporo was due to come to his office the next day. Mr Murdoch subsequently submitted a report dated 29 May 2007. His raw score is 42. Key factors include high number of previous offences, drug dependence and poor employment history. Mr Aporo was advised of this decision on 26 July 2007. Mr Aporo applied for review of the delegate's decision, which the Administrative Appeals Tribunal ('the Tribunal') affirmed ('the first Tribunal'). Mr Aporo appealed to the Federal Court which made orders in the nature of certiorari and mandamus quashing the decision of the first Tribunal and remitting the matter to the Tribunal to be heard and determined according to law ( Aporo v Minister for Immigration and Citizenship [2008] FCA 102 per Rares J). The hearing by the Tribunal ('the second Tribunal') on remittal took place on 1 July 2008. Mr Aporo was represented by experienced counsel. The decision to cancel his visa was affirmed by the second Tribunal on 18 July 2008. The Tribunal noted at [23] that Mr Aporo was diagnosed with dyslexia only a few years previously. After considering the evidence of the supporting witnesses, the first Tribunal turned to the psychiatric evidence, in particular a report provided by Dr Gary Banks, Consultant Clinical Psychologist, based on an interview and assessment sessions that Dr Banks conducted with Mr Aporo on 28 September 2007 lasting approximately four hours. Dr Banks was unavailable to give oral evidence at the hearing before the first Tribunal. Despite the submission by the Minister that Dr Banks' report should be given less weight because he was not available for cross-examination, the Tribunal said (at [44]) that the report was not controversial ' in that [Dr Banks] merely concludes that Mr Aporo needs to commit to intense rehabilitative treatment and that previous attempts toward his rehabilitation have been unsuccessful. I think that is a point on which both parties would agree '. As the first Tribunal noted at [44], Dr Banks' report goes no further than to suggest that rehabilitation is needed and that deportation may inhibit such rehabilitation. The evidence is that the Applicant has yet to fully commit to completely rehabilitating. Dr Bank's [sic] report merely outlines options for the Applicant if he were to display such commitment. The first Tribunal gave detailed consideration to the protection of the Australian community and considered Mr Aporo's criminal record, his medical situation and his family background. It then turned to consider the risk of recidivism. The first Tribunal recorded Mr Aporo's attempts at rehabilitation and referred to his submissions that his family is a strong factor supporting his rehabilitation. There can be little confidence, given his history, that his rehabilitation from drug use will be similarly successful. The first Tribunal observed that '[t] his does not bode well for rehabilitation when he is unsupervised '. Mr Aporo relied in his submissions on the fact that he was never cautioned by the Department that his conduct may result in the cancellation of this visa and that, therefore, the corrective value of such a threat has not been applied in his case. At [70] the first Tribunal said that it had given consideration to the fact that Mr Aporo had not been previously warned of the visa cancellation but, as he had been imprisoned and fined many times over the years with apparently little or no deterrent effect, the first Tribunal expressed doubt that a warning would have made any difference to his conduct. A report by Mr Murdoch stated that Mr Aporo had been assessed as presenting a high risk of re-offending. The first Tribunal said that it appeared that since that time Mr Aporo had made some progress and it found that Mr Aporo was a ' medium to high risk of re-offending '. The first Tribunal went on to consider the expectations of the Australian community, the best interests of Mr Aporo's daughter and a number of other considerations including possible disruption and hardship to his family and any recent good conduct. It found that in all the circumstances it was inappropriate to exercise the discretion to set aside the delegate's decision. The first Tribunal concluded that Mr Aporo remains a threat to the Australian community because of his long history of very serious and other offences. Despite the attempts at rehabilitation, the first Tribunal found that there remained a risk that Mr Aporo would fall back into his pattern of offending behaviour. The first Tribunal considered that the Australian community would expect Mr Aporo to have his visa cancelled and that it could not be said that his daughter's best interests require him to remain in Australia. I shall consider as much of the second Tribunal decision as is the subject of challenge. The second Tribunal recorded Mr Aporo's evidence as to his family life and as to his criminal history. After considering all of his evidence and that of his half-brother, mother and former de-facto partner, the second Tribunal turned to Dr Banks' report, the same report that was prepared for the first Tribunal hearing. The second Tribunal acknowledged that Dr Banks' report was positive about Mr Aporo's motivation for treatment and that he was a suitable candidate for treatment, which would likely decrease the possibility of recidivism. The report recommended that Mr Aporo should be considered for relatively intense rehabilitative drug treatment of at least six to 12 months duration. The second Tribunal noted that Dr Banks' view was that there was reason to suggest that Mr Aporo would return to his anti-social behaviour should his visa be refused and he be sent back to New Zealand. The second Tribunal observed at [72] that Dr Banks did not attempt to estimate the risk of recidivism should Mr Aporo remain in Australia. Counsel who appeared for Mr Aporo before the second Tribunal outlined a number of factors which, he submitted, were relevant to the risk of re-offending. This included the prospect of visa cancellation, of which Mr Aporo had not previously been warned. Counsel linked the absence of a warning of the cancellation of the visa with previous unsuccessful attempts at rehabilitation. After the warning, Mr Aporo had complied with his most recent parole conditions, quit drugs and undertaken rehabilitation courses. At [104], in the context of discussing the protection of the Australian community, the second Tribunal turned to consider the risk of recidivism. It noted Mr Aporo's record of offences and the description of him by Grove J in the Court of Criminal Appeal in 2000 as ' a person meeting the description of a recidivist '. The second Tribunal noted that Mr Aporo stressed that since being detained in Villawood, he had ceased using drugs and their prescribed substitutes and had completed an anger management course. It also noted Mr Aporo's submission that he had not had any convictions for violence since 2003 and ' has turned the corner and grown up '. The second Tribunal referred to Mr Murdoch's assessment in May 2007 that Mr Aporo presented a high risk of re-offending but noted that Mr Aporo was looking at long-term residential rehabilitation services. The second Tribunal considered Dr Banks' report and his opinion that if Mr Aporo received treatment for substance abuse and anger management, the risk of recidivism would be reduced. Dr Banks' report stated that Mr Aporo appeared to recognise the need for change but that proper treatment had begun only recently. The second Tribunal noted that Mr Aporo had come to similar realisations before (when he was 16 and 23) and had continued to re-offend. It also noted that, in the telephone interview in June 2007, Mr Aporo said that he felt that if he returned to New Zealand he would probably get into trouble with the law. The second Tribunal observed (at [113]) that this was not an observation that one would expect to hear from someone who was rehabilitated. The second Tribunal concluded, from reasons that Mr Aporo gave in connection with his account of his assault on Senior Constable Purcell, the subject of the District Court proceedings, that Mr Aporo has a tendency to deny the seriousness of his offences. Mr Aporo's account conflicted with English DCJ's sentencing remarks in the District Court. The second Tribunal said that Mr Aporo's tendency to minimise his past criminal conduct conflicted with his claim to be reformed and ' a different person '. The second Tribunal then returned to Mr Murdoch's assessment. It noted that Mr Aporo disputed Mr Murdoch's assessment that he presented a high-risk of re-offending. In support of this, Mr Aporo referred to a Villawood assessment in which he was classified as moderate to high risk. Noting that Mr Aporo had successfully completed an anger management course and had been abstaining from drugs and substitutes, the second Tribunal accepted that Mr Aporo should be classified as moderate to high risk rather than the high risk estimated by Mr Murdoch. However, the second Tribunal observed that, given Mr Aporo's past record, this is still a significant risk. Taking account of the fact that Mr Aporo has a supportive family in Australia, the second Tribunal observed that the family's presence had not to date significantly influenced his offending behaviour (at [116]). The second Tribunal noted Mr Aporo's argument that the cancellation proceedings had provided a powerful warning of the kind that he has not previously received but said that the numerous bonds, fines and sentences of imprisonment imposed on him over the years ' have had little perceptible deterrent effect on his pattern of offending. One cannot be confident that these proceedings would have a radically different impact. The recidivism risk appears to be moderate to high '. The second Tribunal considered the issue of general deterrence. It noted that Mr Aporo's submissions on this point were directed to specific rather than general deterrence and stated that general deterrence could not be a substantial basis for a decision on an application of the kind before it, although it should be taken into account as a relevant factor. In looking to the expectations of the Australian community, the second Tribunal accepted the submission by the Minister that, over a 17-year criminal history, Mr Aporo had had numerous chances to rehabilitate but had repeatedly offended (at [128]). It considered that the community would expect the visa of a person with such a serious criminal record, who has been assessed as a moderate to high risk of re-offending and has shown little sustained evidence of rehabilitation, to be cancelled. The second Tribunal then considered the best interests of Mr Aporo's daughter and his nieces and nephew, as well as other considerations such as his ties with the Australian community, including his family ties. It concluded that Mr Aporo does not have a close relationship with his daughter and that cancelling his visa ' would do little more than preserve the status quo '. In particular, the second Tribunal found that Mr Aporo had not met his daughter since she was a baby, had no telephone contact with her and had played no part in her upbringing. As for Mr Aporo's nieces and nephew, the second Tribunal concluded that his relationship with them may not have been as close as he claimed (because he did not know their birthdays or ages) and that moves by uncles, aunts and grandparents are a common childhood experience which are not normally regarded as traumatic. The second Tribunal also concluded that Mr Aporo's family ties had already been disrupted by his incarceration. Mr Aporo claimed before the second Tribunal to have been in a continuing relationship for five years with Ms Alexandria Kara. The second Tribunal concluded that Mr Aporo did not have a significant continuing relationship with Ms Kara, noting his ' propensity to fabricate evidence, not least about his personal relationships '. At [160] the Tribunal accepted there was some evidence of rehabilitation. In particular Mr Aporo had ceased using drugs, had completed an anger management course and expressed regret for his criminal ways. However, the Tribunal noted at [161] that Mr Murdoch thought that Mr Aporo was a high recidivism risk and that Dr Banks had not estimated the likelihood of re-offending but suggested strategies that might ' decrease the possibility of recidivism '. The second Tribunal considered that there were no compassionate circumstances weighing against visa cancellation and that no cogent reason had been advanced as to why Mr Aporo would be unable to find work in New Zealand. The second Tribunal concluded at [167] that, in light of all the evidence, the other considerations were outweighed by considerations of community protection and expectations. It stated that, '[u] nusally, in this instance, the best interests of the children are a neutral factor '. The second Tribunal decided that its discretion should be exercised in favour of cancelling Mr Aporo's visa and it affirmed the decision under review. The grounds of the further amended application are: The decision of [the Tribunal] made on 18 July 2008 was vitiated by actual or apprehended bias. The function of the Court is to review the Tribunal decision. Complaints about the conduct of the delegate are not relevant to this application. The Court has no power to review the delegate's decision. The Tribunal conducted a full merits review and for that reason the conduct of the delegate, if it were deficient, was rectified ( Humayun v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 35 ; (2006) 149 FCR 558 at [30] per Wilcox J, with whom Conti and Stone JJ agreed). I shall consider the grounds of the application to the extent that they concern the second Tribunal's decision. I shall now simply refer to the second Tribunal as the Tribunal. They do not explain how the conclusion was reached that Mr Aporo was at a "high risk" of recidivism; there was no material before the Tribunal as to the provenance of the statement of facts taken into account by English DCJ. The applicant speculates that ' it is entirely conceivable ' that the statement of facts was prepared by the prosecution and tendered in committal proceedings and was accepted notwithstanding that the facts may have been incorrect. Specifically, he submits that: the preference for Mr Murdoch's assessment as to the risk of recidivism over that of Dr Banks was unexplained and contrary to the weight of the material on this issue. Mr Murdoch's assessment was not based on specialised knowledge or training and there is no obvious basis for his conclusion. Conversely, the opinion of Dr Banks is based on specialised knowledge. The Tribunal gave Dr Banks' report little or no weight because it did not contain an estimate of the likelihood of recidivism; the weight given by the Tribunal to those parts of Mr Aporo's evidence concerning his childhood are without any basis. A similar approach was taken with respect to Mr Aporo's relationship with Ms Kara; with respect to the likelihood of recidivism, the Tribunal drew inferences from material before it that were neither natural nor obvious. There was no intellectual engagement with the material which indicated that Mr Aporo has responded to drug and counselling programs and the conduct of the Tribunal indicates that it was not open to persuasion; The Tribunal dealt with the material before it in a selective manner. The alleged obligation concerning the provenance of the material is also raised as a separate ground in the application. Other matters are also the basis of more than one ground. This has led to a degree of repetition in these reasons for judgment. The Tribunal referred to Mr Aporo's extensive criminal history. Before the Tribunal was a printout of a Criminal History-Bail Report ('the Bail Report') purportedly in respect of the applicant, under the name of "Myta Greg Aporo". The Bail Report noted that the particulars in the printout were the result of a name check and not verified by finger prints and that, therefore, there was no guarantee that the record referred to the person of interest. The record itself listed different dates of birth against the names listed, from 9 July 1969 to 9 July 1973. It also listed various "alias names": Mita Greg Aporo, Mita George Aporo, Mita Taupopoki George Aporo and other variations on the spelling of these names. There were also names that do not, immediately, seem to concern the applicant: James Smith, Grant Tenint and George Sith. Associated names included Myta Greg Sith. Mr Aporo submits that the Tribunal was obliged to satisfy itself as to the correctness of each of those entries and that each entry referred to the applicant. Also before the Tribunal was a Department of Immigration and Citizenship document containing a request for sentence administration printouts. The resulting printout of the Record of Conviction, Sentences and Appeals ('the Record') for "Myta George Aporo" lists the following aliases: Mita Taupopoki George Aporo born 9 July 1973, Mita George Aporo born 9 July 1973, Myta Greg Aporo born 9 July 1969 and Myta Greg Aporo born 9 July 1973. There is no suggestion that any submission was put to the Tribunal that any of these aliases did not refer to the applicant. The sentencing remarks of English DCJ in the District Court were also before the Tribunal. Judge English noted that Mr Aporo's correct date of birth is 9 July 1973. Her Honour observed that he had a criminal history and that an examination of his criminal record ' discloses that he is no stranger to violence. He has been dealt with in a variety of ways including bonds, fines, periodic detention, and imprisonment '. Her Honour went on to observe that '[t] his man has not been deterred by previous sentences, and leniency has not touched him '. Judge English also commented that Mr Aporo had supplied false names and addresses and dates of birth. Mr Aporo contends that the Tribunal was obliged to go behind the Bail Report, the Record and the statement of facts as recorded by English DCJ to satisfy itself that the contents were correct. I do not accept that contention. The Tribunal was entitled, in the absence of any assertion that the Bail Report, the Record or the statement of facts was incorrect, to accept the accuracy of those documents and the District Court record. In relation to Mr Aporo's submissions about Mr Murdoch's report, I note that no challenge was made in the Tribunal as to Mr Murdoch's training, study or experience. His report was accepted by both parties as emanating from Mr Aporo's parole officer. Mr Aporo did challenge Mr Murdoch's assessment of his risk of recidivism and the Tribunal accepted this criticism. There was no challenge to the material and no dispute as to the provenance of the material which the Tribunal was required to address. It follows that I do not accept that the failure of the Tribunal to verify and test for itself the factual material in the reports regarding Mr Aporo's criminal history and in the material from the District Court supports a reasonable apprehension of bias on the part of the Tribunal. Similarly, I do not consider that the failure to inquire about Mr Murdoch's training, study or experience indicates a reasonable apprehension of bias, where both parties appeared to accept that the report was one emanating from Mr Aporo's parole officer and admissible. This is not presented as a complaint about the weight given to each report but as an error that vitiates the Tribunal's decision, as evidencing a lack of rational or reasoned foundation on the part of the Tribunal with the Tribunal being ' selective of material going one way' , and as a basis for bias or apprehended bias on the part of the Tribunal. These assertions are unfounded. The Tribunal recorded the effect of Dr Banks' evidence. Dr Banks' opinion, in substance, was that Mr Aporo was a suitable candidate for treatment, especially in the areas of substance abuse and anger management and that this would likely decrease the possibility of recidivism. Dr Banks expressed the view that, had these matters been addressed earlier, Mr Aporo's recidivism rate may have decreased. Dr Banks' view was that assessments indicated that Mr Aporo should be considered for relatively intense rehabilitative treatment to help him overcome the problems which put him at risk. Dr Banks recommended that Mr Aporo should continue with the interventions he was then receiving in Australia. Dr Banks did not suggest that he guaranteed that rehabilitative treatment would ensure that Mr Aporo would not re-offend. He simply did not give an assessment of the likelihood of re-offending, with or without a rehabilitation program. That is what the Tribunal pointed out. On the other hand, Mr Murdoch did assess the likelihood, or report the assessment of a likelihood, of re-offending. The Tribunal did not accept that assessment and, in Mr Aporo's favour, substituted the one that Mr Aporo said had been the result of his assessment at Villawood. I see no reason for criticism of the Tribunal's consideration of Dr Banks' report and Mr Murdoch's report, or of the way the Tribunal came to a conclusion based upon those reports, together with Mr Aporo's own evidence and submissions, to determine the likelihood of recidivism. There is no basis for a suggestion that in doing so the Tribunal did not have an open mind or that it was selective without rationale or reason. Mr Aporo emphasises the comment that Dr Banks did not provide an estimate of the likelihood of recidivism. He submits that, for that reason, the Tribunal did not give the report any weight. That is simply not the case. It is true that Dr Banks did not provide an estimate in the sense that Mr Murdoch's report did, but the Tribunal did accept Dr Banks' conclusions, insofar as they went. Mr Aporo submits that the circumstances warranted a further inquiry by the Tribunal and that it was incumbent on the Tribunal further to explore the assessment of Dr Banks who had offered further assistance, or to investigate the basis for Mr Murdoch's report. The Tribunal was not under such an obligation. Mr Aporo also attacks the finding that Mr Murdoch's report did provide an estimate of the likelihood of recidivism. He says that there was no obvious basis for that conclusion and that no reasoning supporting the conclusion, nor was there an explanation of the relevant testing. He seems to be attacking Mr Murdoch's report as an expert report. It is correct that the testing methodology was not contained in Mr Murdoch's report and that there was no explanation of the conclusion but, again, the Tribunal did not simply accept Mr Murdoch's estimate as to the likelihood of recidivism. The Tribunal accepted Mr Aporo's contention as to the correct estimate and there is no suggestion that a submission was made to the Tribunal that all such predictions should be rejected or that the subject matter could not be properly tested or that Mr Murdoch's report was inadmissible. Mr Aporo says that the Tribunal was not obliged to consider an estimate of the likelihood of recidivism as a criterion under Ministerial Direction No 21 (at [2.10]). He submits that, in circumstances where expert evidence as to the risk of recidivism is inadequate, it was unreasonable for the Tribunal not to hold a further inquiry of readily available information regarding that issue ( Luu v Renevier (1989) 91 ALR 39 at 47---8 and 50). The Tribunal had before it Mr Murdoch's report, the Villawood assessment as outlined by Mr Aporo, as well as comments by Grove J concerning recidivism. There was, unlike Luu , a foundation for the Tribunal's conclusion. Dr Banks' report discussed the general question of recidivism which the Tribunal also took into account, although he did not give a present estimate of likelihood. In those circumstances, the Tribunal was not obliged to make a case for Mr Aporo ( Minister for Immigration and Citizenship v Le [2007] FCA 1318 ; (2007) 164 FCR 151 at [60] ). Mr Aporo submits that it would have been a "simple step" for the Tribunal to have pursued the avenues of inquiry offered by the availability of Mr Murdoch and Dr Banks to resolve any conflict in the material ( SZIAI v Minister for Immigration and Citizenship (2008) 104 ALD 22 at [29]). It is not a question of whether it would have been a simple step for the Tribunal to pursue the avenues of inquiry. There was no conflict in the material before the Tribunal, as Dr Banks did not give an estimate. Rather, the Tribunal was unable from Dr Banks' report to draw a conclusion as to the likelihood of recidivism or the effect of rehabilitative steps on that likelihood, even if Mr Aporo were to undertake them. Even if there were a conflict, the Tribunal is not obliged whenever there is a conflict in the evidence presented to conduct its own investigation to resolve that apparent conflict if it is able to give reasons for preferring or giving more weight to some evidence over other evidence or preferring one opinion over another. It is not simply a question of whether or not Dr Banks had provided an estimate in the sense of some mathematical analysis. The resolution of a conflict in the evidence is not the taking of the sort of step of embarking upon the Tribunal's own inquiries as to the underlying facts, which then imports further obligations ( SZIAI at [29]). The obligation on an administrator to make its own inquiries is strictly limited ( SZIAI at [25]). Mr Aporo now criticises the Tribunal for accepting his statements in respect of the Villawood assessment and criticises the Tribunal for accepting the evidence from a witness, namely himself, who had a ' demonstrated propensity to fabricate evidence '. Mr Aporo relies upon the Tribunal's acceptance of his own evidence as indicating a capriciousness in the decision making process and a failure to act judicially in the sense of being based on ' instinct, a hunch or a gut-feeling ' ( WAIJ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 74 ; (2004) 80 ALD 568 at [20] and following; Sharp v Wakefield [1891] AC 173 at 179). The Tribunal was entitled to accept so much of Mr Aporo's evidence and submissions as it determined was acceptable. Further, there is a difference between submissions and the result of an assessment and evidence of criminal history. Mr Aporo says that there was insufficient material before either the delegate or the Tribunal to support a conclusion regarding the likelihood of recidivism adverse to Mr Aporo. The Tribunal was entitled to take account of the evidence and submissions before it and come to a conclusion based upon that evidence and those submissions. That is what occurred. The Tribunal was not obliged to conduct an independent investigation, or to conduct its own assessment of the likelihood of Mr Aporo's recidivism. An example is given of [102] of the Tribunal's reasons. There, the Tribunal said the following in discussing Mr Aporo's evidence of his childhood: ' As regards his childhood, I take it into account but note that neither his mother nor his half-brother supports his claims, nor in fact do they mention any childhood problems he may have had at all '. Mr Aporo submits that this was no proper basis for impugning the credibility of his evidence as to his childhood because of a lack of corroboration as the Tribunal failed to take into account that Mr Aporo only joined his mother in Australia when he was 16 years old and there was no evidence that his half brother lived with him during his childhood. I accept that there was an explanation as to why Mr Aporo's mother and half-brother would not be able to corroborate Mr Aporo's account of his childhood. However, this lack of corroboration did not form the basis of the Tribunal's conclusions. The Tribunal recorded Mr Aporo's childhood and said that it took it into account. The comment about the lack of corroboration was an observation that did not, on a reading of the whole of the Tribunal's reasons, have any effect on the conclusions reached. Mr Aporo also challenges the Tribunal's conclusion with respect to Mr Aporo's relationship with Ms Kara. The Tribunal found (at [159]) that there was no significant continuing relationship between them. In coming to that conclusion the Tribunal acknowledged that Mr Aporo said that he had been in a continuing relationship of five years' standing with Ms Kara, who lived in Melbourne and was taking care of her ailing mother. It documented his evidence as to their continuing contact and acknowledged Mr Aporo's evidence that she was his fiancée. The Tribunal did comment on the fact that neither Mr Aporo's half-brother nor his mother had mentioned such a relationship but it accepted (at [156]) that, at some stage, Mr Aporo did have a relationship with Ms Kara. The Tribunal expressed doubt as to whether the relationship still subsisted and, as part of its reasoning process, expressed the opinion that it would have expected Ms Kara to have contributed some information as to her views if indeed they were engaged to be married. Ms Kara gave no evidence at either the first or second Tribunal hearing and there was no letter or note of a telephone call from her in the documentary evidence. Further, in his telephone interview, Mr Aporo spoke of the relationship in the past tense. Mr Aporo says that these matters were not specifically raised with him in the course of the Tribunal hearing. He complains that the Tribunal disregarded his evidence that he tended to push his loved ones away and that he had verbal, analytical and problem solving difficulties. The Tribunal was not obliged to give Mr Aporo a running commentary of its thought processes. Nor was it obliged to set out each and every possible fact that could possibly have related to a conclusion that it drew. It is not clear that counsel in the Tribunal relied upon the matters now sought to be introduced by Mr Aporo or drew them together in the way counsel presently appearing for Mr Aporo seeks to do. The Tribunal gave reasons for its conclusion as to the relationship between Mr Aporo and Ms Kara. The conclusion was open on the evidence before the Tribunal. I see no error on the part of the Tribunal in coming to that conclusion. For example, he had not received treatment for his anger until recently. Counsel complains that the Tribunal was "largely passive" during the course of the Tribunal hearing and that none of the appraisals as set out in the reasons were put to Mr Aporo during the course of the hearing, indicating that the Tribunal was not open to persuasion. Counsel points out that the Tribunal was aware that Mr Aporo was dyslexic, had a low capacity to express himself verbally and had low literary skills. In his report, Dr Banks gave the opinion that Mr Aporo had extremely delayed literary skills and a below to well-below average level of cognitive function compared to same-aged peers. Mr Aporo's dyslexia was diagnosed only in the late 1990s. Counsel submits that the determinative issues should have been adverted to during the course of the hearing because Mr Aporo was illiterate and dyslexic and therefore could not be presumed to have read and understood the material that gave rise to those issues. All of this seems to ignore the fact that Mr Aporo was represented in the Tribunal by experienced counsel who, presumably, was properly instructed and had read and understood the material. I reject that submission. The Tribunal set out its reasoning and the facts upon which that reasoning was based. Those facts were not mere assertions but the evidence before the Tribunal. In considering the Tribunal decision as a whole and the matters raised by Mr Aporo, I am of the view that no lay observer would think that the Tribunal was approaching the task with anything other than an open mind. I reject each aspect of that submission. The conclusions were based upon the facts and reasoning set out in the decision, and followed that reasoning. There was no indication that Mr Aporo was not afforded an opportunity to respond to the submissions against him or to make submissions. The Tribunal set out in some detail Mr Aporo's submissions as made by counsel and dealt with each one. Mr Aporo's submissions are, in summary, as follows: the principles of natural justice must be applied flexibly and the demands of natural justice are dependent upon the factual circumstances of each case ( Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 612); Mr Aporo was at a distinct forensic disadvantage due to his illiteracy and dyslexia. The hearing was the only opportunity for him to address adverse inferences that could be drawn from his criminal record and history of drug addiction; the Tribunal was aware of his disability and did not read to him excerpts from any of the documents that formed the basis of its appraisals. He was thereby denied a reasonable opportunity to address the documents and inferences drawn from them; the issues that were collectively determinative of his claims, as summarised above at [73], were not raised at the hearing by the Tribunal or the Minister; in those circumstances, it was procedurally unfair to Mr Aporo for the Tribunal in its findings to attribute weight selectively to documentary material in a manner that was ' in substantial respects unreasoned, perverse and in respect to the witness statement, plainly misconceived '. Mr Aporo takes each comment and finding made by the Tribunal, together with the criticisms he raises in his application and complains that they were not raised with him at the hearing and were collectively determinative of the Tribunal decision. The matters so relied upon are individually very different. Some are factual findings of the Tribunal, some are observations of the Tribunal, some are criticisms raised by Mr Aporo now cited as established fact. I deal with these matters elsewhere in these reasons where they are repeatedly raised. In summary: Mr Aporo had a reasonable opportunity to ascertain and respond to the determinative issues that arose ( Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd [1994] FCA 1074 ; (1994) 49 FCR 576 at 590-591). Indeed, the Tribunal makes it clear that it addressed the evidence put forward by Mr Aporo in relation to each of the issues. The Tribunal's findings of which he complains were findings upon matters advanced by Mr Aporo to the Tribunal. The Tribunal did not make findings of fact as to which there was no evidence advanced by Mr Aporo or no submissions made. It follows that Mr Aporo was given the opportunity to address the issues. Mr Aporo complains about the inferences and conclusions drawn from his evidence. This does not amount to a denial of procedural fairness. Mr Aporo does not point to material that had been supplied by or known to the Tribunal from which a conclusion was drawn that was not open on that material, even if he did not like the conclusion reached ( Alphaone at 591-2). Mr Aporo's reliance again on the ' distinct forensic disadvantage due to his illiteracy and dyslexia ' is answered by the fact of legal representation. The Tribunal was entitled to assume that counsel was properly instructed and, indeed, it is not suggested that this was not the case. Mr Aporo says that the Tribunal's conclusions were arbitrary and based on speculation. As I read the decision, the Tribunal's conclusions were based upon the evidence that it set out and were responsive to the submissions made. Mr Aporo says that the Tribunal's conclusions were based upon its own observations, expertise or experience. That allegation is not made out. The Tribunal based its conclusions on the evidence and on the reports which were before it. There was apparently no challenge in the Tribunal to Mr Aporo's criminal record. Mr Aporo submits that it would have been ' a simple administrative task ' for either the Minister or the Tribunal to confirm the provenance of some or all of the documents, in particular the Bail Report, the Record, the statement of facts before English DCJ and the report of Mr Murdoch. He also says that the need for such an inquiry was heightened by Mr Aporo's inability to challenge the provenance of the documents because he was illiterate, dyslexic and had verbal, analytical and problem solving difficulties. Mr Aporo contrasts what he accepts was a consideration of "the provenance" of Dr Banks' report and the lack of inquiry into the provenance of other documents. Mr Aporo discounts the fact that he was represented by counsel and solicitor before the Tribunal. He says that the determinative issues and adverse inferences that arose from the documents were not raised at the hearing, other than the statement of facts before the District Court and the report of Mr Murdoch dated 27 May 2007. Despite the fact that he was legally represented in the District Court and before the Tribunal, Mr Aporo now says that the statement of facts was not read to him at the Tribunal hearing and should have been. Mr Aporo relies on SZJBA v Minister for Immigration and Citizenship [2007] FCA 1592 ; (2007) 164 FCR 14 at [53] ---[56]. In that case Allsop J considered a circumstance in which the Tribunal relied upon the fact that an appellant failed to submit a response to the invitation to make submissions when in fact the Tribunal had received a cover sheet stating that submissions were enclosed even though, apparently by mistake, they were not. The appellant submitted that in those circumstances the Tribunal should have made inquiries about the missing enclosure and the comments the appellant intended to make, as it was on notice that the enclosure had been forwarded. Justice Allsop accepted the ' straightforward recognition ' that no duty to inquire about evidence arises from the terms of s 427 of the Act (at [46]). His Honour noted that in Re Ruddock (in his capacity as Minister for Immigration and Multicultural Affairs); Ex parte Applicant S154/2002 [2003] HCA 60 ; (2003) 201 ALR 437 , Gummow and Heydon JJ (with whom Gleeson CJ agreed) said, in the context of explaining how detailed the questioning of an applicant was required to be, that '[t] he Tribunal conducting an inquisitorial hearing is not obliged to prompt and stimulate an elaboration which the applicant chooses not to embark on '. However, Allsop J concluded that that reference had nothing had to do with the specific circumstances of the case before him. Justice Allsop concluded that the giving of an invitation to comment carries with it an obligation under the Act to deal with a communication in response to that invitation in a reasonably business-like way, including the reading of any response to the invitation. The question in SZJBA was not whether the Tribunal should have undertaken some evidence gathering task (at [59]). The failure ' was to take a simple administrative step of an office or housekeeping nature '. The obligation does not rest on some positive duty of inquiry. It is only in exceptional cases that a failure to make an inquiry may ground a finding of jurisdictional error (at [60]; see also Le at [60] per Kenny J). In my opinion the steps proposed to Mr Aporo to confirm the provenance and contents of the documents were far more than ' a simple administrative task '. Mr Aporo submits that the need for inquiry by the Tribunal was heightened by the fact that Mr Aporo himself was unable to challenge the provenance of the documents because he was illiterate, dyslexic and had verbal, analytical and problem solving difficulties. There is no evidence that those characteristics were the reason for the absence of challenge in the Tribunal as to the provenance of the documents. Mr Aporo had legal advisers. It is not suggested that they were other than properly instructed. Mr Aporo concedes that the documents and their contents were not challenged in the Tribunal. Mr Aporo now submits that that should not be "held against" him because there was no evidence that the matters were discussed with him and the determinative issues and adverse inferences arising from the material were not raised with him at the hearing. In the absence of any evidence to suggest otherwise, I am not prepared to accept that Mr Aporo's previous legal advisers were not properly instructed. During the proceedings before the Tribunal the applicant and his legal representatives had copies of all the material the provenance of which is now complained of. The time to make these complaints was during the Tribunal hearing. It was reasonable for the Tribunal to rely upon the parole officer's assessment concerning the risk of recidivism in circumstances where Dr Banks did not venture an opinion about this matter and in circumstances where the objective evidence and Mr Aporo's own evidence pointed to a serious risk of recidivism. Mr Aporo himself accepted that there was a risk and simply challenged the degree of that risk. Mr Aporo challenged Mr Murdoch's assessment as to his risk of recidivism and the Tribunal accepted the challenge. Specifically, it accepted Mr Aporo's submission that he should have been assessed as a "moderate to high" risk of recidivism. There was no other real controversy for the Tribunal to resolve. The Tribunal was entitled to consider the issue and come to a conclusion and to resolve any controversy, without embarking upon an inquiry. Where no challenge was made to the provenance of or admissibility of the documents or the facts asserted therein, the Tribunal was not obliged to go behind the documents and the statement of facts to satisfy itself in some sort of mini-trial that the facts were correct. The Tribunal did not rely upon the first Tribunal decision. It noted (at [138]) that its conclusions in relation to Mr Aporo's relationship with his daughter were "not inconsistent" with those reached by the first Tribunal in the part of its reasons where the Tribunal was considering the history of such relationship. The Tribunal proceeded at [139] and following to consider what the evidence showed as at the time of the hearing in the second Tribunal. Those observations as to the first Tribunal were by way of background and were not determinative of the Tribunal decision. Mr Aporo complains about what he now describes as "the unfairness" of his interview with Ms Hunt because he was not forewarned as to the consequences of that interview. I note that Mr Aporo did not assert a lack of warning in the Tribunal and there was no suggestion that the interview should not have been taken into account. On 28 March 2007 the Department sent to Mr Aporo a Notice of Intention to consider cancellation of his visa under subs 501(2) of the Act. The letter set out various matters and invited a response and also contained a warning that it was possible that Mr Aporo's visa would be cancelled. A further letter was sent on 10 May 2007 again referring the possible cancellation of the visa. On 22 May 2007 Ms Hunt noted that she had had a telephone call with Mr Aporo who confirmed that he had received the notice of 28 March 2007. He said that he was in the process of completing the form and submitting a response and that the reason he had not submitted it was that he was dyslexic and had to wait for his mother to return to help him to read and understand and complete the form. Ms Hunt acknowledged that Mr Aporo was dyslexic and may have some difficulties in responding in writing to the notice. Therefore, instead of requiring him to complete the form, she conducted a phone interview with Mr Aporo where she asked him the questions from the form, recorded his responses and then forwarded to him a copy of the completed form so that he could confirm or deny the answers or information. The phone interview was conducted on 1 June 2007 and the answers reduced to writing. Mr Aporo's complaint is that the officer should, on each occasion on which she spoke to him, have read the warning to him. I do not accept that there was such an obligation. Mr Aporo acknowledged that he had assistance to read and understand written forms. Ms Hunt also gave Mr Aporo the benefit of a telephone interview rather than requiring the matters to be put in writing. She was reasonably entitled to assume that he was aware from the correspondence of the reason for that correspondence and the interview. There was no reason for her to assume that he had not understood it at all. In any event, even if there had been such a problem there was no doubt that by the time the second Tribunal conducted a merits review Mr Aporo was well aware of the possibility that his visa would be cancelled. It is not apparent that the Tribunal formed a view that the interview of Mr Aporo by Ms Hunt was unfair, nor that she was required to warn Mr Aporo of the consequences of the interview. Nor was it put to the Tribunal that this was somehow determinative of Mr Aporo's application to the Tribunal. It follows that it cannot have been procedurally unfair on the part of the Tribunal not to have thought of an argument on Mr Aporo's behalf, put it to him as a possibility and then come to a conclusion on that matter in his favour. In Cockrell v Minister for Immigration and Citizenship (2008) 171 FCR 345 the Full Court dealt with a case where it was common ground that, because of convictions for a number of criminal offences, the appellant did not pass the character test. The issue there, as here, was whether the exercise of discretion by the Tribunal in its task of reviewing on the merits the decision of the Minister's delegate, miscarried. The Full Court pointed out at [4] that the Court's jurisdiction is derived from s 476A(1)(b) and (2) of the Act which have the effect of conferring on the Court jurisdiction the same as that of the High Court under s 75(v) of the Constitution in relation to, in this case, a decision of the Tribunal of the kind in question by reason of s 483 of the Act. In order to succeed the applicant has to demonstrate jurisdictional error on the part of the Tribunal. Even if the Tribunal were in error in respect of the minor matters relied upon by Mr Aporo, such as whether or not his half-brother and mother supported his claims of childhood abuse, such error did not go to the jurisdiction that the Tribunal was exercising in relation to s 501 of the Act. As in Cockrell , there was nothing to suggest that the Tribunal misunderstood the scope or ambit of the statutory jurisdiction or power, or misunderstood any statements or directives in Ministerial Direction No 21. The Tribunal determined for itself the factors necessary to make a decision in Mr Aporo's case. There was nothing to indicate that the Tribunal misunderstood its task or made an error of any significance in the way in which it approached its task. In reading the Tribunal's decision as a whole, it is apparent that the Tribunal correctly considered the question before it and the nature of the discretion it was called upon to exercise. It follows that his application should be dismissed with costs. I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | character test documents before tribunal included criminal history, sentencing decision and medical reports whether tribunal obliged to investigate provenance of the documents provenance not challenged in tribunal tribunal under no obligation to investigate provenance of documents applicant dyslexic whether tribunal obliged to put each matter to applicant and to read excerpts of documents to him applicant represented by counsel tribunal under no such obligation migration |
The application was accompanied by a statement of claim and various affidavits. Jag has yet to file a defence. An injunction compelling the respondents to inform each of the persons named in the affidavit sought by the paragraph immediately above of the fact of these proceedings and to serve on each such person a copy of this application, the statement of claim served with it, and the affidavit of Simon James Dorries filed with the application. An injunction compelling the respondents to swear an affidavit demonstrating compliance with the injunction sought by paragraph 4. 4 On 2 November 2006, I declined to grant interlocutory relief and ordered that the costs of the respondents be their costs in the principal proceedings. I indicated then that I would publish my reasons. These are those reasons. 5 Plywood is essentially a trade organisation of companies which manufacture and sell plywood panels. In the statement of claim, Plywood alleges that it is: ' charged with representing the interests of almost all of the manufacturers of plywood in Australia, New Zealand, and the South Pacific' . Jag is not a member of Plywood. For the purposes of interlocutory application, I was prepared to assume that there was such requirement, and that there is an obligation on persons such as Jag, if labelling products as meeting the standards required by AS/NZS 2269:2004 , that the plywood comply with that Standard. Specifications for both stress and surface grades are also provided. The standard also specifies veneer quality, bond quality, standard lay-up construction, dimensional tolerances, joints, moisture content and characteristic strength and stiffness values for the nominated stress grades. Procedures for the application of stress grades are provided in Section 4. These standards are developed through an open process of consultation and consensus, in which all interested parties are invited to participate. Through a Memorandum of Understanding with the Commonwealth government, Standards Australia is recognized as Australia's peak national standards body. 17 Mr Dorries deposes, on the basis of information and belief, that a stress grader, once owned by Carter Holt Harvey, a manufacturer represented by Plywood, was sold to a Mr Andrew McLeod, a former employee of a former member of Plywood, North Coast Plywoods, commonly known as Norply. Mr Dorries says that Mr McLeod is now employed by the first respondent. Mr Dorries said the sale ' took place pursuant to a purchase order on the letterhead of the first respondent '. The applicant did not fill the order, and on being asked why the applicant would not supply the upgrade, told Mr McLeod that because Norply was not planning to rebuild its factory, Mr Dorries not see why it needed the upgrade. 20 Later, Mr Dorries says he received a further call from Mr Wintour demanding to know why the applicant would not supply the upgrade. Otherwise, the applicant would not supply it. If an opportunity existed, in particular, within the bracing plywood market to stress grade imported bracing plywood then I see this as a service to the industry rather than any complications for [Plywood] . Since the [Plywood] has not solved the issue of bracing plywood in Australia, I believe that this maybe a satisfactory and workable compromise to all parties concerned. The stress grader is used for a mechanical test but to determine a stress grade, the results of that test must be combined with visual inspection of each veneer in the sheet of plywood. This may be seen from clause 4.3 of the standard. Appendix C of the standard sets out the necessary requirements for such a machine. That said, the applicant's members have invested considerable money in the development of the stress grading machinery used by them and consider that the stress grading machinery so developed gives them a competitive advantage which they are eager to maintain. Further, that investment is part of the applicant's members overall efforts to maintain the quality of the plywood produced by them. Compliance with the requirements of the Standard may require a visual inspection of each veneer to ensure that the veneer complies with the requirements of the standard, but the stress grader is a machine employed in a mechanical testing, and its provision or otherwise is relevant, it seems to me, only to the results of the mechanical testing of the plywood panel. Compliance with the Standard does not depend on whether the mechanical tester of the panel was the manufacturer of it. A mechanical tester of a plywood panel can be satisfied of compliance with the Standard of the veneers in the panel and of the other requirements of the Standard concerning composition of the bonding joints and assembly by means other than a visual inspection by the tester. Firstly, it must be stressed that these requirements were not designed to be restrictive, they are based purely on technical considerations. 29 That requirement would seem to prevent compliance with the Standard, at least as to branding, where the plywood panels comply in every respect with the requirements of the standard as to composition, and also comply with the mechanical grading test, where that testing was performed by somebody other than the manufacturer, or otherwise than at the point of manufacture. 30 The complaint of Mr Dorries seems to be that, ' the respondents are offering in the market place to conduct tests when they lack the necessary information to conduct such tests '. 31 The second respondent is the director of the first respondent and is also a director of International Panels Australia Pty Ltd ('IP(A)PL') which is in the business of importing plywood. Mr Wintour was director of Plywood, the applicant, from January 2005 to November 2005; and from April 2004 to April 2006, was employed by Norply as its general manager. Andrew McLeod was employed as the production manager at Norply from April 2005 to January 2006. 32 The stress grader, which was purchased from Carter Holt Harvey, was purchased about 9 November 2005 by IP(A)PL for the sum of $1000. Discussions concerning the upgrade related to a required software package, which was to cost $6000. 33 The evidence establishes that Jag sources plywood panels from overseas and tests each panel before applying a label to the plywood. 34 After the decision not to rebuild the Norply mill, Jag decided, rather than setting up a private manufacturing operation, to use the stress grader ' to test imported plywood to verify the stress grade assigned to each piece of plywood by the manufacturer or otherwise assign a stress grade to the plywood tested '. 35 Jag published an advertisement in the April 2006 edition of The Australian Timberman magazine. The advertisement describes Jag as ' Australia's only testing facility for Imported Plywood ' and indicates that, amongst other services it offers, there is included mechanically stress grading individual sheets of plywood, as well as conducting "A" Bond quality tests on these sheets, and all other methods of tests for veneer and plywood. The advertisement also said, ' Individual sheets of plywood will be tested to the Australian Standards and labelled accordingly '. JAG does not purport to determine whether each piece of plywood tested complies with the Standard and, for that reason, JAG has never attempted to label plywood tested by it in accordance with the labelling requirements of the standard. In particular, JAG does not include on its labels the word 'Structural' or a veneer grade. JAG has offered its testing facilities to these importers to enable them to verify the quality of the imported sheets as to stress grade in particular, prior to the importer releasing that plywood onto the market. Some of the tests performed by JAG have revealed that some imported plywood, though labelled as complying with the Standard, does not in fact comply with respect to face and back veneer grades and stress grades. JAG has refused to stress grade such panels and has returned those to the importer. IP(A)PL imports plywood manufactured by two overseas mills each of which certify that they have manufactured the plywood in accordance with the Standard. Initially plywood was only imported from one mill (the first mill) however, from September 2006 IP(A)PL have begun importing from a second mill (the second mill). I have attended the first mill on four occasions to inspect its manufacturing processes. Most recently, in the last six months, I attended the first mill in May and again in July 2006. In my view, and based on my inspections, the mill's manufacturing operations enable it to conform with the manufacturing requirements of the Standard. Additionally, the mill has been accredited under the International Standard ISO 9001 with respect to its procedures and processes. I have not yet attended the second mill. However, I have been advised that they do manufacture the plywood in accordance with the Standard and have been accredited under the International Standard ISO 9001 with respect to its procedures and processes. The overseas mills advise of the specifications of the plywood which can only be ascertained by the manufacturer and label the plywood with that information. Mr Wintour said, ' JAG does not include on its labels the word "Structural" or a veneer grade '. The question is whether that representation is arguably misleading or deceptive, or one likely to mislead or deceive. 44 Having regard to the evidence concerning the steps taken by Jag concerning compliance with the panels it tests with the other requirements of the Standard concerning particular veneers, and the quality assurance requirements it imposes on the suppliers of plywood panels to it, I was not satisfied, for present interlocutory purposes, that the representation, made by applying a stress grade to the plywood panels (which, in my view, is a representation that the panel complies with the Australian Standard) is conduct by Jag which is misleading and deceptive. 45 Plywood has its own commercial interests in seeking to restrain the activities of Jag; but, if it were seriously arguable that the panels labelled by Jag were in breach of the Australian Standard for Structural Plywood, the objectives of the Act, particularly the interests (including the safety) of consumers and others, would call out for some interlocutory relief, even if interlocutory orders would have the significant consequence of closing down the business of Jag. ' (Emphasis added. Firstly, Jag Ply's general process of grading and branding does not conform to the specific requirements of AS/NZS 2269:2004. Secondly the test results in this report raise doubt as to whether Jag Ply has mechanically graded every individual sheet in each pack. The first respondent also now conducts visual inspection and testing of bond quality. The first respondent obtained National Association of Testing Authorities (NATA) accreditation on 28 August 2006, having applied for such accreditation in February 2006. Obtaining such accreditation has required the first respondent to develop a procedures manual and a quality manual. The quality manual requires the first respondent to obtain evidence of a quality control system in accordance with ISO9001 from each manufacturer of each tested sheet and that such manufacturing incorporates the requirements of the Standard. The testing simply allocates a stress grade by the use of the mechanical testing procedure. Gummow and Hayne JJ, with whom Gleeson CJ and Crennan J agreed, cited with approval (at par 65) the following statement from Beecham Group Ltd v Bristol Laboratories Pty. The critical statement by his Lordship is "[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried". " (emphasis added. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. The first consideration mentioned in Beecham , the nature of the rights asserted by the plaintiff, redirects attention to the present appeal. It almost certainly would shut down the business of the first respondent. 57 For the above reasons, I declined to order interlocutory relief, and ordered that the respondents on the application for interlocutory relief be their costs in the principal proceedings. | injunction interlocutory relief commercial interests of applicant conflicting evidence refusal to grant interlocutory relief practice and procedure |
The jurisdiction of the Court is invoked pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). 2 The decision of the Commission was the product of a review undertaken pursuant to s 31(4) , (6) and (7) of the Veterans' Entitlements Act 1986 (Cth). The result of the review undertaken by the Commission's delegate was that the delegate was " satisfied beyond reasonable doubt that Mr Godwin did not experience a severe service-related stressor nor did he suffer a service related psychiatric illness ". The delegate went on to conclude that he was " therefore satisfied beyond reasonable doubt that his PTSD is not war-caused ". 3 A number of grounds are set forth in the Application as filed. One matter which the Applicant contends assumes particular importance is the fact that the review by the Commission was undertaken whilst proceedings were pending in the Administrative Appeals Tribunal and the result of that review was announced immediately subsequent to the decision of the Tribunal, published on 28 August 2007. The claims made by Mr Godwin for a pension, he contends, had been resolved such that there was no power thereafter to review his entitlement. Section 31 , he contends, confers no such power. Even if s 31 confers a power of review, he further submits that the conduct of the Commission in undertaking that review is wrong in law. 4 The Commission rejects each of the grounds relied upon and contends that the review was authorised and lawfully undertaken. During this period he served onboard the HMAS Parramatta in Malaysia. 6 He also rendered operational service in Vietnamese waters onboard the HMAS Sydney from 8 to 22 April 1967 and from 28 April to 12 May 1967. 7 In 2002 he claimed a disability pension relevantly in respect of a PTSD, a post traumatic stress disorder. His claim was determined by the Commission and review was sought from the Veterans' Review Board. He thereafter appealed to the Administrative Appeals Tribunal. 8 The Administrative Appeals Tribunal concluded on 8 April 2005 that Mr Godwin did suffer from a war-caused post traumatic stress disorder and remitted the claim to the Commission to assess the rate of pension payable. It was this decision of the Tribunal that accepted that Mr Godwin had witnessed in Vung Tau harbour the destruction of a civilian sampan by a United States patrol boat: Re Godwin and Repatriation Commission [2005] AATA 309. 9 The Commission then determined the rate of pension and Mr Godwin again applied to the Veterans' Review Board. The Board affirmed the Commission's decision and on 22 May 2006 Mr Godwin applied to the Administrative Appeals Tribunal for review of the decision which had been affirmed. It was that decision of the Tribunal which was published on 28 August 2007. That decision was that the Applicant was " entitled to pension at the special rate pursuant to section 24 of the Veterans' Entitlements Act 1986 as and from 5 May 2005 ". 11 The Administrative Appeals Tribunal in 2005 in determining the eligibility of Mr Godwin for a pension concluded that it could not be satisfied that he had not witnessed the sampan incident. If it is not so satisfied, beyond reasonable doubt, the claim must succeed. [72] There was no challenge to Mr Godwin's credit, and the Tribunal was satisfied that he was a witness of credit who had given a consistent account of his experiences to the doctors who assessed him, and to the Tribunal. [73] The Tribunal accepted that no formal record of either the Gurkha incident or the sampan incident, or indeed the New Guinea incident was put before it, but was also satisfied that Mr Josephs' research did not extend to all possible sources. Further, in relation to the sampan incident, an American Swift Boat may have been involved, which was likely to mean that Australian records would not be made. The Tribunal was mindful Mr Josephs did not check any American records, or ship's logs from the archives, and concluded that there may have been no record of the sampan incident, or that it may have been recorded where Mr Josephs research did not extend. The Tribunal was satisfied that this was the cause of the development of his PTSD. [81] On the evidence of the Applicant, and the medical evidence therefore, the Tribunal could not be satisfied beyond reasonable doubt that Mr Godwin did not witness the sampan incident. Witnessing that event satisfied the definition of "experiencing a severe stressor" in the SoP, and led to the development of Mr Godwin's PTSD. Accordingly Mr Godwin's PTSD can be held to be war-caused pursuant to section 9 of the Act. 12 The delegate when making his decision recited that, unlike the Tribunal, there was now available a further report of the incident said to have been witnessed by Mr Godwin. This was the report from Writeway Research Service Pty Ltd dated 24 February 2007. On 24 February 2007, a report was received from Writeway Research Services [Writeway], in relation to the incident in Vung Tau harbour which Mr Godwin had described in his evidence to the Tribunal and to the Board and in histories he provided to various psychiatrists. These events occurred at a significant distance from the anchorage of the Sydney and do not, in any event, correspond to the description of the event provided by Mr. Godwin. A copy of the Writeway report is attached. The subsection further provides that the Commission may set a date, which it considers to be appropriate in all the circumstances, from which the variation shall operate. Similarly, subsection 31(6), provides that where the Commission is satisfied that having regard to a matter which affects the payment of pension (being a matter that was not before the Commission when the decision to grant pension was made) that pension should be cancelled or suspended or is being paid at a higher rate than it should be, the Commission may by a determination in writing cancel, suspend or decrease the rate of pension. Subsection 31(7) provides that the date of effect of such a determination may be earlier than the date on which the determination is made. Having considered the report submitted by Writeway on 24 February 2007, together with the official records on which it was based, I am satisfied beyond reasonable doubt that the event described by Mr. Godwin in his evidence to the Tribunal and the Board and in the histories he provided to various psychiatrists did not occur or did not occur in the manner described. I am therefore satisfied beyond a reasonable doubt that the evidence provided by Mr. Godwin and the reports provided by Dr Hayes, Dr. Allnutt and Professor Quadrio contained material which was false and misleading within the terms of subsection 31(4). I am also satisfied that matters which affect the payment of pension, and which have been detailed in the Writeway report received on 27 February 2007 were not before the Commission when it made its decision and that pension should now be varied. For the reasons given above, I am satisfied beyond reasonable doubt that Mr Godwin did not experience a severe service-related stressor nor did he suffer a service related psychiatric illness. I am therefore satisfied beyond reasonable doubt that his PTSD is not war-caused. SECTION 31(4): ONLY THE " COMMISSION " AND " FALSE "? Neither contention prevails. 15 In support of the former contention, reliance was placed upon s 31(4) being expressed in terms of " Where the Commission is satisfied ". That provision, it was contended, necessarily excluded decisions which had been subsequently reviewed by the Tribunal. That provision, it was said, stood in contrast to s 31(6) which employed the statutory phraseology of " a matter that was not before the Commission, the Board or the Administrative Appeals Tribunal ". Where a power of review was intended to be conferred even after Tribunal review, the contention was that the Parliamentary draftsman employed the language of s 31(6). 16 The argument, however, ignores the effect given to a decision of the Tribunal. Where there has been a decision of the Commission which has been reviewed by the Tribunal, as in the present proceedings, the subsequent decision of the Tribunal is nevertheless " deemed " to be a decision of the Commission. Section 31(4) , it is considered, thus includes both a decision of the Commission and a decision of the Commission as altered, varied or affirmed. The effect of s 43(6) of the 1975 Act cannot be confined to simply identifying the date from which a decision of the Tribunal is to take effect. To so construe s 43(6) is to give effect only to the latter part of the provision and is to ignore the " deeming " effect given to a Tribunal decision. To conclude that the power of review vested in " the Commission " by s 31(4) could not be exercised after review by the Tribunal would be to construe s 31(4) as excluding a power of review where there has been a decision which is deemed to be a decision of the Commission itself and deemed to be a decision of the Commission " for all purposes ". A construction of a statutory provision which permits further administrative reconsideration subsequent to a Tribunal decision is not surprising: see, eg, Hanna v Australian Postal Corporation [1990] FCA 153 ; (1990) 12 AAR 511. 17 Irrespective of s 43(6) of the 1975 Act, however, it is further considered that the contrast in language relied upon by Mr Godwin as between s 31(4) and s 31(6) is misplaced. All that the language employed in s 31(6) prescribes are those circumstances in which the Commission may exercise the power there conferred. It may exercise those powers where it is " satisfied " that there is a " matter " that was not before any of the decision-making stages, be the decision one made by the Commission, the Board or the Tribunal. Such a provision provides little if any basis for confining the ambit of the power conferred by s 31(4). The difference in language as between s 34(4) and s 34(6) is not considered to be a sufficient basis to construe s 31(4) as imposing any constraint other than the one prescribed by the legislature, namely that the Commission be satisfied that evidence was " false in a material particular ". 18 The construction of s 31(4) urged by Mr Godwin was also said to be implicitly supported by the administrative decision-making hierarchy proceeding from the Commission, thereafter to the Board, and finally to the Tribunal. It was understood that the submission advanced was that s 31(4) was to be confined to the initial repository of decision-making authority and not to be extended to decisions which had been exposed to further administrative review. Albeit in the context of s 31(6), the same argument has been rejected: Davis v Repatriation Commission (1997) 74 FCR 577. The hierarchy consists of the Commission as primary decision-maker, the Board as the second tier decision-maker, and the AAT as the third tier decision-maker and ultimate forum of merits review. It was said that the review mechanisms provided by s135 and s175 were intended to result in the final disposition of claims. It was submitted that while the word "matter" standing alone would receive a wide construction, in the context of the review provisions as a whole it must be limited to a degree which is necessary to achieve finality in the disposition of claims. If s31(6) is not limited in this manner, the Commission could review decisions of the Board or the Tribunal again and again on any pretext in defiance of the review hierarchy. The limitation contended for was not more precisely formulated than this, but was said to lead to the conclusion that a medical report which merely repeats and endorses the conclusions in other reports based on documented observations, and which contains no new observation, fact, cause, circumstance, information, opinion or contention, is not capable of being a matter which was not before the Board when the decision to grant the pension was made. It was accepted that a medical report which was brought into existence to take into account some change in the facts and circumstances, or facts or circumstances not previously disclosed, might be in a different position. I see no reason to limit the ordinary meaning of the words "any matter that affects the payment of a pension ..., being a matter that was not before the ... Board ... when the decision to grant the pension ... was made" in the manner contended for. The "hierarchy" argument, which purports to be based on the structure of the review provisions of the Act, ignores the fact that s31 itself contains no less than seven exceptions to the simple three tier structure on which the submission is based. Far from supporting the contention that s31(6) would, unless narrowed, permit the Commission to review decisions of the Board or Tribunal in defiance of the review hierarchy, a reading of the relevant parts of the Act as a whole shows that the three tier review structure contended for is simplistic. Not only does s31 provide a number of additional grounds of review, but decisions made pursuant to the section are themselves subject to review under s135(3). ... The fact that s31(6) may be open to abuse (repeated reviews on any pretext), does not in my view require it to be read down. A capricious or unreasonable exercise of the power will be susceptible to review under s5 of the Administrative Decisions (Judicial Review) Act . 19 The alternative submission advanced on behalf of s 31(4) should also be rejected. This alternative argument assumed that s 31(4) did confer a power upon the Commission to undertake a review -- even after a Tribunal decision -- but contended that there was no power to do so in the present proceedings because there was no evidence which was " false in a material particular ". " False ", it was contended, should be interpreted as meaning " deliberately untruthful ". 20 There are at least two difficulties in acceding to this alternative submission. 21 First, the task of determining whether there was evidence which was " false in a material particular " is not a task entrusted to this Court; it is a task entrusted by the Commonwealth legislature to the Commission. Section 31(4) thus confers the power of review where " the Commission is satisfied that evidence before [it] when it made a decision was false in a material particular ". Where a discretionary power is vested in the Commission in such terms, it matters not that others may have reached a different decision and may have done so reasonably, provided that there was some probative material available to support the decision in fact taken by the Commission: cf Minister for Immigration & Multicultural Affairs v Eshetu [1999] HCA 21 at [45] per Gleeson CJ and McHugh J, [147] per Gummow J, [1999] HCA 21 ; 197 CLR 611. 22 Second, there was indeed material available to the Commission upon which it could reach the state of satisfaction that evidence previously before it was " false in a material particular ". The meaning of the term " false " depends upon the statutory context in which it is used. In some statutory contexts the term may mean " purposely or deliberately or intentionally untrue ": see, eg, Murphy v Farmer [1988] HCA 31 ; (1988) 165 CLR 19. The term " false " in the present statutory context, however, is considered to mean " objectively incorrect ": cf Musgrave v Martin [2003] FCA 920 at [105] , [2003] FCA 920 ; 130 FCR 546 at 565 per Weinberg J. Where the 1986 Act seeks to impose a requirement that a " false " statement be made " intentionally ", it so provides: see, eg, s 208. 23 Limited room for argument emerged as to whether the delegate had erred in the construction of the word " false " and whether he had erroneously construed the term as meaning " misleading ". The letter enclosing the s 31 decision to Mr Godwin's solicitors thus referred to an earlier decision as having been made on the basis of " misleading information " and the s 31 decision itself refers to " material which was false and misleading within the terms of s.31(4) ". 24 This conclusion of the delegate, and his requisite state of " satisfaction ", was able to be supported by the contents of the 2007 Writeway Research material. That material cannot be characterised as being merely equivocal as to whether the sampan incident occurred. To so characterise the material may have supported a submission that there was not now available to the Commission evidence upon which it could be satisfied that the earlier evidence was " false ". In addition to the personnel mentioned above, there were numerous other personnel who would have been in a position to witness a sampan being blown up by a patrol boat within sight of SYDNEY, particularly if their attention was drawn to it by the sound of machine gun fire. They included communications personnel on the bridge, the ship's Aviation Officer and his staff in Flyco (Flying Control) overlooking the Flight Deck who controlled aircraft movements in the vicinity of the ship, the Cargo Officer and members of the cargo handling party on the Flight Deck and ship's divers based on the quarterdeck. Had a sampan been blown up near SYDNEY by a patrol boat, with bodies and body parts being thrown into the air, it would almost certainly have been observed by a large number of people, and it would have been reported to the PCO on the bridge. As such an incident would have been indicative of a possible threat to SYDNEY it would have been reported to the Commanding Officer, and the PCO would probably have asked the Harbour Control Post for information about the incident, particularly whether it appeared to be related to the presence of the two RAN ships. However, I did witness an incident that may be relevant; this involved a sampan (or fishing boat) and an armed patrol boat, which I think was South Vietnamese but may have been US Navy[. Given the nature of the incidents recorded in the monthly summary, as indicated in the extracts attached, it could be expected that the interception and sinking of a suspect junk in the anchorage at Vung Tau, would have been included in the summary. 25 It is thus considered that s 31(4) confers a power to review a decision after a decision of the Administrative Appeals Tribunal. That power was open to be exercised by the Commission by reason of the fact that there was material upon which the Commission by its delegate could be " satisfied " that the evidence previously before the Commission was " false in a material particular ". 27 The Applicant concedes that the power conferred by s 31(6) may be exercised after there has been a review by the Tribunal. Given both the terms of s 31(6) and the decision of Sundberg J in Davis , that concession was quite properly made. 28 The Applicant, however, contends that there is in the present proceedings no " matter " which was not before the Tribunal. The power in s31(6)(a) is available to the Commission only if it is satisfied of the existence of a matter that affects the payment of a pension and which was not before the decision-maker. If the " new material " is no more than a repetition of material that was before the decision-maker, it would not be reasonably open to the Commission to be relevantly satisfied that the material " affects the payment of a pension ". It is understood that the " matter ", as defined by the Applicant, was whether or not the sampan incident occurred. The contention sought to be advanced is that the material relied upon by the delegate was, presumably, " a repetition of material that was before the decision-maker ". 30 It is considered that this submission should also be rejected for at least two reasons. 31 First, the term " matter " can include new evidence relevant to the manner in which the prior decision was made. Section 31(6)(a) has not been construed, and should not be construed, as precluding an exercise of the power of review where new evidence or other material becomes available which has not previously been considered. And it may not matter that that new material was available even at the time when the Tribunal made its decision. A variation of this argument was that the Commission, having had a reasonable opportunity to put Professor Cade's report before the AAT, had not done so, and so was not able to use the report to found an exercise of power under s31(6). These assertions were not developed in argument, and in my view they have no substance. If material becomes available after the relevant decision is made, and it affects the payment of a pension, the power in s31(6)(a) is available to the Commission. It is simply irrelevant that it becomes available at a time when the Commission might seek a review by the AAT. The Commission may engage in conduct which disables it from taking a particular course, but in the absence of any such conduct, it can pursue whichever avenue it chooses. The second argument advanced has overtones of estoppel without any factual basis to support the estoppel. 32 Section 31(6) should not be construed as excluding from the term " matter " new evidence, albeit evidence in relation to an area of factual dispute previously resolved. In Davis, it may be noted, the new evidence which satisfied the requirements of s 31(6)(a) was a medical report which " contained an expression of opinion from a highly qualified medical specialist, based on contemporary clinical and laboratory evidence, that persuasively identified the cause of death to the exclusion of other possible causes ". 33 Second, there is the same difficulty as confronted the Applicant with respect to s 31(4), namely that the power conferred by s 31(6) is a power vested in the Commission if it is "satisfied " of the matters there set forth. The contents of the 2007 report provided a basis for reaching that state of " satisfaction ". 34 Section 31(6) was thus also a basis for review open to the delegate. RES JUDICATA AND ESTOPPEL ? It is submitted that in all the circumstances, the principle of res judicata apply". In addition, Mr Godwin sought " leave to amend the Order of Review to include reliance upon the doctrine of estoppel . It is submitted that the Respondent is precluded from contending to the contrary a fact which has been distinctly put in issue by them and found against them in the Tribunal ". 36 There are at least two difficulties in accepting either contention. 37 First, as a general proposition, adjudication by an administrative tribunal is administrative in character and does not create an issue of estoppel : W J & F Barnes Pty Ltd v Federal Commissioner of Taxation [1957] HCA 23 ; (1957) 96 CLR 294 at 315. And that general approach has been applied in respect of decisions of the Administrative Appeals Tribunal: Midland Metal Overseas Limited v Comptroller-General of Customs (1991) 30 FCR 87. But even where the tribunal substitutes its own decision for that of the original decision- maker, the tribunal in so doing is merely acting in an administrative capacity. Its decision is deemed for all purposes to be the decision of the decision-maker: s 43(6) of the AAT Act. To use the language of Rich and Dixon JJ in Jolly v FCT [1935] HCA 21 ; (1935) 53 CLR 206 at 214 referring to the taxation boards of review, but equally applicable to the tribunal, the tribunal is: "only another executive body in an administrative hierarchy". The tribunal's function, like that of the taxation boards of review which it, inter alia, replaced, is, to adapt the language of Kitto J in Mobil Oil Australia Pty Ltd v FCT [1963] HCA 41 ; (1963) 113 CLR 475 at 502, merely to do over again what the decision-maker himself did; not to give a decision which affects the legal situation of the person dissatisfied with the decision but to work out, as a step in administration what the tribunal considers that position to be. In relation to the taxation boards of review, Kitto J in W J & F Barnes Pty Ltd v FCT [1957] HCA 23 ; (1957) 96 CLR 294 at 315, said: "The board's decision was not, of course, an adjudication; it was administrative in character, and could not create an issue- estoppel. This decision has since been followed: Lilienthal v Migration Agents Registration Authority [2001] FCA 2 at [20] , 65 ALD 437 at 442 per Katz J. 38 Second, the conclusiveness of any administrative determination, it is considered, must necessarily be dictated by reference to the statutory regime pursuant to which decisions are made. The present statutory regime expressly reserves unto the Commission the power to conduct a review, even after a decision has been made by the Tribunal. The power conferred by s 31 to undertake a review is an answer to any submission as to res judicata or estoppel. Departing from the language employed by s 6 , the Applicant has also sought to characterise the Commission's conduct as " vexatious and perfidious and was grossly improper in all the circumstances ". 40 None of these grounds have been made out. All that has happened is that the proceedings before the Tribunal in 2005 and 2007 were conducted on one basis and the s 31 review proceeded upon the basis of further factual material then being available to the delegate but not the Tribunal, in particular the Tribunal that carried out the " eligibility " review in 2005. There has been no " misuse " of the discretionary power conferred by s 31. Nor is it considered " contrary to the public interest " to exercise that statutory power in the present case. 41 Left to one side has been any consideration as to whether the " conduct " relied upon was conduct engaged in " for the purpose of making a decision to which " the 1977 Act applies. 42 There has been no challenge by the Applicant to the manner in which the Repatriation Commission conducted its case before the Tribunal. The Commission frankly informed the Tribunal members conducting the 2007 hearing of the s 31 review being undertaken. And it is common ground, for the purposes of the present proceedings, that it was no part of the tasks entrusted to the Tribunal in 2007 to revisit the finding as to eligibility previously made by the Tribunal in 2005. That action may or may not ultimately be successful but this Tribunal proceeded upon the basis that the Applicant has a war-caused PTSD. We note that the Applicant's treating Psychiatrist Dr Hayes has adverted to a false history but has proceeded to make his diagnosis on the basis of accepting the history given him by the Applicant, while stating any diagnosis may need to be reconsidered. 43 The challenge which is made on behalf of the Applicant to the manner in which the Commission exercised is discretionary power springs from essentially two sources: one is the historical review undertaken by the advocate within the Commission who had been entrusted with the task of reviewing Mr Godwin's file; the other is an account given of conversations as between that advocate and a solicitor who had carriage of Mr Godwin's case. 44 As to the former, the account given by the advocate was that in January 2007 she had been asked by the Assistant-Director of Review " to review the files in relation to the AAT proceedings N2006/0592 ". That file was the file maintained in respect of the assessment of Mr Godwin's pension. Rather than confining her attention to matters immediately relevant to the assessment, the advocate went on to " seek a further historical research report into the 'sampan incident' ". She understood that " American records not readily accessible at the time of AAT proceedings N2003/1270 had since become readily available ". It was that review which undermined the Applicant's eligibility to a pension. 45 As to the latter source of challenge, the solicitor acting for Mr Godwin deposed to a number of conversations with the advocate. I am considering whether to conduct a s.31 review of Mr Godwin's accepted condition of post traumatic stress disorder ... Neither deponent kept any contemporaneous file note of any of the conversations. Both witnesses were cross-examined. The solicitor, for example, maintained that she remembered parts of the conversations " distinctly " and her account should, so it was submitted, for that and other reasons, be accepted. The advocate had no delegation to conduct a s 31 review and, so it was submitted on behalf of the Commission, was unlikely to have said the words attributed to her. 46 It is not considered necessary, however, to resolve any such discrepancies as may have emerged from the differing accounts; nor is it necessary to resolve whether the submissions advanced on behalf of Mr Godwin went beyond the Application filed in this Court, as supplemented by his Outline of Submissions . It is also unnecessary to resolve whether or not submissions which were sought to be advanced were not available to the Applicant by reason of questions not being put to the advocate which should have been put in accordance with the principles of Browne v Dunn (1893) 6 R 67 at 70---1 per Lord Herschell LC. For example, the advocate was never asked in cross-examination whether she had deliberately set out to obtain evidence to defeat the eligibility of the Applicant. 47 In the present case there is no basis for concluding -- as submitted on behalf of Mr Godwin -- that the delegate was " off on a frolic to disprove the Applicant's entitlement ". Such reliance as is sought to be placed, on behalf of Mr Godwin, upon the limited instructions given to the advocate in January 2007 does not support any conclusion that the advocate was conducting any review of historical records which was not within the ambit of her instructions. And, even if the solicitor's account of the conversations with the advocate prevail, those conversations do not support any conclusion that there had been an unreasonable exercise of power or an exercise of power in bad faith. A BREACH OF SECTION 178? In doing so, the Respondent has failed to comply with the provisions of section 31(12) and section 178(1) which prohibits the Respondent from such action within six months of a decision by the Tribunal in respect of the rate of pension. The Tribunal decided the rate of pension for the Applicant on 28 August 2007, less than two weeks before the Respondent's decision. Pursuant to s 178(1), that decision was " binding ... for a period of 6 months " as from 28 August 2007. The Tribunal's decision said nothing as to the period prior to 5 May 2005 and s 178(1) has no application to that prior period. 52 Nor did the delegate's decision purport to diminish the effect otherwise given to the decision of the Tribunal pursuant to s 178(1). In any event, the six month period referred to in s 178(1) has expired. The decision of the delegate, it should further be noted, has previously been stayed by an order of this Court. 53 Accordingly, no breach of s 178 has been established. AN ALTERNATIVE MEANS OF REVIEW: SECTION 10(2)(b)? 55 This final submission was that any relief to which the Applicant was otherwise entitled should be refused in the exercise of the Court's discretion. 56 Adequate provision is made for review, it is said on behalf of the Commission, by such means of administrative review as are conferred by provisions such as s 135 of the Veterans' Entitlements Act 1986 (Cth). 57 Had it been necessary to resolve this submission, it would most probably have been resolved against the Commission. The questions of statutory construction agitated by the parties before this Court have not been without difficulty and a decision to invoke this Court's jurisdiction is not considered to have been an inappropriate way in which to have proceeded. Application dismissed. 2. The Applicant to pay the costs of the Respondent of and incidental to the application. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | veterans' entitlements act 1986 (cth) decision of administrative appeals tribunal subsequent s 31 review decision s 31 review not beyond power evidence before commission " false " " matter " may include new evidence no res judicata or estoppel no misuse of the s 31 power of review veterans' entitlements |
The applicants made the same claim against the respondents in earlier proceeding, although in connection with different house plans. The respondents say that the applicants' present claim ought to have been included in the earlier proceeding and that the applicants are now estopped from bringing the additional claim in this proceeding. Whether or not this defence prevails is to be determined at a trial later this month. The respondents have submitted 17 proposed interrogatories for consideration. The applicants opposed leave to administer these interrogatories, essentially on the basis that they were not relevant to any material fact in dispute. They also opposed them on the grounds that they were too broad and oppressive. Having regard to the Amended Reply, relevant parts of Mr Roberts' affidavit and the applicants' counsel's statement of the applicants' case today, I am not persuaded that the proposed interrogatories are relevant to any material fact in dispute. This is basically because, so far as relevant, the essential facts are not disputed. Following the hearing on 7 August 2008, the applicants amended [1(b)] of their Reply. That awareness came from the applicants' employees or Anthony Roberts and Daniel Stutterd seeing such advertisements or articles concerning such homes in newspapers or industry magazines distributed in metropolitan Melbourne, including the magazines distributed in the Herald Sun newspaper, or from advice from employees of the applicants who had seen such display homes. The applicants cannot state with any more precision the date or how they became aware of each of the First Respondent's Houses. I also do not recall, and have no written record or any other way of identifying, how I, or any other person employed by Porter Davis, first became aware that Metricon was offering for sale the First Respondent's Houses. This is because Porter Davis did not trade and had no plans to trade in country Victoria market during this period. According to counsel for the applicants, the admissions in [1(b)] of the Amended Reply, read with Mr Roberts' affidavit, took the issue of the applicants' knowledge out of contention. Counsel for the respondents argued, however, that the imprecision of the admissions and evidence entitled the respondents to interrogate further. The respondents' counsel submitted that the windows of time created by Mr Roberts' evidence might turn out to be significant in the disposition of the case. There was force in this argument. It was met, however, by the applicants' counsel when he said that the applicants would not segment time and seek to make anything of the dates upon which the applicants became aware of the house plans in dispute, other than to say, in a general way, that litigation costs increased as the litigation continued. The applicants conceded that it would have been open to them at any time prior to trial to have made application to amend. Furthermore, in light of the way the applicants' counsel stated the applicants' case that it was reasonable for them not to have amended their pleadings so as to include the additional claims, the manner in which the applicants came to acquire knowledge of the additional house plans is also apparently irrelevant. I accept too that parts of interrogatories 3 to 17 were objectionable in other respects. Unless further limited by reference to time, they travelled into areas where, on almost any view, there could be little scope for useful dispute about the material facts once the relevant knowledge was admitted. Save for questions 1 and 2, they were, in general, broad, open-ended questions, with the result that some were oppressive (see questions 11, 13 and 15). Other questions (see questions 8 and 9) were proper for cross-examination only. I have considered whether I should view questions 1 and 2 differently from the other interrogatories. These questions seek for details of [1(b)] and [1(c)] of the Amended Reply. They are directed to the identity of the employees who gave advice to the directors and the details of this advice, including when it was given. These questions were not unduly broad, oppressive, or fit only for cross-examination. They were in the nature of a request for further and better particulars. It seems to me, however, that the information that they might elicit is largely already given by Mr Roberts, particularly in the passages set out above, and, in any event, nothing materially turns upon these further details in light of the way the applicants have said that they will put their case. In all the circumstances, I would refuse leave and order accordingly. The question of costs was raised at the conclusion of the hearing. I would not accede to the applicants' application for costs. The applicants themselves acted responsibly in altering the litigation landscape by their Amended Reply and in filing further affidavits. It is against this landscape that the respondents' request to interrogate was substantially reduced. The respondents failed today in part because of the practical way in which counsel for the applicants has stated the applicants' case. The applicants' attitude was not, however, known to the respondents' counsel prior to the hearing. In the circumstances, the proper course is, so it seems to me, to order that the costs of the motion, notice of which is dated 11 July 2008, be costs in the cause. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | application for leave to administer interrogatories whether interrogatories relevant, too broad or oppressive leave refused practice and procedure |
The Tribunal had affirmed the decision of a delegate of the first respondent made on 31 January 2005 not to grant protection visas. 2 The appellants are husband and wife. Only the appellant husband made claims under the Convention with the appellant wife relying on membership of his family unit. I will refer to him as the appellant. The appellant claimed he had a well-founded fear of persecution on the basis of his imputed political opinion and his religion. He claimed to be an adherent to the banned movement known as Falun Gong. 4 The appellant claimed to have become a sympathetic supporter of the Falun Gong after the movement was banned by the Chinese Government in 1999, and then became actively involved in Falun Gong after he was caught helping to protect a Falun Gong practitioner who was a work colleague. He claimed he was dismissed from his employment in March 2000 because he repeatedly challenged communist officers about the banning of the Falun Gong. In July of that year, he says that he became involved in the distribution of Falun Gong promotional material, and lent support to practitioners. He claimed that he was detained for fifteen days in July 2001, and he was tortured during that time. 5 In 2004, after the appellant had became a "firm" Falun Gong practitioner, government officials who came to his home to take his wife away for a forced abortion found Falun Gong material at his home. He claimed that he was detained for a second time but he was allowed to return home after one week because his wife needed someone to look after her. 6 It was after this that the appellant took steps to leave China. He claimed that if he returned to China he would be subjected to persecution. Various errors in the interpretation of questions by the second Tribunal and answers given by the appellant had occurred during the hearing. These errors were said to have been rectified by the appellant in written submissions and a correct transcript provided to the Tribunal after the hearing. 8 The appellant's claims were rejected by the Tribunal for want of credibility and grave unresolved contradictions in his evidence. The Tribunal rejected the appellant's claims to have been a Falun Gong sympathiser. It did not accept that he later became a Falun Gong practitioner or that he was involved in distributing or making Falun Gong propaganda, or that he suffered any resulting persecution. 9 The Tribunal accepted that the appellant had demonstrated a familiarity with Falun Gong but found that this was the result of coaching in order to strengthen his claims. It rejected his evidence that he became involved in a Falun Gong study group in Australia soon after his arrival, finding instead that it was not a practice group for practitioners but a study group for applicants for refugee status. 10 The Tribunal accepted that the appellant later became involved in Falun Gong in Australia but found that he did so to strengthen his claim, and it gave his involvement no weight in accordance with s 91R(3) of the Migration Act 1958 (Cth) ("the Act "). 11 The Tribunal accordingly was not satisfied that the appellant had a well-founded fear of persecution for a Convention reason. 13 While the Federal Magistrate agreed that the standard of interpreting at the second Tribunal hearing left a lot to be desired, his Honour concluded that the Tribunal had taken appropriate action in dealing with those errors. As a result, he held that there had been no breach of s 425 of the Act . The application was accordingly dismissed. The learned Federal Magistrate erred when his Honour found that the Refugee Review Tribunal (the "Tribunal") had not committed jurisdictional error. His Honour erred by failing to find that the Tribunal had complied with section 425 of the Migration Act 1958 when, in fact, the standard of interpretation at the purported hearing before the Tribunal was so incompetent that the Appellants were denied the opportunity to give evidence and present arguments at a hearing. The interpreter failed to accurately interpret the evidence given by the Appellant during the hearing on 11 October 2006. The Tribunal failed to offer a further hearing with a competent interpreter. The Tribunal's decision was vitiated by jurisdictional error on account of the Tribunal conducting its review in such a manner as to attract a reasonable apprehension of bias. However, the first respondent objected to the proposed new second ground. I determined to hear the merits of the proposed substituted ground along with the substantive appeal on the basis that there was a deal of overlap in the relevant factual matrix and to deal with the question of leave in my judgment. The first ground contains an error it seems to me. I will take it that the appellant intended to complain that the Federal Magistrate erred by finding that the Tribunal had complied with s 425. None of those situations under s 425(2) which exempt the Tribunal from compliance with s 425(1) is present in this case. 19 The right pursuant to s 425 is not a merely formal right, but is a right that imposes an objective requirement on the Tribunal to provide a 'real and meaningful' invitation: Minister for Immigration & Multicultural & Indigenous Affairs v SCAR [2003] FCAFC 126 ; [2003] 128 FCR 553 at [37] . Compliance with s 425 of the Act by the Tribunal is a precondition to the valid exercise of its jurisdiction. Failure by the Tribunal to comply with the requirements of s 425 of the Act involves a "jurisdictional error": SCAR at [38]. The statutory obligation upon the Tribunal to provide a "real and meaningful" invitation exists whether or not the Tribunal is aware of the actual circumstances which would defeat that obligation. The statutory obligation upon the Tribunal to provide a "real and meaningful" invitation exists whether or not the Tribunal is aware of the actual circumstances which would defeat that obligation. Circumstances where it has been held that the obligations imposed by s 425 of the Act have been breached include circumstances where ...the applicant was invited to attend and did attend before the Tribunal, but was effectively precluded from taking part because he could not speak English and a translator was not provided or was inadequate : Tobasi v Minister for Immigration and Multicultural Affairs [2002] FCA 1050 ; W284 v Minister for Immigration and Multicultural Affairs [2001] FCA 1788. The interpretation before the Tribunal must be so incompetent that it prevents the appellant from giving evidence: Perera v Minister for Immigration and Multicultural Affairs [1999] FCA 507 ; (1999) 92 FCR 6 at [38] . Further the departure from the requisite standard of interpretation must relate to matters which were significant to the appellant's case in the Tribunal as well as to the Tribunal's decision: Perera at [45]. Perera was cited with apparent approval by the Full Court in Liu v Minister for Immigration and Multicultural Affairs [2001] FCA 1362 ; (2001) 113 FCR 541 at [44] . That passage was itself cited by the Full Court in SCAR at [34]. 21 While it is accepted that a perfect interpretation is never possible, it is essential that the interpreter serve as an accurate means of communication between the parties: Gaio v The Queen [1964] PGHCA 2 ; (1960) 104 CLR 419 at 433. It is sufficient that the translation is sufficiently accurate so as to convey the idea or concept being communicated: WACO v Minister for Immigration and Multicultural and Indigenous Affairs (2003) FCR 511 at [66]. It is a transcript both obtained by the appellant and provided by him to the Tribunal after the hearing on 11 October 2006 using an external Level 3 NAATI Mandarin interpreter. It is not merely a transcript of the questions asked by the Tribunal Member and the answers of the appellant interpreted into English by the Mandarin Interpreter present at the Tribunal hearing. It also contains the English translation by the external translator of the questions put to the appellant in Mandarin by the Interpreter at the hearing as well as the English translation by the external translator of the appellant's answers in Mandarin. 23 By this method any discrepancies in the interpretation of the Tribunal Member's questions and the appellant's answers can be identified. Words contained in parentheses in the transcript were spoken in Mandarin at the hearing and were subsequently translated into English by the external translator. I have adopted the same parenthetical method in these reasons where excerpts from the transcript are set out. Was there a departure from the standard of interpretation? I have, in these tables, used "M" for the Tribunal Member and "A" for the appellant. It demonstrates the considerable confusion on a significant issue caused by inadequate interpretation. AB Page Actual Questions and Answers Translation 274 M: How often were you gathering with that group? (How long did you meet with them? And how many times? ) 274 A: (Every morning, I went to Burwood exercise site to practice Falun gong. ) In Burwood, I went every morning to the place where we do exercise. 276 M: Why do you feel you are closer to that place? (Why do you think so? ) 276 A:( because as far as distance is concerned, I think it is closer. ) As far as distance is concerned, I feel we are closer. 278 M: You told me that the place was closer and I asked you what do you mean by that, and you didn't talk about the distance, you talked about other issues, and I wonder why you didn't answer the question on the point on this occasion. (Do you understand what I am asking you? I asked you why you thought it is closer. You didn't tell me why you feel closer, but to talk about some other advantages, are you with me? ) 278 A: (I still can't understand you. After I came to know my colleague practitioner, I always went there with him due to the short distance to my residence. Moreover most people speak mandarin there. ) Where I live, I have a colleague, members of the same site It is more convenient for us to go together and we speak Mandarin. The Tribunal reasons dealt at length with this subject matter. An analysis of this is contained at paras [56]-[69] and [90]-[95] below. Page Actual Questions and Answers Translation 284 M: In a statement you said to me, you said you changed from Burwood to Auburn when you moved to Homebush but that's different from what you said today. (In your previous statement, you said that you changed from Burwood to Auburn because you moved to Homebush. This is not right isn't it? ) 284 A: (That's interpretation error. ) That was an incorrect translations by the translators. 285 M: What is? What is an incorrect translation? (What is? At where it went wrong? ) 285 A: (Now I couldn't understand what the question is) I couldn't hear the question properly 291 A: (One of them is for refugees and it was self organised by refugees) One of the groups consists of all refugees 291 A: (That one was not held on a daily basis, but on every Thursday) That one meet every Thursday not everyday 291 A: (At that time, I always went from Berala to Burwood group. Most of the time I went to the refugee group. The reason why is that I have to get in touch with some practitioners as I was new to the group. Thus I went to the refugee study group. ) My statement concerning going from Berala was directed to at...at Burwood refugee exercise group. 292 A: (When I was in Berala I went to the Burwood refugee group for Dafa Learning) In the group that I went to Burwood when I was staying in Berala was for the refugee exercise group 292 M: That's the one you were with when you were in Berala? (Were you in Berala at the time? ) 295 M: But I can't see how the interpreter, the translator of this document heard you were talking about Thursday night group and wrote all this stuff about a morning group (He said that " I couldn't understand why the translator mentioned about your Thursday night group" also talked about morning exercise group. ) 299 A: (That was the place for morning practice) That was early in the morning exercise. 299 M: When did you start with the refugee group? (What about the refugee group? ) 299 A: (We only went to the refugee group every week Dafa learning, Dafa learning in the refugee group) There was a weekly meeting 299 M: But when did you start with it, when did you commence with it? Which month, which year? (Which month and what time? ) 300 A: (The time I lived in Berala was probably... I came to know a Refugee group in Burwood, because there are two groups, one in the morning the other at night. I came to know the morning group one month later) not translated - interrupted by Tribunal Member 301 A: (Maybe around March 2005, or February, March? Anyway until April. At the time I didn't leave from Berala to my new address. ) My memory is not too good, it could be February or March in Any case it is one month before I left Berala. They include the Interpreter telling the Tribunal Member that the appellant wanted (in his answer) "... to make an amendment". The appellant said no such thing. Page Actual Questions and Answers Translation 328 A: (At the beginning I supported Falun gong when I was in china, then I participated and started to practice. After my arrival to Australia, I practice more often. ) I want to make amendment. In china, initially I was a supporter, but I did practice later, in Australia, I practiced further. 331 A: (some issues for the last time I indeed didn't hear clearly, If he asked me "did you practice Falun gong in China, I would have answered. ) Last time indeed I could not fully understand some issues. If the question was asked "did you practice Falun gong in China? " I would have answered. 332 M: You had freedom reign in the statement you made through Mr Jeans, and this statement you are presented as a person who supported Falun gong in China and practiced in Australia (In your statement from Mr James, you can say whatever you like. In your statement it says that you were a supporter to Falun gong not a practitioner. ) 332 A: (I gave my written documents to the immigrant agency at the time. Something may go wrong while the document was drafted. ) I bring all my written documents to the agent, and in the transfer there could be some errors. 350 M: When did you start to practising Falun gong in China? (When did Falun gong start in china? ) 351 A: (The Master preached the Dafa on May 15, 1992) 15th September 1992. 351 A: (15 May) My master transferred his practice to me on 15th May 1992. 351 A: (formally it counts from that day... to teach the public) Transmit the doctrine. 355 M: But you told me that the Master transferred his practice to you, transferred his practice onto you 16 years ago. (You said your Master confer the practice to you. What do you mean by saying preaching the Dafa? ) 355 A: (That is to say he teaches the public. It has been 16 years since he started to teach the Dafa on 15th May 1992) Transfer means teaching 355 A: (The formal preaching was started from 1992. Since then, it has been taught across the country and all over the world gradually. ) Perhaps the term I use is, the literal is "transfer the doctrine" it maybe teaching, might be a proper better word. Falun gong officially teaches its doctrine since 1992. I was enlightened by the Master step by step. ) This is what we Chinese called destiny, my destiny did not, wasn't ripe, its my interpretation. OK? Wasn't ripe prior to 01. My master is converting me stage by stage. 357 M: and what made it ripe in 2001 (Why an affinity is reached at the year 2001. Dafa? Are you referring to Falun gong? Dafa refers to Falun gong. I get to know more and more after 2001. Apart from propagating the materials, I have faith in it. ) Because I have more occasion to be in touched with the Great Philosophy, the great method, which is Falun gong, because I had a car and I was able to transport the publicity material, so I have more occasion to be in touch to be in contact with them. 358 M: I don't know how having a car, transporting client materials has anything to do with you suddenly becoming more enlightened or <inaudible> (I can't see why having a car enables you to transport the materials for them. ) 358 M: nine years after you were exposed to the Falun gong, two years after it was banned (Ok, I don't know why having vehicle materials can make you devote yourself into Falun gong. This was after their preaching in 1999, after two years banning by the government. ) 359 A: (The very reason why it was banned is that people always have desires to know an unknown thing. Once I know, I found it is so great that I began to have faith in it. ) Because they have banned it, it created a desire for me to understand it more. Once I understood it more, I wanted to be with it. I realised the (incomplete). 361 A: (besides, I would also like to know why the CCP suppress the Falun gong. This is the very reason why I wanted to know more, to find out what organisation it is. ) Because the communist is banning Falun gong, I want to know exactly what organisation it is. 362 M: I thought it is important to ask you a number of questions about it rather than just to dismiss it because you hadn't mentioned it before (As you haven't mentioned before I cannot rule this out of my consideration immediately. This is why I have raised you so many questions to you. ) 362 M: So I have gathered more information from you about what your claim was your involvement as a Falun gong practitioner in china. (So many questions have been raised to you on your Falun gong practice in china. Page Actual Questions and Answers Translation 307 M: But still nothing about the Burwood group that you described in the last hearing or in this particular written statement that I am reading back to you. (I couldn't see any evidence for the member of the Burwood group. ) 308 A: (First, people in the Auburn group are all refugees. Sometimes their cross-validations are not to be accepted. This is because they are not Australian citizen) Firstly the reference from Auburn the reference from auburn they all from refugees, I did not submit them because they are not residents. 308 M: you did submit them, it comes through you (He said that you did submit them. ) 309 A: (That's for the refugee group. The one I submitted is from the leader of the Refugee group. His name is Wu Jianghua) The only one who for the responsible person for the Refugee group is Mr Wu Jianghua. 309 A: (In the Burwood exercise group, the morning group, a lady whose name is Kitty. The very reason why I did not ask her to write me a statement is that I am no longer practice there. I Could find her as she went abroad to listed the lecture few days ago. Time is very tight for me to wait. But I can provide the documents if it helps. ) The Burwood morning group, the responsible person is called Cathy, she was out of the country, for, for to give evidence elsewhere. And if necessary, I can get her evidence. 310 A: (Actually our time is flexible. We sometimes met on Thursday that depends on his work commitments. Now we always meet on Friday whilst it used to be on Thursday) He may not have written it in exact detail, our meetings vary from time to time depends on his work commitments. We used to be on Thursday night, now we meet on Friday night. 310 M: If you say he hasn't written in exact detail, you are asking me whether I should give weight to his statement (You say he hasn't written in exact details in other words, what were you saying. Whether I should give weight to his statement to make my decision. ) 311 A: (This is because that we all changed to Parramatta on Friday. The Parramatta I referred is the place that I am currently in for Dafa learning. ) We all moved to Parramatta now, and its no Friday. So when I mentioned Parramatta it is what I meant Friday 313 M: He says you meet Parramatta Council meetings on Friday night (He said that he saw you in Parramatta Council on Friday. ) 313 M: It would be very hard for me to read Mr Wu's statement as your evidence with your involvement of Falun gong prior to the last hearing of the RRT (So I can not look at Mr Wu's statement to prove your, in Falun gong at last hearing prior to the Tribunal hearing, your relationship with Falun gong. (To prove your relationship with Falun gong prior to the last Tribunal hearing, I can't consider Mr Wu's statement. ) 315 M: If I were to arrive of that view, I don't ever do so lightly, I would be required under the law to disregard this part of your case (I do not do it so often but suppose if I have a, if I have to draw a conclusion, then I probably will take the other, his statement will not be taken into my considerations. ) 316 M: but were you actually integrated, involved, were you actually involved in Falun gong group practice, you say you were prior to the last RRT hearing, but there is still no evidence really you were, even if I look at the photographs. And even I accept that that's Burwood (If I see your photos, I still have no evidence to prove your relations with the Falun gong prior to the last hearing. ) 319 A: (This was in St James. There is a festival which is to be held on the very same day each year. I have a document. I also went there this year, but I didn't take photos. This was last year in 2005) St James. 319 A: (All these were taken either this year or last year, this one was in 2005) No translation 320 A: (This was in the 2005 Australian Falun Dafa Experience Sharing Conference) This is national conference 05. 320 A: (Around October, it was in the Park close to the Central railway station to support the Falun gong) Central railway station. 320 M: When was that one with the banner was taken in memory of <inaudible>. (Which month) 320 A: (Last October, Oh February to March 2006, March to April? ) May February April 2006. 322 A: (I didn't take too may photos as I did not do it intentionally. We should give up all kinds of human attachments. Thus I can't take too may photos) I can't take too many photos. 322 M: Nothing tells me that you are anything but a distance observer of these people (Only this photo I can take into consideration. ) 323 M: Ok I presume that sculpture quite distinctive and would lead me to a park in Burwood (I just need to check out the credibility. Attitude. So I have a.... Attitude to this point. ie. you are a Falun gong practitioner. ) 364 M: to make any further submissions to this matter as you like Use statement to this matter 364 M: it was suggested to me earlier I might like to gather more details from a particular witness, that witnesses is welcome to provide more details. (If witness, you can also use witnesses' statement you can write into your statement that you practiced Falun gong in China by 5pm on 20th October. ) 364 M: you may want to review this hearing with Mr Jeans and if you may feel there are more things to say (Do you have more things to say to the hearing? This area is also analysed at paras [97]-[103]. Page Actual Questions and Answers Translation 337 A: (This is because I was under detention before. Although this is not a real crime, it will affect me to obtain a passport. Does it mean mobile arrest warrant? In china, criminal detention means offence to the law while administrative ones is the general warning and the like) Because my residence would have some light criminal record, but did not have a crime record but because to get a passport I therefore need to spend money to get my passport. 341 M: You said that if the authority had any record of your passport you couldn't get out. But the point I am putting to you if that passport was not connected, if they found that the passport was not connected to any records, they would arrest you at the airport (You just said if you have had any criminal record in the authority. You would not be allowed to go out. But they let you go, which means you do not have any records there. ) 348 A: (We paid for the passport. As long as we paid, they will give you the passport. Your previous records would not be recorded to my passport as they charged me for this) The money I paid is for the passport, they can't erase or erase my previous records. They all they do is to give you your passport because you paid. 348 A: (In china, the department for issuing the passport and the local police station belong to two functional divisions) The agency that provide passport, the organ, the department providing the passport is different from Public Security 349 A: (It is in the community and it is under the control of the community. Like me, I had to report to the local police station every week. Not the public Security Bureau, not the PSB. Are the local police stations the branch offices of the PSB? At local level? In the community) The department that issues passport is a separate department from the regional offices of Public Security Bureau that I have to report to. one is at a provincial level whilst the other is at the state level. They are two different levels) There are different levels of operation in the PSB if the province of Liaoning is after someone, the provincial level, it may not be the Chinese government is after that particular person. 30 Perera does not, at [37] or at all, contrary to the reasons of the Federal Magistrate at [57] stand for the proposition that errors in interpreting can be rectified. Nonetheless, I would accept that in certain circumstances errors of that kind may be rectified. This could be done by written submissions to the Tribunal after the hearing: Applicant NAAF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62 ; (2004) 221 CLR 1 at [25] per McHugh, Gummow, Callinan and Heydon JJ and per Kirby J at [75]. It could also be done by the provision of a corrected transcript accepted by the Tribunal as accurate. Indeed, that is what occurred in this case in respect to the question of when the appellant commenced the practice of Falun Gong in China. Such errors however cannot always be rectified in this way and a further oral hearing at which an applicant gives evidence may be necessary. It will at least depend on the nature and extent of the errors. 31 It is the first respondent's submission that the interpretation errors were rectified by the provision of a correct transcript to the Tribunal by the appellant after the hearing. The Applicant and his adviser have not asked for a third RRT hearing, and have said that the transcript helps to overcome deficiencies in the oral interpretation of the Applicant' s 11 October 2006 evidence. Guided by the concerns raised in the 27 October 2006 submission, the Tribunal is confident that it has sorted through instances where the Applicant misunderstood questions by the Tribunal that were misinterpreted or inadequately interpreted on 11 October 2006. The Tribunal has also relied, as the Applicant and adviser have indicated they would prefer it to rely, on the transcript's written translation of the information provided by the Applicant at the 11 October hearing, rather than the oral interpretation, the occasional shortcomings of which are shown in the transcript for comparison with what the Applicant is shown to have actually said. The Tribunal has taken account of all of the errors to which the adviser refers. Some of the variations between what the transcript reports the Applicant as saying and what the interpreter related on the day appear to be insignificant variations; however, the Tribunal accept that there were errors and is grateful for the transcript on which the Applicant and his adviser evidently rely and which they have provided to the Tribunal. In view of their concerns, and paying close attention to their specific examples of errors, the Tribunal has relied on the translations by the NAATI-accredited expert who undertook the transcript, where those translations differ significantly from the versions of the evidence provided through the interpreter at the hearing. It is the case that certain, but not all, matters were to an extent clarified by the post-hearing written submissions contained in the letter to the Tribunal from the appellant's migration agent dated 27 October 2006, as well as by the transcript. For example the Tribunal in its reasons acknowledged that its view that the appellant's claim to have become a Falun Gong practitioner in China some nine years before he had previously claimed to be one, and which had raised credibility concerns in respect of the appellant, had arisen as a result of a misunderstanding. The misunderstanding was created by the woefully inadequate interpretation on this topic. The relevant passages are set out under para [27] above. 34 Nonetheless, I regard the balance of the errors, some in isolation, but certainly in totality, as significant, concerning as they do central issues raised in the application. For example, confusing and at times seemingly incoherent evidence was given by the appellant concerning his involvement with a Falun Gong study group at Burwood: see paras [25]-[26], [53]-[62] in these reasons. In its findings the Tribunal did not accept "on the evidence" that the appellant had been involved, relevantly, with the Burwood Park Group. This led it to conclude that the appellant's familiarity with Falun Gong teaching had been acquired by means other than attendance at the Burwood Park Group. It observed that the "appellant's evince (sic) about belonging to this group and about how long he had belonged to it and where and when it met, is riddled with inconsistency". This, in turn, may have had repercussions in relation to the Tribunal's findings in respect to s 91R of the Act . Such inconsistencies significantly were caused by inadequate interpretation. This is not to review the facts found by the Tribunal. However such a finding demonstrates that on this central issue the appellant did not, in my opinion, receive a fair hearing because he was, in effect, prevented from giving relevant evidence in respect of it. 35 Further, on the question of the appellant obtaining a Chinese passport the Tribunal did not accept "on the evidence" that the appellant, who had made "special arrangements" in order to obtain his (and his wife's) passports, had done so or needed to do so for the claimed Convention-related reasons. The Tribunal does not say what "the evidence" was. I cannot be confident that the poor interpretation on this matter did not play any part: see para [30] above. Again this is not to review the findings of fact but rather to illustrate that the appellant was prevented, because of poor interpretation, from giving relevant evidence. 36 In my opinion, neither the post-hearing written submissions nor the transcript were capable of curing fundamental problems created by the poor interpretation. First the incorrect interpretation of questions asked by the Tribunal Member could not be cured. The correct questions were never asked because they were poorly interpreted and it cannot be assumed what his answers would have been if this had not occurred. 37 Furthermore, a witness whose answers appear to be unresponsive, incoherent, or inconsistent may well appear to lack candour, even though the unresponsiveness, incoherence or inconsistencies are due to incompetent interpretation: Perera at [49]. The negative impression in the mind of the Tribunal Member conveyed by the appellant's answers, incorrectly interpreted, is, in my opinion, difficult if not impossible to eradicate, after the hearing. Such a negative impression, in one area of evidence, such as the question of when the appellant began to practice Falun Gong in China, will often affect a decision-maker's conclusions in other areas. It is impossible to discern the affect such impressions made at the time may have had on the Tribunal's conclusions as a whole: cf Applicant NAAF of 2002 at [40]. The subsequent characterisation of this evidence as a "misunderstanding" by the Tribunal does not inevitably overcome the unfavourable impression obtained at the hearing by the Tribunal concerning the appellant's credit. 38 The Federal Magistrate, in his reasons at [46] and [53] correctly, in my view, said that the standard of interpreting "left a lot to be desired" and constituted "significant errors in interpreting". The Tribunal appears to have done exactly what the applicants asked it to do. If errors in interpreting are made, then they can be rectified (see Perera v Minister for Immigration and Multicultural Affairs [1999] FCA 507 ; (1999) 92 FCR 6 at [37] per Kenny J). Whilst it appears that there were errors on the part of the interpreter at the hearing, I am satisfied that the Tribunal took appropriate action in dealing with those errors, as the applicants requested. As a result, the applicants were not deprived of their ability to give evidence due to interpreting errors and there is no breach of s 425 of the Act . There is no jurisdictional error. They do no more than accept at face value, from the Tribunal's reasons, that the problems caused by poor interpretation had been cured by provision of the transcript. The provision of the transcript was no more, as the covering letter, in effect, said, than an attempt to overcome the negative impression (of the appellant's claims) created by the deficiencies in the interpreting. The covering letter from the appellant's migration agent to which I have referred did not purport to be a cure-all. The letter concluded by inviting the Tribunal to contact the writer, Mr Simon Jeans, if it required any further information or assistance. It did not take up this invitation. There is no independent analysis by the Court below of the transcript and the reasons. In my opinion, this was necessary to the disposition of the application for judicial review. 40 The Federal Magistrate at [41] appears to have placed some weight on the fact that the appellant did not ask for a further hearing to deal with the interpretation problems and that the Tribunal "did exactly what the appellant had asked it to do", namely to consider the transcript. The first respondent, too, submits that in the absence of such a request it was appropriate for the Tribunal to proceed as it did. The covering letter, as I have already indicated, is not to that effect. Importantly, the appellant's advisor did not ask the Tribunal to conduct a new hearing. Implicit in the submission was the acceptance by the appellants that subject to the Tribunal taking these matters into account, it was appropriate for the Tribunal to proceed to make a decision. 43 There was no finding nor evidence to warrant a finding that the appellant consented to not having a further hearing such as to trigger the exempting provision in s 425(2)(b) of the Act . No such submission was put in the appeal. I do not regard the above submission concerning the appellant's "implicit ... acceptance" that it was appropriate for the Tribunal to proceed to make a decision as being to that effect. Even if it was I would not accept the submission. Consent for the purposes of s 425(2)(b) of the Act would be required to be given, in my opinion, in unambiguous terms. It would be an unusual case for such consent to be implied. Accordingly it is not to the point that the appellant did not ask for a third Tribunal hearing. The statutory obligation under s 425 to "invite" the appellant to appear before it to give evidence and present arguments lay with the Tribunal. It is a continuing obligation: Applicant NAAF of 2002 at [26]-[27]. It extended no such invitation to the appellant to attend a further hearing so that he could give evidence, with adequate interpretation, on the topics where it had been demonstrated that his "evidence" at the hearing on 11 October 2006 was riddled with confusion and error because of poor interpretation. The failure by the appellant to ask for a further hearing did not affect that obligation. I am satisfied that the interpretation of matters of significance to the appellant's case and the Tribunal's reasons fell well short of the requisite standard. 44 It may be that if there had been no interpretation error the result would not have changed. However I am unable to conclude on the balance of probabilities that this would have been the case. The potential consequences for the appellant should he be forced to return to China are dire. Justice requires that he be afforded another opportunity to give evidence and present arguments. 45 The failure to provide adequate interpretation services meant, in this case, that the Tribunal did not comply with s 425 of the Act . The appellant was in significant respects prevented from giving evidence and for that reason did not receive a fair hearing. Jurisdictional error on the part of the Tribunal has been established. The decision of the Tribunal was accordingly invalid. This ground of appeal is made out. However I propose nonetheless to consider the merits, going to the question of leave, because the particulars of this ground raise serious allegations against the Tribunal Member. They should not be left unresolved. 47 Apprehension of bias is founded on the notion that justice should not only be done, but it should also be seen to be done: Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at 345. The test to be satisfied is "whether the relevant circumstances are such that a fair-minded and informed person might reasonably apprehend that the decision-maker might not bring or have brought an impartial mind to bear on the decision": NADH v Minister for Immigration & Multicultural and Indigenous Affairs [2004] FCAFC 328 ; (2004) 214 ALR 264 at [14] . 48 It is to be remembered that the proceedings before a Tribunal are inquisitorial in nature. There is a distinct difference between judicial officers and Tribunal Members. Judicial officers are required to act both impartially and in a "judicial" manner. A Tribunal Member's role in conducting a review is to "get any information that it considers relevant"; s 424(1) of the Act : NBMB v Minister for Immigration & Citizenship [2008] FCA 149 at [7] . If that should happen, a fair minded lay observer or a properly informed lay person might readily infer that there is no evidence that the witness can give which can change the decision maker's view. Something more is required, and the apprehension must be firmly established: Re Minister for Immigration and Multicultural Affairs; Ex Parte Epeabaka [2001] HCA 23 ; (2001) 179 ALR 296 at [15] and per Kirby J at [53]-[65], and [89]-[95]. 50 However, the enquiry is not directed to the personal thought processes of the decision maker, but to the conduct "objectified" though the prism of what a fair minded and informed observer would reasonably apprehend: NADH at [21]. Cases of apprehended bias have been established where there has been constant interruptions and challenges to an applicant's evidence: Re Refugee Review Tribunal; Ex Parte H per Gleeson CJ, Gaudron and Gummow J at 71; VFAB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 872 ; (2003) 131 FCR 102 at [68] and [82]; NADH per Allsop J at [118]; a hostile attitude, inappropriate tone or hectoring: VFAB at [50], [52]; a failure to acknowledge mistakes: VFAB at [60]; an aggressive and unfair style of questioning: VFAB at [68] and [82]; conduct amounting to intimidation: Re Refugee Review Tribunal; Ex parte H per Gleeson CJ, Gaudron and Gummow J at [31]; unreasoned conclusions bereft of expressed supporting thought processes or any rational foundation: NADH per Allsop J at [35], [39], [47], [53], and brevity of reasoning when more reasoning is demanded: NADH per Allsop J at [35], [39], [47], [53]. 51 The appellant submits that the ground of apprehended bias is supportable on two bases. First, the Tribunal Member's conduct at the hearing was such that a fair-minded and informed person might reasonably apprehend that he might not bring an impartial mind to bear on the decision he was required to give. Second, from the Tribunal Member's reasons in the decisional record and also having regard to the transcript of the hearing, a fair minded and informed person might reasonably apprehend that the Tribunal Member did not bring an impartial mind to bear. 52 In respect to the first of these two bases the appellant, in summary, makes the following submissions. First the Tribunal Member's questioning and conduct toward the appellant's evidence on several occasions appeared dismissive, and included an apparent refusal to entertain certain responses given by the appellant and directed toward his emotional connection to the Auburn Falun Gong group. Second the Tribunal Member also appears to have misled the appellant by misrepresenting the evidence of the appellant by saying the appellant had never claimed to be Falun Gong practitioner in China where in fact the appellant had made that claim in his original protection visa application. Third the Tribunal Member appears to have obstructed the effective hearing of the matter by failing to act on the appellant's criticisms of the interpretation at the hearing as well as concerns raised by the Interpreter. Interpreter: (At the last hearing, you were asked about your identity and role in Burwood group. Interpreter: (When did you start with Burwood organisation? Interpreter: (in which year? Interpreter: (How long did you meet with them? And about how many times? Mr Hardy: Do you ever continue to practice with the Burwood group? Interpreter: (Do you ever continue to practice with the Burwood group? Interpreter: In July, I went to Auburn because, the exercise location, because I was closer to that place . Mr Hardy: why were you closer to it ? Interpreter: (Why were you closer to it ? It is good for our colleague practitioners to study Dafa together. Mr Hardy: Ok, that is not why you are closer to it . Mr Hardy: Why do you feel you are closer to that place ? Interpreter: (Why do you think so? Mr Hardy: If I ask you why you were closer to it , I don't understand why your answer was, there are more members, it was better organised. Interpreter: (I asked you why you feel closer to it , I don't know why your answer was that there are more members there and they are better organised. All practitioners can join each other for experience sharing. Practitioners are encouraged to attach importance to calmness. My problem? Interpreter: (Do you understand what I am asking you? I asked you why you thought it is closer. You didn't tell me why you feel closer, but to talk about some other advantages, are you with me? After I came to known my colleague practitioners, I always went there with him due to the short distance to my residence. Moreover most people speak mandarin there. It is more convenient for us to go together, and we speak Mandarin. Mr Hardy: It looks like I am not going to be able to get to the bottom of this. Interpreter: (It seems I am not going to be able to get to the bottom of this. It was like a train going from one track to another. Interpreter: (Your mind jump the track, like the rail track, you jump one track. I will go back over my notes. Interpreter: Guess? Mr Hardy: Can you think, can you, identify where you mind jump a track. Interpreter: (Can you identify where your mind jump a track, jump the track? Interpreter: (You have just mentioned that you went to Auburn as you thought it is closer. Interpreter: (I ask you what do you mean by "closer to it"? Interpreter: (Why were you closer to it? Interpreter: (But you didn't answer my question why you were closer to Auburn? The use of the words "feel closer" by the interpreter instead of the expression "were closer" used by the Tribunal Member introduced an unnecessary ambiguity. Although the Tribunal Member had earlier used the word "feel" this had not been interpreted by the Interpreter. It would appear from the appellant's responses that he interpreted "feel" to mean his personal and emotional feelings about the Falun Gong group he attended, whereas the Tribunal Member's question was intended to refer to the geographic proximity of the Falun Gong group to the appellant's residence. The appellant was asked whether he ever continued to practice with the Auburn group. The appellant answered by saying he went to Auburn because he was closer to it. However the Interpreter interpreted "it" as "place". It is tolerably clear that the appellant by using the word "it" was referring to the Falun Gong group rather than the place where the group met. When asked to expand on why he was "closer", the appellant referred to the number of people attending, the level of organisation of the group and the benefit of many members studying together including the greater presence of supernatural power. The Tribunal Member's response to these answers was "Ok, that is not why you are closer to it. " This interchange of "place" to "it" happened repeatedly. This misinterpretation was the cause of considerable confusion. Interpreter: (Do you understand what I'm asking you? I asked you why you thought it is closer. You didn't tell me why you feel closer, but to talk about some other advantages, are you with me? Appellant: (I still can't understand you. After I came to know my colleague practitioner, I always went there with him due to the short distance to my residence. It is more convenient for us to go together and we speak Mandarin. However that was not conveyed to the Tribunal Member in English. 56 In its decision record, the Tribunal rejected the appellant's claims partly because it disbelieved what it took to be the appellant's evidence that he had changed from the Burwood group to the Auburn group because of the Auburn group's geographic proximity to the appellant's residence. He said he continued to exercise with the Burwood group until July 2005 when he joined a group at Auburn because he lived at a closer "distance" from Auburn and because it had more members and was better organised. He told the presently-constituted Tribunal that he was living in Homebush when he joined the Burwood group in April 2005 and also living at Homebush when he changed to the Auburn group. His RRT application, lodged on 8 March 2005 states that he was already living at Homebush at the time. By his evidence, he was living at Homebush even before he allegedly started with the Burwood group. In somewhat different evidence, the appellant said in a 21 September 2006 statutory declaration... that in April 2005 he joined the Burwood group which was near Berla, where he claimed he was living at the time. 58 The Tribunal put to the appellant that in his statutory declaration made on 21 September 2006 he said that he, "went to the [Burwood] park [group] every morning until he moved to Homebush and then he started going to the Auburn group. However, he did tell the Tribunal at the 11 October 2006 hearing that he began with the Auburn group in July 2005. The Tribunal accepted that the appellant joined the Auburn group in July 2005. 61 The appellant submits that it appears as if the Tribunal misinterpreted the appellant' s 21 September 2006 statutory declaration as stating his relocation from Berala to Homebush West as the cause of why the appellant changed from the Burwood group to the Auburn group rather than as a narrative of events. 62 The appellant appears to have attempted to dispel the "interpretation error" made by the Tribunal Member about the 21 September 2006 statutory declaration during the hearing of 11 October 2006. Interpreter: Move to? This is not right, isn't it? What is an incorrect translation? Interpreter: (What is? At where it went wrong? However, this explanation does not cover why he claimed in writing to the RRT as at 8 March 2005 that he was already living in Homebush. 65 The appellant submits that the Tribunal then interpreted the statutory declaration which the applicant had provided in a manner which supported the conclusion that the appellant's evidence was unreliable. The evidence the Applicant provided to the RRT about changing his address from Berala to Homebush before 5 March 2005 completely undermines the claim about joining the Burwood park group in April 2005 due to his proximity to Berala, about attending it around six morning a week before going home and then to work, and about changing to an Auburn group later on due to having moved to Homebush... The Tribunal accepts that the Applicant joined a Falun Gong exercise group in Auburn in the second half of 2005. The Tribunal does accept that the proximity to the Applicant's home in Homebush did have something to do with the Applicant's choice of the Auburn group over other groups in and around Sydney. 68 The appellant claimed that the reasons for his relocation were always based on an emotional and/or spiritual connection with the Auburn group that was stronger than with the Burwood group. The appellant submits that the Tribunal dismissed the appellant's evidence about his emotional and/or spiritual reasons for changing groups and indicated it would only accept answers concerning geographic proximity. 69 It is evident from these passages from the transcript that the member and the appellant were at cross-purposes from time to time particularly on the reasons why the appellant moved from the Burwood group to the Auburn group. This was caused by inadequate interpretation of both questions and answers as well as the use of a word such as "feel" with its potential for ambiguity. I do not consider the member was dismissive in his approach. He too was the victim of poor interpretation. He thought the questions and answers were being faithfully interpreted and it is understandable that to a degree he apparently became frustrated and tested what, on the face of it, seemed to be inconsistent answers given by the appellant. This was to be expected in the circumstances. It does not evidence an apprehension of bias. The evidence to the other Tribunal was that you supported some Falun Gong practitioners, you transported some material for them, you even, you post some Falun Gong propaganda on traffic lights. Interpreter: (To me, you told the previous hearing that you did not say that you practiced Falun Gong in China. I know you supported it. It appears to me that no point did you say to Mr Shaw that you were ever a practitioner in China. Interpreter: (The previous Tribunal member Mr Shot, had gave you opportunity to say that the level of your involvement with Falun Gong in China. But you never told him you practiced Falun Gong in China. Interpreter: (During the previous Tribunal hearing, you had never mentioned that you were a practitioner, a Falun Gong practitioner in China. If he asked me "did you practice Falun Gong in China? Interpreter: (Now, I raised this question is that, you had never mentioned you practiced Falun Gong in China. Now you raise this point which I find it hard to believe. Interpreter: (As you haven't mentioned before, I cannot rule this out of my consideration immediately. This is why I have raised you so many questions to you. Interpreter: (So many questions have been raised to you on your Falun Gong practice in China. Interpreter: (I still have a <...> attitude. So I have a <...> attitude to this point, ie, you are a Falun Gong practitioner. The appellant had in fact claimed to be a Falun Gong practitioner in China in his statutory declaration made on 22 December 2004 which accompanied his protection visa application. 73 The appellant claimed that the comments made by Tribunal Member were an indication the Tribunal Member was either not sufficiently apprised of the appellant's claims at the time of the hearing or that he deliberately disregarded the appellant's evidence. For a time, the Tribunal wondered if this meant that the Applicant was claiming to have become a Falun Gong practitioner some nine years before he previously claimed to become one, and raised concerns with the Applicant about his overall credibility on the basis of this example. The Tribunal now sees that this was a misunderstanding, and that what he was saying was essentially that Master Li began inviting him and the world to join in Falun Gong in 1992 but that he answered the call in 2001. 77 It is impossible to determine what was in the Tribunal Member's mind at the time of the hearing, and indeed it is not necessary to do so, in order to establish a case of apprehended bias. There is no evidence to show that the Tribunal Member had intended to be misleading. It is likely that he had forgotten the relevant content of the appellant's statutory declaration. The submission made by the appellant that it was open to conclude that the Tribunal Member 'deliberately disregarded' some of the appellant's evidence as to when he became a Falun Gong practitioner is completely without foundation. This is a most serious allegation. It should never have been made. It is quite clear from the Member's reasons that he accepted without qualification that he had made an error in this respect. Decision-makers are fallible. The relevant questions about his involvement in Falun Gong in China were directed to what the appellant had told the other Tribunal. The Member did not actually ask the appellant about what he had said in his statutory declaration. It was open to the appellant, in answering the question to refer to the statutory declaration. He did not. Perhaps he too had forgotten its contents. For these reasons I am far from satisfied that the conduct of the Tribunal Member in relation to this matter evidences even an apprehension of bias on the part of the Member. Mr Hardy: Now, I need you to answer my question on the point today. Interpreter: (I hope you could answer my question to the point. If you don't understand, please ask me. If he doesn't think that I can interpreter for him, please let me know so that I can be excused. Mr Hardy: Ok, if there is some issue with the interpreter, please let me know. So focus on the questions please. Interpreter: (Focus on my question. Interpreter: Move to? This is not right, isn't it? What is an incorrect translation? Interpreter: What is? at where it went wrong? 80 The appellant indicated that the reason he may have appeared to be answering the Tribunal Member's questions 'off point' was because there was a problem with his comprehension of the interpretation provided by the Interpreter. In response, the Tribunal Member stated that he believed the appellant's apparent inability to answer on point was "an issue of concentration". 81 The Interpreter then suggested that perhaps he should be excused given the concerns about the quality of the interpretation. 82 The appellant contended that from the conduct of the hearing and the responses being given by the appellant, the Tribunal should have been alerted to the possibility that there were potentially significant defects in the interpretation being provided by the Interpreter. The Tribunal noted, on more than one occasion, that the answers being given by the appellant did not appear to correspond with the questions being asked. The Tribunal appears to have become frustrated as a result. The appellant submits that to a fair-minded and informed person, the Tribunal would appear to have closed off the possibility that there could be any legitimate interpretation 'issues'. 83 The apparent frustration of the Tribunal showed when the Tribunal stated, "[i]t looks like I am not going to be able to get to the bottom of this", after noting that the appellant had not answered "on the point" and that then that appellant's mind "jumped a track... like a train going from one track to another". This appears to have led the Tribunal Member to say "[i]t looks like I am not going to be able to get to the bottom of this". 84 And again when the Tribunal Member stated, "[n]ow, I need you to answer my question on the point today" before suggesting that the appellant was not concentrating on the questions being put. 85 Following the hearing, the appellant again raised the 'issue' of misinterpretation by way of a letter from his Migration Agent to the Tribunal dated 27 October 2006 and enclosing a transcript of the Tribunal hearing. I do not doubt that if he had been so aware that he would have taken steps to rectify the position. The Member told the appellant that if there was an issue with the interpreting that he should let him know. Unfortunately this invitation was not fully interpreted because the Member, who had not finished what he was saying, interrupted the interpretation. When he did finish, the transcript then contains the words "apparent omission in transcription". The result was that the appellant never heard the text of the invitation to raise issues about the standard of interpretation. 88 The position was not helped when, shortly after this, the appellant said that he couldn't understand the question from the Member but this was translated into English as "I couldn't hear the question". If the Member did apparently display a degree of frustration with the appellant arising from his answers this was probably as a result of the poor quality of the interpretation. The invitation by the Member to which I have referred was never interpreted. It was said that the Tribunal Member had in this way restricted or limited the evidence being presented during the hearing and did not allow the appellant to fully present his arguments. This is said to amount to an apprehension of bias on his part. Which month? Which year? I came to know a Refugee group in Burwood. Because there are two groups, one in the morning, the other at night. I came to know the morning group one month later. Translate please. Interpreter: I was trying to understand the time frame, I didn't get. Maybe we can simplify this, just by having you tell me which month and which year did you commence practising with the refugee group. Interpreter? Which year? were mistranslated as Which month and what time? 92 The appellant answered this misinterpreted question with reference to the time he was living in Berala. His answer although responsive to the interpreted question was not responsive to the member's actual question. However, the Tribunal Member interrupted the answer being given by the appellant and requested the Interpreter to interpret what had been said. The Interpreter then appeared to have explained why there had been some discussion between him and the appellant. The Tribunal Member then said that the appellant had spoken "too long and too quickly" (which was not translated) and proceeded to ask another question without hearing the translation of the appellant's oral evidence. 93 The appellant says that the Tribunal Member appeared to disregard his uninterpreted evidence in the interests of obtaining a 'simplified' answer to his questions rather than the answers the appellant actually gave. 94 The appellant submits that by his conduct, the Tribunal Member inappropriately limited the appellant's evidence and interrupted the evidence he was giving and that to a fair-minded and informed person, it would appear that the Tribunal Member had denied the appellant a full opportunity to give evidence and present arguments at the hearing. 95 I do not agree. The member had asked two simple questions --- Which month? Which year? Because of inaccurate interpretation his questions did not elicit the simple answers that the questions reasonably demanded. It was reasonable for the member to attempt to re-direct his questions which seemingly were producing unnecessarily long responses given the simple question put. He was quite entitled to take this approach and no criticism of him arises. Yet again the problems were caused by inadequate interpretation. As long as we paid, they will give you the passport. Your previous records would not be recorded to my passport as they charged me for this. They all they do is to give you your passport because they paid. Mr Hardy: Ok, I've asked many questions as I think I need to ask on that point. I think you are going round the circles. I haven't finished yet. 97 The appellant submits that the Tribunal appears to have inappropriately attempted to restrict his evidence when the Tribunal Member said he was "going round the circles". The appellant was in the process of answering the Tribunal Member's question. It was left to the appellant to inform the Tribunal Member that he had not finished his answer to the question. 98 The Tribunal Member asked no further questions relating to the appellant obtaining a passport or why it might be that his passport did not reveal his previous detention by police despite the appellant providing a lengthy explanation to the Tribunal. This was so despite the fact that there was dialogue on this subject consisting of about two pages of transcript between the Interpreter and the appellant and almost none of it was interpreted into English. Instead, at the conclusion of this uninterpreted dialogue, the Tribunal Member began a new line of questioning about when the appellant began practising Falun Gong in China. The Tribunal is prepared to accept that the Applicant may have made special payments for his and his wife's passports and other travel arrangements, but does not accept on the evidence before it that he did so or needed to do so for the Convention-related reasons claimed. However, whether or not the issue was eventually determinative, it was relevant to the review. The appellant submits that to a fair minded and informed person, this may appear that the Tribunal Member was careful to be seen that he had put the required questions to the appellant but that he was not equally careful to listen to the responses given and that the Tribunal Member was not acting impartially by failing to give the appellant every possible opportunity to give his evidence on matters relevant to the review. 102 I reject the submission of apprehended bias. Regrettably, once again, the interpretation was quite inadequate. This is so upon a review of what was actually interpreted but in this case also because the Interpreter did not interpret some of the evidence given by the appellant at all. It is not the function of an Interpreter to engage in dialogue with a witness in order to try to understand what has already been said. That is the function, in this case, of the Member. Start again. Mr Wu JiaHua his statement says that you used to meet on Friday nights, not Thursday nights as you just said. Interpreter: (Mr. Wu Jianhua's statement says that you met on Friday night to practice. He may not provide in all details. We sometimes meet on Thursday that depends on his work commitments. Now we always meet on Friday whilst it used to be on Thursday. We used to be on Thursday night, now we meet on Friday night. Mr Hardy: If you say he hasn't written in exact detail, you are asking me whether I should give weight to his statement. Interpreter: (You say he hasn't written in exact details. In other words, what, were you saying whether I should give weight to his statement to make my decision. The appellant submits that it did not ask the Tribunal to do this. 105 The appellant submits that the mischaracterisation of the appellant's evidence would give a fair-minded and informed person further reason to apprehend that the Tribunal Member was directing an impartial mind to the appellant's case. 106 The respondent submits that the Tribunal was seeking merely to establish, in response to a suggestion by the appellant that Mr Wu Jian-hua's statement did not contain all of the pertinent details, whether the first appellant wanted the Tribunal to place less weight on the written statement of Mr Wu Jian-hua's --- considering that its contents appeared to reveal a direct inconsistency with the first appellant's oral evidence. Here, the Tribunal is effectively pointing out an inconsistency in the appellant's story and inviting him to comment upon how the Tribunal should approach this issue. 107 The Tribunal in its decision stated that the appellant had sought to distance himself from the statutory declarations that were inconsistent with his evidence and that he had given the Tribunal reason to doubt the reliability of Mr Wu's sworn declaration. 108 I do not accept the appellant's submissions. The Member's question about the weight to be given to Mr Wu's statement was entirely appropriate. Once more however, it can be seen that the standard of interpretation was less than adequate. 110 The previously constituted Tribunal relied upon the appellant's answers to support a finding that the appellant was not sufficiently cognisant of Falun Gong doctrine and literature to be a bona fide Falun Gong practitioner. 111 The First Tribunal's decision was overturned and remitted for further hearing. 112 The present Tribunal conceded that the appellant knew the most important of Mr Hongzhi's books but added, "[n]o matter how delayed your response to that question. " The appellant submits that the use of those words to qualify the Tribunal's concessions appear to retain the First Tribunal's sentiment of suspicion toward the appellant's bona fides. 113 The appellant submits that it would appear that at the Tribunal hearing there remained concerns about the bona fides of the appellant's claim for a protection visa due to the way in which he answered the misinterpreted questions from the First Tribunal. The Tribunal does not take the view that the Applicant faltered in relation to Falun Gong knowledge-related questions asked by the previously-constituted Tribunal. The Tribunal accepts that any impression to the effect that he did would be an erroneous impression resulting from oversight as to the way the questions were being interpreted at the time. However, the Tribunal gives no weight to the fact that the Applicant has a working knowledge of Falun Gong teachings and exercises. The evidence before the presently-constituted Tribunal is that the Applicant was studying prior to 18 May 2005 with a study group convened for "refugees," which is the term the Applicant uses to distinguish asylum seekers from residents and citizens... The Applicants evidence to both Tribunals leads the presently-constituted Tribunal to the view that all of the knowledge the Applicant gained prior to the 18 May 2005 hearing was gained for the purpose of enhancing his case as an asylum seeker, whether trough attendance of coaching classes designed for asylum seekers (as some of his information suggests) or with the help and co-operation of a housemate (as the evidence also supports) or by some other means that, significantly, has nothing to do with joining in genuine Falun Gong exercise or study groups at or around that time. 117 The respondent submits that the Tribunal went to some effort to ensure the appellant understood that this 'issue' was no longer an issue and also explained this in its decision. The Tribunal did not rely on this evidence at all and expressly stated that to be the case. 118 I reject the appellant's submissions. Regrettably the qualified concession by the Tribunal Member relied upon has not been set out in full in the appellant's written submissions. No matter how delayed your response to that question. Perhaps badly worded the question was (sic). It does not demonstrate an apprehension of bias. Rather it evinces a fair-minded approach by the Member. 120 In my opinion, for these reasons the proposed new second ground raising apprehended bias has no reasonable prospect of succeeding on appeal were leave to be granted. On this basis alone I would refuse leave to the appellant to raise this ground not argued before the Court below: VAAC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168 at [26] - [27] . 122 The appeal ought be allowed. I will hear the parties on the question of costs given the divided success in relation to the issues before the Court. I will also hear the parties on the question of costs in connection with the application before the Federal Magistrate. The orders of the Federal Magistrates Court made on 18 October 2007 will be set aside. | whether inadequate interpretation whether appellant was effectively prevented from giving evidence because of inadequate interpretation whether the provision of a correct transcript and additional submissions to the tribunal after the hearing cured the problems caused by poor interpretation whether the tribunal discharged its obligation pursuant to s 425 migration act 1958 appeal allowed. apprehension of bias conduct of tribunal member allegedly dismissive, misleading and obstructive misunderstandings caused by poor interpretation apprehension of bias not established. leave to amend notice of appeal new ground of appeal not raised below no reasonable prospect of success. migration migration practice and procedure |
2 In 1992, the Commonwealth Parliament enacted the Superannuation Guarantee (Charge) Act 1992 (Cth) ("SGC Act") and the Superannuation Guarantee (Administration) Act 1992 (Cth) ("SGA Act"). An Explanatory Memorandum circulated with the Bills for the Acts stated, amongst other things, that the scheme was intended to encourage employers to provide a minimum level of superannuation support for employees. Under the scheme, a tax was imposed on an employer who provided superannuation support to employees below a minimum level. 3 The SGC Act imposes a charge on any superannuation guarantee shortfall of an employer in a year: see s 5 of the SGC Act. The charge is the amount of the shortfall: see s 6 of the SGC Act. The SGA Act provides that a superannuation guarantee charge imposed on an employer's shortfall for a year is payable by the employer: see s 16 of the SGA Act . According to s 17 of the SGA Act (as at the relevant time) a superannuation guarantee shortfall for a year is worked out by adding together: (1) the total of the employer's individual superannuation guarantee shortfalls for the year; (2) the employer's nominal interest component for the year; and (3) the employer's administrative component for the year. Provision is made in s 19 of the SGA Act for the calculation of the amount of the shortfall. Provision is made in s 31 of the SGA Act for the calculation for the nominal interest component. Provision is made in s 32 of the SGA Act for the calculation of an employer's administrative component. It is unnecessary to refer to the details of these calculations here. 4 At the relevant time, the SGA Act required an "employer", who had a superannuation guarantee shortfall in a year, to lodge with the Commissioner a "superannuation guarantee statement" on or before 14 August in the following year, or any later day allowed by the Commissioner: see s 33 of the SGA Act (as it then stood). This "statement" in effect acted as a self assessment of the liability of the employer to pay a charge to the Commissioner for the year concerned: see s 35 of the SGA Act . The SGA Act permitted an employer to reduce the amount of the shortfall to nil, but to do so, the employer was required to make superannuation contributions for employees at the prescribed rate based on the appropriate earnings base to a complying superannuation fund by 28 July in the year following the year of income: see s 23(6A) of the SGA Act (as it stood at the relevant time). 5 The Tribunal recorded the salient and undisputed facts in its reasons for decision. In the financial year ending 30 June 2003, the applicant was an employer, for the purposes of the SGC Act and the SGA Act and, as such, was obliged to provide superannuation support for its eligible employees. The applicant made superannuation contributions for employees on 31 July 2003, and not 28 July as provided in s 23(6A) of the SGA Act . A penalty was imposed and subsequently remitted upon the basis that the applicant had made its superannuation contribution only three days late. 8 Before the Tribunal, the applicant, who appeared by its director, contested the SGC on the grounds that the assessment required the applicant to pay again the amount of the superannuation contributions and gave an unexpected and unmerited windfall to the employees in question. This was unfair, so the applicant said, because the delay in payment was immaterial. The applicant informed the Tribunal that s 117(3) of the Superannuation Industry (Supervision) Act 1993 (Cth) precluded it from recouping the overpaid amounts directly from the relevant superannuation fund and that the overpayments could not be applied to the subsequent financial year because the applicant had ceased to trade. 9 In the Tribunal, the respondent argued that there was no power to remit all or part of the SGC, nominal interest or administrative component. 10 The Tribunal held that the respondent had no discretion to remit the SGC and no discretion to remit or waive the nominal interest or the administrative component. It followed that the Tribunal too was unable to remit the impost, nominal interest or administrative component. The Tribunal acknowledged that this result was not without its difficulties and would "serve only to unduly penalise the employer for a relatively minor administrative oversight". 11 The applicant wishes to appeal, out of time, against this decision. 12 Section 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) ("AAT Act") provides that a person such as the applicant may appeal to this Court "on a question of law" from any decision of the Tribunal. The AAT Act provides that such an appeal is to be instituted not later than 28 days after "a document setting out the terms of the decision of the Tribunal is given to the person or within such further time as the [Court] allows": see s 44(2A) of the AAT Act . Where a person makes an application to institute an appeal out of time, the Court will consider the relevant factors, including any explanation the applicant may advance for the delay and the applicant's prospects on the appeal, if leave were granted: see, for example, Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349 per Wilcox J. There may be other matters too, such as the prejudice to the applicant, or the respondent. 13 It is not suggested that the respondent would suffer any prejudice by reason of the applicant's delay in instituting the appeal if leave were granted. The Tribunal gave its decision on 10 November 2006 and emailed a copy of the decision to the applicant's accountant the same day. The delay in instituting this application on 11 December 2006 is insignificant. Unsurprisingly, the respondent neither consents to nor opposes the application for an extension of time. 14 If there were merit in the appeal, then a refusal to grant leave would plainly prejudice the applicant. 15 The applicant's explanation for the delay is straightforward enough. Its director, Mr Howard Bellin, appeared before the Tribunal and has taken responsibility for the late institution of the appeal. In this regard, I assumed the decision would come to me and not to my accountants, for the reason that I appeared at the Tribunal on the applicant's behalf. 17 However, having considered the applicant's draft notice of appeal and the issues it wishes to agitate, I would refuse the application. I turn to the factors that militate against the applicant. 18 First, the notice of appeal as presently drafted does not state a ground of appeal that this Court can hear and determine. Under s 44(1) of the AAT Act , the subject matter of an appeal from the Tribunal is the question of law that is raised by the appeal: see Ergon Energy Corporation Ltd v Commissioner of Taxation [2006] FCAFC 125 ; (2006) 153 FCR 551 at 572 per Gyles J (dissenting in the application of the principle) and Comcare v Etheridge [2006] FCAFC 27 ; (2006) 149 FCR 522 at 527 per Branson J. Had the assessment been made in a timely manner, the superannuation payments could have been made and accounted for in a future period as the company did not, at that time, have a controller appointed. There is nowhere in the Western World's firmament of law where third parties are rewarded when a federal, state or local law is breached. Western natural justice usually requires that a penalty be paid to the state or that those aggrieved are recompensed. In this case, all ex-employees had their superannuation payments made by the appellant, albeit three days late. No one suffered or was disadvantaged. The late payment was for the period to June 20 2003. Prompt action by the Australian Tax Office would have allowed the appellant to make up payments on a monthly basis and also to consult with its employees, an option not available once a creditor was appointed. Taxpayers will pay for a vindictive action and the courts will support what has been acknowledged as bad law by the Australian Parliament. I make the observation, not by way of criticism but by way of explanation: the applicant's written reply and oral presentation this morning did not effectively address this point. What is meant by "a question of law" is often and understandably a matter of some difficulty, especially for non-lawyers. Why would the respondent want to support bad law? Who benefits? The question as to who benefits from the current action must be asked. Does it serve justice for the respondent, a government body, to reward the appellant's ex-employees by double paying their superannuation contributions? He submitted that enforcement of the assessment would not advantage anyone. He also referred to the circumstances, which he said had led to the assessment being made, although there was, I observe, no evidence before me of these latter matters. 24 I turn to the first ground of the applicant's draft notice of appeal. It is irrelevant that, under different statutory regimes, appeals are permitted on the ground that a decision under appeal is "harsh, unconscionable and contrary to the public interest". The proper focus is the nature of the appeal permitted by s 44 of the AAT Act , being the statutory provision that governs appeals from the Tribunal to this Court. The first ground simply does not disclose a question of law. Rather, it would have the Court make a value judgment about the merits of the Tribunal's decision, alternatively, about the operation of the SGC Act and the SGA Act . 25 The second ground of the draft notice is without substance. The common law principles of natural justice, otherwise known as procedural fairness, concern the decision-making procedure or the impartiality of the decision-maker. Common law natural justice, which the applicant invokes, is not concerned with the merits of a decision, as the applicant would have it. There is no suggestion that the Tribunal breached any aspect of the rules of natural justice in making the decision the applicant seeks to appeal. 26 The applicant's third ground also discloses no question of law. Rather, it is an attack on the respondent's delay in making the primary decision. This matter is immaterial to the issue whether the decision-maker had power to remit or waive some part of the impost, although it goes some way to explaining the applicant's dissatisfaction. In particular, this ground does not identify any source of power for remitting the SGC, nominal interest or administrative component. In any case, as counsel for the respondent pointed out this morning, the applicant may have been in a better position had it lodged a superannuation guarantee statement pursuant to s 33 of the SGA Act , because it may then have been in a position to offset the payments it made against a future year's contribution. Time passed by because the applicant defaulted in making such a statement. 27 The fourth ground is apparently a reference to s 23A of the SGA Act . This provision was introduced by the Tax Laws Amendment (Loss Recoupment Rules and Other Measures) Act 2005 (Cth), with effect from 14 December 2005. Section 23A has effect for contributions made on or after 1 January 2006 in respect of the quarter ended 31 December 2005 and subsequent quarters. Section 23A of the SGA Act is therefore of no assistance to the applicant. 28 The fifth ground of appeal is also unhelpful. Section 62 of the SGA Act , which the applicant invokes, relates to additional superannuation guarantee charge under Pt 7. The nature of additional superannuation guarantee charge is clear from the SGA Act . Additional superannuation guarantee charge is imposed for failing to provide a superannuation guarantee statement or other relevant information: see s 59 of the SGA Act . In the applicant's case, this has in fact been remitted. 29 The applicant's submissions, both written and oral, disclose that the proposed appeal would in substance be an attack on the wisdom and justice of the law that the Parliament has made and that the respondent has applied. Members of the community frequently differ about the wisdom and justice of legislation. This is a very good thing. The courts are bound, however, to uphold a constitutionally valid law of the Parliament. If such a law is to be altered, then it must be done by the Parliament itself. 30 For these reasons, I accept that the draft notice of appeal does not raise any question of law, which the Court might address. 31 Moreover, even if the applicant were able to formulate a question of law raising the issues considered by the Tribunal in this case, it is unlikely that error would be shown in the Tribunal's decision. Section 37 of the SGA Act does provide for the amendment of assessments but it was not suggested, and the circumstances do not indicate, that the power to amend might properly have been exercised in the case of the applicant. As the Tribunal noted, there would appear to be no legislative provision that would accord a decision-maker the power to remit all or part of the SGC, or nominal interest and administrative component: see, in this regard, the discussions in Re Jarra Hills Pty Ltd and the Federal Commissioner of Taxation (1997) 37 ATR 1022; Re Truelove and the Commissioner of Taxation [2000] AATA 276 ; Re Kancroft (acting as trustee for the Roberson Family Trust) and Commissioner of Taxation [2004] AATA 113 ; Iwec Pty Ltd v Commissioner of Taxation [2007] AATA 1051 ; and Victorian Patient Transport Pty Ltd v Commissioner of Taxation [2007] AATA 1239. Certainly, the applicant has been unable to refer me to a source of power to do so. It seems to me, therefore, that not only is the draft notice of appeal fundamentally defective, but any possible appeal has little prospect of success. 32 I would therefore refuse the application for an extension of time in which to appeal. 33 Almost by way of postscript, I note that the applicant was not legally represented on this application. Order 4 r 14(2) of the Federal Court Rules provides that "except as provided by or under any Act, a corporation may not, without the leave of the Court, commence or carry on any proceeding otherwise than by a solicitor". Mr Bellin sought leave to represent the applicant on the basis that: (1) he is the sole director of the applicant; (2) he has represented the applicant in the Tribunal and, to date, in this Court; and (3) the applicant does not have sufficient funds to pay a legal practitioner. 34 The respondent submitted that Mr Bellin had given no good reason why leave should be granted to him to represent the applicant and that he had provided no supporting evidence. 35 The Court's discretion to grant leave to a company to carry on proceedings other than by a solicitor has been considered from time to time. Recently, Bennett J commented in Cytel Pty Ltd v Peoplebank Recruitment Pty Ltd [2006] FCA 985 at [6] that such discretion must be exercised judicially according to the requirements of justice and in favour of the company where sufficient reason is demonstrated. 36 I accept that, as the respondent argued, Mr Bellin produced very little evidence in support of his application to represent the applicant. In other circumstances, this would be reason enough to decline the leave that has been sought. It would appear, however, that a controller has been appointed to the applicant. Given the nature of the application and the particular circumstances of the case, including Mr Bellin's familiarity with the matter, I would grant Mr Bellin the leave he seeks solely for the purposes of my hearing and determining this application. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | commissioner's power to remit superannuation guarantee charge application for extension of time to file and serve notice of appeal from tribunal decision taxation practice and procedure |
2 The applicant made an application to the Court on 7 December 2006, claiming that the University had unlawfully discriminated against her on the basis of her race and ethnic origin. The application states that the claim is based on employment-related bullying, harassment, persecution and alienation which resulted in arrests on four occasions. 3 However, in addition to that claim, the applicant seeks a "Declaration of Right" that she is the owner of the University of New South Wales. She also asks the Court to "reprimand" (a) the University for failure "to uphold and value the discovery of Truth through Research and Education"; (b) the State of New South Wales, which "failed to facilitate DUE PROCESS"; and (c) the federal government for ignoring her suffering and pain. She also seeks loss of past and future income in the amount of 3.2 million dollars. 4 In support of her claim, the applicant filed a lengthy affidavit on 7 December 2006. This document was largely in the nature of a submission. It sets out her beliefs as to the way in which she was treated and, as an annexure, a chronology of events which she says evidences the racial discrimination to which she was subjected by the central administrators of the University. The applicant also filed another lengthy affidavit on 30 March 2007, making allegations and submissions on a wide range of matters, from among which it is difficult to discern the material which goes to the substance of her application. For the University, its solicitor, Mr Mattson, filed an affidavit on 22 March 2007, which attached a large number of exhibits documenting the history of the matter. Under s 46PO of the HREOC Act , where a complaint is terminated, an affected person can make an application to the Federal Court of Australia. The unlawful act alleged in the application must be the same in substance as the unlawful discrimination that was the subject of the terminated complaint, or must arise out of substantially the same acts, omissions or practices. If the Court is satisfied that there has been unlawful discrimination by the respondent, the Court may make such orders as it sees fit. You state that UNSW had arranged for the NSW Police Service to arrest you on 15 September 2003, 10 November 2003, 22 October 2004 and also on 29 October 2004 after you attended the UNSW grounds to see the Vice-Chancellor. You claim that staff from UNSW must have provided false information to the NSW Police Service, including details about your ethnic origin which led you to being arrested on these occasions while you were on UNSW grounds. You state that on the first 3 incidents, you were wearing a sari and the last occasion you were wearing a western suit and it was only on the last occasion when an officer of the NSW Police Service listened to your side of the story. The University stated that on 23 June 2003, the applicant entered the office of the Vice-Chancellor, and had discussions with the Director of Human Resources in relation to the applicant's grievances. The applicant was dissatisfied with these discussions, and on 15 September 2003 the applicant again visited the Vice-Chancellor's office. He was absent. The applicant was then asked to leave, refused to do so and was arrested and charged under the Inclosed Lands Protection Act 1901 (NSW). The applicant pleaded guilty on 29 October 2003 and the matter was dealt with on the basis that no conviction was recorded under s 10 of the Crimes (Sentencing Procedure) Act 1999 (NSW). Despite this, the applicant for a third time attended the Vic-Chancellor's office on 10 November 2003. She again refused to leave when requested. After charges had once more been brought against her, the applicant pleaded not guilty to a breach of the Inclosed Lands Protection Act 1901 (NSW), and the Waverly Magistrates Court found the applicant not guilty on the basis that the applicant had a "reasonable belief" that she was entitled to remain on the lands. Subsequent to a meeting on 1 October 2004, the University advised the applicant that she could not attend the premises. On 22 October 2004 and 29 October 2004, the applicant attended the premises and was asked to leave. She refused to do so, was arrested on both occasions and eventually prosecuted. The charges were heard on 28 January 2005. The applicant was found guilty of both charges and the matter was remanded for sentencing. 8 Having reviewed the evidence and considered the possibility of a breach of s 9 of the Act and article 5(f) of the International Convention on the Elimination of all forms of Racial Discrimination , the delegate of HREOC decided that the complaint should be terminated as it lacked substance. There are reasons given for this conclusion. One important matter in those reasons was that the police were called not because the applicant was wearing a sari or for her ethnic origin, but rather because she was asked to leave the University's premises and refused to do so. Consequently, the delegate found that the applicant was not discriminated against on the ground of her Sri Lankan ethnic origin. Rather, the University's decision to call the police was the result of her returning to and then refusing to leave the University's premises, the long history of previous incidents between the University and the applicant, and the events relating to her previous arrests. Because the applicant had not yet had an opportunity to consider these submissions, I decided to hear the applicant's submissions in chief, and ask Mr Mattson to present his written and oral submissions in full, which he did. I then directed the applicant to file and serve full and complete written submissions dealing with the University's submissions and any other matters she wished to address. I also directed the applicant to supply a copy of those written submissions on the University, and gave leave for the University to reply in writing. 10 I have now had the benefit of considering all those further materials. 11 This matter has had a lengthy history dating back to 1999 and the full history of the matter is detailed in the parties' affidavits, annexes and exhibits. The litigious history involves applications and dismissals brought by the applicant before the Administrative Decisions Tribunal, the Supreme Court of New South Wales, the District Court of New South Wales and HREOC. 12 In the proceeding brought before the Supreme Court of New South Wales, Sully J dismissed the applicant's statement of claim on the basis that the proceedings, although not frivolous, could properly be characterised as vexatious and as an abuse of process of the Court: Paramasivam v University of New South Wales [2006] NSWSC 1189. The claims in that proceeding arose out of claims substantially overlapping those brought in the present proceeding. 13 In the present proceeding, the applicant asserts that University security officers and the NSW Police Service identified and removed her from the University's premises by reference to her dark complexion and Sri Lankan background. However, in my view, this belief of the applicant is not determinative when one considers that the appropriate test for unlawful racial discrimination under s 9 of the Act is whether a person has suffered unfair treatment based partly or wholly, or sufficiently connected to, his or her race, colour, descent or national or ethnic background: see Macedonian Teachers' Association of Victoria Inc v Human Rights and Equal Opportunity Commission (1998) 91 FCR 8 at 33; Hagan v Trustees of the Toowoomba Sports Ground Trust [2000] FCA 1615 at [39] . In broad terms, under the Act it is unlawful to do any act involving a distinction based on race, colour, descent or national or ethnic origin which has the purpose or effect of impairing the recognition, enjoyment or exercise on an equal footing of any human right. Moreover, where an act is done for one or more reasons, it is enough that one of the reasons is the race, colour, descent or national or ethnic origin of the relevant person, irrespective of whether it is the dominant or substantial reason for doing the act: see Jones v Scully [2002] FCA 1080 ; (2002) 120 FCR 243 at 273. The applicant claims that she comes within this requirement. 14 Section 31A(2) of the Federal Court of Australia Act 1976 (Cth) empowers the Court to give summary judgment against an applicant if it is satisfied that the applicant has "no reasonable prospect of successfully prosecuting the proceeding". This is a less onerous test than that previously stated and applied in General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 130, namely that the allegations are "so clearly untenable that [they] cannot possibly succeed". Section 31A was designed to make it easier for an opposing party to strike out a claim or defence: see Boston Commercial Services Pty Ltd v GE Capital Australasia Pty Ltd (2006) 70 IPR 146 at 158; Duncan v Lipscombe Charles Care Service Inc [2006] FCA 458 at [6] . Of course it is essential that the Court must be careful not to do an injustice by summarily dismissing proceedings, or denying an applicant an opportunity to ventilate their case. However, in the present case, the material placed before the Court is not sufficient to satisfy the threshold raised by s 31A(2) because it does not raise a reasonable argument to the effect that there has been a contravention of the Act . The version of the evidence for which the applicant contends merely indicates a reference to the applicant's colour of skin or ethnic origin as a way of identifying her for the purpose of giving effect to the provisions of the Inclosed Lands Protection Act 1901 (NSW), a piece of legislation which applies equally to people of any ethnic origin. Merely to identify a person by reference to characteristics of clothing, ethnicity or skin for the purpose of the application and enforcement of a generally applicable law is not a contravention of the Act . 15 I have carefully considered the evidence of the applicant, and it does not, even at its highest, provide any support for the view that she has been treated unlawfully because of race, colour or ethnicity. To the contrary, the evidence supports the conclusion that there was no causal relationship between the removal of the applicant from the University's premises and any contravention of her human rights or unlawful deprivation of equal opportunity. There must be a connection between the impugned act and the prohibited ground as opposed to a mere belief that there has been a discriminatory course of conduct, and when ascertaining whether this connection exists, a broad interpretation of s 9 of the Act should be preferred: see Baird v State of Queensland [2006] FCAFC 162 ; (2006) 156 FCR 451 at 468. In the present case, the applicant is of the belief that she has been unlawfully discriminated against in the basis of her race or ethnicity. The evidence before the court does not establish the necessary basis for forming a view that a causal relationship existed. For these reasons, I am satisfied that there is sufficient substance in the submissions made for the University to warrant summary judgment being entered in its favour. 16 It is not necessary for me to deal with the other prayers contained in the University's notice of motion as they were all posited in the alternative. However, I will briefly state my position on two of the other prayers. 17 First, I would grant prayer five in the notice, which seeks a stay in this proceeding until the applicant provides security for costs. Given the lengthy history of the matter, the cumbersome detail of the affidavits filed to date, and the period over which the proceedings will be heard, it would be reasonable and appropriate for the proceedings to be stayed until the applicant provides security for costs in the amount of $10,000. In the circumstances, this figure, which was proposed by the University, would be extremely modest. Accordingly, even if I was convinced that there was some reasonable prospect of success in this present application, I would still consider that the proceedings should be stayed until security for costs had been given. 18 Secondly, I would not grant prayer four in the notice of motion, which seeks a permanent stay in the proceedings before this Court until the applicant pays the University's costs as ordered by the Supreme Court of New South Wales. Although I would not grant such a stay, I have taken the respondent's failure to satisfy the orders of the Court into account when considering whether a stay would be appropriate until security of costs have been given in respect of the present application. 19 For the above reasons, I have reached the conclusion that the applicant's application should be dismissed pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth). The applicant is to pay the costs of the University in respect of both the application and the University's motion for summary judgment. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | removal of applicant from premises of university applicant of sri lankan appearance applicant's belief of racial discrimination whether removal based partly or wholly, or sufficiently connected to, applicant's race, colour, descent or national or ethnic background s 9 of the racial discrimination act 1975 (cth). summary judgment federal court act 1976 (cth), s 31a no reasonable prospect of success. racial discrimination practice and procedure |
The applicant's proceeding is brought under s 39B of the Judiciary Act 1903 (Cth) (" Judiciary Act "). He seeks declarations that the determination and each of the two summonses is invalid. The Australian Crime Commission ("the Commission") is the first respondent and the examiner, Mr Jeffrey Philip Anderson, is the second respondent. The summons was issued by the second respondent at 11.26 am on 8 October 2008. I will refer to this summons as the first summons. The first summons stated that the Commission was conducting a special investigation pursuant to a determination of the Board, a copy of which was attached to the summons. The determination of the Board is an eight-page document which is entitled Australian Crime Commission Special Investigation Authorisation and Determination (Financial Crimes) 2008 . In these reasons, I will refer to this determination of the Board as the determination. The first summons stated that the examiner, being satisfied that it was reasonable in all the circumstances to do so, pursuant to s 28(1) of the Act, summoned the applicant to attend at 1.00 am on Tuesday, 21 October 2008 before an examiner at an examination to be held for the purpose of the said special investigation. A place was then identified and the summons stated that the applicant's attendance was required to give evidence of federally relevant criminal activity involving his knowledge of the federally relevant criminal activities of a named person and two named companies. The summons stated that the applicant's attendance was required "from day to day unless excused or released from further attendance". There are obligations in the Act relating to disclosure of certain information. An examiner may include a notation on a summons that information about the summons or any official matter connected with it not be disclosed. In this case, the second respondent included such a notation on the first summons. In those circumstances, he was required, and did, serve with the summons a written statement of rights and obligations under s 29B of the Act. The written notice which accompanied the first summons set out the rights and obligations under s 29B(1) and (2) and referred to, without setting out, the rights and obligations under s 29B(3). No reference was made to s 29B(4). Finally, the first summons referred to the obligations of the person served with the summons set out in s 30 of the Act. The second respondent prepared written reasons for his decision to issue the summons. There were some minor redactions of the document put before me. That was done on the basis of a claim for public interest immunity by the respondents. I was satisfied that it was reasonable in all the circumstances that the Summons be issued to the person to whom it is directed. I was satisfied that it was reasonable in all the circumstances that the Summons be issued in the terms approved by me. I was satisfied that the summons does, so far as is reasonably practicable, set out the general nature of the matters in relation to which it is intended to question the person. I was satisfied that, in the particular circumstances of the special ACC operation to which the examination relates, it would prejudice the effectiveness of the special ACC operation for the summons to state beyond that which it does the general nature of the matters in relation to which the examiner intends to question the person. I was satisfied that this was an appropriate Summons for the inclusion of a notation pursuant to subsection 29A(1) of the Australian Crime Commission Act 2002 , in the terms approved by me, because if such a notation were not included it would reasonably be expected to prejudice the effectiveness of the operation and that a failure to do so might be contrary to the public interest. The Statement of Facts and Circumstances document dated 7 October 2008 (referred to in the Reasons document) was tendered, but it is very heavily redacted. The Legal Submissions document (also referred to in the Reasons document) dated 7 October 2008 was tendered and it is partly redacted. Again, the redactions were done on the basis of a claim for public interest immunity by the respondents. The latter document details the history of the determination (and earlier determinations) and the purpose of the special investigation. As I have said, the first summons required the applicant to attend before an examiner at 1.00 am on Tuesday, 21 October 2008. The applicant, his counsel, Mr Michael Abbott QC, and his solicitor, Mr Harry Patsouris, attended at the nominated place at that time, but no one was present. The applicant was served with a second summons. The second summons was issued by the second respondent at 3.30 pm on 23 October 2008. It required the applicant to attend at 9.30 am on Monday, 10 November 2008. The federally relevant criminal activity was described in terms similar to the description in the first summons, save and except that it included activity "involving yourself" and, in addition to the reference to the named person and two named entities, it referred to "and other entities". Other than the matters to which I have referred, the second summons was in the same terms as the first summons. Like the first summons, the second summons had the determination and a written statement of rights and obligations attached to it. The examiner prepared written reasons for his decision to issue the second summons. There were some differences between the examiner's reasons for issuing the second summons and his reasons for issuing the first summons. The "federally relevant criminal activity" involved, not only the applicant's knowledge of the activity of others, but also his own activity. Furthermore, the material the examiner had regard to included, not only a Statement of Facts and Circumstances document dated 23 October 2008 and Legal Submissions document dated 22 October 2008, but also "© My knowledge obtained from a recent examination". I was satisfied that it was reasonable in all the circumstances that the Summons be issued to the person to whom it is directed. I was satisfied that it was reasonable in all the circumstances that the Summons be issued in the terms approved by me. I was satisfied that the summons does, so far as is reasonably practicable, set out the general nature of the matters in relation to which it is intended to question the person. I was satisfied that, in the particular circumstances of the special ACC operation to which the examination relates, it would prejudice the effectiveness of the special ACC operation for the summons to state beyond that which it does the general nature of the matters in relation to which the examiner intends to question the person. I was satisfied that this was an appropriate Summons for the inclusion of a notation pursuant to subsection 29A(1) of the Australian Crime Commission Act 2002 , in the terms approved by me, because if such a notation were not included it would reasonably be expected to prejudice the effectiveness of the operation and that a failure to do so might be contrary to the public interest. The Legal Submissions document dated 22 October 2008 was tendered and it is partly redacted. Again, the redactions were done on the basis of a claim for public interest immunity by the respondents. The applicant attended before the second respondent on 10 November 2008. Mr Abbott QC and Mr Patsouris appeared for the applicant. Mr Abbott asked for the examination to be adjourned while a challenge to the determination and the second summons was pursued before this Court. He pointed out that the contention of the applicant was that the determination had not been signed by the Chair of the Commission. Some of those grounds are the grounds upon which he challenges the first summons. I commence with a brief description of the grounds of challenge common to both summonses. The applicant submits that both summonses are invalid because the second respondent failed to record in writing his reasons for issuing the summonses, failed to record in accordance with the Act his reasons in writing for issuing the summonses and could not have been satisfied that it was reasonable in all the circumstances to issue the summonses. The applicant submits that the second summons is invalid for a number of reasons. First, the second summons is invalid because it did not require the applicant to give evidence as a "witness". Secondly, the second summons is invalid because it was not accompanied by the written statement of rights and obligations required by s 29A(3) of the Act. Thirdly, the second summons is invalid because a copy of the determination did not accompany the summons, or, alternatively, the determination was invalid. Fourthly, the applicant submits that the examiner did not exercise the power in s 28(1) correctly because he failed to consider whether the first summons was spent and whether the circumstances in which it was spent were relevant to the issue of the second summons and failed to consider whether he had the power to issue the second summons in circumstances where "by his own actions" in not attending at the date, time and place specified in the first summons, he had made it "impossible for the examination pursuant to the first summons to take place". There were some other grounds of challenge which were not pleaded and which were raised for the first time in counsel's closing submissions in reply. The trial of this proceeding came on quickly and amendments to the application and statement of claim were made at a late stage. The respondents made informal discovery at a late stage. One document the respondents discovered and which the applicant sought to tender, and to reopen his case for that purpose, was a summons identical to the first summons, save and except for the fact that the time for attendance is 1.00 pm, not 1.00 am as appeared in the first summons. This summons was not served on the applicant. The respondents opposed the applicant's application to reopen his case in order to tender the summons, but indicated that they did not wish to call any further evidence if the application was allowed. I reserved my decision. In the circumstances, I will allow the application, and the summons (including Annexure "B"), which I will refer to as the third summons, will be marked Exhibit "A6". He is referred to in the Board minutes as "Acting Commissioner Tony Negus". The Board minutes record an apology from Mr M J Keelty, who was Commissioner of the Australian Federal Police in June 2008. It appears that Mr Keelty travelled overseas between 14 and 27 June 2008. During this period I will [sic] on official overseas related travel. First, it is invalid because the Chair of the Board did not convene or attend the meeting at which it was made, and the determination in writing was not under the hand of the Chair of the Board. Secondly, the determination is invalid because the purposes stated in clause 9 of the determination exceeded the scope of an investigation under the Act. Thirdly, the determination is invalid because the Board did not actually draw a conclusion as to whether ordinary police methods of investigation were likely to be effective in investigating federally relevant criminal activity. Fourthly, the determination is invalid because of various deficiencies in the resolution of the Board. Fifthly, the determination is invalid because the Board did not resolve the class or classes of persons who were to be able to participate in the investigation (see clause 10 and Schedule 2). Sixthly, the determination is invalid because the Board purported to consent to the Commission conducting an investigation or intelligence operation under a law of a State pursuant to s 55A(3) of the Act (see clause 11(a) of the determination) without identifying the law of the State in question. A similar difficulty is said to arise in relation to s 55A(5A) of the Act (see clause 11(b)). Seventhly, the determination is invalid because, by clause 3(q)(xii) of Schedule 1 of the determination, the Board purported to authorise the investigation of allegations comprising offences which the head of the special investigation suspects may be directly or indirectly connected with, or may be part of, a course of activity involving the commission of offences referred to earlier in the determination. As with the summons, there was also a ground of challenge to the determination which was not pleaded and which was raised for the first time in counsel's closing submissions in reply. He also contends that the third summons, which it will be recalled was not served on the applicant, is relevant to the question of the validity of the first and second summonses. The second summons is the summons that ultimately led to the applicant attending before the second respondent and its significance is obvious. The significance of the first summons is less obvious. It is a reasonable inference that, by mistake, it incorrectly referred to the time for attendance as 1.00 am instead of 1.00 pm. The applicant contends that the fact the first summons was issued and served is relevant to the second respondent's decision to issue the second summons and I will deal with the contention in due course. The significance of his claim that the first summons is invalid is less obvious. However, I do not need to dwell on that question because the grounds of challenge to the first summons are the same as some of the grounds of challenge to the second summons and, for reasons I will give, I reject the grounds of challenge in relation to the second summons. The significance of the third summons is not at all apparent. It is true that its existence is unexplained, but I do not think any inference can be drawn from its existence that supports the grounds of challenge to the first summons or the second summons. The grounds of challenge to the second summons can be put into various categories. First, there are grounds of challenge relevant to the documents themselves, that is, the summons itself, the determination and the written statement of rights and obligations. Secondly, there are grounds of challenge relevant to the record in writing of the second respondent's reasons. Thirdly, there are grounds of challenge which, by reference to the second respondent's reasons, are relevant to the second respondent's decision to issue the second summons. Finally, there is a challenge to the second summons on the basis that it was not issued for the purposes of a special ACC investigation because the determination is invalid. I deal with this last ground of challenge in a separate section of these reasons when I consider the applicant's grounds of challenge to the validity of the determination. I turn now to consider the grounds of challenge to the second summons. 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). The Act provides that a copy of the determination must accompany the summons: s 28(2). This ground of challenge was not the subject of any submissions by the applicant. It must be rejected because the evidence tendered by the applicant included evidence from his solicitor that he was served with the second summons and it was accompanied by a copy of the determination. (3) If a notation is included in the summons or notice, it must be accompanied by a written statement setting out the rights and obligations conferred or imposed by section 29B on the person who was served with, or otherwise given, the summons or notice. (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. Penalty: 20 penalty units or imprisonment for one year. Penalty: 20 penalty units or imprisonment for one year. Furthermore, the summons was accompanied by a written statement of rights and obligations purportedly setting out the rights and obligations conferred or imposed by s 29B. However, the written statement of rights and obligations set out the rights and obligations in s 29B(1) and (2) but it did not set out the rights and obligations in s 29B(3) and (4). The applicant submits that that constituted a failure to comply with s 29A(3) because a person "otherwise given" a summons within the subsection may be a person to whom disclosure has been made within s 29B(3) or (4) and therefore for whom the relevant rights and obligations are those in s 29B(3) and (4). The rights and obligations in those subsections were not set out in the written statement and, therefore, there was a breach of s 29A(3) of the Act. I reject this submission for the same reasons I rejected the same submission in AA v Board of the Australian Crime Commission [2009] FCA 642 (" AA "). 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)). As I have said, all documents are redacted to some extent on the ground of public interest immunity; the Reasons document is only slightly redacted, the Facts and Circumstances document is heavily redacted and the Legal Submissions document is partly redacted. The second respondent was under an obligation to record in writing his reasons for issuing the summons: s 28(1A). Section 28(8) provides that a failure relating to the making of the record does not affect the validity of a summons. (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. Neither party suggested that the second respondent had reasons which were not in the written documents and, in my opinion, he complied with s 28(1A) of the Act. The applicant submitted that, by reason of s 25D of the Acts Interpretation Act , the second respondent was required to set out in his reasons his findings on material questions of fact and refer to the evidence or other material on which those findings were based, and that he had not done that. It was not in this case contended by the respondents, as it had been by the respondents (albeit in the context of s 29 of the Act) in A B Pty Ltd v Australian Crime Commission (2009) 107 ALD 591 at 607 [54] per Flick J, that s 25D was engaged. I do not need to examine the question of whether the second respondent set out his findings or material questions of fact and referred to the evidence or other material on which those findings were based because, in my opinion, s 25D was not engaged and, even if it was, a failure to comply with its provisions would not lead to the conclusion that the second summons is invalid. I held that it did not. In my opinion, the applicant cannot establish that matter. Section 28 does not impose an obligation on an examiner to give reasons to an examinee or to give the written record of his reasons to an examinee: Barnes v Boulton [2004] FCA 1219 ; (2004) 139 FCR 356. That decision was not challenged by the applicant. Rather it asserts an entitlement to be provided with Mr Boulton's record of reasons --- an entitlement the satisfaction of which is said to be a precondition to the holding of the examination. The short answer to the claim is that s 28(1A) in its setting gives no such right expressly and there is no conceivable basis in this context for implying such a right: cf R v Young [1999] NSWCCA 166 ; (1999) 46 NSWLR 681 at 686 ff; let alone for making the provision of such reasons a jurisdictional precondition to the holding of an examination. Neither context nor legislative purpose: cf Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14 ; (2004) 78 ALJR 585 at [11] ; and see generally Spigelman, 'The poet's rich resource: Issues in statutory interpretation' (2001) 21 Aust Bar Rev 224 ; lend any support to such an implication. The clear purpose of s 28(1A) is both to focus and enhance decision making and to provide an accountability mechanism by requiring the creation of an 'audit trail'. Under s 59 of the ACC Act, that record is potentially available on request to the portfolio Minister and to the Parliamentary Joint Committee on the Australian Crime Commission that is constituted under Pt III of the ACC Act: and see ss 54 and 55 for that Committee's powers and duties. As is not uncommon with investigative agencies, the Parliament has counterbalanced the secrecy regime it has erected to ensure the effectiveness of the ACC's investigations with a measure of public accountability through a dedicated parliamentary oversight committee: see eg Intelligence Services Act 2001 (Cth). A right such as the applicant propounds would be an alien presence in such a statutory scheme. The latter, no doubt, includes giving written reasons to the person affected by the decision and publishing written reasons. The obligation in s 28(1A) to record in writing the reasons for the issue of a summons does not engage the obligation in s 25D of the Acts Interpretation Act to set out in an instrument giving the reasons the findings on material questions of fact and to refer to the evidence or other material on which those findings are based. If I assume s 25D was engaged and I assume the examiner's reasons did not satisfy the requirements of s 25D , the applicant's argument must nevertheless fail because s 28(8)(a) of the ACC Act provides that a failure to comply with s 28(1A), 'in so far as that subsection relates to the making of a record' does not affect the validity of a summons. The applicant submits that s 28(8)(a) only relates to the time when the record is made. In other words, the applicant submits that s 28(8)(a) is only engaged where the record is not prepared at one of the times specified in s 28(1A)(a), (b) and (c). It is not engaged, so the argument proceeds, where the failure relates to the contents of the record. I see no justification for drawing such a distinction. The words describing the failure as one relating to the 'making of [the] record' are wide enough to cover obligations both as to the time at which the record is made and as to its contents. The applicant submits that I should infer from that fact that s 28(8)(a) relates only to the time at which the reasons are to be recorded in writing. I was referred to the Explanatory Memorandum for the Australian Crime Commission Amendment Bill 2007. I reject this contention. For the reasons I have given, there is no reason to read down the words in s 28(8)(a) and in fact the Explanatory Memorandum supports the construction which I think is the proper one. The section sets out when a notation must or may be made, prescribes the form and content of the notation, and provides for cancellation of the notation. I have decided the issues in the same way as her Honour (see [88]-[92]). Even if that is wrong, and it was engaged, a failure to comply with it would not lead to the invalidity of the summons by reason of s 28(8)(a). The applicant made a number of complaints about the second respondent's reasons which I think, when properly analysed, were challenges to his decision to issue the second summons. There were no detailed submissions on the grounds upon which the decision to issue a summons under s 28(1) may be challenged on an application under s 39B of the Judiciary Act . I gave brief consideration to some of the issues which arise in AA (at [13]-[18]). I propose to proceed on the basis that if the second respondent's decision involved any of the matters which constitute jurisdictional error then it is invalid (see Craig v The State of South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 176-180). The first ground upon which the applicant challenged the second respondent's decision to issue the second summons was that the second respondent considered that he was issuing the second summons for the purposes of an operation , whereas the determination authorised an investigation . Section 28(7) provides that the powers conferred by the section are not exercisable except for the purposes of a special ACC operation/investigation. Section 24A provides that an examiner may conduct an examination for the purposes of a special ACC operation/investigation. The Act draws a distinction between an intelligence operation and an investigation (s 7C(1)(c)) and a special operation and a special investigation (s 7C(1)(d), (2) and (3)). The Act contains definitions of "ACC operation/investigation", "special ACC operation/ investigation" and "intelligence operation" in s 4. In [13] above, I set out passages from the second respondent's reasons for issuing the second summons. It will be seen that paragraphs 1), 5) and 6) refer to "the operation" or "the special ACC operation". This is clearly an error, but the question is whether it establishes that the second respondent addressed the wrong matter in the sense that he considered that he was issuing the summons for the purposes of a special operation rather than a special investigation, or at least that he did not appreciate the difference. The summons itself refers to a special investigation and it has the determination attached to it. The determination plainly relates to a special investigation. The Statement of Facts and Circumstances document refers to a special investigation and to the determination and the Legal Submissions document refers to the determination and to a special investigation. It seems to me that, looking at the documents as a whole, it has not been established that the second respondent misunderstood the nature of the instrument pursuant to which he was issuing the summons. It is more likely that some of the dangers of using a standard form document have been realised (see the observations of the Full Court of this Court in Australian Crime Commission v NTD8 [2009] FCAFC 86 at [34]). The second ground upon which the applicant challenged the second respondent's decision to issue the second summons was that he misunderstood the exercise he was performing. The applicant referred to the fact that the Legal Submissions document is referred to under the heading, "Material Facts" and to the fact that in one part of the reasons he states that he had regard to "© My knowledge obtained from a recent examination" and yet when setting out his conclusions under the heading "Consideration" he makes no reference to that piece of information. It seems to me that, however one looks at those matters, neither of them establishes an error which is a jurisdictional error. The third ground upon which the applicant challenged the second respondent's decision to issue the second summons is that the second respondent did not consider, or properly consider, the inclusion of the notation referred to in s 29A of the Act. In formulating his reasons for including the notation, there is nothing to prevent the second respondent from relying on each of paragraphs (a), (b) and (c) in s 29A(2) (see [35] above). Furthermore, it is clear from the reference in paragraph 6), "in the terms approved by me", (see [8] above) that he addressed the terms of the notation. The fourth ground upon which the applicant challenged the second respondent's decision to issue the second summons involved an examination by the applicant of the various documents comprising the second respondent's reasons for the decision to issue the second summons and of the documents comprising the second respondent's reasons for issuing the first summons, and a submission that it emerged from that examination that he did not address the right questions. The first submission was that the Reasons document indicated that the second respondent considered he was bound to include a notation on the summons, whereas the standard form part of the Statement of Facts and Circumstances document indicated that the notation was included as a matter of discretion. I do not think there is anything in this point. The documents must be read as a whole and I am not satisfied that the second respondent misunderstood the decision he was making under s 29A of the Act. The second submission was that there were a number of errors in the Legal Submissions document. There is a summary in the Legal Submissions document of the meaning of "serious and organised crime" as that phrase is used in the Act. An example is given of certain offences "such as illegal drug dealings". The applicant submitted that the determination has nothing to do with illegal drug dealings and that the reference to illegal drug dealings is misleading. This criticism is misplaced, as the relevant passage is doing no more than describing the types of offences which can fall within the definition of serious and organised crime. It is true that the transactions and events in that paragraph are described in broad terms, but that does not make the determination invalid, or support a claim that the second respondent fell into jurisdictional error in issuing the second summons. It probably appears in the document because it is part of a standard form which is used. At all events, when regard is had to the whole of the evidence, its inclusion in the Legal Submissions document does not suggest that the second respondent misunderstood the nature of the task he was undertaking. The applicant submitted that a comparison of the Legal Submissions document in relation to the first summons and the Legal Submissions document in relation to the second summons establishes that the second respondent did not consider the question of whether a notation pursuant to s 29A(1) of the Act should be included in the second summons. The submission must be rejected in light of the clear statement by the second respondent in the Reasons document that he considered it appropriate to include in the second summons a notation under s 29A of the Act. Finally, the applicant referred to the fact that, in terms of the matters for examination, the second summons is broader than the first in that it adds federally criminal activity "involving yourself" and "other entities". He submitted that a comparison of the second respondent's reasons in the case of each summons establishes that the expansion of the reach of the summons was not justified. I reject that submission for a number of reasons. First, it is based on the assumption that the first summons was as broad as it could have been on the material then available. The correctness of that assumption has not been established. Secondly, it requires me to draw inferences about the material before the second respondent at the time he issued the second summons in circumstances where there is no basis for me to do that. In fact, the reference to "© My knowledge obtained from a recent examination" suggests that there was additional material. The fifth ground upon which the applicant challenged the second respondent's decision to issue the second summons is that the second respondent did not take into account, in reaching his decision, the fact that the first summons had been issued and served on the applicant. The second respondent plainly had the power to issue the second summons (see s 33(1) of the Acts Interpretation Act ) and the fact is that, by mistake, the wrong time (that is, 1.00 am instead of 1.00 pm) was included on the first summons. Plainly, the second respondent would have been aware of the circumstances surrounding the first summons. I turn now to consider the grounds of challenge to the validity of the determination. The determination itself does not affect a right or liability of the applicant. The second summons does affect a right or liability of the applicant because he is required to attend an examination by reason of it. As I have already said, s 24A of the Act provides that an examiner may conduct an examination for the purposes of a special ACC operation/investigation and s 28(7) provides that the powers conferred by the section are not exercisable except for the purpose of a special ACC operation/investigation. On the face of it, and leaving aside the effect of s 16 of the Act, where the Board does not authorise an investigation and determine that it is a special investigation, the power to issue a summons and to conduct an examination for the purposes of a special investigation is not engaged. The section was referred to in passing in P v Board of Australian Crime Commission [2006] FCAFC 54 ; (2006) 151 FCR 114 at 121 [24] - [26] and D v Australian Crime Commission [2006] FCA 660 ; (2006) 152 FCR 497 at 503 [31] per Mansfield J. Section 16 would only be engaged in this case if the summons was an act or thing done by the Commission because of the determination. Section 7 of the Act provides for the establishment of the Commission and that the Commission consists of, inter alia, the examiners. It would seem to follow that the issue of the second summons is an act or thing done by the Commission because of the determination. On the face of it, by reason of s 16 , the second summons cannot be challenged, reviewed, quashed or called in question on the ground that the determination was not lawfully made. The respondents referred to Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476 and submitted that s 16 was engaged in circumstances where the determination was not lawfully made because of an error of law which did not go to jurisdiction, or because of a failure to comply with a provision of the Act which was not an inviolable jurisdictional restraint. In other words, they accepted that s 16 was not engaged where the determination was not lawfully made because of jurisdictional error, or a failure to comply with an inviolable jurisdictional restraint. I do not need to consider the scope and effect of s 16 because I do not think any of the grounds upon which the determination is challenged are made out. I turn now to examine those grounds. The Chair has various powers and functions in relation to meetings of the Board. He or she may convene meetings of the Board: s 7D. He or she must preside over meetings of the Board: s 7E(a). There is one exception to this last requirement. A person who is another eligible Commonwealth Board member (defined in s 4) and who is nominated, in writing, by the Chair may preside over a meeting of the Board if the Chair is not present: s 7E(b). In June 2008, the Commissioner of the Australian Federal Police was Mr Keelty. Mr Keelty did not preside over the meeting of the Board on 25 June 2008. Mr Negus presided over the meeting (see [23]) above). The applicant submits that the meeting held on 25 June 2008 was not validly constituted and the resolution in favour of the determination was not validly passed. It follows, submits the applicant, that the determination was not validly made. I reject the applicant's submission because I do not think there was a failure to comply with the Act. It is not necessary for me to consider whether, had there been a failure, it would have had the consequence for which the applicant contends. In AA , the applicants applied for interlocutory injunctions restraining the holding of their examinations and I heard the applications after judgment was reserved in this proceeding. One of the determinations which was challenged in that case was in fact made at the Board meeting held on 25 June 2008 and Mr Negus signed the determination as Chair of the Board. The same argument was put as is put in this case and the same letter from Mr Keelty to Mr Negus dated 3 June 2008 was relied on by the respondents for the purposes of s 19(1) of the Australian Federal Police Act 1979 (Cth) ("AFP Act"). I held that Mr Negus had and was able to exercise all the powers and was required to perform all the functions and duties of the Commissioner on 25 June 2008. The Commissioner's letter dated 3 June 2008 established that he was absent from Australia and that Mr Negus was the next most senior member who was available. By virtue of s 19(4), the order of seniority was as determined by the Commissioner and it was a reasonable inference from the letter that the Commissioner had determined that Mr Negus was the next most senior member who was available. In AA , I rejected a submission that s 19(1) only operated in relation to powers, functions and duties under the AFP Act. The applicant referred to s 69C of the AFP Act in support of his argument. This section gives the Commissioner the power to delegate in writing to certain officers, all or any of the Commissioner's powers, functions or duties under the Act. I am unable to see how s 69C assists in the interpretation of s 19 of the AFP Act, which must be construed according to its terms. The applicant also referred to s 17(4) of the AFP Act, which provides that the Commissioner holds office on such terms and conditions (if any) in respect of matters not provided for by the Act as are determined by the Governor-General. The applicant suggested that this subsection is directed to powers, functions and duties of the Commissioner under other Acts. I do not think that is right. Section 17(4) is directed to terms and conditions of the Commissioner's office not provided for (that is, not dealt with) in the AFP Act. They are to be determined by the Governor-General. In my opinion, the words in s 19(1) of the AFP Act are quite general and there is no reason to restrict them to powers, functions and duties under the AFP Act. On 25 June 2008, Mr Negus was performing, for the time being, the duties of the office or position of Commissioner of the Australian Federal Police. The submission is that a mention or reference in an Act to, for example, a director of a company or an officer of an organisation would be a mention or reference in general terms, but a mention or reference to an office occupied by one person is not a mention or reference in general terms . Both parties referred me to the submissions in that case. I have reached that conclusion for a number of reasons. First, there are some authorities that touch on s 20 of the Acts Interpretation Act and, so far as they go, they suggest that there is no distinction of the type advanced by the applicant: Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health [1989] FCA 384 ; (1990) 22 FCR 73 at 75 per Gummow J; Registrar of Aboriginal Corporations v Barker (1997) 81 FCR 53 ; Lim v Secretary, Department of Education, Employment and Workplace Relations (No 2) [2008] FCA 1752 at [44] per Bennett J; Gazal Apparel Pty Ltd v Davies (2007) 247 LSJS 391 at 396 [35] per Doyle CJ. Secondly, the subject of what is to be mentioned or referred to in general terms is not the office or position itself, but the person holding or occupying a particular office or position. There is no reason why that should be restricted only to those cases where the person is a member of a class of persons. The distinction suggested by the applicant seems to me to be an artificial one. It is not obvious why the deeming provision in s 20 of the Acts Interpretation Act would apply in the case of a deputy commissioner of an organisation, assuming there were two or more deputy commissioners, but not apply in the case of the commissioner of an organisation, or why it would not apply to a person lower down in the hierarchy of an organisation who happens to be the only holder of a particular office or position. Such, however, are the consequences of the interpretation of s 20 of the Acts Interpretation Act proposed by the applicant. Finally, the interpretation of s 20 which I think is the correct one, will not frustrate or impede the intention of Parliament because the deeming provision itself does not apply if a contrary intention appears in the relevant legislation. I should add that I do not think the ACC Act reveals a contrary intention in this case. He referred to the composition of the Board (s 7B(2)), its important functions (s 7C), the quorum and voting requirements (s 7F and s 7G) and the provisions dealing with the passing of resolutions outside of Board meetings (s 7J). He submitted that the Act contains only a limited power to delegate (s 59A) and that the Commissioner's power in s 7E(b) of the Act to nominate a person to preside at a meeting of the Board is quite limited. To a point, those matters may be accepted, but I do not think that they reveal a contrary intention within s 20 of the Acts Interpretation Act . The applicant also submitted that if each State Act had an equivalent to s 19(1) of the AFP Act (a matter which was not established) then a consequence of the respondents' argument is that the Board might, at a particular meeting, be composed of quite junior members. It seems to me that is an unlikely possibility, but, in any event it can be said on the other side that it is unlikely that Parliament intended that the Board be unable to transact its business in the event that, for example, a number of police commissioners are absent from duty or from Australia. The determination is not invalid because Mr Negus was Chair of the Board meeting held on 25 June 2008. The applicant submits that the purposes identified in clause 9 are not proper purposes of an investigation as defined in the Act. He submits that the purposes relate to acts the Commission is not authorised to perform under the Act or to acts which may be part of an operation under the Act but not an investigation under the Act. He submits that the acts identified in the first purpose (clause 9(a)) might form part of an operation but do not form part of an investigation. He submits that the acts of apprehending persons (clause 9(b)) and making recommendations to the Board about law reform (clause 9(c)) are not acts the Commission is authorised to perform under the Act. The Act requires the Board to set out in its determination the purpose of an operation or investigation: s 7C(4)(c). As I have said, the Act does draw a distinction between an operation and an investigation. The Act requires the Board to consider "whether methods of collecting the criminal information and intelligence that do not involve the use of powers in this Act have been effective" before determining that an intelligence operation is a special operation (s 7C(2)) and it requires the Board to consider "whether ordinary police methods of investigation into the matters are likely to be effective" before determining that an investigation is a special investigation (s 7C(3)). There are a number of answers to the applicant's submission. The first point is that a statement of purpose is not the authorisation itself. The authorisation is contained in clause 4 and Schedule 1 of the determination, both of which are unexceptional (see [22] above). Secondly, there is no definition of "investigation" in the Act and there is no reason to think that, reading the Act as a whole, some of the acts comprising an operation may not also form part of an investigation. There may be questions of degree involved, but the point is that there is no reason to think that the two functions are mutually exclusive. Thirdly, the Act gives the Commission incidental powers. Note: The CEO may also disseminate information in certain circumstances to law enforcement agencies and other bodies: see section 59. The second purpose (clause 9(b)) in so far as it refers to apprehending persons is a proper purpose having regard to s 12(1) and the third purpose (clause 9(c)) is a proper purpose having regard to s 12(3). The determination is not invalid because of the statement of purpose in clause 9. For present purposes, I will proceed on the assumption that the Board had to be satisfied that ordinary police methods of investigation into the matters were not likely to be effective, although I note that on the face of it that is not what s 7C(3) provides. There were no detailed submissions on the construction of the subsection. The short answer to the applicant's submission is that there is no evidence that the Board was not so satisfied. There is no requirement that such a state of satisfaction be set out in the determination and there is simply no evidence that the Board was not so satisfied at the meeting on 25 June 2008. The onus is on the applicant to establish the invalidity of the determination: X v Australian Crime Commission [2004] FCA 1475 ; (2004) 139 FCR 413 at 419-420 [22] per Finn J; Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 164 per McHugh JA. The determination is not invalid because the Board did not satisfy itself that ordinary police methods of investigation into the matters were not likely to be effective. The applicant submits that the Board did not authorise the Commission to investigate matters relating to federally relevant criminal activity and determine that the investigation was a special investigation. Furthermore, it did not specify the class or classes of persons to participate in the investigation. There is no doubt that the resolution is not drafted with the precision and clarity it could have been. The Board is not empowered to authorise the Commission to undertake a special investigation, determined to be a special investigation and authorisation . The Board is not empowered to authorise the Commission to undertake an investigation. It is able to authorise the Commission to undertake intelligence operations. The Board does not authorise a special investigation; it authorises an investigation and determines it to be a special investigation. The Board does not determine an authorisation ; as I have said, it determines an investigation to be a special investigation. These difficulties with the drafting of the resolution must be acknowledged; however, the matter is one of substance, not form, and the Board is not required to use any particular form of words. Furthermore, it is reasonable to infer from the minutes and the determination that the latter document was the document before the Board. The determination makes it perfectly clear that the Board was authorising an investigation and determining it to be a special investigation, and I do not think that there is any real doubt that the Board understood the acts it was performing. The submission that the Board resolution was deficient because it did not identify the class or classes of persons who were to participate in the investigation misunderstands the effect of the Act. The class or classes of persons who are to participate in the investigation must be identified in the determination (which, subject to the next ground, they are); it is sufficient that they be identified by reference to the instrument before the Board. The determination is not invalid because the Board's resolution of 25 June 2008 does not comply with the provisions of the Act. Clause 10 and Schedule 2 of the determination are set out above (at [22]). The applicant submits that items 2(b) and 3(b) of Schedule 2 exceed the powers of the Board under s 7C(1)(e) of the Act, in that they "impermissibly purport to delegate to persons other than the Board the power to identify persons authorised to participate in the special investigation mentioned in the Determination". The submission was considered by Mansfield J in D v Australian Crime Commission [2006] FCA 660 ; (2006) 152 FCR 497 at [28] - [60] and rejected. With respect, I think his Honour's decision is correct and I will follow it. The determination is not invalid because it does not identify the class or classes of persons to participate in the investigation. On the face of it, the Commission cannot perform or exercise duties, functions or powers under State laws without the consent of the Commonwealth Parliament: Bond v The Queen [2000] HCA 13 ; (2000) 201 CLR 213 at 219 [15] . Section 55A is designed to give that legislative consent in certain circumstances. Clause 11 is set out in [22] above. The applicant submits that clause 11(a) of the determination is not a consent within s 55A(3) because it does not comply with that subsection. It does not identify a particular law of a State. In the case of existing State laws, it fails to identify the particular law and the problem is exacerbated by the reference to a law of a State as "from time to time applies". The same point, mutatis mutandis, is made in relation to clause 11(b), although it is said to be stronger here because a particular duty or function or power must be identified. I see no reason why the Board may not give general consents of the type given in clause 11 of the determination. In any event, there are two limiting factors, namely, the limits on the legislative consent (see s 55A(2)(b) and (5)(b)) and the limit imposed by the determination which refers to the currency of the investigation. Clause 11(b) refers to "this intelligence operation". Having regard to the Board resolution and the determination as a whole, that is plainly a drafting slip and must be read as a reference to the investigation. The determination is not invalid because the consents given by clause 11 do not comply with s 55A of the Act. Paragraph 1 of Schedule 1 sets out the nature of the investigation. Paragraph 2 sets out the general nature of the circumstances constituting federally relevant criminal activity that may have been, may be being, or may in future be, committed and paragraph 3 sets out the general nature of the allegations that federally relevant criminal activity may have been, may be being, or may in future be, committed. Item 3(q)(xii) appears in paragraph 3. There are two answers to the applicant's submission. First, the Board's obligation is to determine and describe the general nature of the circumstances or allegations constituting the federally relevant criminal activity (see s 7C(4)(a)). Secondly, the power in item 3(q)(xii) is very limited. The offences must be incidental and directly or indirectly connected with, or may be part of, a course of activity involving the commission of any offences referred to in paragraphs (a) to (p) of paragraph 3 of Schedule 3. The determination is not invalid because of the presence of item 3(q)(xii) in the determination. This allegation was not pleaded by the applicant. In my view, the allegation is plainly untenable. The allegation depends upon a conclusion that the provisions of the Act engage s 25D of the Acts Interpretation Act . The Act requires that the authorisation of an investigation and determination that the investigation is a special investigation be in writing (s 7C(1)(c), (d) and (3)) and for the determination to describe, state and set out the matters in s 7C(4). However, s 25D of the Acts Interpretation Act is not engaged because the Act does not require the Board "to give written reasons" for the functions and acts it performs under the Act. I refer to my earlier discussion of the scope and effect of s 25D of the Acts Interpretation Act (see [41]-[43] above). The grounds of challenge to the determination fail. In the circumstances, it is unnecessary to consider the scope and effect of s 16 of the Act. I should note that the respondents did not argue in the alternative that, if I held that some paragraphs in the determination were invalid, they could be severed, leaving the balance of the determination as an operative instrument. I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | challenge to two summonses issued by second respondent under australian crime commission act 2002 (cth) whether summonses invalid because second respondent failed to record in writing reasons for issuing summonses whether summonses invalid because second respondent failed to record in accordance with act reasons in writing for issuing summonses whether second respondent could not have been satisfied that it was reasonable in all circumstances to issue summonses whether second summons invalid because it did not require applicant to give evidence as "witness" whether second summons invalid because it was not accompanied by written statement of rights and obligations whether second summons invalid because copy of determination did not accompany summons or, alternatively, determination invalid whether second respondent exercised power to issue summons correctly administrative law |
The trustee is the second respondent, APS Chemical Superannuation Pty Ltd. The insurer is The National Mutual Life Association of Australia. The insurer refused Ms Purcell's total and permanent disablement benefit claim, as did the trustee. On 10 October 2008, the Superannuation Complaints Tribunal ("the Tribunal") affirmed the decisions of the trustee and the insurer. Ms Purcell now appeals to the Court pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Act") to review the decision of the Tribunal based on alleged errors of law. The issue for determination in the appeal is whether the Tribunal erred in law in deciding that the decisions of the trustee and the insurer should be affirmed. The determination of that issue requires a consideration of whether the Tribunal had material before it to justify a conclusion that Ms Purcell was capable of a return to full-time work. Ms Purcell also claims that the Tribunal failed to give proper reasons for its decision. She completed Year 10 at secondary school and performed hospital secretarial work from 1962 to 1968. In 1976, she commenced work for APS Chemicals where she worked in sales, ultimately rising to the position of Sales/Marketing Manager. In April 2001, Ms Purcell incurred an injury to her back in the course of her employment. She last performed work on 26 April 2002 and, on that day, resigned from her employment with APS Chemicals. At the time of her resignation, Ms Purcell was working reduced hours, but her position remained a full-time one. The trustee made its decision on 31 May 2006. The relevant criteria are: whether an injury has stopped Ms Purcell from working in her usual occupation continuously for six months; and whether Ms Purcell is "unable ever again to work in any business, occupation or regular duties for which...she is reasonably qualified by education, training or experience". The criteria are explained further by the relevant definitions such that: It is not disputed that Ms Purcell satisfied the first criterion. The application of the second criterion to Ms Purcell is in dispute. That is because, as treated by the decision makers below, Ms Purcell occupied a full-time position on resigning her employment. A consideration of whether the trustee's decision was fair and reasonable necessarily required the Tribunal to consider the medical evidence available to the trustee as at 31 May 2006. In December 2002, the chiropractor agreed with the assessment of Ms Purcell's general practitioner, Dr MG, that Ms Purcell would only be able to work a maximum of one hour per day. Dr MG later confirmed this limitation in a medical report dated 17 February 2005. Dr MW, an occupational physician produced a report for Ms Purcell's workers compensation insurer dated 16 December 2002. Dr MW reported to the effect that due to ongoing pain Ms Purcell would struggle to work a full day and that "perhaps reduced hours would be reasonable if she is not able to manage". In a report provided by Dr JL for Centrelink on 20 January 2003, it was noted that Ms Purcell was "unfit [for] any work for award wages for more than two years, probably permanently". However, I would anticipate that if she was not signing this document on a monthly basis she would undertake some voluntary work. She is skilled in telephone work and computers and could undertake administrative tasks provided she is not require to undertake repeated bending, heavy lifting, prolonged standing or repeated ascending or descending of stairs. I would consider that a position which would be suitable for her would be one which is reception-based where she has the ability to move about and change her position frequently. ...I would consider in the first place that she should work reduced hours . However the Tribunal omitted from its quote of the report the key words emphasised in the preceding paragraph. It specifically observed that it was not required to find what it would have determined had it stood in the shoes of the decision makers. [Ms Purcell's] GP has at all relevant times assessed [Ms Purcell] as being TPD. However, none of the medical reports obtained for workers' compensation purposes or for the insurer conclude that [Ms Purcell] is TPD. The reports from Dr CB and Dr BD referred to motivational and other issues that were considered to be factors in preventing [Ms Purcell] from returning to work. Many medical reports referred to [Ms Purcell's] dissatisfaction with the Employer. The Tribunal then said that based on the medical reports, Ms Purcell's work history and skills, the decision was fair and reasonable. The Tribunal did not grapple with the important issue as to whether, on the basis of the medical reports, Ms Purcell was likely as at 31 May 2006 to resume full-time employment in light, sedentary, administrative work, especially in circumstances where such full-time work would require long periods of sitting. The Court is not free to interfere with a determination of the Tribunal because it has reservations about or disagrees with the merits of its determination. The Court's role is to consider whether the Tribunal fulfilled its duty under s 37 of the Act; see Constantinides v Du Pont Superannuation Fund Pty Ltd [2002] FCA 534 at [34] . More properly expressed, the Court considers the point raised by this contention is that the Tribunal could not find that the decisions of the insurer and the trustee were fair and reasonable in the absence of material which showed that Ms Purcell was capable of returning to full-time employment, in the context of there being material which showed she could not so return. In response, counsel for the insurer, contends that the Tribunal analysed the relevant medical evidence and the weight of that evidence was a matter for the Tribunal. Ms Purcell claimed an entitlement to a benefit under the deed for which she qualified if she could demonstrate that, amongst other factors, she could not return to full-time work. In so doing Ms Purcell relied on the evidence of her general practitioner, Dr MG, dated 17 February 2005. A report to similar effect was provided to Centrelink by Dr JL in January 2003. The 16 December 2002 report from Dr MW referred to Ms Purcell "struggling to work a full day". While other reports address the issue of a return to work, none of them address whether that return would be capable of being made to full-time duties. Questions about Ms Purcell's motivation to work, possible psychological attitude to returning to work and attitude to her employer are irrelevant considerations when one focuses on whether a return to work is possible on a full-time basis as distinct from a part-time or casual basis. The only medical evidence before the insurer and the trustee which dealt with a return to full-time work, being the evidence of Dr MG and Dr JL, were inconsistent with such a return; at [27] and [28] of the Tribunal's reasons. Dr MG assessed Ms Purcell as unlikely to return to the workforce in the foreseeable future and Dr JL referred to Ms Purcell's unfitness for "any work". The evidence which referred to a fitness for work of a kind consisting of light sedentary duties did not find that a return to full-time work was possible. Dr MW in her report for the workers compensation insurer referred to "reduced hours"; at [30] of the Tribunal's reasons. Dr CB considered a return to "suitable employment" was possible but that "in the first place she should have reduced hours"; at [39]. Dr BD's report is to similar effect; at [40]. Given that a central issue in assessing the claim before the insurer and the trustee was whether Ms Purcell could return to full-time work, and given that there was no evidence which dealt with whether Ms Purcell was capable of returning to full-time work, it was not fair and reasonable for the insurer and the trustee to consider that she was so capable and deny her an entitlement to a total and permanent disablement benefit on that basis. However, that was a matter for the Tribunal to determine on the merits. Nevertheless, its decision, in that regard, is not immune from judicial review because the Tribunal erred in law in affirming the decisions of the insurer and the trustee because there was no evidence to support a crucial aspect of them. There was no evidence of Ms Purcell's ability to return to full-time work of any kind. Counsel for the respondents submitted that Ms Purcell's fitness for "some" work was evidence of fitness for full time work. That submission is fanciful. It is equivalent to saying that a sportsman who is being assessed for playing a full game of hard competitive sport can do so when assessed medically to play "some" of that sport. The same counsel also submitted that Ms Purcell bore the onus of showing she was not capable of a return to full time duties. Ms Purcell attempted to show, by medical reports from her medical practitioners and from Drs MW and JL that she was incapable of such a return. That material was not contradicted by other medical evidence. To the extent that onus is relevant, as distinct from an assessment whether the claimant meets the qualifications for the relevant payment on all the material, Ms Purcell satisfied any such onus. When assessing the fairness and reasonableness of a decision of a trustee, the Tribunal cannot, if it is fulfilling its function properly, ignore material evidence which supports a claim by a claimant under a policy when the contrary evidence relied on by the insurer does not, in a real and practical sense address that issue. I am not satisfied that the Tribunal fulfilled its duty under s 37 of the Act. That is because the Tribunal erred in law by finding the decision of the trustee and insurer to be fair and reasonable in the circumstances when no evidence existed to support the decisions in so far as they assessed Ms Purcell as capable of returning to full time duties and the only evidence on that topic suggested the contrary. This is especially so when the review before the Tribunal was conducted on the basis that Ms Purcell was a full-time employee when she ceased to be employed in April 2002. There was evidence that Ms Purcell performed administrative work in a hospital setting before her job with APS Chemicals. There also was evidence that she performed administrative duties in the later employment. The allegation of any absence of such evidence is erroneous. The material before the Tribunal disclosed that Ms Purcell is reasonably qualified by her experience to perform lighter sedentary administrative work. Once that assessment is open, the second limb of the second criterion of the relevant definition is not made out. The medical practitioners who expressed a view about Ms Purcell's reluctance to return to work were not expressing a psychological opinion but a possible explanation for her attitude to returning to work when they considered that a return to work, albeit on a reduced hours or unstated basis, was possible. The reasons of the Tribunal disclose a reasoning process, albeit flawed in the failure to examine the consequences of an absence of medical evidence which suggested that a return to full-time work was possible. Generally, as long as a tribunal produces reasons which disclose a reasoning process, it cannot be said to have erred in law by failing to provide proper reasons; see Edwards v Giudice (1999) 94 FCR 561 at [44]---[48]. Under s 40 of the Act, the Tribunal is required to give written reasons for its decision. The Tribunal complied with its obligation to give written reasons for its decision by setting out findings on material questions of fact and referring to the evidence on which these findings were based, in the context of the findings being those of the trustee and the insurer for the purpose of the Tribunal's assessment of the reasonableness and fairness of those decisions. The Court directs that any such determination consider the fairness and reasonableness of the decisions of the trustee and the insurer in light of the absence of evidence before them, as at 31 May 2006, of Mr Purcell's ability to return to work on a full-time basis, together with the evidence, including that of Drs MW and JL, which suggests the contrary. The decision of the Superannuation Complaints Tribunal of 10 October 2008 is set aside. The matter is remitted to the Superannuation Complaints Tribunal to be determined again in accordance with the direction contained in [42] of the reasons for judgment. The respondents pay the applicant's costs of the appeal. I certify that the preceding forty-three (43) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | appeal from superannuation complaints tribunal to affirm decision to reject member's claim for total and permanent disablement benefit whether evidence before tribunal to show member capable of return to full-time work no medical evidence of member's capacity for full-time work matter remitted to tribunal superannuation |
The first is an application by the applicant in this proceeding to file a further amended statement of claim. The application is opposed by the second respondents. The second is an application by the second respondents to strike out the applicant's existing statement of claim which was filed on 12 September 2005 (the 12 September SOC). 2 This proceeding was commenced on 4 July 2005 by application with an accompanying statement of claim. A declaration pursuant to section 1317E of the Corporations Act 2001 (Cth) (" the Act ") that the First Respondent has contravened subsection 182(1) of the Act by improperly using his position as an employee of a corporation to gain an advantage for himself and/or the Second Respondents as set out in the statement of claim. A declaration pursuant to section 1317E of the Act that the First Respondent has contravened subsection 183(1) by improperly using information obtained by him in his capacity as an employee of the Applicant to gain an advantage for himself and/or the Second Respondents as set out in the statement of claim. A declaration pursuant to section 1317E of the Act that the Second Respondents have contravened subsection 182(2) of the Act by being persons involved in the First Respondent's contravention of the Act as set out in the statement of claim. A declaration pursuant to section 1317E of the Act that the Second Respondents have contravened subsection 183(2) of the Act by being persons involved in the First Respondent's contravention of the Act as set out in the statement of claim. An injunction, pursuant to section 1324 of the Act and/or section 23 of the Federal Court of Australia Act 1976 (Cth), restraining the Respondents and each of them whether by themselves, their servants or agents or otherwise howsoever from using the Confidential Information (as defined in paragraph 4 of the statement of claim). Delivery up. An inquiry as to damages. Alternatively, at the election of the Applicant, an account of all the profits made by the First Respondent and/or the Second Respondents from the use of the Confidential Information. 4 The declarations sought against the respondents are for contraventions of the Corporations Act 2001 (Cth) (the Act ). 5 In the originating application the applicant's entire case depends upon proof of a contravention by the first respondent of s 182(1) or s 183(1) of the Act or proof of a contravention by the second respondents of s 182(2) or s 183(2) of the Act . The applicant has now abandoned any claim that the first or second respondents have contravened s 182 of the Act . Therefore, the applicant's case against the respondents is that they have contravened, in the case of the first respondent s 183(1) of the Act and, in the case of the second respondents, s 183(2) of the Act . 6 On 12 September 2005 the applicant filed an amended statement of claim (the 12 September SOC) which was permitted by the provisions of O 13 r 3 of the Federal Court Rules . The first respondent filed his defence on 28 September 2005 and the second respondents their defence on 30 September 2005. The parties made discovery to each other including supplementary discovery. 7 On 1 May 2006 the applicant filed a notice of motion seeking leave to file and serve a further amended statement of claim in the form of a document annexed to the affidavit of the applicant's solicitor. The second respondents sought particulars of the proposed further amended statement of claim but were advised by the applicant that it did not intend to give any further particulars. The second respondents thereafter indicated that they would oppose the applicant's application to file the further amended statement of claim. 8 The matter first came before me on 17 July 2006 for the hearing of the applicant's notice of motion. On that occasion the applicant's counsel contended that the second respondents' outline of submissions raised five issues which had never before been raised by the second respondents in relation to the applicant's statement of claim. The matter was adjourned and, in the meantime, the second respondents filed a notice of motion seeking an order that the applicant's further amended statement of claim annexed to the applicant's solicitor's affidavit be struck out. That notice of motion was unnecessary because the document annexed to the solicitor's affidavit had not been filed. 9 Three days later, on 11 August 2006, the second respondents filed an amended notice of motion seeking that the applicant' s 12 September SOC be struck out. 10 The matter came on again on 11 September 2006 when the applicant indicated that it no longer sought to file and serve the further amended statement of claim annexed to the applicant's solicitor's affidavit, but rather sought to file a proposed further amended statement of claim annexed to the applicant's counsel's submissions (PFASC). 11 The first respondent did not oppose the applicant filing the PFASC. However, during the hearing the first respondent applied for an order that the applicant give particulars of its claim for loss or damage in par 35 of the PFASC. The applicant did not oppose such an order and in due course I will order that the applicant give full particulars of its claim for loss or damage. The form of the order will depend upon my decision on the issues to be resolved between the applicant and the second respondents. 12 I should therefore first consider whether the applicant be given leave to file the PFASC annexed to the applicant's counsel's submissions. If I grant leave then that statement of claim will stand in substitution for the 12 September SOC and make the second respondents' application to strike out that statement of claim otiose. If, on the other hand, I refuse the applicant leave to file the PFASC then I should next consider the second respondents' application to strike out the applicant' s 12 September SOC. 13 It is asserted in the PFASC that the first respondent was employed by the applicant as a sales account manager from 28 October 1998 to 28 February 2005. The second respondents have been in partnership since 12 October 2004 and carrying on business under the partnership name 'Warehouse Matrix'. 14 The applicant pleads that it was possessed of confidential information relating to its clients which, because of the nature of the first respondent's employment with the applicant, was disclosed to the first respondent so that the first respondent might fulfil his responsibilities as a sales account manager with the applicant. It is not necessary to identify the confidential information. The applicant further pleads that, during the course of the first respondent's employment, the first respondent learned of other confidential information which was possessed by the applicant but which was not relevant to the first respondent's employment with the applicant. 15 It is pleaded that the first respondent was 'under, a duty of trust and confidence towards the Applicant in respect of the Confidential Information': par 10 of the PFASC. 16 It is pleaded that the first respondent resigned his employment with the applicant on 22 February 2005 with effect from 28 February 2005 but that at some time before 28 February 2005 'the First Respondent removed all papers, computer disks and other materials stored in a filing cabinet near his desk from the Applicant's premises': par 11A of the PFASC. 17 The first respondent commenced employment with the second respondents on or before 4 March 2005: par 14 of the PFASC. It is pleaded that at some time the first respondent, in his capacity as an employee of the second respondents, provided quotations to the applicant's clients for the supply of products by the second respondents to those clients: par 15 of the PFASC. It is pleaded that in giving those quotations the confidential information (as earlier particularised in the PFASC) was used in that the quotations set out the products supplied by the applicant to the client in question and the product replacement sought to be supplied by the second respondents, and the difference in cost between the two products. 18 It is further pleaded some time in March 2005 after the first respondent commenced his employment with the second respondents, the second respondents commenced supplying products to two particular clients of the applicant: pars 17 and 18 of the PFASC. 19 It is pleaded as against the first respondent that the first respondent has, in breach of his duty of trust and confidence, used and/or disclosed confidential information in providing the written quotations: par 21 of the PFASC. It is pleaded in the alternative that the first respondent has, in giving the quotations referred to, improperly used information obtained by the first respondent as an employee of the applicant to gain an advantage for himself and/or the second respondents and thereby contravened s 183(1) of the Act : par 22 of the PFASC. 20 As against the second respondents, it is pleaded that the first respondent provided the written quotations to the applicant's clients in his capacity as an employee of the second respondents and for and on behalf of the second respondents: par 23 of the PFASC. It is pleaded that thereby his acts or conduct in providing those written quotations were those of the second respondents: par 24 of the PFASC. Paragraphs 23 and 24 seek to raise a plea that the second respondents are vicariously liable for the acts and conduct of the first respondent. 21 Next, it is pleaded that the male second respondents at all material times had knowledge of the first respondent's possession of the applicant's confidential information. It is further pleaded that those male second respondents knew that the first respondent was disclosing and/or using the confidential information in providing written quotations: pars 25 and 26 of the PFASC. No particulars are given of how or when the male second respondents acquired that knowledge. 22 The plea in par 25 is that the male second respondents had actual knowledge that the first respondent had acquired confidential information possessed by the applicant. 23 The plea in par 26 is that the male second respondents 'at all material times' had actual knowledge that the first respondent was disclosing or using that confidential information in providing the written quotes. 24 Alternatively, it is pleaded that the male second respondents after 14 March 2005 knew that the first respondent was disclosing or using the applicant's confidential information in the written quotes: par 27 of the PFASC. Again, it is not pleaded how or when the male second respondents became aware that the first respondent was using the applicant's confidential information in the preparation of the written quotes except that it was after 14 March 2005 when one of the two clients commenced purchasing products from the second respondents. 25 The plea in par 27 is that the male second respondents after 14 March 2005 had actual knowledge that the first respondent was disclosing or using that confidential information in providing written quotes. 26 Paragraphs 25, 26 and 27 can be understood therefore as a plea that the male second respondents, from the date upon which the second respondents first employed the first respondent or at the latest 14 March 2005, had actual knowledge that the first respondent was disclosing or using the applicant's confidential information in the written quotes. There is no plea that the female second respondents had actual knowledge of those matters. 27 It is pleaded, in the further alternative, that at no time whilst the first respondent was employed by the second respondents did any of the second respondents make any enquiries as to whether the first respondent was disclosing and/or using confidential information or take any steps to supervise the first respondent in his provision of quotes or take any steps to ensure the first respondent was not using and/or disclosing confidential information in his performance of his duties as an employee of the second respondents: par 28 of the PFASC. 28 Although the plea does not say so expressly, the plea in par 28 may be understood that because of their failure to do what is alleged all second respondents had constructive knowledge of the first respondent's conduct. The knowledge may be imputed the plea asserts because of the second respondents' failure to make any inquiries or take proper steps to ensure that the first respondent was not disclosing or using the applicant's confidential information. 29 It is pleaded by reason of the matters in pars 23, 24, 25 and 26 or 28 of the PFASC that the second respondents knowingly participated in each of the first respondent's breaches of his duty of trust and confidence. 30 As a particular to this plea it is asserted that the acts, conduct and knowledge of each of the second respondents is imputed to them all. It is not pleaded how that imputation arises. The plea really means that the male second respondents' actual knowledge (pars 25, 26 and 27) is imputed to the remaining second respondents. The plea is that by reason of the male second respondents' actual knowledge, or all the second respondents' imputed or constructive knowledge, the second respondents knowingly participated in each of the first respondent's breaches of his duty of trust and confidence. 31 Next it is pleaded because of the matters in pars 23, 24, 25 and 26 that the second respondents aided and abetted or procured the first respondent to contravene the Act or were knowingly concerned in or a party to that contravention: par 30 of the PFASC. The applicant does not in that plea rely upon pars 27 or 28 of the PFASC. It is further pleaded in par 30 of the PFASC that the acts, conduct and knowledge of each of the second respondents are imputed to all of them. 32 This plea may be understood to mean that because the male second respondents 'at all material times', which because of the plea in par 27 must be at a time prior to 14 March, had actual knowledge of the matters in par 25 all of the second respondents aided, abetted, counselled or procured or were knowingly concerned in or party to the first respondent's contravention of s 183(1) of the Act . It is pleaded as a particular to this paragraph that the acts, conduct and knowledge of each of the second respondents is imputed to all of them. It follows that insofar as this plea is directed to the male second respondents it relies only upon their actual knowledge but, insofar as it is directed to the female second respondents, it relies upon their constructive knowledge. 33 The applicant pleads that because the second respondents aided, abetted, counselled or procured the first respondent to contravene the Act or were knowingly concerned in that contravention, the second respondents were persons who themselves contravened s 183(1) of the Act by reason of the provisions of s 183(2) of the Act : par 31 of the PFASC. 34 The applicant next pleads in par 32, as an alternative to the pleas in pars 29, 30 and 31, that by reason of the matters in pars 23, 24, 25, 27 or 28 the second respondents knowingly participated in the first respondent's breaches of his duty of trust and confidence in respect of the two clients referred to in the PFASC. Again as a particular, the applicant pleads that the acts, conduct and knowledge of each of the second respondents is imputed to them all. This plea may be understood to mean that by reason of the actual knowledge of the male second respondents or the constructive knowledge of all the second respondents, the second respondents knowingly participated in a breach of the first respondent's duty of trust and confidence. 35 In par 33 it is pleaded, by reason of the matters in pars 23, 24, 25 and 27, the second respondents aided, abetted, counselled or procured the first respondent to contravene the Act or were knowingly concerned in or a party to the contravention and by reason of that were persons who were involved in the first respondent's contravention of s 183(1) of the Act in relation to the two clients of the applicant earlier described and thereby themselves in contravention of s 183(2) of the Act : pars 33 and 34 of the PFASC. 36 This paragraph also includes the same plea that the acts, conduct and knowledge of each of the second respondents imputed to them all. The plea in par 33 can be understood to mean that, by reason of the male second respondents actual knowledge and the female second respondents constructive knowledge, the second respondents aided and abetted, counselled or procured or were knowingly concerned in a contravention by the first respondent of s 183(1) in respect to the written quotes supplied to the two clients of the applicant. 37 The applicant then pleads that it has suffered loss and damage in that it has lost the sales of product to the two clients identified in the PFASC: par 35. The applicant concedes that it must particularise its claim for damages. It claims the first and second respondents are liable to account to it for any profits made by them: par 36. An injunction is sought against the first and second respondents. The applicant also seeks the relief claimed in the application. 38 As I have said, I have two applications before me. First, the applicant's application for leave to file an amended statement of claim (the PFASC). Secondly, the second respondents' application to strike out the 12 September SOC. 39 Because the first respondent does not oppose the applicant's application to amend its statement of claim, it would be appropriate if I were of the opinion that the PFASC disclosed no reasonable cause of action against the second respondents to allow the PFASC, insofar as it relates to the first respondent, to be filed subject to an order that it give particulars of the loss and damage pleaded in par 35. 40 Because this matter has proceeded as if it were an application to strike out both the PFASC and the statement of claim of 12 September 2005 on the ground that it disclose no reasonable cause of action against the second respondents, it is appropriate to assume that the allegations of fact made in the PFASC and the statement of claim of 12 September 2005 will be made out at trial: Northern Land Council v The Commonwealth (No 2) [1987] HCA 52 ; (1987) 75 ALR 210 at 216; Cubillo v The Commonwealth [1999] FCA 518 ; (1999) 89 FCR 528 at 542. The allegations of fact contained in the statement of claim should be accepted at face value: Australian Competition and Consumer Commission v Alice Car & Truck Rentals Pty Ltd trading as Territory Rent-a-car [1997] FCA 129. 41 I should approach this application on the basis that the PFASC should be allowed to be filed unless it is clearly made out that the pleading discloses no reasonable cause of action, at least against the second respondents. In that regard it would be appropriate to apply the test in General Steel Industries v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 130 and allow the pleading to be filed or, alternatively, in the case of the statement of claim of 12 September 2005, not be struck out unless the cause of action is so untenable that it cannot possibly succeed. The provisions of s 31A of the Federal Court of Australia Act 1976 (Cth) do not apply to this application because this is not an application for summary judgment. 42 The statement of claim should contain in a summary form the material facts upon which the applicant relies but not the evidence upon which those facts are to be proved. The applicant must include sufficient particulars to enable the respondent to the proceeding to know and understand the case which is brought against him or her. The statement of claim should contain such material facts and particulars as will allow the respondent to prevent the respondent from being taken by surprise at the trial and to know the evidence that needs to be obtained. 43 Essentially, three matters are put against the second respondents. First, that the second respondents are vicariously liable for conduct of the first respondent in using the applicant's confidential information in relation to the written quotes. Secondly, the second respondents knowingly participated in the first respondent's breach of his duty of confidence. Thirdly, the second respondents are accessorily liable because they aided, abetted, counselled or procured the first respondent to contravene s 183(1) of the Act or were knowingly concerned in that contravention. In that regard it is pleaded that the second respondents thereby contravened s 183(2) of the Act . 44 The second respondents contend that all three pleas cannot stand. First, it was contended that a plea of vicarious liability was 'untenable'. Secondly, it was contended that the PFASC did not identify any act of participation or conduct on the part of the second respondents which could make the second respondents liable for knowingly participating in the first respondent's breach of his duty of confidence. Thirdly, it was contended that the second respondents could not be accessorily liable under s 183(1) or liable under s 183(2) without actual knowledge on their part. Further, the second respondents contended the PFASC does not identify how the respondents' conduct caused the damage complained of. 45 In the alternative, the second respondents argued that the PFASC lacked sufficient particulars and that particulars should be ordered. 46 As I have already advised, the plea in par 24, that by reason of the first respondent providing quotations in his capacity as an employee of the second respondents his acts or conduct were those of the second respondents, is a plea that the second respondents are vicariously liable for the acts of the first respondent. It follows the earlier pleas in pars 15 and 23 that the first respondent provided the applicant's clients with a written quote in his capacity as an employee of the second respondents. 47 The conduct of the first respondent complained of is not tortious. It is a claim that the first respondent breached his equitable duty of confidence. 48 The second respondents argued that the doctrine of vicarious liability was confined to a tort committed by an employee in the course of that employee's employment and that therefore that this plea should be struck out. In Photo Production v Securicor Transport Limited [1980] UKHL 2 ; [1980] AC 827 at 848, Lord Diplock said that the expression 'vicarious liability' should be confined to liability for tort. There is, however, authority contrary to the second respondents' proposition. In Coulthard v South Australia (1995) 63 SASR 531 (' Coulthard ') the Full Court of the Supreme Court of South Australia was concerned with the publication of confidential information. Nevertheless a breach of the equitable obligation of confidence is analogous to a common law tort. It is to be expected that equity would follow the law in such circumstances and that the common law doctrine of the vicarious liability in tort of an employer for the acts of employees in the course of their employment would apply in equity to breaches of confidence. It is to be expected that equity would act upon the conscience of the employer by requiring the employer to accept responsibility for the employee's breach of confidence. Perry and Debelle JJ both assumed that the respondent employer could be liable for a breach by its employee of his duty of confidence but, like King CJ, found that what was done was not done in the course of employment. I am unable to find any other authority on that point. (But see Jason Pizer 'Holding an Appointor Vicariously Liable for its Nominee Director's Wrongdoing -- an Australian Roadmap' 1997, Vol 15 Company and Securities Law Journal. ) However, this is not the time to decide whether the decision in Coulthard is correct. Having regard to that decision and the dicta of King CJ referred to, it cannot be said on an application of this kind that the pleas in par 24 are untenable. 50 Paragraphs 25 and 26 plead actual knowledge on the part of the two male second respondents. Paragraph 27 also pleads actual knowledge on the part of the two male respondents but from a different time, apparently, to that asserted in par 26. In any event, all three paragraphs, 25, 26 and 27, plead actual knowledge on the part of two of the four second respondents. 51 Paragraph 28 pleads a form of constructive knowledge by reason of the failure of the second respondents to do any of the matters particularised in that paragraph. Each of pars 29, 30, 32 and 33 plead a form of constructive knowledge on the part of the two female second respondents, the knowledge it is said being imputed to them. It is not pleaded how or why the acts and conduct and knowledge of each of the second respondents is imputed to all of them. It may be assumed that each partner's act or conduct or knowledge is imputed to the other by reason of their partnership. That may not be important. More importantly, the knowledge of the female second respondents and any imputed knowledge obtained by all respondents by reason of the acts or omissions in par 28 cannot rise above constructive knowledge. 52 The plea that the first respondent breached his duty of trust and confidence is a plea of breach of fiduciary duty: Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64 ; (1984) 156 CLR 41 at 96-97. The plea in par 29 is that the second respondents knowingly participated in that breach of fiduciary duty. As I have said, the knowledge relied on is both actual and, in the alternative, constructive. 53 It is not suggested that the second respondents owed any fiduciary duty to the applicant. There is no suggestion, nor could there be, that there was any fiduciary relationship between the second respondents and the applicant. The second respondents are said to be liable to the applicant because they knowingly participated in the first respondent's breach of fiduciary duty. A person who knowingly participates in a breach of fiduciary duty is liable to account to the person to whom the fiduciary duty was owed where that person obtains a benefit by that participation: Consul Development Pty Ltd v DPC Estates Pty Ltd [1975] HCA 8 ; (1975) 132 CLR 373 at 397. 54 It was not put that the second respondents could not be liable without actual knowledge of the first respondent's breach of fiduciary duty. It was accepted that a plea that the second respondents knowingly participated in a breach by the first respondent of his duty of confidence with the kind of knowledge pleaded in par 28 of the PFASC could be allowed to stand. 55 In Consul Development Pty Ltd v DPC Estates Pty Ltd , Gibbs J (at 398) and Stephen J (at 412) with whom Barwick CJ agreed expressed different views as to the knowledge required to establish liability in circumstances of this kind. The English Courts have expressed different views: Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] UKPC 4 ; [1995] 2 AC 378; Twinsectra Ltd v Yardley [2002] UKHL 12 ; [2002] 2 AC 164. It appears that the English view has not been accepted in New South Wales and Stephen J's view has been preferred to that of Gibbs J: Yeshiva Properties No 1 Pty Ltd and Others v Marshall (2005) 219 ALR 112 per Bryson JA at [18]-[22]. Because of the uncertainty in the law in Australia on this topic, it would be difficult to conclude that a plea of the kind in par 28 was untenable: Short (as Executrix of the Estate of Short (decd)) v Crawley (No 25) [2005] NSWSC 928 per White J at [43]; The Bell Group Ltd (in liq) v Westpac Banking Corporation and Ors (No 5) [2004] WASC 273. However, because no issue was raised by the second respondents as to the kind of knowledge required, I do not need to explore this complex issue. 56 The second respondents contended that the PFASC did not identify any act of participation on the part of the second respondents. That contention must be rejected. The PFASC makes it clear that the act of participation by the second respondents is their taking the benefits of the profits on the contracts with the applicant's two former clients with the knowledge pleaded. 57 In my opinion, the claim that the plea that the second respondents knowingly participated in the first respondent's breach of his duty of trust is untenable must be rejected. 58 The third attack raises for consideration the construction of s 183 and s 79 of the Act . 62 Section 79 of the Act is in the same terms as s 75B of the Trade Practices Act 1974 (Cth) (the Trade Practices Act ) which was considered by the High Court in Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661. Section 75B plays a similar role in the Trade Practices Act to that played by s 79 in the Act . A person will be accessorily liable to a contravention of a provision of the Trade Practices Act if the person does any of the matters prescribed in s 75B. In Yorke v Lucas the High Court considered each of the paragraphs in s 75B. In respect to paragraph (a) the Court observed that these words have been taken from the criminal law and that to be liable under s 75B(a) a party needed to have intentionally participated in the contravention. Section 75B , on the other hand, in speaking of aiding, abetting, counselling or procuring, makes use of an existing concept drawn from the criminal law and unless the context requires otherwise, there is every reason to suppose that it was intended to carry with it the settled meaning which it already bore: cf. Barker v. The Queen [1983] HCA 18 ; (1983) 153 C.L.R. 338. Nor is there any reason to suppose that because the application of s. 75B may occur in conjunction with a provision such as s. 52 , which requires no intent, it must also be construed so as to dispense with intent as an element of aiding, abetting, counselling or procuring. In Giorgianni v. The Queen it was held that secondary participation required intent based upon knowledge, notwithstanding that the statutory provision creating the principal offence imposed strict liability. Therefore, to form the requisite intent the person must have knowledge of the essential matters which go to make up the offence. It determined that the same knowledge should be required for a contravention of s 75B of the Trade Practices Act . The person must have actual rather than constructive knowledge. 67 In my opinion, s 79 of the Act would be construed in the same way as s 75B of the Trade Practices Act : see Re HIH Insurance Ltd (In Liq) (2002) 41 ACSR 66. 68 It follows therefore that a party cannot be involved in a contravention of s 183(1) of the Act unless the party has actual knowledge of the elements of s 183(1). The elements that must be established for a contravention of s 183(1) are that the person referred to in s 183(1) was an officer or employee of the corporation; that he or she acquired information because he or she was an officer or employee; that the person made improper use of that information; that the person did so to gain an advantage for themselves or someone else or to cause detriment to the corporation. 69 In my opinion, the plea that the second respondents had constructive knowledge of the matters contained in par 28 or the female second respondents had constructive knowledge as pleaded in pars 29, 30, 32 and 33 could not support a claim that the second respondents contravened s 183(2) by being involved in a contravention of s 183(1). Those pleas are untenable. 70 Moreover, the plea of actual knowledge in par 25 insofar as it relates to the male second respondents cannot support a claim that they contravened s 183(2) by being involved in a contravention of s 183(1). That is because the plea of actual knowledge in par 25 falls short of alleging knowledge of each of the elements of s 183(1). The first respondent could not disclose any confidential information of the kind pleaded in par 4 to the former clients of the applicant. Those two clients would each know that information. There is no allegation that that information was supplied to the male second respondent. There is no allegation that the male second respondents knew that the first respondent improperly used the information or, more particularly, how he had improperly used the information. Moreover, there is no allegation that the male second respondents knew that if he did so he did so to gain an advantage for himself or the second respondents or cause detriment to the applicant. 74 It would be appropriate, therefore, not to allow the PFASC to be filed including the pleas in pars 30, 31, 33 and 34. 75 The fourth proposition put by the second respondents was that the PFASC did not identify how the impugned conduct gave rise to loss or damage. I disagree with that contention. It is clear enough that the applicant's case is that by reason of the conduct complained of the applicant lost the benefit of the two contracts with the two clients and the second respondents obtained that benefit. I think the applicant has properly pleaded the relief which is sought having regard to the conduct complained of. 76 However, the claim for relief cannot be allowed to stand in its present form because it relies, in part, upon contraventions of the Act which I have held cannot be allowed to be included in the document to be filed. 77 That leaves for consideration the question of the particularity of the PFASC. 78 The second respondents contended that the PFASC should contain particulars of the knowledge acquired by the male second respondents as pleaded in pars 25 and 26. 79 It was contended that the applicants should be compelled to identify the circumstances in and by which the male second respondents acquired that knowledge. 80 I reject that contention. It is enough, in the circumstances of this case, to assert simply that the second respondents had that actual knowledge. The manner by which they acquired the knowledge is a matter of evidence and not a matter for particulars. 82 However, the situation is not the same, in my opinion, in relation to par 28 which pleads constructive knowledge on the part of the second respondents by reason of their failure to do that which is pleaded. 83 In my opinion, the applicant should be required to give particulars of the facts and circumstances which existed after the first respondent was employed by the second respondents which should have put the second respondents on notice to make the inquiries or take the steps pleaded in par 28: Fox v H Wood (Harrow) Ltd [1963] 2 QB 601. 84 As I have already mentioned, in a number of the paragraphs which follow it is said that the acts, conduct and knowledge of each of the second respondents is imputed to all of them. In my opinion, that plea requires particularisation. The applicant ought to particularise the facts and circumstances which allow it to be said that, as a consequence, the acts, conduct and knowledge of each of the second respondents is imputed to all of them. 85 Lastly, as the applicant conceded, the applicant needs to give particulars of the loss or damage which the applicants says that he suffered by reason of the respondents' breaches. 86 In the circumstances, it would be appropriate to allow the parties to consider these reasons and for the second respondents to bring in short minutes. 87 If a statement of claim is filed which does not rely upon a contravention of the Act , the applicant will need to consider whether the originating application should be amended. 88 In view of the fact that I have indicated that I would propose to allow the PFASC to be filed, albeit in an amended form, it is not necessary to address the second respondents' notice of motion to strike out the existing statement of claim. If, however, the applicant elects not to file the PFASC in the form which I have said I would permit, then that notice of motion will need to be addressed and orders made in conformity with these reasons. I certify that the preceding eighty-eight (88) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application to further amend an amended statement of claim application should be allowed unless cause of action so untenable that it cannot possibly succeed consideration of vicarious liability for breach of confidence consideration of level of knowledge required for knowing participation in breach of fiduciary duty consideration of accessorial liability under s 183(2) of corporations act 2001 (cth) application allowed in part. practice and procedure |
It seeks review of the decision of the fourth respondent ('the Tribunal') dated 26 May 2005 and delivered on 21 June 2005, whereby the Tribunal purported to remit to the applicant the application of the first, second and third respondents for protection (class XA) visas with the direction that the first respondent is a person to whom Australia has protection obligations under the 'Refugees Convention' being the Convention Relating to the Status of Refugees 1951 as amended by the 'Refugees Protocol', being the Protocol Relating to the Status of Refugees 1967. 2 The applicant contends that the Tribunal made one or more errors of law that led it to fail to ask itself the correct question. In response the first respondent contends that correctly understood and inferentially, the reasons of the Tribunal did consider the correct questions. The Tribunal found them to be citizens of Romania. They arrived in Australia on visitors visas in November 2004. On 20 December 2004 they applied for a protection (class XA) visa as a family unit. 4 For reasons published on 31 January 2005, the application for a protection visa was refused by a delegate of the applicant. It was on review of the delegate's decision that the Tribunal made its decision to remit the application for reconsideration. 5 As recounted in the reasons of the Tribunal, the first respondent came from a Christian family of Baptists consisting of ten brothers and sisters. The basis of his claimed well-founded fear of persecution was that, if he were returned to Romania, he would be drafted into the army in relation to which he had avoided service for a long time in accordance with his religious beliefs. He stated that his fear was not of the army itself but of the treatment he would face for having avoided the army for so long a time. 6 The second respondent, the first respondent's wife, stated that her fear was based on the fact that if her husband were to return to Romania and do military service 'his mind would change and he would not be the same man'. Additionally, she would be alone, they would have no accommodation and no possibility of making a living. That is, her evidence was that her fear was dependent on her husband's fear that he would be called up for military service. The length of compulsory military service was reduced from 12 months to eight months with effect from 2003. Persons who have completed their military service may be summoned for active duty up to the age of 35. Since 1996 citizens who, for religious reasons, refuse to perform military service have been able to apply to the Ministry of Defence to perform alternative civilian service. The right is restricted to members of certain religious groups including Baptists. Alternative service, which formerly lasted for 24 months, was reduced to 12 months at the same time as the length of compulsory military service was reduced from 12 months to eight months. The Romanian Government has announced that it plans to abolish conscription by 2007. This is because such laws are laws which apply generally to everyone and conscription has generally been regarded as appropriate and adapted to achieving a legitimate national objective: see Applicant S v Minister for Immigration and Multicultural Affairs [2004] HCA 25 ; (2004) 206 ALR 242 per Gleeson CJ, Gummow and Kirby JJ at [43] and [47]. Only then can it be said that such a person is being persecuted 'for reasons of' their religion or political opinion because, as is well-established, the definition of a refugee looks to the motivation of the persecutors: see the passage from Ram v Minister for Immigration and Ethnic Affairs (1995) 57 FCR 565 at 568 per Burchett J (with whom O'Loughlin and R D Nicholson JJ agreed) quoted with approval by Gummow J in Applicant A [v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 ] , referred to above, at 284, and the passage from the judgment of French J at first instance quoted with approval by Gleeson CJ, Gaudron, Gummow and Hayne JJ in their joint judgment in Chen Shi Hai v Minister for Immigration and Multicultural Affairs [2000] HCA 19 ; (2000) 201 CLR 293 at [34] . These were (1) that the first respondent, as a male Romanian citizen who had reached the age of 20, had an obligation to perform military service; (2) he had successfully evaded recruitment largely by staying outside the country but if he were to return to Romania he would still be obliged to perform military service (at least until such time as the requirement is abolished); (3) he holds an opinion opposed to compulsory military service; (4) this opinion is grounded in his religious beliefs, both the first respondent and his wife being Baptists who are one of the groups permitted to refuse to perform military service on religious grounds. I consider it clear that the law relating to military service in Romania discriminates against conscientious objectors on the basis of their religious beliefs by requiring them to perform an additional four months of compulsory alternative service if they refuse to perform military service. I consider that this additional four months of what is in effect forced labour amounts to persecution involving 'serious harm' as required by paragraph 91R(1)(b) of the Act in that it involves a threat to the [first respondent] 's liberty. I consider that his real or imputed political opinion and religious beliefs are the essential and significant reasons for the persecution which he fears, as required by paragraph 91R(1)(a) of the Act, in that, as referred to above, the law in Romania discriminates against conscientious objectors. I further consider that the persecution which the [first respondent] fears involves systematic and discriminatory conduct, as required by paragraph 91R(1)(c), in that it is deliberate or intentional and involves his selective harassment for a Convention reason. It also concluded that neither the first respondent or his wife or son were excluded from Australia's protection by subs 36(3) of the Migration Act 1958 (Cth) ('the Act') because they do not have a legally enforceable right to enter and reside in any other country apart from the country of their nationality. 11 The Tribunal therefore found that the first respondent, being outside his country of nationality, had a well-founded fear of being persecuted for reasons of his real or imputed political opinion and religious beliefs if he returned to Romania now or in the reasonably foreseeable future. It also found that he was unwilling, owing to his fear of persecution, to avail himself of the protection of the government of Romania. Therefore, it was concluded he was a person to whom Australia had protection obligations under the Refugees Convention as amended by the Refugees Protocol and so satisfied the criterion in s 36(2)(a) of the Act. 12 The first respondent's wife was found to have fears dependent upon her husband's fear and her and her son's applications were dependent on the outcome of the first respondent's application. 13 Accordingly the Tribunal remitted the matter for reconsideration with the direction that the first respondent was a person to whom Australia had protection obligations under the Refugees Convention. It is submitted that what the Tribunal needed to consider was whether the law relating to military service as it applied both to persons who complied with the requirement and to conscientious objectors, was appropriate and adapted to a legitimate national objective in a manner not offending the standards of civil society. The fact this amounts to jurisdictional error is supported by reference to Plaintiff S157/2002 v Commonwealth of Australia [2003] HCA 2 ; (2003) 211 CLR 476 and Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323. 15 In support of its application the applicant turns, firstly, to Applicant S v Minister for Immigration and Multicultural Affairs [2004] HCA 25 ; (2004) 217 CLR 387 at [41] - [49] . 16 In Applicant S the central issue was whether the Tribunal had been in error in concluding that able bodied young Afghan men did not constitute a social group in relation to the circumstances raised by the conscription policy of the Taliban. During the course of oral argument before their Honours, the Minister (for Immigration and Multicultural Affairs) sought to apply the decision in Minister for Immigration and Multicultural Affairs v Israelian [2001] HCA 30 ; (2001) 206 CLR 323 (which was heard at the same time as Yusuf ). The applicant in that case was an Armenian national who was refused a protection visa by the delegate of the Minister. Before the Tribunal, the applicant stated that he had been absent from Armenia when called up for national service. The Tribunal refused the application without expressing any finding as to whether the applicant could be considered a member of a particular social group expressed as draft evaders. His Honour said that the question of whether the discriminatory treatment of persons of a particular race, religion, nationality or political persuasion or who are members of a particular social group constitutes persecution for that reason ultimately depends on whether that treatment is "appropriate and adapted to achieving some legitimate object of the country [concerned]" [Applicant A [1997] HCA 4 ; (1997) 190 CLR 225 at 258. ] These criteria were accepted in the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Chen [ [2000] HCA 19 ; (2000) 201 CLR 293 at 303 [28] ] . As a matter of law to be applied in Australia, they are to be taken as settled. This is what underlay the Court's decision in Israelian . Namely, that enforcement of the law of general application in that particular case was appropriate and adapted to achieving a legitimate national objective. His Honour gave the examples that (i) enforcement of a generally applicable criminal law does not ordinarily constitute persecution; and (ii) nor is the enforcement of laws designed to protect the general welfare of the State ordinarily persecutory [Applicant A [1997] HCA 4 ; (1997) 190 CLR 225 at 258 ] . Whilst the implementation of these laws may place additional burdens on the members of a particular race, religion or nationality, or social group, the legitimacy of the objects, and the apparent proportionality of the means employed to achieve those objects, are such that the implementation of these laws is not persecutory. Ordinarily, denial of access to food, shelter, medical treatment and, in the case of children, denial of an opportunity to obtain an education involve such a significant departure from the standards of the civilised world as to constitute persecution. And that is so even if the different treatment involved is undertaken for the purpose of achieving some legitimate national objective. He referred to Israelian , but said that Applicant S was a case different from Israelian . At [18], his Honour commenced by stating the general proposition that laws relating to compulsory military service for all men of a certain age were generally to be regarded as laws of general application. A similar statement was made by Branson J in Mijoljevic v Minister for Immigration and Multicultural Affairs [1999] FCA 834 at [23] , cited by Callinan J in Applicant S at 423 in footnote (146). Gray J continued by referring to the fact that if a law is applied in a discriminatory manner to persons within particular protected categories, its application will amount to persecution for a Convention reason. After consideration of the authorities he stated that, when an issue of refusal to undergo compulsory military service arises, it is necessary to look further than the question whether the law relating to that military service is a law of general application. His Honour said, in particular, that the question that would have to be asked was whether the conscientious objectors, or some particular class of them, could constitute a particular social group. Although the decision of Gray J was overturned on appeal, his reasoning in the above respects were not affected as a consequence and was accepted in VCAD v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1005 at [32] per Kenny J. The Tribunal apparently proceeded on the mistaken basis that a law of general operation, which did not expressly discriminate or inflict disproportionate punishment, could not support a well-founded fear of persecution for a Convention reason. This is plainly erroneous, and involved the Tribunal asking itself the wrong question. There may well be a well-founded fear of persecution because a law, neutral on its face, has an indirect discriminatory effect or indirectly inflicts disproportionate injury, for a Convention-related reason. That was not a case in which a conscientious objector was a claimant for refugee status because he feared military conscription into active combat if returned to his country of origin. Rather, the claim there was that, on account of his religious beliefs, he had a conscientious objection to military service and was relevant only because he claimed to fear punishment as a deserter if he returned to his country of origin. On the evidence, there was no basis for such fear due to considerable changes in that country. Her Honour's reasoning was upheld on appeal in VCAD v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 1. 22 The applicant therefore submits that there is a line of authority in this Court stemming from Gray J's analysis in Erduran which proceeds on the premise that a law of general application in its operation and enforcement is capable of amounting to persecution particularly where there is an application of punishment in the selective operation or enforcement of the law. This is said to not be inconsistent with the test enunciated in Applicant S . 23 Here the applicant submits there is no suggestion in the evidence that the first respondent might possibly be subject to an outcome other than 12 months compulsory civil service or that he might be specifically punished in a way that was more severe or more onerous than that required of merely serving 12 months in alternative civil service. 24 Returning to Applicant S , the applicant submits that the decision of the High Court was that the manner of application and enforcement of the conscription policy by the Taliban was an example of a law designed to protect the general welfare of the State which truly offended the standards of civil societies which seek to meet the calls of common humanity. The applicant submits that whatever the notion of 'punishment' entails and whether it sets a threshold too low in the light of arguably stronger language employed in Chen Shi Hai v Minister for Immigration and Multicultural Affairs [2000] HCA 19 ; (2000) 201 CLR 293 and applied in Applicant S , is not an issue requiring determination here. It is submitted it is enough for the success of the application that the Tribunal did not identify and address the correct question required by the above statements of the law. 25 The applicant then turns to MZQAP v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 85 ALD 41, a decision of the Full Court comprised by Branson, Marshall and Hely JJ. The applicant contends this is the most recent Full Court application of the principles from Applicant S sourced in Chen and Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225 on the issue of when persecution may arise by the application and enforcement of the law which is in its terms of general application. That was a case where a protection visa applicant claimed that he would be subjected to harm in India because of his support for the Tamil Tigers in Sri Lanka and in particular the dissident group called the LTTE. He contended that the application of the Prevention of Terrorism Act in his case constituted a source of a well-founded fear of persecution. The Tribunal had found that such law was one of general application, not being enforced in any selective or arbitrary way. That was upheld by a Federal Magistrate. After reference to Applicant S at [42] the Court stated at [20] that determination of whether discriminatory treatment is 'appropriate and adapted to achieving some legitimate objective of the country [concerned]' is ultimately a matter of judgment. The Court referred to the reasoning of Finn J in Applicant A101/2003 v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 82 ALD 787 at [24]-[25] as explicative of the nature of the judgments involved. Where such a law is, or is said to be, one having the purpose of protecting a State or its institutions (i.e. it has a "political" purpose), the nature and reach of the law itself and the actual manner of its application will require consideration for the reason that its reach or use in suppressing political opinion may go beyond, or be inconsistent with, what is appropriate to achieve a legitimate government object according to the standards of civil societies: cf WAEZ of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 341 at [32] . It is not unheard of, for example, for a State to utilise sedition-like and public security offences to silence its opponents. ill-treatment or torture, in the course of that process. Is that process used selectively against critics of the State or against the advocates of particular political views? Is it fraudulently invoked for punitive purposes? Does its improper use expose a person to adverse consequences, e.g. torture in detention, even if that person is not later charged or tried with an offence? It is submitted that when the totality of the Tribunal's reasoning is considered, it is clear there has not been any proper inquiry as to the nature of the laws at issue; that is, whether or not there is a legitimate national objective implemented in a way that is appropriate and adapted for the norms of civilised societies. It is submitted that the Tribunal has not fully apprehended the test from Applicant S and has not therefore attended to the elements of the correct question. In particular, it is said that the Tribunal has failed explicitly or implicitly to assess the nature of the alternative duties which might be seen as a legitimate component of the overall legislative regime for dealing with compulsory military service. It is said that it does not elaborate on the question of the relationship between the laws and the objectives of the overall welfare of the State. It has therefore, it is submitted, failed to form a view on whether the evidence discloses any differential treatment offending the standards of societies which seek to meet the calls of common humanity. It is submitted that it seems rather unlikely that the requirement for 12 months civil service could be found by the Tribunal to get close to offending the standards of civil societies. However, the error of the Tribunal was never to ask whether that was the case. Accordingly it is submitted that the Tribunal fell into jurisdictional error. 27 In relation to the remedies sought of declaration, a writ of certiorari and a writ of mandamus, the applicant states that it is sometimes contested whether certiorari is open given the absence of reference to it in s 75(v) of the Constitution or s 39B of the Judiciary Act . However, it is said that it has become accepted that certiorari is necessarily incidental to mandamus: see Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 per Gaudron and Gummow JJ. 29 The first respondent submits that a proper reading of the reasoning of the Tribunal shows that it did address the correct question. In particular, is it said the Tribunal looked at the position of compulsory service and alternative service. It is submitted that by inference it is clear the Tribunal considered the position against the calls of common humanity having consideration in relation to the position of a conscientious objector. It is said that when the Tribunal referred to the additional four months being in effect forced labour, it is clear this was a conclusion that it could not be argued that this did not offend the standards of civil societies. Further, it is submitted that the reference to Applicant S shows that the Tribunal was cognisant of the relevant question. In particular, when applying the provisions of s 91R of the Act, the Tribunal looked at the nature of the conduct and it is clear by inference that the Tribunal held the view that the standards of civil societies would be offended by such systematic and discriminatory conduct. It is said that while the specific words of the test urged by the applicant were not explicitly used, inferentially the Tribunal turned its mind to the correct question. 31 In the first place, the only reference to Applicant S is in the initial passage cited above where it was referred to in a secondary or indirect way. That reference provides no foundation for inferring that the test was properly appreciated by the Tribunal and applied. 32 Further, it is not clear from the Tribunal's reasons on what basis it concluded that the circumstances before it departed from the norm that the enforcement of laws for compulsory military service will not amount to persecution. There is no basis for inferring that it has concluded that the law had no legitimate objective, nor can it be inferred that the Tribunal concluded that the way in which Romania pursues the legitimate end is not appropriate and adapted to the legitimate purpose. Further, there is no basis for inferring the Tribunal took it out of the norm because it concluded that the 12 months alternative offended against the standards of civil societies. The conclusion that the additional four months constituted 'in effect forced labour' is not the product either explicitly or inferentially of reasoning derivative from the questions required to be asked by the authorities. At the most it appears as a passing characterisation unmeasured by reference to the required standard. 33 The reference by the Tribunal to s 91R of the Act cannot provide the requisite basis for inference. This is because s 91R is applicable when there is a finding of persecution reached by the route of asking the correct questions. The issue here is whether the Tribunal correctly reached the finding of persecution. 34 Consequently, I consider that the applicant is entitled to succeed on the application for review and that orders should be made as sought by the applicant. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | protection visas well-founded fear of persecution claimed to be based on conscientious objection on religious grounds to compulsory military service requirement for conscientious objector to serve 12 months of civil service instead of eight months in the military findings of tribunal that additional four months was in effect forced labour amounting to persecution involving serious harm migration |
Notices of Appeal from the judgments of the learned Federal Magistrate were filed in this Court on 30 July 2008. The husband's appeal is NSD 1192 of 2008 and the wife's appeal is NSD 1191 of 2008. On 25 August 2008, I ordered that the two appeals be heard together. 2 In each appeal, a Notice of Motion seeking a stay of proceedings was filed on 27 August 2008. The evidence before the Court on the hearing of the motions took the form of two affidavits sworn 27 August 2008 by the husband, one affidavit being filed in his application and the other in his wife's application. In addition, certain documents were tendered which became exhibits A, B, C and 1, all of which were admitted into evidence without objection. 3 Exhibit A was a copy of the reasons for judgment of J.C. Gibson DCJ in Boumelhem v Commonwealth Bank of Australia [2008] NSWDC 75 , being reasons for judgment delivered by her Honour on 14 May 2008 in proceedings brought by the husband and the wife against the bank in respect of the sale of a property at 69 Roberts Street, Dapto ('the Dapto property'), to which further reference will be made shortly. 4 Exhibit B comprised orders made by the learned Federal Magistrate on the hearing of creditor's petitions, to which reference will be made shortly, on 6 June 2008, which were entered on 10 June 2008 and an accompanying transcript of proceedings in the Federal Magistrates Court of 6 June 2008. 5 Exhibit C comprised a series of judgments in the Federal Magistrates Court. Orders to that effect were made in each matter on 10 July 2007. 7 A brief chronology recording the history of this matter, so far as it is relevant, is as follows. On 9 December 2004, the Commonwealth Bank of Australia ACN 123 123 124 ('the Bank') secured a default judgment against the applicants for $375,945, with a writ of possession being issued in respect of the Dapto property. On a date in or around February 2006, the Dapto property was sold by the Bank in exercise of its power of sale as mortgagee for $260,000, leaving a shortfall of some $115,945. Bankruptcy notices were served by the Bank on each of the applicants and on 7 December 2006 creditor's petitions were filed seeking sequestration orders against the estates of the respective applicants. Those creditor's petitions were filed in the Federal Magistrates Court. In the case of the husband the proceedings were SYG 3647 of 2006 and in the case of the wife SYG 3646 of 2006. 8 In 2007 the applicants instituted the proceedings in the District Court of New South Wales (proceedings 3442 of 2007) which led to the judgment of J.C. Gibson DCJ to which reference has been made. The applicants had sought relief in those proceedings in respect of the sale of the Dapto property which was said to have been at under value. Reference was apparently made to the recent decision of the Federal Court in Upton v Tasmanian Perpetual Trustees Limited (2007) 158 FCR 118 in which the duty of a mortgagee exercising power of sale was canvassed in some detail. J.C. Gibson DCJ decided the case adversely to the applicants and ordered that the judgment be entered for the defendant Bank. The applicants were ordered to pay the Bank's costs. 9 A succession of adjournments were sought and granted by the learned Federal Magistrate in respect of the hearing of the creditor's petitions directed at allowing the District Court proceedings to be brought to a conclusion. It was not suggested, of course, that the District Court proceedings were proceedings which, under s 40(1)(g) of the Bankruptcy Act 1966 ('the Act'), might justify a non-compliance with the relevant bankruptcy notices. My understanding is that the first adjournment of the creditor's petitions was ordered on 26 April 2007, the relevant reasons being given on 22 May 2007. The adjournments that were then ordered were until 20 June 2007. On 20 June 2007 the petitions were further adjourned to 10 July 2007 and on that date they were adjourned to 5 March 2008. 10 On 4 March 2008 the matters were taken back to the Federal Magistrates Court pursuant to the liberty to apply which had been granted, whereupon they were stood over to 25 June 2008, the hearing date of 5 March 2008 being vacated. 11 It would appear that the Bank became aware of the fact that it had not secured an order under s 52 of the Act extending the 12 month period for which s 52(4) of the Act provided before the petitions lapsed. SYG 3646 of 2006 and SYG 3647 of 2006 be extended up to and including 5 December 2008. The orders of 6 June 2008 were made by consent. 16 Notwithstanding the consent of the applicants to the making of those orders on 6 June 2008, the applicants wish to advance an argument on the hearing of the appeals to the effect that it was beyond the power of the learned Federal Magistrate on 6 June 2008 to extend the time for the expiry of the creditor's petitions. Such an argument would run, as I understand it, by firstly considering s 52(5) of the Act which provides for the power of extension to be available 'at any time before the expiration of the period of 12 months commencing on the date of presentation of a creditor's petition'. As previously mentioned, the creditor's petitions in these matters were filed on 7 December 2006 with the consequence that the 12 month period expired on 7 December 2007, long before the orders were made by the learned Federal Magistrate on 6 June 2008. 17 When the matter came before the Federal Magistrates Court again on 13 June 2008 an application was made for the further adjournment of the hearing of the creditor's petitions on the basis that the applicants had, as I understand it, instituted proceedings in the Court of Appeal of the Supreme Court of New South Wales, seeking leave to appeal from the judgment of J.C. Gibson DCJ which had been handed down by her Honour on 14 May 2008. 18 The adjournment application was made on 13 June 2008 with a view to allowing the applicants to obtain the necessary leave to appeal. It will be appreciated that as at 13 June 2008 the extended life of the creditor's petitions was due to come to an end on 5 December 2008. 19 The reason why leave to appeal was necessary in relation to the judgment of J.C. Gibson DCJ was that the amount involved was of the order of $65,000. 20 The learned Federal Magistrate proceeded to address the applications for adjournment of the hearing of the creditor's petitions on 13 June 2008 and his Honour concluded that 'on balance this is not a case where a further adjournment should be granted' (see [2008] FMCA 789 at [8] --- [16] and [2008] FMCA 800 at [8] --- [16]). Notwithstanding his Honour's refusal to order an adjournment sufficient to allow the applicants to seek the leave to appeal which they sought from the judgment of J.C. Gibson DCJ, his Honour was disposed to grant an adjournment for a further period of 28 days in order that the applicants may take whatever action they saw fit in respect of his Honour's decision to refuse an adjournment in the terms which the applicants had sought. 21 As it transpires, no action was taken by the applicants to challenge the decisions of the learned Federal Magistrate made on 13 June 2008 in each of the matters which were before his Honour. When the creditor's petitions came before the learned Federal Magistrate again on 11 July 2008, Mr Badarne, who appeared on behalf of the applicants, asked the learned Federal Magistrate to afford each of the applicants a further adjournment. Reference was made to, inter alia, Ahern v Deputy Commissioner of Taxation [1987] FCA 312 ; (1987) 76 ALR 137 and Adamopolous v Olympic Airways SA (1990) 95 ALR 525. 22 The learned Federal Magistrate was not disposed to accede to the request for a further adjournment. His Honour distinguished the two cases to which reference has been made and proceeded to deal with the creditor's petitions in accordance with s 52 of the Act. 23 It was common ground between the parties that, for the applicants to secure a stay of proceedings under Order 52 rule 17 of the Federal Court Rules , it would be necessary for the applicants to establish an arguable case in respect of the grounds of appeal identified in their Notices of Appeal and, also, that the balance of convenience favoured the granting of the relevant stays. 24 The grounds of appeal specified in the Notices of Appeal were, to all intents and purposes, identical, although in the case of the wife's Notice of Appeal the word 'her' took the place of the word 'him'. Counsel for the applicants, Mr Ash, acknowledged that ground of appeal 2, as originally expressed, could not be made good. He sought leave to effect amendments to the Notices of Appeal filed 20 July 2008 and the amendments sought were not opposed. In the circumstances, I would have thought that leave to appeal would be required for ground of appeal 2 to be arguable before the Court. 26 In any event, it would seem to me that ground of appeal 2 is not one which answers the description of providing an arguable case. The learned Federal Magistrate was not to know what is now common ground between the parties, that is, that the application for leave to appeal from the District Court judgment is to be heard concurrently with the appeal itself. The learned Federal Magistrate was confronted on 11 July 2008 with the prospect of having the petitions expire on 5 December 2008 without having addressed whether or not sequestration orders should be made upon them. Had the learned Federal Magistrate granted a further adjournment he could reasonably have expected that the Court of Appeal's consideration of an application for leave to appeal would take some time and that it would be followed by an appeal which would take a further period of time, with little likelihood of the appeal, if any, being decided before the petitions ultimately expired on 5 December 2008. 27 This is not a case where I would have thought it appropriate for the exercise by the learned Federal Magistrate of his discretion to be disturbed, applying House v The King principles. 28 In saying this it must be recognised that I am presently dealing with an interlocutory application myself. I would not, by saying what I have just said, wish to shut out the possibility of a different conclusion being reached on the hearing of the appeals against the judgments of 11 July 2008, under which the sequestration orders were made. 29 Ground of appeal number 1 falls into a slightly different category. Under s 27 of the Act, the Federal Magistrates Court and this Court have concurrent jurisdiction in bankruptcy. In circumstances where the Federal Magistrates Court made sequestration orders against the estates of the applicants it would seem to me that it is that Court which was empowered by s 52(3) to order a stay of up to 21 days. In Griffiths v Boral Resources (Qld) Pty Ltd [2006] FCAFC 149 ; (2006) 154 FCR 554 ('Griffiths') at [29] --- [33] a Full Court comprising Spender ACJ, Dowsett and Collier JJ held with some diffidence that it should find that under the slip rule, to which reference has been made (Order 35 rule 7(3) of the Federal Court Rules ) it was open to a court to make an order, which would operate nunc pro tunc, extending the life of a creditor's petition as from a date which fell within the permitted period for bringing applications for an extension under s 52(5) of the Act. Their Honours considered that they should follow the approach adopted by the Court in Elyard Corporation Pty Ltd v DDB Needham Sydney Pty Ltd (1995) 61 FCR 385 ('Elyard') in relation to s 459R of the Corporations Law , which bore some similarity to the relevant terms of s 52 of the Act. Elyard was an appeal, by leave, from a judgment of Sheppard J in DDB Needham Sydney Pty Limited v Elyard Corporation Pty Limited [1995] FCA 1387 ; (1995) 131 ALR 213. Sheppard J held, amongst other things, that s 459R of the Corporations Law was so expressed as to exclude the operation of s 1322(4)(d) of the Corporations Law which authorised the making of nunc pro tunc orders extending time limits after the event. 33 Section 459R of the Corporations Law allowed the Court to extend the time within which an application to wind-up a company in insolvency may be determined in circumstances where the application for an extension of the time was made within the time fixed by s 459R(1). Sheppard J held that where the time limit for an extension application had not been complied with, an order could, nevertheless, be made under the slip rule after the event extending the time on the basis that the order providing the extension of time was taken to have been made when the slip occurred. In this case, the period of six months expired on 18 May 1995. That period was extended up to and including 9 June 1995 by order of the Registrar on 21 April 1995 (s 459R(2)); but no further extension was sought by the respondent, and therefore none was included in the orders made by the Registrar on 9 June. The Registrar's order of 9 June had not been entered at any relevant time. The application came before the learned primary judge on 16 June 1995. He delivered reasons for judgment on 20 July 1995 and made orders on 9 August 1995. The reasons for judgment of his Honour recited the circumstances which led to the respondent not seeking a further extension of the relevant period on 9 June. His Honour went on to find that he was entitled to apply the slip rule, which he did, by correcting the orders of the Registrar made on 9 June. He added an order that, subject to further order, the time within which the application for winding-up may be determined be further extended until 5 pm on 30 November 1995. In the result the Court ordered that the appeal be dismissed. The circumstances in which the slip rule applied were extensively canvassed by Lockhart J at 390-392 and by Lindgren J at 401 et seq. In Griffiths , the Court recognised that Elyard was a decision of long standing and their Honours were reluctant to reconsider it. Although it does not directly bind us in applying s 52 of the Bankruptcy Act , to take a different approach would cause substantial confusion in insolvency practice. In my view, however, O 35 r 7(3) was available to his Honour. However, the applicants wish to keep the issue alive so that they may approach the High Court and seek relief which would involve the judgment of the Full Court in Griffiths being overturned. 38 The question which arises is whether or not the arguable case which the applicants are required to demonstrate must be an arguable case which could succeed before this Court on the hearing of the relevant appeals or is it sufficient for the applicants to demonstrate an arguable case that could succeed were the matter taken under consideration by the High Court. I am inclined to the view that the latter alternative is sufficient for the purpose of the Court's consideration of whether or not a stay of proceedings should be ordered. 39 It seems clear that the Court has power to order a stay under Order 52 rule 17 of the Federal Court Rules notwithstanding the provisions of the Act to which I have earlier referred (see for example Evans v Heather Thiedeke Group Pty Ltd (1990) 95 ALR 424 at 425). 40 The question which remains is whether or not the Court's discretion to order a stay of proceedings on the sequestration orders should be exercised favourably to the applicants. I am not persuaded that the discretion should be so exercised. 41 The affidavits of the husband, to which reference has been made, set out, amongst other things, what are said to be the assets of the husband and of the wife. The affidavits indicate that the husband is employed as a factory hand and that his wife is employed as a sales assistant. It would seem to me that the applicants present a case of being, relatively speaking, penniless. In the circumstances, one would have thought that no relevant prejudice would be sustained by them retaining their bankrupt status pending the hearing of the appeals. 42 The effect of a successful appeal in relation to a sequestration order was addressed by Buchanan J in his reasons for judgment in de Robillard v Carver (2007) 159 FCR 38. In his reasons for judgment, with which Moore and Conti JJ agreed, consideration was given by his Honour to the general effect of an order of annulment and to orders of the Court setting aside sequestration orders that may have been made (at [140] --- [150]). Buchanan J drew attention to the judgment of Gyles J in Rangott v Marshall [2004] FCA 961 ; (2004) 139 FCR 14 in which Gyles J considered himself constrained to follow Simon v Vincent J O'Gorman Pty Ltd (1979) 41 FLR 95 to which Buchanan J referred at [142]. There are also the two sets of proceedings that my wife and I are involved in at present. These proceedings are in the Supreme Court and numbered 20477 of 2002. The proceedings only involve me and a company called "Leisure Coast Tobacconist & Giftware Pty Limited", which is in liquidation. These proceedings were also previously against the New South Wales Police Force, but that matter was settled and the solicitors for Leisure Coast Tobacconist & Giftware Pty Limited and I received $160,000 from that settlement. I believe that amount should cover the legal costs of the Plaintiffs in the proceedings. As to the future conduct of the proceedings, I understand there is a question of whether the claim was passed to the trustee or remains with me, insofar as my interest in the proceedings is concerned. In any event, I intend to discuss with the trustee the further prosecution of those proceedings. No indication is given as to the husband's status as a party to those proceedings. No indication is given as to the terms of the settlement with the Police Force to which reference is made. No indication is given as to the entitlement of the husband to share in the amount of $160,000, to which reference has been made. No indication has been given as to when that money was paid, if at all, and what has become of it. No indication is given as to the nature of the claims, if any, made against the New South Wales Crime Commission. Nothing has been said in the husband's affidavits to suggest that the further conduct of the proceedings involving the New South Wales Crime Commission will be prejudiced if a stay of the proceedings on the sequestration orders is not made. 45 In my opinion this is not a proper case for the grant of a stay of proceedings in accordance with Order 52 rule 17 of the Federal Court Rules pending the hearing of the appeals. In the circumstances I consider that the Notices of Motion should be dismissed with costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | power of the court to grant a stay of proceedings under sequestration orders relevant considerations discretion orders made nunc pro tunc extending the time of lapsing of creditor's petitions application of slip rule bankruptcy |
2 Interlocutory disputes have arisen, primarily in relation to claims for legal professional privilege by the ACCC. There also are some questions in relation to pleadings and particulars. The principal issue, which has occupied the bulk of this four day hearing, is when litigation in respect of the alleged contraventions of the Act was reasonably anticipated by the ACCC. The ACCC first became aware of the allegations on 22 November 2004 when senior officers of the Amcor Group, accompanied by solicitors, approached the Commission. The ACCC says that by 15 December 2004 litigation was reasonably anticipated by it. However, the Commissioners of the ACCC did not formally resolve in principle to commence proceedings until almost a year later, on 28 November 2005. The respondents say that the relevant date was 28 November 2005. The application and statement of claim were filed on 21 December 2005. 3 In addition, on the subject of legal professional privilege there is a dispute as to whether the dominant purpose for the creation of the documents was use in litigation as distinct from investigation of possible litigation. Also, there is a question as to documents related to the grant of immunity to Amcor and some of its former officers and whether those documents are discoverable at all, or only relevant as to credit. 4 The relevant legal principles on legal professional privilege have recently been the subject of a comprehensive summary by Kenny J in Commissioner of Taxation (Cth) v Pratt Holdings Pty Ltd (2005) 225 ALR 266 at [30]. There is no dispute as to the correctness of this statement and I incorporate it by reference in these reasons. 5 The sixth respondent Mr Rod Carroll is separately represented and did not participate in these interlocutory applications. The term respondent in these reasons does not include him. The officers referred to are the ACCC's General Counsel Mr Robert Alexander, Mr Geoffrey Williams, a Director of its Enforcement Division, and Ms Susan Pryde of the Australian Government Solicitor's office. The dominant purpose of Mr Alexander's communication with those persons was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding. Mr Alexander's note of a confidential communication between himself and a witness (no 41). His dominant purpose in requesting the information in respect of the proposed witnesses was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding. Documents recording confidential communications between, on the one hand, Mr Williams and other officers of the ACCC or AGS and, on the other hand, a proposed witness or a representative of a proposed witness. 2. In some cases, the documents also record internal communications of officers of the ACCC related to the communications referred to in 1. 3. In each instance, the communications recorded in the documents were made by Mr Williams or at his request. His dominant purpose in directing that those documents be created was to record information for use in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. In some cases the draft witness statements contain suggested amendments made by Mr Williams, other officers of the ACCC or AGS, or counsel. Mr Williams' dominant purpose in preparing or requesting those documents was to use them in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. In some cases Mr Alexander was the officer who amended the draft witness statements and he did so with the same dominant purpose. Their dominant purpose in conducting the interviews was to obtain information for use in, or in relation to, the proceeding and to use that information to obtain legal advice in relation to the proceeding. The interviews were not conducted under the powers conferred by s 155 of the Act. In some cases the draft witness statements contain suggested amendments made by Ms Pryde, Mr Williams or other officers. Ms Pryde's dominant purpose in preparing or requesting those witness statements was to use the documents in, or in relation to, the proceeding and to obtain legal advice in relation to the proceeding. In some cases Mr Alexander was the officer who amended the witness statements and he did so with the same dominant purpose. Amcor obtained an Anton Piller order and as a result of the subsequent search certain material came into the possession of Amcor's solicitors Allens Arthur Robinson. On 15 November James Hodgson, another former Amcor executive, was joined as a respondent. I will refer to this action as the Hodgson Proceeding. 8 On 22 November, Mr Pat Ryan of Allens approached Mr Graeme Samuel, the Chairman of the ACCC, in connection with a proposed leniency application concerning serious cartel misconduct. 9 In June 2003 the ACCC had published a Leniency Policy for Cartel Conduct. In these circumstances the harm caused to Australian consumers, businesses and the economy is likely to be substantial. The corporation must meet a number of requirements, including full and frank disclosure and continuing cooperation. It must not have coerced other corporations to participate in the cartel and must not have been the "clear leader" (i.e. ringleader). Similar provisions apply to individuals. 11 A video conference was arranged for later that day. Those present on behalf of the ACCC were Mr Samuel, Mr David Smith, a Commissioner and Chairman of the Commission's Enforcement Committee, Mr Brian Cassidy, the Commission's Chief Executive Officer, Ms Cherie Noy, Assistant Director of the Commission's Enforcement Division and Mr Alexander. Present on behalf of Amcor were Mr Chris Roberts its Chairman, Mr Russell Jones, its then Managing Director, and three partners from Allens, Mr Ryan, Mr Paul Meadows and Mr Bob Santamaria. 12 At the meeting the Amcor representatives foreshadowed a formal application for leniency for cartel conduct in relation to corrugated fibre board packaging (CFP) between approximately 2002 and 2004. One of the Amcor representatives said that Amcor had received certain audio recordings (the Hodgson Recordings) of discussions between Mr Hodgson and other Amcor executives. Allens had advised Amcor that the Hodgson Recordings evidenced cartel conduct. Mr Ryan said that the Hodgson Recordings had been obtained by Amcor following a court order permitting a search of the home of one of Mr Hodgson's colleagues. Mr Ryan also said that the Hodgson Recordings included discussions between Mr Hodgson and Mr Peter Brown, who was until his retirement in October 2003 Amcor Australasia's Managing Director, and Mr Peter Sutton, who replaced Mr Brown. 13 Shortly after the meeting Mr Samuel instructed Mr Alexander to work in conjunction with Mr Williams, who was to be the Case Officer for the matter. Mr Alexander was instructed to report directly to the Chairman as to progress rather than to the ACCC's Enforcement Committee. This was the first time in Mr Alexander' s 34 years with the ACCC and its predecessor that the Enforcement Committee was by-passed in this way. 14 In accordance with Mr Samuel's instructions Mr Williams and Mr Alexander set up and managed a team of ACCC staff for the Amcor-Visy matter. Since 22 November these two officers have discussed all major issues relating to the progress of the matter. Agreed action of an investigatory nature is effected by Mr Williams and his team of investigators. Agreed action on legal issues is effected by Mr Alexander through AGS, the ACCC's solicitors. 15 Also on 22 November Mr Alexander drafted a notice to Amcor under s 155(1)(b) of the Act requiring Amcor to produce the Hodgson Recordings. He also sent a letter to Mr Ryan advising that the ACCC was giving consideration to granting conditional leniency to Amcor under Part A of the ACCC's Leniency Policy. The letter also sought the production of relevant electronic material concerning Messrs Hodgson, Brown and Sutton. These were produced by Allens on the following day. 16 On 23 November Amcor published a press release stating that it had advised the ACCC that it had received information that led it to believe that it "may have been involved in conduct which breaches competition laws" and that it had informed the ACCC that it would provide full co-operation in any investigation and was initiating its own investigation. 17 On 23 November the ACCC received a letter from solicitors A J Macken & Co on behalf of Mr Hodgson and Messrs Trevor Barnes and Ian Sangster, all former employees of Amcor and respondents in the Hodgson Proceeding. The letter referred to the Amcor press release and stated that the firm's clients, as "former senior executive officers", were aware of information relating to the conduct to which Amcor had referred. The clients wished to co-operate fully with the ACCC but were effectively constrained by the interim injunctive orders obtained by Amcor in the Hodgson Proceeding. The firm was obtaining instructions from its clients to apply to the Court to vary or discharge such orders. They wished to make application for leniency. They were aware of the terms of the ACCC's Leniency Policy. 18 On 24 November Carter Holt Harvey Ltd made a confidential submission to the ACCC seeking its approval for the acquisition of a company called Wadepack Ltd. The proposed acquisition was to take place in the "highly competitive fibre-based packaging (folding carton and corrugated packaging) industry". There was reference to Amcor as a "vigorous and effective competitor" and "increasing substitution of corrugated packaging for folding carton packaging". 19 Also on 24 November the ACCC issued a notice under s 155(1)(b) to Visy and certain officers seeking various documents. 20 On 25 November Mr Meadows telephoned Mr Alexander saying he believed the Hodgson Recordings may be subject to confidentiality restrictions in the Hodgson Proceeding. Mr Alexander, having obtained a copy of the orders, formed the view that the ACCC required the leave of the Federal Court if the ACCC were to use this material. An application was made to Goldberg J on 2 December. His Honour made an order permitting Amcor to provide materials, including the Hodgson Recordings, to the ACCC. The order was made with retrospective effect from 22 November. 21 On or shortly after 25 November the ACCC engaged Mr Peter Jopling QC with Mr Chris Caleo of Counsel in relation to the application for leave in the Hodgson Proceeding and in relation to the ACCC's investigation of the alleged cartel. 22 On 26 November Mr Ryan and Mr Meadows made a formal written application for leniency on behalf of the Amcor Group and its current and former officers and employees, excluding Messrs Hodgson, Mihelic, Sangster, Bayley and Barnes . The letter stated that the information available to Amcor appeared to indicate that at some time in or about 2001 "an understanding may have been reached between at least Amcor and Visy Board concerning the supply of (CFP)" involving market sharing and price fixing. The understanding appeared to have been entered in or about 2001 and may have been given effect to up until the end of September 2004. 23 On 7 December Amcor issued a press release stating that its Board had resolved to accept offers of resignation by Mr Russell Jones (Managing Director) and Mr Peter Sutton (Managing Director, Amcor Australasia) from their employment and any directorships and other positions. The consultancy of Mr Peter Brown, a former Managing Director, had been terminated. This was said to be in the light of an interim report from Amcor's legal advisors. Messrs Jones and Sutton would "receive their minimum legal entitlements only on termination". Mr Alexander regarded the action by Amcor as a significant indicator that there was likely to be substance to the allegations that Amcor had made to the ACCC. 24 On 7 December Mr Tom Jarvis of Deacons telephoned Mr Alexander. Mr Jarvis said that he was acting on behalf of Mr Sutton who, Mr Jarvis said, was very keen to co-operate with the ACCC. Mr Jarvis said that Mr Sutton had "walked into a situation in which those above and below him were acting in a particular way and he had no real option but to go along with it". Mr Alexander replied the next day stating that if immunity were granted to Amcor it would extend to Mr Sutton provided he cooperated fully with the ACCC. 25 On 7 December Mr Alexander received from Mr Williams transcripts of excerpts from the Hodgson Recordings. 26 On 8 December Allens provided to the ACCC extensive transcripts of the Hodgson Recordings. Mr Alexander read the transcripts and realised that these recordings included not only conversations between Mr Hodgson and other Amcor executives but also a recorded conversation between Mr Hodgson and the respondent Mr Harry Debney, the Chief Executive Officer of Visy. I think, my view is that it's worked pretty well over the last couple of years. You can't keep going for big weeks. [sic --- bucks? Yes, first quarter each year. And I don't care who leads it. If you want us to lead it, we'll lead it. I just want a macro understanding. You haven't told anyone? 29 Mr Sutton was interviewed on 9 December. He said amongst other things that he recognised his voice and that of Mr Hodgson on the Hodgson Recordings. Some time around July 2003 he (Sutton) had become aware that an arrangement existed between Amcor and Visy in relation to CFP. He had been told of that arrangement by Mr Brown who had said that Amcor and Visy had decided that they were not going to let the price war between the two companies continue and that some action would be taken to get prices back up. 30 On 14 December Mr Williams and Mr Alexander interviewed Mr Jones. He said that in 2001 Mr Brown had explained to him (Jones) that there was an arrangement in place between Amcor and Visy with regard to some major CFP accounts and that Mr Brown had asked him if he (Jones) could approach Mr Richard Pratt of Visy about the arrangement. Mr Brown told Mr Jones to ask Mr Pratt to speak to Mr Debney of Visy to reaffirm the arrangement. Thereafter Mr Jones met with Mr Pratt to reaffirm the arrangement. During the discussions Mr Jones told Mr Pratt that he (Jones) had been advised by Mr Brown that the arrangement Mr Hodgson had in place with Mr Debney was not holding and that he (Jones) had been asked to have Mr Pratt confirm that the arrangement was something that he supported and that he would talk to Mr Debney about it being affirmed. In response Mr Pratt said that he was aware and acknowledged that and that he would talk to Mr Debney. After the meeting with Mr Pratt, Mr Brown told Mr Jones that the arrangement was continuing and that discussions between Mr Hodgson and Mr Debney were to continue from time to time. 31 On 14 December Mr Williams and Mr Alexander interviewed Mr Roberts who had become Amcor's manager of its fibreboard box container division eight weeks previously. He said he did not know anything about the cartel. Mr Alexander formed the view at the time of the interview that Mr Roberts "did not know much about what happened in the past". 32 On 15 December Mr Williams and Mr Alexander interviewed Mr Brown. Mr Brown said that the arrangement between Visy and Amcor had commenced following a meeting between himself and Mr Debney at Mr Brown's home in Glen Iris in about 2000. Mr Debney laid out what he would like to do in terms of managing the CFP market place. The essence of the arrangement proposed to Mr Brown by Mr Debney was to freeze the CFP market and for Visy and Amcor not to compete for extra CFP volume. Visy and Amcor were colluding on prices. Mr Jones had told him (Brown) that he (Jones) had a meeting with Mr Pratt and that they had gone through a list of customers. Mr Brown had several meetings with Mr Debney endeavouring to get the arrangement between Amcor and Visy "back on track". During at least one of these meetings, according to Mr Brown, Mr Debney had said that he would "tell my guys to back off". In at least one conversation between Mr Brown and Mr Debney, Mr Debney had said that Mr Pratt was aware of what was happening and that he agreed with it. Mr Brown confirmed the excerpt from the Hodgson Recordings of a discussion on 27 September 2002 between Mr Hodgson and himself (quoted at [27] above). 33 On 13 December Mr Williams had two telephone conversations with Mr Marcus Bezzi, a solicitor in the office of AGS in Sydney, regarding the engagement by the ACCC of AGS to act as solicitors. In the conversation Mr Williams enquired about the possibility of junior counsel being engaged, asked for AGS to take a role in the drafting of pleadings, enquired whether solicitors within AGS would be available to work on the matter, discussed the preparation of a case management plan and enquired about the use of a "Ringtail Casebook" as an evidence and document handling system for litigation. 34 Shortly after that conversation Mr Bezzi had a discussion with a solicitor in his office, Ms Jackie Gleeson. He told her that the ACCC had a new matter commencing in Melbourne, that Ms Susan Pryde of AGS in Melbourne would identify possible junior counsel in Melbourne to work on the matter. Ms Gleeson said that she was happy to take a role in drafting pleadings and Mr Bezzi discussed the preparation of a case management plan with her. 35 Mr Alexander deposes that following the conclusion of the interview with Mr Brown on 15 December he formed the opinion that the ACCC would commence proceedings against Visy in relation to the allegations made by Amcor. By this time he had determined that he would recommend to the Commission that such a proceeding be commenced and he considered that the Commissioners would accept that recommendation. At the time he discussed the case with Mr Williams who was of the same view. 36 In summary, Mr Alexander says his conclusion was that the ACCC would commence legal proceedings against Visy after the Commissioners, and in particular its Chairman Mr Samuel, had considered a number of matters. 38 On 15 December A J Macken & Co on behalf of Messrs Barnes, Sangster, Hodgson, Mihelic and Bayley replied to a letter from Mr Alexander of the 13 th . In that letter Mr Alexander noted that the restrictions in the Hodgson Proceeding had now been lifted to the extent that the A J Macken clients could communicate with the ACCC. The ACCC was unable to grant leniency under its policy because the clients were not the first to apply for leniency. However, under the ACC's cooperation policy it had a discretion to offer leniency, including immunity, to those who assist ACCC investigations. Before the ACCC would be prepared to make any offer it would need to "understand in broad, dot-point form, what information your clients would provide to the ACCC". 39 In their reply, A J Macken & Co complained that if Amcor was to be treated as the first to apply for leniency that would be unfair in circumstances where Amcor was a party principal to collusive conduct, was in breach of an undertaking to the Federal Court of Australia at the time of its application for leniency, supported its claim for leniency by material which the A J Macken clients had provided to the solicitors for Amcor but which Amcor and the clients were prohibited from supplying to the ACCC by orders obtained by Amcor "and which material would be in part unhelpful and misleading unless supplied by persons with knowledge of its provenance. Our clients are those persons". 40 The letter went on to request reconsideration of any decision under the leniency policy or, if necessary, extension to them of the cooperation policy. Nothing in the letter was to be taken as indicating any unwillingness on the part of the clients to cooperate with the ACCC. He was provided with a pricing policy and asked to move prices up over a period at accounts which were below the pricing policy. These activities occurred in 2000-2002. He had never spoken with the opposition on pricing issues or acted in any manner other than to implement Amcor pricing policies. 44 From March to October 2005 the ACCC issued a number of notices under s 155 to various persons. In the body of such notices the description and period of time of the alleged cartel varied. A number of examinations under s 155 took place, including Mr Peter Dwan, Visy's General Manager, Marketing, on 22 July and Mr Pratt on 26 July. 45 Witnesses were interviewed at various times up until November. 46 On 17 August Mr Alexander sent an email to Mr Samuel stating that Mr Ryan and Mr Meadows had requested a further meeting in the week commencing 29 August. This request arose from a radio interview Mr Samuel had given about the Steve Vizard matter on 1 August in which Mr Samuel said "we may get ourselves into a not dissimilar position in the not too distant future" and "I am going to have to explain at the time why it is we have not prosecuted certain individuals or certain companies for being involved in a cartel". Mr Alexander said that he and Mr Williams thought that it was "too early to be contemplating any such discussion when there is a way to go in the investigation and we have not clearly formulated the proceedings". 47 On 14 November counsel were briefed to settle an application and statement of claim. 48 On 28 November Mr Williams swore an affidavit in the Hodgson Proceeding stating that during the past years the ACCC "had been conducting an investigation into alleged contraventions of section 45 of the Trade Practices Act 1974 in the corrugated fibreboard containers industry" and that "[t]he matters the subject of the ACCC investigation are highly confidential at this time". 49 By late November 2005 Mr Alexander and Mr Williams together with other ACCC staff and solicitors from AGS had substantially completed the ACCC's preparation for the commencement of proceedings but the statement of claim had not been settled by counsel. The ACCC was aware that it needed the leave of the Federal Court prior to commencing the proceeding because Goldberg J, in making the orders on 2 December 2004 permitting Amcor to provide the Hodgson Recordings to the ACCC, had stated that a further order would be required for the ACCC to use those recordings in court proceedings. 50 On 22 November Mr Alexander and Mr Williams prepared a staff paper for the Commissioners seeking an in-principle decision to commence proceedings against Visy. On 28 November there was a meeting of Commissioners at which the staff paper was considered. The Commissioners made an in-principle decision to institute proceedings as recommended. 51 On 9 December Mr Alexander and Mr Williams prepared a staff paper for the Commissioners seeking a final decision. On 16 December the Commissioners considered that paper and made a final decision to institute proceedings. As already mentioned, the application and statement of claim were filed on 21 December. 52 One matter that which attracted some discussion in the present application occurred after the commencement of proceedings. On 1 December 2006 the ACCC served its second further amended statement of claim. In relation to the allegations against Mr Pratt there was a substantial change. The original statement of claim alleged three meetings between Mr Jones and Mr Pratt, on or about 21 May 2001, 7 February 2003 and 13 February 2004 (pars 28, 31 and 34), all at the All Nations Hotel in Lennox Street, Richmond. In its second further amended statement of claim the ACCC deleted par 31 and amended par 34. The net result was that the allegation of the 2003 meeting was dropped and what was said at that meeting is now alleged to have been said at the 2004 meeting. In Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority [2002] VSCA 59 ; (2002) 4 VR 332 at [19] Batt JA, with the concurrence of other members of the Victorian Court of Appeal, held that there must be a "real prospect" of litigation, as a distinct from a mere possibility, but it does not have to be more likely than not. In Microsoft Corporation v Ben Zhong Fan [2003] FCA 1026 at [73] - [75] Jacobson J preferred the Mitsubishi view, as did Allsop J in Australian Competition and Consumer Commission v Liquorland (Australia) Pty Ltd [2005] FCA 503 at [8] . 55 The weight of authority now seems to favour the Mitsubishi "real prospect" test. If necessary, I would prefer that to the Safeway "more likely than not" test. However, for the reasons which will hereafter appear, I am satisfied that the higher standard has been met in the present case. The respondents accept that the opinion of particular officers within the ACCC such as Mr Alexander and Mr Williams is at least relevant, but not conclusive. As will be seen, a strong attack was made on the reasonableness of such opinions. 57 The respondents place particular stress on the institutional structure of the ACCC. They submit that under the Act only members of the Commission, meeting as the Commission, or meeting as a duly constituted Division of the Commission, or a member of the Commission acting under delegation, have the power to authorise the institution of legal proceedings by the Commission under Pt VI of the Act in respect of contraventions of Pt IV. 58 The manner in which the ACCC may exercise its powers and perform its functions is governed by ss 18 , 19 , 25 and 26 of the Act. Section 18 deals with meetings of the Commission and covers such matters as the location of and the chairing of the meeting and meeting procedures. Section 19 empowers the Chairman to direct that the powers of the ACCC under the Act in relation to a particular matter shall be exercised by a division of the Commission consisting of the Chairman and such other members, not less than two, as are specified in the direction. Under s 25 the Commission may by resolution delegate to a member of the Commission, either generally or otherwise as provided by the instrument of delegation, any of its powers under the Act (with some exceptions) and certain other powers given to the Commission in other statutes, other than the power of delegation. Section 26 authorises the Commission to delegate any of its functions and powers under Pts IVA , V, VC and VI to a staff member. 59 The respondents point out that ss 25 and 26 are to be contrasted. Section 25 does not authorise the Commission to delegate its statutory functions and powers to its own staff members. It may only delegate those functions and powers to a member of the Commission; see also the definition of "Commission" in s 4 which includes a member of the Commission or a Division of the Commission performing functions of the Commission. By referring to a member of the Commission or a Division of the Commission, the definition is referring to members to whom a power has been delegated under s 25 and a Division established under s 19: Australian Competition and Consumer Commission v Rural Press Ltd (No. 2) [2000] FCA 66 ; (2000) 96 FCR 389 at [13] . 60 The respondents say that the Act has expressly regulated the extent to which the Commission may delegate the exercise of its powers and functions. Certain powers are expressly conferred on a member of the Commission, as opposed to the Commission acting in a meeting, e.g. issuing a notice under s 155. Otherwise the powers and functions vested in the Commission are intended to be exercised by members of the Commission acting in a meeting at which a quorum is present or through a Division established by s 19 , or through a member acting under a delegation under s 25. 61 The conclusion, the respondents submit, is that the Act contains a clear statutory indication that the Commission is not to delegate to one or more members of its staff the power to decide whether to institute proceedings under Pt VI. This is consistent with the Commission's published documents. 63 The reasonable anticipation test is not a question of the exercise of some power by the Commission, such as the power to commence litigation. It is rather concerned with a state of mind which may or may not exist at a particular point in time. Only human beings can anticipate events. Whether the state of mind of a particular individual can be attributed to an incorporated body such as the ACCC depends on the particular law in question, in the present case the common law rules relating to legal professional privilege: see Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 506-509. One does not look in this context for the "directing mind and will" of the ACCC: see Lord Hoffmann's explanation in Meridian at 509-511 of the sometimes misunderstood decision in Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705. 64 The law of legal professional privilege necessarily assumes that the privilege may, indeed usually will, arise before the actual commencement of litigation --- otherwise there would be no point in the concept of reasonable anticipation. Therefore, in applying that law to the ACCC it would be misleading to focus on the state of mind only of those who have the power to commence litigation on the Commission's behalf. Looking at the policy behind the law of legal professional privilege (cf the approach of Lord Hoffmann to the legislation in question in Meridian at 511), the protection needs to apply at a time when the prospect of litigation is less than certain (whether the Safeway or the Mitsubishi test applies). By this stage there is a need for frank and candid communication between client and lawyer, or other persons such as potential witnesses, on the subject matter of the litigation --- no less than there is when the litigation actually starts. The privilege exists to serve the public interest in the administration of justice by encouraging full and frank disclosure by clients to their lawyers: Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67 ; (1999) 201 CLR 49 at [35] . The people who are supervising the actual work which generates the documents in question will not necessarily be the ones who can decide to commit the corporate body to litigation. However if, as matter of organisational reality, they are responsible for the work in question it will be appropriate to impute their state of mind to the corporation. 65 In the present case, Mr Alexander and Mr Williams were senior and experienced officers. As already mentioned, Mr Alexander had 34 years experience with the ACCC and its predecessor. He was the senior legal officer on the staff of the Commission. Under Legal Services Directions issued by the Attorney-General, Commonwealth agencies usually require legal advice from an external lawyer that a proceeding has reasonable prospects of success before a decision is made to commence litigation. However, Mr Alexander holds a specific exemption from the Attorney-General to the effect that his advice will be sufficient for the ACCC to commence proceedings. In the way this particular matter was arranged administratively, he reported directly to the Chairman. The state of mind of Mr Alexander and Mr Williams can be attributed for present purposes to the Commission, although of course that state of mind has to be objectively reasonable. The respondents point to a number of occasions after 15 December 2004 where officers of the ACCC, such as Mr Alexander and the Enforcement Committee, had spoken of the matter as an "investigation". 67 I do not think such a demarcation exists, at least in the circumstances of the present case. One cannot say that investigation ceases one day and then litigation preparation commences the next, like spring ending and summer starting. In a case like the present one, investigation, in the sense of seeking out information, never stops. The same conduct, such as a lawyer interviewing a potential witness, asking the witness for more detail, or seeking the reaction of the witness to a document or circumstance, can be characterised as investigation by an officer preparing a budget, or as case preparation by the lawyer. What is important is not the label attached to some activity but the true characterisation of that activity in the circumstances of this case. It was unsworn and not in admissible form. No attempt had been made to obtain Visy's version of events. There was particular criticism of Mr Hodgson. This was based in part on what other Amcor representatives had said about him in their interviews with Commission officers. He was a good talker, he is a salesman by background and he would run off at the mouth on a whole [sic] of issues and he would, you know, from one meeting to the next change his position on issues quite dramatically. So even in the relatively short time that I had been dealing directly with him you learnt not to take everything he said as the gospel, you know, as being accurate. I'll get him". Well, I formed the view he had a barrow to push. There was certainly no love lost between Amcor and Mr Hodgson. 73 Stress was put on what was said to be the lack of evidence concerning Mr Pratt. It was said the Hodgson-Debney tape only contained a hearsay account of a conversation supposedly between Mr Jones and Mr Pratt sometime earlier. The A J Macken & Co letter of 15 December 2004 enclosing an outline of information to be provided by Mr Hodgson and Mr Barnes to the ACCC contained no reference to Mr Pratt. Yes, Mr Jones was the critical factor, so far as Mr Pratt was concerned. The following exchange took place in Mr Alexander's cross-examination. Honours were about even. "Now, what you got out of that was, doing the best you could with this witness, aided and abetted by his two lawyers, and you feeding him leading questions was, there had been a matter of fact discussion for less than a minute with Mr Pratt and according to what he said, in that minute, he also discussed some particular customers? Yes. [sic] At that time. Well, I-I don't want to talk about any witness statements since. Because they are privileged. What, you are going to sandbag Mr Pratt in Court are you if you get the chance, just drop it on him without warning? No, no, there is an order by his Honour that the witness statements be exchanged in June. Yes, that sounds right. 76 Reference was made to interviews of the witnesses at which Mr Alexander and others made comments indicating that the ACCC was at an early stage of investigation. We only know a very small amount. So that I think that is the technique we have found is the best way of arriving at the truth of what happened. And so we will be cross-checking what you say, and if there is something which we can't quite work out down the track, we would like to come back to you and ask you some more questions. So it is important that you understand that co-operation and truthfulness are the key to all of this. You know, if you lose a customer, you go and pick up a customer. You know, if it's that sort of cartel and it keeps the market share constant, then maybe that's what it is. But there's no --- no sort of high price setting here that I can see in the early day --- in my early stages in this- with this fibre job. So it's a strange --- a strange arrangement. Now, what I --- what the papers are saying is, given that it's a Clayton's cartel and everybody in the industry knows everything about what everybody else is doing, that's not quite right. The information that those guys took was pretty --- pretty sensitive. The Amcor personnel have not given any evidence, let alone been cross-examined. There has been no evidence at all, even on a hearsay basis, from the Visy side. When the Amcor personnel do give evidence at the trial, the foreshadowed criticisms may or may not be effective. For present purposes I am only concerned with the extent to which the respondents' criticism throws light on the reasonableness of the assertion of Mr Alexander and Mr Williams that as at 15 December 2004 they were of the view that litigation over the Amcor-Visy cartel allegations was reasonably anticipated. 79 I am quite satisfied that they in fact held that view. It is true that, as the respondents point out, there was no contemporaneous record of this. But I do not think reconstruction, whether conscious or otherwise, is involved. On the day in question, the Commission had just concluded its series of interviews with senior Amcor executives Mr Sutton, Mr Jones, Mr Roberts and Mr Brown, so it was a logical milestone in the Commission's dealings with this matter. 80 But that is not enough. The critical question is whether such a view was objectively reasonable, such that a reasonable person in their position might hold on the material then available. As was stressed by the respondents, the information that the ACCC had was not on oath. Nevertheless that fact does not seem particularly relevant since in civil litigation it would be the norm rather than the exception that a plaintiff has only evidence in unsworn form when proceedings are commenced. 81 The respondents submitted that "no rational person, no fair-minded person" could have formed the view that as at 15 December 2004 litigation was likely, as distinct from possible. I accept that the standard is that of a rational or fair-minded person, as long as fair-minded in this context is understood as conveying the notion that such person is not driven by malice or collateral considerations. However, there can be no suggestion of some kind of natural justice obligation vis-a-vis the potential defendant. A potential plaintiff does not have to give a potential defendant a hearing before commencing litigation, or arriving at a reasonably based anticipation of such litigation. 82 Cartel behaviour is by its nature clandestine and unlikely to be recorded in unambiguous documents. Members of the business community would recognise it as seriously unlawful and subject to substantial penalties if revealed. Discovery of such conduct is likely to be difficult. One might expect that the ACCC's investigations at times may commence with little more than rumour and mildly suspicious market behaviour. The present case stands in stark contrast. The ACCC's encounter with this matter came, so to speak, big end first. The Chairman and CEO of a major public company, accompanied by three partners from Allens, waited on the Commission on Monday 22 November 2004 and stated that information which had come to them the previous Friday suggested that Amcor "might be involved in breaches of the TPA in the corrugated box area". It soon became apparent at the meeting that the breaches in question involved cartel behaviour or that, as Mr Meadows delicately put it, "certain practices may have existed in relation to customers in the corrugated box industry". 83 Within two weeks or so the Commission had audio recordings not only of admissions by Amcor executives but one of, at least arguably, a clear admission by a very senior executive of the other party to the cartel. 84 Some of the detailed criticism by the respondents does not withstand closer examination. For example, it is not correct to say that Mr Hodgson's solicitors had advised the ACCC that "the recordings might be misleading" if that is intended to be read as casting some doubts on Mr Hodgson. The correspondence between the Commission and A J Macken & Co ([38]-[40] above) concerned the firm's complaint that at that stage the Commission had not granted immunity to the firm's clients, including Mr Hodgson. As one might expect, the firm was not denigrating its own client. On the contrary, it was putting him forward as someone who could provide valuable evidence, including explaining the background to the Hodgson Recordings and the persons involved. 85 The "Clayton's cartel" comment came from Mr Roberts, whose relevant involvement with Amcor commenced at a very late stage, only eight weeks before his interview. In any event, the term in the present context is equivocal. The manufacturers of a non-alcoholic drink called Clayton's Tonic coined the catchy slogan "The drink you have when you're not having a drink". "Clayton's" has passed into modern Australian usage as conveying the notion that something is not the real thing, not authentic or genuine. Mr Roberts' comment may be open to the interpretation, not that there never was a cartel, but that there was one which was not working or was, as Mr Jones said in his interview, "fraying at the edges" or as Mr Brown said, needed to be put "back on track". However, entering into a price fixing or market sharing arrangement is a separate and distinct contravention (s 45(2)(a)) from giving effect to such an arrangement (s 45(2)(b)). So if there was a sufficient basis to anticipate litigation over the former, it is not to the point that information was not yet available about the latter. 87 The respondents submitted that as at 15 December 2004 the information concerning Mr Pratt was "desultory". Mr Jones' account of the 2001 meeting was that the discussion about the alleged arrangement lasted "no more than a minute" and Mr Jones "could not recount anything that Mr Pratt said in the meeting in respect of any arrangement; and instead gave the ACCC his opinion of what Mr Pratt understood about the discussions". 89 It was pointed out that Mr Jones had said that Mr Pratt's reference to the arrangement in later meetings to stability was "oblique", and "very oblique, if a reference at all". Reference was made in this context to the amendments to the statement of claim (see [52] above). However, if the purpose of the meetings with Mr Pratt was, as Mr Jones and Mr Brown say, to get confirmation from the top man at Visy that the cartel was still on foot, a lengthy and detailed conversation on the topic might not have been expected. 90 Stepping back for a moment from detailed criticism, a powerful factor affecting the judgment of a reasonable person in the position of Mr Alexander and Mr Williams, or anyone else at the ACCC, as at 15 December 2004, would be the motives of the former Amcor personnel who had agreed to give evidence. Because of the continuing cooperation requirement and ringleader exclusion in the ACCC Leniency Policy there is obviously a motive for a person under immunity to downplay his or her own role and exaggerate that of a person on the other side of the cartel. But it is not at all clear why the Amcor personnel would have a motive to invent an Amcor-Visy cartel which never existed. 91 Approaching the ACCC and admitting cartel conduct is not a step to be taken lightly. Admission cannot be made without prejudice. There is the risk that somebody else may have already made admissions, or that the ACCC may be already aware of the cartel. Even if immunity is granted, a corporation is not protected from the prospect of massive claims by parties claiming to have suffered damage by the cartel (as has now occurred in this case) or, in the case of an individual, dismissal from highly paid employment in humiliating and career-threatening circumstances. The likely awareness of such consequences tells against the invention of fictitious cartels. 92 There is also the particular role and responsibility of the ACCC. 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 Act's objective as stated in s 2: 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 . 93 With the material in its possession by 15 December 2004, summarised in [36] above, the prospect of litigation was certainly more likely than not, and verged on the inevitable. 95 As to dates, in fact the actual or estimated date of the documents in question has been provided. A protocol between the parties provides for a limited method of capturing the estimated dates. Where a document is dated with a day and a month but not year and the year can be reliably estimated then that date is used. If the document has a year but no day or month then the date is entered as at the 1 st January of that year. If the document has a month and a year but no day the date is entered as the 1 st of that month. If the document's content refers to a date and that date provides a reasonable basis for estimating the date of the document then that estimated date can be used. 96 As to the name of the author, this complaint was made as to the ACCC's original list of documents dated 26 July 2006. The ACCC served a revised list on 27 November 2006 which included, as requested, information setting out "whether the statements were prepared by the ACCC or the AGS or counsel". The ACCC submits, and I accept, that it is not obliged to state the name of the author of each individual discovered document. No authority was cited for that proposition. The purpose of the requirement that a document be described is simply that the other party may know from the description whether or not it should be inspected and so that it can be identified subsequently: Australian Flight Test Services Pty Ltd v The Minister for Industry, Science and Technology [1996] FCA 1031 at 6-7. These requirements have been met in the present case. I note that the number of documents in question in this case is comparatively modest. The descriptions of them in the ACCC's list of documents suggest that the respondents would not be in any quandary as to whether or not to inspect. And they would have no lack of legal manpower to do so, if they were permitted. Since this matter has been fixed for trial before me next October, I shall follow that injunction. 99 My conclusion that by 15 December 2004 there was a high degree of likelihood that litigation would be instituted gives rise to an irresistible inference that the production of the documents was for the dominant purpose of contemplated judicial proceedings. As at 15 December 2004 was the ACCC ready to commence proceedings? Obviously not. There needed to be detailed assessment of evidence including, but by no means limited to, that coming from the Amcor personnel and, based on that evidence, careful formulation of the ACCC's case in a statement of claim. Until that task was completed there was little point in the Commissioners formally resolving to commence proceedings. But that does not gainsay the fact that as 15 December 2004, given the unprecedented nature of the material in the possession of the ACCC, litigation was unavoidable. 100 The descriptions of the nature of the documents (see [6] above) indicates that they were necessitated by the need of preparing for litigation. They are virtually all concerned with the laborious process of preparing witness statements, the very stuff of litigation preparation. 101 There was some complaint in the respondents' submissions of the "formulaic" assertion by Mr Alexander and Mr Williams of a dominant purpose. However, I note that in Microsoft at [77] there was criticism of a deponent who had used the adjective "primary". His Honour thought that it was "unsatisfactory that (the witness) has not spoken in the language of dominant purpose". Thus there may be something of a dilemma for witnesses swearing affidavits in support of privilege claims. Witnesses may feel they have to use either the formulaic term "dominant" or search around for some synonym --- a process which may be equally formulaic. In Grant v Downs at 678 Barwick CJ preferred the word "dominant" to describe the relevant purpose. In his Honour's opinion, neither "primary" nor "substantial' satisfied the true basis of the privilege. So it may be that the formula, however tedious, will continue to be used. I think this tacit conclusion is correct. Once it is accepted that the dominant purpose was for use in litigation, the nature of the documents, as evidenced by their description, compels the conclusion that they were created in circumstances imposing obligations of confidentiality. This is a civil proceeding. These documents are either discoverable or not in accordance with the law relating to discovery and legal professional privilege. That law confers rights on all litigants, whether they are model ones or not. 106 The first three grounds really revolve around the same point. Documents relating purely to credit are not discoverable. In a different context McHugh J, in a dissenting judgment, has criticised any bright line distinction the evidence as to credit and evidence as to the issues: Palmer v The Queen [1998] HCA 2 ; (1988) 193 CLR 1 at [51] et seq. However the Full Court of the Federal Court in Reading Entertainment Australia Pty Ltd v Birch Carroll & Coyle Ltd [2002] FCAFC 109 has reaffirmed the distinction in the context of discovery. The judgment in Reading is binding on me. 108 In the present case, everyone knows that critical witnesses for the ACCC have been granted immunity. That fact can be, and no doubt will be, used by the respondents as a legitimate basis for an attack on credibility the witnesses. The effectiveness of such an attack cannot be predicted. However, documents which do no more than evidence that fact are relevant only to credit and are not discoverable. It included some new sub paragraphs to par 222. These were not introduced pursuant to leave. This is not a criticism, since the respondents had to plead to the ACCC's amended statement of claim. However the question of leave needs to be considered now. The 1995 Report covered Visy Board's sales and included a detailed analysis of all major costs areas by month, year to date performance against budget, and the previous year. It included statistics on volumes, credit notes, employee numbers and conversion cost per unit of volume and per employee. Jones, then the Managing Director of Amcor Limited, visited during the meeting and was briefed on strategy developments, including the significance of the information in the 1995 Report. During these meetings, Morriss, Brown and Jones discussed the competitive position of the Amcor Group's CFP business and discussed information derived from the 1995 Report. These presentations were made by Brown, Morriss and others in or about the first half of 1988 and later by Hodgson to Brown and Jones at the Amcor Group's Rocklea offices in or about mid to late 1998. The presentation by Hodgson was made to support his request for a new corrugator and supporting infrastructure modernisation in order for the Amcor Group to compete more effectively with Visy Board's CFP business. This was agreed at the March 1998 strategy planning meeting referred to in sub-paragraph (a) above and ultimately approved by the Board on Amcor Limited and implemented. They have the potential of raising countless side issues as to the rights and wrongs of the conduct of Mr Morriss and the effect of that conduct on Amcor. Such evidence would be likely to be excluded as resulting in an undue waste of time: Evidence Act 1995 (Cth) s 135 (c). 111 Such pars (ae) and (af) stand on a different footing. The respondents put them as an alternative. In the end the respondents did not object to the provision of further particulars. The first to fifth respondents' motions dated 5 December 2006 and 1 February 2007 are dismissed with costs. 2. Subparagraphs 222 (aa) to (ad) of par 22 of the first to fifth respondents' amended defence filed 8 January 2007 are struck out. 3. The first to fifth respondents pay the applicant's costs of the motion dated 21 February 2007. | allegations of price fixing and market sharing information concerning allegations came to knowledge of applicant on 22 november 2004 in principle decision to commence proceedings on 28 november 2005 claim for privilege for documents created after 15 december 2004 held: legal professional privilege |
The Court below dismissed an application by the appellant for judicial review of a decision of the Refugee Review Tribunal. The Tribunal had affirmed a decision of a delegate of the respondent Minister not to grant the appellant a protection visa. 2 The appellant, who is a citizen of Bangladesh, claimed to have a genuine fear of persecution if returned to Bangladesh in the reasonably foreseeable future on account of his political opinion and his relationship, as a Muslim, with a Hindu woman. It is only his fear of persecution on account of his political opinion that is an issue of current relevance on appeal. 3 The appellant claimed to have been active in the Bangladeshi National Party ('BNP') and that he had been targeted by members of the Awami League. The Tribunal observed that the situation in Bangladesh had changed significantly since the appellant left there in 1997. It noted that the BNP had been the majority party in the governing coalition since October 2001. It did not accept that there is any current threat of harm from persons who opposed the appellant before his departure from Bangladesh. It said that as the Awami League is not in government, it was unable to influence authorities to not protect the appellant. It found that the appellant is not at risk of harm on account of his political activities prior to 1997. 4 The appellant lodged his application for review of the decision of the delegate on 28 June 2001. On 21 January 2003, the appellant submitted a letter from his lawyer in Bangladesh to a hearing before a Tribunal ('original Tribunal'), differently constituted than the Tribunal the subject of these reasons ('current Tribunal'). The file before the original Tribunal was before the current Tribunal. In its reasons for decision, the current Tribunal said the following about the letter: 'On 21 January 2003, the appellant submitted a letter from a Member of Parliament, the applicant's Bangladeshi lawyer and further press reports on deployment of armed forces in Bangladesh' (emphasis added). 5 Counsel for the appellant acknowledged that the date of the letter was difficult to read but contended that it bore an October 2002 date. The letter advises the appellant not to return to Bangladesh as 'local police and military forces' were searching for him in order to arrest him. 6 The current Tribunal made no further reference to the letter in its decision. It observed that the appellant had been absent from Bangladesh for over eight years. It considered his claim that political opponents would harm him to be 'based on speculation' and it did not accept 'that there is any current threat of harm from persons who had opposed [the appellant] before his departure'. 7 Counsel for the appellant contends that the lawyer's letter was evidence that the current Tribunal was bound to take into consideration in coming to its decision. He conceded that the current Tribunal was not obliged to refer to every item of evidence before it (see Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 and Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 at [46] (' Applicant WAEE' )). He nevertheless contended it was obliged to do so in the circumstances of this case. That was because, so the argument ran, the letter showed a risk to the appellant's well-being even after the change of government. 8 I agree with counsel for the Minister that it is not clear that that letter was not taken into account. Considering the reasons for decision of the current Tribunal beneficially, it appears that the letter was not specifically adverted to by the current Tribunal, having regard to its strong finding about a lack of danger to the appellant given his long absence from Bangladesh. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. 9 The last sentence in the quote from Applicant WAEE in the preceding paragraph is particularly relevant to the current issue. The current Tribunal made strong findings rejecting any consideration of a future politically-based threat due to the passage of time. Inferentially, it rejected the thrust of the letter. 10 Even if the current Tribunal did not take into account the lawyer's letter, the letter was not a document of such significance that the current Tribunal was bound to take it into account in coming to its decision as it went against the other material on the question of the likelihood of a threat to the appellant on political grounds, including country information (see Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40 ; (1986-87) 162 CLR 24 at 40). Alternatively, it may be said that any failure to take the letter into account was not the ignoring of relevant material in a way 'that affects the exercise of power' (see Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at [82] per McHugh, Gummow and Hayne JJ). 11 On proper analysis of the appellant's first point, no jurisdictional error has been demonstrated to have been made by the current Tribunal. 12 Counsel for the appellant sought leave to raise a new ground, not covered by the notice of appeal and not raised in the Court below. I refused leave to raise that ground after hearing from counsel for the appellant. I did not wish to trouble counsel for the respondent on a ground about which he had little notice, being a ground which had no prospect of success. 13 Counsel for the appellant wished to contend that the current Tribunal made a jurisdictional error by not considering the possibility that the Awami League might be re-elected in the future. This issue is answered by the current Tribunal's strong finding that, given the appellant's long absence from Bangladesh, he is not at risk of persecution from former political opponents. The current Tribunal was not obliged to engage in speculation about the outcome of future elections. 14 It was for the above reasons that I refused leave for the second argument to be raised. 15 The appeal is dismissed. | application for protection visa refused decision affirmed by refugee review tribunal appeal to federal magistrates court dismissed appeal whether jurisdictional error whether failure to take into account relevant evidence appeal dismissed migration |
Pursuant to s 25(1A) of the Act, the Chief Justice determined that the appeal be heard by a single judge. 2 On 31 January 2006, the appellant's solicitor, Mr Cheung, filed a notice that he had ceased to act for the appellant in the proceeding. When the appeal initially came on for hearing on 7 February 2006, the appellant appeared in person and sought an adjournment of two weeks on the ground that he wished to arrange for new legal representation. After hearing submissions from the appellant and the respondent, I adjourned the appeal to 13 February 2006. 3 On 13 February, the appellant was represented by Mr Baker of counsel, acting on the instructions of his former solicitor. I granted the appellant leave to file in Court a notice stating that Mr Cheung had recommenced acting as his solicitor. It is set out in some detail in two Supreme Court judgments: see Todaytech Distribution Pty Ltd v Yu [2004] VSC 246 (" Todaytech No 1 ") and Todaytech Distribution Pty Ltd v Yu [2005] VSC 313 (" Todaytech No 2 "). 5 The appellant was employed by the respondent as its Victorian State Manager. As a result of the appellant's conduct whilst employed by the respondent, the respondent commenced proceedings against the appellant in the Supreme Court of Victoria in March 2003 alleging that the appellant fraudulently misappropriated the sum of $197,153.40 from the respondent ("the Supreme Court proceedings"). 6 In default of appearance by the appellant in the Supreme Court proceedings, the respondent entered judgment against the appellant on 10 April 2003 for damages to be assessed, plus costs of $1,750. At a hearing on 24 July 2003, Master Evans assessed the respondent's damages at $205,428. 7 By summons dated 25 February 2004, the appellant sought to set aside the default judgment and the order assessing damages. He also sought leave to file and serve a defence and counterclaim. The summons came on for hearing before Master Wheeler. On 29 March 2004, Master Wheeler dismissed the summons and directed that monies held in court be paid out to the respondent in partial satisfaction of the judgment debt. 8 The appellant appealed against the orders made by Master Wheeler. The appeal came on before Redlich J as a re-hearing de novo pursuant to r 77.05 of the Supreme Court Rules . His Honour upheld the appeal: see Todaytech No 1 . In addition, Redlich J made orders setting out a timetable for the future conduct of the proceeding. Pursuant to that timetable, the appellant filed a defence and counterclaim dated 30 April 2004 ("the defence and counterclaim") claiming the sum of $593,432.22. The timetable included directions that interrogatories were to be delivered on behalf of the respondent and answered by the appellant within certain times. 9 The appellant defaulted in answering the interrogatories that were delivered for his examination. On 20 September 2004, Master Kings extended the time within which the appellant could provide answers to the interrogatories until 27 September 2004 and reserved liberty to apply. The interrogatories were not answered within the time extended by the Master. Without further leave of the Court the Defendant may not file and serve interrogatories for the examination of the Plaintiff. The Defendant file and serve answers to the Plaintiff's interrogatories 21 days from the date of service of this order. Failure by the Defendant to file and serve answers to the interrogatories in accordance with this order will result in the Defendant's defence being dismissed. There was no appearance for the appellant on the return of the summons on 5 November 2004. Master Wheeler granted judgment in favour of the respondent as a result of the appellant's non-compliance with Master Kings' order, and ordered that the appellant pay damages to the respondent fixed at $226,492, plus costs ("the 5 November judgment"). 11 On 8 November 2004, the appellant entered a plea of guilty in the County Court of Victoria to a charge of theft of money from the respondent between 15 August 2002 and 19 October 2002. A conviction was entered and the appellant was sentenced to a suspended period of imprisonment on 2 December 2004. 12 In Todaytech No 2 , Hargrave J found that the theft of money to which the appellant pleaded guilty in the County Court was, in effect, the same theft as that which was alleged to be a misappropriation in the Supreme Court proceedings. In his submissions to me, counsel for the appellant confirmed that this was the case. 13 On 22 December 2004, the respondent served a bankruptcy notice dated 3 December 2004 ("the bankruptcy notice") on the appellant. The bankruptcy notice claimed payment of a debt of $62,958.27 payable by the appellant to the respondent pursuant to the 5 November judgment, $163,533.73 having already been paid. 14 The respondent filed a creditor's petition dated 23 March 2005 ("the creditor's petition") on 8 April 2005. The creditor's petition was served on the appellant on 20 April 2005. The creditor's petition was founded upon an act of bankruptcy said to have been committed by the appellant within six months before the presentation of the petition in that the appellant had failed on or before 12 January 2005 to comply with the requirements of the bankruptcy notice. However, the further hearing of the creditor's petition was adjourned pending the outcome of further proceedings in the Supreme Court. 15 By a summons dated 6 June 2005, the appellant applied to set aside the 5 November judgment. The summons came on for hearing before Master Evans on 14 July 2005. Master Evans set aside the 5 November judgment, apparently on the basis that he considered that the 7 October orders were irregular in form, with the consequence that the 5 November judgment was also irregular. 16 The respondent appealed against the orders of Master Evans. The appeal was heard by Hargrave J. In a judgment delivered on 27 July 2005, his Honour allowed the respondent's appeal and refused the appellant's application to set aside the 5 November judgment: see Todaytech No 2 . 17 Hargrave J rejected the contention that the 7 October orders and the 5 November judgment were in some way irregular. In addition, Hargrave J held that there was no sufficient affidavit material going to the merits to establish a prima facie case to defend the proceeding. I note that, in an earlier affidavit sworn in the proceeding on 14 April 2004, the defendant deposed to a defence along the lines that he was taking the money in cash from the plaintiff pursuant to an agreement to do so; in other words, that he was authorised to take the money which is the subject of the misappropriation claim in this proceeding and which was the subject of the theft charge in the County Court. At that time, Redlich J was prepared to hold that this affidavit evidenced a prima facie defence which should be allowed to go to trial. In my view, circumstances have changed since that time. The defendant pleaded guilty to the theft charges which mirror the misappropriation claims made in this proceeding. He says he did so for practical reasons, to avoid a long trial. In my view, the plea of guilty by the defendant in the County Court can be relied upon by the plaintiff as an admission of the misappropriation which is alleged by the plaintiff in this case. I find that the defendant has not established a prima facie defence on the merits. 19 The creditor's petition came on for hearing before Hartnett FM on 1 August 2005. Her Honour reserved her decision as to whether a sequestration order should be made. 20 On 15 August 2005, the appellant made an application in the Supreme Court proceeding to amend his counterclaim. Master Evans adjourned the application sine die with liberty to apply on the basis that the decision of Hartnett FM was pending and, if a sequestration order were to be made, the appellant would have no standing to prosecute his counterclaim, but rather it would be a matter for his trustee in bankruptcy to consider. 21 On 17 August 2005, Hartnett FM made a sequestration order against the appellant. The respondent has failed to prosecute that counterclaim. Indeed, the defence to the claim was struck out in the Supreme Court and it is that defence that the respondent relies upon by way of his counterclaim. The respondent provides to the court in these proceedings no evidence deposing to the factual matters on which his counterclaim is based. He has had more than adequate opportunity since the service upon him of the bankruptcy notice. No issue of a counter-claim being one that could not have been set up in the action in which the judgment or order was obtained was raised in response to the service upon the respondent of the bankruptcy notice. Indeed a counterclaim was set up on the action or proceeding in which the judgment was obtained and such counterclaim was not prosecuted diligently or at all by the respondent. The respondent has made further application to a Master for order for payment of the debt by instalments. He deposes that he has not delayed in prosecuting the counterclaim but that the interlocutory applications in the Supreme Court and the bankruptcy proceedings in the Federal Magistrates Court have prevented him from progressing his counterclaim. If this Court determines that a sequestration order ought not be made, the appellant deposes that he will immediately seek to replead his counterclaim and prosecute it in the Supreme Court at the earliest possible opportunity. 25 In oral submissions, counsel for the appellant argued that the striking out of the appellant's defence and the entry of judgment in the Supreme Court proceedings did not affect the counterclaim. In his submission, the counterclaim was a separate proceeding which remained on foot, and the appellant did not need to make any further application to proceed with it in the Supreme Court. Counsel accepted that the appellant carried the burden of establishing that the counterclaim was a real claim against the petitioning creditor that had at least a reasonable prospect of success, but he contended that this burden could be discharged simply by looking at the terms of the pleaded counterclaim itself, and without the need for any additional affidavit evidence. The appellant's appeal does not identify any error of law. 27 Section 52(2)(b) of the Bankruptcy Act 1966 (Cth) ("the Bankruptcy Act ") provides that the creditor's petition may be dismissed if the court is satisfied by the debtor that for other sufficient cause a sequestration order ought not to be made. While the authorities make it clear that one such sufficient cause may be that the debtor has a counterclaim against the creditor, the debtor (in this case the appellant) carries the onus of proving that the counterclaim has substance. 28 The respondent submits that the appellant was given ample opportunity to provide evidence of his counterclaim to the Federal Magistrates Court and yet he failed to do so. Moreover, the appellant's defence has been dismissed by the Supreme Court, and it relied on the same matters as the appellant seeks to agitate by counterclaim. In addition, the appellant entered a plea of guilty to a charge of theft that is inconsistent with the matters alleged by way of counterclaim. For these reasons, the respondent submits that the counterclaim in its current form is without merit and doomed to fail. 29 The respondent also submitted that the fact that a sequestration order has been made against the appellant does not prevent his trustee in bankruptcy from electing to proceed with the counterclaim in accordance with ss 60(2) and 60 (3) of the Bankruptcy Act . Should the trustee decide not to proceed with the counterclaim, the appellant can request review of that decision by the Federal Magistrates Court pursuant to s 178 of the Bankruptcy Act . 31 The expression 'appeal by way of re-hearing' is used in contradistinction to the expressions 'appeal in a strict sense', and 'appeal by way of hearing de novo '. It is important to bear in mind what these expressions connote. In the case of an appeal in the strict sense, the function of the appellate court is to determine whether the decision in question was right or wrong on the evidence and the law as it stood when the decision below was given. Where an appellate tribunal can receive further evidence and its powers are not restricted to making the decision that should have been made at first instance, the appeal is usually described as an appeal by way of re-hearing. An appeal by way of hearing de novo is one in which the matter is heard afresh, and the decision is given on the evidence presented at the appellate hearing: see Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 ; (2000) 203 CLR 194 (" Coal and Allied Operations ") at 203 [12]-[13]. 32 In Coal and Allied Operations , at 203-204 [14], the High Court said that statutory provisions conferring appellate powers, even in the case of an appeal by way of re-hearing, are construed on the basis that, unless there is something to indicate otherwise, the power is to be exercised for the correction of error. A similar observation was made by the Full Court of this Court in Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833 ; (2001) 117 FCR 424 at 432-433 [21] . Thus, it has been said that this Court's appellate powers are only exercisable if the appellant can demonstrate that the orders under appeal are the result of some legal, factual or discretionary error: see Abeyesinghe at [4]. Hartnett FM was satisfied that all the affidavits necessary for the making of a sequestration order were filed. It is for the debtor to establish the existence of 'sufficient cause': Cain v Whyte [1933] HCA 6 ; (1933) 48 CLR 639 at 645-646; Ling at 24. He must establish that he has a real claim against the creditor that is likely to succeed. If the Court is satisfied that there is such a claim, and that its quantum is likely to equal or exceed the creditor's claim, it will not make a sequestration order. If the claim is likely to be less than the creditor's claim, the Court will require the debtor, if he is to avoid a sequestration order, to pay the difference between the judgment debt and the amount he is likely to recover on his claim. See Re Player (1962) 19 ABC 277 at 282; Re Schmidt; Ex parte Anglewood Pty Ltd (1968) 13 FLR 111 at 115-116; Ling at 25-26; Commonwealth Bank v McDonald [1999] FCA 984. A debtor does not establish a real claim that is likely to succeed merely by producing a statement of claim in an action against the creditor: Re Rivett; Ex parte Edward Fay Ltd (1932) 5 ABC 182; Player at 282, or by pointing to the existence of current litigation against the creditor: cf Re Douglas Griggs Engineering Ltd [1963] 1 Ch 19 at 23. While the Court does not try the cross-claim in advance, the debtor must adduce sufficient evidence to show that it is a real claim which is likely to succeed: cf Vogwell v Vogwell (1939) 11 ABC 83 at 88; Player at 282. The Plaintiff [the respondent in the appeal] is and was at all material times a corporation registered pursuant to the laws of the State of Victoria. The Defendant refers to and repeats paragraphs 6 to 46 hereof as if they were set out hereunder seriatim. 38 The appellant further alleges that in or about July 2002 he agreed with the respondent that this indebtedness could be satisfied by the appellant withdrawing money from the cash takings of the respondent's business in Victoria and that, pursuant to this agreement, the appellant withdrew the sum of $188,387.70 between July and October 2002. This allegation is inconsistent with the plea of guilty entered by the appellant to the charge of theft in the County Court. 39 As noted by Sundberg J in Helfenbaum , it is insufficient for the appellant merely to produce the counterclaim. Sufficient evidence must be adduced to show that it is a real claim which is likely to succeed. On the hearing of the appeal, counsel for the appellant did not refer me to any evidence which supported the counterclaim. Rather, counsel submitted that it was unnecessary to look beyond the allegations contained in the counterclaim. He submitted that Hartnett FM had fallen into error simply by failing to take account of, and give weight to, the allegations contained in the counterclaim. I reject these submissions. 40 In her reasons for judgment, Hartnett FM refers to an affidavit sworn 29 July 2005 in which the appellant disposed to his belief that his Supreme Court counterclaim was on foot and needed to be repleaded. Apart from this belief, Hartnett FM said that the appellant had provided no evidence to the Federal Magistrates Court deposing to the factual matters on which the counterclaim is based, despite having more than adequate opportunity of doing so. In these circumstances, it is impossible to say that Hartnett FM erred by making the sequestration order. 41 The 27 October affidavit was not in evidence before Hartnett FM, and no application was made to me for leave to rely upon fresh evidence in this appeal. However, even if regard is had to the material in this affidavit and the exhibits thereto, it does not establish that the counterclaim has a real prospect of success. On 14 April 2004, I swore an affidavit in the Supreme Court Proceedings which deposed as to circumstances relevant to my Defence and Counterclaim. Annexed hereto and marked "KY3" is a copy of my affidavit in the Supreme Court Proceeding sworn on 14 April 2004. On its face the affidavit is vague and incomplete. For instance, it makes passing reference to various other affidavits and documents. These other documents include an admission by the appellant of his indebtedness to the respondent in the sum of $260,000 that is said to be recorded in a file note that is exhibited to an affidavit that has not been produced. I was informed by Mr. Zhong that I could get paid from the cash out of cash sales when the Plaintiff did not require it for its cash-flow. 44 Hargrave J considered the affidavit of 14 April 2004 in the passage I extracted earlier in this judgment. I agree with his Honour's conclusion that the affidavit has been overtaken by the appellant's plea of guilty to the theft charge, and cannot be relied on to establish a defence on the merits. 45 The 27 October affidavit does not contain any reference to his criminal conviction, or any explanation of how his plea of guilty to the theft charge can be reconciled with the allegation in the counterclaim that the cash withdrawals were authorised by the respondent, or with the material which I have quoted from par 13 of his affidavit of 14 April 2004. 46 In all the circumstances, I am not satisfied that the counterclaim has any real prospects of success. Indeed, the matters to which I have referred, including in particular the fact that the appellant has been convicted of theft in the County Court, indicate that the prospects of success on the counterclaim are remote or non-existent. 47 Counsel for the appellant also argued that Hartnett FM made several other errors in her reasons for decision. 48 First, counsel referred to the statement by Hartnett FM in paragraph 11 of her reasons for judgment that 'the respondent was personally served with the bankruptcy notice on 22 December 2002, that being the latest at which the respondent was clearly aware of the order of Master Wheeler made 5 November 2004. ' The reference to 22 December 2002 is an obvious typographical error. In the first paragraph of her reasons for judgment, her Honour stated that the bankruptcy notice was duly served upon the respondent on 22 December 2004. Plainly, the respondent could not have become aware of Master Wheeler's order of 5 November 2004 on a date in 2002, and her Honour intended to refer to service of the bankruptcy notice on 22 December 2004. There is no substance in this point. 49 Counsel for the appellant then criticised her Honour's finding that the appellant had filed to prosecute the counterclaim. I can see no error in her Honour's finding that the appellant has not prosecuted the counterclaim. The appellant's submission was based, at least to some extent, upon a formal distinction between the defence which had been struck out, and the counterclaim which remained on foot. The submission ignores the fact that the defence contained a plea of set-off, which was resolved adversely to the appellant by the entry of judgment. But, more fundamentally, it is not possible to avoid the substance of the matter in this way. The burden fell on the appellant to demonstrate that the counterclaim was supported by hard evidence and had a real prospect of success. The appellant simply failed to do so before the Federal Magistrates Court, and has not done so before me. The appellant pay the Trustee's costs of and incidental to this appeal, such costs to be taxed in default of agreement. I do not propose to make any orders dealing with the costs of the trustee's application. There was no 'sufficient cause' for Hartnett FM to refrain from making a sequestration order. Moreover, I consider that on the material that has been placed before me, there was no sufficient cause for not making a sequestration order. 53 I note that, as the respondent pointed out, the fact that a sequestration order has been made against the appellant does not prevent his trustee in bankruptcy electing to proceed with the counterclaim in accordance with ss 60(2) and 60 (3) of the Bankruptcy Act . 54 Accordingly, I order that the appeal be dismissed with costs. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | appeal from decision of federal magistrate creditor's petition grounds for refusal of sequestration order whether set-off or cross claim sufficient cause whether real claim likely to succeed bankruptcy |
The grounds pressed in argument were, first, that the Attorney-General in granting the certificate took into account an irrelevant consideration, namely mere risk, unsubstantiated in the context of the present case, of inadvertent disclosure and, secondly, that the decision was a decision which was so unreasonable that no reasonable decision-maker could have come to it. The security assessment recommended that action be taken under the Passports Act 1938 (Cth) to cancel and prevent the re-issue of the applicant's Australian passport. The assessment was provided to the Secretary to the Department of Foreign Affairs and Trade. The Minister for Foreign Affairs and Trade directed that the applicant's passport be cancelled and prevented its re-issue on 4 December 2003 and he was advised of that on 9 December 2003. On 19 December 2003 the applicant lodged an application in the Tribunal which challenged the adverse security assessment issued by the Director General of Security ('the Director General') and the decision of the Minister for Foreign Affairs and Trade who cancelled his passport. 3 The first challenge is to be heard and determined by the Security Appeals division of the Tribunal pursuant to section 39A of the Act. The second is to be heard and determined by the general division of the Tribunal. As I understand it, both challenges are to be heard concurrently in the Tribunal. During the processes within the Tribunal an earlier certificate by the Attorney-General under the same provisions had been issued but in December 2004 the solicitor for the applicant was invited to comment on a number of matters so that the Attorney-General might reconsider the issue of the earlier certificate at least so far as it affected the solicitor for the applicant, Mr Hopper. 4 Mr Hopper has been granted a security classification entitling him access to information that is classified to the secret level within the Australian security arrangements, although it is only in respect of such documents to that level as those in control of them within the executive choose to show him. There is no suggestion made in these proceedings that challenges Mr Hopper's integrity or the evidence which he has given as to attempts he would make to keep confidential and abide by any decisions or directions under legislation for the keeping confidential material which might be disclosed to him pursuant to the application he made to the Attorney-General. The fact that, whatever the safeguards, your access to the certificated material is an encroachment upon its confidentiality ( Commonwealth v Northern Land Council [1993] HCA 24 ; (1992-93) 176 CLR 604 at 620). The risk of you disclosing, inadvertently or otherwise, sensitive ASIO information to your client, one of your other clients, or another person. You have represented, or currently represent, a number of members of the Islamic community in Sydney who have been the subject of investigation by ASIO. In the present case, some of the documents refer to other individuals who are also current or former clients of yours. The risk of inadvertent disclosure is increased because it may not be self-evident to you that asking a particular (apparently benign) question of your client or other persons, could reveal to your client or the other person(s) some aspect of the certificated material. The risk of inadvertent disclosure of national security information has been recognised by Courts without reflecting in any way upon the integrity of the particular legal representative. The risk may increase with the volume of material, the complexity and protractedness of the legal proceedings and the passage of time. Once the certificated material became part of your general knowledge it may be difficult for you to recall its source and ensure non-disclosure. The potentially serious consequences if such disclosure occurred. Disclosure of the certificated information (and related submissions) would also result in the disclosure to others of ASIO's modus operandi and ongoing investigations. The ongoing maintenance of confidentiality of ASIO sources of information and modus operandi is essential for ASIO to carry out its functions, including ASIO's ability to provide advice to the Australian government on matters relating to security. Disclosure of modus operandi and details of ongoing investigations could alert targets and thereby enable them to take counter intelligence steps which could adversely affect ASIO's ability to gather useful and important intelligence. The extent to which your being present (when the certificated evidence is given or submissions are made) is likely to assist your client. You may be able to make submissions about such things as the likely reliability, plausibility or relevance of evidence given or submissions made that could affect the weight the Tribunal would attach to such evidence or submissions. You would not, however, be able to tell your client anything which would disclose certificated evidence or related submissions. This prohibition may well mean that your client will not be able to adduce any responsive evidence. We are obliged for the opportunity to address the concerns raised by the Attorney General in relation to certificated material. Nonetheless, the immunity sought by the Attorney General is subject to a competing interest being the proper administration of justice. This administrative decision has been made on the basis of this adverse security assessment. For our client to obtain even the basic level of procedural fairness and natural justice it is imperative that the writer, who holds the appropriate security clearance, be permitted access to certified material and be permitted to make submissions to the Tribunal at in camera hearings. The writer acknowledges that he has represented a number of clients subject to ASIO investigations in the past and currently. The writer represents 3 clients in "passport cases" and one in a civil litigation. The writer further represents another client held in Guantanamo Bay but has not communicated with this client. These clients instructed the writer that they understood this and had no objections if such were the case. The writer understands the importance of retaining a clear knowledge of the source of information related to national security as a strategy to prevent inadvertent disclosure. This has to be advantageous to a situation where numerous persons had separate representatives. A significant possibility would exist that the writer would be struck off the role of solicitors if a deliberate or negligent disclosure of certified information was made. The writer acknowledges that disclosure of sources of information, being persons, documents or devices, would seriously prejudice the operations of ASIO and the interests of national security. The writer undertakes not to disclose sources of information of ASIO and to employ the highest degree of prudence to ensure that no inadvertent disclosure occurs. The writer undertakes not to disclose any information obtained from certified information regarding the modus operandi of ASIO and details about ongoing operations to any person or client. It is the writer's role to represent clients legally and not assist them in activities that may be detrimental to the national security or to otherwise offend the laws of Australia. As such the writer undertakes not to deliberately disclose certified information and employ the highest degree of prudence to avoid inadvertent disclosure of such information. Furthermore, the writer has a significant understanding of the client's mindset, social background, culture and his philosophy toward Islam. This information may well assist our client in relation to any analysis of his comments by ASIO or others. This is significant in the circumstances as the client cannot be present and is up against a well resourced Government that has taken action to restrict his right to international travel based on serious allegations that have criminal undertones. This has involved providing advice to numerous clients, instigating court and tribunal proceedings and public comment. The writer is one of the few non-government lawyers who has obtained a security clearance that is at the appropriate level to have access to certified material. That of the public interest to maintain national security, over that of the proper administration of justice. Given the resources of the Government and the fact that our client is not permitted access to certified information or in camera proceedings the interest of the proper administration of justice is superior. This is buttressed by the writers exposure to national security matters and the acute awareness of the sensitivities of restricted information and the consequences that would flow from its disclosure. The writer further undertakes to employ the highest degree of prudence to prevent inadvertent disclosure of certified information. The Attorney-General relied on affidavits dated 17 August 2005 an 7 February 2005 by a legal officer of the Australian Security Intelligence Organisation ('ASIO') whose name has not been revealed in open court for reasons set out in those affidavits. I direct under section 50 of the Federal Court of Australia Act 1976 (Cth) that the name of the officer or any material capable of identifying him not be disclosed without leave of a judge of the court. 11 The material in the affidavits provided by the unnamed officer includes redacted electronic copies of the submissions which were before the Attorney-General and noted by him on the occasions on which he came to consider the issue of the earlier certificate and the certificate the subject of these proceedings dated 19 April 2005. 13 In essence, the material that was put to the Attorney-General by the Director-General asserted that, without any challenge to Mr Hopper's integrity or willingness to abide by his obligations under his security classification, there was a real risk of inadvertent disclosure by him. Among other reasons given as to why that may happen was the fact that Mr Hopper not only acted for the present applicant but had acted in the past and continues to act at present for other persons who are of interest to Australia's security services and to whom inadvertent disclosure may be, in effect, meaningful. 14 The argument before me has tended to centre on the provisions of section 39A subsections (8) and (9), particularly because it is in those provisions that some exception to the blanket effect of a certificate can be made if the Attorney-General is prepared to consent to a person representing an applicant before the Tribunal being present when evidence is adduced or submissions made that are the subject of the certificate. However, each part of the statute must be construed separately, although the court will try to give an harmonious meaning to it as a whole: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at pp. 381-382 [69]-[71] and 384 [78]. 15 Critically, each of the three empowering provisions authorises the Attorney-General to certify in writing that the disclosure of information concerning a specified matter or the disclosure of any matter contained in a document will be contrary to the public interest by reason that it would prejudice the security of Australia. Each provision then provides consequences as to the effect of the certificate when so given. 16 The courts have a duty to view governmental secrets through different spectacles to those with which they would view private information: Esso Australia Resources Ltd v Plowman [1995] HCA 19 ; (1995) 183 CLR 10 at p. 31 per Mason CJ. However, courts are naturally cautious in construing legislation which has the effect of interfering with what might be regarded as ordinary civil rights of citizens or dealing with other fundamental common law concepts. Thus, provisions will be construed so as to preserve those rights unless such interference is shown to be strictly required by clear words or as a matter of necessary implication: Wentworth v New South Wales Bar Association [1992] HCA 24 ; (1992) 176 CLR 239 at p. 252 per Deane, Dawson, Toohey and Gaudron JJ. 18 I am mindful that the context in which the certificate is authorised to be issued in the form it was under the Act occurs in circumstances where, first, a person's civil liberties and other civil rights may be substantially impacted upon and, secondly, those liberties and rights are the subject of the proceedings before the Tribunal. 19 The question, however, that Parliament has confided to the Attorney-General under each of sections 36, 39A and 39B is the formation of a judgment of a Minister of the Crown that disclosure of particular information would prejudice the security of Australia. Necessarily, considerations which are present to the mind of the member of the Executive of the Commonwealth at ministerial level to whom that responsibility is confided are difficult to judge of in a forensic contest, particularly where an issue of public interest immunity or matter of state immunity arises. 20 The issue to which the Attorney-General's or Minister's attention must be directed is his or her certification that disclosure would be contrary to the public interest by reason that it would prejudice the security of Australia. It is put that, therefore, the Attorney-General's decision to grant the certificate took into account a consideration not authorised by law which renders the decision invalid. IS AN UNSUBSTANTIATED OR SPECULATIVE RISK RELEVANT? There are cases in the books in which this has happened. One very well known example is Attorney General v Leveller Magazine Limited [1979] AC 440 in which a Colonel in the MI5 gave evidence under a pseudonym and in circumstances where it was intended that his identity not be revealed. But, by setting out his own circumstances and qualifications in giving his evidence in open court other persons were able, outside the court, to put two and two together and, as Lord Russell of Killowen colourfully said: ' [t]he gaff was already blown by the deposition ' ([1979] AC 440 at p. 468 F-G). In effect, the cat was out of the bag. 23 Once that occurs by, in effect, persons putting two and two together the damage is done and cannot be undone. In circumstances where the security of the nation has been confided by statute to a Minister of the Crown who forms a view that there is a risk to security by a revelation of information, I do not consider that it is an irrelevant consideration for the Minister to have regard to an assessment of risk, even of remote risk, in circumstances where the person who is applying, as in this case, to have information revealed to him or her could be put into the position where, inadvertently and through no design of his or her own, he or she will unconsciously reveal something of importance which may be of no meaning to him or her. In Jackson v Wells (1985) 5 FCR 296 at pp. I gave this submission anxious consideration. It was a course apparently considered by the High Court in Alister [v The Queen [1983] HCA 45 ; (1984) 154 CLR 404] , although ultimately not adopted. As I have indicated, I would have welcomed the assistance of counsel upon the content of the documents. The applicants would, no doubt, have felt more satisfied that the documents were rigorously examined by the court if their counsel had been given the opportunity to take the court through the documents. But, in the end, I rejected the proposal. It involves a number of problems. Without reflecting in any way upon the integrity of any counsel or solicitor, difficulties are likely to arise where counsel appearing in, and advising their clients in respect of, protracted and complex proceedings acquire information which they are not free to use or to pass on to their clients. During the heat of battle an unwitting disclosure may occur. Frank and full advice becomes impossible. I am aware of cases in which, for reasons such as these, experienced counsel have declined to receive information which they are not free to share with their clients. It seems to me merely commonsense to conclude that the fewer people who have access to confidential information the less is the risk of unauthorised disclosure. Weighing the assistance likely to be obtained from counsels submissions against the sensitivity of the material, it seemed better not to accede to Mr Roberts' suggestion. Experience in forensic contests in which it is sought to reveal, even under conditions of strict confidentiality, limited material to one or more legal advisers or representatives of a party, while excluding those persons from communicating with others in the same interest, can create great difficulties for the adviser. It is even harder where that information is communicated to a person such as Mr Hopper who, accepting the highest ideals of the legal profession to act for those who need assistance, act for other persons who are in a similar situation of potential, perceived, or real, risk to security or in litigation involving the question of whether or not their security classifications or other civil rights have been affected by decisions taken in the interests of national security: cp: Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 222 ALR 411 at pp. 415-416 [15] and 417 [19]. 25 Some of the obvious difficulties which can be created for legal advisers or others in such situations were adverted to in an interlocutory judgment given by McLelland CJ in Eq, in Telstra Corporation Limited v Australis Media Holdings Limited (unreported, Supreme Court of New South Wales, 3 December 1996). This was a point forcefully made by Hayne JA in the Mobile Oil Australia case where, at p 87, his Honour said: "Once the documents are inspected by the principals of the trade rival the information which is revealed is known to the trade rival and cannot be forgotten. Confidentiality is destroyed once and for all (at least so far as the particular trade rival is concerned). To say that the trade rival is bound not to use the documents except for the purposes of the action concerned is, in a case such as this, to impose upon that trade rival an obligation that is impossible of performance by him and impossible of enforcement by the party whose secrets have been revealed. How is the trade rival to forget what internal rate of return the competitor seeks to achieve on a new investment of the kind in question? How is the party whose hurdle rate has been revealed to know whether the rival has used the information in framing a tender? Thus, if the trade rival may inspect the documents concerned, the confidentiality of the information in them is at once destroyed. Is that necessary for the attainment of justice in the particular case? For reasons of this kind in some classes of cases it may sometimes be appropriate to confine disclosure of particular documents to nominated individuals associated with the parties to which disclosure is to be made who have given undertakings to the Court and to the disclosing party, not only restricting the use to which information in the documents may be put, but restricting the future activities of those individuals in representing or advising, or in participating in decision making for, those parties, at least for some specified period of time. Such a procedure, however, has its own disadvantages discussed in the cases including the quarantining of the individual to whom the poisoned chalice passes, from providing their services in particular areas and depriving the parties of the benefit of those services, and also creating a situation where agents of a principal are in that capacity put in possession of information, from access to which the principal is excluded. The subject matter, scope and purpose of each of sections 36, 39A and 39B indicate that the Minister has an unconfined discretion to have regard to what he, as a high officer of the Executive, considers is in the public interest and may prejudice the security of Australia: Minister for Aboriginal Affairs v Peko Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at p. 40 per Mason J; Reg v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [1979] HCA 62 ; (1979) 144 CLR 45 at pp. 49-50. 27 I am of opinion that one cannot read any of those sections in a way which confines the considerations which the Minister is able to take into account in forming a view as to whether or not a certificate should be issued only to considerations that are able to be substantiated in relation to risk. This is particularly so where what is being looked at in the sections is the disclosure of, in effect, information and the ability to safeguard the spread of information which up to the time of the grant of the certificate has been regarded as confidential for, what are not challenged in these proceedings to be, good reasons. 28 In coming to the conclusion which he did, the Attorney-General was asked to consider whether Mr Hopper should be permitted under section 39A(9)(b) to be present in the Tribunal when evidence was adduced or submissions made which were the subject of the certificate. The Attorney-General did not give his consent. Again, it is said that because of his having had regard to the consideration of the potential, but an unintended, risk of Mr Hopper revealing information, the Attorney-General erred in law. I do not consider that he did so. It was said by counsel for the applicant that the ASIO submission made to the Attorney-General on 21 February 2005 questioned, without a substantive basis, the extent to which, if Mr Hopper were present when the certificated evidence was given or submissions were made, he would be likely to assist the applicant. Mr Hopper would not, however, be able to tell his client anything which would disclose certificated evidence or related submissions. This prohibition may well mean that Mr Hopper's client will not be able to adduce any responsive evidence. I think that in essence the passage may capture, in part, the operation of section 39A(9)(b) and the consequence provided in subsection 39A(10). That is to say, if Mr Hopper were present while the confidential material were adduced before the Tribunal, he would not, by force of section 39A(10), be able to reveal any of the material that he so gleaned or learned of to his client. Moreover, it would put Mr Hopper into an invidious position at that time for he may then know his client has a perfectly good answer to some of the material, but he would not be free, directly or indirectly, to disclose that answer. 30 It was then submitted by counsel for the applicant that such a result would inevitably lead in every case to a situation in which consent could never be given. I am not sure that that has validity, but it is necessary to consider the facts of the present case. There may well be cases where, for example, the Attorney-General forms a view as to the prejudice of a particular person having access but where he might form a different view as to the prejudice resulting from another person having access for the purposes of assessing prejudice to security under each of the three sections authorising the issue of certificates. 31 For these reasons, I am of opinion that the ground that the risk of inadvertent disclosure, albeit unsubstantiated by evidence or tendency evidence on the part of Mr Hopper, was not an irrelevant consideration going to vitiate the issue of the certificates. WAS THE DECISION UNREASONABLE? The submission was introduced with the words that counsel had difficulty in making it. I have difficulty in accepting it. 33 In my opinion, the material reveals a perfectly rational basis on which the issue of the certificate was approached. Other minds may have approached it differently and rationally, but it is not the function of the court to interfere unless it can be seen that there is some reason to say that the decision-maker in effect behaved in an irrational way or in a way that was not authorised by law. In my opinion there is no substance in this ground and I reject it. In my opinion the ordinary rule of litigation should apply in this case. | national security review of decision to issue certificate under sections 36 , 39a and 39b of the administrative appeals tribunal act 1975 (cth) where legal representative sought access to evidence adduced by asio officers whether risk of inadvertent disclosure an irrelevant consideration by decision maker where risk of disclosure is unsubstantiated or speculative whether decision was a decision which was so unreasonable that no reasonable decision maker could come to it administrative law |
2 The applicant filed an application for an order nisi in the High Court of Australia on 29 May 2003 requesting the respondents to show cause why constitutional writs should not be issued in respect of the decision of the Tribunal. The applicant supported his application for an order nisi by an affidavit sworn on 29 May 2003. 3 The application was remitted to this Court pursuant to orders made by Gaudron J, as varied by McHugh J, following the delivery of judgment in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 190 ALR 601 (" Muin" ). 4 By letter dated 12 November 2004, the District Registrar of this Court notified the applicant that the Court proposed to consider whether there was an arguable case on the basis of the written material that the applicant had given to the Court and without any oral hearing. The applicant was invited to file written submissions on the question of whether the Court should make an order nisi and, on 8 December 2004, he did so. 5 I propose to deal with this application on the papers. He claims a well-founded fear of persecution on political grounds if returned to India because of his involvement with Sikh organisations. The applicant says that, as a result of his political opinions, he was detained and tortured by the police in 1994 and he fears he will again be hunted by the police if returned to India. 7 The Tribunal accepted that the applicant was detained and mistreated by the police. However, the Tribunal found it implausible that the Indian police would have maintained a continuing interest in the applicant to such an extent that he could be considered a high profile militant in danger of detention and persecution if returned to India. The Tribunal said that the applicant had none of the characteristics of a high profile militant, as he did not hold office in a Sikh organisation and had only helped to transmit messages and shelter militants. The Tribunal noted that the applicant had lived in Calcutta for three years without being detained or questioned and was issued with a passport by the authorities and departed India legally. The Tribunal was not satisfied as to the veracity of the applicant's claims that his father was murdered by the authorities in India. 8 The Tribunal said that the submissions made by the applicant and his representative did not accord with independent evidence to the effect that the level of police harassment has declined significantly and that, since the election to government of the Sikh Akali Dal Party in February 1997, police are being disciplined for human rights abuses in the Punjab. The applicant relies on the High Court's decision in Muin . The High Court in Muin held that the plaintiff was denied procedural fairness in circumstances where the plaintiff relied on a misrepresentation that the Tribunal would have regard to the delegate's Part B documents before making its decision (see Gaudron J at [63]; Gummow J at [171]; Kirby J at [201]; Hayne J at [257] and Callinan J at [309]). 10 In his written submissions, the applicant asserts that he was denied natural justice in the processing of his review application by the Tribunal. The applicant claims that the Tribunal did not have before it, and therefore did not consider, country information referred to in Part B of the Ministerial delegate's decision. The applicant says that he was misled by three letters sent to him by the Tribunal into believing that the Tribunal had been forwarded, and had considered, all the papers relevant to his application. The applicant first refers to a letter from the Tribunal dated 30 May 1997, which states that the Tribunal has requested that the Department forward to it a copy of any documents held by the Department that are relevant to the applicant's case. The applicant then refers to a letter from the Tribunal dated 14 April 1998, which states that the Tribunal has looked at all the material relating to the application. The applicant finally refers to a letter from the Tribunal dated 30 May 1997, which states that the applicant should not send any documents or written arguments to the Tribunal that have already been given to the Tribunal or the Department. 11 The applicant claims that had he not been misled by the Tribunal, he would have taken steps to draw to the Tribunal's attention the Part B documentation that was favourable to his case. In particular, he would have sought advice about how to get copies of the documents from the Department, drafted his written submissions differently, provided further written submissions and included additional documents in the material provided to the Tribunal. In an affidavit sworn on 8 December 2004, the applicant says that he would have also conducted searches on the internet for additional information that supported his case, attempted to find supporting material from other sources and mediums and contacted his family in India to ask them for letters of support or statutory declarations explaining the situation in India and his situation in particular. 12 The applicant claims that the Tribunal did not have before it, and did not consider, all of the Part B documents. This claim is based on the absence of any reference in the decision of the Tribunal to three of the six Part B documents referred to in the decision of the delegate ("the three Part B documents"). There is evidence that the Tribunal had access to relevant documents because, in its decision, it discussed the other three Part B documents that were referred to in the decision of the Ministerial delegate. There is no general obligation on the Tribunal to expressly refer to every document placed before it. 14 Even if it is assumed that the three Part B documents were not forwarded to the Tribunal, there is no basis put forward which suggests that these documents would have made a difference to the outcome reached by the Tribunal. 15 In his written submissions, the applicant says that the three Part B documents contain statements that are favourable to his case. No particulars of the favourable statements are provided in these submissions. Many of these abuses are generated by intense social tensions, violent secessionist movements and the authorities' attempts to repress them, and deficient police methods and training. Many such persons were tortured. As a result, there are hundreds of unsolved disappearances in which relatives claim an individual was taken into police custody and never heard from again. Police usually deny these claims, countering that there are no records of arrest. In other instances, they torture detainees to extort money and sometimes as a summary punishment. In its decision, the Tribunal agreed that the early part of the 1990s was one of the bloodiest chapters in India's post-independence history and that extensive human rights abuses took place in Punjab at the height of the separatist movement. The Tribunal was prepared to accept that in 1994, the applicant - like thousands of Sikh youths at a time of severe repression by the Indian authorities of Sikh militancy - was detained and mistreated. Therefore, the extracts from the DFAT Country Profile would not have made any difference to the decision of the Tribunal. 18 The applicant does not provide any particulars, in either his written submissions or his affidavits, of what statements in the 1995 Country Reports or 1996 Country Reports are favourable to his case and would have made a difference to the decision of the Tribunal. However, it is clear from an analysis of the Tribunal's findings that these documents could not have made a difference to the decision of the Tribunal. 19 The Tribunal's determination that the applicant did not have a well-founded fear of persecution if returned to India was based on its findings that the applicant was not a high-profile militant in danger of arrest and detention, that the applicant had lived in Calcutta for three years without being arrested or questioned and that the level of police harassment had declined since the election of the Sikh Akali Dal Party to government in the Punjab in February 1997. 20 In support of its finding that the level of police harassment in the Punjab had declined since February 1997 and police were now being disciplined for human rights abuses, the Tribunal referred to independent country information, including the US Department of State's Report on Human Rights in India published in 1997. The 1995 and 1996 Country Reports would not have affected the Tribunal's finding on this point, as these documents related to the situation in India prior to the election in February 1997. The Tribunal discussed the submissions made by the applicant's representative to the effect that serious human rights abuses by the security forces still exist in India, even if the pattern of disappearances is at an end. The Tribunal also noted the representative's statements and that the climate of impunity for Punjab police offices has been deeply ingrained over many years and it will take a long time for the police to become a disciplined force with regard to citizens. The Tribunal recognised that the applicant's representative had referred in support of these submissions to a paper of the Documentation, Information and Research Branch of the Immigration and Refugee Board entitled India: Information from four specialists on the Punjab and published in Ottawa in February 1997 as well as a report from United Press International dated 29 January 1996. In its discussion of the independent country information, the Tribunal extracted a passage from the first of these documents to the effect that people who are not high profile militant suspects are not at risk from the police in the Punjab today. 21 On the material before me, the applicant has not made out an arguable case that the Tribunal committed jurisdictional error. 22 The application for an order nisi should therefore 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 Tamberlin. | ministerial delegate refused protection visa to applicant decision affirmed by refugee review tribunal application for order nisi denial of natural justice claim that refugee review tribunal did not have before it, and did not consider, the part b documents referred to by the delegate migration |
He arrived in Australia on 6 September 2004. He applied on 13 October 2004 for a protection (class XA) visa. On 16 November 2004 a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs refused to grant a protection visa. On 7 December 2004 the appellant applied to the Refugee Review Tribunal ('the RRT') for review of the delegate's decision. On 5 April 2005 the RRT handed down a decision signed on 8 March 2005, affirming the delegate's decision not to grant a protection visa. The appellant applied for judicial review of the decision of the RRT to the Federal Magistrates Court. On 15 December 2006 Turner FM dismissed the application for judicial review. An appeal against Turner FM's judgment was filed in this Court on 22 December 2006. 2 At the hearing of the appeal the appellant was unrepresented. He had filed no written submissions. His only response to my invitation to say anything further about his appeal was that he wished his case to be reconsidered. 3 The grounds of appeal are very similar to other matters recently before me. They lack any specific identification of error in the judgment appealed against or jurisdictional error in the decision of the RRT. Rather, they advance a confusing miscellany of assertion and references to cases (one of them non-existent so far as I can see --- AGDB v Minister for Immigration and Multicultural Affairs ). The Single judge of the Federal Magistrate Court in his Honours judgment delivered on the 15 December 2006 failed to find error of law, jurisdictional error procedural fairness and relief under section 39B of the judiciary Act 1903. I will provide more ground after received the judgment. The grounds and relief is very similar with a recent Federal Court judgment ---SZCBB v Minister for Immigration and Multicultural and Indigenous Affairs. Tribunal made his decision in bad faith. I was prosecuted because of my religious believe . I had been targeted by Hindu fundamentalist. It was very difficult time for me, Hindu militants would pursue me no matter where else I might go in India. The FM erred in failing to find that the Tribunal erred in law under section 476, section 426 and Migration Act 1958 . The FM in his honour judgement delivered on 15December 2006 failed to find the error of law and relief under section 39b of the judiciary Act. My point is that despite having attended the hearing, it became imperative that, before the Tribunal made up its mind to dismiss the application, such in information was required to be sent to me in written to make comments, in order to fully compliance of section 424A as decided by the majority Judge of the High Court in SAAP. In my view it is not the function of this Court to strive to make sense out of such a generalised series of grounds. One might just as well allege jurisdictional error without further particularisation and leave it to the Court to find for itself a basis for the appeal. 5 Nevertheless, the appellant is unrepresented, and while such assistance as he and others have received is not of much use to the Court I will endeavour to make some sense of his appeal. 6 First, I see no error in the statement of the test distilled and stated by the RRT in its discussion of the elements to be established to satisfy the definition of 'refugee' under the Refugees Convention and Refugees Protocol and hence be a person to whom Australia has protection obligations. To satisfy the criteria for the grant of a protection visa the appellant must be outside his country, have a well-founded fear of persecution for one of the reasons set out in the Convention definition (race, religion, nationality, membership of a particular social group or political opinion) and be unable, or unwilling because of his fear, to avail himself of the protection of his country. He had married in 1990 and had two children. Triplicane was riot-prone, and Hindu fanatics and fundamentalists, such as the BJP and RSS, constantly threatened the lives of Moslems and Christians. Minorities could not voice their grievances. Anyone with a Moslem appearance was robbed and beaten by thugs. Moslems were particularly at risk on annual Hindu religious days. He claimed to be a typical victim of Hindu fanatics in Chennai. If he had not left India he could have been killed by fanatics in Chennai. As he was good at business, there were also Hindu business rivals who were keen to see his business close "for their upliftment" - these people joined hands with fundamentalists and fanatics to foment trouble in his personal and professional life. They asked him his name, and questioned him about the quality of his tea and other "irrelevant questions". He believed that these were coercive methods of Hindu fanatics. He and his friends left the beach. He told his friends that these were methods used by Hindu fundamentalists to create "fear psychosis" in him. He was injured and robbed of money and jewellery. Most refused, and complained to the police and sympathetic politicians. The extorters developed a grudge against those who complained, and one day some of his friends were beaten up, and were told that he would be killed if he was caught. However, his wife was threatened in Chennai. His son became ill but she was too frightened to leave the house and take him to a hospital. His son died. The families blamed the applicant for this tragedy. The Babri mosque was demolished at this time [6 December 1992], and Hindus attacked Moslems everywhere. He was living in a Hindu area so had to flee Mumbai at this point. He then moved to Delhi to find work, without success because of the general tension, then with a friend started a rice export business from Bhuvaneswar in Orissa state. In April 1993 he visited his wife in Chennai as she had given birth to their daughter, then he returned to Orissa, where his business was going very well. However they came there and the family escaped. The applicant reported this to the police, who said they could take no action "as the people involved were not identified properly". The applicant believed that the assailants and the police were "hand in glove". A few days later he and others intervened to protect a Moslem being attacked by a Hindu. A person entered his house and told him that if he disclosed anything to anybody, or to the police, he would be killed. He asked his committee to help but they said they could not, so he wrote many letters to political parties, without success. His business suffered. As he and a friend approached the shop, an auto-rickshaw struck his scooter. He believed this was pre-planned. The drunken passengers stopped and manhandled them. Members of the public intervened and rescued them both, handing over one of the culprits to the police. The applicant and his friend were admitted to hospital for a day. The hospital authorities told the police, who investigated. The police arrested one of his assailants (Vasu), while the other two, expecting arrest, had got "anticipatory bail". People knocked on his door. He believed they intended to murder him. Fearing for the children's safety, his wife could not take them to school. He was warned to tell the neighbours or the police about anything. As a result, when he gave evidence in court he told the magistrate he knew nothing. He did not identify his assailant. However "wherever I went there was also some kind of disturbance or other" so he could not stay there. The BJP formed an alliance with the state-based AIADMK, the Congress Party allied with the state-based DMK. He and his friends supported the DMK. The Congress and DMK won nationally and at state level respectively [on 13 May 2004], as a result of which he received threatening phone calls. As he and others left the DMK office a gang in an auto-rickshaw followed them. The police said they could do nothing about this. He borrowed money and moved from one place to another, leaving his wife and two daughters behind. He was advised to come to Australia and did so. The RRT also spent some time summarising independent country information about religious tensions in India as a whole and in Tamil Nadu, the state where the appellant lived. 9 The RRT obviously detected that the appellant had difficulty giving his evidence. However, as such a report cannot assist in establishing precisely what difficulties the applicant has actually faced in India and the reason for them, and as these are key issues on which the Tribunal must make findings, I do not consider that such a report might offer any practical advantage to the Tribunal in performing this task. These findings were based upon independent country information. 12 Attention then turned to some more specific claims. One concerned an assault in 1998. His evidence about the circumstances in which the incident occurred has varied, but in my view it has the hallmarks of an ordinary accident leading to an assault by the inebriated passengers of the vehicle. I cannot be satisfied that it was anything more than that, and therefore am not satisfied that it was a pre-planned attack on him by Hindu extremists, whether connected with a political party or not, for any of the reasons set out in the Convention. I accept that the police charged his assailants and that, because they had threatened him after the incident, he chose not to give evidence against them. However, I accept that the applicant found this incident very distressing and that he may have interpreted it in the way he has claimed. His explanation was that Hindu nationalists did not want him to become popular. While I am satisfied that he did use part of his income to assist poor people in Triplicane, it is unclear from his account why this might have led to his being targeted by Hindu extremists, particularly as he was giving what little money he had to Hindus as well as Moslems, was not involved in proselytising and was rarely in Triplicane after 1992. Further, there is evidence of several well organised Moslem groups involved in bombings and other terrorist activities in this period in Tamil Nadu, and one would expect their members to be the target of Hindu extremist retaliation, rather than the applicant. In any case, although at one point he gave evidence that he had been giving away his savings until he left India for Australia, he also said at another stage at the Tribunal hearing that he had not done any charitable activities at all since 1998. It appears to me that he was being more precise in his latter response, and I propose to rely on it. Taking all the above factors into account, it appears highly unlikely, and I am not satisfied, that anyone might have wished to harm him in subsequent years for a reason arising from his having been involved in charitable activities in the past. He claimed to have travelled around Tamil Nadu for some three months with DMK supporters in the lead up to the election (which I am satisfied was held in May 2004). 1 have considerable difficulty believing this claim, for a number of reasons - firstly because he did not mention it early in the hearing when listing where he was residing over the years in India (instead claiming to have been in hiding in other parts of the country), secondly because his participation in this campaigning activity had not been mentioned in his written account, and thirdly because it sits uncomfortably with his evidence that he was not a member of any political party in India. However, he has stated that he had difficulties with his longer term memory and it may be that he has had some involvement with this party, which is now the ruling party in Tamil Nadu. As to whether he was being threatened in the lead up to his departure from India in 2004 as a result of these political activities, that is inconsistent with his evidence that he was "small fry", and it is also very difficult to accept that anyone from Chennai could have located him in order to make such threats, given his evidence that he was moving from one city to another, or indeed that they might have bothered to do so. Therefore, while I am satisfied that the applicant was fearful of being harmed by Hindu extremists or Hindu supporters of another political party, I do not consider that that fear was well-founded before his departure from India. However, if I am wrong on this point, I am satisfied for the following reasons that the chance of his being harmed for a Convention reason elsewhere in India is remote. He considered himself to be in hiding, and was prompted to move whenever he "felt fear" or saw "suspicious persons". However he does not claim to have been threatened or harmed by Hindu extremists or anyone else outside the Chennai area of Tamil Nadu during the ten years prior to his departure for Australia. That is consistent with his evidence that he was "small fry" in terms of his political profile even in Chennai. Local Hindu extremists in his district in Tamil Nadu would appear to have neither the means nor the desire to locate him elsewhere. I am not satisfied that he was at risk of politically-motivated harm outside the Chennai area in the lead up to his departure from India in 2004. Despite incidents of violence and discrimination during 2003/4, relations between various religious groups in India generally were amicable last year among the substantial majority of citizens. Therefore, while I am satisfied that he was fearful of being harmed anywhere in India by Hindu extremists or Hindu supporters of another political party, I find that that fear was not well-founded. It is a large and populous country. As to whether it would be reasonable to expect him to relocate, I rely on the following. Firstly, according to his own claims he has traveled extensively around India, speaks some English and Hindi (both of which are spoken widely) and is confident that there are Tamil-speaking communities in other parts of India. Secondly, there are no official restrictions on moving from one state to another there (U.K. Home Office, Country Assessment: India, October 2001), and no local police checks on new arrivals (U.K. Home Office 2001). Thirdly, there are large Moslem communities in several states in India. Fourthly, he appears to have the qualities necessary to enable him to relocate. He willingly moved to Australia, a country in which he neither spoke the language fluently nor had any friends or relatives. However for the above reasons I am satisfied, and find, that it would be reasonable for the applicant to relocate within India and that, if he did so, his fear of Convention-related persecution would not be well-founded. 18 The grounds of his application for judicial review before the Federal Magistrates Court, were expressed, although differently, with no greater particularity than the grounds in his Notice of Appeal. I was attack by RSS & BJP in India. Now BJP & RSS ACTIVISTS are very strong. 20 Turner FM had no difficulty rejecting the grounds in the application for judicial review. They largely alleged a lack of procedural fairness or a failure to give proper consideration to the case and were without any apparent substance. 21 The matters raised by the amended application were also rejected. None of them was developed further by the appellant. It does not appear that any particular focus was placed on the relocation issue. 22 Examination of the question whether relocation would be reasonable is related to the broader question of whether a fear of persecution is well-founded. The latter question must be assessed by reference to the protective capacity of the country of nationality as a whole and not merely a part, or parts, of it. The focus of the Convention definition is not upon the protection that the country of nationality might be able to provide in some particular region, but upon a more general notion of protection by that country. If it were otherwise, the anomalous situation would exist that the international community would be under an obligation to provide protection outside the borders of the country of nationality even though real protection could be found within those borders. Given the humanitarian aims of the Convention this question was not to be approached in a narrow way and in her further analysis the delegate correctly went on to ask not merely whether the appellant could relocate to another area of India but whether he could reasonably be expected to do so. I should add that this seems to me to be a better way of looking at the matter than to say, as the first and last sentences of par 91 of the Handbook suggest, that the fear of persecution need not extend to the whole territory of the refugee's country of nationality if under all the circumstances it would not have been reasonable to expect a person to relocate. Once the question of relocation had been raised for the delegate's consideration she was of course obliged to give that aspect of the matter proper consideration. However, I do not consider that she was obliged to do this with the specificity urged by counsel for the appellant. I agree that it would ordinarily be quite wrong for a decision-maker faced with a relocation possibility to take the general approach that there must be a safe haven somewhere without giving the issue more specific attention, but the extent of the decision-maker's task will be largely determined by the case sought to be made out by an applicant. In the present case the applicant raised several issues, all of which were dealt with by the decision-maker. If the appellant had raised other impediments to relocation the decision-maker would have needed to consider these but having regard to the issues raised by the appellant and to the material that was before the decision-maker on the issue of relocation she was entitled to come to the conclusion that the appellant could reasonably be expected to relocate elsewhere in India. 26 In the present case the RRT gave a number of reasons for its conclusion that it was not unreasonable for the appellant to relocate. I set them out earlier in para [15]. The appellant indicated in his written and oral evidence that he moved from place to place, and in answer to questioning from the RRT indicated that he speaks some English and Hindi, and there were Tamil speaking communities in the north of India. 27 These were legitimate matters for the RRT to take into account. In addition, the RRT put to him directly the proposition that he could relocate. He was never harmed outside the Chennai area. He responded that there had been incidents all over but nothing had affected him because he kept moving around. If he stayed in one place he would have problems. Firstly, there were no restrictions on moving from one state to another in India (U.K. Home Office, Country Assessment: India, October 2001). The applicant agreed that that was correct, so long a one was not being pursued. Secondly, there were no local police checks on new arrivals (U.K. Home Office 2001). The applicant responded that police would have them under surveillance. Thirdly, I put to him that India was a huge country and it appeared local RSS members in Tamil Nadu would have no means of locating him in other states. The applicant disagreed. Fourthly, he had shown adaptability by moving to a country, Australia, where he knew no one and did not speak the language. He responded that they would be after him as soon as he landed at the airport. The RRT was not bound by his responses. Provided the relevant issues were considered by the RRT, the test suggested by Black CJ in Randhawa is met. 29 It follows that I am unable to discern any jurisdictional error in the decision of the RRT nor any failure to discern such an error on the part of Turner FM. My exploration of the issue in this case is not an indication that it is the task of this court to take up the case of even unrepresented litigants where no cogent basis is advanced for suggesting error on the part of the Federal Magistrates Court or jurisdictional error on the part of the RRT. 30 I will dismiss the appeal with costs. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | protection visa relocation migration |
The Tribunal had affirmed a decision of a delegate of the first respondent ("the delegate") to refuse to grant the appellant a protection visa. 2 The appellant is a citizen of Sri Lanka who arrived in Australia on 14 May 2005. He entered on a Business (Short-stay) visa. On 14 June 2005, the appellant lodged an application for a protection visa, claiming to have a well-founded fear of persecution as a result of his membership to the Janatha Vimukthi Peramuna political party ("the JVP") and his alleged involvement in plans to overthrow the then Sri Lankan government. Further, the appellant claimed to fear persecution from supporters of the People's Alliance ("the PA") following his joining of the United National Party ("the UNP") in 1992. The delegate refused the visa application on 9 September 2005. The appellant claimed that he and his family had been subjected to death threats and physical and verbal harassment from supporters of the PA in both the lead up to and aftermath of national elections. 4 The Tribunal was not satisfied that the appellant was ever a member of the JVP. It further found that, even if he did have a later affiliation with the UNP, he had not suffered any harm or persecution as a result of this association. In drawing these conclusions, the Tribunal noted a number of inconsistencies and contradictions in the evidence provided by the appellant at the hearing. It will be necessary to return, in greater detail, to the Tribunal's reasons. The Tribunal affirmed the decision of the delegate on 31 May 2006. In that application, the appellant made a number of claims challenging the fact-finding and procedural approach which had been adopted by the Tribunal. It had concerns about the Applicant's credibility which were matters entirely open to the Tribunal, and consequently, having raised significant credibility findings, it did not need to explore in further detail the claims made by the Applicant of being in hiding. He held that the error of interpretation was not material and did not amount to a jurisdictional error. The Federal Magistrate held that the Tribunal was entitled to accord little weight to the letters from the appellant's wife and to regard them as being "vague" in the sense of being generally non specific about who it was that was making threats and the reasons for making those threats. His Honour also rejected the bias claim. The learned Magistrate erred in not finding that the Tribunal acted without jurisdiction in acting in breach of its obligations under the law. The learned Federal Magistrate erred in not finding that the Tribunal acted without jurisdiction in that it failed to have regard to relevant considerations. The learned Federal Magistrate erred in not finding that the Tribunal acted without jurisdiction in that the decision was based in part on a finding not open on the material before the Tribunal. The learned Federal Magistrate erred in not finding that the decision was affected by jurisdictional error in that there was a reasonable apprehension that the Tribunal was biased. The appellant had claimed to be a member of the JVP between 1986 and 1992 when he joined the UNP. The Tribunal rejected this claim finding that the appellant was never a member of the JVP and that he had never been wanted by the Sri Lankan authorities as a result of his alleged membership of that organisation; nor had he gone into hiding or suffered any harm because of his alleged JVP membership. 13 In his written submissions in support of his protection visa application and in support of his application to the Tribunal for review of the delegate's decision the appellant provided very little detail about his alleged membership of the JVP. As a result, the Tribunal questioned him at some length about this matter. It is necessary, in order to deal with this aspect of the appellant's case, to set out these exchanges. In order to escape later I worked for the UNP from 1992. Why did you join the JVP? So I decided to work for them, but I regret now and I could not proceed with my studies also because of that. The JVP was an illegal organisation at the time. We wrote notices declaring curfew. But after the death of the leader of the party, government came to know of the activities of the JVP. Even the armed forces of Sri Lanka supported the JVP at that time. At that time we got arms from the (indistinct) army camp. Then after that (indistinct) took a decision that the army personnel should resign from the army. Later on the JVP took a decision that all officers of the army should resign from the army. Then, at the time the president of the country was Premadesa and he had his own private organisation called Black Cats, and he had a couple of them, some other organisations. Then those organisations walked into the houses of army people and killed their families. Then the army officers thought that the JVP was responsible for the killing of their families and they turned against the JVP. Then the army officers started pursuing the JVP members and killing them. At the initial stages most of the members of JVP were educated men. You say that the army was supporting the JVP. You say that the army supported the JVP. How can that be? It was always opposed to the government and the army. You told me that the army supported the JVP. That's very different to one or two officers potentially sympathising. What you're saying does not equate with that information. Then in 1992 I joined the UNP because my relations saved me from being killed. Some people came in vehicles without numberplates and people were abducted and killed, and one day they tried to take me but I was taken to school, to the office, and I was kept there. What the principal of the school did was he put me into classroom and locked me up to save me. Then after the vehicles had left I came out. After that I went into hiding. I was hiding in the Dambulla temple. Why would a school principal risk his life and his position to save a member of an outlawed criminal terrorist organisation? From my fourth year he was looking after me. Even the --- I got very popular with the teachers (indistinct) in the school. I was head prefect of the school at the time. Why couldn't they just simply report you to the authorities and have you arrested? That's why they came in vehicles without number plates to arrest me. I had not harmed anybody so even the people in the village, they were trying to save me. I wanted to escape from all this. I came to know late Mr Ranjan(? ) Wijeratne. Wijeratne, was it? I came to know him, when I was working in the hotel. You say he advised you to join the UNP in order to escape. To escape from who? Several of my friends were killed like that. I was secretly working there. But I spoke to him, he sympathised with me. The JVP was still an illegal organisation. Why would the UNP accept a member of the JVP into their organisation when the JVP wanted to kill UNP? Because although the authorities were pursuing me I had never done anything very illegal or any dangerous things. You were a member of an illegal organisation at the time, and you were wanted by the authorities. So why would anyone in the UNP want to support you or protect you? " (Emphasis added). The answer given by the appellant suggested a number of reasons, in addition to the familial relationship, for the principal placing himself at risk. From my fourth year he was looking after me. Even the --- I got very popular with the teachers ...in the school. I was head prefect of the school at the time. His evidence, which was accepted, was that "From my fourth year he was looking after me" should have been rendered "brought me up from the age of four years. " The appellant contends that this was a material error because it undervalued the closeness of the relationship and the time over which it had developed. 15 The Tribunal gave extensive reasons for rejecting the claim by the appellant that he had been a member of the JVP. It found that his claim that, when he joined the JVP, it was strongly supported by the majority of army officers was directly contradicted by available country information. The Tribunal found it inconceivable that the majority of military officers would be supporters and sympathisers of an organisation like the JVP at a time at which the military was engaged in significant action with a view to eradicating the organisation. The Tribunal noted that the appellant had, later in his evidence, stated that there were only some officers who supported the JVP. 16 The appellant relied on the decision of Kenny J in Perera v Minister for Immigration and Multicultural Affairs [1999] FCA 507 ; (1999) 92 FCR 6 to support the proposition that an inadequate or inaccurate translation of evidence before the Tribunal renders the Tribunal unable to afford a non-English speaking applicant any effective opportunity to give evidence to it. Such a failure can constitute a contravention of s 425(1) of the Act and a jurisdictional error. In Perera it was not alleged that a particular passage of evidence, given by the applicant, was erroneously translated. Rather, his complaint was "that certain features of the transcript indicated that the interpretation was of poor quality or ... incompetent. " (at 22). Her Honour examined the transcript as a whole. She found that certain of the applicant's answers were unresponsive and, in some instances, "virtually incoherent". There appeared to be a misunderstanding of the Tribunal's questions and there was confusion in the communication such that the Tribunal was forced to give up a line of inquiry on a significant aspect of the applicant's claim. The departure must relate to a matter of significance for the applicant's claim or the Tribunal's decision. He had not, prior to the hearing before the Tribunal, sought to support this claim by reference to the alleged incident in which some unnamed individuals sought to abduct him from school and were frustrated by the actions of the school principal. When this incident was raised at the hearing, the Tribunal sought to obtain further details about what had occurred and to test the claims by reference to country information. When the Tribunal expressed some scepticism that public officials such as a principal or school teachers would risk offering assistance to a member of a banned organisation which was engaged in an armed struggle with the government, the appellant volunteered a number of reasons why such persons might have been prepared to protect him notwithstanding the risks to themselves. In the case of the principal the appellant relied on the familial relationship between them to explain why he might offer protection. The appellant added that the principal had been looking after him "from my fourth year". Even if the Tribunal had understood this to mean "fourth year of school" rather than "four years of age" the difference only affected the length of time that the appellant had been cared for by his uncle. The Tribunal was prepared to accept that the familial relationship existed. It was, however, doubtful that even "blood relatives" would risk "severe repercussions" by protecting a member of a banned revolutionary organisation. It is also to be observed that this scepticism was but one of many reasons why the Tribunal refused to accept the appellant's claim to have been a member of the JVP. 18 I regard the mistranslation on which the appellant relies to be of marginal significance: a variation or a shade of meaning is involved rather than any gross error. More importantly, the error was not material in the sense that it played no direct part in the reasoning process of the Tribunal. At best for the appellant, it may have resulted in the Tribunal marginally underestimating the intensity of the principal's commitment to the welfare of the appellant. The error did not deprive the appellant of the opportunity to give evidence and present arguments to the Tribunal. There was, therefore, no contravention of s 425 of the Act by reason of inadequate translation of the appellant's evidence. The issues which the appellant claims not to have had the opportunity to give evidence and present argument about were the cause of certain injuries sustained by him and the question of where he lived between 2000 and 2005. 20 The appellant complains that he was not afforded the opportunity of dealing with these issues because the Tribunal did not identify them as being important. He placed particular reliance on certain observations of the High Court in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 231 ALR 592 at 600. The applicant is to be invited 'to give evidence and present arguments relating to the issues arising in relation to the decision under review'. The reference to 'the issues arising in relation to the decision under review' is important. The statutory language 'arising in relation to the decision under review' is more particular. The issues arising in relation to a decision under review are to be identified having regard not only to the fact that the tribunal may exercise all of the powers and discretions conferred by the Act on the original decision-maker (here, the Minister's delegate), but also to the fact that the tribunal is to review that particular decision for which the decision-maker will have given reasons. The issues that arise in relation to the decision are to be identified by the tribunal. But if the tribunal takes no steps to identify some issue other than those that the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered dispositive are 'the issues arising in relation to the decision under review'. That is why the point at which to begin the identification of issues arising in relation to the decision under review will usually be the reasons given for that decision. And unless some other additional issues are identified by the tribunal (as they may be), it would ordinarily follow that, on review by the tribunal, the issues arising in relation to the decision under review would be those which the original decision-maker identified as determinative against the applicant. A careful analysis of what she said about this topic is necessary in order to determine whether the issue was adequately identified for the purposes of the Tribunal's review. In his statement he refers to the 1994 general election campaign ...and the Presidential election campaign in 1999 ... He claims to have been harassed, threatened and attacked where he sustained injuries and was hospitalised for four days, because of his political activity, but has provided no evidence such as medical reports. He also claims that due to the life threatening incidents he and his family suffered, he went into hiding and moved from place to place. He states his wife and mother have been threatened through anonymous phone calls and acts of intimidation to find out his whereabouts. He fled Sri Lanka as he feared he would be harmed and will face mistreatment should be return there at the hands of his political opponents. The applicant is vague and non-specific regarding the date he joined the UNP and the dates and details of his political activities. The level of mistreatment he claims to have experienced does not appear to be consistent with the level of political activity. Whilst he claims to have been actively involved with UNP election campaign activities I do not consider he held power or position in Sri Lanka which would lead to him being targeted in the manner claimed. I note that his involvement in political activity was primarily during election campaign periods and there is no indication that he was heavily involved in political activity apart from election campaigns. As an active supporter of the UNP he claims that he also attracted a serious adverse political profile with the ruling PA and was threatened and attacked by unidentified persons. As stated above there does not appear to be any reason why the applicant should be specifically targeted for harm on the basis of his participation in campaign activity. There is no indication that the applicant reported this matter to police nor the senior leadership of the UNP, therefore I find it difficult to accept that given the claimed circumstances that action was not taken by UNP politicians, legal professionals or members of one of the human rights groups that operate in Sri Lanka particularly given that the UNP regained power in December 2001. I note the UNP regained power in December 2001 which they retained until early in 2004. The applicant's claims of persecution by various political opponents relate to the 1994 general election campaign and the Presidential election campaign in 1999 as stated above. He has not claimed that he was involved in the April 2004 general elections at all, yet he insists that acts of violence against him by political opponents continued unabated until his departure from Sri Lanka in May 2005, some six years after his claimed campaign activities in 1999. Furthermore, I do not accept that there is any information to support his claim that he continued to face mistreatment after the declaration of the election result in 2001 where the UNP regained power, and there is no plausible reason why he would be pursued in the manner claimed. There has been no information provided to support a finding that the applicant's involvement in political activity in Sri Lanka was so significant and high profile that he would be subject to ongoing mistreatment after the result of the election was known. I do not accept that there was any basis for him to have been pursued after the declaration of the April 2004 election. I also find it difficult to accept that given the claimed level of mistreatment over a period of time, that action was not taken on his behalf by UNP politicians, legal or medical professionals or members of one of the human rights groups that operate in Sri Lanka. 22 The appellant's legal advisor made a written submission on his behalf to the Tribunal. The submission said that the appellant "had sustained physical injuries in the course of attacks by the PA supporters and hired thugs against which he had absolutely no protection. " The submission did not say when any of the physical injuries had occurred but referred to "one occasion [on which the appellant] had been hospitalised following an attack by the political opponents. " It was further submitted that, upon his discharge from hospital, it had been necessary for the appellant "to move from place to place for security reasons. One of the first issues raised with the appellant when he appeared before the Tribunal was where he had lived in Sri Lanka. He said that he had been born in 1971 at Dambulla where his father was working at the time. The family remained there until 1974 when they moved to Ukuwela. The Tribunal asked the appellant whether he lived in Ukuwela "all of your life before coming to Australia? 24 Sometime later the appellant told the Tribunal that he had lived in Colombo between 2000 and 2005. He said that he was living in about five or six houses over this period and had no permanent address in Colombo. He said that he had given his earlier answer because Ukuwela (or a nearby village) was his permanent address. The Tribunal indicated that it was disturbed by the apparent inconsistency in the appellant's evidence and put him on notice that "the credibility of the evidence you have given in relation to where you lived is an issue, is a serious issue, based on the evidence you have given. " At this point the appellant advised the Tribunal that he would obtain documentary evidence of where he lived in this period. 25 Towards the end of the hearing, the Tribunal asked the appellant what he feared would happen to him if he were to return to Sri Lanka. They came in search of me, I had to climb on the roof. And after that they threatened my wife and left. My infant son at the time was only two months. The appellant responded that "this" had happened in January 2005. The Tribunal appears to have understood that the beating, on the one hand, and the hiding on the roof and the threatening of his wife on the other had constituted separate incidents: see reasons at CB 113. Only the latter events occurred in January 2005. Why would these people attack you? Because they thought my presence would be a hindrance to their campaign. 26 These exchanges led to the Tribunal rejecting certain of the appellant's claims. I accept that these scars exist but their mere existence is no evidence as to how they were inflicted and do not of themselves support the [appellant's] claims that they were inflicted by political opponents. The [appellant] did not state when the incident or incidents occurred that caused the scars despite having the opportunity to do so. The [appellant] confirmed that despite the harm that he had suffered in the alleged beating he had not reported this incident to police, stating that the police always supported the party in power and that he could not identify the assailants. However as was pointed out to the [appellant] at the hearing, the police are sworn to protect all people from criminal attack and they are the people to whom attacks such as these should be reported. Given the vague and limited evidence before me I am not satisfied that these scars were caused by beatings from political opponents and therefore find that the applicant was not beaten by political opponents and the scars on his head and face were not caused by any beatings from political opponents. Based on the evidence before me I find that the [appellant] never lived in Colombo as claimed and did not flee Ukuwela to escape harm from his political opponents as claimed. I also find that as the [appellant] did not flee Ukuwela to escape harm from his political opponents that his mother and wife were not forced to live in fear from his political opponents after her (sic) allegedly fled Ukuwela and went into hiding, and that his mother and wife were not subject to threats, anonymous phone calls or acts of intimidation from his political opponents who allegedly wanted to know his whereabouts after he allegedly fled Ukuwela and went into hiding. " I thought that the Tribunal had overlooked the exchange which is recorded above at [25]. On reflection, however, I do not consider that the Tribunal has erred. It is not likely that the evidence about the January 2005 incident had been overlooked. It had been recounted earlier in the Tribunal's reasons when it summarised the appellant's evidence. The appellant had claimed to have been the victim of multiple physical attacks. He did so in the original statement which he made in support of his protection visa application and this was referred to in the decision record of the Minister's delegate, in the passage set out above at [21]. The attacks there referred to were timed around the 1994 general election campaign and the 1999 Presidential election campaign. One of the attacks which occurred during these times was said to have led to the appellant being hospitalised for four days. As the delegate further notes, the appellant insisted that acts of violence against him by political opponents continued through until his departure for Australia in May 2005. When the appellant's legal advisor made submissions to the Tribunal he referred to the appellant having sustained physical injuries in the course of multiple attacks by opponents. He did not say when those attacks had occurred. He referred to the fact that the appellant had been hospitalised after one of these attacks but did not suggest that the delegate had erred in placing that event in the time period between 1994 and 1999. Even if the appellant's answer to the Tribunal's question about what he feared upon return to Sri Lanka can be understood as an assertion that he was beaten in January 2005, he does not assert that it was that beating that led to the scarring which he offered to show the Tribunal. Given that the appellant had claimed to have been attacked on multiple occasions, the Tribunal was correct to say that the dates of the incidents which were alleged to have caused the scarring had not been provided although the appellant had been given the opportunity both in written submissions and at the oral hearing to have provided this information. 28 The more fundamental issue, however, is whether the Tribunal deprived the appellant of the opportunity to deal in greater detail with the cause of his scarring and the place where he lived between 2000 and 2005 by failing to notify him that it regarded those matters as important issues. As the High Court held in SZBEL the appellant was entitled to proceed on the basis that the issues which would be considered by the Tribunal were those identified by the Minister's delegate as being determinative against the appellant and any additional issues which were identified by the Tribunal. 29 The issues of when and if the appellant had been subjected to physical violence by political opponents for political reasons was squarely raised in the delegate's decision record: see above at [21]. The delegate was prepared to accept that the appellant may have been attacked during the period of election campaigns in Sri Lanka but not that such violence continued at other times. The appellant's legal advisor, in his submission to the Tribunal, referred to physical injuries which had been sustained by the appellant but did not give any details of any of the occasions on which such violence occurred and, in particular, did not provide information as to the dates on which such incidents were said to have taken place. No mention was made of any of the physical attacks leading to scarring. It was the appellant who, during the course of the hearing before the Tribunal, drew attention to his scarring in order to support his claim to have been beaten by opponents in Sri Lanka. The appellant did not state when and by whom any act of violence leading to scarring was inflicted. This was a point of evidence rather than an issue. The issue was whether or not the appellant had been subjected to physical violence by his political opponents for political reasons. That issue had been squarely raised by what appeared in the Minister's delegate's decision record. The appellant drew attention to his scars in order to bolster his claim to have been attacked by his opponents. One may well cavil at the Tribunal's reasoning that vagueness and imprecision as to the details of the various alleged incidents necessarily led to the conclusion that those incidents had not occurred but any error in this regard (if there be one) does not go to the Tribunal's jurisdiction. 30 The question of where the appellant lived between 2000 and 2005 arose in the course of the hearing before the Tribunal. It arose because of an apparent inconsistency in the evidence of the appellant. When the inconsistency emerged the Tribunal immediately put the appellant and his advisor on notice that the Tribunal considered that it went to the appellant's credit. This was acknowledged by the appellant and his representative to the extent that the appellant offered to provide documentary evidence of where he was living during the relevant period. Following the hearing the appellant's advisor forwarded to the Tribunal various letters from public officials in Sri Lanka. Those letters certified that the appellant had lived in various places in Sri Lanka in the period between 2000 and 2005. Therefore these documents do not verify in any way the [appellant's] claims that he had fled Ukuwea and lived in various places in Colombo to avoid harm from political opponents. 32 For these reasons I do not consider that there has been any failure by the Tribunal to meet its obligations under s 425(1) of the Act by failing to give the appellant the opportunity to provide evidence and make submissions relating to the two identified issues. As developed in argument the contention was that the Tribunal was obliged, but failed, to consider and determine certain substantive issues arising from the evidence and material before it. 34 In order to understand this contention it is necessary to have regard, in some detail to certain findings made by the Tribunal and to related evidence and submissions. As already noted, the appellant had claimed to be the victim of harassment, intimidation and violence. This mistreatment was said to have been inflicted by his political opponents for political reasons. As has been seen the Tribunal rejected the claims that the appellant had been beaten and suffered scarring as a result of those beatings. I accept in the context of Sri Lankan politics that participants in the political process would be subject to some low level of threats and intimidation from political opponents in the context of robust political debate. In the [appellant's] case this would include claims that he had received various verbal threats, harassment and telephone threats over time from PA members and supporters. However, in the case of the [appellant], he has not reported suffering any specific harm as a result of these threats and intimidation and has not indicated that any of his political opponents carried out, or attempted to carry out these threats. Based on the above, I find that these threats were idle threats made in the context of the passionate and inflamed nature of political participation and campaigning in Sri Lanka and I further find that the makers of these threats did not have any intention to carry them out. Therefore, I find that these threats do not constitute the type of serious harm that would amount to persecution under the Convention. The appellant's contention assumes that his evidence and submissions forged a link between the threats and intimidation and the violence to which he claimed to have been subjected. The Tribunal had accepted that he had received verbal threats and been harassed by PA members and supporters. It was not, however, prepared to accept that any of these threats had led to physical violence against the appellant. One reason given by the Tribunal for coming to this conclusion was that the appellant had "not reported suffering any harm as a result of these threats and intimidation and has not indicated that any of his political opponents carried out, or attempted to carry out these threats. " The use of the "reported" is potentially ambiguous. It may be understood to refer to reporting the threats to the police or other authorities. The better view is, however, that the Tribunal was noting that the appellant had not given evidence or made submissions to this effect either to the department or to the Tribunal. So understood, the Tribunal's reasoning was that, because the appellant had not linked specific acts of violence to specific threats, the threats were to be treated as being "idle" and that those who uttered them had no intention of carrying them out. Such a process of reasoning is consistent with the Tribunal's earlier finding that the appellant had not been beaten by his political opponents and does not suggest that the Tribunal ignored the appellant's claims to have suffered physical attacks. In my view the Magistrate correctly rejected the claim that the Tribunal ignored or failed to take into account a relevant consideration. They are vague and appear to be written by the applicant's wife in order to enhance the applicant's claims for refugee status. I have therefore not placed any weight on these letters when making this decision. The nature of the threats was, in most instances, not explained. Most were said to have been made in an attempt to find out the whereabouts of the appellant. One was a warning that, should he return to Sri Lanka, he would be killed. 37 The appellant contends that the finding that the letters were "vague" was not open on the evidence. This submission must be rejected. The letters speak for themselves. There is, as the Tribunal found, little detail in them about when the alleged threats were made, the terms in which they were made and who made them. The Tribunal did not err in describing the appellant's wife's letters as "vague" and in according them no weight. It was, in my opinion, open to the Tribunal to reach the conclusion which it did. It is said that the various errors allegedly made by the Tribunal (including alleged factual inaccuracies) gave rise to a reasonable apprehension of bias against the appellant. 39 For reasons which I have already given I do not think that the Tribunal erred in law; nor to I consider that its reasons, when carefully analysed, can fairly be said to contain inaccuracies. Even if I had been disposed to accept that some or all of the alleged errors had been made by the Tribunal I do not consider that such errors, either individually or collectively, would have warranted a finding of apprehended bias. Like Courts, tribunals from time to time make errors which are corrected on review or appeal. The reasonable observer would not conclude that such errors are indicative of partiality. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | protection visa appeal from federal magistrates court where mistranslation by interpreter whether mistranslation deprived appellant of the opportunity to give evidence and present arguments to tribunal whether appellant deprived of the opportunity to give evidence and present arguments about injuries he sustained and where he had lived between 2000 and 2005 whether federal magistrate erred in finding no error in the tribunal's conclusion in relation to three letters sent by the appellant's wife used to support his claims whether federal magistrate erred in not finding the tribunal's reasons gave rise to a reasonable apprehension of bias migration |
For present purposes, the appeal presently raises the short point whether, under s 60(4) of the Bankruptcy Act 1966 (Cth) (the Act), the appellant can maintain the appeal. It arises because, after the appeal was instituted, the appellant became bankrupt on 13 August 2008. 3 The Official Trustee in Bankruptcy, as trustee of the appellant's estate, discontinued this appeal by notice of 10 September 2008. Hence, subject to the point arising under s 60(4) of the Act, the appeal is at an end. 4 The appellant has appealed against the sequestration order made on 13 August 2008. That appeal has been heard. Judgment on that appeal is to be delivered at the same time as this ruling. If, as is the case, the appeal against the making of the sequestration order is to be dismissed ( Rana v Chief of Army (No 2) [2008] FCA 1555) , the ruling becomes critical. If the bankruptcy had been set aside on that appeal, then the notice of discontinuance of this appeal by the trustee would have had no effect, because the sequestration order would have been set aside effective from its making, and the appellant would be free to prosecute the appeal. The merits of the appeal, if the appellant is still able to prosecute it, have not yet been the subject of argument. That will follow if the appeal is found not to have been discontinued. If it is, then s 60(4) preserves his right to prosecute the appeal and the appeal will need to be heard. If it is not, the appeal has been discontinued. 7 It is common ground that the institution of the appeal from the judgment of the Federal Magistrate is the commencing of an action to which s 60(4) may apply if the appeal is in respect of any personal injury or wrong done to the appellant: see s 60(5) , and Cummings v Claremont Petroleum NL [1996] HCA 19 ; (1996) 185 CLR 124 ; Evans v Hi Fert Pty Ltd [2003] SASC 186 at [24] per Duggan J; Cole v Challenge Bank Ltd [2002] FCAFC 700 ( Cole ). (I mention that the appellant relied on Cole to support his contention that such an appeal as the present falls within s 60(4) , but no such issue arose in that case. The costs of that proceeding were taxed at $7,582.86 and a certificate of taxation issued on 8 December 2005. That decision was affirmed on appeal: Rana v Chief of Army Staff [2006] FCAFC 63. The appellant's attempts to relitigate the issue arising in that proceeding in the High Court were unsuccessful: Rana v Kiefel [2008] HCASL 56. 9 The challenged decisions of the respondent concerned the recorded ground upon which the appellant was discharged from the Australian Army in 1982. If the appellant had succeeded in having his discharge recorded as related to his physical or mental capacity to perform his duties, then his eligibility to benefits under the Defence Force Retirement and Death Benefits Act 1973 (Cth) may have arisen. 10 On the basis of the debt arising from the certificate of taxation of costs at $7,582.86, a bankruptcy notice directed to the appellant was issued on 10 May 2007, and was served on him. 11 On 21 May 2007, the appellant applied to the Federal Magistrates Court to set aside the bankruptcy notice. His application was dismissed by a Registrar of that Court on 10 July 2007. That decision was reviewed by a Federal Magistrate who (as noted above) also dismissed the application. Hence this appeal. 12 The appellant emphasised that this appeal is by way of rehearing. That does not alter its essential character. It is still an appeal from a decision refusing to set aside a bankruptcy notice. Accepting that, on the appeal (if it is alive) the Court's task is to reconsider, on the materials before the Federal Magistrate, whether the bankruptcy notice should be set aside, the question at present is a more confined one. It is whether the application to set aside the bankruptcy notice, and the appeal on that issue, is in respect of any personal injury or wrong done to the appellant. 14 Both the Registrar and the Federal Magistrate rejected those grounds. 15 It appears that (1) and (2) were treated together: the appellant claimed that it was an abuse of process to issue the bankruptcy notice whilst his compensation claim was ongoing and unresolved. The Federal Magistrate said there was simply no basis to suggest that, in issuing the bankruptcy notice, the respondent had an improper purpose. Nor was there any evidentiary basis to show the decision referred to in [8] above was obtained by fraud or collusion, or in other circumstances, which would have led to the Federal Magistrates Court going behind that judgment and so revisiting the question whether the costs debt, upon which the bankruptcy notice was issued, really existed. 16 There was also no satisfactory evidence of any proceedings by the appellant claiming substantial damages against the respondent, far less that any such claim might succeed. Section 40(1)(g) required the appellant to satisfy the Federal Magistrate that he had a counterclaim set-off or cross demand against the respondent that he could not have set up in the action in which the relevant costs order was made. 17 Before the Federal Magistrate, the appellant also identified separate proceedings against the Repatriation Commission for benefits under the Defence Force Retirement and Death Benefit Act 1973 (Cth) and under the Veterans' Entitlement Act 1986 (Cth), and against the Commonwealth and Brigadier Orme as delegate of the respondent for unlawful discrimination in about September 2003 and on about 5 April 2005 and for negligence (the third claim). The appellant faced the same difficulties with the claims against the Repatriation Commission as against the MRCC. As to the third claim, made on 11 July 2007 the Federal Magistrate reviewed the application, and noted that the delegate of the President of the Human Rights and Equal Opportunity Commission had terminated the complaint (the precursor to proceedings) as lacking in substance and that he considered the claim unlikely to succeed. 18 The proceedings in the High Court, even if they be regarded as an application to set aside the judgment including the costs order referred to in [8] above, were not shown to have strong prospects of success (they have since been dismissed) and were not accompanied by any application to stay the operation of the costs order. So, in the exercise of that Court's discretion, it was not appropriate to set aside the bankruptcy notice or to extend time to comply with it. I do not consider that material can inform the application of s 60(4), although it might otherwise touch upon the appeal if it were to proceed. I do not need to decide that question. 20 He also sought to rely on a further affidavit as supporting a "collateral attack" on the reliability of the delegate of the respondent whose decisions were subject to judicial review in the proceeding referred to in [8] above, and apparently also relating to the prospects of success of the third claim referred to in [17] above. Again, I do not consider that material can inform the application of s 60(4), and I do not need to decide whether --- if the appeal were to proceed --- it should be received as fresh evidence on the appeal. 21 The appellant's written outline of submissions did not address the question of whether s 60(4) preserves the appeal, or whether in the light of his bankruptcy the trustee has discontinued it. Nor did he develop oral submissions on the issue other than to describe it as a "smokescreen", except to refer to Faulkner v Bluett (1980) 52 FLR 115 and Griffiths v Civil Aviation Authority (1996) 67 FCR 301 and to make some observations on those cases. (1)). 23 Section 60(4) was the subject of the decision of the Full Court (Lockhart, O'Loughlin and Merkel JJ) in Bryant v Commonwealth Bank of Australia (1997) 75 FCR 545. Lockhart J at 550 said that the categorisation of an appeal depends upon the categorisation of the action itself which gave rise to the judgment. In that case, the appeal was from the summary dismissal of an application which his Honour described (at 554) as related to proprietary claims to property which would pass to the trustee in bankruptcy. In the joint judgment of O'Loughlin and Merkel JJ at 561-564, their Honours reviewed a number of authorities on the scope of s 60(4) of the Act. I respectfully adopt their Honours' analysis, which included reference to Faulkner v Bluett . As might be expected, the cases recognise a distinction between claims which are referable to a bankrupt's financial and property rights (so the loss, if established, is to the property or estate of the bankrupt) and claims which are for damages estimated by immediate reference to injuries sustained by the bankrupt. Faulkner v Bluett is an illustration of the first of those categories. 24 Although that contrast is a useful one, because s 58 of the Act provides for the vesting of the property of the bankrupt in the trustee upon the making of a sequestration order, s 60(2) generally has a wider perspective as it relates to all actions commenced by a bankrupt prior to the bankruptcy. It is not confined to actions which may increase the property of the bankrupt if successful, or which themselves are choses in action which have a value as property of the bankrupt. Section 60(4) then exempts certain actions from the scope of s 60(2). If an action is not so exempted, then s 60(2) will apply to it. 25 In my view, the claims of the appellant on the appeal, and in the primary application to set aside the bankruptcy notice, do not fall within the scope of s 60(4). If the appeal were successful, there would be no damages awarded to the appellant and certainly no damages assessed by immediate reference to pain or injury experienced by him. There would be no direct benefit to him in the sense of a valuable personal asset (his example was a driver's licence) being restored. An illustration of such a case is provided by Griffiths v Civil Aviation Authority (1996) 67 FCR 301 , which recognised that a commercial pilot's licence (the appeal to this court was from a decision by the Administrative Appeals Tribunal imposing stringent conditions on the licence) is property of a bankrupt personal in nature and not part of the estate available to the creditors. See in particular per Spender J at 311-318. 26 In my view, s 60(4) is not intended to preserve to a bankrupt a claim to set aside a bankruptcy notice, as it is intended to preserve only the prosecution and benefits of litigation if there are potential benefits to the bankrupt which are not legitimately entitlements of the bankrupt's creditors: see eg Daemar v Industrial Commission of New South Wales (1988) 12 NSWLR 45 esp per Kirby P at 55-56, and per Samuels JA at 57. See also Hamilton v Young [2007] QSC 160 ; Fitzpatrick v Keelty [2008] FCA 35 per Moore J at [44]-[53]. The application to set aside the bankruptcy notice will not directly result in any award of damages to the appellant. If he has any such claims, preserved by s 60(4), they can still be pursued provided they have been brought within time. The refusal to set aside the bankruptcy notice does not affect the extent of the claims the appellant may still pursue under s 60(4). Moreover, the judgment referred to in [8] above, which was the subject of an unsuccessful collateral attack in the application to set aside the bankruptcy notice, was itself only indirectly a route to potential personal benefits to the appellant; it challenged the lawfulness of decisions about the record of reasons for the appellant ceasing to be a member of the Australian Army. As I have noted, putting aside the ultimately unsuccessful High Court proceeding, the set offs, counterclaims or cross demands he asserted relying on s 40(1)(g) of the Act provided the other reason of the appellant to set aside the bankruptcy notice. If the appellant has such claims, and they fall within s 60(4), he will be able to pursue them independently of his application to set aside the bankruptcy notice. 27 Accordingly, I rule that the appeal has been properly discontinued by the trustee. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | appeal against refusal to set aside bankruptcy notice subsequent to instigation of appeal the appellant becomes bankrupt whether application to set aside bankruptcy notice and appeal are claims in respect of personal injury or wrong to the appellant so that the appeal may be pursued under s 60(4) bankruptcy act 1966 (cth) when trustee in bankruptcy has purported to discontinue the appeal held appeal discontinued bankruptcy |
The application is for an order, pursuant to the Court's discretionary power under O 80 r 4 of the Federal Court Rules 1979 (Cth), that this matter be referred to a legal practitioner on the Pro Bono Panel for legal assistance. 2 This application was made subsequent to numerous other applications made by Mr Rivera in this Court since he was placed in custody in Australia in 2002 pending extradition to the United States of America to face charges relating to a murder he is alleged to have committed in California in May 2002. The most recent of these applications was determined by Flick J on 13 December 2007, in which his Honour declined to expedite the hearing of an appeal from the decision of a Judge of the Court which dismissed an application for review of a decision of the Human Rights and Equal Opportunity Commission: see Rivera v Human Rights and Equal Opportunity Commission [2007] FCA 2037. The history of some of Mr Rivera's earlier litigation is summarised by Gyles J in Rivera v Minister Administering the Extradition Act 1988 (Cth) [2007] FCAFC 191. It is not necessary for me to repeat or elaborate upon this extensive litigious history. 3 On 28 December 2007, Mr Rivera filed an application seeking a writ of habeas corpus and other relief. The matter was listed for first directions on 8 February 2008. On 2 January 2008, however, Mr Rivera filed a notice of motion seeking to have the hearing expedited and the surrender warrant issued under s 23 of the Extradition Act 1988 (Cth) stayed, in light of an arrangement that he be extradited from Australia to the United States some time in the week commencing 7 January 2008. This arrangement was put in place after Mr Rivera was placed on a commercial airline flight to the United States on 22 December 2007 in the custody of the United States' authorities, but, due to his behaviour, was removed from the aircraft prior to its departure and returned to the custody of Australian authorities. 4 When the notice of motion came on for hearing on 3 January 2008, Mr Rivera stated that he did not wish to press at that time either his application of 28 December 2007 or his notice of motion of 2 January 2008, despite the fact that he was well aware of the arrangement to remove him from Australia next week. Instead, Mr Rivera only sought a referral under O 80 r 4 of the Federal Court Rules 1979 (Cth) of his case to a legal practitioner on the Pro Bono Panel. He indicated that he would consider not pursuing either his application or notice of motion after he had obtained legal assistance. 5 Accordingly, these reasons only concern the question of whether the Court should exercise its discretion to make an order under O 80 r 4. As Mr Rivera did not press his notice of motion seeking expedition of his application for habeas corpus or a stay of his surrender, I will not rule on those matters. That application remains listed for first directions on 8 February 2008, irrespective of any matter these reasons address. Similarly, these reasons do not stay the surrender warrant issued under s 23 of the Extradition Act 1988 (Cth). This discretion is a broad one, and is not limited by those matters set out in O 80 r 4(2): see Taylor v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 319 at [10] - [11] . 7 The issue in the present reasons is whether the discretion of the Court should determine that the "administration of justice" requires Mr Rivera's proceedings to be referred to the Registrar to arrange for pro bono legal representation. 8 In my view, the administration of justice in this case does not require that the matter be referred to a Registrar to arrange pro bono legal representation or advice for Mr Rivera because his application of 28 December 2007 discloses no reasonable prospects of success, and Mr Rivera has not adduced any evidence or provided any authority to indicate otherwise. The lack of reasonable prospects of success, or where a case is "patently hopeless" or has no "arguable basis", has been regarded by the Court as sufficient reason to refuse a referral under O 80 r 4: see Taylor [2005] FCA 319 at [10] ; Rivera v The Commonwealth of Australia [2007] FCA 1465 at [34] . As a matter of discretion, therefore, I am of the view that it is not appropriate to prolong the present proceedings which are without merit. 9 The reason Mr Rivera's case discloses no reasonable prospects of success is because it relies entirely on a premise that cannot be maintained. For habeas corpus to issue, an applicant must show that he or she is unlawfully held in the custody or control of the respondent: see Hicks v Ruddock (2007) 156 FCR 575 at 587-592. Mr Rivera's application depends on the assertion that his present detention is unlawful because, once he placed on the commercial airline flight on 22 December 2007, his lawful custody under Australian authorities ceased, and the continuation of his custody since that date is without lawful authority. 10 This assertion is without substance because the authority to detain Mr Rivera did not, and indeed could not, terminate at the point at which Mr Rivera boarded the flight. 11 The authority to detain did not terminate because the surrender warrant issued by the Minister for Justice and Customs (now styled the Minister for Home Affairs) under s 23 of the Extradition Act 1988 (Cth) on 31 August 2006 authorises Mr Rivera's custody in Australia until he is transported "out of Australia to a place in the United States". Given that the power of the Minister to issue this warrant and include such a condition is not disputed by Mr Rivera in his application of 28 December 2007, it is uncontentious that the warrant, when issued, represented a lawful authorisation of his custody in Australia. In my view, the provision in the warrant that Mr Rivera's custody continue until he is transported "to a place in the United States" --- which a seat on a commercial airline flight yet to take off patently is not --- is sufficient basis on which to hold that the warrant still constitutes lawful authorisation of his custody in Australia. 12 In addition, the authority to detain could not possibly be said to have terminated in these circumstances because it would result in serious practical difficulties. One difficulty would be the likelihood that persons in the process of being extradited would easily be able to avoid extradition, or indeed any form of ongoing custody, simply by repeating the same type of behaviour as that used by Mr Rivera in this case, and then seeking habeas corpus . The Great Writ was not designed to aid the evasion of justice, but rather the proper administration of it, a task that would be impossible if properly issued extradition warrants were frustrated by specious applications in circumstances such as those of the present case. 13 Mr Rivera's application of 28 December 2007 also indicates that he will argue that, pursuant to s 26(5) of the Extradition Act 1988 (Cth), he is retained in custody unlawfully because two months have elapsed since the day on which the surrender warrant in respect of his extradition was first liable to be executed. This argument is also untenable. Section 26(6)(b) provides that a Court shall not order the cessation of a detention which has lasted more than two months if the delay is for "any ... reasonable cause". In this case, on the basis of evidence adduced by the respondent which was not disputed or contradicted by Mr Rivera, it is clear that reasonable cause for the delay exists, namely, the behaviour of Mr Rivera when placed on a commercial airline flight, and the need for the United States' authorities to find an alternative means of transport. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application for referral to a legal practitioner on pro bono panel under o 80 r 4 of the federal court rules 1979 (cth) court's discretion central application discloses no reasonable prospects of success. practice and procedure |
2 The reason I granted interlocutory relief was that I found there was a serious question to be tried as to whether the first respondent, Exact International BV ("Exact") had breached an implied obligation of good faith under the terms of the Distributorship Agreement entered into between the relevant parties in 1997. The injunctions were therefore founded upon the continued existence, at that time, of the Distributorship Agreement which had not been terminated. 3 Article 20(3) provides that the Distributorship Agreement may be terminated without cause by either party at the end of any calendar quarter on 90 days' written notice. 4 On 22 December 2006, Baker & McKenzie, the solicitors for Exact, wrote to Home Wilkinson Lowry, the solicitors for the Hume companies in these proceedings. Notwithstanding this, and in spite of the commercial imperative to bring the Distributorship Agreement to an end (see [2006] FCA 1439 at [32] ), the Hume companies contend that the letter was not a valid notice of termination. 6 The parties agree that if the letter was a valid termination notice, the interlocutory injunctions should be dissolved. They also agree that certain inter partes undertakings, in similar terms to the injunctions, should be released. 7 Five issues arise. The first is whether there is any onus upon Exact to prove that the notice was effective under Dutch law. 8 The second issue is whether a notice not issued by Exact, but by its solicitors, was a valid notice. 9 The third issue is whether a notice not sent to either Hume Computers or Hume Business, but to its solicitors, was effective. 10 The fourth question is whether the letter contained an unequivocal statement of Exact's election to terminate. 11 The fifth question is whether the letter, considered as a whole, constituted a repudiation of the Distributorship Agreement by Exact. 12 If these questions are determined adversely to the Hume companies, they contend that a condition should be imposed on the discharge of the injunctions and release of the undertakings. The proposed condition is that Exact is to pay the compensation due under Article 21; see [2006] FCA 1439 at [12] . We note that you act for Hume Business Solutions Pty Ltd ("Hume Business"). Our client does not concede that Hume Computers was entitled to do this or that the purported assignment was effective and nothing in this letter is to be taken as an admission of these matters by our client. These breaches are associated with (amongst other things) the quality of the services provided by your clients to end-users of our client's software, as required by Article 7 of the Agreement. Further, our client has thus far been unable to fully investigate these matters as a result of the orders made by the Federal Court of Australia on 16 October 2006 (and undertakings given subsequently). However, our client intends to vigorously pursue its investigations (in conformity with the orders of the Court and the undertakings). It is true that the Distributorship Agreement is governed by the laws of the Netherlands; see Article 27. 16 Here, Exact does not assert that foreign law differs from domestic law. It therefore assumes no burden to prove that the Distributorship Agreement was terminated under Dutch law. 18 It is plain from the unredacted portions of Exhibit G that Bakers had actual authority to give the notice. The exhibit includes an email of 22 December 2006, sent at 4:08AM, from Exact to Mr Hambrett of Bakers. It states that Exact has made the decision to terminate. It approves Mr Hambrett's draft letter to Hume' lawyers. 19 There is no other inference apart from the obvious one that Exact conferred actual authority on Baker & McKenzie to give notice of termination in the terms stated in the letter of 22 December 2006. 20 Nothing in Article 20(3) of the Distributorship Agreement, or any other article, prescribes the method by which notices are to be given. In particular, nothing precludes a party from giving notice by its agent. 21 Townsend Carriers Ltd v Pfizer Ltd ( 1977) 33 Prop & Comp R 361 is authority for the proposition that where an agreement does not preclude the giving of notice by an agent, the notice can be given by the agent in its own name; at 365 per Megarry VC. See also Young v Lamb (2001) 10 BPR 97867 at [36] --- [38] per Stein JA (Mason P & Hodgson JA agreeing). 22 Counsel for Hume sought to advance an argument that the right of "either party" to terminate under Article 20(3) precluded notice by an agent. This submission was based upon the distinction drawn in Article 18(2) between "the Distributor" and its "employees, agents and advisors". 23 However, in my opinion, Article 18(2) must be read in its own context. It provides for the obligations of confidentiality contained in Article 18(1) to apply to Hume's agents. Its basis may be thought to be that Hume may not have absolute control of an agent's use of confidential information. 24 I reject the submission that Article 18(2) has the effect of excluding the principles of agency from the termination provision contained in Article 20(3). 25 In my view, there is no express or implied exclusion of the principles of agency in the words of Article 20(3). 26 It follows that I am of the view that it was open to Baker & McKenzie to give the notice of termination on behalf of Exact. 27 I should add that it is unnecessary for such a notice to disclose the agency; Townsend Carriers at 365. In any event, the letter of 22 December 2006 stated that the solicitors acted for Exact and that "our client" notifies its intention to terminate. 29 The same principles of agency apply to the giving and receipt of a notice. Megarry VC said in Townsend Carriers at 365 that he did not "think that the principle it is more blessed to give than to receive is part of the law of landlord and tenant. " Nor in my opinion is it part of the principles that apply to the exercise of a contractual power of termination of a commercial contract. 30 Before turning to the principles of agency, it is necessary to deal with the circumstances in which the letter was physically delivered to Hume's solicitors. 31 I am satisfied by the evidence of Ms Naylor, a paralegal employed by Bakers, that she delivered the letter to the offices of the Hume companies' solicitors, Messrs Home Wilkinson Lowry, shortly before noon on 22 December 2006. I am also satisfied that the receptionist accepted service even though the solicitor on the record, Mr Webeck, was not in the office. The affidavit of Ms Cameron does not establish the contrary position. 32 That service took place as deposed to by Ms Naylor is plainly supported by an email sent to Mr Webeck at 12:33PM on 22 December 2006. It states that there is attached a copy of correspondence delivered by hand earlier that day. The attachment is the letter of 22 December 2006. 33 What is more, the evidence in Exhibit H plainly establishes that Mr Webeck forwarded the letter of termination on to the Hume companies on 27 December 2006. It was forwarded by email but its production in answer to a notice to produce shows, in my opinion, that it was printed out as a written document before 1 January 2007. 34 This follows from the nature of the document, its importance to the Hume companies and the overall circumstances which clearly give rise to an inference that the email was printed out on or about 27 December 2006. 35 Thus, I find that the letter of 22 December 2006 came to the attention of the Hume companies, having been forwarded on to them by Mr Webeck. Article 20(3) does not preclude notice of termination by way of indirect delivery to the Distributor. In my opinion, this is sufficient to amount to effective notice, provided that the document is unequivocal and does not constitute a repudiation. 36 Strictly speaking therefore, it is unnecessary to consider whether Hume's solicitors had authority to receive notice. However, I will proceed to deal with that issue. 37 The costs agreement between Hume and the solicitors produced in answer to a notice to produce was obviously superseded by a retainer that applied to the conduct of the litigation. However, no further costs agreement was produced. 38 It is true, as counsel for Hume submitted, that in general a solicitor does not have implied or ostensible authority to accept contractual notices on behalf of a client, particularly where that amounts to the exercise of a substantive right; see IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 at [4] and [33]; see especially the helpful review of the authorities by Keane JA at [33] --- [44]. 39 However, I do not need to consider the questions of implied or ostensible authority because in my opinion Messrs Home Wilkinson Lowry had actual authority to receive the notice. 40 This is to be inferred from two pieces of evidence. First, on 20 January 2006, Home Wilkinson Lowry wrote to Exact Software Australia. Mr Leathem is the managing director of Hume Computers and a director and shareholder of Hume Business Solutions. 42 The expression "matters arising" is a broad one and is to be considered in the light of the subject matter of the letter of 20 January 2006 which demanded undertakings from Exact Software Australia prior to the institution of these proceedings. 43 It is also to be considered in light of the plain fact that Home Wilkinson Lowry are acting as solicitors for the Hume companies in the present proceedings, notwithstanding that no costs agreement has been produced relating to any such retainer. Thus it may be thought that the solicitors would have authority to deal with all issues which reasonably arise in the pursuit of the proceedings; CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 8 ANZ Ins Cas 61-232 at 75,555 (Kirby P). 44 The observations of Kirby P in CIC Insurance were directed toward ostensible authority. However, here, particularly in light of Mr Leathem's affidavit and the failure to produce a current written retainer, I would infer the existence of actual authority. 45 That termination of the Distributorship under Article 20(3) was part of the subject matter of the proceedings may be seen from my remarks in [32] of my earlier judgment. 46 In addition, I can be more comfortable in drawing an inference that the solicitors had actual authority by the failure of the Hume companies to call evidence. I am entitled to infer that the testimony would not have been favourable to Hume's case; Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418 --- 419 (Handley JA). 47 The only other submission which I need to address under this subheading is not concerned with the question of authority. It is whether the email of 22 December 2006, attaching a copy of the letter of the same date, constituted written notice. 48 Counsel for Hume submitted it did not because an email is an electronic representation of writing and therefore does not constitute writing itself as required by Article 20(3). I reject that submission. 49 The requirement of written notice is to be construed in light of the fact that this is a commercial agreement made between two companies engaged in the computer software business. I would be blinding myself to commercial and technological realities to find that an email communication in the present circumstances was not written notice; McGuren v Simpson [2004] NSWSC 35 at [20] --- [21]. 50 There was no suggestion that the email was not received. This submission focussed upon the use of the words "intention to terminate". This was said to amount to an indication of an intention to send a further notice, at a future date, actually terminating the agreement. 52 In Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] UKHL 19 ; (1997) AC 749 at 771, Lord Steyn observed that in determining the meaning of the language of a commercial agreement the law favours a "commercially sensible construction". It is hostile to technical interpretations and undue emphasis on niceties of language; see also Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177 at [25] (Kiefel, Sundberg & Edmonds JJ). 53 Applying this approach, in my opinion the letter conveyed clearly and unequivocally that the Distributorship Agreement is to terminate with effect on and from 31 March 2007. If authority is needed for this proposition, it may be found in Ballas v Theophilos (No 2) [1957] HCA 90 ; (1957) 98 CLR 193 at 204-205; see also Young v Lamb at [28]. The first was the statement in the fourth paragraph that Exact does not concede that Hume Computers was entitled to assign the agreement to Hume Business. The second was Exact's reservation of its right to terminate immediately under Article 20(2) if it becomes aware of a breach by Hume Computers or Hume Business. 55 In my view neither of these statements constituted a repudiation because they do not evince an intention not to comply with the contract as correctly interpreted; DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12 ; (1978) 138 CLR 423 at 431-432 (Stephen, Mason & Jacobs JJ). 57 In my earlier judgment at [12] I said that the meaning of Article 21(1)(a) is not entirely clear, although it plainly enough entitles Hume to substantial compensation on termination of the Distributorship Agreement. 58 Whatever the proper construction of Article 21(1)(a), Exact has not breached it nor threatened to do so. Indeed, in a letter of 31 January 2007, Messrs Baker & McKenzie confirmed that its client would pay "such compensation, if any, as may be required by the Agreement". The words "if any" do not evince an intention inconsistent with performance of Exact's obligations. 59 It follows in my view that there is no warrant for the imposition of the condition proposed by Hume. I will also make the declarations sought in the cross-claim. 61 The parties are to bring in short minutes to reflect this. 62 Exact foreshadowed an application for a special costs order. My preliminary view is that, whilst Hume's objections to the notice were without substance, the circumstances do not warrant an indemnity costs order against it. I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | termination whether notice of termination valid agreement governed by foreign law whether notice must be effective under foreign law where notice given and received by solicitors for each party and not parties themselves whether notice unequivocal of election to terminate whether notice constituted repudiation of agreement notice held to be valid contract |
When the matter came on for hearing before me, the appellant was unrepresented but he had present a friend who assisted him and also an interpreter. The matter that he raised on the hearing before me was a submission to the effect that he had not had an opportunity to have his case properly put before the Tribunal, and that he was not present during at least part of the proceedings before the Federal Magistrate. 2 The adequacy of the interpretation was a matter dealt with in some detail in the decision of the Tribunal. The Tribunal addressed the issue because a complaint was made by the appellant after the hearing to the effect that the interpretation was inadequate. To support this claim, the appellant put an allegedly correctly translated transcript, along with the original transcript, before the Tribunal. The Tribunal examined this material and formed the view that the inaccuracies alleged did not affect the reasons for its decision. These reasons were then set out in its decision of 14 November 2005. 3 Notwithstanding the above, the appellant pleaded no ground of appeal and made no submission before the Federal Magistrate in relation to misinterpretation. Consequently, this matter was not dealt with in the decision of the Federal Magistrate. In addition, no question was raised concerning the appellant's absence during the course of the hearing before the Federal Magistrate. These omissions occurred despite the fact that the appellant was represented before the Federal Magistrate by a firm of solicitors and also by counsel. 4 In light of these omissions before the Federal Magistrate, I am not persuaded in the circumstances of this case that it is appropriate for this Court to entertain on appeal any further dispute in relation to the alleged misinterpretation and the effect which it may have had on the reasoning of the Federal Magistrate. In any event, these matters were not raised in the Notice of Appeal before this Court, and have not been addressed by the appellant in submissions. Moreover, insofar as the appellant alleges that the Tribunal did not act logically or rationally in deciding the case, no information was given, no specifics were set out and no argument was put to the Court to support this contention. In any case, the Full Court of this Court has held on several occasions that the mere fact that a decision is not logical is not of itself a ground for judicial review: NACB v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 235 at [29] ; W404/01A of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 255 at [35] ; VWST v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 286 at [18] . 5 Another contention which was raised in the Notice of Appeal related to the construction of s 425 of the Migration Act 1958 (Cth) and its application to the circumstances of the present case. One matter which was raised by the appellant was that the Tribunal did not put him on notice that his failure to move to Karachi was going to be a critical issue in its decision. 6 In its recent decision in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 at [35] (' SZBEL '), the High Court enunciated the principle that if the Tribunal takes no step to identify and raise an issue other than those which the delegate considered dispositive, and does not tell the applicant what that other issue is, the applicant is entitled to assume that the issues the delegate considered important comprise all the issues in relation to the decision under review. In the present case, the Federal Magistrate accepted that there was an issue which was different which was considered by the Tribunal. However, having regard to the transcript of the proceedings in the Tribunal, the Federal Magistrate formed the view that the issue had been referred to as an important question by the Tribunal, which was sufficient to satisfy the principle set out in SZBEL . 7 In SZBEL , the High Court refers to an obligation on the Tribunal to invite an applicant to amplify any aspect which it believes will be taken into account and of which the applicant may not be aware. It is not necessary, according to the reasoning in SZBEL , to expressly challenge an applicant by directly putting a proposition contradictory to his or her submissions, but it is important that the matter should at least be referred to. In the present case, I am of the view that the transcript indicates that the Tribunal did signal a concern in relation to the question now raised by the appellant on appeal, namely, his reasons for not going back to Karachi. The Tribunal raised these questions and indicated their importance in questions 46 through to 57 of the transcript before the Tribunal. 8 In those circumstances, although the principles of SZBEL are indeed called into play, I consider that the task imposed on the Tribunal by those principles has been satisfied. Accordingly, having heard the submissions of the appellant and having considered the reasoning of the Tribunal and the Federal Magistrate below, I am of the opinion that this appeal should be dismissed with costs as it does not have any substance and in particular because the question of misinterpretation was not raised either before the Federal Magistrate or in the Notice of Appeal before this Court. 9 For the above reasons, the appeal is dismissed. I will fix costs in this matter at $4000. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | tribunal to identify issues it considers important illogical reasoning not of itself ground for review migration law |
The respondents have admitted liability. The Court has been asked to impose penalties and make other appropriate orders. The parties have tendered an agreed statement of facts. This means that the parties agree that, for the purposes of this proceeding, the facts in this statement are not to be disputed: see Evidence Act 1995 (Cth) s 191. The parties say that this agreement is not to be taken as an admission to those facts outside the context of this proceeding. I am not bound to accept facts merely because they have been agreed between the parties. Also I can draw inferences from such of the agreed facts as are accepted. 2 Visy and Amcor were the major participants in the market for the supply of corrugated fibreboard packaging (CFP) products in Australia. Between them they held over 90 per cent of that market. 3 Broadly speaking, the contraventions fall into four categories. 4 First, there was an Over-arching Understanding made in early 2000 under which Amcor and Visy agreed to maintain their respective market shares and not to deal with each other's customers. If a customer did change suppliers, the firm receiving that new customer would provide one of its own to the other by way of "compensation". In effect, there would be a swapping of customers (although the customers were not to know this). Further, Visy and Amcor would collaborate with each other in order to increase prices. 5 Secondly, there were Annual Price Increase Understandings whereby increases in prices were agreed in each of the years 2000, 2001, 2002 and 2003. 6 Thirdly, there were Customer Price Understandings whereby prices were agreed in respect of particular customers. 7 Fourthly, there were Compensation Understandings whereby, in respect of particular customers who had changed from one supplier to the other, that supplier would provide another customer or customers in exchange. It worked this way. If, say, Amcor customer X decided to switch to Visy, Amcor and Visy would get together and decide on a Visy customer, say Y, who would be provided to Amcor as "compensation" for the loss of X. When Y's contract came up for renegotiation, Visy and Amcor would exchange details of proposed prices and other terms so as to ensure that the deal offered to Y by Visy was much less attractive than Amcor's. Y would then, as Visy and Amcor intended, accept Amcor's offer. 8 The Commission has not proceeded against those on the Amcor side of this cartel because in late 2004 Amcor approached the Commission and admitted liability. The Commission applied its Leniency Policy for Cartel Conduct, published in 2003, under which the first party to disclose a cartel of which the Commission is unaware will receive an immunity, provided it is not the "clear leader", gives full and frank disclosure, and continues to cooperate with the Commission. In unrelated litigation Amcor had sued former executives and obtained a Court order for a search of their premises. Incriminating material, including tape recordings of conversations, was discovered and on its solicitors' advice Amcor approached the Commission. Details of these events will be found in my earlier judgment on an interlocutory application: Australian Competition and Consumer Commission v Visy Industries Holdings Pty Ltd (No 2) [2007] FCA 444 at [7] - [52] . They include groceries, beverages, dairy products, fruit, produce, meat, poultry, seafood and confectionery. Returnable plastic crates, shrink wrap and other packaging products compete in segments of the CFP market, but otherwise there are no packaging materials which are reasonably substitutable for, or in close competition with, CFP products in relation to the packaging of the goods mentioned. CFP is used to make the ubiquitous cardboard box. 10 The type of CFP products and associated services supplied by Visy and Amcor would vary substantially between customers due to differing customer requirements in terms of board paper type, strength, construction, sheet size, design style, print characteristics and method of assembly. Different board grates were used in the manufacture for supply of CFP products to suit the different applications of the products. Corrugated boxed were supplied in a number of different styles. CFP products could have printing applied either in a pre-print or post-print process. 11 In most cases CFP products were supplied to the customer's specifications. In particular industries, some standard sized CFP boxes were used, such as fruit and other produce. However, further value adding could be required such as the individual customer's logo or product information. 12 The CFP services supplied by Visy and Amcor in connection with the supply of CFP products included performance and quality testing, art graphics and printing services, packaging design, performance and cost optimisation, development services, tooling and packaging systems, transport and delivery, warehousing of stock and supply chain cost analysis services. 13 The cost of supplying different CFP products is affected by product type, dimensions, board grade, printing, order quantity, freight and other factors. 14 From 2000 to 2004 the value of the CFP market was between $1.8 and $2 billion per annum. Details of some individual customers' requirements have been the subject of confidential evidence. However, it can be said that some of the larger customers would have annual purchases of the order of $20 million or more. Visy manufactures CFP products from both recycled and kraft (ie virgin) paper. It has manufacturing plants at Dandenong, Campbellfield and (since 2002) Wodonga in Victoria, Warwick Farm and Smithfield in New South Wales, Carole Park in Queensland; Gepps Cross in South Australia, and O'Connor in Western Australia. 17 Visy is a vertically integrated operation. It purchases packaging paper from another member of the Visy Group, Visy Pulp and Paper Pty Ltd, which operates seven manufacturing establishments in Australia. They produce annually more than 1 million tonnes of packaging paper, of which 750,000 tonnes is made from recycled paper and 300,000 tonnes from kraft. 18 Since 2000 the Visy Group has increased its production capacity and production of both pulp and paper products and CFP products. 19 Since 1995 Visy increasingly experienced production capacity constraints, particularly in Queensland. Transport of products across State borders alleviated these constraints, but this added to distribution costs. In 2002 Visy's new Wodonga plant commenced operation. This substantially increased Visy's production capacity for Victoria, New South Wales and South Australia. 20 The best available estimate of market share of CFP supplied is the estimated share by volume per square metre of CFP sheet manufactured. The estimated annual sales value of those customers was $75 to $80 million per annum. During the same period Visy ceased supplying approximately 100 to 125 companies by reason that they had entered into supply arrangements with the Amcor Group. Estimated annual sales value of those customers was $40 to $45 million per annum. The numbers of customers moving between Amcor and Visy during that period includes customers referred to hereafter as having been transferred as "compensation". 22 Most of Visy's and Amcor's largest customers were supplied under specifically negotiated contracts. These contracts specified the manner in which prices would be reviewed during the term of the contract. Typically, prices were held constant for a period and then increased by a specified fraction of CPI increases or cost movements. 23 The contracts negotiated between suppliers of CFP and individual customers dealt with a number of practical matters, including technical specifications of each product which for some of the large customers could run to sometimes thousands of different products, order quantities, special palletising requirements, special packaging equipment, delivery, and timing of deliveries. 24 Such matters affected the price to be charged by suppliers of the CFP for the products and services to be supplied. The charges could be affected by terms as to the period during which prices would be held constant and the manner of the increase, charges for the cost of tooling, volume rebates, discounts for early payment, sign on fees and contribution to capital requirements of a customer. Contracts sometimes included a "meet the market" clause by which the customer was entitled to seek prices from another supplier and, if the supplier did not agree to meet that price, the customer could obtain supply from the other supplier. 25 The majority of contracts with customers are renewed or extended with the existing supplier. However a customer might seek an offer from an alternative supplier under a "meet the market" clause. In such a case supply may not change but the method is used to market check the price levels or competitiveness. 26 If a customer decides to seek an offer or tender from an alternative supplier, the tender process typically lasts several months and requires substantial expenditure, both for the potential alternative supplier and the customer. This is because typically the customer purchases a large number of CFP products and the alternative supplier must undertake a process of learning about the customer's requirements and its current products. 27 An incumbent supplier has a number of advantages during that tender process, including the existing commercial relationship, a better understanding of the customer's product requirements, forecasting schedule and order patterns, current equipment on site, less transaction costs for the customer, familiarity with the customer's intellectual property and technology and the operation of the "better the devil you know" factor. 28 Costing an offer for a new customer depends on a number of factors including board grades, box design, printing requirements, the number of passes in the separate manufacturing task, minimum quantities for each order, the number of stock keeping units (SKU) that is an individual CFP product with a designated order number, delivery times and waste levels. 29 During 2000 to 2003 Visy implemented a general price increase to its non-contract customers once a year. Its standard terms and conditions permitted Visy to increase prices on giving 30 days notice. Visy would determine the amount and date of the increase and advise its State managers to write to non-contract customers. State mangers had the discretion to determine whether to implement in respect of any particular customer the four general price increases which occurred from 2000 to 2003. That discretion was in fact exercised on some occasions. 30 In the two year period to late 1999 both Visy and Amcor had incurred significant net trading losses due in part to a price war between them. From January 2000 Visy adopted some strategies to return the business to profit including cessation of free equipment deals, improved trading terms, increased charges for tooling services and volume focus to shift to retention of large accounts and growth in small/medium accounts. It is a private company owned by Mr Pratt and his family. As can be seen from the brief description of its operations, Visy is a very large company. The Visy Group of which it is a member is larger again. 32 The fifth respondent Mr Harry Debney was the Chief Executive Officer of Visy. 33 The sixth respondent Mr Rod Carroll was the General Manager of Visy. 34 Mr Pratt is still a director of Visy. Mr Debney and Mr Carroll have resigned their respective positions. 36 Mr Peter Brown was the Managing Director of Amcor Australasia, a division of Amcor Limited which conducted the business of manufacturing and supplying CFP. 37 Mr Peter Sutton was from 1 July to 30 September 2003 Deputy Managing Director of Amcor Australasia and from 1 October 2003 until 6 December 2004 the Managing Director of that division. 38 From 1 February 2000 until 30 June 2000 Mr James Hodgson was Group General Manager, Corrugating, Northern Region, of Amcor Fibre Packaging Australasia (AFPA), a subdivision of Amcor Australasia. From about 1 July 2000 until 1 October 2004 Mr Hodgson was Group General Manager of AFPA. 39 From January to July 2000 Mr Edward Laidlaw was General Manager Sales/Group Marketing Executive of Amcor Australasia. From August 2000 until September 2002 he was General Manager - Sales and Marketing of AFPA. On 2 September 2002 he was appointed General Manager, Sales - Beverage and Processed Food Packaging of AFPA until 28 February 2003. From 1 March 2003 until 30 November 2004 Mr Laidlaw was Group General Manager, Marketing and Technology of Amcor Australasia. 40 From July to December 2001 Mr Ian Sangster was Regional General Manager, Northern Region of AFPA. From January until December 2002 Mr Sangster was National Marketing Manager for CFP for fresh foods of AFPA. He was Acting General Manager, Sales and Marketing of AFPA from December 2002 until August 2003. He then was appointed General Manager Sales and Marketing Australia of Amcor Australasia and remained in this position until October 2004. Unless otherwise indicated, the statement of agreed facts records what was the substance of conversations. It uses the formula "X said words to the effect that". It does not purport to be an agreement as to the actual words used. Also it seems unlikely that the term "Over-arching Understanding" was actually used at the time. However, the term captures the essence of the understanding which the parties arrived at. It is convenient to use it in this descriptive sense. 43 The Over-arching Understanding was arrived at as a result of a series of meetings between Mr Debney and Mr Brown at Mr Brown's home in Glen Iris, Melbourne between January and April 2000. Mr Debney said to Mr Brown that he believed it was not in Visy's interests to continue the price war with Amcor and that Visy intended to increase its CFP prices to more realistic levels. He said he wanted the intense competition between Visy and Amcor to cease so that each company could then sell CFP at sustainable price levels. 44 Mr Debney proposed that Visy and Amcor would continue to enjoy roughly the current share each had of the CFP market. They would not poach each other's customers and prices would be increased from their current unsustainable levels. Mr Debney said that these proposals were the basic principles which Visy and Amcor should agree to and abide by. They should comply with those principles and not take any action which would precipitate a return to price war conditions. He intended to ensure that Visy abided by these principles. 45 Mr Brown said that Amcor would agree to act in accordance with the principles proposed by Mr Debney, subject to Visy also agreeing to so act. Mr Debney said that Visy would. (For the purposes of this proceeding only, Mr Debney agrees with the version of events generally set out in [42]-[44] save and except that he does not agree with the precise chronological sequence of the discussions. Mr Brown said that he would appoint Mr Laidlaw to be the Amcor contact person. 47 In this and other instances of Understandings, the agreed statement of facts says, and I accept, that the Understanding is proved not only by the conversations, but is also to be implied from the conduct which constitutes giving effect to the Understandings. 49 In July 2000 Mr Carroll met with Mr Hodgson and Mr Laidlaw at Rockman's Regency Hotel in Melbourne. Mr Carroll or Mr Hodgson said to the other that Visy and Amcor had agreed that they would not poach each other's principal CFP customers, that their respective shares of the CFP market would remain at roughly their current levels and each would focus on increasing its prices for CFP. 50 Mr Carroll said that he had been appointed as the contact person at Visy with whom Amcor could discuss issues and that Mr Laidlaw should deal with him. He said that he would buy Mr Laidlaw a pre-paid mobile phone so that he and Mr Carroll could contact each other. Mr Hodgson said to Mr Carroll that Visy and Amcor should agree on minimum floor prices for CFP. Mr Carroll responded that Visy and Amcor should give some thought to the suggestion and talk about it later. 51 Between July 2000 and November 2004 Mr Carroll and Mr Laidlaw met some 30 to 40 times to discuss issues or matters arising from the Over-arching Understanding. These meetings were held at Rockman's Regency Hotel in Melbourne, the Tudor Motel in Box Hill, the Elizabethan Lodge in Blackburn North, Westerfolds Park on Fitzsimons Lane, Templestowe, the Templestowe Park on Porter Street, Templestowe, the Cherry Hill Tavern in East Doncaster and Myrtle Park on Severn Street, North Balwyn. Mr Carroll and Mr Laidlaw also discussed matters arising from the Over-arching Understanding by telephone on numerous occasions. The telephone discussions were generally initiated from public telephones and received on Mr Carroll's or Mr Laidlaw's mobile telephones. They had exchanged mobile telephone numbers either at the meeting referred to at [49] --- [50] or soon after. (For the purposes of this proceeding only, Mr Carroll agrees with the version of events generally set out in this paragraph, save and except that he does not agree that he and Mr Laidlaw met or spoke on average more than once per month. Mr Carroll told Mr Laidlaw he should use the Optus mobile for the purpose of contacting him in relation to the Over-arching Understanding. 53 Between late 2000 and late 2001 Mr Carroll and Mr Laidlaw used their mobile telephones to contact each other to discuss issues arising from the Over-arching Understanding. 54 Later in these reasons there is frequent reference to discussions between Mr Carroll and Mr Laidlaw. Those discussions occurred either at the various venues referred to in [51] above or by telephone. 55 Between July 2000 and October 2004 Mr Hodgson attended about five to ten of the meetings between Mr Carroll and Mr Laidlaw. 56 Between mid 2000 and September 2003, about twice to three times per year, Mr Debney met with Mr Brown to discuss various industry matters and issues or matters arising from the Over-arching Understanding. These meetings were generally held at Crown Towers, Southbank. 57 Towards the middle of 2001 Amcor became concerned that the Over-arching Understanding was in danger of collapsing. On 21 May 2001 at Mr Jones' request Mr Pratt met with Mr Jones at the All Nations Hotel in Richmond. Mr Pratt communicated to Mr Jones that Visy would adhere to an understanding that Mr Debney had reached with Mr Brown, that is to say, the Over-arching Understanding. 58 On 27 September 2002 Mr Debney met with Mr Brown at the Crown Crystal Club in Crown Towers, Southbank. Mr Brown said that Mr Hodgson had some concerns about Visy's behaviour in the CFP market and that Mr Hodgson wanted to meet with Mr Debney to discuss these matters and to have Mr Debney confirm that Visy would continue to honour the Over-arching Understanding. Mr Debney agreed. As a result, on 20 October Mr Debney met with Mr Hodgson at Crown Towers to discuss the Over-arching Understanding. 59 On 3 September 2003 Mr Debney met with Mr Brown and Mr Sutton at the Crown Crystal Club. Mr Brown said that Mr Sutton had his full confidence and that he believed that Mr Sutton would be able to work with Mr Debney to continue implementing the Over-arching Understanding to maintain a stable market. Mr Debney said that he believed he could work with Mr Sutton to maintain the stable market. Mr Sutton said the same thing. 60 Between January and October 2004 Mr Sangster attended about three to five of the meetings between Mr Carroll and Mr Laidlaw. It contained provisions to the effect that Visy would increase its prices for CFP supplied to its non-contract customers by about 7 per cent with effect from about May 2000 and Amcor would increase its prices by approximately 7 per cent with effect from the same time. 62 The 2000 Price Increase Understanding was arrived at as a result of meetings between Mr Debney and Mr Brown between January and mid-March 2000. At the meetings Mr Debney said to Mr Brown that Visy had conducted an evaluation that a general price increase was justified and had determined to implement such an increase. Mr Debney said Amcor should agree to implement a price increase for non-contract customers from around May 2000 and that Visy would lead with an increase of its prices for non-contract customers of 7 per cent if Amcor would agree to follow that increase. Mr Brown said to Mr Debney that Amcor would follow a price increase by Visy for non-contract customers of 7 per cent but Visy must go first. Wax boxes constitute a very small percentage of boxes supplied to non-contract customers. 64 On 21 March 2000 Visy notified certain of its non-contract customers that its prices for the supply of CFP would increase by 7 per cent with effect from 1 May 2000. 65 From about 21 March 2000 Visy sent letters to its non-contract customers (with some exceptions) informing them that Visy would increase its prices for the supply of CFP by 7 per cent with effect from 1 May 2000. 66 From about 11 April 2000Amcor sent letters to its non-contract customers informing them that it would increase its prices for the supply of CFP by 7 per cent with effect from 8 May 2000. 67 From about 1 May 2000 Visy increased its prices for the supply of CFP to many of its non-contract customers by 7 per cent. 68 From about 8 May 2000 Amcor increased its prices for the supply of CFP to its non-contract customers by approximately 7 per cent. It contained provisions to the effect that Visy would increase its prices for CFP supplied to its non-contract customers by approximately 8.25 per cent with effect from about early April 2001 and Amcor would increase its price for CFP supplied to its non-contract customers by approximately 8.5 per cent with effect from about mid-March 2001. 70 The 2001 Price Increase Understanding was arrived at in discussions between Mr Carroll and Mr Laidlaw between about October 2000 and January 2001. Mr Laidlaw said to Mr Carroll that Amcor wished to increase its prices for its non-contract customers and he was seeking confirmation that Visy would support the proposed price increase. Mr Laidlaw said that Amcor would lead the proposed price increase by increasing its prices for non-contract customers by 8.5 per cent in mid-March 2001 and that Visy should follow Amcor's price increase promptly. 71 Mr Carroll said to Mr Laidlaw that Visy was also proposing to increase its price to its non-contract customers by a similar percentage and would do so with effect from the anniversary of the 2000 price increase, on 1 May 2001. 73 From about 5 March 2001 Visy sent letters to its non-contract customers (with some exceptions) informing them that Visy would increase its prices for the supply of CFP by 8.25 per cent with effect from 9 April 2001. 74 From about 20 March 2001 Amcor increased its prices for the supply of CFP to its non-contract customers by approximately 8.5 per cent. 75 From on or about 9 April 2001 Visy increased its prices for the supply of CFP to many of its non-contract customers by approximately 8.25 per cent. It contained provisions to the effect that, subject to making some exceptions of its own choosing, Amcor would increase its prices for CFP supplied to its non-contract customers by approximately 3.75 per cent with effect from about mid-March 2002 and, subject to making some exceptions of its own choosing, Visy would increase its prices for CFP supplied to its non-contract customers by approximately 3.25 per cent with effect from about early April 2002. 77 The 2002 Price Increase Understanding was arrived at discussions between Mr Carroll and Mr Laidlaw between December 2001 and February 2002. Mr Laidlaw said to Mr Carroll that Amcor wished to increase its prices for non-contract customers in early 2002 by a percentage about equal to the increase in the CPI and Amcor proposed that the price increase be 3.75 per cent in March 2002. 78 Mr Carroll said that the 3.75 per cent price increase was higher than the price increase proposed by Visy, that Visy would increase its prices for non-contract customers but only by about 3.25 per cent. He also said that Visy would make exceptions for unspecified customers in applying the price increase. 80 From about March 2002 Visy sent letters to non-contract customers of its choosing informing them that it would increase its prices for the supply of CFP by between 3.25 and 3.5 per cent with effect from 8 April 2002. 81 From about 18 March 2002 Amcor increased its prices for the supply of CFP to non-contract customers of its choosing by approximately 3.75 per cent. 82 From about 8 April 2002 Visy increased its prices for the supply of CFP to some of its non-contract customers of its choosing, by approximately 3.25 to 3.5 per cent. It contained provisions to the effect that, subject to making some exceptions of its choosing, Amcor would increase its prices for CFP supplied to its non-contract customers by approximately 3.5 per cent with effect from about early March 2003, and subject to making some exceptions of its choosing, Visy would increase its prices for CFP supplied to non-contract customers by approximately 3.25 per cent with effect from about mid-March 2003. 84 The 2003 Price Increase Understanding was arrived at as a result of discussions between Mr Debney and Mr Hodgson at Crown Towers on or about 20 October 2002. Mr Debney said that Visy was prepared to have another moderate price increase for non-contract customers. Mr Hodgson said that the increase should be 3.5 per cent. 85 Mr Debney said that he agreed the increase should be about CPI and the increase should be announced in the first quarter of 2003 and implemented in March 2003. He said that he did not care whether Visy or Amcor led the price increase and if Amcor wanted Visy to lead then it would. 86 Mr Hodgson said that Amcor would notify its non-contract customers of the 2003 price increase by a letter in January or February 2003 and implement the increase in March 2003. Mr Debney responded that Visy would take the same action for its non-contract customers. 87 In a further discussion between Mr Carroll and Mr Laidlaw between about December 2002 and January 2003 Mr Laidlaw said that Amcor wished to increase its prices for its non-contract customers in March 2003 by a percentage about the same as the increase in CPI, which it expected to be 3.0 to 3.5 per cent and that he was seeking confirmation that Visy would support the proposed increase. 88 Mr Carroll said to Mr Laidlaw that Visy was also proposing another general price increase for its non-contract customers, but the increase must be subject to exceptions, and Visy would increase its prices to its non-contract customers by 3.25 per cent subject to some exceptions. 90 From about mid-February 2003 Visy sent letters to non-contract customers of its choosing informing them that Visy would increase its prices for the supply of CFP by 2.5 to 3.25 per cent with effect from 17 March 2003. 91 From 3 March 2003 Amcor increased its prices for the supply of CFP to non-contract customers of its choosing by approximately 3.5 per cent. 92 From 17 March 2003 Visy increased its prices for the supply of CFP to many non-contract customers of its choosing by approximately 2.5 to 3.25 per cent. Its range includes dairy products, bread and frozen foods. It operates a number of manufacturing sites across Australia. 94 Nestlé Australia Limited is a manufacturer of fast moving consumer goods such as snack foods, dairy products and powdered beverage products. It also operates a number of plants across Australia. It contained provisions to the effect that Visy would not seek to enter into contracts for the supply of CFP to Goodman Fielder and Nestlé, two of Amcor's principal customers and, if Goodman Fielder or Nestlé requested Visy to provide a quote for the supply of a quote, Visy would quote prices higher than Amcor's prices. 96 The Goodman Fielder and Nestlé Price Understanding was arrived at as a result of discussions between Mr Carroll and Mr Laidlaw in early 2001. Mr Laidlaw said to Mr Carroll that he understood that Visy was to "cover" Amcor on the upcoming tenders for the Goodman Fielder and Nestlé CFP accounts. Mr Carroll responded that Mr Laidlaw's understanding was correct. Mr Carroll said that Visy was not interested in picking up the account and would quote prices above the prices provided by Mr Laidlaw. 98 Goodman Fielder gave Visy a period of time in which to prepare its tender. The time was particularly short in light of the fact that the tender provided for the supply of about 1950 stock keeping units (SKUs) (products for which prices were to be provided). 99 On 11 April 2001 Visy submitted a tender to Goodman Fielder. Amcor submitted its tender on 27 April. 100 On 22 May Visy submitted a revised proposal to Goodman Fielder. It reduced its prices by 3.8 per cent across the board by changing quantity breaks and removing freight costs. Goodman Fielder held the belief that Visy's prices were higher than Amcor's. (I note here that in this and many other instances the statement of agreed facts uses the formula "Visy's (or Amcor's) prices were higher than Amcor's (or Visy's) prices and/or the customer held the belief that the prices were higher". On enquiring of senior counsel for the Commission I was told that this formula was the best agreement that could be reached. Often, he said, it was difficult to tell which price was, objectively speaking, "higher" because there were not only the dollar figures, but other elements such as volume discounts, early payment discounts, minimum orders and the like. It seems to me that at a minimum the statement of agreed facts accepts that the customer held a belief that one supplier's prices were higher than the other. This is the important fact for present purposes. What counts is what the customer was led to believe as a result of Visy and Amcor putting the relevant Understanding into effect. 102 On 23 November Amcor and Goodman Fielder entered into a written agreement for Amcor to supply CFP. The contract was for a term of seven years. Under the contract Amcor provided substantial benefits to Goodman Fielder such as a "sign on" payment of $5.794 million and in return Goodman Fielder agreed to price increases averaging about 10 per cent for its Australian operations. 103 In June 2001 Nestlé requested Visy to participate in a benchmarking exercise involving providing prices for a limited number of products including bulk bins currently supplied by Visy. Visy's primary concern was to retain supply of those products. 104 Amcor had a five year contract for the supply of CFP to Nestlé which commenced in 1998. The benchmarking exercise was a mid-term price check. Visy provided the prices to Nestlé. The prices were generally higher than Amcor's then current prices. 105 A benchmarking exercise is difficult because Visy does not know the volume of business that will be available to it and accordingly cannot factor in the potential for volume discounts or the potential to deliver cost savings to the customer. Also, in most benchmarking exercises Visy assumes that the customer is acting under a "meet the market" clause and that the existing supplier will have the right to match any price offered by Visy. 106 On 16 July 2001 Amcor informed Nestlé that its existing supply contract had commenced on 1 January 1999 and had been entered into during the Visy-Amcor price war. 107 Between October 2001 and February 2002 Mr Carroll and Mr Laidlaw discussed the Nestlé account on a number of occasions. Mr Laidlaw said that he wanted to know whether Visy's negotiations with Nestlé had progressed. Mr Carroll said that they had not progressed and that he expected Amcor to retain the account. 108 On 11 February 2002 at a meeting between Mr Laidlaw and Nestlé officers, Amcor and Nestlé reached an informal agreement for Amcor to supply CFP to Nestlé with a 37 per cent price increase over the three year term of the agreement, without Nestlé seeking a formal proposal from Visy. This was confirmed in a written agreement on 23 December 2002. It operates a number of manufacturing sites across Australia. 110 Visy had a seven year contract to supply Fosters' CFP requirements expiring on 30 June 2003. This agreement provided for half yearly price increases of 80 per cent of CPI. Having acquired other businesses that purchased CFP from Visy, Fosters began considering the possibility of consolidating the various agreements. Mr Ron Brown of Fosters did not consider the existing contracts were uncommercial, but believed it should be possible to negotiate better terms. He was particularly interested in annulling further price increases that were due every six months from July 2001 until the expiration of the existing agreement. 111 In mid-2000 Visy proposed consolidating the existing agreements, extending the agreement to June 2008 and with existing prices to be held firm until 30 June 2002. 112 Coca Cola Amatil Limited (Coke) manufactures carbonated soft drinks, juice and mineral waters and operates a number of manufacturing sites around Australia. It contained provisions to the effect that Amcor would not seek to enter into a contract for the supply of CFP to Fosters, Amcor would quote prices to Fosters higher than the prices quoted by Visy, Amcor would not seek to enter into a contract for the supply of CFP to Coke and Amcor would not quote prices to Coke higher than the prices Visy quoted. 114 The Fosters and Coke Price Understanding was arrived at meetings between Mr Debney and Mr Brown between January and March 2001. During those meetings Mr Debney said to Mr Brown that Amcor should not cause trouble for Visy in the upcoming tenders to Fosters and Coke. Mr Brown said that Amcor would not compete with Visy for Fosters and Coke accounts because they were Visy's customers. Mr Laidlaw said to Mr Carroll that he understood Amcor was to assist Visy to renew its CFP supply contract with Fosters by Amcor quoting prices higher than Visy's. Mr Carroll said that Mr Laidlaw's understanding was correct. 116 Mr Laidlaw also said that Fosters had requested Amcor to quote on a few product lines and if Amcor's quote was competitive Fosters would ask Amcor to quote for all its CFP requirements. Mr Carroll said to Mr Laidlaw that he would provide the general level of Visy's prices on the Fosters account to Mr Laidlaw so that Amcor could "cover" Visy's prices. 117 In March 2001 Mr Carroll and Mr Laidlaw had a discussion in which Mr Laidlaw informed Mr Carroll of the Fosters product lines on which Fosters had requested Amcor to quote and Mr Carroll told Mr Laidlaw the general level of Visy's pricing for the Fosters account. 118 On 22 March 2001 Amcor submitted indicative prices to Fosters for the product lines nominated by Fosters. 119 In February and March 2001 Visy submitted the proposal to Fosters for a new supply agreement which included incentives additional to those previously offered. This belief was formed in March 2001 by Mr Brown and Mr Chris Anderson of Fosters on the basis of their review of prices of Visy and Amcor. 121 In May 2001 Visy entered into a CFP supply agreement with Fosters which included the incentives mentioned. 122 In respect of Coke, it is not alleged that Visy gave effect to the Fosters and Coke Price Understanding. It contained provisions to the effect that both Visy and Amcor would seek the continuing of their then current supply of CFP to Mildura Fruit Co, part of the customer's requirements being supplied by Visy and the remainder by Amcor. Each of Amcor and Visy would increase its prices by approximately the same amount from the expiration of the term of their then current supply agreements, Visy's on 31 March 2002 and Amcor's on 31 May 2002. 125 The Mildura Fruit Co Price Understanding was arrived at after discussions between Mr Carroll and Mr Laidlaw in early December 2001. One of them said that Visy and Amcor needed to increase prices for citrus boxes in the Murray River region, including the price of citrus boxes that they supplied to Mildura Fruit Co. The other agreed and said they should agree on a target price. 127 In the period from early December 2001 to early January 2002 Mr Laidlaw asked Mr Carroll whether Visy was prepared to increase its price for the C-6 box by about 12 per cent above the current level in the first year of its new contract. 128 Mr Carroll said that Visy would increase its price for the C-6 box by about 12 per cent as proposed. Mr Laidlaw said Amcor would also increase its price for the C-6 box by about 12 per cent. 129 On 12 December 2001 Visy submitted a proposal to Mildura Fruit Co for the supply of CFP by Visy for three years commencing on 1 April 2002 at prices approximately 12 per cent higher than the current prices. 130 On 13 December Mr Craig Madden and Mr Ian Hengsen of Amcor met with Mr Russell Witcombe of Mildura Fruit Co in Mildura. Mr Madden said to Mr Witcombe that Amcor would need to increase the prices it charged to Mildura Fruit Co by 50 per cent over the life of the new supply contract in order for Amcor to recover its costs. 131 Also on 13 December Mr George Chrisakis of Visy met Mr Witcombe at Mildura. Mr Chrisakis tabled the proposal referred to in [128] above and said to Mr Witcombe that the proposal represented a 12.45 per cent price increase on existing prices, that the price increase was the aggregate of the price increases for Visy's non-contract customers during the period of Mildura Fruit Co's contract, less the 2.8 per cent price increase that Mildura Fruit Co had received in 2001 and that the prices would be held firm for two years. 132 On 21 December 2001 during telephone discussion between Mr Chrisakis and Mr Witcombe Visy withdrew its original proposal and submitted a revised supply proposal which did not contain a fixed percentage or minimal annual sales requirement and was for a term of twelve months with a price increase of approximately 12.45 per cent. 133 On 18 January 2002 Amcor submitted a supply agreement proposal for Mildura Fruit Co incorporating, amongst other things, a price increase of 12 per cent in the first year of the contract. 134 On 29 January Visy submitted a supply agreement to Mildura Fruit Co for a term of three years incorporating a price increase of 12.45 per cent in the first year of the agreement and containing several variations from Visy's then current supply agreement, including the absence of any fixed percentage or minimum annual sales requirement. 135 On about 4 February Visy submitted prices to Mildura Fruit Co by fax incorporating a 12.45 per cent price increase over its current prices. Visy's prices with respect to the C-6 and C-31 citrus boxes as quoted to Mildura Fruit Co for 2000 and 2001 supply were similar to or less than the prices charged to a large number of Visy's non-contract fruit grower customers in South Australia. 136 In early February 2002 Mr Laidlaw and Mr Carroll had a discussion in which Mr Carroll confirmed to Mr Laidlaw that Visy would increase its prices to Mildura Fruit Co by 12 per cent in the first year of its new supply contract. 137 On 15 February Mr Laidlaw, Mr Madden and Mr Curtain of Amcor met with Mr Witcombe in Mildura and reached and in principle agreement for Amcor to supply CFP, which agreement included a price increase of approximately 10 per cent in the first year of the supply. 138 In March 2002 Amcor and Mildura Fruit Co executed a formal contract for Amcor to supply CFP which provided for the price increase of approximately 10 per cent in the first year of supply and included a requirement for Mildura Fruit Co to purchase at least 50 per cent of its annual CFP requirements from Amcor, a four year term, a price increase of 6 per cent from 1 March 2003, 6 per cent from 1 March 2004 and a CPI price increase from 1 March 2005 and 10,000 minimum order quantities. It has a number of manufacturing plants across Australia. In early 2002 Amcor supplied most of National Foods' CFP requirements. Visy supplied CFP to National Foods' Vitasoy division in Wodonga under a contract expiring on 31 August 2003 and to three other small locations. It contained provisions to the effect that both Visy and Amcor would seek continuation of their then current supply of CFP to National Foods whereby part of the customer's requirements were supplied by Amcor and the remainder by Visy and, both Visy and Amcor would ensure that their tender prices reflected the additional CFP manufacturing costs which would be required to meet National Foods' product specifications. Visy and Amcor would discuss with each other the prices each proposed to include in its tender. In respect of the parts of the National Foods' CFP requirements supplied by the other, both Visy and Amcor would tender prices to National Foods which were generally higher than those submitted by the incumbent supplier. 141 The National Foods Price Understanding was arrived at in discussions between Mr Carroll and Mr Laidlaw in mid to late April 2002. One of them said to the other that in their respective responses to a request for tender to supply National Foods, which was particularly complex as it specified many quantity breaks on many products lines, both Visy and Amcor should ensure that product specifications in the National Foods request that would increase the cost of supply were reflected in the tender prices submitted by each of them. The other agreed. One of them said that they would need to meet again and spot check the tender prices each proposed to submit so that each would be well positioned to obtain its existing share of National Foods' business. The other agreed to this proposal. Mr Carroll informed Mr Laidlaw of those prices. Mr Laidlaw said that Amcor would "cover" Visy's prices for the National Foods' sites then supplied by Visy. Mr Carroll responded that Visy would "cover" Amcor's prices for the National Food sites then supplied by Amcor. 143 In May 2002 Amcor submitted a proposal to National Foods for the supply of CFP. Visy supplied a proposal on 10 May 2002. On 21 May Visy submitted a revised price schedule. 144 On 3 June Visy submitted a further revised price schedule reducing its pricing for certain product lines. On 24 June Amcor submitted a revised price proposal. 145 Amcor entered into a supply agreement with National Foods which did not include the Vitasoy division (which remained under contract to Visy). Amcor's agreement included the following terms: a $1 million sign on fee, reduced pricing on certain product lines at the Morwell site as compared to the pricing included in Amcor's proposal and a 6 per cent rebate on volume greater than 8.2 million square metres. 146 In relation to the prices for CFP in Visy's revised proposal of 3 June 2002 and Amcor's proposal of 24 June 2002 ([144] above), National Foods, through its representatives Mr Paul Pafumi and Mr David Koch, believed that Visy's average prices were higher than Amcor's average prices for the sites supplied by Amcor (except for the Salisbury site). 147 National Foods, though Mr Pafumi and Mr Koch, held the belief that Amcor's average prices were higher than Visy's for the sites then supplied by Visy. 148 On 20 June 2002 National Foods informed Amcor that it accepted its proposal. In June or July 2002 National Foods informed Visy that National Foods accepted its proposal. It operates sites located in Queensland, Victoria and the Northern Territory. It contained a provision to the effect that Visy would not seek to enter into a contract for the supply of CFP to Parmalat, one of Amcor's then principal customers. The Parmalat Price Understanding also contained provisions that Visy would discuss with Amcor the prices Visy proposed to include in its tender to Parmalat and Visy would submit CFP tender prices to Parmalat which were higher than those submitted by Amcor to Parmalat. 151 The Parmalat Price Understanding was arrived at as a result of discussions between Mr Carroll and Mr Laidlaw in early 2003. Mr Laidlaw said that Amcor was concerned to retain the Parmalat account as Amcor had recently lost volume to Visy. Either Mr Carroll or Mr Laidlaw said that they should compare the prices that they would each quote to Parmalat so as to ensure that Amcor obtained the Parmalat account. The other one agreed. 153 Between April and late June Mr Carroll and Mr Laidlaw had a discussion during which Mr Laidlaw told Mr Carroll the prices that Amcor proposed to quote Parmalat. Mr Carroll said that he considered Amcor's prices were too high. 154 Shortly after this discussion Mr Carroll and Mr Laidlaw had further discussions during which Mr Carroll told Mr Laidlaw the prices Visy would tender to Parmalat for certain Parmalat product lines. Mr Laidlaw said that he was concerned that Visy's prices for some product lines were below Amcor's current prices and that the Visy tender prices were too low. 155 On 1 July 2003 Amcor submitted a proposal to supply CFP to Parmalat incorporating a price increase over Amcor's then current supply prices. Mr Laidlaw was not directly involved in the tender negotiations. 156 In July 2003 Visy submitted a proposal to Parmalat. 157 Later that month Mr Carroll and Mr Laidlaw had further discussions in which they discussed the prices that Visy and Amcor were quoting to Parmalat. 158 In July or early August Amcor submitted a revised proposal to Parmalat. 159 Parmalat, through its representative Mr Kevin Goos, held the belief, on the basis of his review of the proposed prices of Visy and Amcor, that Visy's prices were higher. 160 In July or August 2003 Mr Goos had a discussion with Mr Lloyd in which Mr Goos said that Visy's prices in the Northern Territory and Victoria were too high and much higher than Parmalat's current prices. Mr Lloyd said he would check the prices. 161 On 8 August 2003 Visy submitted a revised proposal to Parmalat. 162 In relation to Visy's revised proposal of 8 August 2003 some of the products which were to be supplied in the Northern Territory had initially been priced for supply out of Carole Park in Queensland. Some of those products were re-priced for supply from Gepps Cross in South Australia. Visy's revised proposal showed a 14.2 per cent reduction of the prices to be supplied in the Northern Territory, the effect of revising prices for lower board grades for some products and a correction of an anomaly for one of the product lines in which an amount more than ten times the correct price had initially been concluded. 163 Parmalat through Mr Goos held the belief, on the basis of the review of the proposed prices of Visy and Amcor, that Visy's prices were higher than Amcor's. 164 On about 2 August 2004 Amcor entered into a supply agreement with Parmalat for the supply of CFP with effect from 1 January 2004. It operates a number of plants across Australia. It contained a provision to the effect that Visy would not seek to enter into a contract for the supply of CFP to the food and beverage division of Cadbury Schweppes, one of Amcor's then principal customers. The Cadbury Schweppes Price Understanding also contained provisions that Visy would discuss the prices it proposed to include in its tender to Cadbury Schweppes and that it would submit CFP tender prices to Cadbury Schweppes which were higher than those submitted by Amcor. The understanding did not extend to CFP products known as "microflute". 167 The Cadbury Schweppes Price Understanding was arrived at, or as a result of, meetings between Mr Carroll and Mr Laidlaw between May and June 2004. Mr Carroll said to Mr Laidlaw that Cadbury Schweppes had asked Visy to quote on some selected product lines of CFP under a new supply agreement. One or the other said that they needed to compare Amcor's current prices with the prices Visy proposed to quote to Cadbury Schweppes and the other agreed. 169 Mr Carroll and Mr Laidlaw had a meeting at Myrtle Park at which Mr Laidlaw asked Mr Carroll what price Visy proposed to quote to Cadbury Schweppes for certain product lines. Mr Carroll told him Visy's level of pricing. Mr Laidlaw said the Visy proposed levels were too low. Mr Carroll said he would take Mr Laidlaw's comments on board. 170 On 11 June Visy submitted a proposal to Cadbury Schweppes for approximately 21 product lines (none of which were microflute lines) based on the minimum order quantity of 2000 units. 171 In relation to the prices proposed by Amcor and Visy, Cadbury Schweppes, through its representative Mr Rick Thorpe, held the belief, on the basis of his review of the proposed prices by the two companies, that Visy's average prices were higher than Amcor's. 172 In late June Mr Thorpe told Mr Lloyd that Visy's proposal was uncompetitive and invited Visy to submit a revised proposal. 173 On 1 July Visy submitted a revised proposal containing prices for approximately 21 product lines. It restated the prices in the June proposal for a minimum order quantity of 2000 units and also quoted reduced prices for a minimum order quantity of 5000 units (again not including microflute). The amount of the reduction varied depending on carton style ranging from 3 per cent to 5 per cent. 174 In relation to the prices proposed by Amcor in May and prices proposed by Visy on 1 July, Cadbury Schweppes held the belief, on the basis of its representatives' review of the proposed prices, that Visy's average prices were higher than Amcor's. 175 On 17 August 2004 Mr Laidlaw and Mr Thorpe reached an in principle agreement with Cadbury Schweppes for the supply of CFP. The terms included a five year term (Visy only offered a three year term as per the tender request), a $2 million signing on fee, extending Folding Carton board contract for a further three years and a 2.5 per cent rebate on incremental sales. 177 In 2004 it operated its business out of Reynella and Berri in South Australia, Houghton in Western Australia and Buronga in New South Wales. Its CFP requirements were supplied by both Amcor and Visy. Visy supplied about 15 per cent of the total requirements. It supplied Berri, 30 per cent of Reynella and 10 per cent or less of Houghton. Hardy desired to have at least two suppliers. In mid-2004 Hardy was acquired by the Constellation Group. On 28 July 2004 Hardy issued a request for a proposal to Visy placing all its CFP requirements in Australasia up for tender. It contained provisions to the effect that both Visy and Amcor would seek continuation of their then current supply of CFP to Hardy whereby part of the customer's requirement was supplied by Visy and the remainder by Amcor, and that Visy and Amcor would discuss with each other the prices each proposed to include in its tender to supply CFP. 179 The Hardy Price Understanding also contained a provision to the effect that in respect of parts of Hardy's CFP requirements supplied by the other, both Visy and Amcor would submit tender prices which were generally higher than those submitted by the incumbent supplier. 180 The Hardy Price Understanding was arrived at in discussions between Mr Carroll and Mr Laidlaw between July and October 2004. 181 Either Mr Carroll or Mr Laidlaw said to the other that it would be a fair outcome that the existing supply arrangements for each Hardy production site should be maintained so that Amcor would continue to supply the Buronga site and the majority requirements for the Reynella site. Visy would continue to supply Berri, a minority share at Reynella and the Houghton site. Either one or the other said that they would need to exchange prices in dollars per tonne for each Hardy production site in order to cover each other's prices so that the current supply positions would be maintained. The other agreed to the exchange of prices. 183 On about 6 or 9 August Mr Carroll and Mr Laidlaw had a discussion in which they informed each other of the prices in dollars per tonne each proposed to submit to Hardy in respect of sites it currently supplied. Each agreed to cover the other's prices. 184 On 13 August each of Amcor and Visy submitted proposals to Hardy for the supply of CFP. 185 Between 30 August and about November Mr Mick Scammell and Ms Meg Molenaar of Hardy met with Mr Chrisakis and Mr Neil Furniss of Visy at Visy's Gepps Cross plant and at Hardy's Reynella production site in South Australia. The participants identified product lines which Mr Scammell said were okay and product lines to which Mr Scammell said Visy's prices were higher than Amcor's prices. Mr Scammell invited Visy to submit an amended tender with lower prices for the latter product lines. Visy subsequently resubmitted lower prices for various lines. 186 Between 30 August and 16 November Mr Scammell and Ms Molenaar met with Mr Gerry Peterson of Amcor on at least six occasions at Amcor's South Australian plant and Hardy's Reynella production site. Mr Scammell and Ms Molenaar identified product lines for which Amcor's tendered price was higher than Visy's tender price and invited Amcor to submit an amended tender with lower prices for those product lines. 187 In mid to late September Mr Carroll and Mr Laidlaw had a discussion concerning the feedback Amcor had received from Hardy about the tender prices Amcor had submitted. Mr Laidlaw's intention was to check whether the information Mr Scammell had provided about Amcor's competitiveness was correct. Mr Laidlaw said that Amcor's prices for some product lines at Hardy's Reynella site were higher than some of Visy's prices and they should compare tender prices. Mr Carroll said he would compare those tender prices with Mr Laidlaw. 188 On about 5 or 6 October Mr Carroll and Mr Laidlaw had a further discussion in which, at Mr Laidlaw's request, Mr Carroll informed Mr Laidlaw of Visy's prices and product lines for which Amcor's tender price were higher than Visy's. This exchange confirmed to Mr Laidlaw that the Visy prices provided by Mr Scammell to Amcor were correct. 189 On 8 October Amcor submitted a revised tender process to Hardy incorporating the lower prices for product lines referred to in the meetings with Mr Scammell and Ms Molenaar. 190 In October Visy also submitted revised prices. On certain product lines the prices were reduced by 4.8 per cent. 191 On about 26 November Mr Scammell and Mr Gerry Peterson, Amcor's Sales Manager for South Australia, had a telephone discussion in which Mr Scammell informed Mr Peterson of the CFP business that Hardy had decided to award to Amcor. Hardy was conscious of staying above the minimum annual spent with Amcor to ensure it continued to obtain the advantage of receiving a 9 per cent rebate on all purchases from Amcor. 192 On 26 November Ms Molenaar sent an email to Mr Neil Furniss and Mr Tony Kane of Visy informing them that Visy would retain its current share of supply of CFP to Hardy's Berri site and would increase its share of supply of CFP products to the Reynella site. When the tender was determined, Amcor succeeded in obtaining approximately $13.3 million of Hardy's business. Visy succeeded in obtaining approximately $2.9 million of the business including approximately 150 lines formerly supplied by Amcor equating to an annual spend of $633,000. 193 In December 2004 Visy provided Hardy with a draft contract which contained an additional term offering a volume rebate of 5 per cent on sales exceeding $3.25 million. It operates a number of processing sites across Australia. Visy and Amcor arrived at the Inghams Compensation Understanding. It contained provisions to the effect that Amcor would compensate Visy for the CFP volume Visy had lost as a result of Amcor entering into a supply agreement with Lion Nathan and Amcor would allow Visy to enter into a CFP supply agreement with Inghams, an existing customer of Amcor, as compensation. 196 The Inghams Compensation Understanding was arrived at in discussions between Mr Debney and Mr Brown. In early 2001 Mr Brown and Mr Debney met at a hotel in Melbourne. The meeting may have been at Mr Brown's request. Mr Brown told Mr Debney that Amcor had won the account for supply of CFP to Lion Nathan. Mr Debney said that he was upset that Amcor had taken the Lion Nathan account and that he and Mr Brown had agreed that it was a term of the arrangement between Visy and Amcor that there would be no poaching of major customers. Mr Debney also said that Amcor had breached this term by taking the Lion Nathan account and that Visy required Amcor to compensate it for the volume that Amcor had taken. 197 Mr Brown believed that it was in Amcor's interest to placate Visy because Amcor wanted to have price stability in the market and did not want to return to a price war. Mr Brown requested Mr Hodgson and Mr Laidlaw to identify accounts that were not considered to be highly profitable to Amcor, or that Amcor considered Visy was likely to gain in any event. Mr Brown and Mr Hodgson decided to offer Visy a number of accounts including Inghams and some smaller accounts. 198 In a subsequent discussion held by telephone or at Crown Towers, Southbank in February 2001 Mr Brown said to Mr Debney that Amcor would allow Visy to take the Inghams account as compensation for Lion Nathan. 200 During this discussion Mr Laidlaw said to Mr Carroll that Amcor would allow Visy to take a package of CFP accounts, including Inghams, the Amcor part of the Effem Foods Pty Limited account (approximately 10 per cent), Chisholm & Co Pty Limited's Queensland operation, Bush's Pet Foods Pty Limited, P&M Quality Smallgoods Pty Limited and Hansell's (New Zealand) Limited. Mr Laidlaw said that in total the tonnage of these packages was the same as the tonnage for the Lion Nathan account and that he understood that Mr Brown and Mr Debney had spoken and agreed in principle to the package. 201 Mr Carroll said that he accepted the Inghams account but that the other accounts offered were unacceptable. He said he wanted a more prestigious account instead of the others offered. 202 After February 2001 Mr Carroll and Mr Laidlaw had a meeting at which Mr Laidlaw told Mr Carroll the average dollar per tonne price that Amcor proposed to quote to Inghams in its proposal to supply CFP. 203 In the period from approximately February to May 2001 Amcor submitted a supply contract proposal to Inghams. It provided for a price increase of approximately 14 per cent from its then current prices. 204 In about May 2001 Visy submitted a proposal to Inghams. The proposal included an innovative product, relating to the box tray and other high use items which were advantageous to Inghams. The proposal included firm prices until 30 June 2002, transition tooling being absorbed by Visy, and a volume rebate. In addition packaging systems worth $507,000 were to be funded by Visy (initially proposed $932,000). 205 On 29 May Visy reviewed the proposal, reducing some prices and removing some product lines. The final proposal submitted to Inghams provided for prices approximately 7 per cent less than Amcor's then current prices to Ingham's and greater with rebate. 206 Inghams held the belief that Amcor's prices were higher than Visy's prices. 207 On about 24 September 2001 Visy entered into a contract for the supply of CFP to Inghams with effect from 1 July 2001. In mid-2001 Amcor supplied George Weston's bakery and cakes division (approximately 70 per cent of the company's CFP requirements) and Visy supplied CFP to George Weston's meat and dairy division. In about June or July 2001 Amcor formed the view that Visy had been over-compensated for its loss of the Lion Nathan account by the acquisition of the Inghams and Smith's accounts. In mid-2001 Visy and Amcor arrived at the George Weston Compensation Understanding. It contained a provision to the effect that Visy would compensate Amcor for the CFP volume Amcor had lost as a result of Visy entering into supply agreements with Inghams and Smith's. 210 The George Weston Compensation Understanding also contained a provision to the effect that Visy would allow Amcor to enter into a CFP supply agreement with George Weston's meat and dairy division, to which Visy supply CFP, as compensation to Amcor for Visy entering the supply agreements with Inghams and Smith's. 211 The George Weston Compensation Understanding was arrived at in discussion between Mr Debney and Mr Brown in June or July 2001. Mr Brown said to Mr Debney that by getting Inghams and Smith's, Visy had recovered more than the volume it had lost as a result of Amcor taking Lion Nathan and Visy would therefore need to compensate Amcor. Mr Debney said to Mr Brown that Visy had recovered more volume from Amcor than it should have and Mr Carroll and Mr Laidlaw could address this imbalance in their discussions. 212 Following this discussion, there was a further meeting between Mr Carroll and Mr Laidlaw in July 2001 in which Mr Carroll said that Visy took Smith's because it wanted Inghams and a second prestigious account as compensation for the loss of the Lion Nathan account, and that Smith's was appropriate and the timing was right. Mr Carroll also said to Mr Laidlaw that he understood that the Inghams and Smith's account jointly represented more than the Lion Nathan account in volume and that he and Mr Laidlaw would need to agree on what Visy customers would be offered to Amcor as compensation for Visy taking that excess volume. 213 In a series of further discussions between Mr Carroll and Mr Laidlaw in July and August they each discussed the accounts that Amcor could receive as compensation. 214 At a further discussion in August Mr Laidlaw said that Amcor would accept the George Weston meat and dairy division account and the OSI (NSW) division account as compensation for Visy taking the Inghams and Smith's accounts. Mr Carroll said that he would not object and would not react strongly if Amcor took the accounts. 216 On about 8 January 2002 Visy submitted a proposal to George Weston for the continued supply of CFP to George Weston's meat and dairy division at prices above Visy's then current prices. 217 On 13 February Visy submitted a revised proposal to George Weston for the continued supply of CFP to George Weston's meat and dairy division at increased prices. The letter offered two options to George Weston. Option 1 was that existing price levels would increase by 7 per cent effective 1 March 2002 and would remain in place until 31 December 2002. Option 2 was that the existing price levels would be increased by 3 per cent effective 1 March 2002 and then by a further 3 per cent effective 1 March 2003 and then remain firm. The term of the agreement under Option 2 was to be two years commencing 1 March 2002. The Don Smallgoods subdivision of George Weston's meat and dairy division had received a 19 per cent reduction (taking into account a volume rebate, subject to its applicability) from Visy in December 2000 and Visy's prices to George Weston had otherwise been held firm for two years (whereas non-contract customers had received price increases). 218 On 25 March Mr Peter Lloyd, National Marketing Manager of Visy, sent an email to Mr Maurice Hibbert of George Weston informing him that Visy wanted to implement the price increases for the continued supply of CFP to George Weston's meat and dairy division with effect from 1 April 2002. 219 On 27 March Mr Lloyd sent an email to Mr Hibbert stating that Visy would increase the prices at which it supplied CFP to George Weston's meat and dairy division with effect from 1 May 2002. 220 In March on or about 11 and 17 April and 14 May Amcor submitted proposals to George Weston for the supply of the whole of George Weston's CFP requirements. 221 On or about 24 April Visy submitted a proposal to George Weston for the supply of CFP in respect of George Weston's meat and dairy division manufactured at George Weston's plant in Altona, Victoria. 222 On about 26 and 29 April Visy submitted proposals to George Weston for the supply of CFP to George Weston's baking division and biscuit and cake division. 223 On 29 April Visy again informed George Weston by way of a letter from Mr Carroll to Mr Hibbert that Visy would increase the prices at which it supplied CFP to George Weston's meat and dairy division with effect from 1 May 2002. 224 On or about 15 May 2002 Amcor submitted a revised proposal to George Weston for the supply of the whole of George Weston's CFP requirements. Amcor's price was based on the use of kraft paper, which is more expensive but stronger and therefore does not require as much paper in terms of weight per metre. Amcor did not need to obtain Visy's prices because George Weston provided Visy's pricing to Amcor. 225 In relation to the prices for CFP proposed by Visy and Amcor, George Weston's representative Mr Hibbert formed a belief in about April or May 2002, on the basis of his review of the proposed prices of Visy and Amcor, that Visy's prices were higher. 226 In about August 2002 Amcor entered into a contract for the supply of the whole of George Weston's CFP requirements. It has manufacturing sites down the Eastern Seaboard. Hans Continental Smallgoods Pty Limited purchased OSI's business in New South Wales prior to December 2003. It contained a provision to the effect that Visy would compensation Amcor for the CFP volume Amcor had lost as a result of Visy entering into supply agreements with Amcor's former customers Inghams and Smith's. The OSI/Hans Compensation Understanding also contained a provision that Visy would allow Amcor to enter into a CFP supply agreement with OSI, an existing customer of Visy, in respect of OSI's CFP requirements in New South Wales, as compensation to Amcor for Visy entering into CFP agreements with Inghams and Smith's. 229 The OSI/Hans Compensation Understanding was arrived at as a result of a number of discussions including a meeting between Mr Debney and Mr Brown in June or July 2001. 230 The OSI/Hans Compensation Understanding was also discussed between Mr Carroll and Mr Laidlaw in the discussions about the George Weston Compensation. 231 In August 2001 Mr Carroll and Mr Laidlaw had a further meeting at which the OSI/Hans Compensation Understanding was discussed. Mr Laidlaw said to Mr Carroll that Amcor would accept the OSI account in New South Wales as compensation for Visy taking the Inghams and Smith's account. Mr Carroll said he would not object and not react strongly if Amcor took the George Weston meat and dairy division account and the OSI (NSW) division as compensation for Visy taking the Inghams and Smith's accounts. Mr Laidlaw also said to Mr Carroll that he was frustrated at the time being taken to finalise the transfer of the OSI business from Visy to Amcor. 233 Notwithstanding the discussions in 2001, from 2001 until early 2004 Visy continued to supply the requirements of OSI in New South Wales and South Australia. 234 On about 9 December 2003 Hans, which had acquired the OSI business in New South Wales, issued a request to tender to Visy and Amcor to supply CFP to Hans, including the OSI New South Wales business. 235 Shortly afterwards Mr Carroll and Mr Laidlaw had a discussion in which Mr Carroll said to Mr Laidlaw that Visy would submit prices in response to the request at Visy's then current prices so as to enable Amcor to secure the Hans account. 236 On 22 December 2003 Amcor submitted a proposal to Hans for the supply of CFP. Mr Laidlaw was not directly involved in the tender negotiations. 237 On 23 December Visy submitted a proposal to Hans. 238 During the tender process, at a presentation on 2 February 2004, Visy proposed a carton rationalisation program estimating the cost savings which could be achieved to be approximately $140,000. By letter dated 3 February 2004 Visy offered a volume rebate of 2.5 per cent for annual net sales in excess of $2.45 million and a 1 per cent discount for payments within 14 days. 239 Hans, through its representative Ms Michelle Yates, held the belief, based on her review of the proposed prices, that Visy's prices were higher than Amcor's prices. 240 On 16 February 2004 Amcor entered into a contract for the supply of CFP to Hans. Amcor included a rebate of 10 per cent on all sales if sales exceeded $4 million in the first year. It operates at sites in Queensland and New South Wales. Between late August to December 2001 Visy and Amcor arrived at the Merino Compensation Understanding. It contained a provision to the effect that Visy would compensate Amcor for the CFP volume Amcor had lost as a result of Visy entering into a supply agreement with Mrs Crocket's. Visy would allow Amcor to enter into a CFP supply agreement with Merino, an existing customer of Visy, as compensation for Mrs Crocket's. 243 The Merino Compensation Understanding was arrived at as a result of meetings between Mr Carroll and Mr Laidlaw between late August and December 2001. Mr Laidlaw said to Mr Carroll that Visy had undercut Amcor on its prices for the supply of CFP to Mrs Crocket's and had taken Mrs Crocket's account from Amcor. Mr Laidlaw said that Amcor wanted compensation for the CFP volume it had lost. 244 Mr Carroll said that he accepted that Visy had gained Mrs Crocket's account from Amcor and that Visy would compensate Amcor for the loss of the account. He also said that Visy would allow Amcor to have the Paper Converting/Merino account as compensation. 245 Mr Laidlaw said that the Paper Converting/Merino was an acceptable trade for the Mrs Crocket's account. The prices were low and generated a negative margin. Visy's prices had been reduced by an aggregate of 31.5 per cent from the previous supply agreement. Visy's prices were fixed for two years. Also, under the then current agreement, Visy provided $60,000 capital. 247 In November or December 2001 Visy received from the Grocery Sellers Buying Group a request for quotation on behalf of some of its members, including Merino, which included a request for quotation for the supply of CFP to Merino for two years commencing 1 January 2002. Amcor also received this request. 248 On 7 December, in response to this request, Amcor submitted a proposal to Merino for the supply of CFP containing prices based on the prices that Amcor believed Visy was then supplying to Merino. Amcor's belief was based on previous quotes by Amcor to supply CFP to Merino, information obtained by Amcor representatives from the CFP market and Amcor's relationship with Merino. Mr Laidlaw was not directly involved in the tender negotiations. 249 Merino, through its representative Mr Steve Childs, held the belief that Amcor's prices were higher than Visy's prices under Visy's then current supply contract. 250 On 14 December, in response to the request, Visy made an offer to the three members of the Grocery Sellers Buying Group that were existing customers of Visy, including Merino, for the supply of CFP to them on their own account and not as members of the Grocery Sellers Buying Group. 251 Mr Childs of Merino, on the basis of his review of the offer by Visy, held the belief that the prices referred to in the offer in the preceding paragraph were approximately 37 per cent higher than Visy's prices under its then current supply contract with Merino. 252 On 4 January 2002 Mr Childs had a meeting with Mr Michael Cannon of Visy at Merino's office in Crestmead, Queensland in which Mr Childs said to Mr Cannon that he thought Visy's proposed price increase of 37 per cent was too high and that he did not understand the basis for the increase. Mr Cannon said to Mr Childs that he would review the quoted prices. 253 Shortly after this meeting Mr Cannon and Mr Childs had a telephone discussion in which Mr Cannon said that he was not able to make any amendment to the prices that had been quoted and that Visy management were firm on the prices offered. 254 On 7 August 2002 Amcor entered into a contract to supply CFP to Merino. It operates from sites in Victoria and New South Wales. Huhtamaki purchased around $4 million worth of CFP per annum. About this time Visy and Amcor arrived at the Gillette Compensation Understanding. It provided that Visy would compensate Amcor for the CFP volume Amcor had lost as a result of Visy entering into a supply agreement with Amcor's former customer Huhtamaki and that Visy would allow Amcor to enter into an agreement with Gillette, an existing customer of Visy, as compensation. 257 The Gillette Compensation Understanding was arrived at as a result of meetings between Mr Carroll, Mr Hodgson, Mr Sangster and Mr Laidlaw held in July 2003. At the meetings Mr Laidlaw said to Mr Carroll that Amcor wanted to be compensated by Visy for the volume Amcor had lost as a result of Visy gaining the Huhtamaki account. 258 Mr Carroll said that he understood Visy needed to compensate Amcor for the Huhtamaki account and that the Gillette account was an account Visy could trade to Amcor. Mr Carroll also said that Visy would not react strongly if Amcor sought to take the Gillette account from Visy. In the request for tender Gillette changed the minimum order quantities, reducing them to smaller quantities in comparison to the quantities in Visy's existing supply agreement. 260 In February 2004 Amcor submitted the tender to Gillette for the supply of CFP containing prices at around the prices that Amcor believed Visy was then supplying. Amcor's belief was based on previous quotes by Amcor to supply CFP to Gillette, information obtained by Amcor representatives from the CFP market and Amcor's relationship with Gillette. Mr Laidlaw was not directly involved in the tender negotiations. 261 On about 6 February Visy submitted a tender to Gillette and on 9 February, at the request of Gillette, the same prices were submitted in a different format. 262 To go back a little in time, towards the end of the previous year, Mr Paul Meldrum of Visy and the Visy account manager, Mr Scott Kerr, had attended a meeting at Gillette's plant and head office in Scoresby, Victoria with Ms Nevenka Odnoral at which Ms Odnoral said that Gillette had obtained some prices from competitors of Visy and that Visy's current prices were higher than the price Gillette had received. 263 Shortly after 9 February 2004 Mr Meldrum received a phone call from Mr Michael Sirakoff of Gillette who told him that Visy's prices were not the most competitive and invited him to submit a revised tender. 264 On 16 February Visy submitted a revised price schedule to Gillette reflecting a 5 per cent reduction in respect of the price of certain products and services. 265 Gillette through its representative Mr Sarakoff held the belief, on the basis of his review of the proposed prices of the two companies, that Visy's prices were higher than Amcor's. 266 In late February Mr Sirakoff had a discussion with Mr Meldrum by telephone. Mr Sirakoff told him that Gillette had received Visy's tender and wanted to know whether Visy was interested in revising its tender to offer lower prices. Mr Meldrum responded to the effect that Visy's prices were firm and he would not submit any further revised prices. 267 On 20 July 2005 Gillette entered into a CFP supply agreement with Amcor for a period of three years commencing on 20 July 2004. It operates approximately 170 franchised stores around Australia, mostly in Queensland, Western Australia and New South Wales. 269 Between about mid-2002 and November 2002 Mr Laidlaw told Mr Carroll that the prices that Amcor proposed to quote to Eagle Boys. Either Mr Carroll or Mr Laidlaw said to the other that they should continue to discuss the prices to be submitted to Eagle Boys. The other said he agreed. 270 By engaging in the conduct referred to in the preceding paragraph Visy gave effect to the Over-arching Understanding. 271 In August 2002 Visy submitted a proposal to Eagle Boys for the supply of CFP. On 14 November it submitted a revised proposal. 272 On 27 November 2002 Amcor submitted a proposal to Eagle Boys. 273 Eagle Boys representatives Mr Tom Potter and Mr Ian Smallwood, on the basis of their review of the proposed prices, held the belief that Visy's average prices were higher than Amcor's prices. 274 On 28 January 2003 Mr Potter informed Mr Peter Allen of Visy that Visy's proposals were uncompetitive. He invited Visy to submit a revised proposal. 275 After that conversation, and before 6 February, Mr Allen telephoned Mr Potter and offered to reduce Visy's price for a 12 inch pizza box by a specified amount and said that if the resulting price was attractive to Eagle Boys, Mr Allen would reconsider Visy's prices for other size pizza boxes. 276 On about 6 February Mr Potter sent to Mr Allen a letter attaching a table purporting to compare Visy's prices for large pizza cartons with those that Potter believed Visy charged Pizza Hut and Domino's for the same product. Mr Potter also referred to the original quote and a subsequent reduced quote for that product provided by Visy to Eagle Boys. 277 On 19 February Mr Allen wrote to Mr Potter rejecting Mr Potter's comments and reconfirming the prices quoted by Visy. 278 On 26 February Mr Potter informed Mr Carroll that Visy's proposal to Eagle Boys was higher than the prices at which Visy supplied Eagle Boys' competitors Pizza Hut and Domino's. 279 Visy believed throughout the period 2000 to 2003 that Visy's supply arrangements with Domino's and Pizza Hut were not comparable to Eagle Boys. Eagle Boys required 8 million boxes per annum as against 30 million for Domino's and 28 million for Pizza Hut. Eagle Boys required distribution to regional centres in New South Wales whereas Domino's and Pizza Hut generally required distribution to capital city distribution centres only. Eagle Boys' printing requirements were more difficult. Eagle Boys sought the more expensive B Flute rather than the E flute supplied to Pizza Hut. 280 On 28 February Visy submitted confirmation of its lower quote. 281 In relation to the prices proposed by Amcor, Eagle Boys' representatives Mr Potter and Mr Smallwood held the belief, on the basis of their review of the proposed prices of Visy and Amcor, that Visy's average prices were higher than Amcor's. 282 Between late February and early March 2003, Mr Carroll and Mr Laidlaw had a discussion in which Mr Carroll told Mr Laidlaw the prices Visy had quoted to Eagle Boys. Mr Laidlaw asked Mr Carroll not to lower the prices that Visy had quoted and to increase those prices. Mr Carroll said that Eagle Boys had told him that it believed that the prices Visy had quoted were not as competitive as Visy supplied to other customers in the pizza industry, including Pizza Hut, such that Visy would not increase the prices that it had quoted to Eagle Boys. Mr Carroll said Amcor was seeking to obtain unrealistically high prices from Eagle Boys and would need to lower its prices to finalise the supply agreement. Mr Laidlaw said that Amcor would consider what Mr Carroll had proposed and try to reach an agreement with Eagle Boys. 283 On about 3 March and 17 March Amcor submitted a revised proposal to Eagle Boys containing prices and a rebate structure. 284 On about 16 April Amcor entered into a supply agreement with Eagle Boys. 285 By engaging in the conduct referred to in [271]-[282] above Visy gave effect to the Over-arching Understanding. Section 45A(1) provides that a provision which has the purpose, or is likely to have the effect, of fixing, controlling or maintaining prices is deemed to have the purpose or effect of substantially lessening competition. So once price fixing is established, the " substantial lessening of competition " test is satisfied, without any need for further evidence. 291 In arriving at the Understandings with Amcor which concerned the fixing of prices, Visy contravened s 45(2)(a)(ii) , as it applies by virtue of s 45A. Insofar as the Understandings involved market sharing, swapping of customers and the like, they contained exclusionary provisions because they prevented or restricted the supply of goods by Visy and Amcor to particular customers. In arriving at such Understandings, Visy contravened s 45(2)(a)(i). By its conduct in applying those Understandings in the case of particular customers, Visy gave effect to the unlawful Understandings and thus contravened s 45(b)(i) and (ii). 292 The orders I pronounce today are in a form agreed by the parties. They record the Court's declaration as to what the Court finds to be the contraventions of the various respondents. The formal orders are made by reference to the paragraphs in the Commission's statement of claim. The orders include declarations that Visy has committed 69 contraventions. However, s 76(3) provides that a person is not liable for more than one pecuniary penalty in respect of the same conduct. The net result is that penalties may be imposed for a total of 37 contraventions by Visy. Under s 80(1)(e) the Court may grant an injunction against such a person. 294 By meeting with Amcor's CEO Mr Jones at the All Nations Hotel and confirming that Visy would adhere to the Over-arching Understanding, Mr Pratt was knowingly concerned in Visy's giving effect to that Understanding. The Commission does not seek the imposition of a pecuniary penalty on Mr Pratt because he and his family are the owners of Visy and thus the burden of the penalty on the company (not to mention legal costs) will fall on him personally. Decisions of this Court recognise that it is legitimate to avoid double counting where an individual contravenor is an owner of a corporate contravenor: Australian Competition and Consumer Commission v Ithaca Ice Works Pty Ltd (2000) ATPR 41-777 at [13], Australian Competition and Consumer Commission v Commercial and General Publications Pty Ltd (No 2) (2002) ATPR 41-905 at [27]-[29]. I accept this should be so in the present case. However, Mr Pratt's ownership of Visy has other significance for this case. I shall return to this aspect. 295 Mr Debney was knowingly concerned in, or a party to, 14 contraventions. 296 Mr Carroll was knowingly concerned in, or a party to, 49 contraventions. In 1993 and 1994 the maximum penalties had been increased to their present level from $250,000 and $50,000 respectively: s 10 of the Trade Practices Legislation Amendment Act 1992 (Cth) and s 46 Industrial Relations Reform Act 1993 (Cth). As from 1 January 2007 the penalties for a corporation may exceed $10 million where the Court can determine the benefit obtained as a result of the contravening. The maximum penalty is three times the value of that benefit or 10 per cent of annual turnover, whichever is the greater: Trade Practices Legislation Amendment Act (No. 1) 2006 (Cth), Sch 9 Pt 1. However, these penalties only apply to contraventions committed after 1 January 2007. 298 In the case of Visy, the Commission proposes, and Visy does not contest, a penalty of $36 million. It is sufficient to impose one penalty rather than separate penalties for each contravention. The single most serious contravention was Visy's arriving at the Over-arching Understanding. The four annual Price Increase Understandings (2000 to 2003) were very serious contraventions involving price fixing. The conduct of Visy in arriving at the 2000 and 2001 Price Increase Understandings on the one hand was, to a certain degree, more serious than its conduct in arriving at the 2002 and 2003 Price Increase Understandings, because the latter understandings were expressly qualified so as to allow each of Visy and Amcor to make "some exceptions [to the implementation of the price increase] of its choosing", whereas the former understandings were not qualified. Visy's contravention in arriving at the 2000 Price Increase Understanding should attract a $2 million penalty, and its contravention in arriving at the 2001 Price Increase Understanding should attract a further $2 million penalty. Visy's two contraventions in arriving at the 2002 and 2003 Price Increase Understandings should attract a $1.5 million penalty for each contravention. In the case of all four annual Price Increase Understandings, Visy's penalty for giving effect to the understandings should be $1.25 million each. The Mildura Fruit Co Price Increase Understanding stands outside the contraventions by Visy in relation to the other named customer understandings, as it involves price fixing, and is a more serious set of contraventions. The 11 instances of arriving at further understandings in relation to named customers, and giving effect to them, should attract $1 million penalties each, $500,000 being attributable to arriving at the understanding, and $500,000 being attributable to giving effect to the understanding. The Over-arching Understanding was largely given effect by Visy arriving at, and giving effect to, the 16 further understandings admitted in the proceeding. However, by reason of s 76(3) of the Trade Practices Act , it is not submitted that any further penalties should be attributed to each instance of giving effect to the Over-arching Understanding constituted by the same conduct which constituted the contraventions referred to in the preceding three sub-paragraphs. Arriving at the Over-arching Understanding is in the category of the most serious conduct in the subject of this case. His other conduct, arriving at six understandings, should incur a penalty of $130,000 each, totalling $780,000. He was a senior Visy executive who had a very substantial role in giving effect to the Over-arching Understanding over almost five years. He was appointed by Mr Debney to have the day to day management of that understanding. He was involved in making or giving effect to 15 of the 16 sub-understandings. 301 The Commission accepts that Mr Carroll was appointed to his position by Mr Debney after the latter had arrived at the Over-arching Understanding and at all times he reported to Mr Debney and was acting under his instructions. Ordinary sentencing principles apply: Trade Practices Commission v Axive Pty Ltd (1994) ATPR 41-368 at 42,794, Australian Competition and Consumer Commission v J McPhee & Son (Australia) Pty Ltd (1998) ATPR 41-628 at 40,891. 305 The fact that the Commission and the respondents have proffered a penalty agreed as between themselves is relevant, although not of course conclusive, since the responsibility of imposing penalties is conferred by the Trade Practices Act on the Court: see generally Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993. Often the profits can be immense, and the risk of detection slight. Of its nature, cartel behaviour is likely to occur in secret and between parties who seek mutual benefit. In the present case, detection occurred purely by chance when Amcor's solicitors, in the course of quite unrelated litigation, stumbled across incriminating material. Even then the present resolution may not have been reached were it not for two additional factors. First, the Commission's immunity policy and, secondly, the fact that there were not only witnesses prepared to give evidence, but also tape recordings of damning conversations. 307 The progressive increase in the maximum penalties mentioned above shows how gravely the legislature regards this kind of conduct. Price fixing and market sharing are not offences committed by accident, or in a fit of passion. The law, and the way it is enforced, should convey to those disposed to engage in cartel behaviour that the consequences of discovery are likely to outweigh the benefits, and by a large margin. 308 Critical to any anti-cartel regime is the level of penalty for individual contravenors. We tend to overlook the fact that corporations are constructs of the law; they only exist and possess rights and liabilities as a consequence of the law. Heavy penalties are indeed appropriate for corporations, but it is only individuals who can engage in the conduct which enables corporations to fix prices and share markets. 309 Many countries with free market economies have recognised this reality by enacting laws which make cartel conduct by individuals subject to criminal sanctions, including imprisonment. In the United States this happened as long ago as 1890 with the Sherman Act 15 U.S.C. More recently, as shown by the Organisation for Economic Co-operation and Development report Hard Core Cartels --- Third Report on the Implementation of the 1988 Recommendation , Paris, 2006, the following countries have laws providing for terms of imprisonment for cartel conduct: Canada, France, Germany, Ireland, Israel, Japan, South Korea, Mexico, Norway, Slovak Republic and the United Kingdom. 310 The Australian Government appointed an expert committee chaired by former High Court Justice Sir Daryl Dawson to report on Australia's competition laws. In April 2003 the Dawson Committee in its report ( Review of the Competition Provisions of the Trade Practices Act ) recommended (Report p 163) that, in the light of submissions made to it and growing overseas experience, criminal sanctions deter serious cartel behaviour and should be introduced. 311 On 2 February 2005 the Treasurer, the Honourable Peter Costello MP, announced acceptance of the recommendations of the Dawson Committee and stated that the Government would amend the Trade Practices Act to provide for a term of five years imprisonment, as well as increases in other penalties. The cartel in this case therefore had the potential for the widest possible effect. In relation to the conduct of Visy alleged in respect of named customers specified in the Second Further Amended Statement of Claim, the ACCC does not allege as part of its case in this proceeding that the conduct, insofar as it is admitted to constitute either making an unlawful arrangement or giving effect to such an arrangement, had any negative financial impact on or caused loss to any of the named customers. The Commission's case sought the imposition of penalties, the making of declarations, the granting of injunctions and other relief. It did not set out to prove that any particular customer of Visy suffered any particular loss. However, that is not to say that the conduct in which Visy engaged was victimless. The whole point of price fixing and market sharing is to obtain the benefit of prices greater than those which would be obtained in a competitive market. It must follow that customers pay more than they would in a competitive market, and so suffer loss. The conduct involved here was inherently likely to cause loss. The fact that no particular loss has been alleged in respect of any particular customer cannot alter that. 315 The cartel here went on for almost five years. Had it not been accidentally exposed, it would probably still be flourishing. It was run from the highest level in Visy, a very substantial company. It was carefully and deliberately concealed. It was operated by men who were fully aware of its seriously unlawful nature. 316 It is appropriate to make some allowance for the fact that the respondents have admitted liability and thus saved a great deal of public expense for a trial which could well have lasted six months or more. Traditionally criminal courts are inclined to give less weight to a plea of guilty when it does not result from genuine remorse, repentance or contrition: The Queen v Shannon (1979) 21 SASR 442 at 452-453, Warner, K, Sentencing in Tasmania , 2 nd ed, The Federation Press, 2002, at 3.603. Also the weight to be given to an admission of guilt might be less when it comes late, or when it is virtually bowing to the inevitable. 317 I shall say something about remorse in the context of consideration of the individual respondents. In the meantime, I note that the principal positive defence pleaded, and maintained until recently, was that any communications between Visy and Amcor were "commercial tactics" against Amcor aimed at "camouflaging" what Visy was doing and a means of obtaining "market intelligence" from its rival (amended defence par 222 (c) and (d)). 318 In light of what is now admitted to be the facts, it may be doubted that this John Le Carré defence had any prospects of success. Section 45 prohibits contracts, arrangements or understandings containing provisions of a specified kind, whether or not a party harboured a secret intention to cheat. Moreover, entering into a prohibited contract, arrangement or understanding is a free-standing contravention in itself, whether or not it has been given effect. In any case, a contract, arrangement or understanding can still be given effect even if there is some cheating between the parties (as distinct from cheating the customers, which is the raison d'être of a cartel) or the cartel does not work as well as some of the parties might have hoped. 319 The corporate culture of Visy in relation to its obligations under the Trade Practices Act was non-existent. None of the most senior people hesitated for a moment before embarking on obviously unlawful conduct. There was in evidence a Visy document entitled "Trade Practices Compliance Manual" dated February 1998. It was signed by Mr Pratt. It bears a distribution list, signed by Mr Debney, with the names of 50 or so personnel covering every State and Head Office. It is essential that it be read and understood by you. Visy Industries requires strict compliance with its policy on the Trade Practices Act . All necessary contact with competitors should be conducted in formal settings. The Visy Trade Practices Compliance Manual might have been written in Sanskrit for all the notice anybody took of it. 320 Parity with penalties imposed in other cases is a relevant consideration. Counsel referred to a number of other cases. I do not think it necessary to analyse these in detail. Ultimately each case turns on its own facts. Suffice it to say that the penalty proposed is more than twice the highest previous penalty imposed by this Court. That is reflective of the fact that this must be, by far, the most serious cartel case to come before the Court in the 30 plus years in which price fixing has been prohibited by statute. 321 The penalty of $36 million proposed for Visy is appropriate in the circumstances. I accept the analysis by which the Commission has arrived at this figure. They expressed contrition, accepted the serious nature of the contraventions and accepted that they warranted a very substantial penalty. They apologised for their conduct, regretted the circumstances which had occurred and repented their contraventions. They accepted that they stepped "well over the line of the boundaries prescribed by the Act". However, contrition here probably has a substantial element of regret at being found out. 323 While Mr Pratt's conduct, as revealed in the statement of agreed facts, was limited to the one meeting with the Amcor CEO at the All Nations Hotel, that was of major importance to the operation of the cartel. It would not be expected that somebody in his position would get involved in the day to day running of the cartel, like Mr Debney or, to a greater extent, Mr Carroll. Yet he gave his personal sanction to this obviously unlawful arrangement and an assurance of its continued operation. It would not have continued without his approval. The company deeply regrets what happened and its poor appreciation of the complexities and application of the various provisions. In any case, the statement is hardly consistent with a frank admission of wrongdoing. 325 More importantly, there is nothing complex about the law that prohibits price fixing and market sharing. Mr Debney and Mr Carroll certainly knew about this law. That is why they met with their competitor in parks and suburban hotels and used pre-paid mobile phones. There cannot be any doubt that Mr Pratt also knew that the cartel, to which he gave his approval, and in which he has admitted to being knowingly concerned, was seriously unlawful. 326 There is also the factor that the cartel was to operate for Mr Pratt's personal benefit, via his ownership, or part ownership, of Visy. This was not the case of an employee acting out of some misguided sense of corporate loyalty. He personally directed his subordinate, Mr Carroll, to operate it (to Mr Carroll's great cost, apart from anything else). From time to time Mr Debney personally participated in it. He was the senior officer of a large company operating in a market which affects the whole community. His conduct showed no regard for the law. 328 The proposed penalty of $1.5 million is appropriate. 329 I was informed that Mr Debney's (and Mr Carroll's) penalties will be borne by a Visy entity or a related entity. Such indemnities are now unlawful by virtue of ss 77A and 77B of the Trade Practices Act . These sections were introduced by the 2006 amendments following recommendations in the Dawson Committee Report. They only apply to contraventions committed after 1 January 2007. Paragraph (b) is concerned with pecuniary penalties payable under the Corporations Act . However par (c) would seem to apply to a liability to pay a pecuniary penalty to "someone other than the company" (ie the Commonwealth) under s 76 of the Trade Practices Act . Unlawful cartel conduct would not be "conduct in good faith". The section would seem to apply to the time when the indemnity is given and not to the time of the underlying conduct which gave rise to the indemnity. Anyway, Visy and any other related corporate entity will have to satisfy themselves that any indemnity to Messrs Debney and Carroll is lawful. Nevertheless, he engaged over a long period in knowingly unlawful conduct. The proposed penalty of $500,000 is appropriate. | cartel conduct visy companies and amcor companies held 90 per cent of the corrugated fibreboard packaging market in australia between january 2000 and october 2004 visy and amcor engaged in price-fixing and market sharing contrary to s 45 of trade practices act 1974 (cth) amcor received conditional immunity from action by the australian competition and consumer commission commission brought action against visy companies and three of its senior officers four categories of contraventions: over-arching understanding in 2000 to maintain market share and increase prices; annual price increase understandings each year for 2000 to 2003, customer price understandings and compensation understandings respondents admitted liability parties submitted an agreed statement of facts trade practices |
I said I would hear the parties as to the form of orders which should be made, including any order as to costs. I directed that an outline of written submissions be filed and exchanged in relation to orders and costs, and both parties complied with that direction. It is trite law to say that I have a discretion in relation to costs pursuant to s 43 of the Federal Court of Australia Act 1976 (Cth), the only constraint being, speaking generally, that I am obliged to exercise that discretion judicially. The usual rule in relation to costs is that costs follow the event, in the absence of special reasons to the contrary: Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234-235. A departure from the usual rule requires a valid, special reason. When considering the exercise of discretion in relation to the exercise of costs, it is frequently submitted that other cases bear upon the issue, and provide guidance as to how those costs should be ordered, but it has been established in a number of cases that other cases are not particularly helpful where the facts are quite different, and I adopt the observations of Heerey J in Fetherson v Peninsula Health (No 2) [2004] FCA 594 ; (2004) 137 FCR 262 at par [12]. The defendant has submitted that the plaintiffs should pay his costs as he has succeeded on the whole of the claim in the sense that he is not liable to pay any of the amount claimed by the plaintiffs. The plaintiffs make a quite different submission. They submit that the defendant should pay their costs as they were successful in relation to all the substantive issues. The plaintiffs point to the fact that they succeeded in establishing the issues that the company was insolvent, that there were reasonable grounds to suspect insolvency and that the defendant was aware of those reasonable grounds. They also established that a reasonable person in a like position to the defendant would have been so aware of those reasonable grounds, and they succeeded in relation to the defences available under s 588H(2), which were not made out. I found that the defendant had contravened s 588G(2) of the Act, and so I concluded that I should make a declaration accordingly. In the circumstances of this case, I consider that there should be a departure from the usual rule as to costs, that costs follow the event, for the following reasons. The plaintiffs have succeeded in obtaining findings in their favour in respect of all the integers of the claim required to be established for a cause of action under s 588G of the Act, and for the entitlement to recover the amount of loss and damage suffered by the creditors identified in accordance with s 588M of the Act. The defence which has succeeded in enabling the defendant to avoid liability, is not a defence which the liquidator could have accepted himself. It was not for the liquidator to make the judgment as to whether the defendant would obtain an order that he ought fairly to be excused, because that was a matter for the Court. Only the Court can excuse a defendant under s 1317S. The liquidator might believe that the defendant has acted honestly, but it is not a matter for him to decide that the defendant ought fairly to be excused. That is a matter for the Court to exercise its discretion. In substance, the plaintiffs have established their case for liability of the defendant to pay the damages suffered by the creditors, and by raising the matters identified in s 1317S(2) of the Act, the defendant, in effect, seeks an indulgence. The way the defendant puts the case, in substance, is that he says, "I have been found liable to pay these damages, but I have acted honestly and," --- this is cumulative --- "I ought to be excused. " That is akin to seeking an indulgence from the Court. In bringing the action and not succeeding in obtaining the ultimate orders which they seek, the plaintiffs have not committed any error or default in the way they ran the proceeding. The plaintiffs have made out all the integers of their cause of action. As I said earlier, the liquidator could not have excused the defendant from payment of the loss and damages suffered by the creditors. In short, the plaintiffs were justified in bringing the proceeding and the reason why they do not obtain the orders which they seek in their favour is not due to any failure on their part to prove their case. Mr Evans, who appeared for the defendant, submitted that it cannot be the case that, if a defendant succeeds in a defence under s 588H he would not ordinarily receive a costs order in his or her favour. That may be, but that is not the matter with which I am faced here. Mr Evans submitted further that there is, in substance or in truth, as he put it, no meaningful distinction between the defence pursuant to s 1317S of the Act upon which Mr Carroll has succeeded, and the defences pursuant to s 588H of the Act on which he failed. I think there is a meaningful distinction because pursuant to s 588H of the Act, there is a defence, strictly so-called, available if the integers identified in that section are established. Section 1317S is not a defence as such to the substantive action. It is a relief from a liability to pay the amount which otherwise might have been ordered by way of damages. In either case, whether a defence is raised under s 588H of the Act, or relief is sought pursuant to s 1317S of the Act, the basic elements of the claim can be established by a liquidator. Although it is for the liquidator to evaluate the strength or weakness of the defences under s 588H, it is a quite different exercise when considering whether the Court would exercise its discretion under s 1317S of the Act. So I consider that it is not inconsistent, as a matter of logic or principle, for there to be a different costs order depending upon whether a defence under s 588H of the Act succeeds, or whether relief is granted pursuant to s 1317S of the Act. In those circumstances, it seems to me that the following orders should be made. The Court declares that: The defendant has contravened s 588G(2) of the Act by failing to prevent The Stake Man Pty Ltd (in liquidation) from incurring debts totalling $356,952.02. Pursuant to s 1317S(2) of the Act, having regard to all the circumstances of the case, the defendant ought fairly to be excused for the contravention of s 588G(2) of the Act. Pursuant to s 1317S(2) of the Act, the defendant be relieved wholly from any liability to pay to the plaintiffs, pursuant to s 588M of the Act, any amount in respect of the loss and damage suffered by creditors of the company referred to in the schedule to the amended Statement of Claim herein, a copy of which schedule is annexed as Schedule A to this order. The schedule in the Statement of Claim sought debts totalling $459,119.02. I have made a number of findings in relation to those debts which reduced the claim, on the evidence, to $356,952.02, but I consider that the relief to be granted, pursuant to s 1317S(2) of the Act should relate to the claim as filed. The defendant should be ordered to pay the plaintiffs' costs of and incidental to the proceeding, including any reserved costs, save for the costs reserved in relation to the interlocutory proceeding which was filed on 12 October 2007 seeking freezing orders against the defendant and his wife, Louise Margaret Carroll. In relation to the costs of that interlocutory proceeding, which was ultimately dismissed, it appears to me, and it was not seriously contested, that at the time that process was issued there was a proper basis for it. In the events which have now occurred that basis has fallen away. Pursuant to O 62 r15 of the Federal Court Rules , reserved costs follow the event, unless the Court otherwise orders. I consider in this case that the Court should otherwise order that the costs of and incidental to that interlocutory process lie where they fall. The formal order should be that there be no order in respect of the costs, including reserved costs, in relation to or incidental to that interlocutory process. The situation which has arisen in relation to the interlocutory process is that at the time there was a reasonable basis for bringing it. That basis has now disappeared as a result of subsequent events. It is not appropriate that the Court try the whole of that interlocutory proceeding simply for the purpose of determining the costs, and there is clear authority for the proposition that, unless in those circumstances it is abundantly clear that the interlocutory process would have clearly succeeded or clearly failed, there should be no order as to costs in relation to it. I adopt and follow the reasoning of McHugh J in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6 ; (1997) 186 CLR 622 , Finkelstein J in Gribbles Pathology Ltd v Health Insurance Commission (1997) 80 FCR 284 and Hill J in Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585 ; (1993) 44 FCR 194. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | costs order relevant principles judicial discretion whether cause for departure from usual rule. practice and procedure |
The petition was filed in the High Court on 25 January 2008 as the Court of Disputed Returns (s 354 of the Act). On 8 April 2008 Gummow J referred the matter to this Court on the application of the respondent ('the Commission'). First, as a matter of form, the petition fails to comply with s 358 of the Act. 2. Secondly, as a matter of substance, the petition is doomed to failure. 2 As the first of those grounds may be determinative of the petition, I proceeded to consider it separately. 3 Mr Smith was the No 1 Senate candidate for The Fishing Party, contesting the election in Queensland in the above the line group ticket G. He alleges in the petition that the Commission registered a political party that contested the election for Queensland, New South Wales and South Australia, named the Australian Fishing and Lifestyle Party ('the Fishing and Lifestyle Party'). He alleges that the Fishing and Lifestyle Party obtained Federal political party registration by "fraud or misrepresentation". For the purposes of considering the form of the petition and compliance with the Act, that allegation is accepted, as is the fact that it constitutes "illegal practice" within the meaning of the Act. "Illegal practice" is defined in s 352(1) as '... a contravention of this Act or the regulations ' and is a ground for voiding an election (s 362 of the Act). DOES THE PETITION COMPLY WITH THE REQUIREMENTS OF THE ACT? Section 358(1) of the Act provides that subject to subs (2), no proceedings shall be had on a petition unless the requirements of s 355 are complied with. 5 Section 355 sets out the pre-requisites of a petition under the Act. Does the petition set out the facts relied on? 9 The Commission submits that, as pointed out by Gaudron J in Webster v Deahm [1993] HCA 38 ; (1993) 116 ALR 223 at 225, the very minimum assertion necessary to constitute a fact which will invalidate an election or return for the purposes of s 355(a) of the Act is one that raises a matter or matters by which the election was likely to be affected, such as an assertion ' that goes to or bears upon the casting or counting of votes '. 10 The petition does include some alleged facts under the heading "The Senate Election Facts". Is there a remedy for unscrambling election Senate results if a group is removed from the election after the votes have been cast and counted? Read beneficially to Mr Smith, they do suggest that the existence of a party as a group affects the actual votes recorded and also the directed distribution of preferences. That distribution may be influenced and affected as alleged by ' deals done prior to the election for the distribution of preferences '. 12 Mr Smith, in his submissions, made it very clear that in questioning whether there was a way of "unscrambling" election results, his case as set out in those alleged facts is that the Senate election is a complex system of preference votes that are ' non-lineal '. He says that if a party is removed, there is no process available by any ' lineal means ' to know what would happen and that, if the party were not on the ballot paper, the outcome in terms of the likely voter pattern would be ' unpredictable '. He submits that there is an infinite list of variables that are likely to affect the outcome of the election and that the result of the change of one of those variables would result ' in chaos ' which, he said, would flow from the change in just one variable before the election. 13 The Commission points out that this amounts to a case based on the contention that one variable can ' change anything and everything '. It submits that the statutory threshold necessary is that the election is likely to be affected . Accordingly, the facts relied on to invalidate the election or return under s 355(a) must be sufficient to establish, as a threshold, that the election is likely to be affected. An allegation of chaos that may affect the outcome is, it submits, insufficient. 14 In a case where the relief sought is an order under s 360(1)(v) or (vii) of the Act (declaring that a person who was returned as elected was not duly elected or declaring an election void) on the ground that there has been a contravention of the Act, the consequence of s 362(3) of the Act is that, relevantly, the facts which would justify the relief must include facts which would allow the Court to be satisfied that the result of the election is likely to have been affected. The minimum assertion necessary to constitute such a fact is one raising the matter or matters by which the election is likely to be affected ( Webster at 225 per Gaudron J; McClure v Australian Electoral Commission [1999] HCA 31 ; (1999) 163 ALR 734 at [23] ---[24] per Hayne J). As Dawson J outlined in Sykes v Australian Electoral Commission [1993] HCA 36 ; (1993) 115 ALR 645 at 649, paragraph (a) requires not only the essential facts relied on to be set out but also those facts must be sufficient to justify a finding in invalidity. As his Honour pointed out, otherwise s 355(a) in conjunction with s 358(1) would achieve little. 15 Whether or not the requirements of s 355(a) are complied with is to be determined solely by reference to what appears on the face of the petition ( Wheeley v Australian Electoral Commission [2005] FCA 473 at [13] per Kiefel J). In the present case there are no facts set out or assertions made in the petition as to the likely outcome of the election other than the possibility that, because of a preference deal, the quota or a Senate position may have been achieved for some other, unspecified, group. The facts alleged emphasise the difficulty of "unscrambling" the Senate results if a group were to be removed. As Dawson J said in Sykes at 649, it is not sufficient for a petitioner to allege insufficient facts to justify relief under the Act but nevertheless contend that as they were the only facts upon which he or she relied, the requirements of paragraph (a) were satisfied. 16 I accept the Commission's submissions that the statutory threshold has not been established. The petition does not set out the essential facts relied on to invalidate the election as required by s 355(a). It is also not in dispute that no amendment was made to the petition as filed prior to the expiry of the 40 day period. While Mr Smith does not apply to amend the petition, it is necessary to consider whether an amendment would be available if the petition were found not to comply with the Act. 18 As noted above, s 358(1) of the Act provides that, subject to subs (2), no proceedings shall be had on the petition unless the requirements of, relevantly, s 355, are complied with. The 40 day requirement of s 355(e) is one which must be complied with if proceedings are to be had on the petition within the meaning of s 358(1). In Nile v Wood [1988] HCA 30 ; (1987-1988) 167 CLR 133 the petition failed to include a prayer for relief as required by s 355(b). Justices Brennan, Deane and Toohey stated at 137 that if there are defects in the petition in a failure to comply with s 355, those defects are not capable, by reason of s 358, of being cured by amendment after the period of 40 days fixed by paragraph (e) for the filing of a petition. Accordingly the petition was held to be incurably defective and no proceedings could be had on it (at 140). 19 Accordingly, as the 40 day period has now expired, any amendment to the petition is not available as the petition does not comply with s 355(a) of the Act. Section 358(2) provides that the Court may, at any time after filing the petition and on such terms (if any) as it thinks fit, relieve the petitioner wholly or in part from compliance with s 355(aa). 23 There are some difficulties in distinguishing between the facts required by s 355(a), as to which no amendments are to be made after the 40 day period and the facts needed to comply with s 355(aa), where compliance can be dispensed with at any time after the filing of the petition. As Dawson J observed in Sykes at 648, the precise distinction between those two subparagraphs ' is a matter of some obscurity '. 24 This is not a case of a lack of particularisation. The facts in the petition do not comply with s 355(a) of the Act even at a level of generality. The inclusion of s 355(aa), which refers to the particularity of the content of the petition emphasises the imperative nature of the other provisions of s 355 ( Rudolphy v Lightfoot [1999] HCA 61 ; (1999) 197 CLR 500 at [9] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) including s 355(a). 25 In Rudolphy , the High Court confirmed that ' once the forty day period has expired, it is not possible thereafter to amend the petition which has been filed within time so as to cure any non-compliance with the requirement of section 355 ' (at [12]). Amendment to the petition is not available. However, his petition does not allege sufficient facts that would be capable of showing that any such wrongful registration is likely to have had any effect on the outcome of the elections in question. Any amendment to the petition is not available as the 40 day period referred to in s 355(e) has now expired. 27 The petition fails to comply with s 355(a) of the Act and must therefore be dismissed. I will hear the parties as to 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 Bennett. | senate election petition filed under s 355 of commonwealth electoral act 1918 (cth) claiming political party obtained registration from respondent by fraud or misrepresentation whether petition complies with requirements of the act section 358 provides that no proceedings shall be had on the petition unless requirements of s 355 are complied with petition does not contain necessary facts as required under s 355(a) facts must raise matters by which the election is likely to be affected section 355(e) requires petition to be filed within forty days amendment to petition not available as forty day period has expired parliamentary elections |
The notice of appeal in these proceedings purports to include ' SZEOQ and Others ' as the appellants in this case. The 'others' referred to are not otherwise identified, although I gather from the history of the proceedings that they are the appellant's wife and child, whose application for a visa was made on the basis that they are immediate family members of a person entitled to a protection visa. Since the outcome of their applications is dependent upon the outcome of the husband's application, this appeal in substance relates to the claims made by the husband, who I will title ' the appellant ' for the purposes of these reasons. 2 The notice of appeal in this Court relies upon two grounds: firstly, that the Tribunal was biased in making its decision; and secondly, that the Tribunal breached s 424A of the Migration Act 1958 (Cth). At the hearing, the appellant clearly indicated that he did not wish to rely upon the second ground. Accordingly, the appeal before this Court relates to the question of whether the Tribunal's decision contained jurisdictional error on the ground of bias. On 28 February 2003 he made an application to the Department of Immigration and Multicultural and Indigenous Affairs for a protection visa under the Migration Act 1958 (Cth) ('the Act'). On 16 May 2003 a delegate of the first respondent refused the application and on 29 May 2003 the appellant applied for a review of that decision. 4 In his application for a protection visa the appellant claimed that he is an ethnic Roma/Russian who has suffered discrimination in Lithuania for all of his life. The appellant claimed that he had been unable to find a good job in Lithuania since 1984 and had not been able to attain higher education. As a result, the appellant spent several years working abroad during the 1990s and up to 2002. 5 Upon his return to Lithuania in July 2002, the appellant claims that his home was raided on three occasions, allegedly because of his Roma ethnicity. The appellant was not arrested or charged. However he was aware that police in Lithuania were known to beat, detain and arbitrarily arrest Roma citizens and to fabricate criminal charges against them. He said that some of his relatives, including his cousin and brother, had been imprisoned on fabricated charges. For this reason, following the raids upon his house he left Lithuania for Australia. He did not complain to the authorities about his treatment because he considered it would serve no purpose. 6 The Tribunal conducted a hearing with the appellant on 13 April 2004. Now having read your files I understand that you are an ethnic Roma. You are a very blond man, you have light skin, you have I think very large colored eyes. And so if I walked past you in street I would think that you were perhaps... possibly an ethnic Russian, you even look like a Lithuanian to me. In all documents... In majority of documents... When you fill the forms, when you go and try to find a job or you apply for a position for work, you have to fill the form, and it's always the question 'Who are your parents? ' And in terms of social activities it's like when you... When I would meet my relatives from my father's side that's always obvious and neighbourhood... people in neighbourhood could make their conclusions on the appearance. You are a man who obtained an education in Lithuania. You have travelled extensively to the United States, Ireland, U.K., Poland ... And you come before this Tribunal to state that you need international protection against Lithuania. But since about the year 2000 ... or since about 1996 you haven't lived in Lithuania very much at all! You have only been back there in between visiting other countries; you have spent more time out of Lithuania than you have lived in Lithuania! It was a general action against Roma people. And we were the members of it, we were the target of it, because we are Roma. So that was a normal act performed by police against Roma ethnicity community. And the reason, Sir, that I don't believe you is that you live in an ordinary street in Vilnius. And I am stunned that you would think that the Lithuanian police had so much time on their hands that they pursued people of mixed Roma ethnicity and persecuted them merely because they were a mixed Roma ethnicity. When you have things like that happening to you, your first question is 'Where to go? ' And ... To go and complain. You normally go to police to complain to what is happening to you. But police, sort of, goes ... But from police you go to 'procuratura', which is like internal affaires [sic] . And then you go to the state level. So there are 3 levels. And how can you go there if the first level is not responding? And I had very sad experience with my brother's situation, who had been arrested. And we went to 3 different lawyers, tried to get their justice. But as soon as they would find out that police was putting their criminal charge against them... him, they would refuse to take the case, because they were really scared for their future, for their reputation... Sorry, not reputation --- interpreter's mistake --- for the outcome of the case. I couldn't see a sense in going to police because they would go nowhere. I wouldn't get the outcome. Because what was happening in Lithuania at that stage, the courts were so corrupted, there was no one case in terms of national... nationality being ... Not a case in terms of national... In terms of ethnicity of Roma people being persecuted. Not one case was in the court. Because government is hiding everything, all evidence about this problem. And there is a reason that I can't agree with you. You see, in Lithuania, it is now a democratic system with its judiciary and with a complaints mechanism for people if the authorities have exceeded their power ... [The Tribunal member referred to various sources of country information. ] ... So, you see, sir, the independent evidence doesn't support what you are saying. And you made no attempt to report the behaviour that occurred. And, sir, since 2002, the Lithuanian government has introduced a program of increasing the education and benefit of Roma communities living in encampments. And you see, sir, had there been such attacks by the police on ethnic Roma living in ... outside of the encampments, in ordinary streets, the Roma Rights Centre and the Roma Lobby Group would have reported that. Because there is so much information! It's there! There is so many reports done! I can get report after report, and it doesn't tell me what you are telling me. And, unfortunately, it's such a strong fear, which is again, the fear of the State; it is basically engraved in Roma people. And all of this, it's like I ... Nobody would lodge their complaints because people don't believe they will get somewhere. It's like everything goes through the sand. You never tested it! You can go to Vilnius and stop any Roma person walking along the street and ask him: "How is your life". And he will never tell you anything because he doesn't know you, because he's not sure where you are coming from. You are blond, you have fair hair, you have fair skin. Roma tend to be dark hair and dark skin. And you, sir, look like a classic ethnic Russian, or even a Lithuanian. So I ask myself: "How would somebody identify this person as a Roma? " You have a Russian name, you look like a Russian. I was persecuted by police. And I never mentioned that somebody on the street offended me because of my looks. I was persecuted by police, which knows exactly who I am. Nothing happened to you. Nothing happened to you. You got an education in Lithuania, you have citizenship in Lithuania. And you might not have a job, sir, but it is very, very difficult for Lithuanians to get work. Economy is lousy, and has been lousy even under Russian times. And after independence ... After independence, sir, it became even worse. And even educated people were unable to find job. And so people leaved Lithuania in order to obtain work in any way that they could. And you, sir, are a typical example, from where I can see, of a Lithuanian, who has left Lithuania, for work purposes. You see, sir, young educated Lithuanians, even with university degrees, cannot get jobs. And what do these people do? The [sic] work, trade. The [sic] go out of Lithuania and they buy things, and they bring them back, and they try to sell. And they try to put money in their families now. And what information have I provided that is misleading? I think I'll ... (unclear) 424A to you since it's misleading. Because ... First of all I just would like to note that in point of fact you didn't give the applicant chance to comment on all your information. Can I finish, please? However, the Tribunal member agreed to provide the country information to the appellant and give him an opportunity to respond, and to provide any further submissions. A letter was sent by the Tribunal on 15 April 2004 and a reply was sent by the applicant on 5 May 2004. 14 On 14 September 2004, the Tribunal handed down its decision which concluded that the appellant was not entitled to a protection visa. The Tribunal also noted that the persistence of negative stereotypes about Roma and the general economic hardship in Lithuania caused popular resentment against measures to improve the situation of Roma as a disadvantaged group. The Tribunal noted that the appellant was not arrested or charged with an offence after numerous raids. It was of the opinion that accusing a person of involvement in criminal activity and conducting raids did not amount to persecution. It noted that the appellant did not suffer any significant physical harassment or ill-treatment and that there was no threat to his life or liberty. Further, the Tribunal said that there could not be a failure of State protection in circumstances where the applicant had not reported the police behaviour. 17 The Tribunal also considered whether the appellant was at risk of persecution on the basis of his Russian ethnicity, and concluded that he was not. Accordingly, the Tribunal decided that the appellant was not entitled to a protection visa. The application raised numerous issues for consideration by the Federal Magistrates Court. The issue of bias was not raised in the application to the Federal Magistrates Court, but it was raised in the appellant's submissions filed in that Court. Nicholls FM noted that the transcript of the hearing before the Tribunal gave rise to some concern and accordingly he allowed the appellant a further opportunity to provide evidence in support of his allegation of bias. The appellant subsequently filed an affidavit in the Federal Magistrates Court in which he directly raised the conduct of the Tribunal member at the hearing as the basis of his claim for bias. This, together with her untrue statements related to my appearance (she stated that I was a blond man, with fair skin etc), lack of independent evidence (which is also untrue) and baseless allegations regarding my credibility, resulted in my lacking of ability to address matters relevant to my application for a protection visa. I was confused, frustrated and had difficulties responding to the presiding member's untrue accounts. His Honour then considered the statements of the Tribunal member relating to the appellant's appearance. He found that the Tribunal's initial questioning of the appellant was immaterial because the Tribunal ultimately accepted the appellant's ethnicity and thereafter dealt with the claims of the appellant in that context. 21 The appellant had also alleged that the Tribunal's method of providing information was ' very unfair' and that the ' presiding member told lies' . Such a claim apparently arose from the fact that the Tribunal indicated that it had not been able to find any independent evidence to suggest that Lithuanian police targeted Roma. Nicholls FM held that this complaint was not sufficient to establish bad faith or bias on the part of the Tribunal. Bias will be made out if it shown that the Tribunal member was actually biased, or if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide: see Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488 at [11] ; Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568 at 575; R v Watson; Ex parte Armstrong [1976] HCA 39 ; (1976) 136 CLR 248 at 258-63. 23 The principles relating to bias have been considered by the Full Court of the Federal Court specifically in relation to migration appeals in SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749 at [42]ff. Second, the allegation is not to be lightly made and must be clearly alleged and proved. Third, there are many ways in which bad faith can occur and it is not possible to give a comprehensive definition. Fourth, the presence or absence of honesty will often be crucial; see SBAU at [27] citing SBAP v Refugee Review Tribunal [2002] FCA 590 per Heerey J at [49] and NAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 805 per Hely J at [25]. This is especially so where all that the applicant relies upon is the written reasons for the decision under review; SBAU at [28] citing SAAG v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 547 per Mansfied J at [35] and SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 668 at [38] per von Doussa J. Bad faith is not to be found simply because of poor decision making. It is a large step to jump from a decision involving errors of fact and law to a finding that the decision maker did not undertake its task in a way which involves personal criticism; see NAAG of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 713 at [24] per Allsop J quoted with approval in NAAV at [107] by Black CJ. It is sufficient to demonstrate recklessness in the exercise of the power; SCAZ v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1377 ("SCAZ"). The Tribunal member in the present case was entitled to, and indeed obliged to, put adverse information to an application for a protection visa. However, in many ways a Tribunal member who puts any such adverse views to an applicant at a hearing fulfils that worthwhile objective of putting the applicant on notice of potentially adverse findings and thereby giving the applicant the opportunity to comment. From the very beginning of the hearing, the Tribunal member expressed profound disbelief in the appellant's claims. She expressed her opinions about the merits of the appellant's claim vehemently. She asked questions of the appellant in an aggressive manner. Her responses to his answers were frequently dismissive and almost suggest contempt for the appellant's claim. As noted above, at one point she expressed the view that he was ' a typical example ' of a Lithuanian who had left Lithuania for work purposes. 26 The statements by the Tribunal member evincing her disbelief in the appellant's claims continued throughout the hearing. Subsequently, as remarked upon by Nicholls FM, the hearing descended into almost a slanging match between the Tribunal member and the appellant's migration advisor. 27 I do not consider that the above conduct establishes actual bias on the part of the Tribunal member, especially when considering the reasons which were ultimately given for the decision. The question, therefore, is whether the conduct of the Tribunal member was such as to give rise to an apprehension of bias in a fair-minded lay observer. 28 The first respondent submits that a vigorous exchange with the appellant's advisor does not indicate that the Tribunal has a closed mind so as to constitute an appearance of bias. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion. The Tribunal member's behaviour would give rise to an apprehension in a fair-minded lay observer that the Tribunal had prejudged the appellant's claim. Tribunal members frequently are able to put adverse views to applicants for protection visas in a professional and objective manner such that no apprehension of bias could arise. This was clearly not the manner in which it was done in the present Tribunal hearing. 30 In making this finding, I note the observations of the High Court in Ex parte H , a migration case which involved similar allegations of bias on the basis of the conduct of the Tribunal member. Moreover, the need to ensure that the person who will be affected by the decision is accorded procedural fairness will often require that he or she be plainly confronted with matters which bear adversely on his or her credit or which bring his or her account into question. Similar questions by a judge in curial proceedings in which the parties are legally represented may more readily give rise to an apprehension of bias than in the case of inquisitorial proceedings. If that should happen, a fair-minded lay observer or a properly informed lay person might readily infer that there is no evidence that the witness can give which can change the decision-maker's view. In other words, a fair-minded lay observer or a properly informed lay person might well apprehend bias by the Tribunal against the male prosecutor. And because the female prosecutor's application stood or fell with his, a fair-minded lay observer or a properly informed lay person might, in our view, form the same view in her case. 32 Nicholls FM placed reliance upon the fact that, in respect of the appellant's Roma ethnicity, the Tribunal had given the appellant the benefit of the doubt and accepted that he was an ethnic Roma/Russian. There are two answers to this statement. Firstly, the comment that the appellant did not have the appearance of an ethnic Roma was not the only statement of the Tribunal member which might be seen to suggest a prejudgment of the appellant's case. Rather, an apprehension of bias would have arisen from the cumulative effect of statements made throughout the hearing. Secondly, and more importantly, the fact that the Tribunal ultimately accepted that the appellant was an ethnic Roma cannot repair the flaws in the conduct of the hearing. Regardless of the findings made by the Tribunal member, her conduct at the hearing is such that it would give rise to a reasonable apprehension of bias. 33 For these reasons, I am satisfied that Nicholls FM erred in finding that the Tribunal decision was not affected by apprehended bias. Accordingly the appellant should succeed and that the decision of the Tribunal must be set aside. | judicial review conduct of tribunal member bias apprehended bias arising from conduct of tribunal member. migration |
Ms Barbour is employed by Veda as its "Head of Call Centres". For the purposes of the Privacy Act 1988 (Cth) (Privacy Act), Veda is a "credit reporting agency" and carries on a "credit reporting business". 2 The present proceeding is one of nine proceedings, each brought by an individual alleging the same causes of action against Veda. The applicants in all nine proceedings are identified at [6] below. Each applicant complains that Veda furnished to one or more credit providers incorrect information relevant to that applicant's creditworthiness. The causes of action pleaded are in defamation and negligence. 3 The orders to be made on the present motion will also have implications for the other eight proceedings. 4 The motion falls into two parts. In the first part, Veda seeks to restrict access to exhibits RAB1, RAB2, RAB3 and RAB8 to Ms Barbour's affidavit on the ground that those exhibits would disclose information that is confidential to Veda, and which, if disclosed, would be apt to damage Veda's business interests. Veda seeks an order that access be restricted to counsel and solicitors retained by Mr Dale, provided they have signed an undertaking to the Court in a form annexed to the notice of motion. 8 Two points may be made at the outset. First, it is not obvious why Veda seeks both an order for destruction and the third undertaking referred to at [4]: they are in almost identical terms. Second, since the same solicitors and counsel are representing all nine applicants, it would not be appropriate for them to undertake to use exhibits RAB1, RAB2, RAB3 and RAB4 and the information gained from them for the purposes of one proceeding, Mr Dale's proceeding, alone. 9 Veda relies on affidavit evidence of Rebecca Ann Barbour, Veda's "Head of Call Centres" showing, in general terms, the nature of the contents of exhibits RAB1, RAB2, RAB3 and RAB8. 10 Veda has devised procedures according to which its Call Centre in North Sydney responds to queries and requests from "consumers", that is to say, individuals in relation to whom Veda holds or may hold a credit information file. 11 In order to comply with the Privacy Act and the Credit Reporting Code of Conduct issued by the Privacy Commissioner under s 18A of that Act (the Code), Veda has produced "Business Process Documents" specifying procedures with which Call Centre staff are required to comply. These documents constitute exhibits RAB1, RAB2 and RAB3. Ms Barbour labels exhibit RAB1 "Investigations", exhibit RAB2 "File processing", and RAB3 "Complaints". 12 The Business Process Documents were prepared by Scott Jamieson, legal counsel employed by Veda, over a period of two months in December 2006 and January 2007 with the assistance of Call Centre staff. The Business Process Documents reflect procedures which have been developed and observed at the Call Centre with only minor variations over the last ten years (prior to 1997 each state handled its own telephone queries from subscribers and consumers, and Veda established the Australian Call Centre in 1997 to centralise this activity). 13 Section 18J of the Privacy Act and cll 3.8---3.15 of the Code require that Veda investigate any request made by a consumer for amendments to personal information included in his or her credit information file. The procedure which Veda follows is set out in the Business Process Document that is exhibit RAB1. 14 All requests for amendment and complaints are recorded on Veda's "Public Access System". The original hardcopy of a request for amendment is kept by Veda for 12 months, after which it is shredded. 15 If a consumer persists in a request, notwithstanding notification by Veda that it refuses to make the amendment requested, the request is upgraded to a "complaint" and the complaints procedure set out in exhibit RAB3 applies to it. 16 Veda allows credit providers or finance brokers who have subscribed to Veda's database to access that database to make inquiries and post reports. Subscribers accessing consumer credit information in this way are able to take advantage of training provided free of charge by Veda which specifies the subscriber's obligations in relation to accessing and updating data held by Veda. Exhibit RAB8 is a copy of Veda's Call Centre Process Document which specifies the processes involved in keeping subscribers informed as to their obligations to correct information and to encourage the flow of information from subscribers about errors in, or the updating of, their credit information files. The document reflects Veda's practice and procedure in dealing with subscriber enquiries over the period 2000 to 2005. The business process documents are of great value to Veda's business. They are integral to Veda's daily operations and particularly to ensuring compliance with laws and regulations. Veda's internal audit processes rely upon those documents in order to confirm compliance and the documents constitute the mechanism by which Veda ensures adherence to internal procedures and can demonstrate to regulators (such as the ACCC, Privacy Commissioner and Ombudsmen), Veda's compliance with legal requirements. The documents also enable Veda to work efficiently, and therefore cost-effectively, by being consistent in our processes. Further, by ensuring compliance with legal requirements, the documents play a role in reducing the risk of legal action and assisting the business to operate profitably. 9. The way a credit reporting business such as Veda deals with subscribers and consumers and carries out its obligations to subscribers and consumers is fundamental to the business. The documents that outline the procedures that govern those activities are documents Veda does not want its competitors to have access to. I am concerned that if the documents were put into the public domain, Veda's competitors may be able to obtain the benefit of the considerable work Veda has undertaken in developing efficient and cost effective procedures over many years and, accordingly, replicate those procedures and gain a competitive and advantage by adopting Veda's own compliance procedures. Veda's main competitor is Dunn & Bradstreet [sic --- Dun & Bradstreet] which carries on business as a credit reporting agency throughout Australia. 10. Further, I am concerned that if the confidentiality of these documents was compromised and if they were placed into the public arena, there may be a risk of Veda's security procedures being comprised. The Business Process Documents contain very close detail about Veda's security procedures, that is, procedures aimed at protecting an individual's private information including containing details of how Veda ascertains whether an individual making a request is in fact the individual to whom the file relates. I am concerned that if those procedures were made public it could affect the ability of members of the public to fraudulently access private information of other people and thus compromise the security and privacy of that information. The processes Veda has to establish those security procedures have taken many years to identify and develop. I agree that these expressions are very general, but I admitted the paragraphs on the basis that their generality goes to weight. To some extent, the problem has been overcome by the agreement of both parties that I should be at liberty to examine exhibits RAB1, RAB2, RAB3 and RAB8, and I have done so. 19 Having read exhibits RAB1, RAB2, RAB3 and RAB8, I note that, as Ms Barbour implies in her affidavit, they record in detail procedures which Veda employees are required to follow in given situations. I accept that Veda has a legitimate interest in ensuring that they are not disclosed to a competitor. A competitor would or might be interested to take ideas from the exhibits for the purpose of improving its own procedures. 20 However, I do not need to decide for the purpose of the present motion whether the documents constituting the four exhibits are to be characterised differently from the internal procedures manuals and instructions of many businesses. A business proprietor has a legitimate interest in preventing disclosure of such documents that have not entered the public domain, and use of them against the proprietor's interests. Unlike Dun & Bradstreet, DR Capital and CRA are not trade rivals of Veda: they are not credit reference agencies. 22 It appears that DR Capital has been assisting, in ways not made entirely clear by the evidence, Mr Dale and the other eight applicants in the bringing and conduct of the nine proceedings. Indeed, DR Capital introduced the nine applicants or some of them to the firm of solicitors that has instituted the proceedings. 23 According to an Australian Securities and Investments Commission (ASIC) search, CRA has one shareholder and director --- DR Capital and Richard George Symes respectively. DR Capital has two directors, Mr Symes and David Colin McGrath, and two shareholders, Leah Symes and Karen Merle McGrath. According to the ASIC search, Mr and Ms McGrath are of the same address and Mr and Ms Symes are of the same address. 24 I infer that the solicitors for Mr Dale and the other applicants would feel free to show exhibits RAB1, RAB2, RAB3 and RAB8 or communicate their contents, to representatives of DR Capital or CRA in the course of representing the interests of Mr Dale and the other applicants, unless I were to decide that they are not at liberty to do so. 25 Mr Dale has not led evidence as to the role of DR Capital and CRA. 26 The evidence led by Veda, however, shows that CRA's business is that of assisting individuals in remedying allegedly erroneous credit ratings in respect of them. On its website, CRA states that it is "a credit repair company who have [sic] assisted thousands to restore their credit ratings, assisting with both past and current credit problems. " DR Capital's website redirects the reader to CRA's website. 27 Ms Barbour states that she is aware that DR Capital is paid fees for assisting consumers in making complaints to Veda or in requesting that Veda investigate the data on an individual's credit information file. She states that people who identify themselves as being employed by DR Capital regularly telephone Veda's Call Centre or send correspondence to Veda, and that she has spoken to such callers herself. 28 According to Ms Barbour's affidavit, a Google search of "Veda Advantage" results in a page displaying a sponsored link by CRA stating "Credit Repair Australia --- Explore Your Options! Call 1300 FIX CREDIT www.creditrepairaustralia.com.au" and "Got Bad Credit? Find out how you can repair your credit with a free consultation. www.foxsymes.com.au". 29 As noted above at [16], credit providers or finance brokers who subscribe to Veda's database are able to access it electronically to view a consumer's credit file in connection with an application for credit. DR Capital is a subscriber to Veda's database and frequently accesses it. Ms Barbour states that DR Capital's status as a subscriber is in its capacity as an "authorised agent". She states that this characterisation refers to entities who act in a "broker type role in assisting an individual to obtain credit". A search of access statistics for DR Capital reveals that between 1 October 2006 and 30 September 2007, DR Capital made a total of 7,406 inquiries of credit information files on Veda's database. 30 Ms Barbour states that DR Capital's accesses to the database are typically recorded on the consumer's credit file as being an inquiry regarding a term account for a zero monetary amount. She observes that this is unusual for access by subscribers who are credit providers or brokers assisting individuals to obtain credit, because in either of these cases the particular class of the application and the amount of credit being applied for are specified when a person's credit information file is accessed. Ms Barbour suggests that DR Capital must be accessing credit information files for reasons other than assessing an application for credit by the person whose file is accessed, and that DR Capital is probably investigating some grievance or complaint by that person. 33 No doubt it is in the interests of Veda and its subscribers that Veda's credit information files be accurate. It is not in the interests of either that an individual's credit rating be recorded as worse or better than it is. If it is recorded as worse than it is, the subscriber may refuse to grant the individual credit, thereby missing out on a profit it would otherwise have made. If it is recorded as better than it is, the subscriber may grant the individual credit and suffer loss in consequence of his or her default. It follows that insofar as DR Capital is able to disclose to Veda any errors in Veda's credit information files, it is serving Veda's interests, as well as those of the individuals who are its clients. 35 Some preliminary matters must be noted. 36 First, neither Ms Barbour's affidavit to which the documents were exhibited nor the four exhibits themselves may become part of the evidence on the final hearing. Even if they do, an order could be sought and made under s 50 of the Federal Court of Australia Act 1976 (Cth) forbidding or restricting publication of them, although it would be premature to consider at this stage the possible or likely fate of an application for such an order. It suffices to say that the present motion cannot be considered on the basis that the exhibits will inevitably become available to the public. 37 Second, Veda has not served the four exhibits in question and there is therefore no question of Veda's having waived, foregone or abandoned any claim to keep them confidential. 38 Third, the exhibits were filed pursuant to a direction of the Court for Veda to 'file and serve any ... affidavits". Veda is to be regarded as acting under compulsion of law by reason of the direction (see Akins v Abigroup Ltd (1998) 43 NSWLR 539) just as it would be doing if it had been required to give discovery of the documents or to produce them in compliance with a subpoena or notice to produce. Whatever the position may be when a party simply leads evidence on the final hearing without having been required to file and serve its affidavits in advance, that is not the case here. Veda would not have filed and served its affidavits and their exhibits if it had not been directed by the Court to do so. 39 Fourth, the principles of Harman v Secretary of State for the Home Department [1983] 1 AC 280 ( Harman ) signify that Mr Dale and the other applicants, and counsel and solicitors representing them in the proceedings, impliedly undertake to the Court not to use the exhibits or the information contained in them for any other purpose than that of the present proceedings. The implied undertaking is reflected in para (2) of the undertaking proposed by Veda, set out at [4] above. No doubt solicitors and counsel will draw the implied undertaking to the attention of Mr Dale and the other eight applicants if they have not already done so. The implied undertaking also applies, of course, to all the affidavits and exhibits that have already been served. It would be a punishable contempt of court if any of the applicants or any of their legal advisers were to make use of, or to disclose the content of, any of the affidavits or exhibits (including, but not limited to, the four in dispute) to anyone for any other purpose. 40 Fifth, O 46 r 6(3) of the Federal Court Rules provides that except with the leave of the Court or a Judge, a non party must not inspect, relevantly, an affidavit in a proceeding. I treat the reference to "affidavit" in the rule as embracing exhibits to the affidavit (in any event subr (4) of O 46 r 6 provides that except with the leave of the Court or a Judge, or with the permission of the Registrar, a non party must not inspect any document in any proceedings that is not referred to in subr (2) or (3)). Although those rules are concerned with inspection of documents on the Court's files, it is noteworthy that Dun & Bradstreet, DR Capital and CRA and their employees would not be entitled to inspect the exhibits in the Registry without leave. 41 Sixth, I accept that exhibits RAB1, RAB2, RAB3 and RAB8 are confidential to Veda, but, as noted above, I do not find it necessary to determine whether they are confidential in any way or to any extent different from the internal procedural records and instructions maintained by any business. 42 Seventh, in Cadence Asset Management Pty Ltd v Concept Sports Limited [2006] FCA 711 , which concerned discovered documents, Finkelstein J held that disclosure to a litigation funder was not caught by the implied undertaking. His Honour's reason was that a litigation funder, although not a party, was not a stranger to the proceeding and had a sufficient interest to be provided with the documents, or at least to those documents it needed in order to assess the merits of the action. 43 Neither DR Capital nor CRA is a litigation funder. Nor are they expert witnesses. On the present state of the evidence, it is not clear to me that they have any proper role in relation to the prosecution of these proceedings. 44 The conclusion I have reached is that the position of Mr Dale's legal representatives and Mr Dale (and the other eight applicants) should be left to be governed by the implied undertaking in accordance with Harman [1983] 1 AC 280. I accept a submission of senior counsel for Mr Dale that his legal advisers should be at liberty to explain to their client, if and as and when they think appropriate, what the exhibits reveal, and to show the exhibits to him for that purpose, subject, of course, to their also explaining to him the implied undertaking he gives to the Court and the potential consequences for him of a breach by, for example, disclosing what he has learned from the exhibits to DR Capital or to CRA. As Toohey J observed in Commonwealth v Northern Land Council [1993] HCA 24 ; (1992) 176 CLR 604 at 638, an undertaking by a litigant's legal representatives not to disclose to the litigant can give rise to considerable difficulties. 45 One reason why I do not require a written undertaking from Mr Dale and his legal representatives is that to do so may be seen to diminish the importance and seriousness of the implied undertaking. Undertaking number (2), at [4] above, is implied, and breach of it is just as clearly a contempt of court as if it had been given to the Court in writing. I would not wish to give currency to any notion to the contrary. 47 On the present state of the evidence, it is not shown that disclosure to DR Capital and CRA would be for a legitimate purpose of the proceeding. 48 It is important to note that the officers of DR Capital and CRA are not legal practitioners owing to the Court the duties of officers of the Court. There would not be available against them the additional and special sanctions that are available against solicitors and barristers for a breach of the implied undertaking. 49 It seems sufficient for me to express the concluded view that I have stated above, and to leave the implied undertaking given by Mr Dale and the other eight applicants and their legal representatives in the proceedings to operate so as to preclude disclosure to the DR Capital and CRA. 51 Veda's concern is to ensure that it does not itself contravene s 18K(1) by serving the exhibits on the solicitors who act for all applicants and who confer with representatives of DR Capital. Veda has invited Mr Dale and his legal representatives to propose any means (other than an applicant's consent) by which it may be lawful for them to disclose personal information contained in, for example, Mr Dale's credit information file to the other eight applicants and to the representatives of DR Capital. 52 Mr Dale has not contended that the para (m) exception applies. Even if it did, (by reason of the fact that there was a direction for the filing and service of affidavits), the fact is that, by consent, affidavits have been filed and served only in the Dale proceeding, and so it is questionable whether the exhibits relating to the other eight applicants would be within the exception. 53 Mr Dale has not contended that disclosure is required or authorised by law by reason only of the fact that the same solicitors represent all nine applicants. 54 Mr Dale has not suggested any means by which the exhibits relating to him or to any of the other eight applicants, may be lawfully disclosed to the other applicants or to DR Capital. 55 In these circumstances, absent the consent of a particular applicant, his or her credit information file must not be disclosed to the other applicants or to any one else. However, there appears to be no evidence of a threat of such disclosure and in the absence of such evidence, an order would be inappropriate. The respondent has properly drawn the matter to attention, and the solicitors and counsel representing the applicants, as officers of the Court, will be relied on to observe the prohibition in s 18K(1). My present thinking is that there should be no order as to costs because both parties had a measure of success on the motion. In favour of Veda, I have held that at present exhibits RAB1, RAB2, RAB3 and RAB8 should be withheld from DR Capital and CRA, and I have rejected a submission made on behalf of Mr Dale that the exhibits should be treated as if they had become part of the evidence on the final hearing. In favour of Mr Dale, I have not required that he or the solicitors or barristers representing him in this proceeding sign written undertakings to the Court, and have been content to allow their positions to be governed by the undertaking to the Court that is implied in accordance with the principles of Harman [1983] 1 AC 280. The Privacy Act part of the motion took virtually no time at all and was not seriously contested by Mr Dale. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | proceeding one of nine brought by individuals against credit reporting agency alleging it had provided incorrect information concerning their creditworthiness causes of action in defamation and negligence respondent served affidavit pursuant to usual direction of court respondent did not serve certain exhibits to the affidavit claiming that they were commercially confidential respondent moved for orders that access to those exhibits be limited to legal representatives of the respective applicants and that they be required to give written undertakings to court to use the copy exhibits and information in them only for purposes of the proceeding, and to destroy the copies at conclusion of proceeding exhibits in question were business records showing internal procedures followed by respondent directed to ensuring that privacy act 1988 (cth) and credit reporting code of conduct complied with applicants assisted by a company whose role not clear on the evidence. held : (1) affidavit and copy exhibits were served pursuant to "compulsion of law"; (2) access not denied to applicants; (3) written undertakings not required of applicants and their lawyers; (4) position of applicants and their lawyers left to be governed by their implied undertaking to the court; (5) applicants and their lawyers would not be justified on the evidence in disclosing content of the exhibits to company assisting applicants. practice and procedure |
On 3 April 2008 Ms Budd filed an application in this Court challenging such decision. 2 The present application was filed pursuant to O 4 r 1 of the Federal Court Rules (Cth) ('the Rules') and is accompanied by an affidavit sworn on 14 March 2008. On 21 April 2008 Ms Budd filed another affidavit sworn on 9 April 2008. 3 Ms Budd's application to this Court is not in the form of a Notice of Appeal as required by O 53 r 2(1) and r 3(2) of the Rules. Her application was not filed within the time limits prescribed by s 44(2A)(a) of the Administrative Appeals Tribunal Act 1975 (Cth) ('the AAT Act') nor was such application accompanied by a draft Notice of Appeal. 4 At the hearing before it on 23 September 2008 the Court informed Ms Budd that it would treat her application as an application for an extension of time in which to appeal from the Tribunal's decision. 5 On 14 August 2008 the respondent filed a Notice of Objection to Competency in response to Ms Budd's application. In consequence Ms Budd was unable to attend at Court at the hearing of her application. Instead she appeared by telephone. Ms Budd was not legally represented. 7 Ms Budd rarely leaves her home unit in Coogee. The evidence before the SSAT reveals that she only left her home four or five times during 2006 and not at all during the first three months of 2007. She is susceptible to panic attacks if she leaves her home, and when she does leave her home she uses a wheel chair. Ms Budd cannot use public transport. She is a member of the half fare taxi scheme operated by the New South Wales Government which is available for persons who cannot readily use public transport. 8 Ms Budd undertakes voluntary work for St Clare's Convent in Waverley and for other religious organisations and schools. Her work consists of writing poetry, interpreting scriptures and preparing other religious materials suitable for distribution to Christian organisations. Ms Budd has provided the Court with examples of her work, and Sister Francis of St Clare's Convent has written letters acknowledging such work. 9 Ms Budd undertakes her work from home. Ms Budd usually sends her work to its recipients by facsimile transmission or delivers it personally by way of taxi. On occasions her son has delivered her work to its recipients. 10 On 17 October 2006 Ms Budd lodged an application for a mobility allowance with Centrelink. Section 1035 of the Social Security Act 1991 (Cth) ('the Act') contains the applicable tests for determining whether Ms Budd qualifies for such an allowance. 12 On 10 January 2007 the decision of the Centrelink delegate was reviewed by an Authorised Review Officer who affirmed the decision. 13 On 16 January 2007 Ms Budd appealed from Centrelink's decision to the SSAT. On 11 April 2007 the SSAT affirmed Centrelink's decision. The SSAT concluded that Ms Budd failed to qualify for a mobility allowance because she was not required to travel to and from her home for the purpose of her work. 14 Ms Budd applied to the Tribunal for a review of the SSAT decision and participated in a hearing before the Tribunal by way of telephone. The Tribunal delivered its decision on 21 February 2008 affirming the SSAT decision and dismissing Ms Budd's application: see Budd v Secretary, Department of Education, Employment and Workplace Relations [2008] AATA 137. That is the extent of her travelling. Ms Budd also stated in her letter dated 26 November 2006 that she does not leave the house to do her voluntary work and instead writes the poems at home and then sends them to St Clare's Church. In a letter, undated but received by the Tribunal on 5 November 2007, Ms Budd stated that "St Clare's does not need me to do "face to face" work". Ms Budd is able to conduct her voluntary work from home. In making my finding I have taken into consideration the reports of Dr Hugo Rodriguez, the letters from Sister Francis, the letter from Senator John Faulkner and several letters that Ms Budd sent the Tribunal. 17 The Court considers that neither paragraph (2B)(a) nor paragraph (2B)(b) applies in the present circumstances. 18 In considering whether it is in the interest of justice to grant an extension of time under s 44(2A)(a) of the AAT Act, the Court notes that it is 'not limited to' the grounds contained in paragraphs (2B)(a) and (2B)(b). In the light of the decision in Ahearn's [sic] case it is useful to set out in modified form the relevant principles in relation to the exercise of the Court's discretion when considering an extension of time in a human rights application based upon those principles distilled by Wilcox J in Hunter Valley as follows: 1. There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The "prescribed period" of 28 days is not to be ignored (Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 550). 2. It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained (Lucic v Nolan (1982) 45 ALR 411 at 416). It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition (Comcare v A'Hearn [1993] FCA 498 ; (1993) 45 FCR 441 and Dix v Client Compensation Tribunal (1993) 1 VR 297 at 302). 3. Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. (See Doyle v Chief of Staff (1982) 42 ALR 283 at 287). 4. Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension. (See Doyle at p 287). 5. The mere absence of prejudice is not enough to justify the grant of an extension. (See Lucic at p 416). 6. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. (See Lucic at p 417). 7. Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of exercise of the court's discretion (Wedesweiller v Cole (1983) 47 ALR 528). Such principles were applied by Gray J in Pham v Commonwealth of Australia [2002] FCA 669 , although in the context of s 46PO(2) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth). The Court also finds that the respondent would not suffer undue prejudice if the Court were to grant leave to Ms Budd to file and serve a notice of appeal out of time. 21 In the present case the Court considers that the merits of Ms Budd's proposed appeal are particularly significant in deciding whether to exercise its discretion under s 44(2A)(a) of the AAT Act. As Ms Budd has not provided the Court with a draft Notice of Appeal the Court will treat the arguments raised in Ms Budd's application and affidavits as her proposed grounds of appeal. 22 The first proposed ground of appeal alleges that the Tribunal denied Ms Budd natural justice. Ms Budd submits that the Tribunal member misconceived 'the medical reports' and failed to 'apply the proper logic and reasoning to my medical reports of Dr Rodriguiez [sic] dated 19 June 2007' . Ms Budd also claims that the Tribunal member misunderstood her evidence; 'went wrong' in 'logic and reasoning' ; and denied her a 'fair proper review due to a wrong reasoning error in law' . 23 A denial of natural justice may arise in a variety of different circumstances. It can for example result from a misconstruction of the powers provided to the Tribunal (see Anisminic Ltd v Foreign Compensation Commission and Another [1969] 2 AC 147 at 171) or where a Tribunal identifies a wrong issue, asks itself the wrong question, ignores relevant material, relies upon irrelevant material or, in some circumstances, makes an erroneous finding or reaches a mistaken conclusion: see Craig v The State of South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179. 24 In considering Ms Budd's submission that the Tribunal failed 'to apply the proper logic and reasoning' to the medical report of Dr Rodriguez dated 19 June 2007, the Court observes that the Tribunal referred to such medical report in its decision. The Tribunal found that Ms Budd was able to conduct her work from home, and in so finding took into account, among other evidence, the report of Dr Rodriguez dated 19 June 2007. The Court finds that the Tribunal took Dr Rodriguez's evidence into account and did not err in its consideration of such evidence. 25 There is no evidence to support Ms Budd's claim that there has been a denial of natural justice. Ms Budd was afforded a full hearing before the Tribunal and the matters she raises do not constitute any basis for a finding of a denial of natural justice. 26 The second proposed ground of appeal alleges that the Tribunal was wrong in finding that Ms Budd did not qualify for a mobility allowance. Ms Budd also claims that the Tribunal failed to appreciate that she cannot work other than at home because of her condition and that her need to travel by taxi arises from such condition. 27 The challenged finding, namely that Ms Budd does not satisfy the criteria for a mobility allowance, is one of fact and not of law. 29 The Court observes that it has a limited power to review questions of fact (see Comcare v Etheridge [2006] FCAFC 27 at [13] - [16] ), but such power only arises 'after the Court has given consideration of the questions of law which constitute the subject matter of the appeal' : see Comcare at [17]. In the current proceeding however no question of law is raised. 30 In these circumstances, the Court cannot substitute its own decision for that of the Tribunal: see Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others [1986] HCA 40 ; (1986) 162 CLR 24 per Mason J at 40-41. 31 Although it is inappropriate for the Court to trespass into the merits, the Court notes that Ms Budd misinterprets the travel test in s 1035(2) of the Act. Her submissions at hearing and her correspondence with the Court continually reiterated that she 'does the work' and that she 'does the travel' . However, the existence of these two facts in isolation does not satisfy the travel test in s 1035(2). The determinative issue before the Tribunal was whether she was required to travel in order to perform the work. The Tribunal found against Ms Budd on such issue and this Court cannot interfere with that finding. 32 It follows from the above that it is not 'in the interest of justice' to grant leave to Ms Budd to file and serve a notice of appeal out of time pursuant to s 44(2A)(a) of the AAT Act. The Court accordingly dismisses the application with costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | mobility allowance travel test. extension of time to file and serve a notice of appeal administrative appeals tribunal act 1975 (cth) s 44(2a)(a). social security practice and procedure |
The one outstanding point is that which relates to the basis on which the applicants should pay the respondents' costs on the notices of motions dated 8 January 2007 including any costs thrown away in relation to the amendment of the statements of claims. The respondents submit that the applicants should pay the costs forthwith. The applicants oppose that aspect. Firstly, they submit that each of the statement of claims as filed on 31 October 2006 have effectively been almost abandoned. Only five paragraphs remain unaltered in each. Eight have been struck out and many pages of new allegations added. These statements of claims had resulted from an order made by French J on 29 August 2006 requiring the applicants to commence the actions by 1 November 2006. There had, therefore, been opportunity for the statement of claim in each matter to have been properly drafted. The reality is, say the respondents, that it has taken from 1 November 2006 until present for the pleadings to be finalised. 4 The history of the proceedings from the record is as follows. In the event that the applicants have not by 1 November 2006 commenced proceedings against the respondents they shall pay the respondents' reasonable costs of and incidental to the provision of the discovery affidavit and inspection of documents in compliance with orders made in these proceedings. Proceedings by the third applicant were discontinued by consent on 5 July 2007. The proceeding was then adjourned on 12 July 2007 and then again on 20 July 2007 by consent. 6 In the main actions (WAD 308-310/2006) the applicants filed their applications on 31 October 2006. The first and second respondents file and serve any application pursuant to Order 11 Rule 16 and Order 20 Rule 2 by 8 January 2007, together with an outline of submissions in support. By 29 January 2007, the applicant file and serve any written outline of submissions in response. On 2 February 2007 the Court ordered by consent that the applicants file and serve their submissions in response by 6 March 2007 and that the notice of motion be heard on 12 March 2007 at a time to be fixed, no submissions were received from the applicants. The matter was then adjourned by consent on 12 March 2007, 26 March 2007, 26 April 2007 and 12 June 2007. 8 On 12 July 2007 the applicant was ordered to file a proposed amended statement of claim on WAD 308/2006. The respondents were ordered to file and serve any specific objections to the proposed amended statement of claim with any amended notice for dismissal or strike out within 7 days, none was received. On 1 August 2007 the parties attended the directions hearing at which time the issue of costs being payable forthwith was raised for the first time. 9 The applicants oppose the order for payment of costs forthwith. They state that the success of the respondents' notice of motions have been satisfactorily met by the applicants' agreement to pay the costs. However, the applicants say there was an absence of conferral by the respondents before each motion was brought. In those circumstances, by comparison with the Rules of the Supreme Court of Western Australia, there would be disentitlement to an award of costs, certainly costs payable forthwith, if there was no conferral. In the applicants' submissions, the history of these matters do not justify departure from the Rule reflected in O 62 r 3(3). 10 In reply the respondents refer to the affidavit of Lucy Westwood sworn on 8 January 2007 to support their contention that there was a willingness to confer on their part. In Harris , Kiefel J accepted that an order that certain costs be taxed and paid forthwith was justified in circumstances where there had been a long delay in the course of the proceeding by the pursuit of an ill-considered and unnecessary claim. It is common ground that the making of the order sought by the notice of motion is a matter in the discretion of the Court. Such costs should be capable of being recovered without the innocent party having to wait, possibly years, for that to occur (per Weinberg J in McKellar v Container Terminal Management Services Limited [1999] FCA 1639 at [41] ). This is because the respondents have consented to the adjournment of hearings which may have enabled the proceedings to be advanced. In these circumstances I do not consider the evidence is such as to support the exercise of the Court's discretion in favour of making the costs payable 'forthwith'. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | interlocutory proceeding whether costs should be payable forthwith costs |
The receivers appointed were Brian McMaster, Oren Zohar and Mark Korda. Orders were made at the same time requiring the authority of the receivers to approve transfers or dispositions of the property of the company to a value in excess of $5,000 within any seven day period. 2 The orders made on 20 April 2006 were varied on 30 June 2006 by more elaborate orders. These included an order that, subject to the receivers' satisfaction as to the solvency of the company, they could approve payments by it to meet "reasonable legal expenses" incurred in these proceedings or in connection with proceedings brought against the company by the Australian Securities and Investments Commission (ASIC) or others in the future. 3 The condition requiring satisfaction as to solvency before payments could be approved was modified by further orders made on 26 July 2006. By those orders the receivers were permitted to disregard, for the purposes of their satisfaction as to solvency, the potential liability of the company under guarantees it had given to so called Mezzanine companies in the Westpoint Group. The Mezzanine companies had raised funds from retail investors for property developments in the Westpoint Group. The receivers were also entitled to disregard the company's potential GST liability for the supply of sales and marketing services to other entities in the Westpoint Group. The modification of the condition requiring satisfaction as to solvency has been referred to in these proceedings as a "carve-out" from that condition. 4 On 13 November 2006 Westpoint Realty filed a motion seeking a further carve-out in relation to its potential liability to QBE Insurance (Australia) Ltd (QBE) in connection with a Deed of Indemnity and Guarantee relating to certain QBE bonds. The guarantee related to the performance by Westpoint Corporation Pty Ltd (Westpoint Corporation) of its obligation to guarantee payments made under Bonds issued at its request by QBE in favour of a developer Bayshore Port Melbourne Ltd (Bayshore) and a financier, Perpetual Trustees Pty Ltd (Perpetual) in connection with building works at Port Melbourne. QBE made payments to Bayshore on the strength of demands pursuant to the Bonds. The demands were made by a privately appointed receiver of Bayshore who is a member of the same firm as the Court appointed receivers of Westpoint Realty. A concern about a possible conflict of duty in the Court appointed receivers' assessment of the potential liability to QBE has led to the proposal for the modified carve-out. For the reasons that follow I propose to authorise an additional carve-out conditioned upon the opinion of independent counsel as to the prospects of successfully defending the QBE claim. One was sworn by the company's sole director, Norman Carey, on 10 November 2006. The other was sworn on 15 November 2006 by Brian McMaster, one of the Court appointed receivers. 7 As appears from the affidavits a summons issued out of the Equity Division of the Supreme Court of New South Wales on 5 October 2006 in which QBE is named as plaintiff and Westpoint Realty and Mr Carey are named as defendants. By that summons QBE claimed a sum of $3,562,656 from the two defendants. It also claimed interest of $57,978.56 under s 100 of the Civil Procedure Act 2005 (NSW) together with court filing fees of $1,318, service fees of $159 and solicitors costs of $914. The total sum claimed was $3,623,025.56. 8 In a Commercial List Statement filed with the summons QBE alleged that in or about early 2003 Westpoint Corporation and Mr Carey asked it to consider applications from time to time to issue bonds. QBE agreed to that request subject to undertakings from Westpoint Corporation and a number of guarantors including Westpoint Realty and Mr Carey. The terms of a Deed of Guarantee and Deed of Variation into which they subsequently entered were pleaded. A copy of the deed was exhibited to an affidavit sworn by Mr Carey in connection with the present application. Under the deed Westpoint Realty, Mr Carey and others guaranteed the punctual performance by Westpoint Corporation of its obligations under the Deed. 9 QBE alleged that on 8 October 2004, at the request of Westpoint Corporation, it issued a guarantee indemnity to Bayshore and Perpetual, being Bond No AO 1868308BON. This 'First Bond' contained terms including an unconditional undertaking by QBE to pay on demand from Bayshore or Perpetual any sum of money up to a maximum of $1,781,328. Payment of the demand would be made at the direction of Perpetual without reference to Westpoint Corporation. Every demand made was required to include a statutory declaration that Westpoint Corporation had defaulted under a Head Contract between itself and Bayshore and that the amount demanded was owing by Westpoint Corporation under that Head Contract. A Second Bond was issued by QBE on 10 October 2004 to Bayshore and Perpetual. The undertaking to pay was on the same terms and for the same maximum amount as provided for in the First Bond. 10 According to QBE, Bayshore made demand on 12 July 2006 requiring that it pay the maximum amounts for which the First and Second Bonds provided. The demand was said to be in writing and contained in a letter from Craig Shepard, one of two privately appointed receivers and managers of Bayshore. I interpolate that both receivers and managers are members of the firm KordaMentha, the same firm in which Mr McMaster, the Court appointed receiver of Westpoint Realty, is a partner. The letter was said to have been accompanied by a statutory declaration and a written direction from Perpetual dated 5 July 2006. QBE said it paid Bayshore the sum of $3,562,656 on 21 July 2006 in accordance with its obligations under the First Bond and the Second Bond. 11 QBE then alleged that it sent a written demand to Westpoint Corporation on 9 August 2006 requiring payment of the sum of $3,562,656. The demand required payment by 18 August 2006. 12 On 21 August 2006 QBE sent demands to the guarantors, Westpoint Realty and Mr Carey requiring payment of the sum of $3,562,656 by 28 August 2006. Neither Westpoint Realty nor Mr Carey have paid it the sum allegedly owing pursuant to the Deed of Guarantee. 13 On 29 August 2006 Clavey Legal, acting for Westpoint Realty and Mr Carey, wrote to the solicitors for QBE requesting copies of the statutory declarations required to be provided to QBE by the party making the demand under the Bonds. Mr McMaster wrote to Mr Carey on the same day attaching the letter received from QBE's solicitor and directed to Westpoint Realty. He wrote again on 31 August 2006 seeking a response regarding the demand. Clavey Legal wrote to the solicitors for QBE on 1 September 2006 referring to a telephone conversation held on that day and confirming their request for a copy of the Perpetual Loan Agreement and the statutory declaration provided to QBE with the call on the Bonds. The solicitors for QBE responded on 12 September 2006 forwarding copies of the two Bonds and the statutory declaration by Mr Shepard dated 12 July 2006. 14 According to the statutory declaration Mr Shepard, who made the demand, is one of the joint and several receivers and managers of Bayshore. In his statutory declaration he said that the Bonds were issued at the request of Westpoint Construction as support for its performance of its obligations under a contract made with Bayshore for building works at 50 Knott Street, Port Melbourne. He alleged that Westpoint Construction had defaulted under that contract. It had failed to bring the works to practical completion by the Date for Practical Completion required by the contract, which was 28 February 2005. Under cl 35.7 of the Head Contract Westpoint Construction was indebted to Bayshore for liquidated damages calculated at the rate of $28,000 per day from the Date for Practical Completion until the works reached practical completion or the date that the Head Contract was terminated. The works under the Head Contract had not reached practical completion and it had not been terminated. On that basis a notice had been issued under the contract claiming liquidated damages as at 15 May 2006 in the sum of $12,348,000. A demand for payment in that amount had been made by Bayshore to Westpoint Construction on 19 May 2006. The sum had not been paid. 15 On 20 October 2006 Mr Clavey of Clavey Legal wrote to the solicitors for QBE saying that its demand had been reported to Mr McMaster as one of the Court appointed receivers of Westpoint Realty and of Mr Carey's assets. He said that the demand had potentially placed Mr McMaster in a position of a conflict of interest as his partners in the firm KordaMentha were the privately appointed receivers of Bayshore. According to the letter their conduct could be called into question in any proceedings commenced by Westpoint Realty and Mr Carey against QBE. 16 Clavey Legal said in its letter that Westpoint Realty and Mr Carey disputed their claimed liability to QBE. Their position was that the "bonding facility" entered into between QBE and Westpoint Corporation was to have been issued on the strict basis "... that only the financee (sic) could have the benefit of any call made pursuant to a Bond issued by QBE". The demand had been made by KordaMentha as the private receiver of Bayshore, the developer. Clavey Legal said it was further instructed that, had it been made known to Westpoint Realty and Mr Carey by QBE that QBE intended to issue a bond under which a developer could call for payment, his clients would not have agreed to execute the guarantee under which QBE had made its demand. The credit risk undertaken in the circumstances was substantially different to the risk which Westpoint Realty and Mr Carey would have been prepared to guarantee. His clients also contended that the sum demanded by QBE did not constitute "loss" for the purpose of cl 1.4 of the Deed of Indemnity and Guarantee. A number of other contentions were advanced to which it is not necessary to refer for present purposes. 17 According to Mr Carey's affidavit he was managing director of Westpoint Corporation at the time the bonding facility agreement was negotiated. That company was a related entity to Bayshore and had effective control over the development which it was conducting. The primary financier for the project was Perpetual. The requirement for the issue of the bond was its stipulation on the basis that the bond was to be for its benefit. 18 Mr Carey claimed that Mr Graeme Rundle, formerly the Chief Financial Officer of Westpoint Corporation, made arrangements for the bonding facility to be made available on the basis that any bond issued was to be in favour of Perpetual. He said he has been informed by Mr Rundle and believes that the bond facility was negotiated on the limited basis required by Perpetual. It was not a requirement of the developer, Bayshore. His recollection of the bonding facility agreement terms and correspondence between QBE and officers of Westpoint Corporation was "... that there was a clear agreement between Westpoint Corporation and QBE that bonds issued under the QBE facility would be issued on a limited basis that excluded a party other than the primary financee (sic) having any right to call for payment under a bond issued by QBE". Mr Carey asserted that it was never intended that a bond be issued under the QBE facility on the basis that any party other than Perpetual would be entitled to call on payment. The credit risk for Westpoint Corporation and Westpoint Realty as guarantor was narrow because Perpetual's exposure was insured by Bayshore purchasing mortgagee insurance and the bond was to be issued in favour of Perpetual only. Is either a partner or employee of KordaMentha and is one of the joint and several receivers and managers of Bayshore. 2. That in his capacity as the private receiver and manager of Bayshore he called upon QBE to make payments totalling $3,562,656 pursuant to the Bonds. 3. That he asserted that Westpoint Construction had defaulted under the Head Contract. He did not explain the basis upon which he made that claim. He also asserted that he had legal advice from Clavey Legal that Westpoint Realty does not owe QBE any money under the terms of the Deed of Indemnity and Guarantee and that there are defences and triable issues, but that further investigation would be required by obtaining orders that QBE produce documents. 20 Mr Carey said that he met with the legal representative for Mr McMaster on 22 September 2006 and was told that Mr McMaster could not be informed of the substance of the legal advice provided by Clavey Legal as he had a likely conflict of interest by reason of his partners' private appointment as the receivers and managers of Bayshore. He was informed by his solicitor and believes that Mr McMaster's solicitors proposed a resolution of the conflict by the instigation of a "separation protocol" to ensure that information regarding the QBE claim would remain confidential. 21 Mr Carey then referred to the originating process issued out of the Supreme Court of New South Wales and said he had been informed by Mr McMaster and believed that unless an order were made excluding the QBE claim from his consideration as to Westpoint Realty's solvency he would be unable to approve payments in the normal course of Westpoint Realty business and would be unable to approve any funding of its legal costs so as to defend the proceedings commenced by QBE. Because of Mr McMaster's apparent conflict of interest he could not, according to Mr Carey, form any view at all as to the merits of QBE's claim against Westpoint Realty because he could not be informed of the substance of the legal advice provided to Westpoint Realty in that regard. There was further material in Mr Carey's affidavit going to the solvency of Westpoint Realty. He asserted, inter alia, that it has no outstanding GST liability. 22 Mr McMaster also swore an affidavit. He said, inter alia, that he is still not satisfied that Westpoint Realty is solvent. I was concerned that this may seriously affect the ongoing operation of Realty. Realty did not seek to vary the orders to allow the Receivers to authorise essential operating expenses. Accordingly, the Receivers sought and obtained a direction from this Honourable Court to the effect that the Receivers could "carve-out" the potential GST Liability and Mezzanine Liability from their consideration of the solvency of Realty. Orders to this effect were made on 26 July 2006. He also confirmed that QBE had commenced proceedings in the Supreme Court of New South Wales. They are partners in the firm based in KordaMentha's Melbourne office. Corrs have not provided him with copies of those documents nor have they disclosed the copies of those documents to him. I interpolate that it is not clear why those documents could not be provided to Mr McMaster. Given that they form the basis of the QBE claim against Westpoint Realty, they would not appear to attract either privilege or commercial confidentiality. 26 Mr McMaster referred to discussions about whether KordaMentha or Corrs had a conflict of interest in considering the QBE claim. The Bayshore receivers are separately represented by Arnold Bloch Liebler. (b) Disclosing the relevant facts and issues to the Court and seeking a determination as to whether or not there is a genuine dispute. (c) For Westpoint Realty to brief an independent barrister to form a view as to whether or not there is a genuine dispute. Mr McMaster said that solution is acceptable to the receivers. 27 Since he became aware of the QBE liability he has received repeated requests from Westpoint Realty to approve expenses. He has repeatedly responded that he cannot authorise such payments unless he is satisfied as to solvency and that Westpoint Realty should seek a further direction in respect of the QBE claim. Because Mr Clavey was on leave between 22 October and 6 November 2006 he was unable to bring the application before that time nor to respond to Corrs on proposed solutions for the resolution of the potential conflict. 28 Mr McMaster said that the Court receivers do not oppose the application. He is concerned, however, that he has once again obtained notice of a potentially significant liability from a third party rather than from Westpoint Realty itself. He is also concerned that this is the third such liability which it is proposed to exclude from the receiver's consideration of solvency. In addition he is concerned that Westpoint Realty has been demanding that he authorise payments since the potential liability was disclosed in circumstances where he was not satisfied as to the solvency of Westpoint Realty. The need for the application was identified at the end of September, but no application was made until 10 November 2006. These issues may have a serious impact on Westpoint Realty's business and its ability to pay creditors. The receivers and managers of the sixth defendant are hereby authorised to approve expenditure, out of funds of the sixth defendant, of up to $10,000 for legal advice and representation including the filing of any necessary appeals in case number SO160 of 2006 in the Equity Division of the Supreme Court of New South Wales between QBE Insurance (Australia) Ltd ACN 003 191 035 and the sixth defendant. Notice of this motion and the supporting affidavit be served forthwith on QBE Insurance (Australia) Ltd ACN 003 191 035. Costs today reserved. The orders are made in circumstances where 'an investigation is being carried out', 'a prosecution has been begun' or 'a civil proceeding has been begun'. That is to say the orders can be made before liability is established and indeed before the evidence necessary to establish liability has been collected. While an application under the section is not interlocutory in an existing criminal or civil proceeding, it is interlocutory in a wider sense. It preserves the status quo and the assets of the relevant person pending the outcome of the investigation, prosecution or civil proceedings which are on foot. 32 The difficulty in this case arises, in essence, because the Court appointed receivers are members of the same firm as the privately appointed receivers and managers of a company connected with the Westpoint Group. The privately appointed receivers and managers made the relevant demand under the Bonds issued by QBE. That demand has ultimately given rise to the proceedings against Westpoint Realty. 33 There is undoubtedly the potential for difficulty and conflict of duties when a Court appointed receiver over a group of companies accepts appointment as a private receiver and manager over any of those companies or associated entities. A similar potential for difficulty arises when the privately appointed receiver and manager is a member of the same firm as the Court appointed receiver. 34 The complexity and scale of the issues surrounding the Court's appointment of receivers to various Westpoint companies and officers and the appointments of various private receivers under charges over some of those companies or related companies requires a careful but at the same time pragmatic approach to the issue of potential conflict. The guiding principle in each case must be the maintenance of the protective purposes of the orders made on 20 April 2006 and subsequently. Necessarily the protective purposes are served by ensuring that the company the subject of the orders under s 1323 is not subjected by default to additional and unwarranted liabilities simply because of the Court imposed constraints on its capacity to deal with its assets including constraints on its capacity to provide legal representation in the defence of claims against it. 35 The proposed carve-out creates an artificial "blind spot" in the judgment to be made by the receivers and managers of Westpoint Realty in the discharge of their functions under the Court order. That blind spot would be created by the external and accidental fact of the appointment of an associate of the Court appointed receivers as the receiver and manager of Bayshore. 36 In my opinion the question whether the Court appointed receivers should have regard to the potential liability of Westpoint Realty to QBE should be determined upon the opinion of an independent barrister engaged by the receivers for that purpose. If in the opinion of an independent barrister there is a reasonable prospect of defending the proceedings, then the receivers can proceed on the basis that they may disregard the potential liability to QBE in determining whether they are satisfied as to the solvency of Westpoint Realty. If, on the other hand, the barrister is of the view that there is no reasonable prospect of defending the action, then the receivers and managers may consider the potential liability to QBE in assessing the solvency of Westpoint Realty and, in any event, in determining whether it is reasonable to approve the expenditure of Westpoint Realty funds in legal representation in connection with the action. 37 The independent barrister engaged for that purpose should be entitled to have regard to all such materials as may be provided to him by the solicitors for the receivers and by the solicitors for Westpoint Realty relevant to the alleged liability to QBE. The condition will require the advice of independent counsel that there is a reasonable prospect of successfully defending the QBE claim. Absent such advice the receivers are to assume the existence of the claimed liability of QBE in assessing the solvency of Westpoint Realty. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | appointment by court of receivers to member of corporate group authority of court appointed receivers to approve payments of legal costs defending proceedings by third parties proceeding instituted by third party under guarantee connected with issue of bonds to associated company demand for payment under bonds by privately appointed receiver and manager of associated company receiver and manager of associated company member of same firm as court appointed receiver whether court appointed receiver in position of conflict power of court appointed receiver to approve legal expenses conditioned upon satisfaction as to solvency of company whether court appointed receiver should be authorised to disregard claim in assessing satisfaction as to solvency effect of possible conflict conditional "carve-out" approved conditional upon opinion of independent counsel that reasonable prospect of defending claim corporations |
In the proceedings, the applicants sue on their own behalf and on behalf of certain investors in the respondent pursuant to Part IVA of the Federal Court of Australia Act 1976 (Cth) ( the Act ). In very brief terms, the applicants claim that the respondent failed to disclose matters which it was required to disclose or ought to have disclosed and thus left the market ignorant of the true facts concerning the business and affairs of the respondent. This conduct on the part of the respondent, it is said, caused the price of the relevant shares in the respondent to be inflated above the true value of those shares resulting in the group members suffering loss when they invested in the respondent. In December last year I fixed for hearing yesterday (9 March 2009) a Notice of Motion which the respondent had filed on 12 December 2008 (the respondent's Notice of Motion). That Notice of Motion was filed pursuant to a direction made by me on 31 October 2008. The direction which I made then was designed to compel the respondent to decide sooner rather than later whether it intended to seek an order that these proceedings not continue as a representative proceeding under Part IVA of the Act and whether it intended to make any other interlocutory applications. When I made that direction it was my intention to hear and determine as soon as possible all interlocutory applications which were then in prospect. There was also returned before me yesterday a Notice of Motion filed by the applicants in which the applicants sought certain interlocutory orders designed to ready the matter for final hearing. The final hearing has been fixed to commence on 31 August 2009. The applicants' Notice of Motion was largely disposed of yesterday. The parties are to agree on the form of orders which flow from the views which I expressed yesterday in respect of that Notice of Motion and to lodge Short Minutes of Order embodying their agreement by close of business today. If any issues remain from that Notice of Motion, those issues will be addressed when the matter is next before me on 25 March 2009. Shortly before the matter was called on yesterday, I was informed that the respondent had abandoned its Notice of Motion. I was told that the only issue remaining in respect of that Notice of Motion was the question of costs. In light of the respondent's abandonment of its Motion, the applicants sought an order that the respondent pay its costs of and incidental to the respondent's Motion. The respondent resisted the making of any costs order against it. It argued that the applicants should pay its costs, or at the very least, that there should be no order as to costs. In its Notice of Motion the respondent sought the following orders: Pursuant to section 33N of the Federal Court Act 1976 (Cth) (the Act ), (order) that the proceeding no longer continue as a proceeding under Part IVA of the Act. (Order) that the applicants pay the Respondent's costs including the costs of this Motion. Such further or other orders that this Honourable Court considers appropriate. (2) If the Court dismisses an application under this section, the Court may order that no further application under this section be made by the respondent except with the leave of the Court. (3) Leave for the purposes of subsection (2) may be granted subject to such conditions as to costs as the Court considers just. The respondent also indicated at that time that it would confine its arguments to those two subsections. The respondent's Notice of Motion was initially supported by the affidavit of Duncan Geoffrey Travis sworn on 11 December 2008. A second affidavit, sworn by Mr Travis on 5 February 2009, was also to be relied upon. It is apparent from the evidence contained in the two Travis affidavits that the solicitors for the applicants and the solicitors for the respondent had corresponded extensively for at least the second half of 2008 about the appropriateness of the definition of the group formulated by the applicants for the purposes of these proceedings. The respondent had asserted that the definition in the applicants' pleadings was defective. On 6 February 2009, the respondent filed and served an Outline of Submissions in support of the orders which it sought in its Notice of Motion. (3) As is apparent from this statement of issues on the motion, AWB relies only on s 33N(1)(c) and (d) of the Act and not on s 33N(1)(a) or (b). The submissions which the respondent made in respect of that issue were directed to persuading the court that the applicants' claims raise non-common questions of such significance and number that the use of Part IVA of the Act as a means of advancing those claims would not provide an efficient and effective means of dealing with the claims of group members. Alternatively, the respondent contended that, in any event, it was no longer appropriate for the claims of group members to continue as a representative proceeding. These propositions repeat the language of s 33N(1)(c) and (d) of the Act. In the Outline of Submissions filed on behalf of the respondent, the respondent's Counsel analysed the Application and the Amended Statement of Claim in order to: In the respondent's Outline of Submissions it was also submitted that the solicitors for the applicants had been unable to provide the detailed information concerning group members sought by the solicitors for the respondent and that this fact was making it difficult for the respondent to meet the applicants' case --- a difficulty which was likely to continue. Such a problem, so it was submitted, would not exist, or not exist to the same extent, if the claims were pursued individually. The group definition issue was submitted to be a separate but sufficient ground for the making of the s 33N order sought by the respondent. That definition was altered in a material respect when the Amended Statement of Claim was filed on 31 October 2008. In the amended pleading, subparagraphs (a), (b) and (c) of the definition remained the same. Such a post-commencement right to "opt in" is impermissible, so it was submitted, because it is inconsistent with one or more of ss 33C, 33H, 33J and 33K of the Act (see also Multiplex Funds Management Limited v P Dawson Nominees Pty Limited and Another [2007] FCAFC 200 ; (2007) 164 FCR 275 at [142] per Jacobson J, with whom French J (as he then was) and Lindgren J agreed). On the present state of the authorities, this submission was plainly correct. The respondent also argued that, even in its original form, the definition of Group Members was bad. However, the respondent accepted that I would be obliged to reject this latter submission because it runs counter to the reasoning of the Full Court in Multiplex [2007] FCAFC 200 ; (2007) 164 FCR 275 , by which I am bound. Unsurprisingly, the applicants resisted the respondent's Motion. On 2 March 2009, the solicitors for the applicants filed a lengthy affidavit sworn by Ben Slade, who is the solicitor for the applicants, and an Outline of Submissions. Mr Slade provided a detailed analysis of the relevant facts, matters and circumstances, and the reasons which, in his view, justified a conclusion that the Part IVA procedure was the cheapest and most efficient way of dealing with the claims of the Group Members. In their Outline, the applicants made detailed submissions in answer to the submissions made by the respondent on the common questions issue. When addressing the group definition issue, the applicants stated that they proposed to seek leave to amend the group definition yet again by deleting subparagraph 1(d) and replacing it with a new subparagraph 1(d). Subparagraph 1(d) is the subparagraph which stipulated for the funding criterion. Yesterday, the applicants applied for leave to make that amendment, both to the Amended Application and to the Amended Statement of Claim. When I come to make the other orders and directions arising out of yesterday's hearing, I will grant that leave. The applicants also made submissions as to the correct interpretation of s 33N of the Act in the present context. In particular, it was submitted on behalf of the applicants that, in order to succeed in its Motion, it was incumbent upon the respondent to satisfy me that it is in the interests of justice to "declassify" the proceeding for the reasons encapsulated in s 33N(1)(c) and/or (d) of the Act. Mr Scerri QC who, with Mr Darke, appeared for the respondent, referred to the history of this dispute (including the fact that there had been earlier representative proceedings commenced pursuant to the Rules of Court). Those earlier proceedings had ultimately been dismissed. Mr Scerri went on to submit the following: Mr Scerri's ultimate submission was that: (i) The respondent had acted reasonably and promptly when it became clear that it could not succeed in its Motion; and (ii) It was the applicants' change of position in respect of the definition of Group Members that had dramatically changed the context in which the Motion was to be considered and it was that change of position which had brought about the respondent's decision to abandon the Motion. The applicants submitted that their change of position in relation to the definition of Group Members did not have the consequences for which the respondent contended. The applicants submitted that because the respondent had abandoned its Motion, it should pay the applicants' costs of that Motion. I am not persuaded that the applicants' latest change in position in respect of the definition of Group Members has had or will have the consequences for which the respondent contends. The claims by the group made in this case involve many common issues and many matters of fact. Those claims also involve some issues which may be aptly described as individual issues, that is to say, issues which will almost certainly need to be resolved by a consideration of each claimant's individual circumstances. The nature and number of this latter group of issues are not likely to be substantially affected by an increase in the number of persons comprising the group. Nor do I think that the significance of the common issues when compared with the significance of the non-common issues will change a great deal simply because the number of persons comprising the group has increased. It is neither necessary nor appropriate for me to resolve the merits of the respondent's Motion for the purpose of determining the question of costs. The simple fact is that the respondent has abandoned the Motion and has sought to justify that abandonment by asserting that abandonment of its Motion became inevitable once the applicants notified their intention to seek leave to change their position in relation to the definition of Group Members in the manner foreshadowed on 2 March last. I do not think that the respondent's decision to abandon its Motion can be attributed to the applicants in the way in which the respondent has contended. The applicants' change of position in relation to the definition of Group Members has rendered the second ground relied upon by the respondent in support of its Motion nugatory. By bringing forward in the Motion and advancing the group definition submissions which it did in support of its Motion, the respondent has been successful in forcing the applicants to address an obvious defect in the definition of Group Members. On this point, the respondent has had success. However, I think that most of the work done by both parties in relation to the respondent's Motion was done in relation to the common questions issue. On that issue, in substance, the applicants have succeeded since the respondent's arguments directed to that issue and claims for relief based upon those arguments have now been abandoned. On the other hand, as I have said, the respondent has had success on the group definition question. I do not think that it would be appropriate in the present case to make specific costs orders directed individually to each of the two broad sets of arguments raised by the respondent in support of the relief which it sought in its Motion. Such an approach would inevitably make the taxation of costs in the present case unnecessarily complicated and would also unreasonably add to the costs of that taxation. Taking into account the various factors to which I have referred, I think that the appropriate order in relation to the costs of the respondent's Motion is that the respondent pay 80 per cent of the applicants' costs of and incidental to the respondent's Notice of Motion filed on 12 December 2008, which costs are to include the costs incurred by the applicants in respect of retaining Counsel and one solicitor in respect of one hour of yesterday's hearing. That is the order which I will now make. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | exercise of discretion in respect of costs notice of motion abandoned in substance each party had some success percentage costs order justified and appropriate costs |
The first question in issue is whether or not the responsibility for what went wrong lies with the liquidator. If it does, the second question is to what extent should the liquidator bear the loss that has been suffered. 2 The facts, for the most part, are uncontroversial. Taycorp Three Pty Ltd (in liq) owed $69,132.13 to the Chief Commissioner of State Revenue (NSW). The debt was for land tax and parking space levies. As the debt was not paid the Chief Commissioner applied to have Taycorp wound up in insolvency. On 27 August 2004 Taycorp was wound up and Mr Porter was appointed liquidator for the purposes of the winding up. 3 Within a month of the winding up order, the liquidator had received the following information: Taycorp was solvent; the company was the registered proprietor of two commercial properties in Sydney each worth approximately $3 million; and the properties were held on trust for the Tayles Discretionary Trust No 3. The liquidator was also told that Taycorp owed approximately $1.5 million to the Commonwealth Bank of Australia (CBA) and had few other debts. 4 The discretionary trust was established by a deed dated 12 December 1995. The deed conferred power upon a person designated as "appointor" to remove the trustee and appoint a new trustee. On 28 February 2005 the appointor removed Taycorp as trustee of the discretionary trust and replaced it with Miller Street Pty Ltd, the plaintiff. Mr Tayles, who was a director of both Taycorp and Miller Street, wrote to the liquidator on 1 March 2005 informing him of the change in trustee. In that letter Mr Tayles advised that solicitors were in the process of preparing documentation so that the properties could be transferred from the old trustee to the new trustee. 5 When the liquidation of Taycorp commenced there was a tenant in each property. Following his appointment the liquidator contacted the tenants and directed them to pay to the liquidator the rent due under the lease. In his letter of 1 March 2005, Mr Tayles also demanded that the liquidator account for the rent less any amount that might be due to creditors. 6 The liquidator replied to Mr Tayles saying that he would obtain legal advice before deciding what to do. He took the opportunity to remind Mr Tayles that he (the liquidator) had not yet received the books and records of Taycorp and that Mr Tayles had not prepared and submitted a report as to the affairs of the company. 7 No matter what advice the liquidator received he could not for practical reasons transfer the title to the properties to Miller Street. The properties were mortgaged to the CBA to secure not only the loan of $1.5 million to Taycorp but also other facilities totalling approximately $1 million which the CBA had granted to other companies controlled by Mr Tayles. The winding up order was an event of default under each of the facilities with the result that the debts to the CBA were due and payable. Moreover, from 1 March 2005 the CBA began charging penalty interest on its facilities. 8 The CBA had informed Mr Tayles that it was prepared to "restructure" the facilities if certain conditions were met. The conditions included the removal of the liquidator, the provision of financial information about Taycorp and the other borrowing companies, the provision of copies of the leases for the properties and valuations being obtained presumably to show that the properties would be adequate security for the "restructured" facilities. 9 In those circumstances the liquidator could hardly give up the properties without seeing the CBA paid out. It was not suggested that it would have been appropriate to transfer the properties subject to the CBA mortgage. 10 In the event, it was not until around 18 August 2005 that the CBA decided to "restructure" the loans and not until 26 August 2005 that it advised the liquidator that it consented to the transfer of the properties to Miller Street. Only at that point could the liquidator consider a transfer of the properties. 11 Five days after the CBA indicated it would consent to the transfer, that is on 31 August 2005, Miller Street brought this application. It sought relief of three kinds: first, an order for the transfer of the properties to Miller Street; second, payment of the rent in the liquidator's hands; and, third, damages for loss suffered by the discretionary trust since March 2005, being the time it was alleged the liquidator should have transferred the properties. 12 The liquidator adopted the position that until he could establish the liabilities that had been incurred by Taycorp in its capacity as trustee of the discretionary trust he was not obligated to transfer the properties because of the trustee's lien. There was also the question of the liquidator's costs which were to come out of the assets under his control. 13 I accept that one difficulty confronting the liquidator was that Mr Tayles had not handed over the company's books and records and that made it difficult to assess the liabilities of Taycorp. The problem was that most of the company's books had been lost when Mr Tayles changed residences. Still, Taycorp had been in liquidation for almost a year and little was being done to finalise the liquidation. It is true that the liquidator had been told by Mr Tayles that an application would be made to stay the liquidation on the basis that the company was solvent. But that had been threatened as early as August or September 2004, and no application had been forthcoming. So at some point, and that point was well before August 2005, the liquidator should have got a move on. After all, sooner or later the liquidator had to ascertain the company's liabilities. The task was never going to be difficult. The liquidation was a simple affair. Only two persons ultimately claimed to be creditors. There were no other claims and there were no assets that had to be got in. The only thing that engaged the liquidator was collecting the rent and arguing with Mr Tayles. 14 The delay in progressing the liquidation is highlighted by the fact that it was not until 3 February 2006, some seventeen months after the litigation commenced, that the liquidator advertised for creditors. Only two creditors lodged proofs. Each was a trumped up claim. Mr Tayles explained to the liquidator why neither proof should be admitted. The liquidator accepted the explanation and rejected the proofs. No appeal was taken from the liquidator's decision. 15 While this was going on, steps were being taken in the action. On 15 September 2005 an order was made permitting Mr Tayles to execute on behalf of Taycorp a transfer of the properties to Miller Street. The order was made in anticipation of the provision by Miller Street of a bank guarantee in favour of the liquidator to cover the liquidator's costs and expenses to that date and to meet any liabilities of Taycorp. There followed a series of communications between Mr Tayles and the liquidator's office about the form of the guarantee. By letter dated 12 October 2005, the liquidator's solicitor estimated that the liquidator then held approximately $203,308 in the winding up. On the basis that the bank guarantee should cover, dollar for dollar, any funds that were to be transferred by the liquidator to Miller Street, the solicitor suggested the guarantee should be in the order of $200,000. A further letter from the solicitor dated 21 October 2005 stated that the bank guarantee should include allowance for further anticipated legal fees and that in any event approximately $224,000 will have been paid to Miller Street by the time the guarantee is delivered and title to the properties is transferred. A series of emails then passed between the parties in November 2005, in which counsel for Mr Tayles informed the liquidator that a dollar for dollar bank guarantee would be provided and asked for confirmation of the exact amount being sought by the liquidator. 16 The matter came back to court on 13 December 2005. Following argument on the appropriate amount of the bank guarantee, I made orders approving the transfer of the properties upon Miller Street undertaking to provide to the liquidator an unconditional bank guarantee requiring the bank to pay the liquidator upon demand a sum of up to $225,000. There was a further undertaking to procure a guarantee for an additional $40,000 if ordered to do so, which was designed to cover legal costs the liquidator might incur in any prospective legal battles in the winding up. 17 The guarantee for $225,000 was provided on 12 January 2006. Still the properties could not be transferred to Miller Street. The reason was that the CBA had not finalised the restructure of the loans. It was not until May or June 2006 that the new facilities were in place and the transfers could be effected. They were transferred immediately. 18 Although there was delay in the transfer until the CBA had finalised the new loans, Miller Street was receiving the rents with the consent of the liquidator. It had been in receipt of rent since around November 2005. Even before then the liquidator had paid to Miller Street some of the rent he had received. The payments were made to enable Miller Street to meet its obligations. 19 On these facts Miller Street claims that the liquidator's delay caused the discretionary trust to suffer two heads of loss. The first claimed loss is the difference between the normal interest that was payable on the loan to the CBA and the default interest that had been charged between 1 March 2005 and April 2006. That claim must fail. Although the liquidator's delay in finalising the liquidation was both inordinate and inexcusable, it did not delay the restructure of the loans. Nor did the liquidator act unreasonably while negotiating the terms of the bank guarantee. 20 The second claim is for loss of rent. To explain this claim I need to backtrack a little. Immediately after his appointment the liquidator learnt that Taycorp owned two properties. Each was a floor in a building at 221 Miller Street, North Sydney. Within a month the liquidator had completed an initial investigation into the affairs of Taycorp and was of the view that the company was solvent, having an estimated surplus of assets of approximately $4.3 million. This estimate was based on the combined value of the properties being approximately $6 million. That was a reasonably accurate estimate for commercial properties returning a rent of approximately $480,000 per annum. So far as the creditors were concerned only three were identified at the time: the CBA for $1.5 million, the Chief Commissioner of State Revenue (whose debt had in fact been paid by Mr Tayles) and a claim by the body corporate for $120,000 which was ultimately rejected by the liquidator. The liquidator had also been informed, and had no reason to doubt, that the properties were held on trust for the discretionary trust. 21 On those facts, it would have been clear to the liquidator that sooner or later the properties would be transferred to the new trustee. This put the liquidator in a special position of responsibility. Not only was he required to carry out the normal duties of a liquidator he had to act "in a responsible way" as regards the trust property: Re Crest Realty Pty Ltd (in liq) and the Companies Act [1977] 1 NSWLR 664, 672. What that involves must, of course, depend upon the circumstances: Re G B Nathan and Co Pty Ltd (in liq) [1991] 24 NSWLR 674, 688. In many circumstances, including the present, the duty requires the liquidator to take action to preserve and protect the trust property: Irvine v Australian Sharetrading and Underwriting Ltd (in liq) [1996] 22 ACSR 765, 783. Where the trust property includes land the trustee is ordinarily under a duty to make the land productive, which requires the trustee to make reasonable efforts to lease the property if it is vacant: 3 Scott on Trusts (5 th ed, 2007) SS 17.13. 22 Here I am satisfied that the liquidator failed in his duty. I have already mentioned that when the liquidation commenced the properties were tenanted. As the liquidator knew, the lease for level 4 was due to expire on 15 June 2005. But he took no step to find a new tenant. The liquidator said he took no step to find a tenant because he believed that Mr Tayles would soon make an application to the court to regain control of the properties. I think the reality is that the liquidator simply did not turn his mind to what he should do with the properties. Even if he had it would have been apparent that although Mr Tayles had been threatening for months to take action to recover the properties he was in fact doing little more than writing letters. It was not appropriate for the liquidator to let matters stand, especially as the term of the tenancy was running out. 23 At one point I was inclined to the view that the liquidator might be saved because it was not until May 2005 that he was provided with positive proof that the properties were held on trust. In the end, however, I do not accept this is a sufficient basis to justify the liquidator doing nothing. He had been told from the beginning that the properties were held on trust. There was no reason to disbelieve what he had been told and that in due course it would be verified. Mr Tayles provided that verification. Some information was given on 8 March 2005 when Mr Tayles forwarded to the liquidator a statement of affairs and a pro forma balance sheet for the discretionary trust. Even if he had some reservation beforehand the liquidator had no reason to doubt from that point that the properties were held on trust. 24 In the end it was Mr Tayles who took action to find a tenant, albeit without having the authority to do so. On 5 May 2005 he approached an experienced real estate agent, Ms Hilder, and asked her to find a tenant. An agency agreement was executed on 19 May 2005. Ms Hilder found two tenants each willing to take a lease of part of level 4. One lease commenced on 15 September 2005 and the other on 31 October 2005. The aggregate rent payable by the tenants is $14,523.67 per calendar month, inclusive of GST. This was less than the rent paid by the outgoing tenant but, as Ms Hilder explained, the rental market had dropped away. 25 There can be no doubt that if an estate agent had been retained to find a tenant well before 19 May 2005 a tenant would have been found to take over the property in mid-June. Ms Hilder said that the lettable area of level 4 was 492 square metres and for an area of that size the standard practice is to begin looking for a tenant between six to nine months before the tenant is needed. She explained that a tenant wanting to move into such a large space usually looks about nine months ahead. Ms Hilder confidently said that if she had been retained in January 2005 there was an "extremely good" chance of getting a tenant to take possession on 15 June 2005. What ultimately transpired bears this out. 26 The liquidator's failure to make the trust property productive has resulted in a loss to the discretionary trust of two months rent. The liquidator will be ordered to make good that loss. 27 It was put that the liquidator's failure to protect the trust property should deprive him of the costs and expenses to which he would otherwise be entitled. I do not agree. Once the loss of rent is made good, there is no reason to deprive the liquidator of the costs for the work he has done. 28 The costs of the action fall into a different category. I think they should lie where they fall. Each side has had a measure of success and it would be unfair to make any party pay the costs of the other. To give effect to this ruling requires an order that the liquidator be indemnified out of the trust assets for only one half of his costs. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | winding up trustee company duties of liquidator finding a new tenant for trust property corporations |
Some of the threshold facts are uncontroversial and others are not. The appellant is a citizen of Bangladesh. He arrived in Australia on 3 August 2004 and on 16 August 2004 lodged an application for a Protection Visa. 2 On 30 November 2004 the Minister's delegate refused the application and on 1 January 2005 the appellant applied for review of that decision before the Tribunal. On 21 April 2005 the Tribunal affirmed the delegate's decision to refuse a protection visa. That decision of the Tribunal was made by a Tribunal differently constituted to the Tribunal whose decision is the subject of this present appeal. That decision was, by order of the Federal Magistrates Court, quashed and the matter remitted to the Tribunal for further consideration. On 25 September 2006 the appellant attended an oral hearing and gave oral evidence to the Tribunal. 3 Some of the background matters are these. 4 The appellant claimed to fear persecution in Bangladesh by reason of his membership of the Awami League and his suspected involvement in the assassination of the Awami League leader, Ahsanullah Master on 7 May 2004. The appellant claimed before the Tribunal that he was an active member of the Awami League in Bangladesh and worked for the late Awami leader, Ahsanullah Master. The appellant contended before the Tribunal that he was present on 7 May 2004 when Ahsanullah Master was shot and killed. On the following day, 8 May 2004, the appellant contended that he participated in protests over the death of the Awami League leader. 5 The appellant further contended that the police raided his home in search of him and on one occasion showed his wife a warrant for his arrest in connection with the murder or assassination of Ahsanullah Master. The appellant said that against the background of these events on 7 May 2004 and 8 May 2004 and the subsequent conduct of the authorities, the appellant elected to flee Bangladesh in fear of his safety and in fear of his life. 6 The Tribunal considered the review of the decision of the Minister's delegate and the reasons of the Tribunal are set out at Appeal Book (AB) AB137 to AB150. One matter of controversy relates to a number of documents which were submitted to the Tribunal by the appellant in support of the application and these documents are relied upon by the appellant as powerful, it is said, corroboration of the oral evidence of engagement in the events of 7 May 2004 and 8 May 2004 and thus a well-founded fear of persecution for a Convention reason. The first of the documents is a letter under the heading of 'Bangladesh Awami League' at AB54 and that document is dated 9 March 2005 and signed by a person described as the 'General Secretary' of the 'Gazipur Awami League'. He is an active Awami League worker. His contribution in domestic movement is praiseworthy. Series of false cases filed against him and also warrant of arrest including property attachment warrant was issued from the court against him. Police forces is searching him all over Bangladesh. He saved by chance. As per political situation of the country, his life is not safe and secure in Bangladesh. If he comes back to Bangladesh might have to face indefinite prison and torture in detention cell. 8 The second document is a letter at AB55 which is under the heading of the 'Dhaka City Awami League' and again it contains a similar certification. It is dated 16 February 2005 and addressed 'To Whom It May Concern'. The third document is a letter at AB56 which is under the letterhead of an advocate with a Master of Science degree and a Bachelor of Laws degree, A.N.M. Safder, and that letter purports to certify that the author is the legal adviser to the appellant and that a case has been lodged against him in the particular district in Bangladesh where the assassination event of the Awami leader occurred. The letter goes on to say that the warrant and case is pending and unresolved. The letter confirms that a warrant of arrest has issued against the appellant, both individually and in relation to assets for attachment of moveable and immoveable property. 9 The next document in contention is one at AB58 which sets out searches from the Court Registry of various matters in relation to warrants of arrest against a number of individuals in connection with the assassination or murder of the Awami League leader. The second nominated person in the document is the appellant in the present proceedings. There is also a document at AB62 and AB63 which talks about a particular incident on 8 May 2004 arising out of turmoil consequent upon the assassination on 7 May 2004. 10 The central contention of the appellant before this Court is that Lloyd-Jones FM fell into error by failing to find that the Tribunal, in assessing the factual matrix and in particular the documents I have mentioned, failed to conduct a forensic investigation and inquiry so as to test the genuineness and for that matter the relevance of the documents. The appellant says that the Tribunal ought to have made an investigation into the documents and satisfied itself as to the accuracy of the documents and, in particular, the matters to which the documents go. 11 The Tribunal when analysing both the documents and the oral evidence approached the matter in this way. Recognising that the appellant had previously given oral evidence to the Tribunal, the Tribunal reflected over the oral evidence and the documents in a sequential way by dealing with the appellant's contended Awami League activism; the events of 7 May 2004 as put by the appellant to the Tribunal both in writing and in oral evidence; the events on 8 May 2004; the question of whether the appellant or his family suffered a threat or well-founded fear for their safety as a result of the 7 May 2004 incident and, in particular the steps they took or did not take to ameliorate those concerns; and finally, the Tribunal dealt with the documentary evidence and the appropriate approach to reliance upon those documents. 12 As to the first matter of the appellant's Awami League activism, the Tribunal noted the presentation of documents in support of that claim and particularly those documents I have already described. The Tribunal noted that based upon information from the Australian High Commission in Dhaka, there is a systemic concern that some documents generated either in Bangladesh or in connection with Bangladeshi matters appear to have some doubts cast over them, though, of course, not all documents fall into that category. The Tribunal proceeds to deal with some aspects of the evidence of 24 September 2006 given by the appellant and ultimately concluded that the Tribunal could not be satisfied that the appellant's Awami League activities up until the first incident on 7 May 2004 would give rise to a 'real chance' of persecution for any reason related to the Refugee Convention should he return to Bangladesh. 13 The Tribunal then turned to consider the events of 7 May 2004 and 8 May 2004 to determine whether any of those events properly gave rise to a well-founded fear of persecution in the appellant should he return to Bangladesh. As to the 7 May 2004 incident, the Tribunal examined closely the evidence concerning the events of that day; the explosion of a bomb; and the full details of the assassination event. The Tribunal put a number of propositions to the appellant as to whether it was plausible, in its view, that an Awami League activist would be seriously suspected of murdering an Awami League leader in the course of a speech being given by the leader at the particular place and time. It explained, however, the mere fact a person was subject to prosecution for a criminal offence would not necessarily mean that they would not be able to invoke refugee protection obligations in Australia, but this was something the Tribunal would have to assess. That said, in the present case, the Tribunal is not satisfied it is plausible the applicant would be subject to a warrant for the murder of one of the leaders of the Awami League merely for being in attendance at the meeting on 7 May 2004. The Tribunal is satisfied the applicant's guilt or otherwise would have been readily established given the public nature of the incident and that his actions would have been witnessed by many persons. Accordingly, the Tribunal is not satisfied the applicant was charged or even suspected of any involvement in the killing on 7 May 2004; nor that a warrant was issued against him in respect of this or any related matter. To the extent that he has provided documentary evidence in support of the claim, I reject the same as false. 15 Having considered aspects of the appellant's evidence judged against the background of the documents put forward as corroboration of the events, the Tribunal concluded that it could not accept the oral evidence of the appellant and thus, because of the nexus with the documents as corroboration of the oral evidence, concluded that, to the extent that the documents are relied upon to support the oral evidence, then the documents fell away with the rejection of the oral evidence. The Tribunal went one step further and rejected the documents as not genuine. The conjunction of those findings dealt with the claim by the appellant of a well-founded fear of persecution based upon any Convention reason arising out of the events of 7 May 2004. 16 The Tribunal then considered the incident of 8 May 2004 which involved a confrontation between the appellant, his colleagues from the Awami League and supporters of the BNP party. 17 The Tribunal considered the oral evidence about those matters and cumulatively had regard to the previous conclusion that the Tribunal could not be satisfied that the appellant was suspected of involvement in the murder of Ahsanullah Master. The Tribunal further considered aspects of the appellant having gone into hiding after 8 May 2004; the appellant's fear of prosecution and particularly the implications of a backlog in the Bangladeshi court system; the question of the appellant's access to a lawyer; and the reasons for delay in the court system. Secondly, the present Tribunal is also not satisfied that an essential and significant reason the applicant may be arrested and charged would be for one of the reasons in the convention. This includes because he has apparently resisted and acted without any serious fear of harm for several years as an alleged Awami League activist, the Tribunal is satisfied that he initiated and engaged in violent activity after the 7 May 2004 incident. However, based on the evidence, the Tribunal is satisfied the sole reason he may be arrested would be for his violent activities and not for reason of his actual or imputed political opinion or any other convention ground. 18 The Tribunal went on to conclude that it was satisfied that the appellant was wanted for a legitimate purpose, that is, one other than related to the Refugees Convention. Therefore, the Tribunal is not satisfied the alleged threats to the applicant's family give rise to refugee protection obligations for him in Australia. 19 Finally, the Tribunal dealt with the documents and in dealing with the documents, the Tribunal made reference to the high level of document fraud in Bangladesh and put to the appellant that if it was sufficiently satisfied he was not a witness of truth, it may reject some or all of the purportedly corroborating evidence as false. The Tribunal then, at AB149, dealt with an assessment of the documents. It is clear that the Tribunal did not investigate through the Australian High Commission or any external sources the documents, but it is equally clear that the Tribunal subjected the documents to forensic analysis in terms of the relationship between the oral evidence and other evidence of relevant matters, particularly those going to the events of 7 May 2004 and 8 May 2004. 20 It seems to me that it is not necessary to reproduce the particular paragraphs in which the Tribunal undertakes that task, leading to its conclusion. The primary paragraph however is the second major paragraph on AB149. As a result of the cumulative consideration of all of these matters, the Tribunal was not satisfied that the documents were reliable or that weight ought to be given to them. Thus even if some of the abovementioned pleas and other documents were legitimate, the Tribunal is not satisfied that they give rise to any refugee protection obligations in Australia. 21 Therefore, the approach of the Tribunal was to cast doubt on the documents. In any event, if one assumed that the documents spoke genuinely to the matters they address, the Tribunal was not satisfied that the documents and oral evidence of the appellant gave rise to a well-founded fear of persecution for a Convention reason, thus giving rise to protection obligations in favour of the appellant under the Act. The appellant commenced proceedings in the Federal Magistrates Court challenging the Tribunal's affirmation of the delegate's decision and filed at AB 1G an amended application. That amended application sought relief in terms of a declaration, a writ of certiorari and set out grounds for relief supported by a range of particulars. 22 The grounds before the Federal Magistrate concentrated upon the Tribunal's failure to investigate the documents I have mentioned; a challenge to the finding that the documents were not genuine; a challenge to reliance upon independent country reports or evidence as to the disposition of individuals to bring into existence fraudulent documents in the appellant's country of origin; incompatibility of the Tribunal's decision with newspaper reports concerning the assassination of the Awami League leader; the reliance upon independent country information in reaching findings ultimately adverse to the appellant; and a rejection of the appellant's claim to fear persecution. 23 Federal Magistrate Lloyd-Jones dealt with each of those matters in his considerations at paras [6] to [23] of the reasons. The Federal Magistrate examined each of the grounds, that is, the five grounds identified by the appellant. It seems to me to be unnecessary to quote the paragraphs of Lloyd-Jones FM which deal with all of these grounds. It is sufficient to say this. As to the Tribunal's observations going to the assessment of the oral evidence and the consequent rejection of the corroborative evidence, Lloyd-Jones FM concluded that there was no procedural unfairness in the Tribunal's assessment of those matters. Those conclusions were open to the Tribunal on an assessment of the evidence. 24 As to the independent country information which was also relied upon by the Tribunal, the Federal Magistrate concluded that the information fell within s 424A(3)(a) of the Act and that there was no obligation to put those concerns to the appellant. Further, Lloyd-Jones FM concluded that there was no obligation to provide documents to the appellant for comment. As to the rejection of the appellant's claim of a fear of persecution in his country of origin, the Federal Magistrate noted that this was essentially an attempt to revisit the merits determination of the Tribunal. The Federal Magistrate then dealt with the remaining grounds. Ground 3 involved a contention that the Tribunal did not attribute any importance to the Court documents and police information and gave greater weight to other material. However, that deliberation simply involved an assessment by the Tribunal of the merits of the material before it. 25 By ground 4 the appellant contended that the Tribunal had ignored relevant material and had acted upon irrelevant material, including independent country information. That matter involved an assessment by the Tribunal of material properly before it. This ground of challenge fell within the scope of the appellant's other grounds. Ground 5 involved a contention that the Tribunal had failed to provide the appellant with independent country information for comment. Federal Magistrate Lloyd-Jones concluded that there was no obligation under the Act to provide that information to the appellant. 26 The appellant appeals to this Court and raises four grounds of appeal. The Federal Magistrates Court failed to follow the procedural fairness when making its decision. The Federal Magistrates Court failed to identify breach of rules of procedural fairness and natural justice by the Tribunal member. The Federal Magistrates Court was an improper exercise of its power conferred by the enactment in pursuance of which it was purported; therefore the decision should be set aside. The Federal Magistrates Court breached the rules of natural justice in procedural fairness. The grounds of appeal to this Court which are formulated in short form terms, essentially raise, in terms of the submissions of the appellant, the same matters which were dealt with before the Federal Magistrates Court. The appellant has filed submissions in support of those four grounds (notwithstanding that the grounds are not particularised) which extend to 15 paragraphs setting out various contentions with a conclusion arising from those contentions on p 5 of the submissions. 28 The essential matter raised by the submissions is that the Federal Magistrate failed to recognise the failing on the part of the Tribunal in the investigation and analysis of the documents and in failing to find that the Tribunal had improperly dealt with the contentions of a well-founded fear of persecution arising firstly out of the appellant's participation in the Awami League and secondly, arising out of the events of 7 May 2004 and 8 May 2004. 29 As to the grounds of appeal to this Court which rely upon a failure to follow procedural fairness, it is clear from the conduct of the proceedings that the Federal Magistrate afforded procedural fairness and natural justice to the appellant in the conduct of the proceedings before that Court. As to the matters of a failure on the part of the Federal Magistrate to identify a failure of procedural fairness on the part of the Tribunal and the contention of an improper exercise of power on the part of the Tribunal (and thus jurisdictional error), I am not satisfied that there is any such failure of procedural fairness or jurisdictional error on the part of the Tribunal and nor am I satisfied that there is any failure on the part of the Federal Magistrate to identify any such failure. 30 One aspect of that contention relates to s 424A of the Act. There seems to me to be no doubt that there is no obligation on the Tribunal to put to the appellant before reaching its decision, the Tribunal's prospective concern or actual concern as to the evidence of the appellant in relation to all of the matters the subject of the appellant's claim to a well-founded fear of persecution or the consequences of a rejection of that evidence in the context of the documents and the country information. It seems to me that s 424A makes it clear that no such obligation arises. 31 I am not satisfied that there is any error of jurisdiction in the Tribunal in failing to investigate or inquire into the accuracy of the documents or the material addressed by those documents. On one view, and certainly in the appellant's view, the Tribunal has an obligation to make inquiry as a matter of procedural fairness. In submissions this morning, the appellant places great emphasis upon the documents and papers he put to the Tribunal. He says that the Tribunal failed to make any proper inquiry and concluded that the documents were not genuine. He says that his claims of a fear of persecution, torture or adverse treatment are genuine and supported strongly by the documents which are also genuine. 32 In addition, the appellant this morning says that colleagues or former colleagues associated with the Awami League have become scattered; some have been arrested and taken into custody; and others have scattered by reason of steps taken against others. He says that it is well-known that he was an activist member of the Awami League and thus he is at risk. He says that the papers and documents which the Tribunal contends are not genuine are, in fact, authentic and they are the very foundation for his claims. He reiterates in submissions in reply the contention that the Tribunal did not investigate the documents that he relies upon and thus the expression of a failure of procedural fairness is a failure to investigate and enquire on the part of the Tribunal. He says that he will experience torture should he return to Bangladesh. 33 Notwithstanding those matters and the emphasis given to them by the appellant, the question for determination before this Court is whether there is error on the part of the Federal Magistrate. The ground is really put forward on the footing that the Federal Magistrate erred by failing to find error on the part of the Tribunal by reason of jurisdictional error because the Tribunal failed to make external inquiries of either the Australian High Commission or other authorities such as the Department of Foreign Affairs and Trade or United Nations agencies as to the content and accuracy of the documents. I am not satisfied that there is any such jurisdictional error on this ground. In other words, the Tribunal, consistent with authority, is not required to make external forensic third party inquiry in relation to the documents ( Prasad v MIEA [1985] FCA 47 ; (1985) 6 FCR 155 at 169 per Wilcox J; MIMIA v SGLB (2004) 207 ALR 12 ; [2004] HCA 32 per Gummow and Hayne JJ at [43] per Callinan J at [124]; Appellant S395/2002 v MIMA [2003] HCA 71 ; (2003) 78 ALD 8 ; 203 ALR 112 ; SZJBA v Minister for Immigration and Citizenship & Anor 96 ALD 270 ; [2007] FCA 1592 per Allsop J [46] to [49]). 34 The appellant invites the Court to take a different view of these matters and reshape the obligations of the Tribunal to make such investigations. It seems to me that the issue before the Tribunal was whether the totality of the evidence before the Tribunal assessed against the background of the written material and any country information judged in the context of the documents was such that the findings were open to the Tribunal. Those findings were open to the Tribunal and there is no jurisdictional error on the part of the Tribunal in reaching those conclusions and no error on the part of Lloyd-Jones FM in failing to find jurisdictional error on the part of the Tribunal. 35 Therefore, it necessarily follows that the appeal must be dismissed. 36 I also have an application supported by appropriate affidavit material that the costs of the first respondent of and incidental to the appeal be fixed in an amount of $2,600.00. On the basis of the affidavit material I am prepared to order that costs be fixed in that sum. 37 I order that the appeal be dismissed and that the appellant pay the costs of the first respondent fixed in an amount of $2,600. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of grounds of appeal contending for jurisdictional error on the part of the refugee review tribunal in failing to investigate and enquire into documents put to the tribunal and a failure to investigate the content of material raised by the documents consideration of a failure of procedural fairness on the part of the tribunal as a contended ground of error on the part of the federal magistrate in failing to find a failure of procedural fairness on the part of the tribunal and jurisdictional error migration |
The proceeding against the fifth defendant was discontinued by the plaintiffs on 15 January 2009. I have been told by counsel that the plaintiffs and the second defendant are negotiating a possible settlement of the proceeding between them, and I have been asked not to progress the usual interlocutory steps in the proceeding pending the outcome of the settlement negotiations. The plaintiffs operate farming businesses which are primarily concerned with the production of wheat and barley, which is grown in the district surrounding Kimba on the Eastern Eyre Peninsula. The first defendant is a duly incorporated corporation under the Corporations Act 2001 (Cth) (" Corporations Act ") and carries on a business as a rural consultant. It is alleged by the plaintiffs that the first defendant is registered as a financial services licensee under s 913B(1) of the Corporations Act in the role of "futures advisers". It is alleged by the plaintiffs that the first defendant held itself out as having expertise in a number of areas, but it is unnecessary to set out the details. The first defendant acted as the plaintiffs' agent in relation to the transactions which are the subject of the proceeding. The third and fourth defendants, ABB Grain Ltd ("ABB Grain") and Glencore Grain Pty Ltd ("Glencore Grain"), are duly incorporated corporations under the Corporations Act and each carries on business as a wholesaler of grain. It is alleged by the plaintiffs that the third and fourth defendants are "very large grain marketing businesses which possess extensive knowledge of grain markets, both locally and internationally". The plaintiffs claim that they have suffered loss and damage as a result of entering into three contracts with the third defendant and one contract with the fourth defendant. The plaintiffs filed and served a Statement of Claim on 4 August 2008. That pleading was replaced by an Amended Statement of Claim ("ASOC") filed and served on 18 November 2008. On 23 December 2008, I made an order striking out the ASOC against Glencore Grain ( Keynes v Rural Directions Pty Ltd [2008] FCA 1964). That led to an application by the plaintiffs for leave to file and serve a Second Amended Statement of Claim ("the proposed SASOC"). There are three notices of motion before me which, in chronological order, are a notice of motion by Glencore Grain, a notice of motion by the plaintiffs and a notice of motion by ABB Grain. Before summarising the orders sought in those notices of motion and the evidence adduced in support of the motions, it is convenient to summarise the relevant allegations in the pleadings. It will be necessary to consider also the proposed SASOC to determine whether it overcomes the defects I find exist in the ASOC. ABB Grain has filed a Defence and Cross-claim and I have had regard to that pleading in preparing the summary which follows. It is not disputed that ABB Grain has experience and expertise in Australian and international grain markets, and prices in those markets. The company entered into three contracts with the plaintiffs, and the details of those contracts are as follows: On 16 April 2007, plaintiffs and ABB Grain entered into what is referred to as a basis contract. I will refer to this contract as the ABB Grain basis contract. The contract placed an obligation on the plaintiffs to deliver 272 tonnes of wheat to ABB Grain at Port Lincoln in the period from the beginning of November to the end of December 2007. The contract was denominated in US cents per bushel, and the price which was locked in was 520 cents per bushel, which, at the exchange rate on that date, converted to $AUD230 per metric tonne. On 18 April 2007, the plaintiffs and ABB Grain entered into what is referred to as a forward contract. When necessary to distinguish this from other contracts, I will refer to this contract as the ABB Grain first forward contract. The ABB Grain first forward contract placed an obligation on the plaintiffs to deliver 1230 tonnes of barley to ABB Grain at Port Lincoln in the period from 1 November 2007 to 31 December 2007 for $AUD173 per tonne. On 4 June 2007, the plaintiffs and ABB Grain entered into a second forward contract. When necessary to distinguish this from other contracts, I will refer to this contract as the ABB Grain second forward contract. The ABB Grain second forward contract placed an obligation on the plaintiffs to deliver 600 tonnes of wheat to ABB Grain at Port Lincoln in the period 1 November 2007 to 31 December 2007 for $222 per tonne. The plaintiffs were not able to deliver the required quantities of wheat and barley under the three contracts with ABB Grain because of a production failure. As I understand it, a small quantity of barley was delivered under the first forward contract, but the precise details are not relevant for present purposes. The contracts were "washed out", a process whereby the plaintiffs indicated to ABB Grain that they could not meet their obligations under the contracts, ABB Grain elected to cancel the contract and liquidated damages became payable. The plaintiffs' liability to ABB Grain under the "washout" agreements is said to be as follows: The ABB Grain basis contract: $31,492. The ABB Grain first forward contract: $158,628. The ABB Grain second forward contract: $173,340. The plaintiffs allege that they are not liable to ABB Grain for these amounts because ABB Grain failed to comply with various obligations placed on it under the Corporations Act and because it was in breach of a duty of care it owed to the plaintiffs. In the alternative, the plaintiffs plead that, if they are liable to ABB Grain for the above amounts, they are entitled to recover them as loss and damage from the first defendant who, the plaintiffs allege, breached various duties owed to them as their agent. I will need to discuss the relief sought by the plaintiffs against ABB Grain later in these reasons. In relation to the ABB Grain basis contract, the plaintiffs allege that ABB Grain failed to provide them with a Product Disclosure Statement ("PDS") as required by the Corporations Act . The plaintiffs allege that the ABB Grain basis contract was a derivative within s 761D , or a financial product within s 763A and s 763C of the Corporations Act . They allege that they were given a PDS "but only some months after having entered into the [basis contract]". The plaintiffs allege that, had they been given a PDS which met the requirements in ss 1013A , 1013B , 1013C , 1013D and 1013E of the Corporations Act , they would have been advised that the futures price for wheat contracts "might rise substantially" and, if the basis contract had to be washed out, the plaintiffs would suffer a significant loss. The plaintiffs allege that, for reasons they plead, "there was a strong likelihood that the price of wheat would increase significantly". The plaintiffs allege that, if they had been given a PDS containing the said information, they would not have entered into the ABB Grain basis contract. In its defence, ABB Grain admits that the ABB Grain basis contract was a derivative within s 761D(1) of the Corporations Act and that it was required to prepare a PDS as the issuer of the contract. ABB Grain pleads that it gave a PDS to the plaintiffs as required by the Corporations Act . The plaintiffs also claim that they ought to have provided them with a Statement of Advice ("SOA"), as required by s 946A of the Corporations Act . They claim that, if they had been provided with an SOA that complied with ss 947A , 947B and 947C of the Corporations Act , it would have contained similar information to that identified in relation to the PDS and that they would not have entered into the ABB Grain basis contract. In its defence, ABB Grain claims that, by reason of the circumstances of its financial services licence and its position under the Corporations Act as a "regulated person", and the operation of s 944A of the Corporations Act , it was not required to provide an SOA to the plaintiffs. In submissions, the plaintiffs' counsel made it clear that this is an allegation against the first defendant and not ABB Grain. Therefore, it may be put to one side. In relation to the ABB Grain first forward contract, the plaintiffs' claim is that the third defendant was required to provide a PDS to them. They allege that the ABB Grain first forward contract was a financial product within the meaning of ss 761D , 763A and 763C of the Corporations Act , that a PDS was required by reason of s 1012B(3)(i) and (ii) and that the Corporations Act required the PDS to be in the form and contain the matters specified in ss 1013A , 1013B , 1013C , 1013D and 1013E . The plaintiffs allege that, had they been provided with a PDS, it would have contained information that the price of barley "might rise substantially" and that, if they were unable to deliver the required quantities, they would suffer a large loss. They also allege that it would have contained information to the effect that there was a "strong likelihood that the prices of wheat and barley would increase significantly". They allege that, had they been given a PDS, they would not have entered into the ABB Grain first forward contract. The plaintiffs also allege that they should have been given an SOA in relation to the ABB Grain first forward contract. They claim that, if they had been given an SOA, they would have been given similar information to that identified in relation to the PDS. In its defence, ABB Grain alleges that the ABB Grain first forward contract fell within the terms of s 761D(3) of the Corporations Act and was not a derivative or financial product within ss 761D , 763A and 763C of the Corporations Act . ABB Grain admits that it did not provide a PDS to the plaintiffs. ABB Grain admits that it did not provide an SOA to the plaintiffs, but denies that it was under an obligation to do so. It again relies on the matter identified in [14] above. Again, it was made clear by counsel for the plaintiffs in the course of his submissions that this is an allegation against the first defendant and not ABB Grain. In relation to the ABB Grain second forward contract, the plaintiffs' pleas and ABB Grain's responses are the same as they are in relation to the first forward contract. In relation to both of the ABB Grain forward contracts, the plaintiffs allege that ABB Grain owed them a duty of care to take reasonable steps to inform itself of matters identified in paragraph 51 of the ASOC and "to convey that information in the PDS which should have been given to the Plaintiffs". The matters in paragraph 51 are matters which the plaintiffs allege indicated that prices of wheat and barley would rise. It is unnecessary to set them out. ABB Grain denies that it owed a duty of care to the plaintiffs in relation to the ABB Grain forward contracts. The proposed SASOC adds a further cause of action in relation to the ABB Grain basis contract (paragraphs 30A-30C). The plaintiffs allege that ABB Grain, in the alternative to the allegation that they knew a number of matters which should have been included in the PDS, owed them a duty of care to ascertain those matters and include them in the PDS. ABB Grain did not do that and thereby was in breach of the duty of care. The plaintiffs allege that, had ABB Grain included the information in the PDS, they would not have entered into the ABB Grain basis contract. The plaintiffs allege that the duty of care arose because they entered into the ABB Grain basis contract and because ABB Grain was required to provide them with a PDS. The relevant pleading for present purposes is the proposed SASOC. Glencore Grain has not filed a defence. It is not disputed that the plaintiffs entered into a forward contract with Glencore Grain whereby the plaintiffs were under an obligation to deliver 1070 tonnes of barley to Glencore Grain at Port Lincoln in November/December 2007 at $203 per tonne. I will refer to this as the Glencore forward contract. The plaintiffs allege that Glencore Grain should have given them a PDS. They allege that the Glencore Grain forward contract was a financial product within the meaning of ss 761D , 763A and 763C of the Act, that Glencore Grain was required by s 1012B(3)(i) and (ii) to provide a PDS to the plaintiffs in the form required and containing the information specified in ss 1013A , 1013B , 1013C , 1013D and 1013E of the Act and that none of the plaintiffs were given a PDS. The plaintiffs allege that, had they been given a PDS, they would have been provided with information known to Glencore Grain that the price of barley was "now much more likely to rise than fall", and that the plaintiffs were likely, if unable to deliver the required quantity, to suffer a "much larger loss". The plaintiffs further allege that there was a "strong likelihood that the prices of ... barley would increase significantly". The plaintiffs allege that they would not have entered into the Glencore Grain forward contract had they been given a PDS. The plaintiffs also allege that they should have been given an SOA conforming with the requirements of ss 947A , 947B and 947C of the Act and that it would have contained the type of information identified in relation to the PDS. They claim that, had they been given an SOA, they would not have entered into the Glencore Grain forward contract. As I understood the plaintiffs' submissions, this allegation is made against the first defendant and not Glencore Grain. The plaintiffs allege in the alternative that, if Glencore Grain did not know the information identified in the proposed SASOC, Glencore Grain owed them a duty of care by reason of the fact that Glencore Grain was obliged to provide the plaintiffs with a PDS to ascertain the information and to convey that information to the plaintiffs in the PDS. The plaintiffs allege that Glencore Grain acted in breach of the duty of care by failing to provide a PDS at all and, in particular, by not providing the plaintiffs with a PDS which warned of the risk that the price was now much more likely to rise than fall and in failing to provide the plaintiffs with an appropriate measure of the risk. The plaintiffs allege that they suffered a production failure and were unable to deliver the required quantity of barley under the Glencore Grain forward contract. The plaintiffs and Glencore Grain entered into a "washout agreement" on 30 August 2007 whereby the plaintiffs became liable to Glencore Grain for the sum of $173,340. The plaintiffs allege that the washout agreement discharged the Glencore Grain forward contract. It is convenient to deal with the notices of motion in the order of ABB Grain's notice, Glencore Grain's notice and the plaintiffs' notice. The proceeding as against the third defendant in respect of the contracts in paragraphs 31 and 41 of the Amended Statement of Claim filed on 18 November 2008 be summarily dismissed pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth) on the basis that it has no reasonable prospects of success. The first affidavit is an affidavit of Ms Sarah Jane Graves, a solicitor, who is employed by ABB Grain as legal counsel. Ms Graves annexes to her affidavit the following documents: The ABB Grain first forward contract (No 75996) dated 18 April 2007. The ABB Grain second forward contract (No 58801) dated 4 June 2007. The Trade Rules of the National Agricultural Commodities Marketing Association Ltd ("NACMA") as at May 2007. I note the following points about these documents: The ABB Grain first forward contract provides for delivery to take place between 1 October 2007 and 31 December 2007. It contains clauses dealing with non-performance and contract cancellation. The Seller may initiate partial or complete cancellation of the Grala tonnage by formally requesting for a Contract Washout with ABB. The Washout payment will be calculated from the difference between the price on the Contract and a price reflecting market value at the time of Washout as negotiated between ABB and the Seller. The cancellation is completed by payment to the Seller by ABB or upon receipt of payment by ABB from the Seller depending upon the circumstances. ... Upon the Buyer's determination of the Seller's default, the Buyer shall notify the Seller at once of such finding, and promptly thereafter, notify the Seller which of the options (a) or (b) or (c) above they elect to exercise. For the avoidance of doubt, nothing in these Rules shall be construed as requiring the party not in default to make any payment of compensation or damages to the party in default. Mr Howells is the National Accumulation Manager of ABB Grain. In his affidavit, Mr Howells explains the mechanics of ABB Grain basis contracts. He explains the fact that the price under such contracts comprises the sum of three components, namely, a basis component, a futures component and a foreign exchange component. He explains what each of these components involves. He exhibits to his affidavit the basis contract between ABB Grain and the first and second plaintiffs and the Product Disclosure Statement dated 13 November 2006, which was the version applicable at the time of the said contract. Mr Howells states that the first and second plaintiffs made a request through their agent on 16 April 2007 that the futures component under the contract be locked in. He also states that on 5 September 2007 the first and second plaintiffs elected to buy back the futures component, thereby suffering a loss of $31,491.92. Mr Howells explains the mechanics of forward contracts and he states that there is "no market in which forward contracts are traded or can be traded". He states that because there is no market there is no usual market practice. Mr Mattiske sets out the circumstances in which the Glencore Grain forward contract was negotiated and entered into. It seems clear enough that the Glencore Grain forward contract was entered into on 4 June 2007 and required delivery between 1 November 2007 and 31 December 2007. The contract was subject to the NACMA Trade Rules. It seems that in late August 2007 the plaintiffs, through their agent, advised Glencore Grain that they would not be in a position to deliver the required tonnage and meet their obligations under the contract. They instructed their agent to give notice of default pursuant to rule 17 of the NACMA Trade Rules and to seek Glencore Grain's agreement to close off the contract. On 30 August 2007, the parties agreed to "wash out" the contract, as provided for in rule 17.1(1)(c) of the NACMA trade rules. Glencore Grain filed a further affidavit on its notice of motion. This affidavit was an affidavit of Mr Maurice John Thompson, a partner in the firm of solicitors acting for Glencore Grain. For present purposes, it is unnecessary to discuss the contents of that affidavit. The plaintiffs' amended statement of claim against the fourth defendant be struck out. The plaintiffs' notice of motion seeking such leave is dated 4 February 2009. That an injunction be issued and the Fourth Defendant by itself or its servants or agents be restrained until further order from taking any further step in the arbitration proceedings by National Agricultural Commodities Marketing Association Ltd which it has sought to commence against the Plaintiffs. The plaintiffs' application is supported by a number of affidavits. The first affidavit is an affidavit of the first plaintiff, sworn on 11 February 2009. In his affidavit, the first plaintiff describes his operations as a grain farmer at Kimba in South Australia. He describes his understanding of the mechanics of a forward contract, and the way in which he could make a profit in circumstances where his production failed and the price of wheat fell. The second affidavit is an affidavit of Mr Proud, sworn on 17 February 2009. He exhibits to his affidavit a paper by a body called The Group of Thirty and entitled "Derivatives: Practice and Principles --- Global Derivatives Study Group --- July 1993". The third affidavit is an affidavit of Mr Proud, sworn on 24 February 2009. For present purposes, it is unnecessary to address its contents. Glencore Grain filed a further affidavit, being an affidavit of Mr Maurice John Thompson, sworn on 15 February 2009, but for present purposes it is unnecessary to address its contents. The principal authorities to which I was referred are: Boston Commercial Services Pty Ltd v GE Capital Finance Australasia Pty Ltd [2006] FCA 1352 ; (2006) 236 ALR 720 ; Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd [2008] FCAFC 60 ; (2008) 167 FCR 372 ; Spiteri v Nine Network Australia Pty Ltd [2008] FCA 905. It is not necessary for me to discuss the issues which have been considered in the authorities. It is sufficient for me to say that where a plaintiff's cause of action depends on a triable issue of fact then summary judgment will not be entered. Where the plaintiff's cause of action depends on an arguable question of law then summary judgment may not be entered. However, in the latter case where the Court has had the benefit of submissions on the question of law and is able to decide the question then the Court may proceed to do so on an application for summary judgment. Of course, the Court must be alert to the possibility that, in truth, the determination of the question of law depends on a triable issue of fact. Furthermore, there may be other reasons why, in the particular circumstances of the case, the Court will not decide an arguable question of law on an application for summary judgment. The plaintiffs' case against ABB Grain in relation to the ABB Grain forward contracts depends on the proper construction of provisions of the Corporations Act . I have had the benefit of full submissions on the issues of construction and I am able to determine them. The merits of the plaintiffs' case do not thereafter depend on triable issues of fact. For reasons I will give, I have determined the issues of construction in favour of ABB Grain and, in those circumstances, an order for summary judgment is appropriate. In the circumstances, it is unnecessary for me to consider any defects in the form of the pleadings in the ASOC as far as they deal with the ABB Grain forward contracts. The pleadings in the proposed SASOC in relation to the ABB Grain forward contracts do not overcome the fundamental defects in the ASOC. Leave to amend will be refused in relation to those contracts because an amendment will be futile. The other cause of action pleaded by the plaintiffs in the ASOC against ABB Grain relates to the ABB Grain basis contract. ABB Grain applies for that pleading to be struck out on the ground that it has a tendency to cause prejudice, embarrassment or delay in the proceeding. Embarrassment in the context of O 11 r 16 includes a pleading "which is susceptible of various meanings, or contains inconsistent allegations or in which alternatives are confusingly intermixed or in which irrelevant allegations are made tending to increase expense. This list is not intended to be exhaustive": Bartlett v Swan Television & Radio Broadcasters Pty Ltd [1995] FCA 1429 ; [1995] ATPR 41-434 at 40,889 per Carr J. For reasons I will give, the plaintiffs' pleading in the ASOC in relation to the ABB Grain basis contract is embarrassing and should be struck out. Again, for reasons I will give, the pleading in the proposed SASOC does not overcome the defects, and leave to amend in terms of that document will be refused. The plaintiffs may apply for leave to replead their cause of action in relation to the ABB Grain basis contract, but I will hear from the parties if such an application is made. In the proposed SASOC, the plaintiffs plead a cause of action against ABB Grain which is not pleaded in the ASOC. The cause of action is a breach of a duty of care allegedly owed by ABB Grain to the plaintiffs. Counsel for the third defendant put persuasive arguments in support of the proposition that such a duty could not arise as a matter of law (see [56] below), but it may assist the parties if I indicate that, on the submissions to date, I would not be disposed to conclude that the allegation was unarguable in the relevant sense. As far as the plaintiffs' claim against Glencore Grain in relation to the Glencore Grain contract is concerned, I have concluded, for the same reasons I will give in relation to the ABB Grain forward contracts, that the proposed SASOC does not disclose a reasonable cause of action and that summary judgment would be given in relation to it. In those circumstances, it would be futile to allow the amendment, and leave to amend in terms of the proposed SASOC is refused. In the circumstances, it is unnecessary to consider Glencore Grain's challenges to the form of the plaintiffs' pleading in the proposed SASOC in relation to the Glencore Grain forward contract. The third and fourth defendants each submit that they do not. Each submits that a forward contract is not a derivative or financial product and that the plaintiffs' cause of action under the Corporations Act for failure to provide a PDS must fail. The fourth defendant submitted that there were other reasons the cause of action under the Corporations Act must fail, and I will mention these reasons in due course. The third and fourth defendants submit that the second cause of action pleaded in relation to the forward contract (that is, alleged breach of a duty of care) must also fail. There is a link between the two causes of action, which I now explain. The information which must be included in the PDS by virtue of the provisions of the Corporations Act does not go beyond information which is known to the provider of the PDS (s 1013C(2)). The plaintiffs submit they do not know how much, if any, of the information they identify in their pleadings was known to ABB Grain or Glencore Grain. Therefore, they plead a duty of care in the alternative. The plaintiffs allege that, in so far as the information was not known, ABB Grain and Glencore Grain each had a duty of care to ascertain the information and include it in the PDS. The alleged duty of care is said by the plaintiffs to arise from the fact that the parties entered into a contract or contracts and ABB Grain and Glencore Grain were required to provide PDS documents. There are two points to note: the cause of action based on an alleged duty of care fails if there was no obligation to provide a PDS and it does not necessarily succeed if there was an obligation to provide a PDS. The first point is clear; the second requires some elaboration. The submission is put by ABB Grain and Glencore Grain that, even if there was an obligation to provide a PDS, it is not reasonably arguable that there was a duty of care to ascertain information and provide it in the PDS. The submission is that it would be inconsistent with the statutory scheme if the obligation to provide certain information gave rise to an obligation at common law to provide additional information. In the alternative, there are simply no circumstances giving rise to a duty of care. It is not necessary for me to decide the second point in relation to the forward contracts because I have concluded that there was no obligation to provide a PDS and the duty of care argument must fail on that ground. Were the forward contracts financial products? The obligation to provide a PDS is contained in s 1012B(3) of the Corporations Act . The Product Disclosure Statement must be given at or before the time when the regulated person makes the offer, or issues the financial product, to the person and must be given in accordance with this Division. Note: If a Product Disclosure Statement is given when the offer is made, it will not need to be given again when the product is issued to the person (see subsection 1012D(1)) unless the Product Disclosure Statement that was given is no longer up to date. Each of those concepts is defined in Part 7.1 of the Corporations Act . The submissions in this case centred on the definition of "financial product". There is a general definition of "financial product" in ss 763A , 763B , 763C , 763D and 763E . Section 764A contains a list of specific things which are financial products whether or not they fall within the general definition. A derivative, which is defined in s 761D(1) , is one such facility: s 764A(1)(c). Section 765A contains a list of specific things which are not financial products and that is so whether or not they fall within the general definition or are one of the specific things identified in s 764A. This order of precedence is laid down by s 762A. One of the specific things identified in s 765A as not being a financial product is so much of an arrangement as is not a derivative because of s 761D(3)(a) (see s 765A(1)(n)). A thing so declared is a derivative despite anything in subsections (3) and (4). The effect of the legislative scheme is that, where an arrangement falls within s 761D(3), it is not a financial product. Where the arrangement does not fall within s 761D(3), it may be a financial product if it falls within s 761D(1) or the general definition in s 763A et seq. The plaintiffs' case is that the forward contracts do not fall within s 761D(3), but do fall within s 761D(1) or s 763A and s 763C. I have set out the terms of s 761D above. This has effect subject to section 763E. (2) For the purposes of this Chapter, a particular facility that is of a kind through which people commonly make financial investments, manage financial risks or make non-cash payments is a financial product even if that facility is acquired by a particular person for some other purpose. Note 2: An example of an action that does not constitute managing a financial risk is employing a security firm (while that is a way of managing the risk that thefts will happen, it is not a way of managing the financial consequences if thefts do occur). As to the civil remedies, s 1022B gives a person a right of action in relation to the failure to provide a PDS to recover the amount of the loss or damage suffered by him or her. Section 1022C provides that, in addition to awarding loss and damage under s 1022B(2) , the Court may, if it thinks it necessary in order to do justice between the parties, make an order declaring void a contract entered into by the client referred to in that subsection for or relating to a financial product or a financial service. It is convenient to start with the question whether the forward contracts fall within the terms of s 761D(3). The relevant paragraph is (a) and three matters are identified. For an arrangement to fall within the exception in (a) the characteristic in (i) must be present, and the characteristics in (ii) and (iii) respectively must not be present. Clearly, wheat and barley are tangible property and, in each case, there was an obligation to sell, and a corresponding obligation to buy, at a price and on a date in the future. It is a broad definition, including within its terms contracts, agreements, understandings, schemes or other arrangements whether formal or informal, written or oral, and whether or not enforceable by legal proceedings. In this case each forward contract was a contract within the ordinary legal meaning of that term and each was evidenced by a written document or documents. Leaving aside questions of market practice, which I will discuss later and which are not relevant in terms of paragraph (ii), I did not understand any party to suggest that there was a term of one or more of the forward contracts which was not in the documents put in evidence. The plaintiffs submit that it is arguable that the forward contracts possess the characteristic of permitting the seller's obligations to be wholly settled by cash, rather than by delivery of the property because of either of the following: the buyer's remedies under such a contract would be damages and not specific performance and the buyer would pay such damages in cash; and the washout provisions mean that the seller's obligations can be wholly settled by cash. In the case of each forward contract, there is an obligation on the plaintiffs to deliver a specified quantity of wheat or barley at a particular time, or, more accurately, during a particular period. A failure by a seller of goods to comply with an obligation to deliver the goods may give rise to an action for damages by the buyer for non-delivery (see, for example, s 50(1) of Sale of Goods Act 1895 (SA)). The measure of damages where there is an available market for the goods in question is " prima facie to be ascertained by the difference between the contract price and the market or current price of the goods at the time or times when they ought to have been delivered..." (see, for example, s 50(3) of Sale of Goods Act 1895 (SA)). Where there is no difference, or where a buyer fails to adduce evidence of actual damage, he or she may nevertheless recover nominal damages for breach of contract: Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66 ; (1938) 61 CLR 286. On occasions, a Court may order specific performance of a contract for the sale and delivery of goods (see, for example, s 51 of the Sale of Goods Act 1895 (SA)). Generally speaking, a Court will not order specific performance where the goods in question are readily obtainable in the market. If it be assumed (as is probably the case), that a failure by a seller to deliver wheat or barley under forward contracts of the type in question in this case would ordinarily lead to an award of damages rather than an order for specific performance, then, putting to one side for the present the effect of washout provisions, it would only be in a very loose sense that it could be said that the seller's obligations could be wholly settled by cash, rather than the delivery of the property. I do not think that that is what s 761D(3)(a)(ii) means. It seems to me that the important words in the paragraph are arrangement , permit and rather than . It seems to me that those words mean that the option wholly to settle an obligation by cash must be in the arrangement, it must be vested in the seller and the alternatives of paying cash or delivering the property must be of a similar nature or standing. The "option" of paying damages is not an option provided by the arrangement, nor is it of a similar nature or standing as the obligation to deliver the property. That is what the law requires of him. If he fails to do so, he incurs a liability to pay damages. That however is the ancillary remedy for his violation of the other party's primary right to have him carry out his promise. It is, I think, a faulty analysis of legal obligations to say that the law treats a promisor as having a right to elect either to perform his promise or to pay damages. The buyer's right to recover nominal damages in certain circumstances reinforces the point. There is also force in the submission of counsel for ABB Grain that it is inherently unlikely that Parliament would have intended that the application of a provision such as paragraph (ii), with all the consequences that flow therefrom, would turn on whether the discretionary remedy of specific performance was likely to be awarded. I turn now to the plaintiffs' second submission in relation to this paragraph, namely, that the washout provisions in the forward contracts mean that they fall outside the terms of paragraph (ii) because they permit the seller's (that is, the plaintiffs') obligations to be wholly settled by cash, rather than the delivery of the property. I reject that submission because the washout provisions are of a different nature and have a different operation to a permission in the arrangement for the seller's obligations to be wholly settled by cash. First, the washout provisions in the case of the ABB Grain first forward contract only operate if the plaintiffs suffer production failure, and they only operate in the case of the ABB second forward contract and the Glencore Grain forward contract if the seller finds that he is or will be in default. Secondly, it is correct to say that, in essence, the washout provisions operate at the option of the buyer, not the seller. Thirdly, where invoked, the washout provisions result in a measure of damages similar to that specified in s 50(3) of the Sale of Goods Act 1895 (SA) brought forward to a time at which it has become obvious to the seller that he or she will not be able to meet the obligation to deliver the goods. In my opinion, it is proper to characterise the washout provisions as contractual provisions as to the buyer's remedies in the case of breach and the measure of damages or compensation payable to the buyer in those circumstances. In my opinion, there are no clauses in the arrangement permitting the seller's obligations to be wholly settled by cash, rather than delivery of the property. He said that because there is no market there is no usual market practice. ABB Grain submitted that in light of that evidence the matter in (iii) was satisfied. The plaintiffs submit that there is an arguable case that usual market practice permits the seller's obligations to be closed out by the matching up of the arrangement with another arrangement of the same kind under which the seller has offsetting obligations to buy. There was a good deal of debate before me as to the exact scope of the concept of a seller closing out his or her obligations by the matching up of the arrangement with another arrangement of the same kind under which the seller has offsetting obligations to buy. In essence, the plaintiffs submit that this requirement is satisfied if, in fact, it is possible, or known, or not uncommon, for a seller who is facing a production failure to agree to buy an amount equivalent to what he has agreed to sell, thereby capping a loss in a rising market or making a profit in a falling market. I do not think that is what paragraph (iii) means and it follows that, even if the plaintiffs established at trial the market practice they identified, it would not assist them. Therefore, the question of market practice is not a triable issue upon which the plaintiffs' case depends. It seems to me that what the plaintiffs identified is not a usual market practice permitting the closing out of the seller's obligations by the means specified. What the plaintiffs identified was a means of making a profit or capping a liability in a market where goods are readily obtainable. It is the nature of the goods, not usual market practice, which permits the seller to act in the way specified. It is also important to note that what must be closed out are the seller's obligations . It seems to me that the use of these words and the reference in matching up ... with another arrangement support the contention of ABB Grain that the market practice referred to in the paragraph (iii) is one whereby the seller's obligations are for all practical purposes brought to an end upon the entering into of the offsetting arrangement. That, to my mind, is what the paragraph is directed to and there is simply no evidence of a usual market practice of that nature in the case of forward contracts. The market practice identified by the plaintiffs (if it is a market practice) is not of that nature. I am satisfied that the forward contracts are not derivatives because they fall within the terms of s 761D(3)(a). It follows that they are not financial products for the purposes of Chapter 7 (see s 765A(1)(n)) and there was no obligation to deliver a PDS in relation to them. This means that the plaintiffs' cause of action under the Corporations Act must fail. The cause of action based on an alleged breach of duty of care must also fail because it is said to arise because of an obligation to deliver a PDS. ABB Grain and Glencore Grain submit that, even if their submission that the forward contracts fall within s 761D(3)(a) fails, nevertheless, the forward contracts were not derivatives within s 761D(1) or financial products within s 763A and s 763C. It is appropriate for me to address these arguments. I start with s 761D(1) and the three conditions which must be satisfied before an arrangement is a derivative. They submit that under the forward contracts the value of the arrangement ... varies by reference to the market price of wheat or barley from time to time. By way of example, they submit that if the price of wheat or barley rise, and a buyer enters into a contract to sell the same quantity at the then market price, the "value of the arrangement" from the buyer's point of view will increase by the increase in market price. Taking the example given by the plaintiffs, I do not think another contract, say a contract by the buyer to sell the wheat or barley he has contracted to purchase, can be at one and the same time part of the arrangement for the purposes of determining the value of the arrangement and be the something else within s 761D(1)(c). On the face of it, the words the value of the arrangement are very broad, and, if the plaintiffs' submissions are correct, many transactions would be derivatives, even though they would not be considered to be derivatives as a matter of ordinary language. Almost all forward contracts for goods which are readily obtainable in the market would be caught. Under the regulations, the prescribed period in the case of contracts, other than foreign exchange contracts, is one business day (reg 7.1.04(1) and see also reg 7.1.04(2)). I acknowledge the fact that there are the exceptions in s 761D(3) but even so, one is cautious of an interpretation of subs (1) which would catch an ordinary transaction like the sale and purchase of a motor vehicle with payment of the purchase price today and delivery in one week's time. It seems to me that the answer lies in the meaning of the "something else" referred to in the paragraph. It includes an asset, a rate (including an interest rate or exchange rate), an index or a commodity and things of any nature whatsoever and whether or not deliverable. In my opinion, although the precise boundaries of the definition may be difficult to identify, the matters the plaintiffs relied on, that is, the fact that there is a market for goods and that a party to the arrangement may enter into a transaction, is "something else" for the purposes of paragraph (c). In my opinion, the forward contracts do not fall within s 761D(1) because the condition in para (c) is not satisfied. I turn now to consider whether the forward contracts fall within s 763A and s 763C. The plaintiffs submit that in entering into the forward contracts they were managing a financial risk within s 763A(1) and s 763C. Other than pleading the two sections, they have not pleaded facts in support of their contention, nor is there any evidence in support of it. The plaintiffs submit that a person in their position is likely to enter into a contract when the price was high to avoid the risk of price variations and a production failure. It seems to me that it is possible that a forward contract would be entered into at a particular time in order to manage a risk which has financial consequences; the difficulty in this case is that there is nothing in the ASOC or proposed SASOC to indicate that this was done in the case of the forward contracts. Had the case turned on this point, it would have been necessary to hear from the parties as to whether the plaintiffs should be given the opportunity, assuming they could do so, to provide proper pleadings or particulars of their case under s 763A and s 763C. Before leaving the question of the definition of a "derivative" and a "financial product", I mention the fact that the plaintiffs referred to the Explanatory Memorandum for the Financial Services Reform Bill 2001 (the provisions in that Bill form Chapter 7 of the Corporations Act ) and the report of the then Companies and Securities Advisory Committee ("CASAC"), "Regulation of On-exchange and OTC Derivative Markets". The report of CASAC is dated June 1997 and is referred to in paragraph 6.72 of the Explanatory Memorandum. The plaintiffs submit that I can have regard to this material by reason of s 15AB of the Acts Interpretation Act 1901 (Cth), or at common law. As recommended by CASAC in its report entitled ' Regulation of On-exchange and OTC Derivatives Markets ' the definition focuses on the functions or commercial nature of derivatives rather than trying to identify each product that will be regarded as a derivative. The definition proposed by CASAC in its report has been used in developing the definition in proposed section 761D. This is a difficult dividing line to draw as much depends on the intentions of the particular parties concerned. The existing Corporations Law seeks to deal with this issue by the concept of the likelihood of the agreement being settled other than by delivery (see definition of 'eligible commodity agreement' in section 9 of the Corporations Law). However, CASAC explicitly rejected this test on the basis that the 'unlikely' requirement was not clear and some futures contracts such as deliverable share futures may not be likely to be closed out. The Advisory Committee, it its OTC Discussion Paper, proposed that the derivatives definition exclude forward contracts which in practice result in physical delivery. Some submissions supported this exclusion. Other submissions argued that the proposal may exclude some commonly accepted types of derivatives, such as forward rate agreements which could involve physical delivery. However, it sought to exclude ordinary commercial forward agreements which were subject to deferred physical delivery. That exclusion, as it currently operates, has a number of complex and imprecise elements. Only those contracts under which physical delivery of a commodity, other than a currency, is mandatory should be excluded from the derivatives definition. Physical delivery would not be mandatory if the possibility of close-out existed. The Committee recognises that a vendor who does not own the property the subject of a mandatory physical delivery forward transaction has the same exposure and therefore creates the same counterparty credit risk as if the arrangement were to be cash-settled. However, without this physical delivery exclusion, the derivatives definition would unnecessarily regulate ordinary commercial forward agreements. whereby one or both parties, at some future time, may have to provide cash or other consideration (excluding any initial or periodic consideration that is fixed at the time the agreement is entered into) to the counterparty or a substitute counterparty (such as the clearing house), that consideration ultimately being determined in whole or part by reference to the derived value element ( liability element ). any other category of option prescribed by regulation (this could cover commodity options that are being used as risk management tools or otherwise in a similar way to other derivatives). chattel and real property mortgages. I do not find either the Explanatory Memorandum or the report of CASAC of great assistance. In my opinion, there is nothing in either document which suggests to me that the conclusions I have reached are incorrect. It is not strictly necessary for me to deal with them, but I will mention them briefly. Glencore Grain submitted at the outset of its submissions that the plaintiffs were not retail clients because the monetary limit in s 761G(7) and reg 7.1.22(2)(a) was exceeded. There seemed to be some uncertainty on the part of Glencore Grain as to the monetary limit and, by the end of submissions, I do not think it pursued the submission. Glencore Grain submits that, even if it was required to provide a PDS, it would not be required to provide the information identified in the ASOC and in that respect it refers to, and relies upon, s 1013F(1) and (2). It seems to me that this submission raises, or potentially raises, factual issues which could only be properly resolved at trial. Glencore Grain submits that, as the plaintiffs approached it with a view to entering into a contract, and not the other way around, it was not an issuer of a financial product within s 1012B(3) (see also s 761E). Again, I think this submission raises, or potentially raises, factual issues which could only be properly resolved at trial. Glencore Grain submits that the Glencore Grain forward contract was discharged by the washout agreement. It submits that the plaintiffs are liable to Glencore Grain under the washout agreement for the sum of $173,340 and that they have not paid that sum to Glencore Grain. In the circumstances, Glencore Grain submits that the plaintiffs have not suffered any loss or damage for the purposes of making a claim under s 1022B(2). Furthermore, they cannot seek orders under s 1022C. Orders can only be made under that section, "in addition to awarding loss or damage" under s 1022B(2) and, as no loss or damage can be awarded under s 1022B(2), orders cannot be made under s 1022C. There is a good deal of force in Glencore Grain's first submission that the plaintiffs have not suffered any loss or damage under s 1022B. There is no doubt a liability to a third party can constitute loss or damage, but it is difficult to see how the plaintiffs could be liable to pay Glencore Grain $173,340 and yet at the same time be able to recover that sum from Glencore Grain. There is also force in Glencore Grain's submissions about the operation of s 1022C although I do not think the contrary interpretation is so weak as to justify summary judgment or striking out. It seems to me that it is arguable that s 1022C(1) can be interpreted to mean, in effect, in addition to the power to award loss and damage, and it is arguable that the washout contract, if it is a separate contract, is nevertheless "for or relating to a financial product" within s 1022C(1)(a). These are difficult issues which require a closer analysis than has thus far been undertaken. For the reasons set out below, those pleas are embarrassing and should be struck out. In the proposed SASOC, the pleadings in relation to the ABB Grain basis contract are contained in paragraphs 24---30C and 56, 56A, 56B, and the claims for relief. A number of the defects in the ASOC are repeated and there are additional defects. Leave to replead in accordance with the proposed SASOC should not be granted. The defects in paragraphs 25---30 of the ASOC are as follows: In relation to paragraph 26, although I think what is intended is relatively clear, I think it is embarrassing to plead a case against ABB Grain by incorporating earlier pleas which deal with a different contract and a different party. This defect remains in the proposed SASOC. In relation to paragraph 27, I think it is embarrassing because it does not state which party should have provided the SOA. The plaintiffs' counsel said it is an allegation against the first defendant. That should be pleaded. This defect remains in the proposed SASOC. (b) the plea incorporates earlier paragraphs (and, in one case, a later paragraph) which deal with a different contract and a different party and include allegations relating to that different party (or parties). It is unclear whether similar allegations are made against ABB Grain. In addition, some of the paragraphs incorporated into the plea deal with events which occurred after the ABB Grain basis contract was entered into. (c) the plea is embarrassing in not clearly separating an allegation of what may or was likely to happen from what in fact happened. These defects remain in the proposed SASOC. In relation to paragraph 28.3, the plea is embarrassing because it seeks to incorporate an earlier paragraph, which in turn seeks to incorporate two earlier paragraphs. Those paragraphs deal with a different party. There is a reference in paragraph 18, which is incorporated into paragraph 28.3, to the provision of a statement of advice, but, as I understand the plaintiffs' submissions, it is not asserted that ABB Grain or Glencore Grain should have provided an SOA to the plaintiffs. This defect remains in the proposed SASOC. There are still problems with the claim for relief. It is not made clear how a party can claim from another party loss and damage represented by the amount he is liable to pay that party. Furthermore, the plaintiffs make no claim for an order under s 1022C(1)(a). They do claim orders under s 1022C(1)(b) and s 1022C(2). The power to make orders under s 1022(1)(b) and s 1022C seems to be dependent on an order being made under s 1022C(1)(a). These defects remain in the proposed SASOC. In my opinion, these defects in the pleading of the ABB Grain basis contract in the ASOC are sufficient to lead to the conclusion that the pleading should be struck out. As I have said, the defects are not cured in the proposed SASOC. Pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), there be judgment for the Third Defendant against the Plaintiffs in relation to that part of the proceeding which relates to the contracts between the Plaintiffs and the Third Defendant pleaded in paragraphs 31 and 41 of the Amended Statement of Claim. Pursuant to O 11 r 16 of the Federal Court Rules , the Amended Statement of Claim, in so far as it relates to the contract between the Plaintiffs and the Third Defendant pleaded in paragraph 25, be struck out. The Plaintiffs be refused leave to file and serve the Second Amended Statement of Claim against the Third Defendant. The Plaintiffs and the Third Defendant have leave to make further submissions on the Plaintiffs' proceeding against the Third Defendant. The Plaintiffs be refused leave to file and serve the Second Amended Statement of Claim against the Fourth Defendant. The Plaintiffs and the Fourth Defendant have leave to make further submissions on the Plaintiffs' proceeding against the Fourth Defendant. I will hear the parties as to costs and other orders. I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | financial products derivatives applications for summary judgment on basis of whether forward contracts for supply of grain are financial products or derivatives whether arrangement permits seller's obligations to be wholly settled by cash or set-off rather than delivery whether usual market practice permits seller's obligations to be closed out by matching up of arrangement with another arrangement of same kind under which seller has offsetting obligations to buy whether value of arrangement varies by reference to value of something else corporations |
2 The appellant contends that Federal Magistrate Scarlett erred by failing to find that a decision of the Tribunal based on reasoning that was 'irrational and illogical' and based upon 'unwarranted assumptions' was vitiated by jurisdictional error; by finding that the Tribunal was not under a duty 'to make reasonable enquiries as to the veracity of documents before dismissing them'; by finding that 'misrepresentation of evidence by the Tribunal did not constitute jurisdictional error'; and by finding that the Tribunal 'did not apply the wrong test' in determining the matters before it. 3 Although it will be necessary to consider the background facts in some detail having regard to these grounds of appeal, the central matters in issue are these. 4 The appellant was born on 24 April 1978 in Lebanon and is a citizen of that country. He arrived in Australia on 27 November 2000 and applied to the Minister for a protection visa on 20 February 2001. He contended before the Minister's Delegate and in support of his review applications before the Tribunal that he feared serious harm should he return to Lebanon because of his activities in opposing Syrian foreign labourers, supported by Syrian authorities, taking up, in large numbers, the jobs of ethnic Lebanese in the fruit industry in the region of Becaharre. In particular, he claimed that he had been threatened by 'plain clothed' people in July 2000 telling him to cease agitating against the take-up of Syrian workers by Lebanese employers; he was threatened a second time in late July 2000; and on 6 August 2000 he was shot. The appellant claimed he had to then 'move around' to avoid detection until leaving Lebanon and arriving in Australia on 27 November 2000. 5 The Tribunal was unpersuaded by and therefore not satisfied of the claims made by the appellant of a well-founded fear of persecution for a Convention reason and concluded on the basis of information given by the appellant to the Tribunal in support of the review application; information provided by the appellant at a hearing conducted on 11 January 2006; and material submitted to the Tribunal by the appellant or his advisers on 7 December 2005, 21 December 2005 and 12 January 2006, that the appellant's claims were not credible and that his evidence in support of the claims was 'implausible, contradictory, internally inconsistent and moreover, inconsistent with the independent evidence'. The Tribunal concluded that it could not be satisfied that the applicant had been 'truthful in his claims and evidence' and had failed to be truthful about aspects of his evidence given at the hearing. The Tribunal concluded that the applicant had 'greatly exaggerated' the treatment he faced by Syrian authorities. The Tribunal has further found that his claims are in direct contradiction to the independent evidence. The Tribunal has found the applicant to have been untruthful to the Tribunal and gives no weight to his claims. In light of the applicant's lack of reliability as a witness, it cannot rely on the documents submitted by him. Given the significant adverse findings on credibility in relation to the applicant, the Tribunal cannot be satisfied that the applicant has a real chance of being persecuted for a Convention reason by the Syrian authorities in Lebanon in the foreseeable future, and is therefore not satisfied that the applicant's fear of persecution for a Convention reason is well-founded. The underlining is from the original findings. The expression of this ground of attack upon the Tribunal's reasoning is put this way. The appellant claimed that he had been threatened and shot in the head by Syrian agents because of his opposition to Syrian workers taking up employment in Lebanon and displacing Lebanese workers. In support of his claim of this event, he provided the Tribunal with the following information: sworn evidence of the injury to a first Tribunal hearing; a document marked ' Croix Rouge Libanaise, Centre de Becharre ' (the Red Cross); three brain scans, one of which from the Sydney Imaging Group concluded, 'There is still evidence of a bullet lodged in the soft tissue of his scalp' ; written claims of the event to the first Tribunal's review of the Delegate's decision; sworn evidence to the second Tribunal; a letter from a Priest of the Christian Maronite Archdiocese, Youssef Tawk, dated 2 December 2005 asserting, based on Priest Tawk's knowledge of the appellant's prior experience in Lebanon, that his return would 'put him in great danger'; a letter from Mr Farid Ishek Habib, a member of Parliament, declaring that the appellant was 'shot at by the Syrian army' at the village of 'Bcherri ... because he belonged to a certain group' and that 'today [the appellant] is still subject to danger if he returns to Lebanon as a result of that incident'; a further letter from the Lebanese Red Cross describing the condition of the appellant on 6 August 2000 when he arrived at the Red Cross Centre 'with a shot in the head ... inflicted by the Syrian forces that were located in the area'. 9 The appellant contends that this evidence supports, on the balance of probabilities, a conclusion that the appellant was shot and the shooting was carried out by Syrian agents. The appellant says the Tribunal's finding that he 'may have sustained a gunshot wound' but that the Tribunal 'cannot be satisfied about who was responsible for the shooting --- or why' is based on a finding that all of the appellant's evidence as to the shooting, said to influence the appellant's contended well-founded fear of persecution should he return to Lebanon, by reason of his political opposition to Syrian authorities operating in southern Lebanon in support of Syrian nationals, is to be rejected because the appellant's evidence is implausible, contradictory, internally inconsistent and inconsistent with independent evidence. 10 The appellant says that an analysis of the evidence said to support each conclusion reveals that there is 'no probative evidence' to support the Tribunal's assertion that the appellant's evidence was implausible; there is nothing 'contradictory' or 'internally inconsistent' in the appellant's evidence; and, there is no demonstrated inconsistency between the independent information before the Tribunal and the evidence of the appellant. The appellant says that it follows that the rejection of the appellant's evidence on these grounds, is not supported by rational or logical reasoning and reflects findings based, in part, on assumptions not properly open to the Tribunal. Such errors of reasoning which form the basis of the findings resulting in a determination that the Tribunal cannot be 'satisfied' of the relevant matters, are said to be jurisdictional errors. 11 In written submissions, the appellant contends that the Tribunal failed to take account of the material described at [8] of these reasons said to be relevant to the question of whether the Tribunal might be satisfied that the appellant held a well-founded fear of serious harm should he return to Lebanon, expressly on the basis that the appellant's 'lack of credibility as a witness' meant 'it [the Tribunal] cannot rely upon the documents submitted by him'. Since the finding on credibility is, it is said, misconceived by reason of irrationality and illogicality of reasoning, the Tribunal's failure to have regard to the relevant documents means the Tribunal has failed to exercise the duty of review thus giving rise to jurisdictional error. 12 The appellant also says the Tribunal had regard to and relied upon material consisting, in part, of information from a 'Lebanon Voters --- info' website and information consisting of a flawed analysis by the first Tribunal in its reasons of data, drawn from that website, so as to conclude that inconsistencies existed between the appellant's evidence and the identified information. Reliance, in error, upon the identified information is said to be a jurisdictional error. 13 Lastly, the appellant says the Tribunal asked itself the wrong question by asking whether the appellant's fear of persecution was or could be well-founded in circumstances where the appellant might behaviourally modify his conduct by returning, not to Becaharre in Lebanon where historical concerns of persecution had arisen (if well placed) but by returning to another place or city within Lebanon where such concerns would not be manifest. If so, the criticism may simply be a vehicle for attempting to contest adverse findings made by the Tribunal within the scope of the jurisdiction conferred upon it. If the criticism is to go beyond such a challenge, what is required is some precision in identifying the legal consequence of irrational or illogical reasoning and the legal principle to be invoked that attracts that consequence ( S20/2002 per Gleason CJ [5]). That task requires identifying and characterising the suggested error and relating it to 'the legal rubric under which a decision is challenged' ( S20/2002 per Gleason CJ [9]). 15 Here, the Tribunal has a statutory duty to review a decision (s 414(2)) to refuse to grant a protection visa (s 411(1)(c)) and is conferred with all the powers and discretions conferred by the Act upon the initial decision-maker (s 415(1)) and a power to affirm, vary or set aside the decision and substitute a new decision (s 415(2)). In discharging that duty and exercising those powers, the Tribunal must determine whether it is satisfied or not that the appellant is a person to whom Australia has protection obligations under the Refugees' Convention as amended by the Refugees' Protocol (s 36(2)(a) ; s 65(1)(a)(ii) and s 65(1)(b)). If not so satisfied, the Tribunal must affirm the Delegate's decision (s 65(1)(b) and s 415(2)(a)). A protection obligation arises in favour of a non-citizen in Australia who owing to a well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is unable or, owing to such fear, is unwilling to avail himself of the protection of that country. That inquiry requires the Tribunal to reach a state of satisfaction about the elements attracting that obligation in each application before it and consider, among other things, whether the contended reason for the persecution is the essential and significant reason; whether the persecution involves 'serious harm' and whether the persecution involves systematic and discriminatory conduct. Serious harm includes a threat to the person's life or liberty; and significant physical harassment (s 91R). A decision of the Tribunal is a privative clause decision and is thus final and conclusive (s 474(1)) unless the Tribunal has failed by reason of jurisdictional error to make a decision under the Act for the purposes of s 474 of the [2003] HCA 2 ; Act ( Plaintiff S157/2002 v Commonwealth of Australia (2003) 211 CLR 476) which 'must be read so as to refer to decisions which involve neither a failure to exercise jurisdiction nor an excess of jurisdiction conferred by the Act' ( Plaintiff S157/2002 per Gaudron, McHugh, Gummow, Kirby and Hayne JJ [76]). The quality, nature and content of the decision will be found in the reasons of the decision-maker. 17 What legal principle or legal rubric might be invoked that brings about the legal consequence that the decision of the Tribunal is to be quashed on the ground of demonstrated jurisdictional error expressed in the description 'irrationality or illogicality of reasoning', attracting the constitutional writs. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it. Those different kinds of error may well overlap. The circumstances of a particular case may permit more than one characterisation of the error identified, for example, as the decision-maker both asking the wrong question and ignoring relevant material. What is important, however, is that identifying a wrong issue, asking the wrong question, ignoring relevant material or relying on irrelevant material in a way that affects the exercise of power is to make an error of law. Further, doing so results in the decision-maker exceeding the authority or powers given by the relevant statute. In other words, if an error of those types is made, the decision-maker did not have authority to make the decision that was made; he or she did not have jurisdiction to make it. His Honour also noted that the conclusion reached by an administrative decision-maker may on a full consideration of the material before him be found to be capable of explanation only on the basis of some 'misconception'; if the result appears to be unreasonable on the supposition that the decision-maker addressed the right question, correctly applied the rules of law and took into account all the relevant considerations and no irrelevant considerations, it may be that a 'proper inference' is open that the supposition is false. Ordinarily, however, it will be necessary to go further, as in the respects mentioned by Dixon J [Avon Downs]. If, in the particular context, it is material to consider whether there has been an error of law, then it will not suffice to establish some faulty inference of fact. On the other hand, where there is a duty to act judicially, a power must be exercised 'according to law, and not humour' and irrationality of the kind described by Deane J in Australian Broadcasting Tribunal v Bond may involve non-compliance with the duty. It is often unhelpful to discuss, in the abstract, the legal consequences of irrationality, or illogicality or unreasonableness of some degree. Their Honours considered whether that contention was made out. That contention of a criterion of jurisdictional error was said to derive from Eshetu (supra). Their Honours observed that in Eshetu it was pointed out that a stricter view should be taken of what must be shown to make out jurisdictional error where the statutory provision 'conditions the attraction of jurisdiction upon the attainment by the decision-maker of satisfaction that a certain state of affairs exists and that state of affairs includes factual matters' ([146] Eshetu ). Their Honours noted the distinction between insufficiency of evidence to support a conclusion of fact by the decision-maker and an absence of any foundation in fact for the fulfilment of the conditions upon which the power to decide, depends. Their Honours noted these remarks of Dixon CJ, Williams, Webb and Fullagar. If there are other indications that this is so or that the purpose of the function committed to the tribunal is misconceived it is but a short step to the conclusion that in truth the power has not arisen because the conditions for its exercise do not exist in law and in fact. At [52], their Honours concluded that 'the decision of the Tribunal has not been shown to have been, in the sense propounded by the appellant, illogical, irrational, or lacking a basis in findings or inferences of fact supported on logical grounds' . 24 This notion of degrees of strictness of that which must be shown to make out jurisdictional error is consistent with the observations of Gleason CJ in Plaintiff S157/2002 at 485 [13] where his Honour noted references in the authorities to the concept of 'manifest' defect in jurisdiction and 'degrees of error' expressed in terms such as 'palpably misused [an] advantage', 'glaringly improbable', 'inconsistent with facts incontrovertibly established' and 'plainly unjust' echoing the familiar remarks in House v The King [1936] HCA 40 ; (1936) 55 CLR 499. Such an idea is influential in ordinary appellate judicial review, and it is hardly surprising to see it engaged in the related area of judicial review of administrative action. If there is some evidence (perhaps slight) to support a finding, a Court exercising judicial review ought not to interfere with the decision-maker's assessment of the material as the limits upon the jurisdiction of the court exercising federal jurisdiction are well known ( Attorney-General (NSW) v Quin [1990] HCA 21 ; (1990) 170 CLR 1 at 35-36 per Brennan J). Some facts, such as a jurisdictional fact, however, are not facts in the ordinary meaning of that term ( Eshetu , 651, [130] per Gummow J) and where a decision-maker is required to be satisfied of the existence of specified matters, the decision-maker must act in good faith, must not misdirect itself, fail to consider relevant matters or take into account irrelevant matters. Even if none of these things can be established, the courts will interfere if the decision reached by the authority appears so unreasonable that no reasonable authority could properly have arrived at it. However, where the matter of which the authority is required to be satisfied is a matter of opinion or policy or taste it may be very difficult to show that it has erred in one of these ways, or that its decision could not reasonably have been reached. It may be otherwise if the evidence which establishes or denies, or, with other matters, goes to establish or to deny, that the necessary criteria has been met, was all one way'. It would permit review in cases where the satisfaction of the decision-maker was based on findings or inferences of fact which were not supported by some probative material or logical grounds ( Bond at 366; Canada (Director of Investigation and Research) v Southam Inc. [1997] 1 SCR 748 at 776-777)'. The satisfaction of the minister is a condition precedent to the discharge of the obligation to grant or refuse to grant the visa, and is a 'jurisdictional fact' or criterion upon which the exercise of that authority is conditioned. The delegate was in the same position as would have been the minister (S496) and the tribunal exercised all the powers and discretions conferred on the decision-maker: S415. If the decision did display these defects, it will be no answer that the determination was reached in good faith. To say that a decision-maker must have acted in good faith is to state a necessary but insufficient requirement for the attainment of satisfaction as a criterion of jurisdiction under S65 of the Act. However, inadequacy of the material before the decision-maker concerning the attainment of that satisfaction is insufficient in itself to establish jurisdictional error. 'Inadequacy' in the material is, by itself, not enough ( SGLB ). Inadequacy may, however, be a circumstance which supports an inference that the Tribunal misconceived the test or was not satisfied in respect of the correct test ( S20/2002 ). 30 In SFGB v Minister for Immigration and Multicultural and Indigenous Affairs 77 ALD 402, Mansfield, Selway and Bennett JJ quashed a determination of the Tribunal based upon a finding 'unsupported by any evidence'. In Minister for Immigration and Multicultural Affairs v Al-Miahi (2001) 65 ALD 141, the Full Court, in reliance upon Bond said there is no place for judicial review in simply demonstrating 'faulty logic' as '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 error of law. That view was adopted by French, Hill and Marshall JJ in Minister for Immigration and Multicultural Affairs v W306/01A [2003] FCAFC 208. In W404/01A of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 255 , French, Lee and Carr JJ concluded that even if the reasoning of the Tribunal '... were illogical, the authorities show that this is not, in itself, a ground of review, though it may on occasion manifest other reviewable error' [35]. In NATC v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 52 [25], Heerey, Sundberg and Crennan JJ rejected the suggestion that the Tribunal's lack of satisfaction rested upon illogical reasoning and observed, in reliance upon NACB v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 235 [30], '... in any event, want of logic does not itself suffice to constitute an error of law:' [25]. In VWST v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 286 , Kiefel, Marshall and Downes JJ, also in reliance upon NACB , agreed that, 'the current state of the law is that want of logic in the reasons of the RRT is not an available ground of review' . That statement of principle did not incorporate the qualification 'in itself'. 31 The central matter is this. 32 A determination of the Tribunal as to a state of satisfaction or otherwise, of the relevant criteria or criterion in question, that is based upon a finding of fact or inferences drawn from facts, not based on logical or rational grounds, will give rise to an error of jurisdiction if there is no evidence to support the finding or no proper basis for drawing the inference; or, if there be some evidence, although inadequate, reliance by the Tribunal upon that inadequate evidence gives rise to an inference that the Tribunal has misconceived the test or is not, in reality, satisfied of the requisite matters, as a result of which there has been only a purported, rather than a real, exercise of the power conferred upon the Tribunal. 34 The appellant is a Maronite Christian, attended school in Becaharre and attended two years of TAFE training in Beirut where he lived with his sister. After completing studies, the appellant worked at a family owned restaurant in Becaharre and also at a place called the 'Procto Centre', a medical centre in Beirut where he undertook part time (four days per week, 4 to 5 hours each day) administrative work from 1997 to November 2000. On the days he worked for the Procto Centre, he lived in Beirut with his sister but otherwise he returned to Becaharre. He agreed that these were the two places where he lived --- that is ate, slept and resided. 35 The appellant said illegal migrant workers from Syria (100,000) supported by Syrian intelligence personnel have displaced young Lebanese workers in the labour market causing significant unemployment among young people in Becaharre. The appellant and another man rented an office in Becaharre to organise meetings to resist illegal migrant labour; made lists of unemployed workers; established a phone line for employers to contact people on the list; and had 12-20 people running the office. The appellant spent time there (when in Becaharre) when not working at the medical centre in Beirut. 36 The appellant said he was shot in the head as a result of this work as Syrian workers lost employment. The appellant also said Syrian intelligence personnel came to the office; identified themselves and wanted the office closed. The Tribunal noted independent evidence from the Immigration and Refugee Board of Canada from 1995 suggesting that Lebanese internal security forces would most likely seek out those persons opposing a Syrian presence in Lebanon although according to the McGill Institute of Islamic Studies in Montreal, Christian opponents of the Syrian presence are free to voice opposition and are not harassed unless engaged in illegal activity or found to be cooperating with Israel. The appellant disagreed and said Christians are harassed. The appellant told the Tribunal that he had not been involved, since arriving in Australia, in any political campaign to agitate against the Syrian presence in Lebanon. Although the shooting was six years ago, the intelligence people remain in place and young Lebanese returning to Lebanon have been tortured. Even if he does not go back to Becaharre, he remains in danger; his family is prominent. 37 The Tribunal noted Department of Foreign Affairs and Trade ('DFAT') Country Information Report of 23 February 1996 stating that security checks at Beirut airport are almost certain to identify for detention anyone wanted by State authorities and that, 'It is unlikely that persons wanted in connection with grave offences could circumvent security procedures' . The Tribunal also noted a further DEFAT report of 13 January 2003 that, 'It remains highly implausible that persons wanted by the Lebanese judicial authorities could depart Beirut International Airport with inside assistance' . The appellant said that he was assisted by a cousin employed in 'general security' to leave Lebanon through the Beirut airport. 38 As to the office activities, the appellant stopped engaging in his activities in August 2000. The office was set up with a person who became a solicitor; the appellant has not been in contact with him since leaving Beirut; the appellant lost contact with him in late 2002 and although that individual has received threats, he has had no problems 'because he is a solicitor', 'came from a poor family' and the person, because he is a solicitor, 'knew how to talk to them'. 39 As to the documents, the appellant said this: Mr Habib is a member of parliament and a political activist who supported the appellant. Mr Habib is a friend of the appellant's family and a friend of his older brothers. Mr Habib is very close to the family and the appellant's older brothers. As to Priest Tawk, the appellant made contact with Priest Tawk at church services. Priest Tawk is well known to the appellant's father through activities in the church. Because of the absence of medical equipment necessary for treatment at the Centre and because there was no other hospital in Beherri, he was transferred by an ambulance belonging to a Lebanese Red Cross to outside Beherri equipped with the necessary equipment where he was treated at once. There was a centre for the Lebanese Red Cross whose role was to transfer patients in ambulances to neighbouring centres and it was not equipped with the necessary equipments. As to the letter from Danny Fakhri, the appellant told the Tribunal that he knew him because he lived in the village. 44 The appellant told the Tribunal that after being shot on 6 August 2000, the appellant had had no further contact with Syrian authorities. The appellant said that he did not return to the family home in Beherri and he was staying in different places in Beirut. The Tribunal noted in the course of the hearing that this information seemed inconsistent with earlier evidence in the hearing that he had resided with his sister in Beirut or in the family home at Beherri until he left Lebanon in November 2000. The Tribunal asked the appellant to explain the inconsistency between continuous residence at the two identified places as compared with later evidence that after August 2000 the appellant did not return to the family home and stayed in different places in Beirut. In evidence the appellant said that he lived in the two continuous places until the event in August 2000 and after the event he moved one week on, one week off between a friend's house and a cousin's house. The electoral lists for 2000 show that in the Basharri sub-division 40,229 of 41,970 registered voters were Maronites. Whilst there are other minority groups in Basharri they are of a negligible proportion and no evidence could be found in the sources consulted of overt tension between these groups. The appellant said Syrian labourers are seasonal during fruit picking and enter Lebanon illegally. The appellant's adviser noted that the website report referred only to residents. 47 As to likely harm or danger should he return, the Tribunal asked the appellant what he thinks would happen to him if he was to return to Lebanon and the appellant said that he could not presume what would happen but information from friends suggest that his life would be in danger if he returned. The appellant confirmed that the activities identified by him were the only activities of an anti-Syrian character. 48 The Tribunal referred to submissions from the appellant's adviser previously identified in these reasons and noted, in particular, the comments concerning the website making reference to registered electors and the curious fact that the independent information referred to by the Tribunal from the website contained only the registered voter details and the remainder of the quoted information was the opinion of the earlier Tribunal. As to the independent country information drawn from 1995 and 1996, the appellant's adviser said it did not represent the position in November 2000 when the appellant left Lebanon. 49 As to the information from DFAT of 13 January 2003, the appellant's adviser noted that the appellant was not sought by Lebanese judicial authorities or related Lebanese authorities and the appellant's fear of persecution were from Syrian forces and agents. As to the knowledge of the appellant by the authors of the various letters, the appellant's adviser said that such a matter was unexceptional and had they not known of the appellant, they would not be able to express an opinion. As to the apparent inconsistency between the continuous two places of residence and subsequent movement in the period between August and November 2000 after the shooting, the appellant's adviser said that those movements did not, in the ordinary sense of the word, amount to 'residing' in a place and according to the transcript of evidence, the appellant's response to the earlier question suggested the places of 'permanent residence' prior to the incident and thus no inconsistency arose. As to the appellant's belief of serious harm should he return, the appellant's adviser responded to the Tribunal that the activities of the appellant were of 'sufficient interest' to result in his being shot which provided the foundation for a well-founded fear of serious harm. The Tribunal could not be satisfied that the appellant's claims of difficulties with Syrian authorities were credible. The Tribunal found the appellant's claims 'in this regard' to be implausible, contradictory, internally inconsistent and inconsistent with the independent evidence. The Tribunal identified what it perceived to be a 'range of inconsistencies' between the appellant's written claims and his hearing before the Tribunal; and in the evidence or claims articulated during the course of the hearing. Having regard to those two matters and a third, 'the inherent implausibility in his claims and evidence', the Tribunal could not be satisfied of two things. First, that the appellant had been truthful in making and evidencing his claims; and, secondly, that he has 'any claim to have a well-founded fear of persecution for a Convention reason'. 51 The first inconsistency was initial evidence at the hearing that the appellant resided at two locations in Lebanon both connected with his family: his sister's house in Beirut and the family home in Becaharre, and later evidence in the course of the hearing that after the shooting in August 2000 he was staying 'in different places in Beirut' and could not 'stay in a fixed place'. The Tribunal weighed that evidence in conjunction with evidence of the appellant that after the shooting he had no further contact with Syrian authorities and left Lebanon in November 2000 (three months later). Since the appellant accepted that Syrian authorities did not 'come after him', the Tribunal thought an inference was open that those Syrian intelligence authorities had no continuing interest in him. The explanation for that apparent lack of interest was that after the shooting, the appellant moved around and inferentially, Syrian authorities would have had difficulty finding him. That later evidence in the course of the hearing was seen by the Tribunal as a change in position to explain an anomaly perceived by the Tribunal of no apparent threat of harm between August and November 2000. That led the Tribunal to conclude that 'the applicant has not been truthful' about his whereabouts in Lebanon. 52 That conclusion was open to the Tribunal. 53 The second matter concerned the appellant's employment. The appellant's evidence was that he worked at the Procto medical centre in Beirut from Monday to Thursday for four to five hours a day from 1997 until he left Lebanon in November 2000 and when in Becaharre he would attend at the employment office from 4pm to 8pm three days each week. Since that regular pattern of employment had endured from 1997 to November 2000, the Tribunal reasoned that Syrian authorities could have located him had they had any interest in him. Since they did not, it suggested to the Tribunal that there was no interest. That suggested to the Tribunal that the claim of Syrian 'threat' was not credible. 54 That conclusion was open to the Tribunal. 55 The third matter concerned the evidence of the appellant's agitation against Syrian migrant labour in Lebanon and the claim of his shooting for that reason. The Tribunal said it had 'grave credibility issues' arising from 'this claim --- particularly the contradiction between his claims and the independent evidence'. That grave concern went to four things. First, claims were made that attacks continued to be made on freedom of expression and association yet no claim was made nor was evidence put that the appellant was stopped from 'establishing this organisation'. 56 Secondly, the appellant did not claim nor was evidence put to the Tribunal that he or the organisation was 'actually prevented' from carrying out their various activities. The evidence was that the appellant was threatened to close, by 'plain clothed' Syrian authorities. The Tribunal finds the claims of harm by Syrian authorities not to be commensurate with the non-violent, innocuous activities of the applicant. The Tribunal found that anomalous in light of the claimed closeness. Further, the Tribunal noted that although the appellant's friend and colleague was involved in precisely the same activities, his friend had had no difficulties with Syrian authorities because 'he was a solicitor'. The Tribunal found that explanation to be 'absurd'. The Tribunal reasoned that if the colleague was engaged in precisely the same activities, he too would face harm yet none was faced 'because he was a lawyer'. 58 Although a Court might decide some of those matters differently, those conclusions were open to the Tribunal. 59 The final or fourth aspect of the Tribunal's assessment of the employment agitation by the appellant, was this. The appellant has been in Australia for six years; has not been involved in any activities critical of Syrian presence in Lebanon nor activities agitating for the removal of Syrian migrant workers from Lebanon. Those circumstances suggested to the Tribunal that the appellant has no 'ongoing' interest in the issue and, looking forward, would be unlikely to fear serious harm from Syrian authorities should he return to Lebanon. 60 It seems to me that such a matter properly informs the decision-maker as to whether the Tribunal might be satisfied of a well-founded fear of persecution for a Convention reason. 61 The fourth topic addressed by the Tribunal going to demonstrated inconsistency and implausibility is the evidence of the appellant's departure from Lebanon. The Tribunal noted that the appellant departed from Lebanon on his own passport at a time when he claimed he was a person of interest to Syrian authorities. The Tribunal had regard to DFAT Country Information of 23 February 1996 concerning airport checks by Lebanese and Syrian authorities and the probability of detection and detention of persons of interest. The Tribunal reasoned that persons of interest at the time of departure of the appellant (November 2000) would, most likely, have been detained and because the appellant was not detected and detained, an inference is open that he was of no interest to the Syrian authorities. The Tribunal considered the appellant's evidence that he was able to depart Lebanon with the assistance of his cousin thus avoiding detection, and the DFAT Report of 13 January 2003 of 'high implausibility' that persons sought by 'Lebanese Judicial authorities (inter alia) could depart Beirut International Airport with inside assistance'. The appellant contended he was of interest to Syrian authorities, not Lebanese authorities, and as to the Country Information Report of 23 February 1996, it was said to be out of date, irrelevant and addressed security checks concerning persons sought in connection with 'grave offences' and the appellant was not so sought. The Tribunal noted those contentions but also noted evidence that Syrian and Lebanese authorities cooperate closely and controls at Beirut airport are 'tight'. Notwithstanding that the first DFAT report was dated 1996, it was open to the Tribunal to inform itself by that document on the topic it addressed. Similarly, it was open to the Tribunal to have regard to the DFAT report of 13 January 2003 going to the probability of persons of interest to State authorities departing Lebanon at Beirut International Airport through 'inside assistance'. 62 It was open to the Tribunal to consider those matters in drawing an inference that the appellant may not have been of interest to Syrian authorities thus informing, in part, whether the Tribunal could be satisfied of the appellant's claim of a well-founded fear of persecution for a Convention reason. 63 The final matter addressed by the Tribunal was the treatment of the documents ([8] of these reasons) put to the Tribunal. The Tribunal accepted as a fact that the appellant had been shot. The Tribunal was not satisfied as to who was responsible for the shooting or why it occurred. The approach adopted by the Tribunal and therefore its reasoning was to test each element of the underlying substratum of fact of the appellant's claims and form a view about whether it could be satisfied about any or all of those contentions. Because the Tribunal was not satisfied the appellant's contentions on the various matters discussed in these reasons were true and further, that the appellant had greatly exaggerated particular matters and had fabricated others, no reference to documents from the Red Cross or third parties could be redemptive of the poisoned well of credibility ( S20/2002 [49] per McHugh and Gummow JJ) as to how the appellant came to be shot, by whom or for what reason. The documents were thus disregarded by the Tribunal in reaching the decision-maker's state of satisfaction of the relevant matters. Although a Court might weigh those documents in the balance or approach the sequence of consideration of the content and authority of the documents in a different way or at an earlier point in the continuum of assessment, there was nothing irrational, illogical or unreasonable in the Tribunal considering each factual element of the appellant's contentions; determining whether the appellant could be believed and then turning to whether the documents might inform the decision-maker's capacity to be satisfied as to the reasons for the shooting, the participants engaged in the event and the relevant circumstances, so as to determine whether the Tribunal could be satisfied that the appellant held a well-founded fear of persecution for a Convention reason. The Tribunal elected not to have regard to those documents in light of its earlier conclusions. 64 The appellant contends that the Tribunal was under a duty to make enquiries about the matters contained in the documents. However, the Tribunal was not required to make enquiries into those documents or of the authors of them ( Gomez v Minister for Immigration and Multicultural Affairs (2002) 190 ALR 543 [26]; Minister for Immigration and Multicultural Affairs v SGLB [2004] HCA 32 ; (2004) 207 ALR 12 [43]; SXFB v Minister for Immigration and Multicultural Affairs [2005] FCAFC 164 [8]). 65 The Tribunal did not rely upon the matter described at [45] of these reasons, in its reasoning on credit. 66 The appellant's grounds of challenge based upon irrationality, illogicality and the making of unwarranted assumptions by the Tribunal and the grounds of failing to take account of relevant material and taking account of irrelevant material, therefore fail. 67 In addition, there is no substance in the contention that the Tribunal failed to ask itself the correct question or asked itself a wrong question. 68 For these reasons, there is no error on the part of the Federal Magistrates Court and the appeal must necessarily be dismissed with costs. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of the tests applicable to determine the circumstances in which reasoning on the part of the refugee review tribunal that is illogical or irrational or based on unwarranted assumptions, constitutes an error of jurisdiction for the purposes of judicial review consideration of a decision by the tribunal to have no regard to particular documents going to an event said to be a foundation for a well-founded fear of persecution for a convention reason migration |
The statutory power to issue a Part A competition notice lies in Pt XIB of the Act. Part XIB is directed to '[t] he Telecommunications Industry: Anti-competitive conduct and record-keeping rules '. Within that statutory framework, prior to the issue of the Competition Notice and pursuant to s 151AKA(10) of the Act, the Commission gave written notice to Telstra ('the Consultation Notice') of its proposal to issue a Part A competition notice. Telstra also challenges the issue of the Consultation Notice. Telstra asserts that the notices and the decisions to issue them lack validity and that it was denied procedural fairness. 2 The notices were issued in the context of certain action by Telstra in connection with charges for its wholesale and retail telephone line rental services and correspondence between Telstra and the Commission. While the notices relate to asserted anti-competitive conduct, these proceedings are not to determine whether Telstra has engaged in anti-competitive conduct. At issue is whether the Commission exercised its powers validly under the Act and accorded Telstra such procedural fairness and natural justice as the statutory context or (if applicable) the common law required. Telstra sells access to its Public Switched Telecommunications Network ('PSTN') to its own retail customers and to wholesale customers who are themselves licensed carriers or carriage service providers. Access to the PSTN is a "line rental" service which enables the customer to establish a link between it and the telephone exchange. In practical terms, however, line rental by itself does not provide a functional telephone service. It is necessary to acquire some further calling service in order to make use of the telephone. The simplest form of residential package available from Telstra to retail customers is "HomeLine Part", which is a bundle of line rental with local call services only. Customers who select the HomeLine Part plan may then pre-select the other telephony services (eg, national long distance, international and fixed-to-mobile calls) from any carrier, including carriers other than Telstra. Telstra's wholesale customers, such as Optus, may provide such pre-selectable services as part of a package that they provide to their customers. 4 At the wholesale level, Telstra offers a stand-alone line rental service which is not bundled with other call services. Telstra charges other carriers and carriage service providers per month for line rental services for on-sale to residential end users. This wholesale service was and is known as "Home Access". 5 On 28 October 2005, Telstra informed the Commission of its intention to implement and from 5 December 2005 implemented a change to its wholesale Home Access plan, increasing the monthly price by $3.10 from $24.50 (excluding GST) to $27.60 (excluding GST) ('the Home Access increase'). The Home Access increase was announced to at least some wholesale customers on 2 November 2005. Up to 30 November 2005 the Commission did not communicate to Telstra any relevant concerns held by it about the proposed increase. 6 On 1 December 2005, Telstra also increased the price of its HomeLine Part service, that is, the pre-selectable service it provides its retail customers, from $26.95 (including GST) to $31.95 (including GST) ('the HomeLine Part increase). The Commission was informed of Telstra's intention to implement that price increase by letter dated 23 September 2005. On 24 October 2005, the Commission "consented" to the HomeLine Part increase. The Commission points out that that consent, given for the purposes of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (Cth) and a specific statutory instrument, involved no view as to whether the proposed conduct would contravene the "competition rule" as defined in s 151AK of the Act. 7 On 30 November 2005, the Commission wrote to Telstra requesting that it refrain from implementing the Home Access increase pending further investigation by the Commission and consultation with Telstra's wholesale customers. The Commission expressed concern that the proposed increases would take advantage of market power and have the effect of substantially lessening competition. • Almost all of Telstra's retail residential line rental plans would now be priced below the price paid by wholesale Home Access customers. • Retail HomeLine Part customers who pre-selected another carrier for pre-selectable calls would pay more for their local services (local calls and line rentals) than most other Telstra residential customers. Telstra declined to provide the undertakings sought. 10 On 22 December 2005, the Commission issued the Consultation Notice. Telstra sought information on which the Commission relied in issuing the notice. That information was not provided. Telstra made a submission in response to the matters set out in the Consultation Notice under cover of a letter dated 27 January 2006. 11 On or before 12 April 2006, the Commission made a decision to issue the Competition Notice with respect to Telstra. The Competition Notice was served on Telstra on or about that day. 12 Optus relies on the Competition Notice in a separate proceeding ('the Optus proceeding') against Telstra. In the Optus proceeding, Optus alleges that Telstra has breached s 151AK of the Act and relevantly claims relief under 151CC and 151CE of the Act. The existence of the Competition Notice is a precondition to the availability of that relief. 13 Telstra seeks, in these proceedings, to review the Commission's "decisions" to issue the Consultation Notice and the Competition Notice. It also seeks to review conduct engaged in by the Commission for the purpose of making those decisions. Its application for review is made to the Court pursuant to ss 5 and 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('the ADJR Act'), s 39B of the Judiciary Act 1903 (Cth) and s 163A(1) of the Act. 14 No competition notice has previously been considered in any proceeding in this Court. Did the Commission's decision to issue the Consultation Notice involve or include a decision or conduct for the purposes of ss 5 and 6 of the ADJR Act or is it otherwise susceptible to review? 2. Is the Consultation Notice uncertain? 3. Does the Consultation notice comply with the requirements of s 151AKA(10) of the Act? Is the Competition Notice uncertain? 2. Does the Competition Notice comply with the requirements of s 151AKA(2) of the Act? 3. Does the Competition Notice differ in substance from the Consultation Notice such that s 151AKA(10) of the Act was not satisfied? Does s 151AKA(10) of the Act displace the Commission's obligations of natural justice or procedural fairness? 2. Did the Commission fail to accord Telstra procedural fairness in connection with the issue of either notice? The Commission has taken one of the courses of action available to it under Pt XIB of the Act. I only propose to consider Pt XIB to the extent necessary and relevant to these proceedings. 17 Division 3 of Pt XIB of the Act deals with competition notices. A notice issued under s 151AKA(1) or (2) is known as a Part A competition notice. Such a notice may state that a carrier or carriage service provider has engaged, or is engaging in, a specified instance of anti-competitive conduct (s 151AKA(1)). Alternatively, it may state that a carrier or carriage service provider has engaged, or is engaging, in at least one instance of anti-competitive conduct of a kind described in the notice (s 151AKA(2)). A notice under subs (2) is not required to specify any instance of anti-competitive conduct (s 151AKA(5)). 18 In deciding how to describe a kind of anti-competitive conduct in a notice issued under subs (2), the Commission may have regard to whether the carrier or carriage service provider could, by varying its conduct, continue to engage in anti-competitive conduct and avoid proceedings against it under Div 7 of Pt XIB the Act (s 151AKA(6)(a)) and ' any other matters that the Commission thinks are relevant ' (s 151AKA(6)(b)). 19 A carrier or carriage service provider must not engage in anti-competitive conduct, that rule to be known as the "competition rule" (s 151AK). The Commission may issue a Part A competition notice where the Commission has ' reason to believe ' that the carrier or carriage service provider has engaged, or is engaging, in an instance of anti-competitive conduct (for a s 151AKA(1) notice) or at least one instance of a kind of anti-competitive conduct (for a s 151AKA(2) notice) (s 151AKA(7) and (8)). That refers to the mental state or view required of the Commission before a notice may issue. The Commission accepts that it must have a bona fide view and a reasonable basis for it. 20 The two circumstances in which a carrier or carriage service provider is said to engage in anti-competitive conduct are set out in s 151AJ of the Act. Anti-competitive conduct occurs, in substance, where the carrier or carriage service provider has a substantial degree of power in a telecommunications market and takes advantage of that power, or takes advantage of that power and engages in other conduct, with the effect or likely effect of substantially lessening competition in that or any other telecommunications market (s 151AJ(2)). It also occurs where the carrier or carriage service provider engages in conduct in contravention of ss 45, 45B, 46, 47 or 48 of the Act and that conduct relates to a telecommunications market (s 151AJ(3)). 21 A carrier or carriage service provider may apply to the Commission for an order exempting specified conduct from the scope of s 151AJ (s 151AS(1)). Such an order is known as an "exemption order". The Commission must not make an exemption order unless it is satisfied that the conduct will or will likely result in a benefit to the public that outweighs the detriment of any lessening of competition or unless satisfied that the conduct is not anti-competitive (s 151BC(1)). Telstra has not applied for such an order. 22 The Competition Notice was issued under s 151AKA(2) of the Act. That is, it is a notice stating that Telstra has engaged, or is engaging, in at least one instance of anti-competitive conduct of a kind described in the notice. 23 Section 151AKA(9) is equivalent to s 151AKA(10) and provides that the Commission must give written notice prior to the issue of a Part A competition notice under s 151AKA(1) of the Act. 24 The term ' Consultation ' appears as a heading to subss (9) and (10) of s 151AKA of the Act. That heading has no statutory force. It is not part of Pt XIB of the Act ( Acts Interpretation Act 1901 (Cth) s 13(c)). 25 If a notice fails to meet the statutory description in s 151AKA(10) of the Act or is otherwise invalid, then a necessary precondition to the exercise of the power to issue a Part A competition notice pursuant to s 151AKA(2) has not been met and the competition notice is invalid. 26 The Act distinguishes between a "reason to believe" and "reason to suspect" that a carrier has contravened, or is contravening, the competition rule. In the latter circumstance, the Commission must act expeditiously in deciding whether to issue a competition notice (s 151AQ(1) of the Act). It must act expeditiously to determine whether it has a "reason to believe" that the competition rule is being contravened. If so, the Commission may issue a s 151AKA(10) notice as a first step towards issuing a Part A competition notice. 27 In deciding whether to issue a competition notice, by s 151AP, the Commission must have regard to any guidelines in force which it has formulated (s 151AP(1)(a)). Those guidelines must address the appropriateness of issuing a competition notice as opposed to taking other action under the Act (s 151AP(3)). The Commission is also to have regard to such other matters as the Commission considers relevant (s 151AP(1)(b)). 28 The Commission may vary a competition notice, so long as the variation is ' of a minor nature ' (s 151AOA(1)). It must give written notice of any such variation (s 151AOA(3)). 29 The purpose of a Part A competition notice, as submitted by the Commission, is to give the recipient a warning so that it can make an assessment as to whether or not it should continue with the conduct asserted to be anti-competitive. The warning has force by reason of Div 7 of Pt XIB of the Act. Those sums are significant (s 151BX provides for $10 million for each contravention plus $1 million for each day for the first 21 days during which the contravention continues and $3 million for each day thereafter). • The Commission to apply for an order relating to public disclosure or advertisement (s 151CB). • Third parties who have suffered loss or damage by the relevant conduct to bring an action for damages, but only for the period when the relevant Part A competition notice was in force (s 151CC of the Act). • Third parties to seek other compensatory orders for the period during which the Part A competition notice is in force (s 151CE). The Explanatory Memorandum to the Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005 (Cth) recognised that Telstra owns infrastructure which its competitors need to access and interconnect with in order to compete effectively against Telstra. It also referred to the fact that ' Telstra's control of this infrastructure, combined with its market position, creates an incentive and ability for it to favour its own retail business in the provision of access to important services provided over this infrastructure ' (at 2). The increase in penalty was to provide sufficient deterrent to weigh against the benefit of breaching the competition rule. The potential penalties can be said to be serious and substantial. 31 The Court cannot, however, order the recipient of a Part A competition notice to pay a pecuniary penalty or damages under these provisions unless it is first satisfied that the recipient has, in fact and at law, contravened the competition rule. The fact of issue of a Part A competition notice is irrelevant to proof of the matters set out therein. 32 A Part A competition notice comes into force when it is issued unless a later time is specified (s 151AO(1)). The Commission may revoke the notice, at any time, pursuant to s 151AOB of the Act. Unless a Part A competition notice is revoked, it remains in force until the end of the period specified in notice, which may not be longer than 12 months (s 151AO(1)). 33 It is comprehended within the statutory framework that the kind of conduct described in the Part A competition notice need not be identical with that described in the s 151AKA(10) notice. This is evident from the fact that a s 151AKA(10) notice must only describe the kind of anti-competitive conduct in ' summary form ' and that s 151AKA(10)(a)(ii) refers to conduct ' that is proposed ' to be specified in the subsequent Part A competition notice. The Commission may change its views and wish to alter the description or detail of the anti-competitive conduct in the Part A competition notice after receiving submissions from the carrier or carriage service provider pursuant to a s 151AKA(10) notice. The critical issue in this case is the extent to which the notices may differ. The parties disagree as to whether the kind of anti-competitive conduct in the Competition Notice is within the description of the kind of anti-competitive conduct, in summary form, in the Consultation Notice and the extent of information required in that "summary". 34 A s 151AKA(10) notice serves to advise the carrier or carriage service provider that the Commission proposes to issue a Part A competition notice and to give the opportunity to make a submission in relation to that proposal. The Act comprehends that, before a Part A competition notice issues, the recipient must have the opportunity to make submissions to the Commission with respect to the kind of anti-competitive conduct that is proposed to be the subject of that notice. If there is a change in the substance of the anti-competitive conduct, as described in summary form in the s 151AKA(10) notice and as described in the Part A competition notice, so that a different kind of anti-competitive conduct is specified in the latter notice, the statutory scheme has not been complied with. 35 A further question arises whether the Act or the principles of natural justice require that the carrier or carriage service provider first be given the opportunity to address the new conduct. This, in turn, raises the question whether s 151AKA(10) codifies and prescribes the totality of procedural fairness to be accorded to the carrier or carriage service provider prior to the issue of a Part A competition notice. The Commission submits that it does. Telstra submits that it does not. Optus submits that s 151AKA(10) of the Act does not displace the Commission's obligation to accord procedural fairness but that that obligation was complied with. The question is whether what has been done in fact answers the description of what the statute permits to be done in law. A statutory notice such as a s 151AKA(10) notice or a Part A competition notice (together, 'the Statutory Notices') must not be so vaguely expressed that its meaning of application is a matter of real uncertainty. The Statutory Notices must convey, with reasonable and sufficient clarity and certainty, the subject matter with which they deal and enable the recipient to know what is required if their issue is to be a valid exercise of statutory power ( Television Corporation Ltd at 70 per Kitto J; SA Brewing Holdings Ltd v Baxt (1989) 23 FCR 357 at 369 per Fisher and French JJ (with whom Wilcox J agreed); Pyneboard Pty Ltd v Trade Practices Commission (1982) 57 FLR 368 at 373, 374 per the Full Court). Where different kinds of subject matter are dealt with by different statutory provisions, the Statutory Notices should specify or make clear which particular aspects of the statutory regime are referred to and/or relied upon ( Department of Industrial Relations v Forrest (1990) 21 FCR 93 at 118 per Lockhart and Hill JJ). 37 The severity of prospective penalties or consequences of failure to comply with a statutory notice that flow from the subject matter and the impact of the characterisation of the conduct are relevant factors in identifying the requisite degree of certainty (see Pyneboard at 374 , Fieldhouse v Commissioner of Taxation (1989) 25 FCR 187 at 208 per Hill J). Account is to be taken of the statutory context in which the issue of a statutory notice arises and of the relevant interests of third parties. To take an example relevant to a Part A competition notice, a third party may contemplate bringing an action for damages in reliance on that notice and has an interest in knowing with clarity the ambit and scope of the notice. 38 One of the purposes of the Statutory Notices is to enable the recipient to identify its allegedly anti-competitive conduct. The requirement of reasonable clarity is met if, where a statutory notice is to elicit a response, the notice makes it reasonably clear, in the circumstances in which it is given and on a fair reading of its terms, what information is required or sought. 39 The Statutory Notices should be reasonably construed and the requirement for clarity is not to be applied ' in a precious or hypercritical fashion ' ( Pyneboard at 375). Nor should the Statutory Notices themselves be construed as statutory provisions: '[a] rtificial dissection, in the cause of determined obfuscation, can introduce an argumentative element of uncertainty into words which, when read reasonably in context, are adequate to convey a plain and clear meaning ' of what is required ( Pyneboard at 375). The Statutory Notices need not plead all the facts necessary to constitute a contravention or possible contravention of the Act ( SA Brewing at 370 per Fisher and French JJ). 40 The question is whether a reasonable person in the position of the addressee of a statutory notice can fairly comply with its requirements or take advantage of the opportunity offered ( Fieldhouse at 208 per Hill J with whom Burchett J relevantly agreed). The Statutory Notices are concerned with the conduct of carriers or carriage service providers and can only be given to a carrier or a carriage service provider. In this case, the Statutory Notices were given to Telstra, a sophisticated, well-advised company with significant telecommunications experience. The notices followed a course of correspondence between Telstra and the Commission concerning the subject matter of the notices. Context may make something certain that, in the abstract, is uncertain. 41 Telstra relies on observations by Lockhart and Hill JJ in Forrest at 118 to suggest, in effect, that the Consultation Notice must make explicit on its face every nuance or explanation without regard to the fact that Telstra, as the recipient, has knowledge of and understood certain of the terminology and subject matter. Their Honours in Forrest were referring to a different kind of notice: a conclusive certificate under s 34 of the Freedom of Information Act 1982 (Cth) ('the FOI Act'). The Court there was concerned with whether that notice would be uncertain to a review Tribunal charged with the function of determining whether reasonable grounds existed for the documents the subject of the certificate to be exempt from the FOI Act. In the present case, the s 151AKA(10) notice sought information from a recipient in the industry about its own processes. 42 The purpose of a s 151AKA(10) notice is to provide the affected carrier or carriage service provider with an opportunity to make a submission to the Commission on its proposal to issue a Part A competition notice. The Commission is obliged, by the Act, to consider any such submission. To achieve its purpose, a s 151AKA(10) notice must provide sufficient detail to enable a real, practical and reasonably specific response as to whether or not the recipient is engaging in the kind of conduct alleged and whether that conduct is anti-competitive. Further, a s 151AKA(10) notice is not of a mere advisory character. It should provide sufficient information to enable consideration of a possible modification of conduct. 43 As stated in SA Brewing at 375, with respect to notices under s 155 of the Act, the Statutory Notices ' must specify the information sought with sufficient clarity to enable [the] recipient to know what is required '. As with s 155 notices, the Statutory Notices are to be reasonably construed and terms used in them ' will ordinarily take their meaning ' from the commercial circumstances in which the notices are given ( SA Brewing at 369 citing Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 47 FLR 163 at 175---6). (2) Does the Consultation Notice describe, in summary form, the same kind of anti-competitive conduct described in the Competition Notice? (3) If the Consultation Notice does not describe, in summary form, the same kind of anti-competitive conduct described in the Competition Notice, was Telstra denied procedural fairness? The second and third issues are considered after an assessment of the Competition Notice. 46 Telstra contends that the Consultation Notice fails to specify the type or kind of anti-competitive conduct that has been engaged in or is being engaged in by Telstra and that it does not enable Telstra to identify what is to be done to avoid engaging in such conduct. Telstra asserts that the meaning and operation of the Consultation Notice is not reasonably certain; it does not communicate with reasonable clarity what conduct is impugned; and it fails to comply with s 151AKA(10)(a)(ii) of the Act in that it does not describe in appropriate summary form the kind of anti-competitive conduct that is proposed to be specified in a competition notice. 47 The Consultation Notice is Annexure A to these reasons. In order to understand this section of my reasons, it is necessary first to read that notice. (b) It gives inadequate description of the market in which Telstra is said to have a substantial degree of power. There are no particulars of the way in which Telstra is said to have taken advantage of its power in that market. Reviewable decision or conduct? The Commission asserts, however, that its "decision" to issue the Consultation Notice is not so reviewable. 51 Section 5 of the ADJR Act relevantly provides for review in this Court of a ' decision to which [the ADJR Act] applies ' on any one or more of the grounds set out in that section. Review may also be sought in respect of conduct engaged in for ' the purpose of making a decision to which [the ADJR Act] applies ' on the grounds prescribed in s 6. 52 A "decision" to which the ADJR Act applies is, subject to exceptions that are not presently relevant, a decision of an administrative character made, proposed to be made, or required to be made, under an enactment or by a Commonwealth authority or an officer of the Commonwealth under an enactment (s 3(1) of the ADJR Act). A "decision" will generally, but not always, ' entail a decision which is final or operative and determinative, at least in a practical sense, of the issue of fact falling for consideration' ( Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 337 per Mason CJ, with whom Brennan and Deane JJ agreed). It will also involve a substantive determination. ' If "decision" were to embrace procedural determinations, then there would be little scope for review of "conduct" ' as expressly contemplated by s 6 of the ADJR Act ( Bond at 337). 53 The Commission accepts that the "decision" to issue the Consultation Notice is a step taken under the Act. It submits, however, that that step is determinative of nothing ( Neate v Australian Securities Commission (1995) 60 FCR 518 at 520---1); it does not confer, alter or otherwise affect legal rights or obligations, whether arising under the Act or otherwise. At most, the decision is said by the Commission to precede ' an act (the issue of a notice under s 151AKA(10)(a)) which gives rise to a limited procedural right (to have a submission considered) and a concomitant obligation to consider it '. 54 The Commission further submits that, in any event, Telstra did not apply for a review of the alleged "decision" to issue the Consultation Notice within time (s 11(3)(b)(iii) of the ADJR Act). 55 Telstra submits that the decision to issue the Consultation Notice depended upon the exercise of a specific statutory power under s 151AKA(10) of the Act, which decision gave rise to a legal right to put submissions to the Commission and legal obligation on the Commission to consider those submissions. It was a prerequisite to the issue of a Competition Notice and therefore had, according to Telstra, operative effect and impacted directly on Telstra's legal rights and obligations. Further, Telstra submits that an extension of time to review that decision should be granted as the Commission has pointed to no prejudice arising from such an extension being granted. Optus consents to an extension of time being granted. It is the case that s 151AKA(10) of the Act requires a notice under that section to be given prior to the issue of a Part A competition notice pursuant to s 151AKA(2). However, the satisfaction of that statutory prerequisite involves no "decision" of an administrative character. In order to comply with s 151AKA(10) the Commission must, as I have noted, give a notice stating that the Commission proposes to issue a Part A competition notice (s 151AKA(10)(a)(i)), describing in summary form the kind of anti-competitive conduct proposed there to be specified (s 151AKA(10)(a)(ii)) and inviting the carrier to make a submission within the specified time limit (s 151AKA(10)(a)(iii)). The Commission must then consider any submission received within time (s 151AKA(10)(b)). The discharge of those statutory obligations involves no determination of a substantive nature. The issue of a s 151AKA(10) notice is an action taken prior to the ultimate decision to issue a Part A competition notice upon satisfaction of the "reason to believe" threshold. That action is procedural in character and involves no "decision" within the meaning of s 5 of the ADJR Act. 57 It follows that, there being no relevant "decision", it is unnecessary to consider whether an extension of time should be granted under the ADJR Act to review the "decision" to issue the Consultation Notice. 58 That leaves for consideration whether the Commission's conduct in issuing the Consultation Notice is reviewable "conduct" within s 6 of the ADJR Act. No specific time limit applies to the review of conduct. "Conduct" engaged in for the purpose of making a decision includes ' the doing of any act or thing preparatory to the making of the decision ', including the taking of evidence or the holding of an inquiry or investigation (s 3(5) of the ADJR Act). It ' points to action taken, rather than a decision made, for the purpose of making a reviewable decision '. Conduct is ' essentially procedural and not substantive in character ' ( Bond at 341---2). 59 The issue of the Consultation Notice was more than merely a preparatory step in the deliberative or reasoning process of the reviewable decision to issue the Competition Notice ( Bond at 342). The issue of the Consultation Notice was "conduct" of the Commission within the meaning of s 6 of the ADJR Act and therefore reviewable pursuant to s 6 of the ADJR Act. It is also, in my view, amenable to review pursuant to s 39B(1A)(c) of the Judiciary Act . Section 151AQA of the Act contemplates an application to the Court under s 39B(1) in relation to that decision and prevents the Court from staying the process to issue the notice pending the finalisation of the application. 61 The Commission submits that the statutory scheme does not contemplate there being a reviewable decision or conduct in connection with the issue of a s 151AKA(10) notice. It relies on two matters in so doing. First, there is no specific provision for such review. Secondly, a review at that stage of the process would, the Commission submits, be contrary to the requirement for the Commission to proceed expeditiously once it has "reason to suspect" that there has been a contravention of the competition rule. The Commission points out that it would be unable to complete the process of forming a "reason to believe" under s 151AKA(8) if persons were able to invoke s 39B of the Judiciary Act before the Commission had received and considered the written submissions as contemplated by s 151AKA(10). 62 There are a number of reasons why the Commission's submissions should not be accepted. There is no clear language excluding the right to invoke s 39B of the Judiciary Act . Importantly, s 39B(1A)(c) confers jurisdiction on the Court in any matter arising under any laws made by the Parliament other than an exception which does not apply here. The decision to issue the Consultation Notice is a matter arising by reason of Pt XIB of the Act. It is within jurisdiction whether it be considered a "decision" or "conduct" for the purposes of the ADJR Act. Further, in any event, it is accepted that there is jurisdiction under s 39B(1) of the Judiciary Act to review the Competition Notice. As Optus submits and the Commission accepts, a valid s 151AKA(10) notice is a prerequisite to the issue of a valid Part A competition notice. An assessment of whether the Consultation Notice complies with s 151AKA(10) is a necessary incident to the Court's review of the Commission's decision to issue the Competition Notice. 63 The discretionary matters raised by the Commission as to the appropriateness, in certain circumstances, of review of a s 151AKA(10) notice do not go to jurisdiction but to discretion in the granting of relief. If such relief is sought at an early stage, such as prior to the issue of a Part A competition notice and before any final or operative or determinative decision has been made, relief may be denied on substantive or discretionary grounds (Robertson A, "The administrative law jurisdiction of the Federal Court --- Is the AD(JR) Act still important? " (2003) 24 ABR 89 at 94). 64 I will turn to consider what Telstra identifies as the deficiencies in the Consultation Notice. Section 151AJ provides the circumstances in which a carrier or carriage service provider engages in anti-competitive conduct . "Engaging in conduct" encompasses the doing or refusing to do any act (s 4(2)). This leads the Commission to submit that '[t] he addition of the epithet 'anti-competitive' in the provisions of Division 2 of Part XIB appears to be more in the nature of a statutory description than an indication of content '. It follows, the Commission submits, that there is compliance with s 151AKA(10) if the Consultation Notice identifies the conduct as a "kind of anti-competitive conduct" and it is not required to indicate whether the conduct falls within s 151AJ(2) or (3). 66 The Consultation Notice states that the Commission, in deciding to issue the notice, ' has had particular regard to section 151AJ(2) ' of the Act (para 4) and sets out the elements of anti-competitive conduct as defined in that subsection (paras 10 to 14). While that does not preclude regard to s 151AJ(3) of the Act, there is no reference to the purpose of engaging in that kind of conduct and there is an absence of reference to the distinguishing elements of subs (3), such as s 46 of the Act. 67 A reading of the whole of the Consultation Notice and reference to the Act would have established that the anti-competitive conduct to which the Consultation Notice referred was conduct within subs (2) of s 151AJ rather than subs (3). Further, Telstra responded to the Consultation Notice by engaging in a detailed analysis of the elements of contravention under s 151AJ(2) of the Act, which confirms that it understood the kind of conduct there alleged. 68 There was no uncertainty in this regard. Those markets are defined in the notice. It is in that context that an assessment should be made of the clarity of the Consultation Notice. 71 The Commission Guidelines pursuant to s 151AP of the Act were issued in February 2004 (Australian Competition and Consumers Commission, Telecommunications competition notice guidelines (2004) ('the Guidelines')). The Commission submits that Telstra must be taken to have had the contents of the Guidelines in mind and also the capacity to segment the market to consider the effect on the market. In view of the relevance of the Guidelines as set out in s 151AP and their public availability, it is reasonable to assume that, in understanding the Consultation Notice, Telstra was aware of the content of the Guidelines, including the description of the markets. The Guidelines emphasise transparency in the investigative process and the decision to issue a competition notice. They relevantly state that, when deciding whether to issue a Part A competition notice the Commission will consider each of a non-exhaustive list of matters separately. The decision to issue a Part A competition notice depends on an overall balance of the factors listed. The example is given of conduct that occurs at the wholesale level of the market may also affect competition in downstream retail markets (the Guidelines at 17). • Submissions received from the carrier or carriage services provider which the Commission must consider if received within the specified timeframe (the Guidelines at 19). Nor could it reasonably have failed to understand why the Commission would assert that it has a substantial degree of power in that market. Telstra did not require particulars to understand how, by engaging in the Relevant Conduct, the Commission asserted that Telstra had taken advantage of its market power in the Wholesale Local Services Market. The Consultation Notice was served after correspondence between Telstra and the Commission. It is also important to read the Consultation Notice as a whole. That assists in understanding the conduct, the market power and the alleged effect or likely effect on competition. 1) 2003 (Cth) ('the Direction') to keep and retain records and provide reports to the Commission of "imputation". Individual cost and revenue elements by customer group and the retail margin for each "retail service" must also be identified (cl 5(1)(b)) where a "retail service" is line rental, local calls, national long-distance calls, international calls, fixed to mobile calls and certain other services (cl 3 of the Direction). The volume-weighted average of the local carriage service is broken down into a local call component and a line rental component; Telstra is to record the retail costs in respect of each retail service and costs that are incurred in transforming the relevant core (or wholesale) service into the retail service (rules 5 and 8 of the Imputation testing (Initial Reports) Record Keeping and Reporting Rules (2004) ('the Rules') issued by the Commission further to the Direction). 75 By its report on imputation testing relating to the accounting separation of Telstra for the September quarter of 2005, the ninth set of reporting produced in accordance with the Direction, the Commission stated that it regarded imputation testing as designed to reveal whether there is a sufficient margin between Telstra's retail prices and the prices Telstra charges wholesale access seekers to use its network, plus related costs, to enable equally efficient access seekers to compete in retail telecommunications markets (Australian Competition and Consumer Commission, Imputation Testing and Non-Price Terms and Conditions Report Relating to the Accounting Separation of Telstra for the September Quarter 2005 (2005) ('the Imputation Report')). It reported inter alia that, for the September quarter, Telstra passed the imputation tests for domestic and international long-distance calls, fixed-to-mobile calls and the bundle of fixed-line voice telephony services for both residential and business customer groups and for the bundle of certain internet ('ADSL') and fixed-line telephony services for business customers. However, Telstra failed the imputation test for local call services (line rental and local calls combined) for both residential and business customers and for all other (non-bundled) ADSL and fixed-line telephony services for business customers. 76 The Imputation Report stated that the "primary objective" of the Rules 'is to provide an indication of whether Telstra is engaging in ' systemic price squeeze behaviour in relation to core telecommunications services ' (at 7). Telstra could reduce the margin by lowering the retail price for the service and/or raising the wholesale access price for the essential input. It records the "fail" results for the local call and line rental service and concerns about potential price squeeze behaviour by Telstra. It states that the Commission has not previously regarded the fail results for the local call and line rental product as being a "serious concern" and notes that the results do not necessarily provide evidence of a contravention of the Act (at 21). At that meeting, Telstra explained the reason for a proposed increase in the cost for wholesale customers to Home Access. This was to enable Telstra to recover more closely what it said was the efficient cost of restructuring the network. In the proposal Telstra referred to the concurrent HomeLine Part increase and asserted that wholesale customers would retain a margin in which to compete. 79 Telstra had briefed the Commission on its proposed price increases. It asserted, inter alia, that its wholesale customers would still have a "positive margin" after the proposed price increase in Home Access line rental. The Commission responded by letter dated 30 November 2005. That response referred to the HomeLine Part increase and the Home Access increase and noted that there had not been a corresponding price increase to Telstra's "HomeLine Plus" and "HomeLine Complete" line rental rates, each being bundled residential packages. 83 Telstra, through its solicitors, responded the next day, pointing out that the Commission had consented to the HomeLine Part increase and that Telstra had notified the Commission of the proposed Home Access increase. Under the heading ' Line rental price increases will not substantially lessen competition ' the letter stated that Telstra's line rental prices had traditionally been set below cost, subsidised by call charges and that the Commission was aware of this fact and had ' expressed a desire over the years for Telstra to rebalance its access and call charges '. Telstra asserted that the Home Access increase would allow Telstra to recover its costs of providing access and offset losses that Telstra would otherwise suffer due to it being unable to subsidise its access costs with call charges where retail customers do not utilise Telstra for long distance calls. Telstra contended that the HomeLine Part increase was for the same reason and emphasised '[l] ine access is not a service provided in isolation, and the profits obtained from the call services provided over the line must be taken into account '. 84 On the same day, the Commission issued a notice to produce documents under s 155(1)(b) of the Act. The notice set out the matters that the Commission specified constitute or may constitute contraventions of s 46 and/or s 151AK of the Act by reference to the proposed Home Access increase. A wide range of documents were required to be produced that related to that price increase. Those documents were produced. 85 On 22 December 2005, the Commission served the Consultation Notice. This may be less than an exhaustive explanation of the Commission's concerns, provided that the conduct to which the notice is directed is sufficiently identified . Section 151AKA(10) of the Act was introduced by the Telecommunications Competition Act 2002 (Cth) ('the 2002 Amending Act'). As stated in the Explanatory Memorandum to the Telecommunications Competition Bill 2002 (Cth) ('the 2002 Explanatory Memorandum'), '[i] t is not intended that the [s 151AKA(10)] notice will need to contain full particulars of the instance or kind of anti-competitive conduct that is proposed to be specified in the notice, although this may be appropriate in some circumstances '. There is no need to identify a specific instance of the conduct. The requirement that the conduct be described in "summary form" confirms, as set out in the 2002 Explanatory Memorandum, that the "substance" of the anti-competitive conduct must be specified rather than full particulars of the instance or kind of anti-competitive conduct. A notice under this subsection need only specify a kind of conduct and not an instance of conduct or an instance of a kind of conduct. Section 151AKA(2) provides that the Commission may allege in a Part A competition notice that the carrier or carriage service provider has engaged in ' at least one instance of anti-competitive conduct of a kind described in the notice '. This means, Telstra contends, that the Commission is obliged to specify a kind of anti-competitive conduct in the Consultation Notice and then allege, in the Competition Notice, that the carrier or provider has engaged in at least one instance of anti-competitive conduct of that kind. Telstra complains that the Consultation Notice may specify instances but fails to achieve the requirement of stating what the kind of anti-competitive conduct is. 88 In Telstra's submission, the "kind of conduct" must be described in terms sufficient to enable Telstra and third parties to know with reasonable clarity what conduct is being impugned and what it is required to avoid liability for the consequences of that conduct. As elaborated in [42], it must also be sufficient to enable a submission in response. A mere assertion, such as in the Consultation Notice, that conduct is anti-competitive is said not to fulfil this requirement. The substance of the conduct and how it is characterised as anti-competitive must be specified. • The conduct is said to result in the alternatives ' a negative margin, no margin or only a small positive margin ' without particularisation and in circumstances where previously the Commission had asserted ' no margin '. There is no explanation of whether the conduct complained of is supplying in a small positive margin, in a negative margin or at no margin. • There is no explanation why conduct such as supply in a small positive margin could not occur in a competitive market. • The expression in paragraph 5(c) ' at prices set at a level whereby there was and is a negative margin, no margin or only a small positive margin between those prices and Telstra's retail prices for Local Services ' is vague and unclear and gives rise to further permutations. • The likely effect on competition, as described in paragraph 12, is said to be caused by Relevant Conduct taken alone or that conduct ' together with the Other Conduct '. That description is not sufficiently certain. • There are further permutations introduced by the different ways in which such conduct is then said to have the effect or likely effect of substantially lessening competition. • The permutations are emphasised by the reference in paragraph 13 to '[f] urther or alternatively to paragraph 12 ' and the description of the conduct as including ' other conduct of Telstra in the supply of Local Services ', which "other conduct" is not identified. • While Other Conduct was described by reference to the HomeLine Part increase, being ' one of [Telstra's] retail Local Services products ', the Other Conduct is not itself considered as the kind of conduct proposed to be the subject of the Competition Notice. It is only an addendum to the Relevant Conduct. It is not clear whether or how the Other Conduct should be addressed. • The permutations are further emphasised in paragraph 14 which purports to be a summary of the kind of conduct said to be anti-competitive. • The markets in which the conduct occurred and that they are telecommunications markets (the Wholesale Local Services Market and the Retail Fixed Services Market) (paras 8 to 9). • That Telstra has a substantial degree of market power in the Wholesale Local Services Market (para 10). • That Telstra has taken advantage of its market power by engaging in the conduct in the Wholesale Local Services Market (para 11). • That certain of the conduct in which Telstra has engaged has the effect or likely effect of substantially lessening competition in the Retail Fixed Services Market and that that conduct is therefore a kind of anti-competitive conduct (paras 12 to 13). The "instance" or instances of anti-competitive conduct that must be stated in the Competition Notice are an example of such conduct occurring in fact: here the implementation and maintenance of the "price squeeze". As put by Optus '[i] t is no more complicated than that '. The purpose is to put Telstra on notice of the conduct which it proposes to include in a Part A competition notice. 93 The Consultation Notice stated that the Commission proposed to issue a Part A competition notice pursuant to s 151AKA(2) of the Act in relation to Telstra, in accordance with s 151AKA(10)(a)(i). It invited Telstra to make a submission to the Commission on that proposal by a specified time limit, in accordance with s 151AKA(10)(a)(iii). 94 The Consultation Notice described a kind of anti-competitive conduct in summary form (s 151AKA(10)(a)(ii)). It has not been suggested that, at the time of the issue of the Consultation Notice, the Commission did not propose to specify that conduct in a Part A competition notice. The Consultation Notice stated that, by engaging in the Relevant Conduct, Telstra has taken and is taking advantage of its market power in the Wholesale Local Services Market (at para 11). By reference to the effect, or likely effect, of that conduct, taken alone or together with the Other Conduct, being a substantial lessening of competition in the Retail Fixed Services Market for the reasons that were given (para 12), the element of anti-competitive conduct identified by s 151AJ(2)(b) was specified. By identifying the conduct which involved the taking advantage of market power, the market in which that power was taken advantage and its effect or likely effect in a telecommunications market, the kind of anti-competitive conduct was described in summary form. 95 It remains to be determined whether the kind of conduct described in summary form in the Consultation Notice is the same kind of conduct as described in the Competition Notice. 96 Following the issue of the Consultation Notice, by letter dated 6 January 2006 Telstra sought ' clarification of the apparent inconsistencies' between the Imputation Report and the Consultation Notice. I will return to that letter later. Similarly, the ways that [the Commission] considers that the Relevant Conduct may contravene the competition rule is described in [the Consultation Notice]. It is important for Telstra to note that nothing in this letter or any other correspondence should be taken as adding to, altering, or substituting for, anything stated in [the Consultation Notice] ' (my emphasis). I do not accept that materials or understanding extrinsic to the terms of the notice are irrelevant to the assessment of the Consultation Notice. 98 Telstra submits that the Consultation Notice should be assessed on the basis that it should be able to be understood by third parties. Third parties have an interest in understanding the ambit and scope of a Part A competition notice for the purposes of s 151CC of the Act and of a s 151AKA(10) notice for the purposes of themselves making submissions to the Commission. There is no evidence that any third party had difficulties in understanding either of the Statutory Notices. I do not accept that, because a third party may rely on the existence of a Part A competition notice, it is appropriate to ignore the fact that the recipient of a s 151AKA(10) notice is a sophisticated and experienced carrier or carriage service provider. Further, an interested third party is likely to be another carrier or carriage service provider, or otherwise have an understanding of the telecommunications industry. 99 Even in the context of Telstra's submission that the Consultation Notice must be valid on its face and cannot be supplemented by extraneous materials, it cannot be ignored that the recipient is Telstra. In order to assess Telstra's understanding of the Consultation Notice and ability to respond to it, Telstra was in the position as described above --- a reader well versed in the telecommunications industry and its terminology, a "skilled reader". For example, Telstra complains that there is no definition in the Consultation Notice of wholesale and retail markets which, as Optus contends, are definitions known and utilised in the telecommunications industry. Telstra does not dispute that contention but maintains that it is irrelevant, because the notices ' must be clear and certain on their face '. 100 The Consultation Notice must be considered in context. It relates to Telstra's conduct and, insofar as it contains terms of art or references to Telstra's products, unless the contrary is established or raised, the Commission is entitled to assume that Telstra was familiar with the subject matter and terminology. These observations apply equally to the Competition Notice. 101 Neither prior to the issue of the Consultation Notice nor in the notice did the Commission give Telstra the "material and analysis" forming the basis for or relating to the Commission's allegations and statements in the Competition Notice. Telstra submits that it does not know what matters the Commission took into account in forming its views. To the extent that this is said to reflect Telstra's ability to understand the kind of anti-competitive conduct described in the Consultation Notice, I do not accept that such information was necessary to enable understanding. 102 The Consultation Notice did not need to descend into detail of terminology and description in order to be clear. In the context of conduct relating to Telstra's bundles of services, expressions such as "weighted average" and "a negative margin, no margin or only a small positive margin" are not unclear. The context is of a range of retail services, sold as a bundled package, where some are used to subsidise others. If the Consultation Notice was referring to individual services within the bundle, Telstra's criticisms would have more substance. The Commission was not obliged, in the interests of clarity, to explain to Telstra why, where Telstra sells access to the PSTN to other carriers and carriage service providers as wholesalers, it could be thought by the Commission that Telstra had a substantial degree of power in the Wholesale Local Services Market. This is said to be circular. Telstra further submits that, if the Commission cannot itself identify the conduct, it can have no "reason to believe" that Telstra has engaged in anti-competitive conduct and the jurisdictional pre-requisite of s 151AKA(8) of the Act cannot be satisfied. 104 Optus submits that, by reading the Consultation Notice as a whole and noting that paragraph 14 expressly incorporates the effects identified in paragraphs 12 and 13, Telstra's concerns about paragraph 14 and the alleged circularity are made clear. Paragraph 14 is then ' simply the final aspect of description of the kind of anti-competitive conduct ' that is to be specified in the Competition Notice. 105 Telstra also criticises the Competition Notice on this basis. It is convenient to deal with this aspect of the two notices together. 106 I do not accept that the criticism of "circularity" of description of the kind of conduct renders the Consultation Notice or Competition Notice uncertain or invalid. When the notices are read as a whole, in the context of Pt XIB of the Act (in particular s 151AJ(2)(b) and s 4G) the assertions in paragraph 14 of the Consultation Notice and paragraph 13 of the Competition Notice are not unclear. The assertion is that where the conduct described in the Statutory Notices has the effect or likely effect of substantially lessening, preventing or hindering competition in a telecommunications market, it is anti-competitive conduct for the purpose of the notice and the Act. The Commission was not obliged to explain the terminology of the Act. The Consultation Notice describes a kind of anti-competitive conduct, which description is sufficiently clear. If the Commission proposed to issue a Part A competition notice, it had, as a necessity, reason to believe that there was anti-competitive conduct by reason of Telstra's conduct. 109 The Commission contends that the fact that it has "reason to believe" in relation to the conduct described in the Competition Notice is a relatively low threshold. The Commission draws in aid observations directed to the phrase "reason to believe" in cases concerning s 155 of the Act. In that context, the phrase is directed to a belief that a person is capable of furnishing information or producing, for example, documents relating to a matter that constitutes or may constitute a contravention of the Act. Telstra does not accept that this is analogous to the requisite reason to believe that a carrier or carriage service provider has engaged or is engaging in relevant anti-competitive conduct for the purposes of s 151AKA(8). It submits that the requisite state of mind requires the existence of facts which are sufficient to induce that state of mind in a reasonable person ( George v Rockett [1990] HCA 26 ; (1990) 170 CLR 104 at 112). 110 The basis for the belief is set out in the correspondence and in the Consultation Notice. Telstra has not demonstrated that there was an absence of such belief prior to the issue of the Competition Notice. I will turn to consider the terms of the Competition Notice. 111 The Commission accepts that, if the Consultation Notice did not conform to the requirements of the Act such that no notice was given pursuant to s 151AKA(10), it was not in the position to issue a valid Part A competition notice. 112 Pursuant to s 151AKA(2) of the Act, a Part A competition notice must cite at least one instance of anti-competitive conduct of a kind described in the notice. As Telstra concedes, the notice is permitted to be in terms which describe conduct beyond identification of particular instances, so as to capture the conduct at a higher level of generality. However, this does not mean, Telstra contends, that any level of generality or abstraction would be a description which falls within the power granted to issue the notice. 113 The Competition Notice is Annexure C to these reasons. In order to understand this section of my reasons, it is necessary first to read that notice. Where I refer to defined terms in the Competition Notice those terms take their meaning from that notice. (c) Does the Competition Notice describe the same kind of anti-competitive conduct described in summary form in the Consultation Notice? • The Imputation Report recognised that the relevant area of competitioompetition Notice invalid for lack of clarity. There is no evidence that Telstra was unfamiliar with or failed to understand the meaning of or the terminology in the Competition Notice. Many of the expressions used which were the subject of complaint were defined. I will deal later with the consequences of some of those defined terms but they are not unclear within the structure of the Competition Notice itself. 130 A Part A competition notice is a statutory notice intended to be read by an experienced carrier or carriage service provider. Generally, as with an injunction ordering that a person abstain from wrongful acts, a Part A competition notice should make it reasonably clear what are the limits of the class of acts so enjoined. It is not required to be finely detailed and there is no requirement for particulars to be provided. 131 I do not c11948249 The Commission's response was by letter dated 16 January 2006. This may be by creating a margin squeeze across a bundle of services (as suggested by your letter) but that is by no means the only way pricing conduct can generate competition concerns. Competition concerns often arise when pricing conduct creates a margin squeeze in relation to particular services within a bundle, even though there are cross-subsidisation opportunities across a wider bundle. Similarly, competition may be substantially lessened when pricing conduct raises rivals' costs or increases barriers to entry. The specific ways in which the Relevant and Other Conduct create competition concerns are specified in [the Consultation Notice]. Telstra also requested further information which it asserted was necessary to prepare its submission and engage in an ' open and meaningful process of consultation ' with the Commission. The further information requested by Telstra in its letter of 20 January 2006 was not provided by the Commission. 122 Telstra's submission to the Commission in respect of the matters set out in the Consultation Notice was provided ' under protest ' on 27 January 2006. By that submission, Telstra denied that it had taken advantage of market power or substantially lessened competition in the course of executing the Home Access and HomeLine Part increases. I will return to the contents of Telstra's submission later. 123 In the period between 10 January 2006 and 1 May 2006, the Commission sought additional documents and information from Telstra by a second notice issued on or about 10 January 2006 pursuant to s 155(1)(a) and (b) of the Act. Telstra provided some further documents and information in response to the notice. • Issued two s 155 notices which ' unambiguously talked about a price squeeze '. • Issued the Consultation Notice. • Invited Telstra to make a written submission, which had occurred. The Commission submits that it should be inferred that it considered that written submission as well as the other matters to which it was required to have regard under s 151AP and may have regard to under s 151AKA(6). That has not been disputed. 126 As with the Consultation Notice and for the reasons at [65] to [68] above which apply also to the Competition Notice, that submission is rejected. If the reasonable reader wished to clarify which subsection of s 151AJ was applicable, that reader would make reference to that section of the Act. A fair reading of the whole of the Competition Notice would make it clear that the language of paragraphs 12 and 13 of the Competition Notice is consistent with the language of s 151AJ(2). The conduct is described with reference to the elements of subs 151AJ(2) and not the elements of subs 151AJ(3). The focus is on anti-competitive effect rather than purpose. The Consultation Notice made specific reference to s 151AJ(2) and, in the absence of a reference to s 151AJ(3) or the language of s 151AJ(3), it is apparent that the kind of anti-competitive conduct described in the Competition Notice is conduct within subs (2) and not within subs (3). 127 Telstra submits that there are sufficient permutations imported to make the notice unclear and uncertain. • In para 12, the conduct is said to have the effect or likely effect of substantially lessening, preventing or hindering competition in one or more of 7 identified respects. • It is not clear if each of the variations of conduct is said to be impugned. • It is not clear which of Telstra's Rivals are referred to: those whose viability is threatened, those whose viability is not threatened or future rivals. • Two broad types of conduct are impugned. • Both types of conduct depend on the definition of Fixed Voice Services which encompasses "one or more" of four different types of telephony service. • Both types of conduct depend on the definition of Retail Price. There is no indication of components of price or what time frame is concerned. This is important where Telstra asserts that it has been cross-subsidising line rentals through its call costs and has been supplying line rental at both wholesale and retail levels at below true cost price. • Lower Spend Customers are defined in terms of "low-to-mid spending customers" Questions arise as to where "mid" ends, over what period of time the spending applies and how such spending is calculated. • No explanation is given as to how matters such as Total Cost are calculated. • It is unclear in what businesses "economies of scale and scope" are said to apply and what precisely this expression means. • Some of the matters are of no obvious materiality to a hindrance of competition, such as the alleged "threatening the viability" of at least some of Telstra's Rivals. It submits that the Competition Notice falls below the standard of clarity and certainty in such an instrument. It submits that, because of the potential penalties, the fact that the Competition Notice is the "linchpin" for the commencement of proceedings by a third party and because it is intended to make clear what conduct may be changed to avoid those consequences, it should be assessed as would an injunction. I do not accept the breadth of that analogy. 129 Many of the complaints relate to expressions and methods of drafting. I do not accept that, in context, they render the Competition Notice invalid for lack of clarity. There is no evidence that Telstra was unfamiliar with or failed to understand the meaning of or the terminology in the Competition Notice. Many of the expressions used which were the subject of complaint were defined. I will deal later with the consequences of some of those defined terms but they are not unclear within the structure of the Competition Notice itself. 130 A Part A competition notice is a statutory notice intended to be read by an experienced carrier or carriage service provider. Generally, as with an injunction ordering that a person abstain from wrongful acts, a Part A competition notice should make it reasonably clear what are the limits of the class of acts so enjoined. It is not required to be finely detailed and there is no requirement for particulars to be provided. 131 I do not consider that there is lack of clarity with respect to the subject matter sufficient to invalidate the Competition Notice. The obligation is to describe the kind of anti-competitive conduct and to state that the carrier or carriage service provider has engaged, or is engaging, in at least one instance of anti-competitive conduct of that kind. Some of that conduct is described without the degree of precision that may be appropriate in a pleading but that does not render it unclear. The Competition Notice is not a pleading but a written notice of the matters set out in s 151AKA(2) of the Act; it has no evidentiary value. It simply has the effect of "opening the door" for others to test the matters relating to the conduct in other proceedings. It is intended to make the recipient stop and consider whether the Commission's "reason to believe" is justified. (b) Does the Competition Notice comply with s 151AKA(2)? Optus also submits that it is a matter for the Commission to determine how wide or narrow that kind of conduct is. As Optus submits, the Commission may have regard to the likelihood that a carrier can vary its conduct to avoid later proceedings while still engaging in anti-competitive conduct and a wide degree of flexibility is permitted in the description of the kind of conduct to reduce that likelihood. 134 Section 151AKA(5) provides that a Part A competition notice under subs (2) is not required to specify any instance of anti-competitive conduct. However, I do not find it necessary to consider whether or not the Competition Notice was required to contain a description of at least one instance of anti-competitive conduct because it did specify and contain a description of at least one instance of such conduct and a description of a kind of anti-competitive conduct. 135 Telstra contends that the Commission was obliged to say why and in what way each of the forms of conduct in paragraph 13 of the Competition Notice is anti-competitive. In my view, the Competition Notice sufficiently describes the kind of conduct in sufficient detail to enable Telstra to comprehend why the Commission alleges that it is anti-competitive. To the extent that Telstra repeats the submission that it made about circularity in the Consultation Notice, I do not accept the submission for the reasons at [106] above. 136 Telstra submits that there is no proper notification of the conduct said to be anti-competitive other than the recitation of a statutory formula. The Competition Notice describes different kinds of conduct and asserts that the conduct ' had and has the effect or likely effect of substantially lessening, preventing or hindering competition ' in a telecommunications market in the manner described in paragraph 12. Paragraph 13 of the Competition Notice, read in context, describes the kind of anti-competitive conduct in accordance with s 151AJ(2). The fact that the assertion is in terms of the statutory formulation of engagement in anti-competitive conduct in s 151AJ does not affect the fact that the kind of anti-competitive conduct is described and that the Competition Notice described at least one instance of anti-competitive conduct of that kind. 137 The Competition Notice sets out: the Commission's reason to believe; the conduct; the markets in which the conduct occurred; the fact that they are telecommunications markets; that Telstra has a substantial degree of market power in a particular market; that Telstra has taken advantage of its market power by engaging in the conduct in that market; and that certain of the conduct has the effect or likely effect of substantially lessening competition in the relevant market. 138 When the Competition Notice is read as a whole and in the context of s 151AJ(2) and s 151AKA(2), at least one instance of a kind of anti-competitive conduct is described and the kind of anti-competitive conduct is described. The way in which each aspect of the conduct has the effect or likely effect of substantially lessening, preventing or hindering competition in a telecommunications market is described. 139 I accept that the Competition Notice sets out the matters as required by s 151AKA(2) of the Act. Further, the Commission was obliged to consider Telstra's submission in response to the Consultation Notice. 141 As the Commission submits, there is no requirement in the Act that a s 151AKA(10) notice be a draft Part A competition notice. The process envisages and contemplates that there will be differences between the notices. This is necessary for the flexibility and swift regulatory response that are meant to be features of the regime. It is expected that there is a development and evolution of views and detail between the two notices. 142 The issue is the extent and nature of those differences. The Commission accepts that the Competition Notice should be interpreted and then a determination made as to whether the Consultation Notice contains a description in summary form of conduct which, in substance , is specified as the impugned conduct in the Competition Notice. 143 Telstra accepts that there was some "matching" between the subject matter of the Consultation Notice and that of the Competition Notice and that there was, in the Competition Notice, further particularisation of the matters set out in the Consultation Notice. However, it contends that this does not extend to all of the new matters raised. Telstra refers to Mison v Randwick Municipal Council (1991) 23 NSWLR 734 at 737 and submits that, by 'significantly altering ' the content of the Competition Notice from what had been foreshadowed in the Consultation Notice, the Commission changed the nature of the content. 144 Optus accepts that there must be a relevant connection between the notices. It submits that the instance of anti-competitive conduct in the Competition Notice must, ' in broad terms ', be an instance of the same kind as that described in summary form in the Consultation Notice. The Commission cannot ' significantly alter ' the kind of conduct. Whether the relevant connection is maintained requires an evaluative judgment ( Kindimindi Investments Pty Ltd v Lane Cove Council (2006) 143 LGERA 277 at [54]). A narrowing or specification of the kind of conduct with greater precision is permitted but the description must, Optus submits, in substance be of the same kind of conduct. 145 The parties provided detailed schedules of all of the differences between the Consultation Notice and the Competition Notice. The Competition Notice is not meant to mirror the Consultation Notice. It is expected to be responsive to the submissions consequent on the Consultation Notice. To the extent that further definitions are included and further particulars and explanations of terms used in the Consultation Notice are given, the subject matter of the notices cannot be said to be substantively different. • Retail Customers include the whole class of residential end-user customers (para 1(d)). • The Relevant Conduct is described with reference to the Home Access increase in circumstances where there was no commensurate increase in the pricing of the range of Telstra's retail Local Services products when assessed as a weighted average (para 5). • The Other Conduct refers to one of the retail Local Services products, the HomeLine Part. The reference is to the HomeLine Part increase, which was for local call services but not for fixed-to-mobile, long distance and international call services (para 6). • The Retail Fixed Services Market is the market for the supply of fixed services including Local Services products " as well as" fixed-to-mobile, long distance and international call services (para 8(b)) (my emphasis). • The conduct said to have the effect or likely effect on competition is the Relevant Conduct alone or together with the Other Conduct (para 12). • The "price squeeze" that is said to result from the taking advantage of market power in the Wholesale Local Services Market is the effect on "Telstra's rivals" who are Telstra's wholesale customers in the Retail Fixed Services Market and their ability to compete effectively with Telstra in that market (para 12). That is, all four types of telephony service are relevant but not necessarily co-extensively. • Local Services means line rental and local call services supplied for the end-use of Retail Customers (para 1(d)) (my emphasis). • Retail Customers may acquire Local Services only or other Fixed Voice Services as well (para 1(h)). • Lower Spend Customers is a narrower class of customers than Retail Customers both as to class of spending and services purchased. It is defined as ' low-to-mid-spending customers in the Retail FVS Market, including at least those Retail Customers who are in the lowest expenditure quartile in the Retail FVS Market' (para (1)(e)). In particular, as an example, paragraph 5(g) of the Competition Notice imports a reference to Lower Spend Customers as the customer segment in respect of which Telstra's Retail Price is less than the sum of the Wholesale Price, PSTN OTA Charges and Retail Transformation Costs. 149 The market in which Telstra is said to have a substantial degree of market power is the same in the two notices, the Wholesale Local Services Market. 150 The telecommunications market in which the anti-competitive effect is exerted is defined as the Retail Fixed Services Market ('RFS Market') in the Consultation Notice and the Retail FVS Market ('RFVS Market') in the Competition Notice. • RFVS Market : " one or more " of Local Services, fixed-to-mobile call services, national long distance call services and international call services (paras 1(a) and 7(b) of the Competition Notice). • A hindering of competition for the supply of Local Services to Retail Customers, which further limits the ability of Telstra's rivals to generate additional revenue and compete effectively in the RFS Market (para 12(b)). • Prices to Retail Customers for retail Local Services (para 12(c)). • Barriers preventing or hindering suppliers and potential suppliers of Local Services to Retail Customers from entering into or expanding within the RFS Market (para 12(d)). • Competition for Lower Spend Customers with respect to supply of Fixed Voice Services (that is, "one or more" of the enumerated services) (para 12(a)). • The effect on the ability of Telstra's Rivals to supply Fixed Voice Services to Retail Customers at a competitive price by means other than a bundle which includes Local Services. The example is given of preventing or hindering supply, by Telstra's rivals, of Fixed Voice Services on a "pre-selection" basis to Telstra's HomeLine Part customers (para 12(e)). In the Consultation Notice, the conduct referred to a failure to make a commensurate increase in the pricing of Telstra's retail Local Services products when assessed as a weighted average of across the range of retail Local Services products (para 5(b)). 154 The Competition Notice introduces other subject matter and terminology not specifically included in the Consultation Notice. Telstra submits that a number of those are of sufficient substance to change the description of the conduct in the Competition Notice from that described in the Consultation Notice. Telstra points to para 12(e) in particular. It asserts that this clearly introduces new subject matter. As I have noted, this raises the subject matter of preventing or hindering Telstra's Rivals from supplying Fixed Voice Services to Retail Customers at a competitive price by means other than in a bundle which includes Local Services. 155 Telstra's Rivals are defined to include existing and prospective Wholesale Customers who compete or would compete with Telstra in the RFVS (para 1(l)). In the Consultation Notice, Wholesale Customers included only existing purchasers of Local Services from Telstra (para 1(e)). However, the Consultation Notice referred to the effect on suppliers and ' potential suppliers ' of Local Services (para 12(d)). In a similar vein, the addition in the Competition Notice of the effect of threatening the viability of some of Telstra's Rivals (para 12(d)) is not sufficiently dissimilar from the allegation in the Consultation Notice (para 12(b)) of substantially interfering with the ability of Telstra's Wholesale Customers to compete. 156 The Commission emphasises that some of the information about which Telstra complains is a response to matters raised in Telstra's submissions after service of the Consultation Notice. The Commission and Optus contend that each difference represents either further particularisation, a more sophisticated description or a narrowing of the category of conduct or market that was present in the Consultation Notice. Elaboration and particularisation do not of themselves affect the substance or subject matter of the Statutory Notices nor introduce uncertainty into the Competition Notice. 158 I only propose to deal with those differences that I consider substantive or potentially substantive, those differences that could be said to raise subject matter with which Telstra could not reasonably be said to have had the opportunity to comment. The key matters, in my view, are the introduction into the Competition Notice of Lower Spend Customers in paragraphs 5(g) and 12(a) and the inclusion of concerns as to the supply of unbundled Fixed Voice Services in paragraph 12(e). 159 The Commission and Optus submit that the Lower Spend Customers are but a subset or segment of the Retail Customers of the Consultation Notice. As I have noted, the Commission was obliged by the Guidelines to have regard to the effect of the conduct in segments of a market, across the whole market or in a number of markets, in deciding whether to issue a Part A competition notice. Telstra submits that, if it had been aware that the Commission was focussing on Lower Spend Customers, it could have made inquiries and provided further information by way of its submission in response to the Consultation Notice. For example, it could have addressed the relationship between profit or loss made on Lower Spend Customers and cross-subsidisation with other customers. 160 Optus submits that the RFVS Market of the Competition Notice is a "substantially identical market" to the RFS Market of the Consultation Notice. Emphasis is placed on the fact that the notices describe the "same economic concept", a price squeeze between Telstra's wholesale and retail price for access services. 161 Optus concedes, however, that the effect of substantially preventing or hindering Telstra's Rivals from supplying Fixed Voice Services by means other than by a bundle including Local Services is not separately identified in the Consultation Notice. This was reinforced by the changed definition of Fixed Voice Services in terms of "one or more" of the components of the bundle of services. As defined in the Consultation Notice, the definition encompassed all fixed services, including Local Services products as well as fixed-to-mobile, long distance and international call services. Further, the definition in the Consultation Notice was not limited to "voice" services and may have included other services supplied by fixed line such as dial-up or broadband internet access. Telstra's submission in response was directed to bundled services. Telstra was not given notice in the Consultation Notice of the price squeeze being "a kind of anti-competitive conduct" because of its effect on competition for the supply of Fixed Voice Services other than by way of bundles. Indeed, it was by reference to bundled services that the expression "weighted average" of prices of retail services across Telstra's product range and prices set at a level described in composite terms of "negative margin, no margin or only a small positive margin" between wholesale and retail prices would have a clear meaning. Telstra relied, in its submission in response to the Consultation Notice, upon the fact that the profit-making aspects of the bundle subsidise the loss-making aspects of the bundle both before and after the increase in the wholesale price. It clearly directed itself to the market of bundled services. While there was passing reference to individual components, it was in the context of the bundle as a whole and the recovery of costs over the whole of the bundle. 163 Further, the anti-competitive conduct described in summary form in the Consultation Notice did not distinguish between the different retail services that were included within the bundle of services provided by Telstra and the subject of correspondence between Telstra and the Commission. • a "negative margin, no margin or only a small positive margin" between Telstra's wholesale and retail prices for Local Services (para 5(c)(i)). • Local Services were defined in terms of line rental and/or local call services supplied for end-use Retail Customers (para 1(a)). • Retail Customers included all residential end-user customers (para 1(d)). • the fact that a "significant proportion", of Telstra's Retail Customers, unidentified or undifferentiated, acquire undifferentiated retail Local Services at a price lower than the wholesale Home Access price (para 5(d)). • the effect or likely effect on competition is by reference to the undifferentiated RFS Market (paras 8(b) and 12). It was directed to the supply of "one or more" of the components of the bundled services to a specific segment of the retail market. That specific segment may be a segment of the whole of retail end-users but Telstra was not directed to any segment of the retail market in the Consultation Notice. Rather, Telstra was directed to a consideration of the effects on residential retail users as a whole or, to adopt the language of the Consultation Notice in another context, to a "weighted average". Irrespective of what precisely is meant by Lower Spend Customers in terms of amount spent or time over which that amount is spent, Telstra was not warned to consider the effect on such customers, nor given the opportunity to obtain particulars of the definition of them. By adding a reference to the provision of Local Services to Lower Spend Customers, the subject of the complaint has changed and now relates to a previously unidentified class of retail customer. 2. The composition of the market in respect of which the conduct was asserted to have an anti-competitive effect changed. In the Consultation Notice, it was the RFS Market which comprised the bundle of Local Services "as well as" fixed-to-mobile, long distance and international call services. The conduct was asserted to be anti-competitive because of its effect or likely effect on competition in that bundled market. In the Competition Notice, the market was, depending on the context, bundled or unbundled as provided for by the words ' one or more ' in paragraph 1(a). In so doing, the Competition Notice specified, as a kind of anti-competitive conduct, the effect of the price increases on the ability of Telstra's Rivals to supply services ' by means other than a bundle '. The description of a kind of anti-competitive conduct comprising an unbundled market was not earlier raised. Reliance on the expression "in summary form" does not excuse the Commission from its obligation to provide sufficient information to Telstra to enable the statutory consultation process to be meaningful and effective. It submits that if the s 151AKA(10) notice encompasses the matters in the Part A competition notice but that the latter is more specific and better articulated, there is no substantial difference. I accept that submission. where the Relevant Conduct (or the Relevant Conduct combined with the Other Conduct) has the effect of substantially lessening competition in a retail market (the Retail Fixed Services Market). where each of those kinds of Conduct has the effect of substantially lessening competition in a retail market (the Retail FVS Market). The thrust of Optus' argument is that the Consultation Notice need only describe in summary form the kind of conduct. It contends that the kind of conduct described in the Consultation Notice was that, by raising the wholesale price, Telstra put its rivals into a "price squeeze" with respect to its retail products. On this basis, the kind of conduct is the price squeeze and a variation in detail of the object or the market in which the price squeeze was effected is irrelevant. 170 This ignores the statutory context and purpose of the Consultation Notice and the fact that the description of the kind of anti-competitive conduct therein differed in substance. The purpose of the Consultation Notice was to give to Telstra the opportunity to make submissions on the proposed kind of conduct and its alleged anti-competitive consequence. The kind of anti-competitive conduct described in summary form was not simply a "price squeeze" or a "price squeeze" with respect to retail products. 171 The Commission submits that it is not required to provide in the Consultation Notice any additional information about the basis for its proposal to issue a Part A competition notice. The Commission says that the requirement is to describe in summary form the kind of anti-competitive conduct. Accordingly, it did not need to articulate in the Consultation Notice the substance of that conduct or how it comes to be characterised as anti-competitive. The Consultation Notice did descend to an articulation of the effect of the conduct and thereby directed Telstra to a specific kind of anti-competitive conduct. The Consultation Notice issued by the Commission clearly related to the effect on competition of the supply of fixed services to Retail Customers as a bundle, without dissection. 173 In the Competition Notice, the kind of anti-competitive conduct was described with greater particularity: the retail products were one or more of the Fixed Voice Services that made up the bundle and the customer focus was Lower Spend Customers. Those were said by the Commission and Optus to be merely subsets of the bundle of "fixed services" and Retail Customers of the Consultation Notice. This assumes a number of matters. One is that the bundle of "fixed services" and Retail Customers are made up of individual components that do not interact, so that the totality is no more than the sum of the component parts. If that were so, there would be no difference in the kind of anti-competitive conduct described in the notices because the price squeeze would have the same effect on the total product as it would on the individual components. 174 This ignores the concept of the combination representing the product of interaction between the component parts, so that they are different kinds of product. By way of analogy, a watch is a kind of timepiece which functions by the interaction of its components. A spring or a battery may each be components of the watch but they are different products. They could not be said to be sub-sets of a watch or an instance of a watch. External pressure or applied chemicals would act differently on the watch and on the spring or the battery. 175 The relevant fixed services of the Statutory Notices represented different subject matter. The conduct may have referred to Telstra's recent price increases but it was the object of the impact of those price increases that differentiated the anti-competitive conduct described in the two notices. The retail market in which there was alleged an anti-competitive effect was, in one notice, a market for the supply of the bundle of services and, in the other, a market for the supply and acquisition of the components of that bundle. The bundle of services was, in effect, a single retail product made up of a number of components that, as a combination, enabled the product to be profitable although individual components were not. Individual components each represented a different service. 176 The retail market of the Consultation Notice was a single market supplying all residential end-users; in the Competition Notice, a particular focus was a component of that market. While it could more easily be said that the Lower Spend Customers represented part of the retail market in the abstract, the anti-competitive conduct in the Consultation Notice directed attention to the effect on the retail market as a whole, a single entity. That single entity is made up of components which may or may not interact. There was nothing to suggest that the retail market was to be considered in terms of each of the individual component parts or that it was constituted by the sum of those component parts. 178 The Competition Notice did, however, differ in substance from the Consultation Notice in the kind of anti-competitive conduct it described. The Commission and Optus accept that the Consultation Notice must describe, in substance, the same kind of anti-competitive conduct. It follows that Telstra was not provided with a written notice pursuant to s 151AKA(10) of the Act describing, in summary form, the kind of anti-competitive conduct proposed to be specified in the Competition Notice. Accordingly, the Commission was not entitled to issue the Competition Notice (s 151AKA(10)). In those circumstances, the statutory opportunity of ascertaining the relevant issues has been given ( Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591). 180 I have concluded that the Consultation Notice did not comply with s 151AKA(10) of the Act and that the Commission was not entitled to issue the Competition Notice. The Commission was required to and did not describe in summary form in the Consultation Notice or otherwise give to Telstra by way of additional information, the kind of anti-competitive conduct that was specified in the Competition Notice. 181 Telstra was not given a reasonable opportunity to consult, or to comment and make submissions, or to change its conduct to avoid the issue of the Competition Notice. Telstra was denied the opportunity to be heard in respect of the new and different subject matter. The statutory scheme, which included the right to such opportunity in order to afford procedural fairness, was not complied with. It follows that Telstra was denied procedural fairness. 182 The Commission is required to act expeditiously and to consider the public interest. This is said by the Commission to argue against any suggestion that it is required to issue a further s 151AKA(10) notice or otherwise invite further submissions if it issues a Part A competition notice that differs by more than mere "refinement" from the s 151AKA(10) notice. There is, however, no suggestion that the Commission was under any specific pressures of time which might have impacted on its course of conduct. There is no suggestion that the requirement in s 151AQ for the Commission to act expeditiously has impacted in any way on the provision of information to Telstra. A requirement to act expeditiously does not assist the Commission if the Consultation Notice did not comply with s 151AKA(10) and Pt XIB of the Act. 184 As dealt with earlier in these reasons, I am not satisfied that Telstra was prevented from understanding the content of the Consultation Notice because of drafting or mere terminology. However, that does not apply to new and different contentions of substance that were introduced for the first time in the Competition Notice. The letter did refer to a possible margin squeeze and competition concerns, not only across a bundle of services but also ' in relation to particular services within a bundle '. However, the Commission reiterated that the specific ways in which the Relevant and Other Conduct create competition concerns were specified in the Consultation Notice. 186 In the attachment to its letter of 20 January 2006 Telstra referred specifically to the 16 January letter and the reference to particular services within a bundle. Telstra stated that it did not understand the relevance, or the claim that the existence of margins across the relevant product range as a whole was not sufficient to offset the fact that margins on some individual components may be negative. Telstra's questions were directed to an understanding of the 16 January letter in the context of its supply of bundled services and the relevance of particular services within the bundle. 187 The Commission responded to this letter on 25 January 2006 and stated that it disagreed with Telstra's views and objections with respect to the Consultation Notice. The Commission stated that its position was that the Consultation Notice complied with the requirements of s 151AKA(10) of the Act and that Telstra was in a position to make its submission. It noted that Telstra was entitled, in making the submission, to raise any questions and to request further information from the Commission and that the Commission would consider the submission in relation to its proposal to issue a Part A competition notice and the terms of such notice. 188 The Commission did not otherwise respond to Telstra's queries. 189 In its submission pursuant to s 151AKA(10) of 27 January 2006, Telstra repeated the requests of 20 January. There was comparative reference to unbundled services but the submissions on anti-competitive conduct and the effect or likely effect of substantially lessening competition were based on the delivery of bundled retail fixed services. Telstra referred to a negative margin on the Local Service elements of a wider bundle but stated that it failed to understand how that was relevant when there was no negative margin across the product range of the bundle as a whole. 190 There was no further relevant correspondence prior to the issue of the Competition Notice. 191 The Commission draws attention to the course of dealing between itself and Telstra prior to the issue of the Consultation Notice. It points out that it notified Telstra of its concerns about the combined effect of the proposed price increases and the non-increase in Telstra's own retail prices. It also referred to complaints about "a serious retail-wholesale price squeeze" and the effect on the ability to compete with Telstra in respect of residential customers. It relies upon the fact that Telstra did not seek clarification or allege uncertainty after the Consultation Notice was served, despite the serving of the two s 155 notices, until 20 January 2006. 192 That does not detract from the fact that, after the Consultation Notice and after Telstra's submission in response, it was apparent and should have been apparent to the Commission that Telstra was addressing a kind of anti-competitive conduct consistent with that described in the Consultation Notice but not the same in substance as the kind of conduct described in the Competition Notice. 193 The Commission was aware of Telstra's misconception as to the kind of anti-competitive conduct to be described in the Competition Notice prior to its issue. That misconception reasonably resulted from the Consultation Notice and went to a matter of substance. The Commission failed to respond to Telstra's queries to clarify the kind of anti-competitive conduct proposed to be described in the Competition Notice. The Commission was aware that the submission which it was obliged to consider prior to the issue of the Competition Notice did not address the kind of anti-competitive conduct described therein. This effectively prevented the exercise of Telstra's right to address that conduct. In the circumstances, there was a denial of procedural fairness. Telstra submits that the failure on the part of the Commission to provide that information, which was necessarily significant to the decision ( Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 629 per Brennan J), constituted a denial of procedural fairness. 195 Optus accepts that Telstra was entitled to be informed of the nature and subject of the matter under consideration and to be afforded the right to be heard in respect of the issues on which the decision was based. However, it submits that Telstra was not entitled, at the stage of examination and consideration by the Commission, to see any material that was adverse to its interest. 196 Optus relies upon a number of propositions as expounded by Mason P in Minister for Local Government v South Sydney City Council [2002] NSWCA 288 ; (2002) 55 NSWLR 381 at [250] and following. In particular, it adopts what his Honour said at [267] to the effect that, if Telstra were entitled to see adverse submissions of third parties, the whole process would be unworkable ' because it would lead to an infinite regression of counter disputation ' and, at [251] that, while there is no exclusion of an obligation of procedural fairness at the examination and report stage, an obligation to provide any submission supportive of an adverse proposal ' effectively converts the examination and report stage of the process into a full-blown adversarial trial '. One does not approach it thus: the person is entitled to adverse material, this material was relied on in reaching an adverse result, that makes it adverse material, it was not provided in terms, therefore there has been a failure to afford natural justice. As his Honour noted at [259], much depends on the nature of the investigation, the specificity and importance of the "adverse" recommendation, the nature of the interest affected and the likelihood of it being anticipated as a matter to be addressed. His Honour gave as an example of the effect of specific interest and direct impact of adverse material the facts in Muin v Refugee Review Tribunal [2002] HCA 30 ; (2002) 76 ALJR 966. In the present case, the circumstances include the statutory framework of the decisions, the purposes of the notices, the confidentiality of third party submissions and the ability to obtain the information in subsequent legal proceedings. 199 Optus contends that it would only be if the Commission were to base its decision to issue the Competition Notice on some particular issue or material adverse to Telstra that was not apparent from the nature of the decision that procedural fairness would require that some step additional to the issue of the Consultation Notice be taken and says that this was not pleaded. This was sufficiently pleaded. Telstra relies in the statement of claim upon the alleged failure on the part of the Commission to give notice of the material and analysis on which the Commission based its allegations and statements in the Competition Notice as a basis of a failure to accord procedural fairness and natural justice. Telstra does not suggest that it was entitled to material reflecting the Commission's thought processes. Nor was it entitled to the Commission's own evaluation of Telstra's conduct or information supplied by it ( Alphaone at 592). 200 The Guidelines contemplate complainants and other interested parties providing submissions to the Commission. The giving of ' careful consideration ' to those submissions is said to be one means by which the Commission endeavours to achieve its objectives (p 5 of the Guidelines). The Commission did, by media release dated 22 December 2005, invite such submissions. Telstra submits that it should be inferred that those submissions were provided by third parties and were taken into account. It points to the fact that Optus issued its detailed statement of claim against Telstra in the Optus proceeding only 6 days (including the 4 day Easter break) after the Competition Notice issued and that that makes it ' tolerably plain ' that Optus and the Commission have been working closely together. 201 As Gaudron J said in Re Minister for Immigration and Multicultural Affairs; Ex parte Miah [2001] HCA 22 ; (2001) 206 CLR 57 at [99] , the basic principle of procedural fairness is an opportunity to meet the opposing case, although this does not mean that all material which comes before the decision-maker must be disclosed ( Miah at [140] per McHugh J). 202 Where the Consultation Notice was insufficient as described, Telstra was entitled to be given additional information to be able to provide the meaningful submission contemplated by s 151AKA(10). Where the differences between the notices were as described earlier in these reasons, it is reasonable to assume that, acting bona fide in the context of the Consultation Notice, the Commission relied upon additional material and material adverse to Telstra that went to the matters not described in the Consultation Notice. If the Commission based its decision to issue the Competition Notice on some particular issue or material adverse to Telstra that was not apparent from the Consultation Notice, procedural fairness would require that some step additional to the issue of the Consultation Notice be taken ( Alphaone at 591-2). Telstra was entitled to be given notice of that material or the substance of it. The Commission accepts that, if it was obliged to provide that material to Telstra which it denies, Telstra was not accorded procedural fairness ( Telstra Corporation Limited v Australian Competition and Consumer Commission (2006) 68 IPR 571 at [30]). Failure to provide such information was a denial of procedural fairness or natural justice. The third issue gives rise to a discrete point. It is convenient to deal with that issue first. 205 Telstra points to "uncertainties" in the Consultation Notice but recognises that they are inherent because of the description of the anti-competitive conduct in summary form only. Where the Act specifically provides for such a description, there is no denial of procedural fairness, if those uncertainties are peripheral to the substance of the Consultation Notice. 206 As I have noted earlier, where the subject matter of the Competition Notice is conduct, the recipient is entitled to know what is required of it ( Television Corporation at 70 per Kitto J). Absence of information will involve a failure to provide necessary details if, without such information, the notice will not fulfil the purpose for which it is required to be given ( Deputy Commissioner of Taxation v Woodhams [2000] HCA 10 ; (2000) 199 CLR 370 at [33] ). However, a notice analogous to a notice before action is not intended to serve the purpose of a statement of claim if and when action is taken ( Woodhams at [35] and [37]). Despite the complexity and alleged ambiguity of the Statutory Notices on which Telstra relies, in context, the conduct described is sufficiently clear within each notice. 207 Telstra submits that it was denied procedural fairness or natural justice in connection with the issue of the Consultation Notice by reason of the notice being insufficiently certain and failing to describe a kind of anti-competitive conduct. To the extent that Telstra submits that it was unable to respond adequately to the Consultation Notice and thereby denied procedural fairness for reasons of lack of clarity or uncertainty of language and expression used in that notice, for reasons I have given there was no such denial. Similarly, there was no denial of procedural fairness by reason of the alleged uncertainty and lack of clarity in the Competition Notice. 208 The resolution of the first and second issues requires a consideration of the context of the Act and, in particular, the purpose of the amendments to introduce s 151AKA(10). Subsection 151AKA(9) was also then inserted into the Act. 210 The historical context of statutory provisions may be referred to where appropriate to give the statutory words a meaning that will give effect to the purpose of the legislation ( Newcastle City Council v GIO General Limited [1997] HCA 53 ; (1997) 191 CLR 85 at 112 per McHugh J). That may include a relevant report laid before Parliament where that report was part of that background and, for example, is referred to in the explanatory memorandum ( Newcastle City Council at 100). 211 In September 2001, the Productivity Commission issued a report titled "Telecommunications Competition Regulation" (Productivity Commission, Telecommunications Competition Regulation , Report No. 16 (2001) ('the Productivity Report')). The Productivity Report contained an observation that there appeared to be no requirements for the Commission to publish its reasons for a decision to issue or not to issue a Part A competition notice (at 161). 212 The 2002 Amending Act implemented the Government's response to the Productivity Report. In part, the 2002 Amending Act contained measures to enhance accountability and transparency of decision making under Pt XIB of the Act. Those measures required the Commission to publish guidelines on the exercise of its powers (Pt 9 of the 2002 Amending Act; now s 151AP(3) and (4)) and to "consult" prior to the issue of a Part A competition notice (Pt 15 of the 2002 Amending Act; now s 151AKA(9) and (10)). The recommendations of the Productivity Report were not adopted universally by Parliament in the 2002 Amending Act. To the extent that Telstra refers to the Productivity Report, it must be read with this in mind. 213 As stated in the 2002 Explanatory Memorandum, before the insertion of the amendments it was the practice of the Commission to "consult" with a potential recipient of a Part A competition notice prior to its issue; however, there was no statutory requirement to do so (at 22). Although the Commission made it its practice to consult, the 2002 Explanatory Memorandum observed that that practice ' may not provide sufficient certainty for firms '. Earlier, in August 1999, the Commission issued an information paper in relation to the exercise of its powers under Pt XIB of the Act (Australian Competition and Consumer Commission, Anti-competitive conduct in telecommunications markets --- An information paper (1999)). There the Commission acknowledged its obligation to give ' proper, genuine and realistic consideration to the merits of the case ' in deciding whether it has a reason to believe that a carrier or carriage service provider has contravened the competition rule before issuing a competition notice (at 19-20). It acknowledged that '[a] n important requirement of administrative law is that decisions be made in accordance with procedural fairness and provide natural justice to parties whose rights are adversely affected by the decision ' (at 19). 214 The proposed amendments were to make ' explicit ' the obligation of the Commission to ' consult ' with a carrier or carriage service provider before issuing a Part A competition notice (the 2002 Explanatory Memorandum at 95). Their stated object was to ' enhance certainty and procedural fairness in the use of Part XIB without detracting from the effectiveness of the anti-competitive conduct provisions ' (at 22). 215 The 2002 amendments were not intended to increase or decrease the Commission's ' administrative law obligation to accord procedural fairness ' to the recipient of a Part A Competition Notice (the 2002 Explanatory Memorandum at 95---6). They were intended to reflect the obligation to accord procedural fairness. This was to be achieved by a regime whereby the Commission would be obliged to provide the carrier or carriage service provider with ' a written notice that summarises the instance or kind of anti-competitive conduct to be specified in the Part A competition notice ' (at 4) and invite the carrier or carriage service provider to make a submission which the Commission must consider before issuing the Part A competition notice (at 95). 216 Subsections 151AKA(9) and 151AKA(10) of the Act were intended to benefit both the carrier or carriage service provider and the Commission. The consultation envisaged was to ' have the benefit of assisting [the Commission] to better identify instances of anti-competitive conduct and to prevent this conduct at an early stage ' (the 2002 Explanatory Memorandum at 22). This would assist the Commission better to respond, by way of a special regime, to anti-competitive conduct in an industry that is ' an extremely complex, horizontally and vertically-integrated industry ' (at 22) and where there is ' considerable scope for incumbents to engage in anti-competitive conduct because competitors in downstream markets depend on access to networks or facilities controlled by the incumbents ' (Explanatory Memorandum to the Trade Practices Amendment (Telecommunications) Bill 1996 (Cth) at 6). 217 The Commission points out that the telecommunications industry is singled out for special attention by Parliament and is subjected to more specific regulatory and other intervention than any other industry to which the Act applies. The Commission submits, with reference to the Supplementary Explanatory Memorandum to the Telecommunications Legislation Amendment Bill 1998 (Cth) ('the 1998 Supplementary Explanatory Memorandum'), that the purpose of the regime for Part A competition notices was to enable such notices to be issued quickly, to be robust in terms of identifying conduct in contravention of the competition rule and to open the gate to Court action. The Commission also submits that the contemplation in the Act is of a one-time consultation. An iterative process whereby each "significant" refinement in the Commission's concerns needed to be notified afresh would, it is said, be inconsistent with the duty to "act expeditiously" mandated by s 151AQ(1) of the Act. It is worth noting in this regard that the Commission is obliged to give the recipient of a Part A competition notice written notice of a variation, even of a minor nature (s 151AOA(3)). 218 The Telecommunications Legislation Amendment Act 1999 (Cth) was responsible for the insertion of s 151AKA of the Act and, consequently, the introduction of Part A competition notices into the statutory regime. Those amendments were relevantly the subject of consideration in the 1998 Supplementary Explanatory Memorandum, which states that '[i] n practical terms, a competition notice is intended to cause the recipient of the notice to stop the conduct [the Commission] considers is in breach of the competition rule by raising the possibility of court action and substantial penalties ' (at 1). 219 In the pre-existing regime, identified difficulties included the requirement to set out particulars of the contravention and associated delay, the inability to amend a competition notice and the ability of a recipient partially to modify its conduct and thereby escape a notice (the 1998 Supplementary Explanatory Memorandum at 2 and 7). The amendments were proposed to provide for a Part A competition notice that needed only to cite a specified instance or at least one instance of anti-competitive conduct of a kind therein described. This would enable the notice to be of a ' more general nature than current competition notices ' and require a lesser level of detail and thereby reduce delay (at 2). It was intended, however, that a Part A competition notice would describe the kind of anti-competitive conduct in sufficient detail so as to enable it to be identified. The [s 151AKA(10)] notice will be required to contain the substance of the anti-competitive conduct that will be specified in the [part A competition] notice. It contends that, apart from the requirement to describe the matters set out in s 151AKA(10), it was not otherwise required to give Telstra notice of those or any other matters. 222 The Commission accepts for present purposes that, consistent with authority binding on this Court ( Hot Holdings Pty Ltd v Creasy [1995] HCA 60 ; (1996) 185 CLR 149), it was required to afford Telstra procedural fairness in relation to the issue of the Competition Notice at common law. Optus accepts that s 151AKA(10) of the Act does not displace the Commission's obligations of procedural fairness. The Commission wishes to reserve the question whether a common law duty exists should the occasion to contend otherwise arise but submits that, in any event and in the specific statutory context, the scope and content of that obligation have been satisfied. Put another way, the Commission says that the common law duty extends no further than what is required by s 151AKA(10). Optus submits that s 151AKA(10) reflects the procedural fairness required and that that obligation has been complied with. 223 I do not accept the Commission's submission that the requirement to afford procedural fairness takes its content only from s 151AKA(10) of the Act. While the requirements of s 151AKA(10) of the Act clearly inform the obligation to accord procedural fairness at common law they do not displace it. 224 As Weinberg J noted in Gribbles Pathology (Vic) Pty Ltd v Cassidy [2002] FCA 859 ; (2002) 122 FCR 78 at [115] , statutes commonly require the giving of notice or the invitation of submissions before a particular decision is made. The fact that a decision is preliminary (in the sense that it does not in itself affect rights without some further action being taken) does not obviate the duty to observe natural justice. Such decisions often affect ' important interests, including reputation, or legitimate expectations ' (at [115]). It is not necessary that the decision have direct or indirect legal effect ( Ainsworth v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564). The rules of natural justice apply where a statute confers a power to prejudice a person's rights, interests or legitimate expectations unless they are excluded by plain words ( Annetts v McCann [1990] HCA 57 ; (1990) 170 CLR 596 at 598). 225 As pointed out by Aronson M, Dyer B and Groves M, Judicial Review of Administrative Action (3 rd ed, Lawbook Co., 2004) at 438---41, it is common for statutes to impose procedural requirements which might otherwise be imposed by the rules of natural justice without indicating what effect these express requirements are intended to have on the application of ordinary principles of natural justice. The authors conclude that the presence of express procedural requirements will not normally, of itself, exclude or limit the application of natural justice. The common law rules of natural justice are taken to apply to the exercise of public power unless clearly excluded ( Miah at [126] per McHugh J). The content of the duty is determined in the statutory context (at [130]). 226 It is not the case that the Act purports to exclude the rules of natural justice. There is nothing in Pt XIB that amounts to unmistakable and unambiguous language clearly expressing an intention to exclude natural justice in connection with the issue of a Part A competition notice ( Plaintiff S157/2002 v Commonwealth [2003] HCA 2 ; (2003) 211 CLR 476 at [30] per Gleeson CJ; cf Minister for Immigration & Multicultural Affairs v Lat [2006] FCAFC 61 ; (2006) 151 FCR 214 at [65] to [68] in considering s 51A of the Migration Act 1958 (Cth)). The fact that the Act provides for the provision of certain information in a s 151AKA(10) notice does not of itself evince an intention otherwise to exclude procedural fairness ( Miah at [139] per McHugh J) or, indeed, the possibility of the provision of further information or further consultation. The Act mandates the giving of certain information in a s 151AKA(10) notice as a minimum. Such latitude in the information to be provided is encompassed by the requirement to describe in summary form the kind of anti-competitive conduct proposed to be specified in the Part A competition notice. A "summary form" allows for a minimum but not a maximum of information to be provided. There is no inconsistency between the application of subss (9) and (10), which impose a minimum standard and a common law duty of procedural fairness ( Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 225 CLR 88 at [10] ). 227 There is no dispute that a common law duty of procedural fairness must accommodate to the statutory scheme. In those circumstances, the Commission was required to give Telstra the opportunity to ascertain the relevant issues. Where the exercise of the statutory power attracts the requirements of procedural fairness, Telstra was entitled to put information and submissions to the Commission ( Alphaone at 591-2). The Commission was obliged to identify any issue critical to the decision to issue the Competition Notice which was not apparent from the Consultation Notice and any adverse conclusions, but not the reasoning process, which had been arrived at and which would not obviously be open on the material known to Telstra ( Alphaone at 592). 229 The Commission contends that the requirements of procedural fairness for the issue of a Part A competition notice are less onerous than those applicable to a quasi-judicial Tribunal determining, for example, whether a person is entitled to refugee status, as in VEAL . The Commission points to the flexible nature of the duty and the need to adapt to the statutory requirements. For example, a judicial hearing with rights of appeal must precede the pecuniary consequences arising from the issue of a Part A competition notice. The Commission also challenges the impact of the reasoning in VEAL and Kioa . It emphasises the comment by Brennan J in Kioa at 628 that the person whose interests are likely to be affected by the exercise of a statutory power does not have to be given an opportunity to comment on every adverse piece of information, irrespective of its credibility, relevance or significance. As Brennan J recognised in Kioa , '[a] dministrative decision-making is not to be clogged' by unnecessary inquiries. That observation is particularly relevant in a statutory context where the legislature has sought to respond to the fast moving pace of telecommunications markets and, in so doing, placed the Commission under an obligation to act expeditiously. Was the obligation to afford common law procedural fairness complied with? The Commission stated in a letter to Telstra dated 4 May 2006 that it duly considered Telstra's submission. The Commission submits that it was only required to "have regard" to Telstra's written submission in determining whether it had a "reason to believe" that Telstra had engaged in at least one instance of anti-competitive conduct of the kind it had described in the Consultation Notice. It submits that to "have regard to" means ' to consider, think about and decide whether or not to deploy (the particular matter) in the reasoning leading to the decision '. It does not import any further requirement that may arise from the expression "take account of"; it does not require that the response actually be used in the reasoning process. 231 Telstra's pleaded assertion that the Commission could not have had regard to its submission has not been established. Some of the information in the Competition Notice could be said to be referable to Telstra's submission and there is no basis on which to conclude that the Commission did not or could not have had regard to the submission before issuing the Competition Notice. No lack of bona fides on the part of the Commission is alleged, nor is it said by Telstra that the Commission did not have "reason to believe". 232 The Act recognises that a s 151AKA(10) notice will not contain all of the matters subsequently addressed by a Part A competition notice. The Commission is not under a duty to provide a fully particularised pleading in relation to the impugned conduct and a failure to do so does not amount to a denial of procedural fairness. A Part A competition notice does not itself commence proceedings, nor is it evidence in subsequent proceedings of the matters asserted therein. If proceedings commence, the carriage service provider will be provided with a pleaded case to answer with evidence and be entitled, in the ordinary course, to discovery and associated procedures. 233 Part of the procedural fairness provided for by s 151AKA(10) of the Act is "input" by the carrier or carriage service provider into the decision to issue a Part A competition notice. The s 151AKA(10) notice describes the proposed kind of anti-competitive conduct in summary form (s 151AKA(10)(a)(ii)) and the recipient has the opportunity to make submissions which the Commission must consider (s 151AKA(10)(b)). Even if the s 151AKA(10) notice is not properly called a consultation notice, it was so entitled by the Commission. Telstra was, in turn, entitled to believe that it had the opportunity to address the kind of conduct that was proposed to be cited in a Part A competition notice. 234 While the Commission may have regard to other matters that it thinks are relevant (s 151AKA(6)(b)), the Act does not oblige the Commission to include those matters in the s 151AKA(10) notice. The statutory requirement for procedural fairness is fulfilled in the case of a Part A competition notice issued under s 151AKA(2) by adhering to the process of consultation for which s 151AKA(10) provides and where the s 151AKA(10) notice includes the matters provided for in that subsection. This does not include the reasoning processes of the Commission or generalised information that the Commission might propose to take into account at the time of issuing either the s 151AKA(10) notice or the Part A competition notice. There is no basis in the Act itself for an entitlement to the material taken into account by the Commission or the mental processes of the Commission in issuing the Statutory Notices. 235 Accepting that the Act provides for a consultation process, the Commission submits that the one-time consultation process expressly contemplated by the Act was intended not to be transformed into an iterative process whereby each "significant' refinement must be notified. To the extent that the Competition Notice added a "refinement" to a kind of anti-competitive conduct described in the Consultation Notice, I accept that submission. A refinement may occur by a different method of description of the same subject, reordering of information, elaboration and further particularisation. It does not extend to a change in the substance of the kind of anti-competitive conduct. 236 As Finn J observed in Tobacco Institute of Australia v National Health and Medical Research Council (1996) 71 FCR 265 at 274, the courts have indicated in a variety of contexts that '[c] onsultation is no empty term ' nor ' a mere formality '. The Commission has been given extensive powers which have been granted and affirmed in the context of certain conditions. The statutory process of consultation envisaged by s 151AKA(9) and (10) is rendered ineffective if the recipient is not given adequate and appropriate information in order to make an informed response. 237 Telstra was not afforded the opportunity to address issues relevant to the issue of the Competition Notice. Procedural fairness required that Telstra have that opportunity, whether such natural justice was in accordance with the statutory regime or common law principles. However, it does not take account of the whole of the statutory scheme. That includes the requirement for consultation prior to the issue of a Part A competition notice, the necessary content of that notice and the consequences of its issue. 240 The Commission contends that Telstra has not established that any departure from the requirements of procedural fairness was material or significant in reliance on NAIS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 77 ; (2005) 223 ALR 171 at [71] per Kirby J; Re Refugee Review Tribunal; Ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at [87] per McHugh J in dissent but not on this point). Even if there were deficiencies in the Statutory Notices, the Commission submits that the anti-competitive conduct there described may be sufficiently clear that Telstra suffered no prejudice ( Salim v Loh [2005] FCA 372 at [4] , [32]). 241 The seriousness of the consequences of a decision is relevant to the content of the requirement for procedural fairness. The Commission submits that the consequences of the Consultation Notice are relatively immaterial and that the Competition Notice itself has limited import. Telstra relies on the fact that the Part A competition notice predicates the bringing of an action for damages under s 151CC of the Act and that it entails a public statement by the Commission that it has a "reason to believe" that Telstra has engaged or is engaging in anti-competitive conduct. Telstra complains that that statement adversely affects its reputation. 242 The duty to accord procedural fairness regulates the exercise of power where a statute confers power on a public official ' to destroy, defeat or prejudice a person's rights, interests or legitimate expectations ' ( Annetts at 598 per Mason CJ, Deane and McHugh JJ) or damage reputation ( Ainsworth at 577---8). The existence of a Part A competition notice opens the door for a range of proceedings to be issued against Telstra. In so doing, it exposes Telstra to the possibility of substantial penalties which accrue from the date of issue. 243 As Telstra submits, the significance of the "gateway" that a part A competition notice represents ' should not be underestimated ': the Court has extensive powers to make orders in s 151CE in respect of a contravention of the competition rule where the conduct is of a kind dealt with in a Part A competition notice in force at the time the alleged conduct occurred. 244 The Competition Notice is a pre-condition to the Commission's powers under s 151BY of the Act to commence proceedings to recover a potentially substantial pecuniary penalty for a contravention of the competition rule (s 151BY(3), (s 151BX(3)(a)). It is also a pre-condition for a third party to commence proceedings for damages suffered by conduct done in contravention of the competition rule (s 151CC(3)). 245 Telstra emphasises the consequences to it in terms of potential civil liability and damage to reputation. The Commission responds that no pecuniary penalty can be imposed unless the Court is satisfied that Telstra has, in fact and at law, contravened the competition rule. The Part A competition notice is irrelevant to the proof of such a case and not necessary for the Commission or a third party to commence proceedings seeking an injunction under s 151CA(1) of the Act. It also observes that, even if the Competition Notice is set aside, Telstra may be exposed to pecuniary penalties of $10 million for contravening s 46 of the Act (s 76(1A)(b) of the Act). 246 The Commission does not accept Telstra's characterisation of the consequences of a Part A competition notice as "extraordinary" and "punitive". It points out that such a notice is an exercise of executive rather than judicial power and cannot be "breached". It contends that the Competition Notice ' simply indicates that [the Commission] has reached the "relatively low threshold of 'reason to believe'" in relation to the conduct described in the notice '. That imports a requirement to come to the view in good faith and on reasonable grounds that Telstra is breaching or has breached the competition rule. There is no "finding" that Telstra has engaged or is proposing to engage in anti-competitive conduct, just a public announcement that the Commission has "reason to believe" that Telstra has engaged in at least one instance of anti-competitive conduct of a kind described in the Competition Notice. This is described as a ' relatively low threshold ' ( The Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49 ; (2002) 213 CLR 543 at [130] per Callinan J). The Commission does not accept that this involves damage to Telstra's reputation. 247 No penalties or orders flow directly from the Competition Notice; it allows proceedings to be commenced. The Commission points out that the consequences of the Competition Notice could have been avoided by Telstra if Telstra had accepted the Commission's invitation to give undertakings not to engage in the impugned conduct or successfully sought an exemption order pursuant to s 151AS of the Act. If Telstra were able to satisfy the Commission that the conduct was not anti-competitive or that the benefit to the public outweighs the detriment constituted by any lessening of competition, the Commission could make an exemption order (s 151BC(1) of the Act). 248 However, such an undertaking or the seeking of an exemption order would involve an acknowledgement by Telstra that its conduct or proposed conduct was anti-competitive, a proposition that it does not accept. The issue of a Part A competition notice should not force a recipient to accept the veracity of the allegations made which it disputes. 249 However they are characterised, the consequences that follow from the issue of a Part A competition notice are ' intended to cause the recipient of the notice to stop the conduct [that the Commission] considers is in breach of the competition rule ' (the 1998 Supplementary Explanatory Memorandum at 1). From the Commission's submissions, Telstra should have stopped its conduct by changing its pricing policy in order to avoid the potential consequences of the Competition Notice. That itself is a serious consequence. 250 I do not accept that Telstra should have been obliged effectively to admit to conduct it denied by giving the undertakings sought or hope for the best in obtaining an exemption order under s 151AS of the Act. While the intention of the Act may be to "coerce" a carrier into ceasing its anti-competitive conduct, that kind of coercion is not what is envisaged by the provisions of the Act. Telstra should not be coerced into ceasing to engage in what it views as legitimate activity or seeking to avail itself of exemption orders in respect of such activity. I do not accept that the availability of those avenues means that the Commission was not obliged to accord Telstra procedural fairness in connection with the issue of the Competition Notice. 251 I also do not accept the suggestion by the Commission that, if Telstra were in any doubt about the identification of the conduct to be addressed in the Competition Notice, the onus was on Telstra to overcome that doubt by describing its conduct in an application for an exemption order. That request was made pursuant to s 13(1) of the ADJR Act and refused by the Commission on 17 February 2006. A further request for a statement of findings and reasons in respect of the decision to issue the Competition Notice was requested by Telstra on 24 April 2006 and refused by the Commission on 28 April 2006. 253 Telstra seeks a declaration that it was entitled to make those requests and that the Commission was obliged by s 13 of the ADJR Act to provide the statements sought. The Commission, in response, submits that it was under no such obligation. 254 Where a decision is made to which s 13 of the ADJR Act applies, a person ' entitled to make an application to [the Court]... under section 5 in relation to the decision ' may, by notice in writing, request the decision-maker furnish a statement in writing setting out the findings on material questions of fact, referring to the evidence or other material on which those findings were based and giving reasons for the decision (s 13(1)). The decision-maker, upon receiving such a request, is obliged by s 13(2) of the ADJR Act to prepare the statement sought and furnish it to the person who made the request within 28 days. 255 Schedule 2 to the ADJR Act sets out classes of decisions that are not decisions to which the obligation to provide reasons pursuant to s 13 applies (s 13(11)(c)). The Commission submits, however, that that decision is a decision in connection with the institution or conduct of proceedings in a civil court and, by the application of para (f) of Sch 2 to the ADJR Act, not a decision to which s 13 of the ADJR Act applies. In its submission, the purpose of the exclusion in para (f) is to avoid the disruption of investigative procedures or court process with the requirement to furnish reasons. Conversely, civil procedure is not to be complicated by the s 13 procedure' . 259 There may be no correlative decision by the Commission to institute pecuniary penalty proceedings pursuant to ss 151BX and 151BY of the Act following the issue of a Part A competition notice. Further, third parties will not necessarily issue proceedings to recover damages pursuant to s 151CC of the Act. Certainty of legal proceedings, however, is not necessary for a decision to fall within the broad terms of para (f) of Sch 2. Decisions which "relate to, or may result" in the bringing of proceedings in a civil court for the recovery of pecuniary penalties expressly are included in para (f) of Sch 2 to the ADJR Act. The issue of a Part A competition notice is a prerequisite to the bringing of proceedings in this Court for the recovery of pecuniary penalties for a contravention of the competition rule (s 151BY(3)(g) of the Act). The scheme of the Act expressly contemplates that such proceedings may result from a decision by the Commission to issue a Part A competition notice. Were it not for the fact that such proceedings may result, the desired incentive for the carrier to cease the allegedly anti-competitive conduct would diminish significantly. Indeed, Telstra relies upon that very consequence of the decision in its submissions as to the requirements of common law procedural fairness. 260 The Commission's decision to issue the Competition Notice was a decision within the terms of para (f) of Sch 2 to the ADJR Act. It follows that the Commission was not obliged by s 13(1) of the ADJR Act to furnish Telstra with a statement of reasons for its decision to issue that notice. The obligation to provide reasons pursuant to s 13 of the ADJR Act does not apply to reviewable conduct. It follows that the Commission was not obliged by s 13(1) of the ADJR Act to furnish Telstra with a statement of reasons for its "decision" to issue the Consultation Notice. It is not disputed that that kind of conduct has to be the same, in substance, as the kind of anti-competitive conduct described in summary form in the Consultation Notice. Otherwise, the Commission was not entitled to issue the Competition Notice. 263 Each of the Consultation Notice and Competition Notice were clear in their terms to the extent necessary for Telstra, an experienced and sophisticated participant in the telecommunications industry, to understand. However, the notices differed in the kind of anti-competitive conduct described. Those differences are differences of substance. They relate to the retail market in which the Commission alleged that the conduct would have the effect or likely effect of substantially lessening, preventing or hindering competition. 264 The first difference was in respect of the provision of services in the retail fixed services market. The Consultation Notice addressed the provision of services by Telstra and its competitors by way of a bundle; the Competition Notice included the provision of unbundled services. 265 The second difference was in respect of the residential retail customers supplied. The Consultation Notice did not differentiate among those retail customers. The Competition Notice referred to the effect of conduct in competition for Lower Spend Customers, low-to-mid spending customers who constitute a segment of retail customers. 266 Accordingly, the Consultation Notice did not comply with s 151AKA(10) of the Act and the Commission was not entitled to issue the Competition Notice. 267 Telstra did not have the opportunity to respond to the invitation to make a submission to the Commission on the proposed conduct. Telstra was denied procedural fairness and natural justice, both under the statutory regime and at common law. 268 The Commission's decision to issue the Consultation Notice is not reviewable under s 5 of the ADJR Act but its conduct in issuing that notice is reviewable under s 6 of the ADJR Act. The Commission's decision to issue the Competition Notice is reviewable under s 5 of the ADJR Act. These are also matters that are within jurisdiction by reason of s 39B(1A)(c) of the Judiciary Act . Telstra is not entitled under s 13 of the ADJR Act to reasons for the Commission's decisions. 269 The parties should confer and forward draft consent orders to give effect to these reasons to my associate within 14 days. If there is no consent, each party should forward draft proposed orders within that time. I certify that the preceding two hundred and sixty-nine (269) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | exercise of the commission's power to issue a part a competition notice pursuant to s 151aka(2) of the trade practices act 1974 (cth) and written notice pursuant to s 151aka(10) of the act whether competition notice circular, uncertain and fails to specify matters required by s 151aka(2) sophisticated carrier would understand terminology used in notices competition notice states with sufficient clarity that carrier has engaged in at least one instance of anti-competitive conduct of a kind described in the notice s 151aka(2) complied with allegation that s 151aka(10) notice uncertain, circular and does not describe a kind of anti-competitive conduct s 151aka(10) notice describes with sufficient clarity a kind of anti-competitive conduct whether kind of anti-competitive conduct specified in s 151aka(10) notice differs in substance from kind of anti-competitive conduct described in competition notice s 151aka(10) notice describes the kind of anti-competitive conduct by reference to retail customers, a "weighted average" and the bundled retail fixed services market competition notice describes the kind of anti-competitive conduct by reference to lower spend customers and supply of services by means other than a bundle difference of substance in kind of anti-competitive conduct described failure by the commission to comply with s 151aka(10) commission not entitled to issue part a competition notice jurisdiction whether "decision" to issue a s 151aka(10) notice is reviewable pursuant to the administrative decisions (judicial review) act 1977 (cth) and s 39b of the judiciary act 1903 (cth) satisfaction of s 151aka(10) by the commission involves no reviewable "decision" under s 5 but is reviewable "conduct" under s 6 of the adjr act also reviewable pursuant to s 39b(1a)(c) of the judiciary act whether commission obliged to provide telstra with statement of reasons pursuant to s 13 of the adjr act decision to issue competition notice may result in the bringing of proceedings for the recovery of pecuniary penalties (para (f) of sch 2 to the adjr act) no obligation to provide reasons for either decision whether s 151aka(10) of the act exhaustively defines the requirement of procedural fairness obligation to accord procedural fairness at common law not displaced by s 151aka(10) telstra was not given an opportunity to be heard in respect of differences of substance between the s 151aka(10) notice and part a competition notice telstra was not given an opportunity to be heard in respect of issues or material adverse to telstra and not apparent from the consultation notice seriousness of the consequences of a part a competition notice denial of procedural fairness competition law administrative law procedural fairness |
Each share represented two per cent of the issued capital of the company. The consideration was $2 for each share, a total of $6. Mrs Weeden already held the remaining 98 per cent. 2 On the following day, 6 February, Mr Weeden became a bankrupt upon the acceptance by the Official Receiver of a debtor's petition presented by him. The applicants are the trustees of Mr Weeden's bankrupt estate. They seek an order under s 120 of the Bankruptcy Act 1966 (Cth), or alternatively under s 121 , setting aside the transfers. 4 While a determination of actual market value will no doubt be of assistance to the parties, and the hearing has been conducted on that basis, for the purposes of s 120(1)(b) the applicants need only show that the consideration given was less than the market value, whatever that might be. 5 The bankruptcy of Mr Weeden came about as a result of the failure of the company MSD Sports Pty Ltd which operated a retail chain of sporting apparel and equipment stores under the name Melbourne Sports Depot. Mr Weeden was the sole director, secretary and shareholder of MSD. It went into voluntary administration in July 2006 with total liabilities of some $2.4 million and unsecured creditors of almost $2 million. 6 On 6 December 2006 judgment was entered by consent in the County Court against Mr Weeden in two actions for amounts totalling approximately $500,000 plus interest and costs. 7 On 11 January 2007 Mr Weeden resigned as a director of each of the Weeden Companies. The remaining directors are Mrs Weeden and Mrs Pamela Goldstone, Mr Weeden's sister. Mrs Goldstone holds an Enduring Power of Attorney from Mrs Weeden. 8 On 16 January 2007 Mr Weeden was served with a bankruptcy notice in respect of one of the County Court judgments. The last date for compliance was 6 February 2007. 9 In his statement of affairs Mr Weeden disclosed unsecured creditors totalling $596,010.91 and no divisible assets. In addition her physical health was poor. 11 Prior to the transfers Mr Weeden's solicitors obtained a valuation of his shares in the Weeden Companies from Mr Mark Lipson, a director in the firm Sothertons, Chartered Accountants. In a report dated 5 February 2007 Mr Lipson concluded that the shares had no market value and that it was "reasonable therefore to transfer these shares to the existing shareholder [ie Mrs Weeden] at $2 per share". I shall return later to details of Mr Lipson's valuation and evidence he gave at the hearing. 12 At a subsequent meeting of his creditors Mr Weeden said that he transferred the shares in the Weeden Companies in order to "streamline his affairs" as "he considered it appropriate to transfer the shares at market value". [This was done] in order to avoid the complexities that would have been incurred with the family companies, the advice given to him was to have the affairs simplified by transferring the shares. He said that he arrived at the market value after consulting Mr Lipson. 13 Mr Weeden did not give evidence. Thus there is no explanation as to why, with bankruptcy imminent, he did not wait to ask the trustee in bankruptcy whether such "streamlining" was necessary or desirable. There are other Associated Entities (the Associated Entities). The accounts of the Weeden Companies for the year ended 30 June 2006 were in evidence. 16 The Weeden Companies do not carry on any active business. They are beneficiaries of trusts of which Related Entities are trustees. Some of the amounts payable to the Weeden Companies are subject to formal agreements prepared in accordance with Div 7A of the Income Tax Assessment Act 1936 (Cth). Interest has been charged on these loans and the entities are repaying them in accordance with the terms of these agreements. The interest rate charged on these loans is the rate set by the statutory authorities. According to the opinion of the applicants' expert accounting witness, Mr David Ferrier, which was not disputed, this rate is a commercial rate. 17 According to instructions given to Mr Lipson at the time of his February 2007 valuation, the Weeden Companies have not declared dividends since 1988 and the directors have "expressed an intention of not declaring dividends in the foreseeable future". The Companies "will no longer receive any further distributions from any trust associated with Betty Weeden or the Weeden Family". These assertions were not the subject of evidence before me, although they are receivable as admissions against interest. His valuation is based on the estimation of the net proceeds from an orderly realisation of assets on liquidation. There was no prospective commercial investor who would buy the shares. There was simply no market and consequently no market value. 20 Alternatively, they say that Mr Ferrier's valuation is flawed. On Mr Lipson's valuation on a liquidation basis, assessing the risk of success in an oppression claim and accounting for the time value of money, each share has a market value of $2,698.33. However, as already noted, if this is the market value it is still significantly more than the consideration received and thus would be enough for the applicants' purpose. The provision considered in that case had used the expression "valuable consideration". The High Court held that it was sufficient that the consideration given for the purchase had a "real and substantial value" and not one which was "merely nominal or trivial or colourable". The expression is not intended to include a situation where the property was being disposed of at a 'fire sale', at discounted prices because of some immediate need on the part of the owner to liquidate his or her assets. Of course, there may be differing opinions as to the precise market value of some property, for example house properties, where valuers or real estate agents may give kerbside valuations which spread over a range of monetary values. However, if the property was transferred for an amount less than the lowest amount in the range, the transfer would be a transfer at undervalue, for the purposes of this section. 22 It was common ground that the term "market value" as it appears in s 120(1)(b) is to be construed consistently with the valuation principles stated in Spencer v The Commonwealth [1907] HCA 82 ; (1907) 5 CLR 418 at 432, 436-437, 440 et seq. 23 It is central to the respondents' case that there was in fact no prospective purchaser for Mr Weeden's shares (apart from Mrs Weeden, a circumstance to which I shall return). The relevance of that fact, if it be a fact, needs to be considered in the light of a passage from the judgment of Griffith CJ in Spencer , a case which concerned compensation for the compulsory acquisition of land. 24 Griffith CJ dealt with the very situation where actual buyers of the property in question are likely to be hard, or impossible, to find. His Honour at 5 CLR 431 noted that, in the case of chattels which are the subject of frequent sale or purchase, the value of the articles is taken to be the current price. Someone wishing to sell such articles can readily find a purchaser at a price which is fairly certain and, conversely, a would-be buyer can find a seller at about the same price. In many cases the same considerations apply to land, where the price per acre is "as definitely fixed as the price of wheat or sugar". Bearing in mind that value implies the existence of a willing buyer as well as of a willing seller, some modification of the rule must be made in order to make it applicable to the case of a piece of land which has any unique value. It may be that the land is fit for many purposes, and will in all probability be soon required for some of them, but there may be no one actually willing at the moment to buy it at any price. Still it does not follow that the land has no value. In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, ie, whether there was in fact on that day a willing buyer, but by inquiring "What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell? " It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together. 25 Mr Lipson pointed out some unattractive features (for a purchaser) of the shares in question: they were a small minority, they were subject to pre-emptive rights in the Articles of Association and a directors' discretion to refuse registration, there was a long-subsisting policy of not declaring dividends, etc. However, these are matters going to the quantum of market value. They do not deny the existence of market value. Indeed, Mr Lipson implicitly recognised this. In his report of 24 September 2008 he said that he did not believe there was a "deep and identifiable market" for the shares in the Weeden Companies. It follows that, in his opinion, there was a market, albeit one which did not have the desirable attributes mentioned. And (senior counsel for the applicants) suggested that this often happens; that a minority shareholder in a closely held family company often seeks to sell the shares to outsiders on the --- would you say that happens --- that does happen often? A. It rarely happens in private companies within family groups. It rarely, rarely happens. I can --- it is not something that would be in the normal --- in the normal course of events. ... It is very rare that in a closely held family context that a minority shareholder will seek to dispose of their interest to an outsider or stranger. 26 In this context, at least in the circumstances of the present case, we are not concerned with the definition of a market in the competition law sense. It is rather a question whether the transfer impugned under s 120 was a transfer of property which has value because it can be bought and sold. Minority shares in proprietary companies in Australia by their nature can be, and are in fact, bought and sold. 27 Ms Rome-Sievers for the respondents referred to observations by Beaumont and Hill JJ, with whom Lehane J agreed, in Cannane v Official Trustee (1996) 65 FCR 453 at 471 et seq. Those observations deal with a quite different setting, a company which had a deficiency of assets. Its controller, Mr Cannane, contemplated using it as a vehicle for a backdoor listing on the stock exchange. The only value from the point of view of a prospective purchaser was "something extraneous to the shares, namely the assurance by Mr Cannane that the benefit of the advantageous back door listing would inure to (the company)" (at 472). 28 I now turn to the issues in dispute between Mr Lipson and Mr Ferrier which go to the quantum of market value. Is a valuation on a liquidation basis appropriate? That case concerned liability for Commonwealth gift duty. Section 18(2)(c) of the Gift Duty Assessment Act 1942 (Cth) provided in effect that where a gift included shares in an unlisted company, the Commissioner might, in his discretion, adopt as the value of those shares the sum the holder would receive in the event of the company being voluntarily wound up on the date when the gift was made. On the facts of that case (see the passage from the judgment of the trial judge, Sheppard J, cited at 146 CLR 395) all the members of the Court, except Murphy J, held that it was unnecessary to adopt a winding up basis because the shares were properly valued on an earnings basis. 31 In the present case, as already noted, neither valuer suggested an earnings basis would be appropriate. In any event, the notional winding up in the present case assumes an order made on an oppression petition: Corporations Act 2001 (Cth) s 232 , or on the just and equitable and related grounds: s 461(e) , (f), (g) and (k), not the voluntary winding up predicated by s 18(2)(c) of the Gift Duty Act as relevant in St Helens Farm . 32 If, as both valuers agree, a liquidation basis is appropriate, how would the notional purchaser, properly advised, assess the prospects of obtaining a winding up order? Would a winding up order be made? They are closely held family companies. They do not carry on any business, their sole economic worth being the potential receipt of trust distributions as beneficiaries of trusts within the wider Weeden Group. However, the directors of trustees of the relevant trusts have stated that they do not intend to make any distributions in the foreseeable future, and have not done so for some time. No dividends have been declared by the Weeden Companies since 1988 and are not likely to be declared in the future. 34 The respondents' case is that no court would make a winding up order in favour of a two per cent shareholder who acquired shares with notice of the past history of the companies and the declared intentions of its directors and other controllers of the Weeden Group. It is as though, to adopt an aphorism of tort law, such a shareholder "came to the nuisance". 35 The concept of oppression and the relevant authorities are discussed extensively by the Full Court of the Supreme Court of Western Australia in Jenkins v Enterprise Gold Mines NL (1992) 10 ACLC 136 at 143-147 in a passage too lengthy to set out, but which I respectfully adopt and incorporate in these reasons. It is for the court to decide whether in balancing the interests of the company as a whole against minority interests the directors have acted so as to unfairly prejudice the interests of the minority. The court decides this "according to ordinary standards of reasonableness and fair dealing". Whether the conduct is unfairly discriminatory will be judged on standards which reasonable directors with such skills as directors should have, acting bona fide, would think to be fair. 36 The respondents' defence in a hypothetical oppression and winding up application would necessarily be that the assets of the Weeden Companies can be used for the exclusive benefit of the controllers, through the medium of the Related and Associated Entities. The minority shareholder in the Weeden Companies can expect nothing by way of income and nothing by way of capital for the indefinite future. If the net assets of the Weeden Companies were $100 million and the minority interest were 20 per cent, the unfairness of such conduct would be unarguable. It does not become any less unfair when the minority is smaller. 37 A controlling majority which diverts assets and opportunities of the company to other entities under its control, and from which it will benefit, will be acting oppressively. This is essentially the kind of conduct held to be oppressive in Scottish Cooperative Wholesale Society Ltd v Meyer [1959] AC 324 and a breach of fiduciary duty in Mordecai v Mordecai (1988) 12 NSWLR 58. Similarly, an inflexible policy of not declaring dividends can constitute oppression: Shamsallah Holdings Pty Ltd v CBD Refrigeration and Airconditioning Services Pty Ltd (2001) 19 ACLC 517 at [51]-[56]. It would be no answer to say that such conduct happened to suit the interests of the Weeden family. In Gambotto v WCP Limited [1995] HCA 12 ; (1995) 182 CLR 432 the High Court has reaffirmed the willingness of the courts to protect minority shareholders --- albeit in the context of a majority seeking to amend Articles of Association. 38 A hypothetical purchaser, properly advised, is to be credited with an awareness of the foregoing matters. The price a willing buyer would pay for the shares would reflect the availability of remedies for oppression and entitlement to a winding up order. Such a purchaser is not to be fixed with previous acquiescence in the policies of the controllers of the Weeden Companies. Rather the reasonable assumption is that the purchaser would be entitled to the rights conferred at law by the holding of the shares acquired. Cases such as Re Lowes Park Pty Ltd; Headlam v Lowes Park Pty Ltd (1994) 62 FCR 535 where the minority shareholder had accepted the conduct complained of for many years (see 62 FCR at 548, 550, 553) are distinguishable. 40 Mr Peters SC for the applicants pointed out that s 1072C of the Corporations Act confers rights on the trustee in bankruptcy of a shareholder who becomes bankrupt. Pre-emptive rights are effectively removed (sub-s (6)) and consent to a transfer of the bankrupt's shares must not be unreasonably withheld (sub-s (5)). It was put that the surrounding circumstances in the present case include the imminent bankruptcy of Mr Weeden. A willing seller in the position of Mr Weeden, in answer to a buyer's argument that the restrictions in the Articles warranted a lower price, would point out that the next day a trustee in bankruptcy could sell them without any such restrictions. 41 I doubt whether the circumstance of Mr Weeden's dire personal financial situation is a factor which legitimately can affect the assessment of market value of the shares. 42 However, the existence of restrictive provisions in a company's Articles of Association does not indicate that a minority holding has no market value; rather it is a factor which may call for an appropriate discount. 43 In Abrahams v Federal Commissioner of Taxation [1944] HCA 32 ; (1944) 70 CLR 23 at 44 Williams J, sitting as a single Justice of the High Court, considered that the presence of restrictive Articles was not a factor that should depreciate value because directors were obliged to exercise fiduciary duties conferred by the Article in a proper manner, bona fide and for the benefit of the company. Such obligations are enforceable in the courts. To a prudent purchaser willing to give full value for the shares sooner than fail to obtain them, this restriction should not, to my mind, have many terrors. 44 Subsequently Gibbs J in Gregory v Federal Commissioner of Taxation [1971] HCA 2 ; (1971) 123 CLR 547 at 569, another single Justice case, rather departed from the approach of Williams J in Abrahams . From a practical point of view, the possibility of obtaining redress in the courts against a wrongful exercise of a power given by the articles is not a substitute for articles under which the power is not conferred. 45 This issue is extensively discussed by Young J in Mike Gaffikin Marine Pty Ltd v Princes Street Marina Pty Ltd (1995) 122 FLR 294 at 303 et seq. His Honour quoted the view of the leading authority on share valuation in Australia, Mr Wayne Lonergan, in his work The Valuation of Businesses, Shares and Other Equity . I believe a modern court would, in the absence of a statutory direction to the contrary, generally discount the value of shares to take account of restrictive clauses. 46 An important element in the present case is the special value the shares would have to the majority shareholder --- nominally Mrs Weeden but, it is reasonable to infer, a holder under the practical control and direction of Mr Weeden. This factor is mentioned in the passage from Abrahams cited in [43] above. Nothing in Gregory casts doubt on it. The property is not valueless or diminished in value because there would be no other buyers [Vyricherla and Geita Sebea cited]. On this basis the value of Morpak's goodwill is to be determined upon the basis of a hypothetical sale to the only persons to whom, on the appellants' submissions, it could be sold, and to whom the matters which they submit would render the goodwill valueless in any other purchaser's hands would be irrelevant. Young J applied the same principle in Mike Gaffikin Marine , 122 FLR at 304. 47 It might be suggested that the Explanatory Memorandum ([21] above) is inconsistent with this principle insofar as it disregards "any sort of discount or incentive". However, the Memorandum is not to be taken too literally. For example, a range of "kerbside valuations" would hardly be a determination of market value binding on a court. In any event, an Explanatory Memorandum, however helpful, is not an expression of the will of Parliament and cannot prevail when a statute uses an expression, such as market value, to which courts of the highest authority have given a clear meaning. I believe the worst person to construe (a statute) is the person who is responsible for its drafting. He is very much disposed to confuse what he intended to do with the effect of the language which in fact has been employed. 48 Mr Ferrier has applied a 10 per cent "minority discount". To some extent that overlaps with a further discount for litigation risk which he fixes at 25 per cent. 49 Mr Ferrier's figures quoted in [18] above do not take into account this latter discount because his instructions were to assume as a fact that the applicants (strictly speaking, that should be a hypothetical purchaser) would be able to establish oppression and obtain a winding up order. Mr Lipson's corresponding discount is 92.5 per cent, ie he assumes the chance of success at 7.5 per cent. The estimate of the prospects of success in litigation is probably not something within the specialised knowledge of a Chartered Accountant: see Evidence Act 1995 (Cth) s 79. 50 Considering the factors mentioned by Young J ([45] above), I am inclined to think 10 per cent is not enough for a minority discount. It is true that one factor arguing for a small discount is that we are concerned here with valuation on a net realisable assets basis. Most of the authorities deal with valuation on the basis of capitalisation of future maintainable dividends. In such a setting a hypothetical purchaser would be concerned with the effect of restrictive provisions such as a discretion to refuse registration should he wish to sell the shares in the future. However, when, as in the present case, a winding up is to be assumed, such a consideration does not arise. 51 On the other hand, the pro rata value of the shares, before the application of any discount, is $210,796. That must be getting towards a level of value below which litigation becomes an uneconomic exercise. As such, the relatively small value argues for a higher discount (see the last-mentioned factor in [45] above). 52 Since the discount for acquiring a minority shareholding is wrapped up with the litigation risk and expense factor, I think it is more realistic to fix the one discounting figure. I would assess it at 50 per cent. There was a "likelihood" that those entities would need to be placed in liquidation in order to realise their assets in order to meet their obligations to the Weeden Companies. 54 The respondents have not adduced any evidence to support these assertions. There is no suggestion, let alone evidence, of any matter which might give rise to a defence against recovery claims by a liquidator of the Weeden Companies. There is no qualification to the accounts of the Weeden Companies which are in evidence, so presumably the directors were of the view that the assets had the recoverable values stated. Rather, it is to be assumed they would be able to pay, and would pay, amounts due to the Weeden Companies. A potential purchaser would discount the expected realisation at the purchaser's required rate of return. In the present circumstances, a purchaser would require a return significantly above more orthodox and conventional investments. Mr Lipson adopts 25 per cent. 57 The estimate of the time oppression proceedings would take is outside Mr Lipson's area of expertise. Given modern Fast Track procedures in this Court, I would think six to eight months is more realistic. Once a winding up order were obtained, as already mentioned there is no evidence to support the assumption of further delay in recovery by a liquidator. Moreover, the assets themselves will be earning income in the meantime. I do not think any discount is appropriate. There will be an order that the respondents pay the applicants' costs of the preliminary question. The substantive application will be adjourned for further directions. I certify that the preceding fifty nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | transfer of small minority shareholding in closely-held private company to majority shareholder transfer for nominal sum on day prior to minority shareholder filing for bankruptcy market value of shares articles of association include pre-emptive rights and directors' right of refusal to transfer no dividends paid for substantial period and none to be paid in future valuation of minority shareholdings in proprietary companies bankruptcy corporations |
The application is based upon an allegation that there is a reasonable apprehension of bias on my part. Specifically, the applicant says that by reason of certain public comments I made in late August and early September 2007, in my role as a member of the Taskforce ('the Taskforce') established to oversight the Prime Minister's Northern Territory Emergency Response, more commonly known as the Northern Territory Intervention (which is how I will refer to it in these reasons), a fair minded lay observer might reasonably apprehend that I will not bring an impartial mind to the resolution of the issues that arise in these proceedings. The Notice of Motion was filed on 24 June 2008 and brought on for hearing later that day as a matter of urgency. It was supported by an Affidavit of Mr B. I. Medina (a solicitor), which annexes three documents containing the public comments I made. I was subsequently informed by counsel for the applicant that these documents had been obtained from the website of the Bennelong Society. Because the hearing of the substantive application was imminent, I made orders on 26 June 2008 dismissing this application on the understanding that I would publish detailed written reasons for my decision at a later date. These are my reasons. In June 2007, following the publication of the 'Little Children are Sacred' Report which was commissioned by the Northern Territory Government, the Commonwealth Government decided to establish the Northern Territory Intervention to deal with the incidence of child abuse and domestic violence in remote Aboriginal communities in the Northern Territory. As part of the Northern Territory Intervention, an eight-member Taskforce was formed which included the Chief Executive Officer of the Department of Prime Minister and Cabinet, and the Chief Executive Officer of the Northern Territory's Chief Minister's Department. In late June 2007, I was appointed a member of the Taskforce. There was no representative of the Australian Crime Commission ('the Commission') on the Taskforce and, as far as I was (and am) aware, the work of the Taskforce was separate from, and independent of, the work of the Commission. The role of the Taskforce included providing expert advice to the Commonwealth Government, through the Prime Minister and the Minister for Families, Community Services and Indigenous Affairs, on the implementation of the Northern Territory Intervention, and promoting public understanding of the issues involved in the Northern Territory Intervention. In pursuit of this latter aspect, most of the members of the Taskforce made public comments in the media and elsewhere about the Northern Territory Intervention. It was in that capacity that I made the public comments that the applicant has relied upon in this application. I was appointed as a judge of this Court by Letters Patent signed by the Governor-General on 26 September 2007. My appointment was expressed to take effect from 19 November 2007. Soon after my appointment, I resigned my position as a member of the Taskforce. It is hardly necessary to record the fact that since my appointment I have not expressed any views publicly, for or against, the Northern Territory Intervention. The applicant is an Aboriginal community controlled health organisation providing health services to Aboriginal communities, outstations and pastoral properties in the Katherine region of the Northern Territory. On the morning of 7 May 2008, the applicant filed an application in this Court seeking an order pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) to review a decision of an officer of the Commission, (the respondent in these proceedings), to issue a notice pursuant to s 29 of the Australian Crime Commission Act 2002 (Cth)('the ACC Act'). The notice required the applicant to attend before an officer of the Commission and produce certain records and documents held by it. In summary, the records and documents sought related to presentation by patients of the applicant at clinics conducted by it, for the treatment of injuries that had been sustained, or that possibly could have been sustained, as a result of family and domestic violence and/or other forms of assault, including sexual assault. Because the notice in question required the applicant to produce the records and documents to the Commission's officer by midday on 7 May 2008, the applicant sought an urgent ex parte injunction before me to suspend the operation of the notice until its application for review of the decision to issue the notice, could be determined. Shortly before midday on 7 May 2008, I granted the ex parte injunction and adjourned the application for further hearing at 2.15 that afternoon. At the resumption of the hearing, Mr Docherty of the Australian Government Solicitor's Office appeared for the respondent and sought an adjournment until 9 May 2008, on the basis that the ex parte injunction order would be extended until that time. Since that time, this proceeding has been mentioned before me on a number of occasions and I have given various directions with a view to having the substantive application determined as quickly as possible. During that process, at least three significant things occurred. First, by agreement between the parties, the respondent withdrew the first notice and issued an amended notice with a more limited scope, but still under s 29 of the ACC Act. The applicant's application was then amended to seek to review the decision to issue this second notice ('the Notice'), albeit raising the same, or similar, issues. Secondly, some weeks after this proceeding was issued, another proceeding (being NTD9 of 2008) was commenced by an Aboriginal health organisation located in Central Australia, seeking similar relief and raising similar issues to those raised in this matter. Once this was realised, both applications were listed before me together and dealt with together, until recently. Thirdly, both applicants sought discovery of various documents held by the Commission relating to the decisions to issue the s 29 notices. In response to those requests, the Commission claimed public interest immunity in relation to the production of some of those documents. Because I was to hear the substantive applications, the parties agreed it was appropriate to have the public interest immunity issues heard by another judge, noting the recent comment of the High Court that this was the appropriate course: see Gypsy Jokers Motorcycle Club Inc v Commissioner of Police [2008] HCA 4 ; (2008) 242 ALR 191 at [24] . That matter was subsequently listed before Justice Mansfield on 13 June 2008 and his Honour has now published his rulings on the public interest immunity issues. In the meantime, the substantive applications had been tentatively set down for hearing before me on 30 June and 1 July 2008, subject to the public interest immunity issues being resolved on or about 13 June 2008. Both proceedings were mentioned before me on 20 June 2008, by which time the public interest immunity issues had been resolved. Because of difficulties with the availability of counsel and because it appeared that there may be some differences in the factual material relied upon in each proceeding, the tentative hearing dates of 30 June and 1 July 2008 were confirmed for this proceeding. Proceeding NTD9 of 2008 was set down for hearing before me at the later dates of 14 and 15 July 2008. I will set out below the parts of those public comments relied upon by the applicant. It also contains a number of other provisions including those providing additional powers to the Australian Crime Commission. I had earlier observed that this package of legislation covered about thirty subject areas and extended to more than 500 pages. On the following Monday, 3 September 2007, I was interviewed for an ABC Radio National program called 'Counterpoint' in relation to the paper I had presented at the Bennelong Conference (above) ('the Counterpoint comments'). In that interview I am recorded as stating, during a long answer in which I described what had occurred in the Northern Territory Intervention to that time, that: 'As well, sensible legislation has been put in place'. And the Reverend Doctor Steve Etherington said it will be 15 to 20 years before a work-ready generation is even possible. That means, of course, decades of bipartisan and community support. Are you confident? Perhaps this is because we are in the midst of an election campaign or at least the lead up to it. The Northern Territory Government have said that they fully support the intervention with the exception of the permits and five year leases aspects, but [M]inisters of that [G]overnment seem to be (unfortunately, and it's very disappointing) using opportunities to attack the intervention over the past few weeks. I'd hoped that this whole intervention could be quarantined from that, from the politics of the election campaign. ... So, going back to what's happening on the edges, I just hope that the people that are attacking this, obviously connected with the election campaign, would just desist and therefore assist [us] to get on with it. If we get over that and we move to the next stage in the political process, whilst I'm apprehensive about those attacks, I'm mildly confident that we can move to a bipartisan position whoever wins the election. The three documents are more extensive than this and cover a wide range of issues associated with the Northern Territory Intervention. Prior to the ACC Act coming into effect in 2002, the Commission was known as the National Crime Authority (established under the National Crime Authority Act 1984 (Cth)). The Commission's functions are described in s 7A of the ACC Act, amongst other things, they include: collecting, correlating, analysing and disseminating criminal information and intelligence, and undertaking intelligence operations (when authorised by the Board of the Commission). The expression "intelligence operation" is defined in s 4 of the ACC Act to mean: "the collection, correlation, analysis or dissemination of criminal information and intelligence relating to federally relevant criminal activity. " The expression "federally relevant criminal activity" is defined in s 4 to mean: "a relevant criminal activity, where the relevant crime is an offence against a law of the Commonwealth or of a Territory; or a relevant criminal activity, where the relevant crime is an offence against a law of a State; and has a federal aspect". The Board of the Commission is also authorised to determine that an intelligence operation or an investigation is a 'special operation' or 'investigation' (see s 7C(2) and (3)). Much of the critical work of the Commission is carried out by examiners. Examiners are appointed by the Governor-General (see s 46B) and are given the powers, amongst other things, to conduct examinations for the purposes of a special ACC operation/investigation (see s 24A), to summons witnesses and take evidence (see s 28) and to obtain documents for that purpose (see s 29). A more detailed description of the provisions of the ACC Act is contained in Justice Finn's decision of Barnes v Boulton [2004] FCA 1219 at [5] to [13] which, subject to recent amendments (see below), remains generally current and relevant. The Notice that is at the heart of these proceedings was issued pursuant to s 29 of the ACC Act. The examiner must also record in writing the reasons for the issue of the notice. Those amendments were enacted via by two pieces of legislation: the Families, Community Services and Indigenous Affairs and Other Legislation Amendment (Northern Territory Emergency Response and Other Measures) Act 2007 (Act number 128 of 2007) and the Australian Crime Commission Amendment Act 2007 (Cth) (Act number 168 of 2007). In summary, the former Act made the following relevant amendments: New definitions were added to the interpretation section of the ACC Act (s 4(1)) to extend the ambit of the Commission's function to include intelligence operations in relation to indigenous violence or child abuse. The new definitions applied to the following words or expressions: child, child abuse, Indigenous person, Indigenous violence or child abuse, relevant crime and serious violence. 'Serious violence' was likewise defined by a minimum penalty of three years. Most significantly, the expression 'relevant crime' replaced the expression "serious and organised crime". 'Relevant crime' was defined to mean "serious and organised crime or Indigenous violence or child abuse. " The expression "Indigenous violence or child abuse" was defined in s 4 of the Act to mean: "serious violence or child abuse committed by or against, or involving, an Indigenous person". Other definitional changes were made to extend the operation of the ACC Act to State agencies and staff. Ss 19A(1) and 19A(2), and 20(1) and 20(2) which allow examiners to request, or require, respectively, information from agencies were amended to require the examiner to comply with the new s 20A. That section describes the procedure for seeking information from a State agency and requires that where the Commonwealth Minister makes an arrangement with a State Minister - who may impose conditions on, for example, the types of information that may be sought and from which agencies it may be obtained - any such request for information must comply with that arrangement. This applies to validate summonses issued before the amendment, if the record was made after the issue of the summons. Similarly, s 29(1A) was amended to specify that the record of reasons for issuing a notice under s 29(1) can be made before, during or after the issue of the notice. Mr Young submitted that the package of legislation that supported the Northern Territory Intervention included amendments to give the Commission powers to conduct intelligence operations in relation to child abuse (as set out above). He submitted that the applicant's application in these proceedings seeks to set aside the Notice which was issued in pursuit of those new powers and therefore its application could be seen to involve an attack on a key aspect of the Northern Territory Intervention. He submitted that the public comments that I had made could be interpreted by a fair minded lay observer to mean that I have an adverse view of those people who attacked the Northern Territory Intervention, particularly where they were motivated by factors other than the genuine merits to which the Northern Territory Intervention was directed. Therefore, so he submitted, a fair minded lay observer might reasonably apprehend that I might view this application in the same light and might not bring an impartial mind to bear on the resolution of the issues that arise in these proceedings. In his written submissions, Mr Young referred me to the High Court's decisions in Livesey v New South Wales Bar Assn [1983] HCA 17 ; (1983) 151 CLR 288 , Johnson v Johnson (2000) 201 CLR 488 and Ebner v Official Trustee [2000] HCA 63 ; (2000) 205 CLR 337 (' Ebner' ). Ms Maharaj QC submitted that this application was not made in a timely manner. She submitted that according to the affidavit material filed by the applicant, the applicant's counsel had been in possession of the statements that the applicant now seeks to rely upon for nine days, and yet counsel only made this application on 24 June 2008, just days before the matter was due to be heard on 30 June and 1 July 2008. I took this submission to mean that in the circumstances the applicant had waived its right to bring this application. Ms Maharaj QC also submitted that the test for a reasonable apprehension of bias is one of possibility, rather than probability, and that the assessment has to be made objectively; from the viewpoint of a fair minded observer. This waiver principle was recently affirmed by the High Court in Smits v Roach [2006] HCA 36 ; (2006) 227 CLR 423 (' Smits ') at [43] per Gleeson CJ, Heydon and Crennan JJ, at [61] per Gummow and Hayne JJ and at [125] per Kirby J. Various reasons were given for this waiver principle in Vakauta . In such a case, if clear objection had been to taken to the comments at the time when they were made or the judge had then been asked to refrain from further hearing the matter, the judge may have been able to correct the wrong impression of bias which had been given or alternatively may have refrained from further hearing. It would be unfair and wrong if failure to object until the contents of the final judgment were known were to give the party in default the advantage of an effective choice between acceptance and rejection of the judgment and to subject the other party to a situation in which it was likely that the judgment would be allowed to stand only if it proved to be unfavourable to him or her'. Justice Dawson gave similar reasons (at 577) and Justice Toohey (at 588) referred to the community interest in knowing that cases are being decided impartially. In Smits Justice Kirby referred to the public interest in the 'manifest impartiality and independence of a judge' and suggested that the notion that a party could waive this requirement was 'in some ways, curious' (at [124]). Nonetheless, his Honour was willing to accept the waiver principle because it was now settled law in Australia (at [125]). In addition, it might be observed that timely objections also avoid a waste of costs for the parties, avoid a waste of court resources and assist in the efficient management of the court's business by, among other things, avoiding having a judge who has managed a case and become familiar with it, disqualified by an apprehended bias objection raised at a late stage in the proceedings. An issue related to the waiver principle is the issue of a judge making an early disclosure of any interest or association of which the judge may be aware. In Ebner, Chief Justice Gleeson and Justices McHugh, Gummow and Hayne described this as a 'matter of prudence and professional practice for a judge' (at [69]). Their Honours eschewed any attempt to describe the practice in terms of rights or duties, observing that any such duty to disclose would be a 'duty of imperfect obligation' (at [70]). In particular, their Honours noted that the disclosure of an interest such as the ownership of shares may be straight forward, whereas the disclosure of an association may raise more difficult questions because it would be difficult, for example, to identify all the kinds of association that may give rise to a serious possibility of disqualification (at [72]). In Ebne r Justice Kirby also described disclosure as a matter of 'prudence and desirability' (at [171]). However, in Smits his Honour put the matter somewhat higher when he said it is 'not just a question of prudence. It is part of the governing law. ' (at [102]). It relieves the parties of inquiring into, or otherwise investigating, judicial interests and associations. It invites a timely and informed decision on the part of the judge, litigants and legal practitioners as to whether any disclosed interest should be waived. It removes a cause of judicial resentment or irritation when the question of disqualification is raised belatedly, as it was in this case. The practice of prior disclosure of any possible interests, statements, associations, relationships and extrinsic knowledge thus operates prophylactically. It helps to maintain respect for the integrity of judicial performance in the nation, as a model for the region and the building of the rule of law globally. ' (at [102]). Whether it is a matter of prudence and professional practice or a legal obligation, the need to make such disclosures is a matter I have been conscious of since my (relatively recent) appointment to this Court. All the more so since my appointment is based in Darwin (a relatively small city by population size), the place where I have lived and practiced for approximately 25 years. In each new matter I have therefore endeavoured to identify from the materials filed whether there are any possible interests or associations that may give rise to an apprehension of bias on my part and to bring those matters to the attention of the parties at the first convenient opportunity. In the past seven months I have, not surprisingly, made such disclosures in a number of cases. When this matter first came before me, it was in circumstances of some urgency in that the applicant was seeking an ex parte injunction to prevent the Notice issued by the Commission taking effect at midday. Although midday was only one hour after I began to hear the application, I did briefly consider the parties, the people involved and the issues identified in the materials filed by the applicant, to identify whether there was any possible interest, association or other matter I should disclose. I had no recollection of ever having had any dealings with the applicant, or the deponents to the affidavits filed by the applicant. I also had no recollection of ever having had any dealings with the Commission, or any officers of the Commission. Finally, I could not identify any aspect of the issues raised by the applicant that might give rise to a need to make a disclosure, in relation to my membership of the Taskforce, or any related matter. As it turns out, my association with the Northern Territory Intervention and my involvement in the Taskforce per se, were not matters the applicant relied upon in making this application. I confess I did not turn my mind to the kind of issue bias that has been raised by the applicant in this application. In Vakauta the defendant waited until after final judgment before objecting to comments the judge had made during the trial of the proceedings. In Smits the objection to the relationship between the judge and one of the parties was not taken until after the judge had provided a draft of his final judgment to the parties and despite the fact that senior counsel for the objecting party was aware of the relationship in question from early in the proceedings. In this matter, the public comments the applicant relies upon were made in August/September 2007, some ten months ago. The applicant's solicitor explains why he did not act earlier by stating in his Affidavit that he was not aware of the comments until they were brought to his attention by counsel on 15 and 16 June 2008. Allowing for time to seek advice and take instructions, the applicant then made its application relatively promptly on 24 June 2008.This satisfactorily explains the delay so far as the applicant's solicitor is concerned, however it leaves open the possibility that the applicant's counsel, or the applicant itself, was aware of my public comments and the potential relevance of them to these proceedings before 15 June 2008, so that either, or both of them, should have acted earlier. In relation to Mr Young, noting his duties to the Court as counsel, I do not suggest that he would have failed to inform the Court if he were indeed aware of my public comments and the importance of them to these proceedings, before 15 June 2008. As to the applicant itself, the applicant's solicitor certainly has not stated in his Affidavit that the applicant was unaware of my public comments before he sought instructions on them from the applicant - sometime after 16 June 2008. However, Ms Maharaj QC did not seek to cross-examine Mr Medina on this aspect of his affidavit and, in those circumstances, I do not consider I should draw an inference that the applicant was aware of my public comments and the importance of them to these proceedings, at any time before 15 June 2008. The only remaining aspect of the applicant's conduct that could possibly constitute a waiver of its right to object as it has was its appearance before me on 20 June 2008 when the final hearing dates for the substantive application were confirmed. This was some four to five days after the existence and importance of my public comments were known to the applicant's counsel, its instructing solicitor and, presumably, the applicant itself. While I consider it would have been preferable for the applicant's solicitor, who appeared on that occasion, to have advised me that it was considering applying to have me disqualify myself, the applicant did make its application within a very short period of time thereafter, and before the substantive hearing commenced on 30 June 2008. In all these circumstances, I do not consider that the applicant has intentionally waived its right to raise the objection it has. I will therefore proceed to consider the substance of its application. In fact, in Webb, Justice Deane extended the 'conduct' category to: 'conduct including published statements'. While not adopting this categorisation as comprehensive/exclusive in Ebner , their Honours considered it provided a convenient frame of reference. As an example of the overlaps that may occur, their Honours pointed to the categories of interest and association and referred to the House of Lords decision in R v Bow Street Magistrate; Ex parte Pinochet Ugarte (No 2) [2000] 1 AC 119 (' Pinochet ') (at [28]). Nonetheless, while accepting that the overlaps between these categories will probably give rise to some debate on this aspect, the bias raised by the applicant in this case would appear to best fall within the 'published statements' extension of the 'conduct' category described in Webb. In the course of the joint judgment in Ebner (at [9] and [10]), their Honours referred to the English Court of Appeal decision in Locobail (UK) Ltd v Bayfield Properties Ltd [2000] QB 451 (' Locobail') to make the point that the test for disqualification for bias (even though it is expressed somewhat differently in England) provides the most effective protection of the right to an impartial tribunal. Elsewhere in Locobail, the Court of Appeal set out a list of circumstances that it thought would, and would not, lead to disqualification for bias. While not ignoring the difference in the test for disqualification and noting the different social, political and constitutional circumstances in England (as to which, see: Thomas J B, Judicial Ethics in Australia (2 nd edition) at pp 147 and 233 --- 237), I believe this list of circumstances provides some helpful guidance on the sorts of circumstances that may, and may not, lend to disqualification for bias. We cannot, however, conceive of circumstances in which an objection could be soundly based on the religion, ethnic or national origin, gender, age, class, means or sexual orientation of the judge. Nor, at any rate ordinarily, could an objection be soundly based on the judge's social or educational or service or employment background or history, nor that of any member of the judge's family; or previous political associations; or membership of social or sporting or charitable bodies; or Masonic associations; or previous judicial decisions; or extra-curricular utterances (whether in textbooks, lectures, speeches, articles, interview, reports or responses to consultation papers); or previous receipt of instructions to act for or against any party, solicitor or advocate engaged in a case before him; or membership of the same Inn, circuit, local Law Society or chambers (see KFTCIC v Icori Estero Sp A. (Court of Appeal of Paris 28 June 1991, International Arbitration Report, vol. 6,8 8/91)). By contrast, a real danger of bias might well be thought to arise if there were personal friendship or animosity between the judge and any member of the public involved in the case; or if the judge were closely acquainted with any member of the public involved in the case, particularly if the credibility of that individual could be significant in the decision of the case; or if, in a case where the credibility of any individual were an issue to be decided by the judge, he had in a previous case rejected the evidence of that person in such outspoken terms as to throw doubt on his ability to approach such person's evidence with an open mind on any later occasion; or if on any question at issue in the proceedings before him the judge had expressed views, particularly in the course of the hearing, in such extreme and unbalance terms as to throw doubt on his ability to try the issue with an objective judicial mind (see Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568) ; or if, for any other reason, there were real ground for doubting the ability of the judge to ignore extraneous considerations, prejudices and predilections and bring an objective judgment to bear on the issues before him . The mere fact that a judge, earlier in the same case or in a previous case, had commented adversely on a party or witness, or found the evidence of a party or witness to be unreliable, would not without more found a sustainable objection. In most cases, we think, the answer, one way or the other, will be obvious. But if in any case there is real ground for doubt, that doubt should be resolved in favour of recusal. We repeat: every application must be decided on the facts and circumstances of the individual case. The greater the passage of time between the event relied on as showing a danger of bias and the case in which the objection is raised, the weaker (other things being equal) the objection will be. 'Bias' is used to indicate some preponderating disposition or tendency, a " propensity; predisposition towards; predilection ; prejudice . " It may be occasioned by interest in the outcome, by affection or enmity, or, as was said to be the case here, by prejudgment. Whatever its cause, the result that is asserted or feared is a deviation from the true course of decision-making, for bias is "any thing which turns a man to a particular course, or gives the direction to his measures. First, there is the contention that the decision-maker has an opinion on a relevant aspect of the matter in issue in the particular case. Secondly, there is the contention that the decision-maker will apply that opinion to that matter in issue. Thirdly, there is the contention that the decision-maker will do so without giving the matter fresh consideration in the light of whatever may be the facts and arguments relevant to the particular case. Most importantly, there is the assumption that the question which is said to have been prejudged is one which should be considered afresh in relation to the particular case. " [emphasis added] ( R v London County Council; Ex parte Empire Theatre (1894) 71 LT 638 at 639 per Charles J. They do so by the application of rules for decision-making which, although not always defined with absolute certainty, are generally discernible before the contest is joined and are set by legislative or judicial processes which are external to the judge. The process of adjudication is generally conducted in open court. The judge must give reasons for the decision that is reached. No less importantly, the rules about judicial prejudgment proceed from the fundamental requirement that the judge is neutral. That requirement for neutrality is buttressed by constitutional and statutory safeguards. Those safeguards include not only the provisions for security of terms of office and remuneration but also extend to statutory provisions prohibiting interference with the course of justice. A judge can have no stake of any kind in the outcome of the dispute. The judge must not "[descend] into the arena and ... have his vision clouded by the dust of the conflict. ' The central task and, it may be said, the only loyalty, of the judge is to do justice according to law. What is critical is that there is some real ground or real basis for concluding, in all the circumstances, that the judge will apply that opinion in the case at hand regardless of the facts and arguments presented in that case. Moreover, when the decision maker is a judge any consideration of this critical issue has to take account of the rules, processes and legal requirements that apply to the decision making role of all judges in Australia. The High Court has also made it clear in a number of decisions before and after Ebner that apprehended bias must be 'firmly established': see The Queen v Commonwealth Conciliation and Arbitration Commission; ex parte Angliss Group [1969] HCA 10 ; (1969) 122 CLR 546 at 553 - 554, R v Lusink; Ex parte Shaw (1980) 32 ALR 47 at 50 --- 51, Re JRL; ex parte CJL [1986] HCA 39 ; (1986) 161 CLR 342 at 532 and Re Minister for Immigration and Multicultural Affairs; ex parte Epeabaka [2001] HCA 23 ; (2001) 206 CLR 128 at 158. But the notional lay person should not be taken to be completely unaware of the way in which cases are brought to trial and tried. In a case such as this, the bystander will understand the Court's obligation which, if not maintained, will be enforced on appeal to act fairly and impartially. In that case an Aboriginal Land Commissioner ('the Commissioner') appointed under the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) ('the ALRA') was dealing with two Aboriginal land claims lodged under the ALRA --- the Warumungu Land Claim and the Kenbi Land Claim. During the course of hearing the Warumungu Land Claim, the Commissioner made some comments that were highly critical of the Northern Territory Government. The Full Court described those comments in these terms: 'Statements and conduct [that] could reasonably be regarded as severely critical of the competence of the Northern Territory Government and as casting aspersions upon its integrity concerning its policies in relation to pastoral leases in the Northern Territory'(at 441) . With this in mind, the Full Court considered the issues that the Commissioner had to decide in each land claim to determine whether or not he should be disqualified for apprehended bias. In the Warumungu Land Claim, the Full Court held that the comments made by the Commissioner had no relevant bearing on the issues to be decided and that it could not be reasonably apprehended that the Commissioner might not resolve the issues before him in a fair and unbiased way (at 440 - 441). The Full Court therefore concluded that any evident attitude of the Commissioner's disaffection with the Northern Territory Government and its policies in relation to land tenure and other matters, could not, in its view, reasonably be said to call for the Commissioner's disqualification in that land claim (at 441). The Full Court then considered the Kenbi Land Claim. It noted that in that land claim, the Commissioner had to embark upon an inquiry into the reasons why the Administrator of the Northern Territory made certain planning regulations under the Planning Act (NT) (No. 55 of 1999). In particular, the Commissioner had to determine whether the relevant regulation (Regulation 5) had been made for an improper purpose, namely of defeating the Kenbi Land Claim. The Full Court noted that in the process of making that determination, the Commissioner would be required to determine the bona fides of members of the Northern Territory Government in making the Cabinet decision which led to the making of the Regulation in question (at 441 --- 442). Their Honours observed (at 442) that this issue was significantly different to the issues the Commissioner had to decide in the Warumungu Land Claim and ultimately concluded that the Commissioner should be disqualified from hearing the Kenbi Land Claim on the basis of the remarks he made about the Northern Territory Government because: "It might reasonably be apprehended by a fair-minded person that the Commissioner might not resolve the questions ... relating to the validity of the Planning Regulations with a fair and unprejudiced mind. " In my opinion this decision provides a practical example of the application of the second step described in Ebner and the need, in that step, to look closely at the logical connection between the matter that is said to give rise to the concern about a lack of impartiality and the issues that have to be decided in the proceedings. Finally, I note that another, more recent, example of the application of the second step in Ebner is contained in the decision of Justice Tobias in City of Canada Bay Council v Bonaccorso Pty Ltd (No.2) [2007] NSWCA 368 , particularly his Honour's conclusions at [17] and [18]. The first step is to consider: what is it that might lead to me deciding this case other than on its legal and factual merits? Mr Young submitted that my public comments demonstrate that I have an adverse view or opinion of those people who had attacked the Northern Territory Intervention, particularly where they are motivated by factors other than the genuine merits to which the Northern Territory Intervention is directed. Accepting this characterisation for present purposes, and assuming that it states the position, at its highest, for the applicant, the question that then arises is: might my public comments be interpreted by a fair minded and objective observer in this way? In answering this question, I keep in mind the following matters (among others): that it is not how I will actually approach the determination of the issues in this matter, but how a fair minded lay observer reasonably considers I might; that it is a question of real (not remote) possibility not probability; that the fair minded lay observer will be aware that all judges ordinarily ensure both the appearance and substance of fairness and impartiality and that all judges in Australia are subject to various rules, processes and legal requirements in their decision making role; that bias whether apprehended or actual, must be firmly established; and that there must be some real ground for concluding, in all the circumstances, that I will apply this opinion to the issues that fall to be determined in these proceedings, regardless of the facts and arguments that are presented. In my opinion, such a fair minded lay observer would not reasonably interpret my public comments in this way. This is so for the following reasons. First, my public comments could not possibly be interpreted as referring to the applicant, either individually, or as a member of any identifiable group. Certainly the applicant did not remotely fall within the two groups of people who I had criticised in either the Nowra comments, or the Counterpoint comments, namely that group of people who were attacking those people who had drawn attention to the high levels of child abuse and domestic violence on Aboriginal communities in the Northern Territory, or that group of people who comprised the Northern Territory politicians who were attacking the Northern Territory Intervention (respectively). Secondly, the applicant could not reasonably be said to be a person who is "attacking" the Northern Territory Intervention by legitimately commencing proceedings in this Court seeking to challenge a decision of an officer of the Commission. Therefore, the applicant could not reasonably be said to be the subject of this adverse view or opinion (above), if I held it. Thirdly, there is no real ground for concluding that if I did hold this adverse view or opinion (above), I would apply it regardless of the facts and arguments presented in these proceedings. My public comments were not made in the course of these proceedings and they did not relate directly or indirectly to a person involved in these proceedings (see above), nor did they relate directly to any issue that arises in these proceedings, unlike, for example, the situations that arose in Webb , Vakauta or Maurice . To the contrary, my public comments were made some time ago i.e. ten months, in circumstances far removed from these proceedings i.e. in a public forum and in the national media, about matters of current affairs, that are, at their highest, only very generally connected to the issues in these proceedings. Moreover, there is nothing about the nature of my public comments, or about the circumstances in which they were made, that provides any ground, let alone one that is real, or firmly established, that I would apply the opinions expressed, regardless of the facts and arguments presented in this case. All the more so, when one takes into account that in determining the issues in this case, I will be required to ensure both the appearance and substance of fairness and impartiality and be subject to the usual rules, processes and legal requirements that apply to all judges in Australia. For these reasons, I do not believe that the fair minded lay observer might reasonably interpret my public comments in the way in which the applicant says that they would be interpreted. Nonetheless, in case I am wrong in that conclusion, I will proceed to consider the second step in Ebner. Namely, what is the logical connection between the matter complained of by the applicant and the feared deviation from deciding the issues in these proceedings on their merits. In doing so, I will assume for the purposes of the argument that the interpretation of my public comments put by the applicant (above) is the interpretation that would be adopted by the fair minded lay observer. As the authorities I have referred to show, this step requires a careful consideration of the issues that have to be determined in these proceedings. In that consideration, I must keep in mind that the fair minded lay observer is taken to have a general understanding of the facts and circumstances surrounding these proceedings, but he or she should not be assumed to have the same level of understanding as a lawyer. Nonetheless, he or she is not uninformed and uninstructed about the law in general. I also keep in mind that the fair minded lay observer is aware of the duty all judges have to determine matters fairly and impartially and is aware they are subject to various rules, processes and legal requirements in their decision making role. With these considerations in mind, I consider the fair minded lay observer would be taken to understand that the central issues that arise for determination in these proceedings are whether or not the Notice issued by the examiner pursuant to s 29 of the ACC Act was properly and validly issued and this will require me to construe the provisions of s 29 of the ACC Act and to determine whether, among other things, the examiner properly took into account all relevant matters and did not take into account irrelevant matters in deciding to issue the Notice. I consider the fair minded lay observer would be taken to know that in making this determination I am not able to look into the merits of the examiner's decision to issue the Notice, nor am I able to look at the merits or motives of the applicant's decision to issue these proceedings. While all these matters require some knowledge of the law beyond that of the general population, I consider they all fall within the knowledge of a lay observer who is not wholly uninstructed and uninformed about the law. In my opinion, they are similar to the level of knowledge imputed to the lay observer in Laws who was taken to be aware of the status of assertions in pleadings. It follows that, even if it is assumed that my public comments were to be interpreted in the way put by the applicant ie as indicating an adverse view or opinion of the applicant's application as an attack on the Northern Territory Intervention, there is, in my opinion, no logical connection between that view or opinion and the issues I will have to determine in these proceedings. This is so because the issues in these proceedings involve the application of established legal principle to the decision of the examiner to issue the Notice. Conversely, they do not involve any consideration of the merits of the examiner's decision to issue the Notice, nor, more importantly, any consideration of the merits or motives of the applicant's decision to issue these proceedings. For these reasons, I dismissed the applicant's Notice of Motion dated 24 June 2008 on 26 June 2008. I certify that the preceding sixty-eight (68) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | bias circumstances where a judge should disqualify himself or herself for bias consideration of 'reasonable apprehension of bias' practice and procedure |
Here, both the plaintiff, EMAS Offshore Pte Ltd, and the defendant, APC Marine Pty Ltd, which was the owner of the barge that had been arrested, the " APC Aussie 1" , paid the Marshal the whole of the costs and expenses he had incurred. Thus, he held twice as much as he needed. Both parties rely in differing ways on the payment by the other. APC paid $1,439,601.05 into Court in order to secure the release of the barge. At the same time, APC filed an application to Court for release of ship or other security under r 52(1) of the Admiralty Rules , being in form 19 prescribed under the Rules. In the form 19, APC was named as applicant and owner of the barge. On 30 July 2009 EMAS met a second demand by the Marshal for a further $60,000 and soon after, paid a further $35,000 to meet a subsequent demand of the Marshal. The total of the Marshal's costs and expenses, exclusive of goods and services tax was $91,673.63. Thus, at about the time of the release on 31 July 2009 and immediately after, the Marshal held $192,100 in respect of the total of his costs and expenses incurred during the period that the barge was under arrest. APC asserted that this was a payment in respect of the Marshal's costs. I do not accept that characterisation of the $25,000. Having regard to Mr Chesterman's explanation, it was a payment of security made in respect of APC's potential liability for the costs that EMAS might recover as its costs in the proceedings. The $25,000 amount was the only portion of the total sum paid into Court by APC that could represent security for its liability for EMAS' legal costs of the proceedings. EMAS by then had obtained the arrest, incurred legal costs in respect of the arrest, the proceedings against the barge and then against APC, after it entered an appearance. Thus, I am satisfied that the $25,000 represented a payment of security for EMAS' potential entitlement to an order for its taxable costs of the arrest and release quite apart from whatever amounts EMAS had had to pay to the Marshal in respect of his costs and expenses. On the other hand, APC argued that the money should be held as security for what it might ultimately be liable to pay at the end of the proceedings, when final orders were made, including for costs. EMAS now seeks that it be repaid the $100,000 that it had paid to the Marshal in answer to his calls for security. APC opposed that relief. It argued that the $100,000 paid by EMAS to the Marshal should be used to discharge the costs and expenses of the arrest and release and that the balance of $8,326.37 be refunded to EMAS. In contrast, APC sought that some of the $92,100 it had paid into the Marshal's fund to secure the release of the barge be held as security for any liability it may ultimately be found to have to EMAS. APC argued that the $25,000 should be treated as an overpayment of what was due to the Marshal. APC argued that the $92,100 that it had paid on 30 July 2009 should be used to pay $66,674 into the same account as the $1,439,601.05 so that it would be security, with the $25,000, for any entitlement EMAS may later establish against APC for the Marshal's costs of the arrest and release. APC said that the balance of the $92,100, namely $25,426, should be repaid to it, treating this sum as an overpayment of security it had made to obtain the release. Neither party contended that the Marshal was entitled to retain more than the amount necessary to pay the actual costs and expenses he had incurred (or, before they were crystallised, an amount on account of those costs and expenses). I have not been referred to any case that has considered how to apply a double payment in full to the Marshal of his demands for actual costs and expenses by each of the parties in compliance with their undertakings under rr 41 and 53. Under s 34(1)(a)(ii) of the Admiralty Act 1988 (Cth) if, a party unreasonably and without good cause obtains the arrest of a ship under the Act, that party or person will be liable in damages to any party to the proceeding or to a person who has an interest in a ship who suffered loss or damage as a direct result. Thus, if it were established that the arrest was unjustified (i.e. obtained unreasonably and without good cause) a person in APC's position would be entitled to claim damages from the person in EMAS' position who caused the arrest to be made. EMAS argued that s 34(1)(a)(ii) provided the only basis on which it could be required to pay for the costs and expenses payable by APC to obtain the release pursuant to it undertaking under r 53. And EMAS contended that in any event APC had paid the $92,100 unconditionally, in accordance with the form 19 it lodged by APC to obtain there lease. Importantly, when an application for an arrest warrant is made, r 41 provides that the application itself constitutes an undertaking to the Court to pay to the Marshal on demand an amount equal to the amount of the costs and expenses of the Marshal in relation to the arrest, including costs and expenses in relation to the ship while it is under arrest. The rule provides that this undertaking is given by the person who actually makes the application for the arrest warrant. Thus, if the application is made personally by a plaintiff, it will be personally liable on the undertaking under r 41, if it is made by a plaintiff's Australian legal practitioner, the practitioner will be personally liable. When an application is made to release a ship from arrest, relevantly under r 52 and 53, that application too constitutes an undertaking to the Court made by whomever personally makes it, to pay to the Marshal on demand the amount of the Marshal's costs and expenses in connection with the custody of the ship while it was under arrest, including the costs and expenses associated with the release from arrest of the ship or property. The purpose of the arrest, of course, is to obtain security for the plaintiff's claim and to encourage a relevant person to file an appearance in personam . The purpose of the undertaking in r 53 given to obtain the release from arrest of the ship under rr 51 and 52 is different. It is to meet the costs and expenses actually incurred by the Marshal "... in connection with the custody of the ship or property while it was under arrest, including costs and expenses associated with its release from arrest". Notably, the forms of undertaking in rr 41 and 53 have different scopes. The former covers the costs and expenses of the actual arrest, while the latter does not extend that far. And, the undertaking under r 53 covers the costs and expenses of the release, while that under r 41 does not. It is an important feature of r 53 that the Marshal is not authorised to demand the initial costs and expenses of the arrest. That, however, does not prevent the plaintiff seeking proper provision for these as a condition of the release of the ship. Once the ship has been released, the Marshal will no longer be able to resort to it as security for his costs and expenses. Thus, a person seeking the release must pay, or undertake to the satisfaction of the Marshal under r 53(2) to pay, to the Marshal the costs and expenses as provided in r 53(1) and form 19. Often, the person seeking release will be a relevant person who has provided security for the plaintiff's claim. The relevant person should also bear primary responsibility for the costs and expenses of the Marshal because it regains the ship from arrest. If no relevant person had appeared, then in the ordinary course, the ship would be sold and all the Marshal's costs and expenses in relation to its arrest and custody would be paid out of the proceeds as a priority claim. In Patrick Stevedores No 2 Pty Limited v Ship MV "Turakina" (No 2) (1998) 84 FCR 506 at 509E-F, Tamberlin J said that it was neither necessary nor appropriate to approach the undertakings, as then provided for in the Rules, on the basis that they were mutually exclusive. He also said that the undertakings did not have to be read down so as not to cover costs or expenses that may be encompassed by other undertakings that might be given by other persons. He observed that the Marshal could not claim double reimbursement in respect of the same costs or expenses. His Honour suggested that the parties should negotiate and resolve, as between themselves, the working out of the entitlements and obligations of each party who had provided an undertaking. However, this was prior to the introduction of r 75C. The undertaking that form 19 requires extends to the whole of the period of the arrest and the release, because the applicant for release must apply under r 52(1) in accordance with form 19 for the release of the ship. Once the person seeking the release of the ship from arrest provides a payment to the Marshal, or a sufficient level of confidence in the undertaking given, the ship will be released. Ordinarily, the person seeking the release of the ship will be the relevant person or someone acting for the relevant person. If the arrest has been short, the costs and expenses are not likely to be large. But, if the arrest has been for a long period of time (until the relevant person has been impelled to appear or to provide the security necessary to recover the ship from arrest) prima facie, there could be a hardship on a plaintiff if APC's construction of the operation of the Rules were correct. As Tamberlin J pointed out the Marshal cannot obtain double reimbursement. In the present case, the Marshal obtained security from EMAS, in the form of cash paid pursuant to his demands. But, the Marshal did not pay any costs and expenses prior to receiving the form 19 and payment from APC. Giving effect to APC's argument would produce the consequence that EMAS would now have to pay all of the Marshal's costs and expenses while APC would simply provide security for those payments to be available in the event that it were held liable for them at the conclusion of the proceedings. Such a construction does not lie easily with the requirements of r 52(1), r 53 and form 19. Nor, does it sit easily with the ordinary and natural meaning of s 34(1)(a)(ii) that limits the right of, among others, a relevant person in APC's position to recover damages from a plaintiff in EMAS' position for wrongful arrest. If the person seeking the release of the ship were not, prima facie, liable to pay all of the costs of and in connection with her custody and release, there could be a serious inhibition on the exercise by plaintiffs of their rights to arrest. And, this construction would extend the limited form of liability of a person who caused an arrest created by the Parliament in s 34 in cases where the power to arrest had been misused. I reject APC's argument that a defendant who seeks the release of its ship, would simply be required to provide security for the costs and expenses which the plaintiff had already paid to the Marshal in connection with its arrest. A literal meaning of the Rules does not support that construction : Australian Securities and Investments Commission v DB Management Pty Ltd [2000] HCA 7 ; (2000) 199 CLR 321 at 338 [34] - [35] . And, all other costs and expenses of the Marshal, including in connection with keeping the barge in custody and its release, should be paid out of the $92,100 paid by APC to secure the release. So much of the balance of those funds, equal to what was paid out of EMAS' $100,000, should be added to the amount paid into court by APC as security to abide the ultimate disposition of the proceedings. EMAS may later be able to establish its entitlement to this sum under r 75C or in the substantive proceedings. This allocation of responsibility reflects the prima facie distribution of the burden of the undertakings in rr 41 and 53 which EMAS and APC respectively assumed when each of them became bound to honour them. And it ensures that the security available to EMAS will not be diminished by the costs of the arrest in the event that it is successful in the end result. The parties asked that I make no order in relation to the costs of the present application, until after they had had an opportunity to consider these reasons and make submissions on the basis of stances each taken in the negotiations prior to the hearing. I will direct that the parties bring in short minutes to give effect to these reasons. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | arrest costs of arrest, custody and release of ship payment in compliance with demand by marshal plaintiff pays pursuant to an undertaking given under r 41 of the admiralty rules 1988 (cth) defendant/relevant person pays money into court as security for the plaintiff's claim, and also pays money demanded by marshal pursuant to an undertaking given under r 53 in order to obtain release of ship ship released after payments and r 53 undertaking by defendant/relevant person as a result the amount of the cost of custody of the ship paid twice in compliance with the rr 41 and 53 undertakings r 41 undertaking not provide for demand by marshal for costs of release r 53 undertaking not provide for demand by marshal for costs of arrest admiralty act 1988 (cth) s 34 providing limited rights against plaintiff for wrongful arrest admiralty |
The NRL, a public company limited by guarantee, operates and manages the NRL Competition. The NRL Competition is made up of 16 clubs located in Queensland, New South Wales, Victoria and Auckland ("the NRL Clubs"). 2 Each NRL Club is bound to the NRL by the "NRL Rules", being rules adopted from time to time by the NRL to govern the NRL Competition. The NRL Rules include, as Sched 6, the NRL Playing Contract and Remuneration Rules ("the NRL Playing Rules"). The objects of the NRL Playing Rules are, amongst other things, to provide a fair and even rugby league competition (rule 2(1)), to protect the interests of players who participate or may participate in the NRL Competition (rule 2(2)) and to ensure that by monitoring and enforcing the observance of a salary cap by each of the clubs, a balance is struck between the financial viability of the club and fair payment for players to enable the players to earn a living from rugby league as their primary source of income (rule 2(11)(h)). 3 Under the NRL Playing Rules, any club that participates or wishes to participate in the NRL Competition must be a party to a current Club Agreement (as that expression is defined in the NRL Rules: rule 22(1)) and must ensure that the club and its players have complied with and continue to comply with the NRL Rules (including its schedules and guidelines) (rules 22(2) and (3)). 4 Players must be registered to play in the NRL Competition: rules 23, 38 and 39 of the NRL Playing Rules. Application for registration is governed by rules 40 and 41 of the NRL Playing Rules. The provisions of the CBA are expressly incorporated into the standard NRL Playing Contract. Each NRL Club is required by the NRL Playing Rules to engage players under the standard NRL Playing Contract. The register records particulars of each NRL Playing Contract including the parties to it, the date it was entered into, the match fees and playing fees payable to the player and if the player was at the time of entry into the NRL Playing Contract represented by an NRL Accredited Player Agent, the name of the agent. Schedule 7 of the NRL Rules prescribes the "NRL Accredited Player Agents Rules". 8 The NRL Playing Rules expressly acknowledge that a player is a sportsman and may receive "Remuneration" as well as other income in a variety of forms from a variety of sources: Pts 8.3, 8.4 and 8.5 of the NRL Playing Rules. Two matters should be noted about these Parts of the NRL Playing Rules. A "Third Party Agreement" is defined to mean " any contract, agreement or arrangement, whether entered into by a Club, a Player or some other person or entity on behalf of a Club or a Player, whereby Remuneration is paid to, or for the benefit of, a Player by a Third Party ": rule 7(1) of the NRL Playing Rules. A "Third Party" is defined to mean any person or entity other than a Club or a Player and includes an Associated Entity to a Club: rule 7(1). A Third Party Agreement will form part of a player's Remuneration (and therefore be included in calculating a Club's salary cap) unless, amongst other things, the Third Party Agreement was negotiated independently between the player and the Third Party at arm's length from the Club. In determining whether a Third Party Agreement has been made at arm's length from the employing Club, one factor to be taken into account is whether " the Player is to be promoted by the Third Party as a sportsman independent of his Club who is associated with the Third Party as opposed to a Player from his Club ": rule 100. From 1998 to the present, Riddell has played in the NRL Competition on a full-time basis under 6 different NRL Playing Contracts for 3 different NRL Clubs. 11 The central issue is whether a management fee of $21,175 paid by Riddell to SFX Sports Group (Australia) Pty Ltd ("SFX"), a NRL Accredited Player Agent ("the management fee"), in the year of income ended 30 June 2005 ("the 2005 Income Year") is deductible under s 8-1 of the Income Tax Assessment Act 1997 (Cth) ("the 1997 Act "). 14 This proceeding was heard on the same day and immediately before Spriggs v Federal Commissioner of Taxation (VID 314 of 2007). To avoid unnecessary repetition in these reasons for decision, I incorporate and adopt in these reasons paras [32] to [41] of the reasons for decision in Spriggs. Those paragraphs set out the relevant legislation, the relevant principles and some general considerations concerning sport and professional sport examined by the High Court in Commissioner of Taxation v Stone [2005] HCA 21 ; (2005) 222 CLR 289 at [11] to [15]. When he was approximately 15 or 16 years of age, he was first represented by a player agent. That relationship ended towards the end of 1997 when Riddell was approached by Darryl Mather ("Mather") of International Sports Management Pty Ltd ("ISM"). 16 On 29 May 1998, Riddell entered into a management agreement with ISM ("the ISM Agreement"). [Riddell] desires to engage [ISM] to manage his affairs as hereinafter set out. b) Negotiate playing contracts on behalf of [Riddell]. d) Access and arrange legal, financial, superannuation, taxation, insurance and other appropriate advices and services at the request and cost of [Riddell]. [ISM] will keep [Riddell] informed in relation to any dealings or negotiations undertaken on [Riddell's] behalf. The term of this Agreement shall be for five (5) years and shall continue thereafter until terminated in writing by either party, provided that no less than three months notice shall be given. The said payments shall continue for a period of three years after termination of the contract in respect of any of the arrangements set out above which commence during the period of the agency. (ii) Match payments shall not be included for the purpose of this clause. c) The amount payable to [ISM] shall be paid within 14 days of receipt of monies by [Riddell]. Outside Australia, [ISM] may assign its rights and obligations hereunder to any company with which it is affiliated, including ProServ USA, ProServ UK, ProServ Europe, ProServ Italy and ProServ Japan. 11. During the first twenty four (24) months of the Period of Service [ISM] agrees to provide [Riddell] with a scholarship period. During this time, [ISM] agrees to waiver (sic) any remuneration which would otherwise be due and payable during this portion of the Period of Service as outlined in Clause 4b). This is in no way prejudices the remuneration which may become subsequently due and payable during the remainder of the Period of Service. On 18 November 1999, Riddell signed a further 1 year playing contract with Sydney City for the 2000 season. Riddell was not selected to play a first grade game with Sydney City. 18 During the course of 1999, ISM was acquired by SFX. On 6 June 2001, Riddell entered into a three year playing contract with St George for the 2002, 2003 and 2004 seasons. Each was a NRL Player Contract. Riddell's playing fee (including superannuation) for each of the 2002, 2003 and 2004 years was $100,000: cl 2 of sched 1. In addition, Riddell was paid $2,000 for each match won and $1,000 for each match drawn or lost: cl 1 of sched 1. 20 On the same date, 6 June 2001, Riddell entered into a further management agreement with SFX ("the First SFX Agreement"). That agreement contains substantially the same terms as the ISM Agreement. Five differences are to be noted. First, recital 2 was amended to record that Riddell desired to engage SFX to exclusively manage his affairs. Secondly, SFX was entitled to charge Riddell 7% (not 8%) of his payments for sporting events (cl 4b). 22 Before the end of the 2004 season, Mather of SFX attempted to negotiate a new playing contract for Riddell with St George. Mather proposed a new income for Riddell. St George did not consider Riddell was worth the amount sought by Mather. As a result, Riddell sought and was granted permission by St George to obtain expressions of interest from other NRL Clubs about Riddell prior to 30 June 2004. 23 Between April and June 2004, Mather met with representatives of Parramatta National Rugby League Club Limited ("Parramatta") and Cronulla-Sutherland District Rugby League Football Club Limited ("Cronulla"). Cronulla provided Mather with a written offer setting out proposed terms of a playing contract. The offer was withdrawn shortly afterwards. Subsequently, Parramatta proposed terms of a playing contract. Throughout this period, Riddell spoke to Mather two or three times a week about the progress of the negotiations. It is a standard NRL Playing Contract. The NRL conducts the elite competition for the Game throughout Australasia ("the NRL Competition"). The Club is the holder of a licence to field a team in the NRL Competition. Riddell is not entitled to any match fees: sched 1. However his total annual playing fee (including leave entitlements, superannuation and fringe benefits tax) is $275,000 for each of 2005, 2006 and 2007. 26 On 17 November 2004, a Tax Invoice was issued to Riddell by SFX for the management fee of $19,250, plus GST, totalling $21,175. The notation on the invoice reads "2005 management fees". It is this fee which the Federal Commissioner of Taxation ("the Commissioner") contends is not deductible in the 2005 income year. The evidence showed that on 23 October 2006. Riddell entered into a new management agreement with SFX. Neither party sought to rely either on the fact of making that agreement or the terms of it. It need not be considered further. Each playing contract was negotiated by ISM or, later, SFX. Under the relevant accredited agent's agreement (the ISM Agreement or the First SFX Agreement), this income was described as payment in respect of sporting events in which Riddell participated and for which the agent was entitled to receive a percentage. 29 In addition to those payments, in each income year, consistent with its obligations under the ISM Agreement and the First SFX Agreement, ISM and later SFX negotiated "sponsorship, media contracts, endorsement for goods and services, advertising or any form of promotional work" ("Additional Services"). Issue 1: was the management fee incurred by Riddell in gaining or producing his assessable income in the 2005 income year under s 8-1(a) of the 1997 Act ? The issue is whether the management fee was incurred by Riddell in the actual course of gaining or producing assessable income. The management fee was, as the invoice stated, for " 2005 Management Fees $19,250 ". The invoice was dated 17 November 2004. 35 Assessment of the first positive limb, s 8-1(a) of the 1997 Act , requires consideration of whether that management fee was relevant and incidental to Riddell's income as a NRL player. In my view, it was. 36 In the 2005 income year, all of Riddell's assessable income was gained or produced from his activities as a NRL player. This income was from two sources: " in respect of sporting events in which Riddell participates " (ie playing rugby league) and "Additional Services": see [30] above. The fact that professional NRL players, such as Riddell, produce income from activities other than playing rugby league is recognised in the express terms of the NRL Playing Rules (see [8] --- [9] above) and each of the management agreements (see [16] and [20] above). 37 Secondly, the relationship between the management fee and Riddell's income earning activities is direct. Riddell submitted that the services to which the management fee related were, as the invoice stated, for management fees. A label is never determinative: Commissioner of Taxation v Broken Hill Pty Co Ltd (2000) ATC 4659 at 4668; Colonial Mutual Life Assurance Society Ltd v Federal Commissioner of Taxation [1953] HCA 68 ; (1953) 89 CLR 428; Hallstroms Pty Ltd v Federal Commissioner of Taxation [1946] HCA 34 ; (1946) 72 CLR 634 and Sun Newspapers Ltd & Associated Newspapers Ltd v Federal Commissioner of Taxation [1938] HCA 72 ; (1938) 61 CLR 337. 38 The management fee was charged by SFX a few months after Riddell entered into the playing contract with Parramatta for the 2005, 2006 and 2007 seasons. The fee charged by SFX was the compensation SFX was entitled to receive under the First SFX Agreement and was 7% of the $225,000 in contract money Riddell was to receive for participating in 2005 in the sporting events set out in the playing contract, namely playing rugby league in the NRL Competition. Under cl 4a) of the First SFX Agreement, the fee to be charged to Riddell by SFX for securing "Additional Services" was 20%. The activities undertaken and income earned by Riddell in the 2005 income year related to these Additional Services are set out in [31] --- [32] above. 20% of those amounts would be a sum greater than the management fee in issue in these proceedings. 39 The fee paid by Riddell to SFX was compensation for SFX negotiating a playing contract with Parramatta. The playing contract facilitated the generation of income from the two sources identified in [36]. ISM and later SFX negotiated each of Riddell's playing contracts. That is not surprising. Mr Rodwell from the RPLA said that there are approximately 70 accredited NRL player agents and that he estimates that greater than 95% of the 25 highest paid players at any NRL club are represented by player agents. I am instructed that they all relate to the negotiation of the contract with Parramatta. If the amounts related to obtaining sponsorships they would have been claimed as a deduction (as the ATO recognises this is deductible). Clearly, by noting it and not claiming it as a deduction, you should accept that it is not for sponsorship. That evidence is both relevant and admissible: s 87 of the Evidence Act 1995 (Cth). Even in the absence of this evidence, the fee charged by SFX was of the kind described in [39] above. 41 Finally, employment does not preclude expenditure from being deductible under the first positive limb. It is common for expenditure relevant and incidental to income earned under employment to be deductible. In fact, classification of any arrangement as one of employment could be distracting if that were to be seen as determinative of the issue now under consideration. This is especially so here where the "employment" (as defined by the playing contract and the NRL Playing Rules) expressly contemplates exploitation of Riddell and by Riddell as a NRL player. Issue 2: was the management fee incurred by Riddell in carrying on a business for the purpose of gaining or producing his assessable income in the 2005 income year under s 8-1(b) of the 1997 Act ? In the 2005 income year, Riddell was carrying on a business for the purpose of gaining or producing his assessable income. He turned his rugby league talent to account for money both before and during the 2005 income year: see [30] --- [31] above. For the reasons outlined above, the management fee was incurred by Riddell in carrying on that business. 44 The Commissioner contended that because "business" " includes any profession, trade, employment, vocation or calling, but does not include occupation as an employee" (s 995-1 of the 1997 Act ), an outgoing incurred in the course of employment, or to obtain an employment, is not an outgoing incurred "in carrying on a business". Riddell was an employee of Parramatta. However, the mere fact that he was an employee does not mean that he was not carrying on a business. He clearly was. The answer lies in the definition of "business" and, in particular, the exclusion. "Business" includes employment. It does not include "occupation as an employee". Riddell does not have, and never has had, an "occupation as an employee". His occupation was and remains a professional sportsman who plays rugby league and who exploits his sporting talent as a NRL player " to account for money" . Whether Riddell was carrying on a business is a question of fact. As the High Court said in Martin v Federal Commissioner of Taxation [1952] HCA 36 ; (1953) 90 CLR 470 (at 479), " it is simply a question of the right conclusion to draw from the whole of the evidence ". It would be contrary to the whole of the evidence to conclude that because Riddell earned income under an employment contract he was not conducting a business. He was. Issue 3: was the management fee an outgoing incurred by Riddell at a point too soon to be incidental and relevant to the income producing activities of Riddell? As a result, the Commissioner contends that the management fee was incurred at a point too soon to be an expense incurred in gaining or producing assessable income. 47 I reject the Commissioner's contention that all expenditure incurred prior to the playing contract being signed was not deductible because it came " at a point too soon to be properly regarded as incurred in gaining assessable income " for the reasons set out in paras [56] to [62] of my reasons for decision in Spriggs . 48 Whether an outgoing does come at a point too soon to satisfy s 8-1(a) of the 1997 Act is determined by reference to the particular facts of each case. It cannot be said that the management fee incurred by Riddell was incurred by him " at a point too soon to be properly regarded as incurred in gaining assessable income ". 49 The management fee was expenditure outlayed within a framework in which Riddell, as a professional rugby league player, produced his income. That framework was the NRL Playing Rules, the ISM and the First SFX Agreement and the Playing Contracts. That framework has to be considered in context including Mr Rodwell's evidence that greater than 95% of the 25 highest paid players at any NRL club are represented by player agents. 50 Moreover, the management fee was not incurred prior to the generation of the income. The income was ongoing. The income that was generated as a result of the negotiations of ISM (and later SFX) was from two sources. One of those sources was the playing contract As noted above, the management fee in the 2005 income year was charged by SFX after Riddell signed the 2005 playing contract with Parramatta, a playing contract negotiated by SFX. The fee was, consistent with the First SFX Agreement, 7% of the payment specified in that playing contract for the 2005 year. As a matter of fact, it was a fee incurred by SFX only when the playing contract was signed. Absent the playing contract, there was no fee able to be charged. In those circumstances, it cannot be said that the management fee was incurred at a point in time too soon to be properly regarded as incurred in gaining assessable income. 51 Prior to the 2005 season, Riddell had not previously played for Parramatta. That the fee charged by SFX was for negotiating that playing contract does not affect the deductibility of the management fee. Riddell was a professional rugby league player. Within the identified framework, no distinction can be drawn between the signing of a new contract with the same club and the signing of a new contract with a new club. 52 As I said in Spriggs, argument by analogy must never be allowed to obscure the particularity of the arrangements in question. The Commissioner's reliance upon Federal Commissioner of Taxation v Maddalena (1971) 45 ALJR 426 does just that. Maddalena concerned an era of professional sportsmen and women which bears little or no resemblance to professional sport in the twenty first century. One only has to point to the absence of the electronic media, let alone the internet, in the 1930's to make good that proposition. Secondly, as with Spriggs, the factual matrix in Maddalena is very different to the factual matrix of Riddell. 53 Riddell was and remains a full time professional rugby league player. Maddalena was not. Riddell seeks to claim the management fee as a deduction. That fee was incurred after the playing contract was signed, not before, and could not be charged if no playing contract was negotiated. Maddalena sought to claim travelling expenses and legal expenses, expenses which were incurred before the playing contract and which were incurred regardless of whether or not a playing contract was secured. The management fee incurred by Riddell did not "come at a point too soon to be properly regarded as incurred in gaining assessable income". Issue 4: was the management fee a loss or outgoing of capital or of a capital nature? This argument also fails. and (2) is what it was really paid for, in truth and in substance, a capital asset? : Colonial Mutual at 454 and Sun Newspapers Ltd at 359-360. The advantage must be identified and characterised. The answer to those questions is not assisted by an analysis of the contractual right or rights secured under the contract, as distinct from the activity itself: see Commissioner of Taxation v Raymor (NSW) Pty Ltd [1990] FCA 193 ; (1990) 24 FCR 90 at 99 (per Davies, Gummow and Hill JJ) citing Dixon J in Hallstroms at 648. 58 The management fee was paid for a particular service rendered by SFX under the First SFX Agreement. That agreement obliged SFX to advise and represent Riddell in several related aspects all of which were concerned with exploiting his talents as a NRL player. That was what the expenditure was calculated to effect from a practical and business point of view. It was not an outgoing of capital or of a capital nature. The fee was only incurred if the activity for which it was charged was secured. It was an annual fee. It secured no lasting asset. I would allow the appeal and order the Commissioner to pay Riddell's costs of and incidental to the appeal. I will allow the parties to submit orders to give effect to these reasons for decision. | income tax allowable deductions where taxpayer is professional sportsperson whether sports management fee was an outgoing incurred in gaining or producing assessable income whether management fee was an outgoing necessarily incurred in conducting a business whether came at a point too soon to be relevant and incidental whether of a capital nature taxation |
These proceedings are brought pursuant to s 39B(1) and (1A) of the Judiciary Act 1903 (Cth) ( Judiciary Act ) and ss 19 , 21 and 23 of the Federal Court of Australia Act 1976 (Cth) ( FCA ). A declaration that the committal order is unlawful and of no legal effect, and an order in the nature of certiorari quashing the committal order. A declaration that the surrender decision is void and of no legal effect. An order in the nature of certiorari against the First Respondent to quash the surrender decision. An order for an injunction or an order in the nature of prohibition to restrain and prohibit the First Respondent from giving further effect to the surrender decision. An order in the nature of certiorari to quash the surrender warrant issued by the First Respondent on 12 November 2009 authorising the Officer in Charge of Hakea Prison ( Third Respondent ) to release the Applicant into the custody of officers of the Republic of Hungary ( the surrender warrant ). An order in the nature of habeas corpus directed to the Fourth Respondent requiring him to produce the Applicant to his Honourable Court and release the Applicant from custody. Such other orders as this Honourable Court sees fit. These reasons concern only the urgent motion for the granting of bail entitling him to be released from his current imprisonment. On 16 December 2009, bail was granted to Mr Zentai on similar terms and conditions to those imposed on previous occasions in relation to his challenges to extradition. In doing so, I indicated that I would publish reasons. These are the reasons. On 20 August 2008, Magistrate Barbara Lane, in the Magistrates Court of Western Australia, Perth determined that Mr Zentai was eligible for extradition to Hungary under s 19(1) of the Extradition Act and further issued a warrant under s 19(9) of the Extradition Act ordering committal of Mr Zentai to prison to await surrender. Later on the same day, on 20 August 2008, Mr Zentai made an application to the Court under ss 21(2)(b) and 21 (2)(b)(i) of the Extradition Act for an order to quash the order of Magistrate Lane made on 20 August 2008, by which Mr Zentai was found eligible for surrender for extradition to the Republic of Hungary. In addition, on 20 August 2008, Mr Zentai made an application for an order that he be released on bail pursuant to s 21(6)(f)(iv) of the Extradition Act . From 20 August 2008 until 31 March 2009, Mr Zentai was released on bail pursuant to my orders of 20 August 2008. On 31 March 2009, Gilmour J dismissed Mr Zentai's application to quash the Magistrate's decision ( Zentai v Republic of Hungary [2009] FCA 284). His Honour further ordered a stay of the orders, resulting from his judgment of 31 March 2009, until 7 April 2009. On 6 April 2009, Mr Zentai lodged an appeal from the whole of the judgment of Gilmour J given on 31 March 2009. The appeal was brought pursuant to the provisions of s 21(3) of the Extradition Act . On 7 April 2009, his Honour ordered a further stay of his orders until 11 May 2009. On 7 May 2009, the orders of 31 March 2009 were further stayed until 4.00 pm on 12 May 2009. On 12 May 2009, Gilmour J granted bail to Mr Zentai ( Zentai v Republic of Hungary [2009] FCA 511) in the following terms: Charles Zentai ("the Appellant") after complying with the conditions set out in Schedule 1 to this Order, be released on bail with a duty to surrender to the Federal Court of Australia upon the order of the Federal Court of Australia on a date and time to be notified to the Appellant by an officer of the Federal Court of Australia. The Appellant's passport, currently in the possession of the Magistrates Court of Western Australia, be transferred to the custody of the Australian Federal Police. On 24 August 2009, prior to the hearing of Mr Zentai's appeal to the Full Court of this Court, on 25 August 2009, Mr Zentai filed further submissions for extension of bail pending the delivery of the Full Court's decision. On 8 October 2009, the Full Court (constituted by Black CJ, Tracey, and Barker JJ) dismissed Mr Zentai's appeal ( Zentai v Republic of Hungary (2009) 260 ALR 400). The Full Court made the following orders: The appeal be dismissed. The appellant pay the first respondent's costs. For the purposes of s 21(6)(g) of the Extradition Act 1988 (Cth) the appellant is eligible for surrender within the meaning of s 19(2) of the Act in relation to an extradition offence. The order of the second respondent made pursuant to s 19(9) of the Extradition Act 1988 (Cth) on 20 August 2008 be confirmed. Execution of these orders and the order of the second respondent made 20 August 2008 be stayed for 14 days. The appellant's bail is confirmed on the same terms as granted by Gilmour J on 12 May 2009. On 15 October 2009, Mr Zentai confirmed in writing to the Department of Attorney-General that he would not be instituting an application for special leave to appeal to the High Court of Australia from the Full Court's decision of 8 October 2009. On 22 October 2009, Mr Zentai presented himself to the Australian Federal Police and was placed in custody at Hakea Prison in Western Australia. Mr Zentai now applies for an order to be released on bail, until the hearing and determination of his application for review by this Court, upon the same terms and conditions as those ordered by Gilmour J on 12 May 2009. That jurisdiction having been invoked, the Court may, under s 23 FCA in respect of matters in which it has jurisdiction, make such orders including interlocutory orders as it deems appropriate. This bail application is not made (nor can it be) under the Extradition Act . These proceedings relate to but are not dependent upon the specific provisions of that Act. It is common ground that special circumstances need to be shown together with, in effect, no risk of flight before bail should be granted in extradition proceedings, particularly at an advanced stage of those proceedings. Before turning to those considerations, it is necessary to consider whether or not in the context of an application which is based on s 23 FCA, the Court has jurisdiction and power under the incidental power provisions of s 23 FCA to grant bail on an application such as the present. The current case may be contrasted with Peniche v Vanstone [1999] FCA 1688 ; (1999) 96 FCR 38 and Chan v Minister for Justice and Customs [2001] FCA 170 ; (2001) 108 FCR 65 where Kenny J and Stone J respectively declined to grant bail on the basis that the primary relief sought in those cases would not, in any event, have brought about the release of the applicant in those cases from custody. The primary relief (as amended) in the present case is somewhat different. In Peniche, Kenny J (at 47) considered (obiter) that there was much to be said for the view that the provisions for remand on bail in the Extradition Act were not an exclusive code. As I have sought to show, that is not the situation in these proceedings. On the other hand, in the present application, Mr Zentai's challenge includes two grounds which go directly to whether he is an extraditable person. If he were to succeed on either of those grounds, it would not be open to the Minister to make a further determination under s 22 of the Extradition Act that Mr Zentai is to be surrendered in relation to the specified extradition offence. The application (as now amended) does seek appropriate orders which would result in Mr Zentai's ultimate release were the application to succeed and subject to further appeal. The two grounds of challenge which go to the heart of the issue as to whether he is an extraditable person are, first, that Mr Zentai is not 'accused' of an extradition offence as the extradition is sought only for the purpose of preliminary investigation. The second challenge is that Mr Zentai is not an extraditable person because the extradition offence in relation to which the Magistrate determined he was eligible for surrender under s 19(9) of the Extradition Act was not an offence in the Republic of Hungary at the time of the acts or omissions constituting the offence. This argument relies on Art 2, para 5 of the Treaty on Extradition between Australia and the Republic of Hungary 1995 ( the Extradition Treaty ). Accordingly, the present circumstances are distinguishable from the decisions in Chan and Peniche where the ultimate success of the outcome of those applications would not affect the warrant under s 19 of the Extradition Act under which the applicant was held in each instance. It did have an incidental power to its appellate jurisdiction (conferred by s 73 of the Constitution ). That power included doing all that was necessary to effectuate the grant of appellate jurisdiction including the power to stay orders that were or might become the subject of its appellate jurisdiction and to grant bail so as to make the stay effective. However, it held that bail should only be granted in extradition cases when two conditions were fulfilled. The first condition was that the circumstances of the case must be special in the sense that they were different from those that persons facing extradition would ordinarily endure when regard was had to the nature and extent of the extradition charges. The second was that there be an absence of any real risk of flight considered independently of the effect of any proposed bail conditions. It was held that where special circumstances were proven and there was no real risk of flight, bail may be granted unless the applicant posed a risk to the community or a particular individual. However, the Court did emphasise that one of the most important factors was the stage which the extradition proceedings have reached. As the case proceeds through the legal system, the chance of obtaining bail reduces despite the existence of special circumstances. Something 'exceptional' would need to be shown before bail would be granted by the High Court in extradition proceedings before a grant of special leave to appeal. The current circumstances are slightly different. Although there has been a deal of preceding litigation, it is a different jurisdictional basis and it is the incidental power of s 23 FCA which falls now for consideration. The power is to be exercised (if at all) by a single judge. Nevertheless, even though there are some stages beyond the present application for review, there is little doubt that the litigation viewed as a whole has advanced to a considerable degree. That said, the observations made by the High Court as to the need for 'exceptional circumstances' are expressly and inextricably linked to the high likelihood, indeed 'presumption', of flight when the only remaining legal avenue is a special leave application (and perhaps an appeal if special leave is granted) ( Cabal at [64]). Not only is the current application brought at an earlier stage (albeit that the litigation has ensued for some time) but for reasons indicated below, the flight risk is virtually non-existent. Unlike the facts in Cabal , Mr Zentai is not an alien who has come relatively recently from another country, leaving a secret cache of money overseas and who has prepared false documents preparatory to flight. In contrast, Mr Zentai has lived in Australia for over half a century. His support base including family and medical facilities are all located nearby. He is now aged 88. He has had admissions to Emergency Departments both here at St John of God Hospital Murdoch and Fremantle Hospital on 29 January 2008, 10 August 2008 and 30 January 2009 with AF that's reverted spontaneously within 24 hours. The atrial fibrillation is likely to get worse with time and is likely to continue to cause Mr Zentai the recurrent symptoms described above but also places him at risk of complications of stroke and heart failure. Whilst the stress of incarceration might exacerbate this condition I don't have any conclusive evidence that this would be the case. That practitioner's conclusions, while perhaps a little less gloomy, were similar, broadly speaking. In previous bail applications brought by Mr Zentai (such as Zentai v Republic of Hungary [2008] FCA 1335) it has been accepted that the risk of flight is extremely low. His age, medical condition previously described in earlier applications, long association as an Australian citizen, strong family connections with the Australian community, lack of financial resources (as a pensioner) are circumstances which, of themselves, make any risk of his absconding most unlikely. Added to those circumstances (and accepting that flight risk must be considered independently of any bail conditions), the conditions imposed on the orders directing his release including the impounding of his passport and the requirement that he regularly report to authorities and his movements be restricted realistically mean that there is no risk of Mr Zentai absconding. Although his medical conditions have previously been referred to, that has been updated in recent evidence. If it were apparent that the prospects of success on the main application were low, that would be a real factor to consider in the exercise of discretion as to whether or not to grant bail. Given the serious nature of the reciprocal obligations owed under extradition treaties and the importance of such treaties to Australia, obviously weak or colourable claims would not attract a favourable exercise of the discretion to grant bail. In contrast but without in any way speculating on its ultimate outcome, this application for review is extensive, comprehensive and has been carefully prepared. It raises a number of particular grounds of review based on specific provisions of the Extradition Treaty. The Extradition Treaty by virtue of s 11(1C) of the Extradition Act and the Extradition (Republic of Hungary) Regulations modifies the operation of the Extradition Act . The provisions of the Extradition Treaty, therefore, are important. For Mr Zentai it is argued that some of the provisions are fundamental in the sense that they preclude entirely, as a matter of law, the Minister exercising his jurisdiction under ss 22 and 23 of the Extradition Act . In essence, Mr Zentai argues that he is not an 'extraditable person' within the meaning of s 6 of the Extradition Act , because he is not 'accused' of a war crime, his extradition having been sought by the Republic of Hungary only for the purposes of initial investigation. Accordingly, there is no lawful basis for any proceedings against him under the Act. It is argued that this ground is strongly supported by statements made by the head of the Military Division, Budapest Metropolitan Court that issued the international arrest warrant on which the Hungarian request for extradition is based. It is argued that not only is this a substantial and significant ground for review but it also is a 'special circumstance'. Mr Zentai contends: Article 2 para 5 of the Extradition Treaty has the effect that the alleged war crime is not an 'extradition offence ' , which is the foundation of the request for surrender. There was therefore no jurisdictional basis for the Magistrate (under s 19 of the Extradition Act ) and the Minister (under s 22 of the Extradition Act ) to determine Mr Zentai's eligibility for surrender (Mr Zentai says this was an issue addressed, but not determined, in previous proceedings before the Full Court, which granted bail pending appeal); Article 3 para (1)(f)(ii) of the Extradition Treaty constitutes an absolute prohibition on the Attorney-General making an order to surrender Mr Zentai, because the Military Division of the relevant Hungarian court that issued a warrant for his arrest and before which he is liable to be tried (if charged) is a tribunal 'that is only occasionally, or under exceptional circumstances, authorised to try persons accused of the offence for which extradition is sought'. As a matter of discretion, the Attorney-General, erred in law in failing to refuse surrender (or give proper or any consideration to the refusal of surrender) on the basis of Art 3 para (2)(f) of the Extradition Treaty, namely, that in the circumstances, including the age, health and other personal circumstances of Mr Zentai, his extradition would be unjust, oppressive, incompatible with humanitarian considerations or too severe a punishment. (ii) The effect of ongoing proceedings and imprisonment on Mr Zentai, having regard to the fact that he is 88 years of age and suffers from a serious and debilitating medical condition. (iii) That the Minister, in discharge of Australia's international responsibilities under the International Covenant on Civil and Political Rights 1966 ( ICCPR ), cannot reasonably be satisfied that the Republic of Hungary would be able to afford Mr Zentai a fair trial, in accordance with international standards. In particular, the request for extradition is based on depositions made by persons in proceedings in the (then Communist) Hungarian Peoples' Court in the late 1940's. If tried, Mr Zentai could not, as required by Art 8 of the European Convention on Human Rights 1950 ( ECHR ) and Art 14 ICCPR, confront and examine witnesses as to the veracity and voluntariness of their confessions. Mr Zentai has asked whether the Hungarian prosecution authorities are able to produce for cross-examination the deponents on whose statements the Hungarian authorities would rely to found any prosecution. No such information has been provided by the Republic of Hungary, nor has the Australian Government sought any assurances as to how a fair trial can be conducted in the absence of these principal witnesses. Given that deficiency, it is said, the onus falls on the Australian Government to establish how it can surrender Mr Zentai for extradition to Hungary for investigation in Hungary if the Hungarian Government is unable to assure it that any criminal proceedings could and would be fairly conducted. (iv) The fact that Mr Zentai may be prejudiced at any future trial on the grounds of his nationality or political opinions by reason of bias on the part of the Hungarian People's Court in 1948 when it issued a warrant for his arrest. However, that obligation is not an absolute one, but subject to the qualifying provisions of the Extradition Treaty, either requiring or permitting Australia to refuse extradition in particular circumstances, which (as the grounds for review explain) apply in this case. It is argued that if the grounds for review were made out, then the surrender of Mr Zentai to extradition would be unlawful and Australia would be in breach of its international obligations to one of its nationals, by denying him the benefit of Art 2 para 5 and para 3(1)(f)(ii) of the Extradition Treaty. These unresolved grounds of objection, in contrast to the usual position following determinations under s 19 and s 21 of the Extradition Act may well, with other features of Mr Zentai's circumstances, constitute 'special circumstances'. The first concerns the state of Mr Zentai's health and age - also a relevant consideration for this Court when entertaining this bail application with regard to special or exceptional circumstances. The second consideration is the capacity of the Military Division of the Budapest Metropolitan Court to provide fair procedures to determine Mr Zentai could be guilty of the alleged offence in November 1944. It is argued that this is an international obligation, both of the Republic of Hungary, under Art 8 ECHR and Australia under Art 14 ICCPR. Australia is a party to the latter including the two protocols to the Covenant. Hungary is bound by the former. It is argued for Mr Zentai that whereas breach of the ECHR is essentially a matter for the Republic of Hungary and may result ultimately, if Mr Zentai were ever put on trial, in litigation before the European Court of Human Rights, breach of the ICCPR immediately confronts Australia with its international law obligation to Mr Zentai not to extradite him in breach of the ICCPR and the Extradition Treaty. Further, Art 9 ICCPR entitles Mr Zentai to his liberty subject only to procedures established by law. The liberty of the subject is a significant aspect not only regarding this objection but also generally to the overall context of this bail application. A third alleged aspect of oppression falling within Art 3(2)(f) is the fact that under the Hungarian Criminal Code the apparently mandatory minimum sentence for the offence of war crimes is 10 years. That, in the case of someone of Mr Zentai's age is a virtual life sentence. Finally, if bail is not granted, Mr Zentai, who is 88 years of age, would be likely to remain in prison for some considerable time. That is a further 'special circumstance', together with his deteriorating medical condition, which his continued incarceration is likely to exacerbate. Equally, for reasons indicated above, I am satisfied that this is an exceptional case and that bail should be granted. I note also that bail is not opposed. This is also significant, given the importance of Australia's treaty obligations, a factor which most certainly would not have escaped the first and second respondents. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | incidental power pursuant to s 23 of the federal court of australia act 1976 (cth) of the court to grant bail on judicial review application under s 39b of the judiciary act 1903 (cth) rather than under the extradition act 1988 (cth) jurisdiction |
It seeks to stay the decision of Senior Member Penglis of the Administrative Appeals Tribunal ('the Tribunal'), dated 15 March 2006 in application W2005/8, that the applicant enter into an enforceable undertaking with the respondent and that a banning order dated 2 May 2001 be revoked. The stay is sought until judgment, or discontinuance, or dismissal, or until further order. That motion is brought in reliance on s 44A of the Administrative Appeals Tribunal Act 1975 (Cth). The reviewable decision of the respondent dated 10 December 2004 is set aside. It has been submitted, and not contradicted, that on the occasion of the delivery of the oral reasons, provisional oral orders were made which were subsequently translated into the form of orders finally made on 15 March 2006. 4 The application requires reference to certain statutory provisions. The reasons for decision dated 15 March 2006 set out the terms of the undertaking. 9 The applicant brings three main arguments to support its case why the motion for stay should be granted. The first is that there is apparent uncertainty as to the operation of the Tribunal's orders. For example, reference is made to what is apparently an erroneous reference in those orders to s 420D rather than s 920D of the Corporations Act . Additionally, it is contended there is uncertainty as to the date when order 2(b) becomes effective. Additionally, it is said that order 2(b) appears to be inconsistent with s 920E(1) of the Corporations Act . Further, the reference to 'revoke' in the orders is said to not pick up and track the language of s 920D. Therefore it is said there is uncertainty as to the effect to be given to the orders. 10 I am unable to see how that contributes to the applicant's case meeting the test set out in s 44A(2) of the Administrative Tribunals Appeals Act of securing the effectiveness of the hearing and determination of the appeal. It is not necessary, therefore, for me to rule on any of those matters at this time on this motion. If those problems exist, their link to the effectiveness of the appeal is not made out. 11 The argument in the applicant's case is that public interest considerations require the grant of a stay. In this regard it is important to understand that the banning order which the Tribunal decision seeks to replace with an enforceable undertaking is not an order directed to keeping the person the subject of the order (Mr Daws) from holding any position as a director. Rather, it seeks to impose on him a permanent prohibition from acting as a representative or proper authority holder of a securities dealer or investment adviser. Certain conditions are set out in the order which, if they had been met, would have led to the non-applicability or limited applicability of the order. It is common ground that none of those conditions was met within the relevant time frames expressed in the order. 12 The enforceable undertakings are those which have been agreed as between the applicant and the respondent and which provide protections, arguably all in the public interest, akin to the protections in the banning order, but updating them to the circumstances as they now are. They relate to such things as undertakings received from Mr Daws and requirements placed on him in relation to education and supervision and so on. 13 I mentioned those background circumstances in order to state that the public interest considerations are not ones which are absent from the context where the enforceable undertaking which is sought to be put in place of the banning order would put in issue. The terms of the enforceable undertaking are directed against any danger of Mr Daws inappropriately engaging in the industry. In addition, Mr Daws has informed the Court, and it is common ground, that he has no intention of re-entering the industry and is not presently engaged in the industry to which the banning order relates in respect of his activities. 14 Rather, the public interest considerations on which the applicant now relies relate to the maintenance of the register that the applicant is required to keep and to which reference is made in the abovementioned provisions of the Corporations Act , in particular s 922A and reg 7.6.06 which specifies the details which must appear in the register. 15 At the conclusion of the reasons of the Tribunal of 5 April 2006, the Senior Member found and stated that he was satisfied that in taking the actions which he proposed and which are reflected in the decision and orders of the Tribunal, he was doing so because the public interest was not compromised as the paramount consideration. The respondent submits, and it is not contested, that such finding is not the subject of the appeal. There are, therefore, no public interest considerations arising which can be related to the issue of the effectiveness of the hearing and determination of the appeal. Concerns relating to register are not in this character. 16 I come to the second and main argument of the applicant's case. The essence of it is that the effectiveness of the appeal will be affected because unless the stay motion is granted, the appellate Court will not be able to make orders which will undo the acceptance by the applicant of the enforceable undertaking which the orders direct the applicant to accept. It is not apparent why the Tribunal, standing in the shoes of the applicant, did not make orders accepting the enforceable undertaking. There may have been reasons for that; the fact is, it did not occur. Had that occurred and been appropriate in terms of the Tribunal's power, such orders would appear to be likely to have been able to be set aside on appeal without difficulty. Here, however, the problem which the applicant sees is that it will have embarked on another act at the direction of the Tribunal, namely the act of acceptance of the enforceable undertaking. It contends that if the appeal succeeds, the Court will be unable to undo that act and restore the position to what it was and what it should be. 17 What the applicant is contending is that following a successful appeal there would nevertheless remain on the record the banning order and the accepted undertaking. Therefore the applicant submits that the hearing and determination of the appeal would be rendered nugatory (to the extent that the Court could not make appropriate orders to undo the acceptance of the enforceable undertaking). See Broadbent v Civil Aviation Safety Authority [1999] FCA 1871 per Cooper J at [6]. 18 For the respondent three submissions are made on this issue. The first is that the power of the Court to make orders on the appeal is such that it would allow the Court to make orders directed to the respondent to withdraw the undertaking, thus opening to the applicant the possibility of consenting to the withdrawal given to it in that respect under 93AA(2) of the ASIC Act . It is said this would avoid the undertaking remaining in effect in accordance with the power. 19 Secondly, the respondent submits that on the hearing of the appeal the Court could vary the undertaking so that it ceased to be effective before and upon the making of further orders allowing the appeal, subject to management of temporal considerations and any remaining arguments of power. These submissions are supported by reference to ss 44(4) and 44A (2) of the Administrative Appeals Tribunal Act . Reference is made by the respondent to the decision of Cooper J in Gray v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1992) 39 FCR 526 where his Honour was of the view that an issue there arising, namely of detention, was 'so bound up with the determination of the original appeal' that the Court had power to make an order in relation to it. The expression "by reason of its decision" delimits the general power to make such determination as it thinks appropriate. That is, orders can only be made if they are appropriate by reason of the decision on the point of law: Minister for Immigration and Ethnic Affairs v Gungor (1982) 63 FLR 441 at 454-455; Director-General of Social Services and Health v Hangan (1982) 70 FLR 212 at 223. These are issues which, if it were necessary to decide, I would embark upon in greater detail. However, given the possibility that they could arise again in the forming of orders were the appeal to succeed on these issues to then face the Court, I will not decide them unless it is necessary for me to do so. In my view, it is not so necessary. No reason has been submitted as to why the Court should not place reliance upon that undertaking. 22 The consequence of this is that if Mr Daws were to withdraw the undertaking in accordance with the undertaking so given to the Court, the applicant would have the option of consenting to such withdrawal. Again, see s 93AA(2) of the ASIC Act . True it is, that the fulfilment of this undertaking to the Court would not determine the exercise of the applicant's discretion as to whether to grant its consent. However, it would give to the applicant the opportunity of itself deciding should the appeal succeed whether or not to prevent the continuation of the enforceable undertaking. 23 In those circumstances, I cannot see how the Court can be satisfied that the effectiveness of the appeal requires the granting of the notice of the motion. The effect of the grant of the undertaking to the Court by Mr Daws would be to place the applicant in the situation where it had the option to determine the effectiveness of the appeal. In other words, I consider that the making of the undertaking to the Court is of such effect that I cannot be satisfied that the appeal would be rendered nugatory so that its effectiveness needs to be secured by a stay order. 24 There was reference in the submissions to the prima facie position which is reflected in s 44(1) of the Administrative Appeals Tribunal Act , namely, that subject to the section, the normal rule is that the institution of an appeal to the Federal Court from a decision of the Tribunal does not affect the operation of the decision or prevent the taking of action to implement the decision. As has been said, s 44A(2) to which the first subsection is subject, provides the possibility of amelioration of that prima facie position. 25 The application of the normal rule gave rise to submissions on behalf of the respondent based on whether he should be entitled to enjoy 'the fruits of victory', unless the applicant can satisfy the Court that it has met the test in the second subsection. 'The fruits of victory' are not easy to identify in the present circumstances. The respondent has ceased to engage in the industry the subject of the banning order and the enforceable undertaking, and advises the Court in evidence that he does not seek to do so in the future. At one time in the preparation and delivery of affidavits for this hearing, he claimed some prejudice on not being appointed to the board of a company named Niagara Mining Limited, of which he is manager, and of which he wishes to be a managing director. In an affidavit sworn on 23 May 2006 by the respondent that company has stated (by way of a letter annexed to the affidavit) that it will not appoint him as a director 'whilst the ASIC banning order is in place and their appeal is still to be determined'. That is, it has ceased to be a consideration that the grant of this motion may have affected his so-called 'fruits of victory' in that respect. This is because no action will be taken by that company in respect of the respondent until the appeal itself has been determined. Therefore I do not consider that anything arises to be weighed from the so-called 'fruits of victory' submissions. 26 For those reasons I am of the view that the applicant has not met the test of establishing that to secure the effectiveness of the hearing and determination of the appeal the motion for stay should be granted. Accordingly, the motion should be refused. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | banning order appeal from tribunal decision to substitute enforceable undertaking motion to stay entry into enforceable undertaking pending appeal undertaking by subject of order to withdraw undertaking on court direction if appeal succeeds in circumstances no apparent reason to grant stay to secure the effectiveness of the hearing and determination of the appeal corporations |
The President of HREOC terminated each of the complaints on the ground that he was satisfied that there was no reasonable prospect of the matter being settled by conciliation. Ms Rich instituted a proceeding against past and present partners of PwC under s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) alleging conduct in breach of that Act and the Sex Discrimination Act 1984 (Cth) following each termination. Those proceedings are now consolidated as this proceeding. 3 Amongst the claims advanced by Ms Rich in her second further amended statement of claim ("the statement of claim") are claims of discrete acts of sexual discrimination or harassment by particular respondents, claims of indirect discrimination by reason of the imposition of a working environment or culture antagonistic to efforts to address acts of the above kinds and claims of victimisation because of her complaints of sex discrimination. 5 Client legal privilege protects the confidentiality of certain communications, which may be but need not be written, made in connection with giving or obtaining legal advice or the provision of legal services. The communications accorded protection are those made for the dominant purpose of obtaining legal advice or to conduct or aid in the conduct of litigation in reasonable prospect ( Esso Australia per Gleeson CJ, Gaudron and Gummow JJ at [61]). 6 Client legal privilege exists to serve the public interest in the administration of justice by encouraging frank disclosure by clients to their lawyers. As Mason and Wilson JJ stated in Waterford v The Commonwealth [1987] HCA 25 ; (1987) 163 CLR 54 ( "Waterford" ) at 62, "the proper functioning of the legal system is facilitated by freedom of consultation between the client and the legal adviser". Their Honours went on to observe at pages 64-65 that legal professional privilege is the product of a balancing exercise between competing public interests whereby, subject to the well-recognised crime or fraud exception, the public interest in the administration of justice is accorded paramountcy over the public interest in a fair trial conducted by reference to all relevant documents (see also Esso Australia per Gleeson CJ and Gaudron and Gummow JJ at [35]). There is no further balancing exercise to be carried out; if client legal privilege attaches to a communication, the privilege may be waived or overridden by statue but is otherwise absolute ( Telstra Corporation Ltd v Minister for Communications, Information Technology and the Arts (No 2) [2007] FCA 1445 ( "Telstra" ) at [21]). 7 It is not sufficient for a party merely to assert a claim for client legal privilege; the party making the claim must establish the facts giving rise to the privilege ( National Crime Authority v S (1991) 29 FCR 203 at 211). Where the claim is made in respect of a document, the Court has power to examine the document for itself ( National Crime Authority v S at 211). I interpolate that in this case, to avoid the risk of my seeing privileged communications that might render it impossible or undesirable for me to be the trial judge, I have undertaken not to examine any document in respect to which privilege is claimed without first hearing from the parties. If, having done so, I am persuaded that it is necessary for the Court to examine the document but that it would be inappropriate for me to do so, another judge will be asked to determine the status of the document in question. 8 Although a party who asserts a claim for client legal privilege carries the onus of establishing the claim, where it is alleged that privilege has been waived in a communication that was privileged when made, the party alleging waiver carries the onus of establishing waiver ( Nine Films & Television Pty Ltd v Ninox Television Ltd (2005) 65 IPR 442 at [21]). 9 At common law a person who would otherwise be entitled to the benefit of client legal privilege will waive that privilege, perhaps unintentionally, if he or she engages in conduct that is inconsistent with the maintenance of the confidentiality that the privilege protects ( Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 per Gleeson CJ, Gaudron, Gummow and Callinan JJ at [28]). 13 It is admitted on the pleadings that access restrictions were imposed on Ms Rich in August 2004 and thereafter extended on a number of occasions until she ceased to be a partner in PwC. The access restrictions prevented her from, amongst other things, contacting or communicating with partners, clients or staff of PwC. 15 The respondents have not unequivocally pleaded to the allegation that an effect of the access restrictions was that Ms Rich was notified that her responsibility rating was to be reduced with a corresponding reduction in her partnership drawings. However, she contended that the respondents waived their privilege in the advice by putting in issue their state of mind by their plea in para 78F of the Defence. 17 Ms Rich submitted that because the respondents did not merely deny that the imposition of access restrictions constituted victimisation of Ms Rich, but positively asserted that the decisions to impose the restrictions were made in "good faith", they thereby asked the Court to find that they had an "honesty of purpose" (see the Macquarie Dictionary (online version) definition of "good faith"). Consequently, she submitted, the Court will be required to examine the basis upon which the respondents "honestly" made their decision to impose the access restrictions. 18 It is not in dispute that the respondents received legal advice concerning the decision to impose access restrictions on Ms Rich. She argued that the respondents conduct was therefore inconsistent with the maintenance of confidentiality in their legal advice; by putting in issue their state of mind they had invited examination of the legal advice which had been critical to their decision to impose the access restrictions. 20 The form of implied waiver that Ms Rich seeks here to invoke is known as "issue waiver". Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. ... What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. It is not necessary for me to refer extensively to what their Honours there said as they summarised their conclusions at [60]-[61]. At [60] their Honours emphasised that the authorities reveal that whether or not privilege has been waived will in every case depend very much on the particular circumstances of the case. She has alleged that Mr Harrington, the Management and the Board imposed access restrictions on her on one or more of five grounds identified in s 94(2). 23 By para 77 of the Defence the respondents have, in effect, admitted the imposition of the access restrictions but denied that they were imposed on any of the grounds identified in s 94(2). By paras 78A-78E the respondents expand on that denial by identifying the conduct of Ms Rich that they allege constituted the basis for the grounds on which the access restrictions were imposed. In the circumstances, I conclude that the preferable understanding of para 78F of the Defence (which is set out in [13] above) is that it asserts no more than that the imposition and confirmation of the access restrictions were a genuine response (as opposed to a contrived response) to the matters identified in paras 78A-78E and that response was reasonable and in the best interests of PwC. 24 So understood, s 78F of the Defence does not raise any questions of reliance on legal advice. While the respondents have (appropriately) gone beyond mere denial of Ms Rich's allegations, they have not done so in a way that gives rise to any inconsistency between their conduct and the maintenance of the confidentiality of their legal advice. The additional material pleaded by them does not put the content of their legal advice in issue by pleading their state of mind in a way that invokes reliance on the content of legal advice; rather it identifies conduct of Ms Rich to which the respondents assert that the access restrictions were a genuine response. 25 The above factual findings mean that it is appropriate for me to follow the approach adopted by Allsop J in DSE (Holdings) Pty Ltd v Intertan Inc [2003] FCA 384 ; (2003) 127 FCR 499 at [115] . His Honour there rejected a contention that by denying an allegation as to their state of mind, the respondents had put in issue their state of mind and, to the extent that the respondents received legal advice which might have contributed to the state of mind asserted by them, they had waived privilege on the advice. It is not apparently open to another party to litigation to force waiver of a party's legal professional privilege by making assertions about, or seeking to put in issue, that party's state of mind. 28 The parties were in agreement that the appropriate test to be applied in determining whether or not the respondents have waived privilege in the external legal advice referred to in the letter of 19 April 2005 is whether they have in effect disclosed the substance or conclusion of that advice. The voluntary disclosure of the gist or conclusion of the legal advice amounts to waiver in respect of the whole of the advice to which reference is made including the reasons for the conclusion. The test looks to inconsistency between the disclosure that has been made by the client on the one hand and the purpose of confidentiality that underpins legal professional privilege on the other. It is not a matter simply of applying general notions of fairness as assessed by the individual judge. The authorities to which I have referred show that it is well established that for a client to deploy the substance or effect of legal advice for forensic or commercial purposes is inconsistent with the maintenance of the confidentiality that attracts legal professional privilege. The weight of the authorities, in my view, supports the conclusion that the disclosure of the conclusion reached in or course of action recommended by, an advice can amount to waiver of privilege in respect of the premises relating to the opinion which has been disclosed, notwithstanding that this reasoning is not disclosed. By way of illustration, if there is a disclosure that a client has been advised that interpretation 'A' is preferable to interpretation 'B' of a legislative provision, then even if there is no disclosure of the reasoning leading to that conclusion, the reasoning and content of the advice may be waived, including the factual premises and circumstances leading to that conclusion. 31 The critical question concerning the letter dated 19 April 2005 is thus its proper construction. For this reason only limited assistance is provided by consideration of the facts of other cases. It is necessary for me to form a view, after consideration of the whole of the letter of 19 April 2005, as to whether the respondents by that letter deployed the substance or effect of their external legal advice for forensic purposes. Assuming for present purposes the correctness of the proposition tentatively advanced by Tamberlin J (see [30] above), there would have been no waiver if the letter simply asserted, in effect, that PwC had taken legal advice and thereafter acted from 2 July 2004 in the way complained of by Ms Rich. 32 In my view, a fair reading of the letter of 19 April 2005 leads to the conclusion that it was calculated to convey the message that the conduct of PwC from 2 July 2004 was undertaken on external advice and in accordance with that advice, and, for that reason, PwC did not believe that there had been any victimisation or other conduct for which compensation could properly be sought. This conclusion can, it seems to me, be tested by asking whether, were it the case that PwC had acted in disregard of its external advice, or were it the case that its belief that there had not been any victimisation or other conduct for which compensation could properly be sought was inconsistent with its external advice, would the letter have been misleading? In my view, it is plain that it would have been. The statement that PwC had "acted at all times with the benefit of external advice" was apparently made for the purpose of fortifying the claim that it had not engaged in victimisation, or in other conduct for which compensation could properly be sought. Implicit in the calling-in-aid of the external legal advice for this purpose was the claim that the external legal advice supported the conduct of PwC. 33 I therefore reject the submission of the respondents that the letter does not disclose the substance or conclusion of the external advice received by the respondents and that the statement in the letter reproduced in [18] above amounts to a simple assertion that the client has taken legal advice and has acted with the benefit of it. 34 For the above reasons I find that by the letter of 19 April 2005 the respondents disclosed the gist or conclusion of the external legal advice to which the letter refers. I therefore conclude that they thereby waived client legal privilege in that advice. The waiver does not extend to advice other than external legal advice. Nor does it extend to external legal advice received after the date of the letter. Whether in any particular case the relationship is such as to give rise to the privilege will be a question of fact. It must be a professional relationship which secures to the advice an independent character notwithstanding the employment. If the purpose of the privilege is to be fulfilled, the legal adviser must be competent and independent. Competent, in order that the legal advice be sound and the conduct of litigation be efficient; independent, in order that the personal loyalties, duties or interests of the adviser should not influence the legal advice which he gives or the fairness of his conduct of litigation on behalf of his client. If a legal adviser is incompetent to advise or to conduct litigation or if he is unable to be professionally detached in giving advice or in conducting litigation, there is an unacceptable risk that the purpose for which privilege is granted will be subverted. 38 Although Brennan J expressed a narrower view than Mason and Wilson JJ on the question of when legal professional privilege attaches to confidential professional communications between government agencies and salaried legal officers, their Honours were in agreement as to the need in every case for the legal adviser to be "independent" (see also Deane J at p 80). See also Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2) [1972] 2 QB 102 per Lord Denning MR at 129. 39 I do not understand the other members of the High Court in Waterford to have suggested a different rationale for the requirement of independence from that identified by Brennan J in the above passage. His Honour's reference to professional detachment is consistent with the ordinary meaning of "independent". 40 The content of the requirement that a legal adviser be independent is understandably less stringent than the requirement that, for example, a judge be independent. However, it is informed by the same notions of absence of fear or favour. The concepts of independence and objective impartiality are closely linked ( The Queen (Brooke and Another) v Parole Board and Others [2007] EWHC 2036 (Admin) at [19]). An independent legal adviser is one who can bring a disinterested mind to bear on the subject matter of the legal advice. In the words of Brennan J in Waterhouse , what is required is a legal adviser who is able to be "professionally detached" in giving the advice. 41 Ms Rich submitted, in effect, that (a) the independence of legal advice provided by OGC could not rise above the independence of the person who holds the position of General Counsel because that person supervises, and carries responsibility for, the work of OGC; and (b) since at all relevant times General Counsel has been a partner in PwC, OGC's legal advice has not been independent because General Counsel has been both legal adviser and client. I have not found it necessary to form a concluded view as to the validity of the second part of this broad submission although the first part seems to me to be correct. For present purposes it is sufficient for me to reach a view on whether, having regard to the nature of the dispute between Ms Rich and PwC that forms the subject matter of this proceeding, the relationship between OGC and PwC was a professional relationship which secured OGC's advice an independent character notwithstanding that General Counsel, and one other senior solicitor in OGC, were partners in PwC. 42 Ms Rich did not argue that a salaried, or in-house lawyer, necessarily lacks the independence necessary for client legal privilege to attach to his or her advice. On the other hand, if the personal loyalties, duties and interests of the in-house lawyer do not influence the professional legal advice which he gives, the requirement for independence will be satisfied. In Telstra his Honour concluded at [36]-[39] that as no evidence had been adduced going to the independence of the relevant internal legal advisers no sufficient claim for legal professional privilege had been made. I reject the submission of Ms Rich that the respondents in this case have similarly adduced no real evidence going to the independence of OGC. I refer below to the evidence touching on the independence of OGC. The dominant purpose test has particular importance in relation to the position of in-house counsel because they may be in a closer relationship to the management than outside counsel and therefore more exposed to participation in commercial aspects of an enterprise. The courts recognise that being a lawyer employed by an enterprise does not of itself entail a level of independence. Each employment will depend on the way in which the position is structured and executed. For example, some enterprises may treat the in-house adviser as concerned solely in advising and dealing with legal problems. As a matter of commercial reality, however, both internal and external legal advisers will often be involved in expressing views and acting on commercial issues. The authorities recognise that in order to attract privilege the legal adviser should have an appropriate degree of independence so as to ensure that the protection of legal professional privilege is not conferred too widely. Commercial reality requires recognition by the courts of the fact that employed legal advisers not practising on their own account may often be involved to some extent in giving advice of a commercial nature related to the giving of legal advice. Such involvement does not necessarily disqualify the documents relating to that role from privilege. The matter is necessarily one of fact and degree and involves a weighing of the relative importance of the identified purposes. ... I am cognisant of the fact that there is no bright line separating the role of an employed legal counsel as a lawyer advising in-house and his participation in commercial decisions. In other words, it is often practically impossible to segregate commercial activities from purely "legal" functions. The two will often be intertwined and privilege should not be denied simply on the basis of some commercial involvement. In the present case, however, I am persuaded that Mr Philip was actively engaged in the commercial decisions to such an extent that significant weight must be given to this participation. In many circumstances where in-house counsel are employed there will be considerable overlap between commercial participation and legal functions and opinions. As can be seen from the specific rulings below, I am not persuaded that in this proceeding Mr Philip was acting in a legal context or role in relation to a number of the documents in respect of which privilege was claimed. Nor am I persuaded that the privilege claims were based on an independent and impartial legal appraisal. That is, 'independence' has to be determined having regard to whether or not the person in question was performing a legal function (rather than a commercial or management function) in making a communication or preparing a document. The decision is not authority for the proposition that an in-house lawyer is, prima facie, someone who is not independent of the client. Nor is it authority for the proposition that, where there is some issue about independence in the sense outlined above, none of the documents generated by the in-house counsel can attract privilege. Instead, as the analysis of the documents generated by Mr Phillip shows, privilege can still be maintained in all documents generated in a legal context, or which embody or refer or relate to legal advice. The requirement that the legal adviser be independent is principally concerned with the nature of the relationship between the client who claims client legal privilege and the legal adviser. The requirement that the communication be made for the dominant purpose of obtaining legal advice or to conduct or aid in the conduct of litigation in reasonable prospect is concerned with the object and subject matter of the communication. Each criterion must be satisfied before a claim for client legal privilege will succeed. The person directly responsible for the legal advice and other legal services provided by OGC is the holder of the position of General Counsel. At all relevant times the holder of the position of General Counsel has been a partner in PwC. Elizabeth Jane Dibbs, solicitor, was General Counsel for the period from 1 July 1998 until her retirement in December 2004. At all times while she was General Counsel she held a current practicing certificate and each of the solicitors in OGC also held a current practicing certificate. Ms Dibbs' successor as General Counsel was Meredith Kim Beattie, solicitor. Prior to joining PwC on 8 February 2005, Ms Beattie had been a partner in the legal firm Blake Dawson Waldron for almost 16 years. She has maintained her practicing certificate as General Counsel and each of the solicitors in OGC continues to hold a practicing certificate. 48 I accept the evidence of Ms Dibbs and Ms Beattie concerning the general functioning of OGC. Their evidence demonstrated that OGC operates as a separate functional unit with PwC. Both Ms Dibbs and Ms Beattie have regarded it as essential that OGC operate on a professional basis, providing professional legal advice and services to PwC with the same level of objectivity as would external lawyers. Separate files are opened within OGC and marked accordingly. Working documents and current files are either kept in a separate and secure OGC area or in lawyers' offices capable of being locked. OGC is separately located on an administrative floor away from the business units of PwC. Neither Ms Dibbs nor Ms Beattie has held any management or executive positions at PwC, nor have any of the other solicitors in OGC. Nonetheless, Ms Howard, the Deputy General Counsel, has fulfilled the role of secretary to the Board of partners and was (perhaps is) a member of the Partnership Amendment Review Committee. In both capacities Ms Howard's role has been to provide professional legal advice and legal services and incidental administrative services such as preparing agendas and collating papers. 49 Under the supervision of each of Ms Dibbs and Ms Beattie, OGC has provided legal advice and legal services to PwC on all issues that touched the firm or required legal advice including regulatory enquiries, litigation, contract reviews, transactions and, when necessary and appropriate, briefing external lawyers and counsel to support OGC in its role and to provide external legal advice and services. She received a copy of the letter and read it. She considered it her role to advise PwC, with the benefit of external legal advice, as to the appropriate manner in which to address the complaints and the serious matters raised by the letter. By the end of July 2004 Ms Dibbs held the view that, unless the matter could be resolved to Ms Rich's satisfaction, there was a real prospect that the matter would end up in some sort of dispute proceeding. I infer that by the end of July 2004 Ms Dibbs was of the view that litigation between PwC and Ms Rich concerning some or all of Ms Rich's complaints as recorded in the letter of 2 July 2004 was in reasonable prospect. I also infer that Ms Beattie formed the same view at the time that she joined PwC or shortly thereafter. 51 The parties accept that the dispute between them was effectively crystallised by Ms Rich's letter of 2 July 2004. By that letter Ms Rich indicated that she sought PwC's co-operation "in trying to reform and rehabilitate the firm". Attached to the letter was a 23 page paper identifying issues that Ms Rich asserted required resolution. 52 The executive summary of the paper stated that a number of significant issues arose prior to, during and after a mediation process in which Ms Rich and Mr Stuart Edwards had been involved. However, in my view, all of the issues require the firm's attention and steps be taken by the firm to resolve the situation. Part C of the paper, which is headed "Inadequate Processes/Appeal Procedures", asserted that there were a number of decisions which business unit leaders at PwC have authority to make which are not subject to adequate guidance processes or appeal procedures despite being highly discretionary and capable of having a significant impact on partners and employees. Part F of the paper, which is headed "Recommendations and Way Forward", included a recommendation that steps be taken by PwC to facilitate a "turn-around" in the firm's culture. The steps suggested included the establishment of a steering committee to guide an external inquiry into the culture of the firm and to establish processes to bring about reform firm-wide. This part of the paper also recommended the introduction by PwC of an enhanced risk management process to assist in preventing departure from the firm's values and to facilitate the raising of, and the fair processing of, value issues and grievances. 54 It can be seen from the above that the subject matter of Ms Rich's complaints concerning PwC, and thus the likely subject matter of any litigation between Ms Rich and the respondents, was of a character quite different from the subject matter of legal advice or legal services that OGC ordinarily provided. It was far removed from, for example, commenting on commercial documents to which PwC might become a party, acting for the firm on the sale or acquisition of a business, representing the firm in dealing with regulators or appearing for partners and staff at hearings conducted by regulators, to mention some of the matters identified by Ms Beattie as being the kinds of legal advice and legal services ordinarily provided by solicitors in OGC. 55 The litigation in prospect was also far removed from the kind of litigation in which PwC might ordinarily be involved in that it did not relate to any professional services provided by PwC or any commercial activity in which the firm had engaged. Rather it concerned matters wholly internal to the firm; that is, the firm's culture, its internal decision-making processes and allegations about the way in which at least some of the partners of the firm related to each other. More specifically, it involved allegations made by one partner of PwC against other partners in the firm. The allegations were of inappropriate conduct of a sexual nature by senior partners of the firm, as well as allegations against a number of partners of bullying, harassment and discrimination, and acquiescence by the most senior leadership of the firm in such conduct. It may be that as in-house lawyers, including corporate counsel, play an increasingly important role in advising and providing other legal services to their employers and firms, the common law has come to accept that the requisite independence can be ensured by measures of the kind adopted by OGC (see [48] above). This question can be left to be decided another day. 57 The question for present determination is whether the measures described by Ms Dibbs and Ms Beattie were sufficient to enable OGC to give independent advice to PwC concerning the allegations and claims advanced by one partner, Ms Rich, against other partners in the firm. 58 In reaching a decision as to whether the relationship between OGC and the respondents was such as to secure to OGC's advice concerning Ms Rich's allegations and claims an independent character, I am not required to speculate about how General Counsel, or other solicitors in OGC, in fact approached the giving of that advice ( Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 per Gleeson CJ, McHugh, Gummow and Hayne JJ at [7]). It may be that General Counsel and each solicitor in OGC was fully conscious of, and capable of avoiding, the insidious influences of factors such as loyalty to individual partners and to the firm including its leadership, concern for the reputation of the firm and the reputations of individual partners in the firm and other like matters. The critical question is whether the relationship between OGC and the respondents with respect to Ms Rich's allegations was one of professional detachment. 59 To answer the above question it is necessary to give consideration to the nature of Ms Rich's allegations and the significance that they might have for General Counsel and OGC generally. As mentioned above, they were made by one partner against other partners. It seems uncontroversial that they were of a kind capable of tarnishing the reputation of the firm of which OGC is a part. They cast aspersions of a personal, rather than a purely professional kind, on General Counsel's partners including those partners who comprised the leadership of her firm. General Counsel and the Deputy General Counsel were themselves likely respondents in the litigation in prospect. Because of its likely subject matter, that litigation, should it eventuate, could reasonably be expected to attract a high level of media interest of a relatively sensational kind. For these reasons I conclude that Ms Rich's allegations were by reason of their content inherently likely to engage the personal loyalties and the duties and interests of all partners of PwC --- and probably many employees of the firm as well. 60 I therefore conclude that, having regard to the nature and significance of the allegations raised by Ms Rich in her letter of 2 July 2004, the relationship between OGC and the respondents was not such as to secure the advice of OGC concerning Ms Rich's allegations the objectively independent character necessary to support the respondents' claim of client legal privilege. OGC was not in a position to give professionally detached advice to the respondents concerning allegations of the character of those made by Ms Rich. I have concluded that the work of OGC did not attract client legal privilege. However, if I am wrong in this regard, for the reasons given above in respect of the letter dated 2 July 2005, I conclude that by the letter of 3 November 2004 the respondents waived privilege in the work undertaken by OGC to that date. The Transfer Pricing Group formed part of TLS. Ms Rich reported to Mr Edwards until June 2004. Her primary allegations of sexual discrimination are made against Mr Edwards. 64 It is not disputed that some time in late May or June 2004 Mr Edwards retained external counsel to advise him personally concerning Ms Rich's allegations. His external counsel was not retained to advise PwC or any person within PwC other than Mr Edwards. Nonetheless, he disclosed the advice received by him, or some of it, to others within PwC. The issue for my determination is whether Mr Edwards thereby waived his client legal privilege in that advice. He will not have done so if there was a commonality of interest between Mr Edwards and those to whom he disclosed the advice such that the disclosure did not constitute a waiver of privilege or, alternatively, if the disclosure occurred in circumstances inconsistent with waiver of privilege. 65 Robert Buchanan, a solicitor in the employ of the firm Maurice Blackburn which is retained by Mr Edwards, gave evidence of certain matters of which Mr Edwards has informed him. It is consistent with what might be expected; namely that at this time Mr Edwards saw his interests as being advanced by PwC responding to complaints made by Ms Rich in accordance with advice given to him by lawyers who had received their instructions from him and whose duty was to act in his best interest. 69 It is accepted by Ms Rich that, once she instituted a legal proceeding against the respondents, Mr Edwards shared a common interest in the outcome of that litigation with all the other respondents. However, she contended that the evidence revealed that earlier than this time Mr Edwards had a selfish interest in protecting his own position within PwC. In a file note dated 18 June 2004 Mr Edwards recorded that he had received some "mixed messages from PK [Paul Koenig, a respondent] and NW [Neil Wilson, a respondent] over the last two weeks" and did not feel that he had been "handled well in the process". He further recorded that he took issue with being told by Neil that he was not "squeaky clean". I also said, last Tuesday, Neil said, SJE has only 2 years to go until retirement yet Neil is well aware of my plans to work till 2008 and possibly beyond. ... I said, I went to meet with Paul and Neil face-to-face on some of these matters (PK is overseas at present) to discuss how we take this forward (and confirm comments as to SJE personal position). 74 The respondents argued that nonetheless, as litigation privilege arises from the time that there is a real prospect of a proceeding, any communications between the respondents relating to their common interest in the litigation in prospect is privileged. However, a complicating feature of the present case is that Ms Rich remained a partner in PwC until after she commenced the first of her proceedings in this Court on 4 October 2005. Moreover, in the period preceding 4 October 2005 PwC was conducting an internal review of the complaints made by Ms Rich. Assuming, as it is for present purposes appropriate to do, that the review was bona fide , the interests of the respondents as a group were not then wholly aligned with those of Mr Edwards. If the allegations against one or more partners are eventually substantiated, then certain consequences may flow. If they are unsubstantiated, then certain and different consequences may flow. While all partners in PwC (other than Ms Rich) had a common interest in successfully defending the litigation which it was anticipated that Ms Rich might institute, prior to the institution of any proceeding there were issues arising from Ms Rich's allegations in relation to which Mr Edwards had a selfish interest. The interest of PwC as a firm at that time was to conduct a fair review which included accepting the possibility that Ms Rich's allegations, or some of them, had substance. Mr Edwards' interest was in exonerating himself in respect of Ms Rich's allegations against him and in demonstrating that he was the appropriate person to hold the position of TP Leader. 77 I conclude that, to the extent that Mr Edwards obtained legal advice concerning questions in which his interests were selfish, and potentially adverse to the interests of PwC, he and PwC did not share common interest privilege in that advice. The Court was divided upon whether, in the circumstances of the case, privilege was waived. However, the reasoning of all members of the Court was inconsistent with the proposition that any voluntary disclosure to a third party necessarily waives privilege. No application was made on the present appeal to re-open Goldberg or any of the earlier authorities on the subject. The disclosure of the privileged communications was to a limited group, namely those attending the meeting. While there is no evidence of an express undertaking by the non-clients present at the meeting to preserve confidentiality, the circumstances suggest that the non-clients were under an implied obligation to respect the confidentiality of the communications at the meeting. Having regard to the evidence of Mr Buchanan described above and the circumstances relevantly prevailing at PwC, I am satisfied that each of Mr Harrington and Ms Dibbs was under an implied obligation to respect the confidentiality of Mr Edward's legal advice. Both of them may be assumed to have understood that there were strict limits on the extent to which they were free to disclose that advice to others without Mr Edward's approval. The evidence discloses that the advice, or aspects of it, were disclosed by Mr Harrington to Mr Rob Ward and Mr Patrick McKeon as well as Ms Dibbs. However, each of Mr Ward and Mr McKeon appear to have been senior partners in PwC who were involved in attempts to resolve the dispute between Ms Rich and Mr Edwards. Disclosure of Mr Edwards' legal advice to them was, it seems to me, within the ambit of the purpose for which the advice was disclosed to Mr Harrington and subject to the same implied restraint on further disclosure. 81 I therefore accept that, notwithstanding the disclosure by Mr Edwards of his legal advice to Mr Harrington and Ms Dibbs, he has not waived his client legal privilege in that advice. A written record of the limited disclosure made by Mr Edwards to Ms Fazzino of one aspect of his legal advice has been published on a number of occasions. No claim of privilege can now be upheld in respect of that record. I will at the same time hear counsel on whether it is necessary for the Court to examine any documents in respect of which client legal privilege has been claimed in order to determine the validity of the claim, and if so, whether any embarrassment to my position as docket judge might result from my conducting that examination. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson J. | issue waiver whether respondents through their pleadings put in issue their state of mind whether this resulted in waiver of legal professional privilege in alternative did letter from respondents' solicitors referring to "external advice" constituted express waiver of that advice? held: pleadings did not constitute issue waiver express waiver only of advice referred to in letter. need for legal adviser to be independent whether office of general counsel ("ogc") which included two respondents lacks necessary independence to maintain claim of privilege specifically whether requisite independence for allegations in current proceeding held: with regard to applicant's allegations relationship between ogc and respondents not capable of being one of professional detachment. common interest privilege whether at relevant time respondents shared requisite common interest to maintain claim for privilege alternative did limited disclosure amount to waiver? held: common interest privilege not established where one respondent has a selfish interest in obtaining advice. disclosure of limited nature did not amount to waiver. legal professional privilege legal professional privilege legal professional privilege |
Both the application and the affidavit were filed on 21 November 2006. The affidavit exhibits a notice of appeal which seeks to agitate particular grounds. The matter was listed for determination at 10.15am this morning. The matter was called at approximately 25 past 10.00am. Since sufficient time has elapsed to enable the applicant to appear before the court to agitate the merits of the application and the applicant has not appeared, I propose to deal with the application from the respondent that the matter be dismissed for non-appearance on the part of the applicant. 2 Accordingly, I dismiss the matter on that footing, with costs. 3 I have an application from the respondent in relation to the quantum of the costs. The proposition that is put to the court is that the solicitor-client costs associated with the preparation of a response to the application and incurred in addressing the merits of the application on a solicitor-client basis are approximately $2000. The respondent seeks an order for quantum of costs at $1,300 and I am prepared to make an order in relation to this matter on the papers at $1,300 and therefore fix the costs payable by the applicant to the respondent in that sum. 4 I make a direction that the title of the respondent be amended from Minister for Immigration and Multicultural Affairs to 'Minister for Immigration and Citizenship' and that that respondent become the first respondent. Consistent with authority, I make an order that the Refugee Review Tribunal be joined as a second respondent in the proceedings. I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for leave to appeal from a decision of the federal magistrates court migration |
The Act provides when such a notice may be issued. Before issuing the competition notice the Commission was required to give Telstra a written notice pursuant to s 151AKA(10) of the Act ('the consultation notice'). The Commission served the consultation notice in purported compliance with the Act. 2 Telstra, by a notice of motion, seeks discovery of what may generally be referred to as documents internal to the Commission relevant to the decisions to issue the two notices. The Commission opposes all such discovery. Between 23 September 2005 and 22 December 2005, Telstra and the Commission exchanged information and had meetings about Telstra's proposal to increase the price of HomeLine Part and Home Access. At no time prior to 30 November 2005 did the Commission communicate any concerns about those increases to Telstra. The Commission asked Telstra on 30 November 2005 to refrain from implementing the increases pending further investigation by the Commission. Telstra declined to do so. On or about 22 December 2005, the Commission decided to and did issue Telstra with the consultation notice. Telstra alleges that the consultation notice was deficient in its form and content. 6 Those matters depend on the construction of the consultation notice and the statutory requirements. It is alleged that the Commission could not pay proper, genuine and realistic regard to Telstra's submission in response where the process had "failed" as pleaded. 9 Telstra alleges that, by reason of the matters pleaded, the Commission failed to comply ' with its duty to accord procedural fairness and natural justice to Telstra in connection with its decision to issue the Consultation Notice '. 10 The allegations are denied. 11 The statement of claim, which Telstra says was carefully drawn, does not logically require knowledge of the actual processes of the Commission in its consideration of the consultation notice. Bearing in mind that the consultation notice is a written notice that is required to be given before a Part A competition notice may issue and that s 151AKA(10) sets out what it must contain, the matters that Telstra raises in its pleading can be dealt with by a consideration of the notice itself. 12 The statement of claim asserts that the Commission could not have considered the submission that Telstra made in response to the consultation notice. That raises an objective test and does not, logically, require consideration of the Commission's actual consideration. 13 It is not clear, nor is there any detail in the pleading, what is contemplated by the duty to accord procedural fairness and natural justice in giving to Telstra the statutory written notice beyond an obligation to comply with s 151AKA(10)(a). Telstra submits that the Commission "must have" taken into account ' material or other analysis ' to ground the issue of the consultation notice, which was not and did not have to be revealed to Telstra under s 151AKA(10)(a) and that the Commission's failure to give Telstra this information is a failure to comply with the duty to accord procedural fairness. The inference that there must have been other material is drawn from the differences between the consultation notice and the competition notice. 14 Section 151AP provides that when deciding whether to issue a competition notice, the Commission must have regard to ' such other matters as the Commission considers relevant ' and that the Commission does not need to notify the carrier or carriage service provider of those matters. 15 Telstra is either correct about an entitlement to such other information or it is not but the information itself is not relevant to that entitlement; in either case discovery of the information itself is not necessary. Telstra is not entitled to the documents sought on discovery in respect of the consultation notice. Telstra alleges that the competition notice is invalid. It alleges that the competition notice is defective in its content and that it deviates in significant respects from the consultation notice. 17 That latter allegation and other alleged deficiencies in the competition notice can be tested by construction of the notices, a comparison between the two notices and a consideration of whether the competition notice complies with the statutory requirements as to content. The allegation does not relate to the Commission's own documents. 18 Telstra alleges that the decision to issue the competition notice was made in circumstances where, inter alia, the Commission did not observe procedures required to be observed by s 151AKA. 19 To the extent that it is alleged that the Commission was obliged to give Telstra the opportunity to make submissions and evidence and to provide further information in either the consultation notice or the competition notice, the Commission concedes that it did not do so and asserts that it was under no such obligation. Those allegations raise the existences of a right to the further information but do not give rise to a right to the documents sought themselves. 22 To the extent that it is alleged that the Commission could not have had regard to Telstra's submission, that again does not require consideration of what the Commission did. 23 That leaves the question whether the pleading that the Commission did not have regard to Telstra's submission entitles Telstra to discovery of the documents sought. It is also alleged that by reason of matters pleaded, including the alleged failure to have regard to Telstra's submission prior to the issue of the competition notice, the Commission failed to comply with its duty to accord procedural fairness and natural justice to Telstra in connection with its decision to issue the competition notice. It is this aspect of the pleading on which Telstra primarily relies to assert a right to discovery. 24 The principles concerning discovery in proceedings for judicial review are not really in dispute. Discovery is available and ordered where necessary in the proceedings. "Necessary" refers to necessity for the fair disposition of the case ( Esso Australia Resources Ltd v Commissioner of Taxation (Cth) [1999] HCA 67 ; (1999) 201 CLR 49 at [31] per Gleeson CJ, Gaudron and Gummow JJ). That is determined by the pleadings and what is in issue between the parties ( Canwest Global Communications Corp v Australian Broadcasting Authority (unreported, Hill J, 16 June 1997)). 25 The Commission asserts that Telstra is engaged in a ' fishing expedition '. As stated by Hill J in Canwest at [32]---[36], it is not illegitimate for a party to obtain evidence through the discovery process to support its case, notwithstanding that knowledge of the existence of the material did not exist before discovery. The distinction is between discovery for the purpose of determining whether a case exists and discovery to compel production of documents for use in the case. There is a distinction between mere assertion and a pleading that puts factual matters at issue. Where the pleadings raise an issue to be decided to which a party's documents may be relevant, the Court will have discretion to order discovery ( Treasurer of the Commonwealth of Australia v Canwest Global Communications Corp (unreported, Beaumont, Burchett & Emmett JJ, June 1997)). Discovery may be ordered without particulars of the allegation, however where there is no evidence to suggest that a bare allegation has foundation and the allegation is denied that is ' mere fishing ' and the proceeding is essentially speculative in nature ( WA Pines Pty Ltd v Bannerman (1980) 41 FLR 175 per Brennan J at 181-182). 26 There was, prior to the competition notice, a relationship between Telstra and the Commission, a factor adverted to in WA Pines . There is not, however, ' something upon which the Court can base its conclusion that the applicant may have a right to relief ' ( Minister for Immigration and Multicultural and Indigenous Affairs v Wong [2002] FCAFC 327 at [33] ). Telstra has not particularised the allegation that the Commission did not consider its submissions, nor provided any evidence in support of the allegation. Inferences drawn from the pleadings may be sufficient but such inferences need to be grounded ( Wong at [35]). The Commission has not provided reasons for the decision to issue the competition notice and that is a relevant consideration ( Australian Securities Commission v Somerville (1994) 51 FCR 38 at 49) but does not, of itself, support an inference that the Commission failed to consider Telstra's submissions. Telstra does not allege that the Commission had no reason to believe that Telstra had engaged or was engaging in the relevant anti-competitive conduct or that the notices were issued for a collateral or improper purpose. 27 The allegation that the Commission did not have proper regard to Telstra's submission is not of itself founded on any factual assertion as to the internal workings of the Commission. It is said to follow from specified facts and matters manifested by the conduct of the Commission in dealing with Telstra. There is no issue that raises a consideration of the documents sought, which are internal to the Commission. 28 Section 151AKA(10)(b) requires the Commission to consider any submission received from Telstra. The statement of claim alleges that the Commission ' was required to have proper regard to the submission provided to it by Telstra pursuant to s151AKA(10(b)...and did not do so where the consultation and submission process failed in the respects pleaded '. That raises an objective test. Even viewing the pleading beneficially to Telstra as an unqualified allegation that the Commission did not consider Telstra's submission, the documents sought go well beyond the issue whether the Commission did or did not consider that submission. They extend to any of the reasons for the issue of the competition notice and to the decision making processes within the Commission with respect to the issue of the competition notice. 29 Telstra contends that there has been a failure by the Commission to provide Telstra with material or data or information on which the Commission relied in determining to issue the two notices and that this constitutes failure to comply with statutory procedures and a denial of procedural fairness or natural justice. The Commission accepts that, factually, such information was not provided. That seems to conflict with its pleaded defence, in which the allegation that, for example, Telstra was not given notice of the material and analysis on which the Commission based its allegations and statements in each of the consultation notice and competition notice, is denied. 30 The Commission now accepts that, if it were required to provide such information, it did not. If procedural fairness or natural justice required such notice to be given, the Commission did not accord those rights. The Commission contends that it was not obliged to do so. If the Act mandates such provision of information, that can be determined, irrespective of the information. If procedural fairness or natural justice require such provision of notice, that too can be determined without a consideration of the details of the information not provided. 31 Telstra also seeks in category (d), discovery of documents apparently already provided to Telstra. The Commission asserts that Telstra is already in possession of all documents in this category. That assertion, made during the hearing of the motion and in the Commission's written submissions, was not denied by Telstra. Order 15 rule 2(4) provides that a document is not required to be disclosed if the party giving discovery reasonably believes that he document is already in the possession, custody or control of the party to whom discovery is given. Pursuant to O 15 r 15 the Court will not order the production of any document unless satisfied that the order is necessary. If Telstra wishes a verified list of the documents in category (d) documents, it should provide a basis for such an order. 32 A subcategory of (d) is documents ' by which the Commission addressed any of the questions posed by Telstra in its facsimile to the Commission dated 20 January 2006 '. The Commission states that it did not provide Telstra with any such document, other than those cited in the statement of claim. To the extent that that statement satisfies the request of a document sent to Telstra, it is probably sufficient, unless Telstra requires formal verification of that fact. If the category is not limited to documents provided to Telstra, the Commission is not liable to give discovery of its internal documents for the reasons discussed. There is no present basis for discovery of category (d) documents. The notice of motion should be dismissed. Telstra should pay the costs of 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 Bennett. | notices under s151aka trade practices act discovery sought of internal documents on which decisions to issue notices based allegations of deficiencies in notices and statutory procedures determined by construction of notices and statute allegations that commission could not have considered material not require discovery of material on which decision based allegation that commission did not consider material no factual basis alleged denial of procedural fairness as pleaded not give right to documents discovery not ordered practice & procedure |
2 The procedural history of the matter can be briefly summarised as follows. 3 The respondent, Westpac Banking Corporation ("Westpac"), filed a creditor's petition ("the petition") in the Federal Magistrates Court against Mr Strangio on 14 December 2007. The petition alleged, and was founded on, a failure on Mr Strangio's part to comply with a bankruptcy notice served on him on 5 October 2007 ("the bankrupty notice"). The bankruptcy notice was to the effect that Mr Strangio owed Westpac a debt of $36,144.75, being the amount of a taxed order for costs ("the costs orders") in the County Court of Victoria ("County Court"). 4 Also in the Federal Magistrates Court, on 25 February 2008, Mr Strangio filed a notice stating grounds of opposition to the petition ("the notice of opposition"). Mr Strangio supported his notice of opposition by an affidavit sworn 25 February 2008. The notice of opposition relied on four grounds, one of which was that "the [petition] should be adjourned pending the determination of an application for judicial review" of the costs order. The other grounds asserted a failure to serve the creditor's petition, the existence of an appeal to this Court against a judgment of another Federal Magistrate, and Mr Strangio's solvency. 5 On 26 February 2008, Registrar Luxton adjourned the hearing of the petition to 8 April 2008 with, amongst other things, an order for the filing and serving of further affidavits in opposition. On 8 April 2008, Registrar Hetyey further adjourned the hearing to 12 May 2008 and, subsequently, to 2 June 2008. On 1 June 2008, Registrar Allaway adjourned the hearing to 30 June 2008 and, on that date, Registrar Moore adjourned the hearing to 28 July 2008, when it came before the Federal Magistrate. 6 On 28 July 2008, the Federal Magistrate had a large number of affidavits before her, including an affidavit of Mr Robert Hinton, which was filed by Westpac and two further affidavits of Mr Strangio, one of which annexed a copy of a notice of appeal that Mr Strangio deposed to serving on Westpac's solicitors. In a further affidavit, Mr Strangio deposed to the fact that he had unsuccessfully "appealed" to a judge of the Supreme Court against the costs orders that founded the petition and now sought to appeal to the Court of Appeal of the Supreme Court of Victoria ("the Court of Appeal"). 7 Mr Hinton's affidavit stated that, on 21 May 2007, in a proceeding between Westpac and Mr Strangio in the County Court, Judge Holt had ordered that Mr Strangio pay Wetpac's costs from 24 April 2007 until 21 May 2007, to be taxed failing agreement. A Registrar of the County Court taxed the costs in the sum of $36,144.75. On 7 August 2007, Westpac issued a bankruptcy notice based on Judge Holt's costs order as taxed. The affidavit referred to Mr Strangio's unsuccessful application for an extension of time in which to comply with the bankruptcy notice and to the further curial history of various relevant proceedings. The affidavit recorded that a judge of the Victorian Supreme Court (Justice Williams) had dismissed Mr Strangio's application for judicial review of the costs orders on 3 July 2008 and that Mr Strangio had subsequently served a signed notice of appeal on Westpac "four days late". Her Honour noted that Mr Strangio had not challenged these affidavits. Her Honour held that there was no appeal to this Court, as Mr Strangio alleged. Her Honour also held, in substance, that there was insufficient or no evidence to support Mr Strangio's solvency ground. 9 A further ground of opposition was that "the creditor's petition should be adjourned pending the determination of an application for judicial review of the orders made by Judge Holt on 21 May 2007 which is presently returnable in the Supreme Court of Victoria on 1 April, 2008". Judgment has been handed down in those proceedings. On 3 July 2008 Her Honour Williams J delivered judgment in proceeding number 6701 of 2007 dismissing [Mr Strangio's] application for judicial review. I note that [Mr Strangio] has appealed against the decision of Her Honour Williams J. I accept the evidence, as set out in the affidavit sworn by Mr Robert Thomas Hinton of 28 July 2008 that on 21 July 2008 [Westpac] was served with a signed notice of appeal. That notice of appeal was served four days late. As at this day, no application for an extension of time to serve the notice of appeal out of time has been served on [Westpac]. I reject the evidence of [Mr Strangio] which was changing and contradictory in its nature and as the transcript would reveal fashioned to meet the case against him. 10 Further, the Federal Magistrate declined to adjourn the hearing of the petition until the determination of the appeal to the Court of Appeal. Whilst the court is mindful that it should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings, in this case the judgment relied on as the foundation of the bankruptcy proceedings is a judgment of Judge Holt and nowhere is there evidence before the court that the appeal to the Court of Appeal in the Supreme Court of Victoria is based on genuine and arguable grounds (Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312 ; (1987) 76 ALR 137 at 148). [Mr Strangio] has had ample opportunity to place such evidence before the court including any as contained in the two affidavits relied upon and filed this day. No material persuasive of the granting of an adjournment or that could even properly found such an application was before the court. Having determined to refuse the application for an adjournment the court proceeded to hear the petition. Each of the grounds of opposition are rejected. All formal evidence as necessary has been filed and the court is satisfied with the proof of those matters. No opposition to the granting of the petition was put in submissions made by Counsel for [Mr Strangio]. The court exercises the discretion conferred by section 52 of the [Bankruptcy Act 1966 (Cth)] in favour of [Westpac]. In this Court, he relied on his own affidavits of 25 August 2008 and 12 September 2008. In his 12 September affidavit, he deposed that his appeal to the Court of Appeal was still on foot. A copy of a notice of appeal was annexed to this affidavit. In his 25 August affidavit, he deposed that he was informed by the Federal Magistrate on 28 July 2008 and later by another Court officer that he had 28 days in which to lodge his appeal. 12 Westpac relied on the affidavit of Robert Hinton of 11 September 2008, which exhibited a copy of the transcript of the hearing before the Federal Magistrate. 13 A proposed notice of appeal was attached to Mr Strangio's application for an extension of time. The learned Magistrate erred in law by making a sequestration Order against the appellant in disregard of the principles enunciated by the Federal Court of Australia in Ahern v Deputy Commissioner of Taxation (Qld) [1987] FCA 312 ; (1987) 76 ALR 137 at 148 (" Ahern "). 2. The learned Magistrate erred in law by finding that " no opposition to the granting of the petition was put in submission " made by Counsel for the appellant when, in fact, the appellant's Counsel had submitted that the petition should be dismissed on the basis of the principles enunciated in Ahern . 3. The learned Magistrate denied the appellant natural justice by failing to accede to the appellant's application to adjourn the hearing of the petition pending the making of an application to stay execution of the judgment debt to the Court of Appeal. Mr Strangio filed his application for an extension of time in which to appeal some 7 days outside the prescribed appeal period. Pursuant to O 52 r 15(2), the time limit in O 52 r 15(1) may be extended at any time for 'special reasons'. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression 'for special reasons' implies something narrower than this. Mr Strangio, who as I have said was not represented in this Court, did not expressly seek leave to appeal before or at the hearing. It is plain enough, however, that he challenges her Honour's refusal of an adjournment. I would treat his submissions at the hearing as in substance an application for leave to appeal against this refusal and an application for an extension of time in which to file and serve an application for leave to appeal: see O 52 r 10. I would dispense with the need for a notice of motion. 16 In determining whether leave to appeal against an interlocutory decision should be granted, the Court must be satisfied that the decision under challenge is attended with sufficient doubt to warrant it being reconsidered, and that substantial injustice would result if leave were refused, supposing the decision under challenge were wrong: see Décor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 , at 399-400 per Sheppard, Burchett and Heerey JJ. The question on the extension of time is whether this test has sufficient prospect of being satisfied. 17 In practice, in this area, much the same considerations are relevant for the extensions of time and grant of leave to appeal. Unless the Court grants these applications for an extension of time and, in the case of the interlocutory decision, leave to appeal, there can be no competent appeal against the Federal Magistrate's judgment and orders. 18 Mr Strangio submitted, in effect, that he was misled about the time limit involved in filing a notice of appeal. Westpac did not argue that it has suffered any particular prejudice merely by virtue of the delay in lodgement. 19 The transcript of the hearing before the Federal Magistrate provides no support for Mr Strangio's claim that he was misled by her Honour. He claims that, in response to his in-court inquiry, her Honour led him to believe that the time limit was 28 days. I very much doubt that her Honour so misled Mr Strangio. First, as I have said, the transcript records no such exchange and, in any event, in the Federal Magistrates Court, Mr Strangio had legal representation. This alone makes the suggested exchange most improbable. Even if another (unidentified) court officer misstated the time limit, it must be borne in mind that, in the Federal Magistrates Court, Mr Strangio was represented by experienced counsel, who would presumably have directed him to the time limits fixed by the Rules had Mr Strangio made some relevant inquiry of him. Accordingly, Mr Strangio's explanation for delay should be rejected, or accorded very little weight. 20 Further, consideration of the issues that Mr Strangio would raise on the appeal indicates that the appeal, whether against the sequestration order or the refusal of the adjournment, has little prospect of success. 21 Mr Strangio would argue on appeal that the Federal Magistrate misapplied the principle in Ahern . In Ahern , which was also an appeal from a decision refusing an adjournment of a creditor's petition, the Full Court observed (at 148) that "in general a court exercising jurisdiction in bankruptcy should not proceed to sequestrate the estate of a debtor where an appeal is pending against the judgment relied on as the foundation of the bankruptcy proceedings provided that the appeal is based on genuine and arguable grounds". A Full Court of this Court followed Ahern in Adamopoulos v Olympic Airways SA (1990) 95 ALR 525 , at 526 per Pincus J and 531-32 per Burchett and Gummow JJ. 22 The Federal Magistrate expressly had regard to this principle. The issues of filing and service of the notice of appeal, to which her Honour referred, bore on the competency of the appeal, although these issues were not treated by her Honour as determinative. The critical finding made by the Federal Magistrate was that there was no evidence that the appeal to the Court of Appeal was based on genuine and arguable grounds, notwithstanding that Mr Strangio had, in her opinion, ample opportunity to place relevant evidence before the court. Indeed, that Mr Strangio had been given more than an adequate chance to adduce such evidence is clear from the history of the proceeding. He was also permitted to file additional affidavits on the day of the hearing. There was, as her Honour found, no evidence to support Mr Strangio's claim that the grounds of the appeal to the Court of Appeal were genuine and arguable in this regard. 23 Mr Strangio's affidavits filed in this Court, including his affidavit of 12 September 2008, would not lead me to take a different view from that of the Federal Magistrate. 24 The first ground for the proposed appeal is, therefore, unlikely to succeed. 25 Mr Strangio has also indicated that he would contend on an appeal that the Federal Magistrate erred in law in finding that "no opposition to the granting of the petition was put in submissions" on his behalf. Her Honour's statement in this regard appears in Westpac Banking Corporation v Strangio at [20]. This statement must be considered in the context in which it was made. It is plain from the transcript that counsel for Mr Strangio argued at length for an adjournment of the petition. Counsel framed this application in a number of ways, but failed to persuade her Honour that she should accede to it. After a relatively short break, her Honour proceeded to hear Westpac on the petition. Having heard Westpac, her Honour gave counsel for Mr Strangio an opportunity to address her on the petition. There's nothing I wish to say". Furthermore, her Honour's consideration was not circumscribed by what counsel said since she had regard to the documentary material that Mr Strangio had previously filed. There is no effective opposition to the making of that order in those documents. The second ground of appeal that Mr Strangio would advance has no prospect of success. 27 Finally, Mr Strangio has stated that on appeal he would wish to argue that he was denied natural justice because the Federal Magistrate declined to adjourn the hearing of the petition pending the making of an application to stay the judgment debt to the Court of Appeal. Counsel for Mr Strangio made application for adjournment of the petition pending the determination of the appeal by the Court of Appeal, alternatively, to allow Mr Strangio to make an application for a stay of execution in the Court of Appeal and "to provide further material in regards to the substantive basis of the appeal". Her Honour heard counsel for Mr Strangio and Westpac upon this application, giving them both a sufficient opportunity to explain their respective positions. Having heard them, her Honour said that she did not "propose to grant any further time", saying to Mr Strangio's counsel that "[t]here has been ample time for you to put your case before the court". The Federal Magistrate expanded on this in Westpac Banking Corporation v Strangio at [10]: see [10] above. Her Honour held that Mr Strangio had not presented the Court with any material "persuasive of the granting of an adjournment" even though Mr Strangio had had sufficient opportunity to do so. 28 As already indicated, the Federal Magistrate's decision to refuse Mr Strangio's adjournment application was a discretionary one. The principles applicable on an appeal against the exercise of discretion are well established: see House v The King [1936] HCA 40 ; (1936) 55 CLR 499 , at 504-5 per Dixon, Evatt and McTiernan JJ; Australian Coal and Shale Employees' Federation v Commonwealth [1953] HCA 25 ; (1953) 94 CLR 621 , at 627 per Kitto J; and Ahern, at 146-47 per Davies, Lockhart and Neaves JJ. In order for an appellate court to interfere with an exercise of discretion, it is not enough that the appellate court considers that, had it been the first instance judge, it would have taken a different course. Rather, the appellant must show that there was some error in exercising the discretion, as for example, that the first instance judge acted on a wrong principle. In the present case, there is nothing shown below or in the affidavits filed or the submissions made in this Court that would lead me to conclude that the Federal Magistrate made any discernible error in exercising her discretion. Her Honour did not deny Mr Strangio natural justice as he would allege. 29 The third proposed ground of appeal has little prospect of success. 30 For the foregoing reasons, there have been no special reasons shown that would justify the extension of time that Mr Strangio seeks under O 52 r 15(2) of the Rules. Further, there has been no basis shown for a grant of leave to appeal against her Honour's refusal of an adjournment and extension of time within which to make an application for the grant of such leave. I would refuse Mr Strangio's applications. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | appeal from judgment and sequestration order of the federal magistrates court final and interlocutory orders applications for extension of time application for leave to appeal no adequate explanation no real prospects of success applications dismissed practice and procedure |
The allegations at the heart of the proceeding are that the respondents were parties to a contract, arrangement or understanding which contravened ss 45E(3) and 45EA of Pt IV of the Trade Practices Act 1974 (Cth) ('TPA'). Essentially, the ACCC alleges that the contract, arrangement or understanding included a provision that Edison would not engage any electrical contractor to perform work at the Loy Yang B power station ('Loy Yang B') in the Latrobe Valley in Victoria unless the contractor had entered into an agreement with the CEPU which was certified under the Workplace Relations Act 1996 (Cth). The parties and the witnesses used the terms 'certified agreement' and 'enterprise bargaining agreement' or 'EBA' interchangeably to describe this kind of agreement. The term 'electrical contractor' was used by the parties and the witnesses to refer to a contractor who employs people whose employment is governed by the National Electrical, Electronic and Communications Contracting Industry Award 1998. I will adopt this shorthand expression in these reasons for judgment. 3 Edison and the ACCC have agreed on terms of settlement for the resolution of the proceedings. Pursuant to those terms of settlement, Edison has filed a defence in which it admits to contraventions of ss 45E(3) and 45EA of the TPA. Subject to orders of the Court, Edison and the ACCC have also agreed on proposed orders concerning declarations, pecuniary penalties and costs. 4 The CEPU contests the allegations against it. On 7 April 2006, I ordered that the contested proceeding between the ACCC and the CEPU concerning the CEPU's liability under ss 76 and 80 of the TPA be heard prior to the penalty hearing as between the ACCC and Edison: see Australian Competition and Consumer Commission v Edison Mission Operations and Maintenance Loy Yang Pty Ltd [2006] FCA 853. There was no appearance for Edison at the hearing of the contested proceeding between the ACCC and the CEPU. 5 The hearing proceeded by viva voce evidence. The ACCC called five witnesses. Four of the witnesses, Colin Sutherland ('Sutherland'), Paul Burns ('Burns'), Wayne Buckley ('Buckley') and Mark Pearson ('Pearson') were employees of Edison or a related company at all relevant times. Sutherland was a general manager of Edison Mission Energy Australia Pty Ltd ('EME') and a director of Edison and certain of its related entities including Valley Power Pty Ltd ('Valley Power'). Burns was the manager of community and employee relations for EME and was stationed at Loy Yang B. Sutherland and Burns had the principal carriage of discussions between Edison and the CEPU in August 2001. Pearson was the maintenance manager of EME's plant at Loy Yang B. Buckley held the position of maintenance coordinator for EME at Loy Yang B and reported directly to Pearson. Nothing in this case turns on any distinction between the various corporate entities within the Edison group of companies and, where the context permits, I refer to them simply as 'Edison'. The other witness was David Nabulsi ('Nabulsi'), the sole director of a company called DJN Electrical & Instrumentation Pty Ltd ('DJN'). Prior to August 2001, DJN regularly supplied services to Edison at Loy Yang B in its capacity as an electrical contractor. 6 In addition, the ACCC relied on an affidavit of Rodney McKemmish ('McKemmish') sworn 7 September 2006. Exhibit RMCK-3 to McKemmish's affidavit is his expert forensic report in relation to the authenticity and source of certain emails which were discovered by Edison and which are relevant to the ACCC's case against the CEPU. The affidavit was received in evidence subject to the CEPU's objection to those parts of the affidavit in which McKemmish purported to express an opinion identifying the author of certain emails. The objection is a good one and I uphold it. McKemmish is not in a position to give admissible evidence concerning the authorship of the emails. His evidence is only admissible to the extent to which he addresses the authenticity and technical source of the emails. Apart from this objection, the CEPU did not dispute McKemmish's evidence. 7 The CEPU did not call any witnesses or rely on any affidavit material in support of its case. The first concerns the nature, scope and terms of the contract, arrangement or understanding that was made or arrived at between the respondents. The ACCC submitted that the true nature, scope and terms of the contract, arrangement or understanding can be inferred from the circumstances surrounding a written heads of agreement between Edison and the CEPU, which was signed on behalf of Edison on 23 August 2001 ('the heads of agreement'). The ACCC's primary argument was that the contract, arrangement or understanding was not confined to the literal terms of the heads of agreement, and that it prevented or hindered Edison from acquiring services from electrical contractors including DJN because they did not have a certified agreement with the CEPU. Further, the ACCC argued that the contract, arrangement or understanding was given effect by Edison. Alternatively, the ACCC argued that the same consequences follow even if the contract, arrangement or understanding is entirely embodied in the heads of agreement. 9 The CEPU advanced a narrower approach, submitting that the contract, arrangement or understanding between the respondents was confined to the heads of agreement, which, on its terms, did not contravene ss 45E(3) of the TPA. The CEPU submitted that the events leading up to the signing of the heads of agreement are merely evidence of negotiations between the parties. It submitted that those events did not give rise to a 'meeting of the minds' between Edison and the CEPU that is sufficient to attract liability under ss 45E(3). 10 The second issue concerns the CEPU's accessorial liability under ss 76(1) and 80 (1) of the TPA. In accordance with their respective terms, ss 45E and 45EA impose liability on a person who enters into the prohibited arrangement with an organisation of employees (ie, a union), an officer of such an organisation, or a person acting for and on behalf of such an officer or organisation. Neither s 45E nor s 45EA imposes liability on the union. The CEPU argues that ss 45E and 45EA make the union a principal to the contravention but do not impose liability on it and that, in those circumstances, the CEPU cannot be liable under ss 76 and 80 of the TPA as an accessory to the alleged contraventions of ss 45E(3) and 45EA. In April 2001, Valley Power, a corporation related to Edison, agreed to acquire land from the State of Victoria adjacent to Loy Yang B for the purpose of building a new gas fired electricity generation plant ('the peaker plant'). The State required that the peaker plant be operational by February 2002, so as to meet the demands of peak electricity use during the summer months. To this end, the agreement for the acquisition of land from the State required construction of the peaker plant to proceed in accordance with a strict timetable. Crucially, it was agreed that if the peaker plant was not ready for commercial operation by the first week of February 2002, the land would revert to the State and no compensation would be payable to Valley Power. 12 Valley Power entered into contracts with Simon Engineering (Australia) Pty Ltd ('Simon Engineering') dated 10 July 2001 and 26 July 2001 pursuant to which Simon Engineering agreed to undertake preliminary work in relation to the peaker plant. However, there were delays in commencing construction work, and from July 2001 until September 2001 Valley Power was in negotiation with Simon Engineering about the terms of the contract pursuant to which Simon Engineering would begin construction of the peaker plant. 13 In July 2001, Simon Engineering informed Sutherland that the commencement of construction work on the peaker plant was being delayed because it was unable to get certain unions, including the CEPU, to sign a site labour agreement ('the Simon Engineering site agreement'). 14 Time was of the essence for Edison, as Valley Power was behind schedule to complete construction of the peaker plant by February 2002. Edison was concerned that further delays might force it to cancel the project altogether. In fact, DJN had never entered into a certified agreement or enterprise bargaining agreement with the CEPU. 16 As the principal and sole director of DJN, Nabulsi knew that Peter Mooney ('Mooney') was the local area representative for the CEPU. Between 1998 and 2001, Nabulsi had several discussions with Mooney about the possibility of DJN signing an enterprise bargaining agreement with the CEPU. However, due to what Nabulsi described as the inflexibility of the CEPU's 'pattern' or standard enterprise bargaining agreement, he was not prepared to sign an agreement on behalf of DJN. 17 From about 1999 until July 2001, DJN provided services as an electrical contractor to Edison at Loy Yang B. DJN supplied those services pursuant to a service agreement with Edison, whereby DJN was engaged to supply services to Edison as an electrical contractor at Loy Yang B either on a 'fixed price' or 'hourly rate' basis. In 2001, DJN provided services to Edison at Loy Yang B in the months leading up to August 2001. 18 In 1999 and again in 2000, Nabulsi signed a service agreement on behalf of DJN for a twelve month period that ended, respectively, on 21 July 2000 and 21 July 2001. On 19 June 2001, Edison wrote to DJN advising that the service agreement between Edison and DJN was due to expire on 21 July 2001. Subject to agreement on price, Edison sought to renew the service agreement for a period of three years. The letter from Edison asked DJN to sign a formal contract for the supply of services, complete the contract schedules, and return the documents to Edison. 19 The documents were not signed on behalf of DJN or returned to Edison as requested by the letter of 19 June 2001. This was because Nabulsi was informed in August 2001 that Edison would no longer be utilising DJN's services as DJN had declined to enter into a certified agreement with the CEPU. On a number of issues, questions were also raised as to whether the account given by one witness should be preferred to that given by another. My findings of fact as to the events that transpired in August 2001 are incorporated in the discussion that follows. I will return to the question whether those events support the conclusion that there was a contract, arrangement or understanding between Edison and the CEPU that contravened s 45E(3) after I have considered the relevant legal principles. The meeting was attended by two representatives from Industrial Relations Victoria, a representative of the State Treasurer, representatives from Edison, and a representative from the CEPU, Dean Mighell ('Mighell'). Mighell held the position of state secretary of the Electrical Trades Union (Victorian branch) ('ETU'). The ETU is a division of the CEPU. The representatives from Edison were Sutherland and Burns. 22 The most specific account of the 9 August meeting was given by Burns. He said that Mighell raised two issues on which the CEPU required Edison's agreement. The first issue was that the CEPU required Edison's agreement that its representatives could have access to the Loy Yang B site for the purposes of interviewing union members on site. The second issue was that the CEPU required Edison's agreement that electrical contractors who perform work at the Loy Yang B site must have an enterprise bargaining agreement to which the CEPU was a party. 23 Burns made a handwritten note at the 9 August meeting of the matters that were discussed. DM. issues raised before. The telephone conference is discussed below. 24 By reference to his note of the 9 August meeting, Burns expanded somewhat on his evidence. He said that Sutherland spoke first at the meeting and then Mighell raised the issues on which the CEPU wanted an agreement. In doing so, Mighell said that Edison was aware of the problems as the issues had been raised before. The issues were that the CEPU required access to the Loy Yang B site for the purposes of interviewing its members working on site, and it required that EBAs be in place for ongoing electrical work as well as planned outages at the Loy Yang B site. 25 Although Burns understood that the reason for the meeting was to attempt to get the Simon Engineering site agreement signed, he said that Mighell did not say anything about the site agreement during the course of the meeting. Nor did he recall Sutherland or anyone else at the meeting saying anything about the site agreement. According to Burns, Sutherland said that Edison would consider the site access issue and the electrical contractors issue internally, and that Sutherland would respond to Mighell on the electrical contractors issue and Burns would respond on the site access issue. 26 Sutherland's evidence concerning these matters was not as precise. He did not have any direct recollection of the actual words used by Mighell. His recollection was that Mighell said that there were no bans affecting the Loy Yang B site but Mighell did have some concerns that he wanted addressed. Only two of the concerns affected Edison. The first was that there was a need to improve access for CEPU officials to the Loy Yang B site. The second was that where there were electrical contractors on site, he wanted ETU members protected through an enterprise bargaining agreement. Sutherland's evidence was that he said that Edison would need to consider those matters internally and would revert to the ETU about finding a solution. 27 On this topic, and on other topics, I prefer the evidence given by Burns to that given by Sutherland wherever there is any substantial difference or conflict in their evidence. I have based this assessment on the demeanour of the two witnesses and a careful consideration of the nature and content of their evidence. Generally speaking, Sutherland's evidence tended to be vague and somewhat obfuscatory in relation to key events. His evidence concerning the 9 August meeting is one instance of this; other instances will be identified as I proceed to make findings about the relevant events. In contrast, I found Burns to be an exemplary witness who provided forthright, honest and well-considered responses to the questions he was asked. Here is the doc with the keyed clause in it. Burns said that he had not asked anyone to provide him with a clause. 30 Later that afternoon, Burns sent an email at 6.07 pm to Sutherland on the subject 'CEPU Proposed Agreement' ('Burns' 9 August email'). --- [BURNS]: I believe it was a clause that would assist Mr Sutherland in resolving the issue that he was to deal with. --- [BURNS]: I believe that was the gist of what Mr Mighell was seeking. Burns said he thought he looked up the correct title of the award on the internet, and then made the correction and sent the email to Sutherland. Burns said he had not been asked to provide a clause to Sutherland. 33 The ACCC invited me to infer that Burns was provided with a clause by Mighell or the CEPU for inclusion in the proposed agreement between Edison and the CEPU. I am not prepared to infer that the drafting of the clause originated with Mighell or the CEPU. I find that Burns dictated the clause. He had not asked anyone to provide him with the clause, and he had not been asked to provide a clause to Sutherland. I also accept that the words of the clause represented Burns' understanding of the 'gist' of what Mighell had requested at the 9 August meeting. Burns provided the clause to Sutherland because he thought that it would assist Sutherland in resolving the electrical contractors issue. 34 The text of the clause tends to support Burns' description of the request that Mighell made at the 9 August meeting, namely that Edison agree that all electrical contactors must be covered by a current certified agreement with the CEPU before they would be permitted to perform work at Loy Yang B. After Sutherland received Burns' email, he did not raise any objection to the way in which the clause described the agreement that the CEPU was proposing. 35 A teleconference also took place on the afternoon of 9 August, after the meeting with Mighell, between several Edison personnel to discuss how Edison would respond to the issues raised by Mighell ('the 9 August teleconference'). The participants in the 9 August teleconference were Sutherland, Burns, Pearson, Buckley and Barry Warrillow ('Warrillow'). Warrillow was the Loy Yang B plant manager. During the teleconference, Burns advised the others that Edison was negotiating with Mighell to try to resolve issues relating to the construction of the peaker plant and the finalisation of the Simon Engineering site agreement. He said that one of those issues related to Edison's practice of engaging electrical contractors who did not have a certified agreement with the CEPU. Pearson gave evidence that Burns reported that, in order to get the site agreement up, Edison was seeking to negotiate an agreement with the CEPU that only electrical contractors who had a certified agreement with the CEPU would be permitted on the Loy Yang B site. In the teleconference, Burns asked Pearson and Buckley to investigate the cost implications of such an agreement with the CEPU. 36 Immediately after the teleconference on 9 August, Warrillow also asked Pearson to look at the potential implications of the CEPU's demand and to identify which contractors were likely to be affected by an agreement of that kind. Pearson then asked Buckley, who worked for him, to collate the information that Edison had on its files in relation to contractors that it had service agreements with and to ascertain further information in relation to their pay rates. 37 At 4.06 pm on 9 August, Pearson sent an email to Warrillow, Burns and Buckley on the subject of 'Contractors and EBA's'. Pearson's email addressed a number of issues relevant to the review he had been asked to carry out. The email identified DJN as an electrical contractor who did not have an EBA with the union. If the ETU is saying that the Agreement must be certified that is one thing. If they are saying that the Agreement MUST state that it covers Power Station Sites then this is quite different. Excluding these companies may assist the Unions in pushing the 36 hour week. Some of these have agreements however they will not have the Union as signatories. He said that it was on the afternoon of 10 August that he was asked to investigate the financial consequences for Edison if the proposed arrangement with the CEPU was put into place. Buckley prepared a spreadsheet analysing the financial implications for Edison by 4.46 pm on 10 August. In my view, the probabilities are that Pearson's recollection is correct and the instruction was first given on 9 August. However, nothing turns on the different recollections of Pearson and Buckley in this regard. Sutherland said that the teleconference commenced at about 2.00 pm. The participants in the teleconference included Warrillow, Pearson, Buckley and Burns in Warrillow's office at Loy Yang B; Sutherland was present in the Melbourne office; and Robert Driscoll, the vice president of Edison in California, and Joseph Bacchi, the regional operations manager in the Asia Pacific Region, were elsewhere. According to Burns, Chris Webber, general counsel for Edison, may also have been present but did not participate in the discussion. 41 In his evidence, Burns said that Sutherland outlined what had happened at the 9 August meeting and proposed that the issues be settled. There was then general discussion about the two issues that the CEPU had asked the company to address concerning site access and the requirement that contractors have a certified EBA in place with the CEPU. Burns also gave evidence that the reference to 'Grandfather existing contracts' in his handwritten note referred to the fact that DJN would be permitted to continue work it had already been commissioned to do until that work was concluded. 42 Pearson's understanding of what was discussed in the teleconference was that Edison was minded to proceed down the path of entering into an agreement with the CEPU that would put a limitation on Loy Yang B maintenance, such that only electrical contractors who had certified agreements with the CEPU would be engaged. Pearson said it was explained that Edison was proceeding down this path in order to get the Simon Engineering site agreement for the peaker plant signed, so that construction of the plant could commence. Pearson also said that towards the end of the meeting, or just afterwards, Warrillow instructed him, and Buckley, that they were not to engage electrical contractors who did not have a certified agreement with the CEPU and that they should look at putting that instruction into place. 43 Buckley gave evidence to similar effect. He said that there was general discussion at the teleconference about entering into an arrangement with the CEPU that Edison would only engage electrical contractors at Loy Yang B who were covered by an EBA with the CEPU. He also said that the arrangement was being discussed because it was seen as a prerequisite to reaching a site agreement for the construction of the peaker plant. He understood that the effect of the arrangement would be that some electrical contractors that Edison was currently engaging at that point of time who did not have an EBA with the CEPU would be excluded from the site. He had in mind one particular contractor who would be excluded, namely DJN, but he did not recall mentioning DJN's name during the course of the teleconference. Buckley said that the proposed arrangement represented a change in Edison's practices. 44 Sutherland's evidence was much vaguer and it was discordant with the evidence given by the other witnesses. Like the other witnesses, he said that the teleconference commenced with him giving a report of the 9 August meeting held with Industrial Relations Victoria and the ETU, in which he explained the union's concerns. However, he said that no solution was agreed to at the meeting, other than the fact that Burns was to look at ways and means of improving access to the site for the union and that Driscoll simply instructed him (ie Sutherland) to fix the issue concerning electrical contractors as quickly as possible. He said his response to Driscoll was that he would endeavour to find a solution as quickly as possible. 45 I prefer, and accept, the evidence given by Burns, Pearson and Buckley to that given by Sutherland, to the extent of any inconsistency. In particular, I find that the discussion at the 10 August teleconference was to the effect that Edison would agree with the CEPU that it would only engage electrical contractors who had a certified EBA in place with the union to perform work at Loy Yang B, and that Sutherland, Burns and others were instructed by Driscoll to ensure that such an agreement was made as quickly as possible. I accept Burns' further evidence that the discussion at the 10 August teleconference established the principles on which Edison would proceed in its discussions with the CEPU, and that there was no discussion about the particular steps that would be taken to give effect to any such agreement with the CEPU. I also find that the discussion in the 10 August teleconference made it very clear that the reason for proposing an agreement with the CEPU of the kind discussed was to get the Simon Engineering site agreement signed, thereby enabling the construction of the peaker plant to proceed without further delay. I accept Burns' evidence that DJN was specifically mentioned as the only contractor who would be affected. Sutherland met with Mighell at 3.00 pm ('the 10 August meeting'). 47 Against this backdrop, Sutherland's evidence of what happened at his meeting with Mighell at 3.00 pm is far from satisfactory. Sutherland gave evidence that, from his point of view, the purpose of the 10 August meeting was to 'get some face to face understanding' about the CEPU's position and to confirm with Mighell the issues discussed at the 9 August meeting. He said that Mighell reiterated the concerns he had raised at the 9 August meeting. In particular, Mighell said that the concerns pertinent to Loy Yang B were still the access issues for officials of the ETU and he was seeking the protection of EBA coverage for any ETU members who might from time to time be engaged in contract work at Loy Yang B. Sutherland remembered Mighell using the words 'protection of members'. He said that Mighell put the issues in earnest terms and the general tenor of the discussion was that these were serious issues that Edison would have to find a way to address. Sutherland said he did not offer Mighell a solution that day because he did not have one. But he said that he made it clear to Mighell that Edison would return as soon as it could to offer something to the union on both issues. 48 Although there is no contrary account of the 10 August meeting, I have reservations about whether Sutherland gave a full and frank account of it. This is particularly so given the consensus agreement that was reached by the relevant executives of Edison at the 10 August teleconference, the urgency with which Sutherland arranged the meeting with Mighell, and the terms of a letter to Mighell that Sutherland subsequently signed on 13 August. There is, however, no direct evidence that Sutherland told Mighell at the 10 August meeting that Edison intended, or at least was disposed, to enter into an agreement with the CEPU to the effect that it would not engage electrical contractors to carry out work at the Loy Yang B site if they had not entered into a certified enterprise bargaining agreement with the CEPU. The spreadsheet examined the rates paid to certain contractors, including DJN, and assessed the financial impact if Edison increased pay rates to the level prescribed in EBAs that had been signed by the CEPU. The contractors also use a mix of full time and casual workers. The differences between full time rates is, as seen, very small. The differences in casual rates gets up to 16%. For the sake of determining worst case the spreadsheet has taken the casual rate difference and applied this to the expenditures from the previous year. In an email to Warrillow and Sutherland sent at 9.50 am, Burns suggested that a letter be sent to Mighell first thing on Monday 13 August in relation to the site access issue. In the email, Burns set out the terms of his suggested letter. Burns said that in case Sutherland and Warrillow agreed that a letter in those terms should be sent, he had left a signed letter under Warrillow's door. Burns also said that, if they agreed, he would arrange a meeting with Mooney of the CEPU to agree on a protocol for site access. Burns suggested that the meeting could be on Tuesday morning. The document was a draft letter to Mighell in relation to the site access issue. Burns said he believed the address of the CEPU was 139-155 Queensberry Street, Carlton South, as recorded in the draft letter. The ACCC invited the Court to infer that the letter was sent to, and received by, the CEPU on or about 13 August. 56 Senior counsel for the CEPU accepted that, on its face, the 13 August letter was a complete acceptance of the demand which Mighell was said to have made at the 9 August meeting. But the CEPU denied that there was sufficient evidence to establish that the letter was sent by Edison, or received by Mighell or the electrical division of the CEPU. The CEPU submitted that the alleged dispatch of the 13 August letter is inconsistent with later conduct by Edison and the CEPU in entering into the heads of agreement on 23 August. The CEPU submitted that the safer inference to draw is that the 13 August letter was not dispatched by Edison or received by the CEPU. 57 There is scant evidence about the creation and alleged dispatch of the 13 August letter. Sutherland identified his signature on the 13 August letter, but said he did not know when the letter was prepared and could not recollect where it was typed. Sutherland had no recollection of giving the letter to his secretary to post. However, he did not suggest that he signed the letter but then changed his mind and instructed his secretary not to post it. 58 Although Sutherland signed the letter, senior counsel for the ACCC did not ask Sutherland about its drafting or its contents. He did not, for instance, ask Sutherland about the statement in the first paragraph of the letter, which appears to be saying that the letter confirms a proposal that Sutherland had put to Mighell in discussions the previous week. The evidence is that Edison did not put a proposal at the 9 August meeting, so the letter may have been referring to Sutherland's meeting with Mighell on 10 August. Unfortunately, these questions were not addressed in evidence. 59 In cross-examination, Sutherland said that he did not receive any response from Mighell that claimed to be a response to the 13 August letter. He did not get back a copy of the 13 August letter that had been countersigned by Mighell. He agreed with senior counsel for the CEPU that neither Mighell nor anyone from the CEPU complained to him that there had already been a 'deal' in the terms of the 13 August letter when the draft heads of agreement was provided to the CEPU on 20 August. Sutherland also agreed with senior counsel for the CEPU that it was a strange letter to send to Mighell in light of the fact that Sutherland said that he and Burns had agreed to seek legal advice from Corrs Chambers Westgarth ('Corrs') on Friday 10 August. 60 Burns said that he had no involvement with the preparation of the 13 August letter and did not know who created the document. He said he thought that Sutherland had created it, because the letter was signed by Sutherland and was on EME letterhead. Burns was questioned by senior counsel for the ACCC as to when he became aware of the 13 August letter. Burns thought he first became aware of it in December 2001. However he mentioned that while searching for documents in response to the ACCC's letter of 27 October 2003, he had discovered that he had 'an email of it much earlier'. Burns said that he had not absorbed the content of that email at the time. Burns was not asked to elaborate on the substance of the email or the circumstances in which it was received. 61 I am satisfied that Sutherland created the 13 August letter. I infer that he did so in part by 'cutting and pasting' sections of text from two documents which had been provided to him by Burns. The first document was the clause attached to Burns' 9 August email to Sutherland. The second document was Burns' draft site access letter attached to Burns' 12 August email to Warrillow and Sutherland. The address of the CEPU at the top of Burns' draft letter is substantially replicated in the address of the 13 August letter, and the signature block at the bottom of Burns' draft letter is replicated at the bottom of the 13 August letter. In other words, Sutherland included these parts of Burns' draft letter in the 13 August letter. 62 One important question is whether the 13 August letter was dispatched by Edison and received by the CEPU. The letter was signed by Sutherland. The effect of his evidence was that it would be posted by his secretary in the ordinary course of business. Sutherland did not suggest that he intercepted or prevented the dispatch of the letter. There is no evidence that Sutherland's instructions changed after the 10 August teleconference at which he was instructed to enter into an agreement with the CEPU to the effect that electrical contractors would be required to have a current certified agreement with the CEPU before commencing work at Loy Yang B. The dispatch of the letter is consistent with Sutherland's instruction to fix the problem urgently so that the Simon Engineering site agreement could be signed. There was no evidence from Mighell or any CEPU officer that the CEPU did not receive the letter. 63 The 13 August letter was addressed to the Mighell as the secretary of the CEPU at 139-155 Queensberry Street, Carlton South. The evidence shows that Mighell was the state secretary of the ETU, which is a division of the CEPU, located at 516-520 Swanston Street, Carlton South. There is also evidence from Burns that the address of the CEPU was correctly stated in the 13 August letter as 139-155 Queensberry Street, Carlton South. In addition, the evidence given by Sutherland indicates that the CEPU office is at the corner of Queensberry and Swanston Street, and that the entrance to the part of the office occupied by the ETU division is on Swanston Street. There is no reason to suppose that a letter, which I find was correctly addressed to the CEPU at 139-155 Queensberry Street, Carlton South, would not reach Mighell in his capacity as state secretary of the ETU. 64 The CEPU submitted that I should not infer that the 13 August letter was dispatched by Edison, or received by the CEPU, because to do so would be inconsistent with, or at least make no sense in the light of, the parties' subsequent conduct. I will return to the CEPU's submissions in this regard after I have considered the later events. This is necessary because my findings about the 13 August letter are interrelated to my findings about the parties' later conduct and the scope of their contract, arrangement or understanding. For present purposes, it is sufficient to indicate that I am satisfied on the balance of probabilities that the 13 August letter was dispatched by Edison, and received by the CEPU, in the normal course. At the meeting, Buckley asked Nabulsi whether DJN still intended not to enter into a certified agreement with the CEPU. The two had discussed the issue previously and Buckley knew that Nabulsi had previously determined not to make a certified agreement with the CEPU. Nabulsi reiterated DJN's position that it would not sign an EBA with the CEPU. Buckley said he informed Nabulsi that the consequences of that position were that Edison was 'unlikely' to engage DJN's services. Nabulsi gave evidence that Buckley told him, without any qualification, that DJN's services would no longer be utilised. Nabulsi said he was told that the reason why DJN's services were no longer to be utilised was that Edison had been asked by the CEPU not to engage the services of contractors that did not have an EBA with the CEPU. 66 Buckley said that he understood that Edison had a verbal agreement with the CEPU on 13 August, although he could not recall what led him to believe that. Buckley also said that after the 10 August teleconference he had a conversation with someone whose identity he could not recall to the effect that Buckley should contact Nabulsi and arrange a meeting to talk to him. It is apparent that Buckley contacted Nabulsi and advised him that Edison would no longer be utilising DJN's services because of the instructions that were given to him at, or after, the 10 August teleconference. 67 Nabulsi was a frank and direct witness. I accept his evidence that he was told by Buckley in unequivocal terms that DJN's services would no longer be utilised by Edison because Edison had been asked by the CEPU not to engage the services of electrical contractors that did not have an EBA with the CEPU. The final page of the certified agreement is a memorandum of understanding dated 15 August 2001 between the signatories to the certified agreement ('the Simon Engineering MOU'). The document appears to have been overlooked by counsel for the ACCC. Neither counsel for the ACCC nor counsel for the CEPU referred to it at the hearing. However, there is no reason why I should not regard it as a business record that evidences that a meeting took place on 15 August 2001 at which Simon Engineering and the CEPU reached agreement on the site agreement for the construction of the peaker plant. 69 From the whole of the evidence, I infer that the CEPU would not have entered into the Simon Engineering MOU unless it had first been notified by Edison that Edison agreed to its demand that electrical contractors performing work at Loy Yang B power station must have a current certified agreement with the CEPU prior to commencing work at the site. At the meeting, Pearson and Buckley informed the team leaders that Edison had entered into, or was entering into, an arrangement with the CEPU whereby it would only be using electrical contractors who had a certified agreement with the CEPU. Pearson said that the advice which he and Buckley gave to the team leaders was given pursuant to the instructions that Warrillow gave them towards the end, or immediately after, the teleconference on 10 August. At the team meeting, Buckley and Pearson identified DJN as the contractor likely to be excluded by the arrangement. 71 Pearson could not recollect whether the meeting had taken place on 16 August or on the following Thursday, 23 August. However, I am satisfied by Buckley's evidence that the team leaders meeting took place on Thursday 16 August. This view is consistent with all of the other evidence. Sutherland said that he attended an initial meeting with Corrs but he could not remember when. Burns said that he was not involved in instructing Corrs. Please call me call me on Tuesday, if you can. The draft heads of agreement was phrased in language that differed considerably from the 13 August letter. He was not examined on whether he spoke to Mighell on Tuesday 21 August as foreshadowed in his 20 August email, although Sutherland confirmed that it was his intention to speak to him the day after sending the email. 76 Burns recalled a discussion after Sutherland' s 20 August email had been sent, probably on 23 August, in which Sutherland told Burns that the way the draft heads of agreement was worded was not satisfactory to the CEPU. Burns gave evidence that Sutherland said words to the effect that the draft heads of agreement 'didn't give the union anything. An additional sentence had been added to cl 4.1, which is of particular significance in the present case. What constitutes acceptable industrial arrangements includes having a current certified agreement with the union. 79 Upon receipt of the CEPU's email, Burns and Sutherland discussed Edison's proposed response. They agreed that the proposed changes should be accepted and a response put back to the CEPU as a matter of urgency. Sutherland recalled thinking that he had had enough of this issue and it was of paramount concern to press on in order to get the Simon Engineering site agreement signed. Burns said that he was standing beside Sutherland as Sutherland dictated the reply email to Ms Jongerius, Burns' personal assistant. Sutherland said that they discussed the response by telephone --- he said he was in Melbourne --- but confirmed that the actual words of the email were at his suggestion. I prefer, and accept, Burns' evidence. 80 The reply email was sent to the CEPU from Burns' email address at 4.19 pm. Our signed copy of the Contract Labour Agreement will be delivered to your office tomorrow morning in exchange for a copy of the signed Simon Engineering EBA. He considered that cl 4.1 represented a change in Edison's practices, as Edison had not previously insisted that contractors have a certified EBA with the union in place prior to carrying out work at the Loy Yang B site. He said that Pearson and Buckley would implement the change because maintenance work was undertaken by their department. 82 After the email had been dictated, Sutherland directed Burns to sign the heads of agreement. After expressing some reluctance, Burns accepted Sutherland's instruction and signed it. Sutherland then took the signed heads of agreement and departed for Melbourne in somewhat of a hurry. Burns did not date the final heads of agreement. He identified the handwritten date as having been inserted in Sutherland's handwriting. 83 On 24 August, Sutherland hand delivered the signed heads of agreement to Mighell at the CEPU offices. According to Sutherland, his meeting with Mighell lasted a few minutes. Mighell did not provide Sutherland with a copy of the signed Simon Engineering site agreement, but assured Sutherland that it would be signed on behalf of the CEPU. 84 The heads of agreement was not made available to managers at Loy Yang B for some months after August 2001. Buckley said that he first saw a copy of the heads of agreement late in 2001. Pearson said that he did not see the heads of agreement until late 2003 after Edison had received a letter from the ACCC. It also tendered a copy of the Simon Engineering site agreement as certified by the Australian Industrial Relations Commission. The Commission granted certification on 12 December 2001. The agreement attached to the certification is undated although the typewritten document bears a print date of 15 August 2001. The agreement must have been signed by Simon Engineering, the CEPU and other unions on or before 23 August because the final, fully signed agreement was the subject of Mighell's statutory declaration on 23 August. 86 I have already noted that the final page of the certified agreement is the Simon Engineering MOU dated 15 August 2001 that confirms that Simon Engineering and the unions reached agreement on the Simon Engineering site agreement on 15 August. The probabilities are that the Simon Engineering site agreement was signed by some or all of the parties thereto prior to 23 August and in the period between 15 August and 23 August. This is consistent with Edison having communicated its agreement to accede to the CEPU's demand to the CEPU prior to 15 August. 87 On 3 September 2001, Simon Engineering and Valley Power entered into an agreement to commence the construction of the peaker plant. 88 There is no evidence of any correspondence or communications between the CEPU and Edison in relation to the electrical contractors issue after 24 August 2001. Those services were carried out by DJN as a subcontractor, or pursuant to contractual arrangements that pre-existed the events of August 2001. DJN was not invited to provide any further quotations, nor was it engaged by Edison to supply any further electrical services at Loy Yang B, until early 2004. The letter informed Edison that the ACCC had received information about Edison's agreement with the CEPU in 2001. The letter said that the information indicated that in or about August 2001 Edison entered into an agreement with the CEPU wherein Edison agreed for a period of two years to only allow electrical contractors to work for it at Loy Yang B if they have a current certified agreement with the CEPU. The letter also identified DJN as an electrical contractor who had ceased to be engaged to perform work at Loy Yang B because it did not have a certified agreement with the CEPU. The letter raised the possibility that Edison may have contravened s 45E of the TPA, and asked Edison to provide certain information to the ACCC. 91 Edison obtained advice on the issues raised by the ACCC's letter. On 20 November 2003, a meeting of the Loy Yang B joint venture special management committee was held at Southbank, Melbourne. Sutherland chaired the meeting. Sutherland did not communicate that change to the CEPU and he was not aware of anyone else at Edison doing so. 93 Burns said that after the ACCC's letter, Edison took a decision that it would change its practice and would not continue to adhere to the agreement with the CEPU. Pearson said that Burns and Warrillow advised him that Edison would immediately cease the practice of restricting its engagement of electrical contractors to those who had certified agreements with the CEPU. Pearson convened the team leaders and advised them that, as a result of the ACCC's correspondence, the practice that Edison had in place in relation to certified CEPU agreements would cease and therefore DJN was able to be contracted in future. Buckley said that late in 2003 he became aware that the agreement between Edison and the CEPU was no longer valid or in place. 94 In about January 2004, DJN was invited by Edison to tender for work at Loy Yang B. From about 2 March 2004, DJN again performed work as an electrical contractor for Edison at Loy Yang B. They also acknowledged that Edison reverted to its pre-August 2001 practices late in 2003 after receiving correspondence from the ACCC. 96 Burns said that prior to August 2001 Edison always asked potential electrical contractors what industrial arrangements they had in place, but did not insist that they have an EBA in place with the CEPU. He said that Edison's practice changed when it made the agreement with the CEPU in August 2001. The effect of the agreement, as he understood it, was that Edison would not engage any electrical contractor to perform work at Loy Yang B unless the contractor had a current certified agreement with the CEPU. He said that the change in Edison's practice occurred because Edison acceded to a request that had been made by Mighell on behalf of the CEPU. 97 Pearson also said that the agreement with the CEPU represented a change in Edison's practices in connection with the engagement of electrical contractors for Loy Yang B in that Edison did not previously require contractors to have a certified agreement with the CEPU. This evidence was not challenged in cross-examination by senior counsel for the CEPU. Indeed, Pearson gave evidence in the course of cross-examination that the practice that Edison applied between its discussions with the CEPU of August 2001 and late 2003 when it received a letter from the ACCC was that it would only engage electrical contractors who had a certified agreement that was signed by the CEPU. Pearson said that this practice differed from the earlier practice that Edison had followed before the events of 2001. Again, this evidence was not challenged. 98 Likewise, Buckley said that the arrangement with the CEPU that Edison would only engage people who were covered by a current EBA with the CEPU represented a change in Edison's practices. I see no inconsistency between this evidence and the evidence that Buckley gave in the course of cross-examination that prior to August 2001 Edison asked contractors whether they had any awards or enterprise agreements in place. Buckley said the purpose of the general inquiry that was made prior to August 2001 was to obtain an understanding of the contractor's status concerning employment and to ensure that there were mechanisms in place for settling disputes or other grievances. 99 The foregoing evidence, which I accept, stands in marked contrast to the evidence given by Sutherland. In his evidence, Sutherland downplayed the significance of the agreement between Edison and the CEPU. He described the agreement with the CEPU as one that added to the due diligence that Edison customarily carried out when it engaged electrical contractors at Loy Yang B. He said that prior to August 2001 Edison enquired whether or not contractors had a current certified agreement because the absence of such an agreement would, perhaps, heighten the risk of disputation on the Loy Yang B site. If an electrical contractor did not adhere to appropriate awards or enterprise agreements, Sutherland said it would be a mark against the contractor which would go into an overall assessment of the risk of engaging the contractor. Sutherland said Edison's agreement with the CEPU was a logical extension of Edison's due diligence process and dovetailed in with it. He also described the agreement with the CEPU as one that heightened the vigilance that Edison would apply in its due diligence process. Not only does this evidence conflict with the evidence given by the other witnesses, it also stands in considerable tension with Sutherland's evidence that Edison determined that it would no longer comply with the heads of agreement after it received the ACCC's letter of 27 October 2003. 100 I consider that Sutherland was content to minimise or blur the clear cut change in Edison's practices that was brought about by its agreement with the CEPU in August 2001. I accept the evidence given by Burns, Pearson and Buckley concerning the change in Edison's practices that resulted from its agreement with the CEPU. I reject Sutherland's evidence. 103 Section 45E was originally introduced into the TPA by the Trade Practices (Boycotts) Amendment Act 1980 (Cth). While there are minor differences in the drafting of that section in comparison to the current s 45E, it had essentially the same objects and a similar operation: see Gibbins v Australasian Meat Industry Employees' Union (1986) 12 FCR 450 (' Gibbins' ). The original s 45E was repealed by the Industrial Relations Reform Act 1993 (Cth). In 1996, s 45E was re-enacted it its current form by the Workplace Relations and Other Legislation Amendment Act 1996 (Cth). Section 45EA was also introduced by that Act. 104 There is little judicial consideration of the current form of ss 45E and 45EA: cf Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Corke Instrument Engineering Australia Pty Ltd (2005) 223 ALR 480 ( 'Corke' ). There is, however, considerable authority in relation to phrases that occur in s 45E and in other provisions of Pt IV of the TPA. Those authorities are helpful in construing s 45E in a way that gives a consistent meaning to phrases that are used elsewhere in the TPA: see Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 381-382 [69] - [71] . Some assistance is also to be gained from authorities that have considered s 45E in its original form: Gibbins ; see also Keith Russell Simplicity Funerals Pty Ltd v Cremation Society of Australia (ACT) Ltd (1982) 57 FCR 472. 106 The cases on s 45 of the TPA make it clear that for an arrangement or understanding to occur, there must be a 'meeting of the minds' of the parties: Top Performance Motors Pty Ltd v Ira Berk (Queensland) Pty Ltd (1975) 5 ALR 465; Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 2) (1979) 26 ALR 609. There must be a consensus as to what is to be done, not just a mere hope as to what might be done or might happen: Email at 385. 107 In Federal Commissioner of Taxation v Lutovi Investments Pty Ltd [1978] HCA 55 ; (1978) 140 CLR 434 (' Lutovi' ), the meaning of an 'arrangement' was considered in the context of s 260 of the Income Tax Assessment Act 1936 (Cth). ... It is, however, necessary that an arrangement should be consensual, and that there should be some adoption of it. But in our view it is not essential that the parties are committed to it or are bound to support it. An arrangement may be informal as well as unenforceable and the parties may be free to withdraw from it or to act inconsistently with it, notwithstanding their adoption of it. It may arise merely where the minds of the parties are at one that a proposed transaction proceeds on the basis of the maintenance of a particular state of affairs or the adoption of a particular course of conduct. 109 In Leahy , Merkel J discussed the concepts of 'arrangement' and 'understanding' where multiple parties were alleged to have been involved, in different capacities, in price fixing contravening s 45 of the TPA. In that case, the ACCC brought proceedings against eight corporations and eight individuals. A number of the respondents admitted to contraventions of the TPA. The remaining respondents did not seriously challenge the ACCC's case against the admitting respondents, but rather they sought to distinguish their actions from those of the admitting respondents. The contesting respondents submitted that, unlike the other respondents, they had not initiated any of the price increases in the pricing 'cycle' at the heart of the ACCC's case. While the contesting respondents did not dispute that price increases were communicated amongst competitors in the Ballarat petrol market, they argued that their price increases were the result of competitive market forces and not made pursuant to an understanding to increase petrol prices in the event of a 'price-increase call' by the initiating respondents. An understanding will usually, but may not necessarily, involve some reciprocity of obligation: see Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 at 360 (ACCC v Amcor); Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 at 230-231 and Trade Practices Commission v Email Ltd (1980) 43 FLR 383 at 397. At the least, there must be a meeting of minds of those said to be parties to the understanding and a consensus as to what is to be done; not merely a hope as to what might be done or might happen. Thus, ordinarily, an understanding involves communication between the parties arousing expectations in each party that the other party/parties will act in a particular way: see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [2003] FCAFC 149 ; (2003) 129 FCR 339 at [409] '. A mere expectation that as a matter of fact a party will act in a certain way is not enough, even if it has been engendered by that party. In the present case, for example, each individual who attended the meeting may have expected that as a matter of fact the others would return to their respective offices by car, or, to express the matter differently, each may have been expected by the others to act in that way. Each may even have 'aroused' that expectation by things he said at the meeting. But these factual expectations do not found an 'understanding' in the sense in which the word is used in ss 45 and 45A . The conjunction of the word 'understanding' with the words 'agreement' and 'arrangement' and the nature of the provisions show that something more is required. It is no more than what Lindgren J described as a "factual expectation" which falls short of an "understanding". 111 As these passages from Leahy and Apco indicate, the authorities have expressly refrained from holding that the consensus or meeting of minds required by the words 'arrangement' or 'understanding' must involve a reciprocity of obligation. However, in order for there to be an arrangement or understanding for the purposes of s 45(2), there must be a meeting of the minds of those said to be parties to the arrangement or understanding. There must be a consensus as to what is to be done and not merely a hope as to what might be done or happen: Trade Practices Commission v Email Ltd (1980) 43 FLR 383 at 385 (Lockhart J); Ira Berk at FLR 291 per Smithers J. Ordinarily, an arrangement or understanding involves communication between the parties arousing expectations in each that the other will act in a particular way: Email at 395. There is no necessity for an element of mutual commitment between the parties to an arrangement or understanding, although in practice such an arrangement or understanding would ordinarily involve reciprocity of obligation: Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 at 230---1; 116 ALR 643 per Lockhart J. In Trade Practices Commission v Service Station Association Ltd (1993) 44 FCR 206 at 230-231 and 238, the Full Court endorsed Lockhart J's observation in Email at 397 that it is difficult to envisage circumstances where there would be an understanding involving a commitment by one party as to the way it should behave, without some reciprocal obligation by the other party. 112 Parallel conduct can constitute circumstantial evidence from which an arrangement or understanding may be inferred: Email at 386. Where there is no direct evidence of an arrangement or understanding, an inference that such an arrangement or understanding existed may be drawn from evidence that the parties' conduct exhibits 'a concurrence of time, character, direction and result': David Jones at 468 applying R v Associated Northern Collieries [1911] HCA 73 ; (1911) 14 CLR 387 (' Northern Collieries' ) at 400. Inferences of an arrangement or understanding are apt to be drawn from circumstantial evidence when the facts are particularly within the knowledge of a party who is not called to give evidence: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 (' Jones v Dunkel' ); see also David Jones at 465. 113 In the present case, there were no detailed submissions on the meaning of 'arrangement' or 'understanding' for the purposes of ss 45E and 45EA. Senior counsel for the ACCC generally used the composite phrase 'contract, arrangement or understanding', while senior counsel for the CEPU tended to restrict his language to 'agreement'. In my opinion, there is no reason why the reasoning in Apco and Amcor should not apply. It follows that an 'arrangement' or 'understanding' for the purposes of ss 45E and 45EA must be proven by evidence of a consensus or meeting of minds between Edison and the CEPU under which one party or both parties committed to a particular course of action; it is not sufficient that there is a mere expectation that a party or parties will act in a certain way. The test of 'purpose' is a subjective test; it is determined by examining the subjective purposes of the parties for including the provision in the contract, arrangement or understanding: News Ltd v South Sydney District Rugby League Football Club Ltd [2003] HCA 45 ; (2003) 215 CLR 563 (' South Sydney' ) at 573 [18] per Gleeson CJ, at 580 [43] per McHugh J, at 585-587 [60], [62]-[63] per Gummow J, and at 636-637 [212] per Callinan J; and Hughes v Western Australian Cricket Association (Inc) (1986) 19 FCR 10 (' Hughes' ). 115 The proscribed purpose can be one of a number of purposes, but it must be an operative purpose. In argument, senior counsel for the ACCC seemed to suggest that s 45E imposes a lower threshold than this, relying on the absence of the word 'substantial' in s 45E and the inapplicability of s 4F to ss 45E(3). Section 4F(1) provides that a reference to the 'purpose' of a provision of a contract, arrangement or understanding means the purpose, or one of the purposes, for including the provision, so long as it was or is a 'substantial purpose'. While it is true that s 4F does not apply to s 45E(3), this does not mean that an incidental purpose, which is not an operative purpose, will be sufficient to satisfy s 45E. Like s 45E(3), s 45D(1) is outside the ambit of s 4F and does not contain any explicit requirement that the purpose be a 'substantial' purpose. The High Court has construed s 45D(1) as requiring that the purpose be an operative subjective purpose: Tillmanns Butcheries Pty Ltd v Australasian Meat Industry Employees' Union (1979) 27 ALR 367 at 382-383 per Deane J. In my opinion, s 45E(3) should be construed in the same way. The reference to 'purpose' in s 45E connotes an operative subjective purpose. 116 The issue of 'purpose' was investigated by the High Court in South Sydney in the context of s 45 and s 4D of the TPA. The case concerned a sporting club, South Sydney District Rugby League Football Club Ltd ('Souths'), which alleged that News Ltd and the Australian Rugby Football League Ltd ('ARL') had entered into a contract, arrangement or understanding in contravention of s 45 of the TPA. The alleged agreement between News Ltd and ARL was for the merger of two rugby league competitions. It provided for a unified rugby league competition to be conducted between, ultimately, fourteen teams only. The trial judge held that although the fourteen-team term was part of a contract, arrangement or understanding made between News Ltd and ARL, it did not have the purpose of preventing, restricting or limiting the supply or acquisition of services from particular persons or classes of persons. The Full Court overturned the trial judge's decision (Merkel and Moore JJ, Heerey J dissenting): see South Sydney District Rugby League Football Club Ltd v News Ltd [2001] FCA 862 ; (2001) 111 FCR 456. Merkel J found that the trial judge had conflated the purpose of the merger, joint venture and regional participation provisions of the agreement, with the purpose of the fourteen-team term provision: at 522-523 [264]. Merkel J held at 531 [295] that the agreement had the purpose of preventing the supply or acquisition of services from a particular class of persons by restricting or limiting supply or acquisition to or from the clubs or entities selected to be included in the merged competition. Moore J found that by operation of the fourteen-team term, the services supplied by Souths and other affected clubs would be limited and restricted: at 501-502 [186]. In dissent, Heerey J held that the exclusion of clubs from the merged competition was not a purpose at all: at 474 [78]. Heerey J agreed with the trial judge that while the fourteen-team term limited, and was intended to limit, the number of clubs in the competition, it did not follow that the provision was included for the purpose of preventing the supply of services to, or the acquisition of services from, clubs in excess of the fourteen: at 467 [37]. 117 The High Court overturned the Full Court's decision (Gleeson CJ, McHugh, Gummow and Callinan JJ, Kirby J dissenting). Each of their Honours' separate reasons for judgment considered the proper approach to assessing the 'purpose' of a provision in a contract, arrangement or understanding for the purposes of ss 45 and 4D of the TPA. The purpose of conduct is the end sought to be accomplished by the conduct. The motive for conduct is the reason for seeking that end. The appropriate description or characterisation of the end sought to be accomplished (purpose), as distinct from the reason for seeking that end (motive), may depend upon the legislative or other context in which the task is undertaken... [I]n the context of competition law, it is necessary to identify purpose by describing what is sought to be achieved by reference to what is relevant in market terms. The purpose of the fourteen team term was the objective, in relation to the nature of their business arrangements, that News and ARL sought to achieve; not the reason why they sought to achieve that objective. They may have had different, and multiple, reasons for their conduct. The manifest effect of a provision in an agreement, in a given case, may be the clearest indication of its purpose. In other cases, it may be difficult, or even impossible, to determine the purpose (of a kind relevant to the operation of the Act) of a provision in a written contract merely by reading the document. And, of course, the legislation deals with contracts, arrangements or understandings. 118 While the manifest effect of the provision may provide, as Gleeson CJ said, the clearest indication of subjective purpose, care must be taken that evidence of the effect of a provision does not render the test an objective one. Gummow J warned against this danger at 586 [63]. It must be kept in mind that the effect that the parties sought to achieve through inclusion of the provision in a contract, arrangement or understanding is crucial to the test of subjective purpose. 119 Both McHugh and Gummow JJ expressed some hesitation about determining purpose under s 4D by reference to the subjective purpose of the makers of the provision, but in the end they both accepted the correctness of the subjective interpretation of the section: at 580 [41]-[43] per McHugh J and at 585 [59]-[60] per Gummow J, cf Kirby J at 606 [130]. McHugh J agreed with Gummow J that the trial judge applied a subjective test of purpose and his findings should be upheld: at 581 [46]. 120 Section 45E(3) requires consideration of the subjective purpose for inclusion of the provision in a contract, arrangement or understanding, not the purpose of the contract, arrangement or understanding as a whole. The discovery of that purpose is by no means necessarily to be gained by an examination of the provision itself only. As with any term of an agreement or arrangement, a provision may, sometimes must, be read with, and seen for its true meaning, effect and purpose, the relevant agreement or arrangement as a whole. 121 In many cases it will be necessary and appropriate to infer the subjective purpose from evidence of the conduct of the parties: see Northern Collieries at 402 per Isaacs J. Statements as to purpose from the witness box may be highly probative, but they must be tested closely and received with great caution: ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (No 1) (1990) 27 FCR 460 ( 'Pont Data' ) at 482-483. 122 As I have already mentioned, s 45E imposes liability only on the 'first person' to the contract, arrangement or understanding, and not on the union. Thus s 45E gives rise to the question whether the relevant purpose for establishing a contravention of s 45E is the subjective purpose of first person, to whom liability attaches, or the subjective purposes of both of the parties to the contract, arrangement or understanding. 123 The CEPU submitted that the purpose of the company ought to be the focus of the inquiry, not the union's purpose. In argument, however, senior counsel for the CEPU retreated somewhat from this position and acknowledged that the issue of purpose was clouded by the requirement that there be a 'contract, arrangement or understanding', which means a 'meeting of the minds'. That requirement suggests that the subjective purposes of the parties to the contract, arrangement or understanding are considered in determining subjective purpose. The CEPU submitted that, overall, the correct way to interpret s 45E is to look at the common purpose of the parties. The ACCC invited the Court to infer the CEPU's subjective purpose from the evidence of the 9 August meeting, the events that occurred in the week of 13 August and leading up to the signing of the heads of agreement and the CEPU's signing of the Simon Engineering site agreement, and the absence of communication between Edison and the CEPU in relation to the electrical contractors issue after 24 August 2001. 125 In Pont Data , the Full Court considered the approach to the determination of purpose under s 4F which, like s 45E(3), operates where a particular provision was included in a contract, arrangement or understanding for a proscribed purpose. This indicates that s 4F, in this operation, requires one to look to the purposes of the individuals by whom the provision was included in the contract, arrangement or understanding in question. It therefore directs attention to the "subjective" purposes of those individuals. All other considerations aside, the use in s 45(2) of "purpose" and "effect" tends to suggest that a subjective approach is intended by the former expression. The application of a subjective test does not exclude a consideration of the circumstances surrounding the reaching of the understanding. The other party, Pont Data Australia Pty Ltd, had objected to the inclusion of the provisions. In those circumstances, the Court considered that it was appropriate to look to the purposes of the party as a result of whose efforts the provisions were included: at 477. In the present case, the CEPU instigated the requirement that resulted in the provision, but neither party submitted that either Edison or the CEPU objected to its inclusion. Thus, in my view, it is appropriate to consider the subjective purposes of both Edison and the CEPU in determining whether the provision was included for the proscribed purpose. 127 I reject the CEPU's submission that s 45E requires consideration of the subjective purposes of Edison, to the exclusion of the CEPU's purposes. The language of the section does not suggest that the inquiry as to purpose is limited to a consideration of the purpose of the party to the contract, arrangement or understanding upon which liability is directly imposed. In my opinion, the subjective purposes of each of the parties to a contract, arrangement or understanding are relevant to the determination of the purpose for which that provision was included. I doubt that s 45E requires the Court to search, perhaps vainly, for a common purpose: Pont Data at 477; see also South Sydney per McHugh J at 579 [38]. However, I do not need to express any final view on this issue because I have concluded on the evidence that there was no relevant disparity between the CEPU's purpose and Edison's purpose for including the provision. 'Hindering' has been given a broad construction by the courts; the concept encompasses conduct which in any way affects to an appreciable extent the ease of the usual way of supplying or acquiring an article: Devenish v Jewel Food Stores Pty Ltd [1991] HCA 7 ; (1991) 172 CLR 32 (' Devenish' ) at 45-46 per Mason CJ. Preventing or hindering can be engaged in by threat or verbal intimidation, as well as by physical interference with the actual activities: Australian Broadcasting Commission v Parish (1980) 43 FLR 129 at 153. The concept is not to be limited by any pre-conceived notion of a 'secondary boycott': see Devenish at 41-42 per Mason CJ, at 51-52 per Deane J, and at 58 per Toohey J; Australian Builders' Labourers' Federated Union of Workers Western Australian Branch v J-Corp Pty Ltd (1993) 42 FCR 452 at 459 per Lockhart and Gummow JJ. 129 The CEPU submitted that, for the purposes of s 45E, the impugned provision must be included for the purpose of preventing or hindering a particular and specifically identified person. The CEPU pointed out that the language of s 45E refers to preventing or hindering the 'second person'. It was submitted that the words 'second person' require the identification of a specific target. The major amendment proposed is the insertion of a new section, 45E, which prohibits a person from agreeing with a union to cease to continue to deal with an individual or an individual company, or to continue to deal with an individual or individual company only on new conditions restricting that person's freedom to trade. Existing provisions of the Act already prohibit agreements between competitors to boycott particular persons and to impose restrictions on freedom to trade. Events have demonstrated that trade unions also possess sufficient economic power to engage in this type of undesirable conduct. The Government believes, and it must be accepted by reasonable people, that it would be clearly inappropriate for the Trade Practices Act , which restricts abuses of power by companies, to allow the possibility of similar abuses by unions. It submitted that a significant element of the operation of s 45E is that the target of the prohibited conduct is particularly or specifically identified. 130 The CEPU drew support for this argument from judicial consideration of the words 'particular persons' in s 4D of the TPA in Bullock v Federated Furnishing Trades Society of Australasia (1985) 5 FCR 464 (' Bullock' ); see also TNT at 75-76. Prior to 1986, s 4D referred to 'particular persons' as the target of the proscribed provision. In Bullock, the Full Court left open the question whether Gray J had been correct in limiting the words 'particular persons' in s 4D to 'persons whose identity is known or can be ascertained': at 473. In apparent response to the decisions in Bullock and TNT, the words 'or classes of persons' were added to s 4D by the Trade Practices Revision Act 1986 (Cth): see Gummow J's discussion in South Sydney at 589-590 [75]. The scope of s 45E has not been similarly expanded to include 'classes of persons'. According to senior counsel for the CEPU, it can therefore be inferred that the legislature did not intend to expand the scope of s 45E. Thus, it was submitted, the section requires the identification of a particular second person. 131 The CEPU's argument is not supported by the language of s 45E. Unlike s 4D, s 45E does not contain the word 'particular'. There is no indication that s 45E requires the identity of the second person to be particularly or specifically identified. Section 45E(1) provides support for this view. In effect, s 45E(1) defines the 'second person' by reference to an extant or accustomed relationship of supply or acquisition. Section 45E(3) is concerned with contracts, arrangements or understandings which affect persons in that particular relationship of supply or acquisition. The CEPU's construction would insert an additional requirement in s 45E(1) that the second person be particularly identified, as well as being identified by that particular relationship. This additional requirement amounts to a gloss that, in my view, is contrary to the language and purpose of the section. 132 The CEPU's construction is unwarranted in light of the policy objectives of ss 45E and 45EA. Sections 45E and 45EA are aimed at ensuring that a contract, arrangement or understanding between a union and a person does not prevent or hinder the freedom of third parties to trade. They are remedial provisions designed to prevent exercises of power by a person or a union impinging on defined trading relationships; they not merely aimed at prohibiting agreements which prevent or hinder dealings with particular or specifically identified persons. 133 In any event, in Pont Data , the Full Court considered the phrase 'particular persons or classes of persons' in the context of s 4D. The Court found that the phrase allowed for the identification of persons by reference to a negative characterisation; namely, persons who may not be supplied with information unless they accepted and became bound by the restraints imposed by the agreements at issue. That may be conceded, but they are identified, in the present case, by the characteristic that they may not be supplied with the information in question, unless they accept and become bound by the restraints imposed by the Dynamic Agreement. Such persons come within a particular category or description defined by a collective formula: cf Pearks v Moseley, Re Moseley's Trusts (1980) 5 App Case 714 at 723. They ordinarily would be treated as constituting a particular class, even though at any one time the identity of all the members of the class might not readily be ascertainable. What distinguishes the class and makes it particular is that its members are objects of an anti-competitive purpose, with which s 4D is concerned. 135 It follows that, if and to the extent that s 45E requires the second person to be particularly or specifically identified, that requirement can be satisfied by the use of a negative or exclusionary formula, as in Pont Data . The parties differed about the nature, scope and content of that contract, arrangement or understanding. 137 As I have already noted, the ACCC put its case in essentially two ways. Its primary case was that prior to 23 August 2001 Edison and the CEPU made a contract or arrangement, or arrived at an understanding, that all electrical contractors performing work at Loy Yang B must have a current certified agreement with the CEPU prior to commencing work at the site. The ACCC contended that this contract, arrangement or understanding was broader than, and overshadowed and controlled, the provision that was subsequently inserted in the heads of agreement. 138 The CEPU disputed the existence of any contract, arrangement or understanding other than that embodied in the express terms of the heads of agreement. 139 It is convenient to consider the ACCC's primary case, and the CEPU's response to it, before turning to consider the ACCC's alternative argument that in any event the heads of agreement contained a provision that contravened s 45E(3). For ease of reference, I will use the expression 'arrangement' rather than the more cumbersome 'contract, arrangement or understanding'. Obviously, the terms 'arrangement' and 'understanding' are much broader than the term 'contract', and they are often equated in the authorities: TNT at 25; and Amcor at 359-360 [75]. However, neither party suggested that anything turns on the differences that exist between the three concepts. 140 In advancing its primary case, the ACCC argued that the arrangement between Edison and the CEPU is to be gleaned from all of the evidence concerning the conduct engaged in by Edison and the CEPU over the relevant period. The ACCC pointed to the events that pre-dated the signing of the heads of agreement on 23 August, including the 9 and 10 August meetings, the 9 and 10 August teleconferences, the 13 August letter, the meeting between Buckley and the Nabulsi on 13 August and the team meeting on 16 August to support the wider arrangement for which it contends. It also pointed to events subsequent to Edison's execution and delivery of the heads of agreement, including DJN's exclusion from work at the site, Edison's decisions consequent upon the ACCC's letter of 27 October 2003, and DJN's resumption of work at Loy Yang B in 2004. 141 The ACCC's case is, to some extent at least, based on inferences from the facts to which I have already referred. In drawing inferences of fact of this kind, the civil standard of proof applies, but the facts and inferences upon which the ACCC relies must be proved to a level of satisfaction that is commensurate with the seriousness of the allegations. The allegations made against the CEPU are very serious and can give rise to substantial penalties. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences. 143 Based on the factual findings and applying the legal principles which I have set out above, I am satisfied that prior to 23 August 2001 Edison and the CEPU made or entered into an arrangement that included a provision that Edison would not engage electrical contractors to perform work at Loy Yang B unless they have a current certified agreement with the CEPU prior to commencing work at the site. The arrangement involved a commitment on Edison's part not to permit electrical contractors who did not have a certified agreement with the CEPU to work at Loy Yang B. In exchange, the CEPU committed to signing the Simon Engineering site agreement. The evidence establishes, in my view, that Edison and the CEPU made or entered into this arrangement prior to 15 August 2001. The heads of agreement was entered into in accordance with, and was controlled by, this arrangement. I will elaborate my reasons for these findings in the course of considering the arguments advanced by the CEPU. 144 The CEPU submitted that the evidence showed only one 'meeting of the minds' between Edison and the CEPU --- that is, the heads of agreement of 23 August 2001. The CEPU contended that the communications and events surrounding the making of the heads of agreement are insufficient to prove that there was a meeting of the minds between Edison and the CEPU; rather, they are evidence of the negotiations and canvassing of proposals which ultimately culminated in the heads of agreement on 23 August. In my view, these submissions do not grapple with the overall force and effect of the evidence that is before the Court. 145 While I do not propose to rehearse all of the findings of fact that I have set forth above, it is appropriate to emphasise some of them. On 9 August, Mighell told the Edison executives that the CEPU required Edison to agree that all electrical contractors working on the Loy Yang B site must have a certified agreement to which the CEPU was a party. The Simon Engineering site agreement was not expressly mentioned at the 9 August meeting. But the context in which the meeting took place must have made it clear to all participants that the CEPU was taking the position that it would not sign the Simon Engineering site agreement unless Edison accepted the two requirements that the CEPU advanced, ie site access and the requirement that all electrical contractors on the Loy Yang B site must have a certified agreement with the CEPU. I also infer that those present at the 9 August meeting knew that the delay in the execution of the Simon Engineering site agreement was delaying the construction of the peaker plant. The CEPU was a necessary signatory to the Simon Engineering site agreement. I infer that Mighell knew that the CEPU's refusal to sign the Simon Engineering site agreement was exerting heavy pressure on Edison, and that he was consciously exploiting that situation in making the demands he did of Edison concerning site access and electrical contractors. 146 By the end of the 10 August teleconference, which was shortly before 3.00 pm, Edison's senior executives responsible for the Loy Yang B business had agreed that Edison would accede to the CEPU's requirements for site access and that electrical contractors only be permitted to work at the Loy Yang B site if they had a certified agreement in place with the CEPU. Furthermore, Driscoll instructed Sutherland, Burns and others that an agreement accepting these requirements should be concluded with the CEPU as quickly as possible. 147 Immediately after the 10 August teleconference, Sutherland arranged an urgent meeting with Mighell and met with him at Mighell's office. 148 On Monday 13 August, Sutherland drafted and signed a letter to Mighell which stated that, further to his discussions with Mighell the previous week, Sutherland was able to confirm the proposal concerning contract work being undertaken at Loy Yang B. The proposal stipulated in the letter was that Edison and the CEPU would agree that all electrical contractors performing work at Loy Yang B must have a current certified agreement with the CEPU prior to commencing work at the site. Of itself, Sutherland's signature on this letter indicates that he did in fact have discussions with Mighell to the effect described during the previous week. 149 Edison took various actions on and from 13 August to implement its arrangement with the CEPU. On the afternoon of 13 August, Buckley told Nabulsi in unequivocal terms that DJN's services would no longer be utilised by Edison because Edison had been asked by the CEPU not to permit contractors on site who did not have an EBA with the CEPU. Buckley conveyed this advice to Nabulsi because he was instructed to do so. 150 On 15 August, the CEPU signed a memorandum of understanding recording that it had reached agreement with Simon Engineering and other unions on a site agreement for Loy Yang B. I infer that the CEPU would not have taken the step of signing the Simon Engineering MOU unless it had received a communication from Edison that Edison agreed to its demands. 151 On 16 August, Pearson and Buckley informed the maintenance team leaders that Edison had entered into, or was entering into, an arrangement with the CEPU whereby electrical contractors would not be permitted to work at Loy Yang B if they did not have a certified agreement with the CEPU. 152 DJN was not offered any new contracting work at the Loy Yang B site between August 2001 and about January 2004. It was permitted to complete pre-existing commitments at the Loy Yang B site up to about 20 September 2001, which was entirely consistent with Edison's decision to 'grandfather' DJN's existing contractual commitments. 153 After receiving the ACCC's letter of 27 October 2003, Edison decided that it would no longer comply with its agreement with the CEPU. It immediately ceased its practice of requiring all electrical contractors to have a current certified agreement with the CEPU before they could commence work at the Loy Yang B site. Pursuant to this change in practice, DJN was invited early in 2004 to once again tender for work at Loy Yang B and it resumed work as an electrical contractor at the site on or about 2 March 2004. 154 Taken together, these events and the concurrence of timing, direction and result they display support the findings I have made at [142] above. There is no evidence that Sutherland stopped or intercepted the dispatch of the letter, or that he had any reason to do so. (2) The dispatch of the letter is entirely consistent with the instructions that Sutherland received on 10 August from Driscoll, ie fix the impasse to the Simon Engineering site agreement urgently by acceding to the CEPU's requirements. Those instructions never changed. (3) Sutherland did not take any action on or after 13 August to stop Pearson and Buckley implementing the decision that was taken at the 10 August teleconference. (4) It is consistent with Burns' evidence that he became aware of the 13 August letter in December 2001, and that he recalls seeing an email version of the letter much earlier than October 2003. He was not asked about any telephone discussions. Consequently, Sutherland did not deny having discussions of the kind referred to in the 13 August letter. Sutherland did say, however, that he did not put forward a solution at his meeting with Mighell on 10 August. As noted above, I have reservations about this evidence. 157 It is improbable that nothing happened on 10 August when Sutherland met with Mighell at an urgently convened meeting, other than Sutherland asking Mighell to repeat the demands that Mighell had made at the 9 August meeting. Yet this is the effect of Sutherland's evidence. In these circumstances, and bearing in mind the unreliability of Sutherland's evidence generally and the statements in Sutherland's letter of 13 August, I do not accept Sutherland's evidence that he did not convey any solution to Mighell at the 10 August meeting because he had no solution to offer. However, I will not attempt to make any findings as to what occurred at the meeting. I do not need to do so. My conclusions overall do not depend on a finding as to whether Sutherland conveyed a solution at the 10 August meeting because there were other relevant communications between the CEPU and Edison. Indeed, Sutherland's evidence leaves open the possibility that he had other discussions with Mighell between 9 August and 13 August, outside the context of their meeting on 10 August. 158 Senior counsel for the ACCC urged me to apply the principles enunciated by the High Court in Jones v Dunkel to support the inference that Edison and the CEPU made an arrangement to the effect alleged by the ACCC. While it is clearly open to me to infer from the CEPU's failure to call evidence from key players at the CEPU who would have direct knowledge of the events in question that those witnesses would not assist the CEPU's case, there are limits to the Jones v Dunkel principle. The principle allows me to draw inferences that are open on the evidence more confidently than might otherwise be the case; but it cannot be used to make up for gaps in the evidence. In this case, the inferences that I have drawn from the evidence are so clear that I do not need to rely upon Jones v Dunkel . It is, nonetheless, correct that the absence of evidence adduced by the CEPU from Mighell and Mooney allows me to infer with greater confidence that the CEPU received the letter of 13 August from Sutherland and that it did so before Mooney signed the Simon Engineering MOU on 15 August. More generally, the absence of evidence from the CEPU allows me to conclude, more confidently, that Edison had communicated to the CEPU by 15 August the fact that Edison agreed to the CEPU's requirement that electrical contractors not be permitted to perform work at Loy Yang B unless they had a current certified agreement with the CEPU. 159 The CEPU advanced a series of reasons why I should infer that the 13 August letter was not sent to the CEPU. 160 First, it argued that to infer that the 13 August letter was sent is inconsistent with the fact that Burns and Sutherland agreed to seek advice from Corrs on 10 August or in the week of 13 August. Sutherland gave evidence that he recalled having some discussions by telephone with Burns at Loy Yang B and arising from those discussions they thought that Edison should get some advice from Corrs. He said that Burns agreed to approach Corrs to get the advice. He also said that he believed his discussion with Burns by telephone took place on 10 August and that the proposed legal advice was to relate to both the site access issue and the electrical contractors issue. Sutherland said that Burns made the contact with Corrs, although Sutherland was involved in an initial meeting with Corrs. Sutherland confirmed that Corrs drafted the heads of agreement. On the other hand, Burns said he was not involved in giving any instructions to Corrs to prepare the draft heads of agreement. 161 I do not accept Sutherland's account of Corrs' retainer. I accept Burns' evidence that he had no involvement in giving instructions to Corrs about the heads of agreement. I find that Sutherland, not Burns, made the decision to instruct Corrs and that thereafter Sutherland dealt with Corrs. I also find on the balance of probabilities that Sutherland contacted Corrs shortly after 13 August. 162 The agreed demarcation of responsibility between Sutherland and Burns was that Sutherland would deal with the electrical contractors issue and Burns would deal with the site access issue. There is no evidence that Corrs provided any advice in relation to the site access issue. Sutherland was the person involved in the only meeting with Corrs that is referred to in the evidence. I infer that the draft heads of agreement prepared by Corrs was sent by Corrs to Sutherland. Certainly, Sutherland forwarded the draft heads of agreement by email to Mighell at Mighell's email address on 20 August. Please call me on Tuesday, if you can. 164 It is clear that Sutherland was in direct discussion with CEPU officers about the heads of agreement. In addition to the suggestion in the 20 August email that Mighell should call Sutherland on Tuesday, the CEPU's email of 23 August shows that Sutherland was in direct discussion with Mooney about the heads of agreement. Between 20 August and 23 August, most probably on 23 August, Sutherland told Burns that the way the draft heads of agreement was worded was not satisfactory to the CEPU because it did not give the union anything. This exchange confirms that Sutherland was in direct discussion with Mooney, and perhaps other CEPU officers, about the heads of agreement. 165 In my opinion, the fact that Edison sought and obtained Corrs' assistance in drafting the heads of agreement in the week of 13 August does not alter the probability that the 13 August letter was dispatched by Sutherland on 13 August. It is not uncommon for those charged with finding a solution to a commercial problem to arrange a solution and then seek legal advice in relation to the documentation of that solution, especially when the matter is urgent. 166 Secondly, the CEPU argued that to infer that the 13 August letter was sent by Sutherland is inconsistent with the parties having subsequently entered into the heads of agreement on 23 August. It was said that if the agreement between the parties was expressed in the 13 August letter and that letter was received by Mighell in the week of 13 August, one would expect Mighell to have raised the issue of the prior agreement upon receiving the draft heads of agreement from Edison on 20 August. This did not occur; rather the response from the CEPU on 23 August was described by the CEPU as 'a fine tuning' of the draft heads of agreement. The CEPU asked rhetorically: why would the CEPU have bothered finessing the draft heads of agreement if the real agreement between the parties was contained in the 13 August letter? 167 I do not agree with these submissions. There is no inconsistency between the dispatch of the 13 August letter to the CEPU, and a decision by Edison and the CEPU that their agreement should be recorded somewhat differently, and in some respects more extensively, in a more formal legal document. The 13 August letter records a form of words proposed by Edison. On the evidence, Edison's proposed language exactly matched the requirement that Mighell had laid down on 9 August. It is possible that Mighell, or someone else within the CEPU or within Edison, raised concerns about the explicit language in which Edison had expressed its proposed agreement in the 13 August letter. It is also possible that a decision was taken, perhaps on Corrs' advice, to record the parties' agreement in ambiguous or opaque language, without altering the underlying arrangement between the parties. Furthermore, I consider that the CEPU's argument is inconsistent with the actions that were undertaken by Edison on 13 and 16 August and by the CEPU on 15 August. 168 On the whole, the evidence supports the clearest of inferences that by 15 August Edison had communicated its acceptance of the CEPU's requirement that electrical contractors not be permitted to perform work at the Loy Yang B site unless they had a current certified agreement with the CEPU. The critical thing is that Edison communicated its acceptance of this requirement to the CEPU and that this communication resulted in an arrangement between Edison and the CEPU. The existence of such an arrangement is not inconsistent with the proposition that the parties then proceeded to record their arrangement in a document prepared by Corrs. 169 Thirdly, the CEPU pointed out that the 13 August letter does not refer to the signing of the Simon Engineering site agreement by the CEPU as the quid pro quo for Edison's agreement to the proposal set out in the 13 August letter. The CEPU contrasted this aspect of the 13 August letter with the express reservation in Edison's email of 23 August that the heads of agreement would be signed by Edison 'on the proviso' that the CEPU signed the Simon Engineering site agreement. In my opinion, this argument does not impair my finding that the 13 August letter was sent to the CEPU. As of 13 August, it was implicit in the discussions between the CEPU and Edison that the CEPU would proceed to sign the Simon Engineering site agreement if Edison met its demands concerning site access and the requirement that all electrical contractors at Loy Yang B have a current certified agreement with the CEPU. That this is so is confirmed by the actions that were taken on 13, 15 and 16 August to implement their arrangement. I infer that neither Edison nor the CEPU would have taken those actions in the absence of a communication from Edison to the CEPU that Edison agreed to the CEPU's requirement that contractors on the Loy Yang B site must have a current certified agreement with the CEPU. The CEPU's actions in signing the Simon Engineering MOU on 15 August clearly indicate that an arrangement had been made between Edison and the CEPU before 15 August in the terms set out in the 13 August letter. The proviso in Edison's email to the CEPU of 23 August was no doubt an appropriate precaution for Edison to take, but by then the CEPU had already taken steps to complete the signing of the Simon Engineering site agreement. 170 My conclusion regarding the scope of the contract, arrangement or understanding between Edison and the CEPU is similar to the conclusion reached by Smithers J in Gibbins , a case concerning the original form of s 45E. In Gibbins , the second respondent ('Borthwicks'), entered into an agreement with the Australasian Meat Industry Employees' Union ('AMIEU') as a result of conciliation proceedings under the Conciliation and Arbitration Act 1904 (Cth). Essentially, the agreement provided that the Borthwicks would not 'invite or engage' carriers of livestock who were banned by the AMIEU to come onto its abattoir works to deliver stock. But it went further than that. It obviously was designed to prevent Borthwicks from engaging banned carriers for carrying services. 171 The CEPU submitted that the existence of an agreement or arrangement in the week of 13 August would render the subsequent heads of agreement a sham. The CEPU's submissions on this point are misguided. To adapt the words of Smithers J in Gibbins , the heads of agreement was expressed in its own terms, but it implemented a wider arrangement or understanding. In my opinion, Edison and the CEPU intended that the heads of agreement should be controlled by, and operate in accordance with, the arrangement that had been agreed upon by the parties and put into place in the week of 13 August. 172 The CEPU also argued that DJN's continued presence on site at Loy Yang B gives rise to an inference that the agreement was not intended to exclude DJN from continuing to supply services at Loy Yang B. The fact that DJN continued to perform some work on site at Loy Yang B in August and September 2001, under pre-existing contractual arrangements and as a subcontractor, does not affect my conclusion that the arrangement rendered DJN ineligible from continuing to supply services to Edison. Rather, as Burns' file note of the 9 August meeting shows, Edison implemented a process of 'grandfathering' DJN's existing contracts. 173 The CEPU submitted that, as the heads of agreement is a binding contract, the Court's task is to interpret the words of the contract, without regard to negotiations which transpired beforehand, so long as the words of the contract are clear: Codelfa Construction Pty Ltd v State Rail Authority (NSW) [1982] HCA 24 ; (1982) 149 CLR 337 (' Codelfa' ). It said that cl 4.1 of the heads of agreement merely obliged Edison to 'request' that electrical contractors have acceptable industrial arrangements. On the CEPU's preferred reading, cl 4.1 simply provided that having a current certified agreement with the CEPU was one way, but not the mandated way, that an electrical contractor could have acceptable industrial arrangements for the purposes of the heads of agreement. 174 Under s 45E of the TPA, I am not limited to an examination of the words of cl 4.1. This is not a proceeding to enforce a contract. Section 45E is not concerned only with written agreements; it is also concerned with the making of an 'arrangement' or arriving at an 'understanding'. An arrangement or understanding may be informal and unenforceable: Lutovi at 444. The concept of an 'understanding' is a broad and flexible one: L Grollo & Co Pty Ltd v Nu-Statt Decorating Pty Ltd , supra, at 89; TNT at 25; and David Jones at 463-464. For the reasons explained above, I am satisfied that there was a broader arrangement between the parties which overshadowed and controlled the language used in the heads of agreement. It was understood and agreed between the CEPU and Edison that the heads of agreement imposed an obligation on Edison not to retain electrical contractors at the Loy Yang B site if they did not have a current certified agreement with the CEPU, and that this is the way in which Edison would implement it. Nothing in cl 4.1 prevented Edison implementing its arrangement with the CEPU in this way. 175 None of the CEPU's additional arguments cause me to doubt my finding that as at 15 August, and as at 23 August after the execution of the heads of agreement, there was a contract, arrangement or understanding between Edison and the CEPU that included a provision that Edison would not engage an electrical contractor to perform work at Loy Yang B unless the contractor had a current certified agreement with the CEPU. The next issue is whether this provision was included in the contract, arrangement or understanding for the purpose, or for purposes including the purpose, of preventing or hindering Edison from acquiring or continuing to acquire electrical services from a person who qualifies as a second person for the purposes of s 45E(3) of the TPA. The ACCC says that, pursuant to this provision, DJN was prevented or hindered from supplying services to Edison as an electrical contractor. 177 The CEPU submitted that the surrounding circumstances show that the provision was included for the purpose of securing the signing of the Simon Engineering site agreement. Senior counsel for the CEPU submitted that the present case is analogous to Australian Workers' Union v John Holland Pty Ltd (2001) 103 IR 205. That case involved a prohibition under s 298K of the Workplace Relations Act 1996 (Cth) on dismissing an employee for 'a prohibited reason, or for reasons that include a prohibited reason'. The applicants claimed that the employer had terminated the employment of the second applicant for a 'prohibited reason', namely, because the second applicant was a member of Australian Workers' Union. In determining the reason for the employer's termination of the second applicant's employment, Goldberg J had regard to a broader industrial crisis created by another entity that was affecting the employer. Goldberg J concluded that the second applicant's membership of the union was not the reason for the employer's termination of his employment; the major reason was to solve the broader industrial relations problem that the employer faced: at 214 [41] and at 216 [49]. So too here, the CEPU submitted, the operative reason or purpose for including the provision was to secure the CEPU's signing of the Simon Engineering site agreement. 178 This argument faces insurmountable difficulties. Edison's reason for entering into an agreement with the CEPU may have been to secure the signing of the Simon Engineering site agreement and to ensure that construction work on the peaker plant commenced without further delay. But that was the motive for the agreement, not the purpose of including the provision: South Sydney at 573 [18]. The purpose of the provision is the end that it seeks to achieve. Here, Edison's operative purpose for including the provision was to restrict the electrical contractors it could engage at Loy Yang B to those who had a current certified agreement with the CEPU, conformably with the request from the CEPU. That was also the manifest effect of the provision. Notably, the CEPU's argument does not address its own purpose for including the provision in its arrangement with Edison. On any view of the evidence, the CEPU's purpose for including the provision was to limit the electrical contractors who could be engaged to work at Loy Yang B to those who had a current certified agreement with the CEPU. The CEPU did not include the provision in order to get the Simon Engineering site agreement signed; that was the leverage that the CEPU used to get Edison to agree to include the provision. 179 Section 45E does not require that the provision be included for the purpose of preventing or hindering a person who is particularly or specifically identified. It is sufficient for the purposes of s 45E that the 'second person' be identified by reference to a group of persons who possess a particular characteristic: Pont Data at 488. Here, the relevant group of persons comprised electrical contractors performing, or who wished to perform, work at Loy Yang B who did not have a current certified agreement with the CEPU. The provision in question here specifically identifies and defines the particular group of persons from whom Edison agreed to refuse to acquire services. 180 In closing submissions, senior counsel for the CEPU appeared to present an alternative argument that the second person must be 'in contemplation' of the parties at the time of making the agreement. He relied on Corke , where Finkelstein J refused to grant an interlocutory injunction in relation to an agreement that allegedly contravened s 45E. In my opinion, Corke does not provide any support for the argument. The provision in question in Corke obliged one of the respondents, Corke Instrument Engineering (Aust) Pty Ltd ('Corke'), to negotiate a specific site agreement with the union for each construction project, and provided that the site agreement must be agreed before work commences on the project. His Honour observed that it was entirely by chance that the deed containing the provision was made after Corke had entered into a particular supply agreement. His Honour said that the purpose for the inclusion of the provision in the deed was no different from the purpose for its inclusion in an earlier certified agreement and it was not included for the purpose of interfering with the supply of services from Corke. In this context, his Honour observed that it was inherently unlikely that the plant owner who contracted with Corke for its services was even in the contemplation of the CEPU or Corke when the certified agreement was negotiated: at 484 [14]. The present case is very different. The parties clearly had in contemplation that the provision would prevent or hinder a defined class of electrical contractors from performing work at Loy Yang B. 181 In any event, I am satisfied on the balance of probabilities that the parties knew that DJN, in particular, would be prevented from supplying services to Edison under the arrangement. Nabulsi gave evidence that he had discussions with Mooney over the years about the possibility of DJN signing an EBA with the CEPU. Burns gave evidence that from time to time he and Mooney discussed which contractors were being engaged by Edison to carry out particular work at Loy Yang B, and whether those contractors had an EBA with the CEPU. The evidence clearly establishes that Mooney was in close discussion with Sutherland and Burns during the period between 13 August and 23 August 2001. I infer from this evidence that the CEPU was aware that DJN performed work at Loy Yang B, that it did not have an EBA with the CEPU, and that the provision would exclude DJN from working at Loy Yang B if it did not enter into an EBA with the CEPU. 182 There was some debate in the course of argument as to whether the purpose of the provision, as alleged by the ACCC, would fall within para (a) or para (b) of s 45E(3). The ACCC relied on both paragraphs. In my opinion, the purpose of the provision that I have found to exist falls within the scope of both paras (a) and (b). It is therefore unnecessary for me to resolve the question of which paragraph applies. 183 While I do not propose to express any final view concerning the precise scope of paras (a) and (b) of s 45E(3), I doubt that they are intended to have mutually exclusive fields of operation. There does not seem to be any clear cut line of separation between the two paragraphs. Both paragraphs are capable of applying where the provision seeks to impose conditions on an existing supply or acquisition relationship. Both paragraphs use the expression 'preventing or hindering', which is capable of applying where the provision requires the second person to accept a particular condition before the first person will acquire, or continue to acquire, goods or services from the second person. In practice, it seems to me that many provisions will potentially fall within both paras (a) and (b). 184 This does not mean that every provision will fall with equal facility within the scope of both paragraphs. Some provisions will fall more comfortably within the scope of one paragraph. An example might be a provision that the first person not acquire goods from the second person, except on condition that the second person not supply the same goods to specified third parties. A condition of that kind would fall within subpara (ii) of para (b), but in the absence of para (b) there might have been some argument whether it would fall within para (a). On the other hand, it is arguable that a provision which imposes an eligibility requirement or prerequisite on the establishment of a supply relationship will fall more comfortably within para (a). The question of which paragraph applies will depend on how the purpose of the provision is expressed or characterised. 185 In the present case, the provision can be characterised as one that falls within para (a) because it imposes a prerequisite that must be satisfied before Edison can acquire, or continue to acquire, services from an electrical contractor at Loy Yang B. But it can also be characterised as one that falls within para (b), on the ground that it was included for the purpose of preventing or hindering Edison from acquiring or continuing to acquire services from contractors, except subject to a new condition imposed on electrical contractors that they obtain, or maintain, a current certified agreement with the CEPU. 186 Insofar as the ACCC relied on para (b), the CEPU submitted that the provision was excluded by subpara (i). The basis for this submission was the contention that prior to 2001 Edison already required electrical contractors to identify what registered awards or EBAs they had in place covering employees. The CEPU submitted that neither the heads of agreement between Edison and the CEPU, nor any wider arrangement between them, effected any change in this practice. In my opinion, this argument is not sustainable. It cannot stand with my factual findings concerning the marked change in practice that Edison implemented between August 2001 and late 2003. 188 The first issue that arises concerns the proper meaning and effect of cl 4.1 of the heads of agreement. The CEPU submitted that it merely obliges Edison to 'request' that electrical contractors have acceptable industrial arrangements, and that having a current certified agreement with the CEPU is one way, but not the only way, that an electrical contractor can demonstrate acceptable industrial arrangements. While this is a possible construction of cl 4.1, it is not the only way in which the clause can be read and it does not make much sense commercially or industrially. 189 Clause 4.1 appears in a formal and confidential agreement. The purpose of the agreement is to set out the industrial arrangements agreed by the parties in regard to electrical contractors engaged to work at Loy Yang B. In these circumstances, it is most unlikely that Edison and the CEPU contemplated that contractors should be free to disregard any request made by the company under cl 4.1. It is much more probable that Edison and the CEPU contemplated that Edison would insist that its request under cl 4.1 was complied with by the contractor before the contractor was permitted to commence work at the site. 190 It is also unlikely that Edison and the CEPU contemplated that the holding of a current certified agreement with the union was an entirely optional element in a contractor's industrial arrangements. The alternative construction is that the word 'includes' should be read in context as a statement that acceptable industrial arrangements must include having a current certified agreement with the union, even if the contractor has other industrial arrangements as well. To put the matter another way, the last sentence of cl 4.1 stipulates that a current certified agreement with the union is an essential component of a set of acceptable industrial arrangements. The expression 'includes having' means having, but not being limited to, a current certified agreement. 191 In my opinion, the appropriate construction of cl 4.1 is that it stipulates that a current certified agreement with the union is an essential component of a set of acceptable industrial arrangements. It is implicit in cl 4.1 that Edison would insist that contractors comply with its request. 192 Although I have commenced with the proper construction of cl 4.1, in isolation from the various exchanges that took place between Edison and the CEPU, the precise meaning of cl 4.1 as a contractual provision is not decisive of the operation of s 45E(3). The crucial question under s 45E(3) is the purpose for which cl 4.1 was included in the heads of agreement. The question is whether it was included for the purpose of preventing or hindering Edison from acquiring or continuing to acquire goods or services from an electrical contractor, or a class of contractors, who qualify as second persons for the purposes of s 45E. The meaning and effect of cl 4.1 is relevant to the ascertainment of purpose, but other evidence concerning the purpose of the provision can be as important or more important. 193 It follows that, even if the heads of agreement is the only relevant arrangement and cl 4.1 is the only relevant provision for the purposes of s 45E(3), all of the evidence to which I have earlier referred is relevant to the ascertainment of purpose. Based on that evidence, I am satisfied that cl 4.1 was included in the heads of agreement for the purpose of preventing or hindering Edison from acquiring or continuing to acquire services from electrical contractors at Loy Yang B, including DJN, within the meaning of paras (a) and/or (b) of s 45E(3). Furthermore, I am satisfied that cl 4.1 was applied by Edison, as Edison and the CEPU understood and intended that it would be, to prevent Edison from engaging the services of DJN as an electrical contractor at Loy Yang B between August 2001 and late 2003 because DJN did not have a certified agreement with the CEPU. For present purposes, this means that as at August 2001 Edison must have been accustomed, or under an obligation, to acquire goods or services from another person, who is referred to in s 45E as the 'second person'. 195 On the evidence before me, I am satisfied that at Loy Yang B in August 2001 Edison was a regular acquirer of goods and services from electrical contractors, and that DJN was one such contractor: see s 45E(7)(a). I am also satisfied that Edison was a person who, during the three months immediately preceding August 2001, acquired electrical goods or services from electrical contractors at Loy Yang B, including from DJN: see s 45E(7)(c). On either basis, Edison qualifies as a person who was accustomed to acquire goods or services within the meaning of s 45E. Accordingly, s 45E(3) applies to the contract, arrangement or understanding between Edison and the CEPU. Alternatively, on the assumption that the only relevant arrangement was the heads of agreement and the relevant provision was cl 4.1, I am satisfied that Edison gave effect to that provision in contravention of s 45EA. 199 Leaving aside its dispute as to the existence of the wider arrangement, the CEPU did not advance any contrary argument. In particular, it did not advance any argument to the effect that Edison did not give effect to cl 4.1 of the heads of agreement. 200 The ACCC did not contend that the CEPU contravened s 45EA by giving effect to a provision of its arrangement with Edison. This is consistent with the language of s 45EA, which only imposes a prohibition on the person who has contravened, or would have been capable of contravening, relevantly, s 45E(3). The CEPU challenged the applicability of ss 76(1) and 80 (1) to a union which is a party to a contract, arrangement or understanding that contravenes ss 45E and 45EA. 202 The principles of accessorial liability were discussed by the High Court in Mallan v Lee [1949] HCA 48 ; (1949) 80 CLR 198 (' Mallan' ). The case involved a complaint laid against a company and its public officer, Mallan, for understating the company's income for the purposes of its income tax return . The company was charged pursuant to s 230(1) of the Income Tax Assessment Act with the principal offence. Mallan was charged as an accessory to the company's offence under s 5 of the Crimes Act 1914 (Cth). Thus, Mallan could not be held liable as an accessory to the principal offence. In the first place, the public officer's act on behalf of the company making it an offender ipso facto amounts to a substantive offence on his part under s. 230 (1). In the second place, the sub-section makes him the actor, the principal, for whose guilty conduct the company is responsible vicariously. It would be an inversion of the conceptions on which the degrees of offending are founded to make the person actually committing the forbidden acts an accessory to the offence consisting in the vicarious responsibility for his acts. For it would mean that by s. 230 (1) the legislature had made the company responsible as an offender for the knowing and wilful understatement of income by the public officer to the exclusion of any such liability of the public officer. If that conclusion were reached it would be impossible to make him liable for the same conduct under a provision dealing with accessories. There is a number of cases which show that the application of sections dealing with aiding and abetting may be excluded by the nature of the substantive offence or the general tenor or policy of the provisions by which it is created: cf. R. v. Tyrrell ; Morris v. Tolman ; Ellis v. Guerin . In that case, the applicant was charged with culpable driving under s 52A of the Crimes Act 1900 (NSW), in reliance on s 351. Section 351 enabled an accessory to be convicted as a principal offender. The applicant was the lessee of a truck that suffered a brake failure and collided with two motor vehicles while being driven by the applicant's employee. An issue before the Court was whether the applicant could be convicted of the offence of culpable driving as a principal by reason that he had aided, abetted, counselled or procured the commission of the offence by his employee. 205 Mason J considered the application of Mallan and the exclusion of the doctrine of secondary participation at common law. His Honour identified a number of circumstances in which it may be appropriate to exclude liability for secondary participation. In particular, his Honour stated that the doctrine of secondary participation may be inapplicable 'to a class of persons whom the substantive offence was designed to protect' or 'where the substantive offence itself involves some element of secondary participation'. So much was stated by Coke and Hale (3 Co. Inst. 59; 1 P.C. 613, 614, 704). And it has been settled at common law at least since R. v. Potts . This is also the case even where the offence is of such a nature that the person could not have committed it as a principal offender: cf. R. v. Goldie ; Ex parte Picklum , at pp. 263-264; Mallan v. Lee ; Reg. v. Australian Industrial Court ; Ex parte C. L. M. Holdings Pty. Ltd . , at pp. 245-246. The mere absence in the section of any reference to secondary participation does not, however, show any intention to exclude it: see Hale's Pleas of the Crown (1800), vol 1, p 704; R v Potts . Nor, his Honour opined, could such an intention be otherwise extracted from the nature of the offence or the terms of the section by which it was created. Accordingly, the applicant was liable to conviction on the basis that he aided, abetted, counselled or procured the commission of the offence of culpable driving by his employee. The same conclusion was reached by Gibbs CJ at 477; see also Wilson, Deane and Dawson JJ at 503. 207 In reliance on Dixon J's approach in Mallan , as affirmed in Giorgianni , the CEPU submitted that the question whether a statutory provision excludes accessorial liability is to be determined by having regard to the way in which a section is structured and the purposes for which it was enacted. If such an approach is applied in the present case, the CEPU argued, there is a strong inference that the legislature did not intend a union, as a necessary party to a contravention of ss 45E and 45EA, to be caught by the accessorial liability provisions of the TPA. 208 It is important to note that the statutory provisions at issue in Giorgianni and Mallan differed in material respects from the provisions of the TPA in the present case. In Mallan , the Income Tax Assessment Act provided that the company on whose behalf the alleged accessory had acted was vicariously liable for his acts. In Giorgianni , the legislation deemed an accessory, who was not a 'driver', to be liable as a principal for the offence of culpable driving. Nevertheless, Mallan and Giorgianni recognise that accessorial liability can be excluded by a sufficiently clear expression of a contrary legislative intention. 209 A union or one of its officers is, of necessity, a party to the contract, arrangement or understanding which gives rise to the liability of the first person under ss 45E and 45EA. The CEPU argued that where a union is a principal to the acts constituting the contravention, it cannot be liable as an accessory to them. The CEPU submitted that it would be inappropriate to impose liability on a union, as a principal actor, under ss 76(1) and 80(1) of the TPA. 210 The CEPU pointed out that other provisions of Pt IV of the TPA impose liability on a union as principal. Under s 45DC, a union may be liable if two or more of its members or officers engage in conduct in concert with one another in contravention of s 45D , s 45DA or s 45DB. There is no analogous provision for the purposes of ss 45E and 45EA. The CEPU argued that where the legislature has seen fit to impose liability on a union as principal for the purposes of certain provisions of Pt IV of the TPA, but not for the purposes of ss 45E and 45EA, it is open as a matter of statutory construction to infer that the legislature intended not to impose accessorial liability on a union for being a party to a contract, arrangement or understanding that was made in contravention of s 45E or given effect in contravention of s 45EA. 211 Sections 45E and 45EA are silent as to a union's liability. There is no express exclusion of accessorial liability. Nor is there any implication to that effect. The general tenor and policy of the provisions is consistent with a legislative intention to impose liability on a union for aiding, abetting, procuring, inducing, or being knowingly concerned in contraventions of ss 45E and 45EA. 212 The legislative history of s 45E does not suggest an intention not to impose liability on a union. The Government believes, and it must be accepted by reasonable people, that it would be clearly inappropriate for the Trade Practices Act , which restricts abuses of power by companies, to allow the possibility of similar abuses by unions. On the contrary, it suggests the legislation was aimed at prohibiting 'undesirable conduct' by unions. While the second reading speech relates to the original enactment of s 45E in 1980, which was repealed in 1993, there is no evidence that the legislature intended to exclude a union from accessorial liability when s 45E was re-enacted in 1996 (at which time s 45EA was also introduced). The explanatory material for the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) sheds little light on the purposes of ss 45E and 45EA specifically; however, the provisions were part of a package of amendments designed to prohibit certain forms of industrial action. 214 Insofar as it is possible to discern the policy of the legislation, it is unlikely that the legislature intended to exclude a union from liability in relation to a contravention of ss 45E and/or 45EA. Unions are not a class of persons whom the legislation is designed to protect: see Mallan v Lee ; cf R v Tyrell [1894] 1 QB 710. Quite the opposite, ss 45E and 45EA were designed to prohibit certain types of industrial action by unions. Although liability is imposed on a union as principal for the purposes of some provisions of Pt IV of the TPA, the fact that this course is not taken in relation to ss 45E and 45EA does not, of itself, evidence a legislative intention to exclude a union from liability under ss 76(1) and 80(1). 215 In light of these matters, I cannot accept that the absence of an imposition of liability on a union as principal under ss 45E and 45EA supports an inference that the legislature intended to exclude a union from liability under ss 76(1) and 80(1). 216 Senior counsel for the ACCC referred me to an extract from the bills digest for the Workplace Relations and Other Legislation Amendment Bill 1996 (Cth), a parliamentary paper circulated upon the introduction of the Bill. I do not afford the document any real weight, but it is consistent with the view that the legislature intended that the 1996 Act would 'expose unions to the hefty sanctions' under the TPA, including under the accessorial liability provisions as amended. 217 In Gibbins , Smithers J imposed liability on the union under s 80(1) of the TPA. His Honour found at 474 that it was 'beyond question' that the AMIEU, which was a party to a contract, arrangement or understanding which contravened s 45E, had aided, abetted, counselled and procured Borthwicks' contraventions. Then, as now, a union could not contravene s 45E as a principal. 218 It is also worth noting that ss 76(1) and 80(1) of the TPA catch accessorial conduct of the kinds falling within paras (d), (e) or (f), which includes persons who are directly or indirectly knowingly concerned in, or party to, a contravention: cf Giorgianni . The application of accessorial liability to persons who are parties to a contravention indicates that the legislature intended that accessorial liability would attach to parties to a contract, arrangement or understanding which contravenes the principal provision. 219 I am satisfied that ss 76(1) and 80(1) apply to a union which is a party to a contract, arrangement or understanding which contravenes ss 45E and 45EA. It follows that the CEPU is not excluded from accessorial liability under ss 76(1) and 80(1) of the TPA in relation to contraventions of ss 45E and 45EA. 220 The next question is whether the CEPU's conduct attracts liability under ss 76(1) and 80(1). The principles of accessorial liability applicable to the present case can be shortly stated. It is necessary to prove knowledge of the essential elements constituting the contravention: Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 at 670. The requirement of 'knowledge' is actual and not constructive knowledge: Giorgianni at 504-507; Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 5. Actual knowledge may be established as a matter of inference from the circumstances surrounding the contravention: Pereira v Director of Public Prosecutions [1988] HCA 57 ; (1998) 82 ALR 217 at 219. 221 My factual findings put beyond doubt the conclusion that the CEPU was a party to the heads of agreement and the broader arrangement with Edison. The evidence establishes that the CEPU made demands which instigated, induced and procured Edison to make both the broader arrangement and the heads of agreement. The same evidence establishes that the CEPU aided and abetted, and was knowingly concerned in, the making of the contract, arrangement or understanding between Edison and the CEPU. 222 As to whether the CEPU was involved in Edison's contravention of s 45EA, it is necessary to bear in mind the width of the concept of 'give effect to'. It is defined in s 4(1) as including the doing of 'an act or thing in pursuance of or in accordance with' the contract, arrangement or understanding. An act or thing may be done in accordance with a contract, arrangement or understanding even though the person who did that act or thing did not have the contract, arrangement or understanding in mind at the time: TNT at 68. Independent decisions made by parties to a contract, arrangement or understanding can nevertheless give effect to an arrangement made between them: Dowling v Dalgety Australia Ltd (1992) 34 FCR 109. 223 I have found that Edison gave effect to the contract, arrangement or understanding by excluding DJN from performing work as an electrical contractor at Loy Yang B. In pursuance of the arrangement, the CEPU signed the Simon Engineering site agreement. Further, in its discussions with Edison in August 2001, the CEPU incited, induced, counselled and procured Edison's exclusion of electrical contractors who did not have a certified agreement with the CEPU from performing work at Loy Yang B. I am satisfied that the CEPU thereby counselled, procured and induced Edison's contravention of s 45EA. 225 There is utility in making a declaration of the kind sought by the ACCC: see Rural Press at 92 [95]. It will record the consequences of the Court's findings in a legally binding way, and will mark the Court's disapproval of the CEPU's conduct. However, it is essential that the terms of the declaration are tied to the proven facts: see Rural Press at 91 [90]; cf Bass v Permanent Trustee Company Ltd [1999] HCA 9 ; (1999) 198 CLR 334; and Electricity Supply Association of Australia v Australian Competition and Consumer Commission [2001] FCA 1296 ; (2001) 113 FCR 230. I propose to vary the terms of the declarations sought by the ACCC to ensure that they accord with and are sufficiently tied to the factual findings I have made. Section 80(1) confers a wide power on the Court to grant an injunction where it is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute conduct of the description in paras (a)-(f). It has been described as a 'widely drawn remedial provision available to restrain conduct which may infringe upon [the] public interest by contraventions of the provisions of the Act in Part IV and Part V': per French J in ICI Australia Operations Pty Limited v Trade Practices Commission (1992) 38 FCR 248 ( 'ICI' ) at 268. The breadth of the Court's discretion is underscored by s 80(4) which permits the Court to grant injunctive relief whether or not the person intends to engage in conduct of the kind restrained, or the person has previously engaged in conduct of that kind, or there is an imminent danger of substantial damage to any person if the conduct is repeated or continued. 227 There are at least three limitations on the Court's power under s 80. It is within the scope and purpose of s 80 to grant injunctive relief which is designed to prevent a repetition of the conduct for which the relief is sought. As the jurisdiction to grant an injunction is enlivened by an alleged or actual contravention of a provision of Pt IV, IVA or V of the TPA, there must be a sufficient nexus or relationship between the contravention and the injunction granted. It is that nexus or relationship that enables determination by the Court of whether the injunction sought is "appropriate". Lockhart J said at 256-257 that the public interest character of s 80, and the breadth and flexibility of its statutory provisions, do not mean that traditional equitable doctrines are irrelevant. It remains relevant to consider questions of repetition of conduct, whether it has ever occurred before, or whether imminent substantial damage is likely, although the absence of any one or more of those elements is not fatal to the grant of an injunction. Equally, the public interest character of s 80 means that deterrence is a relevant consideration. French J said that there is room within the statutory framework and its underlying policy for an injunction which is not intended to restrain an apprehended repetition of contravening conduct, but to deter an offender from repeating the offence: ICI at 268. In Trade Practices Commission v Mobil Oil Australia Ltd (1985) 4 FCR 296, Toohey J said that in the case of a particularly flagrant breach and in the absence of any evidence of an intention on the offender's part to continue the conduct, it might nonetheless be appropriate to mark the Court's disapproval by an injunction as well as a monetary penalty: at 300. 229 As to the terms in which a final injunction should be granted, the Court's discretion is as wide as the phrase 'as the Court determines to be appropriate'. On first principles, it is plain that the terms of an injunction should be clear and unambiguous, leaving no room for doubt as to the nature and scope of the future conduct that falls within its boundaries: see, eg, ICI at 259 per Lockhart J. A final injunction should not be granted in terms which simply enjoin the respondent not to breach the Act: see Trade Practices Commission v Walplan Pty Ltd (1985) 7 FCR 495; Commodore Business Machines Pty Ltd v Trade Practices Commission (1990) 92 ALR 563 at 574; ICI per Lockhart J at 259-260; and BMW Australia Ltd v Australian Competition and Consumer Commission (2004) 207 ALR 452 ( 'BMW' ) at 465-466 [36]-[39]. 230 The terms of an injunction will not be appropriate if it extends to conduct that does not have an appropriate nexus with the contravening conduct that attracts the operation of s 80: see ICI at 367 per Gummow J. Depending upon the nature of the contravening conduct, it may be legitimate to grant an injunction against a respondent preventing it from engaging in conduct in a similar manner, or to like effect, as the conduct which was the subject of the established contravention: see ICI at 261; and BMW at 465 [36]. The desirability of granting an injunction in this extended form will depend on the circumstances of the case and the existence of a sufficient nexus with the conduct that contravenes the Act. 231 In the present case, the ACCC sought injunctive relief against the CEPU in extremely wide terms. Effectively, the first order seeks to restrain the CEPU from aiding, abetting, counselling, procuring, inducing or attempting to induce, or being knowingly concerned in or party to Edison making a contract, arrangement or understanding with the CEPU where the contract, arrangement or understanding contains a provision that was included for the purposes described in s 45E(3). The second order goes further and seeks to restrain the CEPU from aiding, abetting, etc any person making a contract, arrangement or understanding with the CEPU that contains a provision contravening s 45E(3). The third order seeks to restrain the CEPU from counselling, procuring, inducing or attempting to induce Edison to give effect to a provision of a contract, arrangement or understanding between Edison and the CEPU where the provision was included for a purpose proscribed by s 45E(3). The fourth order is similar to the third except that it seeks to restrain the CEPU from counselling etc any person to give effect to a provision of a contract, arrangement or understanding between that person and the CEPU which contains a provision included for a proscribed purpose. None of the proposed injunctions are confined to the particular contract, arrangement or understanding which gave rise to Edison's contraventions in this case, and none are limited in time. In my opinion, the injunctions are cast far too widely. 232 The first question is whether the Court should exercise its discretion to grant any injunction against the CEPU or its officers in the circumstances which now prevail. The arrangement between Edison and the CEPU came to an end in late November 2003. DJN resumed work at Loy Yang B in early 2004. There is no suggestion in the evidence that the accessorial conduct on the part of the CEPU has recurred, or that it is likely to recur. On the other hand it is relevant to take into account the deliberate nature of the conduct that the CEPU engaged in during August 2001. 233 The terms of the injunctive orders proposed by the ACCC raise questions as to the appropriateness of granting any injunctive relief. In an attempt to keep the injunctions within proper bounds, the ACCC's proposed orders are replete with definitional provisions that attempt to mirror the requirements of s 45E(1), (3) and (7). Despite these extensive definitions, the ACCC's draft orders do not capture the exception which appears in s 45E(8). The extensive definitional clauses that are attached to the draft orders mean that each order takes on a rather abstract appearance that largely restates the requirements of s 45E(1), (3) and (7) of the TPA. Two of the proposed orders refer specifically to a contract, arrangement or understanding between Edison and the CEPU, but even those orders are not aimed at the August 2001 arrangement because that ended long ago. The other two orders are directed to conduct that, inter alia, procures or induces any person to make, or to give effect to, any arrangement between that person and the CEPU where it contains a provision that would satisfy the requirements of s 45E(1), (3) and (7). As a result, these orders very much have the appearance of orders that attempt to restate the general prohibition that appears in s 45E of the TPA. 234 In my opinion, the terms of the injunctive orders proposed by the ACCC are plainly inappropriate. On the authorities, any injunction must have a clear and sufficient connection with the proven conduct that attracts the jurisdiction of the Court. Any injunction must also be capable of being expressed clearly and in a manner which can be understood by those required to comply with it. I would not contemplate an injunction that operates indefinitely. Where an injunctive order is sought in respect of a class of conduct, similar to proven conduct that has come to an end, I consider that it should only operate for a limited period of time. This is a course commonly taken in the authorities. 235 On balance, I am persuaded that this is a case in which it is appropriate to grant an injunction for a limited period, and in quite specific terms, that will operate by way of deterrence and mark the Court's disapproval of the CEPU's conduct. In my view, the injunction must have a close nexus with the proven conduct that attracts the jurisdiction of the Court. I consider that it should operate for a period of three years and no longer. I propose to hear submissions on those matters before making final orders. I certify that the preceding two hundred and thirty-five (235) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | restrictive trade practices applicant alleged union liable as an accessory to company's contraventions of ss 45e and 45ea of trade practices act 1974 (cth) where contract, arrangement or understanding between company and union whether contained provision included for purpose of preventing or hindering company from acquiring goods or services from electrical contractors who did not have certified agreement with the union consideration of 'contract, arrangement or understanding' and 'purpose' where applicant relied on inferences to be drawn from circumstantial and indirect evidence where union did not call any witnesses or rely on any affidavit evidence whether accessorial liability provisions of trade practices act apply to union that is party to contract, arrangement or understanding contravening ss 45e and 45ea whether legislature intended to exclude union from liability under ss 76 and 80 accessorial liability provisions apply to union consideration of scope of declaratory and injunctive relief trade practices trade practices |
It appears that at one stage Mr Milne's estranged wife Lynette Milne was an additional applicant in the Tribunal proceedings, but subsequently she ceased to be so, at least by the time for the provision of written submissions to the Tribunal. If different conclusions are reasonably possible, it is necessary to decide which is the correct conclusion; and that is a question of fact... . He was examined by the Tribunal and a report of that examination was forwarded to the Taxation Relief Board ('the Board') on 16 October 2001. Subsequently on 25 October 2001, the Board granted Mr Milne partial relief from his then income taxation indebtedness to the Commissioner. There was no evidence that such taxation indebtedness was incurred in consequence of Mr Milne's engagement in taxation avoidance or in any taxation scheme of any kind. The total amount of income tax indebtedness the subject of the Board's consideration was $89,547.10, and the extent of the relief so granted was $37,532.48. The context to that further application included the prior service of a bankruptcy notice in February 2003 and of a creditor's petition on 18 June 2003, in each case at the instance of the Commissioner. The application for release was rejected by the Commissioner on 23 February 2004, and Mr Milne applied to the Tribunal, on 25 February 2004 for review of that second decision, pursuant to Part IVC of the Administration Act headed Taxation objections, reviews and appeals. By the time of the hearing by the Tribunal of that review application on 9 May 2005, according to the Commissioner's evidence, the tax debt had increased to $187,430.25, whereof the amount eligible for release amounted to $149,876.68. Moreover the Commissioner indicated to the Tribunal that a further $15,895 would become due for payment on 12 May 2005, and that there might well be future unspecified taxation debts. 7 The application for review was heard by the Tribunal on 9 May 2005 and on 4 July 2005 the Tribunal determined that the Commissioner's decision should be set aside and the matter be remitted to the Commissioner with the direction that discretion be exercised by way of grant of relief in favour of Mr Milne pursuant to section 340-5 of the Administration Act. Of course no order was made as to costs. Hence the Commissioner's present application to this Court is for judicial review of the Tribunal's decision of 4 July 2005 by way of appeal under the Administration Act. The evident problem with that analysis is that both items of realty and the Honda motor vehicle were jointly owned at all material times by Mr and Mrs Milne, and for what it may ultimately matter, they have been living seemingly at all material times in a state of marital separation, with all the implications thereby involved. Moreover of course, Mr Milne is doubtless jointly and severally liable to those mortgages and there is no evidence moreover as to his wife's financial capacity to meet one half of those liabilities in the event of any shortfall on any sale of those assets or otherwise. In any event it was the Commissioner's case that Mr Milne would not be deprived of an ongoing capacity to earn income as a solicitor, irrespective of bankruptcy, though subject to prevailing Law Society conditions, including the condition of impermissibility to conduct a trust account. It was also said by senior counsel for the Commissioner that a condition of continuation in practice as a bankrupt would be '... whether in all the circumstances... the act of bankruptcy [was] such... that the person wasn't fit and proper to continue practice'. As to his assets, Mr Milne agreed with the Commissioner's estimate that his and his estranged wife's total assets listed on 30 September 2004 amounted to a value of $1,084,200. The assets included the family home, a holiday house at Brindabella, two vehicles, a small parcel of shares and household effects. Mr Milne said he now had only one vehicle whereas previous information supplied showed he had two vehicles at an earlier time. Liabilities included a mortgage of the family home, an overdraft and credit cards. The mortgage of the family home was in both Mr and Mrs Milne's names. At the time of the objection decision under review, Mr Milne's wife was contributing to the household expenses. However, Mr Milne gave evidence that his wife, although earning some income, no longer contributed to the household expenses since the separation. Mr Milne said that he no longer paid school fees as his son was no longer attending the same school. He also no longer paid a vehicle hire purchase. Concerning his assets, Mr Milne provided information that he and his estranged wife had formerly listed the family home for sale but it was no longer on the market. He produced a letter from an estate agent stating that there was no interest from potential purchasers in the holiday property at Brindabella. Further, a licensed valuer furnished a report that the former valuation of the Brindabella property was now excessive. Mr Milne claimed the value attributed by the Commissioner was overstated. The valuer's report, dated 7 April 2005, was before the Tribunal and explained what the valuer saw as the reality in the present market and that the property was now worth even less than previously reported. Mr Milne told the Tribunal this was due to the drought and the Canberra bushfires. He was unable to realise the property and its value had diminished. It had been valued at $260,000 but was not currently marketable. The licensed valuer suggested a revised figure of $235,000 and suggested it would take at least six months to find a buyer at this price, especially in winter. In addition, Mr Milne pointed out the family assets were jointly owned with his estranged wife. It appears that the Tribunal's decision below was made three months after the Brindabella property valuation was completed. In determining the existence of serious hardship, the Board applies several tests that follow a conceptual position that the term serious hardship has connotations of unduly burdensome consequences, the magnitude of which would be likely to lead to persons being deprived of necessities according to normal community standards. Thus, serious hardship would seem to exist where payment of tax liability would result in the debtor being left without the means to achieve reasonable acquisition of food, clothing, medical supplies, accommodation, education for children and other basic requirements. It is not stated explicitly, nor need be construed implicitly, that the statutory notion there of accommodation must necessarily be realty individually or jointly owned by a taxpayer. It is moreover not an irrelevant matter that to change unwillingly from freehold accommodation, particularly when held and occupied for a considerable period of time, to tenanted accommodation, might well have disadvantageous consequences to a taxpayer, particularly a taxpayer having one or more family dependants or partial dependants. what net income remains after deducting total outgoings from total income? That notion would be objective in operation. The several tests applied by the Relief Board follow from a conceptual position that the term serious hardship has connotations of unduly burdensome consequences, the magnitude of which would be likely to lead to persons being deprived of necessities according to normal community standards. Thus, serious hardship would be seen to exist where payment of a tax liability would result in the taxpayer being left without the means to achieve reasonable acquisitions of food, clothing, medical supplies, accommodation, education for children and other basic requirements. On the other hand, elements of hardship may be regarded as marginal or minor rather than serious if the consequences of payment of tax are seen, for example, as limitation of social activities or entertainment, or loss of access to goods or services of a more luxurious nature or standard. As a first step in considering an application for relief, the Relief Board must determine the person or persons to be included in its assessment of hardship factors. Although hardship will be largely personal to the taxpayer, or the dependant of a deceased taxpayer, it is not limited to the immediate state of that person. Rather, the prospect of inability to provide food, clothing, etc. for family members or others for whom the person has responsibility will also constitute a hardship faced by the person. Conversely, although a taxpayer's immediate situation may suggest inability to meet the combined total of the tax debt and family expenditures, that factor will not indicate hardship if the income or asset positions of other members of the family are such as to suggest that the taxpayer cannot reasonably be regarded as responsible for all relevant outgoings. For example, the separate earnings, allowances or benefits received by other family members will be relevant to an assessment of the taxpayer's overall financial circumstances. First, the decision-maker must decide whether the settlement of the liability will result in serious hardship. If that decision is favourable to the applicant, the discretion offered by sub-section 340-5(3) then falls for consideration. In reaching the decision to release in whole or part, the question to be addressed is whether, in all the circumstances, it is just and proper to provide the requested relief. Matters pertaining to the incidence and consequence of the tax and the effect of its exaction upon the affairs of the person will bear upon the issue of whether the relief is just and proper. Support for the two stage approach is to be found in the decision of the High Court in Rex v Trebilco; ex parte F.S. Falkiner & Sons Ltd [1936] HCA 63 ; (1936) 56 CLR 20 . I would respectfully seek to apply that principled approach. The Tribunal below also discussed Deputy President Hall's view that undue hardship means 'hardship that is excessive in the circumstances', and that 'foreseeability and control' constitute 'relevant considerations' to the determination of hardship . Understandably Deputy President Hall further observed that neither expression undue hardship nor substantial hardship is susceptible to 'precise quantification' . The rationalisation of authorities undertaken in Re Wilson has provided assistance to later administrative decisions concerning this and analogous legislative provisions. 19 In relation to the notion of control over a taxpayer's circumstances, inherent implicitly in relation to the application of the tests the subject of TR 2440, the Tribunal below referred to 'Mr Milne's evidence... that a series of business catastrophes left him with debts which he could not control' , and in particular that '[h]is financial position was adversely affected by the fraud of a former partner' , and thereafter by 'poor financial performance of his next partnership venture and then by his chamber practice's expenses outweighing his ability to earn due to absences through ill health' , each being eventualities in relation to which the Tribunal observed that Mr Milne 'was unable to control' . Those are material findings, since they tend to demonstrate the absence of any moral wrongdoing on Mr Milne's part in relation to his present state of financial misfortune. In that regard, counsel for the Commissioner acknowledged that there was no suggestion of professional or social misbehaviour such as gambling or anything of that situation. Incidentally, the reference to 'chamber practice' was to an association (though not partnership) of lawyers where expenses are shared but not profits. It could not be gainsaid that those factors which I have extracted above and in the preceding paragraph of these reasons were relevant to the issue concerning Mr Milne's hardship, the existence and extent whereof the Tribunal was required to resolve. Moreover the Tribunal found that Mr Milne had been '... able to acquire assets and to live reasonably well throughout his adverse business fortunes' , though the notions of high and higher are of course relative concepts, and need to be applied with care having regard to all conceivably relevant circumstances. In any event the Tribunal accepted in favour of the Commissioner the proposition that '... releasing Mr Milne would not be fair in the absence of special factors' , consistently with the previous Tribunal decisions of Ferguson and Commissioner of Taxation [2004] AATA 779 and Spicer and Commissioner of Taxation [2002] AATA 960 , the Tribunal exemplifying Ferguson as a case involving insufficient hardship for the availability of taxation relief. In the present case moreover, the Tribunal emphasised as a so-called 'special factor' in favour of Mr Milne for the grant of serious hardship relief his 'battle to continue work despite his very poor health and the need to support his dependant son until he finishes his schooling and obtains his HSC' . Each of the words in the phrase is an ordinary English word having a well understood meaning... The context in which the words appear makes it clear that the Relief Board is to consider whether the exaction of the full amount of tax would involve the dependants of a deceased taxpayer in financial difficulty which in all the circumstances can be said to be serious... it is obvious enough that what will constitute either will depend upon the circumstances of a given case. Clearly there would be severe financial hardship if the dependants of a deceased person were left destitute without any means of support. That is not to say that in any particular case something less than that will not constitute serious hardship. I can see no error of law in the way to which the Board so proceeded. As I have already implied, that precursor s 265 was expressed to require regard to be paid to the serious hardship which might otherwise affect a taxpayer in the event of an absence of intervention by way of release (or partial release) of income tax liability. That precursor provision operated directly in favour of the dependants of a deceased taxpayer as well as a taxpayer, but for present purposes, the dictum of his Honour in Powell nevertheless provides a significant measure of assistance in relation to the operation of the present s 340- 5 . Moreover his Honour referred to what was said by Dixon J (as he then was) in R v Trebilco; Ex parte FS Falkiner & Sons Ltd [1936] HCA 63 ; (1936) 56 CLR 20 at 32 as to certain statutory 'considerations by which an exercise of discretion is to be guided... [t] he nature of those considerations [to] be gathered from the scope and object of the provision' . Additionally his Honour referred further to dictum of Mason J (as he then was) in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 40, where his Honour described the statutory discretion there addressed, albeit not related to fiscal exaction, as '... similarly unconfined, except in so far as there may be found in the subject matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard', and where his Honour thereafter proceeded to emphasise that '[b]y analogy, where the ground of review is that a relevant consideration has not been taken into account and the discretion is unconfined by the terms of the statute, the court will not find that the decision-maker is bound to take a particular matter into account unless an implication that he is bound to do so is to be found in the subject matter, scope and purpose of the Act. ' Those factors have aspects of materiality in relation to the issue or issues here falling for consideration. 25 Subsequently in Van Grieken v Veilands (1991) 21 ATR 1639, Gummow J cited the principled approach outlined by Hill J in Powell with at least implicit approval, observing that his Honour had further pointed out (at 626 of Powell ) that the decision-maker was entitled to 'consider not only such matters as go to the issue of serious hardship, but also other matters which, in the discretion of the Board, may be relevant'. The Tribunal member considered that 'Mr Milne's outgoings already exceed his income, according to the information he has provided, [and] he is at the worst level of financial hardship' , and moreover that 'should he lose his right to practise as a solicitor, not only he but his two children will suffer severe deprivation' , emphasising in that latter regard to education of children being 'one of the basic requirements set out in TR 2440' . The Tribunal member further observed that should Mr Milne be bankrupted, he and his children (two of which are apparently dependant on him financially or at least substantially so) would lose not only his income but the house where they all lived together. Each of those considerations were matters which the Tribunal was in my opinion entitled reasonably to take into account. 27 Nevertheless the Tribunal member acknowledged that 'even where there is serious hardship, other options should be considered before deciding that the discretion should be exercised in favour of the taxpayer' , and that '[o]ne option might be deferral or payment by instalments' , being an option which the Commissioner notified the Tribunal would be acceptable. Moreover the Commissioner pointed to patience on the Commissioner's part in relation to the collection of Mr Milne's taxation indebtedness when agreeing to the settlement in September 2002, and recorded that Mr Milne did not put any further offer of compromise after the rejection by the Commissioner of the offer made to Mr Milne in December 2003. The Tribunal recorded in that regard however that it was '... told... that this had involved his borrowing further in order to obtain a lump sum to contribute to his tax debt' , and that '[h] e had proposed to pay the remainder by instalments' , but that at the hearing the Commissioner 'did not suggest any level of appropriate payment by instalments and pressed the Tribunal to make a finding that Mr Milne had not demonstrated serious hardship' . 28 Under the heading Final Analysis , the Tribunal undertook a comprehensive summary of what it considered to be the critical circumstances placed before it. The care and precision with which that summary was articulated by the Tribunal warrant recitation of a number of aspects thereof below, rather than a summary merely as to their purport and effect. 29 The Tribunal hence further recorded that there were 'some deficiencies in expenses claimed by Mr Milne but I was left in no doubt as to the extent of Mr Milne's major expenses such as the mortgage payments necessarily made to prevent the mortgagor from foreclosing on the mortgage, thus putting the family out of their home' , and moreover that '[w]hile there were some deficiencies in Mr Milne's evidence and some expenses stated such as clothing and general household expenses that were on the generous side, I am satisfied that the information is as clear as Mr Milne is capable of giving the Tribunal in this situation' . The Tribunal further observed that 'the quantum of tax due under the judgment debt obtained by the Commissioner is continually subject to change' , but that the portion of the debt which was in focus before the Tribunal as a potentially releasable debt amounted to $149,876.68, as was apparently verified by the Commissioner, and further that Mr Milne had 'considerable non-releasable tax debts and continuing tax liabilities arising from his continuing earnings' , and that '[he] must make efforts to pay these debts as well as keep himself and his children in the necessities of life' . The Tribunal accepted Mr Milne's evidence, in my view significantly, that he had 'tried to arrange his affairs to the best of his ability under adversity' , and had 'behaved in a manner that is responsible and has not deliberately set out to ignore his tax obligations' . The Tribunal found yet further favourably to Mr Milne that his '... problems are beyond his control when taking into account his partnership problems and ill health as well as the departure of his spouse, thus removing another possible source of assistance' . The member pointed also to the implications of bankruptcy to Mr Milne's children, implicitly referring thereby to possible diminution in their opportunities for academic qualification with a view to future gainful engagement or employment. As the senior member I think rightly acknowledged, 'bankruptcy is not designed to be a punishment but a way out of hopeless debt with the chance of the debtor re-establishing after a time, usually three years' . Moreover as was emphasised further by the senior member, in particular in the light of Mr Milne's age, the ensuing three years represented a period of time critical in terms of his ability to provide financial assistance to his family. 32 In the result, the Tribunal concluded that the circumstances which I have largely recorded constituted serious hardship within subs 340-5(3) of the Administration Act, and that therefore its discretion should be exercised to 'release Mr Milne from his taxation debt' . Reliance was also placed by the Commissioner on TR 2440, in relation in particular to the statutory meaning of serious hardship . It remains important to bear in mind of course the juridical principles of statutory interpretation entrenched in the general law, as the Commissioner's Receivables Policy guidelines I have already extracted implicitly acknowledge. It will be recalled that TR 2440 emphasised the need for considering the notion of ' necessities according to normal community standards', including those of a basic kind inclusive of '... accommodation [and] education for children...' . It can serve to focus attention on the purpose which the exercise of the discretion is calculated to achieve, and thereby to assist the Minister and others to see more clearly, in each case, the desirability of exercising the power in one way or another. Decision-making is facilitated by the guidance given by an adopted policy, and the integrity of decision-making in particular cases is the better assured if decisions can be tested against such a policy. By diminishing the importance of individual predilection, an adopted policy can diminish the inconsistencies which might otherwise appear in a series of decisions, and enhance the sense of satisfaction with the fairness and continuity of the administrative process. Of course the operations of that policy in relation to contemporary values may be a matter of difficulty when it comes to making a judgment in particular cases. The difficulty with that observation of generality lies in its application, and in particular in relation to Mr Milne's family exigencies as well as those of his own personally, involving as they do the need for reasonable accommodation for himself and apparently for two or at least the youngest of his three children, and completion of the education of that youngest child. I observe that the Commissioner did not seemingly point to any calculations which the Commissioner might have undertaken as to Mr Milne's corresponding annual outgoings, which were presumably substantial, if regard be paid to living expenses for himself and those of his youngest two children, as well as to repayment of interest bearing borrowings for which of course he was personally liable, albeit jointly and/or severally with his wife from whom he was separated. I would add the observation that maintenance of a financial capacity to service interest bearing borrowings is normally material to a borrower's preservation in his or her favour of the entire or substantially the entire value of a mortgaged security against what might otherwise eventuate by way of a 'forced sale' by a mortgagee exercising power of sale or otherwise by an insolvency trustee. Does any special rule apply in relation to a solicitor? At the level of generality, the Commissioner asserted that bankruptcy did not mean that a solicitor must lose his or her right to practice. Pursuant to s 65 of the Legal Profession Act 2004 (NSW) ('the LP Act'), bankruptcy and acts of bankruptcy give rise to a show cause event which is to be investigated by the Council of the Law Society of New South Wales. There was no material adduced in evidence indicative of any shortcoming in Mr Milne's fitness and propriety to practice as a lawyer. 45 The Commissioner submitted moreover that the Tribunal failed to consider and take into account the provisions relevantly of the LP Act. It was asserted in that regard that on a proper understanding of the meaning of serious hardship , a person such as Mr Milne, who had the capacity to meet his tax liability out of currently held assets, could never satisfy the Commissioner that his circumstances gave rise to the exercise of any discretion in favour of release from tax liability. For that reason alone, it was said by the Commissioner that the Tribunal's decision ought to be set aside, there being no utility in ordering that the matter be remitted to the Tribunal for proper or further consideration. Bearing in mind that the realty here involved in both instances was held jointly with his estranged wife, it would be a formidable exercise to determine what funds, if any, might ultimately be available for payment of the subject outstanding income taxes, and for the satisfaction of the secured creditors of Mr Milne and his wife to the extent of any shortfall on any mortgagee sale, and of her half share in the 'equity' of any remaining net proceeds in relation to the sale of their jointly held realty. The context, scope and object of s 340-5 of the Administration Act was said by the Commissioner to have required the Tribunal to consider the matters that would, or could, affect the financial circumstances of Mr Milne in the light of his then current tax liability. Accordingly, so the Commissioner's submissions continued, for the Tribunal to fail to take into consideration matters, such as the operation relevantly of those statutory provisions, constituted a further error of law, either by way of statutory misconstruction, or failure to take into account relevant considerations due to statutory misconstruction or otherwise. In that latter regard, I was referred to Minister for Aboriginal Affairs v Peko-Wallsend Limited [1986] HCA 40 ; (1986) 162 CLR 24, in particular in relation to what appears in the reasons for judgment of Mason J (as he then was) at 39, under the heading Failure To Take Into Account a Relevant Consideration . Of course in circumstances where the Tribunal, at least inherently or implicitly in the particular context the subject necessarily of consideration by the decision-maker, took into account relevant considerations and correspondingly took no account of irrelevant considerations, so much would normally suffice to satisfy the requirements of administrative obligations. 47 The power under s 340-5(3) was contended by the Commissioner in any event to require two matters in particular to be considered and determined: first, whether there would be serious hardship to Mr Milne in the circumstances postulated , and secondly, whether in all the circumstances otherwise prevailing, the Commissioner ought to have exercised the statutory discretion to release Mr Milne's subject taxation liability. In considering the first of those issues, it was contended by the Commissioner that the Tribunal addressed what it considered to be the so-called test of foreseeability and control, presumably thereby referring to the circumstances in which Mr Milne came to have incurred the subject tax liabilities in the first place. The second consideration was described in terms as to whether the release of Mr Milne, if granted, would be fair to 'others', whatever the implications of that broad description. The Tribunal was said by the Commissioner to have considered that in circumstances where a person had earnt a high level of income in the past, and was continuing to earn a high income, special factors were necessary in order to establish 'serious hardship'. The description 'high income' is in any event somewhat unspecific to be necessarily helpful. The Tribunal found that Mr Milne's 'battle to continue his professional work' , despite ill-health, and his need to support his dependent son until he finished school, were 'special factors' . 48 The approaches of the Tribunal's reasoning leading to its decision-making were attacked by the Commissioner as wrong, in that it was said to have 'misunderstood the meaning of serious hardship as a so-called backward looking matter, rather than a matter that turned on an objective analysis of the future'. On a proper understanding of that statutory term, questions as to special factors were said not to arise. In particular, the Commissioner asserted that a taxpayer's 'struggle to continue working' was simply irrelevant, but for what it may ultimately matter, I do not think that somewhat simplistic description sufficiently reflects the complexity of circumstances that the Tribunal explicitly and implicitly took into account in relation to Mr Milne. 49 Addressing a further basis advanced by the Commissioner for the present administrative review sought, it was contended that on a proper understanding of the two-tiered test in subs 340-5(3) of the Administration Act, no reasonable Tribunal could have exercised the statutory discretion to release Mr Milne from his taxation liability. Reference was made by the Commissioner in that regard to the grant of administrative relief made available in Parramatta City Council v Pestell [1972] HCA 59 ; (1972) 128 CLR 305, which related to a local Council's imposition of a rate because of the special benefit flowing from the Council's execution of a particular work or service on public property, and which the High Court affirmed to be invalid. It was argued by the Commissioner conversely that the factual circumstances of a high income earner having substantial assets, sufficient in value to meet all current liabilities, could not reasonably fall within the statutory notion of serious hardship . It is normally a formidable task to establish that the decision of an administrative decision-maker satisfies that test of invalidity. The Commissioner advanced the further case that the exercise of the Tribunal's power to release Mr Milne was unreasonable, in that on the evidence placed before it, no reasonable person could have come to the conclusions reached by the Tribunal in its decision the subject of appeal. I was referred again to Peko-Wallsend where at 41, Mason J discussed the scope of the principle of Wednesbury unreasonableness. I would make a similar observation upon that submission to that which I have made in relation to satisfaction of the test in Pestell . The Commissioner contended further as to an error in law on the part of the Tribunal by way of taking into account irrelevant considerations in the exercise of its powers and authority, being considerations which I have already recorded and need not reiterate. In summary, the Commissioner submitted that the Tribunal's decision complained of was vitiated by the numerous errors of law, cumulatively or in the alternative, to which I have referred, and should be set aside. I must of course resolve the issues of law here arising by reference to the evidence placed before the decision-maker. The Tribunal reached the conclusion of course in favour of Mr Milne of serious hardship within the scope of operation of that subs 340-5(3) expression. The issue arising for the Court's consideration on the appeal is whether that conclusion should be vitiated upon the basis of an application by the Tribunal of what the Commissioner contends to have been the wrong statutory test. The circumstances relevantly of Mr Milne's professional, business and domestic affairs at the material times were not without complication, involving as they did substantially hypothecated real estate assets held in the joint ownership of himself and his wife who had by then separated in terms of their marital relationship, and a serious threat to Mr Milne's capacity to continue to earn professional income as a specialist family law solicitor by reason of his serious ill-health. Such personalty as he owned was of relatively insignificant value, at least when compared to the jointly held realty which was however heavily hypothecated. That realty to the extent comprising the jointly owned former matrimonial home continues to be occupied by Mr Milne and the two late teenage dependant children of the marriage, or presently at least the youngest child, the evidence being perhaps somewhat unclear in that regard. The other jointly owned realty of Mr and Mrs Milne (located at Brindabella in country New South Wales), for reasons I have briefly mentioned, was at the time of the Tribunal decision-making unsaleable. 53 It was reasonably open to the Tribunal, on the basis of the complexity of the evidence placed before it, to arrive at the determination which it did as to the subjection of Mr Milne to a condition of serious hardship within the scope of operation of subs 340-5(3) of the Administration Act, in the absence of the release or waiver by the Commissioner of Mr Milne's fiscal indebtedness the subject of the proceedings, at least to a substantial or significant extent. I have reached therefore the conclusion that the present application of the Commissioner for administrative review of the Tribunal's decision-making has not been established upon any viable juridical basis, and that the same must therefore be dismissed. That conclusion accommodates in my opinion relevant principles of administrative law which are in line with the authorities. 54 In reaching that conclusion, I have been unable to accept that the Tribunal was bound to adopt and implement the approach to administrative review advocated by the Commissioner, inclusively by way of appraisal of any comparison of the value of Mr Milne's assets with the amount of his liabilities at any relevant point of time, having regard to the reality of the extent of the financial hardship which would be likely to attend an exaction of the amount required to satisfy Mr Milne's outstanding taxation indebtedness, inclusive of accrued statutory interest changes, which, if not leaving Mr Milne 'destitute without any means of support' , would have constituted nevertheless serious hardship , in accordance with the text of the Commissioner's policy guidelines framed by TR 2440 and in the light of the approach undertaken specifically and by way of practical exemplification in Re Filsell and Re Wilson . 55 In reaching that conclusion, there is sufficient evidence, to the extent postulated by the Tribunal, as to Mr Milne's adoption of a perceived parental obligation to financially support his dependent son until he obtained his higher school certificate, the expression need taking its context from Mr Milne's personal and otherwise domestic circumstances established by the Tribunal, as well as from his professional circumstances as a sole legal practitioner specialising in family law. It may be reasonably inferred that Mr Milne prospered financially in his earlier professional years as a successful lawyer in the sphere of that specialty, but it was reasonably open to the Tribunal nevertheless to have anchored its decision-making largely upon his circumstances of misfortune sustained in more recent times, and in particular by reason of his former legal practitioner partner's misappropriation of funds, and of his own deteriorating health involving both severe illnesses and physical disabilities. Those circumstances need of course to be balanced, as the Tribunal's reasoning has exemplified, with the factors which the Commissioner's submissions have sought to distil, and which I have sought to summarise in these reasons. It may be readily acknowledged moreover, as the Commissioner emphasised, that there is no special rule in relation to the ongoing entitlement of a solicitor to continue the practice of his profession notwithstanding bankruptcy, though the reality of so doing effectively and to maximum advantage, especially in the context of a sole practitioner (as of course in the case of Mr Milne), is a matter of some practical significance to the requisite extent of the careful consideration accorded by the Tribunal's reasons for decision. 56 In my opinion submissions propounded by the Commissioner, which I have sought to outline in detail discretely or in the aggregate, do not vitiate the conclusions of the Tribunal according to law. The Tribunal's conclusions were reasonably open for adoption, being sufficiently founded upon evidentiary material bearing upon the critical statutory issue of serious hardship , including in particular the fraudulent conduct of Mr Milne's former partner in legal practice and its adverse effect upon Mr Milne financially and probably to at least an intangible extent professionally, and the unsaleable character of the Brindabella property for the time being for the reasons I have earlier indicated. It is of course necessary in that regard that the Commissioner's challenge to the factual findings of the Tribunal should establish a viable footing according to principles of administrative law, and the present appeal does not of course operate by way of a re-hearing. As I have foreshadowed, I am unable to accept that the Commissioner has distilled administrative error in the juridical sense referrable to the reasoning and findings of the Tribunal, being reasoning and findings which were rationally open for adoption in my opinion according to principles of administrative law, and in particular in the light of the relevant evidentiary material placed before the Tribunal. That material was consistent essentially with the conclusion that any enforced exaction of the outstanding income tax indebtedness of Mr Milne would cause serious hardship within the scope of that notion established for instance in Powell and subsequently in Van Grieken , and as continues in operation in the terms of operation of s 340-5 of the Administration Act. 57 I am accordingly of the opinion that the Commissioner has not exposed a viable factor of relevance which the Tribunal omitted to take into account, or of irrelevance which it did take into account, in either case such as to have vitiated according to administrative law the conclusion which the Tribunal reached in what was indeed a complexity of circumstances. 58 The appeal should therefore be dismissed. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | context of liability to income tax review of decision of aat to grant relief from income tax in favour of legal practitioner referrable to circumstances of serious hardship implications of that statutory notion in case of long established legal practitioner adversely affected financially by marital breakdown, illness and financial misconduct of former partner whether tribunal took into account irrelevant considerations or failed to take into account relevant considerations in its determination or otherwise of the prevalence of serious hardship administrative law |
It was amended on 4 December 2007 and then further amended on 7 March 2008. 2 Notwithstanding the form of prior versions of the Application, the Applicant now only seeks to review the decision of the First Respondent not to revoke a Notice of Termination issued on 25 June 2007 pursuant to s 46PH(4) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth). The decision not to revoke that Notice was made on 26 July 2007. In January 2007 the Second Respondent had been delegated the task of investigating a separate complaint made by the Applicant in December 2006. That part of the Application , however, was abandoned by the Applicant during the course of the hearing on 28 March 2008. The matter remaining for decision, accordingly, is within a far more limited compass than was the case at the outset of these proceedings. 4 It should also be noted that an earlier interlocutory decision in these proceedings has caused to be joined the Attorney-General of the Commonwealth as the Fourth Respondent to the proceedings: Dunstan v von Doussa [2008] FCA 97. None of the remaining Respondents have taken any active part in the final hearing and each has instead filed a submitting appearance. 5 It is considered that the remaining claim for relief as made in the Further Amended Application should be dismissed. 7 In September and October 2005 the Applicant in these proceedings made a complaint to the Human Rights and Equal Opportunity Commission against Mr Richard Refshauge and Professor David Hambly. Mr Refshauge was then the Director of Public Prosecutions in the Australian Capital Territory; Professor Hambly was the Chairman of the Sentence Administration Board of that Territory; and the Applicant was in custody. 10 The complaint alleged victimisation of the Applicant under s 94 of the Sex Discrimination Act 1984 (Cth). 11 The President of the Human Rights and Equal Opportunity Commission, now the First Respondent, commenced an inquiry into the complaint. On 31 March 2006 the President wrote to both Mr Refshauge and Professor Hambly seeking a response to the allegations made. Mr Refshauge responded by way of a letter dated 13 April 2006; Professor Hambly responded by way of a letter dated 20 April 2006. The responses were provided to the Applicant on 23 May 2006. 12 On 20 June 2006 the First Respondent delegated the handling of the complaint to the Honourable Dennis Mahoney. 13 Mr Mahoney terminated the complaint on 25 June 2007 because he was satisfied that there were no reasonable prospects of the complaint being able to be resolved through conciliation. That decision was made pursuant to s 46PH(1)(i) of the 1986 Act. 14 On 11 July 2007 the Applicant requested that the First Respondent revoke the decision of the delegate, which had been taken pursuant to s 46PH(1)(i). It was on 26 July 2007 that the President of the Commission responded to that request. He declined to revoke the termination notice. That decision of the President was made pursuant to s 46PH(4) of the 1986 Act. Sections 162 and 163 of the explanatory memorandum are set out below and should be read in conjunction with one another. 162. Subsection (4) will give the President the discretion to re-open a complaint which had previously been terminated pursuant to section 46PH(1). However, the revocation of termination must take place before an affected person makes an application to the Federal Court. 163. The power could be exercised if, for example, information pertinent to a complaint is found subsequent to termination. This would allow the parties a further opportunity to make use of the less formal and inexpensive conciliation process in HREOC. The revocation provision has the potential to deflect matters away from the Court, giving parties another chance to attempt conciliation. The explanatory memorandum states that a termination can be revoked when a matter can be conciliated and when there is new information which would assist with this. I have carefully considered your request that I revoke the termination notice in this matter but I have decided not to revoke the termination. There is no evidence to suggest that the matter is now able to be resolved through conciliation or that Mr Mahoney's view that the allegations against Mr Refshauge are not able to be separated from those related to Professor Hambly is incorrect. In very summary form, that context is as follows. 17 The Human Rights and Equal Opportunity Commission was established by s 7(1) of the 1986 Act. One of the functions of the Commission is to " to inquire into, and attempt to conciliate, complaints of unlawful discrimination ": s 11(1)(aa). A power of delegation is conferred upon the Commission by s 19. 18 Section 46PH(1) provides that the President may terminate a complaint and s 46PH(4), the provision of primary relevance to the remaining decision sought to be reviewed, provides that the President may revoke a decision terminating a complaint. (2) If the President decides to terminate a complaint, the President must notify the complainants in writing of that decision and of the reasons for that decision. (3) On request by an affected person who is not a complainant, the President must give the affected person a copy of the notice that was given to the complainants under subsection (2). (4) The President may revoke the termination of a complaint, but not after an application is made to the Federal Court or the Federal Magistrates Court under section 46PO in relation to the complaint. It is further alleged that the First Respondent " made the decision for a purpose other than the purpose for which the power is conferred ". Reliance is also placed upon unreasonableness. 21 The Grounds of Review set forth in the Further Amended Application are well recognised. Considerable difficulty, however, is encountered when consideration goes beyond the Grounds relied upon and is given to the " Particulars " thereafter provided by the Applicant. Those " Particulars ", in some respects, are difficult to understand without further explanation; others may be understood, but do not assist in giving content to the Grounds sought to be advanced. To some extent, the " Particulars " are an impermissible invitation to revisit the merits of the decision as made by the President of the Commission. Some seek to challenge the decision of the delegate -- but that is not a decision the subject of review in these proceedings. 22 The Applicant, however, is unrepresented and sufficient details may be gleaned from his Further Amended Application to understand how he wishes to present his case. The difficulties confronting an unrepresented applicant cannot be underestimated. But the Court should be astute in ensuring that it does not attempt to so assist such a litigant that it creates a prejudice or unfairness to his represented opponent. 23 In the present proceedings, the Attorney-General of the Commonwealth of Australia -- having been joined as a party to the proceedings -- has fairly and comprehensively taken the Court through the evidence and has filed an Outline of Submissions . Included in this have been further written submissions addressed solely to the power of this Court to order costs in the Attorney-General's favour (should he be successful) and how that discretionary power should be exercised. 24 It has been concluded that none of the Grounds of Review relied upon by the Applicant have been made out. 25 A review of the evidence in its entirety, and extending beyond the issues canvassed in the s 13 Statement of Reasons and the evidence there referred to, does not disclose anything other than a complaint having been made and thereafter dealt with in accordance with law. 26 Notwithstanding the fact that most of the "Particulars" provided are repeated in respect to each of the Grounds of Review , each "Particular" and each Ground has been separately considered. It has not been considered either necessary or appropriate, however, to separately and repeatedly address each "Particular" in the context of each individual Ground . Whichever "Particular" is sought to be relied upon, and whatever may be the Ground of Review to which it is ascribed, no reviewable error has been exposed in the decision of the First Respondent or, it should be noted, in the decision of the delegate. DENIAL OF NATURAL JUSTICE? 28 The Applicant made his complaint to the Commission and thereafter a process of investigation and attempted conciliation began. The process was undertaken in a manner which extended to the Applicant every procedural fairness. 29 A review of the correspondence as between the Applicant and the Commission and its delegate discloses repeated requests being made of the Applicant to identify what he was aiming to achieve and " what is the basic agreement which you would accept ". Given the emphasis upon the statutory objective of conciliation, it is readily understandable why the delegate was making that inquiry of the Applicant. In doing so he was properly discharging his functions and extending to the Applicant an opportunity to be heard in relation to the conciliation process. The Applicant failed to identify what it was that would satisfy his complaint and neither Respondent wished to conciliate. I respectfully submit that this complaint, with its grave accusation that I have committed a criminal offence, has no merit. It is misconceived. No purpose would be served by continuing the inquiry. 30 Conciliation became difficult, if not impossible. The perhaps inevitable outcome of the conciliation process in such circumstances, however, was not the product of the Applicant being denied natural justice. 31 If attention is more specifically confined to the "Particulars" in fact provided in the Further Amended Application , there is no basis for concluding that the decision of the First Respondent was vitiated by reason of " apprehended bias ". A reasonable apprehension of bias must be " firmly established ": Re JRL; Ex parte CJL [1986] HCA 39 ; (1986) 161 CLR 342 at 352. It is not sufficient if a reasonable bystander " has a vague sense of unease or disquiet ": Jones v Australian Competition & Consumer Commission [2002] FCA 1054 at [100] per Weinberg J, [2002] FCA 1054 ; 76 ALD 424. In the present proceedings there is not even a basis upon which any such " vague sense of unease " could be supported. 32 Nothing has been exposed by the evidence in the present proceedings which gives rise to any apprehension as to bias arising by reason of the conduct of the delegate or others. 33 Reliance placed by the Applicant, for example, upon the letter dated 31 March 2006 that was provided by the President to Mr Refshauge and Professor Hambly is misplaced. That letter was nothing more than the Commission informing Mr Refshauge and Professor Hambly that a complaint had been made against them, requesting the provision of information, and inviting submissions. A contention as to bias is not advanced by those letters also enclosing brochures published by the Commission entitled " Information for Respondents " and " Conciliation --- how it works ". Those brochures contain information which presumably is sent to all persons against whom a complaint is made. The Applicant's contention, as explained in oral submissions, was that the President was pursuing a course of differential treatment, the difference only being exacerbated by his being in custody and the legal qualifications of the persons against whom he was complaining. Mr Refshauge and Professor Hambly, the Applicant contends, were being given brochures outlining how conciliation " works " and the assistance that the Commission could provide " about possible terms of settlement ". Even if the provision of such brochures to Mr Refshauge and Professor Hambly is considered in isolation, no basis for a reasonable apprehension of bias arises. Those brochures, taken in the context of how the conciliation process was pursued by the delegate, deny any prospect of such an argument being successful. There is no basis for contending that either the delegate, or later the President, approached the tasks entrusted to them with anything other than an open and fair mind as to how best to investigate and conciliate the Applicant's complaint. 34 An amendment to the "Particulars" was made during the course of submissions (without objection by Counsel for the Attorney-General) to raise a further manner in which it is said that there was a denial of procedural fairness. That amendment sought to support a contention that there was a reasonable apprehension of bias by reason of the delegate not acceding to a request by the Applicant that he relinquish his delegation and have another delegate appointed. In the circumstances I do not of course invite such a course but I would not wish to continue in the matter if the parties wish that it be dealt with otherwise. As I indicated, I would consider such a course if the parties wished me to do so. That, I am informed, is not the case. In my view I should endeavour to complete the function given to me by the President's delegation of the matter to me and I shall do so. 35 Given the conciliatory responsibilities entrusted to the delegate it is, perhaps, not surprising that he gave consideration to taking such a course and not surprising that the matter was expressly addressed in correspondence. The task being undertaken was one of conciliation -- not judicial resolution. But the prospect of approaching the President having been raised for consideration, that an application was made for the delegate to do so and was rejected does not, it is considered, provide a sufficient basis to support a conclusion as to apprehended bias. Clearly the Applicant wanted another delegate; he wanted to have his existing complaint amended and for a series of other complaints to be handled by someone other than Mr Mahoney. Amendment of the complaint had been denied. The Applicant was also concerned as to the terms used by the delegate in earlier correspondence. Any decision by the existing delegate to accede to the application being made that he relinquish his delegation, however, was a matter for him to consider. The fact that the delegate made a decision that was not the desired outcome as sought by the Applicant does not expose any bias. Rather, the decision merely reflects a commitment to discharge the functions delegated to him. 36 The requests made to amend the complaint and the request that a different delegate be appointed and for all matters to be dealt with together (as sought by the Applicant) were all matters addressed by the delegate in correspondence with the Applicant and were taken into account. No denial of procedural fairness has been demonstrated. FAILURE TO CONSIDER RELEVANT CONSIDERATIONS? 38 A failure to take into account a relevant consideration only vitiates a decision if that consideration was one which the administrator was " bound " to take into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24. 39 None of the considerations identified by the Applicant are relevant considerations which the President was " bound " to take into account when making a decision pursuant to s 46PH(4). And some of the " Particulars " alleging considerations which, it is said, should have been taken into account do not fully set forth the facts relevant to the consideration relied upon. 40 One specific matter may be instanced. One "Particular" , again repeated in respect to the other Grounds of Review , asserts that the First Respondent failed to consider correspondence in which it is alleged the delegate " told the applicant he would be harmed if he continued the complaint ". Such a statement in correspondence emanating from the Commonwealth or its officers or delegates, without more, would be disturbing. The context, however, explains the true nature of what was being conveyed to the Applicant. 41 The issue emerged in the text of a letter written by the delegate to the Applicant in July 2006, this being a letter written prior to the Applicant asking for another delegate to be appointed. That letter informed the Applicant that the only body which could make an order imposing a penalty was the Federal Court or the Federal Magistrates Court. It may be that you lodged the complaint with the objective of having a definitive finding made upon the inquiry that victimisation had taken place, whether or not any order could be made. (I do not suggest that, one way or the other). But if that were your objective it would not or could not be achieved by the present complaint proceeding and continuing with the present complaint might result in harm rather than help to you. Under the legislation my essential function is to inquiry [sic] and to attempt to settle the matter by conciliation. The legislation gives me express power to hold that the complaint has not been established, ie, that there was no victimisation. It does not by its terms authorise me to make a definitive and operative finding that victimisation did take place and in the circumstances no definitive finding would be made and your objective would not be attained. 42 The Applicant has explained that he construed the reference to the word " harm " in this context with some foreboding and considered that it could be a reference to an intent to prejudice his ability to obtain parole. In his letter to the delegate in November 2006, in which he expressed a preference that another delegate be appointed, the Applicant indeed conveyed the fact that he had " spent some time pondering what you contemplated within the scope of the "harm" mentioned in your letter ". 43 The context in which the word " harm " was employed in the delegate's letter, it is considered, was but a shorthand reference to whether or not a conciliation process would be of ultimate benefit to the complainant and whether he would be advantaged or disadvantaged. To a person who is not a lawyer and indeed a person detained in custody, however, there may have been some understandable uncertainty. In my previous correspondence I sought to explain this to you. I suspect that you have more to gain from a conciliation and settlement of this matter than from the pursuit of it in a Court. It was to this that I referred. I thought that you would be advantaged by settlement and that, in a practical sense, you might possibly be disadvantaged if it went to a Court. But if I cannot persuade the parties to come to a conciliated settlement, then the legislation must take its course, whatever that may be. 44 The "Particular" which asserts that there was a failure to consider a relevant consideration, namely the consideration that the delegate had " told the applicant he would be harmed if he continued the complaint ", thus seriously and significantly takes out of context that which the Applicant had in fact been told. If the text of that which the Applicant had been told by the delegate is properly understood, it does not bear the meaning sought to be ascribed to it by the Applicant and is not a consideration which the President was " bound " to take into account when making his decision under s 46PH(4). 45 Other "Particulars" may more summarily be dismissed. One "Particular", for example, identifies a letter dated 27 May 2006 as a matter not taken into account. That letter was one of a series of letters urging that further inquiries be undertaken. Insofar as attention may be confined to whether or not that letter was taken into account, the argument is fully answered by the fact that the s 13 Statement of Reasons expressly identifies this letter as part of the " Material Relied Upon in Making the Decision ". 46 Other "Particulars" refer to other correspondence which is not referred to in the s 13 Statement of Reasons . Such correspondence includes a letter dated 16 March 2007 from the Applicant to the First Respondent and a further letter from the Applicant dated 27 April 2007 to the Chief Justice of the Supreme Court of the Australian Capital Territory (and copied to the First Respondent). An exercise of the discretion conferred by s 46PH(4) did not require the First Respondent to consider each individual piece of correspondence previously received or copied to him; nor does the content of any of this correspondence dictate that the First Respondent was " bound " to take it into account. TAKING INTO ACCOUNT IRRELEVANT CONSIDERATIONS? 48 The Further Amended Application thus states, by way of example, that the First Respondent took into account an irrelevant consideration, namely " that issues, of interaction between certain State laws and statutory obligations imposed on Richard Refshauge and David Hambly, and the Sex Discrimination Act (C'th) 1984 ... would be better determined by a Court ". 49 A further variant of this assertion formulated by the Applicant is the "Particular" which recounts that consideration was given to " an assertion that actions complained about were carried out as part of Richard Refshauge and David Hambly's statutory roles and obligations, and further, that this assertion limited their capacity to resolve the complaint through conciliation ". 50 The potential relevance of State or Territory legislation, it is considered, was inevitable. The only question was how it was to be addressed when entertaining the complaint made by the Applicant. 51 The complaint as made by the Applicant was forwarded to Mr Refshauge and Professor Hambly. In his reply dated 13 April 2006, the then Director of Public Prosecutions quite properly set forth the statutory context in which that office operated and the functions entrusted to it, including attending meetings of the Sentence Administration Board established under the Rehabilitation of Offenders (Interim) Act 2001 (ACT). Reference was also made by Mr Refshauge to the immunity conferred by that legislation and under the Director of Public Prosecutions Act 1990 (ACT). The reply of Professor Hambly also made reference to the 2001 legislation. 52 Rather than being a matter irrelevant to the manner in which the decision was made pursuant to s 46PH(4) of the 1986 Act, it is considered that the statutory context within which the persons complained of were operating and the statutory functions they were exercising were matters of immediate relevance to the decision to be made. Mr Refshauge and Professor Hambly were, of course, the persons against whom the complaint was made. 53 This Ground of Review is thus rejected. IMPROPER PURPOSES? A person challenging an exercise of power upon the basis of improper purpose has the onus of establishing that contention. Where the purpose of a decision must be ascertained by inference from other facts, there is a presumption of regularity: Haneef v Minister for Immigration & Citizenship [2007] FCA 1273 at [278] , 161 FCR 40 at 88 per Spender J. An appeal has been dismissed: Minister for Immigration & Citizenship v Haneef [2007] FCAFC 203 , 163 FCR 414. 55 The Ground that alleges the exercise of the power for an " improper purpose " again repeats the reliance placed by the First Respondent upon some issues being better determined by a court. And the variant of this " Particular ", in the form of an assertion that there was " limited ... capacity to resolve the complaint through conciliation ", is again repeated as a " Particular " of " improper purpose ". 56 Again, neither variant of the same contention exposes an exercise of the discretionary power for an " improper purpose " and the contention is misplaced. This Ground of Review is rejected. The Applicant has not discharged the onus of establishing any improper purpose in the exercise of the discretion. 57 The reasons for the exercise of the power have been set forth in the s 13 Statement of Reasons . There is no basis upon which any inference can be drawn that that Statement does not fully set forth the reasons for the exercise of the power. No " improper purpose " can be discerned -- either from the s 13 Statement of Reasons or such other evidence as was sought to be relied upon by the Applicant. UNREASONABLENESS? 59 The " Particulars " provided in support of the other Grounds of Review are repeated. This separate Ground of Review is also rejected. 60 A decision may be set aside upon an application for judicial review if it is " so unreasonable that no reasonable authority could properly have arrived at it ": Buck v Bavone [1976] HCA 24 ; (1976) 135 CLR 110 at 118 per Gibbs J. The test is an objective one: Alexandra Private Geriatric Hospital Pty Ltd v Blewett (1985) 7 FCR 341. The decision will not be vitiated just because a court itself believes that the decision is unreasonable. It must be satisfied that no person acting reasonably could arrive at such a decision. To the extent, for example, that it is alleged that it was unreasonable to take into account some considerations, a fundamental difficulty confronting the Applicant is that the considerations taken into account have been held to be relevant to the exercise of the discretionary power conferred by s 46PH(4). A further difficulty is that the weight to be given to any consideration is a matter for the First Respondent and not for the Court: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24. I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable". This ground of review was considered by Lord Greene MR in Wednesbury Corporation [[1948] 1 KB at 230, 233---4], in which his Lordship said that it would only be made out if it were shown that the decision was so unreasonable that no reasonable person could have come to it. This ground is now expressed in ss 5(2)(g) and 6(2)(g) of the AD(JR) Act in these terms. ... However, in its application, there has been considerable diversity in the readiness with which courts have found the test to be satisfied. ... But guidance may be found in the close analogy between judicial review of administrative action and appellate review of a judicial discretion. In the context of the latter, it has been held that an appellate court may review a discretionary judgment that has failed to give proper weight to a particular matter, but it will be slow to do so because a mere preference for a different result will not suffice. ... So too in the context of administrative law, a court should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits. Nothing of that kind has been exposed in the present proceedings. 62 A further way in which the Applicant wishes to advance the Ground of unreasonableness, and also a way in which he seeks to contend that there has been a failure to take into account matters said to be relevant, is his repeated requests made of the Commission and the delegate as to the " need to gather more information ". The Applicant urged both the President of the Commission, and later the delegate, to make inquiries. The delegate took the position that it was not his task to conduct detailed inquiries with a view to resolving potentially competing factual accounts, but rather to seek to conciliate the complaint if at all possible. I am to inquire into the complaint and to attempt to conciliate it. This may or may not be what you would wish ideally to be the position; you may wish that the legislation provided something different from this. But I do ask you to understand that that is what the legislation provides and that it is all that I can do. Please assist me by focussing on this and by bearing in mind during the conciliation that this is what is involved. It will help you to understand what I am doing and what I have done. 63 No error may be discerned in the delegate adopting that approach. There is, in any event, only limited scope for contending that a decision is unreasonable by reason of a failure to pursue inquiries: cf Luu v Renevier (1989) 91 ALR 39 ; Visa International Service Association v Reserve Bank of Australia [2003] FCA 977 at [627] ---[628], [2003] FCA 977 ; 131 FCR 300 at 430---1 per Tamberlin J. Whatever may be the limits of an obligation upon a decision-maker to make inquiries when required to make relevant findings of fact, the obligation is even more confined when the administrative task being pursued is that of attempting to achieve a conciliated result. Only such inquiries need be undertaken by the delegate as are considered either appropriate or necessary to discharge the function of conciliation. The delegate is " not an independent arbiter charged with deciding an issue joined between adversaries " and was not bound to make his own inquiries for the purpose of forming a view about how a particular claim was to be resolved. Contrast: Applicant VEAL of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 72 at [26] , [2005] HCA 72 ; 225 CLR 88 at 99 per Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ. 64 Any obligation to pursue the further inquiries being urged by the Applicant must also confront the fact that the discretionary power being exercised by the delegate when terminating the complaint is relevantly vested in subjective terms. The attack made upon the failure of the delegate to make further inquiries necessarily has to confront the fact that the President (or his delegate) was empowered to terminate a complaint if he was " satisfied that there is no reasonable prospect of the matter being settled by conciliation ": Human Rights and Equal Opportunity Commission Act , s 46PH(1)(i). It is clear in the present proceedings that the delegate believed that he had made appropriate inquiries; it is equally clear that he was inviting the Applicant to identify further facts which the Applicant considered may have been relevant. It is that which I have been involved in doing. I have inquired into what is involved: You and other parties have already made clear in detail what you claim about the matter. I have examined what you have said and what has been said by the other parties and all of the other material which relates to the complaint and I have considered what may be the implications to be drawn from all of this material. I believe I am appropriately informed about the matter. It has not been suggested that there are other factual matters of which I should know. (If you think that there is other material which is relevant and of which I have not been made aware, please let me know of it. 65 No complaint can justifiably be made in respect of the delegate's decision. BAD FAITH? 67 Such a Ground " is a serious matter involving personal fault on the part of the decision maker ": SBBS v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCAFC 361 at [43] , 194 ALR 749 at 756. It is a Ground which should not have been advanced in the present proceedings. It is certainly considered that the Ground would not have been relied upon had the Applicant been legally represented. 68 Reliance upon this Ground was rightly abandoned by the Applicant during the course of the hearing on 28 March 2008. AN AMENDED APPLICATION OR FURTHER PROCEEDINGS? 70 The occasion for the further amendments was said to have been the recent provision to him of documents by the Second Respondent. Mr Dunstan had previously sought a vacation of the hearing date of 28 March 2008 and had foreshadowed the potential of further amendments being sought. 71 The proposed further amendments were refused and on 28 March 2008 the hearing commenced of the Further Amended Application . 72 There were two principal reasons for refusing leave to amend the Further Amended Application . First, the proposed amendments sought to challenge the " conduct " of the Second Respondent, that " conduct " being reviewable under s 6 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). Although issues occasioning disputes between the parties should desirably be resolved in one set of proceedings, any proposed review of " conduct " was considered to be sufficiently discrete from the case sought to be made as against the Second Respondent, namely what was said to be " unreasonable delay " within the meaning of s 7 of the 1977 Act. Indeed, it was considered that any challenge to what was said to be reviewable " conduct " may -- at least in part -- have been inconsistent with the case which sought to establish " unreasonable delay ". The " conduct " sought to be reviewed may have in part denied the success of any claim alleging inaction on the part of the Second Respondent. The case which was set down for hearing was ready to proceed and it was considered appropriate then to resolve as many of the complaints made by Mr Dunstan as was then possible. 73 In any event, the claim alleging " unreasonable delay " was abandoned during the course of the hearing on 28 March 2008. 74 Second, the proposed further amendments contended that there had been " fraud " and that evidence had been " concealed " or potentially concealed. It was unclear as to who was said to have occasioned the " fraud " and from which facts any such inference was to be drawn. Some time was taken to discern how any case of fraud was to be advanced and no satisfactory explanation was provided by Mr Dunstan at the hearing on 28 March 2008. 75 A third reason was the objective of using the time that had been set aside for the hearing in as useful a manner as possible, without occasioning prejudice to any of the parties. The subject matter of the proposed amendments was understood to be more directed to the activities of the Second Respondent than to what emerged as the remaining decision sought to be impugned, namely the decision of the First Respondent not to revoke the Notice of Termination. 77 In order to avoid any prejudice to Mr Dunstan, the course which was pursued was to give directions on 28 March 2008 for the service of any proposed further application seeking to review the " conduct " of the Second Respondent. It was further directed that no such further application was to be filed without first obtaining leave to do so. Allegations of " fraud " and concealing evidence are serious allegations. From the oral submissions as made on 28 March 2008 by Mr Dunstan, it was then concluded that there was no sufficient factual foundation for any such contention to be further entertained. But it is of obvious importance that any litigant, especially an unrepresented litigant, is given the opportunity to recast his complaint and for any complaint as recast to be considered afresh. It is of equal importance that unfounded allegations of fraud are dealt with as efficiently as a proper consideration of any application may permit. 78 On 28 March 2008 the hearing was not concluded and was adjourned to 24 April 2008. The application for leave to file any further application was also adjourned to that date. At the outset of the resumed hearing on 24 April 2008 it was confirmed by the Applicant that the only decision remaining to be reviewed was that taken pursuant to s 46PH(4) and upon the Grounds as previously identified. The hearing of final submissions in respect to the Further Amended Application , as filed on 7 March 2008, thereafter proceeded. 80 The third and remaining part of the Application , as recast in the form of the Further Amended Application , is to be dismissed. 81 The Applicant contends that, in the event that he is ordered to pay costs, there should be some reduction in the costs otherwise payable. He contends that he has had limited success, in particular with respect to the provision to him of a Statement of Reasons . He also relies upon the course of the proceedings resulting in further documents being disclosed to him which he had long been seeking. 82 A Motion filed on behalf of Professor Hambly seeking his joinder as a party to the proceedings was ultimately not pressed. Had it been pressed, it would most probably have been the case that the order would not have been made. 83 Any apportionment as to costs involves no mathematical certainty. In the event that an order is made in favour of the Attorney-General, it is considered that the Applicant should pay 80% of the Fourth Respondent's costs, including such costs as were incurred in respect of the review of the conduct of the Second Respondent. Such an apportionment is intended to reflect such limited success as the Applicant has had in the present proceedings and a recognition that, to some extent, he should not have to pay costs incurred by reason of the Motion seeking the joinder of Professor Hambly that was filed but ultimately not pressed. 84 Some uncertainty as to the ability of this Court to make an order for costs in favour of the Attorney-General where joined as a party to proceedings under the Administrative Decisions (Judicial Review) Act 1977 (Cth) is occasioned by s 18 of that Act. (2) Where the Attorney General intervenes in a proceeding in pursuance of this section, the court may, in the proceeding, make such order as to costs against the Commonwealth as the court thinks fit. (3) Where the Attorney General intervenes in a proceeding in pursuance of this section, he or she shall be deemed to be a party to the proceeding. 85 If the Attorney-General is " deemed to be a party to the proceeding ", and presumably thereby exposed to the prospect of costs either being awarded against him or in his favour (as with any other party), the purpose to be achieved by s 18(2) is perhaps elusive -- unless an inference is to be drawn that the only order as to costs that may be made is one against the Attorney-General. 86 When the Attorney-General was joined as a party to the present proceedings, left open was this question as to whether he could seek an order for costs in the event that the Applicant was unsuccessful: Dunstan v von Doussa [2008] FCA 97 at [20] . 87 Although it is by no means clear, it is considered that s 18(2) does not preclude an order for costs being made in favour of the Attorney-General. Such a conclusion is at least consistent with the following observations of Spender J in O'Keefe Nominees Pty Ltd v BP Australia Ltd (No 2) [1995] FCA 1079 ; (1995) 55 FCR 591 at 595. In my opinion, where there is intervention by an Attorney-General under that section, the Court does not have power to order costs in favour of the intervening Attorney-General. Subsection (3) provides that where an Attorney-General has intervened in a court, then "for the purposes of the institution and prosecution of an appeal ... the Attorney-General shall be taken to be a party to the proceedings". The effect of this subsection is that, where an Attorney-General has intervened under s 78A for the purposes of an appeal, costs orders may be made against him or her or in his or her favour. But subs (4) provides that where the Attorney-General has instituted an appeal in which the Attorney-General has intervened, the Court hearing the appeal may make such order as to costs ... "as the court thinks fit". 88 The significance of according to the Attorney-General the status of " a party to the proceedings ", as explained by his Honour, is a reason for concluding that costs can be awarded both for and against the Attorney-General. The Further Amended Application as filed on 7 March 2008 be dismissed. 2. The Applicant to pay 80% of the costs of the Fourth Respondent. I certify that the preceding eighty-nine (89) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | human rights and equal opportunity commission act 1986 (cth) s 46ph(4) decision of president not to revoke a notice of termination no reviewable error no apprehended bias no failure to take into account relevant considerations no taking into account of irrelevant considerations no improper purposes no unreasonableness no bad faith costs of attorney-general as party to judicial review proceedings administrative law |
They operate what have been referred to as "co-location" arrangements in Launceston, Devonport and Burnie. Under these arrangements the respondents operate from the same premises and share some common administrative and operational costs. However they are not partners. They retain their own patients and the incomes derived therefrom and do not share profits or losses. They compete in the market for the provision of orthodontic services. 2 Such arrangements are frequently adopted by members of professions in Australia, a notable example being barristers at independent Bars who share chambers and the cost of secretarial and other administrative expenses but do not practice in partnership. There is nothing illegal or dubious in such arrangements and in some respects they have important advantages, which enure to the interest of the public as much as for the practitioners themselves. Practitioners have the benefit of mutual support and the ability to exchange professional learning and experience on a daily basis without the liability and other risks of partnership. 3 However practitioners adopting such arrangements are, like everyone engaged in professions or businesses, subject to the laws against anti-competitive conduct. This is so whether the practitioners adopt corporate identities and are thus subject to Pt IV of the Trade Practices Act 1974 (Cth) or whether they practice as individuals or partnerships and are governed by the uniform Competition Policy Reform Acts and the Competition Code. 4 In the present case the corporate respondents admit that they made and gave effect to arrangements for price fixing and market sharing which contravened s 45 of the Trade Practices Act . The individual respondents admit that they were knowingly concerned in such conduct. 5 The respondents have admitted liability and joined with the Commission in seeking appropriate injunctions, declarations and other orders. As will be discussed in more detail below, the Commission does not seek any pecuniary penalties. 6 The first respondent is Ranu Pty Ltd (Dr Ranu's company) which is controlled by the fourth respondent Dr Sawindar Ranu. The second respondent is P R & G Crowe Pty Ltd (Dr Crowe's company) which is controlled by the fifth respondent Dr Paul Richard Crowe. The third respondent is Hazel Ridge Pty Ltd (Dr Stankevicius' company) which is controlled by the sixth respondent Dr Antanas Vytenis Stankevicius. 7 Other entities involved were F & P G Pty Ltd (Dr Goldschmied's company) which was controlled by Dr Felix Goldschmied and Ashwani Gupta Pty Ltd (Dr Gupta's company) which was controlled by Dr Ashwani Gupta. 8 All the orthodontists referred to were retained by their respective companies to provide orthodontic services. Such services include correcting the alignment of teeth that may be misaligned as a result of tooth irregularity or incorrect jaw and upper mouth dimensions and relationships. The services involve gradual, repetitive and long term adjustment of teeth by an orthodontist over a period of months or years. The Associateship Agreement included a provision that all professional fees charged by each associate were to be fixed by mutual agreement or, in the event of the parties failing to reach agreement, were to be those fixed or recommended by the Australian Dental Association (Tasmania Branch) Incorporated. 10 From about May 1992 until about June 2000 each of Dr Ranu's company, Dr Crowe's company and Dr Goldschmied's company gave effect to that provision by holding meetings from time to time during which they agreed the professional fees to be charged by the associates for the supply of orthodontic services to their respective patients. 11 During those meetings agreement was reached on whether the professional fees charged by the associates should be changed and if so by what percentage and to what particular amount the fees would be changed and the date on which the parties would simultaneously implement the new fees. 12 The agreed fee changes were documented by way of preparation and adoption by the associates of a list of fees to be charged for standard orthodontic services effective from the date the changed fees were scheduled to be implemented. 13 In June 2000 Dr Gupta's company was admitted as a party to the Associateship Agreement, which was amended accordingly. From then until 28 February 2003 the three respondent companies and Dr Gupta's company gave effect to the fee fixing arrangements in the way already described. 14 On about 28 February 2003 Dr Goldschmied retired from practice and his company ceased to be an associate or to supply orthodontic services to patients. 15 Shortly thereafter, on about 3 March 2003, Dr Gupta's company ceased to be an associate. It thereafter supplied orthodontic services to new patients only in Southern Tasmania. The remaining associates, Dr Ranu's company and Dr Crowe's company, continued to fix fees in the way already described. 16 On 14 June 2005 Dr Ranu's company and Dr Crowe's company entered into an agreement (the Practice Agreement) to make certain arrangements for their practices to share premises, equipment and overheads. 17 By an agreement made on 1 July 2005 Dr Stankevicius' company became a party to the Practice Agreement. Thereafter until about June 2006 Dr Ranu's Company, Dr Crowe's company and Dr Stankevicius' company continued to fix fees in the way already described. 19 On or about about 10 November 1995 this arrangement was modified by a written agreement between Dr Ranu's company, Dr Crowe's company and Dr Goldschmied's company to the effect that if a party to the agreement had 20 patients more than any other of the parties, then the first would not supply orthodontic services to new unreferred patients until all parties had received the same or close to the same number of new patients. 20 There was a further modification on or about 30 June 2000 when Dr Ranu's company, Dr Crowe's company, Dr Goldschmied's company and Dr Gupta's company entered into a written agreement to the effect that the limit was 10 new patients. 21 A similar arrangement was made on 14 June 2005 between Dr Ranu's company and Dr Crowe's company. 22 A third 10 patient limit agreement was made on about 1 July 2005 between Dr Ranu's company, Dr Crowe's company and Dr Stankevicius' company. 23 All these arrangements were implemented by instructing the reception staff at the shared premises and maintaining and referring to a list of current patients for each party and distributing unreferred patients between the parties from time to time in accordance with the instructions. They took over the goodwill of a practice formerly carried on by Dr Philip Rogers. 25 Dr Gupta's company was also a party to this arrangement from about July 1998 until about March 2003. 26 Upon his withdrawal from the arrangement Dr Gupta's company agreed in writing with Dr Ranu's company and Dr Crowe's company that the latter companies would have their primary practice in "the Northern Division of Tasmania" and Dr Gupta's company would have its primary practice in "the Southern Division of Tasmania". Those areas were defined, respectively, as the areas north and south of the 42 nd degree of south latitude. 27 It was agreed that Dr Ranu's company and Dr Crowe's company would not supply orthodontic services to any new patients in the Southern Division of Tasmania for a period of seven years. 28 It was also agreed that, save for certain arrangements relating to treatments already commenced, until at least 31 December 2010 Dr Ranu's company and Dr Crowe's company would provide orthodontic services only in the Northern Division and Dr Gupta's company would provide such services only in the Southern Division. 29 That agreement was implemented in that from March 2003 Dr Gupta's company stopped offering the supply of orthodontic services to potential patients in the Northern Division and Dr Ranu's and Dr Crowe's companies stopped offering to supply such services to potential patients in the Southern Division. 30 On 20 September 2006 Dr Ranu's company and Dr Crowe's company, in a letter from their solicitors, advised Dr Gupta's company that they did not accept that the agreement was invalid and that they declined to release Dr Gupta and his company from it. Apparently Dr Gupta then reported the matter to the Commission. The Commission has applied its immunity in respect of Dr Gupta and his company and as a result they have note been made respondents to these proceedings. Shortly thereafter Dr Stankevicius' company became a party to this agreement. Thus when the corporate respondents entered into contracts containing such provisions they contravened s 45(2)(a)(ii). Giving effect to such provisions contravened s 45(2)(b)(ii). 33 The provisions in the various arrangements which prevented, restricted or limited the provision of services to "unreferred" patients or to patients by reference to geographical limitations were exclusionary provisions within the meaning of s 4D. The effect of those provisions was to restrict the ability of potential patients to choose one (ostensibly) competing orthodontist in preference to another for price or other reasons. Thus when the corporate respondents entered into contracts containing such provisions they contravened s 45(2)(a)(i). Giving effect to such provisions contravened s 45(2)(b)(i). 34 All the individual respondents were knowingly concerned in such contraventions and thus are liable by virtue of s 75B. They were aware of the essential facts which constituted the contraventions --- indeed it was the individuals themselves who engaged in the relevant conduct. That they were not aware that the conduct was unlawful is relevant to the fixing of penalty but does not avoid liability: Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661. There seems to have been a widespread misunderstanding amongst the lawyers involved (and possibly many other lawyers) that professions were not subject to the Trade Practices Act . The assumption of legality was reinforced when Dr Gupta, prior to becoming a signatory to the Agreement in 2000, furnished the then existing contracts to a separate solicitor for perusal and that solicitor similarly failed to raise any competition law issues. The same occurred when Dr Stankevicius joined the arrangements. 36 While of course ignorance of the law is not an excuse, the Commission, properly in my view, accepts that the failure of lawyers in separate firms to properly advise their clients is a matter that goes some way towards explaining and mitigating the conduct of the orthodontists. 37 Also the respondents cooperated with the Commission to such an extent that it did not need to resort to its powers of compulsion under s 155. 38 I think in all circumstances it is appropriate not to order any pecuniary penalty. However there will be orders for injunctions, declarations, an order for education and training programs and an order that the respondents pay the costs of the Commission fixed by agreement at $15,000. I certify that the preceding thirty eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | orthodontists with joint practice arrangements sharing expenses but not in partnership price fixing arrangements to share new "unreferred" patients geographical restraints injunctions and declarations and order for costs sought by agreement acting on incorrect legal advice no pecuniary penalty sought trade practices |
It adopts Pt IV and other related sections of the Trade Practices Act 1974 (Cth) (the TPA). 2 The allegations of those contraventions are admitted, as set out in the Defence filed by Messrs Knight and Ross. The ACCC does not press the balance of the allegations of contraventions in the Statement of Claim. 3 Based upon the admissions made by Messrs Knight and Ross, agreement has been reached as to the declaratory relief and other orders, including as to the levels of pecuniary penalties pursuant to s 76 of the Code, to be recommended to the Court as appropriate in relation to the admitted contraventions of the Code. The parties have jointly made submissions as to the appropriate orders the Court should make, based upon the admitted conduct and the relevant background to the contraventions, and upon other matters which the parties contend to be relevant to Court's task. 4 I have been greatly assisted by the joint submissions, much of which is replicated in these reasons. 5 Litigation to establish contraventions such as those admitted by Messrs Knight and Ross can be very complex, time consuming and costly. It is in the public interest for litigation to be concluded in the shortest time frame that is consistent with justice being done between the parties, freeing the ACCC to deal with other matters and reducing the public cost of a lengthy hearing in the Court. Consequently, the Court has encouraged negotiated resolution of proceedings by the ACCC, provided that their terms recognise that the ultimate responsibility for determining the existence of a contravention or contraventions, and as to the proper orders to resolve the proceedings lies with the Court (see Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR 41-375; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285). 6 Accordingly, if the Court is satisfied that there has been a contravention or contraventions as alleged and that the terms of the proposed consent orders are appropriate, it is generally in the public interest for the Court to make orders in terms that have been agreed between parties so as to encourage parties to assist the ACCC in its investigations and to achieve negotiated settlements. Uninformed of their agreement, I may have selected a different figure, but I am satisfied that it would not have been very different from theirs. There is from time to time, amongst members of the profession and amongst the public, discussion concerning plea bargaining. Sometimes it is suggested that it involves disreputable conduct. It is my opinion that that is so if it at all implicates the court in private discussions as to what the court's attitude will or would be likely to be if a particular course is taken. In this case nothing of that kind has occurred. The parties have made their own agreement and put it to the court for approval, not knowing what its attitude was likely to be. ... This, of course, is not a criminal case; the liability is civil only. But, even in the most serious criminal cases, it is not unusual for the prosecution to accept a plea to a lesser charge, subject always to the approval of the court. I have said what I have only to explain that the course which the parties have adopted is both proper and not uncommon, even though perhaps novel in the comparatively new field of trade practices. The question is not that; it is simply whether, in the performance of the Court's duty under section 76 , this particular penalty, proposed with the consent of the corporation involved and of the Commission, is one that the Court should determine to be appropriate. When corporations acknowledge contraventions, very lengthy and complex litigation is frequently avoided, freeing the courts to deal with other matters, and investigating officers of the Australian Competition and Consumer Commission to turn to other areas of the economy that await their attention. At the same time, a negotiated resolution in the instant case may be expected to include measures designed to promote, for the future, vigorous competition in the particular market concerned. These beneficial consequences would be jeopardised if corporations were to conclude that proper settlements were clouded by unpredictable risks. A proper figure is one within the permissible range in all the circumstances. The Court will not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure, or except in a clear case. Although the Court is responsible for determining the appropriate penalty, the Full Court considered that it would be informed by the views of the ACCC about those effects. 11 The decision of the Full Court in NW Frozen Foods 71 FCR 285 was followed by a later Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd (2004) ATPR 41-993. The power of the court to make the orders sought is "defined and conferred by public law not by private agreement": Fiss, "Against Settlement" (1984) 93 Yale Law Journal 1073. In the exercise of that power the court is not merely giving effect to the wishes of the parties, it is exercising a public function and must have regard to the public interest in doing so. This principle applies to the resolution of private litigation by consent orders or undertakings. A fortiori it applies to proceedings brought by the Crown or public or statutory authorities to enforce the law in the public interest. The court has a responsibility to be satisfied that what is proposed is not contrary to the public interest and is at least consistent with it ... Consideration of the public interest, however, must also weigh the desirability of non-litigious resolution of enforcement proceedings . (emphasis added). 14 As I indicated at the close of submissions, I am satisfied that each of the declarations proposed is appropriate and is within power. I am also satisfied that the amount of the proposed pecuniary penalties in each instance and the further proposed order for each of Mr Knight and Mr Ross to attend a trade practices compliance program is appropriate and within power. 15 The following explains why I have reached those conclusions. He also is and was at all material times the head of the cardiac unit at the FMC, an Associate Professor of Surgery at Flinders University and was, from about November 2000 to about March 2003, a member of the Royal Australasian College of Surgeons' (RACS) Board of Cardiothoracic Surgery. From 2002 to 2004, Mr Knight was Vice-President of the Australasian Society of Cardiac and Thoracic Surgeons and from 2004 to 2005 was its President. 17 Mr Ross is and was at all material times, a cardiothoracic surgeon also practising in the Adelaide metropolitan area in South Australia who offered predominantly, and almost exclusively, cardiac surgical services at the FMC, Ashford and Flinders Private. Mr Ross was also at all material times a senior cardiac surgeon at the FMC and was, from June 2000, Clinical Advisor, Cardiothoracic Surgery at Adelaide Community Healthcare Alliance Inc (ACHA), which at all material times owned Ashford and Flinders Private. Mr Ross was also President of the Australasian Society of Cardiac and Thoracic Surgeons between 1999 and 2000. 18 The conduct by Messrs Knight and Ross involving the contravention of the Code related to Mr Craig Jurisevic (Mr Jurisevic) and Mr James Edwards (Mr Edwards), cardiothoracic surgeons in the Adelaide metropolitan area in South Australia. 19 By about 1 January 2001, Mr Jurisevic had obtained the necessary formal qualifications to be entitled to practise as a cardiothoracic surgeon in that he had been admitted as a Fellow with effect from 1 January 2001. Mr Jurisevic's official supervisor during the final year of his RACS Advanced Surgical Training in cardiothoracic surgery (which is part of the training required to be a cardiothoracic surgeon) was Mr Knight. Mr Ross also supervised Mr Jurisevic's surgery during that period. 20 Mr Edwards was admitted as a Fellow in 1997 and since about July 2003, he has been the Director of the Cardiothoracic Surgical Unit of the Royal Adelaide Hospital (Royal Adelaide). By reason of the matters referred to below, barriers to entry to the market for the supply of cardiothoracic surgical services are high. 22 Demand for cardiac surgical services, including open heart surgery, comes from adult members of the public with an acquired or congenital disease or disorder of the heart. Of the 7 to 8 cardiothoracic surgeons practising in the Adelaide metropolitan area during the relevant period, only 1 to 2 of those surgeons predominantly provided thoracic surgical services. No services were or are substitutable for cardiothoracic surgical services. Patients requiring cardiothoracic surgical services would either be public patients (where facilities and the surgical services are provided by the State) or private patients (where facilities and the surgical services are usually paid for by the patient either directly or through their medical insurer). 23 The usual means by which patients obtained cardiac surgical services was firstly for the patient to obtain a referral from a general practitioner to a cardiologist. If the cardiologist considered that cardiac surgery may be appropriate, the cardiologist would then refer the patient to a cardiothoracic surgeon. Such licences at the private hospitals Ashford, Flinders Private and Wakefield Hospital (Wakefield) were conditional upon each cardiothoracic surgeon providing cardiac surgical services also having held a formal appointment at a South Australian public teaching hospital, namely the FMC or the Royal Adelaide (licence condition). Those patients generally travelled to Adelaide for cardiothoracic surgical services. 26 The only hospitals in South Australia which had both the necessary facilities and a licence were Wakefield, Ashford, the FMC, Flinders Private and Royal Adelaide. 27 Private patients generally accepted the recommendation of their cardiologists as to the cardiothoracic surgeon they would engage. Nor was a licence, with conditions similar to that required for the provision of cardiac surgery, required in order to permit cardiothoracic surgeons to provide thoracic surgical services at a hospital in South Australia. 31 A cardiothoracic surgeon needed to provide enough cardiac surgical services to maintain a sufficient level of competence. 32 In order for a person to gain admission to, and fellowship of, RACS, favourable references were required from each of the person's supervising cardiothoracic surgeons as nominated by RACS. Also, both accreditation at private hospitals, and gaining an appointment at a public teaching hospital in South Australia was, for a newly admitted Fellow, greatly assisted by favourable references from the supervising cardiothoracic surgeons involved with his or her training. 33 It is usual for persons, after being admitted as Fellows, to spend an additional one to two years in an overseas placement before returning to a consultant position in Australia. Although usual, however, it is not a requirement for newly admitted Fellows to undertake an overseas placement in order to provide services in the market. 35 During the period from the opening of the cardiac operating theatre at Wakefield in or about 1994 until in or about the date of these submissions only cardiothoracic surgeons who held an appointment at the Royal Adelaide from time to time provided cardiac surgical services at Wakefield. 36 In those circumstances, I am satisfied that (as the ACCC alleges, and Mr Ross and Mr Knight admit) during the period of the conduct there was a market for the provision of cardiothoracic surgical services to private patients living in and near South Australia (the market). Mr Knight proposed that upon becoming a Fellow, Mr Jurisevic would continue to work with them as a senior registrar at the FMC through 2001, then undertake in 2002 a cardiothoracic surgery placement for approximately 18 months at the Brigham and Women's Hospital in Boston, Massachusetts. Mr Knight subsequently received confirmation from the Brigham and Women's Hospital that Mr Jurisevic would be considered for such a placement. Mr Jurisevic accepted the senior registrar's position for 2001. 38 In the course of Mr Jurisevic's final year of RACS Advanced Surgical Training, Mr Knight provided a positive reference to RACS about Mr Jurisevic's surgical competency and gave positive assessments concerning Mr Jurisevic, which included that Mr Jurisevic had impressive operative technique and that he would make an excellent surgeon in the future. 39 Mr Jurisevic completed his RACS Advanced Surgical Training program and was admitted as a Fellow with effect from 1 January 2001. 40 Following Mr Jurisevic's admission as a Fellow, in January 2001 he commenced a 12 month senior registrar's position at the FMC, operating on public patients. 42 On or about 6 February 2001, Messrs Knight and Ross made an arrangement, a provision of which included that Messrs Knight and Ross would hinder or prevent Mr Jurisevic entering or supplying cardiothoracic surgical services in the market prior to his gaining further cardiothoracic surgical training (the provision). 45 On or about 9 February 2001, Mr Jurisevic obtained his specialist registration as a cardiothoracic surgeon from the Medical Board of South Australia. On or about that day, Mr Jurisevic resigned from his senior registrar position. 46 On or about 14 February 2001, Mr Jurisevic applied for accreditation at ACHA hospitals (the accreditation application) in which he nominated Mr David Robert Craddock (Mr Craddock), a cardiothoracic surgeon and the then Director of the Cardiothoracic Surgical Unit at the Royal Adelaide, and Mr John Stubberfield (Mr Stubberfield), a cardiothoracic surgeon at the Royal Adelaide, as referees. Both Mr Craddock and Mr Stubberfield had been supervisors of Mr Jurisevic during his training. 47 Messrs Knight and Ross gave effect to the arrangement referred to in [42] above by engaging in the following conduct. 48 In or about February 2001, Mr Knight had a conversation with Dr Christopher Baggoley (Dr Baggoley), the then Consultant Medical Director at ACHA, in Dr Baggoley's office at Ashford. Dr Baggoley was a member of the Medical Advisory Committee (MAC) at Ashford which considered applications for accreditation. In that conversation, Mr Knight said words to the effect that Mr Jurisevic should not be extended accreditation by ACHA as it would be unsafe for patients if Mr Jurisevic operated independently because he was not ready; and that Mr Jurisevic required further supervision before becoming an independent surgeon. 51 By letter dated 20 February 2001, Mr Ross replied in writing to a query from Dr Andrew Sutherland, Chief (Medical), Division of Paediatric Surgery at the Women's & Children's Hospital in Adelaide where Mr Morris Peacock, a cardiothoracic surgeon who exclusively provided thoracic surgical services, had requested that Mr Jurisevic be extended accreditation. The letter included statements to the effect that Messrs Knight and Ross considered that Mr Jurisevic was very undertrained to provide thoracic surgical services at the Women's & Children's Hospital; that they had grave reservations about Mr Jurisevic going into private practice; and that they felt that it would be entirely inappropriate to have Mr Jurisevic hold any sort of position at the Women's & Children's Hospital. 52 By letter dated 28 February 2001, Mr Knight wrote to Mr Ross (with the consent of Mr Ross) in the latter's capacity as Clinical Advisor, Cardiothoracic Surgery at ACHA; for the purpose of submission to the MAC, and so that the MAC could consider the letter in relation to the accreditation application. During that meeting, Messrs Knight and Ross said words to the effect that Mr Stubberfield should agree to withdraw his support for Mr Jurisevic and not provide a reference for Mr Jurisevic; that Mr Jurisevic was not adequately trained; and that Mr Jurisevic was not competent to take on private practice. 56 Despite those various imprecations, on about 6 May 2001 RACS' Board of Cardiothoracic Surgery confirmed at a meeting of the Board, at which Mr Ross was present, that newly admitted Fellows, such as Mr Jurisevic, were legally entitled to practise independently. In about July 2003, Mr Edwards became the Director of the Cardiothoracic Surgical Unit of the Royal Adelaide. 58 On or about 19 March 2003 Mr Edwards applied for accreditation as a cardiothoracic surgeon at ACHA hospitals which included Ashford, and by 5 May 2003, Messrs Knight and Ross had become aware of Mr Edwards' application. 59 That apparently prompted Mr Ross to write to Mr Edwards by letter dated 5 May 2003. The letter was copied to Mr Stubberfield and Dr Craig. The letter informed Mr Edwards that there was an existing arrangement between those cardiothoracic surgeons who held an appointment at the Royal Adelaide and those cardiothoracic surgeons who held an appointment at the FMC whereby the former surgeons would not seek to operate on private patients at Ashford and the latter would not seek to operate on private patients at Wakefield (the non-compete arrangement). It invited Mr Edwards to become a party to the non-compete arrangement. 60 It also threatened Mr Edwards that Messrs Knight and Ross would seek to operate at Wakefield unless Mr Edwards agreed not to seek to compete with them at Ashford. 63 By letter dated 23 November 2004 Mr Knight also wrote to Mr Edwards. In essence, his letter reminded Mr Edwards of the non-compete arrangement; and invited Mr Edwards to become a party to the non-compete arrangement. The proposed declarations go to the legal controversy between the parties ( Ainsworth and Anor v Criminal Justice Commission [1992] HCA 10 ; (1992) 175 CLR 564 at 596) and the ACCC has a "real interest", as that expression was used in Forster v Jododex Aust Pty Limited [1972] HCA 61 ; (1972) 127 CLR 421 at 437 --- 438, in seeking declaratory relief as the public body charged with enforcing the TPA and the Code (see Australian Competition & Consumer Commission v Goldy Motors Pty Ltd (2001) ATPR 41-801 at [30]). 66 In the light of those findings, I consider it appropriate to make declarations in the terms proposed by the parties. The matters they address are far from hypothetical, and the proposed declarations specifically address the particular contravening conduct on the part of Mr Knight and Mr Ross which has been established: see Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53. 67 Section 86C of the TPA contains the power to order a contravenor of a provision of the TPA to attend a compliance program. The text of the Code includes that (and other) provisions of the TPA which relate to the Schedule version of Part IV: see s 4(1)(b) of the Competition Policy Reform (South Australia) Act 1996 (SA). The proposed order that each of Mr Knight and Mr Ross attend a trade practices compliance program is therefore within power. As it is agreed that their contravening conduct was engaged in ignorance of the relevant provisions of the Code, it is appropriate that they should attend such a program provided it is relevant to the contraventions. The proposed order satisfies that proviso and is sufficiently clear and precise to enable the performance of it to be readily undertaken and assessed. 68 The proposed orders for costs are also clearly within the Court's power and are appropriate. 69 Finally, there is the greater question of the appropriate amount of the pecuniary penalties. The principles are generally equally relevant to the assessment of a pecuniary penalty under the Code. They were addressed by French J in Trade Practices Commission v CSR Limited (1991) ATPR 41-076 at 52,152 - 52,153. 72 I must of course be mindful that the respondents are individuals carrying on business, rather than corporate entities, so the penalty factors set out above must be adapted, where possible, to the circumstances of the respondents . I also bear in mind, as Burchett J pointed out in Trade Practices Commission v TNT Australia Pty Ltd (1995) ATPR 41-375 at 40,169, that the total penalty for related offences ought not to exceed what is proper for the entire contravening conduct involved (the 'totality principle' as known in the criminal law). 73 It has long been accepted that a principal object of a penalty under s 76 is deterrence (see Trade Practices Commission v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 40-091 at 17,896 per Smithers J). Obviously the sum required to achieve this object will be larger where the Court is setting a penalty for a company with vast resources. However, as specific deterrence is only one element and general deterrence must also be achieved, consideration of the party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention. 77 I will briefly set out my reasons for that conclusion, in the light of the matters discussed in the cases referred to. 78 The conduct in relation to Mr Jurisevic came about because, in early February 2001, he indicated to Messrs Knight and Ross that he did not wish to take up the training position at the Brigham and Women's Hospital in Boston and that he intended to commence offering cardiothoracic surgical services, specialising in thoracic surgical services, to private patients in Adelaide. Subsequently, Mr Jurisevic resigned from his senior registrar position at the FMC, three weeks into his 12 month appointment. This upset Messrs Knight and Ross. 79 The 2001 conduct involved making an arrangement in February 2001 and giving effect to it in February and March 2001. The arrangement contained a provision to the effect that Messrs Knight and Ross would hinder or prevent Mr Jurisevic entering or supplying cardiothoracic surgical services in the market in the absence of and prior to his gaining further cardiothoracic surgical training. It is admitted that this had the likely effect of substantially lessening competition in the market because it signalled to newly admitted Fellows that they would probably need further clinical training before entering the market and thereby raised barriers to entry. It also hindered Mr Jurisevic from gaining accreditation at Ashford for a period of time. 80 The 2001 conduct was not accidental but it was influenced by Messrs Knight and Ross's belief as to the appropriate training and experience required for a cardiothoracic surgeon in private practice. The ACCC accepts that their belief was genuinely held. Nonetheless, Messrs Knight and Ross, in their dealings with hospitals and fellow cardiothoracic surgeons, went beyond merely expressing a view that further training was, in their opinion, desirable for newly admitted Fellows in the manner described above. Moreover, at the time of the conduct there were only 7 or 8 cardiothoracic surgeons in the market with Messrs Knight and Ross both being senior and highly influential members of the cardiac units at the hospitals at which they held appointments or accreditation. Both had supervised Mr Jurisevic during the final years of his RACS Advanced Surgical Training program. Their recommendations in respect of Mr Jurisevic were accordingly likely to be influential with hospitals and peers. 81 The conduct in relation to Mr Edwards in 2003 and 2004 was also (as the ACCC accepts) influenced by Messrs Knight's and Ross' belief that it was beneficial to patients that cardiac surgeons work as a team in dedicated cardiac units with support personnel who are experienced and familiar with each other and the particular surgeons' procedures, practices and protocols. 82 In addition, Messrs Knight and Ross were supportive of the non-compete arrangement as they believed it accorded with a 1998 report to the South Australian Health Commission which recommended that there should be two axes for the provision of cardiac surgical services in Adelaide: a northern axis whereby patients from northern regions requiring cardiac surgery would be operated on at Royal Adelaide and Wakefield; and a southern axis whereby patients from southern regions would go to FMC and Ashford for cardiac surgery. It was recommended that adopting these axes would, among other things, be a means of ensuring that there would be a sufficient population base to sustain two viable cardiac units (including both public and private services) in Adelaide. The report did not, however, suggest that cardiothoracic surgeons should only operate within a single axis, or should not hold appointments or accreditation in both axes. 83 The 2003 and 2004 conduct involved, in each case, the sending of the letters of 5 May 2003 by Mr Ross and of 23 November 2004 by Mr Knight referred to above to Mr Edwards in an attempt to have Mr Edwards become a party to the non-compete arrangement by Mr Edwards agreeing not to provide cardiothoracic surgical services to private patients at Ashford and Messrs Ross and Knight agreeing to refrain from providing cardiothoracic surgical services at Wakefield where Mr Edwards was then providing services (as an adjunct to his public work at the Royal Adelaide). Mr Edwards refused to enter into the arrangement. If he had agreed, it is admitted that the resulting arrangement would have been likely to have had the effect of substantially lessening competition in the market. 84 It is not possible to quantify any loss or damage caused by the 2001 conduct. Mr Jurisevic commenced in private cardiothoracic practice in about February 2001, performing his first operation in March 2001. He was accredited as a cardiothoracic surgeon providing thoracic surgical services at Ashford in July 2001 and secured a public hospital appointment as a cardiothoracic surgeon in 2003. 85 However, an ongoing effect of the conduct was that the barriers to entry to the market for cardiothoracic surgical services to private patients were likely to have been raised. As a result of Messrs Knight and Ross' conduct, newly qualified cardiothoracic surgeons in Adelaide were likely to consider they were in effect required to undertake further training, overseas or interstate, in order to practise as a cardiothoracic surgeon, notwithstanding their admission as a Fellow and registration as a cardiothoracic specialist. The conclusion of these proceedings will serve to ameliorate any such ongoing effect of the conduct. 86 The 2003 and 2004 conduct involved only attempted contraventions, and did not therefore involve actual loss or damage, but is nevertheless serious. 87 It should however be observed that the anticompetitive conduct provisions in the TPA were extended in 1996 to apply to individuals in the health sector in South Australia as a result of the enactment of the Code by the Competition Policy Reform (South Australia) Act 1996 (SA). Mr Knight and Mr Ross had little knowledge of the TPA or Code and did not know that the admitted conduct constituted a breach of the Code. Their conduct was not covert. The conduct was accordingly deliberate only in the sense of not being accidental or involuntary and was not in knowing contravention of the law. The respondents have consented to an order that they undergo appropriate training so that contraventions can be identified and avoided in the future. 88 Messrs Knight and Ross have co-operated with the authorities responsible for the enforcement of the Code in relation to the contraventions. They have saved the Court's and the ACCC's time by making the admissions and in reaching agreement with the ACCC on these joint submissions. The time and cost of pursuing these proceedings would otherwise have been very significant. Accordingly, the proposed penalties for Mr Knight and Mr Ross should include a significant discount from those that the Court might otherwise consider appropriate absent such co-operation. 89 Finally, I note that the proposed penalties are within the resources of Mr Knight and Mr Ross and that neither of them has previously been found to have contravened the TPA or the Code. I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | competition code of south australia trade practices act 1974 (cth) whether penalty agreed by parties appropriate where admission to contravention of ss 45(2)(a)(ii) and 45 (2)(b)(ii) and to attempted contravention of s 45(2)(a)(ii) trade practices |
The Minister decided to exercise his discretion under s 501(2) of the Migration Act 1958 (Cth) (' Migration Act ') to cancel the applicant's Transitional (Permanent) BF-C visa. The Minister took into account, among other things, the fact that the applicant, a Vietnamese citizen, had been convicted of murder and attempted murder on 15 December 1989 and had been sentenced to penal servitude for life. 2 Generally speaking, the Federal Magistrates Court has the same original jurisdiction in relation to migration decisions as the High Court has under s 75(v) of the Constitution : Migration Act , s 476(1). However, the Federal Magistrates Court has no jurisdiction in relation to a ' privative clause decision ' or ' purported privative clause decision ' made personally by the Minister under s 501 of the Migration Act : s 476(2)(c). Since the challenged decision of the Minister was made personally by him under s 501(2) and was a privative clause decision (s 474(2) , (3)(b)), the Federal Magistrates Court lacks jurisdiction in relation to it. While a revocation decision made by a delegate of the Minister is reviewable by the Administrative Appeals Tribunal (s 500(1)(b)) , a decision by the Minister is not so reviewable. In November 1977, he escaped by boat from Vietnam to Thailand, accompanied by one of his brothers and a sister. He arrived in Australia with his two siblings on 31 March 1978, under the Offshore Refugee Program. 7 Upon his arrival in Australia, the applicant was granted permanent residency. His permanent resident status was deemed to continue in effect on and after 1 September 1984 under the Migration Reform (Transitional Provisions) Regulations , by way of a Transitional (Permanent) (BF-C) visa. In addition, on 14 November 2005, it was determined that the applicant was the holder of an Absorbed Person visa. This visa allows a holder to remain in Australia indefinitely. 8 The applicant has a very extensive criminal record, commencing shortly after his arrival in Australia at the age of 17 years. On 1 August 1979, for example, he was convicted in the District Court of New South Wales of malicious wounding and sentenced to twelve months periodic detention. In September 1981, the applicant was convicted in Wallsend Court of Petty Sessions of assault and of carrying a fire arm under the influence of alcohol. On this occasion he was sentenced to three months imprisonment and fined. 9 In 1981, the applicant commenced a de facto relationship with his future wife. In 1982, a daughter was born and in 1986 the couple had a son. 10 On 8 December 1987 the applicant was involved in a shooting in a restaurant. He was arrested in June 1988 and taken into custody. Shortly thereafter, while in Long Bay Prison, the applicant married his de facto partner. 11 On 15 December 1989, the applicant was convicted in the Supreme Court of New South Wales of murder and of wounding with intent to murder. He was sentenced to life imprisonment. 12 Between 1989 and 1998, the applicant was incarcerated in a series of correctional institutions. He completed various courses, including English, although he is apparently not fluent in the language. In addition, he undertook some vocational training. 13 In 1998, the applicant applied to the Supreme Court of New South Wales for a redetermination of his life sentence. On 13 August 1998, Studdert J ordered that the applicant should be sentenced to 21 years imprisonment in respect of his conviction for murder, with a minimum term of 16 years. 14 Between August 1998 and a grant of parole in October 2005, the applicant completed a number of additional vocational and general courses while in prison. In 2002, during his term of imprisonment, his sister died of cancer. 15 On 22 July 2004, the then Minister decided to cancel the applicant's visa. In view of the Minister's decision, the applicant was taken into immigration detention when his parole took effect on 7 October 2005. 16 On 14 November 2005, the applicant was released from immigration detention by reason of his status as an ' Absorbed Person ', in conformity with the decision of the Full Federal Court in Nystrom v Minister for Immigration [2005] FCAFC 121 ; (2005) 143 FCR 420. 17 On 8 November 2006, the High Court allowed an appeal from the judgment of the Full Federal Court: Minister for Immigration v Nystrom [2006] HCA 50 ; (2006) 230 ALR 370. In consequence of the High Court's decision, on 28 November 2006 the applicant was again taken into immigration detention. 18 On 1 December 2006, the applicant was interviewed by a Departmental officer while in detention at Villawood. On 20 December 2006, the Department of Immigration advised the applicant that the previous cancellation of his visa was being reviewed. 19 On 23 January 2006, the applicant was released from immigration detention following the decision in Sales v Minister for Immigration [2006] FCA 1807. This decision apparently was taken to suggest that there may have been a failure to accord the applicant procedural fairness in relation to the earlier cancellation of his visa. The letter encouraged the applicant to provide the Department with all information that he wished the Minister, or a delegate, to consider in making the decision. 21 On 5 April 2007, the Department sent the applicant a ' NOTICE OF INTENTION TO CONSIDER CANCELLATION OF YOUR VISA UNDER SUB-SECTION 501(2) OF THE MIGRATION ACT 1958 '. The Notice informed the applicant that the information to be relied upon would include his convictions for murder and attempted murder, the sentences imposed in respect of those offences and the redetermination of the sentence for murder that was made on 13 August 1998. The letter advised that the information that might be taken into account included the transcript of proceedings of a number of criminal proceedings involving the applicant, as well as other material specified in the letter. The applicant was further advised that all information that he had previously provided would be taken into account in making the decision. However, he was invited to provide information and comments in relation to the application of the character test and to address any matters that he considered that the Minister should take into account when exercising the statutory discretion. 22 The applicant engaged a firm of solicitors to act on his behalf. The solicitors wrote to the Department on 23 April 2007 seeking further documentation to assist in preparing a submission on behalf of the applicant. The information requested appears to have been provided on 9 May 2007. 23 On 16 May 2007, the solicitors provided the Department with a submission in writing, apparently prepared by a barrister, on behalf of the applicant. The submission was accompanied by statutory declarations from the applicant and two of his brothers. In addition, the solicitors attached records relating to the applicant that had been obtained from the Parole Board of New South Wales, the Department of Correctional Services and the Serious Offenders Council. The Issues Paper provided detailed background information and presented a number of issues for the Minister's consideration. It was accompanied by a draft Statement of Reasons that the Minister could adopt if he decided to cancel the applicant's visa. 25 Under the heading ' Protection of the Australian Community ', the Issues Paper addressed the seriousness and nature of the applicant's criminal conduct. This part of the Issues Paper reproduced sentencing remarks made by Studdert J on the redetermination application. It also set out extracts from the submission prepared by the applicant's solicitors. 26 The Issues Paper pointed out that the relevant Direction made pursuant to s 499 of the Migration Act expressed the view that a person's previous general conduct and total criminal history are highly relevant to assessing the likelihood of recidivism. In this context, the Issues Paper acknowledged that the applicant had not previously been warned about the risk of visa cancellation or removal. However, he had been interviewed in September 1981 by Departmental Officers while he was in prison, and had been advised that he was liable for deportation by reason of convictions recorded against him in August 1979. 27 The Issues Paper set out extracts from reports of the authorities indicating that the applicant had presented no problems during his incarceration, had attended various courses and programs while in prison, and was thought to represent a low/moderate risk of re-offending violently in the community. Extracts from the applicant's own statutory declaration were also provided, together with a letter of support from his employer. 28 Under the heading ' Expectations of the Australian Community ', the Issues Paper noted that the Australian community might have some sympathy for the applicant, who had arrived in Australia aged 17 as the holder of a refugee visa and who might have difficulty regaining a close relationship with his two Australian-born children with whom he had apparently lost contact. However, the Issues Paper noted that the applicant had no children under the age of 18 whose interests might be affected by his removal from the country. 29 The Issues Paper recorded that, although the applicant had been married, the marriage had not survived his incarceration. Accordingly, he was not in a marital or interdependent relationship with any Australian citizen. It noted that the applicant had relatives in Sydney and other siblings in Vietnam. However, he had asserted that he was not close to his family in Vietnam, since he had never left Australia since arriving in this country in 1978. On the question of hardship, the Issues Paper extracted material from the applicant's submission and from his statutory declaration. The Minister signed the Statement of Reasons submitted to him with the Issues Paper on 23 September 2007. According to the Statement of Reasons, the Minister gave primary consideration to the protection of the Australian community, taking into account the seriousness and nature of the applicant's conduct, the likelihood that such conduct might be repeated and general deterrence. The Minister considered that several of the applicant's convictions pre-dating the convictions of December 1989 added to the serious concerns raised by the convictions for murder and attempted murder. 31 The Minister recorded that he took into account the mitigating factors put forward by the applicant, in particular his lack of formal education and his arrival in Australia as a refugee. I find that the information relevant to this consideration weighs in favour of cancelling [the applicant's] visa and I give this consideration great weight'. The Minister found that the information relevant to the risk of recidivism weighed against cancelling the applicant's visa. He gave this consideration moderate weight. 33 Since there was no evidence to suggest that the cancellation of the applicant's visa and his removal from Australia would deter others in the community, the Minister gave this consideration no weight. However, although accepting that the Australian community might have some sympathy for the applicant, on balance he took the view that the Australian community, having regard to the serious offences committed by the applicant, would expect his visa to be cancelled and for him to be removed from the country. The Minister gave this consideration substantial weight. 34 The Minister said that he took into account other considerations, in particular the extent of the disruption that would be caused to the applicant and his family in Australia by his removal to Vietnam. The Minister also took into account the fact that the applicant had two adult children in Australia and that he had attempted to make contact with them. However, the applicant had not succeeded in making contact and did not know their whereabouts. These considerations, together with the applicant's relationship with his two brothers in Australia, weighed against cancellation of the visa. The Minister gave these matters moderate weight. In reaching my decision I concluded that the seriousness of [the applicant's] offences and, to a lesser extent, the expectations of the Australian community outweighed all other considerations above. Having given full consideration to all these matters, I decided to exercise my discretion to cancel [the applicant's] visa under s 501(2). That the respondent exceeded its jurisdiction in making the decision that the applicant was indeed of bad character when the respondent sought to cancel the applicant's Transitional (Permanent) (BF-C) visa under subsection 501(2) of the Migration Act 1958 . The respondent unreasonably established that the applicant has a substantial criminal record owing to the fact that he had previously been sentenced to a term of 12 months or more of criminal incarceration. The respondent failed to adequately consider and give reasonable weight to the fact that the applicant has indeed rehabilitated significantly and is no longer the man he was once said to be by the court of law. The respondent denied the applicant procedural fairness owing to disallowing the applicant from attending a hearing before the respondent in order to give oral (or documented) evidence in support of his claimed rehabilitation. The respondent failed to consider the fact that the applicant has two children, both Australian-born citizens resident in Australia on a permanent basis. According to the United Nations Convention on the Rights of the Child, children ought to be given primary consideration when undertaking such proceedings as the cancellation of an applicant's visa. The respondent ought to have given more consideration to the potential hardship the applicant's children would certainly face if the applicant's permanent visa was cancelled and the applicant removed from Australia. This aspect of the respondent's decision-making points to the fact that it failed to afford the applicant natural justice. Not surprisingly, his oral submissions did not address the grounds identified in the application, but were limited to matters concerning his rehabilitation, family ties and lack of familiarity with Vietnam. Accordingly, the applicant is entitled to the relief he claims, or some variation thereof, only if he can establish that the Minister has committed jurisdictional error: Migration Act s 474(1) ; Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476. In my opinion, none of the grounds identified by the applicant establishes jurisdictional error by the Minister in connection with the making of the visa cancellation decision. 39 The first ground merely asserts the existence of jurisdictional error, without providing particulars or any basis for the assertion. 40 The second ground seems to challenge the Minister's conclusion that the applicant had a substantial criminal record for the purposes of s 501(7) of the Migration Act . It is clear, however, that the applicant satisfied the definition. He was initially sentenced to life imprisonment following his conviction for murder and, subsequently, to a redetermined sentence of 21 years, with a minimum custodial term of 16 years. 41 The third ground identified by the applicant seems to suggest that the Minister was bound to afford the applicant an oral hearing before cancelling his visa. The Migration Act expressly excludes the ' rules of natural justice ' in relation to visa cancellation decisions made personally by the Minister pursuant to s 501(3) of the Migration Act : s 501(5). However, the rules are not excluded in relation to a visa cancellation decision made pursuant to s 501(2) , even if made by the Minister personally. 42 While the rules of natural justice (or procedural fairness) apply to the decision in this case, they do not necessarily mean that the Minister was bound to afford the appellant an oral hearing: Heatley v Tasmanian Racing and Gaming Commission [1977] HCA 39 ; (1977) 137 CLR 487 , at 516, per Aickin J; Chen v Minister for Immigration and Ethnic Affairs [1994] FCA 985 ; (1994) 48 FCR 591 , at 597, per curiam . Whether there is such an obligation will depend on the circumstances including the terms of the legislation, the nature of the decision, the characteristics of the decision-maker and the factual matters, if any, in dispute: cf M Aronson, B Dyer and M Groves, Judicial Review of Administrative Actions (3 rd ed 2004), at 493-494. 43 Section 501(2) of the Migration Act does not impose any express obligation on the Minister to afford a visa holder an oral hearing. By contrast, other provisions in the Migration Act do impose such an express obligation on a decision-maker: see, for example, s 425(1). Although not determinative, the contrast suggests that an oral hearing is not required before the Minister can exercise the power to cancel a visa under s 501(2) of the Migration Act . 44 In M238/2002 v Minister for Immigration, Multicultural & Indigenous Affairs [2003] FCA 936 , Kenny J made some helpful observations on the requirements of procedural fairness in relation to a Ministerial visa cancellation decision under s 501(2). Precisely what constituted a fair opportunity depended on all the circumstances of the case, including the nature of the statutory power in question and the interests promoted by it, the interests of persons affected by the decision, and what was relevantly known by the decision-maker at the time the decision was made. Under this provision, the legislature has entrusted to the Minister the responsibility for deciding whether the public interest should prevail over the private interest of a visa holder. It is therefore unlikely that Parliament contemplated that every visa cancellation decision would require the Minister, as a pre-condition to the exercise of his or her powers, to afford an oral hearing to the visa holder. 46 Of course, the requirements of procedural fairness may be onerous, even without an obligation to provide an oral hearing. It also extends to require the decision-maker to identify to the person affected any issue critical to the decision which is not apparent from its nature or the terms of the statute under which it is made. The decision-maker is required to advise of any adverse conclusion which has been arrived at which would not obviously be open on the known material. 47 It is not necessary to decide whether there might be some circumstances in which the Minister is obliged to afford a visa holder an oral hearing before deciding to cancel that person's visa. In the circumstances of the present case, there was no such obligation. The applicant was given an opportunity to make submissions in writing and to draw relevant material to the Minister's attention. He took full advantage of that opportunity by engaging solicitors to prepare a well-presented submission on his behalf. The Minister, through his representatives, made known to the applicant the matters he needed to address. There were no substantial factual issues in dispute. The question before the Minister was whether he should exercise his discretion to cancel the applicant's visa, having regard to the uncontentious factual material before him. This was no doubt a difficult and important decision, but it was not one requiring an oral hearing. Indeed, the applicant's representatives never suggested that such a hearing was necessary or desirable. 48 The fourth ground advanced by the applicant is without substance. The Minister clearly took into account the applicant's relationship (or hoped for relationship) with his two adult children, but decided that this consideration was outweighed by others. Since the applicant's children are adults, the United Nations Convention on the Rights of the Child is of no relevance to this case. The applicant had private solicitors acting on his behalf in connection with his submission to the Minister, but they apparently no longer act for him. 50 The applicant was present at the directions hearing on 20 December 2007, when this matter was set down for final hearing on 27 February 2008. No material was presented to the Court to suggest that the engagement of a private solicitor was imminent. In these circumstances, I declined to grant an adjournment. The applicant must pay the Minister's costs. 52 The Minister read an affidavit in support of his claim to a costs order, pursuant to Federal Court Rules (' FCR '), O 62 r 5(a), fixing a sum of $5,500 as the amount of the costs to be allowed. The amount of $5,500 is specified in Item 43H in Schedule 2 to the FCR as the maximum amount that may be claimed in a short form bill as costs of the proceedings in a ' migration appeal case that is finalised after a final hearing ': FCR , O 62 r 40C(4), (5). The present case is not a migration appeal case, as it invokes the original jurisdiction of the Court. 53 I think it appropriate to make a costs order for a fixed amount. I consider that the applicant should pay costs fixed in the sum of $4,500. I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. | cancellation of visa decision by minister personally whether minister obliged to afford visa holder an oral hearing migration |
The respondent is the producer of perindopril erbumine products are the generic version of Coversyl. 2 The applicant claims that the respondent circulated advertising material promoting its products as a "genuine alternative" to Coversyl Perindopril, thereby representing that the products were substitutable for each of the three registered indications outlined above. The Product Information for the Respondent's products indicates that it is not an authorised indication for coronary artery disease (the applicant's third registered indication). 3 The respondent obtained a listing from the Pharmaceutical Benefits Scheme effective from 1 December 2006, which required the respondent to be in an immediate position to supply the market from that date. The applicant sought an interlocutory injunction preventing the respondent from representing that its products were substitutable with Coversyl to treat coronary artery disease. 4 Immediately prior to the scheduled commencement of the interlocutory hearing, the respondent had communication from the Therapeutic Goods Administration that its products had been registered for the third indication. As such, the applicant no longer has a claim against the respondents for misleading and deceptive conduct. Therefore, the only matter for me to decide is one of costs. 5 The considerations which apply when a matter has otherwise been resolved but the parties seek an order for costs has recently been discussed by me in Oxford Funding Proprietary Limited v Oxford Asia Pacific Investments Proprietary Limited (No 2) [2006) FCA 1542 at par [5]. 6 In the present case the dispute arose in circumstances of great urgency. The parties are fierce trade rivals, and understandably concerned to protect their commercial interests. The Court should not be too ready to dictate in hindsight a particular course of conduct which the parties could or should have taken. 7 I think the applicant acted reasonably in initiating proceedings to forestall what was arguably, in its view, misleading and deceptive conduct by the respondent which could be seriously damaging. The respondent, on the other hand, proffered firm assurances which would meet the applicant's concerns. As events have turned out, those assurances have been substantiated. It is possible that the respondent might have offered more corroborating detail in its letter of today's date. However, that was a matter for judgment which had to be made quickly and under pressure. Given its legitimate concern about confidentiality of dealings with the Therapeutic Goods Administration, I do not think that the respondent acted unreasonably, although it might have acted differently. 8 In the circumstances, I do not propose to make any order as to costs. The substantive application will be dismissed. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | interlocutory injunction application respondent about to market the generic equivalent of applicant's product respondent's product only registered by therapeutic goods administration for two of the three indications for which applicant's product registered subsequent to filing of application tga registered third indication costs |
2 Each of the applicants, Peter Balasoglov Bell and Annette Madeline Griffiths, appeal pursuant to s 131B of the Copyright Act 1968 (Cth) from orders of the Magistrates Court of Queensland imposing a penalty against each of them in the sum of $20 000 for breaches of s 132 of the Copyright Act . The orders for payment were suspended and in lieu the applicants were ordered to perform a total of 1340 hours of unpaid community service. (As to such an appeal see Lai Ha v McCusker [2000] FCA 1173 ; (2000) 101 FCR 460). The other penalties imposed by the Magistrate under the Trade Marks Act 1995 (Cth) are not within the jurisdiction of this Court by way of appeal and were probably not within the jurisdiction of the Magistrates Court. It is not however suggested that this Court can provide a remedy with respect to them. An appeal does lie to this Court from a decision of a State court under Part V of the Copyright Act . It would appear that prosecutions under the section may also be brought in this Court: see s 132(7). 3 The applicants pleaded guilty to 21 charges offences against the Copyright Act . It is not necessary to detail the circumstances of the offences given the nature of the errors identified. The offences concern infringing copies of DVDs. Some 3544 DVDs were involved of 671 different titles. 4 Section 132 of the Copyright Act is entitled ' Offences '. Subsections (1) to (4) appear under the subheading ' Offences relating to infringing copies '. There are other headings in the section containing descriptions of offences with an offence or offences listed in the subsection following them. Subsection (5) refers to offences ' relating to infringing public performances of literary, dramatic or musical works' , subs (5AA) to ' offences relating to sound recordings or films heard or seen in public '. Sections (5DB) and (5DC), which appear later, are concerned with offences of ' significant infringement of copyright ' which are of a commercial scale. Subsections (5A), (5B), (5C), (5D) and (5DA) are not concerned with infringement but rather with measures to protect copyright. Subsection (5A) and (5D) relate to the use of a device to circumvent technological protection measures and (5C), (5D) and (5DA) relate to acts associated with the removal of electronic rights management information from copyright works. 5 The three offences of which the applicants were guilty arose under ss 132(1)(b), 132(2A) and 132(3) of the Copyright Act . The first-mentioned offence relates to the selling or letting for hire an infringing copy of a copyright work; the second relates to a person having an infringing copy in their possession for the purpose of selling, letting for hire, distributing and the like; and the third to a person having in their possession a device used for making infringing copies. 6 The question raised by the respondent was whether the Magistrate ought to have imposed a global fine for all 21 offences. It arises because of the terms of s 4K(3) of the Crimes Act 1914 (Cth), which provides that charges against the same person ' for any number of offences against the same provision of a law of the Commonwealth ' may be joined in the same complaint or summons if they are founded on the same facts. Subsection (4) then provides that if a person is convicted of two or more offences against the same provision, the court may impose one penalty in respect of both or all of those offences. 7 The respondent pointed out that it was possible that each of subsections 132(1)(b), (2A) and (3) are themselves different provisions. If that were correct, the Magistrate should have imposed a separate penalty for each offence. This approach would, on one view, equate a ' provision ' in a statute with the ' offence ' with respect to it. It appeared to me that the subsections here relevant create the offences, but if there be a ' provision ' to which they relate, it is to be found elsewhere. 8 One view, canvassed during short argument, is that there are a number of ' provisions ' in s 132, which can be seen by reference to the headings such as ' Offences relating to infringing copies '. The headings are however merely general descriptions of the offences which follow. 9 In my view the offences relating to infringement of copyright may be said to be offences with respect to ' provisions ' of the Copyright Act . Part III , Div 2 and Part IV , Div 6 contain provisions which recognise copyright and when it is infringed. Part V of the Copyright Act , in which s 132 appears, is headed ' Remedies and Offences '. It gives remedies in the event of, and creates offences with respect to, infringement. It appears to me that at the least the offences listed in s 132 concerning infringement may be said to be against the general provisions relating to infringement. The following offences concerning protection measures may stand in a different category, but it is not necessary to further determine that question. It follows that in this case one penalty could be imposed with respect to the three offences. 10 The applicants submit, and the respondent properly concedes, that the penalties imposed were manifestly excessive. The respondent has produced a table of comparative penalties. It may be discerned that a penalty of $20 000 is about twice as much as would usually be imposed. A penalty of $10 000 is within range. (I add that if I am wrong as to whether separate penalties should be ordered I consider this to be the correct total). 11 The second error identified by the parties is that the Magistrate miscalculated the number of hours of community service which could be ordered pursuant to s 69(2) of the Penalties and Sentences Act 1992 (Qld). The maximum number of hours that could be ordered is 910; and the appropriate number of hours given the order for penalty made is 455. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kiefel. | appeal from the magistrates court jurisdiction of the court offences relating to infringing copies penalties separate or global penalties whether offences against the same provision whether penalty imposed excessive community service hours copyright |
The respondent also sought orders that the proceeding be stayed or alternatively transferred to the South Australia District Registry. Order 9 r 1(3) provides that a corporation may not without the leave of the Court enter an appearance or defend any proceeding except by a solicitor. Unlike the English equivalent and the rules of various State Supreme Courts, O 4 r 14 raises no express threshold requirement of special or exceptional circumstances. As French J observed in Simto Resources Ltd v Normandy Capital Ltd (1993) 10 ACSR 776 , the Full Court of this Court in Molnar Engineering Pty Ltd v Burns [1984] FCA 232 ; (1984) 3 FCR 68 noted that application of r 14 did not invoke of the 'inflexibility of the practice in England'. Those rules proceed on the basis that there is a discretion in the court to permit a company to commence and carry on any proceedings other than by a solicitor and to enter an appearance or defend any proceeding without a solicitor and, it would seem, it is a discretion to be exercised by reference to all relevant considerations. It is my opinion that the inflexibility of the practice in England both before and after the promulgation of the English 0.5 r.6, could not but be an influence against the exercise of that discretion by reference to all relevant circumstances. And the discretion remaining in the face of a rule such as 0.5 r.6 can hardly be other than essentially residual. Certainly a change of emphasis appears to be involved. The discretion introduced in the express provisions of the rules is, in the absence of other guidance, to be exercised judicially according to the requirements of justice. The discretion is as to a matter of procedure but it may well affect matters of substance. The consequence of permitting a non-qualified person to appear will be to deprive the court of assistance in respect of matters of law. It might also, according to circumstances, render difficult the proper assessment of fact. These considerations go to the ability of the court ideally to reach the correct decision on the matters of law and fact involved in the litigation. This may operate to the detriment of a company appearing without a solicitor but such a consequence would be of the company's own making. The application by the court of the correct principles of law and the correct assessment of the facts in a particular case are important objectives, but they are not necessarily unattainable without the assistance of qualified advocates. The attainment of these objectives, so far as possible without qualified assistance, is accepted as appropriate where a party sues or defends in person. According to the strength of the case made as to the existence of such reason, so the weight to be given to the consideration that the court might lack qualified legal assistance, will decline. The documents he has prepared are all quite clear and comprehensive. As observed by French J in Termi-Mesh Australia Pty Ltd v Josu Manufacturing Pty Ltd [1999] FCA 1241 , it may be that a more liberal approach is warranted where the corporation is in the position of respondent rather than having actually commenced the proceedings. There is no particular legal complexity about the nature of these proceedings albeit that some technical consideration will be required in relation to some mechanical features of the pleaded complaint. It is a further consideration that I propose (given the modest sum involved) to transfer the proceeding to the Federal Magistrates Court so that it can be dealt with, with less formality and cost. It can be exercised either on general grounds common to many cases or on special grounds arising in a particular case. This exercise should not be confined to cases where there is a strict necessity; it should be regarded as proper [for a magistrate] to exercise the discretion in order to secure or promote convenience and expedition and efficiency in the administration of justice. I am informed that the Federal Magistrates Court has the capacity to manage this matter. The claim involves alleged misrepresentations and s 52 of the Trade Practices Act 1974 (Cth) and relates to a moderate amount (approximately $80,000). While there may be some interesting and challenging technical issues, the sum in issue given the straight forward nature of the claims at law may be disproportionate to the costs which may be occasioned in pursuing the claim through this Court. On transfer, it is likely that the matter can be dealt with more expeditiously and less formally, both resulting in a potential cost saving to the parties. Having raised with the parties the question of transfer, neither objects. There is at least on the face of the matter, no matter of general importance likely to be involved but, in any event, if there were, the transfer would at least permit one additional avenue of appeal. I therefore consider that it is in the interests of the administration of justice for the matter to be transferred. Accordingly, I order that: Mr Kay have leave to represent the respondent until further order of this Court or the Federal Magistrates Court. The proceeding be transferred to the Federal Magistrates Court pursuant to s 32AB of the Federal Court of Australia Act 1976 (Cth) and O 82 r 6 of the Federal Court Rules . Any costs incurred to date in these proceedings be costs in the cause on their transfer to the Federal Magistrates Court. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | legal assistance leave for director of respondent company to appear transfer to federal magistrates court practice and procedure |
Alternatively, the applicant seeks an order that the authority be set aside as an abuse of process. This notice was not complied with. (2) On 28 February 2005, and in reliance upon the respondent's failure to comply with this bankruptcy notice, the applicant presented a creditor's petition in proceedings NSD 299 of 2005 ('the Proceedings') in which it sought an order for the sequestration of the respondent's estate. (3) On 9 June 2005 the respondent filed a Notice of Intention to Oppose Creditor's Petition dated 7 June 2005 together with an affidavit sworn by the respondent on the same date. Amongst the grounds relied upon was that the respondent was solvent and willing to come to an arrangement with the applicant for the payment of the debt that was the subject of the creditor's petition. (4) On 5 July 2005 the creditor's petition came before the Court for a second time. At that time, Registrar Segal referred the matter to the Registry for allocation to a judge's docket and adjourned the matter to 14 July 2005 before the docket judge for directions. The respondent was ordered to file any further affidavits by 12 July 2005. (5) On 14 July 2005 the creditor's petition came before Jacobson J who directed that the respondent file any further evidence by 22 July 2005 and stood the Proceedings over to 11 August 2005 for further directions. (6) On 11 August 2005 Jacobson J ordered that the creditor's petition be set down for hearing before me on 4 October 2005. (7) On or about 27 September 2005 the applicant's solicitors received from Horwath, Sydney Partnership a copy of a statement of affairs ('the Statement of Affairs') of the respondent which was signed on 22 September 2005. In addition to what he received from renting 668A Rocky Point Road, the respondent also received about $34,000 per annum from renting two of the three suites that his shareholding in Hengrove Hall Pty Ltd gave him the right to occupy. The Statement of Affairs did not disclose though that the respondent owned a property known as 78 Caswell Street, Peak Hill ('the Peak Hill Property'), which he had previously estimated to be worth $80,000. Nor did it disclose the existence of any secured creditors other than Westpac or any major unsecured liabilities. However, the information contained in the Statement of Affairs was generally consistent with that contained in a summary statement of assets and liabilities dated 26 September 2005. This deed was entered into on the basis that, if the respondent duly paid the whole of the sum of $278,000 to the applicant, the latter would accept the amount in full satisfaction of what was owing to it and consent to the dismissal of the creditor's petition. (11) On one or more dates prior to 11 November 2005 the respondent transferred a total of $200,000 overseas in relation to his inheritance in East Beirut. (12) On 16 November 2005 the respondent obtained conditional approval from Genie Home Loans ('Genie') to borrow a total of $1,104,000 comprised of one facility of $880,000 plus a further facility of $224,000. The security offered for these facilities was the Sans Souci Property and the Sanctuary Point Property. Neither the existence nor the effect of the arrangements made on 1 October 2005 between the respondent and his wife was disclosed to Genie. (13) The respondent failed to pay the applicant any part of the sum of $139,000 that he was required to pay on or before 20 November 2005 under the deed entered into on 4 October 2005. (14) At some time between 20 and 23 November 2005, the applicant agreed to extend until 30 November 2005 the time for the payment of the sum of $139,000. The respondent failed to make the payment of $139,000 on or before this date. (15) On 12 December 2005 the respondent's wife filed in the Family Court proposed consent orders in terms of the arrangements that had been entered into on 1 October 2005 between her and the respondent. As indicated in (8) supra, no such orders have been made. (16) On 19 December 2005 Genie advanced the sum of $880,000 to the respondent on security of the property at 668A and 668B Rocky Point Road, Sans Souci. Of this amount $837,974 was paid to Westpac to discharge the mortgage debt owing to it. A further $35,260 was paid to the respondent. The balance was applied to legal fees and costs. No part of the advance was paid to the applicant. (17) On the same day the respondent's wife lodged a caveat over the Sanctuary Point Property. (18) Since 19 December 2005 no further amount has been advanced either by Genie or any other lender to the respondent on the security of any property owned by him. Furthermore, since that date, no amount has been paid to the applicant either pursuant to the deed entered into on 4 October 2005 or otherwise in respect of the debt that is the subject of the creditor's petition. (19) On 6 January 2006 the respondent swore, but did not then file or serve, a further affidavit in the Proceedings as to his assets and liabilities. Of this rental income, $12,000 per annum was from renting the Sanctuary Point Property. (21) The affidavit also did not disclose any liabilities of the respondent other than to Genie and for credit cards. (22) On 17 January 2006 the respondent appointed Nicholas Eddy as controlling trustee of his affairs pursuant to the provisions of Part X of the Act. There are significant differences between the information contained in the Further Statement of Affairs and the information that the respondent has previously disclosed about his affairs. This liability previously had not been disclosed in any document provided by the respondent to the applicant. 4 The claim of the applicant that the authority under s 188 of the Act is not effective is grounded on the basis that the draft PIA does not identify, either clearly or at all, the debtor's property that is to be available to pay creditors' claims and therefore does not comply with par 188A(2)(a) of the Act. 5 Paragraph 188A(2)(a) provides that a personal insolvency agreement must identify the debtor's property (whether or not already owned by the debtor when he or she executes the agreement) that is to be available to pay creditors' claims. 6 Paragraph 1 of the draft PIA clearly does that. With respect, I cannot agree. The only provision of the draft PIA which deals with the identification of the debtor's property that is to be available to pay creditors' claims is par 1. Paragraph 2 is only concerned, inter alia , with the income that is generated by the debtor's properties and says nothing with respect to which properties are to be available to meet creditors' claims. 10 As this was the only basis upon which the applicant sought to rely in its application that the authority signed by the respondent on 17 January 2006 under s 188 of the Act is not effective, the claim must fail. 11 The alternative claim is for an order that the authority be set aside as an abuse of process. The factual basis of this claim is the factual context set out above. If a debtor has a desire that his or her affairs be dealt with under Part X without his or her estate being sequestrated and that is his only purpose in giving an authority of the kind to which that section provides, that cannot be a purpose which is 'foreign to the bankruptcy laws'. Indeed, it is a purpose which is contemplated by such laws. 15 I believe it was conceded, if not expressly, then by acquiescence, that the relevant time at which the purpose upon which subs 188(1) is predicated has to be determined is at the time of the signing of the authority. Any desire the debtor may have had prior to or after that time is, with respect, irrelevant. I did not take counsel for the applicant to contend otherwise. It may well be that prior to the time of the signing of the authority, the applicant did not have the desire to have his or her affairs dealt with under Part X ; indeed, it may well be the case that his desire was to avoid any application of the provisions of the Act to his assets or his affairs. However, as events transpired, the matter was put beyond his control and at the end of the day, when he came to sign the subs 188(1) authority, it could not seriously be suggested that he did not have the desire upon which subs 188(1) of the Act is predicated. Indeed, the only inference one could draw is that that was his sole desire. There is nothing in the evidence to suggest that it was anything else. 16 Counsel for the applicant submitted that notwithstanding the literal terms of s 188 which do permit the respondent to do what he has done, then if he is regarded as having some collateral or ulterior purpose which is foreign to the purposes of the bankruptcy laws, the Court may still find that there is an abuse of process. So much may be conceded, but no such collateral or ulterior purpose was suggested and there was nothing in the evidence to suggest there was one. Counsel for the applicant stressed a number of times that one of the terms of the draft PIA was that the provisions of the Act relating to antecedent transactions shall not apply to it (par 8). Indeed, it is a requirement of subs 188A(2) that a personal insolvency agreement must specify whether or not the antecedent transactions provisions of the Act apply to the debtor. Subsection 188A(4) makes provision where a personal insolvency agreement specifies that the antecedent transaction provisions of the Act are to apply to the debtor and subs 188A(5) makes certain adaptations in relation thereto. However, it was not suggested, nor could it on the evidence, that the respondent gave the subs 188(1) authority in order to avoid the antecedent transaction provisions of the Act. There was no suggestion that there was any relevant antecedent transaction which might otherwise be embraced if the respondent's estate were to be sequestrated, rather than subjected to the provisions of Part X. It may well be that in an appropriate case, it might be inferred that the desire of a debtor in giving an authority pursuant to subs 188(1) was not to have his or her affairs dealt with under Part X without his or her estate being sequestrated, but rather to avoid the antecedent transaction provisions in ss 120 --- 125 of the Act. That may, in an appropriate case, involve an abuse of process. But it is not this case. 17 It follows that this alternative claim must also fail. The applicant must pay the respondent's costs of the application. | personal insolvency agreements where debtor signed authority to have his affairs dealt with under part x where debtor required to give proposal for dealing with his affairs where proposal required to include draft personal insolvency agreement where agreement required to identify debtor's property to be available to pay creditors' claims whether provisions of draft agreement made such identification impossible whether authority effective whether authority an abuse of process bankruptcy |
In proceeding NSD 1447 of 2007, I had ordered that the plaintiff, Publishing and Broadcasting Limited (PBL), convene a meeting of all holders of shares in PBL for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement (the PBL Scheme). In proceeding NSD 1448 of 2007, I had ordered that the plaintiff, Crown Limited (Crown), convene a meeting of all holders of shares in Crown for the purpose of considering and, if thought fit, agreeing (with or without modification) to a scheme of arrangement (Demerger Scheme). 2 The PBL Scheme Meeting was held on 23 November 2007 and the Demerger Scheme Meeting was held later on the same day. 3 The PBL Shareholders present and voting (either in person or by proxy) passed a resolution approving the PBL Scheme by the majorities referred to in s 411(4)(a)(ii) of the Corporations Act 2001 (the Act). The Crown shareholders present and voting (either in person or by proxy) passed a resolution approving the Demerger Scheme also by the majorities required by s 411(4)(a)(ii) of the Act. 4 At the second court hearing held on 28 November 2007, I made orders confirming the two Schemes. These are my reasons for doing so. 5 The nature of the two Schemes and other matters were set out in some detail in my earlier reasons for directing the convening of the meetings, and I incorporate those earlier reasons as part of my reasons for confirming the two Schemes. 7 No person appeared at the second court hearing to oppose, or to make submissions in relation to, confirmation of the two Schemes, and no shareholder had given any indication of intending to oppose either Scheme. 8 It was my opinion that both Schemes should be confirmed and I made orders accordingly. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | schemes of arrangement applications by two corporations for orders under s 411 of the corporations act 2001 (cth) confirming schemes of arrangement ultimate objective of demerging media and gaming businesses carried on by one company into media business to be carried on by it and gaming business to be carried on by the other company (recently formed for the purpose) directions for convening of meetings previously made schemes supported by majorities required by s 411(4)(a)(ii) of the act. held : orders made confirming the two schemes. corporations |
2 Shortly thereafter, on 13 February 2006, he applied to the Department of Immigration & Citizenship for a Protection (Class XA) Visa under s 65 of the Migration Act 1958 (Cth). A delegate refused that application on 3 April 2006 and he applied on 5 May 2006 to the Refugee Review Tribunal. 3 That Tribunal affirmed the delegate's decision by way of a decision signed on 21 July 2006 and handed down on 15 August 2006. In doing so, the Tribunal -- it should be noted -- made adverse findings as to the now Appellant's credit. That decision was set aside by the Federal Magistrates Court on 30 January 2007. 4 A reconstituted Tribunal heard the application and again the decision not to grant a Protection (Class XA) Visa was affirmed. Again the Tribunal made adverse findings as to the applicant's credit. The Federal Magistrates Court dismissed an application to review this subsequent decision of the Tribunal: SZJJC v Minister for Immigration & Citizenship [2007] FMCA 1986. 5 The proceeding presently before this Court is an appeal against the decision of the Federal Magistrates Court. ' Then the Tribunal mentioned that the Tribunal has accepted that the applicant's business has suffered losses in India and has been forced to close. No error has been demonstrated in respect to the reasons for decision of the learned Federal Magistrate. 6 The Appellant appeared before the Court this afternoon unrepresented, although he did have the assistance of an interpreter. 8 The manner in which s 424A(1) is said to have been breached remains unspecified. 9 Section 424A(1) requires the Tribunal to provide " clear particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review ". It is a provision which imposes a mandatory requirement and a breach of that section constitutes jurisdictional error: SAAP v Minister for Immigration & Multicultural & Indigenous Affairs [2005] HCA 24 at [77] per McHugh J, at [173] per Kirby J, at [208] per Hayne J, [2005] HCA 24 ; 228 CLR 294 ; SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [13] , [2007] FCA 26 ; 235 ALR 609 at 614 per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ. 10 The difficulties confronting the Appellant, however, seem at least twofold. 11 First, evidence was given before the reconstituted Tribunal on 28 March 2007. Following that hearing, a letter was written to the Appellant on 4 April 2007 pursuant to s 424A(1) inviting him to comment on what was identified as " the following inconsistencies in the evidence between your statement which was provided with your protection visa application; [y] our evidence at the first Tribunal hearing (held on 20 July 2006) and your evidence at the second Tribunal hearing (held on 28 March 2007) ". That letter proceeded to detail the inconsistencies in respect to which comment was invited. 12 But there was no response to that invitation. 13 Second, it remains the responsibility of a litigant -- including even an unrepresented litigant -- to identify the grounds upon which the intervention of this Court is sought. Whatever other deficiencies may be exposed by the purported Grounds of Appeal in the present proceedings, being but broad generalisations as to alleged breaches of statutory provisions, it is considered that a Ground expressed as it is currently drafted does little to advance the interests of a litigant and certainly provides no assistance to this Court. It does not expose any appellable error. 14 Even if the deficiencies in the Notice of Appeal be left to one side, a review of the terms of the 4 April 2007 letter and the terms of the decision of the reconstituted Tribunal does not reveal any relevant " information " which should have been brought to the Appellant's attention and which was not referred to in the letter. In particular, it should be noted that the term " information " in s 424A(1) does not extend to " the existence of doubts, inconsistencies or the absence of evidence ": SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [18] , [2007] FCA 26 ; 235 ALR 609 at 616. Again, if the tribunal affirmed the decision because even the best view of the appellants' evidence failed to disclose a Convention nexus, it is hard to see how such a failure can constitute "information". Finn and Stone JJ correctly observed in VAF v Minister for Immigration and Multicultural and Indigenous Affairs that the word "information": ... does not encompass the tribunal's subjective appraisals, thought processes or determinations ... nor does it extend to identified gaps, defects or lack of detail or specificity in evidence or to conclusions arrived at by the tribunal in weighing up the evidence by reference to those gaps, etc ... If the contrary were true, s 424A would in effect oblige the tribunal to give advance written notice not merely of its reasons but of each step in its prospective reasoning process. However broadly "information" be defined, its meaning in this context is related to the existence of evidentiary material or documentation, not the existence of doubts, inconsistencies or the absence of evidence. The appellants were thus correct to concede that the relevant "information" was not to be found in inconsistencies or disbelief, as opposed to the text of the statutory declaration itself. This may have been what was envisaged by the Appellant. The grounds of the application as made to the Federal Magistrates Court similarly contended that there had been a failure to comply with s 424A and separately contended that the Tribunal had not informed " the applicant regarding the inconsistent evidence ". It may be that the Appellant sought to combine these contentions into the first Ground of Appeal . But that is speculation. Even if that was what was intended, there has been no failure to inform the Appellant of the inconsistencies relied upon and no failure to comply with s 424A. 15 But this Court should not be left to speculate. Grounds of Appeal should be drafted in such a manner as to expose to both the respondents and to this Court the errors alleged to have been committed. An unrepresented party has no licence to not comply with O 52, r 13(2)(b) of the Federal Court Rules 1979 (Cth). That rule provides that a notice of appeal shall state " briefly, but specifically, the grounds relied upon in support of the appeal " . Not every grievance entertained by a party, or its legal advisors, in respect of the factual findings or legal reasoning of the primary judge will constitute a ground of appeal. Findings as to subordinate or basic facts will rarely, if ever, found a ground of appeal. Even were the Full Court to be persuaded that different factual findings of this kind should have been made, this would not of itself lead to the judgment, or part of the judgment, being set aside or varied. This result would be achieved, if at all, only if the Full Court were persuaded that an ultimate fact in issue had been wrongly determined. The same applies with respect to steps in the primary judge's process of legal reasoning. Although alleged errors with respect to findings as to subordinate or basic facts, and as to steps in a process of legal reasoning leading to an ultimate conclusion of law, may be relied upon to support a ground of appeal, they do not themselves constitute a ground of appeal. [5] A useful practical guide is that a notice of appeal which cannot be used to provide a sensible framework for the appellant's submissions to the Full Court is almost certainly a notice of appeal which fails to comply with the requirements of O52 r13(2)(b). Neither the notice of appeal nor the document containing the revised grounds of appeal was, or could have been, so utilised in this case. See also: Commonwealth v Evans [2004] FCA 654 at [35] , 81 ALD 402 ; Argus Real Estate Holdings Pty Ltd v Lyristakis [2002] FCAFC 256 at [10] per Spender and Miles JJ. 16 Although an unrepresented appellant may well seek the assistance of others and, although it is an appellant who must ultimately bear the responsibility for the content of any notice of appeal, in those circumstances where it becomes apparent that a notice of appeal has in substance been drafted by someone other than the appellant (and perhaps drafted with little regard to the facts of an appellant's individual case) it may be appropriate that that is the person, and not the unsuccessful appellant, who should have to pay such costs as may be awarded. And it may be that costs should be awarded against that person on an indemnity basis. In the present proceedings there was no satisfactory explanation as to who it was who drafted the Notice of Appeal , the Appellant himself (not surprisingly so) having no knowledge of the specific statutory provisions to which the Notice of Appeal refers, namely s 424A (or s 430) of the 1958 Act. 17 However, those issues may be resolved in future cases. In the present proceedings and in the absence of the alleged failure to " comply with s424A " being identified by the Appellant, or the " information " to which he refers in the first Ground of Appeal being identified, little further content can be given to this aspect of the first Ground of Appeal. Even unconstrained by the terms of the Notice of Appeal , the Appellant was unable this afternoon to identify his complaint as against the decision of the Federal Magistrate -- other than the fact that the decision of the Tribunal had been affirmed. 18 The first Ground of Appeal also refers to " information [that] does not fall under s424A(3)(a) ". Again, the " information " referred to is not identified. It is, however, understood as being a reference to that information before the Tribunal which was " Independent Evidence ", including evidence as to a political group in India of which the Appellant claimed to have been a member (namely the " People's War Group "). 19 This aspect of the first Ground of Appeal also does not prevail. Section 424A(3)(a) excludes from the operation of s 424A information " that is not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member ". This provision imposes one test and does not contain two disjunctive elements; that is to say, the provision is referring to information that is not specifically about an applicant or another person (such as a witness) but is " by way of contradistinction about a class of persons of which an applicant or the other person is a member ": Minister for Immigration & Multicultural & Indigenous Affairs v NAMW [2004] FCAFC 264 at [64] , [2004] FCAFC 264 ; 140 FCR 572 at 586 per Beaumont J; see also Merkel and Hely JJ at [138]. 20 A review of what is understood to be the " information " only exposes information that is " not specifically about " the Appellant. 21 The " information " set forth by the Tribunal contains an outline of the formation of the " People's War Group ", its aims and ideology and an extract of a United States Department of State Country Reports on Human Rights Practices 2000 . Further " information " is also set forth by the Tribunal as to freedom of religion in India and a Report from the UK Home Office on communal violence. None of this " information " refers at all to the Appellant. 22 This class of " information " is that which falls within s 424A(3)(a): VHAJ v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 186 , 131 FCR 80. Justice Kenny there referred to information about entry rights of non-nationals and considered that such information was " just about " a class of persons. One example is country information. It is usual for the Tribunal to have regard to information about the social, political, religious and other conditions prevailing in a country relevant to an applicant's claim for refugee status, with a view to assessing whether other individuals who share his or her racial, religious, political, social or other attributes suffer treatment of a kind amounting to persecution on Convention grounds in that country. Sometimes information of this kind concerns religious practice, government elections, educational opportunities or other matters. This kind of country information is relevant to the Tribunal's decision-making task only because the applicant falls within the class of persons who share an attribute, which, according to his or her claim, gives rise to a well-founded fear of persecution in the country concerned. In this circumstance, the information does not cease to be information "just about" a class of persons simply because it can also be characterised as information about religious practice, government elections or educational opportunities. His Honour considered that " Official and semi-official information contained in documents assessing conditions in countries from which persons seeking refugee status regularly come ... has been held to fall within para 424A(3)(a) ": at [71]. 23 In any event, it should be noted that the Tribunal disbelieved the evidence of the now Appellant as to his association with the " People's War Group ". Nor does the Tribunal accept that the applicant has been a member of the All India Revolutionary Students Federation (AIRSF) or a member of the Communist Party of India. The Tribunal does not accept that the applicant has been targeted or in any way harmed by police or Hindus generally because of his involvement or association with the PWG or that he has been targeted by the PWG because he has attempted to resign from the PWG and/or because he has attempted to join other political parties. The Tribunal also does not accept that the applicant lost a child as a result of his membership or association with the PWG, that his house was bombed or that his wife was harmed as a result of his membership/association with the PWG. 24 The first Ground of Appeal is thus rejected. 27 Again, this Ground of Appeal as framed fails to identify the " error of law " to which reference is being made. And, again, an independent review of the reasons for decision of the Tribunal as reconstituted fails to expose any failure to give " proper reasons " or any other departure from the requirements of s 430. 28 Indeed, the Tribunal's reasons set forth a detailed account of the evidence before it and a detailed account as to its " Findings and reasons " based upon the evidence. Findings were made on " material questions of fact " and reference made to the evidence upon which those findings were based. The reasons of the Tribunal, it is considered, " inform " the Appellant (and others) as to why the application for review was unsuccessful. Those reasons are not to be scrutinised in any " over-zealous " manner seeking to discern some inadequacy by the way in which the reasons have been expressed: cf Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 , 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. 29 The second Ground of Appeal is also rejected. 31 It is understood that this ground seeks to agitate some asserted inconsistency in the findings made by the Tribunal or, perhaps, to agitate some erroneous fact finding on the part of the Tribunal. Left to one side is the fundamental question as to whether any such inconsistency could establish " jurisdictional error ". 32 For present purposes it is sufficient to conclude that there is no inconsistency in the findings of the Tribunal. The Tribunal accepted that the now Appellant's business had " been forced to close " but did not accept that the business had suffered " for any of the reasons he claimed ". Whilst the Tribunal accepts that there are tensions between the Muslim and Hindu communities and incidents of communal violence in the applicant's home city, the independent evidence referred to above indicates that Muslims comprise a significant minority in India and that the communities generally live relatively harmoniously. The Tribunal has not accepted that the applicant has given credible evidence in relation to his claims to fear harm for reasons of his religion and, in such circumstances, the Tribunal does not accept that the applicant's business has been be [sic] targeted and he has been prevented from operating a successful business for reasons of his religion. Nor does the Tribunal accept that the applicant has been targeted by Hindus for reasons of his Muslim religion. The Tribunal has accepted that the applicant's business has suffered losses in India and has been forced to close. However, the Tribunal has not accepted any of the applicant's claims and does not accept that the applicant's business suffered for any of the reasons he claimed. 33 The findings of fact made by the Tribunal were findings open to it, especially bearing in mind the adverse findings which had been made as to credit. If a tribunal does not believe a particular witness, no detailed reasons need be given for those adverse findings: Re Minister for Immigration & Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 , 168 ALR 407. However, this was essentially a finding as to whether the prosecutor should be believed in his claim -- a finding on credibility which is the function of the primary decision maker par excellence. If the primary decision maker has stated that he or she does not believe a particular witness, no detailed reasons need to be given as to why that particular witness was not believed. The Tribunal must give the reasons for its decision, not the sub-set of reasons why it accepted or rejected individual pieces of evidence. The appeal be dismissed. 2. The Appellant to pay the costs of the First Respondent of and incidental to the appeal. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | migration act 1958 (cth) s 424a(1) provision of information no response to s 424a letter " information " not identified s 424a(3)(a) information " not specifically about the applicant " s 430 reasons of tribunal findings as to credibility open to tribunal need for notice of appeal to comply with federal court rules 1979 (cth) prospect of costs against person drafting notice of appeal and not the appellant migration |
First, a Notice of Motion filed by the applicants on 16 January 2009 by which they seek leave to inspect and copy documents produced by the Australian Securities and Investment Commission ("ASIC") pursuant to a Subpoena to Produce issued on 13 July 2007 and served on it. The documents sought to be inspected by the applicants are the subject of a claim by ASIC that they are privileged from production and inspection on the ground of public interest immunity ("PII"). At the time of the issue of the subpoena the first applicant was the only applicant in the proceeding. Subsequently on 16 December 2008, the second applicant was added as an applicant as a result of the consolidation of this proceeding with another proceeding. For the sake of convenience and conformity, I refer in these reasons to the applicants although from time to time there was only the first applicant in the proceeding. The second application before the Court is a Notice of Motion filed by the second and third respondents ("Multiplex") on 13 March 2009 seeking orders that the applicants' motion be dismissed or permanently stayed as an abuse of process of the Court either generally or under O 20 r 5 of the Federal Court Rules . Multiplex said that it filed the Notice of Motion out of an abundance of caution, having regard to what it said was the onus on the applicants to demonstrate by reference to new evidence or materially changed circumstances or some other compelling reason that the Court should permit the applicants to litigate again the PII issue which has been the subject of a previous interlocutory application and decision by a primary judge and a Full Court on appeal. I propose only to refer those parts of the background which bear upon the Notices of Motion currently before the Court. On 12 July 2007, Heerey J gave the first applicant (the second applicant was subsequently added to the proceeding) leave to issue a subpoena directed to ASIC to produce specified documents in its possession. Production for inspection was not in issue for a substantial number of other documents. No argument was advanced either prior or during the interlocutory hearing before Heerey J as to the basis of any claim for privilege or any other reason which would justify refusal of access to the Documents. This remains the position following receipt of your letter under reference notwithstanding the analytical process by which claims for privilege are being identified is underway. We make no particular criticism of ASIC in this regard as the orders of the Court do not contemplate us being provided with details of any claim in advance to the filing of the List. However, in circumstances where any claim for privilege remains inchoate and there is significant foreshadowed delay, we wish to understand the nature of the claims that ASIC proposes to advance or at the very least require ASIC to review the Documents on an individual basis for such an extended period. Is it, for example, a claim for legal professional privilege (which for obvious reasons we would have thought unlikely), public interest immunity or some other statutory privilege? Uninstructed, we would have thought that the documents identified in the subpoena were unlikely, by their nature, to be amenable to the sorts of heads of privilege which we can presently envisage; particularly where the documents are unlikely to reveal any investigative methodology and the further consideration that the ASIC investigation has now been concluded. Having said this we of course recognise that in certain circumstances claims for public interest immunity can exist following the completion of an investigation but those circumstances do not seem apposite to the documents the subject of the subpoena. At this stage of our review, we do not propose to identify further details save to state that ASIC has identified a serious public interest immunity issue in relation to the documents sought by the subpoena. We have been proceeding on the assumption that there is no extant investigation following ASIC's acceptance of the Enforceable Undertaking. Further, the categories of documents sought in the subpoena would not, on their face, seem to enliven any issue of 'informer privilege', nor raise any issue regarding ASIC's internal investigative processes. A substantive response on this issue, rather than yet further correspondence with an urgent and peremptory deadline, may allow the Applicant to consent to ASIC's request and obviate any need for the cross examination of Ms Sheppard. Prior to the hearing on that day, ASIC notified the applicants' solicitors that it would be making a claim for PII in respect of all the transcripts. At the hearing Mr Watson appeared for the applicant and Ms Hogan-Doran appeared for ASIC. It doesn't appear that public interest immunity was at the forefront of, or a blanket claim was at the forefront of their processes when they were considering a section 25 request. It certainly doesn't appear that even as late as 1 August a blanket claim was envisaged. Just going through the possible heads of public interest immunity as we understand it the investigation is concluded. That is what the enforceable undertaking announced. It is what Ms Shepherd herself says in her affidavit. So concluded the investigation we can't understand that informer immunity would be an issue in respect of all of the transcripts and it doesn't seem to us likely that all of the transcripts reveal details of ASIC's internal processes which would be the claim for an immunity. So not surprisingly they say it is a claim for public interest immunity and we can't tell you what it is but, your Honour, we do have a concern to get that issue, we understand now they will produce the documents tomorrow, those documents but they will make the blanket claim. We would like to get that issue sorted reasonably quickly in light of an eight month history. Now, we also know from the material that there are 41 transcripts comprising 8400 pages. Your Honour, could I indicate I do have in Court a confidential affidavit but I have refrained from giving it to your Honour at this moment because of those concerns. I think my friend has something he wishes to say. Some of that, your Honour, would make sense if the claim was a claim with respect for portions of the transcript. If an informer immunity is being claimed presumably it is not all of the transcript. Hard to imagine how your Honour needs to see anything in that context. Might I indicate in the second matter there's a peculiarity in relation to the transcripts that forces, in effect, the application to be made not in relation to certain portions or substantial portions but indeed in relation to all of them. Yes. Ms Macaulay then addressed the documents sought by the subpoena. She annexed as Annexure A to her affidavit, a list of documents provided by Multiplex to ASIC in the course of the investigation, production of which documents ASIC resisted. She also annexed as Annexure B to her affidavit, a list of the transcripts of examinations of all the persons examined by ASIC under the Australian Securities and Investments Commission Act 2001 (Cth) during the course of the investigation, production of which transcripts ASIC resisted. To so elaborate would or could disclose or tend to disclose certain confidential information contained in or revealed by those documents. Such disclosure would or could tend to defeat the public interest which ASIC seeks to protect in relation to these documents. A separate confidential affidavit will be filed by ASIC in support of ASIC's claim. ASIC does not propose to serve a copy of that confidential affidavit on any party. ASIC sought to prevent the inspection of thirty-six specified documents obtained by ASIC from Multiplex and copies of forty-one transcripts of examinations of witnesses conducted by ASIC. ASIC claimed relief from the subpoena on the basis of PII, legal professional privilege and further submitted that the documents otherwise available for inspection should only be inspected by persons who entered into confidentiality undertakings. ASIC argued that the documents and transcripts would, or would tend to, disclose confidential information contained in, or revealed by, the documents. In the material it filed in the Court and served on the parties, ASIC did not elaborate on the matters of public interest it had identified as a ground or grounds for resisting the production of the documents and transcripts. It contended that to do so would, or could, disclose, or tend to disclose, certain confidential information contained in, or revealed by, the documents and the transcripts. ASIC contended that such disclosure would, or could, tend to defeat the public interest which ASIC sought to protect in relation to those documents and transcripts. Accordingly, ASIC sought to have its claim for PII privilege heard ex parte in camera in the absence of all the parties to the proceeding. It is important to set out at some length the discussion between counsel and myself in the course of the open hearing on 11 September 2007. I do this so as to make it clear that Senior Counsel for ASIC (Dr Flick S.C.) was not only not prepared to state in open court the basis for ASIC's claim that the documents and transcripts were privileged from production on the ground of PII, but also was not prepared to state why that basis could not be disclosed. In the subsequent ex parte hearing in camera which followed, he did not tell me why ASIC could not disclose the basis for its PII claim. I was only told by counsel for ASIC (Mr M Pearce S.C.) why that basis could not be disclosed for the first time in the course of submissions by Mr Pearce S.C. on 30 March 2009. What is the basis of your claim --- I'm not asking for the detail --- is it a statutory claim or a common law claim for refusal to produce or protection from production? To disclose the means whereby information came into the possession of the Commission --- we say for reasons which have been advanced in a confidential affidavit --- legitimately attract privilege and we say that to disclose either the means or the sources of information would also be contrary to the public interest, again for reasons set forth in the affidavit. But the court can publish reasons which say that a claim for public interest immunity is made in respect of a number of documents. The basis of that claim --- and put it in the context of this case --- is to disclose the documents, discloses the means whereby information came within the possession of the Commission and the sources of that information. It started in February 2005, and paragraph 1.15 of the undertaking sets out what ASIC found. The investigation didn't just happen. If you're looking at a particular document and say, "What about this document", what your Honour says may be correct, but what we are saying, and I keep putting this as Delphically as I can, is to say, what the documents for which we wish to claim the privilege discloses, is the means, the mechanism, the procedure, whatever you wish to call it, the means whereby information came into our possession. The fact that you may know a particular fact doesn't disclose, necessarily, something else about the procedure whereby we got that fact . Yes, and that is this, to go back to Smith's case, in that case, during the course of proceedings, a witness was being cross-examined, and the question was put, "Who told you this", and the witness answered the question identifying two individuals by name. The prisoner's family's representatives, supporters were in court. The genie had been out of the bottle, so to speak. Nevertheless, the court said that the claim for privilege had not been lost forever and orders were still made protecting it because, one, they said the limited disclosure was not sufficient to abrogate the privilege, and what was of concern to them was the --- Mr Smith, a thoroughly respectable gentleman that your Honour may be aware of, is in for murder of a few people I think --- it was said that Mr Smith may have a pretty shrewd idea as to who had told the police the information which occasioned them to conduct an investigation. Now, that was the facts of that case and what we are saying is that if you start disclosing information including particular transcripts --- leaving aside the content of the individual transcripts --- if you start disclosing individual transcripts, you're going to start disclosing the means whereby information came into our possession and the sources of that information. If your Honour goes through the affidavits, we did not know, other than by guesswork, what type of claim it was. And your Honour will see we refer to that in our submissions. Your Honour would, in our respectful submission, want to be satisfied that that is as far as one can go and protect the identification of the content claim, because it is a content claim. For example, at the moment, my learned friend has referred to "means". We don't know what that means because, does it mean, in effect, the physical means? No. No, as I understand --- and I'm going to come to the particular --- we know certain things about this case. But, anyway, at the moment the point we wish to make is there has, for the first time, been some identification of the character of the content. Now, the question is, firstly, your Honour should be satisfied that that characterisation which has been made public to my client is, as far as it can go without letting the cat out of the bag, that is, disclosing the confidential information claimed. Because it is an information case, there has to be precise identification of the information which obviously, we accept, cannot be identified before your Honour has determined it, but your Honour should be satisfied that we know as much as we can know whilst protecting that information, and also, to the extent possible, why disclosure of the information would harm the public interest. For example, one may well say, this is a means case and we think --- the public thinks that disclosure of means in a case could deter future whistleblowers. I don't know if that would be the argument, or it would likely identify to somebody, if it's a means case, the precise means by which it took place. To take the example which my learned friend referred to, of Smith's case, obviously there one had identified the information, and one was protecting the disclosure of that information from a particular person. It wasn't disclosure to the public. It was disclosure to a particular person for the reasons indicated by my learned friend. At the moment we are completely unclear as to who this information ought not to be disclosed to. All but five go to the organisation. There may be some other basis of public interest immunity but it doesn't sound to me like it's a whistleblower type case and one would need to understand the reasoning in that context as to why the claim has been maintained to the extent that one can. I was extremely unhappy about adopting the procedure proposed by ASIC but did so after giving the applicants and the respondents the opportunity to make submissions in relation to ASIC's proposal for the procedure for the hearing of its PII privilege claim. During the course of these submissions in open court, counsel for ASIC stated to me, as I have noted earlier, that: "I keep putting this as Delphically as I can ... what the documents for which we wish to claim the privilege discloses, is the means, the mechanism, the procedure, whatever you wish to call it, the means whereby information came into our possession. " I then closed the Court, heard ASIC's application ex parte in camera on that day and on 17 September 2007 and reserved my decision. In the course of that hearing I was not told by Senior Counsel for ASIC why he had been "Delphic", that is "ambiguous, enigmatic, obscure" (according to The Macquarie Dictionary and The Shorter Oxford English Dictionary). I was never told by ASIC until the hearing on 30 March 2009 why it could not tell me in open court that its claim for PII was to protect the identity of an informer or informers to ASIC, that is to say, put colloquially, whistleblower or informer privilege. On 2 November 2007, I dismissed ASIC's application. My reasons for judgment were published publicly with a confidential appendix published only to ASIC: [2007] FCA 1659. ASIC applied for, and was granted, a stay on production of the subpoenaed documents pending a possible appeal. On 16 November 2007, ASIC filed a motion seeking leave to appeal against my order and seeking the imposition of certain confidentiality orders. The parties, in preparation for the appeal, agreed to the imposition of a Special Counsel Regime, the terms of which are set out in the orders of Weinberg J made on 30 November 2007. In essence, the regime allowed Special Counsel appointed by the first applicant and Multiplex to have access to confidential material filed by ASIC on the leave application that included the disputed documents and the confidential appendix to my reasons at first instance. Special Counsel signed confidentiality undertakings that they would not disclose any of the confidential material to any person --- including their instructing solicitors and clients. The regime also provided that Special Counsel would take no further part in the proceeding should ASIC's claim for PII be upheld on appeal. The application by ASIC for leave to appeal was heard by the Full Court on 8 May 2008. On 4 July 2008, the Full Court granted ASIC leave to appeal and upheld the appeal: [2008] FCAFC 123 ; (2008) 169 FCR 227. The reasons for judgment of the Full Court made public, for the first time, that ASIC based its claim of PII solely on the basis that production of the documents and transcripts would reveal the identity of informers. I had rejected ASIC's claim in my confidential reasons which included that the identity of informers was already known within Multiplex or at least was known to some senior personnel in Multiplex. The Full Court held that the applicability of PII was a question of substantive law, appellable on its merits and that in applying PII in civil proceedings, the Court should undertake a balancing exercise to determine whether the public interest which requires that documents privileged from production by PII should not be produced outweighs the public interest that a court of justice performing its functions should not be denied access to relevant evidence. Critically, the Full Court conformably with the reasoning in Haydon v Magistrates Court [2001] SASC 65 ; (2001) 87 SASR 448 , held that "the partial disclosure of an informer's identity, even to the person informed against, is not conclusive" and that immunity from further disclosure was not necessarily lost by the partial disclosure of informers' identities. The Full Court decided that the documents were protected from production as they did not have sufficient importance to the applicants' conduct of the litigation to outweigh the importance of not disclosing the identity of the informers. (In the hearing of the present motions, Mr Watson said, and I accept his evidence, that the applicants and their legal advisers were unaware up until delivery of the Full Court's reasons for judgment on 4 July 2008 of the basis of ASIC's claim for PII and, in particular, were unaware that that claim rested solely on the ground of informer privilege. (I analyse his evidence later in these reasons)). The applicants applied for special leave to appeal to the High Court. ASIC filed a summary of its argument for the purpose of the leave application. The Multiplex parties did not submit to the contrary. On the face of it, it appears that it is open to a primary judge to reopen the interlocutory order that has been made precluding inspection at least if, as the applicant alleges, the factual foundations for that order were not sound, or, we would add, if circumstances affecting the existence of the privilege have changed in the time between the making of the order and the new application for leave to inspect. Further, both ASIC and Multiplex argue that the applicants are precluded from bringing their motion as it seeks to re-litigate a matter not open to them on an interlocutory hearing because the matter has already been determined against them by the Full Court hearing and that such motion amounts to an abuse of process. Both motions came on for hearing on 27 March 2009. The applicants submitted that it was only fair and just that leave be granted to inspect ASIC's documents. Counsel for the applicants submitted that the evidence of Mr Watson, the applicants' instructing solicitor, established that: the applicants and their solicitors were unaware until the delivery of the Full Court's judgment on 4 July 2008 of the basis of ASIC's claim for PII, and in particular, that the claim rested solely on the ground of informer privilege; on 5 September 2005, ABC television broadcast a Four Corners program entitled ' Road to Wembley' . In that program the Multiplex accounting group general manager was identified as having "blown the whistle" and contacted ASIC. Further, on 5 and 6 September 2005, eleven press reports posted on the internet on the websites of various media commented on the Four Corners program and explicitly referred to Multiplex's accounting group general manager; Mr Watson was aware at the time of the hearing on 11 September 2007 that the fact that Multiplex's accounting group general manager had "blown the whistle" on Multiplex in connection with the Wembley Stadium project had been published in the national print and electronic media; on 2 May 2008 Mr Watson had a telephone conversation with Mr Stewart Cummins in which he confirmed to Mr Watson that he was Multiplex's accounting group general manager in February 2005, that he had been the whistleblower referred to in the Four Corners program and that he went to ASIC with his concerns about the Wembley Stadium project; due to the procedures adopted in the hearing before me and in the Full Court, combined with the fact that the applicants and their solicitors were unaware that ASIC's objection to the production of documents was based on informer privilege, the applicants were not in a position to draw the above matters to the Court's attention at the earlier hearings. The applicants submitted that the Court, when balancing between the public interest in the protection of the particular informer in question and the encouragement of potential future informers, and the fair and efficient disposition of civil disputes by the courts, should have regard to the fact that the documents subject to the PII claim "will be highly material to the Applicants' claim and potentially of significance in narrowing the issues in dispute in the proceeding. " In addition, the applicants submitted that it was not credible that all of the forty-one transcripts of examinations said to be subject to PII would reveal the identity of the informer and that all of them could be subject to an immunity claim. ASIC submitted that there are a number of limits on the applicants' ability to re-litigate matters already the subject of an interlocutory order. The principal argument advanced by ASIC and Multiplex on the threshold issue was that the applicants were seeking to re-litigate an issue and a matter which had already been the subject of an earlier interlocutory decision. Although there have been a number of decisions which have sought to categorise the circumstances which entitle or allow a moving party to seek to vary or change an interlocutory order which has previously been made, at the end of the day, it is a matter for the discretion of the Court. ASIC and Multiplex submitted that a second interlocutory application will be an abuse of process if it is not based upon fresh material which was not available at the time of the original interlocutory application or a material change in circumstances since that application. In Christie , Brooking JA and Hayne JA held that as the purported new material had been available at the time of the first application and as the applicant had not offered any explanation for the reason why it was not being adduced, that the second application should have been stayed as an abuse of process. I conclude that it is not possible for this court to adopt a rule which would preclude an unsuccessful applicant for interlocutory orders from repeating the application, on the ground of abuse of process, simply because the applicant sought to rely on additional relevant facts which did not amount to fresh evidence. Some other factor must, in my view, be present before an abuse of process is established, although, since the respondent is being faced a second time with an application for extension of time to bring proceedings, the potential for the second application to amount to an abuse is readily apparent. The applicants submitted that as a matter of principle, a second interlocutory application may be made where there has been a material change in circumstances since the original application was heard, or where there has been discovery of new material which could not reasonably have been put before the Court on the hearing of the original application referring to Manning . The applicants submitted, however, that recent authorities suggest that the ability to make a subsequent application is not limited only to these circumstances, as has been considered in Manning . The applicants submitted that by a majority, the New South Wales Court of Appeal in that case refused to follow Christie . It was submitted that the Court of Appeal held that whether a second or subsequent application should be stayed was ultimately a matter for the discretion of the Court. Further, the applicants submitted that Christie does not stand as a general authority applicable to all interlocutory applications. Instead, the majority decision of Brooking JA and Hayne JA was said to make it clear that they were not laying down a general rule to be applied carte blanche. The decision of Mandie J in Global Realty Development Corp (a Dellaware Company) v Dominion Wines Ltd (in liq) (2005) 225 ALR 361 was cited in support of this proposition. In these circumstances it cannot be said that the majority reasoning in D A Christie Pty Ltd v Baker should, as a matter of comity or otherwise, be followed. Rather, the position in New South Wales is such that the principles propounded by Charles JA should be applied in order to avoid an anomalous difference arising between the relative liberality with which evidence is admitted on interlocutory appeals and the extremely restrictive approach to permitting second interlocutory hearings based on additional (but not fresh) evidence urged by the Nominal Defendant. Whether Charles JA is, or the majority in D A Christie Pty Ltd v Baker are, correct on the true view of the Victorian legislation is not a matter that need be commented on. It is not necessary, and it is probably undesirable, to seek to define a test capable of application to all cases involving statutory extensions of time to start proceedings, or even all cases arising out of s 52(4) of the Motor Accidents Act 1988 . The Nominal Defendant did not submit that if the test contended for did not exist, the conduct of the respondent constituted an abuse of process on any other basis. The deliberate non-tender of evidence for use in a second interlocutory application should the first fail, or for use in an interlocutory appeal from the interlocutory application, might of itself be fatal to success; and even the non-deliberate failure to tender evidence is extremely risky. The Nominal Defendant's proposition that no second interlocutory application can be entertained unless there is a change of circumstances or unless evidence is relied on which could not reasonably have been obtained earlier is too extreme, but a litigant bringing a second application where circumstances have not changed on evidence available earlier is facing serious and self-created risks of an adverse exercise of judicial discretion. The real evils to which Hayne JA referred in D A Christie Pty Ltd v Baker (at 602-603) --- the risk of conflicting decisions, the unnecessary vexing of 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. This preference was said to be based on a close examination of the reasons for the divergence in views and the applicable Rules of Court in Victoria and New South Wales. ASIC submitted that the minority view of Charles JA in Christie was predicated on the basis that it would be anomalous to hold that a further interlocutory application was an abuse of process because it was based on fresh evidence that was reasonably available at the first application, when, under the applicable Rules of Court, such evidence could be adduced on appeal. In Victoria, it was said that there is no longer a requirement for "special grounds" to admit new evidence in appeals from final orders or in appeals from interlocutory orders: see Supreme Court Rules , r 64.22(3). ASIC submitted that having regard to the rules in the Federal Court applicable to the reception of evidence in appeals from interlocutory orders, the correct approach in the Federal Court is, or should be, the strict view of Brooking and Hayne JJA in Christie and Mason P in Manning . The result is, according to ASIC, that the applicants must show that the fresh material they rely upon was not reasonably available to them on the first application or else the second application must be dismissed as an abuse of process. In New South Wales, however, a distinction is drawn by the legislation between appeals from final orders and from interlocutory orders. In interlocutory orders, there is no requirement for "special grounds" to adduce fresh evidence. This, it was submitted, explained why Heydon JA and Foster AJA in Manning preferred the approach of Charles JA's dissenting judgment . To this extent, it was submitted that as s 27 of the Federal Court Act 1976 (Cth) and O 52 r 36 of the Federal Court Rules draw no distinction between appeals from final orders and appeals from interlocutory orders (as per the Victorian position) that "special grounds" (or some similar exceptional circumstances) must be established to receive fresh evidence. To the extent that there is conflict or inconsistency between the decisions or rationes in Christie and Manning , it is not for me to resolve that conflict or inconsistency or decide which is the correct or preferable principle to adopt. I leave that exercise to more eminent judicial authority. Notwithstanding the conflict in the authorities, and even if a more liberal approach of the authorities was taken, both ASIC and Multiplex submitted that the applicants faced difficulty in re-agitating the matters sought absent exceptional circumstances. He narrated the background to, and the history of, the application. In particular, he referred to a number of passages in the transcript of the hearings on 7 August 2007 and 11 September 2007, to some of which I have already referred. Mr Watson gave the following evidence-in-chief: at no time prior to the Full Court judgment did ASIC or its solicitors indicate that the ground of PII upon which it relied in resiting production of the documents for inspection was that to do so would risk identifying a whistleblower or informer. Rather, ASIC's position, as explained (albeit cryptically) to the Federal Court, led Mr Watson to believe that the grounds relied upon by ASIC were considerably more complex; prior to delivery of the Full Court judgment it was not apparent to either the applicants or their solicitors that the basis for ASIC's claim for PII was informer privilege and that this was ASIC's sole ground for resisting production of the documents; these matters became clear to Mr Watson only when he read the judgment of the Full Court. At the same time that ABC Television aired that program, it posted on its website a transcript of the program which Mr Watson produced as an exhibit to his affidavit. On 6 September 2005 Mr Watson watched the "Four Corners" program. He said that the transcript of that program was accurate. Someone in Multiplex had blown the whistle. In mid-February, Multiplex's accounting group general manager raised concerns about the February accounts. In the week leading up to the results, he wrote to members of the board and contacted ASIC, the corporate regulator. And, I mean, not just his concerns. I mean, at the time there were concerns of others in, in, both accounting and also, importantly, in relation to site and senior construction management. The accounting group general manager told Four Corners he also could not comment for legal reasons. In late March, he was retrenched. At the end of our interview with Andrew Roberts, we just had time to ask him why. The accounting group general manager was retrenched in March. Can you tell us why? . . . I mean there's ... that ... If the suggestion is that there was ... he was retrenched because he's raised issues, then absolutely, that's not the case. Mr Watson produced copies of the eleven press reports which appeared on the internet. The ABC program claimed the manager also reported his concerns to the Australian Securities and Investments Commission (ASIC), which had launched an investigation. Mr Watson said that because of the procedure adopted in the hearing before me on 11 September 2007 which was an ex parte hearing in camera, neither Mr Watson nor counsel instructed on behalf of the applicants were in a position to draw these matters to my attention. Mr Watson said, as he had said earlier that, in any event, he was unaware at the time of the hearing on 11 September 2007 that the ground upon which ASIC objected to production of the documents was informer privilege. Mr Watson said that on 29 April 2008 he was contacted by a private investigator engaged on behalf of the applicants who told him that she had just had a conversation with Mr Stewart Cummins who had confirmed to her that he was the whistleblower referred to in the "Four Corners" program. The private investigator gave Mr Watson Mr Cummins' contact details. On 2 May 2008 Mr Watson had a telephone conversation with Mr Cummins in which Mr Cummins confirmed to Mr Watson that he was Multiplex's accounting group general manager in February 2005 and that he had been the whistleblower referred to in the "Four Corners" program who went to ASIC with his concerns about the Wembley Stadium project. Mr Watson said, as he had said earlier, that at this time, neither the applicants nor their solicitors were aware that the basis for ASIC's claim for PII in respect of the documents was informer privilege. Mr Watson said that had he been aware at this time that this was the basis of ASIC's claim, and more particularly, if Special Counsel had been able to inform him that this was the basis of ASIC's claim before the Full Court, he would have informed Special Counsel and sought to have evidence led and submissions made before the Full Court to the effect that Mr Cummins' identity and status as a whistleblower to ASIC: had been revealed not only to the Board of Multiplex but also was known to the applicants; had been revealed in the Four Corners broadcast and in the press; and had been confirmed directly and voluntarily to him by Mr Cummins himself in a telephone conversation. Mr Watson repeatedly denied that he had this knowledge and, in substance, said that he was diverted from considering that informer immunity or whistleblower immunity was the basis for ASIC's PII claim by the statements made by ASIC's counsel on 7 August 2007 and 11 September 2007. Mr Watson was challenged in cross-examination on the basis that it was not clear whether he was saying that he did not know until the Full Court decision that informer immunity was a basis for ASIC's PII claim or whether he was saying that it was only then that he found out that it was the sole basis for ASIC's PII immunity claim. His response consistently was that up until the time he became aware of the Full Court judgment, he had no idea that the basis of ASIC's PII claim was informer or whistleblower immunity. When it was put to Mr Watson in cross-examination whether he was saying that he only discovered that informer immunity was a basis or whether he was saying that he only discovered it was the sole basis upon hearing of the Full Court judgment. Mr Watson reiterated that he did not realise that the basis for ASIC's claim for PII was informer immunity not only because of what counsel for ASIC had said on 7 August 2007 but also because of what transpired at the hearing on 11 September 2007 before me. He referred in particular, to Mr Hutley S.C.'s statement towards the end of the open hearing that "well, whatever it is it doesn't sound like it's a whistleblower type case". (What Mr Hutley S.C. actually said was "There may be some other basis of public interest immunity but it doesn't sound to me like it's a whistleblower type case ..."). Mr Watson said that after that exchange he was clear in his understanding that the claim for PII was not about whistleblowers in any way, shape or form. I accept this evidence of Mr Watson. I consider that he was entitled to discount what counsel for Multiplex had said having regard to what counsel for ASIC had said. In fact, in a sense, it emphasised to me that this was something other than a pure and simple case of whistleblower immunity. If it had been whistleblower immunity it would not have needed to be Delphic. You could have said --- even in part you could have said 'Look, your Honour, there are a variety of bases of our claim. Part of it is whistleblower immunity'. There would have been no need to be Delphic. The fact that it was Delphic seemed to me to confirm all of what had transpired earlier". I consider it to be quite credible. Indeed, it is a logical, credible and reasonable response to Senior Counsel for ASIC's observation, particularly having regard to the other statements made by ASIC's counsel on 7 August 2007 and 11 September 2007. Repeatedly in cross-examination Mr Watson said that the reason why he put informer immunity out of his mind was because there was a chain of events, starting from the moment the applicants were notified of the nature of ASIC's claim and its extent going through the hearing and what was said on 7 August 2007, the submissions which were filed in the lead-up to the hearing on 11 September 2007, what was said at the hearing in open session on 11 September 2007 and then finally leading to the fact that Mr Hutley S.C. said what he said (par [21] above) and no one said anything. I accept this evidence of Mr Watson. I consider it to be credible and a reasonable response to the statements which had been made by counsel for ASIC from time to time. It was put to Mr Watson that Mr Hutley's statement towards the end of the open hearing on 11 September 2007 (par [21] above) was a kind of tipping point at which his mind tipped over into the conviction that ASIC was not relying on whistleblower or informer privilege. It was put to Mr Watson that Ms Hogan-Doran had not said that "this was a claim that had never been advanced before", rather she had said that it was being advanced in "a fashion" that had not been done before. Mr Watson accepted that the words he had used were not her precise words, but I consider that the difference between the words which he used and the actual words used by Ms Hogan-Doran is a distinction without a difference. It was put to Mr Watson that he may have misunderstood what Ms Hogan-Doran said. The thrust of what Ms Hogan-Doran was saying was that the claim being advanced was a claim that was novel and new in relation to the way in which it was being presented. In my view, this would not lead any experienced legal practitioner, barrister or solicitor, familiar with the area of PII to the view that the claim was in any way related to informer immunity or whistleblower immunity. If it had been a claim about whistle blowers, I do not see why Ms Hogan-Doran could not have said either or in whole or in part, 'this is a claim about whistle blowers'. That would not have run the risk of revealing anything confidential about the documents. It happens routinely. It is credible and a reasonable response to what had been said by Ms Hogan-Doran on 7 August 2007. Mr Watson was cross-examined in relation to his evidence about what the private investigator had told him about Mr Cummins on 29 April 2008 and his contact with Mr Cummins on 2 May 2008. He said that the private investigator had been engaged by the applicants on a general retainer shortly after the commencement of the proceeding for the purposes of locating from time to time witnesses who they regarded might be of assistance in the prosecution of the case. The private investigator was instructed in early April 2008 to see if she could make contact with Mr Cummins as a result of a review of documents which had been produced and inspected under the ASIC subpoena. The documents produced under the ASIC subpoena and inspected, in the words of Mr Watson, made it "plain as a pikestaff that we should get on to trying to find Mr Cummins". Mr Watson said that they suspected at that point that Mr Cummins was a whistleblower and his suspicions were confirmed by the telephone conversation with the private investigator on 29 April 2008. Mr Watson reiterated in cross-examination that in the conversation he had with Mr Cummins on 2 May 2008, Mr Cummins confirmed that he was the whistleblower. Mr Watson was also cross-examined along the lines that in relation to the Full Court hearing there was nothing in the orders made by Weinberg J that inhibited his ability to provide instructions to the applicants' Special Counsel. Well, I wouldn't agree with that in its entirety. There was nothing which inhibited me from providing instructions about things which I might have known about, but plainly the orders meant that there was nothing that I knew about the conduct of the appeal and upon which I could give instructions. And counsel could not discuss even the grounds of appeal with me and obtain my instructions about things. So if you're saying there's nothing inhibiting me giving instructions, the fact that I can't discuss with counsel the very substance of the proceeding, in that case the appeal, I would regard as an inhibitor. In this context Mr Watson repeated his evidence that he had formed the view since 7 August 2007 that ASIC was not claiming PII privilege, either in whole or in part in relation to whistleblowers. He said that that was the reason why he did not give the applicants' Special Counsel instructions to consider whether ASIC was claiming informer privilege. Mr Watson also said in cross-examination, in response to a specific question, that at no point before the hearing, or during the hearing in the Full Court did either he or, to his knowledge, anyone else in the applicants' solicitors office give instructions to Special Counsel that they should consider the issue of informer immunity. He said it was about informer immunity in a particular case. He was then asked why Special Counsel were being referred to the case if not to draw their attention to the issue of informer immunity. And her Honour, in that context, made a number of remarks about the regulator in that case attempting to, in effect, advance a policy in opposition to private litigants having access to the products of their investigation through the prism of public interest immunity and privilege. It was then put to Mr Watson that the case had been drawn to Special Counsel's attention because it dealt with the issue of informer immunity. It was not drawn to the attention of Special Counsel because it related to informer immunity. It was drawn to the attention of Special Counsel because it was a case about a regulator trying to deny private litigants documents, and it was a case in which the court were critical of the regulator for attempting to misuse the application of privilege and public interest immunity to deny those things. Her Honour went on to say that if that was the case, if the regulator in that case --- ACCC --- had a concern regarding that matter, that that was a matter for the legislature. And Ms Neesham, when she discussed the case with me, said she thought we were in an even stronger case, because in this case the legislature had actually dealt with the matter in section 25. In particular, I accept Mr Watson's evidence that it was not drawn to the attention of Special Counsel because it related to informer immunity. I accept Mr Watson's evidence that the email was not instructions to counsel to consider whistleblower or informer immunity. Mr Watson was also cross-examined by Senior Counsel for Multiplex. I didn't because I didn't understand the reference to be one to a whistleblower. I accept the evidence of Mr Watson. I consider it to be credible and reasonable having regard to what had occurred on 7 August 2007 and on 11 September 2007 and, in particular, the statements made by counsel for ASIC. In final submissions counsel for ASIC submitted that Mr Watson made a series of compounding mistakes. Counsel submitted that Mr Watson misunderstood what counsel for ASIC said and that thereafter there followed a series of events that should have put things back on the rail. It followed that Mr Watson's understanding failed to take account of what Senior Counsel for ASIC said on 11 September 2007 on four or five occasions when he referred to the means and source of information which could only sensibly have been to informer immunity. Mr Watson's evidence in cross-examination was that it was now plain that he did misunderstand what counsel for ASIC was saying on 7 August 2007 because the claim which he now understood had been advanced in the Federal Court before me "was a claim of the type which is always advanced routinely and commonly". I am satisfied that Mr Watson only misunderstood what counsel for ASIC was saying because counsel had not made it clear what she was saying and Mr Watson was misled by what she was saying that ASIC's claim for PII was based either partly or solely on informer immunity or the need to protect the identify of informers. To the extent that Mr Watson did labour under a misunderstanding, it was a misunderstanding because he understood from what counsel for ASIC was saying, and in my view, it was reasonable for him to understand from what counsel was saying, that the basis for the claim of PII was not a claim that was commonly or routinely advanced before the Court, such as informer immunity, but was something that had never been advanced before. Counsel for ASIC also submitted that a reasonable person would have understood why Senior Counsel for ASIC on 11 September 2007 was being "delphic". I reject that submission. In my view, neither a reasonable person nor an experienced legal practitioner, barrister or solicitor, familiar with the area of PII would have understood during the open hearing on 11 September 2007 why Senior Counsel for ASIC was being delphic. At that time I did not understand why Senior Counsel for ASIC was being delphic, either during the open hearing or the in camera hearing. Further, I did not understand why Dr Flick was being delphic until hearing from Mr Pearce on 30 March 2009. In the alternative to his submission that Mr Watson had made a number of compounding mistakes, counsel for ASIC submitted that I was entitled to disbelieve Mr Watson. It was submitted that Mr Watson was an intelligent man and that I was entitled to conclude that a person like Mr Watson would not have made this series of errors. I accept Mr Watson's evidence that on 7 August 2007, on 11 September 2007 and at the time of the hearing of the application before the Full Court by ASIC for leave to appeal against my decision, he did not know the basis for ASIC's claim for objecting to the production of the documents and the transcripts on the ground of PII and did not know that it was based on whistleblower or informer privilege, that is, it was based on seeking to prevent the disclosure of the identity of informers to ASIC. I also accept Mr Watson's evidence that had he known of this basis of ASIC's claim for PII he would have instructed counsel to bring to the court's attention on 11 September 2007 the broadcast of the Four Corners program on 5 September 2005 and its contents and the other media reports on 5 and 6 September 2005, and he would also have instructed Special Counsel to bring the Full Court's attention to his conversation with the private investigator on 29 April 2008 and Mr Cummins on 2 May 2008. I do not accept the submissions of ASIC and Multiplex that Mr Watson should have realised or appreciated at the hearing before Finkelstein J on 7 August 2007 and at the hearing before me on 11 September 2007 that the basis of ASIC's claim was whistleblower or informer privilege. I am satisfied that ASIC through its counsel deliberately refrained from informing the Court of that basis. Senior Counsel for ASIC on 11 September 2007 was putting the matter "as Delphically as I can". Having regard to The Macquarie Dictionary and The Shorter Oxford English Dictionary definition of "Delphic", I apply to ASIC's counsel's statement the maxim " res ipsa loquitur ". I have no doubt that Mr Watson was diverted from concluding that the basis of ASIC's PII claim was whistleblower or informer privilege by the stance taken by ASIC through its counsel on 7 August 2007 and 11 September 2007. I am satisfied that Mr Watson was an honest and truthful witness and I am in no doubt that he was telling the truth when he said that he did not become aware, nor did he know, that the sole basis or indeed, any basis for ASIC's claim for PII before me and Full Court had been informer immunity or whistleblower immunity, that is to say, seeking to protect disclosure of the identity of an informer. Mr Watson presented as a credible witness with a clear grasp of the issues which were before the Court and he gave his evidence without hesitation or prevarication. His credit and credibility were not dented in any way by the cross-examination either by counsel for ASIC or counsel for Multiplex. I reject the submission that I should disbelieve Mr Watson's evidence as to his belief and understanding at all relevant times. I accept the whole of his evidence as credible and truthful. I am satisfied, and I find, that: prior to the publication of the reasons for judgment of the Full Court on 4 July 2008 neither the applicants nor their legal advisers (other than the Special Counsel briefed for the Full Court application by ASIC for leave to appeal against my orders on 2 November 2007) were aware, nor was there any reason why they should have been aware, that the ground upon which ASIC relied in resisting the production of documents pursuant to the subpoena served on 13 July 2007 was that to do so would identify, or would risk identifying, an informer or a whistleblower, that is to say, that ASIC was claiming informer privilege; the fact that informer privilege was ASIC's ground only became apparent to the applicants and their legal advisers (other than Special Counsel) upon the publication of the Full Court's reasons; there was nothing said by ASIC in its correspondence with the applicants' legal advisers, or in the open material it filed in Court or in what its counsel said on 7 August 2007 or 11 September 2007 which should have made the applicants and its legal advisers understand or believe that ASIC was claiming informer privilege; the references by ASIC's Senior Counsel on 11 September 2007 to "the means whereby information came into the possession of the Commission and the sources of that information" did not alert the applicants or their legal advisers, and would not have alerted experienced lawyers, barristers or solicitors familiar with the area of PII, to the fact that the ground or a ground for ASIC's claim for PII was informer privilege, having regard to ASIC's correspondence with the applicants' legal advisers, the open material it filed in Court or in what its counsel said on 7 August 2007 or 11 September 2007; the applicants' legal advisers were inhibited by the Special Counsel regime established for the purpose of the Full Court hearing from instructing Special Counsel in relation to the Four Corners broadcast, the media reports and Mr Watson's telephone conversations with the private investigator and Mr Cummins. As I have noted earlier, Mr Watson's evidence was that for the reasons he gave extensively in examination-in-chief and cross-examination he was diverted from, or turned away from, considering or believing that the basis for ASIC's claim for PII was informer privilege or protection of the identity of informers. I am satisfied that at the hearings on 7 August 2007 and 11 September 2007 counsel for ASIC expressed themselves in such terms that any well-informed member of the legal profession, barrister or solicitor, who was familiar with the principles applicable to claims for public interest immunity, would not have considered or suspected that the sole basis for ASIC's claim, or indeed part of ASIC's claim for PII, was informer privilege or to protect the identity of informers. I am fortified in this view by the fact that counsel for ASIC on these occasions at these hearings was not prepared to state in open court that that was the basis for ASIC's claim because, in ASIC's view, the fact of the disclosure that that was the basis of ASIC's claim would identify the informer referred to in the Four Corners broadcast. That was why Senior Counsel for ASIC on 11 September 2007 was being "delphic". I reject ASIC's and Multiplex's submission that Mr Watson's knowledge that the basis for ASIC's claim for PII had something to do with the means whereby information came into the possession of ASIC and the sources of that information meant that he should have realised that the means and source had something to do with informer privilege. Multiplex submitted that Mr Watson's evidence in cross-examination, combined with statements made by Senior Counsel for ASIC and Senior Counsel for the applicants on 11 September 2007 entitle the Court to conclude that the legal representatives of the applicants had sufficient information before them to determine that informer immunity was a basis for ASIC's claim. I reject that submission for the reasons to which I have already referred. I do not consider that the applicants or their legal advisers had sufficient information before them on 7 August 2007, 11 September 2007 or at the time of the hearing before the Full Court on 8 May 2008 to determine that informer immunity was a basis for ASIC's PII claim. In the course of the hearing on 30 March 2009, it became apparent that ASIC had become aware of an investigation by the Four Corners program into Multiplex's Wembley Stadium project prior to the broadcast of the ' Road to Wembley ' program on 5 September 2005. It also appeared that ASIC was aware of that broadcast and the contents of it referred to in par [52] above. Secondly, and assuming that Mr Watson is being truthful --- assuming that what he said was truthful, then his failure to reach that conclusion by the time of the Full Court hearing, was a failure of his own making. His failure to appreciate why it was that ASIC was not disclosing the basis of its claim for immunity, and it seems as if I need to spell it out, but your Honour, it's quite plain that if ASIC had disclosed that it was relying on informer immunity, it would have pointed the finger strait at Mr Cummins. Their concern, your Honour --- ASICs concern was to protect the identity of the whistleblower, or whistleblowers. That's what all their conduct was directed at. It was reasonable for ASIC to have assumed, had they stated explicitly their claim was for informer immunity, that would have pointed the finger straight at Mr Cummins. Why was he being Delphic? Now, that is a fair inference from the material, and that being so, they were right not to disclose the basis of their claim for immunity. When I asked Senior Counsel for ASIC why would the solicitor fail to put that material before the Court, the response was that he had made "a number of mistakes". Senior Counsel for ASIC said that Senior Counsel for ASIC's references before me on 11 September 2007 to "the means and source" could only sensibly have been to informer immunity. (I reject that submission having regard to all the statements made by ASIC's counsel on 7 August 2007 and 11 September 2007). I put to counsel for ASIC that "Dr Flick was being Delphic" and his response was that "a reasonable person would have understood why Dr Flick was being Delphic". Counsel for ASIC said that there was a series of compounding mistakes made by Mr Watson, the first being his misunderstanding of what Ms Hogan-Doran said (on 7 August 2007) and then his failure to take account of what Dr Flick said, his failure to appreciate why it was that ASIC was being delphic. ASIC's reliance on Mr Watson's failure to appreciate why it was that ASIC was being delphic presupposes that Mr Watson was able to determine why ASIC was being delphic. However, neither ASIC nor Dr Flick ever explained why ASIC was being delphic. So far as I am concerned, I was never told by ASIC or by its counsel in the open or ex parte hearings in camera on 11 or 17 September 2007 why it could not say in open court that the basis of its claim for PII was informer privilege or whistleblower privilege. I'll come to that in a moment. It wasn't. The Four Corners show did not name Mr Cummins. Now, those in the know would have worked out who it was referring to, and the curious could have made their inquiries. But the great bulk of the viewers, and we don't know how many viewers, of course, there were for Four Corners on that night, but the great bulk --- the great bulk would not have been told. Only those in the know would have had confirmed what they either already knew or suspected. The curious could have made their inquiries and worked it out, but there's no evidence --- there's no evidence that the Four Corners show led to widespread disclosure that Mr Cummins was the whistleblower. There's no evidence at all of that, your Honour. The same applies for the press reports. It must be implicit in that submission that ASIC was aware of the Four Corners program. That the position from ASICs point of view is, would disclosure of the nature of the claim have incurred a risk of identifying Mr Cummins as the whistleblower. We didn't know that they'd launched this proceeding. It was reasonable for ASIC even not knowing about the Four Corners show. Now, that's all I'm saying, your Honour. I am satisfied that ASIC achieved what it sought to achieve at the hearings on 7 August 2007 and 11 September 2007, that is to say, to ensure that the applicants and their legal advisers did not form the view, or believe, that the basis, or one of the bases, for ASIC's claim for PII was informer privilege. In the course of submissions I asked counsel for ASIC whether the fact of the Four Corners program was in evidence before me or the Full Court. Counsel said "there is material that suggests that it was". I expressed surprise at that statement and counsel for ASIC said that he was instructed that the position was that it was not directly raised by counsel in submissions but that there was material which was put before me and before the Full Court. He said that my attention was not drawn to this material. Mr Hutley S. C. followed with his closing submissions. I'm going to come what must now be inferred about Ms Hogan-Doran's approach to this application before Finkelstein J and that depends upon what now seems to be the case as to what ASICs position was before your Honour. And this is, and I say it is, in my respectful submission, extraordinary. It appears to be this, that at all time, ASICs sole case was that it was informer privilege. It appears that there seems to be a fear that if that was said, Mr Cummins would have been identified by us, in court, as the informer, on the basis, no doubt, of the publicly available information that he was the informer as Dr Bell freely conceded. So there appears to have been a fear that if your Honour was told --- we were told, in open court, the fact of what their application was, we would have, as we say we would have, have brought forward the evidence of the matters we seek to agitate here and prove to the court that it was common knowledge that the informer was Mr Cummins. So the aim was to avoid that. And it now appears for the first time, unbeknown to your Honour, we might say, or it appears to the Full Court, that somewhere buried in the confidential information which we haven't seen is some reference to that Four Corners program. We may but speculate as to the elliptical character of that. We do not know. It's the only possible construction. Mr Pearce said reference to that fact will be found in the confidential material which was before your Honour on the application, at first instance. I would call for that material but, your Honour, there's a concession by ASIC. And I don't wish to go back to the position of ASIC as being the Commonwealth but we conduct litigation on the basis that the Commonwealth conducts itself on the basis of a model litigant. And the object of what they were doing, that is, what Dr Flick was doing, was to divert our attention for the possibility of agitating that. That's the only possible construction of what was occurring, because, as your Honour observed, Mr Pearce says our object was to avoid Mr Cummins being identified. Why, one asks, would reference to informer privilege identify Mr Cummins? Why wouldn't equally identify ever other possible witness? Answer, as your Honour observed in debate, that must mean that ASIC was aware of the Four Corners program. Frankly, after the adjournment, Mr Pearce comes into court and tells your Honour, amongst the material that was before you, although not drawn to your attention, was evidence that ASIC knew of that fact, that is, Mr Cummins had been identified in the Four Corners program. Now, we submit it is quite clear what was the object of the Delphic remarks, etcetera, etcetera. It was to avoid exactly what we complain. Exactly what --- it's the only possible aim of ASIC. And then the temerity of ASIC is just breathtaking. They say having succeeded in that aim, we are not to be given leave to reopen because we should have caught on to the trick; we shouldn't have been deceived; it was an inept tempt to deceive us. After Mr Hutley concluded his submissions, Senior Counsel for ASIC said that there were two documents placed before me and the Full Court that referred to the fact of a Four Corners investigation. These documents were on pp 228 and 231 of a Confidential Exhibit ANS-6 to the affidavit of Anna Skreiner sworn on 6 February 2009. They remain confidential exhibits. When I asked Counsel for ASIC whether these documents had been brought to my attention, or to the attention of the Full Court during the previous hearings, counsel answered that he was instructed that this was not the case. Counsel for ASIC reiterated that these documents were not drawn to my attention on 11 September 2007. I wasn't there, of course, and I have not gone back and looked at the transcripts, but I'm instructed they weren't drawn to your Honour's attention. I'm being prompted from all sides to say the question of media was raised, both before your Honour and the Full Court --- the question of media interest. I don't really understand either. I'm sorry I said it now. Should have trusted my instincts. I think that's right. I will just check that --- 231. Certainly that is right about 228, but I think that's --- yes. I am told both those documents refer to events that predate the broadcast. I should be given the --- your Honour, I don't know what is in that document. Your Honour should direct that that be made available to me. I mean, your Honour, if it doesn't refer to the broadcast, if it refers to some form of investigation, it's pounds to peanuts that ASIC must have been aware, must have been aware, at the time of the application before your Honour as to what occurred during that. They had interviewed Mr Cummins. They were obviously aware. And I would ask that ASIC admit that they were at all times aware of the broadcast. I mean, we are dealing with the Commonwealth. But it is very --- I mean, this is pretty extraordinary stuff, your Honour. I would seek a direction that I have access to that material and I don't mind if it cut --- anything beyond it is, of course, blanked out, but the material which goes to the inquiry conducted by the Four Corners, or the Four Corners program should be made available to me. Your Honour can see that from reading the document at 228 to 229. Mr Hutley then asked whether I would permit the applicants to serve a notice to produce to ASIC calling for all documents evidencing or establishing that ASIC was aware prior to the hearing on 11 September 2007 of the fact of the Four Corners broadcast and its content. Mr Hutley sought that leave as a matter of courtesy on the basis that he might not need such leave. I gave the applicants that leave and adjourned the further hearing to a date to be fixed. I asked counsel for ASIC to obtain instructions in relation to the inspection by the applicants' counsel of the two documents in the confidential exhibit and to communicate those instructions by email to my Associate, copied to the other parties. I then adjourned the further hearing of the matter to a date to be fixed. Someone in Multiplex had blown the whistle. In mid-February Multiplex's accounting group general manager raised concerns about the February accounts. In the week leading up to the results, he wrote to members of the board and contacted ASIC, the corporate regulator. ASIC launched an investigation". The procedure to be adopted by the Court where one party to a proceeding serves a notice to produce upon another party to a proceeding is clear. That is to say, compliance with the notice is required and is mandatory unless excused by the Court: CCOM Pty Ltd v Jiejing Pty Ltd (1992) 37 FCR 1 at 3; Trade Practices Commission v Abbco Iceworks Pty Ltd [1994] FCA 1279 ; (1994) 52 FCR 96 at 132; Microsoft Corporation v CX Computer Pty Ltd [2002] FCA 3 ; (2002) 187 ALR 362 at 369, [36] . Order 27 rule 12(1) of the Federal Court Rules provides the failure to comply with the subpoena is contempt of court. It is well established that the procedure to be followed by the Court on the return and the calling on of a notice to produce requires a three stage procedure: Commissioner for Railways v Small (1938) 38 SR (NSW) 564 at 574; National Employers' Mutual General Association Ltd v Waind [1978] 1 NSWLR 372. This step involves the determination of any objections of the witness to the subpoena, or to the production of the documents to the court pursuant to the subpoena. The second step is the decision of the judge concerning the preliminary use of the documents, which includes whether or not permission should be given to a party or parties to inspect the documents. The third step is the admission into evidence of the document in whole or in part; or the use of it in the process of evidence being put before the court by cross-examination or otherwise. Those persons included solicitors and counsel for the applicants and Multiplex. I considered that the persons who had signed the undertakings referred to in that order and subsequent amendments to it should be entitled and allowed to have access to the two documents on pp 228 and 231 of Confidential Exhibit ANS-6, and that those documents should be made available to those persons on the terms that the undertaking they had signed in relation to ASIC's confidential affidavit applied to the two documents. Having regard to the statements made by Senior Counsel for ASIC subsequently on 7 April 2009 (par [128] post), that access was not pursued by the applicants' counsel. The adjourned hearing of the Notices of Motion came on for hearing on 7 April 2009 when counsel for the applicants called on ASIC to produce the documents referred to in the two Notices to Produce. Prior to that hearing, ASIC sent a letter on 3 April 2009 to my Executive Assistant, copied to the solicitors for the applicants and Multiplex, in which, in response to an earlier request from me, ASIC objected to the release of two confidential documents which appeared in Confidential Exhibit ANS-6 to the affidavit of Anna Skreiner sworn 6 February 2009 at pp 228 and 229 and pp 231 and 232. These documents were also part of Confidential Exhibit LAM-11 to the confidential affidavit of Louise Macaulay affirmed 3 September 2007. In the letter ASIC contended that these two documents were covered by both PII and legal professional privilege. The reasons for this include the above. At the commencement of the hearing on 7 April 2009 Senior Counsel for ASIC, in response to a call from the applicants' counsel to produce the documents referred to in the Notices to Produce made a number of statements which I summarise: the Notices were not answered; some documents falling within the terms of the Notices to Produce had been found but were not produced; there was a reference to the Four Corners broadcast on 5 September 2005 in documents which were included in the material placed before me on 11 September 2007. These documents were to be found at pp 225, 228-232 and 234 of Confidential Exhibit ANS-6. They remain confidential exhibits. ASIC was not suggesting that these documents were drawn to my attention; ASIC accepted that on the basis of these documents it was relevantly aware of the broadcast of the Four Corners program on 5 September 2005 and the content of the program which was broadcast at the time of the hearing before me on 11 September 2007 and the hearing before the Full Court on 8 May 2008; there was no duty on ASIC to disclose to me or to the Full Court the fact of the broadcast of the Four Corners program; ASIC had not breached any duty which it owed to the Court; the hearing before me on 11 September 2007 could not be categorised as an ex parte application which involved a duty of full disclosure being imposed on ASIC; as the purpose of the Notices to Produce had been resolved, namely the forensic exercise of establishing that at the time of the hearing before me on 11 September 2007 and at the time of the hearing before the Full Court on 8 May 2008 ASIC was aware of the broadcast of the Four Corners program, the purposes of the Notices to Produce had been resolved and there was no need for them to be called on. At the hearing on 7 April 2009, ASIC relied upon an affidavit of Abigail Sheppard affirmed on 7 April 2009. Ms Sheppard produced in a confidential exhibit to that affidavit six documents which were contained in an ASIC file containing internal ASIC documents and file notes relating to the Multiplex investigation in 2005 which appeared to her to be relevant to the Notices to Produce. Ms Sheppard also said that searches of archived files had disclosed 30 files located off-site. I therefore adjourned the further hearing of the call on the Notices to Produce to 21 April 2009 to enable ASIC to determine whether any further documents were to be produced in response to the Notices to Produce. ASIC submitted that the documents which it produced pursuant to the Notices to Produce were privileged from production and inspection on the grounds of PII and, in respect of two of the documents, on the ground of legal professional privilege. I consider that the documents in respect of which legal professional privilege is claimed are so privileged from production for inspection. I am satisfied that they have come into existence for the purpose of a client seeking legal advice in relation to subject-matter set out in the documents. The fact that those documents have been communicated to ASIC does not destroy the privilege as I consider that there is a common interest between ASIC and the relevant client in relation to the subject-matter recorded in the documents: Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (The Good Luck) [1992] 1 AC 233 ; Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 ; Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 410-411; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 ; University of Western Australia v Gray (No 12) [2007] FCA 396 at [4] ; Heydon JD, Cross on Evidence (7 th Australian ed, 2004), [25265]. The documents sought by the two Notices to Produce have been sought for the limited purpose of establishing that on the date of the hearing before me on 11 September 2007 and on the date of the hearing before the Full Court, ASIC was aware that the Four Corners program on Multiplex had been broadcast on 5 September 2005 and was also aware of the contents of that broadcast insofar as that broadcast stated that someone had blown the whistle at Multiplex and that Multiplex's group accounting general manager had gone to ASIC. At the hearing before me on 7 April 2009 counsel for ASIC acknowledged that ASIC was so aware. For present purposes, the documents sought in the Notices to Produce satisfy no other forensic purpose. On 20 April 2009 Ms Sheppard affirmed a further affidavit in which she explained the steps ASIC had taken, and still needed to take, in order to determine whether there were any further documents to be produced in response to the Notices to Produce. On 21 April 2009, counsel for the applicants did not seek to call on ASIC any further to produce documents pursuant to the Notices to Produce or to seek access to the documents already produced. He adopted this position on the basis that the forensic exercise sought to be accomplished by the Notices to Produce had been satisfied. That exercise was to establish that on 11 September 2007 before me and on 8 May 2008 before the Full Court, ASIC was relevantly aware of the fact of the Four Corners broadcast on 5 September 2005 and the content of that broadcast. If such a duty exists and has been breached the next question to determine is whether that is relevant to the present application and the motions before me. There is clear authority for the proposition that on an ex parte interlocutory hearing before the Court, in the absence of the party against whom the order is sought, the moving party is under a duty to the Court to make full disclosure of all material facts relevantly bearing upon the orders and relief which the moving party is seeking. There is also clear authority for the proposition that if it be established that such full disclosure was not made at the time an ex parte interlocutory order was sought and made, then the fact of that non-disclosure is a sufficient ground of itself, for discharging the order which had been obtained from the Court. It has been well established for well over one hundred and fifty years that a party moving a court for an injunction ex parte, that is to say in the absence of the party against whom the order is sought, is obliged to put before the Court all the material and relevant facts and circumstances of which it is aware which bear upon the determination of the application for the relief sought: Hilton v Lord Granville [1841] EngR 827 ; (1841) 4 Beav 130 ; 49 ER 288 ; Hemphill v M'Kenna (1842) 3 Dr & War 183 at 194. If a party fails to carry out this obligation, such a failure is sufficient in itself to warrant the discharge or setting aside of the ex parte order made by the Court. Uberrima fides is required, and the party inducing the Court to act in the absence of the other party, fails in his obligation unless he supplies the place of the absent party to the extent of bringing forward all the material facts which that party would presumably have brought forward in his defence to that application. Unless that is done, the implied condition upon which the Court acts in forming its judgment is unfulfilled and the order so obtained must almost invariably fall. I add the word "almost" in deference to such an exceptional case as Holden v. Waterlow . The obligation is stated by Turner L.J. in that case to be to "state their case fully and fairly," and so by Sugden L.C. in Dease v. Plunkett ...(at p.261), where he said:- "The plaintiff had not fully and fairly disclosed the entire facts of the case. " Lord Cottenham L.C., in Brown v. Newall ... (at p. 579) observes that the power to grant such an injunction should exist is indispensable, but, from the liability to injustice, must be exercised with caution. Then he says:- "The Court can have no ground upon which it can proceed, in granting an ex parte injunction, but a faithful statement of the case. " The learned Lord Chancellor distinguishes between mis-statement, or suppression likely to influence the Court in acceding to the application, and that which is immaterial. The obligation of candour and diligence exists in such a case. That does not mean stating matters obliquely, including documents in voluminous exhibits, and merely not mis-stating the position. It means squarely putting the other side's case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondents' behalf. That is the responsibility of the applicant, through its representatives . See also Grant Matich & Co Pty Ltd v Toyo Menka Kaisha Ltd (1978) 3 ACLR 375 at 376. The obligation must extend so far because the ex parte procedure constitutes an exception to the rules of natural justice. Furthermore, it is not reasonable to impose upon the Court the obligation to sift through the papers for the purpose of ascertaining everything which is material to its decision whether to grant the relief sought. However, it seems to me no counsel can assume that the Judge has the time to read the whole of the contents of a District Court file before the application for leave to appeal. Nor can it be assumed by counsel that a Judge can read the file, on an application for leave to appeal, knowing the matters to which he or she ought to be addressing their mind, for the purpose of determining what is material. ASIC submitted that the hearing before me on 11 September 2007 could not be characterised as an ex parte hearing. It was submitted that ASIC at that stage was not an applicant but was rather a respondent seeking to resist an order which had been sought against it. ASIC submitted that no duty of full disclosure could be imposed upon a respondent. ASIC submitted further that in any event, in the course of the ex parte hearing in camera I expressed a tentative view then a firm view which was fatal to the case which ASIC was seeking to maintain and that as a result, consideration of any wider disclosure of the identity of the whistleblowers became irrelevant, and any issue relating to disclosure of the Four Corners broadcast on 5 September 2005 was still-born. In support of this submission counsel for ASIC relied on a number of passages in the confidential transcript of the in camera hearing on 11 and 17 September 2007. I refer to those passages in the confidential appendix to these reasons which are only to be published to ASIC and its legal advisers until further order. I do not accept that anything I said in the course of those in camera hearings expressed either a tentative or a firm view such as to render any issue of a disclosure by ASIC of the Four Corners broadcast on 5 September 2005 irrelevant or still-born. In my opinion, the relevance of the Four Corners broadcast and the obligation of ASIC to disclose it to me had arisen at a point of time prior to the commencement of the ex parte hearing in camera before me, and at the latest, at that commencement. I also consider that the obligation of ASIC to disclose it to me continued throughout those in camera hearings. The submissions made by ASIC in the course of the in camera hearings demonstrate that there was an abundance of opportunities and calls for ASIC to raise its knowledge, and the fact, of the Four Corners broadcast on 5 September 2005. As I have observed earlier, in the course of the open hearing before me on 11 September 2007, Senior Counsel for ASIC was not prepared to state that the basis of ASIC's claim for PII was informer privilege or whistleblower privilege, that is to say, that it was seeking to protect the identity or identities of informers. As I have also noted earlier, it is now apparent that the reason for that stance was that ASIC was concerned that if it made known that was the basis for its claim for PII, attention would immediately be directed to the identity of the informer or informers being the person referred to in the Four Corners broadcast. I can see no other basis why Senior Counsel for ASIC was "delphic", that is to say, ambiguous, enigmatic and confusing. I am satisfied that in these circumstances ASIC owed a clear duty to the Court to bring to the Court's attention the fact of the Four Corners broadcast in the ex parte hearing in camera at the start of that hearing, at the least, if its view was that disclosure of the basis of its claim for PII would, or might, identify the identity of an informer to ASIC. I accept that limited disclosure of the identity of an informer, such as to persons within the Multiplex organisation, does not destroy or negate ASIC's claim for protection of the identity of that person who is an informer to it on the ground of PII. So much was decided by the Full Court. Nevertheless, it is clearly relevant to the consideration of ASIC's claim for PII that not only was there the limited disclosure to the persons within Multiplex referred to by the Full Court but also that there was a wider dissemination of the identity of the position the informer held at Multiplex through the broadcast of the Four Corners program on 5 September 2005 and the other media reports, to which I have referred. In those circumstances, independently of the ground or reason for allowing a second interlocutory application for relief along the same lines as an earlier interlocutory application on the basis of fresh evidence or materially changed circumstances, I consider that the effect of the non-disclosure of the Four Corners broadcast to me by ASIC is that exceptional circumstances have arisen and that, in substance, ASIC's application to resist, and its grounds for resisting, the claim for production and inspection of the documents sought in the subpoena should be visited afresh. It would not be in the interests of justice to do otherwise. It is in the interests of justice to do so. I am also satisfied that the applicants were not given the opportunity to bring to the Court's attention the fact of the Four Corners broadcast and the media reports because of the nature of the correspondence between the applicants' legal advisers and ASIC after the service of the subpoena, the submissions made by counsel for ASIC on 7 August 2007 and 11 September 2007, the ex parte in camera hearing on 11 and 17 September 2007 from which the applicants were excluded and the Special Counsel regime imposed for the Full Court hearing. I have concluded that the circumstances upon which the applicants rely to renew their call for production of documents pursuant to the Subpoena to Produce issued on 13 July 2007 constitute either a material change in circumstances since their original application heard before me on 11 and 17 September 2007 and since the hearing before the Full Court or the discovery of new material which could not reasonably have been put before me on 11 or 17 September 2007 or before the Full Court. I have also concluded that those circumstances constitute such exceptional circumstances as, consistently with the reasoning of the Court of Appeal in Manning warrant the exercise of my discretion in favour of allowing the applicants' motion filed on 16 January 2009 to be heard and determined on its merits. I am also of the view that it would be unjust not to allow the applicants to make a further application to inspect the documents produced by ASIC under the subpoena in respect of which ASIC claims privilege from production on the ground of PII: Adam P Brown Male Fashions Proprietary Limited v Phillip Morris Incorporated (supra); National Parks and Wildlife Service v Pierson (supra) (par [39] above). The result of the determination of the threshold issue is that the applicants' notice of motion filed on 16 January 2009 is not an abuse of process and they are entitled to proceed with it and have it determined on its merits. I so rule. Multiplex's notice of motion should be dismissed. I certify that the preceding one hundred and fifty-five (155) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | subpoena to produce public interest immunity privilege claim rejection of claim by trial judge reversed on appeal ex parte in camera hearing duty of full disclosure re-hearing of interlocutory applications abuse of process relevant principles notice to produce. practice and procedure |
On 22 December 2004, the appellant lodged an application for a protection (class XA) visa. 3 The appellant claimed that she had witnessed electoral fraud during the Indonesian presidential election of 2004. She reported what she saw to the Komiti Pemilihan Umum ('the KPU'), the Indonesian National Elections Commission, in her local area. She claimed that the following day she was threatened with death if she 'did not keep quiet'. Days after that she was assaulted by young men. She suspected that her report to the KPU had leaked. She hid at a friend's place but was then told to leave the house because of the fears her friend held as a result of offering a safe haven to the appellant. The appellant departed from Indonesia. She feared that she would suffer serious harm if she returned to Indonesia and that the authorities would not protect her. The application indicated that she had been residing at that address since November 2004. The appellant's postal address was nominated as Suite 201, Level 2, 78 Liverpool Street, Sydney. This was Mr Marzukie's postal address as identified in the application itself. 5 On 26 May 2005 a delegate of the Minister refused to grant the appellant a protection visa. The delegate found that the appellant's fears were not well-founded because the latest US State Report for Indonesia indicated that, notwithstanding the Indonesian government's poor human rights record, observers monitoring the elections considered the elections were largely free and fair. That application recorded no further claims. The application indicated that the appellant's residential address and address for correspondence was 45/2-8 Brisbane Street, Surry Hills, New South Wales and indicated a mobile phone number as the appellant's. No adviser was nominated by the appellant as authorised to act for her in relation to the application for review. The appellant appeared to have signed the declaration herself on the application form, and there was no indication that an interpreter was used in the preparation of the application for review. This was the last piece of correspondence with the Tribunal that was initiated by or on behalf of the appellant. 7 On or about 18 August 2005 the Tribunal sent an invitation to attend a hearing to be held on 18 October 2005 to the address for correspondence nominated in the application for review. There was no response to that invitation. 8 On 5 October 2005 the Tribunal phoned a mobile phone number and 'left the Tribunal's contact number'. There was no evidence from the person who made the telephone call about what type of message was left on the mobile telephone. 9 The Tribunal made no further attempt to contact the appellant on the mobile telephone number in the application for review, including on the day of the hearing. 10 On 18 October 2005 the appellant did not attend the hearing before the Tribunal. The Tribunal proceeded to make its decision affirming the decision under review without taking any further action to enable the appellant to appear before it. It affirmed the delegate's decision on the basis that it could not be satisfied of the appellant's claims, notwithstanding that it accepted that some minor fraud occurred during the 2004 election. The grounds of that application contested the merits of the appellant's refugee claims and the fairness of the Tribunal's decision. 12 The appellant appeared in person at the hearing before the Federal Magistrates Court. She explained that she did not attend the Tribunal hearing because she was sick, did not know the telephone number of the Tribunal, and was not fluent in English. 13 The Federal Magistrate found that none of the appellant's grounds was made out and that the Tribunal properly exercised its discretion under s 426A of the Migration Act 1958 (Cth) ('the Act'). The court observed that the independent country information supported the proposition that there was electoral fraud in Medan, which was the area where the appellant lived. Providing, or procuring the provision of, a residential address and an address for service for the Appellant to the Tribunal which Mr Marzukie knew were not the Appellant's residential address or an address at which the Appellant could access correspondence and were not addresses of which the Appellant was aware of prior to the Tribunal handing down its decision. Failing to tell the Appellant the time and place of the Tribunal hearing failing to disclose the invitation to hearing dated 18 August 2005 prior to the Tribunal handing down its decision. Failing to disclose to the Appellant, prior to the Tribunal handing down its decision, that the delegate of the First Respondent had rejected her application for a protection visa. Failing to disclose to the Appellant, prior to the date of the Tribunal handing down its decision, any correspondence sent to the Tribunal on her behalf or any correspondence received from the Tribunal on her behalf, including the fact that an application for review had been filed on her behalf. Directing or instructing the Appellant not to go to the interview but rather to attend to her work duties as a nanny for his child. By the above conduct, Mr Marzukie denied the Appellant access to information that was critical to her application for review with the Tribunal and thereby knowingly deceived the Appellant. She was thereby denied a real and meaningful invitation to the Tribunal hearing and this subverted the Tribunal's obligations to provide such an invitation under s 425 of the Migration Act 1958 and subverted the Tribunal's exercise of discretion under s 426A. The Court below erred by failing to find that the Tribunal's exercise of discretion under s 426A miscarried because of its failure to consider whether the reason for the Appellant's failure to respond to the invitation to hearing and attend the hearing could have been due to the fact that the invitation was wholly in English and was not in a language that was capable of being understood by the Appellant and therefore was not a real and meaningful invitation. The Court below erred by failing to find that the decision of the Tribunal was vitiated by jurisdictional error as a result of the Tribunal's failure to undertake a reasonably open and regular administrative procedural step to provide the Appellant with a real and meaningful invitation to hearing. The Court below erred in law by finding that the Appellant received several letters from the Tribunal in the absence of any evidence as to receipt of the letters. The appellant sought to rely upon two affidavits, through an interpreter, which set out the factual material she sought to rely upon. I set out the contents of those affidavits, omitting formal parts and the exhibits thereto making my own emphasis of certain portions. I am citizen of Indonesia. I am 43 years old. I do not speak, read or write English . My solicitor has prepared this affidavit as a result of interviews with him on 6, 7 and 28 August 2007, and on 6 October 2007. I participated in those interviews with the assistance of a friend, Juliana Japit who speaks Indonesian. I was 40 years old when I arrived in Australia from Indonesia on 22 November 2004. Before I arrived in Australia, I spent my entire life in Indonesia in the city of Medan which is the main city on the island of Sumatra. At the age of 19 I finished school in Indonesia . I did not get enough marks to go to University. I subsequently worked selling little trinkets, such as key rings, in a shack in Medan that I rented until the age of 34 years. After that I worked as a housekeeper to support my two sons. My ex husband did not support me and my two sons during the period that I was married to him. I had to get a divorce from him because he regularly beat me while I was living with him. Even though I tried to escape from him several times, he would find me and beat me. The police did not protect me from this violence. The main reason I came to Australia on 22 November 2004, was for fear of my life and fear of being put in jail in Indonesia on false charges. When I arrived in Australia I sought out the assistance of a Migrant Agent who could help me to get the protection that Australia offers from those in Indonesia who want to harm me. I met Mr Erwin Marzukie who told me he was a Migrant Agent. He offered to help me by lodging on my behalf an application for a protection visa. He completed my application for protection visa which appears at Court Book pages 1 to 26 and lodged that on 22 December 2004. Can you help me? How are you going to support yourself in Australia? Can I trust you to do this? Remember that if you cannot support yourself in Australia you will be sent back to Indonesia, I am offering you a chance to support yourself in Australia, if you ask questions then you are on your own. You know that I cannot speak English, nor can I read and write English, and that there is nobody in Australia that can help me because I do not have any friends or relatives in Australia, and you are my only hope of escaping with my life from Indonesia, and even now that I am in Australia, I am still afraid because at any time I might be sent back to Indonesia. In your application for the protection visa I will put your residential address being that of one of the staff that work for me, you understand, because I said, there will be problems if I put your residential address as my house. You just have to trust me. You are the only one in Australia that is able to help me, I fully rely on you. That is, you will work for me six and a half days per week as a live in nanny. Remember, if you tell anybody about working for me, then you would most probably be sent back to Indonesia, do you understand? You tell nobody about this. The main reason for me claiming to be a refugee is as stated in that application on pages 7 to 10 of the Court Book. On the last election day in Indonesia when people had to choose a president, like any normal election day, people lined up to vote from morning to afternoon. Around 6:30 in the afternoon I saw a mini truck approaching the place where voting was conducted. Suddenly many people carrying boxes from the truck and replacing them with those boxes inside the police booth. I heard some of them saying if most boxes had been replaced. After the counting of votes, I realised that there had been some sort of fraud in the voting system when the "original" votes were replaced earlier by those people from the truck. I could not sleep that night as it was unfair that the votes had been "fixed". The next few days I reported this event to KPU (Komiti Pemilihan Umum) or the election committee in the local branch giving details of what I saw. The next day, I was approached by a few persons who threatened to kill me if I did not keep quite [sic]. A few days later I was kicked and punched by some young men. I managed to run and hide in my friend's place. A few weeks later she told me to leave the house for fear that it would involve her and her family. I had no choice but to leave the country temporarily. [What do you fear may happen to you if you go back? To shut me up, the [sic] may put me or frame me doing something and send me to jail. [Why do you think this will happen to you if you go back? In order to avoid this, they will shut me up by sending/framing me to go to jail or silence me forever. Mr Marzukie completed my application for a protection visa stating my residential address was 45/2-8 Brisbane Street, SURRY HILLS NSW 2010, (the Surry Hills address) being the residential address of a member of his staff known to me as Jenny. I never lived at that address. During the entire period that I was residing in Mr Marzukie's house at 4 Gabrile Avenue, LIVERPOOL, being the period from December 2004 to December 2005, Mr Marzukie passed on to me only 2 letters that were addressed to me regarding this matter . These letters are annexed hereto and marked with the letter "A" is a copy of a letter from the Refugee Review Tribunal dated 21 October 2005 (see Court Book at pp 50-51); and annexed hereto and marked with the letter "B" being a copy of a letter from the Department of Immigration and Multicultural and Indigenous Affairs, dated 10 January 2005 (see Court Book at pp 27-28). These 2 letters were not translated to me . I would be able to make sense of only small parts of these letters because my ability to read English is very poor, and except for Mr Marzukie and his wife, Mrs Fiona Vimala Marzukie, I knew nobody in Australia who could translate these letters. I did not want to upset Mr Marzukie and his wife so I did not trouble them with translating those letters because I was worried that if I upset them I would lose my job working for them as a live in nanny. I knew that if I lost my job I might not find any other jobs and when my money ran out I would be sent back to Indonesia. I also trusted that Mr Marzukie would translate to me those letters if they were very important . Mr Marzukie was a Migration Agent and an accountant. His wife works with him. I was taking care of his 2 year old daughter, Miss Hermione Teresa Marzukie. She is the only child of Mr Marzukie's second wife, Mrs Fiona Vimala Marzukie. Mrs. Marzukie is Indonesian, and she was married [sic] Mr Marzukie in the year 2000. His first wife lives in Wollongong, and she is of the Vietnamese origin. Mr Marzukie has 2 daughters from his first wife, Natasha and Sarah. One of those daughters is about 14 years old and the other, is about 10 years old. Natasha and Sarah stayed about 2 weeks in their father's house. Mr Marzukie's house is very big. It also has a big back yard. Mr. Marzukie and his wife have their bedroom upstairs, and Mr. Marzukie's office containing computer equipment and printers is located in an upstairs room of the house. My room was downstairs next to the garage. Hermione sleeps with them in the same room at night. During the day, when both Mr and Mrs Marzukie were at work, she slept in my bedroom. Hermione went to day care on Wednesdays and Thursdays at the World Tower in Liverpool Street in the Sydney CBD. On Wednesdays, Mrs. Marzukie takes her there, so that I can clean the house and do the vacuuming. I cannot do the vacuuming of the house when Hermione is in the house because the sound of the vacuuming would wake her up. On my half day off, being a Thursday, I take Hermione to the day care at the World Tower, and at 5.00 pm I collect her and bring her to the house. I did not realise until I was interviewed by my current solicitor on 6 August 2007 that my protection visa was refused by a delegate of the Department of Immigration, notwithstanding that I received the Court Book from the Minister's solicitors prior to the hearing before the Federal Magistrates Court on 11 July 2007. Neither Mr Marzukie nor his colleague Jenny provided me the letter from the Department of Immigration dated 26 May 2005 that stated my application for a protection visa had been refused (see Court Book 29-40) . The first time I was provided the documents at pages 29 to 40 of the Court Book was by the solicitors for the Minister prior to the hearing before the Federal Magistrates Court which was contained in the Court Book for the hearing. The first time that the significance of those documents was explained to me was on 6 August 2007 by my current solicitor. As I cannot read and write the English language, and the Federal Magistrates Court was aware of this fact, the Court Book that was provided to me by the Minister's solicitors prior to the hearing before the Federal Magistrates Court was in the English language. Although I knew that understanding the content of the Court Book was important, there was no one available that I knew who could translate the Court Book to me. As such, I was severely disadvantaged at the Federal Magistrates Court because I had no knowledge at all of the content of the Court Book. The Indonesian interpreter provided at the hearing before the Federal Magistrates Court was not available to translate the Court Book to me, and his assistance was limited to the function of interpreting at the hearing, the questions asked of me and the replies that I gave. I also did not realise until I was interviewed by my current solicitor on 6 August 2007 that Mr Marzukie applied to the Refugee Review Tribunal on my behalf on 28 June 2005 for a review of the delegate's decision, notwithstanding that I received the Court Book from the Minister's solicitors prior to the hearing before the Federal Magistrates Court on 11 July 2007. I cannot recall having signed the form at Court Book pages 41 to 44 and I do not think that I did sign that form but I cannot be certain about this because I do not understand the contents of the form and therefore my recollection is not perfect. The first time I was provided with a copy of the documents at pages 41 to 44 of the Court Book was by the solicitors for the Minister prior to the hearing before the Federal Magistrates Court. The first time that the significance of those documents was explained to me was on 6 August 2007 by my current solicitor. Mr Marzukie did not put his details as my Migrant Agent in the application for review by the Refugee Review Tribunal at page 43 of the Court Book, notwithstanding that he had agreed to be my Migration Agent. I then went to my bedroom to check the Calender in my mobile phone to see what day of the week 18 October was, and found it was a Tuesday which was not my half day off work. As stated above, my half day off work was on a Thursday. When, on about 4 October 2005, Mr Marzukie told me about the hearing, as stated in the above paragraph, I thought it was just an interview with someone at the Department of Immigration. I basically knew nothing about this hearing. Mr Marzukie did not tell me that it was a hearing, he said it was an in interview, and he did not tell me that it was with the Refugee Review Tribunal. I did not know the address and the time of the hearing. Mr Marzukie did not provide me with the invitation to the hearing that appears at Court Book page 47 to 48 or the documents that are stated to have been enclosed with that invitation. I have never seen those documents that were supposed to have been enclosed with the invitation to hearing . I did not realise the significance of the invitation to the hearing until after 15 November 2005 when Mr Marzukie handed me the letter contained in annexure "A" (see Court Book at pp 50-51). To date, this letter was the only letter I ever received from the Refugee Review Tribunal, and there was no brochure with it. Specifically, I had no knowledge until after 15 November 2005 that this scheduled hearing wan an opportunity for me to explain the basis for my fears of returning to Indonesia and to answer questions in respect to my fears. At that time I had no knowledge that this was my last chance to explain the basis for my fears of being seriously harmed if I returned to Indonesia. On Tuesday morning, 18 October 2005, I was dressed up to go with Mr. Marzukie in the morning to his city office so that he could show me where to go to the interview. I kept my mobile phone in my bedroom in the ground floor of Mr Marzukie's house, and I kept it switched off because Mr Marzukie' s 2 year old daughter, Hermione, sleeps in my bedroom. Who will take care of Hermione when you are at the interview? You have to stay with Hermione because there is no one else to take care of her. OK? Get back into your work clothes. I did not realise that Mr Marzukie had put my mobile phone number in my application for review (see Court Book at page 42). I therefore never expected that I would be contacted on my mobile phone. One day when I switched on my mobile phone I saw that I had a missed call. I did not realise that, the missed number was in respect to a phone call from the Refugee Review Tribunal . I only realised this when, at a date after 15 November 2005, Mr Marzukie handed me the letter contained in annexure "A" (see Court Book at pp 50-51) from the Refugee Review Tribunal that stated that the decision would be handed down on 15 November 2005. On that letter, it had the same telephone number as the missed phone number on my mobile phone. Because this letter was in the English language, there was no information, other than the date and the telephone number that I could understand. There was no way for me to go to the interview on 18 October. I did not know where the interview was because Mr Marzukie never told me the address where the interview was held. I had Hermione with me and therefore could not take her with me to the interview as I did not have the permission to do that from Mr and Mrs Marzukie. Hermoine was 2 years old, I could not leave her alone in the house. As I depended on Mr Marzukie for my livelihood and as I was living in his house, I dared not oppose him. I also thought that since Mr Marzukie was a Migrant Agent, he would have allowed me to go to the interview if it was very important for my future. I trusted him to do the right thing by me. Mr Marzukie knew because I was working as a live in nanny for him six and a half days per week, that I was therefore socially isolated . I had no friends, relatives or anyone else who I could talk to about my concerns, and as such Mr Marzukie knew that I was completely dependent on him for advise and assistance. During the entire period I was with Mr Marzukie, he failed to communicate to me anything dealing with my matter except for pointing out to me the date of the interview . I did not ask him anything about my matter because I was afraid that I would upset him and it could get me sacked. In the morning of 18 October 2005, when I realised that I would not be going to the interview, I wanted to call up to tell them I would not be attending, however up to that day and until after 15 November 2005, I did not know where the interview was, whom it was before or how to contact the people running the interview. Mr Marzukie had not given me any letters that told me these things. When Mr Marzukie's aunty arrived in about 23 December 2005 to take care of his daughter, Mr Marzukie sacked me and told me that he would not help me with my Visa any more, and that I was from then on, on my own. After I was sacked, I found Ms Shuang Zhang of 108/413-415 Sussex Street, SYDNEY, a Migrant Agent, who helped me with my application to the Federal Magistrates Court. Ms Zhang did not speak Indonesian and I had a lot of trouble communicating with her in the English language as I had no one who could interpret for me . It was impossible to communicate to her my circumstances. The first person that was able and willing to interpret for me in Australia, and help me, was Ms Juliana Japit who I met for the first time in August 2007. At the Federal Magistrates Court, I said that I did not attend the hearing because I was sick. This was not true. The reason why I said this was that I did not want to break the promise I made to Mr Marzukie that I would not tell any one that I was working for him as a nanny. At the time, I did not realise that Mr Marzukie had taken advantage of me, and that because of his actions, I may be deported to Indonesia where I could potentially be silenced either by ending up in Jail, or worse, losing my life. I like to add this Affidavit to the filed Affidavit that I affirmed on 11 October 2007. Since affirming the Affidavit on 11 October 2007, I have had a chance refresh my memory, and as a result if there is any conflict between this Affidavit and the Affidavit that I affirmed on 11 October 2007, this Affidavit will contain the true information and not the other Affidavit. I arrived in Australia on 22 November 2004, and commenced work with Mr. Erwin Marzukie on 29 November 2004, as a live-in-nanny. I commenced work with Mr. Marzukie on the basis that he was looking for a live-in-nanny. When I commenced work with Mr. Marzukie, I did not know that he was a Migrant Agent until several days after commencing work, when on about 3 December 2004, Mr. Marzukie inquired about my Visa while in Australia. When on about 3 December 2004, I told Mr. Marzukie about my Visa, Mr. Marzukie referred me to another Migrant Agent. Later on about 3 December 2004, before the other Migrant Agent commenced his work, that Migrant Agent informed me of his fees, which I could not afford as I have just arrived in Australia, and had little money with me. When I explained to Mr. Marzukie that I could not afford the fees of the other Migrant Agent, he said he will do the work for me, for free. Can I trust you to do this? If I cannot trust you that you will not mention that you are working for me as a live-in-nanny, I will find someone else instead. You know that I cannot speak English, nor can I read and write English, and that there is nobody in Australia that can help me because I do not have any friends or relatives in Australia, and you are my only hope of escaping with my life from Indonesia, and even now that I am in Australia, I am still afraid because at any time I might be sent back to Indonesia. In your application for the protection visa I will put your residential address being that of one of the staff that work for me, you understand, because I said, there will be problems if I put your residential address as my house. You just have to trust me. You are the only one in Australia that is able to help me, I fully rely on you. That is, you will work for me six and a half days per week as a live in nanny. Remember, if you tell anybody about working for me, then you would most probably be sent back to Indonesia, do you understand? You tell nobody about this. I have worked for Mr. Marzukie from 29 November 2004 to 23 December 2005, as a live-in-nanny. As stated in paragraph 9 above, Mr. Marzukie paid me $450.00 per week, and I receive free board and lodging, worth about $100.00 per week. As stated in paragraph 9, above, I worked for Mr. Marzukie 6 days and a half per week, where I have half a day off work every week, every Thursday afternoon. The time I spent working per day is on average 17 hours per day. I wake up at 6.00am, and start work about 6.10am. I then go to the kitchen and boil water for Mr. and Mrs. Marzukie, so that they can have hot water for their coffee when they come downstairs. While Mr. and Mrs. Marzukie are at the office, I do the cooking for all, the Marzukie family, and I also clean the house. Most of the cooking I do when Hermione is sleeping in my bedroom between 1.30 pm and 3.30 pm. I also do all the laundry washing and ironing, for the whole house. I then empty all the rubbish bins in the house and take the rubbish outside. Every second weekend, Mr. Marzukie's daughters from his previous marriage, Natasha and Sarah, come on Friday night and leave Sunday afternoon. I have to do extra work when they visit because they leave food all over the TV room which I have to clean up, and when they use the family bathroom they make a big mess which I have to clean up. Based from the above my income per week from Mr. Marzukie is $450.00 plus board and lodging worth about $100.00 per week, a total amount of being $550.00 per week, for working about 110 hours per week, which means my hourly rate while working for Mr. Marzukie is $5.00 per hour, and I am not entitled to sick leave or holiday leave. At $550.00 per week my annual total income from Mr. Marzukie would be $28,600.00. On or about 17 October 2007 or 18 October 2007, after Mr. Marzukie had been served with this Appeal's filed documents, I received 3 phone calls from Mrs. Marzukie, which I did not answer, and an SMS message from her "Offering me part-time work", which I did not respond to. 19 There was debate before me as to the relevant considerations that may lead to the reception of further evidence by reference to a number of authorities: see for example Orr v Holmes [1948] HCA 16 ; (1948) 76 CLR 632 , at 640-642; Arnotts v Trade Practices Commission (1990) 97 ALR 555 at 612; Greater Wollongong City Council v Cowan (1955) 93 CLR 435 at 444, and generally Murdaca v Accounts Control Management Services Pty Ltd [2007] FCA 577. 20 Section 27 of the Federal Court of Australia Act 1976 (Cth) ('the Federal Court Act') permits this Court in its discretion to receive further evidence. The exercise of the discretion to receive further evidence must be exercised judicially and consistently with the judicial process. I am not confined to the common law considerations relating to the reception of fresh evidence. So much is clear from the principles enunciated in CDJ v VAJ (No 1) [1998] HCA 67 ; (1998) 197 CLR 172 at [52] - [53] per Gaudron J in dealing with an equivalent provision in the Family Law Act 1975 (Cth). Nevertheless, there are well-established, sound principles surrounding admission of fresh evidence which should normally be considered as relevant to the exercise of the discretion to receive further evidence pursuant to s 27 , but which should not constrain this Court in considering the overall demands of justice. The first ground was that the appellant was denied a real and meaningful invitation because of the conscious deception by her migration agent on the basis of the principles in SZFDE v Minister for Immigration and Citizenship [2007] HCA 35 ; (2007) 237 ALR 64. The second ground was that the Tribunal's failure to take a simple administrative step such as calling the appellant on the day of the hearing was a miscarriage of the Tribunal's discretion under s 426A. It is highly desirable that those allegations be tested at first instance, and not in the appellate jurisdiction of this Court. I understand that the stakes for the appellant are very high, and that she may hold subjective fears of serious harm or even death, by reason of her actions in Indonesia. The prejudice to the appellant is a factor to be considered. Finality in litigation is a significant factor, although it must be weighed in the balance with other aspects, including what is at stake for an appellant. In view of my conclusions as to the other matters relevant to the reception of further evidence, the consideration of finality simply serves to support the final view I have reached in this appeal. 22 In relation to the ability of the appellant to provide the further evidence and whether there was a justification in not adducing the further evidence in the court below, it is necessary to examine the position as it existed before the Federal Magistrate on 11 July 2007, the date of the hearing. 23 At the outset I indicate that I do not accept as contended by the appellant that in the circumstances of this case, it can be said that the ground of appeal based upon the High Court decision in SZFDE [2007] HCA 35 ; 237 ALR 64 was not available because the High Court decision now relied upon was not handed down until 2 August 2007. The ground itself was known and was capable of being agitated, even if only formally, in view of the earlier Full Federal Court's different position. In any event, the reality of the position is that the appellant, unrepresented before the Federal Magistrate, probably had no knowledge of the legal position, but could and should have sought to put to the Federal Magistrate the true factual position in support of her appeal . This, she simply did not do. I do not consider that the fact that the ground of appeal now sought to be agitated would necessarily have been unsuccessful before the Federal Magistrate was the reason that the further evidence now sought to be adduced was not tendered before the Federal Magistrates Court. The appellant in full knowledge of the facts, chose to misinform the Federal Magistrate of the true position. 24 It is important to realise that, as the appellant herself deposes, on or about 23 December 2005 Mr Marzukie terminated the appellant's employment as a nanny and told her that he would no longer help her in relation to her visa, and stated that she was on her own. Another migration agent was found by the appellant to help with her application before the Federal Magistrates Court. The appellant suggests she had trouble communicating with this new migration agent due to language difficulties and was not in fact able to communicate her circumstances to anyone until August 2007. 25 Be that as it may, the facts and circumstances that are now sought to be relied upon by the appellant were obviously well-known to her at the time of the hearing of the Federal Magistrates Court. The appellant was no longer under the influence of Mr Marzukie or dependent on him for her livelihood, and had a new migration agent. 26 Before the Federal Magistrate no mention was made of any of the facts and circumstances now relied upon, and the appellant misinformed the Federal Magistrate that she was sick and that this was the reason she could not attend the Tribunal hearing. 27 The appellant now accepts that this was not true, and says that the reason why she misinformed the Federal Magistrate was because she did not want to break the promise she made to Mr Marzukie that she would not tell anyone that she was working as a nanny. She said she did not realise Mr Marzukie had taken advantage of her and that because of his actions she could be deported to Indonesia with possible serious consequences. 28 I should interpolate that these reasons for misinforming the Federal Magistrate were not sought to be put before this Court on this appeal, in that they were not read as being part of the evidence tendered by the appellant. However, the part of the affidavit containing these reasons was tendered by the first respondent as admissions of the appellant being contained in her first affidavit as filed (see par 31). 29 In my view, such reasons could only assist the appellant, as they seek to provide a justification for her deliberate misinforming of the Federal Magistrate. Without such evidence, this Court is only left with the fact that the appellant deliberately misinformed the Federal Magistrate that she was sick, and this was the reason she did not attend the Tribunal hearing, with no explanation sought to be made to explain the reason for the appellant so deliberately misinforming the Federal Magistrate. In the end, nothing turns upon the acceptance or otherwise of the reasons given for the appellant's conduct before the Federal Magistrates Court, but I have taken her explanation into account. 30 If Mr Marzukie still had some control over the appellant as at 11 July 2007 (the Federal Magistrates Court hearing date), and the appellant did not have a migration agent to assist her (even if only in a limited way), I could perhaps understand the appellant misinforming the Federal Magistrate. However, by 11 July 2007 (nearly one year and six months after being sacked by Mr Marzukie), the appellant freely chose not to inform the Federal Magistrate of the facts and circumstances now relied upon, and instead said she was sick at the time of the Tribunal hearing and for this reason could not attend. 31 Even accepting that the discretion to accept the further evidence now sought to be adduced is very wide, and is not to be limited by enumerating an exhaustive list of relevant considerations, an important consideration is whether the evidence was capable of being adduced by the appellant in the court below and whether there is any justification for the evidence not being adduced. The hearing before the Federal Magistrates Court was the appellant's opportunity to advance her case, and inform the Federal Magistrates Court truthfully of the facts. I am satisfied that the appellant did have the free choice and the ability to inform the Federal Magistrate of the facts and circumstances now relied upon. If the reason for not doing so was because of her promise not to tell about her employment, that was not a proper basis for misinforming the Federal Magistrates Court. 32 It was argued by the appellant that at the time of the Federal Magistrates Court hearing the appellant still did not understand the process, the documents, the invitation to the Tribunal hearing and the Tribunal's decision. It is to be recalled that she did not speak, read or write English, and was socially isolated and unable to obtain translation assistance. However, as I have said, it seems to me that the essential facts and circumstances which are now relied upon as to the reason for not attending, namely her relationship with Mr Marzukie and the conversation she had with him, are all matters she had experienced herself and could easily have been retold from her own knowledge at the time of the hearing. The appellant merely had to tell the Federal Magistrate that she had the responsibility of looking after a child as a nanny on the day, that no one else could look after the child, that she was dependant on Mr Marzukie for her livelihood and was living in his house, and that she dared not oppose him. The appellant could have told the Federal Magistrate that Mr Marzukie was her migration agent, that she trusted him, and that when he would not let her go to the Tribunal hearing she thought that this would be fine because Mr Marzukie was looking after her. None of these matters was beyond the personal knowledge of the appellant, and none requires an understanding of the documents or Tribunal processes. 33 I fully appreciate that the appellant was unrepresented before the Federal Magistrate, spoke no English, and did not appreciate the role and function of the Federal Magistrates Court. However, in response to the question of explanation for non-attendance, the appellant decided herself to misinform the Federal Magistrates Court when she had all the information at her disposal to properly inform the Federal Magistrates Court if she desired. 34 In any event, I take the view that the further evidence does not provide a basis for upholding the grounds of appeal now sought to be agitated by the appellant. 35 Looking at the contention regarding fraud on the Tribunal, the appellant relies upon the principles set out in the decision of the High Court of Australia in SZFDE [2007] HCA 35 ; 237 ALR 64. 36 It is important to consider the facts of that case and the relevant principle there identified. If you go they will refuse you. They are not accepting any visa applications at all at the moment. I am going to take a different approach. I am going to write a letter to the Minister. I am worried that if you go to the [Tribunal] you will say something in contradiction to what I will write. Don't worry. I'm doing what is best for you. It was headed "Application for Consideration [under] Section 417 of the Migration Act ". Section 417 conferred a power upon the minister, if the minister thought it was in the public interest to do so, to substitute for a decision of the tribunal a decision more favourable to an applicant. This and further requests of this nature were rejected. The result was to have "deprived the invitation to the hearing [of] its quality of being a meaningful invitation under s 425". The inference is well open upon the evidence that Mr Hussain acted as he did for self-protection, lest in the course of a tribunal hearing there be revealed his apparently unlawful conduct in contravention of restrictions imposed by Pt 3 Div 2 of the Act, particularly by s 281. The decision-making process was directly corrupted. As a direct result of the representation of Mr Hussain the appellant and her family were dissuaded from appearing before the Tribunal, and in fact did not appear. There was also in effect a conveying of a false impression to the Tribunal, namely that the appellant did not wish to appear. 39 Before this Court, the appellant has set out the basis of the fraud in the Further Amended Grounds of Appeal. The finding of fraud should have specified, in one place in the reasons, what was said that was fraudulent, how it was fraudulent, and how it was acted upon. The finding of fact that the magistrate made however was not challenged in these proceedings. The agent held himself out to be a practising solicitor and registered migration agent. He was neither. He gave fraudulent advice that the Tribunal was "not accepting any visa applications at all at the moment". He expressed a false concern that if [the first appellant] and her family appeared before the Tribunal they would say something inconsistent with his proposed submission to the Minister. The advice amounted to a representation that the Tribunal process was a sham and that participation in it might prejudice [the first appellant's] prospects of a successful outcome on the basis of a submission to the Minister. ... The decision-making process, that is the process of review which incorporates an opportunity for a hearing on the conditions set out in Pt 7 , was corrupted. The importance of the appearance before the Tribunal to the outcome of the review was highlighted by the Tribunal's reference, in its reasons, to matters which it did not have an opportunity to explore with [the first appellant] because of her non-appearance. On this basis, in my opinion, the decision of the Tribunal was vitiated. It was not a decision made under the Act and therefore not a privative decision protected by s 474 . 41 In SZFDE [2007] HCA 35 ; 237 ALR 64 at [45] the High Court drew inferences about the conduct and motivation of the agent in question in order to uphold the finding of fraud. In that case, the agent falsely held himself out to the applicants as a registered agent and a solicitor when he was neither. He took their money for a service that he was prevented by law from performing: see SZFDE [2007] HCA 35 ; 237 ALR 64 at [40] and [42]. He gave deliberately false advice which was designed to stop them from attending the Tribunal hearing (at [42]). If his conduct had been discovered he risked imprisonment for 10 years (at [46]). 42 However, in this appeal before me the factual position is quite different. Even if the appellant's evidence were to be accepted in every respect, the Court would find that Mr Marzukie was motivated by his personal desire to have the appellant look after his child for the day (because it suited his personal needs) and was in no way motivated to prevent the Tribunal from conducting a hearing. 43 I do not consider that Mr Marzukie was motivated to hide anything from the Tribunal. The conflict of interest suggested between looking after the appellant's interests and his own personal needs, even if in breach of the Code of Conduct prescribed by the Migration Agents Regulations 1998 , has not been shown to be a matter Mr Marzukie would have been concerned about, or would have motivated his conduct. The real reason not to have the appellant attend the hearing was just the fact that Mr Marzukie wanted his child looked after by the appellant. Mr Marzukie may have put his interests above the appellant's but that could not amount to a finding of fraud. He described the 'interview' as 'important', but asserted that work was 'more important', which is more properly to be characterised as 'bad' advice: SZFDE [2007] HCA 35 ; 237 ALR 64 at [53] ; see also SZHBC v Minister for Immigration and Citizenship [2007] FCA 1310 at [17] - [18] per Spender J; SZHZT v Minister for Immigration and Citizenship [2007] FCA 1661 at [3] , [11] and [12] per Allsop J and SZFNX v Minister for Immigration and Citizenship [2007] FCA 1980 at [31] - [33] per Besanko J. Further, even if there had been a breach of the Migration Agents Regulations , this would not lead to a finding of fraud in the relevant sense. 44 It is noted that the evidence the appellant seeks to adduce concerns her working conditions (the amount paid to the appellant, the tasks she was required to perform, the hours she was required to work). However, the nature of the arrangements for payment (if any) for migration services cannot take the appellant very far, unless it could be established (as it was in SZFDE ) that this was in some way connected to the deliberate 'stultification' of the legislative scheme or 'disabling' of the processes of the Tribunal: SZFDE [2007] HCA 35 ; 237 ALR 64 at [49] and [51]. In my view there is no connection between the working arrangements made and the processes of the Tribunal such that those processes were disabled or stultified by the conduct of Mr Marzukie. 45 The further evidence sought to be adduced by the appellant shows that Mr Marzukie gave the appellant at least some letters from the Tribunal, her own mobile number was supplied to the Tribunal in the application for review, the appellant was aware of the existence of the hearing and the date upon which it was to take place, she knew the hearing was 'important', and she intended to go to the hearing. Whilst the appellant was influenced by Mr Marzukie at the last minute not to attend (because she 'dared not oppose him'), she understood the Tribunal hearing was important, and she made the decision not to attend with that knowledge. 46 Further, Mr Marzukie's role and conduct as a registered migration agent is quite unlike that of the migration agent in SZFDE . Such things as encouraging the insertion of the incorrect address on the application form, and telling the appellant that the hearing was an 'interview' are not so significant as to warrant a finding of fraud upon the Tribunal. Further, the appellant herself was complicit and knowingly involved in the decision to mislead the Tribunal as to her place of residence. 47 SZFDE does not stand for the proposition that a failure by an applicant to attend the Tribunal hearing due to the fault or conduct of a third person bears the result that the Tribunal decision to proceed under s 426A of the Act is always vitiated by error. 48 This is a case where the appellant did not attend the Tribunal hearing due to a combination of factors --- her own lack of diligence, receipt of some misinformation or bad advice from a third party, and choosing after some persuasion not to attend. None of these matters amounts to fraud because there is no relevant 'fraudulent' conduct vis-à-vis the appellant. The real reason for the appellant not attending is not contained in the various matters particularised by the appellant in the Further Amended Notice of Appeal, but was the appellant's own decision not to attend. The appellant consciously consented to the Tribunal disposing of her case without her appearance, and in the circumstances the legislative scheme and processes of the Tribunal were not in any way disturbed. But where a person's participation in a decision-making process is affected by the material dishonesty of another which conveys a false impression to the decision-maker, then that dishonesty may be said to have distorted or vitiated the approach and to have affected the decision. Whether it has will depend upon a consideration of the circumstances of the particular case. In this case, on the findings made by the learned Magistrate which are not challenged as to the facts, SZFDE and her family were dissuaded from appearing before the tribunal by the fraudulent advice of the migration agent. The agent held himself out to be a practising solicitor and registered migration agent. He was neither. He gave fraudulent advice that the tribunal was "not accepting any visa applications at all at the moment". He expressed a false concern that if SZFDE and her family appeared before the tribunal they would say something inconsistent with his proposed submission to the minister. The advice amounted to a representation that the tribunal process was a sham and that participation in it might prejudice SZFDE's prospects of a successful outcome on the basis of a submission to the minister. To that extent her consent to the disposition of her application for review without a hearing was of no effect. She was denied, by fraud, the opportunity to appear at and be heard by the tribunal on a matter of vital importance to her future and that of her family. The decision-making process; that is the process of review which incorporates an opportunity for a hearing on the conditions set out in Pt 7 , was corrupted. The importance of the appearance before the tribunal to the outcome of the review was highlighted by the tribunal's reference, in its reasons, to matters which it did not have an opportunity to explore with SZFDE because of her non-appearance. The appeal has turned upon the particular importance of the provisions of Div 4 of Pt 7 of the Act for the conduct by the tribunal of reviews and the place therein of the ss 425 and 426A. In the Full Court, French J correctly emphasised that there are sound reasons of policy why a person whose conduct before an administrative tribunal has been affected, to the detriment of that person, by bad or negligent advice or some other mishap should not be heard to complain that the detriment vitiates the decision made. In that case, his Honour was of the view, having considered the decision in SZFDE , that where a migration agent 'falsely indicated in the response to hearing form that the appellant would attend the hearing when the agent knew that could not occur' or where an agent 'signed documents on the appellant's behalf without his knowledge, consent or authority ... and forged [the appellant's] signature', then a court would likely find that there had been a fraud on the Tribunal. For the reasons already set out, SZIVK is distinguishable on the facts from those sought to be put to me on this appeal. 52 In this appeal, even accepting that the evidence suggests that the appellant's negative response to the hearing invitation was procured by her purported agent's coercion, this does and did not amount to dishonest conduct. The appellant's account of her conversation with Mr Marzukie on the morning of the hearing, demonstrating his refusal to take her and his direction that she mind his child in circumstances where she was unable to contact or reach the Tribunal on her own or to otherwise manage independently if she refused his direction, may give rise to an argument that might be characterised as duress. However, duress, while perhaps actionable on other grounds, does not amount to material dishonesty of another which conveys a false impression to the decision-maker such as to make the conduct complained of cognisable as fraud upon the Tribunal under the principles set forth in SZFDE . 53 In Minister for Immigration and Citizenship v SZLIX [2008] FCAFC 17 at [30] - [33] it was made clear that even if an act or omission of a migration agent misleads the applicant, and even directly affects the discharge of the Tribunal's statutory duties in a manner adverse to an applicant, it does not mean that the acts are to be characterised as dishonest or a fraud on the Tribunal. Even assuming it was, and assuming, moreover, that the respondent was thereby misled, we do not consider that all of the agent's acts or omissions vis-à-vis the respondent are thereby to be characterised as dishonest. Nor do we consider that any particular such act or omission which directly affects the Tribunal's discharge of its imperative statutory functions in a manner which is adverse to a person seeking Tribunal review can in turn be characterised as a "fraud on the Tribunal". It has not gone on to reverse, in the way proposed in the respondent's submission, such adverse consequences as may enure to a person in the enjoyment of the procedural fairness benefits provided by the Act as may be occasioned by reliance upon the immigration assistance supplied or to be supplied by an unregistered migration agent. Neither has the common law gone so far in its fraud doctrine: see SZFDE at [53]. This said, an agent may be fraudulent in his dealings with a visa applicant in such a manner as results directly in a fraud on the Tribunal in relation to the due discharge of its Pt 7 Div 4 functions. SZFDE is testament to this. But SZFDE requires that the agent in question is fraudulent in a way that affects the Tribunal's Pt 7 decision-making process. An omission to notify the date of a hearing to a visa applicant may have adverse consequences for that applicant if, as here, the Tribunal proceeds to make a decision under s 426A in the applicant's absence. But before that omission can properly be said to have occasioned a fraud on the Tribunal, it must itself be able properly to be characterised as a fraudulent omission vis-à-vis the visa applicant: SZFDE , at [51]. The simple fact of a failure to inform or bare negligence or inadvertence will not necessarily be sufficient to give rise to fraud on the Tribunal. As we have indicated, particularly having regard to the level of satisfaction required by Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 at 363 and 368 in cases where fraud is alleged, we do not consider that it was open to his Honour to infer fraud. I appreciate, as Finkelstein J in SZIVK [2008] FCA 334 (at [33]) reminds us, that there are many ways in which fraud may be manifested. However, this is not a case where one can infer that the agent, in making the statements to the appellant that resulted in her not attending, acted other than honestly; Mr Marzukie was just concerned about his own interests and put them above those of the appellant. 55 Accordingly, the appellant's first ground of appeal could not succeed even accepting the further evidence of the appellant. 56 The applicant's second ground of appeal--that the Federal Magistrate erred in failing to find that the Tribunal should have considered that the appellant's failure to attend the hearing could have been due to the fact that she could not understand the English language invitation, such that the invitation was not 'real and meaningful'--may be dismissed in much shorter order. 57 There is authority that 'there was no obligation on the part of the Tribunal to ensure that the hearing invitation was provided in a language which the appellant could understand': see SZGWH v Minister for Immigration and Citizenship [2007] FCA 543 at [12] . 58 However, be that as it may, there was nothing to suggest in this case that the Tribunal had any need to consider the possibility that the appellant did not understand or could not be properly informed of the invitation --- I can find nothing that would put the Tribunal on notice of such a circumstance. The application for review was apparently signed by the appellant, on its face without the aid of an interpreter. Prior to that, the appellant in the application for a visa had employed a migration agent. Admittedly the Tribunal was notified that the appellant needed an Indonesian interpreter. However, there is nothing that puts the Tribunal on notice that in giving an invitation it had to go any further than the method it adopted. The invitation, on the basis of the information provided by the appellant and the legislative scheme, could be sent to the appellant's nominated address and contact made on the nominated mobile number (which was in fact the appellant's number) and, just as the appellant obviously needed to have had assistance in completing the application for review, the Tribunal could assume similar assistance would be made available if any further correspondence took place. 59 The Tribunal was certainly entitled to assume the appellant had received the letter inviting her to attend --- the fact that the appellant had not corresponded with the Tribunal since the original application for review was lodged does not mean that the Tribunal was aware of any irregularities or had an obligation to further chase up the appellant to attend the hearing. 60 In fact, as we now know, the appellant was aware of the hearing date, and knew it was 'important'. The failure to attend had nothing to do, in fact, with the appellant's lack of familiarity with the English language. 61 As to the appellant's third ground, the appellant argues that the Tribunal failed to undertake a reasonably open and regular administrative procedural step necessary to provide the appellant with a real and meaningful invitation to the hearing, such as seeking to contact the appellant by telephone on the day of the hearing. In making this argument, the appellant relies on the principles set out in SZJBA v Minister for Immigration and Citizenship [2007] FCA 1592 ; (2007) 164 FCR 14. However, that case is inapposite here for the reasons set out below. That obligation involves such mundane things as opening letters, reading them once opened and taking at least basic simple steps that would be taken in any well-run commercial, professional or governmental office, conformable with the recognition of the importance of the response to the invitation to the rights of the applicant and the review process contained within Pt 7 of the Migration Act . This does not rest on some posited duty of inquiry. It is not engaging in steps that require for their enforcement some express statutory power. The letter that was received, on its face, told any person who read it that there was with it, or supposedly with it, a five page document which was a response to the relevant invitation. On the facts found by the Federal Magistrate, the five page document was not enclosed. The response was an important document. It must have been, or should have been, apparent that an error (human or machine) had occurred. As such, it was a jurisdictional error in that it undermined the steps in the conduct of the review undertaken pursuant to Pt 7 of the Migration Act , that were required by, or authorised by, the statute or authorised as the conduct of the general executive power under s 61 of the Commonwealth Constitution which had been undertaken by the Tribunal, and, once undertaken, were not to be frustrated by the action or inaction of the Tribunal in circumstances where, as I have said, it was obliged to take basic and simple administrative procedural steps. The failure here was to take a simple administrative step of an office or housekeeping nature, the failure to take which could be seen on its face at the time to subvert the observance of the Tribunal of its obligation to give procedural fairness by the giving of the s 424A letter, or by the operation of s 424, or by the general executive power . Division 4 of Pt 7 is the statutory formulation of the giving of natural justice: see s 422B. Given the importance of procedural fairness for the principles of jurisdictional error sourced in s 75(v) of the Constitution : see SZFDE 237 ALR 164 at [32], any subversion of the process of the tribunal is a matter of importance: SZFDE [2007] HCA 35 ; 237 ALR 64 at [32] . Most recently, Kenny J examined these cases in her Honour's comprehensive judgment in Minister for Immigration and Citizenship v Le [2007] FCA 1318. It can readily be accepted, as her Honour said, that there is no general obligation to inquire found in s 424(7), nor is there a general obligation to initiate inquiries or to make an applicant's case for him or her. I refer, without repetition, to the long list of cases referred to by Kenny J in Le [2007] FCA 1318 at [60] . The absence of such a general obligation of inquiry can be accepted, without denying the limited proposition supported by numerous other cases that, in certain exceptional cases, a failure to make some inquiry may ground a finding of jurisdictional error if it was plainly necessary to make some reasonably straightforward inquiry before the making of the relevant decision: Prasad v Minister for Immigration and Ethnic Affairs [1985] FCA 47 ; (1985) 6 FCR 155 at 169-70. Kenny J discusses this in Le at [60]-[67]. I adopt without repetition her Honour's reasons. The only qualification that I would make to her Honour's reasons is that the rubric of Wednesbury unreasonableness may cover circumstances that amount to jurisdictional error and those that amount to error within jurisdiction. It is unnecessary here to explore such possible differences. Here, the failure to take the steps, which in my view were required in the review process, subverted an opportunity to respond to an invitation contemplated or authorised by the statute as part of the review process and so amounted to jurisdictional error . In this appeal, however, the appellant cannot demonstrate that there was any material before the Tribunal that would have put the Tribunal on notice of an error or irregularity in the record which needed to be followed up administratively. 64 In SZICU v Minister for Immigration and Citizenship [2008] FCAFC 1 , the Full Court distinguished SZJBA on the basis that that decision was different because in that case 'there was a failure to inquire into readily available and centrally relevant information' (at [29]). Similarly, in my view the factual position confronting Allsop J in SZJBA was very different from that which arises in this appeal, and the failure to inquire cannot be seen on its face to subvert the observance of the Tribunal of its obligation to give procedural fairness. 65 The appellant's fourth and final ground--that the Federal Magistrate erred in finding that the appellant received certain letters from the Tribunal in the absence of any evidence of receipt of the letters--is also unsustainable. At its highest the use made of the fact of receipt of several letters led the Federal Magistrate to disbelieve the appellant. As it turns out, the appellant did in fact deliberately mislead the Federal Magistrate as to the reason for her non-appearance. Nevertheless, whether or not the Federal Magistrate had an evidentiary foundation for such a view is a matter which will not assist the appellant in the relief she seeks. Unless this error leads to a conclusion that the Tribunal itself fell into jurisdictional error, it cannot result in setting aside the Tribunal's decision. In view of the above reasons relating to the other grounds of appeal, no basis exists for concluding that jurisdictional error occurred, even on the basis of the further evidence sought to be adduced by the appellant. In these circumstances even if the Federal Magistrate fell into the error alleged by the appellant, it could not result in the appellant obtaining the relief she ultimately seeks. 68 In my view, the reference to the receipt of the several letters could not impact upon the conclusion of the Federal Magistrate that there was no jurisdictional error on the part of the Tribunal. The Tribunal exercised its discretion to proceed in the absence of the appellant, no error has been demonstrated in it adopting that course, and its decision affirming the decision of the delegate must remain. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Middleton. | judicial review protection visa where appellant worked for migration agent as a nanny where agent told appellant to work rather than go to tribunal hearing where appellant did not understand english whether invitation in english to attend hearing was "real and meaningful" whether tribunal failed to undertake a reasonably open and regular administrative procedural step where appellant subsequently gave false information to the federal magistrate allegation of third party fraud on tribunal leave sought to adduce further evidence explaining failure to attend hearing fraud on the tribunal migration words and phrases |
He was born in Haifa, Israel, and lived there most of his life. He is of Arab ethnicity and a practicing Catholic. He arrived in Australia on 5 May 2006 and on 16 June 2006 applied for a Protection (Class XA) visa. On 4 August 2006 a delegate of the Minister refused the application for a protection visa. On 23 August 2006 the appellant applied to the Tribunal for a review of that decision. On 23 November 2006 the Tribunal affirmed the decision of the delegate of the Minister to refuse to grant a protection visa to the appellant. The appellant's claims arise in respect of discrimination, harassment and threats to which he was subjected over approximately twelve years prior to leaving Israel. The Tribunal surmised the appellant's claim as being that he was falsely accused and wrongly committed of crimes he had not committed as a juvenile Arab Israeli and that he faces harassment, threats and discrimination by the police and the security forces in Israel. (However, the Tribunal found that it was difficult to attribute the 2004 and 2005 searches to his ethnicity as he was living at his Jewish friend's house at those times, and that it was not satisfied that the raids were related to the appellant's race or any other Convention reason. While the Tribunal found that the experience of being beaten by the militant Jewish man in 1993 was serious enough to amount to persecution on account of his ethnicity, the appellant was not harmed by this man after this and the chance of him being harmed by this man in the reasonable foreseeable future is not real. The Tribunal found that it was "not satisfied that the authorities have a genuine, continuing interest in the applicant for a Convention reason or that there is a real chance that he would be seriously harmed for a convention reason by the authorities if he were to return to Israel". 7 In relation to the first ground, his Honour held it was clear that the Tribunal had considered the question whether there was truly a future threat to the appellant's life or liberty (at [27]). The issue is whether the Tribunal applied the correct test in focussing on the risk of danger to the Applicant in the future rather than focussing on whether past threats themselves constituted 'a threat to (the Applicant's) life or liberty'. [29] Given the state of authority the Tribunal did apply the correct test consistent with authority and it follows there was no error of law associated with its determination. [30] It is not the task of the Court in this proceeding to review the merits of the Tribunal's decision nor to substitute for the Tribunal's views of the evidence before it this Court's views. In the absence of a jurisdictional error this ground fails. As the Tribunal did not accept that the appellant had a well founded fear of persecution for a Convention reason, and the ground of review before the Court fails in limine as no basis arose for State Protection. 9 In relation to the second ground, his Honour observed that the Tribunal clearly found that the appellant's experiences before his departure from Israel did not amount to persecution for a Convention reason. It was submitted that until such a finding was made there is no need to proceed to the next question of whether the Applicant is unable or unwilling to avail himself of the protection of a foreign country. I accept as correct the Respondent's submissions that there was no need in the instant case for the Tribunal to turn to the question of whether there had been a failure of State protection until the Tribunal had first concluded that the Applicant had a well founded fear of being persecuted for a Convention reason and that the requirements of section 91R of the Act had been met. It follows that the Tribunal was not obliged to make any determination about the availability of State protection, it having earlier decided that the Applicant did not have a well founded fear for a Convention reason. [38] This ground too must fail. The Federal Magistrate erred in law by finding that the Tribunal had not made a jurisdictional error in circumstances where the Tribunal failed to consider whether threats of disappearance and death made to the appellant by Israeli security forces could, by themselves, amount to 'serious harm' for the purposes of s 91R Migration Act 1958 (Cth). 2. The Federal Magistrate erred in law in deciding that threats of disappearance and death could not, by themselves, amount to "serious harm" within s 91R Migration Act . The Federal Magistrate erred in law in failing to decide upon the appellant's argument that the Tribunal had made a jurisdictional error by failing to consider whether physical harassment of the appellant by Israeli Special Forces, including detaining the appellant and pointing a gun at him, could amount to "serious harm". That the appeal be allowed. 2. That the decision of the Federal Magistrates Court made on 25 July 2007 be set aside. 3. That the matter be remitted to the Tribunal for consideration according to law. 4. That the respondent pay the appellant's costs of the appeal and the application to the Federal Magistrates Court. Both Counsel in the proceedings before me addressed issues arising from this case in considerable detail. 16 In that case the claimant was a national of Sri Lanka who claimed that, as a result of his political activities in Sri Lanka, he had received numerous threats to his life from members of an opposition political party. The Tribunal had accepted that the claimant had received intimidating and threatening phone calls and letters, but held these phones calls and letters did not involve serious harm to the claimant. The Tribunal upheld the decision of the delegate of the Minister to refuse a visa to the claimant. The claimant applied to the Federal Magistrates Court to have the decision of the Tribunal set aside, wherein the claimant was successful. The Minister then appealed to the Federal Court. In my view this finding was entirely open to the RRT... It could not, in my view, have been the intention of Parliament that threats in the form of declarations of intent, could prima facie constitute serious harm. That is to elevate the element of fear to an impermissible level. All instances of alleged serious harm have the potential to agitate their victim but this is not the hallmark of their categorisation as instances of serious harm. Rather, serious harm contemplates that a person's livelihood or well-being will be jeopardised in a material way. This is not to deny that threats of the kind directed at the (claimant) can never constitute serious harm, but they do not, of themselves, automatically qualify for that description. 18 On appeal from Marshall J, the High Court considered the meaning of "threat" in s 91R. The serious harm in question is future harm. The decision-maker is required to consider future persecution that involves serious harm, and one instance of such serious harm is a threat to life or liberty. The decision-maker is to decide the risk of future harm, not the risk of future communications. However the six paragraphs of s 91R(2) should be considered together, taking their colour from the specification of "serious harm" in the opening words of the subsection. Can verbal threats by themselves amount to "serious harm"? As is clear from perusal of s 91R , Art 1A(2) of the Refugees Convention as amended by the Refugees Protocol does not apply in relation to persecution unless the persecution involves serious harm to the person: s 91R(1)(b). Without limiting the meaning of "serious harm" in the context of s 91R(1)(b) , s 91(2) gives examples of "serious harm", including "a threat to the person's life or liberty" (s 91R(2)(a)). Further, it is clear from the decision of the High Court in VBAO 231 ALR 54 that, as a general proposition, verbal threats will not of themselves constitute serious harm within the meaning of s 91R. 21 In these proceedings the appellant submits that verbal threats, if they are likely to be repeated in the future, are capable, in themselves, of amounting to serious harm for the purposes of s 91(1)(b) depending on the circumstances of the case. The High Court approved the judgment of Marshall J. However, the Tribunal also noted that, according to the evidence of the appellant, Heem knew where the appellant lived and had ample opportunity to harm the appellant if he genuinely intended to do so. The Tribunal considered that the threats were designed to frighten and intimidate the appellant, and that neither Heem nor the Israeli Special Forces intended to act on them. 24 First, in order to constitute a well founded fear of persecution, any threat or relevant risk must be current or prospective, rather than historical only: VBAO 231 ALR 54, Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559. However, it is reasonable that a Tribunal should have regard to events that have occurred, to assist in its decision as to whether it is likely that the claimant will in future be subject to persecution. In many, if not most cases, determining what is likely to occur in the future will require findings as to what has occurred in the past because what has occurred in the past is likely to be the most reliable guide as to what will happen in the future. It is therefore ordinarily an integral part of the process of making a determination concerning the chance of something occurring in the future that conclusions are formed concerning past events. Further the Tribunal clearly considered, in detail, the claims of the appellant, and made findings in respect of each claim. However, the Tribunal concluded that it was not satisfied that the incidents of harm referred to by the appellant constituted "serious harm" for a Convention reason when taken cumulatively, or further that the Israeli authorities had a genuine, continuing interest in the appellant for a Convention reason, or that there was a real chance that the appellant would be seriously harmed for a Convention reason by the Israeli authorities in the reasonably foreseeable future if he were to return to Israel. The finding of the Tribunal that, in summary, the threats were to intimidate and frighten the appellant, and were not threats upon which Heem or the Israeli Special Forces seriously intended to act, were in my view open on the evidence before the Tribunal. 26 Third, it is clear from VBAO 231 ALR 54 that verbal communication of threats without more does not constitute "serious harm" within the meaning of s 91R(1) or s 91R(2) Migration Act . Mr Rangiah submitted that threats such as pointing a gun at a person's head and indicating verbally that the person will be shot unless he or she complies with a demand can constitute "serious harm". However the Tribunal in its decision thoroughly reviewed the incident including where a gun had been pointed at the appellant and verbal threats made, and considered that this did not constitute serious harm. As I have already said, the High Court in VBAO 231 ALR 54 has held that verbal threats, without more , do not constitute "threats" amounting to serious harm for the purposes of s 91R. It is useful to compare the facts of this case with those in VBAO 231 ALR 54, where the claimant had not only been verbally threatened but also had claimed to have been beaten and had his hair cut by rival political groups, but the court declined to quash the decision of the Tribunal that "serious harm" had not been caused to the claimant. In these proceedings the Tribunal considered the evidence of additional events upon which the appellant relied, but was not satisfied that "serious harm" had been or would be occasioned. This finding was open to the Tribunal on the facts before it. 27 Fourth, although Mr Rangiah also submitted that a series of threats designed to intimidate and frighten could cause serious psychological harm, which would itself be "serious harm", it is for the appellant to make the case of well founded fear of persecution before the Tribunal. On the material before me there appeared to be no evidence that the appellant had sustained such serious psychological harm or would sustain such harm if he returned to Israel. 28 Finally, and notwithstanding Mr Rangiah's persuasive arguments, I am satisfied that the High Court's findings in relation to the meaning of the word "threat" as an instance of serious harm in s 91R(2)(a) Migration Act extend to the concept of threat as "serious harm" within s 91R(1)(b). I do not consider that a "threat" as a species of serious harm for the purposes of s 91R(1)(b) is, for example, of potentially broader application in that section in comparison with its meaning in s 91R(2)(a). The section makes it plain that, in considering serious harm within the meaning of s 91R(1)(b) , while not limiting what is serious harm for the purposes of para (1)(b), regard should be had to the specific instances in s 91R(2). In my view, the findings of the High Court's in VBAO 231 ALR 54 in relation to the meaning of "threat", while specifically referable to s 91R(2(a) , are equally applicable to any concept of "threat" as "serious harm" within the meaning of s 91R(1)(b). To find otherwise would, in my view, ignore the plain meaning of s 91R , the fact that categories in s 91R(2) are clearly meant to assist in the interpretation of s 91R(1)(b) , and the clear findings of their Honours' in VBAO 231 ALR 54. 29 It follows that in my view no jurisdictional error in this respect is apparent from the decision of the Tribunal. 30 The Federal Magistrate similarly found that no jurisdictional error appeared from the decision of the Tribunal, because the Tribunal had applied the correct test in this case in relation to whether verbal threats could constitute "serious harm" within s 91R. In making this finding, his Honour relied on VBAO 231 ALR 54 and the Federal Court decision in VBAS v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 212. His Honour did not, as claimed by the appellant, decide that threats of disappearance and death could not, by themselves, amount to "serious harm". His Honour's findings were limited to the case before him (in particular at [27]-[30]). I find no error in either his Honour's approach or decision in relation to this issue. 31 Accordingly the appellant's first and second grounds of appeal cannot be sustained. 33 In my view there is no doubt that the Tribunal considered the circumstances involving the physical detention of the appellant and having a gun pointed at him with a view to identifying whether the appellant had been subjected to "serious harm" within s 91R. He was forced out of the car at gun point and was told to sit on the roadside. His car was searched for bombs. He was kept for an hour, was told to shut up and was called a filthy Arab. He was also told to go or he would not be around for long. This he took to mean he should leave Israel. He confirmed that he was on his way to a beach in Haifa when the Israeli Special Forces stopped his car. He was forced out of the car at gun point and was told to sit on the roadside. His car was searched for bombs or electronic devices that could trigger a bomb. He was told by one of the officers, Heem, that his place was not in Israel and that if he was in the Occupied Territories he would get a bullet in his head. The Tribunal has little doubt that these threats which warned him of death and disappearance were unsettling and upsetting for the applicant. However, according to his oral evidence Heem was aware of his place of residence and had ample opportunity to harm the applicant if he genuinely intended to do so. The fact that the applicant suffered no other harm at the hands of Heem throughout this period is indicative of the fact that the threats were designed to frighten and intimidate him and that Heem or the Israeli Special Forces did not seriously intend to act upon them. The Tribunal, therefore, finds that the threats in this case did not fall within s 91R(1)(b) and do not give rise to any real chance of persecution in the reasonably foreseeable future. However it is not correct to say that the Tribunal failed to consider whether the appellant has been subject to treatment constituting "serious harm" for a Convention reason. From its decision it is clear that the Tribunal considered thoroughly the treatment to which the appellant had been subjected, both specifically and in the context of the appellant's cumulative claim. Although the Tribunal did not discuss whether this treatment constituted "serious harm" specifically within the meaning of either ss 91R(2)(b) or (c), its findings (including that the treatment did not amount to "serious harm" within the meaning of s 91R(1)(b)) are open on the evidence before it. 37 Under the Migration Act it not the role of the Court to engage in a review of the merits of the appellant's claims or findings on the facts by the Tribunal: NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 at [10] . The appellant has claimed before me as a ground of appeal that the learned Federal Magistrate did not consider the issue before his Honour that physical ill-treatment by an officer of the Israeli Special Forces could by itself amount to serious harm. Further it considered the incidents cumulatively and despite that matter was not satisfied that the Applicant's experiences amounted to persecution for a convention reason. Indeed a general reference to the individual assessment by the Tribunal of each of the appellant's experiences, and a cumulative consideration by the Tribunal of relevant incidents, does not obviously demonstrate a specific consideration of the issue in question by the Federal Magistrate. 39 However as I noted recently in SZINP v Minister for Immigration and Citizenship [2007] FCA 1747 , although failure by a court to consider a claim clearly raised by a litigant can give rise to a miscarriage of justice ( QBE Insurance Ltd v Switzerland Insurance Workers Compensation (NSW) Ltd (1996) 70 ALJR 281), it is also clear that the ground before his Honour, and raised on appeal before me, was not plainly arguable because no jurisdictional error is apparent from the decision of the Tribunal in relation to this issue. Even if para [18] of his Honour's judgment does not address the issue of physical ill-treatment of the appellant as claimed by the appellant, this is not a reason to allow the appeal from his Honour's decision or to remit the case to the Federal Magistrate for re-hearing because the ground would have no prospects of success. 40 Accordingly, the third ground of appeal of the appellant cannot be sustained. 41 The appropriate order is that the appeal be dismissed. The appeal be dismissed. | appeal from a decision of a federal magistrate reviewing a decision of the refugee review tribunal appellant's claims arise in respect of discrimination, harassment and threats to which he was subjected by the israeli special forces over 12 years whether federal magistrate erred in finding that the tribunal had made jurisdictional error by failing to consider whether threats of disappearance and death made to the appellant could, by themselves, amount to serious harm whether federal magistrate erred in deciding that threats of disappearance and death made to the appellant could not, by themselves, amount to serious harm high court decision in vbao v minister for immigration and multicultural and indigenous affairs (2006) 231 alr 54 whether federal magistrate erred in failing to decide upon the argument that the tribunal had made jurisdictional error by failing to consider whether physical harassment including detention and the pointing of a gun at the appellant could amount to serious harm migration |
With the assistance of the Northern Territory Legal Aid Commission the completed application was forwarded to the Department of Immigration and Multicultural Affairs (the Department) under cover of a letter dated 6 June 2006, and it was received by the Department on 8 June 2006. As the relevant application fee was not paid to the Department until 16 June 2006, the application was treated as having been made on 16 June 2006. 2 Section 65A of the Migration Act 1958 (Cth) (the Act) requires that the Minister make a decision either to grant the visa or to refuse to grant the visa within 90 days starting on the day on which the application was made. That period expired in September 2006. Notwithstanding this clear and unqualified requirement, no decision has yet been made on the application --- some 16 months after the expiry of the 90 day period and some 19 months after the making of the application. The applicant has been in immigration detention throughout. 3 Clearly there was an egregious failure by the Minister to obey the Parliament's command. 4 In addition to other relief, the applicant seeks an order in the nature of mandamus requiring the Minister to determine the application for the Protection visa according to law. Counsel for the Minister offered no submission against the making of such an order. If such an order is to be made, it is desirable that it incorporate a time limit and that is something on which I would wish to give the parties an opportunity to be heard. 5 Is it appropriate to make such an order in circumstances in which legislation so unequivocally requires that a decision be made within 90 days starting on 16 June 2006? Arguably, the very making of the order detracts from the unequivocal demand of s 65A of the Act and from the Ministerial failure to comply with it for some 16 months. 6 The making of an order would, however, add the prospect of contempt of court by the Minister if the Minister were not to comply within the time fixed in the order. In this respect an order in the nature of mandamus would have utility. 7 Subject to giving the parties the opportunity to make submissions, my present intention is to make an order of the kind mentioned. 8 Also subject to considering the parties' submissions, I propose to order the Minister to pay the applicant's costs, even though, for the reasons that will appear below, the applicant has failed on the other issues raised by him. The applicant commenced this proceeding on 31 July 2007 as a proceeding in the Federal Magistrates Court of Australia and the proceeding was subsequently transferred to this Court. The event which was the immediate stimulus for the launch of the proceeding was the sending of a Notice of Intention to Consider Refusal (NOICR) of the visa application under s 501(1) of the Act on 18 July 2007. However, previously pleas had been made by and on behalf of the applicant over a long period for a decision to be taken on his application. In substance, he was forced to litigate in an attempt to compel the Minister to comply with s 65A of the Act, albeit so very late. In the circumstances I think it is a proper exercise of discretion for me to order the Minister to pay the applicant's costs. He claims to have been persecuted by the Saddam Hussein régime and to have spent some six years in Abu Ghraib gaol. He claims to have fled Iraq, and then to have spent time in Iran, Turkey, Malaysia and Indonesia. 10 The applicant arrived in Australia on 22 February 2003 on a criminal justice entry visa after extradition from Thailand to face charges of "people smuggling" under s 232A of the Act, or in the alternative, s 233(1)(a) of the Act. The allegation was that the applicant had been responsible for the organisation of the arrival of four boats of illegal immigrants over a period of one year in 2000 and 2001 and that he was reckless as to whether or not those persons had a lawful right to come to Australia. 11 The applicant pleaded guilty to two counts of the offence and asked the Court to take a further count into consideration. He was convicted of the offences in the Supreme Court of the Northern Territory and on 21 September 2004 was sentenced to eight years' imprisonment commencing on 17 June 2002, with a non parole period of four years. 12 The period of the applicant's imprisonment, and his criminal justice entry visa, expired at midnight on 15 June 2006. On 16 June 2006, he was taken into immigration detention, and shortly afterwards, at his request, transferred to the Immigration Detention Centre in Villawood, Sydney. 13 The applicant's mother, three sisters and three brothers live in Australia, some or all of them at Villawood. The applicant's mother and siblings came to Australia as illegal immigrants on the vessels organised by the applicant, and apparently have been recognised as having refugee status. The applicant's wife and daughter live in Indonesia and his father and another brother still live in Iraq. The applicant claims that a further brother was killed by the Saddam Hussein régime. 14 The application for the Protection (Class XA) visa made on 16 June 2006 (see [1] above) was also treated as an application for a Bridging visa (Bridging Visa E) (Subclass 050) and as an application for a Temporary Protection visa (Subclass 785). In his application, the applicant gave as details of his employment between 1999 and 2002 that in Malaysia and Indonesia he had been "helping with people smuggling". His frankness may suggest that he saw nothing to be ashamed of in what he had been doing. 15 On 7 July 2006, then Minister Vanstone refused the application for the Bridging visa under s 501 of the Act, on the basis that the applicant had a "substantial criminal record" (see s 501(6)(a)). The applicant's conviction within the four years preceding his application meant that he did not satisfy the criteria for the grant of a Subclass 866 Permanent Protection visa, but was to be considered for the grant of a Subclass 785 Temporary Protection visa. 16 The application for the Protection visa was for a time dealt with by a s 65 delegate, Ms Kate Watson, who authored a "Decision Record" document which she signed and dated 5 December 2006. There is a question as to the status of that document, particularly in the light of two further documents authored by Ms Watson that accompanied it. Those two documents, to which I will refer as "the annexures", were in the nature of briefing memoranda addressed to other Departmental officers, because, for reasons that the evidence does not reveal, Ms Watson ceased to be the Case Manager of the applicant's application in or about December 2006. 17 Before she parted with the matter, Ms Watson, whose position was "Case Manager, Onshore Protection, NSW", wrote in October 2006 to the "Director, Character and Cancellation Section" requesting a waiver of an internal Departmental requirement of a "police clearance certificate" or "penal clearance" from Iran where the applicant had resided for a time. The applicant's adviser had obtained such a certificate from Indonesia where the applicant had also resided, but apparently it was not the policy of the Iranian Government to issue such certificates in relation to people such as the applicant who had resided in Iran unlawfully, that is to say, without an Iranian visa. I discuss the waiver of this requirement at [107]-[109] below. 18 In the time that has passed from 5 December 2006 to date, various officers of the Department have been occupied with questions relating to the waiver of the requirement of an Iranian police clearance certificate and to the applicant's character more generally. The Departmental documents in evidence show that there were different views held within the Department concerning the relationship between ss 65 and 501 of the Act, and that there were changes in the administrative arrangements within the Department for dealing with applications that raised overlapping ss 65 and 501 issues. 19 It is not necessary to describe in detail the various positions that were taken by various officers from time to time. However, it is helpful to note the following events. 20 On 30 March 2007, Nicole Pearson, Director, Character Policy, Character Assessment and War Crimes Screening Branch, expressed several concerns over aspects of the handling of the applicant's application. 21 In late March 2007, the application was discussed with the Minister's office. 22 On 12 April 2007, Ms Pearson gave a direction for the applicant's file to be forwarded to the BCAU for "proper" consideration under s 501 of the Act. 23 The position was taken, apparently in April 2007, that a decision should not be made on the waiver of the requirement of an Iranian police clearance certificate until an "Interpol check" was carried out. 24 From time to time, the applicant's adviser pressed for a decision to be taken, pointing out that the 90 day time limit under s 65A of the Act had long since expired. 25 The applicant was given the NOICR dated 18 July 2007 by the BCAU and the applicant commenced the present proceeding in the Federal Magistrates Court of Australia on 31 July 2007. 26 An internal Departmental memo dated 27 August 2007 advised that the BCAU had drafted a submission recommending that the Minister not refuse to grant the visa under s 501. The same memo noted, however, that the BCAU was still awaiting direction from "Character Policy", in the National Office of the Department, as to whether the Iranian police clearance certificate could be waived. 27 An internal memo dated 28 September 2007 recorded that Minister Andrews had requested "a full s 501 submission" on the case. 28 On 18 October 2007 a document entitled "International Obligations and Humanitarian Concerns Assessment" was completed by an Assessment Officer, Onshore Protection, NSW, noting that there was a real risk that the applicant could experience serious human rights abuses should he return to Iraq. 29 A draft statement of reasons for refusal of a visa was prepared for signature by Minister Andrews, but in fact the document was never signed by him and no decision was taken by him or has been taken by his recent successor, Minister Evans, to refuse to issue the visa under s 501(1) of the Act. Furthermore, at that Section's recommendation, a draft s501 issues paper (IP) was also prepared by an Onshore Protection case officer during this period. The character assessment in relation to [the applicant's] PV application formally came to the attention of Character Policy in March 07 (although we had been following up with Interpol in relation to an Iranian penal clearance since January), when we were asked to provide comments on the draft s501 issues paper (IP), that had been prepared by the On Pro [Onshore Protection] case officer. As the draft IP did not conform to our legal standards (which, given that it had not been prepared by a character case officer, is understandable), the case was referred to BCAU for further consideration. Referral to BCAU was the formal process at this time, although it should be noted that this was one of the first onshore cases to be referred to BCAU following the centralisation of the onshore s501 refusals function in early 2007. The previous approach for Protection Visa applications was that s501 delegates in Onshore Protection would make decisions relating to character, but would seek advice/feedback from Character Policy on complex cases. As you are no doubt aware, this is the first case that we are aware of where person who has been assessed to be owed protection obligations under article 1A, that has had their case progress to full consideration under s501 , which may also account for the initial confusion regarding the area that had responsibility for assessing the character requirement. It was also considered appropriate at this point (late March 2007) to discuss the case with the Minister's office and seek their views, especially given that [the applicant's] earlier associated BVE application had been refused by the former Minister personally (less than 9 months earlier). The advice from the Minister's office was that the case should progress to a NOICR, with the Minister being the likely decision-maker. BCAU were subsequently advised, in line with the approach requested by the Minister's office, to prepare and send a NOICR to [the applicant]. From what I can gather, the reason for this approach was that it would be inappropriate for a delegate to be the decision-maker, given that [the applicant] had been found to be owed protection obligations. As Direction 21 rightly notes, that the power to refuse a visa where International Obligations are owed is a "fundamental exercise of Australian sovereignty" but the responsibility therefore lies within the discretion of the responsible Minister (not with a delegate). In any case, given the previous refusal decision and the likelihood that [the applicant] would be again found not to pass the character test (due to his substantial criminal record), it was appropriate in the circumstances for a NOICR to be sent, so that [the applicant] was given an appropriate opportunity to present his case and to ensure that the department was able to provide the Minister with the most up-to-date and complete information as possible, to assist him in making his decision. The NOICR referred to information that might be relied upon to assess whether to exercise the discretion to refuse the visa application, and invited comment from the applicant. A declaration that section 501 of the Migration Act 1958 ("the Act ") does not have operation or effect in relation to the application for a protection visa made for the purposes of s 36 of the Act by the applicant on 16 June 2006 ("the Visa Application"). 2. Further and in the alternative, a declaration that the respondent, in exercising power under s 501 of the Act in relation to the Visa Application, may not take into account criminal convictions which are not to be taken into account for the purposes of the Convention Relating to the Status of Refugees 1951 and ss 91T or 91U of the Act . 3. Further and in the alternative, a declaration that the Respondent is bound to apply the provisions of clause 118 of the Protection Visas Procedures Manual in considering the exercise of the discretion under s 501 of the Act in relation to the Visa Application. 4. An order in the nature of mandamus requiring the respondent to determine the Visa Application according to law. 5. An order in the nature of mandamus requiring the respondent to grant the applicant a visa of the type referred to in s 36 of the Migration Act pursuant to s 65(1) of the Act where the requirements of s 65(1)(a) have been met. 6. Costs. 34 Counsel for the Minister, on the other hand, submits that I need not concern myself with "the developing views of the Department" or with various draft documents that were prepared, stating "The existence of different streams of view within the Department is ... really neither here nor there". 35 However, counsel for the Minister concedes that it is appropriate for the Court to entertain the application for the declaration referred to in paragraph 1 because the NOICR makes it plain that the Minister does propose to exercise his discretion, one way or the other, under s 501 of the Act . 36 I agree with counsel for the Minister. I am required to decide issues which the proceeding properly advances for decision, and it is not a proper use of the declaratory remedy to advise the Minister or Departmental officers in advance as to considerations they must or must not take into account (as is sought by the declaratory relief set out in paragraphs 2 and 3 at [32] above). 37 In relation to the order in the nature of mandamus referred to in paragraph 4, I have indicated earlier my present disposition to make that order. 38 The order in the nature of mandamus referred to in paragraph 5 set out at [32] above depends on my making a finding that the Minister was satisfied of the matters referred to in s 65(1)(a) of the Act (set out below). In substance, the applicant's submission is that a delegate to whom the Minister's powers under s 65 were delegated, had, within the scope of the authority delegated to her, determined finally that she was satisfied of all the criteria in s 65(1)(a) of the Act . The "Refugees Convention" is a reference to the Convention relating to the Status of Refugees done at Geneva on 28 July 1951, and the reference to the Refugee's Protocol is a reference to the Protocol relating to the Status of Refugees done at New York on 31 January 1967. I will refer to the Refugees Convention and the Refugees Protocol together as "the Convention". 40 Section 36 does not provide that "the" criterion for a protection visa is the criterion mentioned: it provides only that that criterion is "a" criterion for a protection visa. The applicant relies on the mandatory nature of the provision. But the requirement that a visa be granted is enlivened only if the Minister (or the Minister's s 65 delegate) is satisfied that the conditions set out in subparas (i)---(iv) are met. The Minister contends that on the evidence that state of satisfaction was not reached, and further that s 501(1) gives the Minister (or his s 501 delegate) an overarching discretionary power to refuse to grant a visa of any class, if the Minister (or that delegate) is not satisfied that the applicant passes the character test. 42 We have already seen that one criterion for a temporary protection visa that is prescribed by the Act is the criterion prescribed by s 36(2) , namely, that the applicant is a non-citizen in Australia to whom the Minister or the Minister's delegate is satisfied Australia has protection obligations under the Convention. 44 The Migration Regulations 1994 (Cth) (the Regulations) prescribed the criteria to be satisfied by applicants for Temporary Protection visas in Subclass 785 in Sch 2 to the Regulations . 785.226 The applicant satisfies public interest criteria 4001, 4002 and 4003A. 785.227 The Minister is satisfied that the grant of the visa is in the national interest . Nothing turns on this. I also note that in a typed one and a half page document that accompanied her "Decision Record" document dated 5 December 2006, Ms Watson referred to cll 785.223---785.227 as having a different content from that set out above (see [71] below). 47 It remains to make two observations concerning s 65(1)(a). First, it was not suggested that subpara (iv) ("any amount of visa application charge payable in relation to the application has been paid") caused any difficulty. Second, the only section referred to in subpara (iii) of s 65(1)(a) that was suggested to be of relevance in the present case is s 501 of the Act . Therefore, once the Minister or the Minister's s 501(1) delegate attended to the question, he or she must have been satisfied that the applicant did not pass the character test. His or her discretionary power to refuse to grant the Temporary Protection visa given by s 501(1) would then have been enlivened. The instrument of delegation signed by Minister Vanstone takes the form of a delegation of powers under provisions of the Act and the Regulations that are specific to the persons occupying positions that are specified by number. The instrument establishes that the holder of position No 1925 (other evidence establishes that this was Ms Watson) was delegated, relevantly, the Minister's power under s 65 but that she was not delegated the Minister's power under s 501(1). 52 It is convenient to note here that a question arises as to the relationship between subpara (iii) of s 65(1)(a) and s 501. A s 65 delegate, such as Ms Watson in the present case, had the Minister's authority to decide if she was satisfied that the grant of the protection visa was "not prevented by section ... 501". Other delegates had delegated authority from the Minister to refuse under s 501(1) to grant a visa to a person who did not satisfy that delegate that the person passed the character test. Section 501(1) itself does not prevent the grant of a visa: it allows the Minister (or the Minister's s 501(1) delegate) to refuse to grant a visa, and s 65(1)(a)(iii) must be construed accordingly. It follows that before the obligation imposed by s 65(1)(a) to grant a visa is activated, the Minister or the Minister's s 65 delegate must be satisfied that the Minister or the Minister's s 501(1) delegate has not refused to grant the visa. 53 It was not open to Ms Watson, as a s 65 delegate, either not to be satisfied that the applicant passed the character test under s 501(1) or to refuse to grant the applicant a visa on that account. It was, however, open to her to satisfy herself that the grant of the visa was not prevented by a refusal under s 501(1). 54 It is useful to recapitulate. It was for a s 501(1) delegate, not a s 65 delegate such as Ms Watson, not to be satisfied that the applicant had passed the character test within s 501 , and, if not so satisfied, to take the further step, if it was to be taken, of refusing to grant a visa. The role of a s 65 delegate was limited to satisfying himself or herself that the Minsiter or a s 501(1) delegate had not refused to grant the visa in question. The criteria for the Protection (Class XA) visa are contained in Schedule 2 of the Regulations (for example 'cl 866.211'). I have referred to the criteria in this decision record. I have also referred to other parts of the Migration Act and Regulations that are relevant to the decision. Some of the criteria refer to the Minister being satisfied of an issue. I am a delegate of the Minister and have authority to make decisions on the Minister's behalf. I am satisfied that the applicant is a person to whom Australia has protection obligations under the Refugees Convention. He has met the requirements of Article 1A of the Convention. Our legal branch advised, and I find, that Section 501 of the Migration Act is not applicable as the applicant has been found to meet the inclusion clauses of the Refugees Convention . The Refugees Convention contains provisions designed to protect the receiving country. These are the appropriate provisions to apply to an applicant who meets the inclusion clauses. I have considered the applicant's conviction for people smuggling and I find that the applicant is not excluded from protection under the provisions of the Refugees Convention. Further I find that the applicant does not pose a danger to the security of Australia nor does he constitute a danger to the Australian community as outlined under Article 33 of the Refugees Convention. (Emphasis added. After referring to s 91T of the Act and s 5 of the Extradition Act 1988 (Cth), Ms Watson found that the crime of people smuggling for which the applicant was extradited to Australia and convicted constituted a "non-political crime". After carefully surveying earlier decided cases, remarks made by the sentencing judge in the Supreme Court of the Northern Territory as to the applicant's motivation, the assertions made by the applicant and by his mother, Ministerial directions under s 501 of the Act , the United Nations High Commissioner for Refugees Handbook and other matters, Ms Watson concluded that the applicant's crime of people smuggling was not a "serious" non-political crime within the meaning of para (b) of Art 1F of the Convention. 60 It followed that as the applicant did not come within para (b) of Art 1F, he was not excluded from the Convention's provisions. No Contracting State shall expel or return ("refouler") a refugee in any manner whatsoever to the frontiers of territories where his life or freedom would be threatened on account of his race, religion, nationally, membership of a particular social group or political opinion. 2. The benefit of the present provision may not, however, be claimed by a refugee whom there are reasonable grounds for regarding as a danger to the security of the country in which he is, or who, having been convicted by a final judgment of particularly serious crime, constitutes a danger to the community of that country. 64 Again, after considering relevant case law and the comments of the sentencing judge of the Supreme Court of the Northern Territory, Ms Watson found that the applicant was not to be denied the benefit of the Convention because of Art 33(2). 65 Ms Watson found that the applicant had a well-founded fear of persecution for reasons of imputed political opinion, religion and membership of a particular social group if he were return to Iraq. 66 The result of the foregoing was that Ms Watson concluded that the applicant satisfied the Convention definition of a "refugee" and was not excluded from the application of the Convention by Art 1F or Art 33(2). PV [Protection visa] refusal under s501 , however, would generally be pursued only if the applicant would not be at risk of persecution or refoulement as contained in Article 33(1) of the Refugees Convention ie. PV refusal should generally be pursued under s501 only if the applicant falls within the exceptions to the principle of non-refoulement in Article 33(2) of the Refugees Convention or if they are found to be excluded from protection due to the application of Article 1F. [1] As discussed below, I find that the applicant is owed protection under the inclusion clauses of the Refugees Convention and therefore the provisions of S33(2) [sic] and Article 1F are the appropriate measures of the applicant's character as discussed above in relation to the relevant Australian case law. The provisions of the Minister's Directions in relation to the S501 are included as a consideration in the section above in relation to whether the applicant's presence in Australia would constitute a danger to the security of the Australian community. [Footnote 25 was a reference to the legal advice set out at [67] above. 70 I set out the final heading and paragraph of the Decision Record at [42] above. The Decision Record was signed by Ms Watson as "Delegate of the Minister for Immigration and Multicultural and Indigenous Affairs for purposes of s 65 of the Migration Act 1958 " and was dated by hand "5/12/06" and Ms Watson's Position Number (1925) was stated. In this way, Ms Watson correctly acknowledged that her authority was limited by reference to the fact, established by the terms of the instrument of Ministerial delegations in evidence, that the Minister had delegated to her only the Minister's power under s 65 of the Act . 71 Annexed to or accompanying the Decision Record were one and half typed pages and one and a half pages in Ms Watson's handwriting. I therefore find that the applicant does not meet this criterion for the grant of a subclass 866 (Protection) visa. His conviction was handed down less than four years ago. (However, his sentence was deemed to have commenced in 2002. The applicant has produced a clear police clearance certificate from Indonesia in relation to the public interest criteria 4001. However, the applicant has been unable to obtain a police clearance certificate from Iran for the time that he lived there. He has presented a Statutory Declaration stating that he had no charges nor had committed any offences in Iran. A Statutory Declaration for the applicant's sister states that she and her mother travelled to Canberra to the Iranian Embassy there and were told that the Iranian government does not issue police certificates for Iranians who lived there. Our Canberra office has considered whether to grant a waiver of this requirement in the light of the Statutory Declarations and advice from DFAT in Teheran about whether a police certificate can be obtained from the Iranian government by an Iraqi who lived illegally. Our Canberra offices had decided to/not to issue a waiver and the applicant there does/does not meet the public interest criteria 4001 for the grant of a 785 (Temporary Protection) visa. Accordingly, I find that the applicant has/has not met all prescribed Migration Regulations , Schedule 2, criteria for the grant of a subclass 785 (Temporary Protection) visa. I am satisfied that the applicant [...] does/does not meet section 36(2) of the Migration Act and the prescribed criterion in subclause 785.221 for the grant of a subclass 785 (Temporary Protection) visa. Accordingly, I grant/refuse to grant the applicant [...] a Temporary Protection (Class XA) visa. 73 As can be seen, the one and a half typewritten pages do not correspond with the "Criteria to be satisfied at time of decision" applicable at the time (set out at [44] above) although there were obvious similarities. I will need to discuss below the question of the chest x-ray and PIC 4001. However, it may be noted at once that in the conclusion of her discussion of the PIC issue, Ms Watson's position was that it remained open for a decision to be taken either to waive or not to waive a requirement of a "police clearance certificate" from Iran in respect of the time that the applicant had lived in that country. That is to say, Ms Watson's own understanding was that the Decision Record document signed by her was not the final word as to whether the Minister was obliged by s 65(1)(a) of the Act to issue a Temporary Protection visa to the applicant. This is a sensitive case and the applicant is in detention. Pete Davids in Canberra will need to be notified before the case is finalised. I have completed and signed the Convention Protection part of the decision --- someone else can sign off the Regulatory requirements for the visa when Canberra character section makes up its mind whether to grant a waiver to the Iranian police clearance. All other requirements are completed. Character section wanted to have an update from Teheran. Terry Lew sent through a request to Teheran which may have come back to him. It really needs to be finalised soon [there follows a line or partial line of handwriting that is illegible in the photocopy in the Exhibit]. Sally & Pete need to clear the whole dec rec when Iranian penal waiver is granted. Advise PD before grant as PD will need to brief. 75 In the light of Ms Watson's handwritten document it is impossible to accept that she regarded the Decision Record document that she had signed as finalising the question of an obligation on the Minister to issue, or an entitlement of the applicant to receive, a Temporary Protection visa. In Ms Watson's mind, someone else had to "sign off" on the requirements for the Temporary Protection visa under the Regulations. 77 It has been held that Art 1F(b) of the Convention is not to be construed under the influence of the character test in s 501(6) of the Act , and that Art 1F is an independent exclusion of the application of the Convention provisions: see Applicant NADB of 2001 v Minister for Immigration and Multicultural Affairs [2002] FCAFC 326 ; (2002) 126 FCR 453 at [42] per Merkel J with whom Madgwick and Conti JJ agreed, and at first instance, NADB v Minister for Immigration and Multicultural Affairs (2002) 189 ALR 293 at [46] and [47] per Hely J. 78 A similar observation may be made in relation to Art 33(2) in respect of its denial of the benefit of Art 33(1) of the Convention. 79 A s 65 delegate who is not also a s 501(1) delegate is concerned to satisfy himself or herself that Australia has protection obligations to the applicant under the Convention, and is therefore concerned with Art 1F and Art 33(2) (and through them with the relevant provisions of Subdiv AL of Div 3 of Pt 2 of the Act , in particular with ss 91T and 91U of the Act ). 80 A s 65 delegate who is not also a s 501(1) delegate does have the limited role in relation to s 501 referred to in s 65(1)(a)(iii). That role is one of being satisfied that "the grant of the visa is not prevented by section ... 501(special power to refuse or cancel)". Since s 501 does not in terms prevent the grant of a visa, s 65(1)(a)(iii) must be referring to a refusal under s 501(1) (or a cancellation under s 501(2)) by the Minister or by the Minister's delegate. Accordingly, Ms Watson was required to satisfy herself that the grant of a Temporary Protection visa to the applicant was not prevented by a refusal by the Minister or the Minister's s 501(1) delegate. 81 Section 501H set out at [49] above makes it clear that the power of the Minister or of the Minister's s 501(1) delegate to refuse to grant a visa to a person who does not satisfy the Minister or that delegate, as the case may be, that the person passes the character test, is intended to operate independently of the power given to the Minister or the Minister's s 65 delegate by s 65(1)(b) to refuse to grant a visa because the Minister or that delegate is not satisfied that Australia does not owe an applicant protection obligations under the Convention, such as because of the operation of Art 1F. 82 I have previously set out Ms Watson's statement of the effect of the advice given by the "legal branch" of the Department (at [56] and [68] above) and the advice itself (at [67] above). 83 With respect, it is erroneous to think that the "protections" of the receiving country found in Art 1F and 33(2) of the Convention apply to the exclusion of s 501 of the Act . Section 65(1)(a)(iii) expressly requires a s 65 delegate to be satisfied that the grant of a visa is not prevented by a decision to refuse under s 501 , and 501H provides, relevantly, that the power to refuse to grant a visa given by s 501(1) is "in addition to" any other power under the Act to refuse to grant a visa. It follows that a s 65 delegate cannot be satisfied of the matters referred to in s 65(1)(a) where a s 501(1) delegate has refused to grant a visa after not being satisfied that the applicant passes the s 501 character test. 85 It will be recalled that s 65(1)(a)(ii) had the effect of requiring a s 65 delegate to be satisfied that the criteria for the Temporary Protection visa prescribed by the Regulations were satisfied. One of those criteria is that found in cl 785.226, set out at [44] above. Clause 785.226 stipulates, relevantly, that the applicant must satisfy PIC 4001. 86 I set out PIC 4001 at [46] above. The four alternative possibilities set out in PIC 4001 all relate to the "character test". This expression is not defined in the Regulations. In my opinion, the expression bears the same meaning as in s 501 of the Act . I agree with counsel for the Minister that this conclusion follows from s 13(1)(b) of the Legislative Instruments Act 2003 (Cth), and that this is so notwithstanding the fact that s 501(6) states only that the expression bears the meaning there set out "[f]or the purposes of [s 501]". 87 The applicant submits that by reason of her being a s 65 delegate, Ms Watson had power, through s 65(1)(a)(ii) of the Act , cl 785.226 of the Regulations and PIC 4001, to be satisfied in relation to any of the four "character test" related alternatives specified in PIC 4001. Alternative (a) is that the applicant satisfies the Minister that the applicant passes the character test. Alternative (d) is that the Minister has decided not to refuse to grant a visa to the applicant despite not being satisfied that the applicant passes the character test. Yet a s 501 delegate may refuse to grant a visa to a person if the person does not satisfy the s 501 delegate that the person passes the character test. Accordingly, there is a possibility of inconsistent conclusions being reached by the s 65 delegate and the s 501 delegate. 88 Faced with the four alternatives within PIC 4001, the applicant does not suggest that either (a) or (b) was satisfied: plainly Ms Watson knew that the applicant did not pass the character test because he had been sentenced to a term of imprisonment of more than 12 months. The applicant is therefore left to rely on alternatives (c) and (d). 89 In my opinion, Ms Watson did not make a decision satisfying either of these descriptions. Both descriptions require that the decision-maker take a decision favourable to the applicant with the intention of setting to one side the ground of refusal (para (d)) or the potential ground of refusal (para (c)) created by s 501 of the Act . Ms Watson did not take such a decision at all. She considered, basing her view on advice from the "legal branch", that in the circumstances s 501 simply had no scope for operation. 90 The question of the relationship between PIC 4001 and s 501 of the Act is not a simple one susceptible of a straightforward answer. In view of my conclusion that Ms Watson did not take a decision of the kind described in either para (c) or (d) of PIC 4001, I am not called upon to resolve it. I am of the view, however, that s 65(1)(a)(iii) and s 501H make it plain that nothing is to detract from the "special power to refuse [a visa of any kind]" contained in s 501. According to this view, while cl 785.226 requires a s 65 delegate to be satisfied that an applicant satisfies one of the four alternatives specified in PIC 4001, that delegate must also be satisfied that the grant of the visa is not prevented by an exercise of the additional special power of refusal contained in s 501(1) by a s 501(1) delegate. 91 For these reasons, I do not accept the applicant's submissions on this issue. Does s 65(1)(a) oblige a s 65 delegate to grant a visa where the Minister or s 501 delegate has not "yet" taken a decision to refuse to grant the visa? He submits that s 501 "gets its interaction with the normal grant of a visa under s 65(1)(a)(iii)" , and that it does not have application until a decision is made under it: until then it "sits above and outside of the normal processes of a grant of a visa". According to counsel's submission, until s 501(1) is actually invoked by the taking of a decision under s 501(1) to refuse to grant a visa, the régime found in s 65 and Subclass 785 of Sch 2 to the Regulations and, relevantly, PIC 4001, alone apply. 93 According to the submission, a s 65 delegate, upon finding that no decision by a s 501(1) delegate to refuse to grant a visa has "yet" been taken, is at liberty, indeed is obliged by the mandatory terms of s 65(1)(a) , to grant the visa, even if the s 65 delegate knows that the questions that arise under s 501 are still under consideration by the s 501(1) delegate. Indeed, the s 65 delegate would be required to grant the visa even though, as in the present case, a NOICR has actually been issued to the applicant. It would be only an actual decision under s 501(1) to refuse to grant a visa that would defeat s 65(1)(a) 's requirement that a visa be granted. 94 Some force may be thought to be lent to counsel's submission by s 65A ' s 90 day time limit for the s 65 delegate either to grant or refuse to grant the visa. The argument would be that, unless a decision is made within that period under s 501(1) to refuse to grant the visa, the s 65 delegate must grant it before the expiry of that period. 95 I accept that s 65A impliedly requires the Minister to take any decision under s 501(1) to refuse to grant a visa within the 90 day period referred to in s 65A. Absent such an implication, it would be open to the Minister or the Minister's s 501(1) delegate to defeat the operation of s 65A. 96 However, just as there is no sanction, apart from susceptibility to an order in the nature of mandamus for a failure to make a decision under s 65(1) within the 90 day period, a failure to make a decision to refuse a visa under s 501(1) is without sanction except the susceptibility of the Minister to an order in the nature of mandamus. 97 I do not think that the provisions have the effect described by counsel for the applicant. Neither s 65A nor any other provision of the Act is to the effect that a visa is deemed to be granted in any particular circumstances, or after the expiry of any particular period of time. I would not readily find such a significant provision implied. 98 What s 65(1)(a)(iii) requires is that the s 65 delegate be satisfied that a s 501(1) delegate dealing with the matter not have taken a decision to refuse to grant a visa. I do not think that that criterion is satisfied where the s 65 delegate knows that the questions raised by s 501 remain unresolved and are still under consideration. That is to say, I do not think it is the proper construction of the relationship between s 65(1) and s 501(1) that once the stage is reached that the s 65 delegate is satisfied that all other criteria have been satisfied, he or she must grant the visa where, as was the case here, he or she knows that a s 501(1) delegate dealing with the matter has not reached a decision by that time. 99 It must be remembered that although it is convenient to speak of a s 65 delegate and a s 501(1) delegate, the Act speaks only of the Minister. It would be artificial in the extreme to construe s 65(1)(a) as requiring the Minister to grant a visa once satisfied that all the other s 65(1)(a) criteria are satisfied, while the Minister was still contemplating the exercise of discretionary power given by s 501(1). 100 I note, however, that the order in the nature of mandamus that I have in contemplation requiring the Minister to grant or refuse to grant the visa within a specified time would indirectly require him to take a decision under s 501(1) , if one is to be taken at all, within that time. Ms Watson there recorded that the applicant had undergone a chest x-ray by a medical practitioner who was qualified as a radiologist in Australia. Although she made that statement under the heading "Migration Regulation 785.224 --- Chest X-ray", her statement in fact satisfied cl 785.225(a). According to the one and a half page typed document, Ms Watson did not consider cl 785.225A or, if it became applicable, cl 785.225B. Clause 785.225A(a)(ii) required that a "relevant medical practitioner" as defined in cl 785.224 must have considered the radiological report required under cl 785.225(a) in respect of the applicant. 102 Counsel for the applicant submits that the Minister has not led evidence that cl 785.225A was not satisfied. He further submits that I should infer from the fact that the applicant underwent a medical examination carried out by a relevant medical practitioner, that that relevant medical practitioner did consider the radiological report required under cl 785.225(a) in respect of the applicant and found nothing untoward in it. Counsel submits that if the position had been otherwise, Ms Watson would have noted it. 103 I think I am entitled to infer from the omission of any reference to cl 785.225A or cl 785.225B that Ms Watson did not address those clauses. It seems plain that she was working from a different version of cl 785.22. 104 I do not think it fatal that the Minister has not led evidence positively establishing that Ms Watson was not satisfied that criterion 785.225A was satisfied. The one and a half page typed document purports to be a comprehensive summary by Ms Watson, for the benefit of her successor Case Manager in respect of the applicant, of the position in relation to the outstanding requirements of the Regulations. 105 I do not draw the inference that counsel for the applicant seeks. The chest x-ray examination may have taken place after the medical examination by the relevant medical practitioner. While I infer that the chest x-ray examination would have resulted in a radiological report, I do not additionally infer, in the absence of any reference whatever to the matter in the documentary evidence before the Court, that that report went to the relevant medical practitioner who considered it and found it to be satisfactory. 106 For this further reason, it cannot be said that a s 65 delegate became satisfied that all of the criteria referred to in s 65(1)(a) of the Act were satisfied. That notation can be seen in Ms Watson's one and a half page typed annexure set out at [71] above. 108 Counsel for the applicant submits that there was no legal requirement for a police clearance certificate from Iran or, in the alternative, a waiver. All that matters for present purposes, however, is that no delegate of the Minister having authority to do so ever reached the stage that PIC 4001 was satisfied, and, for her part, Ms Watson made it clear that it would be for someone else to "issue a waiver". 109 For this further reason, it cannot be said that a s 65 delegate became satisfied that all of the criteria referred to in s 65(1)(a) of the Act were satisfied. While I will receive submissions from the parties, I am also presently of the view that the order should fix a time for compliance, and that the Minister should be ordered to pay the applicant's costs of the proceeding. 111 There should not be an order in the nature of mandamus requiring the Minister to grant the applicant a Temporary Protection visa (paragraph 5 in [32] above) because it is not established that a s 65 delegate became satisfied that all of the criteria for the grant of such a visa referred to in s 65(1)(a) of the Act were satisfied. 112 The declaration sought that s 501 does not have operational effect in relation to the application for the Temporary Protection visa made by the applicant on 16 June 2006 (paragraph 1 in [32] above) should be refused because s 501 can apply in relation to that application. 113 The remaining two declarations (paragraphs 2 and 3 in [32] above) should not be made because they are in the nature of judicial advice as to a possible future course of action by the Minister and the issues covered by them are not appropriate for declaratory relief. I certify that the preceding one hundred and thirteen (113) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | application for protection (class xa) visa 90 day period in which minister to make a decision expired relationship between ss 65 and 501 of migration act 1958 (cth) different delegates of minister with delegated power to act under s 65 and s 501 scope of s 65 delegate's authority, if any, in relation to the "character test" under s 501 whether s 65 delegate had finally decided to issue temporary protection visa (subclass 785) to applicant whether mandamus lay to compel minister to issue the visa. held : (1) the s 65 delegate had not finally decided to issue a temporary protection visa to the applicant and mandamus did not lie to compel the minister to issue the visa; (2) the role of the s 65 delegate in relation to the s 501 character test was limited to checking with the appropriate s 501 delegate that the applicant had not failed to pass that test; (3) s 65 delegate's powers under s 65 and the migration regulations 1994 (cth) were subject to the powers of the minister and the minister's s 501(1) delegate to refuse to grant a visa; (4) mandamus should issue to compel minister to determine the application according to law, having regard to the fact that the 90 day period fixed by s 65a had long since expired. migration |
This case concerns the nature of the industrial action that might be authorised and, in particular, the consequences of the necessity for such action to be commenced within a period of 30 days beginning on the date of the declaration of the results of the ballot. 2 The respondent Construction, Forestry, Mining and Energy Union (the Union) initiated a bargaining period by way of notice in accordance with s 423 of the Act on 5 April 2006. On 3 May 2006 the Union applied to the Australian Industrial Relations Commission for an order under s 451 of the Act that a protected action ballot be held. The order was made on 5 May 2006. In accordance with s 463(1)(g) the order included the questions to be put to the employees on the ballot. The majority of employees on the roll voted affirmatively to each question in accordance with s 478(1)(b) and (c). Each question attracted 102 votes with one informal vote recorded for question 3. 4 On 16 May 2006 the Union notified the applicant, United Collieries Pty Limited, pursuant to s 441 of the Act of its intention to conduct a 24 hour stoppage of work commencing on 21 May 2006. That stoppage occurred on that date. • A shift stoppage of work commenced at 2.30 pm on Wednesday 24 May 2006. • A shift stoppage of work commenced at 10.30 pm on Wednesday 24 May 2006. • A shift stoppage of work commenced at 6.30 am on Friday 26 May 2006. • A seven day stoppage of work commenced at 6.30 am on Thursday 1 June 2006. 6 The Union gave a further notice dated 2 June 2006 in which a 24 hour stoppage was proposed commencing on 15 June 2006, a date that falls outside the 30 day period. United Collieries contended that the industrial action threatened in that notice was not protected action as it was outside the 30 day period. The Union did not agree, hence this proceeding brought by United Collieries. Although the date for the particular industrial action specified in the 2 June notice has now passed, the question as to what, if any, industrial action will be protected by virtue of the authority granted by the ballot remains live. United Collieries contends that as the 30 day period has expired no action of the kind contemplated under the authority granted by the secret ballot would now be protected industrial action. On the other hand, the Union contends that, as a 24 hour stoppage had taken place within the 30 day period, all of the available options of industrial action approved in the ballot are open. Alternatively, the Union contends that 24 hour stoppages of work, bans on the working of non-rostered overtime, seven day stoppages of work and shift stoppages of work would all be protected action if taking place during the bargaining period as each type of action had been commenced during the 30 day period. 7 The gist of s 478(1) for present purposes is that industrial action is authorised if the action is the subject of a successful protected action ballot and the action commences during the 30 day period beginning on the date of the date of the declaration of the results of the ballot. The 30 day period may be extended by the Industrial Relations Commission if there is a joint application by the employer and applicant for the ballot but only one such extension can be granted, see s 478(3) and (4). Section 478(2) provides that the action is not authorised 'to the extent that it occurs after the end of the bargaining period referred to in s 451 '. Amongst other things, s 451 provides that applications for an order for a ballot may only be made during a bargaining period. I need not summarise the provisions. As the name implies, it relates to a period of bargaining towards a collective agreement. The beginning of the bargaining period is set by s 427 and the end by s 428. It is essentially open ended in that it is brought to an end by agreement, withdrawal from negotiations by the initiating party or termination by the Industrial Relations Commission pursuant to certain powers. 10 Division 3 of Pt 9 deals with protected action. Section 441 provides for a notice of intended action to be given to the employer. That is of some significance in the present debate. Section 441(6) provides that a written notice must state the nature of the intended action and the day when it will begin. Section 445 provides that, amongst other things, action is not protected action unless (as one of two alternatives) the action has been authorised by a protected action ballot. In addition to what might be called industrial protection, s 447 provides wider immunity and s 448 prohibits discrimination against an employee on account of proposing to engage in, or engaging in, protected action. 11 Division 4 of Pt 9 deals with secret ballots on proposed protected action. Subdivision A is a general introduction, including definitions and the object. Notice of the application must be given to the other party. The application must include, amongst other things, the question or questions to be put to the relevant employees in the ballot, including the nature of the proposed industrial action (s 452(1)(a)). Subdivision C deals with the determination of the application and the order for the ballot to be held. The Commission acts after hearing submissions from affected parties. There is a very detailed procedure for the holding of the ballot, including nomination of the ballot agent who is to conduct it. One of the matters to be included in the order is the question or questions to be put to the relevant employees in the ballot, including the nature of the proposed industrial action (s 463(1)(g)). Subdivision D deals with the conduct and results of the protected action ballot. Section 478 is part of that subdivision. Again, the provisions are detailed and formal. Subdivision E deals with authorised ballot agents and authorised independent advisors. Subdivision F deals with the funding of ballots. The general position is that the applicant is liable for the cost of holding the ballot but there is a Commonwealth subsidy available for 80 per cent of the cost. Subdivision G deals with miscellaneous matters, including a regulation making power. 12 Division 5 of Pt 9 deals with industrial action not to be engaged in before the nominal expiry date of a Workplace Agreement or Workplace Determination. Division 6 deals with orders and injunctions against industrial action. Division 7 deals with ministerial declarations terminating bargaining periods. Division 8 deals with Workplace Determinations which apply if a bargaining period has been terminated. Division 9 deals with payments in relation to periods of industrial action. 13 Each side also referred to the principal objects of the Act in s 3 and to the various subclauses of that provision. I regard those general statements as neutral in the present debate. 14 Some initial points should be noted. One is that United Collieries accepts that authorised action might continue past the 30 day period if it is commenced beforehand and, of its nature, will extend past the expiry of the period. A good example would be a seven day stoppage commencing on the last day of the 30 day period. It is accepted that a strike of indefinite duration could be authorised and could continue provided that it was commenced within the 30 day period. United Collieries also accepts that, if question 1 had words added such as 'each successive Monday commencing on (date)' or a series of dates, action would be authorised beyond the expiry of the 30 day period provided that the first date was within the 30 day period. If its preferred submission is not accepted it is acknowledged by the Union that question 3 only contemplates one seven day stoppage, and as this took place during the 30 day period there could be no further action of this type after that time period elapsed. The Union also acknowledges that, if its preferred submission is not accepted, as there was no two hour stop work meeting during the 30 day period, no future two hour stop work meetings are protected as a result of this ballot. 15 I do not accept the Union's preferred argument that, as some industrial action commenced within the 30 day period, all options approved by the ballot are now open. In my opinion, each separate question in the ballot relates to a different kind and nature of industrial action. That conclusion is consistent with the requirements of s 452 and s 463(1)(g) providing for the posing of a question or questions including the nature of the proposed action. 16 The issue of principle for decision arises in relation to each of questions 1, 2 and 5, as an instance of each form of industrial action occurred prior to the expiration of the 30 day period. United Collieries submits that each such instance was self-contained and was not the commencement of anything else. 17 It is submitted by United Collieries that use of the phrase 'the action' in s 478(1)(d) refers to a specific instance of industrial action. The phrase is in the singular and the noun 'action' is governed by the definite article. It is used in contradistinction with the more general phrase 'industrial action'. It is submitted that this construction is assisted by consideration of s 441 dealing with the notification of industrial action. The phrase in that section 'the action' relates clearly to particular instances of industrial action rather than a general description. Rather it uses the definite article, in speaking of " the intended action". It seems to us this implies a measure of particularity greater than would be conveyed merely by quoting the words of one of the paragraphs in the definition. It is submitted that ss 438 , 444 and 447 provide other examples where Parliament used the phrase 'the action' to refer to a specific instance of industrial action. Reference is also made to the definite article in s 452(1)(a) to make a similar point. 18 United Collieries also submits that the ability to extend the 30 day period referred to in s 478(1)(d) provides further support to its interpretation of the section (see s 478(3) and s 478(4)). It is submitted that, if the Union's interpretation of s 478(1)(d) is correct, s 478(3) and s 478(4) will have little utility. Support is also claimed from the examples of protected action ballots contained at the end of s 434. The provisions are designed to be faciltative (i.e. to provide the means for accessing protected action) not prohibitive (i.e. to outline the circumstances in which such action is not available). It calls in aid the results of the secret ballot in that fewer employees voted in favour of the longest period of industrial action. It is argued that as the bargaining period wears on and the number of days of lost pay increases, employees may be less likely to be in favour of further industrial action. It is thus conceivable that there would be a majority of employees participating in industrial action which they, in the end, do not support. It submits that the purpose of enabling the employees directly concerned, as opposed to the Union, to choose to take industrial action would be frustrated. Union officials would decide when and if to take the specified form of industrial action. 21 I am not persuaded that the relevant provisions of the Act are as restrictive as is submitted on behalf of United Collieries. The issue really is whether each question passed at the ballot properly describes industrial action. If a question in the form of question 1 is answered in the affirmative, then industrial action of a particular nature is authorised with no time limits. The effect of the position of United Collieries is that there is an unspoken limitation that action would have to take place within the 30 day period. I disagree. The relevant period for industrial action, having in mind the scheme of the Part of the Act in question, is the bargaining period, not the 30 day period. The existence of the 30 day period does not affect the answer to the question as to whether industrial action has been properly authorised. The purpose of the time limit in question needs to be considered. It is a time limit for commencement of industrial action, not a time limit for completion of industrial action. The bargaining period provides that limit. In my opinion, the purpose of the provision is to ensure that the employees are voting upon a real proposal based upon relatively contemporaneous circumstances. A commitment to relatively prompt action is involved, rather than simply giving an authority which can be held up the sleeve of those negotiating for the employees. 22 The grammatical argument advanced by United Collieries is unconvincing. The phrase 'the action' refers back to 'industrial action'. There is, of course, the need to specify the industrial action but there is no indication that that must be done by reference only to specific instances of it. A consequence of the argument for United Collieries is that a separate ballot would be required before each instance of, eg, a 24 hour stoppage, a ban on the working of non-rostered overtime or a shift stoppage. Bearing in mind the detailed and formal nature of conducting a ballot and the consequent time and cost, that would be an unlikely result. 23 United Collieries attempted to outflank this obvious difficulty by accepting that there could be a predetermined, but specific, series of actions on particular dates or at particular times extending beyond the 30 day period. I can see no distinction in principle between employees authorising 24 hour stoppages after the 30 day period on predetermined days (accepted to be valid), compared with 24 hour stoppages after the 30 day period at times to be determined as the bargaining unfolds. Decisions as to future steps often need to be made at short notice, sometimes in response to actions of the opposing party ... and changing circumstances. 24 The gravamen of United Collieries' complaint is that, as the description of industrial action specified in each of the relevant questions on the ballot leaves open when industrial action should take place, Union officials will be given a role which is not provided by the legislation and which is inconsistent with the facilitation of decision making by the employees actually affected. The exclusion of Union officials from the process in that way is not spelled out in the legislation or in the extrinsic material. If the affected employees vote in favour of a form of industrial action which gives a discretion to Union officials, then industrial democracy has worked with that result. 25 The Act contemplates that negotiations during the bargaining period will be a power struggle with no holds barred, within limits. The secret ballot provisions are not intended to alter the balance of power in favour of employers against employees. They are to assist in ensuring that power is exercised by the affected employees. 26 It is easy to be swayed by perceived policy arguments in matters of this kind. Statutory construction is the issue. Primary attention should be given to the words of the statute. In my opinion, the words 'the action' in s 478(1)(a) and s 478(1)(d) refer to the industrial action which was the subject of the protected action ballot and, in particular, the proposed industrial action put to the employees by way of each question. The content of each question must include 'the nature of the proposed industrial action'. Each question remaining in issue here describes industrial action at a level of generality above specific instances. The description might have been more specific, but it was not. They are in the plural but without a schedule of dates or times. No doubt some descriptions of industrial action may be too general. That issue does not arise here. The form of the questions has not been challenged in this proceeding. I do not mean to imply that they could have been successfully challenged. Each question describes industrial action which was authorised by the employees. As each question describes a type of industrial action in the plural, or a series of individual actions, that industrial action is commenced by the occurrence of the first instance of it. 27 I do not regard the decision or the reasoning in Davids Distribution Pty Ltd v National Union of Workers to be contrary to this conclusion. The particular question in that case concerned the provisions of another division of Pt 9 of the Act with a different focus to s 478 . The same may be said of the other examples given by United Collieries. The object of the Division and the passage referred to in the Explanatory Memorandum do not point to any different conclusion. 28 It follows that the action described in each of questions 1, 2 and 5 was commenced in the 30 day period beginning on the date of the declaration of the results of the ballot. The continuation of that action during the bargaining period is not prohibited by s 478(1)(d). The application must therefore be dismissed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | industrial action during bargaining period approved by a protected action ballot of employees where proposed industrial action is a series of actions whether action commenced is during the 30 day period beginning on the date of the declaration of the result of the ballot if first of the series occurs within the 30 day period industrial law |
Pursuant to a previous order of the Court, written submissions in support of the application and written submissions providing the detail of the submissions sought to be made by the IIA, dated 17 September 2009 and 11 November 2009 respectively, have been supplied to the Court and to the parties. The application is opposed by the applicants and the respondent ('iiNet') adopts a neutral position. The Amended Motion is supported by an affidavit of Peter Coroneos, the Chief Executive Officer of the IIA, sworn on 10 September 2009. The applicants rely upon an affidavit of Sophia Leila Finter sworn 16 September 2009. During the hearing of the Motion, Mr Coroneos was cross-examined upon the contents of his affidavit. In support of its application to intervene, the IIA firstly submits that because of its experience, it can provide unique assistance to the Court. This experience is said to come from its role as representative for 140 members who are engaged in the internet industry in Australia and its role as Australia's national representative of the internet industry. It has provided assistance to government in respect of policy issues affecting the internet industry and has developed several industry codes that apply to such industry. Secondly, the IIA submits that it has ' first hand knowledge ' of the manner in which the safe harbour provisions are intended to operate. Such knowledge is said to arise because the IIA was involved in the formulation of the safe harbour provisions when the US-Australia Free Trade Agreement was under negotiation culminating in the US Free Trade Agreement Implementation Act 2004 (Cth), such Act being the source of the amendment to the Copyright Act inserting the safe harbour provisions. Mr Coroneos also claims to have been personally involved in the formulation and negotiation of such provisions. Thirdly, it is submitted that the IIA can offer assistance in respect of a range of policy issues concerning the formulation of the safe harbour provisions; how the industry has interpreted and applied such provisions since its incorporation; the consequence of the submissions of the applicants upon the internet industry and internet consumers; and the technical infrastructure, standards and operation of the internet. The IIA has also submitted that it was acknowledged in the Revised Explanatory Memorandum to the Copyright Amendment (Digital Agenda) Bill 1999 (Cth) as being an important contributor to the formulation of that Bill which became the Copyright Amendment (Digital Agenda) Act 2000 (Cth). Such Act inserted into the Copyright Act , among other things, s 112E which is an important provision under consideration in these proceedings. In short, the IIA submits that it is ' in a position to advance useful submissions in the public interest on the proper construction of certain provisions of the Copyright Act ' (see Sharman Networks Ltd and Others v Universal Music Australia Pty Limited and Others [2006] FCAFC 178 ; (2006) 155 FCR 291 at [14] . ) It appears from the submissions dated 11 November 2009 that the IIA's final submissions are primarily directed towards four aspects of the proceedings before the Court: the interpretation of s 112E of the Copyright Act ; what effect (if any) the AFACT notices should have on an internet service provider's ('ISP') liability for copyright infringement; whether such notices should lead to the termination and/or suspension of customer accounts; and the correct interpretation of the safe harbour provisions. The IIA emphasises that it does not seek to interfere in the conduct of the proceedings and that because of the limited intervention it seeks it would not disrupt the conduct of the proceedings. It states that should the leave to intervene be granted, it would not seek to make any further oral and written submissions than those already before the Court. (3) The role of the intervener is solely to assist the Court in its task of resolving the issues raised by the parties. The applicants have submitted that the submissions which the IIA would rely upon if granted leave to intervene duplicate the submissions already made by iiNet and accordingly there is no utility in granting leave for the IIA to intervene. Mr Coroneos, in his cross-examination, acknowledged that he had not personally compared the submissions of the IIA to those provided by iiNet given that the final submissions of the IIA were drafted before the final submissions of the parties. Mr Coroneos acknowledged his understanding that to be granted leave to intervene it was necessary for the IIA to provide a different contribution to that already provided by the parties to the proceeding. However, he was not able to identify any specific subject matter in the IIA's submissions which was different to iiNet's submissions. The IIA has referred the Court to several authorities in support of its submissions. IceTV Pty Limited & Anor v Nine Network Australia Pty Limited [2008] HCATrans 356 was one, wherein the High Court of Australia granted leave to interveners on the ground that the Court ' may be assisted ' by them (per French CJ). It has also considered the closing submissions of iiNet. The Court is satisfied that the limited intervention sought would not unreasonably interfere with the conduct of the hearing given that no further oral or written submissions are sought to be advanced (O 6 r 17(2)(b)) and that there are no other relevant matters for determination (O 6 r 17(2)(c)). Therefore, the critical question for the Court's consideration is whether the IIA's contribution would be ' useful and different ' to the contribution being made by the parties (O 6 r 17(2)(a)). In Australian Securities & Investments Commission v Citigroup Global Markets Australia Pty Ltd (No. 3) [2007] FCA 393 , Jacobson J found that he was not satisfied that the contribution of a group which he described as a ' lobby group ', namely the Australian Financial Markets Association ('AFMA'), would contribute to the proceedings in a way which was ' useful or different from the contributions of the parties ' (see [12]). His Honour observed that the parties were well represented by substantial teams of legal counsel. He also observed at [13] that the applicant in those proceedings, ASIC, would not ' be influenced by tactical or forensic considerations which would be necessary to be off-set by submissions made by AFMA '. The submissions sought to be relied upon by the IIA regurgitate in substance the submissions provided by iiNet which deal, in significant detail, with the subject matters concerning the safe harbour provisions; s 112E of the Copyright Act ; and the concept of copyright authorisation considered in the context of the AFACT notices. The submissions of iiNet have also dealt with the practical and cost consequences of an ISP being required to comply with the demands of the AFACT notices. Further, the provisions of the Telecommunications Act 1997 (Cth) and their interaction with the Copyright Act have also been the subject of extensive submissions from iiNet. Indeed, the industry, detail and comprehensiveness of iiNet's closing submissions, stretching for more than 260 pages, eclipse the brief submissions of the IIA even on the specific matters with which the IIA wishes to address the Court. The Court acknowledges that the fact that the IIA could not be considered impartial is irrelevant. Equally, it is irrelevant that the IIA happens to have a perspective which is aligned with one of the parties and not the other. As much is clear from the High Court allowing Telstra and the Australian Digital Alliance to act as amicus in IceTV . Therefore, the only relevant consideration is whether the IIA's submissions are ' useful and different ' from that which the Court already has before it. Had there been a subject matter contained in the submissions of the IIA which had not been the subject of submissions from iiNet, the Court would have adopted the approach taken by Kirby P in Breen . However, the Court is satisfied that the matters sought to be advanced before this Court by the IIA do not add any material to that which has already been provided to the Court. That is, there is no subject matter of the proposed submissions which has been omitted by iiNet, nor which could be usefully supplemented by the matters contained in those proposed submissions. The Court has been fully assisted by both iiNet and by the applicants in respect of the issues which are the subject of the IIA's proposed submissions. The mere fact that the IIA is not iiNet and thus claims to bring a 'broader perspective' does not render its submissions ' different and useful '. Much of the IIA's submissions in favour of its intervention appear to relate to its involvement in the process of the creation of legislation that is at issue before this Court. However, that involvement is only relevant to the extent that it means that the IIA can provide actual insight as to the interpretation of legislation which iiNet cannot. It does not grant the IIA some kind of preferred status as interpreter of the legislature's will. As the applicants have rightly submitted, it does not matter who says something, it matters what is said and, as has already been stated, the IIA has not proffered anything materially different to iiNet. If the IIA intended by its application for intervention to bring to the Court's attention the importance of its decision in these proceedings, it can take such fact as noted. The Court is, and always has been, well aware of the ramifications of the outcome of its decision for ISPs, rights holders, and the development of the internet more broadly. The Court refuses leave for the IIA to participate in the hearing by the making of oral and written submissions. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | interveners application sought for leave to intervene whether problematic for intervener to side with one party whether contribution of the internet industry association would be 'useful and different' to that already provided by parties to the proceeding comparison between submissions of internet industry association and closing submissions of the respondent whether sufficient to constitute 'useful and different' for intervener to approach proceeding from a 'broader perspective' than provided by a party o 6 r 17 federal court rules practice and procedure |
It is not clear whether these orders are sought in the alternative. I shall assume they are, but make it clear that if I do not think it appropriate to make an order in terms of that sought pursuant to O 29 r 2(a), I would not be prepared to make an order in terms of that in (2) above. 2 The applicants, S.P.I. Spirits (Cyprus) Limited and Spirits International N.V. (respectively 'SPI Spirits' and 'Spirits International') oppose the making of such orders. 3 Diageo submits that those orders should be made because the issue raised by the Cross-Claim, the ownership of Stolichnaya and other registered trade marks, is a threshold issue in the main proceeding and should be determined before the other issues raised in the main proceeding. 719317 (the Stolichnaya Ohranj Word Mark). Spirits International is currently the registered owner of the marks, having been assigned them by Diageo pursuant to consent orders made on 8 September 2005, subject to any order that the Court may make in determining the Cross-Claim. FKP and FGUP VO also seek rectification of the Register of Trade Marks to record one or other of them as owners of the trade marks. 5 Diageo submits that the issues arising in the main proceeding other than the issue of ownership of the marks are quite different from those arising under the Cross-Claim. This is demonstrated, it is said, by the fact that Diageo, although a respondent to the Cross-Claim has no relief sought against it and FKP has no interest in the main proceeding once the issue of ownership of the marks is determined. The relief sought by SPI Spirits and Spirits International in the application was founded on two primary claims made against Diageo, characterised in the affidavit of Kathryn Cecilia Everett, sworn 28 November 2005 and filed by Diageo in support of its notice of motion, as the Ruski Claims and the SPI Trade Mark Claims. 7 In her affidavit, Ms Everett indicates that the Ruski Claims are founded on ss 52 , 53 and 55 of the Trade Practices Act 1974 (Cth) ('the TPA') and concern the distribution of a ready-to-drink, low alcohol beverage distributed by Diageo in Australia under the name 'Lemon Ruski' ('Ruski'). For the reasons set out in pars 5 --- 37 of the Statement of Claim, SPI Spirits and Spirits International plead that the distribution by Diageo of Ruski in Australia in its current packaging constitutes misleading or deceptive conduct. The distribution is said to continue; on SPI Spirits and Spirits International's case it continues to mislead. 8 The SPI Trade Mark Claims concern the construction of the Distribution Agreement (as defined in Ms Everett's affidavit). SPI Spirits and Spirits International plead that on a correct construction of this agreement, Diageo was obliged to assign certain trade marks (which include some of the Cross-Claim Trade Marks) to Spirits International upon expiry of the agreement on 4 September 2005 (or upon earlier termination of the agreement). In September 2005 Diageo assigned these trade marks to Spirits International pursuant to interlocutory orders made by consent in these proceedings in May 2005. However, Diageo continues to defend the SPI Trade Mark Claims. 9 SPI Spirits and Spirits International have sought and been granted leave to file and serve an Amended Statement of Claim by 2 December 2005 which adds a cause of action relating to alleged further breaches by Diageo of the Distribution Agreement (breach of which is already pleaded by SPI Spirits and Spirits International in the SPI Trade Mark Claims). These claims are referred to in Ms Everett's affidavit as the 'New Contractual Claims'. The New Contractual Claims are only made by SPI Spirits, which is not a party to the Cross-Claim. 10 On 14 December 2004 the Russian Entities (against whom no facts were, or are, pleaded by SPI Spirits and Spirits International and against whom no relief was, or is, claimed) filed a notice of motion in the proceedings seeking orders that they be joined as parties. SPI Spirits and SPI International opposed this motion but on 17 December 2004 Gyles J delivered an ex tempore judgment and ordered that FKP be added as the second respondent to the proceedings to enable it to file a cross-claim. FGUP VO was joined as second cross-claimant by consent of all parties in May 2005. 12 SPI Spirits is not a party to the Cross-Claim. Spirits International is defending the Cross-Claim on several grounds outlined in its Defence to the Cross-Claim filed on 16 September 2005. The Russian Entities' claim for relief in relation to the Cross-Claim Trade Marks is apparently founded on events which occurred around the time of the disintegration of the Soviet Union in December 1991. In the intervening fourteen years, SPI Spirits and Spirits International and their predecessors in title have continuously and actively used the Cross-Claim Trade Marks in Australia, by promoting and selling an extensive and substantial volume of vodka products under those trade marks, either directly or through local distributors. During this fourteen year period, SPI Spirits and Spirits International and their predecessors in title have also registered (or authorised their distributors to register) the Cross-Claim Trade Marks in Australia and in many countries around the world. 13 Having regard to the aforementioned matters, SPI Spirits and Spirits International submit that these proceedings comprise several distinct claims, the outcome of each of which is unlikely to have a significant impact upon the outcome of the others. The claims made by the Russian Entities in their Cross-Claim, while part of these proceedings as presently constituted, arise out of a substantially different and unrelated set of facts from those which underpin the Amended Statement of Claim. SPI Spirits and Spirits International submit that determination of the Russian Entities' application for rectification of the Trade Marks Register will have no bearing on the outcome of the claims set out in the Amended Statement of Claim. They further submit that the questions in the Amended Statement of Claim do not turn upon the issue of ownership of the Cross-Claim Trade Marks but are founded either in contract (the SPI Trade Mark Claims and the New Contractual Claims) or under ss 52 , 53 and 55 of the TPA (the Ruski Claims); SPI Spirits and Spirits International do not rely upon their ownership of the Cross-Claim Trade Marks in support of any of these claims; and irrespective of the outcome of the Cross-Claim, SPI Spirits and Spirits International will be entitled to pursue and intend to pursue these claims against Diageo. Diageo asserts that ownership of the marks is a threshold and underlying issue, the determination of which, to a greater or lesser extent, will impact upon the outcome of all three claims in the main proceeding. SPI Spirits and Spirits International, on the other hand, assert that even if the Cross-Claim is determined adversely to Spirits International, SPI Spirits and Spirits International will be entitled to pursue their claims against Diageo in contract and under ss 52 , 53 and 55 of the TPA. The misleading representations are said to arise, in essence, from the fact that Diageo, having distributed Ruski in a get-up that included the mark Stolichnaya, SPI Spirits and Spirits International acquired substantial reputation and goodwill in the brands Stolichnaya and Stoli and then from 16 April 2004, having distributed without the mark Stolichnaya, Diageo is representing that, by its continued use of the other features of the get-up, the product is still in the minds of the public associated with Stolichnaya. (2) A consideration of the Ruski Claims makes it clear that the underlying premise of the claims is that SPI Spirits and Spirits International have a reputation in the mark Stolichnaya. Diageo submits that, if the cross-claimants owned the mark, then even if SPI Spirits and Spirits International had acquired reputation and goodwill, that would be held on trust for the cross-claimants. (3) The issue of ownership is clearly a threshold issue and there does not appear to be any other overlap between the Ruski Claims and the Cross-Claim. (4) Diageo distributed Diageo Stolichnaya Vodka in Australia for nine years between September 1996 and September 2005 and has sold Ruski in Australia continuously since 1997. Ms Everett, in her affidavit, has said that, based on her experience and her knowledge of the matter, extensive evidence is likely to be required in relation to these claims and has expressed the view that discovery in relation to the claims is also likely to be considerable and onerous given the length of time during which Diageo sold Diageo Stolichnaya Vodka and has sold Ruski. The proceedings were not commenced until 7 December 2004 and no interlocutory relief has been sought in relation to the Ruski Claims. (b) No steps have been taken other than the filing of a defence and no steps have been taken by SPI Spirits and Spirits International to progress the Ruski Claims. (c) SPI Spirits and Spirits International now seek to file an Amended Statement of Claim which adds significant new claims to the proceedings. (d) SPI Spirits and Spirits International will be entitled to interest on any damages it might be awarded in relation to the Ruski Claims and therefore would be compensated for any delay in payment. SPI Spirits and Spirits International's standing to bring the Ruski Claims is not in any way contingent upon Spirits International's past or present ownership of, or rights in, the Cross-Claim Trade Marks. (2) It is admitted by Diageo in its defence, inter alia , that from 1996, Diageo distributed vodka in Australia under the Stolichnaya trade mark pursuant to the terms of the Distribution Agreement with SPI Spirits and its predecessors. It is further admitted by Diageo in its defence that between 8 July 1997 and 1 September 2004 this vodka was used as an ingredient in the manufacture of Ruski. Regardless of the outcome of the Cross-Claim, the fact remains that for at least fourteen years, vodka sold under the Stolichnaya brand in Australia is vodka that has been manufactured by SPI Spirits and Spirits International and their immediate predecessors. (5) If these claims were to be stayed or heard separately and after the Cross-Claim, SPI Spirits and Spirits International are likely to suffer substantial prejudice given the nature of these claims. In particular, on SPI Spirits and Spirits International's case, Diageo is continuing to engage in the allegedly misleading and deceptive conduct, through its continuing distribution of Ruski in Australia in the livery which is the subject of the Ruski Claims. (6) Given the nature of these claims, it can be anticipated that both parties will wish to adduce consumer and/or survey evidence relating to the matters in issue in the Ruski Claims. The substance of this evidence will naturally change over time and while some such evidence has already been prepared, SPI Spirits and Spirits International are likely to wish to prepare further consumer and/or survey evidence in preparation for trial. As a consequence, SPI Spirits and Spirits International are likely to suffer substantial prejudice if the Ruski Claims are not to be heard until after the determination of the Cross-Claim. If any alternative course is to be adopted, SPI Spirits and Spirits International submit that the Ruski Claims should proceed to a final hearing as soon as possible, and possibly prior to the hearing of the Cross-Claim. (2) The underlying basis of the agreements between Diageo (previously United Distillers (Aust) Pty Ltd) and SPI Spirits and Spirits International or their predecessors was that the vodka supplied to Diageo for distribution in Australia was brand name vodka labelled with the various trade marks. (3) The Cross-Claim relates to only six of those marks and not to the marks known as the Pertsovka Label Mark and the Limonnaya Label Mark. All of the eight trade marks have been assigned to Spirits International pursuant to the consent orders referred to above. As Spirits International now has full use of the marks, it is unlikely that SPI Spirits and Spirits International would suffer any prejudice if these claims were not determined until after the determination of the Cross-Claim. (4) If SPI Spirits and Spirits International and their predecessors did not have any rights in the marks at the time the Distribution Agreement was entered into or when the trade marks were assigned to Diageo, then they are not entitled to any relief in relation to the marks or any conduct related to the Agreement. They relate specifically to the construction of certain written contractual terms and whether certain terms can be implied in the Distribution Agreement (when read together or as amended by a number of subsequent agreements). In particular, SPI Spirits and Spirits International allege that the effect of the written terms was to require Diageo to assign to Spirits International on 4 September 2004 a number of trade marks, including some of the Cross-Claim Trade Marks which were registered during the term of the Distribution Agreement in the name of Diageo with the authority of SPI Spirits and Spirits International. SPI Spirits and Spirits International also allege that there was a breach of certain implied terms as a result of Diageo's failure to confirm that it would assign the relevant trade marks to Spirits International on 4 September 2005. (2) These claims involve questions of contractual construction which do not turn upon, or which cannot be materially affected by, any determination of the issues in the Cross-Claim. Whether or not the Court determines that the Cross-Claim Trade Marks should be cancelled or that either of the Russian Entities be recorded as the owner of those trade marks (each, of course, being a proposition that SPI Spirits and Spirits International strongly resist), this will not affect the Court's decision on whether, as a matter of contractual construction, the relevant terms of the agreements between SPI Spirits and Spirits International on the one hand and Diageo on the other have the meaning and effect which is alleged by SPI Spirits and SPI International. (3) From a procedural perspective, in providing discovery both in relation to the Cross-Claim and the Amended Statement of Claim, SPI Spirits and Spirits International will be required to conduct a thorough review of documents in their possession, custody or power relating to the Cross-Claim Trade Marks. It would create a substantial and unjust burden if SPI Spirits and Spirits International were required to conduct discovery of documents twice; first, in relation to the Cross-Claim and then subsequently in relation to the statement of claim. This is a further reason that it is both in the interests of the parties and the efficient conduct of the proceedings that the claims in the Amended Statement of Claim and Cross-Claim be heard together. They relate to the sales and promotion by Diageo of Diageo Stolichnaya Vodka. Although, like the SPI Trade Mark Claims, these claims relate to alleged obligations of Diageo under the Distribution Agreement, these claims have a different basis than the SPI Trade Mark Claims. (2) Ms Everett has identified each of the eight terms alleged to have been breached, the evidence and discovery required in respect of each allegation and the lack of prejudice to SPI Spirits and Spirits International if the determination of the allegations is deferred. The Distribution Agreement, in substance, is a product distribution agreement under which SPI Spirits (and its predecessors in title) appointed Diageo as the exclusive distributor of a range of vodka products in Australia. In particular, SPI Spirits and its predecessors agreed to supply Diageo and Diageo agreed to acquire from them vodka in certain minimum quantities. Under the Distribution Agreement, Diageo was subject to certain obligations, the terms of which were expressly set out in the Distribution Agreement. Further, determining the questions raised in the Cross-Claim in relation to the ownership of the Cross-Claim Trade Marks is not likely to have any bearing on the question of whether Diageo breached the above obligations. 23 The starting point is that, in the ordinary course, all issues of fact and law should be determined at the one time: Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130; Bathox Australia Pty Ltd v PJ SAS Trading Pty Ltd [2004] FCA 1082 ; Reading Australia Pty Ltd v Australian Mutual Provident Society (1999) 217 ALR 495. 24 The Court's discretion under O 29 r 2 should be exercised with caution: Chippendale Printing Co Pty Ltd v Commonwealth (1995) 17 ACSR 328. For the Court to depart from the ordinary course, the party seeking the separate determination of the issues must satisfy the Court that it would be 'just and convenient' for the order to be made: Reading Australia , supra. The test is 'the practical one of utility, efficiency and convenience in the administration of justice' : Chippendale Printing , supra. 25 The Court has found that it may be appropriate to hear a preliminary issue where there is a 'crisp and clear demurrer point': Novartis AG v FH Faulding and Co Ltd [2004] FCAFC 254. Alternatively, the Court may decide to hear a question separately if there is a narrow point raised on the preliminary issue, and it has the potential to dispose of a significant part of the litigation if decided in one way: TVW Enterprises Ltd v Duffy ( Toohey J, 28 March 1985, unreported ) ; see also Orison Pty Ltd v Strategic Minerals Corporation NL (1987) 77 ALR 141 . Examples are where there is a strong prospect that once the core of their dispute is decided, the parties will settle the remaining issues or where the decision will obviate an unnecessary and expensive hearing of other questions. Such situations must, however, be carefully controlled lest fragmentation of the proceedings should bring delay, expense and hardship, which the making of the order was intended to avoid. (b) There is nothing at this stage which indicates that there will be any commonality of evidence or witnesses (other than in relation to the issues of ownership of the Cross-Claim Trade Marks) that would make it convenient to hear both the Cross-Claim and the Amended Statement of Claim together. Diageo submits that the determining of the Cross-Claim prior to the Amended Statement of Claim may in fact avoid the costs and inconvenience of a hearing on the Amended Statement of Claim, if the Cross-Claim is determined in the cross-claimants' favour. Diageo is unlikely to recover all of its costs in this case and will have expended a considerable amount of time as well as money. (c) There is no prejudice to the cross-claimants if the orders are made and it may assist the cross-claimants in having their claims heard earlier. (d) There does not appear to be any prejudice to SPI Spirits and Spirits International other than a delay in payment of any damages that might be awarded, a prejudice that will be compensated by payment of interest. The Distribution Agreement has come to an end, Diageo is no longer distributing Diageo Stolichnaya Vodka, and SPI Spirits has entered into an agreement with another company for the distribution of its vodka in Australia. (e) The determination of such a decisive issue is likely to be a major factor to both SPI Spirits and Diageo in considering settlement. (f) As stated above, the main proceeding has not progressed at all beyond a defence and reply and is now back to the beginning with the proposed filing of an Amended Application and Amended Statement of Claim which significantly alter the overall case against Diageo. The conduct which is the subject of the main proceeding has either concluded or, in the case of the Ruski Claims, commenced in April 2004 and no interlocutory injunction has been sought. (g) Resolution of the issue of ownership of the marks is likely to contribute to settlement. There is also the convenience of the Court. Not only might hearing time be reduced, both for the trial and any interlocutory disputes, but there would be considerable benefits for the trial judge. If all claims are heard together, the trial judge, in writing his or her judgment, may consider it necessary to determine the ownership issue first. If the ownership issue is determined in favour of the cross-claimants, the trial judge is likely to feel obliged to determine all the remaining issues on the Amended Statement of Claim. If the issue of ownership of the Cross-Claim Trade Marks is fundamental to the Amended Statement of Claim, then both the Court's and the parties' resources may have been unnecessarily wasted. Even if the Cross-Claim is determined adversely to Spirits International, SPI Spirits and Spirits International will be entitled to pursue their claims against Diageo in contract and under ss 52 , 53 and 55 of the TPA. 32 Given the complexity of the issues raised in the Cross-Claim and the fact that the Cross-Claim relates primarily to events which occurred in the Soviet Union and Russia almost fourteen years ago, SPI Spirits and Spirits International estimate that discovery and evidence in relation to the Cross-Claim are likely to consume most of 2006. In the view of SPI Spirits and Spirits International, the Cross-Claim is highly unlikely to proceed to a final hearing until at least 2007. If the Court was to defer the hearing of the claims in the Amended Statement of Claim until after determination of the Cross-Claim, the likely consequence will be that the claims in the Amended Statement of Claim will not proceed to trial until at least 2008, three or four years after SPI Spirits and Spirits International filed their Statement of Claim against Diageo. The substantial prejudice likely to be suffered by SPI Spirits and Spirits International as a consequence of this delay is a further reason to refuse the orders sought by Diageo in its notice of motion. Moreover, I am not convinced that its determination has the potential to dispose of a significant part of the main proceeding if it is decided in favour of one or other of the Russian Entities. 34 It would, in my view, be fair to say that resolution of the ownership of the Cross-Claim Trade Marks in favour of one or other of the Russian Entities may well promote the prospect of settlement between SPI Spirits and Diageo in the main proceeding, if only because such a resolution may adversely impact the measure of damages SPI Spirits and Spirits International might otherwise be expected to retain for themselves, if they are successful in their claims in the main proceeding. But I am not persuaded this is sufficient to warrant the making of an order pursuant to O 29 r 2(a) of the kind sought by Diageo. 35 Nor do I think Diageo's submission that the interests of the cross-claimants are a relevant consideration --- that there is no prejudice to them if the orders are made; and that it may assist them in having their claims heard earlier. In my opinion, the only relevant interests are those of the parties in the main proceeding. It is true that FKP was joined as a second respondent in the main proceeding, but that was only to enable it to bring the Cross-Claim. FKP is, effectively, a dormant party in the main proceeding and Diageo is a dormant party in the Cross-Claim. (2) That issue only arises by virtue of the Cross-Claim, and then only with respect to the Cross-Claim Trade Marks; and that was only facilitated by order of this Court joining FKP as second respondent. (3) This background context stands in stark contrast to the background of the authorities to which I have been referred by both sides; invariably, the issue the subject of the O 29 r 2 order has been latent in the proceeding from the outset, either from a claim made in the original pleadings, or in the defence filed in response; not, as it were, in a Cross-Claim brought by a non-party to the original proceedings from 'left field'. (4) What I consider to be a very relevant question is: Why should SPI Spirits and Spirits International have the hearing of their claim against Diageo deferred for more than a year, perhaps longer, until the determination of the ownership claim by the Russian Entities against SPI Spirits International? I do not know that this question can be satisfactorily answered, but if it can, it is certainly not irrelevant to its answer that only Spirits International is a respondent to the Cross-Claim whereas SPI Spirits is the principal applicant in the main proceeding. (5) It is against this background, and not the background of other cases, that the general principles referred to above need to be applied. (6) I think it is fair to conclude that the issue of ownership of the relevant trade marks as pleaded in the Cross-Claim involves matters of fact and law which have little, if anything, to do with the claims brought against Diageo in the main proceeding. But that, of itself, is no basis to defer a hearing of the latter until a determination of the former. (7) As I have already indicated at [34] supra, I think it fair to conclude that if one or other of the Russian Entities were to succeed in their Cross-Claim against SPI Spirits and Spirits International on the ownership issue, this would likely promote settlement prospects in the main proceeding by SPI Spirits and Spirits International against Diageo. I have already indicated one possible reason for this but there may be others. Even if there are, one thing can be said with certainty --- such a determination of ownership rights would not extinguish the basis of the claims brought in the main proceeding. (8) A number of the submissions made by Diageo as to why an order should be made in the terms sought pursuant to O 29 r 2 are predicated on the basis that if the Cross-Claim is determined in the cross-claimants' favour, there will be savings in terms of time, cost and other matters relevant to efficient case management. In many cases, it may be possible to make an informed judgment about the prospects of success on the issue which is sought to be determined on a preliminary basis, however, in the present case the complexity of the issues involved and the lack of evidence, at least at this stage, make this an impossible call. In my considered view, the issue before me has to be determined without regard to the respective prospects of success of one or other of the Russian Entities and Spirits International on the Cross-Claim. 38 The Notice of Motion is dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | separate decision of questions where application related to distribution of vodka product where claims of misleading conduct, false representations and breach of contract where cross-claim related to ownership of trademarks used in distribution where cross-claimant not involved in application where no relief sought against respondent in cross-claim whether cross-claim should be determined separately and before application practice & procedure |
Initially she worked mainly fixed and regular shifts. Although her working arrangements were regular she was a casual employee. In October 2005 her shift arrangements were varied. Within a short period of time she lost both regularity and quantity of work. Her time was reduced from three shifts to two shifts per week and sometimes less. At the time of the variation to her shift arrangements Ms Thompson was 37 years old. According to evidence given in her case the owner of the hotel, Mr Wakeford, had been heard to remark that he wanted to replace some older staff with 'young glamours'. Some of the other female bar staff were about her age or older and some were younger. 2 Ms Thompson had young children. She preferred her earlier regular working arrangements and not working on weekends because this more easily accommodated her childcare arrangements. On her case the variation to her working arrangements, including a necessity to work sometimes on weekends, was an attempt to force her departure in circumstances where hotel management knew that the altered working arrangements would not be convenient to her, having regard to arrangements she made for childcare while working. 3 Prompted by the alteration to her working arrangements Ms Thompson sought and obtained casual bar work elsewhere. Through a combination of circumstances, including her own unavailability or a desire not to work, her actual working hours in December 2005 fell away almost completely. She was not rostered to perform any work in early January 2006 but had indicated her desire to take four weeks 'holidays' from the Charles Hotel commencing on 6 January 2006. During this period she in fact worked in alternative casual employment. 4 In early January Ms Thompson noticed that she had not been rostered to work in the week before proceeding on her 'holidays'. On 4 January 2006 she had a conversation by telephone with Mr Wakeford. She alleges that the result of this conversation was to terminate her employment relationship with the Charles Hotel. Mr Wakeford says that he expected her to return to work at the Charles Hotel but that she never did so. Did the variation to Ms Thompson's working arrangements from 17 October 2005 represent direct or indirect discrimination because of her age? 2. Did the altered working arrangements represent indirect sex discrimination for the reason that, as Ms Thompson alleges, the burden of the care of young children in Australia falls predominantly upon women? 3. Did the conversation on 4 January 2006 terminate Ms Thompson's employment relationship? One invoked the Court's jurisdiction under s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('the HREOC Act') to deal with matters the subject of a complaint terminated by the President of the Human Rights and Equal opportunity Commission ('HREOC'). Ms Thompson had made such complaints under the Age Discrimination Act 2004 (Cth) and the Sex Discrimination Act 1984 (Cth). The characteristic which she says appertains generally to or is generally imputed to persons in their late 30s is that 'they are less attractive and less glamorous, than persons in a younger age group'. She alleges it was a requirement that 'in order to continue in her usual shifts she look attractive and/or glamorous and young'. 11 Her claim under the Sex Discrimination Act relied on the concept of indirect discrimination as reflected in s 5(2) of that Act. 13 Ms Thompson contends that the relevant characteristic, appertaining primarily to women (although s 5(1) speaks of generally, not primarily), is the characteristic of having child-care responsibilities, which limit one's availability to work. She argues that the changes to her working arrangements in October 2005 imposed a requirement having the effect of disadvantaging women. 14 The other proceedings involve a claim under s 170CK(2)(f) of the Workplace Relations Act 1996 (Cth) (as that Act was in force prior to extensive amendments made effective from 31 March 2006). It turns on the meaning to be attributed to the telephone conversation between her and Mr Wakeford on 4 January 2006. 20 Ms Thompson also makes a claim under the Long Service Leave Act 1955 (NSW). Section 3(2A) of that Act accommodates the circumstances of an employee with no fixed number of normal weekly hours. Section 4(11)(a) also makes it clear that casual employment is not excluded. As she had worked at the Charles Hotel for longer than five years, before 4 January 2006, if she was dismissed from continuing employment, as she claimed, she would be entitled to a pro rata payment on account of long service leave, to which entitlement does not otherwise arise (subject to other exceptions not relevant in this case) until 10 years service has been completed. Apart from a break for 21/2 months in 1999 for the birth of her second child, until some time in 2004 Ms Thompson appears to have worked three regular day shifts during the week. In 2004 one of these day shifts was replaced by a night shift. She did not work any regular hours on weekends. Substantial changes were made from the week commencing 17 October 2005 but before discussing them it is necessary to provide a summary of some earlier events. 22 In January 2005 Mr Doug Allan became the licensee of the hotel. He remained in that position until 13 October 2005 when Ms Marja Engelhardt took over from him. 23 Mr Wakeford was concerned about a number of aspects of the hotel's operations. On 10 August 2005 he sent a memo to Mr Allan. Successive managers have become seat warmers and have only carried on with events as they have been passed on by their predecessors in the past. We need a fresh approach to the hotel operation. They are tired in appearance and attitudes and have a negative effect on the rest of the staff and also on our few remaining customers. Considering I am the one paying the wages I would like some input into employing new staff. With the introduction of the single bar operation to facilitate the eventual non smoking venue NOW is the time to reform our staffing and to introduce some new blood and ideas into the workforce. The operation of the gaming room needs to be reviewed, with vigour. A better understanding of gaming must be introduced to all staff. Other evidence indicated that in the same period the hotel was moving to a single bar operation. This was clearly a period of change which was taking place in a commercially adverse context. 25 On Wednesday, 5 October 2005 Mr Allan gave notice of his resignation following a period of leave which was to commence the following Monday (10 October). Mr Wakeford appointed Ms Engelhardt, then Manager of the bottleshop, to be interim manager of the hotel effective from Thursday, 13 October 2005. Ms Engelhardt had worked for Mr Wakeford for a number of years in various businesses. It appears that, originally, Mr Wakeford intended to find someone else to permanently replace Mr Allan but as events unfolded Ms Engelhardt remained manager and took up the position permanently from 4 November 2005. 26 The relationship between Ms Thompson and Ms Engelhardt (as Manager) appeared to get off to a rocky start. In the week following her appointment as interim Manager Ms Engelhardt authorised changes to the staff rosters. Starting times in the morning were delayed by half-an-hour and two afternoon shifts were cut from the roster altogether --- one on Thursday and one on Friday. For the previous twelve months or so Ms Thompson had been working on day shift on Tuesday and Wednesday and on evening shift on Thursday commencing at 5pm. In the week commencing 17 October 2005 she lost her evening shift on Thursday. Ms Thompson bore a relatively large proportion of the cut in working hours, although certainly not the whole of them. 27 On Tuesday, 18 October Ms Thompson recorded in one of the diaries used to communicate between staff (including managers) that she had spoken to Ms Engelhardt about her shift arrangements and been told that she had lost some work because of her attitude. Ms Thompson's note referred to events which occurred on 11 October, two days before Ms Engelhardt's appointment as interim manager. It is likely that they involved some complaint from Ms Thompson about working under the supervision or direction of staff who were younger than she. One of the staff whose authority Ms Thompson appeared to resist and resent was Ms Melissa White. Ms White was 21 years old and had been appointed assistant manager by Mr Allan. At Ms Engelhardt's request she recorded a formal complaint to which she assigned the date 15 October 2005. She said in her evidence that the date was probably not accurate although the events had occurred at around that time. It started when I started to do some training as assistant manager. Donna told me that she refused to work under or listen to a 21 year old lazy bitch who is to young to be a manager and doesn't no [sic] how to do her job properly. She has mad me feel intimidated and uncomfortable during my shifts with her. This is not on and I don't think I should have put up with it, I have spoke to both you and Tim on several occasions about this matter and written it up in the book, please when you get some time I would like to speak to you further about this matter. They're incompetent. They're --- she just kept going on about the age and as a supervisor, "I'm not working with no fucking 21-year-old supervisor" and I just said look, settle down, come and see Doug when he's back next week and I did sort of pass a bit of a joke that Gavin is going to be the licensee and she went off. Mr Visser was also an assistant manager and had been put in charge of the hotel upon Mr Allan going on holidays the day before. He was also much younger than Ms Thompson. 30 It is apparent that Ms Thompson spoke to Ms Engelhardt on 18 October about the loss of her evening shift on 20 October and did so in a way Ms Engelhardt found confronting. I just felt like she was out to give me a hard time for some reason. I didn't really know why. Was this before or after the roster changes?---No, after. From the moment she came in that first shift with Gavin and saying about Gavin and Mel, I am not working with effing 21-year-olds it became, yes, and then when I changed the rosters and changed the hours she would come in behind the bar and come like two inches from my face and like really, I want my shifts back, I want my shifts back and really, yes, pretty stressful and I would say to her, look, come and talk to me in the office but she would never talk to me in the office about it. She would always confront me in front of patrons and always, like, talking loudly behind the bar and always just coming straight up to my face and, yes, so I would just sort of back away and just say come and see me in the office. In the week commencing 31 October 2005 she was rostered to work evening shift on Monday and day shift on Wednesday. They were also her rostered hours in the week of 7 November 2005. Wednesday of that week was 9 November. Ms Thompson's evidence was that she did not receive another day shift after 9 November. It seems clear that by 9 November Ms Thompson's work relationship with Ms Engelhardt had deteriorated to a marked degree. Ms Engelhardt told her, she said in evidence, that she would not get another day shift as Ms Engelhardt could not work with her. 32 Ms Engelhardt attributed the roster changes that affected Ms Thompson directly to the conflict which was developing between them. Then that sort of wasn't really happening so I put her on weekends, hoping we could avoid each other . It just didn't feel like she wanted to be involved in the up and running and getting the hotel back on its feet. It was anything to make my life really hard and I struggled with that kind of behaviour, I didn't know how to deal with it . As I understood her evidence Ms Engelhardt did not know what else to do except to ensure that Ms Thompson worked on shifts which were different from Ms Engelhardt's own working times so that the opportunity for confrontation and, as Ms Engelhardt saw it, further harassment by Ms Thompson was removed. 34 On 14 November 2005 Ms Thompson had a meeting at the hotel with Mr Wakeford. Ms Engelhardt and Mr Dale (the accountant) were also present. The meeting on 14 November was arranged when Ms Thompson rang Mr Wakeford on 9 November after speaking to Ms Engelhardt about her rosters. 35 At this meeting Ms Thompson was issued with a warning letter referring to three incidents which had occurred on 9 November. Ms Thompson disputed the substance of each of them in her evidence but in my view that cannot detract from the indication that she was not on good terms with Ms Engelhardt. However the third entry is consistent with other evidence to the effect that Ms Thompson and Ms Engelhardt did not enjoy each other's company at work. 37 Ms Visser's evidence confirmed this general picture. It made it too hard to --- both people do their jobs. This is when we had customers coming up to us and saying --- like, Donna was involving customers in workplace stuff and never need to be done. So it made it really impossible to get on the right shifts so everybody could do their jobs properly. Because we've had --- we had one row. I was coming out of the bottle shop because I wasn't in the pub that day. Donna was working and Mia was finishing. They had a conflict behind the bar. Donna stating that, I want my shifts back, and swearing, pointing, and then they went to the office to sort it out. So I don't know --- don't know what happened then. For a short period, commencing about 11 November 2005, Ms Thompson worked, apparently on a trial basis, at the Albion Park Hotel. Then, about 18 November 2005, she began working at the Collegians Club in Wollongong. It appears that she did not continue to work at the Albion Park Hotel after securing comparatively regular casual employment at the Collegians Club. Her obligation to attend a training shift at the Collegians Club on 22 November 2005 saw her prefer that to working at the Charles Hotel. From about this time, therefore, (i.e. mid November 2005) Ms Thompson made up for the shifts she had lost at the Charles Hotel by working elsewhere. Nevertheless, on 28 November 2005 she again took the matter up with Ms Engelhardt. She raised the matter at the main bar in front of customers. Ms Engelhardt caused the conversation to be moved to her office. Ms Thompson persisted in her complaints. Ms Engelhardt sent her home. I'm tired of this behaviour all the time. I'm tired of being attacked in front of customers and all I can recall is Donna kept saying I want my shifts back and I just said look, you know, I could have you sacked for insubordination. The beginning of her shift. 39 During December Ms Thompson's rostered shifts at the Charles Hotel became even more sporadic and reduced for three weeks to one shift per week. On 10 December 2005 Ms Thompson wrote saying she would be unavailable to work on Christmas Eve and New Year's Eve. She attributed her unavailability to difficulties of finding suitable and appropriate child care. It became clear that she had in mind also that she might be asked to work at Collegians Club. During this period there were some other occasions when she was rostered to work at the Charles Hotel but did not do so. In the week commencing 2 January 2006 Ms Thompson was not rostered to work at the Charles Hotel. In that week she worked at Collegians Club on four days. She accepted in her evidence that those working arrangements would have been rostered at Collegians Club the week before. Nevertheless Ms Thompson deposed that on 2 January she had a conversation with Ms Engelhardt complaining that she had been left off the roster at the Charles Hotel. Two days later Ms Thompson rang Mr Wakeford directly. It is this conversation which is relied upon by her as suggesting that her ongoing employment with the Charles Hotel was terminated. 40 In her letter of 10 December 2005 Ms Thompson also indicated that she wanted to take 'four weeks vacation' between 6 January 2006 and 6 February 2006. During this period, although she did not perform any work at the Charles Hotel, she worked at the Collegians Club. On 23 January 2006 Ms Thompson filed an application in the Australian Industrial Relations Commission alleging that she had been unfairly dismissed. She did not return to work at the Charles Hotel. The first of them occurs in his memo to Mr Allan which I set out earlier. Ms Thompson relies upon the reference to some staff being 'tired in appearance and attitudes'. She asserts that these comments applied particularly to her. Mr Wakeford denied that was so or that they had anything to do with age. 42 The next remark attributed to Mr Wakeford arose from Ms Thompson's evidence that Mr Allan had informed her that 'Dave wants fresh new pussy in the place --- fresh new young pussy in the place'. The description 'young' was added by Ms Thompson by way of correction to her first version of Mr Allan's statement. I found it unconvincing and contrived. Mr Allan, who was called in Ms Thompson's case, denied any remark to Ms Thompson in these terms although he did attribute to Mr Wakeford, in about July or August 2005, the statement that 'we need to replace some of our tired older staff with some young glamours'. No instruction to that effect was given. Mr Allan understood it as Mr Wakeford's general desire. The third occasion was during the meeting on 14 November 2005 after Ms Thompson had been given a written warning. Ms Thompson claimed that Mr Wakeford said he wanted 'young, fresh faces in the place'. No other person present at the meeting agreed that was said. The meeting appeared to revolve around Ms Thompson's work performance and, in particular, the difficulties between her and Ms Engelhardt. As I earlier indicated, other female bar staff were about Ms Thompson's age or older. Ms Engelhardt was older. The relevant characteristic which appertains or is generally imputed to persons in their late 30s is that they are less attractive, and less glamorous, than persons in a younger age group. The applicant's case is that Ms Thompson, particularly having regard to her excellent work history at the Charles Hotel, was treated less favourably after 16 October 2005 than she would have been had she been of a younger age group in circumstances which were the same or not materially different. I am satisfied that the changes in working arrangements for Ms Thompson were initially prompted by Ms Engelhardt's response to the need to reduce the bar wages bill and the overall number of working hours. Her decisions were rapidly influenced by her response to Ms Thompson's persistent and unwelcome complaints about the change to her working arrangements. I have no doubt that Ms Engelhardt found the position tiresome and unacceptable. She responded by removing Ms Thompson from shifts where she might encounter Ms Engelhardt. One feature of the changes was to place Ms Thompson from time to time on shifts with a greater number of customers. Such a result is quite inconsistent with any suggested desire to replace her with 'young glamours'. It is, however, entirely consistent with Ms Engelhardt's desire to be rid of her presence without terminating her employment altogether. 45 Ms Thompson bears the onus of showing that discrimination on the ground of her age was at least a reason for the change to her working arrangements even if not the only or even the dominant reason. She has failed to establish that this is so by a considerable margin. The respondent reduced Ms Thompson's hours and removed her regular shifts because she did not look sufficiently young, attractive and/or glamorous. The requirement that bar attendants look attractive and glamorous is one condition which Ms Thompson did not and could not meet (on Mr Wakeford's assessment) and which persons of Ms Thompson's age group would find more difficult to comply with than those of a young age group. Accordingly the requirement constituted indirect discrimination for the purpose of s15 of the ADA. The way in which that was said to discriminate against women rather than men was that 'the responsibility of caring for children is a characteristic that appertains to women predominantly for the purpose of sex discrimination'. Reliance was placed on a decision of Driver FM in Howe v Qantas Airways Limited [2004] FMCA 242. That was a case alleging unlawful discrimination on the grounds of sex, pregnancy and family responsibilities. It concerned a complaint by a flight attendant who was not allowed to change to part-time employment at her existing salary, was required to cease flying and denied access to accumulated sick leave. The case resulted in a declaration about the sick leave issue and orders related to that issue. Whatever social changes may have taken place in Australia over the past 25 years, women remain the dominant care givers of young children. I so find. The point is that the present state of Australian society shows that women are the dominant caregivers to young children. While that position remains (and it may well change over time) s.5(2) of the SDA operates to protect women against indirect sex discrimination in the performance of that care giving role. They did not result in a finding of indirect sex discrimination in that case. They have no application in the present case which is not concerned with a refusal to provide part-time employment. 50 In the present case Ms Thompson's children were 13 and 6 years old at the relevant time. She cared for them as a single parent. The only evidence about the arrangements which she made was that sometimes her father looked after them when she worked in the evenings. I can see no basis to distinguish her circumstances from that of other single parents. There is no basis for any finding of indirect sex discrimination. This claim must also be rejected. " Dave said, "Well, what do you want me to do? You've been off sick, you're working somewhere else. " I said, "I haven't been off sick. " He goes, "You did the other week. " I said, "I didn't, I gave youse notice, I wasn't off sick. " He goes, "And you've been working somewhere else. What more do you want? " I said, "I want my day shifts back, Dave, because they're suitable and practical for me. " He said --- I said, "Bruno gets practical shifts. " He said, "Don't bring Bruno into this, Bruno's a nice young man. " I said, "I know he is a nice young man, but he still gets suitable shifts and he also works somewhere else. " Dave was --- mentioned something about my father again, I said, "That's not relevant. " He went on about that again, and I said, "Dave, it's not relevant. " I said, "You need to be honest with my father," anyway, I said, "about my shifts. " He said, "Don't bring Bruno into it, you're not having your shifts," or something. He goes, "You're too bloody old, you've been here too long, you've had a good run anyway and now it's over, because you and some of the others have had a good run and now it's over. " And then he hung up on me. He told me I wasn't on the roster, I was on holiday at the end of week, and as far as he was concerned, I could stay off the bloody roster. I explained the same thing we had just been through, that the hotel was losing money, we needed to reduce the shifts a bit and reduce staffing. I said we have all had a pretty good run so far, we have been over-staffed and now we have got to reduce. You know she would come to work and then she would go home sick and go and work at Collegians Club and what have you. I did ask her to make her mind up whether she wanted to work for us or work for the Collegians and when she had made her mind up give us a call back before the end of the holidays and we would try to get her back on the roster. 4 January, I'm sorry?---Yes. You are working somewhere else. What more do you want? I want my day shifts back because they are practical and suitable for me. You're not on the roster and as far as I am concerned, you can stay off the bloody roster for good. You and some of the others have had a pretty good run. I think so anyway and now it's over. On his own evidence he was requiring Ms Thompson to choose between her other employment and her employment at the Charles, in circumstances where she had NO guaranteed shifts at the Charles. There was no basis for such an ultimatum. It is submitted that the Court would accept that the main reason for the reduction in shifts suffered by Ms Thompson between October and December 2005 and her ultimate dismissal was her age or a characteristic associated with her age in the sense discussed above. However it does not avail her on the question of motivation unless first she is able to establish that there was a termination of her employment within the meaning of s 170CK of the WR Act. In my view the evidence does not sustain such a conclusion. Another characteristic is that there is no certainty about the period over which employment of this type will be offered. It is the informality, uncertainty and irregularity of the engagement that gives it the characteristic of being casual. Traditionally, casual employees were regarded as employed only for the duration of a specific engagement --- usually day to day. This may be contrasted with the traditional assumption that the period of engagement of a full-time or part-time employee was week to week as usually reflected in a formal period of notice for termination. These assumptions were not universally applicable and were susceptible to modification --- e.g. to a monthly engagement. They are also subject to any relevant modification by or under a statute --- e.g. by award. 59 Counsel for Ms Thompson argued that 'Section 170CK of the WRA does not focus upon the termination of the contract between the parties but rather upon the termination of the employment relationship ' ( original emphasis). She referred to Siagian v Sanel Pty Ltd (1994) 1 IRCR 1; 122 ALR 333 ( 'Siagian' ). In that case Wilcox CJ (sitting as the Industrial Relations Court of Australia) drew attention to the principles discussed by the High Court in Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25 ; (1946) 72 CLR 435 ( 'Watson' ) where it was stated that there may be effective termination of an employment relationship even though the contract of employment may, for some legal purposes remain in existence. Similarly, Wilcox CJ in Siagian said the statutory scheme (which was relevantly similar to the present one) contemplated the effective termination of the relationship whether or not accepted. This conclusion, and the reasons for it, do not support a suggestion that an employment relationship can have a character more enduring or extensive than the contract on which it is based. On the contrary, as discussed in Siagian , the relationship is potentially more fragile, and less enduring, than the contract. 60 Moreover s 170CK makes no reference to termination of an 'employment relationship'. It speaks of termination of employment and s 170CD defines what that term means as set out earlier. I do not see any support in the statute itself for what I understood to be the concept at the heart of the submissions made on behalf of Ms Thompson in this area --- namely that the relevant provisions in the WR Act disclose some intention that a continuing casual relationship might provide a foundation upon which to argue that cessation amounts to termination of employment even though no breach of contract is involved because there is no obligation to offer further work or to accept it. 61 Ms Thompson was working as a casual employee. She had no fixed roster and no fixed number of hours per week. On the evidence she was free to accept or decline the shifts offered to her and did, in fact, for her own reasons decline some. Adopting, as a matter of comity, the approach taken by Moore J in Reed I conclude that at 4 January 2006 she had no legal basis upon which to insist she be offered further work, nor any obligation to accept such work if offered. The fact that no work was offered did not terminate either her contract of employment or any relevant employment relationship. In fact, she had made herself unavailable for any work until 6 February, 2006. There is no evidence that she offered her services to the Charles Hotel thereafter or was available. 62 Even if I had taken a different view about whether there was an actionable termination of employment within the meaning of s 170CK of the WR Act, on the facts of this case I would be satisfied that the respondent had discharged its onus of showing that Ms Thompson's age was not a reason why she stopped working at the Charles Hotel. The only foundation for the suggestion is Ms Thompson's attribution to Mr Wakeford in their telephone conversation on 4 January 2006, of the remark 'You're too old' . I did not find Ms Thompson's evidence to be generally reliable. On a critical issue such as this I would not prefer her evidence to Mr Wakeford's. I am satisfied that she rang Mr Wakeford to go over Ms Engelhardt's head. I accept that there was a discussion about the basis upon which Ms Thompson might resume her casual employment with the Charles Hotel and that Mr Wakeford impressed upon her the need for a change of attitude. I do not accept that any resistance to the idea of her future employment was connected with her age. Had it been necessary to do so I would have concluded that the respondent had discharged its onus of showing that her age was not a reason for her casual employment with the Charles Hotel not continuing. The proceedings will be dismissed. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | whether termination of employment or employment relationship casual employment whether direct or indirect age discrimination whether indirect sex discrimination employment law |
Although contractual relations between Mr Yang and AIA commenced in November 1996, the relevant contractual relationship between Mr Yang and AIA arises out of the two agency agreements that were entered into in October 1998 by Mr Yang and Aulian and assigned in July 2000 to Mr Yang. These latter agreements were terminated on 30 January 2002 following the resignation of Mr Yang of his agency and supervisor positions. 2 The applicants by their third further amended statement of claim allege that they were induced to enter contractual relations with AIA as a result of false representations made by AIA which were continuing throughout the currency of the agreements. The applicants claim that as a consequence of such representations the effective termination of their contracts by the forced resignation of Mr Yang was unlawful, being a breach of ss 51AA and 51AC of the Trade Practices Act 1974 (Cth) ('the Act'). 3 The applicants seek damages pursuant to s 82 of the Act, damages for breach of an implied obligation of good faith and fair dealing in the agency agreements, exemplary damages, other orders under s 87 of the Act, and interest and costs. 4 Each of AIA's employees who allegedly made the representations deny that any representations as alleged were made by them. Further AIA says that it was justified in seeking the resignation of Mr Yang as he had breached the terms of the contract between himself and AIA. This breach involved Mr Yang's receipt of premiums for policies issued to a policy holder, Mr Xu, which were not paid to AIA. He had been educated in China to a secondary school level and had undertaken a variety of occupations. On arrival in Australia he undertook an English language course, worked as a general hand at a supermarket and worked as a part time clarinet teacher and Mandarin tutor. For a period Mr Yang was the President of the Chinese Student's Human Rights Organisation in Sydney. 6 In November 1996 Mr Yang read an AIA advertisement in a Chinese daily newspaper which sought expressions of interest from persons wishing to be engaged as insurance agents with AIA. In response to the advertisement Mr Yang telephoned AIA and spoke to Ms Aileen Chen ('Ms Chen') who was then an Agency Organiser with AIA. 7 Since Mr Yang has a very limited understanding of English all conversations in which Mr Yang participated, unless otherwise stated, were conducted in Mandarin. 8 Mr Yang claims that in the initial telephone conversation with AIA, Ms Chen recognised his name and spoke of his reputation, asking 'are you the especially famous Chinese student leader Jun Yang? ' . Ms Chen then allegedly said that he would easily succeed in AIA and that he only needed to work for two years after which he would be able to retire and have a secure income for life. Ms Chen denies making such statements. 9 Ms Chen offered Mr Yang an interview. He duly attended the offices of AIA at 220 George Street Sydney in November 1996 where he was interviewed by Ms Chen and Kwai Ying Lin ('Ms Lin'), the then New South Wales State Manager of AIA. Mr Yang claims he was introduced to Amy Li ('Ms Li'), an AIA Agency Organiser supervised by Ms Chen, who was present at the meeting. Mr Yang says that he was handed brochures published by AIA entitled 'A Career for Life' and 'Security for Life'. 10 Mr Yang claims that during such interview various representations were made to him to the following effect: if he became an agent with AIA he would only need to work for about two years then he would have a secure income for life; AIA was a 'big family' that takes care of its members; he could build up his business agency to be his own and it could be transferred, sold or closed; there would be commissions and financial benefits which would be protected for his lifetime and the commission was guaranteed for the duration of the policies he sold; he would need to only work for about three years to be financially secure and financially free for his lifetime; he would be his own 'boss' ; AIA would take full responsibility for his conduct even if he did something wrong and he would have no need to be scared or concerned once he signed the agreement because of this protection; that 'an agency career is guaranteed to last for a lifetime' ; and that 'your income will be secured for life' . 11 Ms Chen and Ms Lin both deny the making of any statements as alleged. Further, Ms Li said she was not present at the meeting. 12 At the conclusion of the meeting Mr Yang was introduced to Kenneth Juneau ('Mr Juneau') who was the National Director of Agencies for AIA Australia. I have heard about you. You are a very famous leader of Chinese Students. We feel honoured that you are here to work with AIA. You are like a tiger coming down the mountain. Working at AIA, you will be successful and make a lot of money. I believe you will be the best agent and a key person in AIA. There is now a training course. You should attend the training course immediately so that you can begin to sell AIA's products and earn big money. Only this insurance company AIA will in very short time, allow you to be financially free with secured lifetime income. He also denies he said that the AIA agency business was a guaranteed lifetime career; that the income would be guaranteed for life; that Mr Yang could work hard for three to five years then enjoy unlimited income for the rest of his life; that the business could be sold back to AIA or transferred or sold to anyone he chose; or that AIA guaranteed his agency business was a career for the whole of his life. Mr Juneau acknowledges that he did say that an AIA agency business was a career that could build throughout an agent's life; that the income potential was unlimited depending upon how hard an agent was willing to work; and that an agent could be their own boss and manage their own business. 14 Mr Juneau says that the term 'security for life' was used in the context of the benefits that AIA offers to its clients through its products, not what is offered by AIA to its policy sales agents. Your relationship with clients is one for life' . However such brochure did not suggest that an agency career or income is guaranteed for the lifetime of the agents. 16 In November 1996 Mr Yang attended a training course conducted by AIA to qualify him for appointment as an AIA agent. Mr Yang claims statements were made concerning the lifestyle which an agent could expect. One agent allegedly spoke of his lavish lifestyle in Hong Kong. He claims statements were made similar to those made during his interviews with Ms Chen and Ms Lin, namely that appointment as an agent was a 'lifelong course' ; 'you just work hard for 3 to 5 years and you will enjoy a comfortable and extravagant lifestyle for the rest of your life' ; 'AIA is a big family' ; 'we will own our own business' ; and 'AIA will support us from the beginning to the end, which is a guarantee for the whole life because it's a big company' . On 23 December 1996 Mr Yang attended at the offices of AIA where he signed an agency agreement in the presence of Ms Chen and Ms Lin. Mr Yang claims that he told Ms Chen that he was unable to understand the agreement because it was in English and accordingly asked her to explain the agreement to him. Mr Yang claims Ms Chen told him not to worry about the agency agreement because it was a standard contract which complied with all relevant laws. Mr Yang alleges that he then asked to take the agreement home because his friend was a lawyer who could explain the agreement to him. Mr Yang claims that Ms Chen replied that AIA would not deceive him and that the agreement could only be signed at AIA's offices. AIA takes full responsibility for the adviser's conduct and the adviser's primary duty is to AIA. The remuneration received by the agent is commission on the sale of a product. If you have any problem or any complaint from any customer, or any legal problem, AIA will resolve and take care of them for you. What are you afraid of?! Mr Yang says that he relied upon the representations of Ms Chen and Ms Lin as constituting an indemnity granted by AIA in respect of any act in which he engaged as an agent of AIA. 21 During the hearing counsel for the applicant was directed to specify the representation regarding indemnity that was alleged to have been made during the conversation between Mr Yang, Ms Chen and Ms Lin at the meeting of 23 December 1996 and in writing on the back of Ms Chen's business card. Ms Chen said that the alleged statement relating to the security of engagement would have made a significant impression upon her given the circumstance that her husband had been terminated as an agent of AIA only three months prior to the meeting of 23 December 1996 for misleading a client. 23 Ms Chen agrees that she informed Mr Yang that the agency agreement was a standard contract signed by all agents which defined their relationship with AIA. Ms Chen also says that she warned Mr Yang that he was not to mislead any clients otherwise AIA would terminate the agency agreement. You must, however, be very careful to comply with the rules and laws and to never mislead your clients, otherwise your agency will be terminated immediately by AIA. She says that her practice was to allow a prospective agent to take a contract home although she always made them aware that the standard terms of the agreement were non-negotiable. 25 Mr Yang alleges that Ms Lin told him that 'the business with AIA will be your own, owned by you... you can do anything you want with it' . Ms Lin denies such allegations. She also denies allegations to the effect that the commission and other financial benefits were guaranteed for the duration of the policies which he sold. AIA will care for and provide support to each and every one of its member agents. Look at how good my English is. I didn't even read the Agency Agreement when I signed it too. AIA is the largest insurance company in the world. You don't need to read the Agency Agreement. AIA's standard Agency Agreement will protect the best interests of all agents of AIA. All the AIA's agents signed the same Agent Agreement. AIA will not trick you or take unfair advantage of you. There is nothing in the Agent Agreement that you need to be concerned with. She believes she may have said 'AIA is like a large family. AIA will care for and provide support to each and every one of its member agents' , however she has no recollection of making any of the other remarks attributed to her by Mr Yang. 28 Mr Yang claims that he signed the agency agreement relying upon the representations he alleges were made to him. He took a copy of the agreement home with him which he kept for the ensuing years of his engagement. 29 Mr Yang's wife, Jie Wu ('Ms Wu'), had been a student in accounting at TAFE and worked part-time in an accountancy role until March 1997 when she ceased her full time employment to assist her husband in his agency business. She speaks Mandarin and English. Ms Wu refers to a conversation that took place at her home in Ultimo in or about January 1997. In this conversation she claims that Ms Li made certain statements concerning the income that an agent might make with AIA and the security that was offered. 30 Ms Li says that she visited Mr Yang and Ms Wu's apartment in Ultimo on one occasion in 1997 but no business was discussed on that occasion. She denies that she ever had a conversation as alleged by Ms Wu. 31 Ms Wu also attended an insurance agency training course at the office of AIA in or about March 1997 where she claims that Ms Lin made statements to her concerning the income that might be obtained from working as an agent for AIA. Ms Wu claims that such statements repeated the words 'guaranteed' and 'secure for a lifetime' in the context of an agency income. 32 Ms Lin does not recall having the conversation with Ms Wu and claims that if the conversation did occur, she would not have used the terms 'guaranteed' or 'secure for a lifetime' in relation to the income of an agent. 33 Ms Wu also alleges that she and Ms Lin had a conversation in 1997 at the offices of AIA in which the issue of the transferability of Mr Yang's insurance accounts were raised. That's why Jun Yang's and your AIA agency business is secured for life' . Ms Wu says that Ms Lin allegedly stated that the business could be sold or transferred, that nobody could take it, and that 'this is why your AIA agency business is for life' . Ms Lin denies that any such conversation occurred. 34 Diana Huang ('Ms Huang') had been an agent with AIA from 1999 to 2000. You can make as much money as you want by hard work. You can build up your business and your team as if it is your own business. However he denies ever representing verbally or in writing that an agency career, an agency income, or both, were guaranteed for life. 36 Yong Li Zhang ('Mr Zhang') was an agent with AIA from approximately April 1998 to December 1998. He claimed that during the course of a training meeting in 1998 Ms Lin said that the AIA agency business was a career for life and guaranteed to be so. Ms Lin denies that she would have made any statements to any agent to the effect of those statements alleged in Mr Zhang's affidavit. On 28 August 1998 Mr Yang incorporated Aulian to operate his agency business. He was the sole director and he and his wife were the only two shareholders. 38 Agents of AIA were entitled to receive commissions on the sale of policies and were also entitled to receive benefits in the form of bonuses, known as performance ratio bonuses. Upon termination of an agent, such entitlements were transferred to that agent's supervisor. Mr Yang became aware of agents who were terminated for failing to achieve sales targets. He also became aware that in those circumstances the agent's business passed to their supervisor. As a supervisor, Aulian and Mr Yang became the beneficiary of some of the business of terminated agents. 39 In October 1998 Mr Yang met with Ms Lin for the purpose of entering into a new agency agreement by executing on behalf of Aulian both an Agency Agreement no. 2T7510945 appointing Aulian as an agent of AIA and an Agency Supervisor's Agreement no. 2S7511191. By Deed of Guarantee dated 28 October 1998 Mr Yang and Ms Wu guaranteed the performance of Aulian of its obligations under the agency agreement. 40 Mr Yang alleges that he was told by Ms Lin at the time of signing the new agency agreement that it was 'just like the agency contract. We are a big company. You can trust us' . He said that he asked that his wife who was at the meeting be allowed to see the agreement. Ms Lin allegedly said 'you don't need to look at it. Just sign it' , and accordingly both Mr Yang and Ms Wu signed the documents. Mr Yang claims that he asked to take the documents home to examine them, but such request was refused. Ms Lin denies that she refused him such opportunity and denies the words attributed to her by Mr Yang. 41 On 7 June 2000 Mr Yang registered the trading name 'Jun Yang'. On 26 June 2000 he applied to AIA to transfer the clients and responsibilities of Aulian to 'Jun Yang'. On 29 June 2000 Ms Lin signed a memorandum acknowledging the transfer of the business previously conducted by Aulian to 'Jun Yang'. On 1 July 2000 a Deed of Assignment was signed by Aulian and 'Jun Yang' giving effect to the assignment. Mr Xu was apparently a wealthy businessman who owned a mango farm in Darwin. In October 1999 Mr Yang arranged for the purchase by Mr Xu of two policies of life insurance. One was known as a 'Golden Life' Policy No. 10632098 and the other was known as a 'Life Security' Policy No. 10632104 (together, 'Mr Xu's policies'). Mr Xu's policies required renewal premiums of $11,415.01 to be paid annually on 17 October, or within a period of grace of 30 days thereafter. 43 Mr Yang then participated in some unspecified business ventures with Mr Xu during 2000. Mr Yang believed that an association with Mr Xu would lead to many opportunities to increase sales of AIA policies through Mr Xu's business associates. 44 Mr Xu's policies became due for renewal on 17 October 2000. On 28 October 2000 Mr Yang issued receipts to Mr Xu for the amount of the premiums due on Mr Xu's policies to renew the policies for a further 12 months. Such receipts record that the payments of the due premiums of $7,505.01 and $3,910 were made in cash on that day. However, no premiums were received by AIA in respect of the payments of cash acknowledged by the receipts during the ensuing 12 months. 45 Mr Xu was under the impression that his policies were current until 17 October 2001, but understood that a period of grace applied before the next premium was payable. He accordingly believed his policies would expire on or about 18 November 2001. Mr Xu was puzzled because he had not received any renewal notices by this date and accordingly had his wife, Ms Hong Chen, telephone AIA to enquire why he had not received such notices. Ms Hong Chen was then informed by AIA that the policies had lapsed on 17 November 2000 because of non-payment of the premiums which were due on 17 October 2000. 46 On 5 December 2001 Mr Xu, who does not understand English, had his sister-in-law write a letter of complaint to AIA demanding an explanation for the lapse of his policies. The letter stated that Mr Xu had paid the premiums due in October 2000 to Mr Yang in cash. Copies of the receipts issued to him by Mr Yang dated 28 October 2000 which acknowledged the cash payments accompanied the letter. 47 In his letter Mr Xu demanded a waiver of premium for the ensuing year. When this request was declined by AIA he complained to the Life Insurance Complaints Service Limited and asked to have his insurance plans with AIA cancelled and requested that he receive a full refund of premiums paid to AIA. AIA subsequently offered to reinstate the policies. Although Mr Xu alleged that all records of his policies had been removed from AIA's computer database, such allegation was without foundation. 48 On the afternoon of the same day as Mr Xu lodged his complaint (5 December 2001), Mr Yang attended at the AIA cashier's office and made payment of the premiums which were owing as at October 2000 in respect of Mr Xu's policies. Mr Yang claims that when he did so, the clerk altered the carbon copy of the receipt to record the date of the year of receipt as 2000 instead of 2001. At the time he made payment, Mr Yang applied for reinstatement of Mr Xu's policies, and as a reason for such reinstatement told the clerk that Mr Xu had been overseas and was very anxious to have the policies reinstated. Mr Yang acknowledges that his statement to the clerk was false. As detailed hereunder, Mr Yang offers an explanation for the issue of the receipts and acknowledges that no monies were paid by him to AIA in respect of such premiums until 5 December 2001. He claimed that he issued the receipts to enable Mr Xu to submit them to a lender for the purpose of obtaining a loan. He claimed that he did so because it would be to his personal financial advantage to be on good terms with Mr Xu in the hope of achieving business referrals from him. 50 Ms Wu says her husband told her that he had issued the receipts because Mr Xu needed to obtain some loans and that 'he [Mr Xu] needs more documents to increase his credit. So he has asked for a receipt and he will pay it later' . Ms Wu says she questioned her husband about the arrangement. He knows a lot of business persons in Darwin. He would introduce me to them and ask them to buy insurance policies from AIA. Contrary to his claims made to AIA and the Life Insurance Complaints Service Limited, Mr Xu denied having paid cash to Mr Yang for the renewal of his policies in October 2000. Mr Xu also denied that he had wished to use the two receipts to apply for any loans, and claimed that he never did so. Rather, he claimed that he requested Mr Yang to issue the receipts because he was going to China and asked Mr Yang to make payment of the premiums and that he expected to be able to pay AIA 'in three to four months in early 2001' . 52 Mr Xu also claimed that the receipts were issued to him prior to October 2000, and that payment for premiums would be made by Mr Yang to effect a discharge of monies then owing by Mr Yang to Mr Xu. Alternatively Mr Xu claimed that if the premium was paid by Mr Yang, Mr Xu would owe Mr Yang the amount of the premium. Each of such claims are inconsistent with the claims of Mr Yang. 53 Ms Hong Chen deposed that her husband informed her that 'some time before October' 2000 he had already asked Mr Yang to pay the premiums and then he (Mr Xu) would repay Mr Yang later. She deposed that 'around October 2000' Mr Xu handed her the originals of the receipts. 54 Sui Hobbs ('Ms Hobbs'), who became acquainted with Mr Yang in 1999, provided evidence of a conversation between Mr Yang and Mr Xu on an occasion in 2000 at the Ultimo home of another acquaintance. Ms Hobbs claims that Mr Yang reminded Mr Xu that he had not paid his owed AIA insurance product premiums, to which Mr Xu replied 'We are good brothers. You lent the money to me first and pay on behalf first. I will pay you back later' . Ms Hobbs claims she then saw Mr Yang write the receipt and tear it out of his receipt book and give it to Mr Xu. Accordingly on her version of events the receipts were issued after the due date for renewal on the basis that Mr Yang would make the payment to AIA on behalf of Mr Xu and that Mr Xu would then be indebted to Mr Yang. He claims that Ms Lin authorised him to do so. Mr Yang claims that in his conversation with Ms Lin he said that the receipts were needed for Mr Xu's 'tax or a loan, something' . 56 Mr Yang's claim of Ms Lin providing authority to issue false receipts is supported by the testimony of Mr Zhang sworn 15 August 2007. Mr Zhang claimed that in or about October 2000 he drove from Canberra to Sydney and had a meeting with Ms Lin. Mr Zhang said that he discussed outstanding commissions which he said were owing to him by AIA in the office of Ms Lin. He wants the receipt for loan purposes. He said that he will pay AIA the relevant premium later. Is that ok with AIA? Mr Zhang claimed that he remembered that the name of the client was Xu as it happened to be the same name as one of his old school friends. 57 Ms Lin denies that any such meeting occurred, and denies that any such authority would ever have been given. As a result of this investigation Mr Yang resigned from AIA on 30 January 2002. Mr Yang's version of the events relating to the issue of the receipts leading up to and occurring on 30 January 2002 differs entirely from those of the witnesses of AIA. 59 AIA's records show that meetings with Mr Yang occurred on 7, 14, 22 and 30 January 2002. Mr Yang's affidavits originally referred to only one meeting, held on 30 January 2002, and made no reference to the meetings of 7, 14 and 22 January 2002. However during the course of oral evidence and in his affidavit in reply he admitted attending the meetings of 7 and 14 January 2002. Mr Yang denied that any meeting was held on 22 January 2002. 60 The records of AIA establish that the first meeting with Mr Yang concerning Mr Xu's policies was held on 7 January 2002 in the office of Martin Chinnery ('Mr Chinnery'), the New South Wales State Manager for AIA. At such meeting the complaint of Mr Xu was raised directly with Mr Yang. Mr Yang provided an explanation that he gave the receipts to Mr Xu without payment of monies on the understanding that Mr Xu would follow up with payment. Mr Yang did not suggest at that time that Ms Lin authorised the issue of the receipts to Mr Xu. The meeting took place in the presence of Dennis Lee ('Mr Lee'), the George Street Office Branch Manager of AIA, who translated from Mandarin to English. 61 Mr Chinnery deposed that a second meeting occurred in his office on 14 January 2002 between Mr Yang, Mr Lee and himself. To Mr Chinnery's best recollection he asked Mr Yang to provide a written explanation of the events that precipitated the 14 January 2002 meeting. Mr Chinnery estimated that 'within an hour or two' Mr Yang had provided Mr Chinnery with the written report. 62 Mr Chinnery deposed that a further meeting took place between Mr Yang, Mr Lee and himself on 22 January 2002. At this meeting the seriousness of Mr Xu's complaint was again discussed. According to the diary note made of that meeting, Mr Yang acknowledged that because of his knowledge of the AIA system he was aware that the policies would not lapse for 13 months. He claimed at the meeting that he had not received any cash from Mr Xu on the day he issued the receipt to Mr Xu. He also acknowledged that he remitted the monies to AIA on 5 December 2001 and changed the date on the receipt to 2001 from the original 2000. 63 On 30 January 2002 a meeting took place between Mr Yang, Ms Wu, Mr Lee, Mr Chinnery, and Mr David Murray, the National Director of the Career Agency of AIA. It was explained to Mr Yang that he had committed a very serious breach of his contract with AIA because of his failure to account to AIA for the cash received from Mr Xu. He was told that he had the choice of either resigning or that AIA would terminate the agency agreement. A discussion thereafter ensued during which Mr Yang requested that his wife take over his agency. This request was declined. A resignation letter was then produced and was signed by Mr Yang. On 4 February 2002 a letter was sent to Mr Yang by Mr Chinnery confirming his resignation. 64 By letter dated 8 February 2002 Mr Yang wrote to Edmund Tse ('Mr Tse'), the President of AIA. In such letter Mr Yang complained of his treatment at the meeting on 30 January 2002 and alleged that he had been treated unfairly and sought reinstatement. Such letter makes no mention of the meetings which preceded that of 30 January 2002, nor does it refer to the reason why AIA required his resignation or to the authority allegedly provided by Ms Lin to issue the receipts for Mr Xu's policies. 65 Mr Chinnery has provided the Court with a record of the meeting held on 30 January 2002 which was made on or about 11 February 2002. The record does not suggest that there was any threatening behaviour towards Mr Yang nor intimidation or bad language as alleged by Mr Yang. Mr Chinnery was cross examined, but no challenge was made to the accuracy of his reports. This false impression was created through verbal representations and through reference to AIA documentation. This created a false sense of job security in Mr Yang. d. AIA continued the relevant conduct prior to, during, and following the signing of the second agency agreement by Mr Yang and Aulian. e. AIA did not give Mr Yang adequate opportunity to respond to Mr Xu's claims. f. AIA failed to take into account the written and verbal explanations provided by Mr Yang in relation to Mr Xu's claims. i. AIA did not permit Ms Wu to take over Mr Yang's insurance accounts. j. AIA did not respond positively to Mr Yang's request for re-consideration and a further meeting. Mr Yang did not engage in any misconduct. b. Mr Yang did not withhold client moneys for thirteen months. c. Mr Xu's complaint was an opportunistic attempt to fraudulently obtain moneys from the respondent. d. Mr Yang was expressly authorised by Ms Lin to issue the receipts to Mr Xu on the understanding that Mr Xu would pay the premiums at a yet to be decided later date. Mr Yang relied on the statement of Ms Lin because he was a successful agent and because he considered himself a part of the AIA 'family'. The conversation between Mr Yang and Ms Lin was witnessed by Mr Zhang and corroborated by his evidence. e. Despite having issued Mr Xu with a receipt for the payment of $11,415.01, Mr Xu had not paid Mr Yang any money. Mr Yang claims that Mr Xu asked him to pay the insurance premiums on Mr Xu's behalf on the understanding that Mr Xu would pay Mr Yang back at a yet to be decided later date. Mr Yang then issued Mr Xu a receipt. Both the conversation between Mr Yang and Mr Xu and the issuing of the receipt was witnessed by Ms Hobbs and corroborated by her evidence. The evidence of Mr Xu confirmed that he had not paid Mr Yang any money at the relevant time. Mr Xu confirmed that the assertions in his complaints to AIA that he had paid cash to Mr Yang were false. The applicants also rely on s 51A insofar as the claimed misrepresentations were made with respect to future conduct. (2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation. (3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead. The requirements of a finding of unconscionability in equity were described by the High Court in Louth v Diprose [1992] HCA 61 ; (1992) 175 CLR 621. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable. Gleeson CJ at 62 accepted that 'special disadvantage' meant a disabling circumstance seriously affecting the ability of the innocent party to make a judgment in that party's own best interests. Many, perhaps even most, contracts are made between parties of unequal bargaining power, and good conscience does not require parties to contractual negotiations to forfeit their advantages, or neglect their own interests. Pursuant to s 51AC(6)(b) of the Act the Court is entitled to take into account circumstances existing prior to the commencement of the section but is not entitled to take into account alleged conduct prior to the commencement of the section in determining post commencement breaches: see Australian Competition and Consumer Commission v Leelee Pty Ltd and Anor (2000) ATPR 41-742 at [72]-[92]. 75 Section 51AC(3) of the Act sets out a non-exhaustive list of factors to which a court may have regard in determining whether a corporation has contravened s 51AC(1). They include the relative strengths of the bargaining positions of the supplier and the business consumer as defined and whether, as a result of the supplier's conduct, the business consumer was required to comply with conditions not reasonably necessary for the protection of the legitimate interests of the supplier. Other factors include the capacity of the business consumer to understand documents relating to the supply or possible supply of goods or services and whether any undue influence or pressure was exerted on, or unfair tactics used against, the business consumer. Also relevant is the extent to which the supplier unreasonably failed to disclose to the business consumer any intended conduct that might affect the interests of the business consumer and the risk involved. The extent to which the supplier was willing to negotiate the terms and conditions of any contract for the supply of goods or services with the business consumer and the extent to which the supplier and the business consumer acted in good faith are also relevant factors. 76 The relevant conduct for the purposes of s 51AC(1)(a) relied upon by the applicants must be in connection with the supply or possible supply of services to a person. For the applicants to succeed in a claim within this section the services provided by AIA to the applicants must be identified. 77 As relief for the breaches claimed above, the applicants seek damages pursuant to s 82 of the Act and for other orders under s 87 of the Act. Item 20 of Schedule 1 of the Trade Practices Amendment Act (No.1) 2001 (Cth) extended the limitation period for actions to be brought for damages under s 82 to six years to the extent that the previous three year limitation period under s 82 had not expired prior to the commencement of the amendment on 26 July 2001. Any cause of action by Mr Yang must have accrued on or after 26 July 1998 (being three years before the commencement of the amendment to the section) to be actionable. The proceedings were commenced in October 2003, well outside the limitation period for any claim for damages based upon Mr Yang entering into an agency agreement with AIA as a consequence of misrepresentation in 1996. The applicants however claim that the misrepresentations were not confined to those made at the time of entry into the 1996 agency agreement but that such representations were continuing throughout the currency of all of the applicants' contractual relations with AIA. In relation to the representations allegedly made to Mr Yang by Ms Chen and Ms Lin at the introduction to AIA, or at the training session, no note or record exists. AIA provided Mr Yang with a workbook for the training session. Entries were made in his workbook for the initial training but Mr Yang denies that they were made by him. There is no contemporaneous record or note of any of the alleged representations. 79 Mr Yang claimed that Ms Lin and Ms Li provided the answers to his examination questions during his training. He then claimed that answers were provided to all other candidates. However, subsequent questions and answers advanced different factual scenarios which were irreconcilable. Mr Yang also claimed that he had never seen the agency agreement and that it had not been shown to him. Although several memoranda from AIA complaining of Mr Yang's conduct exist, Mr Yang denied receiving any such memoranda. 80 In his letter dated 8 February 2002 to Mr Tse, Mr Yang made no reference to any of the representations he now relies upon in relation to his engagement by AIA. The allegations concerning the representations are made for the first time in affidavits filed in these proceedings in June 2007. The fact that no mention had been made by Mr Yang in such letter of the authority provided by Ms Lin to issue the receipts for Mr Xu's policies is extraordinary. 81 On 5 July 2004 an affidavit sworn by Mr Yang was prepared in respect of proceedings against AIA in NSD1497/2003 which raised the same claims as are made in these proceedings. Those proceedings, instituted with others, did not continue because the Court ordered separate trials. The allegations now made extend far beyond those contained in that affidavit, even though Mr Yang testified in this hearing that his 2004 affidavit was comprehensive. 82 The Court does not accept the evidence of Mr Yang and Ms Wu that AIA represented that it would take full responsibility for Mr Yang's conduct as an agent. Insofar as they rely upon the writing on the business card, it did not constitute a representation as alleged. Rather it gave notice to any client of the fact that AIA would indemnify the client in respect of any default by the agent. 83 Ms Wu is a director of Aulian. Her evidence demonstrated that she was not an independent witness. She was supportive of her husband, and after initially providing vague responses in answer to questions relating to the translation of her husband's most recent affidavit, she acknowledged that she had translated it for him. She testified that during AIA's training sessions she did not recall any warnings being made by AIA relating to an agent's conduct, yet she vividly recalled statements supportive of her husband's claims. The Court finds the statements of Ms Wu regarding her conversation with Ms Lin about the transfer of Mr Yang's business to her to be unconvincing. Ms Wu's evidence relates to an event which occurred a decade ago. It is denied by Ms Lin. The Court is not satisfied that the conversation occurred as alleged. 84 Mr Ji Yu Zhang had been an agent of AIA between March 2001 and June 2001. He claimed to recall statements made at a training course in March 2001 by an instructor Ms Wong to the effect that if agents worked hard they would be entitled to a life of wealth and income. However there is no evidence to suggest that Mr Yang was present when such statements were made, nor is there any evidence that Mr Yang relied upon any statements of Ms Wong. 85 Ms Huang gave evidence of statements made by Ms Lin during training in 1999. The Court cannot infer that any words spoken to her by Ms Lin at that time were the same as those represented to Mr Yang in 1996. Her evidence does not add any weight to the applicants' case. 86 Qing Na Rong ('Ms Na Rong') became an agent in 1993 with AIA and ceased in 1998. She claimed that she had frequently heard Mr Juneau state words at conferences relating to the income that agents could earn. Her evidence does not define the time when such statements were allegedly made, other than that such statements were made at conferences in Bali, Shanghai and Las Vegas. Her evidence does not establish that Mr Yang was present when such words were claimed to have been spoken. Her evidence also does not support the applicant's claims that any income was guaranteed for life or that the appointment as agent was for life. She maintained that portions of her affidavit were correct until other facts were brought to her attention which indicated clear inconsistency. It is also apparent that Ms Na Rong bore ill-will to AIA because of her dismissal as an agent. She had maintained proceedings against AIA and provided evidence which was inconsistent with allegations she had made against AIA in her own proceedings. She refused to acknowledge the accuracy of facts relating to her termination. Accordingly the Court is unable to draw any assistance from her affidavit. 87 Ms Hong Chen (Mr Xu's wife) had made a formal complaint to AIA that Mr Yang had completed a proposal for her in respect of an insurance policy which contained false details. In respect of such complaint she received a settlement of $39,200.56 from AIA. Surprisingly, she initially denied any knowledge of such event. Ms Hong Chen was also aware of the complaints made by Mr Xu regarding the conduct of Mr Yang. Despite her and her husband's adverse experiences involving Mr Yang, she would not say anything contrary to Mr Yang in her evidence before this Court. The Court gives no weight to her evidence. 88 Mr Xu's evidence relating to the payment of cash is entirely inconsistent with his earlier conduct. For the reasons stated hereunder, the Court does not accept his evidence. In doing so the Court refers to the observations of McLelland CJ in Watson v Foxman and Others (1995) 49 NSWLR 315 at 318-9, cited with approval in Lahoud & Ors. v Lahoud & Anor. [2006] NSWCA 169 at [91] . Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. 90 McLelland CJ in Foxman 49 NSWLR 315 also observed at 319 that 'in the absence of some reliable contemporaneous record or other satisfactory corroboration' an applicant who relies upon spoken words as a basis for an allegation of misrepresentation or unconscionable conduct may encounter 'serious difficulties of proof' . 91 The Court is also guided by the observations of the High Court of Australia in Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118 at [31] where the High Court referred to the preference for courts to make findings on the basis of contemporary materials, objectively established facts and the apparent logic of events rather than on the appearances of witnesses at the hearing. 92 The detail contained in the affidavits provided by Mr Yang is carefully constructed and suggests recent invention in English. The same observation can be made of the other witnesses for the applicants. In this case the translation from Mandarin to English and the grammatical and semantic nuances lost in that process engender too much scope for uncertainty and do not establish the precision necessary for a finding of misrepresentation. The claimed representations by Ms Chen and Ms Lin were allegedly made to Mr Yang in Mandarin. The Court is not satisfied that any representations were made by them as alleged. 93 The only alleged oral representations made in English were made by Mr Juneau to Mr Yang. The Court is guided by the judgment of Heydon JA in Moukhayber v Camden Timber and Hardware Co Pty Ltd [2002] NSWCA 58 where his Honour said (at [29]) 'the risks of misunderstanding...were doubtless increased by the plaintiff's lack of skill in speaking English' . Given Mr Yang's very limited grasp of the English language, the Court is not satisfied that the alleged representations of Mr Juneau were in fact made. 94 The representation alleging indemnity by AIA to Mr Yang and the evidence in support of such alleged representation lacks the required precision to constitute a representation. In summary the Court is not satisfied on the balance of probabilities that any representations were made to Mr Yang by Ms Lin, Ms Chen or by Mr Juneau as alleged. 95 The terms relied upon by Mr Yang as constituting part of the representations, namely ' security for life' and ' guaranteed for life' , exemplify the language difficulties and imprecision associated with the representations alleged in these proceedings. Identical words are contained in AIA's brochures but in an entirely different context to that claimed by Mr Yang. Such phrases are published by AIA in brochures for the benefit of clients, not for its agents. The brochure entitled 'Security for Life' states, inter alia, 'AIA has the strength and international resources to provide "Security for Life" to its much valued customers' . The brochure published solely for use by agents entitled 'A Career for Life' states, inter alia, 'In Australia, we give our clients 'Security for Life' --- we will always be there to help them when they need us no matter where they might be' . The brochure does not suggest that the term 'security for life' was to be interpreted as applying to agents. Rather it clearly applies to 'clients' . 96 The Court finds that the evidence of the applicants does not overcome the 'serious difficulties of proof' that attend their reliance upon spoken words. The Court is not satisfied that any of the alleged representations claimed by Mr Yang were in fact made. The Court finds that Mr Yang was willing to work as an agent for AIA in accordance with the provisions of the agreement. Mr Yang implicitly accepted its terms. The Court is not satisfied that any representations were made as alleged guaranteeing non-terminable agency; guaranteeing any income for life; indemnifying the applicant for any wrongdoing; or guaranteeing the transferability of the Agency to Ms Wu in such eventuality. It created the relationship of principal and independent contractor (Cl 2.3) and contained provisions requiring the agent to observe specific codes of conduct. The agreement could be terminated immediately by AIA in the event of fraud, dishonesty or breach of trust (Cl 2.10). 99 The agreement required the agent to comply with relevant statutory regulations, and to remit premiums for new insurance business (Cl 3.1). Premiums received were to be remitted to AIA within five working days of receipt by the agent (Cl 14.2). 100 The agreement also made provisions for termination and cessation of the agency (Cl 17.3). Automatic termination resulted on the happening of any breach or default of the provisions of the agreement, dishonesty or failure to meet certain contracted requirements (Cl 17.1). In addition, either party was entitled to terminate the agreement on 15 days notice being provided to the other (Cl 17.2). 101 The court is satisfied that even if Mr Yang could not understand the English text of the agreement, he was prepared to enter contractual relations with AIA voluntarily in the belief that it would provide him with an opportunity to earn a good income. He was provided with a copy which his wife, who understood English, could have translated for him if he asked. 102 The relationship of principal and agent continued for almost two years. In October 1998 Mr Yang voluntarily requested a new arrangement with AIA. He signed a new agency agreement on behalf of Aulian, which he knew would govern the relationship of Aulian and himself with AIA. In 2000 he signed a further agency agreement in his own name. In doing so Mr Yang did not rely upon any absolute, unqualified guarantees and promises in relation to the benefits Mr Yang might earn, as claimed. 103 Mr Yang was well aware, if not from the original agreement then as a result of his experience as an agent with AIA, that AIA had the right to terminate agents. Mr Yang and Aulian had themselves benefited from the business generated by agents who were terminated. Mr Yang's own memorandum to AIA asking for the business of terminated agents to be transferred to him demonstrates his very acute knowledge of the operation of that system. Mr Yang was accordingly aware that agents who were unsatisfactory were liable to have their agreements terminated, in which event their business passed to their supervisor. 104 In view of the finding that no misrepresentation was made prior to the execution of the agency agreements, and that no mistake or fraud induced Mr Yang into its execution, Mr Yang's wilful signing of the agency agreements binds him and Aulian to its provisions: see Equuscorp Pty Limited and another v HGT Glengallen Investments Pty Limited (2004) 218 CLR 472 at [32]-[36]. Based upon Mr Xu's oral evidence cash would be paid by Mr Xu to reimburse Mr Yang at a later date in respect of the premiums paid by Mr Yang to AIA. Contrary to such evidence, Mr Yang testified that when asked by Mr Xu for a loan to pay the premium on Mr Xu's policies, Mr Yang refused. Mr Yang claimed to have lent Mr Xu approximately $20,000 from June 2000 to October 2000. There was a falling out between Mr Yang and Mr Xu in consequence of which Mr Yang said that by October 2000 he would not make any further payments for Mr Xu. Accordingly, the Court does not accept that Mr Yang would have made the payment for Mr Xu as an act of friendship. 106 Mr Yang further claimed that it was important for Mr Xu's policies to be renewed so that he could obtain credit for his persistency ratio. However as at December 2001 Mr Xu's policies, subject to the payment of premiums, had been in place for two years. The benefits available pursuant to AIA's persistency ratio scheme depended upon the status of policies during their second year. Accordingly, as at December 2001 Mr Xu's policies would not have been taken into consideration in determining Mr Yang's entitlements under the persistency ratio scheme for the quarter ended 31 November 2001. Mr Ma of AIA testified that Mr Xu's policies ceased to be relevant to a calculation of such ratio for the quarter ended 30 August 2001 and the payment of the premiums on 5 December 2001 was irrelevant to Mr Yang's persistency ratio status. Accordingly such reason for reinstating the policy is unsustainable. 107 The Court finds the evidence of Ms Hobbs relating to the issue of the receipts to be unreliable. She claimed that the receipts were issued by Mr Yang immediately upon request by Mr Xu. The evidence she provided of the alleged conversation concerning the issue of the receipt was vague and unconvincing. It also conflicts with the evidence of Mr Yang and Ms Wu, each of whom claimed that the permission of Ms Lin was obtained before the issue of the receipts. The Court finds Ms Hobbs' evidence to be implausible. 108 The evidence of Ms Wu concerning the issue of the receipts on 28 October 2000, namely that the receipts were issued to Mr Xu because he wished to use them to obtain a loan, conflicts with Mr Xu's evidence. The Court gives no weight to her evidence. 109 In summary, the evidence of the applicants' witnesses conflict regarding the payment of the premium for Mr Xu's policies. It is impossible to construct a rational scenario bearing in mind the differences in the evidence provided by each of the above witnesses. HE REALLY WANTS TO REINSTATE IT. ADV'D SEND A MEMO TOGETHER WITH T + APPT'N FOR REINSTATEMENT & 2 YRS OUTSTANDING $ FOR U.W APPROVAL IN SEVEN DAYS. Mr Yang acknowledges that his statement to the clerk concerning Mr Xu was false. 112 Mr Yang also acknowledged in cross-examination that his statements made to the clerk regarding the reason for seeking the reinstatement of Mr Xu's policies were made without instruction from Mr Xu and were without foundation. The Court finds that Mr Yang was untruthful to the clerk and rejects the assertion by Mr Yang that the clerk, to whom payment was made, changed the date on the copy of the receipt from 28 October 2001 to 28 October 2000. The Court accepts AIA's submission that Mr Yang altered the date on the receipt in a further attempt to conceal his retention of the cash payments. Mr Xu stated 'in fact I have paid cash to your agent which I bought the insurances from. I attach the receipts to you' . In his letter dated 18 December 2001 to the Managing Director of AIA Mr Xu again confirmed that he had made payment in cash to Mr Yang. Further, Mr Xu went so far as to complain to the Life Insurance Complaints Service Limited. 114 The Court finds Mr Xu's evidence that he paid no monies to Mr Yang to be entirely inconsistent with his complaint to AIA and the Life Insurance Complaints Service Limited. 115 Having considered the evidence, the Court concludes that Mr Yang received cash from Mr Xu on the date specified on the receipt, namely 28 October 2000, and that his testimony to this Court is false. 116 The Court also finds that Mr Yang made the payment on 5 December 2001 because he was aware that his failure to account to AIA for the premium which he had held for 12 months would be revealed by Mr Xu to AIA. To conceal this circumstance he provided the clerk with a false reason for reinstatement. 117 The Court is satisfied that Mr Yang withheld the money from AIA for over 13 months, in breach of the agency agreement which required any monies received in cash to be remitted to AIA within five working days. The retention by Mr Yang of the premium monies constituted a breach of s 37 of the Insurance (Agents and Brokers) Act 1984 (Cth). Section 37 provided that monies paid to a person as agent of the insurer are impressed with a trust in favour of the insurer and must be paid to the insurer as soon as reasonably practicable. Nor did Mr Yang make any reference to authority having been given to him in his 8 February 2002 letter to Mr Tse. The affidavits of Mr Yang filed early in these proceedings also made no mention of the authority from Ms Lin. AIA could not initially locate Ms Lin in order to respond to certain of Mr Yang's allegations relating to the representations. The allegation of Ms Lin's authorisation first arose in Mr Yang's affidavit in reply of 17 August 2007. However Ms Lin was subsequently located and refuted Mr Yang's allegations. 119 The failure by Mr Yang to raise such a vital factual allegation before August 2007 is inexplicable. The Court observes that the effect of Mr Yang's allegation would have been to implicate Ms Lin in a fraud on her employer. The Court also notes that Ms Wu did not refer to the alleged authorisation by Ms Lin to issue receipts until she swore her affidavit on 16 August 2007. Both Mr Yang and Ms Wu did not refer to the Ms Lin's authorisation until after it became apparent that Ms Lin could not be located. 120 The Court observes that between October 2000 and 15 August 2007 Mr Zhang had no reason to recollect the contents of any conversation with Ms Lin. Further, he had been terminated as an agent of AIA and acknowledged that he bore ill-will to AIA. During his examination he produced fuel receipts which he claimed verified his visit to Sydney. However during cross examination it became apparent that he had no real way of knowing whether the receipts produced had any relationship to the visit. Further, Mr Zhang acknowledged that no commissions were owing to him at the time of his alleged meeting with Ms Lin, which he claimed was the reason for his visit. 121 Ms Lin said she had no recollection of any meeting ever taking place concerning the receipt. She claimed that she did not know the former agent Mr Zhang and denied that she would have authorised the issue of receipts without the premium being paid. 122 The Court is not satisfied that a meeting occurred as claimed by Mr Yang and Mr Zhang and gives no weight to the evidence of Mr Zhang. Section 3 of the agency agreement referred to 'Major Requirements of this Agreement' . The obligation to comply with all relevant provision of 'the Acts' was incorporated as the first requirement, as provided by Clause 3.1(a). 124 As referred to previously, s 17(1) of the agency agreement permitted AIA to terminate the agreement without notice if there were any breach or default of the agreement; any act of dishonesty, breach of trust or fraud by the agent in the conduct of its business; or a failure to comply with all the relevant provisions of 'the Acts' . Other causes for termination are also provided for by s 17(1) of the agency agreement. 126 The Court finds that Mr Yang was provided a full opportunity by AIA to respond to such claims at meetings held on 7, 14 and 22 January 2002. The Court finds that the applicant's conduct in withholding Mr Xu's premiums constituted a breach of the agency agreement and of s 37 of the Insurance (Agents and Brokers) Act 1984 . 128 As to the failure to account and concealment, the Court agrees with AIA's submission. With regard to the third submission, AIA's evidence discloses that Mr Yang has a history of violent behaviour. On 15 September 1998 a memorandum was written to him by Ms Lin, warning him of the consequences that may flow if he continued his repeated 'pattern of misbehaviour' . This was followed by another memorandum dated 10 June 1999 concerning Mr Yang's emotional outbursts. Such memoranda gave him notification of being placed on probation for a period of three months, effective immediately. An incident occurred as recorded in a memorandum dated 28 November 1999 in which Mr Yang allegedly damaged office furniture and a wall at the offices of AIA. A further incident occurred when a crystal trophy which had been awarded to Mr Yang for second place in an AIA sales promotion competition was smashed by him shortly after its receipt. 129 Another example of misconduct related to unauthorised advertising by Mr Yang using the AIA logo in his advertisement as a mortgage consultant. All agents had been advised in writing that the AIA logo was not be used in any advertisement seeking income from personal exertion, and that agents of AIA were full-time employees. 130 A warning was issued by AIA to Mr Yang on 20 July 2000 regarding his misconduct. However, the records of AIA establish that despite an agreement by Mr Yang to desist, his advertisement including the AIA logo was again published in the Australian Chinese Daily Magazine. 131 AIA also relies upon two instances when Mr Yang falsely represented to AIA the insurance risks of two customers, namely Ms Hong Chen and Mr Xu. In each case certain details in the proposal forms contained incorrect detail in respect of material matters. 132 Despite such facts, it is not apparent that the temperament of Mr Yang was the cause of AIA's action to procure his resignation, nor was there any other cause relied upon by AIA. In view of this fact, the Court will make no finding on AIA's third submission that other grounds were available to AIA to terminate the agency agreement. For this reason, and in the absence of any reliable evidence provided by Mr Yang or Ms Wu, the Court considers that the events relating to the termination as stated by Mr Chinnery are accurate and that the evidence of Mr Chinnery concerning the meetings held with Mr Yang to be more reliable than the evidence of Mr Yang and Ms Wu. The Court accepts the evidence of witnesses of AIA that Mr Yang attended meetings on the 7, 14, 22 and 30 January 2002 in the offices of AIA. 134 The Court finds that Mr Yang resigned from AIA and therefore effectively terminated the two agency agreements on 30 January 2002. Accordingly there is no requirement for AIA to establish that they were made reasonably as required by s 51A(2). It follows that the applicants have not established their claim pursuant to s 51A of the Act. 136 Further the Court is unable to identify a special disability of Mr Yang within the meaning of the unwritten law of unconscionability within the meaning of s 51AA of the Act. In relation to a claim that Mr Yang was unconscionably induced to enter the agreements in 1996 the applicants have not been able to point to any special exploitation of Mr Yang. There is no suggestion that he was offered terms any different from those offered to all prospective agents nor that the terms themselves were inherently unfair. Further the limitation period contained in s 82(2) of the Act prevents the applicants from being able to claim damages for any alleged unconscionable representations which occurred in the first two years of the operation of the 1996 agency agreement which includes the period prior to Mr Yang's entry into the agreement. The alleged continuation of the representations throughout Mr Yang's agency does not assist the applicants in light of the above findings of the Court that the alleged representations, as a matter of fact, are not established. There is no proven unconscionable conduct on the part of AIA. Accordingly this claim must fail. 137 The second basis upon which the applicants claim unconscionable conduct on the part of AIA is in relation to the events leading up to the resignation of Mr Yang on 30 January 2002. AIA accepts that a strict application of legal rights may be unconscionable if exercised harshly, oppressively or capriciously: see Legione and Another v Hateley [1983] HCA 11 ; (1983) 152 CLR 406 at 444. However there is nothing to suggest that the effective termination (by resignation) of Mr Yang was exercised by AIA harshly, oppressively or capriciously. The dishonesty of Mr Yang in relation to the issue of the receipts in respect of Mr Xu's policies, the false completion of the application forms for Mr Xu, the false representations to the AIA clerk on 5 December 2001, the false alteration of the receipt presented to AIA and the false versions of events given to Mr Chinnery in January 2002 together with the choice of resignation offered to Mr Yang, support a conclusion that the cessation of Mr Yang's agency was not in any way brought about by the unconscionable conduct of AIA but rather by the conduct of Mr Yang himself. 138 As discussed above, for the applicants to succeed in a claim under s 51AC of the Act the services provided by AIA to the applicants must be in connection with the supply or possible supply of services to the applicants. The Court accepts AIA's submission that the principal 'right' acquired by the applicants under the various agreements is the right to be paid remuneration in the form of commissions and other benefits. In Queensland Aggregates Pty. Ltd. and Another v Trade Practices Commission (1981) 57 FLR 314 at 319 the Full Court held that a payment of money does not comprise a supply of services under the Act. Such 'right' to remuneration is not a connecting factor for the purposes of s 51AC(1)(a) of the Act. Accordingly the requirements of s 51AC have not been met. 139 As such the applicants have not made out their claim under either ss 51A, 51AA or 51AC of the Act and the Court dismisses the application with costs. I certify that the preceding one hundred and thirty-nine (139) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | misrepresentation as inducement to enter into insurance agency agreement continuing misrepresentations whether representations were made in relation to the employment of agents whether termination of agreement constituted unconscionable conduct breach of agreement. trade practices |
2 On 13 May 2008 Westpac Banking Corporation ("Westpac"), the holder of a fixed and floating charge over the whole of the Company's property, appointed Murray Campbell Smith and Colin McIntosh Nicol as Administrators of the Company pursuant to the provisions of s 436C(1) of the Act . On that date Mary Gaywin Irving, the plaintiff, was the sole director of the Company. 3 On 23 May 2008 the first meeting of creditors of the Company required to be held pursuant to s 436E of the Act was held. The meeting was chaired by Mr Smith. At the meeting Mr Smith noted that the Company's main assets were the former Kenmore Hospital site and adjacent land located at Goulburn in New South Wales. 4 On 11 June 2008 the Administrators, pursuant to s 439A of the Act , sent a report to the creditors of the Company and notified them of the second meeting of creditors to be held on 18 June 2008. In the report to creditors the Administrators noted that the Company was insolvent and said that their opinion was that in the absence of a deed of company arrangement proposal providing a better outcome for creditors than liquidation, it was in the creditors' best interests that the Company be wound up. 5 Prior to sending the report to the creditors, the Administrators had been told that the Company was proposing that it enter into a deed of company arrangement but they had not received any documents. On 10 June 2008 the Administrators received a deed of company arrangement proposal to acquire the assets of the Company from Mr Jim Byrnes on behalf of an entity yet to be identified. The Administrators did not have time to consider the proposal fully. 6 The second meeting of creditors was held on 18 June 2008 and was chaired by. Mr Smith. He informed the meeting that the Administrators had received two proposals for a deed of company arrangement to be entered into by the Company, one from Mrs Irving and one from Mr Byrnes. There was general discussion about the two proposals. The meeting was adjourned until 3 July 2008 to enable further investigation and negotiations in relation to the two proposals. 7 The adjourned meeting was held on 3 July 2008 and, again, it was chaired by Mr Smith. Mr Smith circulated to the creditors present a further report from the Administrators entitled "Alternative Courses of Action". In that report the Administrators noted that they had received two deed of company arrangement proposals, one from Mrs Irving and the other from Mr Byrnes. In the report they analysed and assessed each of the proposals. In the light of the issues they raised and discussed they said that they could not then recommend Mrs Irving's proposal to creditors. They noted that Mr Byrnes' proposal was well articulated and considered but their analysis indicated that it did not clearly provide a better return to all classes of creditors and on that basis, they could not recommend it. In the report they stated that their analysis indicated that liquidation was likely to provide the best return to each class of creditors and on that basis they recommended that the Company be wound up. 8 There was discussion about the matters raised in the Administrators' report. The meeting was adjourned for some time to enable the Administrators to hold further discussions with the proposers of the two deeds. When the meeting resumed the Administrators advised creditors that amendments had been made to Mr Byrnes' proposal and there was further discussion about both proposals. 9 At the request of Mr Byrnes, Mr Smith put a resolution to the meeting that the Company execute a deed of company arrangement as proposed by Mr Byrnes and as amended at the meeting. Mr Smith informed the creditors that he would exercise proxies held by him in favour of the resolution. The resolution was passed. According to Mr Smith, eleven creditors voted for the resolution and ten creditors voted against the resolution. Mr Smith declared the resolution carried on the voices. No creditor requested a poll to be called and no poll was conducted. 10 On 17 July 2008, in the course of finalising the minutes of the meeting and reviewing the names of the creditors, Mr Smith realised that there was a risk that at the meeting eleven creditors had voted against the resolution as he realised he may have omitted to recognise the vote of one of the creditors. 11 Consequently, on 21 July 2008 Mr Smith procured an originating process to be filed in the Supreme Court of New South Wales seeking a declaration that the administration of the Company had not terminated and an order that the meeting of creditors held on 3 July 2008 had not been terminated but was to be treated as having been adjourned to a time and place to be notified by the Administrators to the creditors. 12 On 23 July 2008 Justice Austin declared that the administration of the Company had not terminated and ordered that the meeting of creditors of the Company under s 439A of the Act had not terminated but was to be treated as having been adjourned to a time and place to be notified by the Administrators to the creditors. 13 On 24 July 2008 the Administrators sent a notice to creditors reconvening the second meeting of creditors on 5 August 2008. Mr Smith sought an adjournment of the meeting until 14 August 2008. Shortly before the meeting he had received a number of new and revised proofs of debt, proxies and debt assignments and he needed time to consider and adjudicate upon them. The meeting was adjourned by the creditors until 14 August 2008. 14 At the meeting on 14 August 2008 Mr Smith again circulated an "Alternative Courses of Action" report from the Administrators. In the report the Administrators analysed and considered the Deeds proposed by Mrs Irving and Mr Byrnes. In light of these uncertainties, I cannot presently recommend this proposal to creditors. This results in lower estimated funds available after the secured creditor's claim when compared to the liquidation mid and high scenarios. However, there is a risk that if the sale of the assets under a liquidation is delayed for an extended period or fails to achieve sufficient proceeds then creditors may receive less under a liquidation scenario. In addition, I have significant concerns that the property can be sold at or near to valuation. Those concerns include the history of the property (contamination, heritage issues, costs of remediation) and also the history of past sales efforts. The benefit of the Byrnes DOCA proposal is the early sale and settlement, and certainty around the minimum amount of funds available for creditors. The proposal by Mr Jim Byrnes is well documented and advanced to final draft stage (including asset sale contracts); however my analysis indicates that it does not clearly provide a better return for all classes of creditors and on that basis I cannot recommend it. Their analysis indicated to them that liquidation was likely to provide the best return to each class of creditors and on that basis, they recommended that the Company be wound up. The valuation is at $10.7m for Lot 5 only but notes a number of critical assumptions which impact on value, including around the DA and Masterplan, improvements and the application of the property as an expanded retirement village. It is not clear what action or cost is required to achieve that valuation. As such, I consider my valuation which is more appropriate as it is on an 'as is' basis. I have not received anything further since the 3 July meeting. As detailed previously, Ms Irving's DOCA proposal is silent on a number of keys [sic] points. In particular, how the caveats over the property will be removed. If the caveats cannot be removed, the DOCA cannot be completed. Accordingly, due to the lack of detail provided and the highly uncertain nature of what has been provided, it is not possible to offer a meaningful comparison. I therefore cannot recommend the Irving DOCA proposal. I have compared the estimated return to each creditor group from the DOCA proposed by Mr Byrnes to that estimated to be available under a liquidation. While there are a number of factors which make the comparison difficult and subjective, the return to creditors under the Byrnes DOCA is not clearly superior to that under a liquidation. Accordingly, I cannot recommend the Byrnes DOCA to creditors. However, on balance, I recommend that it is in the best interest of creditors that Longreach is wound up. That list included Margaret Sweet, Catherine Gina Byrnes, Andrew Simmons, Trevor Quilky and Consolidated Byrnes Investment Company Pty Limited all of whom were shown on the list as assignees. 22 Shortly prior to the meeting on 5 August 2008, Mr Smith had received a number of documents constituting assignments of debts owed to certain creditors of the Company. At the same time Mr Smith received proofs of debt lodged by the assignees of the debts. Mr Smith was satisfied that each of the debts assigned was a discrete debt owed to the creditor of the Company and was not one debt that had been split amongst a number of assignees. 23 Each Deed of Assignment was dated 4 August 2008 and notice of each assignment was given to the Company pursuant to s 12 of the Conveyancing Act 1919 (NSW). This was a costs order made in favour of Kenmore Campus Pty Ltd and Kenmore Developments Pty Ltd in the Supreme Court of New South Wales. (No point was taken that the name of the assignor in the Deed of Assignment was different from the name of the assignor shown in the Notice of Assignment). 25 The debts claimed by Kenmore Campus Pty Limited and Kenmore Developments Pty Limited arose in the following circumstances. Prior to the appointment of the Administrators the Company had sold part of the Goulburn land to those companies. A deposit of $500,000.00 was paid by the companies but a dispute arose between them and the Company as to whether they were required to settle the contract. The Company asserted that they were obliged to do so but they contended that they were not so obliged. The dispute was resolved by the parties entering into an agreement whereby the Company agreed to pay Kenmore Campus Pty Limited and Kenmore Developments Pty Limited $600,000.00. Prior to the date for settlement of the payment of the $600,000.00 the Administrators were appointed to the Company and the payment was not made. Those two companies gave a proxy to Mr Byrnes for the purposes of voting at the meeting of creditors. 26 At the meeting on 14 August 2008 Mr Smith advised the meeting of the details of each of the proofs of debts, the Deeds of Assignment and proxies received for the meeting and the amounts he had admitted for voting purposes. Mr Smith then took the creditors through the report and summarised the key points from it. Mr Smith highlighted his recommendation to creditors that, on balance, the Company should be wound up and he referred to the considerations relevant to his arriving at that recommendation. There was general discussion regarding the Deed proposed by Mr Byrnes. At the conclusion of this discussion Mr Smith put a resolution to the meeting that the Company execute the Deed of Company Arrangement proposed by Mr Byrnes in accordance with the statements setting out details of the proposed Deed included in the report dated 14 August 2008. Mr Smith called for a poll on the resolution. On the same day the Company and others executed agreements for the sale of the land for a total sum of $4.395 million. SHOULD THE PROOFS OF DEBT LODGED BY THE ASSIGNEES OF DEBTS DUE BY THE COMPANY BE DISALLOWED? The plaintiff submitted that a specific debt could not be split or divided up so as to allow more than one vote or claim to be allowed or made in respect of a specific debt. It was submitted that the scheme found in ss 439A , 439B and 439C of the Act did not allow or admit the splitting of a debt in this fashion. In the course of oral argument, counsel for the plaintiff accepted that discrete debts could be assigned with the result that the assignee would be entitled to claim the debt resulting from the assignment and obtain an entitlement to vote in respect of that assigned debt, but submitted that what was not effective was to divide a specific debt into individual debts and then assign those individual debts. 30 That submission did not advance the plaintiff's case having regard to the form and content of the Deeds of Assignment which were submitted to the Administrators and upon which Mr Smith relied in determining who was entitled to vote at the meeting. The Deeds of Assignment produced by Mr Smith and upon which he relied are assignments of specific debts incurred in favour of each of the assignees. Each of the assignments is an assignment of the whole of a debt and not part of a debt. 31 The Administrators accepted that it was not proper or appropriate for a creditor of a company to divide up a debt by way of assigning part of the debt to one person and part of the debt to another so as to create more votes available to be cast at a meeting of creditors. That is not the situation which applies in relation to the five Deeds of Assignment in issue in this proceeding. None of them is a partial assignment of debt or an assignment of part of a debt. In each case there is an assignment of the totality of a particular debt in existence. 32 As the argument developed, counsel for the plaintiff embraced the proposition that determination of who were the relevant creditors entitled to vote at the second creditors' meeting convened pursuant to s 439A of the Act was to be made at the time that notices of the meeting were sent to creditors. It followed from this submission that an assignment of a debt due to a creditor after the notices were sent to creditors pursuant to s 439A of the Act was ineffective to carry with it an entitlement of the assignee of the debt to lodge a proof of debt and vote at the meeting. Counsel for the plaintiff qualified this proposition by submitting that an assignment of a debt after the date upon which notices were sent out convening the meeting pursuant to s 439A of the Act would be effective to carry with it a right in the assignee to lodge a proof of debt and vote at the meeting so long as the assignment was bona fide and not effected for the purpose of manipulating the voting at the meeting. Counsel for the plaintiff submitted that the assignments in issue in this proceeding were not bona fide . 33 I can find nothing in the scheme of Pt 5.3A of the Act or, in particular, in s 439A of the Act which supports the plaintiff's submission that there is a cut off time at the point where notices convening the meeting pursuant to s 439A are sent to creditors and published in newspapers which limits the entitlement of a creditor of a company to assign a debt due by the Company to the creditor and which carries with it a right to lodge a proof of debt and vote at the meeting. 34 It was not clear what counsel for the plaintiff meant when he submitted that the assignments were not bona fide . When I questioned what he meant by "not bona fide " he responded that the assignments were a sham and were executed for the purpose of obtaining voting power to enable the resolution that the Company enter into the Deed of Company Arrangement proposed by Mr Byrnes to be passed. I questioned counsel as to what he meant by this submission as I had earlier understood him to say that the plaintiff was not challenging the validity of the Deeds of Assignment. Counsel said that he was not challenging the validity of the Deeds of Assignment at all and that they were perfectly valid Deeds. Nevertheless, counsel continued to submit that the assignments were not bona fide , apparently on the basis that the assignors assigned either a number of different debts, or parts of debts, to more than one person and that the assignments were made for the purpose of manipulating the voting at the meeting. 35 Counsel for the plaintiff also submitted that there was no logical reason for the assignees to take assignments of the debts because if they voted in favour of the resolution that the Company enter into the proposed deed of company arrangement they would not, as unsecured creditors, obtain any return under the Deed. However, if the liquidation of the Company proceeded they were likely to obtain a greater return than they would under the Deed. 36 The expression "creditors" is not defined in the Act . In particular, it is not given a limited temporal aspect. It is therefore necessary to consider the content of that expression by reference to the context in which it appears in the Act -- in particular in Pt 5.3A of the Act and, more particularly, in ss 439A and 439C . I do not consider that there is any warrant for limiting the expression "creditors" in s 439A and s 439C to those persons to whom the Company was indebted as at, or on, the date notice was given by the Administrators to creditors in accordance with s 439A(3)(a) of the Act or the publication of the notice of the meeting required by s 439A(3)(b) of the Act . I cannot find in any provision or context in the Act or, in particular, any provision in Pt 5.3A of the Act any warrant for such a limitation. Nor is any such limitation to be found in reg 5.6.23 of the Corporations Regulations which provides for the manner in which a creditor is entitled to vote at a meeting of creditors of the Company. There is nothing in that regulation which identifies a creditor as being a person who is identified in the books of account of the Company as being a creditor at any particular point of time prior to the meeting at which the right of that creditor to vote is called in question. 37 The submission that the expression "creditors" should be limited to persons to whom the Company was indebted as at the date the notices were sent out or published under s 439A(3) is also inconsistent with the reasoning of the Appeal Division of the Supreme Court of Victoria in Brash Holdings Limited (Administrator appointed) v Katile Pty Ltd [1996] 1 VR 24. In that case the Court had before it for consideration the provisions of Pt 5.3A of the Corporations Law, the predecessor of the present Pt 5.3A of the Act which, for all relevant purposes, was in the same form as the current Pt 5.3A. The administrators of a group of companies had sought declarations as to which creditors of a company were bound by the deed of company arrangement. The relevant enquiry focused on s 444D of the Corporations Law. What has so far been described is sufficient to show that the general scheme of the Part is to involve the company's creditors, without further limitation or description. The word "creditors" should, in the absence of any good reason otherwise, be read as used in the same sense throughout Pt.5.3A, and it is difficult to suppose that sections, drawn so widely as, for instance, s.435A (describing the object of the Part) had in mind anything less than all of the creditors for the time being of the company. 39 It follows that I reject the plaintiff's submission that the determination of who was entitled to lodge a proof of debt for the purpose of voting at the second creditors' meeting was to be made as at the time notices of the meeting were sent out or published in accordance with s 439A(3) of the Act . 40 I also reject the plaintiff's submission that the Deeds of Assignment were not bona fide , or were a sham or should not otherwise have been accepted by the Administrators as supporting the proofs of debt lodged with them. The plaintiff's submission in this respect was confused. The plaintiff's acceptance that the Deeds were valid and the statement by counsel that the plaintiff was not challenging the validity of the Deeds was inconsistent with the submission that the Deeds were a sham. Further, there was no evidentiary basis for the assertion that they were executed for the purposes, presumably improper, of obtaining voting power to enable the resolution that the Company enter into the deed of company arrangement to be passed. No party to any of the Deeds of Assignment was called to give evidence. The fact that the assignees voted in favour of the resolution is not, of itself, proof of any such improper purpose, notwithstanding that they might, if the Company went into liquidation, obtain a better return. 41 In short, the plaintiff's case impugning the efficacy of the Deeds of Assignment for the purpose of supporting the assignees' proofs of debt was based on conjecture and suspicion and was not grounded in any admissible evidence. SHOULD THE DEED OF COMPANY ARRANGEMENT BE TERMINATED? 43 The plaintiff submitted that effect could not be given to the Deed without injustice and that the Deed was oppressive or unfairly prejudicial to creditors or contrary to the interests of the creditors of the Company as a whole. The plaintiff relied upon the fact that, under the Deed, the unsecured creditors will achieve little or no return whereas under a liquidation, depending upon whether there was a high, medium or low scenario, there is a prospect of the unsecured creditors obtaining a return: see par [17] above. The plaintiff relied in particular upon the fact that the Deed proposes a sale price of $4.4 million for the land whereas there is available to the Administrators an independent valuation of $5.93 million. Put shortly, the plaintiff submitted that there is no benefit for the unsecured creditors at all in the Deed which has been executed. 44 The plaintiff also submitted that the Deed should be terminated pursuant to subpar (g) of s 445D(1) of the Act because the Administrators counted the votes cast by the five assignees of the debts due by the Company. Counsel for the plaintiff invited the Court to infer that the debts were assigned for the purpose of supporting the interests of Mr Byrnes who was proposing the deed of company arrangement. Counsel for the plaintiff acknowledged that there was no direct evidence to this effect and that he had not examined or cross-examined the assignees on that issue. 45 In support of the submission that the Deed of Company Arrangement was unjust or unfairly prejudicial or unfairly discriminatory of one or more of the creditors or contrary to their interests, the plaintiff relied upon the Administrators' statement that the Deed did not clearly provide a better return for all classes of creditors, that Mr Smith could not recommend it and that his estimates indicated that liquidation would result in dividends to unsecured creditors of between 76.24 cents, 35.24 cents and no dividend and on that basis, he recommended liquidation. 46 The submission that the Deed should be terminated because the chair of the meeting counted the votes of the assignees of the debts due to the Company is rejected having regard to my conclusion that the chair was entitled to count those votes because the Deeds of Assignment were effective. 48 The context in which those statements were made by the Administrators and the assumptions and analysis made by the Administrators in reaching their conclusions must be considered and evaluated. The creditors were presented by the Administrators with a number of factors which, according to the Administrators, made "the comparison [between a return under the Deed proposed by Mr Byrnes and the return under a liquidation] difficult and subjective". 49 The creditors were presented with a clear choice based on a reasoned report and analysis by the Administrators. That report and analysis demonstrated that there were a number of assumptions and variable factors which bore upon the extent to which a liquidation would bring a better return for unsecured creditors than entry by the Company into the Deed proposed by Mr Byrnes. The report made it clear that it was not inevitable that liquidation would bring a better return for unsecured creditors than if the Company entered into the Deed proposed by Mr Byrnes. For example, the return to unsecured creditors on a liquidation was critically dependent on the sale price of the land in respect of which there were a number of factors which could impact on the ability of the liquidator to achieve a price sufficiently high to result in a return to unsecured creditors. 50 Mr Smith's estimate of the potential dividend to unsecured creditors under what he called his high and medium scenario depended upon the amount received on the sale of the land. The Administrators' high scenario was based on a valuation of the land obtained net of required remedial works. The estimate of a medium scenario was based on a value of the land which was 10% less than the valuation which the Administrators had received. The low scenario was based upon the highest unconditional offer for the land which was $4.5 million and 10% less than the market value of the adjacent properties. The difference between the value of the land in the high scenario and the low scenario was $800,000.00. As noted above (par [15]) the Administrators acknowledged that there was a risk that if the sale of the assets under liquidation was delayed for an extended period or failed to achieve sufficient proceeds then creditors might receive less under a liquidation scenario. It is important to note that the Administrators had significant concerns that the land could be sold for the valuation. The Administrators' concerns included the history of the land which involved issues of contamination, heritage issues and costs of remediation and also the history of past sale efforts. 51 Further, as noted above, the Administrators had identified in their report significant disadvantages of liquidation. 52 All these factors were matters which the creditors were entitled to take into account in determining whether to vote for the Deed proposed by Mr Byrnes or have the Company go into liquidation. A resolution in favour of the Deed rather than liquidation, of itself, does not demonstrate consequential injustice to any creditor or oppression, unfair prejudice or unfair discrimination or a situation contrary to the interests of creditors when regard is had to the range of outcomes or scenarios which might occur under liquidation. 53 The expression "injustice" in s 445D(1)(e) is of wide import. In the context of s 445D(1)(e) I consider that I should ask whether the effect of the Deed is unfair or inequitable in the impact it has upon one or more of the creditors bound by it. 54 Similar considerations apply when considering the application of s 445D(1)(f). A creditor has the basic right to payment, to the winding up of a company, or to the administration of the company in a manner that keeps the business of the company going which ultimately resulting [sic] in the creditor receiving payment out of the property of the company. The court will look at the whole of the effect of the deed and assess 'its unfairness, if any, to the plaintiff creditor bearing in mind the scheme of Pt 5.3A , the interests of the other creditors, the company and the public generally'. It is necessary to consider the total circumstances of the case so as to determine whether there is overall unfairness. " [footnotes omitted]. In the circumstances of the present case, the last sentence of this quotation is critical. 55 The plaintiff's case, in essence, was that effect could not be given to the Deed without injustice and that the Deed was oppressive, prejudicial to and discriminatory against creditors because of the amount for which the land is to be sold pursuant to the Deed of Company Arrangement. Although the Administrators had received an independent valuation of the land which provided a valuation of $5.93 million net of rectification costs, the Administrators had set out in their report factors which made it problematic whether such a value could be received on the sale of the land. Having regard to the circumstances and factors set out in the Administrators' report, I do not consider that effect cannot be given to the Deed without injustice. It is the plaintiff who is complaining about the injustice but I do not consider that there is any injustice to the plaintiff in circumstances where in a context and with the background to which I referred, the creditors, by a majority of number and value, have decided to go the route of deed of company arrangement rather than liquidation. 56 The assumptions and factors identified by the Administrators required the creditors to make a choice. The choice they made did not result in a Deed which was oppressive to, or prejudicial to, or discriminatory against the general body of creditors, and the plaintiff in particular, having regard to the factors which had to be taken into account in determining whether what the Administrators called either a high scenario, a medium scenario or a low scenario in terms of return to creditors might be achieved. 57 For all these reasons I am not satisfied that any ground has been made out which warrants the Court making an order terminating the deed of company arrangement executed by the Company on 21 August 2008. 58 The Originating Process will be dismissed with costs. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Goldberg. | deed of company arrangement executed pursuant to resolution of creditors appeal from decision of chair of creditors' meeting to accept proofs of debt where assignments of debts took place after meeting was convened where result of assignment was a larger number of creditors entitled to vote at the meeting and resolution on deed of company arrangement was passed with the support of those creditors whether debts were split as a result of assignments whether there is a cut off time for lodgment of proofs of debt at the point where the notices convening the meeting were sent whether assignments bona fide whether deed of company arrangement should be terminated. corporations |
The application is made under sections 439A and 447A of the Corporations Act 2001 (Cth) ( Act ). The first meeting of creditors of BBL was held on 25 March 2009. The effect of section 439A(5) of the Act is that the second meeting of creditors is required to be held by 17 April 2009. Section 439A(6) permits the court to extend the convening period, provided that an application is made within the period stipulated in section 439A(5). This application is made within the stipulated time. The administrators seek a four month extension of the convening period to 17 August 2009. That period is longer than the period which is ordinarily granted. However, this application involves somewhat different considerations from those which arise in the ordinary case. The application is supported by an affidavit of Mr David John Frank Lombe who is one of the administrators of BBL. The affidavit sets out in some detail the circumstances and reasons why the extension is sought. The background facts, which I will set out, are drawn from Mr Lombe's affidavit. The group opened a Sydney office in 1982, but it was not until the early 1990s that it began to focus upon investment management and investment banking. BBL was listed on the ASX in 2004. It is the parent company of a large and complex group of local and offshore companies. The BBL group appears to comprise in excess of 1500 subsidiaries, which operate internationally in over 40 countries. BBL is not a trading company. Its income is derived from subsidiaries' trading activities. The primary operating subsidiary of BBL is the Australian company Babcock & Brown International Pty Ltd ( BBIPL ). BBL owns approximately 99.78% of the issued shares in BBIPL. BBIPL is not presently subject to any form of external administration. BBIPL is indebted to a syndicate of local and offshore banks for a sum in excess of AU$3 billion. BBIPL and its banking syndicate have been involved in a highly publicised restructuring of its debt facilities which took place in 2008 and 2009. In 2005 and 2006, BBL raised approximately AU$610 million by an issue of subordinated notes denominated in Australian dollars and quoted on the ASX. There were two separate note issues. The first set of noteholders has their first opportunity to redeem the notes in the ordinary course on 15 February 2010. The first opportunity for the noteholders in the second tranche to redeem their notes in the ordinary course would be 15 September 2011. There is now almost $610 million still owing to the noteholders. The notes were issued pursuant to trust deeds and there is one trustee for the noteholders in both tranches of the note issues. The repayment obligations of BBL to the noteholders are guaranteed by BBIPL. However, it appears from present inquiries undertaken by the administrators that there is no charge or security over the BBL Group's assets to secure the obligations from BBL to the noteholders. Following the issue of the notes, it appears that BBL granted loans to BBIPL and that the amount presently outstanding from BBIPL to BBL, pursuant to the loans, is approximately $621,904,000. The repayment obligations of BBL to noteholders appear to be subordinated to claims of other creditors of BBL. Moreover, the repayment of the loan by BBIPL to BBL and the guarantee given by BBIPL in favour of the noteholders also appear to be subordinated to the repayment of BBIPL's creditors, namely, BBIPL's $3 billion of borrowings from its bank syndicate. There have been a number of ASX press releases in relation to BBL and the issue of the unsecured notes. A release dated 6 February 2009 stated, inter alia , that the board of BBL did not believe that it would be in a position to resume paying interest on the subordinated notes. A further ASX release on or about 13 February 2009 indicated that a trigger event had occurred under the terms of the notes which enabled noteholders, amongst other things, to request repayment of the notes and to issue what are known as exit notices. It was these trigger events and the inability of BBL to meet the next scheduled interest payment to noteholders which resulted in the appointment of the administrators. As I have said, a first meeting of creditors was convened on 25 March 2009. It was disclosed at the first meeting that, upon the basis of BBL's draft accounts, the book value of its net assets was approximately $3.2 billion but that the administrators' estimate of the realisable value of those assets was yet to be determined. The primary assets of BBL are the loans receivable from BBIPL in the amount of approximately $621 million and BBL's investment in the shares of BBIPL which have a book value of $2.6 billion. Mr Lombe deposes that in order to determine that there will be any return to the BBL noteholders, the administrators will need to determine whether any value can be derived from the assets. He says that in order to do this, the administrators will need to investigate the affairs, operations and financial position of BBIPL, in particular having regard to its arrangement with its banking syndicate, and that they will need to seek and consider legal advice in relation to the subordination arrangements between BBL and BBIPL. Mr Lombe also states that it will be necessary to investigate and instruct lawyers to consider whether any valuable causes of action arise in favour of BBL against any party. Mr Lombe observes at [35] that these matters involve complex legal and valuation issues and will take some time to investigate thoroughly. He says that it is crucial for the administrators to be allowed a sufficient amount of time to receive advice as to BBL's legal rights, investigate its affairs and negotiate with any stakeholders who might be encouraged to propose a deed of company arrangement. The ability of the administrators to determine the financial position of BBL and to investigate the question of recoveries is, at present, constrained by a number of factors, including the fact that the administrators have yet to receive the statutory Reports as to Affairs, and also by the lack of direct access to the books and records of BBL. BBL does not own or lease any office premises but its office is notionally located within the premises of BBIPL. The staff who control the access to the documents of BBL are employed by BBIPL or another entity in group. Mr Lombe has set out in his affidavit in some detail the conversations which have taken place to permit access to the books and records. Mr Lombe had a conversation with Mr Larkin, the Chief Executive Officer of BBL and BBIPL, on 31 March 2009 in which Mr Larkin indicated that BBIPL management is committed to providing the information which is needed by the administrators but that a system needs to be established to log and manage the information flows, which are likely to be substantial. Mr Lombe also says at [48] that although he has not yet received a complete response to his request for information, his staff have spent significant time discussing and agreeing with BBIPL the arrangements pursuant to which documents will be provided from the Sydney offices to the administrators. He says that the administrators continue to work with the directors and staff of BBIPL toward obtaining the documents necessary for the conduct of the administration as expeditiously as possible. The administrators agreed to an extension of time for the provision of the directors' Reports as to Affairs. The extension was originally granted to 6 April 2009 but a further extension has been granted to 20 April 2009. I do not need to deal with that in any detail. He observes at [54] that in addition, there has been a significant amount of work which has been reflective of the unique and complex nature of BBL. However, the administrators have decided that this would not be in the interests of BBL or the noteholders because of two essential factors. These are, first, in the absence of completed Reports as to Affairs, the administrators are not able to fully assess the financial position of BBL so as to be able to make a recommendation to creditors. Second, the administrators' investigations would not be sufficiently advanced prior to the second meeting to be able to encourage or negotiate a deed of company arrangement from interested stakeholders. Mr Lombe has set out in his affidavit the opinion that an extension of the convening period for four months is justified and that it is in the interests of creditors of BBL. He observes that the affairs of BBL and the BBL group are particularly complex and that extra time is required to fully investigate the financial affairs, business assets and liabilities of BBL in order to discharge the requirements of the Act. He also refers to the need to review and consider potential causes of action that may provide a better return to noteholders than a liquidation of the company. A number of other matters are also referred to, including the need for time to be able to consider whether a proposal for a deed of company arrangement ought to be made. Mr Simon John Cathro, who is Mr Lombe's joint administrator, gave additional evidence in the witness box as to why the four month period is appropriate. The first reason is the complexity of the BBL group. The second is the need to investigate the restructure of the affairs of BBIPL and to be able to determine the question of how long it may take to realise the assets of that company. Mr Cathro also observed that even if the extension is granted, it would be open to the administrators to call the meeting earlier than 17 August and to recommend that BBL be placed into liquidation if the necessary cooperation from other parties is not forthcoming. Briefly, as Mr Cathro observed, BBL appears to be the second-largest investment bank in Australia. Also, this is not a normal case, in that the ordinary parties affected by the statutory moratorium are not involved in the administration. In particular, there are no employees, no leases of premises or of plant and equipment, and there are no secured creditors. Another matter to which Mr Cathro referred, and which is also covered by Mr Lombe's evidence, is that at the first meeting of creditors on 25 March 2009, the administrators informed the meeting that they would seek an extension of the convening period of four months, and they sought objections from creditors and noteholders present at the meeting. The attendance register is in evidence before me, and it shows that approximately 100 noteholders were present at the meeting in Sydney, including a number of noteholders who apparently attended by telephone from New Zealand. There were no objections voiced at the meeting. In addition, Mr Lombe has put in evidence before me a letter from the administrators to the trustee for the noteholders stating that the administrators consider an extension of up to four months is necessary in order for them to be able to conduct thorough investigations and prepare a comprehensive report to creditors in accordance with their statutory obligations. There is also a letter from the trust company dated 7 April 2009 consenting to the proposal to request an extension of the convening period. The letter does not specifically refer to the four month period, but it is apparent that the consent is to the period of up to four months referred to in the letter from the administrators. The principles applicable to the extension of the convening period prescribed by section 439A of the Act have been considered in a number of authorities. The authorities commence with a decision of Young J in Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611 at 612. The principle referred to by Young J was also stated in Re Diamond Press Australia Pty Limited [2001] NSWSC 313 by Barrett J at [10]. They include the decision of Lindgren J in Re Pan Pharmaceuticals Ltd [2003] FCA 598 ; (2003) 46 ACSR 77 at [41] and [42], and the decision of Hayne J in Re Brash Holdings Ltd (1994) 13 ACSR 793 at 794. I am satisfied that it is appropriate to grant an extension of time to convene the meeting, However, I have given careful consideration to the question of what is an appropriate time for an extension. In Re AFG Insurances Ltd [2002] NSWCA 803 at [5] and [9]-[11], Barrett J considered a number of authorities which have dealt with the question of the time to be extended for convening the meeting, particularly bearing in mind administrations of some complexity. The authorities to which his Honour referred indicate that in certain cases, an extension of up to five months has been granted. I also referred to the difficulties which arise in determining the period to permit the appropriate period for an extension in Mentha, in the matter of Hans Continental Small Goods Pty Ltd (Administrators Appointed) [2008] FCA 1933 at [23] - [25] . It seems to me that I ought to take into account the careful consideration which has been given to this question by both of the administrators. It is plain that the administration is a complex one, bearing in mind in particular the size of the BBL Group and the substantial inquiries which the administrators need to pursue, including the need for legal advice. I am mindful of what Barrett J said in AFG Insurances at [11]. His Honour emphasised that that was a special case with complications and difficulties which one would not expect to be encountered in the normal course and that every case must be approached on its merits without any particular reliance on what has happened in other cases. Nevertheless, this case does have some similarities to the considerations which arose in AFG Insurances . In particular, as I said earlier, BBL has no employees, no leases and no secured creditors. In substance the only substantial creditor of BBL is the 8000 noteholders for whom the trustee has been appointed. Accordingly, the question which often arises in these applications is not present here. That is to say, there appear to be no persons affected by the statutory moratorium who might wish to complain about the extension of time which is sought. I also, of course, take into account the fact that no objection was voiced at the first meeting of creditors, albeit that only approximately 100 noteholders were present and that not all of the 8000 noteholders attended that meeting. I also take into account that the trustee has not objected. There are, it appears, some other very minor creditors of BBL, but on the evidence before me these creditors appear to amount in value to approximately $200,000. The orders which are proposed take into account the form of the order made by Lindgren J in Re Daisytek Australia Pty Ltd [2003] FCA 575 ; (2003) 45 ACSR 446. His Honour there observed that it is desirable that there be an order permitting the meeting to be held before the end of the extended convening period, so that in this case, the administrators will have the ability to convene the meeting earlier than 17 August 2009 if they see the need to do so. Moreover, liberty to apply is granted to any person who can demonstrate sufficient interest to modify or discharge the orders that I will make today, upon appropriate notice being given to the administrators. For those reasons I propose to grant the extension which is sought. However, I would add this. Bearing in mind the careful consideration which has been given to the period of the extension, without of course wishing to fetter the discretion of a judge who may be called upon to do so, I would have some doubts as to whether it may be appropriate for any further extension to be granted. It seems to me that careful consideration has thus far been given to the required period of the extension, but there is always the need to balance the considerations which have been referred to in the authorities of the need to strike the appropriate balance between the speed of the administration and the ability of creditors and shareholders to maximise their return. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application to extend convening period of the second meeting of creditors four month extension sought application involved different considerations than those which arise in the ordinary course particularly complex administration due to size of company and relationship with other companies in corporate group substantial inquiries required on the part of the administrators, including legal advice ordinary parties affected by statutory moratorium, such as employees, lessors or secured creditors, not involved in the administration creditors informed of intention of administrators to seek to extend convening period and no objections voiced application included an order permitting the meeting to be held before the end of the extended convening period application granted corporations |
By a notice of motion filed on 27 January 2006, the respondent to the application ('Lion Nathan') sought the stay of the application pursuant to the exercise of the inherent jurisdiction of the Court, or O 20 r 2(1)(c) of the Federal Court Rules ('the Rules') or alternatively under s 20(3) of the Service and Execution of Process Act 1992 (Cth) ('SEP Act'). At the hearing of the motion I gave leave to Lion Nathan to amend the notice of motion to include a claim for the transfer of the proceedings to the Supreme Court of New South Wales under s 5(4) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) ('the Cross-Vesting Act'). 2 I also gave leave to both of the parties to file additional written submissions to deal with the matters raised by the amendment. Both parties availed themselves of the opportunity to file additional submissions. I note that thereafter Plantagenet filed further submissions and that Lion Nathan objected to the filing of those submissions. I have not considered those submissions. 3 Lion Nathan relies upon the affidavits of Ms Julie Kathryn Ward sworn 27 January 2006 and 15 February 2006. Ms Ward is a partner of Mallesons Stephen Jaques, Lion Nathan's solicitors, who is resident in Sydney. Plantagenet relies upon the affidavit of Mr Ian Murray Mayo sworn 13 February 2006 and affidavits of Ms Leanne Allison sworn 14 February 2006 and 17 February 2006. Mr Mayo is the Managing Director of Plantagenet and Ms Allison is a solicitor with the Perth firm of solicitors, Williams and Hughes, Plantagenet's solicitors. 4 For the reasons set out below, I am of the view that the notice of motion should be dismissed. The winery employs 20 persons. 6 Lion Nathan is one of a number of companies in a group which are related to a publicly listed corporation. These companies carry on business in Australia and overseas in the wine and liquor industry. Lion Nathan's principal place of business is in Sydney, New South Wales. 7 On 8 March 2005, Lion Nathan and Plantagenet entered into a distribution agreement, pursuant to which Lion Nathan was appointed exclusively to distribute Plantagenet wines in all States and Territories of Australia other than Western Australia. Plantagenet said that it was doing so because it had been induced to enter into the distribution agreement by the misleading and deceptive conduct of Lion Nathan. The letter also said Plantagenet accepted the repudiation of that agreement by Lion Nathan. The grounds relied upon by Plantagenet for the allegation that Lion Nathan had repudiated the distribution agreement were that Lion Nathan had without the consent of Plantagenet performed the obligations under the distribution agreement by a joint venture, called 'Fine Wine Partners', with a company, Tucker Seabrook (Aust) Pty Ltd ('Tucker Seabrook'), that Lion Nathan had failed to achieve its performance level obligations under the distribution agreement, and it had breached the confidentiality provisions of the distribution agreement. 10 On 16 December 2005, Mr Peter Cowan on behalf of Lion Nathan responded to the letter saying that he had provided copies of Plantagenet's letter to his legal counsel and that Lion Nathan reserved all of its rights under the distribution agreement including 'our rights to seek substantial damages for wrongful termination'. For that reason we have been instructed to institute proceedings in the Federal Court of Australia. Would you please confirm. 13 As already mentioned, on 16 December 2005, Plantagenet filed an application in the Western Australia District Registry of the Federal Court ('the Federal Court proceedings'). Pursuant to that application Plantagenet claimed damages under s 82 of the Trade Practices Act 1974 (Cth) ('the TP Act'), an order pursuant to s 87 of the TP Act and also damages for breach of contract. The application was given the number WAD 389 of 2005 by the Western Australia District Registry of this Court. 14 On 20 December 2005, Plantagenet appointed Casama Group Pty Ltd ('Casama') as exclusive distributor of its wines. 15 On 20 December 2005, Lion Nathan's solicitors wrote a letter to Plantagenet's solicitors. By that letter, Lion Nathan's solicitors sought an undertaking from Plantagenet that it would continue to perform its obligations under the distribution agreement, failing which Lion Nathan would seek urgent interlocutory relief. The Federal Court proceedings referred to in the heading to the letter had not been served on Lion Nathan at the time that Lion Nathan's solicitors received that letter. 17 On 22 December 2005, Lion Nathan commenced proceedings in the Supreme Court of New South Wales seeking urgent interlocutory relief against Plantagenet. Lion Nathan sought orders restraining Plantagenet from acting upon any purported termination of the distribution agreement; and from performing its new contract with Casama. 18 The papers comprising the application for the urgent injunction were faxed by the solicitors for Lion Nathan to the solicitors for Plantagenet after midnight (WST) on 22 December 2005 and Plantagenet's solicitors first became aware of the institution of the New South Wales proceedings at 6.45 am (WST) when the solicitor with the conduct of the file arrived for work in Perth on 22 December 2005. The solicitor then faxed a copy of the pleadings in the Federal Court proceedings to Lion Nathan's solicitors. Prior to the receipt of this facsimile the injunction application had already been mentioned before the vacation duty judge in the New South Wales Supreme Court. The application was then stood over to that afternoon, and then to the following day. Plantagenet was represented by counsel at these two appearances. 19 At the Supreme Court appearance, on 23 December 2005, there was no contested hearing of the injunction application. Plantagenet gave undertakings to supply 573 cases of wine, the subject of existing purchase orders and 576 cases of wine, the subject of a purchase order made that day. 20 There was a further appearance in the New South Wales Supreme Court before McDougall J on 4 January 2006 where McDougall J made orders in the form of a minute of consent. The minute of consent orders runs to four pages and contains 14 paragraphs and a definitional section. It is plain that the consent orders represent the outcome of negotiations between the parties. Pursuant to the consent orders Plantagenet agreed to supply further wines to Lion Nathan. 21 On 24 January 2006, the solicitors for Lion Nathan wrote to Plantagenet's solicitors stating that they had been instructed to seek a stay of the Federal Court proceedings and proposing a draft minute of orders for the progress of the Supreme Court proceedings which Lion Nathan intended to ask the Supreme Court to make at the directions hearing which was listed for 10 February 2006. 22 The draft minute of orders proposed a timetable for the pleadings, discovery and evidence. The first draft order in the proposed timetable was for Lion Nathan to file and serve a statement of claim on or before Friday, 24 February 2006. 23 On 27 January 2006, Lion Nathan filed a notice of appearance in the Federal Court proceedings and also, as previously mentioned, filed its notice of motion seeking a stay of these proceedings. This Court listed the motion for 10 February 2006. 24 On 31 January 2006, Plantagenet's solicitors made a proposal to Lion Nathan's solicitors that the directions hearing listed for 10 February 2006 in the New South Wales Supreme Court be stood over by consent for seven days pending the determination of the stay application in the Federal Court. On 8 February 2006, Lion Nathan's solicitors responded to Plantagenet's solicitors advising that their client did not consent to the adjournment of the directions hearing listed on 10 February 2006 in the New South Wales Supreme Court proceedings pending the determination of the stay application in the Federal Court proceedings. The solicitors also said that they had been instructed to press for the procedural directions in the New South Wales Supreme Court proceedings in accordance with the timetable in the draft minute of orders provided on 24 January 2006. 25 On 9 February 2006, Lion Nathan's solicitors sent a facsimile to Plantagenet's solicitors enclosing a copy of the statement of claim which they said Lion Nathan would be filing in the Supreme Court proceedings. Lion Nathan's solicitors also advised that they would be amending the proposed minute of orders accelerating the date for the filing of the statement of claim to 10 February 2006 with consequential acceleration to the other dates in the proposed minute of orders. 26 At the hearing before Bergin J on 10 February 2006 Lion Nathan pressed the Court to make the directions in accordance with the proposed minute of orders but Bergin J refused to make the directions, save for the delivery of a statement of claim on 17 February 2006, pending the outcome of this motion in the Federal Court. The conduct relied upon comprises the making of misleading representations by Lion Nathan prior to the completion of the distribution agreement. Plantagenet alleges that Lion Nathan represented that it would perform its obligations under the distribution agreement by its then sales staff and sales organisation; that it had no plans on foot to make major changes in its sales staff and sales organisation, to change its trading name or to enter into a joint venture with another wine distributor to sell Plantagenet wines together with or in partnership with that other distributor. 28 Plantagenet also alleges that Lion Nathan represented that it would use reasonable endeavours to meet sales volume targets for each of the years. In addition to relying upon positive representations, Plantagenet also pleads that it had a reasonable expectation that if Lion Nathan was not going to give effect to the facts and matters contained in those representations, it would advise Plantagenet. Plantagenet pleads that Lion Nathan subsequently made major changes to its sales staff and sales organisation, entered into a partnership arrangement with Tucker Seabrook to distribute Plantagenet wines under the trade name 'Fine Wine Partners' and that since October 2005, Fine Wine Partners has marketed and made sales of Plantagenet wines. 29 Plantagenet claims that it has suffered loss and damage because, as a consequence of relying upon the representations, Plantagenet entered into the distribution agreement, and did not make an agreement with a different party which it would otherwise have done. 30 Further, Plantagenet also pleads a claim at common law for breach of the distribution agreement by Lion Nathan. Plantagenet claims that Lion Nathan breached the terms of the distribution agreement by entering into the Fine Wine Partners partnership with Tucker Seabrook and by permitting Plantagenet wines to be marketed and sold by that partnership; and by disclosing information to Tucker Seabrook and its employees and agents. Further, it alleges that Lion Nathan did not use reasonable endeavours to sell and distribute the products. It is alleged that the breaches amounted to repudiation by Lion Nathan of the distribution agreement and by an email dated 15 December 2005 from Mr Richard Erskine, a director of Plantagenet, to Mr Peter Cowan, of Lion Nathan, Plantagenet accepted the repudiation of the distribution agreement. It is also pleaded that by reason of Lion Nathan's breach of the distribution agreement, Plantagenet has suffered loss and damage. 31 In the statement of claim in the New South Wales proceedings Lion Nathan pleads that on or about 15 December 2005 Plantagenet purported to terminate the distribution agreement and that Plantagenet was not entitled to terminate the distribution agreement on any of the grounds on which it purported to do so. Lion Nathan pleads further that in purporting to terminate the distribution agreement Plantagenet repudiated the distribution agreement; and that in further repudiation of the distribution agreement from about 15 December 2005 Plantagenet refused to supply Lion Nathan with wines in accordance with orders placed by Lion Nathan save for the supply of wines made in accordance with the New South Wales Supreme Court orders. 32 Lion Nathan also pleads that the appointment by Plantangent of Casama as exclusive distributor in the territory which was the subject of the distribution agreement, was a further repudiation of the agreement. It alleges that Lion Nathan has refused to accept the repudiation and Lion Nathan seeks a declaration that the distribution agreement is on foot, an injunction restraining Plantagenet from performing its obligations under the Casama agreement; and alternatively damages for breach of contract and for wrongful repudiation of the distribution agreement. 34 Counsel did not submit that the proceedings in this Court should be stayed on the basis that the proceedings were otherwise an abuse of process or because they were vexatious or frivolous. 35 Counsel for Plantagenet submitted that the case of Sterling Pharmaceuticals was distinguishable because that case was concerned with two sets of proceedings one of which was in Australia and the other in New Zealand, and therefore beyond the scope of the cross-vesting scheme. Counsel for Plantagenet submitted that, in cases where the parties were amenable to the jurisdiction of the legislation comprising the national cross-vesting scheme, the scheme had ousted the common law principles on whether a court would stay its own proceedings on the basis of forum non conveniens. Counsel relied upon observations made by Ormiston JA in Schmidt v Won [1998] 3 VR 435 ('Schmidt') . 36 Counsel submitted that Lion Nathan's application for a stay should therefore be addressed, not by reference to the common law jurisdiction in respect of stays on the grounds of forum non conveniens, but in accordance with the principles applicable under the cross-vesting scheme. 37 Although counsel for Lion Nathan responded to Plantagenet's submissions by applying to amend the notice of motion to include a claim to transfer the Federal Court proceedings to the Supreme Court of New South Wales under the Cross-Vesting Act, counsel said that she continued to press the claim for the stay. 38 In the case of Bankinvest AG v Seabrook (1988) 14 NSWLR 711 at 438 ('Bankinvest') Rogers AJA rejected a submission of counsel in that case that the common law principles of forum non conveniens continued to exist concurrently with the cross-vesting legislation, and observed that 'the former has clearly been subsumed by s 5(2)(b)(iii) [of the Cross-Vesting Act]. So the ordinary remedy of parties, who are served in Australia with process issued out of the Supreme Courts of States or Territories other than that in which they reside and who wish to complain that the Supreme Court of that other State or Territory is not the appropriate forum in which the litigation should be heard, is to seek transfer pursuant to the provisions of s 5(2) of one of the State Cross-Vesting Acts. In the light of the complex and sophisticated scheme now in operation in this country, a stay of the kind contemplated by Voth must be seen as an inappropriately heavy-handed means of ensuring that issues are determined in the proper forum, ie in the court within Australia most appropriate to hear the action and most convenient to the parties for that purpose. Transfer under the Cross-Vesting legislation should be seen as now providing the necessary and appropriate weapon to achieve the same end by transferring litigation to a more appropriate jurisdiction within Australia. In such cases it is difficult to conceive of a situation where an Australian forum will be clearly inappropriate, and the choice of that forum will be governed by the principles governing the exercise of the statutory discretion conferred by the Cross-Vesting legislation. The same rationale for the cross-vesting scheme of avoiding the wasteful consequences of concurrent proceedings, applies whether the concurrent proceedings exist in the Supreme Courts of two different States or in the Supreme Court of a State and in the Federal Court. 43 Thus, although the Court retains a jurisdiction to stay its own proceedings on forum non conveniens grounds, the question of whether to exercise that jurisdiction will be informed by whether it is open to a party seeking the stay to seek relief under the cross-vesting scheme. 44 In this case the parties were amenable to the cross-vesting scheme, and so it was open to Lion Nathan to have brought an application to transfer the Federal Court proceedings under the Cross-Vesting Act rather than to apply for a stay. The transfer application has now been made by the amendment to the notice of motion. As I have already mentioned, Lion Nathan does not seek a stay of the proceedings on the basis of an abuse of process by Plantagenet, and so this application does not fall into the exceptional circumstances category referred to by Ormiston JA in Schmidt in the observations set out above. In my view, therefore, it is appropriate that I decline to exercise the Court's jurisdiction to stay the proceedings. It is appropriate that the question of the destiny of the Federal Court proceedings be considered by reference to Lion Nathan's transfer application now before the Court. 45 In the event that I am wrong in the views that I have expressed, I would decline to stay the Federal Court proceedings. This is because the appropriate test to apply in the circumstances is the test in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55 ; (1990) 171 CLR 538 and not in Sterling Pharmaceuticals (see BHP Billiton Ltd v Schultz [2004] HCA 61 ; (2004) 211 ALR 523 ('BHP Billiton') , the observations of Ormiston JA in Schmidt referred to above and Transport Workers' Union of Australia v Bentley [2001] FCA 671 ; (2001) 112 FCR 580). On the application of that test, it could not be said that the Western Australia District Registry of the Federal Court is a clearly inappropriate forum for Plantagenet to commence the Federal Court proceedings. Plantagenet's principal place of business is in Western Australia, the alleged breaches of the TP Act occurred in Western Australia and the alleged losses were suffered in Western Australia. 48 In my view, counsel for Plantagenet's argument is to be accepted. It follows that the reference to 'court' in s 20 of the SEP Act is not a reference to the Federal Court, whose proceedings are not, in any event, served pursuant to the SEP Act. Further, in Schmidt , Ormiston JA at 454 observed that s 20(1) of the SEP Act is to be construed as referring to an inferior court of a State. 50 I, accordingly, decline to stay the Federal Court proceedings under s 20 of the SEP Act as there is no jurisdiction to do so. Rather, the court is required by statute to ensure that cases are heard in the forum dictated by the interests of justice. An application for transfer under s 5 of the Cross-Vesting Act is brought upon the hypothesis that the jurisdiction of the court to which the application is made has been regularly invoked. If it appears to that court that it is in the interests of justice that the proceedings be determined by another designated court, then the first court "shall transfer" the proceedings to that other court. There is a statutory requirement to exercise the power of transfer whenever it appears that it is in the interests of justice that it should be exercised. It is not necessary that it should appear that the first court is a "clearly inappropriate" forum. It is both necessary and sufficient that, in the interests of justice, the second court is more appropriate. In relation to transfer, the common policy reflected in each of the individual enactments is that there must be a judicial determination by the court in which proceedings are commenced either to transfer or not to transfer the proceedings to one of the other nine based, broadly speaking, upon consideration of the interests of justice...It calls for what I might describe as a "nuts and bolts" management decision as to which court, in the pursuit of the interests of justice, is the more appropriate to hear and determine the substantive dispute. 56 Counsel for Lion Nathan submits that considerable weight must be given to the fact that the distribution agreement contains a clause whereby the parties have submitted to the non exclusive jurisdiction of the courts of New South Wales. Counsel relies upon observations by Simmonds J in Anderson Formrite Pty Ltd v Baulderstone Hornibrook Pty Ltd ( 2004) 206 ALR 614 at 618 where his Honour observed that weight should be given to a clause where parties have agreed to submit to the jurisdiction of a particular court even if the submission was to the non exclusive jurisdiction of that court, but that greater weight should be given if the parties have submitted to the exclusive jurisdiction of the court. 57 Counsel for Plantagenet submitted that on the proper construction of the clause Plantagenet has not submitted its TP Act claims to the non exclusive jurisdiction of the courts of New South Wales. The submission to the non exclusive jurisdiction of the New South Wales Court was limited to claims relating to the construction and performance of the distribution agreement, and did not extend to claims of misrepresentation leading to the entry into the agreement. 58 Secondly, counsel argued that the words 'courts of [New South Wales]' in the clause were apt to include the Federal Court which is a court which, inter alia, sits in New South Wales. 59 A non exclusive jurisdiction clause does not preclude a party bound by that clause from commencing proceedings in a jurisdiction other than the jurisdiction specified in the clause. The effect of the clause is that the contracting parties agree to submit to the non exclusive jurisdiction of the court specified in the clause, the claims that are within the scope of the clause. I accept the argument of counsel for Plantagenet that there is a relationship between the scope of the choice of law clause and the scope of the submission to the non exclusive jurisdiction in cl 24.7 of the distribution agreement. I also accept Plantagenet's argument that the words 'The Agreement and the transactions contemplated by this [agreement]' in that clause, refer to claims relating to the construction and performance of the distribution agreement and do not refer to claims of misrepresentation inducing the entry into the distribution agreement (see Green v Australian Industrial Investment Ltd (1989) 25 FCR 532 at 543 ('Green') ). However, a significant part of Plantagenet's claim in the Federal Court proceedings relates to allegations of breach of contract by Lion Nathan and, therefore, the fact that Plantagenet is party to a non exclusive jurisdiction clause in favour of the courts of New South Wales must be taken into account. In my view, the effect of the clause is that the parties have agreed that New South Wales is an appropriate forum to consider claims falling within the ambit of the choice of law clause, and have, thereby, agreed to accept the jurisdiction of that Court for the determination of those claims, but that does not mean that they have agreed that there is no other court, particularly within Australia, which may also be an appropriate forum. I am of the view, therefore, that, given the limited scope of the claims that the parties have agreed to submit to the non exclusive jurisdiction of the New South Wales courts, some, but not much, weight is to be accorded to the non exclusive jurisdiction clause, as a factor in favour of the Federal Court proceedings being transferred to the New South Wales Supreme Court. 60 I do not regard it as helpful to address, in this context, the question of whether the Federal Court sitting in Sydney is within the ambit of the expression 'courts of [New South Wales]'. This is because the inquiry at hand requires an assessment of whether, by reference to its connecting factors to the Western Australia District Registry of this Court, as opposed to any other district registry, the Federal Court proceedings should be transferred to the New South Wales Supreme Court. 61 I place no weight, additional to that already referred to, on the fact that the distribution agreement provides that the governing law of the distribution agreement is the law of New South Wales. This is because the Federal Court is a national court which applies the common and statutory law of each of the States when it is appropriate to do so. Further, Lion Nathan has not pointed to any distinguishing features in the law of New South Wales which it is anticipated, will assume any importance in the resolution of the controversy (see Green at 544). 62 I place no weight on the claim that the New South Wales proceedings are likely to be determined within a shorter period than the Federal Court proceedings. The evidence of Ms Ward is that the New South Wales proceedings could be heard within approximately six to seven months. The evidence of Ms Allison is that in her recent experience, it is possible for an application to get to trial in the Western Australia District Registry of this Court within a year of the date of issue, even in cases where there have been defaults in the timetable. In her view, if the parties were to comply with the timetable it would be possible to get a matter to trial in this Registry in a substantially lesser period of time. Ms Allison also deposes that she has been informed by Mr O'Connor, a partner of the Sydney law firm, Addisons, that in his experience a trial may be had in the Federal Court in Sydney within four to six weeks of the issue of the application if the disposition of the matter is regarded as urgent. In my view, evidence at this level of generality is of very limited value. What is more significant is that each court has the facilities available to the parties whereby each court is able to make directions, at the instance of the parties, for bringing the matter to trial within a short period of time. 63 I also place no weight on the claim that the proceedings are further advanced in the New South Wales Supreme Court. In this Court, Plantagenet has filed an application and a statement of claim. In the New South Wales proceedings, Lion Nathan has filed a statement of claim and a commercial list statement. In neither of the proceedings has a defence been filed. Further, in neither of the proceedings have directions been made for the progress of the proceedings to trial. Further, I place no weight on the submission that solicitors and counsel retained in New South Wales will have acquired such a familiarity with the case that it would be inefficient to waste that expertise. There has not been any contested application heard in the New South Wales proceedings. 64 As to the question of the number and location of witnesses, Ms Ward has deposed that she anticipates that there would be about 10 witnesses called in support of Lion Nathan's case and that they are largely resident in New South Wales. Among the witnesses referred to are employees from Tucker Seabrook and Fine Wine Partners Australia Pty Ltd as trustee of the Fine Wine Partners Unit Trust ('Fine Wine Partners'). Ms Allison has not specified a number of witnesses whom she anticipates would be called to give evidence for Plantagenet, but she says she has identified several possible witnesses, who, save for one, are resident in Western Australia. 65 Counsel for Lion Nathan submits that the number of potential witnesses resident in New South Wales is a strong factor in favour of the Federal Court proceedings being transferred to the New South Wales Supreme Court. Counsel for Plantagenet submits that it is too early to anticipate how many witnesses will be required to give evidence at trial and that should it transpire that most of the witnesses required to give evidence at trial are resident in New South Wales, it will be open to this Court to make orders to accommodate that eventuality by taking evidence by video link, or even, by directing that the trial be conducted in New South Wales. 66 I accept that it is too early to make any reliable estimate as to the number of witnesses that will be required to give evidence at trial. The pleadings are not yet closed and Ms Ward has made no attempt to identify the issues likely to be in dispute and the matters in respect of which each of the 10 anticipated witnesses will be required to give evidence. I, accordingly, regard the evidence of Ms Ward as to the number of witnesses likely to be called to give evidence for Lion Nathan at trial as being of limited value. 67 Further, I accept that the inconvenience of witnesses having to travel can be often be mitigated by taking evidence by video link; and that the Court does have the power to order that the trial be conducted in New South Wales. However, notwithstanding, these comments, in my view, some weight must be accorded to the prospect that there will be witnesses called by Lion Nathan who are resident outside of Western Australia, who will be required to travel to Perth (if that is the trial venue) to give evidence at the trial of the Federal Court proceedings. However, balanced against that factor must also be weighed the prospect of witnesses from Plantagenet having to travel to New South Wales to give evidence at the trial, if the Federal Court proceedings are transferred to New South Wales. In my view, because it is so early in the life of proceedings, any projection about the relative number of witnesses entails a considerable amount of speculation. I consider, therefore, that this factor must be regarded as neutral because the prospect of some of Lion Nathan's witnesses having to give evidence in Perth if the Federal Court proceedings are not transferred to New South Wales, must be weighed against the prospect of some of the Plantagenet witnesses having to give evidence in New South Wales if the Federal Court proceedings are transferred to the New South Wales Supreme Court. I do not accept the submission by counsel for Lion Nathan that it would be equally inconvenient for the Western Australia based witnesses called for Plantagenet to have to give evidence in Perth, as it would be if they had to give evidence in Sydney. 68 I now deal with the factors relied upon by Plantagenet. 69 Firstly, Plantagenet claims that the Federal Court is the appropriate forum because the Federal Court proceedings were brought in the original jurisdiction of the Court. Plantagenet also claims that there are substantial connections between Federal Court proceedings and Western Australia. These are that the principal place of business of Plantagenet is in Western Australia, the misrepresentations founding the TP Act claims were made in Western Australia and the damage has been suffered in Western Australia. 70 Counsel for Lion Nathan does not dispute that the Federal Court proceedings were brought in the original jurisdiction of the Federal Court. Nor does counsel for Lion Nathan dispute that the Federal Court proceedings have some substantial connections with Western Australia. However, counsel for Lion Nathan submits that those proceedings also have substantial connections with jurisdictions outside of Western Australia, namely, that the principal place of business of each of Lion Nathan, Tucker Seabrook and Fine Wine Partners, is in New South Wales, that the breaches of the distribution agreement are alleged to have occurred in States and Territories outside of Western Australia, and, also, that the entry of Lion Nathan into the joint venture is alleged to have occurred outside of Western Australia. It is also said that the principal place of business of Casama is outside of Western Australia. 71 In my view, there is substance in each party's submission and this factor is a neutral factor. 72 Counsel for Plantagenet submitted that there was a significant disparity in the financial resources available to each of the parties for the conduct of these legal proceedings and this has the potential to lead to unfairness. He submitted that the relative imbalance in financial resources meant that it would be more onerous for Plantagenet to engage in long distance litigation in New South Wales, than it would be for Lion Nathan to engage in long distance litigation in the Federal Court in Western Australia. Counsel for Plantagenet also submitted that, based upon the manner in which Lion Nathan had conducted the litigation to date, it was likely that the litigation would be hard fought, time consuming and expensive; and this had the potential to exacerbate the disparity in financial resources between the parties. (b) Lion Nathan had refused to consent to an adjournment of the first directions hearing in the New South Wales proceedings which was listed on 10 February 2006 pending on the outcome of this motion and had sought to have directions made which provided for a timetable until the trial. Lion Nathan had accelerated its own proposed directions so as to serve a statement of claim before this motion was heard. Counsel also disputed that it was unnecessary for Lion Nathan to have applied for the interlocutory injunction in the New South Wales Supreme Court. 74 Plantagenet is a private company which employs 20 people. Its net profit for 2005 was $269 000. Mr Mayo also deposed that Plantagenet is a small business, and that it is important that its management team including himself be available in Western Australia to attend to that business. He also said that Plantagenet does not have the staff resources to accommodate periods of absence interstate for the purposes of litigation. 75 Lion Nathan is part of a publicly listed group of companies which operates a major multinational business. The parent company of Lion Nathan issued a press release on 9 November 2005 stating that its net profit after tax was $230.4 million for the 2005 year. Cultivaust is a small company with an annual income of less than $200 000. Grain Pool is a substantial statutory corporation with revenues in excess of $600 million. The objective of access to justice is just as applicable in the area of commercial litigation between corporations as it is when individuals are involved. The extra expense involved in a transfer would be a substantial burden on Cultivaust and would exacerbate the existing imbalance of financial resources between these two litigants. 78 I accept the submissions by counsel for Plantagenet that there is a large disparity in financial resources between Plantagenet and Lion Nathan, and that the effect of having to conduct interstate litigation would be substantially more onerous on the financial resources of Plantagenet than it would be on the financial resources of Lion Nathan. 79 It has been necessary for Plantagenet to engage an additional firm of solicitors to act as its solicitors in New South Wales on instructions from Plantagenet's firm of solicitors in Perth, and that Plantagenet has also been required to engage counsel in New South Wales as well. By contrast, Lion Nathan has used its Sydney based firm of solicitors and counsel both in the New South Wales proceedings and the Federal Court proceedings. Lion Nathan can continue to do so in the event that the Federal Court proceedings are not transferred to the New South Wales Supreme Court. No doubt if the Federal Court proceedings were to be tried in Perth, Lion Nathan may well have to incur the additional costs of transporting and accommodating its legal representatives in Perth for the trial, but those costs would be relatively minor, in comparison to the costs that Plantagenet would have to incur in having to retain for the duration of the proceedings a second firm of solicitors and a counsel in Sydney. 80 The parties produced a considerable amount of evidence in relation to the issue of whether it was necessary for Lion Nathan to have sought the interlocutory injunction in the New South Wales proceedings. By reason of the contentious nature of this evidence, the Court is simply not in a position to make any findings on this issue. Accordingly, I make no finding that it was unnecessary for Lion Nathan to invoke the jurisdiction of the New South Wales Supreme Court in order to obtain the interlocutory injunction when it did, and I do not accept Plantagenet's submission to that effect. 81 However, I accept that in giving its solicitors instructions, whilst this motion was pending, to produce and serve an accelerated statement of claim, and to apply to the New South Wales Supreme Court for an accelerated programme of directions which had potential to require Plantagenet to undertake work which might ultimately prove unnecessary, Lion Nathan did indicate that it is prepared to conduct the litigation with a degree of indifference as to whether costs are wasted by the undertaking of potentially unnecessary work. 82 In my view, the disparity in the financial resources of Plantagenet and Lion Nathan and the potential for the conduct of hard fought interstate commercial proceedings to 'exacerbate the existing imbalance of financial resources between these two litigants', is a factor to which I accord considerable weight. This factor weighs in favour of not transferring the Federal Court proceedings to the New South Wales Supreme Court. 83 In balancing all of the factors referred to above, I am of the view that in the interests of justice the more appropriate forum for the conduct of the Federal Court proceedings is the Western Australia District Registry of the Federal Court. I, therefore, decline to order that the Federal Court proceedings be transferred to the New South Wales Supreme Court. 84 It follows that I dismiss Lion Nathan's motion with costs. I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | stay of federal court proceedings forum non conveniens concurrent proceedings in federal court and new south wales supreme court effect of national cross vesting scheme on principles to be applied cross-vesting application to transfer federal court proceedings to new south wales supreme court non exclusive jurisdiction clause disparity between financial resources of the parties transfer refused conflict of laws practice and procedure |
Each cause of action is said to be based upon the conduct of the second respondent, Mr Ben Petro, who was formerly an employee of the first applicant, Dais Studio Pty Ltd ("Dais"), in which capacity he had access to certain computer files. It is alleged that, after Mr Petro left that employment, he downloaded those files from an Internet web site of Dais or one of its clients and used them for his own commercial purposes. The applicants seek declarations, injunctions, orders for delivery up and damages. 2 Dais carries on business in the supply of what was described as "a range of services in relation to design strategy, brand strategy, marketing and Internet strategy and solutions". One of Dais's lines of business is the design and creation of Internet web sites for commercial clients. Mr Petro worked for Dais as a web developer between February 2002 and December 2003. The second applicant, Mr Jacek Perlinski, is the sole shareholder and director of Dais. However, it is not in that capacity that he is a party to the proceeding; rather, he is a party as trustee of the Perlinski Family Trust, which is the assignee from Dais of certain intellectual property which includes the rights to copyright upon which the applicants sue. By reason of the way I have determined the substantive issues involved in the applicants' copyright claims, I do not need to refer to that circumstance further. The first respondent, Bullet Creative Pty Ltd ("Bullet Creative") is a design company which engaged Mr Petro in about August 2005 to build a web site for one of its clients, a business called "Red PR". The applicants allege that, in the course of building that site, Mr Petro engaged in unlawful or actionable conduct of the kind referred to above. After the institution of this proceeding, the applicants settled their differences with Bullet Creative and, on 28 May 2007, Dowsett J granted a permanent injunction against Bullet Creative but otherwise ordered that the action against it be dismissed. The computer data for the images, words, numbers etc that, to the viewer, constitute the site are contained in files located on the server for the site. So are the functional files which cause the site to operate as intended. The construction of a commercial site of any complexity is necessarily a specialised task, and one which would normally (at least according to the assumptions by reference to which this proceeding has been conducted by the parties) be carried out by professional web developers (such as Mr Petro) and the organisations which employ them (such as Dais). Having made a substantial investment in the construction of a new web site, what would the business concerned do if the occasion arose for some details of the site to be changed, as must often be the case? Absent a product of the kind with which this proceeding has been concerned, the business would again have to engage a web development professional to make the necessary alterations to the files constituting the site. 4 The product in question is what is known as a "content management system" ("CMS"). It is a system of files (resident on the server) which enables the owner of the web site to undertake online editing of the content, and therefore of the appearance, of the site. The owner may not know that he or she is using a CMS as such, of course, but will know that, as part of the package of services provided by the web developer who built the site, there is the capacity to make all manner of changes to the content thereof. It seems that the inclusion of a CMS is a common practice in the construction of commercial web sites. There are many CMSs publicly, freely and legally available on the Internet. As I understand the evidence, if a web developer such as Mr Petro desired to incorporate a CMS into a web site being built, he or she could readily obtain it from one of these sources. The developer might then apply some discretionary modifications to suit the particular purposes at hand, but, as I understand it, even a very generic CMS would be expected to have the attributes which would enable incorporation into many web sites. 5 Dais, however, has developed its own CMS, which it incorporates into web sites built for its commercial clients. The CMS is called "WebStable". According to Mr Perlinski, WebStable is the result of continuous development since 1999. It was in that year that he commenced the development of WebStable, then known as WEBS. Since that time, about 10-15 staff members at Dais --- in roles including senior developer, interface designer and other development roles --- have worked, both full-time and part-time, on WebStable. Mr Craig Suthers, to whose contribution I shall refer further presently, was employed by Dais as senior software developer from September 2002 to November 2004. He replaced Mr Shannon Glover, and before him Mr Patrick Cooney held that position. In recent times (ie, as I understand it, since the departure of Mr Suthers), Mr Mattias Lindgren (who has been employed by Dais since 2001) held, and continues to hold, the position. The senior software developer was the leader of a team of developers which included Mr Petro (from February 2002 until December 2003) and others from time to time, such as the only other developer whose name was specifically mentioned in the evidence, Mr Grant Trevor. In addition to the remuneration of staff, Mr Perlinski estimates that, conservatively, the total research and development costs of WebStable to Dais has been of the order of $1,000,000, including the cost of a major modification when the technology was moved from ASP to ASP.NET (terms which I shall explain below). 6 This proceeding is concerned with the source code for the files constituting WebStable, and in particular for two JavaScript files which have been referred to by the parties as a "table file" and an "editor file". The table file incorporated into WebStable is named "CDAITable.js", and the editor file so incorporated is named "CDAIEditor.js". The initial "C" in each case is said to be a reference to the fact that the source code in the file is, in the lexicon of information technology, a "class". The letters "DAI" are an identifier for Dais. The words "Table" and "Editor" generically indicate the kind of function carried out by the file. The extension "js" in each case indicates that the file is a "JavaScript" file, an important circumstance to which I shall refer below. 7 As its name implies, the table file is used in situations in which entries appear on a web site in the form of a list or table. It enables the user to change the appearance of entries in the table, specifically by re-ordering them. This can be done in two ways. The first way is by the user selecting (and thereby highlighting) the entry of interest in the table, and then clicking on an adjacent button or the like to move the selected entry up or down in the table. The second way is available for tables with two or more columns: by clicking at an appropriate point, the user may cause the entries to be re-ordered according to the criterion of a particular column (eg if there were a list of hotels offering a particular standard of accommodation and the prices charged by each, the list could be ordered according to the name of the hotel or the price charged). 8 Other than very generally, the function of the editor file is not so readily inferred from its title. The file is concerned with text, and is involved in changing the appearance of selected text, eg by rendering the text into italics, into bold letters or the like. It enables the user to select (ie to highlight) a section of the text on the web page in question and then to click a button or the like which causes the selected text to appear in the form desired. 9 To describe how the table file and the editor file worked in the context of Dais's CMS, and the limitations of those files, it is necessary to say something about the technology of web sites. At around the first time that Mr Petro worked for Dais, the computer language used to build web sites was called "Active Server Pages", abbreviated to "ASP". At about the time that he left that employ, Dais was commencing to use an improved technology for this purpose, called "ASP.NET". Both involve technologies by which HTML code is dynamically generated on the server in a web site system and passed to the browser software on the user's computer, where it will cause the necessary content (text, images etc) to be displayed on the screen. In cases where it is intended that the user should be able to perform a function with respect to a web site page which he or she is viewing (such as selecting an item from a drop-down list or editing text), a file written in "JavaScript" (or "js") language is automatically downloaded to his or her computer when the site or page is opened. Each of the files presently in contention --- the table file and the editor file --- was written in JavaScript, reflecting its role in facilitating the performance of a function by the user. 10 As JavaScript files, the table file and the editor file did not contribute to the initial appearance of the web site on the user's screen, or to the provision of data which gave content to the site or page being viewed. Where a list or table was in use, the structure and appearance thereof was the work of the HTML code dynamically generated on the server (by ASP or ASP.NET), as was the collection, transmission and presentation of data from the underlying database. In the case of text, the text itself and the text box in which it was presented were again the concern of the HTML code generated on the server, not of the editor file. It was only in relation to certain modifications being effected by the user upon the presentation of the table or text that the relevant JavaScript file would be brought into play. Even then, neither of these files would itself make the modifications: rather, they would send commands to the browser software which would then, for example, provide the colour for highlighting or the different font for italicising. Dais called Mr Scott Carpenter, a consultant software engineer, as an expert witness. He graduated in December 1998 from the University of Queensland as a Bachelor of Information Technology. Accordingly, they could be used in any situation on a web site in which a list or table, or text, respectively, needed to be modified in the ways indicated above. This explains why, although each file appears once only in the overall system of files constituting WebStable, each may be called up in a multiplicity of otherwise quite diverse situations across a web site as a whole. In the case of the table file, there are 12 different source code files (ie files involving data required to be presented in the form of a list or table) which use a file called CDAIAspPage.asp to create a table. That file in turn uses another file, called CDAITable.asp to allow the table to be generated and displayed on a web browser. That file references the table file --- CDAITable.js --- when the user initiates the operation to make changes to the list or table. It is likewise with the editor file. In WebStable, there are 15 different source code files which use the file called CDAIAspPage.asp to create an editor, which in turn uses the file CDAIEditor.asp to make the editor available to all source code files, and that file references the editor file --- CDAIEditor.js --- when the user initiates the operation to make changes to text. It will be apparent that the table file and the editor file have roles which are specific to WebStable and are tightly integrated into the system of files as a whole. It was in this sense that Mr Carpenter said that the two files were an "integral part" of WebStable. 12 Depending on the size and structure of the web site, the uses to which the table file could be put might be extensive. One of Dais's clients is a business called "AA Co". A hard copy of every page in its web site was put into evidence, and it appears that tables for the modification of which the table file might be used appear on 118 pages of the site. On the other hand, it is conceivable that the table file might, in the context of a particular site, have no potential use at all --- the site might contain no tabulated information, or might contain only tables that need never be modified. Likewise in the case of the editor file. Of the pages of the "AA Co" web site in evidence, there were 56 which contained text which could, if the site owner so chose, be modified in appearance by use of the editor file. As with the table file, there may be situations in which the editor file is either absent or unused, for instance when the owner could not foresee any need to change the appearance of text on the pages of the site. 13 I should also say something here about the size of WebStable, and of the table file and editor file within it. Mr Petro called Mr Andrae Muys, a consultant software engineer, as an expert witness. He graduated in 2000 from the University of Queensland as a Bachelor of Engineering (Computer Systems Engineering) with honours. However, he completed the coursework component of that degree in 1996. Mr Muys had access to a version of WebStable (not the version upon which Dais relies for its copyright claim, but sufficiently equivalent for present purposes) in which he counted a total of 225,674 lines of source code. Of those, 497 lines, or about 0.22%, constituted the table file and the editor file together. They were within what Mr Muys referred to as the "display components", as distinct from the "behaviour components", of the code. If the display components only were looked at, some 2.5% of the lines of code were constituted by these two files. Mr Petro also called Mr Murray Wood, a system developer, as an expert witness. He graduated in 1987 from Griffith University as a Bachelor of Informatics. He too had access to a version of WebStable other than that on which Dais relies in copyright, but again it was one that is sufficiently similar for present purposes. Although he did not have access to the database source code, he was able to perform a calculation from which he concluded that the "significance of the two JavaScript files in relation to the whole system is 1548/171000 = 0.00905". Mr Petro conducted his case upon the basis of an assertion that the quantitative contribution of the table file and the editor file, together, in a typical WebStable CMS was slightly less than 1%, and Dais was not heard to take issue with that. 14 I turn next to the process of the development of the table file and the editor file, and of the involvement of Mr Petro therein. Not long after he joined Dais in September 2002, Mr Suthers needed a "client site table class" for a project on which he was working. He had previously worked for a company called Softworks Australia Pty Ltd, where he had created, from scratch, a comprehensive table class (ie table file). Recalling the name and location of that file, he downloaded it from the Internet, deleted some unnecessary functions and, in collaboration with Messrs Petro, Lindgren and Trevor, made such further modifications as were necessary to adapt the file for use in a WebStable project upon which he was then engaged. In the course of doing so, Mr Suthers wrote some entirely new lines of code. Neither the downloaded Softworks file nor the version used in the project on which he was then engaged was in evidence. A file which, in July 2007, was located at the same Internet address as the Softworks file downloaded by Mr Suthers in 2002 was in evidence, but it was, in the expression of its source code, very different from any version of the WebStable table file which was before the court. Neither party identified what lines of the source code for the table file were written by Mr Suthers from scratch, nor whether (and if so what parts of) the source code in the table file in any reasonably current version of WebStable continued to contain any lines so written from scratch. Mr Lindgren said that, at some later stage, it was necessary to add further functions to the table file beyond those originally included by Mr Suthers. 15 Mr Lindgren was the developer primarily responsible for the creation of the editor file that subsequently became part of WebStable. He did so under the supervision of Mr Suthers at about the same time as Mr Suthers himself was creating the table file. Although Mr Lindgren affirmed two affidavits which were relied on by Dais, in neither did he deal with the subject of his role in the creation of the editor file (or, for that matter, with that of his collaboration with Mr Suthers in relation to the table file). However, in answering questions from the court as to how he went about the task of creating the editor file, Mr Lindgren said that the first step was to undertake research into "what the different methods will do". That involved looking at a Microsoft site called MSDN. All that information is in like a dictionary so you have to look at that dictionary to know which words activate that function. So what you do is that you go to the Microsoft MSDN website and you look up those words so you know what they are and how they function and what they return back to your own code. ... I guess also basically when you start writing the code you look at the functionality that the code requires so for the editor, for example, it would have to be able to cut, copy and paste and to do those commands within the browser you have to look at the Microsoft information because it tells you how to perform those functions. 16 As one of the team of developers working under Mr Suthers at Dais, Mr Petro carried out much work on the WebStable source code. He had regular and ongoing exposure to the files of CMSs being built by Dais for its clients, including the table file and the editor file. Necessarily, Mr Petro's period in the employ of Dais exposed him to the workings of WebStable, and to the contribution made by the table file and the editor file. He also became familiar with Dais's file-naming conventions. Save in one respect, the exact identification of the projects upon which he worked is immaterial. I shall turn to that exceptional respect when I deal specifically with Dais's claim in copyright below. 17 It will be apparent from what I have said that neither the table file nor the editor file was a fixed, unchanging, entity. Indeed, although Mr Perlinski referred to "WebStable" as a single, discrete, software product (and the terms in which I have described it above in these reasons assume as much), it was no part of Dais's evidentiary case to identify a single entity that constituted WebStable as such. Each time some actual source code from a part of WebStable (most commonly the table file and/or the editor file) was referred to in the evidence, it was from a version of WebStable produced for a particular client. Neither Mr Perlinski nor any of Dais's other witnesses gave evidence, and I could not infer, that the WebStable source code was unchanging. By contrast, as Mr Lindgren said with reference to the table file, "code grows over time". I find that both of the subject files were modified by the developers employed by Dais as part of a process of continuous improvement. As between applications, the files were, or at least may well have been, different by reason of the specific needs of the web sites of particular clients. Counsel for the applicants described the different variations of the files as "iterations", a description which seems apt enough. The absence of a single, unchanging, expression of each of the table file and the editor file is a circumstance of some importance for the applicants' claim in copyright, to which I shall refer further in due course. 18 I turn next to the conduct of Mr Petro of which Dais complains. In 1999 (ie before he commenced his employment with Dais), Mr Petro had built a web site for a business called "Food Direct". Since then, he maintained what he described as "an ongoing relationship" with Ms Ilana Hannan from that business. In about May 2004 (ie about 5 months after Mr Petro had left his employment with Dais), Ms Hannan asked Mr Petro to redevelop the Food Direct web site, and he commenced work on that project, on a monthly retainer of $2,000. For reasons which do not need to be canvassed here, that project was never completed. In the course of his work for Food Direct, Mr Petro commenced to build an online newsletter system, which would allow Ms Hannan to send a weekly email newsletter to her member-base of over 20,000 users. That system required a table file and an editor file. 19 In order to obtain the table file and the editor file required for the Food Direct newsletter system, Mr Petro made access to the table file and the editor file on the existing web site of one of Dais's commercial clients. Mr Petro could not recall the name of the web site to which he had access, but he assumed that it was one of the sites upon which he had been working whilst in the employ of Dais. It may even have been Dais's own site. In order to access the site from which he obtained the table file and the editor file, Mr Petro did not require, and did not use, a user name and/or password. Rather, he keyed into the URL line on his browser the location and name of each file by reference to the file-naming conventions used by Dais. Had it been Dais's own site, and in the case of the table file, he would have keyed in the following address "www.dais.com.au/_script/admin_script/cdaitable.js". This took him directly to the files which he needed. He then saved the files to a directory on his own computer and modified them to suit his own purposes in building the online newsletter system for Food Direct. As I understood his evidence, the files remain on the server for the Food Direct web site, but Mr Petro thinks it unlikely that they were ever used, since he never completed the project for the construction of the Food Direct newsletter system. However, from that point, Mr Petro used these files, as modified by him, in the building of a number of subsequent web sites for other clients. 20 In about June 2004, Mr Petro secured casual employment as a web developer with an organisation called "International Education Services" ("IES"). His first task was to rebuild a web site of IES itself called "Foundation Year". He did so, utilising the table file and the editor file originally obtained from a Dais-built CMS, and modified by him. Over about the next 22 months, Mr Petro either built or modified some 10 web sites for commercial clients. On each such occasion, he utilised the table file, and on two such occasions he utilised the editor file, originally obtained from a Dais-built CMS, and subsequently modified by him. Indeed, for about the latter eight or so such instances, the CMS provided by Mr Petro to his clients was, as I understand his evidence, more or less standardised. He did not suggest that the table file and (where it was used) the editor file were not in each case at least based upon what he had originally downloaded in about June 2004. In October 2005, Mr Petro became engaged full-time in the employ of IES. The occasion for this engagement was the need to build various web sites for an organisation called "PIER Online". Whilst in the employ of IES, Mr Petro built the PIER Online web site, utilising the table file, but not the editor file. 21 As I mentioned at the outset, one of the web sites built by Mr Petro was for a business called "Red PR". He did that in about August 2005. By coincidence, in about April 2006 Red PR was engaged by Dais as its own public relations consultancy. In March 2007, Red PR engaged Dais to assist them with their brand and corporate identity, an aspect of which was the evaluation, and potential re-development, of their web site (with which Red PR had grown dissatisfied). This required the staff at Dais to examine the file system and workings of the web site, from which they concluded that the CMS had been substantially copied from WebStable, most probably by Mr Petro. That conclusion led to the commencement of the present proceeding. 22 Notwithstanding Dais's immediate suspicions upon examining the CMS for the Red PR site, it emerged that the only elements of WebStable that Mr Petro had taken for his own CMS were the table file and the editor file. Dais's case at trial was that, when he downloaded those files in about June 2004, he reproduced them within the meaning of the Copyright Act 1968 (Cth) and he subsequently used them for his own commercial purposes, including his engagement upon the Red PR project. Dais also alleged that Mr Petro's use of the information contained in those two files, and of his knowledge as to how to secure access to them after the termination of his employment with Dais, involved breaches of certain obligations of confidence to which I shall later refer. However, as explained above, I could not find that there was an unchanging entity called WebStable which constituted a work in the sense required by the Copyright Act . Dais did not tender any form of WebStable save one that had been built for a particular client. I was not shown, or told about, a "master file" or the like which existed on Dais's own computer and which spawned all forms which were commercially marketed. I do not know whether such a thing existed. The only setting in which I could approach the question whether there was a computer program on which Dais could sue as a copyright work would be one that involved a specific, identified, form or iteration of WebStable as built for a particular client. It identified the work upon which it sued in two ways (expressed in the alternative). Each relied upon the definition of "computer program" in the Copyright Act . In its primary case, Dais contended that the source code for the HR Advantage CMS as a whole was a computer program, and therefore a literary work in the statutory sense. Mr Petro agreed with those propositions, in which circumstances I so find. However, against the possibility that I might not find that Mr Petro reproduced all or a substantial part of that work --- a matter to which I shall return in due course --- Dais contended in the alternative that each of the table file and the editor file in the HR Advantage CMS was a computer program, and therefore a literary work, in its own right. It is to the resolution of that question that I now turn. 25 For the HR Advantage table file or editor file to be a computer program, it had to be "a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result". Unaided by authority, I would have no difficulty in holding that each file constituted such a set of statements or instructions. Each contained at least statements, but I would hold also instructions, in the sense that the commands undoubtedly involved in the lines of source code were instructions for things to happen. It may be that they were instructions for files or portions of the browser software other than the subject files to do things, but they were instructions nonetheless. It is no less clear that the instructions (or statements) were used in a computer. As client-side JavaScript files, this use occurred in the user's computer (ie the computer in which the browser displaying the web site was running). And the result which they brought about was the activation of the browser software to make the changes in appearance to a table, or to text, as displayed on the user's screen. 26 It was submitted on behalf of Mr Petro, however, that neither the table file nor the editor file was a set of instructions which brought about a certain result. As I understand the submission, it was not suggested that these files were not instructions as far as they went; rather, it was said that there was no "certain result" which they brought about. I do not consider that such is a proper basis upon which to disqualify the files from satisfying the requirements of the definition of "computer program". In part, however, the submissions make a point of more substance, namely, that the definition requires that the instructions or statements to which it refers actually bring about the result in question, by their own doings and unaided as it were. The submissions point out that, as client-side functional files, the table file and the editor file play only a role, and a relatively minor role, in bringing a result about. The submissions call for a consideration of the current statutory definition of "computer program". 28 Under the definition of "computer program" in the Copyright Act before the current definition was introduced in 2000, it was necessary that there be "a set of instructions ... intended ... to cause a device ... to perform a particular function. " In Powerflex Services Pty Ltd v Data Access Corporation (No 2) (1997) 75 FCR 108, one of the questions with which the Full Court was concerned was whether commands in the nature of "macros", which caused the performance of particular functions in a computer, were themselves computer programs within the meaning of that definition. A poem may consist of a series of stanzas, but copyright exists in the entire poem not separately in each stanza. The question, however, will clearly be one of fact. If a particular set of instructions is functionally separate from the entirety of the program, then it seems to us there is no difficulty in treating that set of instructions as being a literary work separate from the balance of the program. An illustration is the Widget C program in the Autodesk case, where Widget C was a functionally separate part of the entire program in the sense that the balance of the program could function separately from the lock program. If that is the case, then the relevant program to be considered here would not be that small fragment of program which causes the macro command to perform its function (some 229 lines), but the Dataflex compiler program itself. On this basis it is doubtful that the macros themselves could be seen as a substantial part of the whole or, to adopt the language of Gaudron J in Autodesk , that they would be described as the "linchpin" of the program. 29 When Powerflex went to the High Court --- see Data Access Corporation v Powerflex Services Pty Ltd [1999] HCA 49 ; (1999) 202 CLR 1 --- it was held that the single word assigned to each of the macros was not, at that level of abstraction, a "computer program" (202 CLR at 36 [100]). If there is a statutory basis it must be found in the words of the definition "intended ... to cause a device having digital information processing capabilities to perform a particular function". If the segment of the larger program in question can be said to have a function which is not merely one of the functions in the set of functions performed by the larger program, but is a separate and distinct particular function, it may be that this segment can be properly viewed as a computer program in and of itself. The Autodesk example given by the Full Court ((1997) 75 FCR 108 at 127) would illustrate that kind of distinction. The lock program in Widget C had a function (to prevent use of the software unless the correct key was inserted) which was not merely one of the functions in the set of functions performed by the computer aided design program which was AutoCAD. The Full Court appears to have concluded in this case that as a matter of fact the function performed by the segment of the Dataflex source code which underlies each Macro is merely one of the functions performed by the larger program, and therefore that segment is not a computer program in and of itself. We need not consider that conclusion because even if it is not right and the segment of source code which underlies each Macro is a computer program, there was no reproduction and no adaptation of those works. The first is that the question with which their Honours were concerned was whether a segment of a program could be considered as a program in its own right. By reference to the then statutory definition, their Honours answered that question by identifying the function which the segment performed: if it was a separate and distinct particular function, the terms of the definition may have been satisfied. In the present case, by contrast, the table file and the editor file are not merely segments of a larger program; or at least so to regard them begs the question. Considered as expressions in the sense required by the Copyright Act , they exist on the HR Advantage CMS as discrete files which may be downloaded, and which Mr Petro did download. 31 The second reason why Data Access does not govern the resolution of the present problem is that the terms of the definition of "computer program" have changed since that case was decided. The previous definition was concerned with a function , and required that the set of instructions be intended to cause the device to perform the function. The present definition requires that the set of instructions be used , directly or indirectly, to bring about a certain result . As a matter of ordinary language, a thing might be used to bring about a certain result notwithstanding that it is but a component in a collection or sequence of things which together bring about the result. It may be accurately said that a brake pedal is used to arrest the progress of a car, notwithstanding that the pedal alone would be incapable of achieving that result. It may also be accurately said that soap powder is used to clean the family wash, notwithstanding that the desired result could not be brought about by the application of dry powder alone. 32 Is there anything in the decided cases, or in the circumstances which surrounded the amendment of 2000, which would make it appropriate not to construe the definition of "computer program" in the way I have proposed above? The legislative history of the statutory definition of "computer program" was considered at some length by Emmett J in Australian Video Retailers Association v Warner Home Video Pty Ltd [2001] FCA 1719 ; (2001) 114 FCR 324, 339-342. The phrase 'expression ... of a set of instructions' is intended to make clear that it is not an abstract idea, algorithm or mathematical principle which is protected but rather a particular expression of that abstraction. The word 'set' indicates that the instructions are related to one another rather than being a mere collection. The phrase 'intended... to cause' is used in preference to words such as 'capable... of causing' to cover the situation where the program, as written, may not operate for technical reasons such as the presence of a programming error. What is required to achieve that result in a given case will vary according to circumstances and according to the knowledge of that recipient. In general terms, the less knowledgeable the recipient, the greater will be the need for the instruction to be accompanied by information. Thus, the expression 'set of instructions' in the original form of the definition directs attention to an entire set of instructions, and not merely those parts that consist of bare commands. The words 'set of instructions' direct attention to instructions in their entirety. That direction is reinforced by the parenthetical description of the instructions in the original definition as instructions 'whether with or without related information'. Further the definition is concerned with instructions that 'cause a device having digital information processing capabilities to perform the particular function'. In many cases it will be necessary for instructions to be accompanied by related information if those devices are to perform quite ordinary computer functions --- Autodesk Inc v Dyason (No.2) at 329. The emphasis on a singular function indicates that it is necessary to identify precisely the relevant function --- see Data Access at 24 [56]. Similarly, in the current definition, it is necessary to identify precisely the 'certain result that the set of statements or instructions' is to be used to bring about. 33 Emmett J then dealt with the 2000 amendment. However, there is no reason to think that the underlying concept of the 1984 definition was intended to be altered by the amendment that introduced the current definition. The current definition was substituted by the Copyright Amendment (Digital Agenda) Act 2000 (Cth). The revised explanatory memorandum circulated by the Attorney-General in connection with the Bill for that Act stated that the new definition was intended to implement a recommendation of the Copyright Law Review Committee (CLRC) in its 1995 report "Computer Software Protection". " (at 341-342 [81]). That is so, but the actual wording of the new definition was based upon the definition in the legislation of the USA. The Committee is mindful that the position adopted in Australia in relation to the extent of the protection afforded to computer programs should, as far as possible, be consistent with that adopted by our major trading partners. The Committee believes that the US definition, by using the words "to be used directly or indirectly in a computer", covers programs written in source code, object code and microcode. Accordingly, it disposes of any uncertainty whether protection is limited to when the program code is visible. Also, the inclusion of the word "statements" clearly extends the scope of the definition to cover programs written in declarative programming languages. To this point, there is nothing in the history of definition that would require the interrogatory expressed at the start of the previous paragraph to be answered in the affirmative. Indeed, the committee, and therefore the legislature in 2000, appears to have been concerned with issues quite different from the present. In other words, it must be because, as a matter of construction, the set will always be defined by its ability to bring about the result, such that, if some other statement, instruction or the like is also required, the statements or instructions putatively making up the original set could not be regarded as a "set" in the statutory sense. That there might be a definitional issue of this kind was apprehended by at least some of those who contributed to the work of the committee. In its report, the committee referred to a submission made to it which drew attention to difficulties which may arise from the inherent uncertainty in the concept of a "set" of statements or instructions. Their submission suggests a resolution of this problem by focusing on the function of a particular statement or instruction. In their view the appropriate test would be whether a statement or instruction "contributes to, and is an elemental part of the process of performing a specific function" in which case it would be part of the "in-the-set" statements. It is a test that the courts could apply when dealing with cases of alleged reproduction and which in any event they must already apply in determining the subject matter in question. There are two other reasons for leaving to the courts the determination of what is and what is not part of a computer program. The definition of "literary work" gives no guidance such as is proposed on what forms part of or does not form part of works other than computer programs. This could be an issue in relation to, eg, unpublished notes for a draft of a novel. Second, that definition refers to "a computer program or compilation of computer programs", acknowledging, so it seems, that what is under consideration may constitute a single program or two or more programs. The facts of the Autodesk case illustrate that possibility. 35 It is difficult, with respect, to appreciate how the committee might have thought that the problem of the "set" related, at least primarily, to the matter of reproduction rather than to the matter of whether some plurality of statements or instructions (which otherwise complied with the definition) constituted a set and therefore a computer program. The problem does, it seems to me, relate to the establishment of the basal proposition that the phenomena on which an applicant relies together constitute a literary work. However that may be, the fact is that there was nothing in the committee's report that suggested that statements or instructions should be considered to be a set only if they together, and without contribution from elsewhere, brought about the result to which the new definition refers. Had it been the view of the committee, or otherwise the proper construction of the new definition which it proposed, that the problem of the "set" was more apparent than real because in every case the matter would be resolved by reference to the result, it might easily have said so, and, indeed, might well be expected to have said so. 36 With respect, I agree with Emmett J that there is no reason to think that the "underlying concept" of the 1984 definition was intended to be altered by the amendment of 2000. Specifically in the present context, I can think of no reason why the concept of a "set", which was utilised by the 1984 definition, should be differently viewed in the 2000 definition. As the Explanatory Memorandum for the 1984 amendment stated, the word "set" indicated "that the instructions are related to one another rather than being a mere collection". It is, therefore, the fact of interrelation, rather than the ability, unaided, to bring about the result, that should be treated as giving a practical connotation to the concept of a "set" in any particular case. What should be the nature of the relationship? Clearly, the use to which the statements or instructions are put. If the statements or instructions are co-operatively used to bring about a certain result, that should be regarded as sufficient to satisfy the definition. That they require also the participation of other components of software, be they statements, instructions or otherwise, should not, in my view, be regarded as disqualifying. 37 I was not referred to any American authorities on the present question, and my own researches have found none. Perhaps surprisingly, the question whether a plurality of statements or instructions said to constitute a set should be regarded as being used to bring about a certain result notwithstanding that they do not do so unaided does not seem to have arisen in decided cases in the USA. 38 I was also referred to the judgment of Selway J in Telephonic Communicators International Pty Ltd v Motor Solutions Australia Pty Ltd (2004) 62 IPR 323, but I do not consider that there is anything in his Honour's judgment that requires me to take an approach different from that disclosed by my reasons as set out above. 39 In the result, I would answer the interrogatory set out at the start of par 32 above in the negative. The definition requires me to accept as a computer program any set of statements or instructions which is used to bring about a certain result. I consider that the instructions in the table file and the editor file were a set within the terms of the definition. Those files were discrete manageable entities. Either could be downloaded and used as such. Either could be included in, or excluded from, a CMS, depending on the developer's requirements. Each added functionality, in the sense that results were made possible by its inclusion. Each file (or either file as the occasion required) was sent as an entity to the user's computer to function co-operatively with the browser's software. The instructions on each file were related by function, by location and by utilisation. On any view, those instructions constituted a set. Further, the results for the bringing about of which the files were used were recognisable and definable. In the case of the table file, for instance, one result might be the highlighting of a line entry in a table. Another result might be the re-ordering of the lines in the table. For each result to be brought about required the participation of HTML software on the browser; but it required also the participation of the relevant instructions in the table file. That is to say, in the words of the definition, the bringing about of the result in question required the use of those instructions. And the same conclusion could be drawn, mutatis mutandis , in the case of the instructions in the editor file. 40 For the sake of completeness, I mention here that Mr Muys and Mr Wood expressed the opinion that neither the table file nor the editor file was a computer program. The question for the court, however, is not whether either file was a computer program as understood by professionals in the field; it is whether either file satisfied the statutory definition. 41 For the above reasons, I hold that each of the table file and the editor file in the HR Advantage CMS was a computer program, and therefore a literary work. 42 Mr Petro accepted that the source code for the HR Advantage CMS and, subject only to his submission that the table file and the editor were not computer programs in their own right, that the source code for those files had the necessary originality to sustain a claim in copyright, and that Dais was the copyright owner in each case. In other words, subject only to that qualification, the only point that Mr Petro put in issue was infringement. This includes, of course, indirect copying (ie copying a copy of the work) and so-called subconscious copying. But, one way or the other, "the copyright work must be shown to be a causa sine qua non of the infringing work": Francis Day & Hunter Ltd v Bron [1963] Ch 589, 624 per Diplock LJ. It is not sufficient that the putative infringer made a copy of a progenitor, or a sibling, of the copyright work. In the context of the present case, what is required for Dais to succeed is that Mr Petro copied the HR Advantage CMS, or the table and editor files from that CMS. It will not be sufficient if what Mr Petro copied was another CMS (or the relevant files from another CMS) not itself a copy of the HR Advantage CMS, even if that other CMS was a progenitor work from which the HR Advantage CMS was derived. 44 Although Mr Petro accepts that he downloaded a table file and an editor file from the site of one of Dais's customers (or, possibly, from Dais itself), he could not recall from which site he did so. In order to prove that the table file most likely downloaded was that contained in the HR Advantage CMS, Dais put two documents in evidence. The first was the source code for the table file in a CMS built by Mr Petro in August 2005 for Red PR. The second was the source code for the table file in HR Advantage. In each document as tendered, the source code that was identical to the corresponding code in the other document was highlighted. In the HR Advantage document, a group of 21 sequential lines of code was not highlighted. Additionally, two lines, and some words and symbols on other lines, were not highlighted. In the Red PR document, about a quarter of the content was not highlighted. Mr Petro accepted that he had made changes to the table file that he originally downloaded from a Dais-built site. Notwithstanding that circumstance, the comparison of the two documents does not of itself justify the inference that the HR Advance file was most probably the one that Mr Petro downloaded. While Mr Petro undoubtedly added code to the version that he downloaded, the HR Advantage document contains code that does not appear in the Red PR document. Given what I would hold to be a fairly high degree of standardisation as between the table files on CMSs built by Dais for different clients, I think it no more likely that Mr Petro downloaded the table file from the HR Advantage CMS than that he downloaded a corresponding file from some other Dais-built CMS. 45 A similar documentary comparison was embarked upon in relation to the editor file. This time the HR Advantage editor file was compared with the editor file in the "Foundation Year" CMS which Mr Petro built in the period June to August 2004. I would express the same conclusions in this context as I have in the previous paragraph in the context of the table file comparison. 46 The HR Advantage CMS was in the course of development within Dais during Mr Petro's last few months there. Activity records maintained by Dais --- and relevantly entered up by Mr Petro himself --- show him as having been engaged to some extent upon "testing HR Advantage" on 24 October 2003. However, Mr Petro could not recall the project at all. He surmised that "testing" might have meant no more than it said, namely, that he tested a site which had been built by others. It was put to him that the records of Dais described him as "the person responsible for the HR Advantage Consultant site", to which he responded, "Okay, I accept it, but like I said, I have absolutely no memory of it". If there were any such records, they were not produced. It was put to Mr Petro that he had been the "lead developer" for the site, to which he first responded that he had no recollection of it, and, after a short break in the hearing had given him the opportunity to review the Dais activity records, asserted that those records showed only the one entry which linked him with the site. He added "... so I maintain that I wasn't the lead developer on that site. " It was put to Mr Petro that, in addition to 24 October 2003, he had spent some time on 1 July and 8 August 2003 working on the HR Advantage site, and he replied that he had "no idea". It was not established by Dais that Mr Petro did work on the HR Advantage site on those two days. 47 Mr Petro's evidence, both in its substance and in the manner of its giving, was perfectly ingenuous. He frankly said what he had done, and why. I gathered that it never occurred to him that he had done anything wrong. He did not have the demeanour of a witness who attempted to avoid confronting uncomfortable facts by recourse to a pretended inability to recall. Rather, having worked to various degrees on projects under development during his time at Dais, he said that he had no recollection of having had anything to do with the HR Advantage site. If he worked on it only to the extent of "testing" on one day as proved by Dais, I can well understand that he would have had no recollection of that circumstance, or of the site generally. I accept his evidence in these respects. Mr Petro accepted that the site from which he downloaded a table file and an editor file in about June 2004 was most likely a site upon which he had worked at Dais (ie if it was not the Dais site itself). Dais too conducted its case on that basis, and it seems very probable that that is what occurred. I could not find that Mr Petro worked on the HR Advantage site other than very briefly, for the purpose of testing, about two months before he left the employ of Dais. That circumstance, together with Mr Petro's inability to recall ever having worked on that site, leads me to find that that site was probably not the one from which Mr Petro downloaded the table file and the editor file. 48 In the circumstances, and for the reasons stated above, I could not find, on the probabilities, that Mr Petro reproduced the table file or the editor file from the HR Advantage CMS. The result must be that Dais's claim in copyright fails, whether the work is regarded as the entire HR Advantage CMS or is regarded as each of the table and editor files contained in that CMS. 49 At this point I should note that, in its case as pleaded, Dais alleged that Mr Petro had made or reproduced an adaptation of "WebStable" or of a substantial part of WebStable. However, counsel for Dais did not address the question of how Mr Petro's conduct amounted to an adaptation, as distinct from a reproduction, of WebStable itself. Indeed, the statutory requirements to establish the existence of an adaptation were not dealt with at all by Dais. In these circumstances, I am not disposed to consider whether Mr Petro's conduct in downloading the table file and the editor file from an unidentified site might have amounted to an adaptation of those files as they appeared in the HR Advantage CMS. 50 Since the matter was argued fully before me, I propose to consider Dais's copyright case upon the supposition that I am wrong in the conclusion that Mr Petro did not reproduce the table file and the editor file from the HR Advantage CMS. If he did so, Dais's alternative claim in copyright (ie that based upon the proposition that each such file was a work in its own right) must succeed. However, whether his primary claim (ie as based upon the proposition that the HR Advantage CMS as a whole was the copyright work) succeeds will depend upon whether the table file, the editor file, or both files in combination, constituted a "substantial part" of the CMS as a whole, for the purposes of s 14 of the Copyright Act . It is to that question that I next turn. 51 To resolve the question whether a part of a copyright work is a "substantial part" requires a consideration of the part against the copyright work as a whole: TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (2005) 145 CLR 35, 45 [27]. In making that comparison, one looks to the quality of what was taken, rather than to its quantity: Data Access (202 CLR at 32 [83]); Gold Peg International Pty Ltd v Kovan Engineering (Aust) Pty Ltd (2005) 225 ALR 57, 103 [187]. In the particular context of a literary work which is a computer program, the matter of substantiality is not resolved by reference to the functional essentiality of the part taken to the operation of the program as a whole. It follows that the originality of what was allegedly taken from a computer program must be assessed with respect to the originality with which it expresses that algorithmic or logical relationship or part thereof. The structure of what was allegedly taken, its choice of commands, and its combination and sequencing of commands, when compared, at the same level of abstraction, with the original, would all be relevant to this inquiry. Rather, what is required is use of statements or instructions, directly or indirectly, to bring about a certain result. Adapted to the context of the present definition, I think that the principle for which Data Access relevantly stands is that the substantiality of what was allegedly taken must be assessed with respect to the originality with which that part expresses the means by which the result is brought about. According to Mr Suthers, he based the file upon equivalent code which he had written in a previous employment. He made deletions and other changes, including the writing of new code, such as would probably sustain the conclusion that the result was an original work for copyright purposes (and the contrary was not submitted by Mr Petro). But the further conclusion that the original contributions of Mr Suthers and the other developers employed by Dais were of such a quality as to make the resulting table file a substantial part of WebStable as a whole is not, in my view, established on the evidence. 53 In relation to the editor file, the evidence was that Mr Lindgren based the first version of that file on an earlier file in use of Dais. As I have set out in par 15 above, Mr Lindgren explained how he went about creating the editor file, but his explanation related substantially to function rather than to expression. As I pointed out above, notwithstanding Mr Lindgren's contribution to Dais's evidentiary case, he gave no evidence in chief from which I could make any finding about the originality of the expressions of the source code in the earliest version of the editor file as incorporated into WebStable. 54 However these conclusions may be, the question with which I am concerned is not whether the expression of source code in the table file and the editor file was original in any absolute sense; nor even whether that expression was, taking the qualitative dimension of originality, a substantial part of the original WebStable CMS with respect to which that code was written. Rather, the question is whether the expression of the source code in those files, or in either of them, was a qualitatively substantial part of the entire expression of source code in the HR Advantage CMS. It is here that Dais's case is in some difficulty. Exhibited to an affidavit filed on behalf of Dais was a compact disc containing the whole of the source code for the HR Advantage CMS. While the existence of that exhibit was drawn to my attention, Dais did not present any argumentative case designed to establish that, along the dimension of originality, the table file and the editor file were, or either of them was, a substantial part of the whole body of the source code in the CMS. It may be one thing to invite a Judge to read a book, and then to submit that a particular chapter is a substantial part thereof, by reference to quality. It is, however, another thing altogether to invite a Judge to read in excess of two hundred thousand lines of computer code, meaningless to a layperson, with a view to having him or her accept that there is a qualitative respect in which a small part something of the order of one percent thereof should be regarded as a substantial part. I did not understand that any such invitation was extended to me; had it been, I would not have accepted it. 55 As I have noted elsewhere in these reasons, Mr Carpenter expressed the opinion, without objection, that each of the table file and the editor file was an integral part of the HR Advantage CMS. That opinion, however, was expressed with reference to the functions performed by those files. No opinion was given as to the originality with which the statements and instructions in the source code in those files expressed the means by which the results in question were brought about, nor as to how that original quality, if there were one, should be comparatively measured against the original quality to be found in the source code for the CMS as a whole. 56 In the circumstances, where Dais has not established that a degree of skill, labour and judgment has given the table file and the editor file an originality which made them a qualitatively substantial part of the HR Advantage CMS as a whole, it is relevant also to consider the quantitative dimension: Tamawood Ltd v Henley Arch Pty Ltd (2004) 61 IPR 378, 389 [50]. Manifestly, on such a measure the two files were not a substantial part of the CMS. Based on a line-count, I could not find that the two files were a quantitatively substantial part of the whole source code for the HR Advantage CMS. Mr Wood expressed the opinion that a line-count was not the ideal way to determine substantiality, since "some routines are used often as they are referenced from many places within the program". I accept that so far as it goes, but manifestly Mr Wood was referring to function, rather than to expression. I consider that the only way to take a quantitative measure of expression in a case involving source code is by reference to the proportion of lines of code in the whole work constituted by the part reproduced. 57 For the above reasons, I hold that Dais has not established that the source code in the table file, the editor file, or both, in the HR Advantage CMS was a substantial part of the source code as a whole in that CMS. It follows that, if otherwise it should be held that Mr Petro reproduced the source code for those files, he did not reproduce a substantial part of the source code for the HR Advantage CMS. It was that code which, according to Dais, was the confidential information the use of which would be restrained in accordance with the principles referred to by Gummow J in Corrs Pavey Whiting & Byrne v Collector of Customs (1987) 14 FCR 434, 443 and again in Smith Kline & French Laboratories (Aust) Ltd v Secretary, Department of Community Services and Health (1990) 22 FCR 73, 87. However, his Honour did opine, obiter , that the existence of detriment was not necessary (22 FCR at 111-112). As to the first, it was not submitted on behalf of Mr Petro that the relevant source code was not information identified with the requisite specificity. Although I might otherwise have thought there was a question whether some parts or segments of the code had a greater claim to confidentiality than others, both sides conducted their cases upon the basis that the code as a whole either was, or was not, entitled to protection, and I shall likewise adopt that basis for the purposes of these reasons. As to the fourth element, counsel for Dais submitted that, in Smith Kline , "Gummow J discounted the detriment requirement". Counsel for Mr Petro did not submit the contrary, in which circumstances I think I should regard Dais's title to relief as complete upon demonstration of unauthorised use of the information found to be confidential. 60 Before turning to consider the second and third elements in Smith Kline , there are some additional facts, specific to the matter of confidentiality, which should be mentioned. In his affidavit sworn on 24 April 2007, Mr Perlinski devoted a group of 16 paragraphs to the subject "Commercial loss to Dais if WebStable product is used by others". The license [sic] has been put in place by DAIS to protect the code and restrict the client from disclosing the code and administrative access to the code to a third party or competitor. " This agreement is drafted very favourably for Dais, and contains wide and tight requirements as to confidentiality. A client who executed this agreement could be in no doubt but that the source code for all the files that made up the CMS in WebStable was not to be disclosed to third parties. There was evidence that, during the time of his employment with Dais, Mr Petro was involved in a client liaison to a significant degree. In his affidavit sworn on 24 April 2007, Mr Perlinski referred to 8-10 projects where Mr Petro, and another staff member there mentioned, "had an intimate knowledge of the client's circumstances, the project details and the financial details of the project. " Mr Petro himself gave evidence that, for a lot of the Dais projects, his was "a client liaison role". He said he was "quite good with clients". This line of evidence caused me to wonder whether Mr Petro knew of the terms of the agreements into which Dais entered with its clients, as mentioned in the previous paragraph. I say "wonder", since the subject was not broached by either side, either in the cross-examination of Mr Perlinski or Mr Petro, or in submissions. In these circumstances, I do not think I should find that Mr Petro had such knowledge. In the first place, Mr Perlinski's evidence as to terms of the agreements is expressed in the present tense --- it speaks as at April 2007. Mr Petro left the employ of Dais in December 2003. There is no evidence of any similar agreement that was in place during the period of Mr Petro's employment. Next, there is the absence of any direct evidence as to Mr Petro's knowledge, or likely knowledge, of the agreements. Had it been part of his role to procure the execution of such agreements with clients, or otherwise to liaise on contractual aspects, it would, I infer, have been a fairly simple matter for Mr Perlinski to have said so in his evidence. And finally, there is the absence of any submission on behalf of Dais that I should find that Mr Petro in fact knew of the terms of these agreements. It is true that counsel for Mr Petro also left this area untouched, but it was a matter upon which Dais bore the onus of proof, and of persuasion, and I am bound to conclude that it made no attempt to satisfy either. I proceed, therefore, on the basis that, however tight and protective Dais's contractual arrangements with its clients may have been, they were unknown to Mr Petro. 62 In his affidavit sworn on 24 April 2007, Mr Perlinski also referred to the steps which Dais took to ensure that its employees, including Mr Petro, maintained business confidentiality in a number of respects. Exhibited to the affidavit was a copy of each of Mr Petro's employment agreement and of a "confidentiality agreement" referred to therein. Please read the document carefully and seek advice with the Studio Manager if there is anything you need clarified. .... It is a condition of your employment that you agree to be bound by the provisions of DAIS Confidentiality Agreement which is attached to this letter of appointment. Your signing of this DAIS Confidentiality Agreement will indicate your acceptance of the terms and conditions contained within the agreement. Ben, it gives us great pleasure to offer your employment with DAIS and we look forward to a rewarding association. Would you please sign this letter and the Confidentiality Agreement, as acceptance of our offer and the terms and conditions of employment and return them to DAIS as soon as possible. You are employed as a Web Developer by DAIS Studio Pty Ltd and in that capacity have access to and acquire knowledge of valuable trade secret [sic], confidential and proprietary information including, but not limited to DAIS and DAIS related parties (as hereafter defined) marketing and business methodology and their financial condition (hereafter "Confidential Information"). In this agreement "Related Party" and "Related Parties" shall mean and include any related corporation or business entity of DAIS (as such from is defined in the Corporations Law as amended) or any other company, organisation or institution in any way associated with or connected with or which enjoys a special course of dealings with DAIS or any client of DAIS. You agree that all such Confidential Information is disclosed to you in confidence and you undertake to hold same as strictly confidential and secret under the term of this agreement. To protect DAIS and it's Related Parties interests in maintaining the confidentiality of Confidential Information, you shall not without the written consent of DAIS at any time either during or after the termination of your employment for whatever reason directly or indirectly publish or reveal in any way whatsoever or use for your own or another's benefit, any of the Confidential Information which you may acquire whilst an employee of DAIS and you shall maintain such secrecy in respect of all Confidential Information and shall take all necessary and proper precautions to prevent any unauthorised disclosure or use thereof. All improvements, discoveries, ideas and inventions made or conceived along or in conjunction with others arising out of or in the course of your employment, whether or not the proper subject of a trademark, patentable or copyrightable (hereinafter called "the inventions") will be the sole and exclusive property of DAIS and you will promptly disclose in writing to DAIS all the inventions. You will, upon request and at the employer's expense (notwithstanding that your employment has ceased for any reason), execute any agreements or documents and do all such further acts as DAIS may reasonably require in order to assign it to any right, title and interest in any or all of the inventions. He said that "[o]nly certain DAIS development team members have access to the coding scripts, backup files and development servers at DAIS". He said that other staff were restricted from access by password security and by reason that the computer drives on which the confidential material was contained could not be accessed from their work stations. The "creative team" were additionally excluded from access to the WebStable login system on the development servers because they used Macintosh computers. The second extract was a table headed "employment checklist" which apparently had the purpose of assisting the person responsible for engaging a new employee to cover all necessary documents and procedures in that process. It contained a sub-heading "Make sure all forms are in paper file", under which the entry included "letter of offer" and "confidentiality agreement", but there was nothing otherwise presently relevant. The third extract was a document headed "Employment Record Tracking Sheet", which dealt with matters of personnel administration and is not presently relevant. The fourth extract was a pro-forma leave application form. The fifth extract was a list of 11 items headed "Team Conduct". It made no reference to confidential information or to anything with which I am presently concerned. The sixth extract was a workplace bullying policy. The seventh extract was a document headed "Dais Internet Policy". It was concerned with Dais's staff standards with respect to staff usage of the Internet and email facilities. There is a passage which may be relevant to the present case, but which is not altogether clear. They should delete them. None of this material was explained in submissions made on behalf of Dais. Neither is any of it so self-evidently relevant to the question whether there was an equitable obligation of confidence in relation to the source code for the table file and the editor file as to require its consideration in that context in the absence of such an explanation. Here the cases have referred to a number of indicators, or "lines of inquiry" ( Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167, 193). Recognising that there is nothing prescriptive in these indicators, I note that reference has been made to the skill and effort that were expended to acquire the information; the extent to which the information was known both inside and outside the employer's business; the ease or difficulty with which the information could be properly acquired or duplicated by others; the steps taken by the employer jealously to guard the information; the commercial value of the information and the usages and practices of the industry concerned: see Ansell Rubber Co Ltd v Allied Rubber Industries Pty Ltd [1967] VR 37; Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic [1973] VR 784, 796-798; Secton Pty Ltd v Delawood Pty Ltd (1991) 21 IPR 136, 149; Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317, 334; Del Casale v Artedomus (Aust) Pty Ltd (2007) 165 IR 148, 160. 66 I accept Mr Perlinski's evidence that Dais has invested very considerably in the development of WebStable as a whole. However, Dais's evidentiary case did not deal directly with the skill, effort or expense associated with the development of the table file and the editor file as such. For all I could tell from the evidence of Mr Suthers, Mr Petro and Mr Lindgren, the development of the code for those files was an unremarkable part of an ordinary week's work. As I have said above in another context, the origin of the table file was a similar file which Mr Suthers downloaded from elsewhere. Mr Lindgren, who was called by Dais and who was the lead developer for the editor file, said nothing on which I could base any meaningful conclusions as to the skill and effort which was involved in the writing of the source code for that file. 67 The evidence which Dais did call on the point was by way of an inference stated by Mr Carpenter. In his second affidavit sworn on 4 July 2007, Mr Carpenter said that he had read the complete body of source code for the HR Advantage web site three times. He said that the code for the table file was "a critical part of the WebStable program due to it being used as part of the source code that retrieves and displays web site content from the WebStable database. " He said that writing that code "took a high degree of skill and labour on the part of the author", a conclusion which he drew "by reviewing the type of functions available", which he said included "a means to re-order the table rows and searching for specific text in a table column". Mr Muys disagreed with Mr Carpenter in this respect. In his affidavit sworn on 18 July 2007, Mr Muys referred to these passages in Mr Carpenter's affidavit. He said that the table file in WebStable added only three features to the behaviour of the HTML TABLE visual element, namely, the ability to re-order rows, the ability to search for specific text in a table column and the ability to notify any associated scrollbar to ensure a search result was visible. He noted that Mr Carpenter had referred to the first two of those features. 68 As to the first feature --- the means to re-order the table rows --- Mr Muys set out in his affidavit the 21 lines of code that gave effect to that feature. It is well known as the most trivial sort algorithm known to computer science, and routinely taught to first or second year undergraduates as an example of how not to implement a sort operation. The amount of labour required to implement this sort feature is minimal. I would expect a Bubble Sort implementation to require no more than 30 minutes effort. The amount of skill required to implement this feature is comparable to that of a second year undergraduate tutorial question in any IT degree. He agreed that it would take a reasonably competent programmer about 30 minutes to write these lines of code, in addition to the time spent testing it and ensuring that it worked within the whole program. It is so trivial that it is only ever taught for the sake of completeness, and it would be considered an easy first year undergraduate tutorial question within any IT degree. The amount of labour required to implement this is trivial, of the order of five to ten minutes effort. As mentioned above, the amount of skill required to implement this feature is comparable to that of a first year undergraduate tutorial question in any IT degree. For a reasonably competent programmer, writing this code might occupy 20-30 minutes. The skill required consists of the basic familiarity with the W3C Standards to be expected of any entry level web developer. A junior programmer who did not know of the function --- a "time-saving feature" --- would write more code than was necessary. I do not take into account the means by which the files were integrated into WebStable as a whole since, although that was undoubtedly a central aspect of the files' utility in WebStable, it was not taken or used by Mr Petro. He took only the files themselves. As to those files, clearly there was skill, and some effort, involved in the writing of the relevant code, but only in the sense that this was done by employees whose expertise lay in that area. For those employees, and others like them in the industry, I rather gathered that the writing of the relevant code was much towards the lower end of the spectrum of difficulty. 72 To what extent was the source code for the table file and the editor file known both inside and outside Dais's business? In the context of the type of business which Dais conducted, the "inside" part of this question should be applied to the source code in the form in which it existed on Dais's own computer system (ie the question is not, I take it, concerned with the knowledge which employees of Dais may have had of the code as located on a computer or computer system external to the business). The answer is that the code was known only to the developers. It was not known to designers and others. As to the "outside" part of the question, there was no evidence that the code as located on a computer --- or server --- external to Dais was in fact known to anyone other than a Dais-employed developer and the authorised administrator of the server of the commercial client concerned. However, there was much evidence as to the potential for such knowledge, such that I would be inclined to infer that, if no-one in these circumstances in fact knew the code, it was more because the subject was not generally of interest than because such knowledge could not have been acquired. I shall advert to that evidence below. 73 Coming next to the ease or difficulty with which the source code for the table file and the editor file could be properly acquired or duplicated by others, there are two aspects of the relevant technology which bear directly on the point. The first concerns the ability to locate and download the relevant files, as Mr Petro himself did in about June 2004. It was based on knowing that convention that after you left DAIS, you were able then to go straight to a DAIS client website and to obtain both the editor file and the list table file?---Yes, that is what I assume that I did. But you can't recall which particular site it was?---I have no idea. It may well have been the DAIS site itself. So it could be the DAIS site. Now, to get that from the DAIS site, you wouldn't need to access the back end, would you?---No. So you could just literally type in the URL for DAIS?---That is right. Execute some functions and voila, there it is?---Voila. Type in www.dais.com.au/_script/admin_script/cdaitable.js and voila. And that would give you literally the table file source code?---The code would be shown on the browser, that is right. You would have highlighted it?---Most likely file, save as, and that is when I would have changed it to the file name that I desired, which I think was list table. On 18 April, 2007 I accessed these files, after provision to me of these files by DAIS, via the two internet web addresses (URLs [Uniform Resource Locator]), http://www.foundationyear.com/admin/_script/CDAIEditor.js and http://www.foundationyear.com/admin/_script/CATable.js. The table and the editor file referred to in the extract set out above were one of Dais's points of reference in their copyright infringement case against him. Left unstated in that the respective DAIS WebStable files CDAITable.js ("DAIS Table File") and CDAIEditor.js ("DAIS Editor File") remain publicly available files accessible at the locations: http://hradvantage.com.au/_script/CDAITable.js and http://www.hradvantage.com.au/_script/CDAIEditor.js. 74 It will be noticed in that the URL address had at least two components --- the file location (eg www.dais.com.au/_script/admin-script/) and the file name (eg cdaitable.js). There is a question whether the file location, the file name, or both would be obvious to a competent programmer of reasonable experience such that he or she could have done what Mr Petro did, without his prior knowledge of such things from his employment with Dais. Where I would have success with is guessing what directory the files live under. There are standard names such as scripts or underscore script. I would be able to find that but given the variety of editors available or the editor may have been written in house. I would pat myself on the back if I was able to guess the file name. So utilising the method you just suggested you could then go down a list of the sub files and find the likely one?---Not for most websites. For security if I am trawling around and trying to visit specific directories a website will say I am not going to show the individual files. If I could guess the file name correctly it would open it but if I was just to type in scripts it would say virtual directory not allowing content displayed. It will not show me what files are in there for obvious security reasons. All good websites will have that in place. So I can't peruse the files for most websites. It would prevent a listing of the individual source code files. Mr Muys said that he had, without prompting or assistance from anyone, accessed and downloaded the table file and the editor file from the HR Advantage site simply by directing his browser to the following addresses: www.hradvantage.com.au/_script/CDAITable.js and www.hradvantage.com.au/_script/CDAIEditor.js. Under cross-examination, however, Mr Muys accepted that he already knew the file names and that it did not present a difficulty for someone as qualified as he to work out the path, intuitively as it were. However, it could be done. For someone who happened upon the files by chance, or who, having a working appreciation of the kind of generic names apparently used in such matters, was prepared to persevere by trial and error, the files, and therefore the codes, would have to be regarded as publicly available. If so, I do not think there would be any impropriety in a third party acquiring the relevant information. A person who leaves information in a place which, while concealed to a point, is nonetheless accessible to members of the public without breach of the law, cannot, in my estimation, be heard to assert that there was some impropriety in a stranger viewing and absorbing that information and using it to his or her own lawful advantage. 76 The other aspect under this heading relates to the nature of the subject files as JavaScript code. Each time the web site in question was opened in a browser, the JavaScript code was sent to the browser and, if the user were technically knowledgeable in relevant respects, he or she might have secured access to the code, and read it. It's almost impossible in those circumstances to restrict its use in terms of other programmers being able to access it and use that source code?---There are some libraries and utilities available that can encrypt the JavaScript code; not widely used though. No, but if you didn't use them you know it's really out there?---Yes, that's correct. Once it's gone to your client and your client is using it on a website the JavaScript code in particular is vulnerable to being able to be accessed and used by other programmers?---As well as the HTML and other images --- any other multimedia. You'll be surprised what you can learn by simply studying a few lines of someone else's JavaScript. Remember, if you see something really cool on a Web page, you can always see how they did it. Just view source. At http://ph.answers.yahoo.com/question/index?qid=20070607123346AAPRjiK Yahoo Answers' top voted answer to the question "Can anyone give me any info on how to get my own web site going. It follows that I must find that any knowledgeable user of a web browser would be able to view the code for the two subject files by "right-clicking" and then selecting "view source". Mr Muys drew attention to what he described as "the marginal functionality provided by ... [the table and editor files] over the default functionality provided by the web browser" and to "the ease with which alternative independent implementation could be obtained or developed". With respect to the table file, Mr Muys said that the file provided "aesthetic improvements, but not any fundamental or necessary functionality". Under cross-examination, he accepted that aesthetics were very important for an enterprise like Dais which was helping people "leverage" or develop their brands, and were an important part of the Dais business model. As to the matter of alternative implementation, Mr Muys said that there were numerous open-source program components that were available providing the same aesthetic improvements as achieved by the WebStable table file. He exhibited to his affidavit a similar file which found on the Internet in 15 minutes, using Google. 78 In his second affidavit, Mr Carpenter said that a web browser based text editor was "a common part of the source code for most CMS products". Mr Muys said that he was unaware of any "modern CMS product", proprietary or open-source, that did not provide a web browser based text editor. I would expect --- because the editing function is quite separate it's a stage in the workflow process that the user is going through and therefore most editors tend to be very stand-alone as far as their interactions with the rest of the program so they are instantiated by the program, provided with information. When they can finish they're then provided information back. So having done that I would expect that would be a matter of probably only a couple of hours work to actually connect --- to actually, you know, use the interface that that editor provided me to load the file and use that interface to extract the final content. With the table file, the table file because it is --- because the table functionality is more close aligned with the actual display of information rather than just the direct editing and information that would probably require a little bit more work but I would be very surprised if it took me any more than half a day worth of modification in order to actually integrate a replacement table file and if I was fortunate to find a good table file online --- on the Internet it could also likely only be a couple of hours. By a normal programmer's standard, these two files represent only a small amount of code. There really is not that much to them. They appear to already be at a very basic level. I think it would be hard to make these files simpler than what they already are. As they are so basic I do not see anything particularly clever in them. Anything that these source code files do can also be done by third-party products available on the Internet. He gave an example of such a component, and where it might be found on the Internet. He described it as "a comprehensive and feature-rich product". After inspecting the table file, Mr Wood said it was not "a highly innovative or significant piece of source code". He expected that an IT graduate with three years of experience in JavaScript would be able "to generate this source code from scratch in under 24 man-hours including testing. " Under cross-examination, Mr Wood said that such an estimate involved a degree of generosity towards the graduate: "Basically, if the graduate couldn't do it in that amount of time, I think he'd be out on the street again if he was on my project. On the strength of the evidence referred to above, I am bound to find that these two files, or files substantially performing the same functions, could have been re-created from scratch by a developer of reasonable experience in about a week of normal work. Indeed, similar files might, and I would find probably could, be downloaded readily, freely and legally from open-source sites on the Internet. I do not, therefore, think that the files had any element of confidentiality about them by reason of the difficulty or expense associated with re-creating them or something similar. 81 Turning to the question whether the source code for the subject files was jealously guarded by Dais, there are, I consider, three relevant considerations. The first relates to the steps taken by Dais to make it clear to the developers employed by it that these files were confidential. That is relevant under the third element to which Gummow J referred in Smith Kline , and I shall turn to it presently. 82 The second consideration relates to the steps which Dais took, as between itself and its clients, to ensure that the files remained confidential. This aspect must be considered against an understanding that, when completed, a new web site will be loaded onto the client's server, located (in the case of highly sophisticated or well-resourced companies) at the premises of the client itself or (more usually) at the premises of the Internet service provider utilised by the client. The administrator in either case will have a user name and password by reference to which he or she will be able to access all the source code in the relevant CMS, including that in the table file and the editor file. In this context, the licence agreement which Dais extracts from its clients (see par 60 above) makes a deal of sense. I find that Dais goes to considerable lengths to ensure that strangers do not have access to the CMS in WebStable including, quite obviously, the source code. However, as mentioned above, I could not find that Dais's practices in relevant respects were the same when Mr Petro was employed as they were in April 2007 or that, if they were, that Mr Petro knew of them. 83 The third consideration relates to the specific steps which Dais might have taken, but did not take, to keep the relevant information confidential. Mr Muys noted that the code for the WebStable product which he viewed contained no copyright or other proprietary notice. By way of contrast, he referred to a project of which he was the lead maintainer, and which used 75 separate and distinct third-party components. Where copyrights to different parts of the file are owned by different developers because they've developed them independently, it lists --- it identifies which parts of the file are copyright to which individuals or which organisations and it contains a link to an external file in the top level of the project directory that contains the full text of the licences involved for the entire project. 84 Save with respect to the licence agreement which it executed with its clients (and subject to its dealings and communications with its own developers, a matter to which I shall turn presently), I could not find that Dais took any relevant steps to keep confidential the source code of the table file and the editor file. Of its nature, that code was intrinsically susceptible to inspection and appropriation by strangers. It seems that encryption may have been a technique by which Dais could have protected the security of these files, but, according to Mr Carpenter, that practice was uncommon. However, the absence of any copyright or proprietary endorsement on or in relation to the subject files shows that there was a step which might have been taken, and which, apparently, was commonly taken, but which Dais did not take. In these circumstances, and with reference particularly to the technology of client-side JavaScript code, I am disposed to give little weight to the protection which Dais secured for itself by the terms of the licence agreements into which it may have entered with its clients. In the nature of things, it is not a particular client, who had paid for the construction of a web site, that would be likely to appropriate source code on that web site for other purposes. If there were to be an unwanted appropriation, it would, I infer, most likely be done by a web developer, computer professional or well-informed amateur who had the purpose of building his or her own web site. In this setting, I could not find that Dais took any serious steps to protect the confidentiality of the files on which it sues in this proceeding. 85 As for the commercial value of the table file and the editor file, I accept, of course, that they are an integral part of WebStable, and that a Dais-built CMS --- at least one that required the relevant functions --- would not operate as intended without them. I am, however, concerned with the value of the two files as such. If Dais were minded to "sell" these files, how much might it expect to receive in return? There was no evidence of a market for such things, in which circumstances I must assume that a willing buyer would pay no more than it would cost him or her to build an equivalent product from scratch. Mr Muys' evidence was that "the ready availability of zero-cost alternatives" for the files would justify the conclusion that "the licence sale value" of them is "only marginally above $0". Mr Wood's evidence as to the value of the editor file is as I have set it out in par 79 above. In effect, his evidence was that the commercial value of that file was nothing. As to the table file, he said that he did not find it to be "a highly innovative or significant piece of source code". Based on the wages that would be required to be paid to a developer to re-create that file, his estimate of the value thereof was of the order of $1,680. 86 To an extent, the usages and practices of the industry in relevant respects are also illuminated by what I have written above. They do not support Dais's assertions of confidentiality. When he needed a table file in 2002, Mr Suthers commenced by downloading one from a site upon which he had worked in his previous employment. Dais was the beneficiary of that. Whether or not Mr Perlinski knew what was happening at that time, the fact is that Mr Suthers' actions demonstrated what appeared to be accepted by developers as a quite uncontroversial practice. Absent issues of copyright, and without begging the question now being considered, I cannot appreciate why it should be regarded otherwise. 87 I accept that the ability to view (and to copy) source code is a commonplace in the relevant technology, and the evidence of Mr Wood that trainee programmers are encouraged to exhibit curiosity about such matters. I accept the evidence led by Mr Petro that the endorsement of a copyright notice upon source code is a practice which is commonly resorted to, and that this practice removes such element of ambiguity as might otherwise surround the question of the entitlement of a stranger to copy or use the code. I also take into account the nature and function of the two subject files. They operate in the way of utilities: important and ever-available, but without involving anything particularly special or unique in their own right. In these respects the files are rather like the electrical wiring in a new house. There was nothing in the evidence to suggest that if these files became unavailable, other similar files would not do equally as well. The impression I gathered from the evidence as a whole is that programmers and developers in the industry regarded files of this kind much in the way of a generic resource required for a new web site, but one that could normally, and without impropriety, be downloaded from any available source. 88 For the above reasons, I cannot conclude that the source code for the table file or the editor file had the necessary quality of confidentiality about it within the terms of Gummow J's second element in Smith Kline . 89 Turning next to the third element --- receipt of the information by the defendant in such circumstances as to import an obligation of confidence --- Dais led no evidence that Mr Petro was told, orally or in writing, that the table file and the editor file were confidential, or the like. It is true that Dais procured him to execute a confidentiality agreement (to which I have referred in par 62 above) but that imposed no more specific an obligation than that Mr Petro should not use, disclose, etc confidential information as generically defined. In that sense the agreement begged the present question. Mr Suthers, to whom Mr Petro reported during the time that the table file and the editor file were under early development at Dais, was never told to keep the code for the two files confidential. To Mr Petro's observation, Mr Suthers obtained the initial version of the table file from a web site which he had built in a previous employment. These circumstances do not bespeak a working environment in which a requirement to keep the two files confidential was implicit. As I have said, no such requirement was ever made explicit. 90 I recognise, of course, that the very fact that Mr Petro first obtained an awareness of the table file and the editor file during the course of his employment is relevant to the third element of Gummow J. Nothing I have said in these reasons should be taken to deny the proposition that it might well have been a breach of Mr Petro's duty of good faith for him to have revealed to a competitor of Dais the code in these files while he remained in that employment: see Faccenda Chicken Limited v Fowler [1987] Ch 117, at 136-137. But the question with which I am concerned is whether information obtained by a person during his or her employment may, consistently with the equitable obligation of confidence, be used by the person after the employment has ended. The mere fact that the information was obtained during the employment is relevant in such a context, but is not determinative. 91 I do not consider that the circumstances in which Mr Petro received the details of the source code for the table file and the editor file were such as to import an obligation of confidence. 92 For the above reasons, I do not consider that Mr Petro was under an equitable obligation of confidence with respect to his knowledge of the existence, content and location of the source code for the table file and the editor file, or with respect to his use of that code for his own purposes. Undoubtedly Mr Petro used for his own benefit information which he had acquired in the employ of Dais, namely, the location (by reference to Dais's file naming conventions) of the table file and editor file in a Dais-built CMS. He also used the source code for those two files, and at least the availability, content and utility of that code should also be regarded as "information" in this context. The contrary was not submitted by Mr Petro. The question to be resolved is whether any of that information was "confidential information" within the terms of the confidentiality agreement. That term is defined in Recital A thereto as trade secrets, confidential and proprietary information. 94 In the light of my findings above as to the absence of any equitable obligation of confidence with respect to the source code in the table file and the editor file, it is clear that the code in question could not be regarded as a trade secret. Neither, in the light of those findings, do I regard it as "confidential information". The cases show that there is a category of information which, although not sufficiently confidential to attract the operation of the equitable obligation of confidence, is such as would justify the imposition of a contractual restraint, operating after the termination of the employment in question: see Faccenda at first instance [1984] ICR 589, 598-600, and on appeal [1987] Ch at 135-138; Wright v Gasweld , 22 NSWLR at 333-334 and 339. The principle for which these cases stand, however, is one that informs the making of a judgment as to whether a particular contractual restraint should be regarded as valid. It does nothing to provide a connotation for the term "confidential information" in an existing contract, the validly of which is not challenged. Put another way, although the cases may recognise that there is a category of what might be called "confidential information", the post-employment use or disclosure of which might be the subject of a valid contractual restraint, they necessarily assume the existence of a contract which specifies the information in question. That is not this case. 95 The confidentiality agreement was, of course, a document of Dais's own drafting. Rather than specify the separate categories of information which it desired to be covered by that agreement, Dais chose to refer to the information generically and must, I consider, live with the consequences of such ambiguity as may be involved in its choice of words. I can envisage two categories of information that would obviously, and appropriately, be described as "confidential information" within the meaning of the agreement. The first is information to which the equitable obligation of confidence attaches, notwithstanding that such information might also be regarded as a trade secret in the narrow sense. The second is information which Dais identified, by a communication to Mr Petro, as being confidential for the purposes of the agreement. Beyond these two categories, however, I consider that Dais shouldered the burden of persuading the court that information which happened to come to the attention of Mr Petro during the course of his employment should be regarded as "confidential". Largely by reason of the facts and circumstances which I have canvassed earlier in these reasons, I do not consider that the source code for the table file or the editor file, or the names of those files which enabled Mr Petro to locate that code, was confidential information within the terms of the agreement. 96 There remains the question whether any of the information to which I have just referred was "proprietary information". Information as such, of course, is not property: see TS & B Retail Systems Pty Ltd v 3Fold Resources Pty Ltd (2003) 57 IPR 530, 537, and the authorities there cited; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 236 ALR 209, 246 [120]. When information is secret or truly confidential in fact, there is a sense in which the person by whom the information is known might be said to own the information. At times, the concept of property has been used --- metaphorically as I appreciate it --- to describe the position existing when information cannot be used or revealed without breach of the equitable obligation of confidence: see Deta Nominees [1979] VR at 193. However, it is difficult, if not impossible, in my view, to consider how any, even metaphorical, invocation of the concept of property could be legitimately made in circumstances where there was no obligation, equitable or contractual, to keep the information confidential. 97 But I cannot dispose of the "proprietary information" aspect of the confidentiality agreement simply by holding that the term is legally meaningless. It is a term which the parties have chosen, and I should strive to give it meaning. From the structure of Recital A to the agreement, it seems that the proprietary information may be something less than confidential information, but something the dissemination of which Dais has a legitimate interest in restricting. Counsel for Dais submitted that proprietary information, in context, meant "intellectual property" or "industrial property". Expressed as barely as that, the submission would seem to require the existence of an established entitlement to a recognised intellectual property right, a bar which I have held Dais is unable to cross in this proceeding. There is, however, another sense in which the submission may have substance. Mr Petro's contract of employment contained a paragraph headed "inventions, patents, designs, copyright and trade marks". The paragraph itself stated that a number of things, including an "improvement", used or made by Mr Petro in the course of his employment would "remain the property of DAIS". The use of the word "property" in this context has the potential at least to give some meaning to the words "proprietary information" in the confidentiality agreement which Mr Petro was required to execute at the same time as he entered into the contract of employment. 98 I consider that the paragraph in Mr Petro's contract of employment to which I have referred was concerned with the ownership, as between Mr Petro and Dais, of the rights there referred to. That is to say, if there were an invention or a new design (for example) developed as a result of Mr Petro's work for Dais, it would be Dais, rather than Mr Petro, that owned it. In my view, this was most probably the kind of thing that the drafter of the confidentiality agreement contemplated when he or she used the term "proprietary information". I recognise, of course, that this involves a degree of grammatical looseness that would never do in legislation, but it works within the confines of the text chosen by the parties to the agreement and gives that text some reasonably intelligible operation. As so construed, the agreement means that Mr Petro was not to use any information which came to him during his employment with Dais and which related to one of the rights referred to in this paragraph of his contract of employment. Relevantly to Mr Petro's use of the table file and the editor file, there were no such rights. It follows that he has not acted in breach of so much of the confidentiality agreement as was involved in the reference to "proprietary information". 99 For the above reasons, Dais's claim in contract must be dismissed. Neither is there any serious argument but that he used this information to gain an advantage for himself, or for his own clients. The substantial question which I must decide, therefore, is whether Mr Petro's use of the information was improper within the meaning of s 183(1). By s 5 of the Act an "officer" is defined to include a director, but it also includes many other persons, eg the secretary of the corporation, an employee, a receiver and manager appointed under a power contained in an instrument (but not a receiver who is not also a manager, nor a receiver and manager appointed by the court), an official manager and a liquidator appointed in a voluntary winding up (but not a liquidator appointed by the court or by the creditors). It seems to me, therefore, that what is "improper" for the purposes of s 124(2) cannot be determined by reference to some common, uniform, or inflexible standard which applies equally to every person who is an officer, but rather must be determined by reference to the particular duties and responsibilities of the particular officer whose conduct is impugned. 102 A provision relevantly the same as the present s 183(1) appeared in s 232(5) of the Corporations Law. That provision came before Young J in the Equity Division of the Supreme Court of New South Wales in Rosetex Company Pty Ltd v Licata (1994) 12 ACSR 779. His Honour referred to the original precursor of s 232, s 107 of the Companies Act 1958 (Vic), and to the parliamentary materials which accompanied the enactment of that section. Those materials suggested that the intention was "to introduce a general statutory provision which would be declaratory of the existing law" (12 ACSR at 784). It seems to me that in this schema the proper interpretation is to take the word 'information' in subs (5) as referring to that type of information which equity would restrict the director from using to his personal profit. ... Accordingly, in my view, 'information' in s 232(5) means the sort of information which equity would protect by injunction if a director used it in breach of his fiduciary duties. 'Improper' use of that information is in much the same plight as a breach of fiduciary duty under the general law. It follows that as there is not here any breach of fiduciary duty in the current circumstances there is no infringement of s 232(5). 103 In R v Byrnes [1995] HCA 1 ; (1995) 183 CLR 501, the High Court was concerned with an appeal from a conviction for breaches of s 229(4) of the Companies (South Australia) Code , a provision which was the equivalent of the present s 182(1) of the Corporations Act . Brennan, Deane, Toohey and Gaudron JJ referred, apparently with approval, to what Jacobs J had said in Grove v Flavel , and held that, for the conduct in question to be improper, it was not necessary that the offender be conscious of the impropriety. When impropriety is said to consist in an abuse of power, the state of mind of the alleged offender is important Hindle v John Cotton Ltd (1919) 56 SLR 625 at 630-631: the alleged offender's knowledge or means of knowledge of the circumstances in which the power is exercised and his purpose or intention in exercising the power are important factors in determining the question whether the power has been abused. But impropriety is not restricted to abuse of power. It may consist in the doing of an act which a director or officer knows or ought to know that he has no authority to do. 105 Two judgments given in 2000 in the Supreme Court of New South Wales bear upon the present question. There are some extensions made by the statute in that there is taken away some problems of privity, there is conferred a statutory right to receive damages or compensation where under the general law there would only be an account of profits and other ancillary advantages. However, generally speaking, if there has been no improper use of information under the general equitable principles, there is no improper use of information under the statute. This is logically so when one remembers that sections like s 232 were originally taken by the drafters of the 1958 Victorian Companies Act and the 1961 New South Wales Companies Act from the equitable duties set out by Romer J in Re City Equitable Fire Insurance Company Ltd [1925] Ch 407. " (19 ACLC at 322 [116]). Counsel for Mr Petro did not deal with the section at all. Counsel for Dais contented himself with submitting, in his written outline, that the "information" to which s 183 refers is not confined to information that would be protected by the equitable obligation of confidence, that Mr Petro had provided "IT/computing services" to Bullet Creative, and that neither applicant had consented to "third party use of WebStable". It was not submitted that the interests of Dais's unidentified client, or former client, from whose web site it may be assumed that Mr Petro downloaded the subject files, were to any extent involved in a consideration of the question whether his having done so was improper. 107 On the findings I have made above, it is not at all obvious how I might come to the conclusion that Mr Petro's use of the relevant information was improper. No breach of any fiduciary obligation was involved in what Mr Petro did. As a former rather than a present employee, no suggestion of excess of authority on Mr Petro's part could be sustained. Mr Petro had not held a senior position with Dais, and the information which he used was not, I have held, confidential. Posing the question in accordance with the broad formulation of their Honours in the High Court in Byrnes --- was there a breach of the standards of conduct that would be expected of a person in the position of the alleged offender by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case? --- it is hard to find a satisfactory answer which would favour the position for which Dais contended. Absent a finding of infringement of copyright, its counsel did not propose any. For my own part, in the light of the findings I have made above as to copyright, confidential information and breach of contract, and taking into account the practices and usages of the industry, I could not conclude that a reasonable person with knowledge of all the relevant circumstances would consider that Mr Petro had breached the standards of conduct which pertained to a person who had been, but was no longer, employed in a subordinate role as a web developer in a business of the kind conducted by Dais. 108 For the above reasons, Dais's claim under the Corporations Act must be dismissed. 110 Dais alleged that it suffered damage to the extent of revenue forgone by its inability to exploit WebStable as a result of the activities of Mr Petro. In his affidavit sworn on 1 July 2007, Mr Perlinski set out the revenue that Dais might reasonably have expected to receive --- broken up according to development costs, licence fees and profit margins --- had each of the then known web sites built by Mr Petro been built, supplied and serviced instead by Dais. He provided his workings in each instance, and his calculations were supported by quotations prepared by Mr Lindgren. Mr Petro challenged the assumption of causation upon which these calculations were based. It was submitted on his behalf that it had not been established that his use of the table file and the editor file led to Dais forgoing any revenue from the exploitation of WebStable. For reasons which follow, I would accept that submission. 111 As made clear earlier in these reasons, the table file and the editor file were minor, though functionally important, elements of WebStable. They were in the nature of utilities that facilitated the making of aesthetic modifications in a web site. If they were not available in their WebStable form, they, or files of equivalent functionality, might have been obtained from elsewhere, or written from scratch as a last resort, without expense or inconvenience. There was no suggestion that Dais was the only supplier in the industry from whom a CMS incorporating files which provided that functionality could be obtained; rather, the contrary was manifestly the case. Neither was there any suggestion that any of Mr Petro's clients took their business to him because these files were part of the CMS which he provided. Had any such suggestion been made, I would have regarded it as far-fetched. Had he not had access to these files, Mr Petro would have been able to provide his clients with web site products every bit as pleasing and functional as those that he did provide. He would simply have obtained equivalent functionality from elsewhere. Even if he could not have done so, and even if this caused his clients to take their business elsewhere, there is no way that I could assume that they most probably would have taken it to Dais rather than to other similar service providers in the industry. 112 The conclusions expressed in the previous paragraph should not really be a matter of evidence in themselves. The customers just want to know that the system works and is easy to use. I would not expect a customer to base any part of their purchasing decision on the source code in the two JavaScript files. In relation to a number of them, Mr Perlinski's affidavit of 1 July 2007 estimated the general dimensions and requirements of a web site that they might have had built by Dais had they not gone to Mr Petro, and the charges that Dais would have imposed for its services. A witness from each of three of the organisations in question gave evidence to the effect that they were very happy with Mr Petro's work for reasons unrelated to the functions in which the table file and the editor file were involved. They left no doubt but that they would not in any event have obtained services from Dais. 114 In relation specifically to its claim in copyright, it was submitted on behalf of Dais that its damages might be assessed by considering the notional licence fee that ought to have been its reasonable expectation for exploitation of WebStable: see eg Nominet UK v Diverse Internet Pty Ltd (2005) 68 IPR 131, 142 [47]. However, the present is not a case in which I could find that there was any commercial value in the particular form of expression taken by the source code in the table file and the editor file. I can think of no reason why a web developer would contemplate paying good money to Dais for the use of those files when equivalent functionality might just have readily been obtained elsewhere at no cost, or effectively so. 115 For the above reasons, I would find that Dais did not lose any revenue as a result of the use of the table file and the editor file by Mr Petro. It would not have made good its claim for damages. | computer program content management system for internet web site individual files within such a system whether "set of statements or instructions" whether "used ... to bring about a certain result" whether source code on files a computer program as defined. infringement whether necessary to establish actual copying of work or copy of work whether infringement constituted by copying progenitor or sibling of work. infringement computer program part only copied whether part a substantial part qualitative or quantitative approach to this issue originality of part relevant of failure to explain qualitative aspects of whole work. obligation of confidence information obtained during employment information used after termination of employment whether information had necessary quality of confidentiality circumstances in which information was conveyed to employee. contract of employment containing confidentiality terms whether information acquired by employee was "confidential information" or "proprietary information". obligation of former employee as to use of information acquired during employment whether such use "improper". copyright copyright copyright equity contract corporations |
His Honour dismissed an application for judicial review filed in the Federal Magistrates Court on 3 January 2006 seeking review of the decision of the Refugee Review Tribunal ('The Tribunal') handed down on 24 November 2005. The Tribunal affirmed a decision of a delegate of the Minister given on 8 August 2004 not to grant the appellant a Protection (Class XA) Visa. 2 When the appeal was called on today there was no appearance by the appellant. 3 I am satisfied that he has been given notice of his appeal. In particular, a letter posted to him at his nominated address for service on 31 October 2006 by express post, notifying of his appeal, has not been returned unclaimed. There is other correspondence both from the first respondent, the solicitors for the first respondent and from the Court which notified him of this appeal which was sent to his address for service and has not been returned unclaimed. 4 In the circumstances I dismiss the appeal pursuant to s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). 5 I order that the respondent pay the first respondent's costs which I fix in the sum of $1200. | no appearance by appellant migration |
The principles in relation to whether or not an adjournment application should be granted were delineated by the High Court in its decision of Sali v SPC Ltd [1993] HCA 47 ; (1993) 67 ALJR 841 at 843 as follows: " an adjournment which, if refused would result in a serious injustice to the applicant should only be refused if that is the only way that justice can be done to another party in the action ". The serious injustice or prejudice that Mr Easton, on behalf of John Holland, says it will suffer arises from its desire to seek leave to appeal my decision of last Friday, 2 October 2009. In that decision I refused to strike out a part of the Union's pleading that seeks to raise a collateral challenge to a declaration made by a Commonwealth Minister under s 100 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the SRC Act"), which is fundamental to its licence as a non-Commonwealth licensee. I held the Union's right to raise that collateral challenge was not clearly untenable or unarguable. Consequent upon that order, I ordered that John Holland make discovery of certain documents relevant to the issue of the collateral challenge and, particularly, the declaration made by the Minister under s 100 of the SRC Act. Mr Easton says that, if I proceed with the trial of this matter next week, the trial will render nugatory any appeal that John Holland may be able to pursue. He says that will occur because, in that event, the Union will have obtained discovery of the documents relevant to the collateral challenge, documents which he says are particularly sensitive in commercial terms. He also says that the Union will have been able to agitate its collateral challenge at the trial when, if John Holland was able to successfully appeal the matter, it would not have had either of those advantages. I do not consider these matters amount to serious injustice or prejudice such that I would be justified in vacating the hearing dates in this matter. First, John Holland has not yet even prepared a notice of appeal. It necessarily follows that it has not sought leave to appeal and it has not sought a stay of the orders I made last week. It is therefore not possible to ascertain what prospects, if any, John Holland has of obtaining leave or, after that, of succeeding on the appeal. Secondly, this is not a case where injustice will be caused to John Holland because it will be prevented from pursuing a claim or defence if the adjournment were refused. That was the situation that arose in Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146. All I did last week was to rule that the collateral challenge the Union wished to pursue was not so clearly untenable or unarguable that the Union should be prevented from pursuing it. I did not rule on the substance of that issue, ie whether or not John Holland or the Union would be successful on that particular issue. It follows, at its highest, that if this trial proceeds, John Holland will have to contend with an issue during the trial, and before the trial make discovery of documents, where it may not have to do so if it were able to obtain leave; and a stay; and then succeed on the appeal. However, it is frequently the case that a party to litigation has to contend with an arguable point raised by an opponent, make discovery and incur costs in defending that point. Sometimes, even where it is successful on that point, it may not be entitled to costs because it fails on the primary issues in the case. But this is part and parcel of litigation. It is not a matter that I consider amounts to serious injustice or prejudice. Furthermore, even if John Holland may suffer some injustice or prejudice by my refusing to adjourn the trial next week, I do not consider it is sufficient to outweigh the counter-veiling factors that have been identified by the High Court, including, more recently, in its decision of Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 ; (2009) 83 ALJR 951. They include these: this trial was set down urgently, approximately two months ago, by Dowsett J. When Dowsett J set the matter down for trial, he thought that, in all the circumstances, setting an early trial date was the most efficient way to deal with the matter. He was confronted with an application for interlocutory relief which, ultimately, he granted in a form to allow the matter to remain in status quo until the urgent trial. While it may be possible to dissolve that injunction in whole or in part as a condition of an adjournment, it is not without significance, in my view, that that injunction was framed and put in place in circumstances where the trial of the whole proceedings was expected to be held within a short period of time. Additionally, the Court has had to make special arrangements to make a judge available to hear this matter next week. Furthermore, I take into account the interests of other parties in the Court who may have been affected by this matter being granted an urgent trial date. Finally, I take into account whether or not public confidence in the administration of justice will be affected by an adjournment of this trial. In this particular matter, I consider this factor is significant. I am told by Mr Murdoch SC for the State of Queensland, which has intervened in these proceedings, that John Holland's claim has placed a cloud over the State's Workplace Health and Safety legislation and the State is therefore anxious to have the matter resolved as promptly as possible. That is, of course, just one aspect of the public interest that is at work in these proceedings. For all these reasons, I refuse John Holland's application to vacate the dates set for the trial of this matter next week. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Reeves. | application to vacate trial dates prior discovery order applicant intending to seek leave to appeal in relation to the discovery order whether the applicant will suffer serious injustice or prejudice if adjournment not granted consideration of countervailing factors including court processes, other litigants, public interest in early determination practice and procedure |
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