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2 On 27 November 2008, Mr Dudley Quinlivan resigned from each of these offices with the company. He was replaced by a Mr Leo Ralph as the sole director and the secretary of the company. I was informed, without objection, in the course of proceedings today by Mr Coulsen, on behalf of the administrators, that an event, which seems at least to have influenced the resignation of Mr Dudley Quinlivan as director and secretary of the company, was a disqualification order made by the Australian Securities and Investments Commission in respect of his ability to be a director of a company. A consequential application was made by him to the Administrative Appeals Tribunal for the review on the merits of that decision, and a stay of the order of ASIC, which the Tribunal was disposed to grant. It seems that as a matter of prudence, nonetheless, Mr Quinlivan decided to resign the directorship. 3 On 10 December 2008, Jason Walter Bettles and Susan Ruth Carter were appointed as administrators of the company. The hearing date for the winding up application was originally fixed to be 11 December 2008. Upon the winding-up application coming on before a registrar of the Court that day, an application was made for the winding up application to be adjourned, pursuant to s 440A(2) of the Corporations Act 2001 (Cth). That particular application being beyond the jurisdictional remit of a registrar, the application was referred to a judge. It came before me for hearing today. 4 On the application being called on for hearing, the material initially relied upon on the part of the administrators comprised an affidavit of Mr Bettles sworn on 10 December 2008, and a further affidavit of Mr Bettles sworn on 15 December 2008, the latter being filed by leave. It was a matter of comment in the course of submissions made on behalf of the Commissioner by one of his officers, Mr Cleary, that there was an absence of sworn material on the part of related companies. An opportunity was extended, which was taken up by the administrators, for the case to be stood down to determine whether or not it was desired that the application proceed on existing materials. 5 In the result, a further affidavit came to be relied upon by the administrators. That is an affidavit of Mr Dudley Quinlivan, which was sworn today at Bundall on the Gold Coast, and filed by leave without objection. To understand the relevance of that particular affidavit and its contents, some brief recitation of the background to the winding up application and the state of affairs of the company, as best the administrator has presently been able to ascertain them, is necessary. 6 There are no secured creditors of the company. The most significant creditor, and by a large margin, is the Commissioner of Taxation ("the Commissioner"). At the time when the report as to affairs was prepared, the company was indebted to the Commissioner, on behalf of the Commonwealth of Australia, in the sum of $592,668.40. That particular debt attracts a general interest charge, such that a sum now in excess of $600,000 is owed to the Commonwealth and payable to the Commissioner. 7 The other unsecured creditors are each, in one way or another, companies which are controlled by Mr Dudley Quinlivan. 8 In his more recent affidavit, Mr Bettles deposes that the company is part of a group associated with the Quinlivan family. Part of that group is a company called RLT Finance Proprietary Limited (RLT). RLT, according to Mr Bettles, is indebted to the company in the amount of $3,532,820. 9 Mr Bettles's investigations have disclosed that the group of companies of which Scottsdale Homes Number 3 is part, have been set up such that all financing for individual corporate entitles within the group is undertaken by RLT. Another company within the group, and also one of the unsecured creditors of Scottsdale Homes Number 3, is Corymbia Corporation. Corymbia Corporation is constructing a large development called Corymbia Woods at Collingwood Place in Queensland. In September 2008, local government development application approval was given for the Corymbia Woods development. That, so the administrator deposes, meant that the value of the development increased such that Corymbia Corporation was able to refinance through its current financial institution, Equity Trust, to meet the costs associated with the completion of that development. 10 The refinancing package totalled some $47 million. A feature of the present economic climate is that Equity Trust has advised that it is not in a position to fund the development any further because of, apparently, a lack of funding from depositors. Corymbia Corporation has located, via a company known as Professional Mortgage Providers (Victoria) Proprietary Limited, another funder. 11 A letter of offer from that institution of $47 million is in evidence before me. Funding from that source would repay the current advance by Equity Trust and provide moneys to complete the development, with some surplus being available, so it is apprehended, to pay other debts. This particular funding arrangement is due to settle at the end of January 2009. At that time, so the administrator deposed, Corymbia would be able to advance moneys to RLT, with RLT then being able, in turn, to settle a debt which it had to Scottsdale Number 3. The latter debt arises from dealings, which it is not necessary to detail for present purposes, between Scottsdale Number 3 and RLT. The administrator believes that once the debt owing by RLT to Scottsdale Number 3, a sum of $3,532,820, is paid, there will be more than sufficient funds to meet Scottsdale Number 3's liabilities, which include, in the main, the indebtedness to the Commonwealth in respect of taxation liabilities, which I have mentioned. 12 The administrators have received from Equity Trust a letter, undertaking that upon it being paid under the refinancing schedule to occur at the end of January 2009, it will ensure that funds are available to meet what it then apprehended to be the current debt to the Commonwealth, payable to the Commissioner; viz, $593,000. Other evidence before me discloses that documentation in respect of the refinancing proposal is in active preparation, with settlement expected to occur on or about 31 January 2009. 13 The preliminary review by the administrators of the company's records suggest that there has been two payments to related creditors, totalling $445,036, which may be preferential. Mr Bettles has not discovered any other transactions which may be voidable by a liquidator. He further deposes that there would be no need for a liquidator to seek recovery of those potential preferential payments if the debt owed by RLT were paid, because that debt exceeds the liabilities of the company. Mr Bettles has further deposed that, based on his investigations to date, he would recommend that at a second meeting of creditors, presently scheduled for 23 January 2009, creditors adjourn the meeting for three weeks, because it is likely that in that time, the refinancing, which I have described, would settle that Corymbia Corporation would advance funds sufficient to enable RLT to meet its liabilities, which includes the debt to the Commonwealth, payable to the Commissioner, and therefore, with no liabilities, the administration of the company could end without the need for a deed of company arrangement. 14 This, then, was the background against which the Commissioner came to comment in submissions about the absence of an affidavit from Mr Dudley Quinlivan. The comment presaged an apprehension which I had in respect of the state of the material as then before me. I am the controlling mind of the Quinlivan group of companies. I refer to Mr Bettle's affidavit of 10 December; in particular, to exhibit JWB 5, being a loan preapproval letter, Professional Mortgage Providers (Vic) Proprietary Limited to Corymbia Corporation, dated 27 November 2008. Upon settlement of the refinance to Corymbia Corporation described in the preapproval, I will cause sufficient funds to be made available and paid to the administrators of Scottsdale Number 3 Pty Ltd, so that all creditors of it are paid in full. The judge in the present case was not satisfied that it was in the creditor's interests for the administration to continue and it is his decision to that effect that is challenged here. The question of whether an administration should continue, rather than that there be a winding up, is obviously closely related to the further question of whether the creditors could hope to get more by way of payment of their debts from one form of process or administration than from the other. In order to satisfy the court of the matter referred to in s 440A(2) of the Corporations Law, one would expect that there would have to be some persuasive evidence to enable it to be seen that there were assets which, if realized under one form of administration rather than the other, would produce a larger dividend, or at least an accelerated dividend for the creditors. 16 It is possible that in a liquidation of the company, a domino effect might occur, whereby related company loans are called up successively. Whether or not that would lead to a better return to creditors than a continuance of the administration and something of a "wait and see" approach in relation to the proposed refinancing and consequential repayment, is a moot point indeed. The only particular recovery in prospect to which the administrator points in his later affidavit is that of the two preferential payments. That would yield a recovery well short of 100 cents in the dollar for the creditors. The application for winding up be adjourned until 12 February 2009. 2. The convening period described by section 439A be extended to 13 February 2009. 3. A direction that the meeting of creditors held pursuant to section 439A be held no earlier than 14 February 2009. 18 In effect, this puts in place a regime whereby, by 12 February 2009, the refinancing and consequential repayment will either have occurred as apprehended, or not. 19 Faced with this particular development and, at least, the prospect of a return of 100 cents in the dollar for the Commissioner on behalf of the Commonwealth, Mr Cleary did not oppose the making of the orders sought on behalf of the administrators. 20 Section 439A(6) permits the court to extend the convening period on an application made during or after a period referred to in s 439A(5). The period in question in this case commenced upon the appointment of the administrators, see s 435C(1)(a) of the Corporations Act . Section 439A(7) provides that if an application is made under s 439A(6) , the court may only extend the convening period if satisfied that it would be in the best interests of the creditors, if the convening period were extended in accordance with the application. 21 Factors which the court must consider in that regard are set out in s 439A(8). It seems to me, having regard to the matters that I have recited already, that it is in the best interests of the creditors to extend the convening period as proposed. I am particularly influenced by the considered view of Mr Bettles, who is a responsible practitioner. I am also influenced no less by the disposition of the Commissioner, through his officer, in light of the development this morning which led to an affidavit from Mr Quinlivan being filed and read. There is something of a calculated risk in the extension and in the adjournment, but, in the circumstances, it seems to me in the best interests of the creditors for that risk to be taken. 22 I therefore make orders in terms of those proposed, which I have set out above. I grant liberty to apply on two clear days' notice in writing, and I reserve 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 Logan. | application for adjournment of winding up application where company under administration application allowed practice and procedure |
A notice of assessment of penalty of $23,618 for having a tax shortfall amount in respect of that financial year (the penalty assessment) was issued to the applicant on 25 November 2005. That amount became due on 21 December 2005. 2 The applicant has not paid either of the assessment or the penalty assessment. 3 This application was filed on 5 April 2007 pursuant to s 39B of the Judiciary Act 1903 (Cth) (the Judiciary Act ). The applicant seeks a declaration that the assessment was not properly made by the respondent. It also seeks orders prohibiting the respondent from enforcing the assessment or the penalty assessment. In essence, the applicant claims that the assessment was made in bad faith and for an improper or ulterior purpose, so that in reality there is no assessment at all of its taxation liability in respect of that financial year: cf Deputy Commissioner of Taxation v Richard Walter Pty Ltd [1995] HCA 23 ; (1995) 183 CLR 168. 4 By motion of 20 April 2007, the respondent seeks to have the application summarily dismissed on the grounds that it is clearly untenable and that it amounts to an abuse of the process of the Court. Alternatively, the respondent seeks that the statement of claim be struck out as not disclosing a reasonable cause of action. That prompted the applicant, on 7 September 2006, to apply to the Supreme Court of South Australia to set aside the first statutory demand pursuant to s 459G of the Corporations Act . That matter was heard on 17 November 2006. Judgment was reserved. Late in the day of 16 November 2006, the applicant filed an application in this Court also pursuant to s 39B of the Judiciary Act seeking that the notice of assessment and the penalty assessment be declared invalid and quashed (matter SAD 262 of 2006). In the Supreme Court proceedings, on 24 January 2007 Judge Withers set aside the first statutory demand because the proceedings in this Court demonstrated a genuine dispute in relation to the debt. The defendant was not aware of this prior to argument. But for the filing of that summons the plaintiff's application would have been dismissed. It contended that, on the statement of claim, the application could not possibly succeed. On 1 February 2007, Finn J dismissed the application with costs. The transcript of the hearing of that day reveals that the matter was dismissed because there was no defence mounted to the motion to have the application struck out. 7 Then round two began. 8 On 7 February 2007, the respondent issued to the applicant a further statutory demand (the second statutory demand) pursuant to s 459E of the Corporations Act for $77,515. That was the then total of the assessment and the penalty assessment together with accumulated interest. The applicant on 28 February 2007 again applied to the Supreme Court of South Australia to have the second statutory demand set aside. The second Supreme Court proceedings were listed for argument on 10 April 2007, but the hearing was adjourned pending the outcome of these proceedings. That was because the solicitor for the applicant, shortly before 10 April 2007, deposed that he had been instructed to issue fresh proceedings in this Court to again challenge the validity of the assessment and the penalty assessment. 9 Hence, these proceedings. 10 The applicant has not objected to the assessment or the penalty assessment or brought any proceedings under Pt IVC of the Taxation Administration Act 1953 (Cth) to challenge the quantum of the assessment. Its claim is limited to the claim that the assessment and the penalty assessment are invalid because they were made in bad faith. 11 It is appropriate to refer to one other piece of litigation relevant to the present issue. Haritopoulos Pty Ltd (Haritopoulos) at material times has been the trustee for the Charitopoulos Family Trust (the Trust). It lodged an income tax return for the financial year ended 30 June 2002 in its capacity as trustee of the Trust. Its income tax return disclosed a substantial capital gain on the realisation of certain property which, it claimed, was offset by accumulated past trading losses. The applicant to this application is one of the beneficiaries of the Trust. Pantelis Charitopoulos is a director of both the applicant and Haritopoulos. 12 On 30 March 2006, Haritopoulos Pty Ltd also issued proceedings under s 39B of the Judiciary Act in this Court (matter SAD 54 of 2006) against the respondent for orders that certain notices of assessment of income tax against it were invalid as not having been made in good faith and having been made for an improper purpose. In particular, Haritopoulos challenged the validity of an assessment issued on 8 November 2005 in respect of the financial year ended 30 June 2002 by which Haritopoulos was assessed for income tax liability at $2,813,000 (plus certain other amounts to which I do not need to refer), and the validity of an assessment issued on 24 November 2005 imposing a penalty assessment of $2,109,750. On 25 May 2006, the respondent applied to summarily dismiss that application. The motion was heard on 29 August 2006. Judgment was given on 23 March 2007. Justice Besanko found that, on the material before the Court, Haritopoulos had no arguable case that the assessment challenged was made in bad faith and entered summary judgment dismissing the proceeding in its entirety: Haritopoulos Pty Ltd v Deputy Commissioner of Taxation [2007] FCA 394. 13 In each of the proceedings heard by Finn J and Besanko J, the nature of the allegations is very similar to those now asserted in the statement of claim filed on behalf of the applicant in this matter. 15 The material allegations common to this application, and to the earlier applications in this Court by the applicant and by Haritopoulos, is that there is a group of companies known as "The Golden Chef Group" of which the applicant is a member. In respect of the financial year ended 30 June 2002, both the applicant and Haritopoulos lodged income tax returns in a timely manner, each claiming that no taxation liability arose. Between November 2004 and November 2005 the respondent carried out an audit of certain members of the Golden Chef Group, including both Haritopoulos and the applicant. Mr Charitopoulos became involved in dealing with the relevant officer of the respondent in about October 2005 during that audit. He had a telephone conversation with that officer on 17 October 2005 and a meeting with him on 20 October 2005. At the meeting, Mr Charitopoulos agreed to address outstanding matters promptly. That officer then indicated that, following receipt of further information, an assessment of income tax may issue, inter alia, to Haritopoulos and to the applicant. In the meantime, as that officer indicated, default assessments would be issued due to the delays in providing to the respondent information requested, and that that officer anticipated that the default assessments would issue in about six to eight weeks. Certain further information was then provided to the respondent, including a package of material provided on 3 November 2005. On 8 November 2005, the officer of the respondent dealing with the matter wrote to Mr Charitopoulos confirming what had been discussed on 20 October 2005, including the proposed issue of default assessments due to delays in the provision of information requested, and that the default assessments would take "at least six to more than eight weeks to issue". On 8 November 2005, that officer also told Mr Charitopoulos that the package of material delivered on 3 November 2005 had not by then been analysed. 16 In fact, the assessment of the income tax liability of Haritopoulos for the year ended 30 June 2002 was issued on 8 November 2005 and the assessment of income tax liability of the applicant in respect of that financial year was issued on 15 November 2005. 17 The allegations as to want of good faith and as to improper or ulterior purpose in making the several assessments in each instance were similar. In this case, they continue to be that the respondent failed to consider the material supplied on 3 November 2005 in making the assessment and that the assessment is incorrect in particular by apparently not allowing carried-forward losses. It is also alleged that the assessment does not contain any apparent basis upon which it was made. It is further alleged that the failure to consider adequately the package of information provided on 3 November 2005 leads to the view that the respondent, in the circumstances, did not act bona fide in making the assessment. It is further alleged that by reason of the conversation on 20 October 2005, the respondent represented that it would consider the package of materials, and its failure to do so together with its failure to provide in the assessment information as to the basis of the assessment, shows that the respondent did not act in good faith in making the assessment. There are subsidiary allegations to which I do not need to refer in any detail, such as a failure to accord procedural fairness to the applicant in the making of the assessment. 18 As to the penalty assessment, the statement of claim alleges that the respondent has provided no particulars as to how the penalty assessment was made, and further claims that it was based (so it is claimed) on a "false or misleading statement" of which the penalty assessment contains no particulars. On the evidence, the penalty assessment does not contain the statement which it is alleged to contain. Such a statement was contained on the penalty assessment issued to Haritopoulos. It appears that that part of the statement of claim has been transported from the Haritopoulos statement of claim in error. In fact, the current statement of claim in the present application does not then seem to assert that the making of a false or misleading statement leads to the invalidity of the penalty assessment. 19 Taking facts alleged in the present statement of claim at their highest, the issues which might point to invalidity of the assessment and of the penalty assessment are the same as those which Besanko J addressed in Haritopoulos [2007] FCA 394. They are a failure to provide particulars of the assessment and of the penalty assessment; secondly, the issue of the assessment on 15 September 2005 when, a few weeks earlier, an officer of the respondent had anticipated that it would take six to eight weeks for a default assessment to issue; thirdly, the fact that the penalty assessment was issued so close in time to the assessment; and finally, the failure to consider the package of information provided on 3 November 2005 before making the assessment (although it is clear that there was no undertaking given to consider that material before making the assessment, and in fact it was made plain on 20 October 2005 and in the letter of 8 November 2005 that a default assessment would issue notwithstanding the provision of that further information). 20 I agree with Besanko J, for the reasons his Honour gave, that on those allegations no arguable case of bad faith on the part of the respondent in making the assessment or the penalty assessment could be made out. As so much has been acknowledged by counsel for the applicant, I do not need to repeat those reasons. Furthermore, although it has not been expressly stated in this application, I note that Besanko J also rejected the further contention that arguably there had been a breach of s 166 of the 1936 Act and in any event his Honour found it beyond argument that s 175 meant that any such breach would not affect the validity of the assessment. His Honour also noted (as appears also to be the case here) that the claim based upon a want of procedural fairness had not been pursued before him, and in any event it was unarguable as ss 175 and 177 would operate so as not to affect the validity of the assessment even if there had been a want of procedural fairness to which the applicant was entitled. In the light of those provisions, Besanko J concluded, and I agree, that the applicant was bound to confine its challenge (as distinct from any challenge to the amount of the assessment under Pt IVC of the Taxation Administration Act 1953 (Cth)) to the "Hickman grounds" ( R v Hickman; Ex parte Fox and Clinton [1945] HCA 53 ; (1945) 70 CLR 598 per Dixon J at 615), relevantly that the assessment was not made in good faith. 21 In those circumstances, it was an appropriate acknowledgment by counsel for the applicant that the present statement of claim does not give rise to an arguable case of a want of good faith on the part of the respondent in making the assessment or the penalty assessment. He submitted that the material sought to be relied upon, if accepted, showed a factual basis upon which that conclusion was arguable, so that the action should be allowed to proceed to trial and the motion refused. 25 The motion of the respondent came on for directions on 24 April 2007. On that date, it was listed for hearing on 15 May 2007 and directions were given to enable the applicant to file and serve any responsive material by 3 May 2007 and for the exchange of submissions. The applicant did not comply with those directions. On 15 May 2007, the applicant applied for a further adjournment of the hearing. It was granted a further adjournment to 31 May 2007 upon its undertaking not to trade or to incur any further liability other than for costs in relation to these proceedings, and upon the basis of an order that it would by 22 May 2007 file and serve an affidavit setting out its assets and liabilities as at 20 April 2007 and any subsequent change in those assets and liabilities. It was given leave to file and serve an amended statement of claim, if so advised, by 25 May 2007 and to file and serve any affidavit material in response to that filed on behalf of the respondent by 24 May 2007. 26 The applicant did not comply with any of those orders. 27 The affidavit of Mr Charitopoulos sworn on 22 May 2007, which purports to comply with the order requiring it to set out its assets and liabilities as at 20 April 2007, does not do so. The assets were then used in Adelaide by Golden Chef Australia Pty. Ltd. (in liquidation). The ownership of these assets is disputed by the Receivers and managers of Golden Chef Australia Pty. Ltd. (in liquidation). Moreover, there is, despite the further affidavit of Mr Charitopoulos sworn on 29 May 2007, no further attempt to comply with that order of the Court. There is no explanation as to why the applicant has failed to do so. 28 There is no explanation as to why the applicant did not file and serve its proposed amended statement of claim in time. That document is an exhibit to the affidavit of 29 May 2007. There is also no explanation of why the responsive evidentiary material of the applicant was not filed and served within the time permitted. The applicant has presented nothing upon which it might be entitled to the further indulgence of the Court. Indeed, the apparent attitude of the applicant to the Court's orders gives rise to serious questions as to whether the applicant intends genuinely to dispute its liability to pay the amounts the subject of the assessment or the penalty assessment, or whether it is simply endeavouring to prolong these proceedings as a strategic or delaying tactic. If that were so, I would decline to grant the further indulgence sought by the applicant. 29 However, I prefer not to dispose of the application on that basis. The "new issue" as described by counsel for the applicant, emerged in the proposed amended statement of claim which is annexed to the affidavit of Mr Charitopoulos of 29 May 2007. The new allegations are in pars 21 --- 23 of that document. The Applicant says that the Assessment issued against the Applicant was issued for the same reasons as those referred to in paragraph 21 hereof and as part of a course of conduct of the Respondent. The said ulterior and/or improper purpose was to raise assessments against (inter alia) the Applicant so as to put the Respondent in a more advantageous position than it otherwise would have been in relation to the proposed Deed of Company Arrangement, which directly or indirectly was perceived by the Respondent to affect the Applicant and the Respondent's potential claims and rights against the Applicant. 30 The evidentiary source for that allegation is a letter to the solicitors for Haritopoulos of 17 July 2006 informing them of the respondent's decision to disallow the objection to the 30 June 2002 assessment issued on 8 November 2005 in respect of the tax payable by Haritopoulos during the financial year ended 30 June 2002. Accompanying that letter were the Reasons for Decision. Indeed, in my judgment, there is no prospect of the so-called "new issue" demonstrating a lack of good faith on the part of the respondent in issuing the default assessment to Haritopoulos under s 167 of the 1936 Act, far less in respect of the assessment to the applicant. Section 167 empowers the respondent, if not satisfied with the income tax return furnished by a particular taxpayer, to make an assessment of the amount upon which in the respondent's judgment income tax ought to be levied. The amount of that assessment upon which income tax ought to be levied is then the taxable income for the purpose of s 166. The Commissioner is then empowered by s 166 to make an assessment of the taxable income of any taxpayer and of the tax payable on it. 32 The "new" allegations of fact in the proposed amended statement of claim could not support the conclusion that the respondent, in not being satisfied with the income tax return lodged by Haritopoulos for the year ended 30 June 2002 did not form that view in good faith. Nor does it go any distance to establishing that the respondent, in making the assessment of the amount upon which Haritopoulos should have income tax levied for that financial year, did not make that assessment in good faith. In its context, the timing of the forming of those views was obviously prompted by some perception on the part of the respondent that Haritopoulos may be affected by a proposed Deed of Company Arrangement, and by the view that it was necessary or desirable for an assessment of the tax liability of Haritopoulos for the financial year ending 30 June 2002 to be made before the proposed Deed of Company Arrangement came into force. But it does not suggest in any way that the satisfaction of the Commissioner required by s 167 was not reached in good faith or that the respondent's assessment of the taxable income upon which the assessment was then made was not made in good faith. The identification of a reason for acceleration of the formation of the views upon which s 167 was enlivened and the power to issue a default assessment made does not impugn the integrity, that is the bona fides, of the exercise of that power. Indeed, the evidence of Mr Charitopoulos that he was told on 20 October 2005 that default assessments would be issued indicates that the decision to exercise that power had been made by then, at least informally. The formation of the view about the level of the taxable income of Haritopoulos for the financial year ended 30 June 2002 could not have been affected by the awareness of the potential Deed of Company Arrangement. Counsel for the applicant did not suggest how, in any way, the amount of the assessment made by the respondent under s 167 might have been affected by the knowledge of a potential Deed of Company Arrangement. 33 The proposed Deed of Company Arrangement is exhibited to the affidavit of Mr Charitopoulos of 29 May 2007. His affidavit does not make it clear that the proposed Deed of Company Arrangement was provided to the respondent in the package of information on 3 November 2005, so it does not make it clear whether the respondent had that document. Even if it were, the proposed Deed of Company Arrangement concerned Golden Chef Australia Pty Ltd (in liquidation) (Receivers and Managers appointed) (Administrator appointed) (GCA). It recorded that on 20 January 2006 the creditors of GCA had resolved pursuant to s 439C of the Corporations Act that the GCA would execute a Deed of Company Arrangement. The Deed was to provide a moratorium so that the business of GCA could continue, and to establish a Deed Fund to be administered by the Administrator in order to pay the creditors other than the non-participating creditors in full. The non-participating creditors, by definition, included Haritopoulos and other "Proponents". The so-called "Proponents" under the Deed (apparently, the associated companies of GCA) were to support and contribute to the Deed Fund to pay out the trading creditors of GCA in full. The Deed contemplated that Haritopoulos would grant security by way of a second registered mortgage over certain of its assets to secure the contributions proposed to be paid by the "Proponents" towards the Deed Fund. The Deed recognised that the respondent disputed the capacity of Haritopoulos to grant that mortgage, and it made provision in the event of the respondent successfully preventing the granting of that mortgage. 34 In those circumstances, assuming the Deed had not by then been entered into, it was not inappropriate for the respondent to endeavour to fix an amount in accordance with s 167 of the Act as the assessable income of Haritopoulos. Its decision to do so when it did, to protect or better secure its legal position, does not impugn the bona fides of the exercise of the power: Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 at 534. Nor could the timing of the decision, or the reason for the timing of the decision, inform the manner in which the power under s 167 has exercised in the particular circumstances. 35 The position of the applicant is even more remote from the proposed Deed of Company Arrangement. There is nothing in that document to suggest that its position, or the position of the respondent in relation to the applicant, could have been affected in any way by it. The applicant is not mentioned in it. The only basis upon which counsel for the applicant sought to attribute the paragraph of the Reasons for Decision referred to in the proposed amended statement of claim to the issue of the assessment against the applicant was by use of the plural "assessments" in the passage that has been quoted. There is no reason to do so. The plural is readily explained by reference to the fact of the primary assessment under s 167 and then the penalty assessment made against Haritopoulos. In the context of that passage in those Reasons, there is no basis upon which the use of that plural expression could be taken to be referring to the applicant. 36 It is also clear, for the reasons already expressed, that the particular paragraph of those Reasons for Decision could not have affected the respondent forming the view in terms of s 167(b) of the 1936 Act of not being satisfied with the return furnished by the applicant for the financial year ended 30 June 2002, or the assessment of the amount on which income tax ought to be levied. It is apparent on the material that the respondent had formed the view that a default assessment should be made in respect of the applicant's taxation liability for the financial years ended 30 June 2002, at least by 20 October 2005. The default assessment crystallised the liability of the applicant to pay income tax and determine its extent: Re Mendonca; Ex parte Commissioner of Taxation (1969) 15 FLR 256 at 259-260. It thus identified for the applicant when its taxation liability was due: Taylor v Commissioner of Taxation (1987) 16 FCR 212 at 217. But there is nothing to suggest the decision about the amount was other than made in good faith. 37 Nor is there any ground for inferring that the lack of detail as to the foundation for the assessment shows a lack of good faith. The assessment discloses the taxable income as determined by the respondent to be $104,968. The annexures to Mr Charitopoulos' affidavit of 29 May 2007 records the distribution from the Charitopoulos Family Trust to the applicant of $122,074 for the year ended 30 June 2002 (as well as such smaller distributions from some other trusts). The Reasons for Decision referred to also note that the applicant is part of the Golden Chef Group, and that the income tax return for the Charitopoulos Family Trust for the income year ended 30 June 2002 showed that that trust distributed its income to 30 June 2002 of $122,074 to the applicant. To the extent that the applicant submitted that this feature enhanced the significance of the "new issue", in my view the submission takes the new issue no further. 38 There is also no merit, in my judgment, in the assertion that the proposed pleading gives rise to a new issue, that is one which the applicant could not reasonably have raised earlier. Mr Charitopoulos' affidavit confirms that the Reasons for Decision, now relied upon as the "new issue", were received by mid-2006. Moreover, the evidence indicates that in an affidavit of Mr Charitopoulos, filed on 16 August 2006 in support of the application by Haritopoulos, that particular passage of the reasons was also relied upon. Mr Charitopoulos there refers to those Reasons for Decision received on 20 July 2006 by the solicitors for Haritopoulos, and precisely to the passage which is now said to be a "new issue". He there says that the reasons raise a "new basis" on which the assessment issued to Haritopoulos was raised. One cannot but help think that, at that time, that paragraph of the Reasons for Decision was not considered to provide evidence of a lack of good faith or an ulterior purpose on the part of the respondent in making the assessment concerning Haritopoulos. If so, the view was realistic. That it is now relied upon may simply be another way of endeavouring to delay the obligation of the applicant to pay the tax assessed (subject to such remaining rights as it has to object to the assessment). However, again I do not think it is necessary to determine whether that factor, together with those raised by the respondent on its first response discussed above, would lead to the dismissal of the application irrespective of the possible merits of the "new issue". That section appears to relax the test imposed by General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125; see e.g. Garrett v National Australia Bank [2007] FCA 530 at [37] --- [38]. 40 For the reasons I have expressed, in my view the "new issue" raised in the proposed amended statement of claim has no prospects of success. I do not think it goes any distance at all, assuming the facts asserted in that document, in demonstrating that the respondent in issuing the assessment, and subsequently the penalty assessment, did so with a lack of bona fides. I have not overlooked the discussion by Finn J in Daihatsu Australia Pty Ltd v Commissioner of Taxation (2001) 184 ALR 576 as to declining to recognise a comprehensive definition of what can constitute a lack of bona fides. Counsel for the applicant expressed the relevant test as to whether the assessment or the penalty assessment were made for an improper or an ulterior purpose. I accept that the exercise of power for an improper or ulterior motive may amount to a lack of bona fides so as to lead to the purported assessment being no assessment at all. However, I do not think that the facts as alleged on the "new issue" in the proposed amended statement of claim go any distance to demonstrate an improper or ulterior purpose on the part of the respondent in the issue of the assessment or of the penalty assessment. Nor is there any evidence contained in the affidavit of Mr Charitopoulos of 29 May 2007 which takes the position any further. 41 As I regard the proposed amendment to the statement of claim as not enhancing in any way the applicant's prospects of obtaining the primary relief which it seeks, in my view it is appropriate to decline to grant leave to amend the statement of claim in the way sought. It follows, as counsel for the applicant acknowledged, that on the existing statement of claim the application must be dismissed. I so order. The applicant must pay to the respondent costs of the application. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | proceedings challenging assessment of income tax application for summary dismissal under s 31a of the federal court of australia act 1976 (cth) whether assessment made for improper or ulterior purpose whether assessment made in good faith where timing of assessment allegedly affected by pending deed of company arrangement whether acceleration of assessment impugned the bona fides of the exercise of power application dismissed income tax |
The applicant challenges a decision of the second respondent in the Australian High Commission in Malaysia made on or before 12 November 2003 refusing to re-evidence a Return Endorsement or Transitional (Permanent) visa into her newly issued Malaysian passport. 2 On 28 June 2006 the applicant filed an amended application pursuant to leave granted on 31 May 2006. An order in the nature of a writ of mandamus and/or an injunction requiring the Second Respondent to give, pursuant to section 70 of the Migration Act 1958 (Cth), the Applicant evidence of her Transitional (Permanent) Visa. Alternatively, an order in the nature of a writ of mandamus and/or an injunction requiring the First Respondent to give, pursuant to reg 2.18 of the Migration Regulations 1994 (Cth), the Applicant evidence of her Transitional (Permanent) Visa. An order that the First Respondent pay the Applicant's costs of the application. Such further or other orders as this Honourable Court deems fit. The applicant is the holder of a Transitional (Permanent) Visa and the Second Respondent has refused to give, pursuant to section 70 of the Migration Act 1958 (Cth), the Applicant evidence of her visa. The respondents are estopped, or otherwise prohibited by operation of law, from denying that the Applicant is the holder of a Transitional (Permanent) Visa. She is a solicitor. She has lived in Australia for long periods of time both as a child and an adult. This proceeding is brought to determine whether she is entitled to evidence of her holding a Transitional (Permanent) visa. 5 A non-citizen who immediately before 1 September 2004 held an old visa of the kind known as '(a) an Authority to Return or (b) a Return Endorsement' is taken, on 1 September 2004 to have been granted a Transitional (Permanent) visa: reg 9 Migration Reform (Transitional) Regulations (Cth) 1994 (the Transitional Regulations). The regulation provides that a Transitional (Permanent) visa permits the visa holder to enter Australia within three years after each departure from Australia and remain indefinitely in Australia. She would be entitled to evidence of a Transitional (Permanent) visa if immediately before 1 September 1994 she held an Authority to Return or a Return Endorsement. 6 Before dealing with the facts, it is necessary to identify the relevant legislation relating to evidence of visas and the relevant legislation relating to a Transitional (Permanent) visa. The applicant was granted an Authority to Return on 18 November 1976. The grant of an Authority to Return was by administrative action in placing a stamp in an eligible person's passport. 10 The Migration Act was amended in 1979 by the Migration Amendment Act 1979 (the Amending Act), which came into force on 1 November 1979. The Amending Act inserted ss 11A and 11B into the Migration Act . 15 Authority to Return stamps were withdrawn from use in Australia on 2 July 1979 and were replaced by Return Endorsement stamps. 16 The Statute Law (Miscellaneous Provisions) Act 1987 (the Miscellaneous Provisions Act) came into effect on 1 January 1988. Section 3 of the Miscellaneous Provisions Act had the effect of amending all the acts in Schedule 1 of the Miscellaneous Provisions Act. Section 11A of the Migration Act was amended to delete all reference to 'a return endorsement'. 19 The respondent tendered an affidavit of Christine Sawa who has been an officer of the Department of Immigration and Multicultural Affairs (DIMA) since 1979, who gave evidence of the history relating to Authorities to Return and Return Endorsements. From January 1987, ATRs and REs were replaced by a system of Resident Return Visas ("RRV"). During a 3-year "transitional period" between 1 January 1987 and 31 December 1989, holders of existing ATRs and REs were encouraged to apply for RRV. In many cases the evidence of the ATR or RE in the holder's passport would be stamped as "cancelled" when a replacement RRV was issued. 21 Section 11A of the Migration Act was repealed by the Migration Legislation Amendment Act 1989 (Cth) which came into effect on 19 December 1989. Section 5(14) , however, of the Miscellaneous Provisions Act has not been repealed. 22 On 1 September 1994 reg 9 of the Migration Reform (Transitional) Regulations came into effect. That evidence was not challenged. The respondents tendered an affidavit of their solicitor, Mr Kennedy, who exhibited the Department of Immigration and Multicultural Affairs (DIMA) computerised records of visas granted to the applicant. That evidence was also not challenged. 25 The applicant, Ms Sidhu, was born in Malaysia on 2 February 1967. On 30 May 1975 she was issued a Malaysian passport which was valid until 30 May 1980 (the 1975 passport). On 29 July 1975 she was granted an Australian Migrant visa and emigrated to Australia with her parents on the same day. On 18 November 1976 the applicant was granted an Authority to Return to travel to Australia. It was evidenced by a stamp placed on page 10 of her 1975 passport. On 7 April 1980 the passport was extended until 30 May 1985. 27 On 10 December 1984 the applicant was granted a new Malaysian passport (the 1984 passport) to replace the 1975 passport. On 10 January 1985 the applicant was provided with a Return Endorsement in the 1984 passport. It appears on page 11 of the 1984 passport. She attended school and then university, completing her degrees in 1989. 29 Between 1984 and 1989 the applicant departed Australia on many occasions and was granted re-entry upon her return. 30 On 8 July 1989 the applicant departed Australia. She returned to Sydney through Kingsford Smith Airport on 31 July 1989. When she gave her 1984 passport to the immigration officer at the airport it was taken for processing and returned to her. The applicant's evidence was that she did not notice at this time the Return Endorsement on page 11 of the 1984 passport was stamped 'CANCELLED'. She said that she also did not notice that a new document had been pasted into page 18 of the 1984 passport. 32 The applicant deposed that the immigration officer did not explain why the Return Endorsement had been cancelled nor did he seek her approval or consent before stamping the Return Endorsement as cancelled. 33 The applicant deposed that she did not become aware that the Return Endorsement was purportedly cancelled on 31 July 1989 until mid to late 1997. I will address her evidence in that regard later in these reasons. 34 It was the applicant's evidence that as at 31 July 1989 she did not understand that the Return Endorsement had been purportedly cancelled. She understood the visa on page 18 of the 1984 passport meant 'that as long as I entered Australia on or before 31 July 1994, the document would be automatically renewed or replaced if I sought to enter Australia subsequently'. The applicant assumed 'that there was no longer any 3 year requirement from the date of the last departure'. 35 The applicant travelled to London in 1990 to attend university. She entered and left Australia on a number of occasions between 1990 and 1991. 36 On 20 May 1993 the visa granted on 31 July 1989 was cancelled. The applicant is now unable to recall the circumstances in which it was cancelled. Page 35 of the 1984 passport exhibits a new visa which was issued on 21 May 1993. Importantly, that Return Resident visa was granted in Kuala Lumpur where the applicant was then residing. 38 There are three classes of Return Resident visas; Subclass 155 a five year Resident Return; Subclass 157 a three month Resident Return; and Subclass 159 a Provisional Resident Return visa. 39 On 8 November 1994 the applicant sought and was granted a new Malaysian passport (the 1994 passport). On her return to Australia on 16 October 1996 she presented both her 1984 passport (containing evidence of permission to enter Australia) and her 1994 passport. She presented both passports again on her departure from Australia on 26 October 1996. 40 On 9 September 1997 the applicant applied to the Australian High Commission in Kuala Lumpur for evidence that she was the holder of a Return Endorsement and that it be placed in her 1994 passport. She completed an application form entitled 'Application for a resident return visa (RRV) or replacement evidence of a RRV --- 1085'. She also submitted her 1984 and 1994 passports to the Australian High Commission in Kuala Lumpur. 37983967E was cancelled by the Immigration Officer on the spot and without my consent and the cancellation was not explained to me at all. The Return Endorsement was replaced on the spot by visa No. E144983 (please see attached page for a copy of the same). I now seek reinstatement of the Return Endorsement which was not duly cancelled nor properly cancelled. I shall be greatly obliged if your goodselves would kindly reinstate my Return Endorsement. 43 On 12 September 1997 a senior migration officer in the Australian High Commission in Kuala Lumpur, Ms Pereira, sent a facsimile message to the Entry Operations Section (EOS) of the then Department of Immigration and Ethnic Affairs in Canberra giving details of manually re-evidenced Authority to Return for inclusion on the visa database. The reason given for the issue was to reinstate the Authority to Return. 44 The Australian High Commission returned the 1994 passport to the applicant. It included a document labelled 'Australia Visa' which appeared on page 23 of the 1994 passport. At the top of the page there is handwriting which reads 'Re-evidenced in New Passport No A9778262'. REGS. The code 'BF' indicates that the class of visa is a Transitional (Permanent) visa: reg 1.06(b)(i) of the Migration Regulations . 46 Subclass 111 is a 'dummy' subclass which was created by the Department to evidence/re-evidence visas granted pursuant to reg 9 of the Transitional Regulations derived from an Authority to Return or Return Endorsement held on 1 September 1994. 47 The BF155 visa (the Return Resident visa) on page 35 of the 1984 passport, which had been granted on 20 May 1993, had been stamped 'LABEL INOPERATIVE'. 48 The applicant sought and was granted a further new Malaysian passport on 10 June 1999 (the 1999 passport). The applicant again sought to have her right of entry into Australia evidenced in her new passport. On 14 September 1999 evidence was placed in the applicant's 1999 passport. REGS. 50 The applicant travelled to Australia in September 1999 and June 2002 under her 1999 passport using this endorsement as her permission to enter Australia. 51 Her Malaysian passport was due to expire in June 2004. She sought and obtained a new passport in September 2003 (the 2003 passport). 52 On 25 September 2003 the applicant lodged a further Form 1085 application to have her right of entry to Australia evidenced in her 2003 passport and, on 26 September 2003, a delegate of the Minister placed a further BF111 Label in her passport. Apparently, the delegate had only checked the computerised movement records from 1996 onwards. 53 Later, on 26 September 2003, EOS telephoned the delegate and advised that the applicant was not entitled to a BF111 visa because she had been absent from Australia for more than three years between April 1991 and October 1996. 54 When the applicant went to collect her passport on 7 November 2003 the visa in the 1999 passport had been stamped 'LABEL INOPERATIVE'. The 2003 passport included a document entitled 'Australian Visa' which was also stamped 'LABEL INOPERATIVE'. 55 On 12 November 2003 an officer of the Australian High Commission in Malaysia wrote to the applicant advising of her correct immigration status. Departmental records indicate that you were absent from Australia for more than three years between 1991 and 1996. Your failure to do so caused your ATR to cease on 7 April 1994 and it is not possible to reevidence an ATR that you do not hold. We refer to your letter dated 12.11.2003, the photocopy of which we enclose herewith for your easy reference. We are making a representation to you to reinstate the Authority to Return (ATR) to Ms. Sharon Sidhu, so that her right to indefinite permanent residence in Australia is dependent on her return at least once every three years, with the time period to commence from the date of notification of the reinstatement of her ATR. 59 Importantly, the applicant was absent from Australia for a period of five years between 7 April 1991 and 16 October 1996. In that regard the officer's letter of 12 November 2003 that the applicant was absent from Australia for more than three years in those years is correct. 60 The applicant contended that, because there was no evidence from Ms Pereira to the contrary, I should infer that when on 12 September 1997 Ms Pereira evidenced the Authority to Return in the applicant's 1994 passport she did so with full knowledge of the fact that the applicant had not entered Australia between April 1991 and October 1996. 61 I am not prepared to draw that inference. There was no evidence adduced by the applicant that on 12 September 1997 the Authority to Return was evidenced with knowledge of the fact that the applicant had not entered Australia for more than five years between 1991 and 1996. Indeed, there is evidence to the contrary. There is the letter of 12 November 2003 from the officer of the Australian High Commission who wrote that the 'earlier re-evidence of your Authority to Return in 1997 was an administrative error on the department's part'. There is also an internal file note of Florence Leong of 7 November 2003 which indicates that, as soon as she became aware that the applicant was not eligible for an Authority to Return as she had been absent from Australia for more than three years in the period between 1991 and 1996, she took steps to obtain the applicant's passport for the purpose of expunging the Authority to Return. She also checked movement records to satisfy herself that the applicant had been absent from Australia for more than three years in the relevant period. 62 In my opinion, there is simply no evidence that on 12 September 1997 Ms Pereira evidenced the Authority to Return with knowledge of the fact that the applicant had been absent from Australia for a period of more than three years between 1991 and 1996. The absence of evidence from Ms Pereira to the contrary cannot be used to fill that vacuum. 63 If there had been some evidence to the effect contended for by the applicant, then the absence of evidence from Ms Pereira might more readily lead to the inference for which the applicant contended. However, the omission to call evidence from Ms Pereira could 'not properly be treated as supplying any gap which the evidence adduced for the (plaintiff) left untouched': Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298 per Kitto J at 308. 64 I am also not satisfied that the respondents were on notice that evidence should be led from Ms Pereira on that issue. The applicant's application sought evidence that she held a Transitional (Permanent) visa. She could only be entitled to a Transitional (Permanent) visa if she held at Authority to Return or a Return Endorsement as at 1 September 1994. It is not clear then, in those circumstances, why, on the application as it was framed, the respondents needed to adduce evidence from Ms Pereira. 65 There was nothing in the applicant's case to put the respondents on notice that the applicant asserted that the action taken on 12 September 1997 by Ms Pereira was taken deliberately and with knowledge that the applicant had not entered Australia between April 1991 and October 1996. It was not raised in correspondence with the respondents or DIMA. It was not referred to in the application or affidavits. It was not raised in the applicant's written submissions. The respondents were never put on notice that it was a live issue that needed to be addressed. The applicant did not, at any time prior to the hearing, take issue with the respondents' assertion in 2003 that the action of 12 September 1997 was due to administrative error. For those further reasons, it would be inappropriate to raise an inference of the kind contended by the applicant due to a failure to call Ms Pereira. 66 In my opinion, the proper inference to be drawn from the evidence which has been adduced is that the action of the Department on 12 September 1997 was, as has been claimed by the Department, an administrative error. The subsequent evidencing of a Return Endorsement on 14 September 1999 was also, in my opinion, an administrative error. So also was the placing of a further BF111 Label in her 2003 passport on 26 September 2003 an administrative error. 67 I decline to find that any officer at any time ignored a condition of a Return Endorsement or a condition of a Transitional (Permanent) visa which required the applicant, if the Return Endorsement was to remain in force or the visa was to remain in force, to enter Australia within three years of her last leaving Australia. 68 After the applicant had closed her case and during counsel's address, counsel sought to read a further affidavit of the applicant which was directed to the question of detriment. There was no evidence in her earlier affidavit which was directed to that question. 69 I allowed the applicant to read that further affidavit. In that affidavit she said that, because of the grant of her application on 12 September 1997, she believed she held a valid Return Endorsement and therefore she did not make any application for a Subclass 155 visa. Nor did she take any action to move to Australia in order to fulfil any residential requirement for obtaining a Subclass 155 visa. 70 She deposed to other things that she would have done so as to strengthen her eligibility for such a visa. The applicant was cross-examined by the respondent's counsel. The applicant made the mistake many witnesses make in trying to argue her case through her evidence. She was very wary of any question asked of her. She did not respond directly to the cross-examiner. She made every attempt to avoid questions asked of her. Her evidence is not very satisfactory. 71 In cross-examination she said that she believed after 12 September 1997 that she held a valid Return Endorsement because of the grant of the application at that time. 72 She said that some time after 1989 she believed that a mistake had been made cancelling the Return Endorsement and issuing the Resident Return visa and that is why she made the application to the Australian High Commission in Kuala Lumpur to evidence that Return Endorsement in her passport. 73 It was put to her in cross-examination that, if she was right to say that she did not become aware the Return Endorsement was purportedly cancelled until mid to late 1997, her action in applying for a further Residential Return visa on 20 May 1993 was inconsistent. 74 She would not admit that she had made an application for a further visa in 1993. She did admit that she must have presented her passport to enable her to obtain a further visa. 75 As already observed, the Resident Return visa granted on 20 May 1993 was issued by the Australian High Commission in Kuala Lumpur where the applicant was then residing. 76 Notwithstanding the applicant's evidence that she has no recollection of making an application, I find that she must have made such an application and presented her passport for the purpose of having the Return Resident visa evidenced in her passport. 77 It was put to her that, in those circumstances, she must have understood that the Return Endorsement was no longer valid. Otherwise she would not have applied for a further Return Resident visa. She made every attempt to avoid answering that proposition. 78 I am satisfied that she must have known at least as early as 1993 that the Return Endorsement had been cancelled and that the Return Resident visa had been granted. Indeed, that is consistent with her evidence contained in her affidavit of 19 July 2006. At that time, I did not understand that the Return Endorsement had purportedly been cancelled. I subsequently read the new document on page 18 of the 1984 Passport. It stated that it was valid from 31 July 1989 to 31 July 1994. I took it to mean that as long as I entered Australia on or before 31 July 1994, the document would be automatically renewed or replaced if I sought to enter Australia subsequently. I assumed that there was no longer any 3 year requirement from the date of the last departure. That does not make the cancellation on 31 July 1989 valid. 80 The applicant applied for the second Return Resident visa in May 1993 because she must have recognised that the Return Resident visa which had been granted on 31 July 1989 would expire within the year. Clearly, she was not intending to travel to Australia at that time because she did not travel to Australia again until October 1996. Therefore, she made application for a Return Resident visa to protect her position. 81 If, on the other hand, as she asserted in her affidavit, she did not become aware that the Return Endorsement had been cancelled until 1997 then she must have known that the Return Endorsement had ceased to be in force by the time of her application in May 1993, because she had not travelled to Australia within three years of her last departure from Australia. 82 The findings which I have made are inconsistent with the broad sweep of her evidence and mean that her evidence must be treated with some caution. 83 In summary, therefore, I find that at some time prior to May 1993 the applicant was aware that the Return Endorsement had been cancelled on 31 July 1989. She was aware that she had in fact been granted a Return Resident visa which would expire on 31 July 1994. 84 She applied for a further Return Resident visa in May 1993 because she appreciated, as I have just said, that her Return Resident visa would otherwise expire. 85 It follows, therefore, that when she applied in September 1997 for evidence of her Return Endorsement she must have known that it had been cancelled on 31 July 1989. 86 That does not mean that she knew she was not entitled to the Return Endorsement. There is no evidence to that effect and I do not make a finding of that kind. The only evidence is that she applied for the reinstatement of the Return Endorsement because she believed it should not have been cancelled. I accept that evidence. 87 I also accept that she believed after 12 September 1997 that she was entitled to a Return Endorsement because a Return Endorsement had been evidenced in her passport on that day. 88 I also accept her evidence that, as a consequence, and until 12 November 2003, she did not apply for a Return Resident visa because she believed that she was entitled to enter Australia on the evidence of the Return Endorsement included in her passport. 89 It was put to her in cross-examination that she has still not applied for a Return Resident visa, notwithstanding the Department's assertion that she is not entitled to a Return Endorsement. 90 I can understand that she would not have applied for a Return Resident visa after she commenced these proceedings in case it was thought by the Department, or, indeed, by the Court, that such an application was an acknowledgement that she knew she was not entitled to a Return Endorsement. 91 Because there is no evidence, I cannot make any finding as to why she did not make an application for a Return Endorsement after 12 November 2003 and before commencing these proceedings on 29 November 2005. 92 I am not able to find that the applicant has been disadvantaged in any application she might make for a Resident Return visa by not having applied for one in 1997. The best from the applicant's point of view that I can find is that she has perhaps lost the chance of having applied for a Return Resident visa between 1997 and 12 November 2003. 93 For reasons which follow, in my opinion, the Department was right to advise her that she was not entitled to a Return Endorsement as from that date. 95 I have relied on the evidence which I have already referred and the contents of Mr Kennedy's affidavit for determining the applicant's status at various points of time. 96 Before 1 November 1979 the applicant held a statutory permission to return to Australia known as an 'Authority to Return', which appeared in her 1975 passport. The Authority to Return allowed entry into Australia for an indefinite period of time subject to the condition that it was valid for three years from the date of last departure from Australia. 97 On 10 January 1985 the Authority to Return in the 1975 passport was replaced by a Return Endorsement in the 1984 passport. The Return Endorsement was expressed to be valid for return travel to Australia by the holder within three years from the date of last departure from Australia. The applicant remained in Australia and complied with the conditions of the Return Endorsement from the time of its issue in 1985 until 1989. 98 On 31 July 1989 when the applicant returned to Australia from an overseas holiday the Return Endorsement in her 1984 passport was purportedly cancelled by an officer who was purportedly acting in accordance with the then existing Departmental policy. That officer issued the applicant with a Return Resident visa that was valid for a period of five years until 31 July 1994. 99 The applicant tendered Migrant Series Instruction (MSI392: Resident Return visas), which was a Departmental instruction issued on 10 May 2004. The old ATR or RE stamps were to be stamped as "cancelled" at the time of issuing the replacement RRV. However, some offices (sic) continued to cancel ATRs and REs after the transitional period ended in December 1989. Many of those cancellation decisions have been "set aside" or "voided", having the effect of reinstating the ATR or RE. Nevertheless, there may still be instances where a client will request the reinstatement of their cancelled ATR or RE. She argued that an administrative decision involving jurisdictional error lacks legal foundation and can be regarded as no decision at all. In that regard, the applicant's counsel relied on Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 ; (2001) 209 CLR 597 (' Bhardwaj '). The effect of the High Court decision in Bhardwaj was explained by the Full Court of this Court in Jadwan Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCAFC 288 ; (2003) 204 ALR 55. All six judges who formed the majority did so on that basis. Only Gaudron and Gummow JJ, with the agreement of McHugh J, as part of their reasoning, relied on the proposition that jurisdictional error on the part of the decision-maker causes an administrative decision to be of no legal effect. Gleeson CJ, Hayne J and Callinan J do not appear to have embraced that proposition. Kirby J in his dissenting judgment clearly did not. Gaundron and Gummow JJ did not explain in detail the consequences of the proposition that a decision has no legal effect. They did not deal with issues such as the status of the first decision of the IRT if the IRT had not chosen to ignore it and make another. Indeed, their Honours did not discuss what might be the factual, as distinct from the legal, consequences attaching to an administrative decision if no challenge to its validity is ever made, or if any challenge to its validity is made out of time, or is made in proceedings to which someone bound or otherwise affected by the decision is not a party. Nor did their Honours say anything about the possible effect of an administrative decision after a court proceeding in which a party has made out a case of jurisdictional error on the part of the decision-maker, but the court has declined to grant relief in relation to the decision by reason of discretionary considerations. The facts of Bhardwaj did not call for pronouncement upon these issues. The IRT had itself chosen to ignore its previous decision. The validity of that decision was in issue in the very proceeding with which the High Court was dealing. All that it shows is that the legal and factual consequences of the decision, if any, will depend upon the particular statute. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition. I reject the appellant's submissions in so far as they are to the contrary effect. However, in view of the respondents' concession, which was rightly made, I need not further explore that matter. Whether the decision was ineffective or void ab initio, the Return Endorsement was not cancelled on 31 July 1989. So much is agreed by the parties. 106 The applicant argued that the issue of the Return Resident visa on 31 July 1989 was also invalid. I am not sure that necessarily follows but I think, in the end, nothing turns on that because the Return Resident visa would have expired, in relation to the first one issued, in 1994 and, in relation to the second, on 21 May 1998. 107 As at 31 July 1989 the applicant continued to hold a Return Endorsement permitting multiple entry into Australia and the statutory permission to remain in Australia indefinitely, subject to the condition that the visa remained valid only for three years from the applicant's last departure from Australia. 108 The applicant next entered Australia on 23 March 1991 and departed on 7 April 1991. 109 If the cancellation of the Return Endorsement was ineffective or void ab initio, the departure on 7 April 1991 meant that she needed to re-enter Australia within three years of the date of her last departure. She therefore needed to re-enter Australia by 7 April 1994 otherwise the Return Endorsement ceased to be valid. As has already been observed, the applicant did not enter Australia again until 16 October 1996. It follows that unless there was some supervening event, the Return Endorsement ceased to be valid on 7 April 1994. 110 As has already been noticed, on 1 September 1994 the Transitional Regulations deemed a non-citizen who held a Return Endorsement to have been granted a Transitional (Permanent) visa. 111 The applicant recognised that she had not entered Australia within the three years as required by the condition of the Return Endorsement and, as such, was not able to return to Australia after 7 April 1994 relying upon that Return Endorsement. However, she argued that she still held a Return Endorsement because, pursuant to the provisions of s 11A, the Return Endorsement itself had not otherwise ceased to be in effect or had been validly cancelled. It was submitted that whilst the Return Endorsement was of no utility after 7 April 1994, it still existed. It was submitted that, therefore, as at 1 September 1994 when reg 9 of the Transitional Regulations took effect, immediately before that date, the applicant held a Return Endorsement, because reg 9 did not require that a person hold an Authority to Return or a Return Endorsement that was 'in effect'. 112 In my opinion, that argument must be rejected. Section 11A of the Migration Act authorises an officer to grant to a person a Return Endorsement which would allow a person to enter Australia 'on any number of occasions while it remains in force'. Section 11A(2) speaks of the visa continuing in force in the period specified. It follows that, where the period specified has expired, in this case three years after the applicant's last departure, on 7 April 1994, the Return Endorsement is no longer in force. Because the Return Endorsement was no longer in force the applicant did not after 7 April 1994 hold a Return Endorsement. 113 It is explicit in reg 9 that the non-citizen must hold an Authority to Return or a Return Endorsement for reg 9 to operate. It is implicit in reg 9 that the visa referred to in reg 9(b) is valid and in force as at 1 September 1994. If it were otherwise, any Return Endorsement that had expired at any time prior to 1 September 1994 would qualify to provide 'the holder of the Return Endorsement' with a Transitional (Permanent) visa. Indeed, the applicant was forced to contend that reg 9(b) applied to all Authorities to Return and Return Endorsements which were granted prior to 1 September 1994 including all Authorities to Return and Return Endorsements that might have ceased to be in force more than 15 years before. 114 There are two other provisions of the Migration Act which are inconsistent with the applicant's contentions in this regard. The Amending Act also provided for the inclusion of s 11B in the Migration Act . Section 11B of the Migration Act provided that a Return Endorsement could be cancelled at any time by the Minister or an authorised officer. 115 If the applicant's argument were correct it would mean that, notwithstanding a person's Return Endorsement had been cancelled by the Minister or an authorised officer, the Return Endorsement would by force of reg 9 of the Transitional Regulations become a Transitional (Permanent) visa. 116 The applicant's contention is also inconsistent with s 82(5) of the Migration Act . A 'visa' is defined in s 5 to include an old visa. A person cannot, in my opinion, hold a visa which has ceased to have effect. Section 77 of the Migration Act provides that 'a non-citizen holds a visa at all times during the visa period for the visa'. It would follow that a person does not hold a visa after the period has expired. 119 In my opinion, the applicant's argument that the applicant's Return Endorsement became a Transitional (Permanent) visa by operation of reg 9 of the Transitional Regulations must be rejected. 120 That really is an end to the matter. The application before the Court was for the issue of the constitutional writs to evidence the applicant's Transitional (Permanent) visa. 121 On the applicant's own case she was never entitled to a Transitional (Permanent) visa because she did not hold a Return Endorsement as at 1 September 2004. She lost her entitlement to her Return Endorsement on 7 April 1994 and therefore never became entitled to a Transitional (Permanent) visa on 1 September 2004. 122 However, the applicant argues that what was done on 12 September 1997, when she was given evidence of a Return Endorsement to which she was not entitled, in some way gives her an entitlement to that Return Endorsement. 123 It was put that because Ms Pereira did what she did on 12 September 1997 the first respondent has waived or is otherwise estopped from denying that the applicant is entitled to a Transitional (Permanent) visa. 124 If that is the case, then the respondents must have done two things. First, the respondents must have waived the condition in the Return Endorsement that the applicant must return to Australia within three years of her last departure, namely, 7 April 1994. Secondly, the first respondent must have waived the condition precedent in reg 9 of the Transitional Regulations that a Transitional (Permanent) visa only issue to those who are entitled to an Authority to Return or Return Endorsement as at 1 September 2004. 125 Two grounds are put forward. The applicant contends that the respondents have waived the three year requirement. Alternatively, it is contended that the respondents are estopped or otherwise restrained from denying the validity of the Return Endorsement. The appellant contended that another way of putting the second argument is that 'the respondents are bound to satisfy a substantive legitimate expectation held on behalf of the Applicant that she is the holder of a Transitional (Permanent) visa on conditions set out in her earlier label'. However, in respect of that alternative submission, the applicant 'conceded ... that this latter format of the ground of review is not yet part of Australian law'. 126 That concession, I think, also has been rightly made. In Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1, McHugh and Gummow JJ said at [67] that McHugh J's dissenting judgment in Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20 ; (1995) 183 CLR 273, in which he said that administrative decision makers must accord parties procedural fairness including bringing to that party's attention the issue on which the decision is likely to turn so as to allow the party to deal with it, meant that there was no need for any doctrine of legitimate expectation and should be accepted as representing the law of Australia. See also Hayne J at [121] and Callinan J at [148]. For the reasons given by Finn J in Rush v Commissioner of Police [2006] FCA 12 , the doctrine of substantive legitimate expectation is not presently part of Australian law. I need, therefore, say no more about the 'other way' of putting the estoppel argument. Nor was it explained. The applicant's submission was that the condition that the applicant return to Australia within three years of her departure on 7 April 1991 was waived by the four circumstances mentioned above. 129 'Waiver' is an imprecise term: The Commonwealth of Australia v Verwayen [1990] HCA 39 ; (1990) 170 CLR 394 (' Verwayen ') per Mason CJ at 406 and Dawson J at 451-452. It has been described as a vague term used in many senses: Smyth & Co v Bailey & Co [1940] 3 All ER 60 per Lord Wright at 70. It may be that the term is now used only to describe two legal concepts; election and estoppel, although there is support for a broader scope: see Toohey J in Verwayen at 468 and McHugh J at 491. 130 It was not made clear in this case how it is said that waiver applies separate to the argument that an estoppel arose. 131 It was, however, conceded that if waiver was to apply at all it could only apply where there had been a deliberate decision by the decision maker to ignore the condition attaching to the Return Endorsement. Whatever the concept of waiver, that concession was rightly made: Craine v Colonial Mutual Fire Insurance Co Ltd [1920] HCA 64 ; (1920) 28 CLR 305; Verwayen at 406, 473, 485 and 498. 132 The four circumstances relied upon by the applicant do not, in my opinion, support a finding, either individually or collectively, that any officer of DIMA deliberately waived the condition that the applicant enter Australia within three years of her departure on 7 April 1991. 133 I think the first circumstance should be understood as the act by an officer of DIMA permitting the applicant to enter Australia. The applicant's own conduct could not amount to a waiver. 134 The applicant entered Australia on 16 October 1996 using a passport which had included in it a Return Resident visa (Class 155) which was issued on 21 May 1993. That Return Resident visa entitled the applicant, on the face of it, to multiple travel to Australia until 20 May 1998. When that passport was presented to an officer in Australia on 16 October 1996, any officer reading that endorsement would understand that the applicant was entering Australia under the permission of that visa. No officer would have assumed that she was travelling under the Return Endorsement marked on page 11 of the 1984 passport because that had been stamped 'CANCELLED'. 135 As I have said, the 1989 cancellation was set aside on 12 September 1997. For the reasons I have already given, that was due to administrative error and was not a deliberate act on the part of that officer to waive the condition that the applicant must enter Australia within three years of her departure on 7 April 1991. 136 It follows that the placement of evidence of her Return Endorsement in the relevant passport in September 1997 and 1999 were also not deliberate acts on the part of any officer to waive that same condition. 137 The applicant's subsequent entries to Australia were under the permission of that Return Endorsement but that takes the matter nowhere. The evidence of those Return Endorsements had been made in error. The fact that she relied upon that error does not constitute any evidence of waiver on the part of any officer of the Department. 138 The circumstances relied on by the applicant occurred more than three years after the Return Endorsement ceased to be in force. Those circumstances could never retrospectively waive the condition attaching to the Return Endorsement in 1994. In particular, the circumstances could not reverse a Return Endorsement which ceased to be in force on 7 April 1994. 139 In my opinion, the applicant's claim, insofar as it is based on waiver, must fail. The Respondents are estopped, or otherwise prohibited by operation of law, from denying that the Applicant is the holder of a Transitional (Permanent) Visa. 1.2 The Return Endorsement was expressed to continue in force until the expiration of 3 years from the date of the last departure from Australia. 1.3 On 7 April 1994, a period of three years from the date of the Applicant's last departure from Australia elapsed. 1.4 On 16 October 1996, the Applicant entered Australia and departed on 25 October 1996. 1.5 On 12 September 1997, the Senior Migration Officer, Australian High Commission, Kuala Lumpur placed evidence of the Applicant's Return Endorsement in her then current passport. 1.6 Between 17 September 1999 and 23 September 1999, and 6 June 2002 and 14 June 2002, the Applicant entered, remained and subsequently departed Australia. 1.9 On 12 November 2003, the Second Secretary (Immigration), Australian High Commission, Kuala Lumpur, wrongfully refused to give the Applicant evidence of her visa in her then current passport. The Applicant assumed that she would be entitled to re-enter Australia as long as she did so within three years of her previous visit, and be entitled to stay indefinitely. In the circumstances, it is reasonable to infer that the Applicant held such an assumption: Re Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Lam [2003] HCA 6 ; (2003) 214 CLR 1 at 30-32 [90] - [92] , 47 [145]. This assumed state of affairs was based upon the conduct or representation of the First Respondent (or her agents) in 1997 and onwards. If the assumption is not fulfilled, the Applicant will suffer detriment. If the applicant assumed that she would be entitled to re-enter Australia, as long as she did so within three years of her previous visit and be entitled to stay indefinitely, as at 7 April 1994 she must have known that that entitlement would cease on that day. It follows that she must have known prior to 1 September 1994 that she was no longer entitled to a Return Endorsement as at 1 September 1994. 144 The estoppel which is sought to be erected by the applicant is an estoppel that did not arise until 12 September 1997, after she had lost an entitlement to a Return Endorsement and therefore a Transitional (Permanent) visa. 145 It follows, therefore, that if at any time between 7 April 1994 and 12 September 1997 the applicant entered Australia she could not have entered Australia on the authority of the Return Endorsement. 146 She seeks to erect an estoppel by a representation that she is entitled to a Return Endorsement which, on her assumption, would have ceased to be effective on 7 April 1994. For reasons I have given, the Return Endorsement had ceased to be effective before 12 September 1997. 147 The applicant's argument is that the act of the officer on 12 September 1997 in evidencing the Return Endorsement in her passport revived an entitlement to a status which had ceased on 7 April 1994. 148 The estoppel which is contended for has the purport of granting to her a Return Endorsement in circumstances not permitted by reg 9 of the Transitional Regulations. There is no discretion reposing in any officer of the Department to grant the applicant a Return Endorsement or a Transitional (Permanent) visa. No act was done prior to 1 September 1994 that would have permitted her to claim the benefit of the Transitional (Permanent) visa under reg 9 of the Transitional Regulations. It must follow that what then is sought by the applicant is an estoppel contrary to the provisions of reg 9. That, in my opinion, is impermissible because it would create a power in the Minister or an officer to do an act which is ultra vires the Migration Act and the Transitional Regulations. It would have the effect of contradicting the Transitional Regulations. Any doctrine of estoppel in that context would threaten to undermine the doctrine of ultra vires by enabling public authorities to extend their powers both de facto and de jure by making representations beyond power, which they would then be estopped from denying. Rather, in the present case, the respondent seeks to prevent the appellant from making a decision within the latter's power which would have the effect of altering the previous intra vires decision. The respondent is then met with the objection that to allow an estoppel in this context would hinder or prevent further exercise of the statutory discretion. He was born in 1969. In 1971 he returned to Yugoslavia. 153 In 1984 he was issued with an Australian passport by the Australian Embassy in Belgrade and in 1990 he was issued with a second Australian passport by the same Embassy. He entered Australia twice in 1991 and 1992 on that second passport. On each occasion his passport was stamped with an arrival stamp. When he later applied to sponsor his Thai born wife and her child for permanent resident status when he was told that he was not, and never had been, an Australian citizen. He argued that he was entitled to the issue of an Australian passport and that the Minister was estopped so as to compel the Minister to grant him Australian citizenship. The attempt to argue such an estoppel was met by a phalanx of cases that cannot be breached: Wyong Shire Council v Associated Minerals Consolidated Ltd [1972] 1 NSWLR 114 at 142 per Hope J; Southend-On-Sea Corp v Hodgson (Wickford) Ltd [1962] 1 QB 416; Rubrico v Minister for Immigration & Ethnic Affairs (1989) 23 FCR 208 at 229; Roberts v Repatriation Commission (1992) 39 FCR 420 at 425; Minister for Immigration, Local Government & Ethnic Affairs v Kurtovic (1990) 21 FCR 193; Minister for Immigration & Ethnic Affairs v Polat (1995) 57 FCR 98 at 105, 107; Formosa v Secretary, Department of Social Security (1988) 46 FCR 117. 154 This is not a case of the exercise of a statutory discretion. The applicant contends that she is entitled to have evidence of a Transitional (Permanent) visa to which, on any understanding but for the representation, she is not entitled under reg 9 of the Transitional Regulations. 155 If the applicant's contentions were accepted, the respondents and, in particular, the Minister, would be obliged to grant to the applicant something to which she was not entitled under the Migration Act or the Transitional Regulations. That is an estoppel which, in public law, cannot arise. 156 The applicant, as I have mentioned, did not in the first instance adduce any evidence of detrimental reliance. It was only during the hearing that she presented the evidence to which I have referred and upon which I have made findings. The only detriment that I can accept which might have been suffered is that she did not apply for a further Return Resident visa after 1997 and before 12 November 2003. She had been previously granted such a visa on 31 July 1989 and again on 20 May 1993. She has been invited by the first respondent to make a further application. I am not satisfied that, in those circumstances, she has suffered any detriment by relying on the representation made on 12 September 1997. 157 For that further reason, no estoppel arises. I certify that the preceding one hundred and fifty-eight (158) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | application for writ of mandamus or injunction requiring respondents to evidence transitional (permanent) visa into applicant's passport applicant held a return endorsement consideration of transitional (permanent) visa return endorsement ceased to have effect before date of introduction of transitional (permanent) visa therefore applicant never held such a visa waiver of conditions attaching to return endorsement not made out where respondents' conduct was not deliberate respondents cannot be estopped from denying the existence of a visa the applicant never held application dismissed. migration |
On 13 October 2008 Mr McCann obtained an order under s 596B of the Corporations Act 2001 (Cth) that Mr Mason be summonsed to be examined about the affairs of Australvic and to produce documents at that examination. Mr Mason brought two applications. The first, made pursuant to s 596C , was to obtain access to the affidavit relied upon by Mr McCann to support his 596B application. The second was to have the examination summons discharged. During the course of the hearing, I directed that Mr Mason be permitted to inspect the affidavit after certain deletions had been made. Shortly after the hearing Mr Mason's application to set aside the examination summons was dismissed. What follows are my reasons. The basis of the application to set aside the examination summons was as follows. Australvic was the registered proprietor of property situated in Oakleigh, Victoria. Perpetual Trustee Company Ltd and Wanstrow Pty Limited each held a mortgage over the property. Following a default under the first mortgage, Perpetual Trustee took possession of the property and sold it by public auction. The net proceeds of sale (after deducting the amounts due to both mortgagees) were $1,410,044.13. Several parties, including Australvic, claim to be entitled to this sum. On 13 September 2007 Australvic issued proceedings in the Supreme Court of Victoria to assert its title to the proceeds. The defendants, one of which is Caveat Finance Pty Ltd (in liquidation), are the other claimants. Perpetual Trustee paid the net proceeds into the Supreme Court pending the resolution of the competing claims to the fund. Following his appointment, Mr McCann took over the conduct of the Supreme Court action. Mr Mason, who is a director of Caveat, says it is "most likely" he will be called by Caveat to give evidence at the trial of the action. He asserts that the reason Mr McCann obtained the summons was to conduct an enquiry principally for the purpose of prosecuting the Supreme Court action. Mr McCann disputes this allegation. He deposed that the purpose of the examination is to investigate whether Mr Kyriackou, a former director of Australvic, has breached any fiduciary duties he owed the company. Mr McCann's concern is that a considerable amount of the money that was advanced by Caveat to Australvic under five loan agreements made between November 2006 and February 2007 appears to have found its way into the hands of Mr Kyriakou. Mr McCann says he has been unable to properly investigate the matter because there is a "conspicuous lack of documentation and information" and he has received no assistance from Mr Kyriakou. The relevant legal principles are not in doubt. An examination summons will be discharged if it is oppressive, unfair, an abuse of process or has been issued for an improper purpose: Sent v Andrews (2002) 6 VR 317, 320; Re Southland Coal Pty Ltd (2005) 189 FLR 297, 303. An examination summons will not be oppressive, unfair, an abuse of process or improper merely because there is on foot litigation between a liquidator (or the company in liquidation) and the proposed examinee. Thus, in Sent at 320, Buchanan JA said: "Where an examination relates to proposed or current litigation, in general terms the question is 'whether the examination is genuinely for the information of the liquidator to aid him in considering whether there is a cause of action upon which he will proceed ..." In Re Southland Coal at 302-303, Young CJ in Eq said: "It is clear that it is no basic objection to the issue of an examination summons on the ground of oppression that the liquidator may ascertain the strength of the case of a person with whom the company is involved in litigation". On the other hand, a liquidator is "not entitled to conduct a dress rehearsal of the cross-examination in an action or to seek to damage the opposing parties case by attacking the credibility of that party's witness": Sent at 320; see also Re Hugh J Roberts Pty Ltd (1970) 91 WN (NSW) 537. In Hamilton v Oades [1989] HCA 21 ; (1989) 166 CLR 486 , 498, Mason CJ put it this way: "[I]f a liquidator were to conduct an examination directed to compel the examinee to disclose defences or to give pre-trial discovery, or to establish guilt, this examination may be restrained as an abuse of process". It is not, however, enough that "there is a chance that this will occur": Re Southland Coal at 303. It is clear that the examination summons was sought to assist Mr McCann in investigating whether there has been a breach of duty by Mr Kyriakou. Mr McCann is not seeking to conduct a dress rehearsal of a possible cross-examination of Mr Mason. I accept that, during the course of the examination, Mr McCann may uncover information that will be of assistance in the Supreme Court proceeding. That, however, is not a sufficient reason to discharge the examination summons. Nonetheless, to safeguard against any improper use of the examination procedure, it was ordered that: (a) the examination of Mr Mason be limited to eliciting information in relation to whether Mr Kyriackou has breached any duties he owed to Australvic; and (b) the evidence given by Mr Mason must not be used in the Supreme Court proceeding without leave of the court. I should say something about the s 596C application. The starting point is that an affidavit filed in support of an application for an examination summons is sealed: r 11.3(4) of the Corporation Rules . The reason for this rule is so that a liquidator need not disclose to a proposed examinee the matters upon which the liquidator wish to examine, thereby defeating the purpose of the examination: Re Normans Wines Ltd (Receivers and Managers Appointed) (in liq); Harvey v Burfield (2004) 88 SASR 541 , 555. Mr Mason inspected the affidavit, after certain deletions had been made. The effect of the deletions meant that Mr Mason was not in a position to know the questions Mr McCann proposed to ask during the examination. As each party had a measure of success there was an order that the costs lie where they fall. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | winding up liquidator's examination summons to attend application to discharge summons principles to be applied corporations |
Allphones claims that order because it wishes to obtain the full name, address and position with the ACCC, of the employee or official of the ACCC who provided a copy of a Written Submission prepared on behalf of the ACCC to two firms of solicitors and possibly to other persons in the circumstances set out more fully later in these reasons. Allphones argues that, by providing that document to those persons, the ACCC official who did so ( the relevant ACCC official ) contravened s 155AAA(1) of the Trade Practices Act 1974 (Cth) ( the Act ) and also breached an equitable duty of confidence said to have been owed by to Allphones by that official. Allphones informed me that it intended to sue the relevant ACCC official and the ACCC itself for damages or compensation arising from such breaches. The ACCC has declined to disclose the identity of the relevant ACCC official or any other information concerning that official. Birch Partners and Chew + Matthews are the two firms of solicitors to which the submission was sent. The order sought by Allphones is sought pursuant to O 15A r 3 of the Federal Court Rules . That rule relates to identity discovery as distinct from cause of action discovery (as to which see O 15A r 6 of the Federal Court Rules ). On that day, the ACCC made an ex parte application for the abridgement of the time for service of its Application and of a Notice of Motion filed on that day. The ACCC also sought an urgent listing of the application for interim injunctive relief contained in its originating process. This interlocutory application was designed to ensure that Allphones dealt with its franchisees in certain upcoming dispute resolution negotiations and mediation in a way which was not misleading or deceptive and upon terms which allowed those franchisees a reasonable time for reflection in the event that some settlement agreement as between them and Allphones were reached. The gravamen of the complaint being agitated by the ACCC in proceedings NSD 1567 of 2008 as at 3 October 2008 was that Allphones was making statements to its franchisees concerning those franchisees' entitlements to certain bonuses which, in the opinion of the ACCC, were misleading. For present purposes, it is not necessary to traverse in detail the claims which were made by the ACCC on 3 October 2008 in proceedings NSD 1567 of 2008. On 3 October 2008, I made orders for the abridgement of the time for service of the ACCC's Application and for the return of that Application and the Notice of Motion to which I have referred. Those orders provided that the proceedings were to be returned before me on 9 October 2008 at which time the ACCC's application for interim relief was to have been dealt with. Proceedings NSD 1567 of 2008 were listed at 10.15 am before me on 9 October 2008. No contested hearing took place on that occasion. Allphones offered to the Court, and the Court accepted, certain undertakings which addressed the matters which had been of concern to the ACCC when the proceedings were commenced. The proffering of these undertakings rendered a contested hearing unnecessary. Subsequently, in November 2008, in proceedings NSD 1567 of 2008, the ACCC made a further application for interim injunctive relief. The ACCC brought this second application for interlocutory relief in order to address further concerns which it had in relation to the conduct of Allphones in connection with its ongoing negotiations with its franchisees. On 19 January 2009, I delivered judgment in respect of that application ( Australian Competition and Consumer Commission v Allphones Retail Pty Ltd (No 2) (2009) 253 ALR 324). This second interlocutory application is not presently relevant. At 8.53 am on 9 October 2008, shortly before proceedings NSD 1567 of 2008 were called on before me on that day, the solicitors for the ACCC sent by way of email to my Associate and, at the same time, to the solicitor for Allphones, a document styled Applicant's Submissions in Support of Motion for Interlocutory Injunctions dated 9 October 2008 ( the ACCC's Written Submission ). Plainly, this document was intended to be referred to and relied upon by the ACCC at the interlocutory hearing in those proceedings fixed for that day. At the time when the ACCC's Written Submission was sent, the ACCC's application for interlocutory relief had not been resolved and the ACCC was entitled to assume that that application would proceed at 10.15 am as scheduled. Because the ACCC's claim for interlocutory relief was ultimately resolved on 9 October 2008 on a basis satisfactory to the parties and to the Court, no reference was made to the ACCC's Written Submission in open Court on 9 October 2008 nor was it relied upon by the ACCC on that occasion. I had not previously directed that a written submission be lodged. I did not grant leave to the ACCC to file in Court the ACCC's Written Submission on that occasion, nor was I asked to do so. However, on the same day, the ACCC's Written Submission was marked by my Associate as having been filed in Chambers so that a formal record of the date when the document was received would be made in the Court file. It is the practice of the Court to record the receipt by the Court of a written submission by noting that such a document has been "filed". A written submission may be filed over the counter at the Registry, in Court (with the leave of the presiding judge) or in Chambers. The ACCC's Written Submission in the present case was marked as "Filed in Chambers" on 9 October 2008. No prior leave had been granted to the ACCC to forward that document to my Chambers. At the hearing of these proceedings, Allphones submitted that, in pars 6, 13, 14, 15 and 37 of the ACCC's Written Submission, the authors of the document set out certain information which was contained in, or derived from, several monthly management accounts prepared by Allphones in respect of the period from 1 March 2004 to 6 December 2007 ( the Management Accounts ). This submission is correct, at least in respect of some of the paragraphs referred to. Allphones also contended that the Management Accounts and certain other workbooks are confidential internal business records of Allphones and that the information contained in them is confidential to Allphones. Allphones contended that I should find that the only way in which officials of the ACCC might have gained access to this information was by inspecting documents produced to the ACCC by Allphones under compulsion pursuant to a notice served upon Allphones by the ACCC on or about 6 December 2007 pursuant to the provisions of s 155 of the Act ( the s 155 Notice ). On the evidence before me, I am prepared to make that finding. In the ACCC's Written Submission, Counsel for the ACCC made reference to several paragraphs in an affidavit filed in support of the ACCC's initial interlocutory application and to several documents exhibited to that affidavit. Some of those paragraphs and documents contain material which is of a financial character and which has plainly been derived from financial material furnished to the ACCC by Allphones in response to the s 155 Notice. I shall return briefly to the circumstances in which these documents were produced to the ACCC by Allphones later in these reasons. On 15 October 2008, Allphones became aware that a copy of the ACCC's Written Submission had been provided to two firms of solicitors, Birch Partners and Chew + Matthews, who, at that time, were both acting for various disaffected Allphones' franchisees. It also seemed to Allphones that the document had been given by the relevant ACCC official directly to certain Allphones franchisees. There is no evidence before me that supports this contention. The most likely explanation for the fact that some franchisees came to have possession of a copy of the document is that they obtained their copy from one or other of Birch Partners or Chew + Matthews or from another franchisee who, in turn, had obtained his copy from one or other of those firms of solicitors. On 24 October 2008, Allphones restored proceedings NSD 1567 of 2008 to my list with a view to seeking confidentiality orders in respect of the contents of the ACCC's Written Submission and in respect of certain other documents. After some brief argument, no confidentiality orders were made on that day and the matter was adjourned in order to enable the parties to attempt to reach some satisfactory accommodation on the question of confidentiality. Allphones did not, at that time, seek relief based upon any equitable duty of confidence or any other substantive right. Its claim was confined to a claim based upon O 46 r 6 of the Federal Court Rules . The document described in par 1 of these Orders shall not be made available to or inspected by any person who is not a party to these proceedings without the prior leave of a Judge. The costs of and incidental to the respondent's Notice of Motion filed on 24 October 2008 be costs in the cause. On 31 October 2008, Allphones commenced these proceedings (NSD 1720 of 2008). It is important to refer briefly to certain additional background facts and circumstances. In 2006, Hoy Mobile Pty Limited ( Hoy Mobile ) commenced proceedings in this Court against Allphones. Those proceedings ( the Hoy Mobile proceedings ) were heard in February and March 2008 by Rares J. His Honour delivered reasons for judgment on 30 May 2008 ( Hoy Mobile Pty Limited v Allphones Retail Pty Ltd (No 2) (2008) ATPR 42-240). Allphones appealed from that judgment. On appeal, Allphones was partly successful ( Allphones Retail Pty Ltd v Hoy Mobile Pty Ltd [2009] FCAFC 85). Hoy Mobile had been a franchisee of Allphones for approximately four years prior to the commencement of the Hoy Mobile proceedings. In the Hoy Mobile proceedings, Hoy Mobile had claimed an entitlement to a larger share of various commissions, bonuses and other moneys which had been paid or allowed to Allphones by certain suppliers to it than the share which Hoy Mobile had, in fact, been paid by Allphones. On 25 March 2008, the ACCC commenced proceedings against Allphones, Matthew Donnellan, Ian Harkin and Anthony Baker in this Court (NSD 408 of 2008) ( the main ACCC proceedings ). The individuals named as respondents in those proceedings are or were employees and directors of Allphones at various times over the period with which the main ACCC proceedings deal. The Statement of Claim in the main ACCC proceedings is lengthy. There are many allegations made in the Statement of Claim concerning Allphones' dealings with its franchisees and its management of the Allphones business of which the franchisees are an integral part. In the main ACCC proceedings, the ACCC makes complaint about a large number of events and actions for which Allphones is alleged to have been responsible and contends that the respondents to those proceedings have contravened ss 51AC, 51AD, 52 and 59 of the Act in the operation of the Allphones franchise system. On or about 6 December 2007, that is to say, after the commencement of the Hoy Mobile proceedings but before the ACCC had commenced any proceedings of its own, the ACCC served the s 155 Notice upon Allphones. As I have already mentioned, that Notice required production to the ACCC of the Management Accounts and of certain other documents. In response to that Notice, Allphones produced to the ACCC under cover of a letter dated 13 December 2007, the Management Accounts from 2005 to December 2007 and the audited Financial Statements of Allphones for 2004. In the covering letter and in an earlier email, Allphones asserted to the ACCC that the Management Accounts were incorrect. It provided various explanations in support of this assertion. When producing documents and records to the ACCC in response to the s 155 Notice, Allphones did not expressly assert that the materials which it provided were confidential. On 24 January 2008, after further requests made of Allphones by the ACCC, Allphones furnished to the ACCC certain workbooks referable to the Management Accounts. Confidentiality was not claimed in respect of these materials at the time when they were produced. On 29 August 2008, pursuant to the Franchising Code of Conduct contained in the Act, Allphones sent a Notice of Dispute to approximately 90 of its franchisees ( the Notice of Dispute ). The sending of the Notice of Dispute commenced a dispute resolution process in accordance with the provisions of the Franchising Code of Conduct and the agreements pursuant to which those franchisees were conducting Allphones' business. Two of the issues which that Notice sought to resolve related to bonus payments which Allphones received from telecommunications carriers and to other payments it received from handset and equipment suppliers. The issue which had been thrown up by the Hoy Mobile proceedings and the main ACCC proceedings and which was sought to be dealt with by the Notice of Dispute in relation to these matters was whether Allphones was obliged to share with its franchisees a larger slice of the total of these bonuses and payments than it had already shared with those franchisees. The Notice of Dispute was sent after Rares J had delivered judgment in the Hoy Mobile proceedings and after the ACCC had commenced the main ACCC proceedings. By sending the Notice of Dispute and embarking upon the dispute resolution process initiated by the sending of that Notice, Allphones was seeking to overcome the problems created for it by those two sets of proceedings. In late September and early October 2008, the solicitors for Allphones provided to the solicitors for the ACCC various documents which were then being sent to Allphones' franchisees for the purposes of resolving the issues adumbrated in the Notice of Dispute. It was the sending of these documents, and the alleged misleading nature of them, which provoked the application for interlocutory relief which the ACCC brought on 3 October 2008. On 14 October 2008, Mr Birch of Birch Partners made a formal request of the ACCC for a copy of the ACCC's Written Submission. Later, on the same day, the relevant ACCC official provided a copy of that submission to Birch Partners and to Chew + Matthews. Before complying with Mr Birch's request, the relevant ACCC official sought legal advice. His or her attention was drawn to the fact that a member of the public might inspect "a written submission" at the Registry (O 46 r 6 of the Federal Court Rules ). There is no direct evidence suggesting that the ACCC also provided a copy of that submission directly to franchisees. There is evidence that some franchisees either had the document or were privy to its contents---at least to those parts which concerned the financial information which Allphones claims is confidential. On or about 15 October 2008, Allphones became aware that the ACCC had sent its Written Submission to Birch Partners and to Chew + Matthews. At that time, both of those firms of solicitors were acting for disaffected Allphones franchisees who were by then engaged in the dispute resolution process initiated by the Notice of Dispute. By letter dated 16 October 2008, the solicitors for Allphones sent a letter of demand to the solicitors for the ACCC. In that letter, Allphones' solicitors asserted that one or more officials of the ACCC had breached or had been involved in a breach of s 155AAA of the Act. Allphones will be sending to franchisees relevant financial information about payments received from carriers and suppliers. That information will also be the subject of a report by BDO Kendall which will be sent to the franchisees. The dissemination of inaccurate information drawn from Management Accounts, particularly when it is done before Allphones has circulated more reliable information, is clearly calculated to prejudice the prospects of successful dispute resolution in accordance with the prescribed process. It is bound to confuse and mislead. This is a matter of great urgency and importance to Allphones as our client will be progressing with the dispute resolution with franchisees as soon as possible. Would you please respond to this letter by 12 noon tomorrow, 17 October 2008. By letter dated 21 October 2008, the solicitors for Allphones again asserted that ACCC officials had breached s 155AAA of the Act and requested that the ACCC provide to them details of the identity of the official or officials who had disseminated the ACCC's Written Submission. The ACCC refused that request. In the face of that refusal, these proceedings were commenced on 31 October 2008. It was submitted on behalf of Allphones that this conduct has placed Allphones in a difficult negotiating position because the ACCC's Written Submission contains assertions by the ACCC to the effect that a significantly larger sum of money is at stake in the dispute between Allphones and its franchisees than Allphones contends is truly at stake. Allphones submitted that its prospects of resolving its disputes with its franchisees have been impaired or cruelled by the ACCC putting into the ring inflated figures which will inevitably form the basis of the franchisees' claimed entitlements to a further share of bonuses and other supplier payments. (iii) Third, the applicant is not required to demonstrate the existence of a prima facie case against the prospective respondent. However, relief of this kind is nevertheless unavailable to a person who intends to commence 'merely speculative proceedings'. This criterion requires the applicant to demonstrate a reasonable objective basis for the proposed claim ( Hooper v Kirella Pty Ltd [1999] FCA 1584 ; (1999) 96 FCR 1 ; Glencore International AG v Selwyn Mines Ltd [2005] FCA 801 ; (2005) 223 ALR 238 at [16] , [91], [96], [105]). (iv) Fourth, an applicant under a rule in the form of O 15A r 3 of the Federal Court Rules must show that the order sought is necessary in the interests of justice. That is, the applicant must show that "the making of the order is necessary to provide him with an effective remedy in respect of the actionable wrong of which be complains". The ACCC knows the identity of the relevant ACCC official and has declined to reveal that identity. The disclosure of the identity of that person is in the interests of justice because it is necessary in order to provide Allphones with an effective remedy for the actionable wrongs of which it complains. The ACCC also referred me to Rush v Commissioner of Police [2006] FCA 12 ; (2006) 150 FCR 165 at [3] ---[7] (pp 168---170). The ACCC resisted Allphones' application on two broad grounds, namely: The ACCC submitted that neither of the causes of action intended to be relied upon by Allphones in the proceedings which it intends to bring was arguable and that its foreshadowed claims for relief were purely speculative. As far as the cause of action for breach of statutory duty is concerned, the ACCC submitted that: The ACCC also submitted that the s 155AAA(1) duty did not prevent disclosure of the kind made here because the disclosure was made when the relevant ACCC official was performing duties or functions as an ACCC official (see s 155AAA(1)(a)). As to the case based upon an equitable duty of confidence, the ACCC submitted that: The ACCC also submitted that the foreshadowed claims for relief were speculative. It said that, at this stage, it is impossible to tell whether Allphones has suffered or will suffer any loss as a result of the alleged contraventions. Damages are therefore speculative. There is no threat of further disclosure and some measure of protection is in place as a result of the orders which I made on 28 October 2008. Therefore, an injunction would not be granted. It was also submitted that a declaration would not be made because the making of a declaration would serve no purpose. Finally, the ACCC submitted that the interests of justice would not be served by allowing Allphones to sue the relevant ACCC official. Allphones has an effective remedy (if it has any remedy) against the ACCC itself. There is no legitimate purpose to be served in proceedings being brought against one of the ACCC's officials. In any event, the ACCC submitted that the claim against its official was hopeless. By its solicitors' letter dated 21 October 2008 sent to the solicitors for the ACCC, it has, in my view, made reasonable inquiries directed to ascertaining those matters. It should not be expected to canvass Birch Partners, Chew + Matthews or franchisees with whom it is in dispute. Accordingly, the requirements of subrule (1) of O 15A r 3 have been satisfied and the Court's discretion is open to be exercised. Order 15A, r 3 plainly contemplates that the applicant needs to ascertain the identity of the relevant person in order to institute a proceeding in the Court against him or her. Secondly, the applicant must show that "some person" has or is likely to have knowledge of facts, or the possession of documents, tending to assist in identifying the prospective respondent. The rule is therefore available even if relief is sought against a person who is in no way implicated in the wrongful conduct of which the applicant complains. In other words, relief is available against a "mere witness" or bystander: Stewart v Miller [1979] 2 NSWLR 128 (Sheppard J), at 135 (a decision on the New South Wales rule). To this extent, the rule differs from the equitable bill of discovery. Thirdly, the applicant is not required to demonstrate the existence of a prima facie case against the prospective respondent: Levis v McDonald at 41, 44; Stewart v Miller at 139-140. Nonetheless, the power conferred by O 15A, r 3 is not to be used in favour of a person who intends to commence "merely speculative proceedings": Stewart v Miller at 140; Levis v McDonald at 44. A material factor in the exercise of the Court's discretion is the prospect of the applicant succeeding in proceedings against the person he or she wishes to sue: Exley v Wyong Shire Council (unreported, Supreme Court, NSW, Master Allen, 10 December 1976); noted Ritchie's Supreme Court Procedure (NSW) par [13,004]. Fourthly, the High Court has emphasised that an applicant under a rule in the form of O 15A, r 3 must show that the order sought is necessary in the interests of justice. That is, the applicant must show that: "the making of the order is necessary to provide him with an effective remedy in respect of the actionable wrong of which he complains. " John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54 ; (1988) 165 CLR 346 at 357. These observations emphasise the link between identity discovery and the applicant's complaint that he or she has suffered from an actionable wrong. In the present case, the debate between the parties has been directed to principles 3 and 4 (as to which see [33] and [34] in Hooper v Kirella Pty Ltd [1999] FCA 1584 ; 96 FCR 1 extracted above). See also Monsanto Company v Syngenta Seeds Pty Ltd [2006] FCA 228 at [8] ---[11] (per Finkelstein J) where his Honour described the criterion in relation to prospects as "... a claim that is worth investigating ...". At [9], he also said that "... in most cases an applicant for identity discovery must show some prospect of success in its proposed action". In Wyeth v Secretary, Department of Health and Ageing (2009) 255 ALR 352 at [24]---[29] (pp 355---356) Jacobson J described the test as being "... along the same lines as that which applies to a claim for interlocutory injunctive relief ". His Honour went on to say that consideration of that test was connected to the identification of the interests of justice. In Rush v Commissioner of Police [2006] FCA 12 ; (2006) 150 FCR 165 at [3] ---[7] (pp 168---170), Finn J said: Order 15A, rr 3 and 6 of the Federal Court Rules 1979 (Cth) provide respectively for what is colloquially known as "identity discovery" and "information discovery": see generally Hooper v Kirella Pty Ltd (1999) 96 FCR 1. I am empowered by our Rules to order identity discovery where (i) an applicant, having made reasonable inquiries, is unable to ascertain the description of a person sufficiently for the purpose of commencing a proceeding in this Court against that person; and (ii) it appears that some other person has, has had, or is likely to have knowledge of facts or possession of any document tending to assist in ascertaining who that person is. Information discovery in contrast is discovery against the very person against whom relief may be sought. It is tightly circumscribed in the requirements to be met before discovery may be ordered. Common to both species of discovery is a prospective proceeding which may be commenced in this Court. Inherent in this possibility are the requirements that the proceeding will be (a) within federal jurisdiction and (b) in respect of a cause of action known to law which is not purely speculative in character and which is not devoid of prospects. There is no difficulty in this matter in relation to the former of these requirements, some at least of the prospective causes of action being said to arise under Commonwealth legislation: see Judiciary Act 1903 Cth, s 39B(1A)(c). It is the latter requirement, which requires the identification of a possible cause of action (in this case a legal wrong done to the applicants), that is problematic. It is unnecessary for me to refer in detail to the growing body of case law on preliminary discovery. It is sufficient for present purposes to refer to the following. The O 15A, r 3 power to order identity discovery is not to be used in favour of a person who intends to commence merely speculative proceedings. A material factor in the exercise of the Court's discretion is the prospect of the applicant succeeding in proceedings against the person wished to be sued: Hooper v Kirella at [33]. Information discovery under O 15A, r 6 is significantly limited by the conditions imposed in subparas (a), (b) and (c) of that rule. Subpara (a) requires that there be reasonable cause to believe that the applicant has or may have the right to obtain relief in the Court. While the threshold test under this subrule may be set at quite a low level: see Gull Petroleum (WA) Ltd v Tah Land Pty Ltd [2001] FCA 1531 at [59] ; the test for determining whether the applicant has a reasonable cause to have the requisite belief is an objective one: see Hooper v Kirella at [39]. Though it is not necessary to demonstrate a prima facie case, it is not enough merely to assert that there is, or is the mere possibility of, a case against the prospective respondent: Hooper v Kirella at [39]. Belief is an inclination of the mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. If there is no reasonable cause to believe that one of the necessary elements of a potential cause of action exists, that would dispose of the application insofar as it is based on that cause of action: John Holland Services Pty Ltd v Terranora Group Management Pty Ltd [2004] FCA 679 ; BC200403021 at [13], [14], [17] and [73]. While O 15, r 6 expressly contemplates "fishing", it equally requires that each of the limiting conditions prescribed in subparas (a), (b) and (c) must be established. Preliminary discovery cannot itself be used to remedy deficiencies in the satisfaction of the conditions themselves: Airservices Australia v Transfield Pty Ltd [1999] FCA 886 ; (1999) 92 FCR 200 at [5] . The Full Court's judgment in Hooper v Kirella Pty Ltd 96 FCR 1 is binding upon me. I think that what is required is more than a claim worth investigating. In my judgment, what is required is a claim that is within the jurisdiction of this Court and which is not so near to being hopeless as would reasonably and properly justify the claim being described as "merely speculative". The foreshadowed claim must have some prospect of succeeding. Success in this context requires a cause of action known to the law and a real (as opposed to fanciful) prospect that some remedy might be granted. If the foreshadowed proceedings would almost certainly be susceptible to an order for dismissal pursuant to s 31A of the Federal Court of Australia Act 1976 (Cth), then preliminary discovery would ordinarily not be ordered. This is the flavour of the remarks of Jacobson J in Wyeth 255 ALR 352 at [24]---[29]. A judge called upon to decide whether an order for preliminary discovery should be made must consider whether the applicant will be left without an effective remedy if an order is not made ( John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54 ; (1988) 165 CLR 346 at 357). Although the judge is not called upon to decide the foreshadowed proceedings in order to determine the discovery question, he or she is required to consider whether the foreshadowed claims are devoid of prospects. This may require the judge to form a conclusion as to whether or not a particular defence might well succeed on the materials before him or her ( John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54 ; 165 CLR 346 at 357). In the present case, the two matters which must be considered are: The two questions are related. As to the question posed in [56(a)] above, Allphones relies upon two potential causes of action as against the relevant ACCC official. These are: The statutory duty alleged to have been breached is that which is contained in s 155AAA(1) of the Act. The duty itself is circumscribed by the exceptions contained in subpars (a) and (b) of s 155AAA(1). That is to say, there is no duty not to disclose any protected information to any person if the circumstances in either subpar (a) or subpar (b) are in play. Commission official is defined so as to include staff of the ACCC and consultants engaged by the ACCC (see s 155AAA(21)). In the present case, the relevant ACCC official is a member of the staff of the ACCC. There are other exceptions provided for in s 155AAA to the prohibition on disclosure contained in subsection (1). That financial information is protected information for the purposes of s 155AAA. Therefore, unless the terms of subsection (1)(a), (1)(b) or (16) of s 155AAA are satisfied in the present case, there will be a reasonable basis for thinking that the relevant ACCC official has contravened s 155AAA(1) of the Act. Subsection (1)(b) does not assist the ACCC. However, subsections (1)(a) and (16) are relevant. As to subsection (1)(a), on the material before me, the disclosure in the present case took place in circumstances described in that subsection. This complexion on those circumstances is unlikely to change. The communications by the relevant ACCC official with the two firms of solicitors on 14 October 2008 were undertaken in the following context: Section 155 empowers the ACCC to collect information and documents under compulsion for the purposes of its investigative function. In order properly and adequately to investigate a suspected contravention of the Act, it must be able to use information and documents which it gathers in this way. The legitimate use of such information and documents may involve disclosing the information or the contents of the documents to third persons. It is this legitimate use of protected information which is intended to be covered by s 155AAA(1)(a). There is sufficient evidentiary material before me to enable me to be satisfied that, when the relevant ACCC official sent the ACCC's Written Submission to Birch Partners and to Chew + Matthews, he or she was "... performing duties or functions as a Commission official". He or she was not acting on a frolic of his or her own. He or she almost certainly believed that the persons to whom the document was sent had a right to inspect it at the Registry. The persons to whom it was sent had a very real interest in the contents of the document and in both sets of proceedings brought by the ACCC against Allphones. This is a case where it is difficult to see the evidentiary matrix altering much if at all were the substantive issue to be litigated. The position is analogous to the circumstances under discussion in the passages from John Fairfax & Sons Ltd v Cojuangco [1988] HCA 54 ; 165 CLR 346 to which I have referred at [55] above. Further, I think that the ACCC's Written Submission is a "written submission" within the meaning of O 46 r 6(2)(g) of the Federal Court Rules and that, for that reason, it was already "publicly available" within the meaning of s 155AAA(16) of the Act by 14 October 2008. Allphones submitted that the document was not a written submission because: As I have already noted, the document was stamped as "Filed in Chambers" on 9 October 2008. In that sense, it was filed. It was thereby made part of the Court's file and part of the records of the Court. The points raised by Allphones and noted in [72] above lack merit. The real question is: In substance, is the ACCC's Written Submission a written submission? I think the answer to that question is clearly "yes". It purports to be a written submission. It contains submissions and arguments of fact and law directed to the interlocutory application with which it deals. It is easily identifiable as a written record of submissions. It is signed by both Senior and Junior Counsel who were then appearing for the ACCC. The character of a document such as a written submission is to be judged as a matter of substance. It does not depend on any of the matters relied upon by Allphones noted at [72] above. It was submitted on behalf of the ACCC that there was no sense in the proposition advanced on behalf of Allphones to the effect that the document could not be a "written submission" within the meaning of O 46 r 6(2)(g) of the Federal Court Rules unless it was referred to in open Court. It was said that that rule could only be given practical operation if Registry staff can determine quickly by looking at the document whether it is a written submission. To require that persons called upon to decide that question also verify whether the document has been referred to in open Court is unworkable. In the end, the substantive questions are: In the present case, the ACCC's Written Submission was accepted by the Court on 9 October 2008. It so happens that, technically, it was also "filed". But that is not the critical factor. The document was received and retained by the Court. It was not returned or destroyed. It was placed in the Court file (as it should have been). By the end of the day on 9 October 2008, it was a "written submission" within the meaning of O 46 r 6(2)(g) of the Federal Court Rules . Once the document became part of the Court file, it was open to any person to inspect it. This remained the position until 28 October 2008 when I restricted access to it. For these reasons, the document was publicly available as at 14 October 2008 when it was sent to Birch Partners and to Chew + Matthews. Allphones' case based upon s 155AAA will almost certainly fail. That case is speculative. Even if Allphones could establish a contravention of s 155AAA(1) of the Act by the relevant official in the circumstances of this case, there are significant obstacles standing in the way of Allphones should it seek to bring an action to vindicate its alleged private rights based upon the official's public duty embodied in s 155AAA of the Act. A great deal of argument was addressed to this question. However, because of the conclusion which I have reached as to Allphones' prospects of proving a contravention of s 155AAA(1), I do not need to decide whether such a private right in the hands of a citizen (Allphones) is available in the present case. In order for such a private right to exist, the relevant legislation must be found to reflect a legislative intention to create a private right for breach ( Byrne v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 at 424---425). The question is one of construction of the statute. As submitted by Allphones, it is the statute that creates the right and the common law that supplies the remedy ( Darling Island Stevedoring and Lighterage Co Ltd v Long [1957] HCA 26 ; (1957) 97 CLR 36 at 52). It is by no means clear or beyond argument that the Act creates a private right in Allphones to sue for damages and other relief in the event that an ACCC official discloses information in breach of s 155AAA. There is much to be said for the view that no such right is created (see, in particular, the observations of McHugh and Gummow JJ in Byrne [1995] HCA 24 ; 185 CLR 410 at 458). Injunctions have been granted to give effectual relief, that is not only to restrain the disclosure of confidential information, but to prevent copies being made of any record of that information, and, if copies have already been made, to restrain them from being further copied, and to restrain persons into whose possession that confidential information has come from themselves in turn divulging or propagating it. The relevant information was contained in documents which were produced pursuant to compulsory powers invoked by the ACCC and in circumstances where it is at least arguable that the only source of any duty of confidence is s 155AAA itself. Although the use of documents and information obtained compulsorily in this way is constrained by s 155AAA and perhaps may be constrained by other general law principles, it is difficult to see how a party in the position of Allphones could sensibly expect that the information would be kept confidential and not disclosed even for legitimate purposes associated with the due performance by the ACCC of its statutory functions. It may be thought that this is particularly so in circumstances where Allphones made no express claim for confidentiality when the documents were produced. A cartel claim, by definition, involves collusion between two or more actors. In the same way that it is both inevitable and self-evident that the statements of a cooperating criminal conspirator will be used against (ie, disclosed to) the non-cooperating conspirators, it must be taken for granted that a cartel participant contemplating a confession to the authorities knows, or should know, that his statements will be used by the authorities to prosecute the other party or parties. As such, the ACCC's claim that a party like Amcor can have a reasonable expectation of confidentiality with respect to statements made to investigators is devoid of substance. And without such a reasonable expectation, the ACCC's contention that non-disclosure of the documents is required to protect the public interest cannot stand. In the latter case, the section seems to contemplate that there is no room for any equitable duty of confidence to arise. The relevant ACCC official could only be liable if such a duty were imposed upon the ACCC. No claim of confidentiality was made at the time when the documents were produced. The circumstances of their production are not such as to suggest that some duty of confidence should be imposed. The existence of such a duty is inconsistent with the statutory obligation imposed upon the ACCC to investigate and litigate, where appropriate, contraventions of the Act. It seems to me that the Parliament recognised the need for some protection of information and documents furnished to the ACCC pursuant to s 155 of the Act when it enacted s 155AAA. However, the protections to be found in s 155AAA are limited and are intended not to restrict the ACCC unduly or inappropriately in the way that it goes about legitimately performing its statutory duties and functions. I think that the only protection for such information is that which is afforded by s 155AAA. For the above reasons, in my judgment, the foreshadowed proceedings by Allphones are next to hopeless. They are speculative in the sense in which that expression is used in the authorities. The cause of action for breach of statutory duty is virtually hopeless and the cause of action based upon some equitable duty of confidence is in the same category. Even if Allphones could overcome the difficulties which I have discussed at [67]---[86] above, the Court would be very unlikely to make a declaration or grant any injunctive relief. Since 28 October 2008, orders preventing inspection in the Registry of the ACCC's Written Submission have been in place. Further, there is no present threat by the ACCC to make further disclosure of the contents of the document. A declaration would serve no useful purpose. As far as damages are concerned, it seems to me that the foreshadowed claims are entirely speculative. Allphones has had ample opportunity since 15 October 2008 to put its case to its franchisees and to the ACCC as to the correct position concerning the disputed rebates, commissions and bonuses. If its advocacy is sound and based upon accurate information, it should be able to persuade its protagonists of the correctness of its position. If it cannot correct the so-called misinformation, that will most likely be because the franchisees and the ACCC do not accept the correctness of the Allphones position. The lost opportunity to take advantage of or mislead its franchisees is not something for which the law will provide recompense. For these reasons, I am of the view that Allphones would almost certainly be unable to prove any quantifiable loss in the proceedings which it has foreshadowed. The prospects of Allphones succeeding in either or both of the foreshadowed causes of action against the ACCC official who sent the ACCC's submission to Birch Partners and Chew + Matthews is an important and material factor to be considered in the exercise of the Court's discretion whether or not to order the preliminary discovery sought by Allphones. In any event, I do not think that the interests of justice would be served by the making of the order which Allphones seeks. There is no suggestion in the present proceedings that the relevant ACCC official was motivated by malice or otherwise took the action which he or she did other than in the honest belief that it was an appropriate thing to do. The litigation between the ACCC and Allphones is substantial litigation. Allphones has a great deal at stake both in terms of money and reputation. Furthermore, as I have mentioned at [27] above, Allphones is attempting to resolve its differences with its franchisees through a process of negotiation and mediation. That process is especially directed to the question of whether or not the franchisees are entitled to a larger slice of the rebates and bonuses pie. A consideration of the interests of justice involves more than the question of whether or not the order is necessary to provide to the applicant an effective remedy in respect of the actionable wrong of which he or she complains. The Court should be slow to allow its processes to be used as the means by which one party seeks to gain a strategic advantage over another unless that result is a necessary incident of the legitimate deployment of those processes. In the present case, Allphones has not persuaded me that the claims which it says it wishes to make warrant the intervention of the Court by the making of a preliminary discovery order. In my judgment, in the end, if there is any actionable wrong involved in the present case which might conceivably give rise to a remedy, the most effective remedy will be a remedy against the ACCC itself. It is not necessary for Allphones to achieve that which it legitimately desires to achieve to proceed against an individual ACCC official. For these reasons, I propose to dismiss the application with costs. I certify that the preceding ninety-three (93) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | preliminary discovery identity discovery applicant required to produce documents to the australian competition and consumer commission by a notice under s 155 of the trade practices act 1974 (cth) commission official disclosed some information obtained from those documents to third persons whether that disclosure was a breach of s 155aaa(1) of the trade practices act whether any equitable duty of confidence owed by the commission and its staff to a person who produces documents to it under compulsion in response to a s 155 notice whether foreshadowed causes of action and claims for relief have sufficient prospects of success to justify the making of a preliminary discovery order whether the interests of justice would be served by the making of such an order application for preliminary discovery order refused practice and procedure |
They sought to make them representative proceedings under Pt IVA of the Federal Court of Australia Act 1976 (Cth). But under s 46PO(2) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) they required an extension of time in which to commence the proceedings. They now seek to discontinue. The essential questions that have arisen are whether Mr and Mrs Wotton need and, if so, should be granted leave under s 33V of the Federal Court of Australia Act to discontinue and should they pay the respondents' costs? Around 18 November 2004 a resident member of the indigenous community died in the local police station. An internal police investigation was conducted on the island in relation to the death in custody. On 26 November 2004 the police report into the death in custody was read out to a large gathering of the community. The report absolved Senior Sergeant Hurley, the police sergeant involved, of any criminal wrongdoing relating to the death. This led to what has been called the Palm Island "riot" during which a police station and accommodation were destroyed. A state of emergency was declared. On 27 November 2004 Mr Wotton was arrested and charged with offences under s 65 of the Queensland Criminal Code 1899 (Qld) in relation to his alleged involvement in that unrest. Four others were also charged with Mr Wotton. The charges attracted a maximum sentence of life imprisonment. On 1 March 2007, shortly before his trial was to commence Mr Wotton lodged a complaint with the Human Rights and Equal Opportunity Commission (as the Australian Human Rights Commission was then called). The complaint alleged, among other matters, that the arrest, charging and prosecution of Mr Wotton contravened or would contravene the Racial Discrimination Act 1975 (Cth). Mr Wotton sought an ex parte injunction under s 46PP of the Human Rights and Equal Opportunity Commission Act to restrain the holding of his criminal trial: Wotton v State of Queensland [2007] FCA 280. Those proceedings purported to be instituted as representative proceedings under Pt IVA of the Federal Court of Australia Act . In refusing the ex parte relief, Moore J noted that there had been considerable delay in the lodging of the complaint with the Commission: Wotton [2007] FCA 280 at [3] - [5] . His Honour said that he would express no view about whether those proceedings could have been brought as representative proceedings. Subsequently, at his trial Mr Wotton was convicted and sentenced to a term of imprisonment. It purported to have been made on behalf of Mr Wotton, his co-accused and "all the black residents of Palm Island who were residents of the place on and between 18 and 28 November 2004". The solicitors later supplemented the complaint with further submissions. The Commission accepted the complaint as being a representative complaint made on behalf of class members other than the unnamed co-accused. The complaint was made against the State of Queensland, including the Queensland Police Service, the Office of the Director of Public Prosecutions and the Queensland Court of Appeal. It is not necessary to outline any matter in relation to the Queensland Court of Appeal since nothing was raised in the present proceedings in respect of that court. Some allegations made by Mr Wotton to the Commission were, subsequently, withdrawn by him. On 12 September 2007, the then President, the Hon John von Doussa QC, signed a notice of termination pursuant to s 46PH(2) of the Act on the grounds that he was satisfied that some aspects of the complaint were lacking in substance and or misconceived, in relation to one aspect of the complaint, some other more appropriate remedy was reasonably available to each of the complainants and the subject matter of one aspect of the complaint had been dealt with adequately by another statutory authority. He terminated the complaints against the Office of the Director of Public Prosecutions and the Queensland Court of Appeal on the basis that he was satisfied that those complaints were respectively lacking in substance and misconceived. The President gave a statement of reasons to Messrs Levitt Robinson for that decision on the same date. He noted that the alleged conduct of, and actions taken by, the Queensland police during the state of emergency had been the subject of a number of complaints to the Crime and Misconduct Commission of Queensland and that that body had dealt adequately with those matters. The President concluded that the arrest and charge of Mr Wotton on 27 November 2004, due to his alleged participation or involvement in the riot on the island on the previous day, could not be said to be connected to a decision not to arrest and lay charges against Senior Sergeant Hurley in relation to the death that precipitated the riot. The President said that almost 2 years later a coronial inquest had made findings against Senior Sergeant Hurley and that the decision not to lay charges against him had been due to different reasons and circumstances at that time. He concluded that the arrest and charging of Mr Wotton was within the scope of actions that the Queensland police, as a law enforcement agency were permitted to take under the provisions of the Queensland Criminal Code 1899 (Qld) regardless of the race of the alleged offenders. The President said that the surrounding circumstances of the incident did not suggest that Mr Wotton's race was the basis of the actions taken against him by the police. He acknowledged that Mr Wotton felt aggrieved due to the alleged severity of the charges against him compared to the refusal to arrest or charge Senior Sergeant Hurley for allegedly causing the death of the person in custody. The President, however, noted that eventually Senior Sergeant Hurley had been charged with manslaughter and that the matter was being dealt with in the courts, while Mr Wotton's trial was currently pending. The President was satisfied that this aspect of the complaint could be more appropriately dealt with through criminal proceedings under Queensland law and terminated this aspect of the complaint on that basis. The President determined that the decision to lay charges against a person of one race, Mr Wotton, and not to lay charges against a person of a different race, Senior Sergeant Hurley, in particular circumstances that were materially different, was not sufficient to support an allegation of racial discrimination under the Racial Discrimination Act . He concluded that this aspect of the complaint was lacking in substance and that, in any event, the criminal courts were capable of dealing more appropriately with these matters. Next, the President examined the allegation in the complaint of a breach of the International Covenant for the Elimination of Racial Discrimination . That concerned an allegation that the police engaged in disproportionate brutality, targeting or affecting selected racial and ethnic minorities. The President noted that the nature of the riot at the time had involved setting the police station, courthouse and police residence on fire, throwing rocks and the alleged making of death threats to the police. He said that it was arguable that, even though the majority of the residents on Palm Island were aboriginal people (being about 95% of the population), the actions were taken by the police to carry out their duties to protect the security of all people on the island at the time, regardless of their race. He said that there was no evidence to suggest that the police had targeted aboriginal residents during the state of emergency for reasons based on their race rather than for their conduct or their behaviour. The President said that the information he had considered indicated that the police specifically searched certain homes for the purpose of arresting and identifying individuals who had allegedly played some role during the riot. He also noted that the Crime and Misconduct Commission had also investigated the matter. He concluded that it did not appear that the Queensland police acted in a manner that could be considered to contravene Art 5(b) of the Convention and was satisfied that this aspect of the complaint was lacking in substance. The President also rejected a claim based on a contravention of s 13 of the Racial Discrimination Act . Relevantly, that section prohibited a refusal or failure to provide services to the public on less favourable terms by reason of race, colour or ethnic origin. The President observed that it was not clear how a decision not to arrest and lay charges against certain police officers would amount to a refusal or failure to provide general police services to the complainants contrary to s 13. He was satisfied that the allegation was misconceived. The President also rejected any complaint of indirect discrimination on the basis that there had been no material provided to support or explain that allegation. He concluded that that aspect of the complaint related to the police conduct during the state of emergency and that had been dealt with by the Crime and Misconduct Commission. Next, the President turned to the allegations against the Director of Public Prosecutions. He said that the Director was an independent statutory office created by an Act of the Queensland Parliament. He concluded that the information provided by the complainants was insufficient to support an assertion that Mr Wotton and his class members were prosecuted because they were aboriginal. Accordingly, he was satisfied that the allegations against the Director of Public Prosecutions were misconceived and terminated that aspect of the complaint. During the course of these proceedings the applicants sought to join the then Director of Public Prosecutions as a respondent, but subsequently abandoned that application. The President's letter concluded by informing the solicitors that an application could be made to this Court within 28 days of the issue of the notice of termination. On 26 September 2008 Messrs Levitt Robinson wrote to the new President of the Australian Human Rights Commission asking her, pursuant to s 46PH(4) of the Act, to revoke the previous President's notice of termination. They said that they intended to seek leave pursuant to s 46PO(2) from this Court for an extension of time in which to file an application in this Court. A delegate of the President decided not to revoke the earlier termination of Mr Wotton's complaint and informed Messrs Levitt Robinson of that decision on 9 January 2009. In it Mr Wotton and his wife, Cecilia, sought, as their first claim, an order that the time for bringing the application be extended pursuant to s 46PO of the Act up to and including the time at which it was filed. The application asserted that the proceedings had been brought pursuant to s 46PO of the Act and Pt IVA of the Federal Court of Australia Act by Mr and Mrs Wotton on behalf of the aboriginal residents of Palm Island, Queensland, between 18 and 28 November 2004. The State of Queensland was the first respondent. The other named respondents were individuals said to be sued in their capacities as respectively, the Commissioner of Police, a former Attorney General and Minister for Justice for the State of Queensland, the present Attorney General and Minister assisting the Premier in Western Queensland and the Minister for Police, Corrective Services and Sport. The applicants conceded at the hearing that all the respondents other than the State should not have been joined as parties to the proceedings because they had not been identified as respondents to the terminated complaint. Among other orders which the applicants claimed was a declaration, pursuant to s 46PO(4)(a), that each of the respondents had committed unlawful discrimination and an order directing certain of them "not to repeat or continue such discrimination". The application also sought orders revoking awards to two named police officers, neither of whom was joined as a party and an order for compensation. In addition to these claims, the application sought, by way of interlocutory relief, a declaration that s 26 of the Director of Public Prosecutions Act 1984 (Qld) was invalid, by force of s 109 of the Constitution , to the extent that it was inconsistent with ss 9 and 10 of the Racial Discrimination Act . Other declarations were sought by way of interim relief including one "that an Act [sic] made unlawful by ss 9 or 10 of the Racial Discrimination Act is a tort for the purposes of s 10.5 of the Police Service Administration Act 1990 (Qld)" and a declaration that s 95 of the Public Trustee Act 1978 (Qld) did not apply to Mr Wotton's capacity to bring these proceedings pursuant to s 46PO of the Human Rights and Equal Opportunity Commission Act . Mr Wotton was still a serving prisoner in the Townsville Correctional Centre, as disclosed in the application forms. The applicants also filed a Form 167 under O 81 r 5 of the Federal Court Rules (to bring their claim alleging unlawful discrimination) and a Form 129 under O 73 r 3 (to bring representative proceedings under Pt IVA of the Federal Court of Australia Act ). The Form 167 expressly acknowledged that an extension of time was needed in which to bring the proceedings. The Form 129 identified the group members as all aboriginal residents of Palm Island between 18 and 28 November 2004. A number of the claims for relief and interim relief were plainly not appropriate in the context of the proceedings as framed. This would have led inevitably to either an amendment or a strike out application. On that date, I made a number of directions, including that the applicants file and serve any affidavits supporting the application for leave to proceed pursuant to s 46PO(2) of the Human Rights and Equal Opportunity Commission Act by 15 April 2009 and the respondents file and serve any affidavits in reply by 29 April 2009. I fixed 4 June 2009 to hear the question of whether the applicants would be granted leave to proceed under s 46PO(2) and made directions for the filing of submissions by the parties. I also ordered that notices under s 78B of the Judiciary Act 1903 (Cth) be served in respect of the claims that provisions of the Queensland statutes were invalid. On 9 April 2009, Messrs Levitt Robinson wrote to the Crown Solicitor, referring to the directions made on 1 April 2009 and attached a notice of discontinuance. The notice of discontinuance was premised on the basis that the respondents would consent. On 17 April, the Crown Solicitor wrote a letter saying that if the respondents consented to the discontinuance, the applicants would be liable for costs pursuant to O 22 r 3. The Crown Solicitor advised that the respondents may consider a partial compromise on costs if the applicants would agree to enter into a deed of release including standard clauses providing for a bar to proceedings, confidentiality, indemnity release and discharge. That led to the applicants filing a motion on 23 April seeking leave to discontinue the current proceedings pursuant to s 33V of the Federal Court of Australia Act . On 27 April, Messrs Levitt Robinson wrote to the Crown Solicitor advising that they would be willing to enter into negotiations in relation to the question of costs but would not be able, at that stage, to provide a deed of release having the effect of barring any future proceedings. They said that they might be prepared, on behalf of class members, if instructed, to negotiate a settlement of the compensation claim without initiating any further complaints and sought to understand the respondents' attitude to that proposal. There was a further exchange of correspondence prior to the hearing on 30 April in which the parties substantially adhered to their positions. On 30 April, having regard to the provisions of s 33W of the Federal Court of Australia Act , I indicated that I would require a substantive argument on the question of whether the proceedings could be discontinued and on what basis. I set a timetable to enable the parties to provide evidence and make submissions on the motion. I have been assisted considerably by the written submissions filed by each of the parties' counsel and the oral argument on 4 June 2009. The State argued that the proceedings should be dismissed or discontinued and that the applicants should pay their costs of the proceedings on an indemnity or party/party basis. The applicants sought to resist an order for costs. The issues for consideration are: What is the nature of the application currently before the Court, the subject of the notice of discontinuance, and does s 33V of the Federal Court of Australia Act apply to it? What is the effect of a discontinuance or dismissal, and, should the Court make any orders to limit any such effect so as not to prejudice the rights of either the applicants or group members or both to bring further proceedings? Should the proceedings be discontinued or dismissed? What, if any, order for costs should be made? An "affected person" in relation to a complaint was defined in s 3(1) as meaning a person on whose behalf the complaint was lodged. Thus, an affected person had the right to bring proceedings within 28 days after the date of issue of a notice of termination. But if proceedings were sought to be commenced later than that period of 28 days, an affected person required an order from the Court allowing an application to be filed outside that time. Thus, the Court has a discretion to allow an application to be made outside the 28 days. Unless and until the Court has allowed an application to be filed outside the 28 days, an affected person will not have made an application to one of the Courts provided in s 46PO(1). This is so even though a document has been filed in the Court seeking further time in which such an application may be filed. Conceptually, the requirement that the Court allow further time in which to file an application outside the 28 day period provided in s 46PO(2) has similarities with an application for leave or special leave to appeal. An application for leave or special leave to appeal is not an appeal. Rather, it is a proceeding in which an applicant for such leave or special leave is "... no more than an applicant desiring to obtain the Court's leave to commence proceedings in the Court": United Mexican States v Cabal (2001) 209 CLR 165 at 179 [30] per Gleeson CJ, McHugh and Gummow JJ, applying Collins v The Queen [1975] HCA 60 ; (1975) 133 CLR 120 at 122-123 per Barwick CJ, Stephen, Mason and Jacobs JJ. Further, the disposition of a special leave application is not the determination of an appeal ( Attorney-General (Cth) v Finch [No 2] [1984] HCA 40 ; (1984) 155 CLR 107 at 115) . The result is that the refusal of an application for special leave does not produce a final judgment of this Court which forecloses the re-opening of the matter in an appropriate and, necessarily, very special case where the interests of justice so require. There is, of course, a distinction between an application for leave or special leave to appeal to a court and one to extend the time within which proceedings under s 46PO(2) might be brought. In the former case the parties' rights have been determined already by the judgment or order which is to be the subject of an appeal if leave or special leave were granted: cp Jackamarra v Krakouer [1998] HCA 27 ; (1998) 195 CLR 516 at 519-520 [3] - [4] per Brennan CJ and McHugh JJ. An order under s 46PO(2) allowing an extension of time in which to make an application under s 46PO(1) , if granted, entitles the affected person to have his or her allegation of unlawful discrimination heard and determined by the Court. If an extension of time is not allowed, then a respondent to the complaint before the Commission cannot be sued under s 46PO in respect of the alleged unlawful discrimination. Hence, unless and until, the Court allows further time under s 46PO(2) to make an application more than 28 days after the issue of a notice of termination, proceedings of the kind brought by the applicants here are in the nature of a mere application to the Court for permission to commence proceedings. That permission is given if the Court allows further time under s 46PO(2) to file a substantive application alleging unlawful discrimination by one or more respondents. If the Court does not allow further time under s 46PO(2) , there is no application made invoking the jurisdiction of the Court to hear and determine the allegation of unlawful discrimination within the meaning of s 46PO(1) notwithstanding the form of the initiating process or application filed. Thus, I am of opinion that the applicants have not made an application under s 46PO(1) at this time. Rather, they have made an application under s 46PO(2) seeking further time in which to bring proceedings under s 46PO(1). The jurisdiction that the application filed on 11 March 2009 invoked was confined to the issue in the last clause of s 46PO(2). That jurisdiction required the Court to hear and determine only whether the applicants should be allowed further time (beyond 28 days after 12 September 2007) in which to make an application alleging unlawful discrimination by one or more of the respondents to the terminated complaint. It follows that the only matter currently before the Court is whether further time should be allowed to Mr and Mrs Wotton under s 46PO(2) to make an application under s 46PO(1). It is their claim that, first they are persons aggrieved by the termination of the complaint under s 46PO(1) , and secondly, in that personal capacity they should be allowed more time by the Court to make an application to it alleging unlawful discrimination by the respondents against them and group members. An application for further time under s 46PO(2) can only be made by one or more affected persons within the meaning of s 46PO(1). It is possible that such a discrete application could be made in accordance with s 46PO(5) in proceedings under Pt IVA of the Federal Court of Australia Act . But, s 33H(1)(b) and (c) required that one or more of the application or forms 129 or 167 specified the nature of the claims made by the group members and the questions of law or fact common to them. There was no claim made (as referred to in s 33C(1)(c)) by the group members in any of those documents for an allowance of further time to file an application under s 46PO(2) of the Human Rights and Equal Opportunity Commission Act . Nor did any of those documents specify any question of law or fact common to the group members (referred to in s 33H(1)(c)) the subject of the application to allow further time to make the foreshadowed application under s 46PO(1). For these reasons, I am satisfied that the application to allow further time under s 46PO(2) is not a representative proceeding within the meaning or application of Pt IVA of the Federal Court of Australia Act . Therefore, the only matter under s 46PO(2) is a claim brought by Mr and Mrs Wotton in their own capacities, and not in as a representative proceeding, seeking an allowance of further time. There is a further reason why the application under s 46PO(2) for an extension of time would not amount to representative proceedings. That is because s 33C(1)(c) requires that the claims of all of the group members give rise to a substantial common issue of fact or law. "Substantial" in s 33C(1)(c) means "real or of substance": Wong v Silkfield Pty Ltd [1999] HCA 48 ; (1999) 199 CLR 255 at 267 [28] per Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ. There is no evidence that the personal circumstances of Mr and Mrs Wotton, or the reasons why they did not make their application (even as a representative proceeding) within 28 days of 12 September 2007 or now seek an allowance of further time to do so, involve any, let alone, substantial, common issue of fact or law that applies to all other group members. The only issues in this matter under s 33C(1)(c) would be factual ones going to why the further time was required. I am not satisfied any substantial common question of fact or law exists so as to satisfy s 33C(1)(c) that the present application to allow further time could be a proceeding under Pt IVA. It has not been argued or suggested that further time could have been allowed because of the late discovery of a factual or legal ground. WHAT, IF ANY ORDERS, SHOULD BE MADE ON A DISCONTINUANCE OR DISMISSAL? In the event that this conclusion is incorrect, both parties accepted that it was possible to grant leave for the proceedings to be discontinued and an appropriate order made protecting the rights of persons who were intended to be group members from the consequences of allowing that discontinuance. The sources of power to make those orders would be either ss 22 and 23 or (if I were wrong about the proceedings not being made under Pt IVA) ss 33V(2) , 33Z (1)(g) and s 33ZF of the Federal Court of Australia Act . Each of those sections is sufficient to enable the Court to make a declaration protecting the rights of third parties, being those whom the applicants sought to claim were group members. None of those third parties has been heard or joined. They have had no opportunity to protect their interests. Ordinarily (leaving aside cases or statutes excluding the principles of natural justice or procedural fairness) no-one should have his or her rights affected or destroyed without an opportunity of being heard. This principle was illustrated in the great case of Cooper v Wandsworth Board of Works [1863] EngR 424 ; (1863) 14 CB(NS) 180 [143 ER 414] and remains applicable today: Taylor v Taylor [1979] HCA 38 ; (1978) 143 CLR 1 ; Commissioner of Police v Tanos [1958] HCA 6 ; (1958) 98 CLR 383 at 395 per Dixon CJ and Webb J. Under s 33V(1) , a representative proceeding cannot be settled or discontinued without the approval of the Court. The decided cases on s 33V(1) all appear to have been concerned with settlements, rather than discontinuances. The considerations affecting a settlement are not always the same as a discontinuance. It is important that any order that is made has regard to the interests not only of the present parties but of group members who may be affected by the terms of any grant of leave to discontinue. The applicants and their solicitors have had almost no contact with group members for the purposes of instituting or conducting the proceedings. Very soon after the application was filed, the applicants' solicitors first approached senior members of the community on Palm Island for their assistance. It became clear to the applicants' solicitors at that time that any substantive proceedings could not be pursued as group proceedings if an extension of time were granted under s 46PO(2). Thus, it is important to ensure that any order by which these proceedings are brought to an end (by discontinuance or dismissal) not have a substantive impact on group members or affect their rights. The Court must be careful to guard against any injustice that could be done to persons who are not represented in these proceedings and whose rights may be adversely affected by their outcome. This responsibility is reflected in the scheme of Pt IVA itself, especially in ss 33V(1) and 33ZF (1). No group member would suffer any prejudice that has been identified if leave to discontinue these proceedings were granted to Mr and Mrs Wotton on the basis that the discontinuance were treated as affecting only those two applicants' rights and interests. The Court has an important responsibility of safeguarding the interest of group members as a whole under s 33V(1). There is a danger that when a settlement is reached or a discontinuance is agreed, the interests of the actual parties to the proceedings may receive their paramount consideration while the impact on group members may not be fully or properly addressed. That is why in exercising the power under s 33V(1) to approve a settlement or discontinuance the Court must scrutinise with great care the way in which any order is formulated. In the decided cases the Courts have approached settlements with a keen eye to ensuring that the interests of group members are vouched safe: see eg Australian Competition and Consumer Commission v Chats House Investments Pty Ltd (1996) 71 FCR 250 at 258B-C per Branson J; McMullin v ICI Australia Operations Pty Ltd (1998) 84 FCR 1 at 3C-E per Wilcox J; Courtney 122 FCR at 181 [45] per Sackville J and Vernon v Village Life Ltd [2009] FCA 516 at [64] - [68] per Jacobson J. And, the power in s 33ZF(1) enables the Court to make any order that it thinks appropriate or necessary to ensure that justice is done in a proceeding under Pt IVA. Wilcox J described the extent of the power in s 33ZF(1) as being "the widest possible" in McMullin 84 FCR at 4C-D. In Courtney 122 FCR at 182-184 [47]-[54] esp at [52] Sackville J examined the scope of the power, and cautioned that s 33ZF(1) should not become a vehicle for rewriting the rest of Pt IVA. This provision, like all provisions conferring jurisdiction or granting powers to a court, should not be construed narrowly by making implications or imposing limitations which are not found in its express words: Owners of the Ship 'Shin Kobe Maru' v Empire Shipping Co Inc [1994] HCA 54 ; (1994) 181 CLR 404 at 421 per Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ. The parties agreed that any order permitting discontinuance or dismissing the proceedings should be framed so as not to affect the rights of other group members than Mr and Mrs Wotton. I am satisfied that this is a correct approach. In my opinion I should make a declaration reflecting my findings on the nature of these proceedings and the fact that their outcome affects only Mr and Mrs Wotton's rights under s 46PO(2). SHOULD THE PROCEEDINGS BE DISCONTINUED OR DISMISSED? I reject that argument. There has been no substantive hearing on the merits of the application. The application to allow further time under s 46PO(2) is at an early stage. There has been no examination as to whether or not the proceedings are, in their nature, such as ought reasonably be dismissed. Where a party does not wish to continue proceedings but to reserve the right to bring them at a later stage, a discontinuance is an appropriate means of doing so. Under O 22 r 2(1)(a), (b), (c) and r 3 of the Federal Court Rules a party will be liable for the other parties' costs (unless they otherwise agree) by discontinuing as of right before the first directions hearing, or (if the matter proceeded by pleadings) before the pleadings have closed, or by consent of all the parties, if judgment has not been entered. However, under O 22 r 2(1)(d) a party may discontinue at any time with the leave of the Court. There is no usual order provided in the scheme of O 22 in respect of costs where a party discontinues with leave under O 22 r 2(1)(d). The applicants have sought leave under O 22 r 2(1)(d). The terms of O 22 r 2 should not be narrowly construed: Re Tieken: Reg v Tieken [1995] FCA 896 per Burchett, Tamberlin and Kiefel JJ; Cameron v Goldtek Australia Pty Ltd (1997) 72 FCR 274 at 279C per Moore J. The circumstances in which the applicants seek to discontinue have been explained in the evidence. Mr Wotton is in prison. There are difficulties in his communicating with his solicitors and obtaining co-operation from potential group members. Before Mr Wotton had been imprisoned, Messrs Levitt Robinson took instructions from him and his wife exclusively. Stewart Levitt was the principal solicitor in that firm with the carriage of the matter on behalf of the applicants. Mr Levitt said that as at 11 March 2009 the only instructions which his firm held to institute these proceedings as representative proceedings in the Court at Sydney had come from Mr and Mrs Wotton. Mr Levitt's firm is based in the city of Sydney. In his affidavit Mr Levitt said that his firm had acted on behalf of Mr Wotton and other members of the Palm Island community in a range of matters. He, and solicitors in his employ, had travelled to Palm Island on a number of occasions. On those occasions, until his incarceration on 24 October 2008, Mr Wotton had provided essential support to his firm whilst on Palm Island. Mr Wotton had assisted Mr Levitt and his firm in identifying potential witnesses, arranging conferences with witnesses as well as providing transport around the island which had no public transport system. Mr Levitt said that prior to the institution of the proceedings he had formed the view that the Palm Island Aboriginal Shire Council would support representative proceedings, or similar proceedings to those for which the applicants seek further time under s 46PO(2). He based this view on a number of discussions that he and his employed solicitors had had with Palm Island residents between 2007 and March 2009, for the contents of which he claimed legal professional privilege. He had observed a number of occasions on which the Council had both spoken through the media on behalf of the residents of Palm Island and conducted public meetings to discuss developments in relation to the island and its community. In mid March 2009, Craig Longman, an employed solicitor in Levitt Robinson, sent emails to the mayor and other councillors enclosing copies of the Court documents filed in these proceedings. When Mr Levitt visited Mr Wotton in custody on Palm Island on 24 March 2009, he formed the view that Mr Wotton would have limited or no capacity to assist in the conduct of the proceedings as a representative action. Later on 24 March 2009, Mr Levitt dined with the mayor of the Council together with Mr Longman and an aboriginal elder. They discussed the logistical difficulties that Mr Wotton's incarceration had created for Mr Levitt's firm in locating and dealing with potential witnesses. The mayor said that he had received a copy of the Court documents and explained to Mr Levitt the reasons why the council could not provide any assistance in the proposed representative proceedings. In the next 2 days Mr Longman remained on Palm Island to interview witnesses for the purposes of the proceedings. But Mr Longman experienced significant difficulties in interviewing witnesses and obtaining transport. Mr Longman said that because Mrs Wotton was required to work on both days she could not provide support to him during the visit and that he had been able to interview only 3 witnesses, one of whom was Mrs Wotton herself. Mr Levitt said that without the active and overt support of the Council and in light of the presently available resources to the applicants he did not believe it was logistically practicable to maintain the proposed representative proceeding given that he and counsel assisting the applicants had been acting pro bono up to this time. The State identified some substantive complaints concerning the current form of the proceedings. In particular, the State noted the concession that the respondents other than it should not have been joined. There were also substantive problems in the way in which the application has been framed that more careful attention to the formulation of the relief sought would have avoided. The State also complained that the applicants had been tardy in seeking to discontinue. I am not persuaded that that is so. The applicants began seeking to obtain evidence from other persons on Palm Island in support of the proposed representative proceedings after the present application had been filed. But only when the applicants' solicitors visited Palm Island shortly before the first directions hearing did they become disabused of the view that the Council would support the proposed proceedings. Soon after that, on 9 April 2009, the applicants informed the respondents that they wished to discontinue. In that context, the respondents have incurred some waste of their resources and costs. But the question of who should bear those costs is distinct from the question of how the present application should be brought to an end. I am of opinion that I should grant the applicants leave to discontinue against the State rather than dismissing a case that has not been tested. However, their application for an extension of time against the other respondents should be dismissed as incompetent. I am also concerned that, despite my conclusion as to the nature of these proceedings being outside Pt IVA , I should not make an order that could affect the rights of any person who would be a group member identified in the applicants' proposed proceedings. That requires attention as to the terms of the discontinuance including the liability of the applicants for costs. It is appropriate that the discontinuance and dismissal should be made binding only upon the applicants and that the other group members need not show to the Court that they have any involvement in the current claims in the event that they later wish to bring proceedings themselves (see also s 33ZF of the Federal Court of Australia Act ). It argued that the applicants did not act reasonably in commencing the proceedings and that a strong inference could be drawn that they had sought to discontinue because they realised that they have a strong likelihood of failure. Moreover, the State argued that the applicants could, and should, have waited a short time before filing, to investigate whether they would have support from the local community for a representation proceeding. Instead, it argued, the applicants went ahead, causing the State and the other respondents to become involved unnecessarily in litigation at a premature stage. There is no doubt that the decision to involve the other respondents was misconceived and that they are entitled to any costs incurred over and above those that the State would have incurred in any event. Given that the respondents have all been represented by the State Crown solicitor and common counsel, any additional costs are not likely to be substantial. As Finn J pointed out in O'Neil v Mann [2000] FCA 1680 at [12] the rules do not provide expressly for the incidence of costs on the discontinuance of proceedings under O 22 r 2(1)(d) with the leave of the Court. The power to order costs in such a situation arises pursuant to s 43 of the Federal Court of Australia Act . That power is not conditioned by any predetermined rule: Foots v Southern Cross Mine Management Pty Ltd [2007] HCA 56 ; (2007) 234 CLR 52 at 63 [26] - [27] , 65 [34] per Gleeson CJ, Gummow, Hayne and Crennan JJ; Probiotec Ltd v University of Melbourne [2008] FCAFC 5 ; (2008) 166 FCR 30 at 42-43 [46] - [48] per myself, Finn J at 32 [1] and Besanko J at 51 [82] agreeing. It relied on Mr Levitt's evidence that he had formed this view in the week of 24 March 2009, prior to the first directions hearing, but the applicants still persisted in filing notices under s 78B of the Judiciary Act and a motion to join the previous Director of Public Prosecutions, which was subsequently not pressed. The State also relied on the concession by the applicants that the claims against the respondents other than it were incompetent and were not to have been brought. The State also relied on an argument that there were three separate complaints before the Commission that had been joined improperly in the proposed proceedings. I reject that argument. The issues were part of the one matter arising out of events on Palm Island in November 2004: Re Wakim; Ex parte McNally [1999] HCA 27 ; (1998) 198 CLR 511 at 585-586 [139] - [142] , 587-588 [146]-[148] per Gummow and Hayne JJ with whom Gleeson CJ and Gaudron J agreed at 546 [25] and [20]. In addition, the State contended that the proceedings had been couched as representative proceedings for an ulterior purpose. It complained that the applicants' solicitors had claimed that they were acting on behalf of the group members in correspondence in order to achieve a settlement, after having stated that they wished to discontinue. The State contended that it may be inferred that the group proceedings were brought only for "some improper purpose" and are an abuse of court. It did not identify the allegedly improper purpose beyond these generalisations. In my opinion this argument should be rejected. The onus of establishing an abuse of process is a heavy one: Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509 at 529 per Mason CJ, Dawson, Toohey and McHugh JJ. Most proceedings are brought to obtain a vindication of rights either by a judgment of the Court or a negotiated settlement. I am not satisfied that there has been an abuse of the process of the Court by the applicants in bringing proceedings to seek to achieve such an outcome in the present case. There was no improper purpose of the applicants identified in their submissions, nor any abuse of the process of the Court. If the applicants did have an underlying basis for their claim of unlawful discrimination, they would be entitled to compensation either from a judgment or a settlement. And, merely because the applicants' solicitors recently concluded that the conduct of a representative proceeding would be difficult without the support of the Council, this did not entail that a settlement necessarily could not benefit group numbers. Next, the State argued that the proceedings had been brought in the New South Wales Registry of the Court when Moore J, in the earlier proceedings brought by Mr Wotton, had ordered the transfer of those proceedings to the Queensland Registry. The State argued that these proceedings should be seen as a continuation of the previous interlocutory application and that Mr and Mrs Wotton had flouted Moore J's direction to transfer the proceedings to the Queensland Registry. I reject this argument. These proceedings are new proceedings. The proceedings before Moore J concerned an early stage in the complaint process prior to the Commission having dealt with the complaint. These proceedings arise out of rights said to flow from the rejection of the complaint. In addition, the solicitors for the applicants and their counsel, who are in Sydney, are acting pro bono. I infer that it would be more difficult for them at this stage to conduct the proceedings in Brisbane or elsewhere in Queensland, even though they have travelled to Palm Island to assist the applicants in this and other matters. At the moment I am not satisfied that there was any abuse in commencing the proceedings here, although I have considerable sympathy with the proposition, implicit in the State's submissions, that a venue for trial of the proposed representative proceedings in Queensland would be likely to be more convenient and satisfactory than here. I am not satisfied that the State has established any improper purpose for the institution of these proceedings. On the evidence, the applicants appear to have had a proper purpose to vindicate the rights claimed. I reject the application for indemnity costs. WHAT COSTS ORDER SHOULD BE MADE? But, the proceedings continued for only a brief period and the respondents have been on notice from 9 April 2009 that the applicants seek to discontinue. That leaves the question of whether I should make an order for the costs to be paid on a party/party basis for the whole or some part of the proceedings. In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6 ; (1996) 186 CLR 622 at 624-625 McHugh J discussed principles applicable where the moving party does not want to proceed to a hearing on the merits. Both parties urged on 30 April 2009 that the proceedings cease. At that time, the proceedings were treated by the parties as being under Pt IVA. I was not prepared to grant leave to discontinue on the scant evidence as it then stood or to exercise any power under s 33V(1). After the applicants indicated that they wished to discontinue, it was reasonable for both them and the State to have conducted themselves as they did. I am not satisfied that Mr Wotton acted unreasonably in bringing these proceedings in his own right. Mrs Wotton's position received no separate attention in any party's submissions. I am not in a position to conclude that she acted unreasonably. It is appropriate to treat Mrs Wotton's position cognately with that of her husband. This is because of her relationship to Mr Wotton, his circumstances as revealed in the evidence and the absence of any suggestion by the respondents that Mrs Wotton in her own right acted unreasonably. I am not satisfied that Mr Wotton had no reasonable prospect of obtaining an extension of time in respect of his own claims, given his involvement in the criminal proceedings, his subsequent conviction and incarceration. However, that issue has not yet been determined. The proceedings were more complicated than necessary. Because of the overlap of the foreshadowed representative proceedings and the misconceived joinder of the other respondents Mr and Mrs Wotton should bear some costs of those complications but not the costs of the whole proceedings. In my view the justice of the case will be served by requiring the applicants to pay the State's costs up to and including 9 April 2009, at which time it would have been obvious that the proceedings could be brought to an end promptly. The applicants and the State should bear their own costs thereafter. The applicants should pay any additional costs of the respondents who should never have been joined. I certify that the preceding sixty-six (66) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | representative proceedings federal court of australia act 1976 (cth) pt iva criteria for representative proceedings s 33c application for extension of time to bring proceedings as a representative party whether such application is itself representative proceeding need for substantial common issue of fact or law the application for extension of time not a representative proceeding no substantial common issue of fact or shared by applicants and proposed group members on issue of extension of time pt iva not engaged s 46po human rights and equal opportunities commission act 1986 (cth) extension of time under s 46po(2) purported representative proceeding under pt iva federal court of australia act 1976 (cth) application made out of time no substantial common issue of fact or law for the application for extension of time no representative proceeding commenced until court extends time under s 46po(2) proceedings discontinued by leave under o 22 r 2(1)(d) purported representative proceedings whether proceedings commenced for improper purpose no reasonable prospect of obtaining relief sought proceedings incompetently presented party and party costs ordered high court and federal court human rights costs |
I invited the applicant to formulate and provide a draft form of final orders and circulate that draft to the respondent with a view to discussing the content of the final orders and ultimately reaching agreement, if possible, as to the form of the final orders. The final orders are to be made today and they are agreed in the form of a document which I have initialled and which forms part of the Court record. The initialled draft contains a declaration and then sets out five orders of the Court. BC 41 BC41-D016), an inside mounting bracket (Applicant's Drawing No. BC 41 D016), and a front assembly (Applicant's Drawing No. BC 41 D015)) ("the Pivot Drawing") by making a two-dimensional and three-dimensional reproduction of the Work from December 2003 to commencement of the trial in this proceedings (19 June 2006). The Respondent whether by itself, its servants or agents or otherwise howsoever is restrained from infringing the copyright subsisting in the Applicant's Pivot Drawing by reproducing or authorising the reproduction of the Pivot Drawing either in two-dimensional or three-dimensional form whether by reference to the Respondent's first drawing of pivot arms for its pivot mechanism (being Respondent's Drawing Nos. SSB-057 and SSB-067) or by reference to the Respondent's October 2005 drawings (being Respondent's Drawing No. BU-000014, BU-000015 and BU-0000166) or in any other means constituting a substantial reproduction of the Pivot Drawing. On or before 15 June 2007 the Respondent deliver up to the Applicant copies of the Respondent's drawings for its pivot mechanism as identified in Order 1. That issues of the costs of the proceedings and any order for payment of interest upon the damages awarded are reserved to be determined at a date to be fixed. The applicant in the proceeding consents to a stay of the operation of Order 1 until 4.00pm, Friday, 15 June 2007 and accordingly I have made a further order staying the operation of Order 1 until that time and date. 4 The remaining matter involves the resolution of the reserved costs of the proceeding and any order for the payment of interest upon the damages awarded. I have made a direction that the applicant file and serve written submissions in relation to the reserved questions, by Wednesday, 30 May 2007 and a further direction that the respondent file and serve submissions in reply by 4.00pm, Wednesday, 13 June 2007. I have indicated that I will resolve the reserved questions in the week commencing Monday, 18 June 2007. Mr Campbell SC has indicated that the applicant is content to rely upon written submissions in relation to the reserved questions. However, Mr Bennett, the solicitor appearing for the respondent, has indicated that he would wish to speak to Mr Burley of counsel as to whether the respondent would wish to make oral submissions on the reserved questions in addition to any written submissions. I have requested the respondent to let my Associate know whether the respondent wishes to make oral submissions otherwise I will determine the matter on the written submissions during the course of the nominated week. 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 the final form of orders to be made arising out of the judgment in norm engineering v digga australia [2007] fca 761. intellectual property |
2 The appellant is a citizen of Georgia who arrived in Australia on 27 June 1999. On 14 September 2000 the appellant lodged an application for a protection (Class XA) visa with the Department of Immigration and Multicultural Affairs (as it was then named). A delegate of the first respondent refused the application for a protection visa on 26 September 2000. It was determined that the appellant did not have a real chance of Convention related persecution if returned to Georgia and that his fear of persecution on return was consequently not well founded. On 27 October 2000 the appellant applied to the Tribunal for a review of that decision. The appellant claimed that he was interrogated as a result of his involvement in the political movement called the "White Eagles", and that his house was searched, and his family was targeted. Due to this adverse attention, the appellant claimed to have relocated. 4 The Tribunal accepted that there was a political group named the White Eagles, and that the appellant was a member of that group. However, the Tribunal found that the appellant was not a person to whom Australia owed protection obligations under the Refugees Convention. 5 In arriving at this conclusion, the Tribunal found that the White Eagles were not in a position to exert any political influence which would attract adverse political attention, as they had limited resources and a limited ability to advertise. The Tribunal found that that the appellant had not been subject to interrogation or the searches as claimed. Further, the Tribunal did not accept as credible the evidence suggesting that the appellant and his family were targeted. The Tribunal also found that Georgians generally did not face any serious problems should they express their political views in public. The appellant also claimed that the Tribunal's decision was "highly controvertial" [sic], illogical and that the Tribunal's decision had been affected by apprehended bias. 7 In dealing with the s 424A(1) point, the Federal Magistrate, (citing VAF v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 123 ; (2004) 206 ALR 471 , which was approved by the High Court in SZBYR v Minister for Immigration and Citizenship [2007] FCA 26 ; (2007) 235 ALR 609) , held that the Tribunal was not obliged to provide the particular information to the appellant because the information related to the Tribunal's thought processes, and therefore did not attract the operation of s 424A(1). The circumstances of the White Eagles political movement was plainly a matter of general import, not one wholly specific to him. Although the Applicant claimed to be a leader of the group in Hashuri, nonetheless this was plainly information about a class of persons and not information solely limited to the Applicant himself. No particulars of the grounds were provided. The appellant's contentions were, however, developed in written submissions filed by the appellant. 11 The appellant's written submissions do not deal with the unreasonableness or bias grounds of appeal. The submissions focussed on three issues which formed part of the Tribunal's reasoning and led to the rejecting of the appellant's claim. " He contended that the Federal Magistrate had erred by holding that this "information" was "an assessment of the [appellant's] evidence and a thought process" and that the findings were general findings not related to the appellant personally but to a class of persons. He contended that it was necessary for the Tribunal to raise these issues with him in order to satisfy the requirements of s 424A(1) of the Act and the requirements of procedural fairness. 12 Counsel for the Minister objected that the procedural fairness ground had not been raised before the Federal Magistrate and that the appellant should not be granted leave to raise it on this appeal. 13 The appellant, who appeared with the assistance of an interpreter, responded by advising the Court that he was not familiar with the law and that his written submissions had been prepared for him by a Migration Agent in Sydney. 14 In my view the Minister's submission has force. I have, however, because of the disadvantage under which the appellant labours, considered the written submissions on procedural fairness. I do not consider that they are reasonably arguable. Nor do I consider that the arguments founded on s 424A(1) of the Act can succeed. 15 The appeal ground based on s 424A of the Act was argued before the Federal Magistrates Court. The learned Federal Magistrate dealt with it in detail in his reasons (see paragraphs 7 to 23). For the reasons given by the learned Federal Magistrate I do not consider that the Tribunal failed to meet its obligations under s 424A. In this context it is of particular importance to note that the three matters, relied on by the appellant in this appeal and which are set out at [11] above, were matters which had been placed before the Tribunal by the appellant in the course of the hearing. As the Federal Magistrate observed, the Tribunal specifically raised these issues with the appellant and indicated that they cast doubt on the eligibility of the appellant to obtain a protection visa. 16 The appellant's application to the Tribunal predated the introduction of s 422B to the Act . I am prepared to assume, in the appellant's favour, that he was entitled to the protection of the full range of procedural protections coming under the umbrella of common law procedural fairness and that the three matters which he asserts he should have been heard on were "credible, relevant and significant" for the purposes of his application to the Tribunal. Even on those assumptions there was no denial of procedural fairness. The Tribunal learned of the matters from the appellant. Having considered them, it came to the provisional view that they tended against acceptance of his claimed entitlement to a protection visa. It expressly put its provisional views to the appellant and invited his response. That response was taken into account. It cannot, therefore, be asserted that he was not given a fair opportunity to deal with the issues. His real complaint seems to be that the Tribunal was bound to accept these assertions as being supportive of his case. 17 As already noted, the appellant did not seek to argue the unreasonableness and bias grounds which appeared in the notice of appeal. 18 The appeal should be dismissed with costs. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. | appeal appeal from single judge affirming decision of refugee review tribunal where tribunal affirmed decision of a delegate of the minister of immigration and multicultural affairs to refuse the application for a protection visa whether the tribunal had failed to comply with its obligation under s 424a of the migration act 1958 (cth) whether the applicant was denied procedural fairness whether the federal magistrate erred in finding the tribunal's decision was not illogical and had not been effected by apprehended bias no denial of procedural fairness no error shown in federal magistrates' decision appeal dismissed migration |
3897 of 2006 ('the Supreme Court proceedings'). Ms Marie Ashdown also seeks an order that such leave be deemed to have been granted from 29 August 2007. An order is also sought that each party pay its own costs. 2 Ms Marie Ashdown and her sister Ms Dulcie Ashdown ('the Ashdowns') were the registered proprietors of land known as 49 Goodlands Avenue, Thornleigh ('the Thornleigh property'). Such property was owned by the sisters as joint tenants. Ms Dulcie Ashdown died on 9 January 2005. 3 During 1997 the Ashdowns granted a power of attorney to the first respondent, Mr Spargo, who is the first defendant in the Supreme Court proceedings. Prior to 27 July 2001, the Thornleigh property was the subject of a series of mortgages to Wygoss Pty Limited, which is the second defendant in the Supreme Court proceedings. It appears that Mr Spargo exercised his power of attorney in executing at least one of the mortgages in the names of the sisters. 4 On 26 June 2002 by way of Financial Management Order in the New South Wales Guardianship Tribunal the estate of Ms Marie Ashdown was subject to management under the provisions of the Protected Estates Act 1983 (NSW) and such management was committed to the Protective Commissioner. On 25 July 2006, Ms Marie Ashdown by her tutor the Protector Commissioner, instituted the Supreme Court proceedings. On 31 July 2007, Mr Spargo was made bankrupt. Accordingly it is necessary for leave to be granted to enable Ms Marie Ashdown, through the Protective Commissioner, to continue with the Supreme Court proceedings. 5 The affidavit of Mr Christopher Matthew Zucker sworn 3 September 2007 attaches the existing Statement of the Claim in the Supreme Court proceedings, and the proposed Amended Statement of Claim. It is not necessary to consider in detail the claims made on behalf of Ms Marie Ashdown against each of the three defendants namely Mr Spargo, Wygoss Pty Limited and Mr Prior except to observe that there are allegations of undue influence in relation to the mortgages granted to Wygoss Pty Limited, unconscionable conduct, a claim for relief under the Contracts Review Act 1980 (NSW), and a claim for relief for breach of trust and breach of fiduciary duty. Alternatively there are claims in debt and other causes of action. In essence it is alleged that Mr Spargo received all of the funds that were secured by the mortgages and held them on trust for Ms Marie Ashdown. The assertion made by Mr Spargo that part of the funds were spent by him in support of the Ashdowns and in the maintenance and upkeep of the Thornleigh property is disputed. The second respondent, Mr Avavanis, is the trustee of the bankrupt estate of Mr Spargo. He is represented today in Court but takes no position either to accede to or oppose the orders sought. 6 The Supreme Court proceedings are fixed for hearing on 4 December 2007, but an interlocutory application for leave to amend the Statement of Claim in the Supreme Court proceedings is scheduled to be heard before Nicholas J on 12 September 2007. Accordingly the application for leave under s 58(3)(b) of the Act has been brought as a matter of urgency. Such authorities refer to the wide scope of the words ' in respect of' as contained in the relevant subsection. The Court is satisfied that for the purposes of s 58(3)(b) of the Act the claim the subject of the Supreme Court proceedings falls within the purview of s 82 and that the Supreme Court proceedings are in respect of a provable debt. As such this is a proper case for an application for leave under s 58(3)(b) of the Act. 10 The circumstances which a Court must consider when asked to grant leave have been set out in Allanson v Midland Credit Ltd (1977) 16 ALR 43. In that Full Court decision their Honours observed at 48 that if the issues involved would be better and more comprehensively dealt with in a contested trial of the action in the Supreme Court than if a creditor was required to lodge a proof of debt, a grant of leave should follow. 11 The issues as outlined in the Statement of Claim and in the proposed Amended Statement of Claim establish that there are complex factual issues to be determined which, it is apparent, could be determined more effectively in the Supreme Court proceedings. 12 As the Supreme Court proceedings were last before that Court for directions on 29 August 2007, an order is sought for leave to be granted effective from that date. The power of the Court to grant leave pursuant to s 58(3)(b) of the Act includes the power to grant such leave nunc pro tunc : see Re Veghelyi; Smith and Others v Official Trustee in Bankruptcy (1993) 45 FCR 413 at 417. 13 Accordingly the Court considers that the orders sought by Ms Marie Ashdown should be made forthwith and the Court makes the orders as set out above. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy . | leave to take fresh steps in proceedings in respect of a provable debt subsequent to bankruptcy of debtor. bankruptcy |
3 The plaintiffs are farmers who grow wheat and barley in the district surrounding Kimba on the Eastern Eyre Peninsula. For the purposes of marketing their grain, they act as a group. The first and second applicants act as agent for the group. The first defendant, Rural Directions Pty Ltd, is a rural consultant and at all material times was registered as a financial services licensee under s 913B(1) of the Corporations Act 2001 (Cth) ("the Corporations Act ") in the role of "futures advisers". The first defendant is alleged by the applicants to have held itself out as having expertise in farm business planning, agronomy, grain marketing, farm management training, project management, and research and development. 4 The second, third, fourth and fifth defendants are each an incorporated company which carries on business as a wholesaler of grain. It is alleged by the plaintiffs that they conduct "very large grain marketing businesses...[and] possess extensive knowledge of various grain markets, both locally and internationally". Each of the second, third, fourth and fifth defendants is alleged by the plaintiffs to have "accumulated considerable expertise in the analysis of grain markets and in the behaviour of prices within those markets". 5 It is alleged by the plaintiffs that they entered into various contracts with each of the second, third, fourth and fifth plaintiffs. For present purposes, only the contract between the plaintiffs and the fourth defendant is relevant. 6 It is alleged by the plaintiffs that on or about 4 June 2007 they entered into a forward contract with the fourth defendant for the delivery of 1,070 tonnes of barley to Port Lincoln in November/December 2007 at a price of $203 per tonne. I will refer to this contract as the contract for sale and purchase. It is alleged by the plaintiffs that, by reason of the provisions of the Corporations Act , the fourth defendant should have given them a Product Disclosure Statement. Section 761A defines a Product Disclosure Statement by reference to various sections in Ch 7 of the Corporations Act . It is alleged by the plaintiffs that, had they been given such a statement, they would have been made aware that there was a significant risk that the price of barley might rise substantially and if they, the plaintiffs, were unable to deliver the required quantities of barley then they would suffer a much larger loss. It is further alleged that the plaintiffs would have been made aware that, for reasons set out in certain paragraphs in the amended statement of claim, there was a strong likelihood that the price of barley would increase significantly. 7 The above is a brief description of the plaintiffs' case against the fourth defendant. There is, in addition, an allegation in the amended statement of claim that, because the fourth defendant was required to give a Product Disclosure Statement to the plaintiffs, it owed a duty of care to the plaintiffs to take reasonable steps to inform itself of certain matters set out in the amended statement of claim and to convey that information in the Product Disclosure Statement which should have been given to the plaintiffs. However, as far as I can see, there are no allegations of breach of duty, causation or loss and damage in relation to the alleged duty of care. 8 The plaintiffs seek damages in the sum of $173,340 from the fourth defendant. That sum is calculated by reference to the difference between a price of $365 per tonne and the contract price of $203 per tonne multiplied by the quantity to be delivered under the contract for sale and purchase (that is, 1,070 tonnes). In the alternative, the plaintiffs seek an order under s 1022C(1) of the Corporations Act , declaring the contract for sale and purchase to be void, or an order under s 1022C(2) of the Corporations Act for the return of any moneys which have been paid, as a washout cost, under the contract for sale and purchase. There is a reference in paragraph 56 of the amended statement of claim to the fact that, by reason of a production failure, the contract for sale and purchase has been washed out and that, as a result of that fact, they have suffered loss and damage. There was a washout agreement between the plaintiffs and the fourth defendant and it is described in the following paragraph (at points 2 and 3). The thrust of the plea in paragraph 56 of the amended statement of claim is not a denial of the obligation under the washout agreement, but rather an acceptance of the obligation for the purpose of establishing loss and damage. It may well be that the plea in paragraph 56 was framed mainly with an eye to the plaintiffs' case against the first defendant. The substance of the evidence does not appear to be in dispute. It establishes the following. 1. On or about 4 June 2007, the first and second plaintiffs entered into a contract with the fourth defendant under which the first and second plaintiffs would supply 1,070 metric tonnes of barley at a price of $203 per metric tonne to the fourth defendant between 1 November 2007 and 31 December 2007. This is the contract for sale and purchase. The trade rules governing the contract for sale and purchase were said to be the National Agriculture Commodity Marketing Association ("NACMA") Trade Rules. The first defendant negotiated the contract with the fourth defendant on behalf of the applicants. It is said that the contract for sale and purchase resulted from detailed negotiations on the telephone. The contract is evidenced by a document entitled "Purchase Contract-NTP" issued by the fourth defendant and by a document entitled a "Confirmation of Trade" document issued by the first defendant on behalf of the plaintiffs. The latter document provides that disputes relating to the contract are to be resolved through "[a]rbitration as per NACMA Trade Rules". It seems clear from the documents that the contract for sale and purchase was governed by the NACMA Trade Rules. 2. In late August 2007, a Mr Loman of the first defendant, acting on behalf of the first and second plaintiffs, advised a representative of the fourth defendant that the first and second plaintiffs would not be in a position to deliver the required tonnage and meet their obligations under the contract for sale and purchase. The first defendant had been instructed by the first and second plaintiffs to give a notice of default under r 17 of the NACMA Trade Rules and to seek the fourth defendant's agreement to close off the contract. Rule 17 provides a mechanism whereby a seller who becomes aware that he will not be able to meet the contract can advise the buyer who can then elect between various courses of action. One option available to the buyer is to close out the contract, based on the current market price. This is known as washing out the contract. 3. On 30 August 2007, the parties agreed to wash out the contract for sale and purchase under r 17.1(1)(c) of the NACMA Trade Rules, and under that agreement the first and second plaintiffs agreed that they would be jointly liable to the fourth defendant for the sum of $173,340, being the difference between the agreed price and the then prevailing price of $365 per metric tonne. I will refer to this agreement as the washout agreement. A number of documents evidencing the agreement passed between the parties, including a "Confirmation of Trade" issued by the first defendant on behalf of the plaintiffs. 4. On 6 August 2008, the solicitors acting for the plaintiffs wrote to the fourth defendant and said, among other things, the following. However, our clients have always regarded Rural Directions as the party primarily responsible for the position in which they have been placed and would rather not have to proceed against your company as a party to the action provided that you are prepared to await the outcome of the action against Rural Directions. 5. The plaintiffs have not paid the washout price under the washout agreement to the fourth defendant. 6. The fourth defendant has been, and remains, ready and willing to do all things necessary for the proper conduct of arbitration in respect of the dispute between the parties. 7. Rule 26.0 of the NACMA Trade Rules is in the following terms. 2) If any dispute arises out of or relates to any contract subject to these Trade Rules or the breach, termination or subject matter of a contract, the dispute shall be submitted to and settled by Arbitration in accordance with the NACMA Dispute Resolution Rules in the edition current at the date of the establishment of the Terms of Trade in the contract, such rules forming an integral part of the contract and of which both parties to the contract shall be deemed to be cognisant. 3) Neither party to a dispute, nor any persons claiming under either of them, shall bring any action or any legal proceedings against the other in respect to any such dispute until arbitrated in accordance with the NACMA Dispute Resolution Rules. 4) It is expressly agreed and declared within these NACMA Trade Rules that the obtaining of an award through NACMA arbitration shall be a condition precedent to the right of either party or of any persons claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute. The dispute between the plaintiffs and the fourth defendant which is the subject of the proceeding falls within r 26 of the NACMA Trade Rules and the Court should make an order under s 53 of the Commercial Arbitration and Industrial Referral Agreements Act 1986 (SA) staying the proceeding. 2. The plaintiffs' claim against the fourth defendant based on the Corporations Act is bound to fail and judgment ought to be given in favour of the fourth defendant against the plaintiffs under s 31A of the Federal Court of Australia Act 1976 (Cth). The fourth defendant submitted that it was not reasonably arguable that the facts of this case engaged the provisions of the Corporations Act upon which the plaintiffs rely. I was taken to various sections of the Corporations Act and submissions were made by both parties as to why the facts did or did not fall within the terms of those sections. 3. The plaintiffs' proceeding against the fourth defendant should be dismissed or, alternatively, the statement of claim should be struck out, because it is clear that the plaintiffs' claim cannot succeed, having regard to the washout agreement. The plaintiffs' obligation to pay the fourth defendant the sum of $173,340 arises under the washout agreement. As against the fourth defendant, it is that obligation which they seek to avoid, and yet they have not sought relief which would result in that obligation being avoided. They have not challenged the obligation under the washout agreement in their amended statement of claim and, in fact, in so far as there is a reference to the washout agreement in the amended statement of claim, it proceeds on the assumption that the obligation is binding (see [8] above). The plaintiffs have not pleaded any grounds for attacking the obligation to pay under the washout agreement. It may be that the grounds for challenging the washout agreement will be related to the grounds for challenging the contract for sale and purchase but, in my opinion, if that is so, it needs to be clearly pleaded. I note that, in their written submissions made after the hearing, the plaintiffs conceded that the contract for sale and purchase was discharged by the washout contract and that it is the latter contract that they seek to have cancelled. 13 However, I do not think it is appropriate at this stage to dismiss the plaintiffs' proceeding against the fourth defendant, but rather it is appropriate to strike out the amended statement of claim against the fourth defendant. I will then adjourn the notice of motion and the plaintiffs can consider whether they can re-plead their case against the fourth defendant. If they consider that they can, then they will have to seek leave to file and serve an amended statement of claim; if not, the plaintiffs' proceeding against the fourth defendant will be dismissed. 14 In the circumstances, I do not think it is necessary or appropriate for me to consider the fourth defendant's first argument. The fourth defendant's first submission cannot be sensibly determined until the "matter" referred to in s 53(1) is clearly defined. If that is done then the fourth defendant's first argument can be considered at that time. 15 The fourth defendant's second argument raises questions of law about the proper interpretation of sections in Ch 7 of the Corporations Act . In circumstances in which the plaintiffs' amended statement of claim is plainly otherwise defective, I refrain from expressing an opinion on those questions of law. They may not arise, or, if the plaintiffs re-plead their case against the fourth defendant, they may arise in a different context from that presently pleaded. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | pleadings contract for sale and purchase of barley second "washout" contract entered into obligation sought to be avoided contained in washout contract challenge to obligation pleaded in relation to contract for sale and purchase practice and procedure |
This morning an affidavit has been filed on information and belief by Stacey Heath, which deposes to some oral arrangements entered into by the principal of the defendant, Mr Murat Coskun, and another gentleman, the effect of which is that a 10 per cent interest in the company has been purchased by Mr Pezkan Cosgun, an incoming investor. The effect of those arrangements is that $100,000 has been paid by way of deposit, and that sum has been paid by way of a trust account cheque to the plaintiff in the proceedings. The balance purchase price for the 10 per cent interest, which has a value of $500,000, is to be paid within 14 days. 2 The affidavit of Ms Heath does not exhibit any written confirmation of any of these oral arrangements. However, I am satisfied that a special circumstance exists in the form of the intervention of these proposed arrangements. However, because the arrangements are not documented, depend upon oral arrangements, and are otherwise largely undefined, I propose to adjourn the hearing of the application until 10.15 on 12 March, by which time I would expect to have before me an affidavit which deposes to a written agreement which evidences a legally binding obligation on the part of the purchaser to pay the balance of the purchase funds within 14 days of today, which would be of course 14 March 2008. 3 In reliance upon that material, I will then consider whether the matter ought to be adjourned for a further week to enable moneys to be paid and cleared. If those events occur they will result in the total discharge of the plaintiff, who is the only creditor who has a debt which is currently due and payable. However, I should emphasise that unless these arrangements are documented in a properly enforceable form and there is a serious prospect that the funds will be paid and cleared by 14 March 2008, then the real probability is that on 12 March 2008 I will make orders for winding up. I'll reserve the costs of the application until that date. I certify that the preceding three (3) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application for an order that the defendant be wound up in insolvency under the provisions of the corporations act 2001 (cth). insolvency |
The amendment is to change the name of the vessel from "George T" to "Sea Coral". The cause of action pleaded in the writ in rem is a claim for damages arising from a breach of a charter party. It is alleged that the owner failed to maintain the vessel in accordance with the maintenance warranty; failed to undertake necessary repairs whilst the vessel underwent her special survey in 2004; and failed to undertake necessary repairs whilst the vessel was under repair at Zhoushan in 2006 and in Antwerp in 2007. 2 There are two grounds relied upon by counsel for the plaintiff in support of the application to amend the writ in rem and to extend it. 3 The first ground is that there has been a change of the ownership and a change of the name of the vessel since the issue of the writ in rem. The evidence shows that sometime after 1 July 2007 (the evidence is not precise as to the date) the ownership in the vessel passed to a company called Dalton Worldwide SA; and also that the name of the vessel has changed from "George T" to "Sea Coral". Sometimes they leave port before their owners have discharged their debts to those ashore who have supplied the ship with goods, materials or fuel or to those who have repaired or equipped the ship, or to agents who have made disbursements on account of the ship. One of the functions of this court is to assist creditors to obtain satisfaction of their just claims. Accordingly, if a writ in rem is issued before any change in the ownership of a ship has occurred, a subsequent change of ownership would provide good cause for renewing the writ unless those who have the conduct of the action have obviously not pursued it with diligence. 4 In my view, those observations are applicable to the circumstances of this case. 5 The second ground relied upon is that the solicitors have acted with diligence in respect of potential service during the previous 12 months. The evidence shows that in the last year the vessel has not visited an Australian port. I accept that the solicitors for the plaintiff have, for this reason, not been able to effect service within the previous 12 month period of the writ in rem. I also accept that they have acted with diligence in seeking to track the movement and location of the vessel. Another factor in favour of the renewing of the writ in rem is the fact that there is at least a prospect of the vessel berthing in Australia within the renewal period. The vessel in question is a bulk iron ore carrier, which has in the past, although not in the last year, visited Australian waters and has berthed at Port Hedland and other locations in Australia. 6 I am, therefore, satisfied that the circumstances of this case warrant the amendment of the writ in rem and the extension of the writ in rem. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | change of ownership of vessel whether writ in rem should be renewed admirality |
The application was filed on 18 May 2005, and was made pursuant to s 46PO(1) of the Human Rights And Equal Opportunity Commission Act 1986 (Cth) ('HREOC Act'), following upon the termination of a complaint made to the President of the Human Rights And Equal Opportunity Commission ('HREOC') in accordance with s 46PH(1)(i) of the HREOC Act, the President being Mr von Doussa QC (formerly Justice von Doussa of this Court). That complaint was originally made to HREOC on 25 August 2004. The proceedings were originally commenced by Mr Jones in those respective capacities as applicant against The Bible Believers' Church, conceivably an unincorporated association and originally the sole respondent, by the application filed on 18 May 2005, which initiating process was supported by an affidavit of Mr JD Landis sworn on 17 May 2005. A formal extension of time for that purpose was sanctioned by order of the Court made on 22 June 2005. Subsequently by order of the Court made on 21 July 2005 pursuant to Order 6 Rule 2 of the Federal Court Rules , there was added as second respondent to the proceedings Mr Anthony Grigor-Scott, who has described himself as a pastor of The Bible Believers' Church, and who has conducted what may be described as denial of the complaint and resistance to consequential relief in person. 2 The subject matter of complaint by Mr Jones was the publication of material claimed to be racially vilifying of Jewish people, being material which appeared on the World Wide Web, and in particular at websites collectively described as The Bible Believers' Website (the internet address of which is http\\www.biblebelievers.org.au) purportedly owned and operated at all material times by the Bible Believers' Church (hereafter referred to as 'the BBC'). At all material times the BBC was the listed 'registrant' of the website and Mr Grigor-Scott was registered as the 'registrant contact name' and 'tech name' for the website, and as will become apparent in these reasons, he has controlled the purported activities of The Bible Believers' Church to the extent that those activities were capable of being attributed to an apparent unincorporated association, and has otherwise and in any event undertaken such activities himself. The initiating application was subsequently amended by Mr Jones on 27 September 2005, and declaratory relief and orders were sought by that amended pleading against both respondents, and otherwise to the same effect as appeared in the original pleading. It may be taken for the purpose of the proceedings there has existed at all conceivably material times a relatively speaking substantial community of persons comprising the Australian Jewry. . At no stage during the proceedings has either respondent filed or served a form of notice of appearance or a defence pursuant to O 9 and O 11 r 20 of the Federal Court Rules respectively. Nevertheless, Mr Grigor-Scott has assumed to have an entitlement to be heard to dispute the entirety of the claims the subject of the proceedings by making to the Court very lengthy written submissions, purportedly in the form of affidavit material, as well as oral submissions from the Bar Table, whether on behalf of himself or of the BBC, or both, irrespective of that so-called church not having any apparent legal personality known to the law. The practical course adopted by the applicant has been to treat the proceedings as being wholly resisted and to pursue relief by way of s 46PO with as much expedition as achievable in the circumstances. 5 The application of Mr Jones brought at the outset of the proceedings on behalf of the Executive Council of Australian Jewry, as well as by himself, seeks relief by reason of what is pleaded to be breaches on the part of either or both respondents of s 18C of Part IIA of the Racial Discrimination Act 1975 (Cth) ('the RD Act'). As previously observed, the absence of any material elements of the statutory scheme have not been formally pleaded by either respondent by way of defence to the application in accordance with the Federal Court Rules , though as will shortly appear, the respondents or at least the second respondent Mr Grigor-Scott, have or has (as the case may be) purported to make an application to the Court for dismissal of the proceedings upon the footing of s 18D. I will later make observations upon the status in law of the BBC in the proceedings. The practical course adopted by the applicant has been to oppose and join issue upon or demur to the causes of action and the relief purportedly sought by any and all of such purported process or processes sought to be put in place by Mr Grigor-Scott. 6 Earlier on 25 August 2004, a complaint had been lodged with HREOC by the present applicant Mr Jeremy Jones, in his capacity as President of the said Executive Council of Australian Jewry. Whereas monopolistic control of the media, film, and a more boldly pursued holocaust hoax of six-million Jews claimed gassed and cremated by Germany in World War II has produced such powerful psychological and material results the entire world is enslaved to the beneficiaries of the lie and Temples of Equivocation affront the intelligence of humanity in major cities world-wide. The gravest threat to all this wealth and influence is the growing doubt over the question of whether or not a real holocaust of 6 million Jews actually took place. When they don't use the holocaust the money collection sharply drops off. Thus the more the Press, TV and Hollywood promotes the holocaust the more money the United Jewish Appeal and other Zionist funds can extract from gullible people... Jewish leaders have discovered that by repeating holocaust stories over and over again they can instil a guilt complex within all Gentiles. This effectively silences most critics of Zionist political goals... Why doesn't the Jew-controlled press, TV and film industry give massive media attention to real victims and to proven holocausts of Gentiles in recent history. Both cases were ultimately heard and determined in favour of the Council by the Federal Court of Australia. In both cases the Court was satisfied that Jews, and Jewish Australians in particular, constitute a race or a national or ethnic group for the purposes of the Act. In the Toben case, the Court also found that the publication of material on the internet is an act that is done otherwise than in private for the purposes of s 18C of the Act. The connection of the BBC and of Mr Grigor-Scott to the foregoing Bible Believers' website will be further indicated in these reasons. The grounds or particulars of the complaint were at least implicitly adopted by Mr Jones therein and subsequently pursued in the present proceeding. 7 The foregoing decision on appeal in Toben v Jones [2003] FCAFC 137 ; (2003) 129 FCR 515 was made on 27 June 2003 by a Full Federal Court comprising Carr, Kiefel and Allsop JJ in favour of Mr Jones as complainant also in those proceedings, in line with the decision at first instance of Branson J in Jones v Toben (2002) 71 ALD 629. Mr Jones, being the applicant for relief there involved, is the same representative person for the Executive Council of Australian Jewry as here constituted. 8 The circumstances leading to the Court's decision-making in Toben [2003] FCAFC 137 ; 129 FCR 515 were similar in substance to those which have led to the bringing of the present proceedings, and reflected a not dissimilar theme to the subject matter of complaint involving denial of the Holocaust which preceded and continued throughout World War II, an attack upon the widespread exposure of those circumstances on the part of Jewish people, and assertions that Jewish people exaggerated the number of Jews killed in the Holocaust for improper purposes. The language the subject of complaint in Toben was described by Carr J at [45] as 'deliberately provocative and inflammatory' and a 'flamboyantly-worded challenge' , and lacking in good faith, those being descriptions adopted by the applicant in relation to its case against the respondents. In my view, it confirms what a reading of the article as a whole raises as a prospect, namely that it was published with Jewish people in mind, as those responsible for concocting the Holocaust and, indeed, as an attack upon them'. Her Honour agreed with Carr J that there was no proof of the appellant's (ie Toben's) good faith. The above history (taken from the works of scholars, Lerner and Schwelb, working contemporaneously with events) is given to illuminate what it was that the international community was dealing with. By this time in the twentieth century, the nations of the world had experienced a century stained by, amongst other catastrophes, racial slaughter, pogroms, forced removal and relocations of whole peoples, religious and ethnic genocide, and were undergoing the trauma involved in the break-up and disintegration of colonial empires and national and regional political structures based on racial characteristics. The unexpected recrudescence, in the winter of 1959-1960, of some of the most recent and horrific manifestations of racist behaviour enlivened the world community to act swiftly and (with an inevitable degree of variation in political perspective) unanimously, to take steps towards the elimination [his Honour's emphasis] of the perceived evil. The perceived evil was all [again his Honour's emphasis] forms of racial discrimination and racial prejudice, the manifestation of which had been, in recent generations, at times horrifically violent and strident, at times overt, and at times less overt and less brutal, but nevertheless insidiously pervasive. In any form, it was recognised, by all nations in the international community, to strike at the dignity and equality of all human beings. Racial hatred was one form or manifestation of the perceived evil. Unhappily, it was a form with which the nations in the General Assembly in 1960 to 1965 were all too familiar. It was the form of the perceived evil most likely to lead to brutality and violence, but it was not the only form of the perceived evil antithetical to the dignity and equality inherent in all human beings upon which the Charter of the United Nations was based. It was to all [his Honour's emphasis] such forms and manifestations that the Convention was directed. In this Convention, the term "racial discrimination" shall mean any distinction, exclusion, restriction or preference based on race, colour, descent, or national or ethnic origin which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of human rights and fundamental freedoms in the political, economic, social, cultural or any other field of public life. 11 The material relied on, in particular, by the Executive Council of Australian Jewry was The Bible Believers' Newsletter #242 , (the copy before the Court bearing the date 9 May 2005). He has ministered full-time since 1981, primarily to other ministers and their congregations in other countries. He pastors Bible Believers' tiny congregation, and is available to teach in your Church. (ii) an abridgment of a book titled ' The International Jew , The World's Foremost Problem ' (the author whereof was stated to be Henry Ford Senior) containing the ' Editor's Forward ' of one page in length, together with a summary of the life of Henry Ford contained in a journal apparently published, and which referred to the circumstances that Mr Ford ' was accused by many Jews' and 'was a resolute opponent of Roosevelt's policy of "controls" in industry and commerce ...'. During the investigation process, the Commission identified that the Bible Believers' Church ("The Church") is the owner of the website in question. The Church also submitted that the published material is not in breach of the RDA, that the exemptions under section 18D of the RDA apply because the views expressed are based on a genuine belief for the purpose of public interest and that the complaint is "out of time" because the material was initially published in the Church's Newsletter more than two years ago. Accordingly, I have decided to terminate your complaint on that basis pursuant to section 46PH(1)(i) of the [HREOC Act] . The Commission provided a copy of your letter to the Church on 21 December 2004 and in a further letter dated 18 January 2005, the Church proposed that the resolution of the matter is for you to withdraw the complaint. I am also advised that during a telephone conversation with Mr Hien Le of the Commission on 4 February 2005, Mr Grigor-Scott further advised of his view that the matter is not capable of being resolved by conciliation. Accordingly I have decided to terminate your complaint on that basis pursuant to section 46PH(1)(i) of the [HREOC Act] . Information about this process can be obtained from a Federal Court/Federal Magistrates Court Registry. The contact details for the nearest Registry are provided below. Service of a sealed copy of the original application, together with the formal affidavit of Mr Landis (solicitor) in support of the grant of an extension of time, the principal affidavit of the applicant Mr Jones sworn 17 May 2005, and the form of Claim made under the HREOC Act (s 46PO) and the RD Act (s 18C), were lodged with the Court on that date, and delivered to Mr Grigor-Scott in person on 16 June 2005 at his residence known as 'Cravallee' situated in Breeza Road Currabubula in the State of New South Wales. Mr Grigor-Scott said to the process server at the time of service 'I'm not accepting them just leave them there'. No issue as to invalidity of service was subsequently raised on behalf of either respondent. 16 On 22 June 2005, I ordered that an extension of time for the filing of the application be allowed nunc pro tunc up to and including 18 May 2005. Thereafter on 21 July 2005 as I have earlier mentioned, the Court ordered, pursuant to Order 6 rule 2 of the Federal Court Rules , that Mr Grigor-Scott be joined to the proceedings as second respondent. The evidence filed in support of the relief the subject of that notice of motion indicated that the BBC was not listed in records of the Australian Securities and Investments Commission ('ASIC'), nor in the Australian Business Register, but that there had been at all material times a domain name 'biblebelievers.org.au' accessed through the World Wide Web ( infra ), whereof the 'registrant' was the BBC and the 'registrant contact name' was Mr Grigor-Scott. I observe that earlier on 18 January 2005, Mr Grigor-Scott wrote to HREOC on a printed letterhead of the BBC. 17 An amended application of Mr Jones was presented to the Court on his own behalf and on behalf of the Executive Council of Australian Jewry on 27 September 2005. A Declaration that the First Respondent and/or Second Respondent has engaged in conduct rendered unlawful by Part 11A Section 18C of the Racial Discrimination Act by having published or allowing to be published on the World Wide Web at websites collectively known as "the Bible Believers' Website" (the internet address of which is http:\\www.biblebelievers.org.au) (which website is owned and controlled by the respondent) material which is racially vilifactory of Jewish people ('the Material'). An order that the First Respondent and/or Second Respondent forthwith do all acts and things necessary to remove the Material from the Bible Believers' Website from the World Wide Web. I undertake that neither I nor any employee or agent of mine (actual or ostensible) will publish any such material in the future and that all such material which is presently published by the Bible Believers' Church, or by any employee or agent thereof (actual or ostensible) in any print or electronic media (including the Internet) will forthwith be withdrawn from publication. An order that the First Respondent and/or Second Respondent pay the Applicant's costs. Such further or other Order as the Court may deem appropriate. the action in this matter be dismissed. An order that the Human Rights and Equal Opportunity Commission expunge their files of all and any unfavourable, uncomplimentary or negative commentary on our Church. HREOC was not joined to the proceedings the subject of that notice of motion purportedly filed in the Federal Court by Mr Grigor-Scott, notwithstanding the terms of the order sought in paragraph 3 immediately above. 20 In summary, the applicant's case in chief, being of course that of Mr Jones for and on behalf of The Executive Council of Australian Jewry, was to the effect that the material complained of was reasonably likely to offend, insult, humiliate or intimidate Jewish Australians, by reason of what it contains or comprises in relation to the racial, national and ethnic origin of Jewish people including Jewish Australians, especially when read as a whole. In that regard, although the BBC may be conceivably described as an unincorporated association or body of persons, nevertheless as I have already indicated, it has been recorded and disclosed at all material times as the registrant of the subject website conducted in its name. It was the applicant's further case, as I have also foreshadowed, that Mr Grigor-Scott was the instigator and controller of the conduct complained of, and further that the written material thus described by the applicant as offensive did promote and involve the imputations framed by the applicant which I have above recorded. The case for breach of Part IIA of the RD Act was thus contended by the applicant, to have been duly made out and further that no case had been established by or on behalf of the respondents or either of them which would attract the operation of any of the exemptions stipulated in s 18D of the RD Act. I have of course already extracted the full text of s 18D of the RD Act. 21 The applicant submitted that 'Jews in Australia comprise a group of people with an 'ethnic origin' for the purposes of the Act...'. The applicant submitted that the BBC was an unincorporated association and 'does not appear to have any corporate identity or existence'; the applicant supported that proposition with evidence that the BBC is not listed in either ASIC or Australian Business Registrar records. The applicant made the further submission that in Jones 71 ALD 629, the first respondent, 'the Adelaide Institute', was also found to be an unincorporated association in the control of the second respondent, Mr Toben. He describes himself as the director of the Adelaide Institute and in correspondence utilises the letterhead of the Adelaide Institute [...] I am satisfied that the respondent is responsible for the actions of the Adelaide Institute. In particular I am satisfied that at all material times it has been the respondent who has caused the material which is displayed on the websites of the Adelaide Institute to be displayed on those websites. In any event of course, Mr Grigor-Scott has legal personality as a natural person and he at least has been properly constituted as a respondent to the proceedings, and can be appropriately sued by the applicant. As I have foreshadowed, the BBC does not appear to have been registered anywhere in Australia, whether as any form of incorporated or deemed legal entity created under the auspices of Federal or State legislation in Australia or otherwise, though as already exemplified as well as explained, it does operate a website. As I have foreshadowed, it would seem that the BBC has no legal personality, being at most an unincorporated association and merely an emanation of Mr Grigor-Scott, which is probably the more accurate description. There is no evidence of any other person being a member of the BBC, whether by way of a register of members or otherwise. Nevertheless in the light of the way in which the proceedings have been structured and the litigation conducted by each of Mr Jones in his stated represented capacity as applicant and of Mr Grigor-Scott as respondent, the Court record in respect of the proceedings has continued as a matter of expediency to be as it presently appears in the heading to these reasons for judgment. 24 Prior to the filing and service of the amended statement of claim by Mr Jones, which remained in operation for the purpose of the hearing, the proceedings had been on 20 September 2005 the subject of what may be described imprecisely as preliminary proceedings. On that occasion Mr Grigor-Scott informed the Court that '... the Church is not a justiciable body' and that '... nobody can appear for it', and hence he was not seeking to appear for the BBC. Notwithstanding that neither respondent had filed an appearance, counsel for the applicant informed the Court that the applicant did not seek to exclude either respondent in those circumstances from objective relief. It's not a corporation. It's not registered with anybody. It's just a group of believers. It's just part of the Body of Christ. As such, it cannot sue, neither can it be served a Summons'. 25 Thereupon counsel for the applicant formally read the affidavit in chief of the applicant Mr Jones sworn on 17 May 2005, to which was annexed or exhibited the complaint made to HREOC and the BBC Newsletter # 242, thereby drawing attention to what therein appeared in particular as to serious doubts about the occurrence of the Holocaust and its incidents, and as to the global conspiracy of the 'Jews as a group' to dominate other people, and to raise funds on the theme of the Holocaust. Mr Goot referred further to the content of the allegedly offending material concerning 'The Problems of Mass Gassing' and the implications of the Holocaust as the main theme of Jewish fund-raising for the past 38 years, being a theme described in that 'Newsletter' as 'a hoax'. Counsel further drew attention to a letter of 18 January 2005 appearing on the BBC letterhead, from the respondent to HREOC, which claimed that the BBC website was 'covered against the allegations by exclusions 18C and 18D of the Act', referring thereby of course to the RD Act. Counsel further drew attention to what appeared in that BBC newsletter in relation to the Henry Ford Senior book ( ante ). 26 At that stage of the proceedings, Mr Grigor-Scott acknowledged the authenticity of the BBC newsletter #242 per se , but asserted that he was 'not the web administrator', that person being described as an 'American citizen domiciled in the United States', who he did not identify; upon that footing Mr Grigor-Scott asserted that the Court did not 'have jurisdiction over [the website] at any rate'. 27 At the close of the evidence in chief of the applicant, Mr Grigor-Scott sought to tender indiscriminately a very large bundle of documents which he had sent to the Court prior to commencement of the hearing, but being a tender which I rejected as plainly oppressive. I further pointed out to him in that context, first, that '[y]ou can adduce evidence to show that you are not responsible for this material [and that] it is a responsibility that should be attributable to someone else or to some [other] legal entity', and secondly, that 'if you wish to produce to me material that shows the contrary of the complaints that are made about the subject matter then you would be welcome to produce that material as well ...'. After I further asked Mr Grigor-Scott whether there was any other material which would throw light on the complaint made against him, and which he would seek to tender into evidence, certain dialogue between counsel for the applicant, Mr Grigor-Scott and the Court ensued in relation to the need or expediency to produce to the Court the applicant's letter of complaint to HREOC, which was ultimately attended to. I also indicated to Mr Grigor-Scott that it was open to him to testify orally in the witness box if he chose to do so, but after discussion he indicated that '... we shall have to leave it to an address ...'. Anything which is on the church website is supported by the Bible, by the Talmud, by the most eminent Jewish scholars, or by history, historical fact, everything. The website is over 600 megabytes, thousands of files, and there is not one file against any particular group from Adam's race, not one ... [a]s a matter of fact we speak about the glorious future of Israel'. He further said that of the entire website material, '[t]here is only one there of my authorship. 31 It should be observed that during the subsequent hearing that occurred on 5 June 2006, counsel for the applicant informed the Court that the applicant no longer relied upon the Henry Ford material, appearing within exhibit 'JJ1' attached to Mr Jones affidavit of 17 May 2005, in support of his application. 32 I informed Mr Grigor-Scott during the hearing on the 20 September 2005 of the need to provide to the Court written submissions that addressed the issues put against him, and to refrain from submitting to the Court what would be excessive written submissions otherwise. Unfortunately Mr Grigor-Scott did not heed that request. In relation to the above documents, counsel for the applicant acknowledged to have received all three. Counsel submitted that the same ' ... can be described as raising irrelevant matters [and] as being scandalous, if not contemptuous of the Court', and additionally 'vexatious', descriptions which were substantially correct. 34 Mr Grigor-Scott additionally sent to the Court by electronic transmission a 41 page document and certain of the annexures or exhibits thereto, which transmission the applicant complained as to not having been actually received, and thus not having been seen by the applicant. Once again this material was seemingly put forward at least primarily as submissions or contentions. Mr Grigor-Scott informed the Court that there should have been received by my associate submissions of 49 pages and 29 pages, in relation to which any receipt thereof by the applicant was once again denied by his counsel. Mr Grigor-Scott's response was '... I had so much work to do that I've only been able to print out what I have been able to print out, I worked till 11 o'clock last night and I've been working since June or July of last year'. Hence his explanation for having available no additional copy of those purported submissions available for the applicants' legal representatives. Moreover when I passed down to Mr Grigor-Scott for confirmation those documents which the Court had received from him since the last hearing day, he observed unspecifically '[t]here are more'. It is matter for speculation what Mr Grigor-Scott could conceivably have sought to achieve by the provision of that wholly disproportionate amount of material to the Court. 35 I made the observation in the foregoing context to Mr Grigor-Scott that I had directed the provision of written submissions and not further evidence, since the giving of evidence from both parties had been completed on the previous occasion of the hearing of the proceedings. Counsel for the applicant reminded the Court that during the intervening period of time, Mr Grigor-Scott had sought and obtained from the Court an extension of time to provide his written submissions, yet the applicant had only received 'a plethora of affidavits at the end of last week' (referring to those documents enumerated in [33] above to the partial extent that actual receipt was acknowledged). Counsel for the applicant reminded the Court in any event that at the intervening directions hearing on 23 February 2006, Mr Grigor-Scott had informed the Court that he wanted to put on further evidence, and that I had said that if he had wanted to re-open his case, he would have to do so by application supported by affidavit showing what viable information he wished to rely on. Mr Grigor-Scott then stated that 'we have no affidavit in support of an application to re-open'. I thereupon recorded that no such notice of motion to adduce further evidence at the instance of the respondents had been filed in the Registry or had otherwise been provided to the Court. 36 Counsel for the applicant then indicated to the Court, in relation to each of the documents described in [33] above, that '... we are content for the affidavit material upon which Mr Grigor-Scott relies to be treated as submissions', despite the extent of prolixity of the material. Mr Grigor-Scott objected to the adoption of even that course, asserting that 'I've got the evidence here'. I pointed out to Mr Grigor-Scott inter alia that the issue arising was one of infringement of the subject legislation, being an issue the resolution whereof did not '.... mean ... you can now provide to the Court a mass of material, historical material, material that relates to events long ago passed', referring thereby of course to the materials identified in [34] above, and further that '[t]he critical thing you have to answer as a matter of evidence is have you contravened the legislation of which you are accused of doing'. Earlier in the course of the proceedings, I had emphasised to Mr Grigor-Scott that it was that issue which he needed at least primarily to address. 37 Thereafter on 5 June 2006 there was tendered to the Court by the applicant four (4) letters of Mr Grigor-Scott addressed to HREOC, being those bearing date 5 November 2004, 18 November 2004, 19 November 2004 and 18 January 2005, and which comprised at least the part of the context in which Mr von Doussa QC had terminated the original complaint of Mr Jones in the circumstances I have recorded earlier in these reasons. After formally reading the affidavits of the applicant's solicitor sworn on 21 July 2005 and 20 September 2005, counsel for the applicant informed the Court that he did not seek to cross-examine Mr Grigor-Scott upon the material the subject of his foregoing lengthy written communications made to the Court as identified above, or otherwise. The applicant's case in chief was thereupon formally closed. 38 Mr Grigor-Scott next sought to tender formally into evidence a box of material appropriately described by counsel for the applicant as 'piles of photocopied documents and a number of books and leaflets and the like', being material which had not evidently been provided at least in that loose form in advance of the hearing in Court on that day, either to the applicant or his legal representatives. I indicated to Mr Grigor-Scott that I could not and would not accept the tender of such 'a massive bundle of material unless you can explain to me precisely how it bears upon the issue in these proceedings. ' The essence of his response was merely that the material '... establishes that the one with the hatred is Mr Jones. We have got no hatred. We have got no animosity against the Jews. Why should we care? ...'. We teach what the Bible teaches. And there was no such word as Jew in any Bible until a couple of years ago or any language. And the Jews are not a Semitic people ... there are a lot of things missing out on that transcript. I paid $550 for a transcript which had been tampered with and I have written those things down in these affidavits things which are missing questions and answers, just not there'. Mr Grigor-Scott did not point specifically or verbatim to any of the contents of the transcript which had been allegedly 'tampered with', and which I have not in any event since noticed or detected. After I thereupon asked Mr Grigor-Scott '... is that all you wish to say in support of the tender of that material ...', pointing out to him that '... you have not uttered one word that demonstrates a legitimate legal basis [for] the admissibility of that material in these proceedings? We just present the truth and if someone doesn't receive it, well, it is not for them. Maybe another religion is but, you know, ... we just walk away. So we don't argue about things. His forwarding of purported evidentiary material and contentions to the Court, and without apparently any prior or contemporaneous distribution to the applicant in accordance with the Federal Court Rules , or largely so, involved an abuse of process, in terms both of methodology of dispatch or communication as well as size. The provision of that material constituted a failure on his part to come to issue in relation to the subject matter of complaint raised by the applicant in the proceedings. 40 The next course sought to be implemented by Mr Grigor-Scott was to place before the Court a package bearing date '2 August 2006', which contained a large bundle of largely random and disconnected documentation sent to the Court under cover of a letter bearing date 1 August 2006. I caused my associate to inform him, by letter bearing date 7 August 2006, that the leave of the Court would be necessary before at least any such further and written material could be considered, given the stage to which the proceedings had by then advanced. The random or unsystematic manner by which documentary material was simply bundled together was obviously oppressive in the technical sense, aside from absence of relevance. 41 On 22 August 2006, Mr Grigor-Scott dispatched to the Court electronically a further substantial package of documentation, as well as filing a form of application bearing that date. The basis or purpose of the application was stated therein '... to reopen the hearing of this matter to formally present as evidence all the material already provided to his Honour Mr Justice Conti and to the Plaintiff and also to make a further submission. ' The date when such application was sought by him to be heard by the Court was left blank on that form. 42 In any event, the Court appointed a date in September 2006 for the hearing of the foregoing application of the respondents 'to re-open the hearing of this matter'. At the commencement of that hearing on 14 September 2006, Mr Grigor-Scott asked 'to go into the witness box if I may ...'. I explained to him, in response to his assertion that 'I have actually sent the evidence to you', that he did not merely by dispatching the purported affidavit material, which included material in electronic format, to the Court, which he had done, thereby formally establish facts '... according to legal rules of evidence', being facts purportedly recorded literally on a massive historical scale. I explained to him moreover that it was not the Court's task 'to wade through a massive amount of material that you might see fit to... unload upon the court'. I further pointed out to him that he needed to confront the issue arising at the instance of the applicant and involving that material alleged by the applicant in its pleadings to have offended the legislation and which he appeared to have adopted as his own, and as that also of the BBC. I explained to him further that it was not the Court's function to undertake the onerous task of examining and determining the admissibility of such a substantial amount of material which he had sought to submit electronically to the Court, and indeed much more, even if it was admissible, the accuracy, historical truth, or justification otherwise of those contents of the material the subject of complaint. Moreover I emphasised to Mr Grigor-Scott that '[w]hat I am concerned about is what you have said, and then I have to form a judgment as to whether what you have said offends the legislation or otherwise'. 43 Significantly, Mr Grigor-Scott stated to the Court in purported response that he did not disown any of the material published in the name of the BBC. I indicated to him that it was apparent to the Court in any event that he was the person who had published the material complained of in the name of the BBC. After repeating to the Court that he agreed 'generally speaking' with 'what is on that church website', Mr Grigor-Scott asserted, in my view paradoxically, that 'I don't agree with the anti-Semitic material, which is all written by Jews, such as the Babylonian Talmud and many many works of rabbis', thereby apparently referring to the persons in Australia for instance purportedly represented by Mr Jones rather than people whom he would distinguish as the Israelites historically of the Old Testament of the Bible. I further explained in any event to Mr Grigor-Scott inter alia that 'I am only concerned about what particularly has been produced by the applicant [Mr Jones] in support of its case and you are here [seeking] to answer what the applicant has said in its case'. I informed him moreover that '... on the face of it, there appears to be a prima facie case of allegations of racial hatred under the terms of the [RD Act]. ' In that regard, I should record at once that Mr Grigor-Scott acknowledged to the Court that 'I have associated myself' with the publication of the book ' The International Jew , The World's Foremost Problem ' (that being of course the subject of authorship of Henry Ford Senior as earlier recorded in [12(ii)] of these reasons), but he explained to the Court that his purpose in associating himself for instance with that published literary work was '... to show my people ... show believers and seekers of truth that Jews are not Israelites, they are a separate people altogether ... they have deceived ... by masquerading as the so-called chosen people which they are not, they are the enemy of Israel'. 44 Mr Grigor-Scott also testified on that occasion that the BBC website was 'not under my control, neither is it under my authorship' and asserted that 'I am a pastor of the Church ... the web administrator is in the United States', though he did not disclose that person's identity to the Court on any occasion. The evidence, and I would add Mr Grigor-Scott's conduct of the proceedings on behalf of himself, and purportedly on behalf of the unincorporated BBC, points overwhelmingly to that website being controlled and directed at least by him. On that occasion Mr Grigor-Scott continued to appear for himself and to defend his conduct and actions complained, and in particular that his publication of material complained of in the name of The Bible Believers' Church (which I will continue to abbreviate as 'BBC'). The document did not comprise in whole or in part the form of application, notice of motion or pleading prescribed by the Federal Court Rules . The last preceding document of an initiating character had been the 'Application' sent electronically to the Court on or about the date it bore, being 22 August 2006, and bearing his signature, and to which I have already referred at [41] above. 47 Earlier on 5 June 2006, senior and junior counsel for the applicant Mr Jones had provided to the Court a so-called 'Applicant's Supplementary Written Outline of Submissions' directed to the issue of the statutory reasonableness of an act for the purpose of the scope of operation of s 18D of the RD Act, that being germane to the outstanding question or controversy apparently remaining within the scope of the proceedings. The full text of s 18D has been earlier extracted in these reasons. 48 The question as to the reasonableness or otherwise of conduct for the purposes of s 18D was explained by a Full Federal Court in Bropho v Human Rights and Equal Opportunity Commission and Anor (2004) 135 CLR 105 comprising French, Lee and Carr JJ. My attention was drawn by counsel for the applicant to the following passages in the reasons for decision, being pars [80]-[82], [96] and [102] in the reasons for judgment of French J, [141] and [144] in the reasons of Lee J and [178] in the reasons of Carr J. An Act will be done reasonably in the performance, exhibition or distribution of an artistic work if it is done for the purpose and in a manner calculated to advance the purpose of the artistic expression in question. An act is done reasonably in relation to statements, publications, discussions or debates for genuine academic, artistic or scientific purposes, if it bears a rational relationship to those purposes. The publication of a genuine scientific paper on the topic of genetic differences between particular human populations might, for one reason or another, be insulting or offensive to a group of people. Its discussion at a scientific conference would no doubt be reasonable. Its presentation to a meeting convened by a racist organisation and its use to support a view that a particular group of persons is morally or otherwise "inferior" to another by reason of their race or ethnicity, may not be a thing reasonably done in relation to para (b) of s 18D. The same kind of criterion may be applied to acts done in reports or comments on events or matters of public interest. A presentation of a report or comment which highlights, in a way that is gratuitously insulting or offensive, a matter that is irrelevant to the purported question of public interest under discussion may not be done "reasonably". A feature article on criminal activity said to be associated with a particular ethnic group would in the ordinary course be expected to fall within the protection of para (c). If it were written in a way that offered gratuitous insults by, for example, referring to members of the group in derogatory racist slang terms, then it would be unlikely that the comment would be offered "reasonably". It follows from the preceding discussion that good faith may be tested both subjectively and objectively. Want of subjective good faith, ie, seeking consciously to further an ulterior purpose of racial vilification may be sufficient to forfeit the protection of s 18D. But good faith requires more than subjective honesty and legitimate purposes. It requires, under the aegis of fidelity or loyalty to the relevant principles in the Act, a conscientious approach to the task of honouring the values asserted by the Act. This may be assessed objectively. A person acting in the exercise of a protected freedom of speech or expression under 18D will act in good faith if he or she is subjectively honest, and objectively viewed, has taken a conscientious approach to advancing the exercising of that freedom in a way that is designed to minimise the offence or insult, humiliation or intimidation suffered by people affected by it. That is one way, not necessarily the only way, of acting in good faith for the purpose of s 18D. On the other hand, a person who exercises the freedom carelessly disregarding or willfully blind to its effect upon people who will be hurt by it or in such a way as to enhance that hurt may be found not to have been acting in good faith. That course of re-opening was opposed by counsel for the applicant upon the basis that Mr Grigor-Scott's affidavits of 7 September 2006 and 11 October 2006 were in any event of no relevance to the defence by the respondents of the proceedings, and otherwise to any issue in the proceedings relevantly to the statutory scheme. Moreover it was emphasised that the respondents had already passed up ample opportunity to present any such material to the extent that it was relevant, and in any event, no relevance to the issues properly arising had been demonstrated by Mr Grigor-Scott. 51 By way of rejoinder, Mr Grigor-Scott pointed broadly to what appeared on the BBC's website and 'to ... what I have got on the computer here', that being however a response of no utility, much less an explanation as to how any specific instance of his website documentation bore upon the issues arising, or for what reason. It is convenient at this point that my impression was that Mr Grigor-Scott's purported unspecific tender of vast numbers of unidentified documents might operate to draw out the current proceedings indefinitely. Moreover Mr Grigor-Scott continued to repeat in the course of his purported address to the Court vaguely or at best broadly expressed criticisms of the applicant's case of obviously no assistance, such as that '[t]here were a whole series of implausible submissions ...', that 'they have no case', that there was 'no evidence of breach of the statute', that 'the applicant is misusing the Act in order to promote the objectives of the Anti-Defamation League of B'nai B'rith', that 'my church has done nothing wrong', and that the applicant's case was 'untruthful'. 52 Mr Grigor-Scott next invoked reliance upon documents which I have identified earlier in my reasons as having emanated from the authorship of the respondents or either of them. It was an unjustified submission in the light of what I have recorded earlier in these reasons in relation to such documents. Thereafter he invoked reliance upon the affidavits bearing dates 7 September 2006, 25 September 2006 and 11 October 2006, without invoking any justifiable basis for doing so. Mr Grigor-Scott repeatedly asserted that I did not 'understand the case'. I explained to him that in relation to his affidavit material, I was '... at a loss to understand how [the same] bear even remotely on the issues that have been raised against you' and that '[t]hey relate to a massive amount of information that just doesn't bear upon the precise case that has been raised by you'. 53 To exemplify the nature and content of the affidavit evidence most recently assembled and upon which Mr Grigor-Scott purportedly sought to rely on, I drew attention in particular to his most recent affidavit sworn on 11 October 2006 and tendered at the hearing of the proceedings on that day. I am the second respondent. It will be immediately obvious from the url: BIBLEBELIEVERS.ORG. AU and the banner over our main page" "the PRESENT Truth --- what Jesus is doing NOW," and "The Principles of Bible Believers'," that the material on our Church Website is published exclusively for the benefit of Bible believers, not for unbelievers or critics. Web statistics show that the majority of people using the resources are believers who regularly use our Church Website for study purposes and connect to specific files and primarily are not random visitors from search engines seeking information on specific or key words... . The resources on our Church Website are a matter of academic interest and public debate as established by the fact a minimum 15,000 persons daily visit our Church Website and study or download on average four articles each. The academic interest and public debate is further established by the number of academies established within Australia and throughout the world as well as myriad academic publications committed to the matters published on the Church Website. Scores of millions of books, MP3 CDs, video and cassette tapes of the Prophet's Message are published and distributed worldwide every year --- fee [sic] of charge to the believers in developing countries through the love of the Brethren and the grace of God. The new printing works in Kinshasa, Congo, alone printed 7 million books in 2005, and the goal for 2006 is 17 million. Printeries elsewhere publish Message books in greater quantities and also in many languages. Time is of the essence, we are at the very end of the Gentile dispensation, soon the Lord will turn to Israel to fulfil Daniel's Seventieth Week and our day of grace will have expired along with that of Jews who are Gentiles. This is the Work of the Lord. The enormous quantity of material submitted or referred to as "evidence" (and returned three times unread), the professional and academic expertise reflected in that material, the very wide publication and distribution of that material by people other than the respondents, the public interest that must exist for that material to have been produced in the first place and then so widely distributed, and the extent to which such material has been used by the respondents indicates the dedicated state of mind of the respondents in relation to the fact that our reports, comments and statements were made reasonably and in good faith. Ministers and Brethren throughout the world study the material on our website and "prove all things" as commanded by the Scripture. The Applicant's complaint is untrue. It cannot be substantiated and is refuted by the incomplete so-called evidence they have submitted . The complaint is not based upon racial discrimination or racial hatred but is an attack upon Bible Believers' Church because, like Jewish Authorities around the world, we do not recognize the hoax of the extermination of six million Jews in either World War I or World War II, and because of the applicant's false accusations that we are a religion that impersonates the Israelite people and therefore in competition with their own impersonation. The complaint has not been tested by the HREOC, by Solicitor for the Applicants, Mr Steven Lewis, by their Barrister Mr Robert Goot, or by this Court. The Applicant's Attachment B is a misrepresentation of the facts. My Church and my person have borne the burden of this professional negligence with the expenditure of our time and resources. The "specific matters" referred to in the Applicants' claim must be studied online and in conjunction with supporting files. The printouts supplied by the Applicant are incomplete since the linked material has been omitted. Besides, the quotations are a systematic misrepresentation of facts clearly set forth and fully substantiated from independent, generally Jewish sources in each article. None of the three Articles can be construed as racial hatred unless it is Jewish hatred for non-Jews. If the Applicants are offended, their offence derives from substantiated truthful reports of offensive behaviour of Jews toward non-Jews. Of course the circumstances merely that material is published on the internet purportedly for the information of a segment of persons, as Mr Grigor-Scott thus sought to explain above, provides no answer per se to the cause of action pleaded by Mr Jones on behalf of the Executive Council of Australian Jewry. 54 The reference in par 6 of Mr Grigor-Scott's affidavit above to ' Jews who are Gentiles ' reflected of course the distinction which Mr Grigor-Scott sought to propound, both on the subject website purportedly of the BBC , and elsewhere in the literally massive amount of affidavit material which he progressively sought to tender to the Court. That purported distinction was said by him to be between '... the word Jew [and] the word Israelite and because the vast majority of Jews even before the days of [the] Messiah were not Israelites', and because '[w]hereas Israelites are a Semitic people descended from the Hebrew race through Abraham, Isaac and Jacob, Jews are mostly non-Semitic peoples... [v]ery few Jews have any historical or blood link to Palestine with no common ethnic or racial background'. At the conclusion of discussion with Mr Grigor-Scott at the final hearing conducted on 18 October 2006 in relation to his purported affidavit of 11 October 2006, I observed that the contents thereof did not relevantly or at all address the issues arising in the proceedings, and ruled adversely to its admissibility of the same, as in the case of his preceding purported affidavit of 7 September 2006. 55 As previously observed, a letter bearing date 18 January 2005 from Mr Grigor-Scott as 'Minister of the Gospel' appears on the letterhead of Bible Believers' Church, which was addressed to HREOC and was in evidence in the subject proceedings. It may be readily inferred from the evidence in the present proceedings that the operations and activities of BBC are controlled and directed by Mr Grigor-Scott, and so far as the evidence extends, by him alone. No other person has given evidence for the respondents in the proceedings other than Mr Grigor-Scott himself, and no other person has been identified by him by name as a member of the so-called the BBC, or has engaged in the operation of the website. In some of his correspondence, he has however referred obliquely to his receipt of legal assistance. To the extent to which Mr Grigor-Scott literally inundated the Court with documentation, he thereby imposed upon the Court an inappropriate as well as burdensome amount of reading matter, some of which was written material in purported affidavit form which was not presented or framed in any event in compliance with the Federal Court evidentiary and structural rules and regulations, and which at least for the most part was irrelevant to the issues tendered by Mr Jones for resolution in the proceedings, as I have already explained or observed. 56 Mr Grigor-Scott alone presented the respondents' case moreover to the extent that it was oral in form. Many of those publications which he cited or extracted, and the other documents he produced, appeared to have emanated from overseas sources. To have endeavoured to adopt the normal course of causing each affidavit tendered by the respondents to be verbally read in Court, and contemporaneously ruled upon paragraph by paragraph in terms of admissibility, would have been as impractical as it would have been inherently time consuming and otherwise burdensome to the Court. As I have foreshadowed, the only realistic course open for adoption was unfortunately for me to receive the material produced by Mr Grigor-Scott and to read the substantial detail thereof in Chambers. For me to have endeavoured to read the respondents' affidavits in open Court in the traditional way would have been inimical to any reasonable and orderly conduct of the subject proceedings. That behaviour has comprised or included the propagation of what may be described as written material appearing and published in the name of the BBC which has appeared on a website whereof the BBC is the registrant, and which website has been operated and controlled at all material times by Mr Grigor-Scott directly. As I have already indicated, the BBC does not per se appear to have legal personality cognisable in the common law of Australia, irrespective of its purported website status. In the course of the hearing of the proceedings, which took place on four hearing days at intervals during the period of time from September 2005 to October 2006, it became apparent that although Mr Grigor-Scott made unsubstantiated claims as to the existence of a world-wide congregation of the BBC at least per medium of that website, no other person or legal entity was identified, by viable evidence according to law as susceptible to rejoinder as an additional respondent to the proceedings. 58 In my opinion therefore the case of the applicant, which I have summarised at length in these reason, has been established by the applicant, and the relief sought by the applicant should be in principle as well as in scope duly sustained, at least largely for the reasons which the applicant has submitted to the Court, and which I have sought to record or to summarise in the reasons for judgment. Despite the voluminous number and extent of purported submissions and contentions made to the Court by Mr Grigor-Scott, both written and oral, and whether explicitly or implicitly advanced on behalf of the BBC and/or himself, the case so advanced has neither in substance or in reality come to issue with that presented with precision by the applicant (of course in referring to the BBC, I do not overlook its apparent absence of legal personality). The literally massive amount of written material purportedly, at least for the most part, in the nature of affidavits, and with which Mr Grigor-Scott has sought literally to 'flood' this Court, has failed to come adequately to issue with the case propounded by the applicant, with appropriate precision or at all, and moreover was not presented in conformity with established rules of evidence, and with the procedural requirements of the Federal Court. 59 Mr Grigor-Scott's case has failed moreover to confront and answer the nature and the extent of the findings and reasoning of this Court in Jones v Toben , both at first instance and on appeal, to which authority I have of course earlier made reference. There was ample corresponding support in the present case for the making here of similar findings to those made in Jones v Toben . Moreover it is unnecessary for me to determine the validity of the second respondent's assertions regarding the Holocaust. I am not in a position to determine, as a matter of fact, whether the claim made by the author of the pamphlet that the Holocaust never occurred is true or not. I do not have the evidence which would be needed to enable me to make that determination, assuming that the matter is susceptible of proof in a court. As Gray J observed in Irving v Penguin Books Ltd [2000] EWHC QB 115 at [1.3] , that is a task for historians whose role it is to provide an accurate narrative of past events; whereas my role is to determine whether the public dissemination of the leaflet by Mrs Scully in Launceston contravenes s 18C of the RDA. In my view, a leaflet that conveys an imputation that Jews are fraudulent, liars, immoral, deceitful and part of a conspiracy to defraud the world is reasonably likely to offend, insult, humiliate or intimidate Jews in Australia. This would be so regardless of whether or not the leaflet made mention of the Holocaust. However, the fact that the imputation arises in the context of a debate about the Holocaust makes it even more likely that the leaflet would cause offence. This is particularly so owing to the inflammatory language used in the leaflet, as well as the fact that it is unambiguously dismissive of the Jewish view of the Holocaust. I therefore find that this leaflet contravenes s 18C. 60 In the course of the concluding day's hearing of the proceedings conducted on 18 October 2006, and in particular of Mr Grigor-Scott's assertions and submissions of that concluding day, he acknowledged that 'we agree' that he was either the author of the material placed on the BBC website complained of in the proceedings, or else he agreed in any event with that material, but he asserted that the same '... has no relevance whatsoever to racial discrimination against Jews', and further '[i]t does, however, demonstrate the Jews discrimination against non-Jews', though upon what basis he did not appear to articulate, at least with any specificity. He described incidentally, in my opinion without any plausible basis for justification advanced in his evidence, that the eleven page letter of 17 December 2005 of the Executive Council of Australian Jewry (Exhibit R1) was '... a compound of lies, bold-faced lies and the evidence that they have put [is] untruthful evidence'. 61 I have recorded in some detail Mr Grigor-Scott's assertions and submissions, advanced as they were from the Bar Table and which were contained in written material which he sought to tender, inclusively of his short purported written submissions dated 25 September 2006. He maintained to the Court that all that he had done in the course of the proceedings the subject of complaint was undertaken ' .... to determine reasonableness and good faith', in line with the operation of s 18D of the RD Act upon which he repeatedly claimed reliance. I should further record additionally that on the concluding day's hearing, I rejected the admissibility of the remaining evidence of 7 September 2006 and 11 October 2006, which he sought to tender into evidence, as 'oppressive and irrelevant', though I nevertheless agreed to treat his relatively short two and a half page 'submission' of 25 September 2006 as having been placed before the Court for consideration. By that document, Mr Grigor-Scott asserted reliance upon what appeared in the judgments of the Full Federal Court in Bropho [2004] FCAFC 16 ; (2004) 135 FCR 105, and specifically at [79] and [101]-[102] in the case of French J and [178] in the case of Carr J, though I am unable to discern how those passages conceivably assisted his case. 62 As foreshadowed, counsel for the applicant placed reliance upon what appeared in the reasons for judgment in Bropho [2004] FCAFC 16 ; 135 FCR 105 of French J at [96] and [102], of Lee J (dissenting) at [141], and of Carr J at [178], and contrary to the submission of Mr Grigor-Scott, counsel for the applicant explained further by supplementary outline of written submissions the basis for his invocation of those principles enunciated in Bropho [2004] FCAFC 16 ; 135 FCR 105 which he thereupon cited. Those principles related to the statutory tests as to ' reasonableness', 'public interest' and 'good faith' , in relation to which tests it was submitted by counsel that Mr Grigor-Scott's case fell well short, being a submission which in my opinion, in the light of the matters I have recorded in these reason, was clearly correct. Mr Grigor-Scott's purported invocation of s 18D was made incidentally by way of a so-called written 'submission', and not by way of formal application for relief in the form prescribed by the Federal Court Rules . 63 I should record for completeness that Mr Grigor-Scott sought to contend in his belated 25 September 2006 document that '[t]he matters about which the complaints in this matter have been made do not relate to every "Jew", but are part of an academic or public interest discussion in relation to "Zionist" policies and practices'. I have not been able to identify, much less rationalise however, the existence of any such discussion in the context of the present proceedings and of the conduct complained of by the applicant which has led thereto. I agree with the response of counsel for the applicant that the submission is misconceived in its purported aspects. 64 I should acknowledge that by letter bearing date 1 August 2006 written very belatedly by Mr Grigor-Scott, there was sent, without prior approval of a direction or otherwise of the Court, a comprehensive five page closely typed letter. This document bore implicitly the fact of a likely receipt by him of legal assistance, by at least the latter stage of the proceedings. It included what may be described as an unfortunate hotchpot of repetition, abuse of the applicant's case, misstatements, and otherwise irrelevant material that constituted no sufficient basis for specific consideration in the course of these reasons. 65 In the result the application by Mr Jones made on his own part and on behalf of the Executive Council of Australian Jewry should be granted, and the relief sought thereby should be ordered in principle. Given however that the BBC does not have legal personality, not being an incorporated entity as I have earlier explained, no order may be made against what is merely a name or description, though of course restraints may be made against future conduct of Mr Grigor-Scott as to causing or committing proscribed conduct to occur, including proscribed conduct undertaken in the name of the BBC. I should add that the applicant's amended application sought inter alia an order that the second respondent, Mr Grigor-Scott, deliver to the applicant a written statement of apology. I consider such an order to be inappropriate. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | racial vilification racial discrimination whether conduct of respondent rendered unlawful by s 18c of the racial discrimination act 1975 (cth) whether publication of material on world wide web reasonably likely to offend, insult, humiliate, or intimidate jewish people in australia whether first respondent has legal personality relief granted against second respondent federal court rules failure of respondent to file a defence human rights and discrimination law practice and procedure |
2 The first and second applicants have been referred to by the parties in the papers and correspondence as KYC and KSL, respectively. I will use those initials for convenience and consistency. 3 The appeal is to be decided upon the facts comprising the arrangement on which the ruling was made: Federal Commissioner of Taxation v McMahon (1997) 79 FCR 127. During the 2001 year, KYC reverted to a 30 June year end due to a change in ownership of the company. This represented KYC's 2001 year of income. KSL was incorporated by KYC as a special purpose entity to acquire a particular business from Telstra Corporation Ltd (Telstra) as part of the arrangements referred to below. These shares were not issued to Telstra until 14 December 2000. These shares represented approximately 51% of the total capital of KYC at the time of issue. The business was not transferred from Telstra to KSL until 14 December 2000, immediately after the issue of KSL shares to Telstra on the same date. On the basis that KSL did not trade from the time of incorporation until 14 December 2000, being the time of transfer of the business from Telstra, the business of KSL commenced on that date. After utilising losses in that income year, there were tax losses available to be carried forward of $27,470,209. The attempted loss transfer was ineffective as it sought to transfer the whole of the losses incurred by KYC for the period 1 January 2000 to 30 June 2001. The transfer was ineffective because the issue of 38,700,000 ordinary fully paid shares in the capital of KYC to Telstra on 14 December 2000 was an abnormal trading event and resulted in a change of ownership as the shares represented approximately 51% of the total capital of KYC at the time of issue. Can KYC pursuant to Division 170 of the Income Tax Assessment Act 1997 (ITAA 1997) transfer to KSL an amount of its tax loss for the year ended 30 June 2001, being that part of the loss incurred by KYC during the period 14 December 2000 to 30 June 2001, so that KSL may deduct the amount of loss transferred in accordance with section 36-17 of the ITAA 1997 in the year of income ended 30 June 2002? Can KYC and KSL have an extension of time within which to effect a written agreement for transfer of the amount of the loss of one month from receipt of the ruling? That KYC and KSL may make a written agreement for transfer of the amount of the tax loss within one month of receipt of the ruling referred to at 1. No. KYC may not pursuant to Division 170 of the ITAA 1997 transfer an amount of its tax loss incurred during part of an income year (being the period 14 December 2000 to 30 June 2001) to avoid an abnormal trading event which resulted in change of ownership. Not applicable. Nothing turns on this error. The objection was disallowed in full on 1 December 2005. (b) Secondly, even if that not be correct, KSL would not be able to satisfy s 170-40(2) of the ITAA 1997, being prevented by Division 165 from deducting the transferred amount in the deduction year. The definition of the phrase "tax loss" in s 995-1 takes one, relevantly, back to s 36-10. 10 Section 36-15 is entitled, "How to deduct tax losses". You then apply this Subdivision to work out if you can deduct the tax loss in that income year. 11 Division 165 of the ITAA 1997 concerns the income tax consequences of changing ownership or control of a company. Such a change may affect whether a company can deduct its tax losses of earlier years: see s 165(1). In particular, s 165-10 sets out requirements (in addition to s 36-15 above) for the deduction of tax losses. Subdivision 170-A concerns transfer of tax losses within wholly-owned groups of companies. There are other eligibility requirements that they must also satisfy. The other company must have enough assessable income to offset the transferred tax loss. In that case different rules apply. 19 Section 170-15(1) provides that the amount of the tax loss that is transferred is taken to be a tax loss incurred by the income company (see ss 995(1) and 170-10(1) for the meaning of the phrase "income company") in the loss year (see ss 995(1), 36-10(4) and 170-10(1) for the meaning of the phrase "loss year"). 20 Thus, to the extent that the whole or part of a tax loss is (validly) transferred from the loss company to the income company, that amount is a tax loss of the transferee or income company for the year in which the loss occurred in the transferor or loss company. 21 Section 170-15(2) provides for the deeming of the timing of the loss by the income company to be a year earlier if the loss year is the same as the income year of transfer, because Division 36 requires that a tax loss to be deducted must be incurred in an earlier year of income. That income year is called the deduction year . (2) The * loss company can no longer deduct the transferred amount and is taken not to have incurred the *tax loss to the extent of that amount. 24 Section 170-10(1) provides that transfer may occur "if the conditions in this Subdivision are met". The conditions of transfer are dealt with by ss 170-30 to 170-70. One of those provisions, s 170-40, deals with the income company (here, KSL). Those Divisions do not apply to the *income company if the *loss year and the *deduction year are the same. It contains provisions which enable the Commissioner to reverse the effect of schemes that, in order to avoid tax, bring together in the same company assessable income and tax losses, current year deductions, or deductions for bad debts that apart from the scheme would not be fully used: s 175 -1. Section 175 -5 concerns when the Commissioner (the respondent) can disallow deduction for a tax loss. Section 175 -10 concerns income or capital gain injected into a company because of available tax losses. Though my reasons for dismissing the appeal can be tolerably shortly expressed, an appreciation of them is best gained by first recounting the arguments of the parties. There is force to the submissions of both sides. The ultimate question of construction, though a short one, is best appreciated through the immersion of the debate of the parties. Therefore, the approach that I have adopted is to discuss the submissions of the parties at some length. This process has been made easier by the clarity of the submissions. Thus, a portion or segment or constituent piece or section of the whole loss (however ascertained) was a part of the tax loss. This ordinary meaning was taken from standard dictionaries (Oxford and Macquarie). There is nothing in this ordinary meaning, the applicants submitted, to restrict "part" to a portion of the whole; the word is wide enough to accommodate a "portion or division" which is separate and marked by a relevant boundary or event (here two dates within a wider encompassing time frame). The expression "part of the tax loss" is not limited, the applicants submitted, to a part of a tax loss that has been calculated under s 36-10, that is by reference to the full year. 28 The applicants accepted that the task was not merely one of applying a dictionary to words in a section of an Act. The words must be read in their context and must reflect the purpose of the section in which they occur. 29 It should be recalled that context is not merely the Act as a whole, including its text and structure, but context "in its widest sense": CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2 ; (1997) 187 CLR 384 at 408. The relevant words are considered by reference to the language of the statute as a whole in their legal and historical context having regard to the evident aim and purpose of the legislation and provision in question, to any canons of legal construction and to any inconvenience or improbability of result of any given construction. Fundamental to the task is the giving of close attention to the text and structure of the relevant provisions as to the words used by Parliament: Braverus Maritime Inc v Port Kembla Coal Terminal Ltd [2005] FCAFC 256 ; (2005) 148 FCR 68 at [36] and the cases there cited, and Commissioner of Taxation of the Commonwealth of Australia v Linter Textiles Australia Limited [2005] HCA 20 ; (2005) 220 CLR 592 at [50] . 30 The applicants submitted that the context of s 170-10 led to the phrase "part of a loss" being seen as comprehending the apportionment of a tax loss for a year into that part incurred before and that part incurred after a date relevant to the operation of the loss deduction and loss transfer provisions. 31 The applicants first pointed to s 165-20 as an instance of the use of the phrase "part of the tax loss" to encompass part of a year. This is in the part of the ITAA 1997 dealing with deducting tax losses of earlier years (Subdivision 165A) and the effect of change of ownership, control and business carried on. In this context, temporal specification is made of the part of the loss that can be carried forward by reference to the disqualifying event or circumstance. 32 The applicants emphasised what they submitted was an underlying assumption of transfers of tax losses in subdivision 170A --- that what can be deducted by being carried forward can be transferred. In this respect the terms of s 165-20 are important --- s 165-20(1) refers to the part of the tax loss that was incurred in part of the year. Thus s 165-20 recognised, it was submitted, that it is possible for part of the tax loss to be referable to part of the loss year, whilst recognising that a tax loss, prima facie, relates to an entire year of income: s 36-10. 33 The use of text such as appears in s 165-20 is not isolated. Similar provisions appear in s 165-96(2) of the ITAA 1997, concerning the "carrying forward" of capital losses by a company and ss 266-50, 266-95, 266-130, 266-170 and 267-50 of Schedule 2F to the Income Tax Assessment Act 1936 (the "ITAA 1936"), concerning the "carrying forward" of trust losses. 34 The respondent emphasised the words "the amount" in s 170-10(2). This phrase, with the definite article, is to be identified with the words in s 170-10(1), "an amount of its tax loss for an income year". Thus the amount that can be part of the tax loss, is an amount of the company's (here KYC's) tax loss for an income year (that is a whole income year). So the amount --- the quantum chosen to be transferred is the result of a calculation in respect of an income year (that is a whole income year). 35 The respondent emphasised the definition of the phrase "income year", through ss 2-15(3) and 995-1, in ss 4-10(2) and 9-5(2). With some qualifications, which are unnecessary to discuss, income year is based on a "financial year", which is defined also as a period of 12 months beginning on 1 July. Thus, it was submitted that through the notion of "income year" and "tax loss" as defined in s 36-10, s 170-10 is concerned with part of an amount calculated by reference to a whole year. 36 The respondent submitted that the applicants' construction of s 170-10 required a reading into s 170-10 of the words "in part of a year". The respondent equally relied on provisions such as ss 165-20 and 165-96(2) of the ITAA 1997 and ss 266-50, 266-95, 266-130, 266-170 and 267-50 of Schedule 2F to the ITAA 1936 as indicative of the type of specific provision that the Parliament employed when it intended the phrase "part of the tax loss" to encompass a loss referable to part of an income year. 37 The essence of this debate between the parties is, of course, the extent and scope of s 170-10. It is necessary to recognise that the authorisation to transfer losses, that is to have one entity's losses treated as those of another is entirely based in statute. 38 The applicants sought to use an aspect of the reasoning of the respondent in its reasons for disallowing the objections. The respondent, in those reasons had noted that KYC could not rely on s 165-20 to deduct (that is carry forward) part of a tax loss referable to part of an income year because KYC did not fail both limbs of s 165-10. Therefore it did not need s 165-20; it could deduct or carry forward all of its tax loss, in accordance with s 36-15. The applicants said that it would be an odd result if KYC could transfer part of a loss referable to part of a year if, in other circumstances, it could rely on s 165-20 (because it failed both limbs of s 165-10), but it could not transfer such a part of a loss referable to a part of a year, if it did not need to rely on s 165-20 to deduct (that is carry forward) losses. The difficulty with this argument, as the respondent submitted, was that in neither of the posited facts (KYC not failing both limbs of s 165-10 and KYC failing both limbs of s 165-10) could KYC, according to the respondent's submission, transfer part of a tax loss referable to part of an income year. The respondent submitted that provision is made for deduction (that is carrying forward) of part of a tax loss for a part of a year, but that there is no statutory basis for ever transferring part of a tax loss that was incurred during a part of an income year (defined as the loss year). Thus, I do not find assistance in this part of the applicants' argument. The real question is whether s 170-10 is wide enough in language to encompass any calculated part of a tax loss, including a part incurred in a more limited time period than the whole income year. 39 The applicants also sought to use the terms of ss 175-5 and 175-10 in support of their argument. They submitted that the use of the words " some or all of a tax loss ( or a part of a tax loss)" in s 175-5(1) drew a distinction between part in terms of quantum (denoted by the phrase "some of a tax loss") and a part of a tax loss referable to some other matter, such as the part referable to part of the loss year following a change in ownership (denoted by the words "part of a tax loss"). In this latter respect, the definition of "continuing shareholders" in s 175-10(3) was emphasised. Thus, the applicants said the phrase "part of the tax loss" was used in a context which was cognate and which allowed the Commissioner to exclude a tax loss that was referable to part of a year of income. 40 The respondent submitted that these provisions were of little assistance being in a different context. 41 The applicants also sought assistance from the legislative history. Divisions 165 and 170 are a re-enactment in the drafting style of the ITAA 1977 (being inserted by the Tax Law Improvement Act 1997 (Cth)) of the relevant company loss provisions of the ITAA 1936. 43 The applicants emphasised the following points about that legislative history. First, it was submitted that the precursors of s 165-20: s 80A(2) (and later re-enacted in s 80A(5)) of the ITAA 1936 used the phrase "part of the loss" to encompass part of a loss incurred in part of a year. Section 80A(1) provided for a 40% continuity of beneficial ownership by reference to voting, dividends and right to capital at all times "during the year in which the loss was incurred...". The part which may be allowed is such amount as the Commissioner considers to be the loss incurred after the change in beneficial ownership of the shares. In this situation, sub-section (1) or sub-section (3), as the case may be, will operate to disallow a deduction for the loss. The part which may be so allowed is the amount the Commissioner considers to be the loss incurred in the part of the year of loss occurring after the shares were acquired by the continuing shareholders. I tend to agree. 51 The respondent rejected the proposition that this is what the phrase "or part of a loss incurred by the taxpayer" was referring. The respondent said that the phrase "the whole or part of a loss incurred by the taxpayer" was referring to the undeducted part of a loss incurred in a previous year. 52 The phrase was capable of referring to part of a loss referable to a whole year undeducted, presumably after partial utilisation in a later year. Section 80A(1) denied the deduction of a loss where ownership had changed; s 80A(2) limited that denial to that part of the loss that arose before the change in ownership. In these circumstances, the satisfaction of the business test in s 80E meant that s 80A did not operate to prevent "the whole of the loss being so taken into account". Whilst the lack of repetition of "a part of a loss" at this point is at first blush puzzling, it can be easily understood, conformably with the applicants' submissions, as stating that no operation of s 80A(1) as to the whole, or s 80A(2) as to the part, of a loss will prevent the whole loss being taken into account. Thus, for such force as it has, I tend to agree with the applicants' submission that the phrase or "a part of a loss" in s 80E of the ITAA 1936 encompassed the part of the loss incurred in part of a year, in respect of which by the combined operation of s 80A(1) and (2) the Commissioner could not be satisfied of the ownership test. 53 Thirdly, the applicants referred to the enactment in 1984 of s 80G(6) of the ITAA 1936 and the use therein of the expressions "the whole or a specified part of the loss" and "the loss or that part of the loss". Reference was also made to the explanatory memorandum. The respondent submitted that these references did not reveal any assistance to the applicants. I agree. I do not think that they advance the position. 54 The respondent further submitted that the explanatory memorandum accompanying the introduction of s 80G (the precursor to Subdivision 170-A of the ITAA 1997) supported its construction that the reference to "part" is as to quantum only --- that is a part of a whole year's loss. What can be transferred under s 80G is company A's right to deduct that dollar amount, to the extent of the whole of it or a part only of it. An agreement to transfer the loss company's right to a deduction under s 80(2) in respect of the whole of its loss deductible under that section must necessarily refer to a loss of a particular dollar amount that is then, ie, at the date of the agreement, identifiable, even if that dollar amount is not itself recorded in the agreement. An agreement to transfer the loss company's right to a deduction under s 80(2) in respect of part only of that loss must identify the part of the then identifiable dollar amount of the entire loss that is the subject of the agreement; prima facie, that could be done by recording in the agreement either the dollar amount of that part of the fraction of the then identifiable dollar amount of the whole of the loss, that is the subject of the transfer agreement. 59 The applicants submitted that what Drummond J said was being taken out of context. I think there is force in that criticism. On appeal from Drummond J, the Full Court set aside the answers given to a separate determination of questions ( Harts Australia Ltd v Commissioner of Taxation [2001] FCA 761 ; (2001) 109 FCR 405). In so doing Merkel J (with whom Lee J and Finn J concurred) made a number of relevant points: (a) An agreement to comply with s 80G(6)(c) must be in relation to an amount that is fixed and identifiable in the sense that it is ascertainable. (b) The general purpose and policy of these provisions is beneficial to the taxpayer and thus a liberal, rather than a narrow or technical approach, is to be taken to the construction of s 80G. (c) The amount need not be quantified and specified in the agreement, but it must be fixed and ascertainable. 60 Fourthly, the applicants submitted that Division 170 is relieving legislation. This submission was supported by the terms of the second reading speech for the earlier legislation in the Income Tax Assessment Bill (No 4) 1984 that the purpose was to assist taxpayers and stimulate business activity. It was also supported by the expression of view by the Full Court in Harts [2001] FCA 761 ; 109 FCR 405 at [18] . 61 The respondent submitted that it was "doubtful" whether Division 170 should be characterised as relieving legislation, "rather than providing a statutory regime for the transfer of losses within a corporate group where certain conditions are satisfied. " Looking at its history and provenance, it is tolerably clear that the aim of Division 170 is to provide a benefit to taxpayers by relieving them from the logical consequences of individual legal personality. Its precursor, s 80G, was intended to be beneficial to the taxpayer Harts [2001] FCA 761 ; 109 FCR 405 at [18] and Commissioner of Taxation v Asiamet (No 1) Resources Pty Ltd [2004] FCAFC 73 ; (2004) 137 FCR 146 at 193 [141] . Its aim was, broadly, to align the treatment of company groups with divisions in companies: Asiamet (No 1) Resources 137 FCR at 193 [142]. But that is to be seen as effected by the statutory language employed, and no further. 62 Thus, I agree with the thrust of the applicants' submission in this regard that provisions such as Division 170 should not be narrowly construed and should be interpreted to promote the purpose or object underlying the Division which can be seen as the purpose and object of s 80G of the ITAA 1936. That does not mean, however, that provisions are given a meaning which they do not bear. Rather, no narrow approach is to be taken, and the beneficial purpose is to be borne in mind in ascribing the meaning to words used: Commissioner of Taxation of the Commonwealth of Australia v Murry [1998] HCA 42 ; (1998) 193 CLR 605 at 632; Federal Commissioner of Taxation v Top of the Cross Pty Ltd (1981) 37 ALR 623 at 633; Plessey Australia Pty Ltd v Federal Commissioner of Taxation (1989) 89 ALR 395 at 400; and Federal Commissioner of Taxation v Reynolds Australia Alumnia Ltd (1987) 77 ALR 543 at 549 and 560. 63 The respondent relied upon the notion that Division 170 was a code and that care should be exercised in having recourse to the pre-existing law when construing it. Reference was made in this respect to Brennan v R [1936] HCA 24 ; (1936) 55 CLR 253 at 263. In this respect, however, the terms of s 1 - 3 of the ITAA 1997 are to be recalled, in particular since Division 170 can be seen to have a precursor, redrafted in different style, in s 80G of the ITAA 1936. 65 It was common ground that the loss company, KYC, satisfied all conditions in subdivision 170-A. In particular the matters set out in s 170- 35 , and through it, Subdivision 165-A. The satisfaction of Subdivision 165-A arose from the fact that the continuity of business test in s 165- 13 was not failed, even though the continuity of ownership test in s 165- 12 was failed. 66 The issue was whether the income company, KSL, satisfied s 170-40(2) --- that is whether it was prevented by Division 165 from deducting the transferred amount in the deduction year. 67 It was common ground that KSL would not meet the requirements of s 165- 10 in relation to the whole of the 2001 year because it failed the continuity of ownership test in ss 165- 10 and 165- 12 throughout the loss and income years, and it failed the continuity of business test in ss 165- 10 and 165- 13 because it did not carry on the same business during the income year as it carried on immediately prior to 14 December 2000. 68 The applicants at this point called in aid s 165- 20 . It is taken to have been incurred by Keycorp Solutions when it was incurred by Keycorp. First, the respondent pointed to s 170- 15 which deems the amount of the tax loss to be incurred by the income company (KSL) in the loss year (2001) and does not contemplate a situation where the deemed amount is part of the tax loss incurred during part of a year. The respondent submitted that if it had been intended that Subdivision 170-A would allow KSL a deduction under s 165- 20 in respect of a loss transferred that was referable to part of a year, it would be expected that the legislature would have expressly provided for that in s 170- 15 by stating that the amount would be taken to be incurred by the income company in the same part of the year as it was in fact incurred by the loss company. 70 Secondly, the respondent reverted to the terms of s 170- 10 and its use of the phrases "tax loss" and "income year" requiring a calculation over the whole year. 71 Thirdly, it was submitted that s 170- 15 (1) was a deeming provision and thus should be construed strictly: Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96. The respondent submitted that the applicants were attempting to give s 170- 15 more work to do than it bore. In particular, this criticism was made of [31] and [32] of the applicants' submissions. 72 The applicants submitted that all these submissions of the respondent rest on the primary or first issue --- whether Division 170 provides in its terms for transfer of part of a loss which is incurred in part of a year. If it is, all the arguments about s 170-40(2) collapse in on themselves. 73 I think there is force in this last submission. Ultimately, there is one issue: Does Division 170 contemplate as part of its operation the transfer between companies in a group to which the Division applies part of a tax loss for a year which is referable to part of that year? 74 This point was reflected in the final submission of the respondent. If Parliament had intended that "part of a tax loss" incurred in part of a tax year could be transferred it would be expected that a provision in the same terms as sec 165- 20 would be found in Subdivision 170-A. There is no such provision in that Subdivision. The respondent emphasised the existence in Subdivision 165-B of detailed rules to calculate taxable income and a tax loss where a company has not had the same ownership and control during the same income year. 76 Section 165- 23 describes "what this Subdivision is about". Divide the income year into periods: each change in ownership or control is a dividing point between periods. Treat each period as if it were an income year and work out the notional loss or notional taxable income for that period. 79 Sections 165-45 to 165-65 deal with working out the company's taxable income. Section 165-45 concerns division into periods; s 165-55 concerns how one attributes deductions to periods; s 165-60 concerns how one attributes assessable income to periods; and s 165-65 concerns how one calculates the company's taxable income for the income year. 80 Section 165-70 concerns how to calculate the company's tax loss for the income year. 81 Sections 165-75 to 165-90 deal with special rules that apply if the company is in partnership. 82 The respondent stressed the existence and terms of these rules. It submitted that it was clear from Sub-division 165B that rules were required for attribution of various deductions to different periods of the year. For example, s 165-55(2) directs how various deductions are to be treated. Some deductions are not allowed to be taken from the part of the year: see s 165-55 (4) and (5). Also, the respondent emphasised s 165-70 with its provision of rules for the attribution of assessable income to different periods. 83 The respondent submitted that this complex regime of rules for dissecting an income year in circumstances where a company has not had the same ownership and control during the income year and had not satisfied the same business test, revealed that it was unlikely that there would be a capacity in the taxpayer to divide an income year up at will and have the kinds of consideration dealt with by Subdivision 165B entirely unregulated by any rules. 84 The applicants submitted that Subdivision 165-B had its origins in amendments to the ITAA 1936 introduced by the Income Tax Assessment Amendment Act (N0 2) 1978 (Cth) (as ss 50A-50N), in legislation dealing with "bottom of the harbour" tax schemes. In particular, sec 165-70 provides a mechanism considered unnecessary for the effective operation of sec 165-20 and its predecessors in sec 80A of the 1936 Act (or for the operation of the other provisions identified in the Applicants' principal submissions). 86 The view that I have come to is that the answer to this question is, "no". 87 I accept that, as a matter of English, part of a tax loss that is referable to some nominated part of a year can be said to be part of the tax loss for the whole of that year. That this is an available meaning can be accepted. One does not start, however, with some disembodied plain meaning of a phrase, find what can fall within it and, having done so, be required to look for good reason why the full width of that meaning should not apply in the particular context. The task is to construe the terms of s 170-10 in the context in which they appear in the ITAA 1997, recognising their context and place as, in significant respects, a plain English redrafting of earlier provisions in the ITAA 1936. It is also necessary to appreciate that the provisions dealing with deducting or carrying forward and transferring tax losses can be seen as provisions designed to benefit the taxpayer, not as provision to raise revenue. In that respect, they should not be read narrowly. 88 Section 170-10 deals with concepts that are referable to, and take their meaning from, a whole income year. The phrase "tax loss", through s 995-1, is understood by reference to s 36-10. That provision takes one to all deductions "for an income year". This is, with some irrelevant qualifications, a financial year that is a period of 12 months beginning on 1 July. I do not find it an entirely natural or easy meaning. Part of tax loss for an income year is more easily understood as a part (whether a proportion or a fixed nominated amount) of a loss incurred in the whole income year. 91 The context in which one finds these words assists in the recognition that this latter approach is correct. The ITAA 1997 gives a defined meaning to the phrases "tax loss", "income year" and "financial year" which look to, at least, a whole 12 month period. These are basal concepts in the legislation. 92 In a closely related body of provisions dealing with the deduction of tax losses the notion of part of the loss that was incurred during a part of a year is expressly provided for: s 165-20. Not only is the phrase provided for there, but also wherever the legislature apparently wished to provide for part of something arising by reference to a time period otherwise than by reference to the basal building block of the legislation, the income year, or financial year, it did so. 93 Further, Subdivision 165-B sets out a detailed regime for working out taxable income and tax loss in parts of years in which there has been a change in ownership or control and in which the business continuity test is also not satisfied. Accepting the anti-avoidance origins of Subdivision 165B, nevertheless, its existence and relationship with the operation of Division 165, throws light upon the language of s 170-10, a related or cognate provision. The capacity to use periods of time shorter than the basal time unit is not a matter of passing interest or account. If the legislation were to be directed to a segment of the basal unit of the income year, one would expect that to be spelt out in terms of the kind that it is in s 165-20 and provided for with rules such as those in Subdivision 165B. 94 If the phrase "part of the tax loss for the income year" encompasses part of the tax loss for the income year which is referable to part of the income year, one will or may be left without rules (other than, of course, ordinary accounting practice and principle) for the ascertainment of income and deduction for that segment of time. If what is being sought to be transferred is the whole loss in the part of the year that has been marked out by a change in ownership and control, Sub-division 165-B will, however, apply: s 165-23. If there has not been such a change and a choice as to a time period is being made, presumably only accounting principles will apply. 95 I do not think that this was intended. Section 170-10, in terms, set against the background of the basal importance of the unit of the income year and the language used when part of a loss or other aspect of gain or deduction is intended to be referred to by reference to part of a year, does not encompass part of a loss by reference to part of an income year. 96 This does not mean that only a monetary amount can be transferred. A percentage or some other division of the tax loss (as calculated for the whole income year) can be transferred. But it means that only a part (a proportion or amount) of the whole year's tax loss can be transferred. 97 This leads to a lack of complete conformity between the regime for deduction under Division 165 and that for transfer under Division 170. I do not see that as an oddity or inconvenience. It is merely what Parliament has chosen. It would be odder and possibly more inconvenient if the taxpayer were left freely able to choose the time unit of its tax affairs to transfer its losses, in circumstances where the Parliament has set down a detailed regime for dealing with working out taxable income and tax loss where, for one reason, there are two or more temporal units of the basal income year. 98 I do not think that an appreciation of the precursor to Division 170 in the ITAA 1936 takes the matter beyond the words of Subdivision 170A themselves. 99 The above is a simplified acceptance of the essence of the submissions of the respondent, subject to the qualifications made in the detailed discussion of the submissions. 100 For the above reasons I would dismiss the appeal with costs. I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | meaning of 'part of a loss' in loss transfer provisions part of a loss does not include loss calculation by reference to part of the year. income tax |
This was decided in reasons reported as Australian Communications and Media Authority v Clarity1 Pty Ltd [2006] FCA 410 ; (2006) 150 FCR 494. The making of such orders and declarations was held over pending determination of the issues relating to civil penalty. These reasons now address that remaining issue. It follows that these reasons should be read with those previously published. With respect to Clarity1 Pty Ltd (Clarity1), $9.9 million for contravening s 16(1) and s 22(1) of the Spam Act 2003 (Cth) (the Spam Act ). With respect to Mr Mansfield, $1.98 million for contravening s 16(9) and s 22(3) of the same Act. The respondents contend that the appropriate pecuniary penalties are as follows. With respect to Clarity1, the sum of $10 000 for the same contraventions. With respect to Mr Mansfield, the sum of $2000 for the previously mentioned contraventions. 3 The applicant acknowledges that the amount of penalty being sought against each respondent is substantial. However, it contends that the amounts are low in the context of the very high maximum penalty that the Court could impose under the Spam Act . It is said that the penalties sought against the respondents are only 10 per cent of the maximum possible penalty that the Court may impose. It is submitted that the very high maximum penalties provided for by Parliament reflect the seriousness with which Parliament regards contraventions of the Spam Act . It is therefore appropriate to commence by examining the provisions of the Spam Act addressing the issue of penalties. 5 Section 24 is the primary provision addressing pecuniary penalties for contravention of civil penalty provisions under the Spam Act . 11 To understand the reference to 'penalty unit' in these provisions it is necessary to have regard to other portions of the Spam Act . Section 4 defines penalty unit, subject to the appearance to any contrary intention (of which there is none), as having the meaning given by s 4AA of the Crimes Act 1914 (Cth). Relevantly a penalty unit means, where the reference is in a law of the Commonwealth and unless the contrary intention appears, the sum of $110. 12 The applicant submits when determining the pecuniary penalty the Court may also have regard to the system of infringements set up in Sch 3 to the Spam Act . It is appropriate to have such regard as part of the context in which the penalty provisions appear. Whether the infringement notice system carries any weight in that respect is a matter additionally to be determined. 13 Section 30 of the Spam Act provides that Sch 3 has effect. Clause 1 of Sch 3 states that the object of the Schedule is to set up a system of infringement notices for contraventions of civil penalty provisions as an alternative to the institution of proceedings in the Federal Court. Clause 3 empowers an authorised person (being the Chairman of the applicant or a member of staff appointed under cl 9 of Sch 3) to issue an infringement notice requiring a person as an alternative to action in the Federal Court to pay a penalty specified in the notice: cl 4(1). The amount of the penalty is provided for in cl 5. It is submitted that in that context regard must be had to the penalties applicable as a consequence of an action in the Federal Court. It demonstrates that the quantum of pecuniary penalty sought by the respondents is manifestly inadequate in the context of the legislative provisions for penalty. 16 Nevertheless the respondents submit these provisions should not be understood as requiring application so as to produce an unrealistically large penalty payable for multiple contraventions. This has been included to ensure that a meaningful penalty may be charged for a single contravention without causing an unrealistically large penalty payable for multiple contraventions . For example, there are reported cases of dedicated spammers sending millions of unsolicited commercial electronic messages each day. Without a ceiling amount for daily contraventions, such a spammer could potentially be liable for a million contraventions. They therefore submit a more appropriate method of fixing a pecuniary penalty for both Clarity1 and for Mr Mansfield would be to base the penalty on the value of the benefits received by both respondents. It is argued that such a measure of the pecuniary penalty would be more in line with the precedents in more serious criminal matters where confiscation of assets and restitution play a large part in the penalties applied to wrongdoers. However, there is no basis in the Spam Act for the application of an alternative method to that prescribed by the provisions of the Spam Act itself. It is the provisions of the Spam Act to which regard must be had, not other legislation enacted for another purpose. 18 I therefore turn to the matters enumerated in s 24(2) of the Spam Act noting, however, that those matters are not exclusive and that the Court must have regard 'to all relevant matters'. 56 862 092 CEMs (of which 33 199 806 were successfully sent) based on an analysis of the 'success' and 'failed' text files contained in System#11. As the Court found at [64] of the previous published reasons, the respondents admitted to have continued to dispatch CEMs at the same rate until 24 October 2005. This was supported also by the evidence of Mr Duffy. At [65] of the previous reasons, the Court noted that the term 'send' as applicable to CEMs in s 16(1) of the Spam Act included attempt to send (s 4) so that it was not material whether or not the respondents had 'successfully' sent the CEMs. 20 In making these findings the Court also found that the CEMs were sent to a number of electronic addresses kept by Clarity1. The Court has found that there were 5 664 939 unique electronic addresses contained in the 'Direct2' database (see [58] and [66] of the previous reasons) and 2 291 518 unique electronic addresses contained in the 'success' and 'failed' text files (see [61] read with [66] of the previous reasons). 21 At [97] the Court found that, except in relation to 182 electronic addresses belonging to persons who purchased goods or services from Clarity1, the applicant's claim that Clarity1 contravened s 16(1) of the Spam Act was made out: see [112] of the previous reasons. Accordingly, each time Clarity1 sent a CEM during the period from 10 April 2004 to 24 October 2005 it committed a contravention of s 16(1) of the Spam Act . 22 In relation to the contravention of s 22(1) by Clarity1, the Court found that the majority of the unique electronic addresses kept by Clarity1 were obtained by using address-harvesting software or by obtaining harvested-address lists from external parties prior to the relevant commencement of the Spam Act : at [114] of the previous reasons. It was held at [115] that in the majority of instances of contravention of s 16(1) , Clarity1 used a harvested-address list in contravention of s 22(1) on each occasion. 23 In [121] of the previous reasons it was held that Mr Mansfield had aided, abetted, counselled and procured and was knowingly concerned in or a party to the above contraventions of s 16(1) and s 22(1) committed by Clarity1. Accordingly, on each occasion that Clarity1 contravened those sections, he contravened s 16(9) and s 22(3) of the Spam Act respectively. 24 Therefore the applicant submits that is clear from the findings that Clarity1 was a prolific sender of CEMs regularly sending thousands of CEMs a day until at least 24 October 2005, each time in contravention of s 16(1) of the Spam Act . In the majority of these instances Clarity1 also contravened s 22(1) as the electronic addresses that Clarity1 used were harvested-address lists. Mr Mansfield was closely involved in those contraventions, that giving rise to the contraventions which were found in respect of him. All of the contraventions of s 22 of the Spam Act occurred when Clarity1 used a harvested-address list to send CEMs in contravention of s 16. 25 The applicant contends that there is evidence that the respondents are continuing to engage in the proscribed conduct. It relies on the affidavit of Mr Duffy, sworn 19 May 2006. In that affidavit, Mr Duffy refers to complaints from the public received in respect of Clarity1 in relation to contraventions of the Spam Act . He refers to evidence from which the applicant contends the respondents did not stop sending CEMs after the making of interim injunctions on 20 July 2005 and interlocutory injunctions on 4 August 2005 as well as after the delivery of the reasons of the Court on 13 April 2006. Mr Mansfield has lodged an affidavit, sworn on 16 June 2006, denying that the case is as Mr Duffy has stated. He also tenders certain evidence and suggests that others than Clarity1 or himself may have sent the allegedly offending messages in the name of Clarity1. This issue arises after the reasons of the Court were delivered on 13 April 2006 and the affidavits have not had the benefit of cross-examination. In those circumstances I do not consider it is appropriate to take into account the allegations of continuing conduct in fixing the penalty in respect of the findings made on that date. It is submitted that the respondents have refused to accept that their conduct may contravene the Spam Act and have continued to deny any contravention stating in their written submissions that the applicant's claims are without foundation. 28 Therefore the applicant submits that the nature of the contraventions as well as the extent of them support a significant and substantial pecuniary penalty. In the case of the Trade Practices Act 1974 (Cth) (Trade Practices Act), where the provisions in relation to loss or damage bear similarity, it has been established that an absence of loss or damage is not a mitigating factor in the imposition of penalty even though a statute expressly requires the nature and extent of such loss or damage to be taken into account: Trade Practices Commission v ICI Australia Operations Pty Ltd (1991) 105 ALR 115 at 119 per Olney J. I agree with the applicant that there is no reason to depart from that approach in the context of the Spam Act . 30 Consequently the presence of loss or damage is to be considered as a possible aggravating factor. 31 The contraventions are distinguished by the huge volume of CEMs sent by the respondents. There was evidence before the Court that witnesses have described them as annoying, time consuming and frustrating. Witnesses have in response to the CEMs implemented filtering and blocking software. The threat to functionality of the internet thus represented is supported by statements in the Regulation Impact Statement contained in the Explanatory Memorandum to the Spam Act . The Explanatory Memorandum at 6 notes that studies have indicated financial costs in the form of loss of productivity and increased download times. I therefore accept that it can be reasonably inferred that the respondents' conduct is likely to have resulted in real loss or damage to the recipients of the CEM in the form of direct financial costs associated with purchasing blocking and filtering software; other financial costs in the form of lost time and productivity; and non-financial costs in the form of annoyance and frustration at having received unsolicited CEMs. Such loss or damage is therefore an aggravating factor to be taken into account. I consider this is an important factor in their favour. The respondents, although in the Court's view misplaced in their view of the effect of the Spam Act upon them, were entitled in the case of new legislation to test their views before the Court. 33 However, the introduction of the Spam Act included a considerable pre-education campaign undertaken by the applicant warning industry participants and users that the Spam Act was coming in to force. As a consequence of that and of direct contact by the applicant with the respondents, they should have been aware of the possibility of contravention. Nevertheless, it was a fact that they were firmly of the view that their actions did not give rise to any contraventions and that they would establish this before the Court. The respondents were legally represented prior to the commencement of the proceedings and in the proceedings until 11 August 2005. This is not therefore a case where there should be a discount for ignorance of the law: Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193 ; (2003) 131 FCR 529 at 598-599, at [309]-[310] ( Universal Music ). Their conduct prior to the commencement of the Spam Act , referred to in the applicant's submission, was conduct in which they were then entitled to engage in. It is said that the respondents engaged in the conduct intentionally and flagrantly based on their own inaccurate interpretation of the provisions of the Spam Act and their refusal to concede their impugned conduct was rendered illegal by that Act. I accept the respondents' conduct was deliberate but that was an expression of their belief that their understanding of the new law was correct. The law is that if a company 'takes the odds' on the law, it must expect serious consequences if it miscalculates (this was said in relation to the Trade Practices Act ): Universal Music at 599. However, where the issues at law arise under untested new legislation, allowance must be made for that circumstance. This is said to be supported by the respondents failure to take any steps to address the concerns which were raised by the applicant. 38 The respondents did address the concerns, by contesting the applicant's views of the effect of the new legislation. I agree with this submission. 40 The respondents have provided an unaudited statement of assets and liabilities of Mr Mansfield with no supporting documentation dated 5 May 2006 and unsigned company tax returns for Clarity1 for the financial years 2004 and 2005. This financial information purports to demonstrate that Clarity1's business had a total gross income in the financial year 2003/2004 of $530 627 and in the financial year 2004/2005 of $895 739. The information also suggests that the company recorded an overall loss in both years. The applicant says that the Court should conclude therefore that the respondents' business was 'a substantial small business'. On the evidence before the Court, I must so find. 41 The applicant submits that the apparent limited capacity of the respondents to pay cannot mitigate against the need for an appropriate pecuniary penalty to be applied. This is supported by reference to Australian Competition and Consumer Commission v High Adventure Pty Limited (2006) ATPR 42-091. That was a case in which the Full Court heard an appeal against a pecuniary penalty on the grounds that such penalty was manifestly inadequate and had failed to give due consideration to proper deterrence. The offence of resale price maintenance had given rise to the pecuniary penalty so that the penalty arose under the Trade Practices Act . As the cases to which the judge was referred show, the principal, if not the sole, purpose for the imposition of penalties for a contravention of the antitrust provisions in Part IV is deterrence, both specific and general. This rule is so well entrenched that citation of authority is unnecessary. Moreover, as deterrence (especially general deterrence) is the primary purpose lying behind the penalty regime, there inevitably will be cases where the penalty that must be imposed will be higher, perhaps even considerably higher, than the penalty that would otherwise be imposed on a particular offender if one were to have regard only to the circumstances of that offender. In some cases the penalty may be so high that the offender will become insolvent. That possibility must not prevent the Court from doing its duty for otherwise the important object of general deterrence will be undermined. The potential effect of such a result on innocent parties such as employees and creditors, and indeed of the lessening of competition, might provide grounds for some reduction: Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 2 ; (2003) ATPR 41-957 at 47,511; [2003] FCAFC 2 ; [2003] 196 ALR 611 at [8] . However different considerations apply when it seems that when the practical reality is that the corporation is going out of business anyway. I see no reason in the content of the Spam Act not to follow the principles enunciated in these decisions in the context of the Trade Practices Act . 42 There is no evidence that Clarity1 is likely to go out of business apart from any effect which a pecuniary penalty may have on it. 43 Also I accept that the issue of capacity to pay is, although a relevant factor, of less relevance when balanced against the necessity of imposing a penalty that satisfies the objective of general deterrence: Australian Competition and Consumer Commission v Leahy Petroleum (No 2) (2005) 215 ALR 281 at 284-285, at [9] and [11] ( ACCC v Leahy ). 44 The information concerning Mr Mansfield states that he does not own any land or buildings or motor vehicle. He owns household effects to the value of $30 000. His investments are valued at $28 510. He values his one share in Clarity1 at nil. 45 In a further affidavit of 8 June 2006, Mr Duffy states that on 5 June 2006 whilst reviewing the Spam matters reporting database he identified two nearly identical emails which he believed were sent by Clarity1 and which stated that Mr Mansfield earns a multi-million dollar income. The emails are analysed in the affidavit. Mr Mansfield has responded in an affidavit sworn on 16 June 2006. He denies that he earns a multi-million dollar income. He refers to advertising being based on hyperbole, that not all his claims 'are literally true' and to his customers knowing that much of his advertising is 'mere puff', including the statements about a 'multi-million dollar income'. Mr Mansfield therefore does not deny the emails referred to in Mr Duffy's second affidavit but does deny the truth of the comments in relation to his income. In the absence of any trial of the issue, I cannot place reliance on it. Viewed in the light of the present evidence it seems to me to be in the character of 'puff'. There are two aspects of this matter which attract the operation of that principle. First, there is the high volume of contraventions rendering the conduct at the high end of the scale and arguably likely to attract close to the maximum penalty. The applicant concedes that the maximum penalty provided under the Spam Act would be extreme given all of the circumstances. Second, every time the respondents contravened s 16(1) or s 16(9) of the Spam Act they also contravened s 22(1) and s 22(3) meaning that there was a degree of overlap from the same conduct in relation to contraventions. 47 The applicant proposes that the totality principle be applied as follows. First, the Court should be disposed to applying the significant penalty sought by the applicant noting that it is considerably less than the maximum penalty that is possible. Second, the Court should regard the use of address-harvesting lists as an aggravating factor in determining the penalty for contravening s 16(1) and s 16(9) by the respective respondents. 48 It is very clear in the circumstances of this case that to allow separate penalties to be imposed for the same conduct in these circumstances would create a penalty that was 'too high or crushing': CPSU v Telstra Corporation Ltd (2001) 108 IR 228 at 230 per Finkelstein J. The applicant states that cooperation flowed from the fact that at no time did the respondents entertain the possibility that their conduct might contravene the Spam Act . They vigorously opposed the position asserted by the applicant that they had not shown any cooperation in that relevant respect. However, the respondents were entitled to do that in the case of new legislation. 52 The applicant estimates, based on the evidence referred to in its submissions, that Clarity1 sent considerably in excess of two CEMs in contravention of the Spam Act on at least 300 days during the period between 10 April 2004 and 13 April 2006. 53 The applicant further submits this estimate is a conservative one in view of a number of factors. First, the sending process adopted by the respondents involved sending many thousands of CEMs in 'campaigns' on a particular day. Second, as the evidence in the expert report discloses, between the period of 10 April 2004 and 7 April 2005 Clarity1 sent considerably in excess of two CEMs (usually thousands) on 252 separate days. It has admitted, by not responding to the notice to admit facts, that it continued to send CEMs at the same rate until at least 24 October 2005. Third, in order to achieve the high volume of total CEMs sent it would be necessary to send CEMs in bulk quantities over the course of many days. Fourth, on almost every occasion Clarity1 sent a CEM it contravened s 16(1) and s 22(1) of the Spam Act and Mr Mansfield contravened s 16(9) and s 22(3). 54 Therefore the applicant submits that there is circumstances disclosing systematic, flagrant, deliberate and blatant conduct which warrants a very substantial penalty. In my view this fails to weigh the conduct in the context of the novelty of the legislation and the other circumstances referred to under 'reasoning on pecuniary penalties'. It should be sufficiently high to have a deterrent quality, and it should be kept in mind that the Act operates in a commercial environment where deterrence of those minded to contravene its provisions is not likely to be achieved by penalties which are not realistic. It should reflect the will of Parliament that the commercial standards laid down in the Act must be observed, but not be so high as to be oppressive. The unrealistic character derives principally from the quantum of penalty viewed in relation to the capacity of either respondent to pay and the need for general as well as specific deterrence. It is not just the total quantum of a pecuniary penalty which can provide the element of general deterrence. That quality derives from a consideration of the penalty in relation to the conduct giving rise to it and the financial capacity of the offenders. Where the financial capacity is not great, a lessor pecuniary penalty in value will derive its quality of general deterrence from its magnitude in relation to that capacity. 57 With respect to Clarity1, the position is that a pecuniary penalty of $9.9 million is sought, being 10 per cent of the potential penalties of $66 million and $33 million. I agree these offences involve overlapping conduct so that the former is the relevant potential maximum. A penalty in the amount of $9.9 million is clearly one beyond the capacity of Clarity1 to pay and so likely to lead to its liquidation. It is quite disproportionate to the commercial realities of Clarity1. Even as proposed it is in the particular circumstances 'an unrealistically large penalty' (see the Explanatory Memorandum). It is overly weighted in favour of general deterrence. Importantly, it does not appear to be constructed on any allowance of the new character of the legislation and the entitlement of the respondents to test their view of the effect of the legislation. 58 The same may be said of the pecuniary penalty proposed by the applicant with respect to Mr Mansfield. There a pecuniary penalty of $1.98 million is sought against potential maximums of $13.2 million and $6.6 million. The proposed penalty is one which would bankrupt Mr Mansfield. It is disproportionate to his financial realities and is also overweighted to general deterrence. It is in the character of 'an unrealistically large penalty'. It also is not constructed with any apparent regard to the new character of the legislation. The declaratory relief now sought reflects the findings contained in the reasons for judgment and do not inflate the true extent of the contraventions or the conduct ( Australian Competition and Consumer Commission v Virgin Mobile (No 2) [2002] FCA 1548 at [14] per French J). 61 In my opinion the declarations should be made as sought. Section 33(1) provides for restraining injunctions and s 33(2) provides for performance injunctions. Here, the applicant seeks a restraining injunction. 63 In seeking that injunction, the applicant submits that the Court should have regard to the public interest: Australian Competition and Consumer Commission v 4WD Systems Pty Ltd (2003) 200 ALR 491 at 556-557, at [212] and [216] per Selway J. It is submitted that the injunctions proposed in the minute before the Court are consistent with that interest and that its terms have a clear nexus with the contravening conduct and are capable of being obeyed. 64 The respondents do not counter this in any submissions. I therefore consider that it is appropriate the injunctions be granted in the terms of the minute. It is well established that it is appropriate for costs to be awarded to the successful party in proceedings, that is, that costs should follow the event subject to any specific circumstances that warrant a reduction in costs or an alternative order. No such circumstances arise in this matter. Accordingly the respondents should be ordered to pay the applicant's costs, to be taxed. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholson. | unsolicited commercial electronic messages (spam) use of harvested electronic addresses contraventions established pecuniary penalties declarations injunctions costs media law |
2 The Deed of Settlement relates to the proceeding NSD 489 of 2004 brought in this Court by the liquidators against Mr Selim and also to certain cross-claims made by Mr Selim against the liquidators, the Commonwealth of Australia and also a proceeding brought by Mr Selim against Zurich. 3 The proceeding against Zurich is to be heard with the main proceedings which were instituted by the liquidators. Those proceedings are listed for hearing to commence before Emmett J on 2 June 2008. The liquidators have estimated the length of the hearing to be in the region of five to six months of Court time including the hearing of Mr Selim's cross-claims. 4 Mr Selim has not settled his cross-claims against the Commonwealth. Those cross-claims include a claim for contribution to any liability that he may have to Pan and a claim for losses said to have been suffered personally by Mr Selim as a majority shareholder in Pan. There is also a claim under s 236 of the Act for leave to bring a derivative action in the name of Pan. 5 The issues which arise on the application are first, whether the liquidators have power to assign the cause of action, and second, if so, whether they would be justified in doing so. I will refer to the principal parts of that affidavit. 7 The background to the appointment of Mr McGrath and Mr Honey as liquidators of Pan and Pan Laboratories is explained in [8] to [10] of the affidavit and need not be repeated. It is sufficient to say that at a meeting of creditors which commenced on 1 September 2003 and which concluded on 23 September 2003, it was resolved that Pan and Pan Laboratories be wound up in insolvency pursuant to s 439C(c) of the Act and that Mr McGrath and Mr Honey be appointed joint and several liquidators of those companies. Other entities in the Pan group were placed into liquidation in October 2003. 8 Prior to the insolvency of Pan, that company was listed on the Australian Stock Exchange. The business of Pan comprised the contract manufacturing of pharmaceuticals and other products which are often referred to as "complementary medicines. " Pan held various licences in respect of those goods under the Therapeutic Goods Act 1989 (Cth) for the manufacture of those products. 9 Mr Selim was the majority shareholder and Chief Executive Officer of Pan. The appointment of Mr McGrath and Mr Honey as administrators and later liquidators of Pan followed a decision of the Therapeutic Goods Administration (TGA) to suspend the manufacturing licences of Pan. 10 Initially the suspension was for a period of six months commencing on 28 April 2003 but subsequently further notices were given under the Therapeutic Goods Act for suspension and product recalls. The notices under that Act referred to breaches by Pan of its licence conditions and the standards of the Australian Code of Good Manufacturing Practice. 11 After the commencement of administration of Pan, Mr McGrath and Mr Honey caused a review to be undertaken of the circumstances which resulted in the notices given under the Therapeutic Goods Act . The solicitors were assisted by a team of consultants specialising in Good Manufacturing Practice. As a result of their inquiries the liquidators determined that the matters identified by the report under the Therapeutic Goods Act resulted from systemic failures at Pan and in particular the failure to have in place adequate systems to ensure compliance with Good Manufacturing Practice. 12 The liquidators determined that Pan should commence proceedings in the Federal Court against Mr Selim seeking damages for breach of duties owed to Pan under s 180 of the Corporations Act . The damages claimed in the action are for the losses that Pan has suffered as a result of the licence suspensions, the recall of the products and the claims that have been made by more than 200 sponsors of the products. Those sponsors did so pursuant to various agreements apparently entered into with Pan or the Pan group. 13 Mr Selim denied liability in the proceedings and brought cross-claims against the liquidators, Key Pharmaceuticals Pty Limited, the Commonwealth of Australia and several officers of the TGA. 14 Mr Selim settled his cross-claim against Key Pharmaceuticals and orders were made dismissing that claim. 15 Mr Selim's cross-claims against the Commonwealth primarily relate to claims of misleading representations said to have been made by the TGA and other Commonwealth officers during the period prior to the initial suspension of Pan's manufacturing licences in April 2003 and also relating to the TGA's audits of Pan. 16 In the second further amended third cross-claim, Mr Selim seeks contribution pursuant to s 5 of the Law Reform (Miscellaneous Provisions) Act 1946 (NSW) to the extent of an indemnity for any liability that Mr Selim may have to Pan. 17 In the second further amended fourth cross-claim, Mr Selim seeks damages against the Commonwealth by reason of the loss said to be suffered by him personally in respect of the diminution in value of his shareholding in Pan. 18 In the alternative Mr Selim seeks, as I have said above, an order pursuant to s 236 of the Act for leave to bring derivative proceedings on behalf of Pan in Pan's name against the Commonwealth. Mr Selim's claims against the TGA officers allege that the officers are guilty of misfeasance in public office. The liquidators are a party to this cross-claim by reason of the application for leave to bring a derivative action. 19 The Commonwealth filed applications to strike out the two cross-claims made against it. The applications made by the Commonwealth were filed on 12 May 2006, however during argument in Court on those applications Mr Selim amended the cross-claims and the Commonwealth determined, following those amendments, no longer to press either of the applications to strike out the cross-claims. Mr Selim has retained solicitors and senior and junior counsel to represent him in the cross-claims. 20 Zurich's involvement in the proceedings results from its role as the underwriter and issuer of a directors' and officers' liability insurance policy. In early 2004 Mr Selim commenced proceedings in the Supreme Court of New South Wales against Zurich for indemnity in respect of the claims made against him by the liquidators and for his defence costs. Those proceedings were transferred to the Federal Court. They are proceedings under NSD 1603 of 2004 and are apparently to be heard together with the principal proceedings. Zurich has denied that it is liable to indemnify Mr Selim in the insurance proceedings. 21 In early February 2008 the liquidators sought approval of the Committee of Inspection of Pan to engage in settlement negotiations with Mr Selim and a mediation was arranged for mid February 2008. The proceedings were not settled at the mediation, but negotiations continued and were ultimately successful. I will refer briefly to the terms of that Deed. 23 The principal terms of the Deed of Settlement for present purposes are to be found in cll 10, 11, 12 and 16. Clause 10 provides for the liquidators, subject to Court approval, to assign to Mr Selim all the causes of action which Pan has against the Commonwealth of Australia arising out of or in any way connected with the matters alleged in the principal proceedings or the cross-claims against the Commonwealth. Pan, the liquidators and Mr Selim agreed to execute a deed of assignment in the terms set out in the Deed of Settlement. 24 It is not appropriate for me to refer to the monetary terms recorded in c 10 of the Deed of Settlement, however I should refer to cl 10.6, which provides that within seven days of the execution of the Deed, the liquidators are to make an application to the Court seeking approval for the assignment of the causes of action to Pan. 25 The Deed of Settlement provides in cl 11 for Mr Selim to indemnify the liquidators in respect of any costs that may be incurred by them in relation to the cross-claims against the Commonwealth or otherwise in respect of any cause of action assigned to Mr Selim. 26 There are a number of conditions subsequent set out in cl 10. Other than to say that one of them is obtaining Court approval, I do not consider it is necessary to spell out the remaining conditions subsequent or the various other provisions of that clause. 27 Clause 16 of the Deed of Settlement provides for the parties to keep the terms of the Deed confidential. There are exceptions which are set out in cl 16.2, including the need to make disclosure of the terms of the Deed to the Court on this application. 28 One other provision which is relevant to the present application is cl 17, which provides for an appropriate public announcement of the settlement to be made in due course. 29 The liquidators have obtained the advice of Senior Counsel in relation to the proposed assignment. The liquidators were provided with a joint opinion of Mr John Sheahan, SC, and Mr Scott Nixon. The liquidators determined upon the basis of the advice and the other matters to which I have referred that it is appropriate, subject to the approval of the Committee of Inspection and subject to orders being made on this application, for Pan to assign to Mr Selim the causes of action against the Commonwealth. The Committee of Inspection passed an appropriate resolution at a meeting held on 21 April 2008. This Court has previously heard and granted similar applications under both ss 479(3) and 511(1). A useful example of this is the decision of Lee J in Bank of Melbourne Ltd v HPM Pty Ltd (in liq) (1997) 26 ACSR 110. See also the decision of Hansen J in UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 21 ACSR 251 , affirmed on appeal by the Court of Appeal in (1996) 21 ACSR 457 (per Hayne JA, Brooking and Phillips JJA concurring). 32 The Court's power to give directions pursuant to s 511 is subject to the provisions of s 511(2). The Court must be satisfied that the determination of the question or the exercise of the power will be "just and beneficial" before it accedes to an application. In Re ACN 007 537 000 Pty Ltd (in liq); Ex parte Parker (1997) 150 ALR 92 at 97, Mansfield J referred with approval to the decision of Young J in Dean-Willcocks v Soluble Solution Hydroponics Pty Ltd (1997) 24 ACSR 79. Mansfield J quoted a passage from the judgment of Young J in which his Honour observed that the meaning of the words "just and beneficial" are that the Court has a discretion as to whether making any order under the section will be of advantage to the liquidation. Section 506(1)(b) of the Act provides that the liquidators in a voluntary liquidation may exercise any of the powers that the Act confers on a liquidator in a winding up in insolvency or by the Court. One of those powers is the power under s 477(2)(c) of the Act. That subsection empowers a liquidator to "sell or other dispose of in any manner" all or any part of the property of the company. 34 A number of decisions have confirmed that the power under s 477(2)(c) includes the power to cause the company to assign a cause of action to a third party. The leading authorities were referred to by Lee J in Bank of Melbourne at 112. 35 His Honour observed at 112 that the power of sale under s 477(2)(c) is similar to that conferred on a trustee in bankruptcy by ss 134(1)(a) and 135(1)(a) of the Bankruptcy Act 1966 (Cth) to dispose of the property of a bankrupt. His Honour observed that it entitles the liquidator to sell a bare right of action to a stranger, whether for a cash payment or on terms that the stranger will pay to the company part of the proceeds of the litigation provided only that the right of action is property. His Honour also observed at 112 that s 9 of the Corporations Law (which was then in force) defined "property" to include a chose in action. 36 Unlike the Bankruptcy Act , the Corporations Law did not vest the property of the company in liquidation in the liquidator unless an order to this effect was made by the Court. However, as Lee J pointed out, the lack of such an order will not limit the liquidator's power to assign a company's right of action provided that in such a case the company remains the assignor for the purposes of the transaction. 37 In the present case the agreement in cl 10.1 of the Deed is that the liquidators will cause Pan to assign the causes of action against the Commonwealth. The assignment is an absolute one. 38 It seems to me to follow from what was said by Lee J and from the various authorities to which his Honour referred that in the present case the proposed assignment of the causes of action is within the power of the liquidator. See also the comparatively recent decision of the High Court in Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 CLR 386. Lee J pointed out in Bank of Melbourne that in determining whether a liquidator should be directed to make an assignment, a Court should consider whether the assignment would lead to vexatious or improper litigation. His Honour observed that there is no obligation on either the Court or the liquidator to conduct an investigation of the likelihood of success of the proceeding and that it will be quite impractical to do so in an application of this nature. 40 In Citicorp Australia Ltd v Official Trustee in Bankruptcy (1996) 141 ALR 667 a Full Court dealt with a similar question arising under the Bankruptcy Act . The Court observed at 682, upon the basis of English and Australian authorities, that it is only in a clear case that the Court should come to the view that the proposed assignment is frivolous or vexatious or that the Court should not allow the assignment to occur. 41 Their Honours pointed to the observations of Lord Hoffman in the English decision in Stein v Blake (1996) 1 AC 243 at 260. The relevant passage was set out by the Full Court in Citicorp at 681. It is unnecessary to repeat what Lord Hoffman said in that passage. 42 The observations of the Full Court in Citicorp at 679 are also pertinent. Their Honours observed that there will be few cases where some decisive point exists on which the trustee or the Court can be satisfied that the claim which is proposed to be assigned has no reasonable prospects of success. 43 In the present case it is relevant to note, as I have already, that the cross-claims brought by Mr Selim against the Commonwealth and the TGA offices were the subject of a strikeout application but that the Commonwealth ultimately determined not to pursue that application after amendments were made to the pleadings. 44 In those circumstances, it seems to me to be the position that it is not clear and obvious that any proceeding in respect of the cause of action against the Commonwealth would have no reasonable prospects of success. Accordingly, there is no basis for me to conclude that the assignment of the causes of action to Mr Selim would result in vexatious or improper litigation, so the assignment cannot be said to be an inappropriate exercise of the liquidator's powers. 45 There are a number of other reasons why it seems to me that the liquidators are justified in assigning the causes of action to Mr Selim. It is not necessary to state them in any detail. I have referred to some of them above but in summary there are three principal reasons. 46 First, the proceedings would be lengthy and expensive and if they proceed to a final hearing there is always the risk of the insolvent estate of Pan being exposed to a substantial costs order in the event that the claims against Mr Selim fail. 47 Second, the liquidators have determined that it is in the interests of the unsecured creditors to obtain an outcome the financial details of which are recorded fully in the terms of the Deed of Settlement. 48 Third, Mr Selim has agreed to indemnify the liquidators in respect of the costs order that might be made against them as a result of the failure of the claims against the Commonwealth and the TGA officers. 49 I should also point out that the Committee of Inspection has seen fit to approve the terms of the Deed of Settlement subject only to the Court's approval and such directions as are now sought in this application. 50 Reference may be made to the observations of Hanson J in UTSA where his Honour observed at 285 that the liquidators have a wide discretion in choosing the entities to which they propose to assign the cause of action. The observations of Hanson J at 288 of that judgment also point in favour of the view that the liquidator is justified in entering into the assignment. 51 Finally, I have referred to what Mansfield J said in Ex parte Parker about s 511(2) and the requirement that the exercise of the power be just and beneficial. The reasons, which I have referred to above, point in favour of that condition being satisfied. In Bank of Melbourne , Lee J observed at 112 to 113 that this is an appropriate course. His Honour referred to a number of leading authorities including decisions of McClelland CJ in Re BPTC Limited (1996) 14 ACLC 845 at 846 and Re G B Nathan v Co Pty Ltd (1991) 24 NSWLR 674. 53 Two other matters arise on this application. First, the liquidators sought an order under s 17(4) of the Federal Court of Australia Act 1976 (Cth) that the hearing of this application take place in the absence of the public. I acceded to that application. 54 Second, the liquidators also sought an order under s 50 of the Federal Court Act that access to the affidavit of Mr McGrath and to the exhibit to the affidavit be restricted to the Court and the liquidators. That course is consistent with the course adopted by Mansfield J in Re Addstone Pty Limited (in liq) (1998) 83 FCR 583 at 598. The position in Re Addstone was slightly different from that which occurs in the present case. However, there are a number of aspects of the Deed of Settlement which seem to me to point in favour of the confidentiality orders at least for the time being. 55 In Adultshop.com Ltd v Members of the Classification Review Board (No 2 ) (2000) FCA 1872 at [23] - [31] , I referred briefly to the principles which apply in the exercise of the Court's discretion to make an order under s 50. I observed at [28] of my reasons in that case that the Court will respect legitimate claims for confidentiality which should not be unduly discounted in the weighing process when balancing the claim for confidentiality against the countervailing public interest in open justice. 56 In the present case it is sufficient to say that an order under s 50 is warranted for the time being because of the conditions subsequent referred to in the Deed of Settlement. As I have said previously, I do not think it is necessary for me to refer to them in my reasons for judgment, but I have considered them carefully and I do think that the weighing process in the present case points in favour of upholding the claim for confidentiality. The Deed of Settlement itself contains a confidentiality clause in cl 16. 57 In summary, I think it is sufficient to say that disclosure of the pertinent provisions of Mr McGrath's affidavit which exposed his reasoning process would seriously prejudice the liquidators in the event that Mr Selim and the Commonwealth have access to the views which Mr McGrath has expressed in his affidavit. 58 For these reasons, I propose to make the direction set out in [1] of the draft order handed to me this morning by Senior Counsel for the liquidators. I also propose to make orders in terms of [2], [3] and [4]. Order 4 reserves liberty to apply. It may be appropriate in due course for the orders under s 50 to be reviewed in light of subsequent developments in the litigation. 59 I have given this judgment in closed court pursuant to s 17(4) of the Federal Court Act . However, having now heard from Mr Nixon who has fairly conceded that the order under s 17(4) need not be continued, I will dissolve that order and direct that my reasons for judgment may be published. 60 I will leave in force the order under s 17(4) insofar as it applies to the transcript of the application that was made before me this morning. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application for court directions in winding up proceedings involving former chief executive officer, company in liquidation and officers of the commonwealth court's power to give directions within power for liquidators to direct assignment of causes of action as part of terms of settlement assignment justified claims for confidentiality upheld corporations |
His Honour then also granted liberty to these respondents to make application for further security thereafter. The proceedings have now reached the stage where pleadings have closed. Thus this fresh application for security has been made. The applicant does not contest the proposition that further security should be provided. It confirms that the only real issues are as to the stage of the proceeding for which security should be provided and the quantum. The applicant says security should be provided up to the stage of mediation, discovery and inspection of documents, and filing and serving of expert reports --- a stage short of entry for trial. The applicant also challenges the quantum estimate of $250,000.00 in any event. The applicant points to the fact that it has consented to an order for security for costs in favour of the third respondent made on 8 May 2009, whereby it has been ordered to provide further security for that respondent's costs in the sum of $135,000.00 up to and including mediation, discovery and inspection of documents, and the filing and service of expert reports. The Freehills respondents point out, however, that the third respondent does not intend to adduce expert evidence and that by agreement this has been left to the Freehills respondents. The discretion must be exercised judicially and is not confined by O 28, r 3 of the Federal Court Rules . See Bell Wholesale Co Limited v Gates Export Corporation [1984] FCA 34 ; (1984) 2 FCR 1 at 3 --- 4; Chapman v Luminis Pty Ltd [2002] FCA 496 at [12] . It is well understood, and little authority need be recited in this regard, that in ordering security for costs the Court does not give a full indemnity. The effect of this principle is that the Court has a discretion to choose such amount as it thinks fit in all the circumstances of the case. The amount will not exceed the estimate of party and party costs but it may be less. The Court usually takes "a broad brush" approach to the determination of the amount. In that regard the process of estimation embodies to a considerable extent reliance upon the "feel" of the case after considering relevant factors. It is not usually necessary to descend into the minutiae of the claims and the Court does not sit as a taxing officer would to determine the amounts. However, it may be appropriate to consider some of the detail of the estimates made by the parties in determining quantum. See generally in relation to these principles Reinsurance Australia Corporation Ltd v HIH Casualty and General Insurance (in liquidation) [2003] FCA 803 at 16-17. As to the stage to which security should now be given, the applicant contends that it would be appropriate to maintain uniformity or a degree of uniformity between the stages for which all of the respondents are entitled to have their costs secured. As noted above, the third respondent and the applicant have agreed and the Court has ordered by consent that the third respondent's costs be secured up to the stage of mediation, generally speaking. While I accept that uniformity is a consideration, the fact that the applicant and the third respondent have agreed and consented to an order being made up to the point of mediation, should not be considered determinative or necessarily the primary factor in assessing the stage for security which should now be provided. On a more substantive point, counsel for the applicant emphasises the parties recognise that there ought to be mediation in this proceeding and all are working towards that end. In that sense the mediation stage may be said to be an appropriate one in which the costs of these respondents should be secured. Counsel for the parties are in general agreement that mediation might be possible in about three months. In my view, while it may be appropriate in some cases, having regard to the nature of the issues and the work required to be done, to limit an order for security for costs to a stage up to and including a mediation, this, when all is put in the balance, is not one of those cases. I consider that to order security for costs up to the stage of mediation, generally speaking, whilst it is a possibility, would in the circumstances be reasonably artificial. In recognition of a need to limit the work for which security should be given, the Freehills respondents do not seek security for all costs associated with the stage up to the point of entry for trial. In particular, they do not argue at this stage for security for preparation for trial during 2009, trial, all of the general care and conduct required in relation thereto, counsel's fees, or certain other disbursements associated with the final preparation for trial. Rather, the Freehills respondents, by reference to a draft bill of costs, claim security for costs in the sum of $250,000.00, as against a sum of $437,000.00 that they say is a reasonable estimate of the relevant work to be done, calculated as follows: Items 1 --- 8 (additional work done to date, completing discovery and inspection, pleadings and particulars, experts, non-expert evidence, directions hearings, security for costs, private mediation) $295,000.00 Item 11 (part of general care and conduct) $42,000.00 Item 14 (part of expert fees) $90,000.00 Item 16 (part of miscellaneous disbursements) $10,000.00 Total $437,000.00 As I say, while it would be possible to use mediation as the end of the next stage for security purposes, and the applicant and third respondent have already agreed to do this, I consider having regard to the complex issues of law and fact in relation to actions for loss and damage allegedly arising out of breach of the Trade Practices Act 1974 (Cth) and the Corporations Act 2001 (Cth), where the sum claimed by the applicant (with interest) is in the region of $20,000,000.00, it is inevitable that there will be an overlap of the work required to be done for any substantive mediation, certainly one that is likely to be successful, and the getting up of the action generally for trial. It is this consideration --- in effect that the preparation for mediation will benefit from getting up, and that getting up will benefit the mediation --- that leads me to allow security to the point of entry. When one also takes into account the fact that the Freehills respondents have limited their claim for security so that it does not include the items listed above, then there is not all that much at stake between the position of the applicant and the Freehills respondents, save for the actual estimation of quantum. So far as quantum is concerned, the Freehills respondents have produced a draft bill of costs in support of their application for further security. This is questioned on a number of fronts by the applicant. I will deal with some of the more important points made in respect of it, as these bear upon the ultimate assessment I need to make. The first item in the draft bill of costs is for "additional work done to date". Counsel for the applicant, rightly in my view, submits that the amount of $20,000.00 included in the calculation for this item is simply designed to increase the initial amount of security provided for of $55,000.00, by $20,000.00. I tend to agree with the applicant that that is not appropriate. While counsel for the applicant suggested that it is open to the Court to vary an order for security where there are materially changed circumstances or discovery of new material which could not reasonably have been put before the Court on the hearing of the original application, I am not satisfied that this is such a case. See generally Gurtler v Finance Now Pty Ltd [2009] FCA 631. The second item is in respect of completing discovery and inspection. For this a total of $40,000.00 is suggested. Item 2.2 concerns inspection of documents held by the liquidators. It seems there are considerable volumes of materials in this category for discovery and that the costs for inspection will be large. The applicant reasonably suggests these need not be inspected for the purpose of mediation. However, on the approach I prefer, they will need to be inspected in due course, although not until after any unsuccessful mediation. Counsel for the applicant also questions whether there will in the circumstances be any proper basis for any further or better discovery, as item 2.3 of the draft bill suggests, by which further costs in the amount of $10,000.00 might be incurred. Item 3 of the draft bill of costs deals with pleadings and particulars. Particular attention has been placed on a proposed amendment to para 44 of the statement of claim. The Freehills respondents say that this raises a number of new directions. The applicant is at pains to contend it should not involve major amendments to the defence. The respondents have anticipated additional work under this item totalling $25,000.00. I suspect overall it may not require quite that much attention but understandably it will need to be carefully regarded. Item 4 of the draft bill of the costs deals with experts. There is a related item 14 dealing with disbursements for expert fees totalling $150,000.00. The Freehills respondents have limited their current estimate to $90,000.00. Counsel for the applicant strongly presses the view that some of the fees of the applicant's experts seem excessive and in any event, that the expert evidence of a chartered accountant, Mr Barry Honey, should be considered unnecessary. In the event, following further exploration of the issues with counsel, I do not believe it can be said that the evidence of Mr Honey is irrelevant and unlikely to be helpful. The respondents through counsel accept that some of the expert fees are high and say they have made appropriate reductions in limiting their estimate to $90,000.00. While there have not been expert evidence orders previously made, the expert reports have been obtained by the respondents in order to deal with that put on by the applicants. There is no dispute between the parties in that regard. Item 5 deals with non-expert evidence, the applicant says this should not be the subject of security at this point but in light of my ruling I rule to the contrary. Such work may be informed by preparation for mediation and vice versa. Similarly in relation to item 6 concerning additional directions hearings, for which an amount of $15,000.00 is estimated, one would expect up to the time of entry, security in an appropriate sum will be necessary. Item 7, dealing with security for costs, and item 8, dealing with private mediation, also appear to be generally within the bounds of work that must be done leading up to and including the mediation. Calculations of $10,000.00 and $15,000.00 respectively are suggested. These are not the subject of any particular objection by counsel for the applicant. Item 11 of the draft bill of costs is in respect of "general care and conduct" by reference to which an amount of $142,000.00 is estimated, being 20% of the earlier subtotal having regard to matters listed in item 41(a) --- (f) of the scale of costs. However, as noted above, for the next stage the respondents estimate $42,000.00. I accept that this is a complex case, both factually and in relation to the matters of law involved and sums claimed, and that the matter will require a considerable amount of care and attention and a proper allowance in this regard ought be provided. There is, by way of general comment, no doubt that the Freehills respondents are entitled properly to prepare their case in response to a claim of this significance. There should be no unreasonable crimping of the work to be done on behalf of the Freehills respondents and so of the estimate of security required. In respect of all work to be done in the proceeding, the draft bill of costs prepared by the respondents estimates total professional fees of $852,000.00 and total disbursements of $626,000.00, making a total of professional fees and disbursements claimed in the sum of $1,478,000.00. However, as noted above, in relation to this application for security, the Freehills respondents say that it is contemplated this stage of the proceedings (up to the matter being set down for trial) would only encompass the items (or part of the items) from the draft bill in items 1 --- 8 ($295,000.00), 11 ($42,000.00), 14 ($90,000.00) and 16 ($10,000.00) totalling $437,000.00. In respect thereof, they submit that security be in the sum of $250,000.00, which they say represents a considerable "discount" from the estimate contained in the draft bill of costs. By proposing that this stage of proceedings be up to the matter being set down for trial, but that security should not be calculated by reference to the items 9 (preparation for trial during 2009 totalling $185,000.00), 10 (for trial totalling $230,000.00) and the balance of 11, and none of the disbursements anticipated for counsel's fees in items 12 and 13, the approach of the Freehills respondents is, in my view, a considered and reasonable one. It should also be noted that while the third respondent has consented to an order that $135,000.00 security be provided, by agreement between the respondents, the third respondent does not intend to produce expert evidence and has left the adducing of such evidence to the Freehills respondents. This undoubtedly adds work for the Freehills respondents. However, I do not consider that item 1 of the draft bill of costs is an appropriate item to be included for consideration. I consider that generally speaking the work in items 2 --- 8 is appropriate. I consider the experts fees is also on the high side. In the event, I would order that security for costs be provided in the sum of $220,000.00 (to be provided by bank guarantee). I will hear from counsel as to the terms of the orders to be made. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker. | application for further security for costs next stage for which security for costs should be ordered quantum of security draft bill of costs considered further security for costs ordered in sum of $220,000.00 security for costs |
His Honour dismissed the appellant's application pursuant to s 75(v) of the Constitution for prerogative writs in relation to a decision of the second respondent, the Refugee Review Tribunal ('the Tribunal'), and upheld the decision of a delegate of the first respondent, the Minister for Immigration and Multicultural and Indigenous Affairs ('the Minister'), to refuse the appellant the grant of a protection visa. 2 The appellant is a national of Burma (also known as Myanmar). According to his protection visa application, he is a member of the Mon ethnic group and a Buddhist monk. He arrived in Australia on 16 May 2001 on a visitor visa granted to him in Rangoon (also know as Yangon) on 20 February 2001. 3 The appellant lodged an application for a protection visa on 7 September 2001. He claims to have a well-founded fear of persecution in Burma because of his political opinions and his Mon ethnicity. The appellant made a statutory declaration on 14 November 2001 which more fully sets out his claims to refugee status ('the first statutory declaration'). 4 In the first statutory declaration, the appellant says that in January 1990 he joined the Mon National Democratic Front ('the MNDF'), a newly-formed organisation which had been registered as a political party and which campaigned for the liberation of Mon people, their general welfare, and the regeneration of Mon culture. MNDF fielded two candidates for election in May 1990, one of whom was successful. Not long after the election, the MNDF had its registration cancelled and its legal status revoked by the Burmese government, together with a number of other political organisations. 5 In addition to his involvement with the MNDF, the appellant says that the Burmese government found out that he was involved in secretly distributing magazines produced by the Young Mon Party, which is based in Thailand, and the Mon New State Party, which is based in Burma. He did this on three or four separate occasions. As a result, early in 1993, the appellant received notification to report to the Military Intelligence Office in Burma. There he was interrogated about his activities, but was discharged after a few hours. On leaving, the officers warned him that if he was caught distributing anti-government political material in the future, he would be prosecuted. 6 The appellant joined the Pha Ya Ghi Monastery in Rangoon ('the Monastery') on 5 May 1993. He studied Buddhist teachings at the associated Mon Pali University. He says that he joined the Monastery because of his religious convictions, but he also saw it as a place of sanctuary given the anxiety that he felt as a result of his interrogation. Within the Monastery, the appellant remained concerned about the welfare of Mon people. 7 On 23 April 1999, in the context of his teachings on Mon literature, the appellant says that he made a speech at the Monastery to a group of approximately 230 students, who were mostly Mon people, but who came from various colleges and campuses. In the speech, he strongly criticised the treatment of Mon people by the Burmese government. Later that evening, the appellant was informed by a friend that a group of soldiers had come to the Monastery looking for him. The appellant immediately left the Monastery and fled to Thailand. However, because of the pressure on Burmese 'refugees' living in Thailand, the appellant made arrangements to leave Thailand for Australia. An application for review of that decision was lodged on 7 February 2002 with the Tribunal. The Tribunal invited the appellant to give oral evidence and present arguments at a hearing on 26 November 2003. 9 The appellant provided the Tribunal with a further statutory declaration made on 13 November 2003 ('the second statutory declaration'). In the second statutory declaration, the appellant says that in Burma he had very little opportunity to express his political beliefs, and the statements that he had made, including the speech at the Monastery on 23 April 1999, had got him into serious trouble. The appellant says that in Australia he has been able to express his beliefs openly, and is able to work with groups committed to the struggle for democracy in Burma. 10 The appellant's political activities in Australia included the following matters. In May 2002, he took part in the fundraising activities of the National League for Democracy (Liberated Area) ('NLD (LA)'), including attendance at church hall meetings in Springvale and Mulgrave in May and October 2002. In February 2003, the appellant became a member of the Mon New State Party. On 31 May 2003, he attended a meeting of a group called Australia Karen Organisation. On 12 June 2003, he participated in a prayer ceremony at a Buddhist Monastery in Noble Park which was held to commemorate an incident in Burma on 30 May 2003 when 70 members of the National League for Democracy were killed and Aung San Suu Kyi and 35 others were taken into detention. On 19 June 2003, he participated in a demonstration involving about 150 to 200 people outside the Burmese Embassy in Canberra. The demonstration was organised by several Burmese organisations in Australia, including NLD (LA), the all Burma Student Democratic Front, the People's Defense Forum (Burma) and the Australian Mon Association ('the AMA'). On 8 August 2003, he participated in a second demonstration involving 190 to 220 demonstrators outside the Burmese Embassy in Canberra. The demonstrators marched as a group from the Burmese Embassy to Parliament House. In connection with this demonstration, the appellant was part of a smaller group of eight individuals which approached the Embassies of Singapore, Philippines, Indonesia, Malaysia and Thailand to deliver a letter to them. Between 1 and 3 November 2003, the appellant attended a reconciliation conference in Thornbury, Victoria, which was organised by the Australian Karen Youth Project. The aim of the conference was to promote reconciliation between different ethnic groups in Burma. These activities are described in somewhat greater detail in the second statutory declaration. 11 The Tribunal found the appellant to be a direct witness and accepted his evidence about his experiences in Burma. But it did not accept that the evidence established the appellant's claim that he was persecuted by the Burmese military because of his political opinions and his Mon ethnicity. The Tribunal held that the appellant had no profile with the Burmese authorities, and he had given them no reason to be interested in him. In relation to the appellant's claim that he will be persecuted on his return to Burma because of his activities in Australia, the Tribunal accepted that the appellant may be questioned about his activities in Australia and monitored by the government if he returns to Burma, but said that does not amount to persecution. The Tribunal noted that the country information report of the Department of Foreign Affairs and Trade ('DFAT') advises that 'active and high-profile' people would be targeted and perhaps persecuted on their return to Burma, but the Tribunal was not satisfied that the appellant would be regarded by the Burmese government as an active and high-profile demonstrator, or that the AMA is of particular concern to the Burmese authorities. 12 The Tribunal concluded that the appellant does not face a real chance of persecution on return to Burma as a failed asylum-seeker whose presence might or might not have been noted by the Burmese government at the political and social gatherings he has attended in Australia. Nor is it satisfied that the [appellant] had a profile in Burma which brought him to the adverse interest of officials in Burma. Even considered cumulatively, the Tribunal is not satisfied that the [appellant] will have an adverse profile with Burmese authorities. If he returns to Burma, the Tribunal is satisfied that the [appellant], who knows and understands the political situation there and who does not have a record of consistent political activity in Burma, will not act in such a way as to bring himself to the adverse attention of those authorities. On 7 October 2005, that application was dismissed by Phipps FM. 16 Before Phipps FM, the appellant argued that the Tribunal decided that he would not face persecution if he returned to Burma because he would not act in such a way as to bring himself to the Burmese government's attention. The appellant said that the Tribunal asked itself the wrong question --- it should have considered whether he acted in that way in the past and would act that way if he returned to Burma in the future because he feared persecution ('the behaviour modification claim'). 17 Phipps FM found that the behaviour modification claim was not considered by the Tribunal. In his Honour's opinion, therefore, the issue was whether it should have been considered by the Tribunal having regard to the appellant's claims and evidence before the Tribunal. Phipps FM referred to the second statutory declaration but concluded that '[t]here is nothing in this evidence to suggest that the [appellant] modified his behaviour because he feared persecution. ' His Honour considered that in Burma the appellant had little opportunity to express his beliefs because of his 'living conditions'. The Tribunal found that his past activities did not make him of adverse interest to the authorities. It is not a finding that the [appellant] will modify his behaviour because of fear of persecution. It is a finding based on what has occurred in the past. It did not ask the wrong question. There is no jurisdictional error. His Honour erred in finding that the evidence before the [Tribunal] did not give rise to a modified behaviour claim. His Honour should have held that the evidence before the Tribunal did give rise to such a claim and the Tribunal's failure to consider this claim constituted a failure to consider the persecution claim and therefore constituted a jurisdictional error. His Honour should have held that the Tribunal was required to ask whether the appellant's modified behaviour was influenced by the threat of serious harm. The failure of the Tribunal to ask such a question constituted jurisdictional error. For similar reasons, the appellant contended that Phipps FM erred in law. The appellant seeks orders that the Tribunal's decision be quashed and that the Tribunal be directed to decide the appellant's application for a protection visa according to law. 20 The appellant focused on the Tribunal's finding that the appellant knows and understands the situation in Burma, and not having a record of consistent political activity in Burma, the appellant would not act in such a way as to bring himself to the adverse attention of the authorities. The appellant contended that this finding impliedly recognises that he modified his behaviour in the past because of his knowledge of the Burmese political climate, and would do so in future if returned to Burma. The appellant submitted that Phipps FM erred when he concluded that the Tribunal's finding was merely a finding based on what had occurred in the past and a finding that the appellant would continue to act in the same way in the future if he returned to Burma. 21 The appellant submitted that the Tribunal made jurisdictional errors of the kind described in Appellant S395/2002 . The Tribunal's task is to assess what the applicant will do, not what he or she should do. If it fails to do so, it commits a jurisdictional error. Otherwise every applicant for a protection visa, however bland their history of activity in the country from which they have come, would have to be considered for a protection visa on the hypothesis that upon return such a person could become a political activist of a kind likely to be persecuted by the authorities of the home country. In this case, however, in the passage to which counsel has drawn attention, it seems to have gone further. The Tribunal accepted that the applicant's brief record of anti-government activity while in Burma was one for which she paid dearly. Its satisfaction that she would not be "motivated to be involved in anti-government activities in Burma in such a way as to put herself at risk with Burmese authorities" implied a finding that fear of persecution would prevent her from being involved in such activities. If that is so, then the Tribunal appears to have overlooked a subjectively and objectively based fear of persecution on the part of the applicant for a Convention ground. It is up to the Tribunal, as an inquisitorial body, to deal only with the appellant's material and evidence before it: see Abebe v Minister for Immigration and Multicultural Affairs [1999] HCA 14 ; (1999) 197 CLR 510 (' Abebe '), per Gummow and Hayne JJ at 576 [187]. 24 This contention was pressed at two levels. At the higher level, the Minister contended that as the behaviour modification claim was not raised by the appellant before the Tribunal, there was no error in the way that the Tribunal dealt with the appellant's claim. Phipps FM was correct, so the Minister said, in finding that the Tribunal was not obliged to inquire into the behaviour modification claim because it was not explicitly raised by the appellant at the hearing or in the second statutory declaration. 25 In oral submissions, the Minister also put the argument at an alternative and lower level. This argument accepted that the Tribunal may be required in particular circumstances to investigate beyond the limits of the claim expressly made by the appellant, but it maintained that there is nothing in the present case to indicate that it was bound to do so because the behaviour modification claim was not explicitly or implicitly raised by the appellant: see Paramananthan v Minister for Immigration and Multicultural Affairs (1998) 94 FCR 28 (' Paramananthan ') per Merkel J at 62-63; Minister for Immigration and Multicultural and Indigenous Affairs v VFAY [2003] FCAFC 191 (' VFAY'), per French, Sackville and Hely JJ at [97]. 26 The Minister submitted that on a fair reading of the Tribunal's decision in its entirety, the Tribunal based its decision on the appellant's past activities in Burma and also his activities in Australia. According to counsel for the Minister, the activities in which the appellant engaged in Australia were such that the appellant would not have a high profile --- he was merely a 'noisy face in a crowd'. The Minister submitted that the Tribunal had not erred in the way in which it looked at the appellant's past behaviour and transposed it into the future, citing Minister for Immigration and Ethnic Affairs v Guo [1997] HCA 22 ; (1997) 191 CLR 559. The Minister also submitted that it can be inferred that as the appellant had the unrestricted right to engage in political activity in Australia, but did not join a political party for two years, he would not engage in activities on return to Burma that would bring him to the adverse attention of the authorities. 27 The Minister contended that the Tribunal's consideration of the behaviour modification claim does not reveal any error, let alone jurisdictional error. In the Minister's submission, it is apparent from the Tribunal's reasons that it looked at the claims presented by the appellant and determined that it was not satisfied that he has a well-founded fear of persecution. In doing so, the Tribunal did not fail to ask the correct question. Accordingly the issues to be determined in this appeal are whether that claim arose from the evidence before the Tribunal and, if so, whether the Tribunal's failure to consider it amounts to jurisdictional error. 29 An appeal from a judgment from the Federal Magistrates Court is an appeal by way of re-hearing: see Abeyesinghe v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1558 at [4] ( 'Abeyesinghe' ); Low v Commonwealth [2001] FCA 702 at [3] . The right of appeal exists for the correction of error: see Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47 ; (2000) 203 CLR 194 at 203-204 [14] . Thus, 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]. In my view, a legal error by the Federal Magistrates Court will be demonstrated if a behaviour modification claim did in fact arise on the evidence before the Tribunal, and the Tribunal failed to consider it. Such assumptions, if made, would be wrong. The proceedings before the Tribunal are inquisitorial and the Tribunal is not in the position of a contradictor. It is for the applicant to advance whatever evidence or argument she wishes to advance in support of her contention that she has a well-founded fear of persecution for a Convention reason. The Tribunal must then decide whether that claim is made out. However, ultimately the [Tribunal] is under a duty to fulfil its statutory obligation to "review the decision" before it and to do so according to s 420(2), which requires it to act according to the "merits of the case". Unlike an adversarial proceeding, parties do not appear and put a case, as such, to the [Tribunal]. As stated above, the [Tribunal] is required to determine whether it is "satisfied" that the applicant is a person to whom Australia has protection obligations under the Convention. In an appropriate case the [Tribunal] may undertake its own enquiries and, in some instances, may be obliged to do so: see Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 170 per Wilcox J; Luu v Renevier (1989) 91 ALR 39 at 49-50 per Davies, Wilcox and Pincus JJ; and Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71 at 118-119; 151 ALR 505 at 547-548 per Wilcox J. Similarly, the [Tribunal] is not to limit its determination to the "case" articulated by an applicant if the evidence and material which it accepts, or does not reject, raises a case on a basis not articulated by the applicant. That obligation arises by reason of the nature of the inquisitorial process and is not dependent upon whether the applicant is or is not represented: cf Bouianov v Minister for Immigration and Multicultural Affairs (unreported, Federal Court, Branson J, No NG 134 of 1998, 26 October 1998) at p 2 and Saliba v Minister for Immigration and Ethnic Affairs (1998) 89 FCR 38 at 49-50. Representation can be relevant to the content of a duty to act according to "substantial justice" or fairly in a particular case, but cannot affect the fundamental duty of the [Tribunal], acting inquisitorially, to review the decision before it according to the "merits of the case". That duty... is a fundamental incident of the inquisitorial function of an administrative tribunal such as the [Tribunal]. The arguments and evidence of applicants or the Minister cannot narrow the Tribunal's jurisdiction to investigate the generality of a claim for a protection visa. Whatever the arguments or evidence of an applicant, the Tribunal is entitled, but not bound, to look at the issue generally. If the Tribunal elects to exercise its jurisdiction more widely than the applicant or the Minister has asked, however, it must do so in accordance with law. Given that the appellants claimed that Bangladesh was "not a safe place for [them] at all" and that they had a "real fear of persecution", the Tribunal was entitled to go beyond examining whether the appellants faced persecution because of their personal history. Notwithstanding that it rejected the particular claims of the appellants, it was entitled to investigate the matter more fully and determine whether the appellants' more general fear of persecution was well-founded. Rejection of an applicant's specific claims of persecution and the failure to identify other forms of harm provide a reason for holding that the applicant had no fear of persecution. But that is all. In the present case, for example, although the appellants did not raise any issue of modifying their behaviour because they feared persecution, it seems highly likely that they acted discreetly in the past because they feared they would suffer harm unless they did. If it is an error of law to reject a Convention claim because the applicant can avoid harm by acting discreetly, the Tribunal not only erred in law but has failed to consider the real question that it had to decide --- whether the appellants had a well-founded fear of persecution. Nonetheless, the majority held that the Tribunal had fallen into jurisdictional error by not properly considering a behaviour modification claim that emerged from the evidence or the Tribunal's evaluation of that evidence. McHugh and Kirby JJ held that the Tribunal itself had opened up the issue by its examination of the general issue of homosexuality and persecution in Bangladesh, and by its specific finding that the appellants would not be persecuted if they acted discreetly in the future: at 488-489 [38]-[39] and at 493 [53]. 34 The analysis of this issue by Gummow and Hayne JJ proceeds on the footing that the Tribunal is not confined by the way in which an applicant formulates his or her claims: the central question whether there is a well-founded fear of persecution must in their view be examined in the light of all the evidence before the Tribunal and the Tribunal's findings of fact. In the case before them, this question had to be addressed in the light of the Tribunal's finding that the appellants were likely to live in a way that would not cause Bangladeshi society to confront their homosexual identity: at 502 [87]. But it is no answer to a claim for protection as a refugee to say to an applicant that those adverse consequences could be avoided if the applicant were to hide the fact that he or she holds the beliefs in question. And to say to an applicant that he or she should be "discreet" about such matters is simply to use gentler terms to convey the same meaning. The question to be considered in assessing whether the applicant's fear of persecution is well founded is what may happen if the applicant returns to the country of nationality; it is not, could the applicant live in that country without attracting adverse consequences. It did not ask whether the appellants would live "discreetly" because that was the way in which they would hope to avoid persecution. That is, the Tribunal was diverted from addressing the fundamental question of whether there was a well-founded fear of persecution by considering whether the appellants were likely to live as a couple in a way that would not attract adverse attention. That the Tribunal was diverted in that way is revealed by considering the three statements in its reasons that are referred to earlier: first, that it is not possible to "live openly as a homosexual in Bangladesh"; secondly, that "[t]o attempt to [live openly] would mean to face problems"; and, thirdly, that "Bangladeshi men can have homosexual affairs or relationships, provided they are discreet ". Nowhere did the Tribunal relate the first and second of these statements to the position of the appellants. It did not consider whether the adverse consequences to which it referred sufficed to make the appellants' fears well founded. All that was said was that they would live discreetly. If such a claim had been made, it would have raised factual and legal questions beyond the scope of the case put to the Tribunal. In large measure they were not believed. If they had wished to, the appellants could have advanced a claim that their decision to live as they had been living and would live on their return to Bangladesh was influenced by a fear of harm if they did not; or that persons for whom the government of Bangladesh is responsible induce or inculcate a fear of harm in those living openly as homosexuals; or that they are at risk of suffering serious harm constituting persecution if they wished to display, or inadvertently disclosed, their sexuality or relationship to other people. They did not advance any claims of this kind beyond those connected with the factual accounts advanced by them to the Tribunal and rejected in large measure by the Tribunal. The Tribunal accordingly did not err in not dealing with them. While the authorities make it clear that the Tribunal is not required to make the applicant's case, it is bound to consider a case on a basis not articulated by the applicant if it is raised by the evidentiary material that is before the Tribunal or by the Tribunal's findings based on that evidence. It is a not an obligation that can be discharged simply by reference to the terms in which the applicant articulates his claim. 39 On the authorities, the Tribunal is obliged to consider at least three types of claim: first, those that are explicitly put by the applicant; secondly, those that are implicit in the material before the Tribunal; and thirdly, those that emerge from the Tribunal's findings or conclusions. For the purposes of this case, it is unnecessary to explore the boundaries of the Tribunal's role any further. But it is important to recognise that in each type of case, regardless of what is put by the applicant or the Minister, the Tribunal must ask itself the right question - whether the applicant has a well-founded fear of persecution for a Convention reason. Where the material before the Tribunal, or the Tribunal's own findings or reasoning process, indicates that the applicant has modified or would modify his or her behaviour if returned to the country of citizenship, the question must be asked why the applicant would do so: see Appellant S395/2002 , esp per McHugh and Kirby JJ at 489 [39] and per Callinan and Heydon JJ at 503 [88]. 40 The appellant's claim was based on evidence that he was involved in anti-government activities in Burma, albeit at a level that probably would not have generated significant government attention aside from the specific incidents mentioned. It was also based on evidence that he has been significantly involved in such activities in Australia. This evidence was accepted by the Tribunal. The Tribunal also accepted evidence to the effect that the Burmese Embassy in Canberra was interested in its citizens in Australia, and it was possible that the appellant's activities in Australia might have been recorded by Burmese officials. Further, the Tribunal accepted evidence that the appellant may be questioned about his activities in Australia on his return to Burma, and that he could be watched for a period after returning. However, it did not accept that this kind of surveillance amounted to persecution. Specifically, the Tribunal considered that the appellant's anti-government activities, both in Burma and subsequently in Australia, would not have the consequence that Burmese authorities would regard him as a significant or high profile activist. The Tribunal accepted general country advice from DFAT which it interpreted to mean that only 'active and high profile' demonstrators would be targeted, and perhaps persecuted, by the authorities on their return to Burma. 41 The Tribunal found that the appellant would not face persecution on return to Burma because it was satisfied that the appellant, who knows and understands the political situation there and who does not have a record of consistent political activity in Burma, will not act in such a way as to bring himself to the adverse attention of those authorities. In my view, as the appellant submitted, this finding recognises that the appellant had modified his behaviour in the past because of his knowledge of the Burmese political situation and was likely to do so on his return to Burma. It is difficult to reach any other conclusion when one considers the evidence before the Tribunal. The effect of that evidence, which the Tribunal accepted, was that the appellant's activities in Burma, and his activities subsequently in Australia, had brought him to the adverse attention of Burmese authorities. 42 Moreover, the appellant's second statutory declaration said that he wished to continue his activities to get rid of the dictatorship in Burma. In Burma I had very little opportunity to express my political beliefs, and what opportunity I took got me into serious trouble. I have engaged in these activities in Australia, as it has been the first time in my life I have been able to act upon my convictions safely, and has been a great opportunity for me to organize and participate in a struggle which is difficult if not impossible to engage in at home because of the repression of the military dictatorship. I hope that in the future all the efforts of Australian Burmese groups in solidarity with Burmese in other countries and in Burma itself will result in this regime being overthrown, but unfortunately I cannot see that happening very soon. I greatly fear returning at the moment owing to what occurred before I left. I believe the Burmese regime is trying to kill my people, and is committing genocide against the Mon. I know it is dangerous to speak out against the government but when I did so before I left I felt I had no choice but to do so. It follows, in my view, that the Tribunal's satisfaction that the applicant would not so act was based upon the view that he would modify his behaviour because he knows and understands the political situation and the risks that would attend his protest activities if they were to continue unmodified. 43 In my opinion, whether or not it was explicit or implicit in the material before it, or arose from the Tribunal's findings, the Tribunal's decision clearly raises the issue of whether the appellant had modified, and would in future modify, his behaviour to avoid persecution for a Convention reason. 44 Without being overly critical of his Honour, the explanation of the Tribunal's decision given by Phipps FM is unconvincing and I cannot accept it. His Honour held that the Tribunal had simply made findings about what had occurred in the past but had not considered the behaviour modification claim because it was not required to do so. This finding is difficult to reconcile with the Tribunal's conclusion that the appellant 'knows and understands the political situation [in Burma]' and if he returns, 'will not act in such a way as to bring himself to the adverse attention of those authorities'. The Tribunal has not only made findings about what has occurred in the past --- it has expressly considered how the appellant will act in the future. 45 There are other difficulties with the manner in which the Tribunal approached the appellant's claim. The Tribunal's conclusion that, even if the appellant's activities in Burma and Australia are considered cumulatively it was not satisfied that the appellant would have an adverse profile with Burmese authorities, indicates that the Tribunal approached the issue on the basis of the balance of probabilities, rather than by appropriately assessing the possibilities of future persecution: see Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244, per Merkel J at 248 [15]. The latter approach reflects the requirements of the Refugee Convention. To qualify as a refugee, an applicant must have a well-founded fear of persecution. This will be so if the applicant holds a genuine fear of persecution that is founded on a real chance that he would be persecuted for one of the reasons stipulated in the Convention if he returned to the country of his nationality: see Chan v Minister for Immigration and Ethnic Affairs [1989] HCA 62 ; (1989) 169 CLR 379. 46 The Tribunal's assessment of the appellant's likely profile with the Burmese government is perhaps attended by another difficulty. The Tribunal seems to have found that the appellant should be characterised as a 'low-profile' rather than 'high-profile' anti-government protestor, notwithstanding his political activities in Australia and the fact that his activities in Burma had previously brought him to the adverse attention of the authorities. Relying heavily on this categorisation, the Tribunal accepted that 'the [appellant] may be questioned about his activities in Australia and that he could be watched for a period after returning home', but that the appellant's profile was such that he would not be persecuted if he returns to Burma. There is to my mind a degree of artificiality or stereotyping about the process of categorising an applicant as either 'high-profile' or 'low-profile'. This process carries with it a risk of obscuring the fundamental question that the Tribunal is required to consider, namely whether an applicant has a well-founded fear of persecution for a Convention reason. In order to decide this appeal, however, it is not necessary for me to say anything further about this issue. 48 The conclusion I have reached is that the Tribunal raised the issue of whether the appellant had modified his behaviour to avoid persecution, and indeed implicitly recognised that he had done so. Accordingly, it was obliged to specifically address the merits of that claim in its decision. It did not do so. Indeed, the Tribunal did not address the scenario of what will happen to the appellant if he returns to Burma and engages in anti-government activity because it made the assumption that he will not act in that way. 50 To address the behaviour modification claim properly, the Tribunal had to address a range of questions. If the Tribunal had found that this fear had caused them to be discreet in the past, it would have been necessary for the Tribunal then to consider whether their fear of harm was well-founded and amounted to persecution. That would have required the Tribunal to consider what might happen to the appellants in Bangladesh if they lived openly as a homosexual couple. Would they have suffered physical abuse, discrimination in employment, expulsion from their communities or violence or blackmail at the hands of police and others, as Mr Khan suggested were possibilities? These were the sorts of questions that the Tribunal was bound to consider if it found that the appellants' "discreet" behaviour in the past was the result of fear of what would happen to them if they lived openly as homosexuals. Because the Tribunal assumed that it is reasonable for a homosexual person in Bangladesh to conform to the laws of Bangladesh society, however, the Tribunal disqualified itself from properly considering the appellants' claims that they had a "real fear of persecution" if they were returned to Bangladesh. More specifically, the critical question is whether the appellant, knowing and understanding the political situation in Burma, would modify his behaviour because that was seen to be a means of avoiding persecution for a Convention reason. In the present case, to borrow and adapt the language used in Appellant S395/2002 , the Tribunal was diverted from addressing the fundamental question of whether the appellant has a well-founded fear of persecution by its conclusion that he was likely to live in Burma in a way that would not attract adverse attention. The Tribunal failed to give proper attention to what might happen to the appellant if he lived 'openly' in Burma, in accordance with his convictions and political beliefs. 52 The Tribunal accepted that the appellant's activities had brought him to the adverse attention of the authorities in the past. It did not, however, go to the next step of asking whether there was a real chance that such adverse attention would continue in future in ways that amounted to persecution, or whether the appellant would modify his behaviour to avoid persecution. Applying the second limb in VWBA (see par [21] above), the Tribunal, by finding that the appellant 'knows and understands the political situation', failed to properly consider why the appellant will modify his behaviour if he returns to Burma. Nowhere has the Tribunal asked itself why it has reached the conclusion that the appellant will not act in such a way in the future as to bring himself to the adverse attention of the authorities. 53 I have therefore concluded that the Tribunal failed to consider the real question it had to decide. I am also satisfied that Phipps FM erred in law in the findings he reached, and in the conclusion that there was no reviewable error in the Tribunal's decision. Section 474(2) defines a 'privative clause decision' as a decision of an administrative character made, proposed to be made, or required to be made, as the case may be, under the Migration Act or under a regulation or other instrument made under the Migration Act (whether in the exercise of a discretion or not), and subject to the exclusions in subss (4) and (5). A reference to a 'decision' in s 474 includes the matters listed in s 474(3). 55 In Hicks v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 757 at [39] , French J concluded that '[a] decision infected by jurisdictional error is not "a decision made under [the Migration Act ]" and is therefore not within the definition of "privative clause decision" under s 474(2) and (3)'. In Plaintiff S157/2002 , Gaudron, McHugh, Gummow, Kirby and Hayne JJ concluded at 506 [76], that s 474 of the Migration Act must be read 'so as to refer to decisions which involve neither a failure to exercise jurisdiction nor an excess of the jurisdiction conferred by the [Migration Act]' because an administrative decision which involved jurisdictional error was 'properly regarded, in law, as no decision at all': see also Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 ; (2002) 209 CLR 597, per Gaudron and Gummow JJ at 615 [51]. 56 The Tribunal's decision in this case was marred by jurisdictional error. In truth, it was not a decision under the Migration Act . It follows that it is not a 'privative clause decision' within the meaning of s 474 of the Migration Act and the appellant is entitled to relief. In my opinion, the appropriate orders are that the appeal be allowed, the decisions of Phipps FM and the Tribunal be set aside, and that an order in the nature of a writ of mandamus issue remitting the matter to the Tribunal and requiring the Tribunal to hear and determine the matter according to law. In addition, the first respondent should pay the costs of the appellant. There will also be an order that the Tribunal be added as the second respondent to these proceedings. | appeal from decision of federal magistrate applicant for protection visa behaviour modification claim whether claim put to tribunal whether jurisdictional error whether privative clause decision whether prerogative writs appropriate in circumstances migration |
Living in the fourteenth century in the depths of the Middle Ages, he became an Oxford don and a popular reformer. His progressive and outspoken political and theological views led to frequent clashes with the church and the university. 2 Wycliffe was critical of the church hierarchy --- monks, friars and in particular popes --- and their wealth and influence. He saw no basis in scripture for the existence of an ecclesiastical elite and instead encouraged a group of itinerant, poor priests to spread the word of God throughout England. Although he was attacked by the authorities during his lifetime, it wasn't until the Council of Constance in 1415, 31 years after his death, that he was formally declared a heretic. Among his greater heresies were his rejection of the doctrine of transubstantiation (on the grounds that it elevated priests to daily miracle-workers and had no biblical basis) and his denunciation of certain popes as antichrists. The church decreed that his books be burned and his remains exhumed. 3 Fortunately, many of Wycliffe's books survived and it is one of these that is the main reason why Wycliffe is remembered today. Wycliffe was part of an important fourteenth-century movement to bring the English language to the institutions of church, court and government. Although parts of the Bible already existed in English, Wycliffe was the first to oversee a full translation. And while scholars today question how much of the translation work was undertaken by Wycliffe himself, and how much by his disciple Nicholas of Hereford, the work they produced continues to bear his name. 4 While John Wycliffe may not have fared well at the hands of the fourteenth-century authorities, his name and his mission continue today. Wycliffe Bible Translators (International) is an organisation with fifty-six members and approximately 5,300 workers world-wide. One such member is Wycliffe Bible Translators Australia ('Wycliffe'). Wycliffe is, and has been since 1 July 2000, endorsed by the Australian Taxation Office as an Income Tax Exempt Charity under sub-division 50-B of the Income Tax Assessment Act 1997 ('the Act'). It is an evangelical missionary organisation that seeks to spread the Christian religion through literacy and translation work, predominantly in the third world. It has been particularly active in areas which previously had no written language and has taught people in such places how to read and write their own language. Its missionaries learn the local language, translate the Bible into that language and then teach the local population how to read the Bible. 5 The respondent, Word Investments Ltd ('Word'), was established by Wycliffe in 1975 to provide financial and fund-raising support to Wycliffe. The two entities are still linked today, with some sharing of staff and common registered offices. Like John Wycliffe, Word has come into conflict with the authorities. The applicant, the Commissioner of Taxation, does not accept that Word is a charity and has refused to endorse it as exempt from paying income tax. 6 The relevant provisions of Division 50 of the Act, as they apply to Word, require Word, in order to be exempt, to be a charitable institution which has a physical presence in Australia and to incur its expenditure and pursue its objectives principally in Australia. They also require it to be endorsed as exempt from income tax. In 2001, Word applied for income tax exemption and the Commissioner refused to endorse it. A further application, which was also refused, was made in 2002. 7 Word then appealed to the Administrative Appeals Tribunal ('the Tribunal') which found that Word was entitled to endorsement from 1 July 2002, but was not entitled to endorsement prior to that date since its primary activity at that time was the running of a commercial funeral business that was not charitable in nature. 8 The Commissioner has appealed the finding of the Tribunal that Word was entitled to be endorsed as a tax exempt charitable entity under the Act for the period from 1 July 2002. There is also a cross-appeal by Word against the finding of the Tribunal that Word was not a tax exempt charitable entity between 1 July 2000 (when the endorsement regime commenced) and 1 July 2002. Word was initially involved in raising funds through housing development. This activity ceased in the early 1980s after which there were two or three years of dormancy. In 1986 or 1987 Word's directors approached Wycliffe to seek its views on whether Word should continue. The result was a decision that Word would take over the fund-raising activities then carried on by Wycliffe, which consisted of investing money borrowed at non-commercial rates from people who wished to support its activities. 13 At this time, Word held itself out as offering financial planning advice and investment opportunities. Its information memorandum for investors described Word as existing "for the purpose of offering the public financial planning advice and a sound investment vehicle where interest earned is used to further the work of Bible translation and other Christian work throughout the world. " Its investments were to be in "areas that, in the opinion of the administration, are morally and culturally ethical and offer sound investment opportunities. " Investment vehicles included government and semi-government securities, banks and other investments. Investors were entitled to up to 25% of the interest earned on their investments, with the remainder to be distributed by Word. In reality, most investors chose not to be paid any interest. 14 Word's investors were members of the Christian public who lent money at low rates of interest. Until 2002 this interest was the only major source of income for Word. The majority of it was distributed to Wycliffe, with the balance going to other Christian organisations. What Wycliffe did with the money given to it by Word was well known to Word and to its investors, but was not the subject of any control by Word. Word did not itself organise translations, send missionaries overseas, train pastors, publish scriptures or engage generally in evangelising work. All of these things were done by Wycliffe, whose activities I have described briefly above at [4]. There is no suggestion that Wycliffe's activities are not charitable, nor is there any doubt that they are conducted almost exclusively outside of Australia. 15 The first significant change in Word's fund-raising activities came in 1996 when moneys in a term deposit stood to be reinvested. It was resolved to establish Bethel Funerals, a funeral business. The purpose statement and philosophy statement of Bethel Funerals referred to the Christian purposes of the business and to the fact that profits were to be distributed to two main ministry organisations, one of which was Wycliffe. Word acts as trustee of the Foundation and conducts Bethel Funerals in that capacity. Consequently, from that time, Word's only source of income has been the investment of moneys lent to it by investors. At around the same time, Word paid Wycliffe to carry out a particular translation, rather than giving the equivalent amount directly to Wycliffe. Word's directors said that this was to enable Word to be more closely involved with Wycliffe's activities. 17 In March 2005 the Foundation applied for endorsement as a tax exempt charitable fund. The application was refused and an objection was made against that refusal in May 2005. As at the date of the Tribunal hearing, no decision had been made on the objection. 18 In 2005, apparently because of uncertainty about its status for income tax purposes, the directors of Word resolved to terminate its investment activities. In some cases, the exemption is subject to special conditions. Section 50-110 provides the circumstances that must exist for an entity to be entitled to endorsement. Relevantly, under sub-s (2), the entity must be covered by one of the specified items in the table in section 50-5 and, under sub-s (5)(a), the entity must meet the applicable special conditions. This income was used solely for the benefit of Wycliffe and other similar religious organisations. Its activities were pursued solely in Australia. Consequently, during this period, Word was entitled to be endorsed as exempt from income tax as an institution for the advancement of religion, under item 1.1 in the table at s 50-5 of the Act. • From the commencement of Bethel Funerals in 1996 until 30 June 2002 when Bethel Funerals started operating separately from Word, the business of Word was a commercial operation for the purpose of making a commercial profit. As such, Word was not a charitable institution during that period. • Word's activities from 1 July 2002, after Bethel Funerals had started operating separately, were the same as those prior to 1996 and consequently Word was entitled to endorsement as a charitable institution from 1 July 2002. • Word was not a fund established by trust, for the purposes of item 1.5B of the table at s 50-5 of the Act, since its memorandum and articles of association did not constitute an instrument of trust and, at any rate, the trust would not satisfy s 50-60 since its distributions to Wycliffe were not to a foundation or institution which incurs its expenditure and pursues its charitable purposes outside Australia. • The question of whether the Foundation was an exempt fund under item 1.5B of the table at s 50-5 of the Act was not properly before the Tribunal. • Word, being a separate legal entity, was not a part of Wycliffe and is not entitled to the exemption which Wycliffe has. In addition, it is necessary as a practical matter for Word to establish that it was a charitable organisation during this time. This is because this period represents the base position from which changes were made in 1996 and 2002. It is not in dispute that if Word's purposes prior to the establishment of Bethel Funerals in 1996 were not exclusively charitable then it cannot succeed in respect of subsequent periods. 25 The advancement of religion is a charitable purpose. No contrary intention is apparent in the Act. 26 There is no doubt that the advancement of religion includes missionary work: Baptist Union of Ireland (Northern) Corporation Ltd v Commissioners of Inland Revenue (1945) 26 TC 335 (Court of Kings Bench of Northern Ireland). This is so whether that work is conducted within Australia or overseas. However, an organisation that does missionary work will not qualify as a charitable institution if its purpose is not exclusively charitable ( Attorney-General (NSW) v Adams [1908] HCA 51 ; (1908) 7 CLR 100 at 113-114) unless the non-charitable purposes are merely incidental to the charitable purposes: Inland Revenue Commissioners v City of Glasgow Police Athletic Association [1953] UKHL 1 ; [1953] AC 380 at 395-396 per Lord Normand, at 402 per Lord Reid, at 405 per Lord Cohen. 27 In determining whether an institution is charitable, it is necessary to consider the institution's essential object, which is itself to be determined by a consideration of the purpose of its formation, its constitution and its activities. 28 The starting point in determining the essential object of an institution is its constitution or articles of association. However, this will not always be determinative since "[t]he skill of Chancery draftsmen is well able to produce a constitution of charitable flavour intended to allow the pursuit of aims of a non-charitable or dubiously charitable flavour": Attorney-General v Ross [1986] 1 WLR 252 at 263 per Scott J. Similarly, the constitution of a legitimate charity may be drafted in such a way as to obscure that legitimacy, whether through the inexperience of the drafter, the mistaken belief that the organisation's charitable nature will never be questioned, or otherwise. Where it is unclear from the listed objects of an organisation what its main purpose is, or where the evidence shows that the listed objects do not reflect the actual purpose of the organisation, it is appropriate to look to the activities of the organisation together with the expressed objects. In my view, this is not a case where the listed objects leave it unclear what is the main purpose of the organisation. Nor is there evidence that the stated objects do not reflect the actual purpose of Word. The first six objects in paragraph (a) of the objects (set out above at [9]) are clearly related to Word's evangelising activities. As for the remaining objects, I am satisfied, as was the Tribunal, that their comprehensive nature is more likely to reflect a degree of caution on the part of the drafter to ensure that no necessary or desirable act would be prohibited because of an unintended omission from the list. Its constituent documents prohibited distribution to members of the company and the income generated was applied solely for the benefits of [Wycliffe] as the primary recipient with small contributions to other similar religious organisations. It pursued those objectives solely in Australia and, as such, satisfied the requirements of Item 1.1 of s 50-5 and s 50-50(a) of the Act and was entitled to be endorsed as exempt from income tax for that period as an institution for the advancement of religion. The first is the Commissioner's submission that there was insufficient evidence for the Tribunal to conclude that the payments made by Word to Wycliffe and other organisations were used by them for charitable purposes. No such conclusion expressly appears in the Tribunal's reasons but I agree with the Commissioner's submission that that is the only basis on which the Tribunal could have concluded that Word's activities were charitable. 31 This evidentiary submission invites consideration of the wrong question. It is not relevant whether Wycliffe and the other recipients of Word's funds used those funds for religious purposes; that question is only relevant to the charitable purposes of those organisations. In determining Word's purposes, the question is what Word understood was being done with its funds. On this question, there was ample evidence. Three directors of Word gave evidence before the Tribunal. Two of them were also directors of Wycliffe. All three gave evidence of Wycliffe's activities and the reasons why Word supported those activities. All three were cross-examined by counsel for the Commissioner. Also in evidence was the fact that Wycliffe has itself been endorsed by the Commissioner as an exempt charity and that the directors of Word were aware of this. Finally, in considering the evidence, the Tribunal was required to give Word the benefit of the presumption referred to by Higgins J in Hardey v Tory [1923] HCA 35 ; (1923) 32 CLR 592 at 595: "where a gift is made to a society having a distinctive charitable purpose, prima facie the gift is for that purpose. More importantly, there was also evidence that Word intended and believed that Wycliffe and the other organisations would use the money for charitable purposes. It follows that no error of law has been made out. 33 The second question of law that arises from the Tribunal's findings in respect of this period is whether the generation of income from interest earned on deposits is a sufficiently religious activity to establish Word as a charity. Word relied on a number of cases in support of its contention that fund-raising may be part of a charitable purpose. With one exception, I have not found these authorities to be of great assistance. The exception is Incorporated Council of Law Reporting for England and Wales v Attorney-General [1972] Ch 73. In that case, the Council was a not for profit organisation that published reports of judicial decisions. It was entitled to and did charge for its services but was prohibited from distributing profits to its members. The Commissioners of Inland Revenue argued that the purpose of the Council was to carry on the trade of publishers and sellers of law reports and that this was not a charitable purpose. They said that no legal distinction could be drawn between the Council and a similar publisher that profited from its publishing and selling law reports. The Court of Appeal rejected this argument. The difference between the two cases is in my view a vital distinction. The element of unselfishness is well recognised as an aspect of charity, and an important one. Suppose on the one hand a company which publishes the Bible for the profit of its directors and shareholders: plainly the company would not be established for charitable purposes. But suppose an association or company which is non-profit-making, whose members or directors are forbidden to benefit from its activities, and whose object is to publish the Bible; equally plainly it would seem to me that the main object of the association or company would be charitable --- the advancement or promotion of religion. In that case the Society carried on a crematorium for which fees were charged. The fees were not distributed to members and were re-invested in the Society. It was held that the provision of cremation services was a charity for public benefit. It was argued against the Society that the charging of a fee for the cremation services meant that their provision could not be charitable. It may even be that public demand for the kind of service which the charity provides becomes so large that there is room for a commercial undertaking to come in and supply similar services on a commercial basis. But no authority and no reason has been put forward for holding that when that stage is reached the objects and activities or the non-profit-earning charitable organisation cease to be charitable. Lord Pearson, at 157, concurred. The proposition for which they stand is that where an organisation engages in an activity that has a charitable purpose, that purpose will not be lost where a profit is made in conducting that activity, provided that the profit is not distributed to members and is used exclusively (save for allowable incidental purposes) for charitable purposes. They do not address the question whether an activity that is not in itself charitable, but that is conducted for the purpose of producing income to be used for a charitable purpose, may itself be charitable. 37 Nonetheless, I think it is clear from the above passages that the making of a profit through trade or business is not necessarily inconsistent with a charitable purpose and that the true question to be asked is the purpose of the making of the profit. If the purpose is commercial then the exclusive purpose of the organisation is not charitable; if the purpose is selfless then it may be. Prior to 1996, the sole profit-making activity engaged in by Word was the investment of moneys provided by public investors who shared Word's beliefs and aims. The profits thereby made were then provided to Wycliffe and similar organisations. If, consistent with my understanding of the passages cited above, the true focus of the enquiry is on the purpose and not the manner of the profit-making, then it is clear that Word's purposes were, up to 1996 and subject to the second matter which I will come to shortly, charitable. 38 Some assistance may be found in the rating cases. Statutes imposing rates on property are frequently subject to exemptions for property used exclusively for charitable purposes. In Ryde Municipal Council v Macquarie University [1978] HCA 58 ; (1978) 139 CLR 633, the High Court by majority of 3---2 held that a 'market' at Macquarie University consisting of retail and business premises let out to banks and shops for the benefit of students and staff was entitled to rating exemption under the relevant statute. The reason was that the enterprises run at the market were desirable for the functioning of the university and a use of the site for the purposes of the university: see [1978] HCA 58 ; (1978) 139 CLR 633 at 643---644 per Gibbs ACJ and at 650 per Stephen J (with whom Murphy J concurred). 39 Where the commercial activity is not a purpose of the university but is merely incidental to the carrying out of the purpose, the land on which it is conducted will still be used exclusively for charitable purposes. So in Salvation Army (Victoria) Property Trust v Fern Tree Gully Corporation [1952] HCA 4 ; (1952) 85 CLR 159, the sale for profit of produce grown at a facility for delinquent boys, an activity which the High Court held to be merely incidental to the charitable purpose of the occupier of the land, did not preclude the property from being exempt from the rating statute. 40 However, where the commercial activity is neither part of the charitable purpose of the occupier nor merely incidental to that purpose, and is used only to generate income, the land will not qualify for a 'sole use' exemption because the land will not have been 'used' by the occupier: Commissioners of Taxation v Trustees of St Mark's Glebe [1902] AC 416; Ryde Municipal Council v Macquarie University [1978] HCA 58 ; (1978) 139 CLR 633 at 643---4 per Gibbs ACJ. 41 The difficulty with the rating cases is that they direct attention not to the activities of the organisation, but to the use to which certain property is put. They therefore fragment the activities of the organisation in a way that is not done by Division 50 of Part 2---15 of the Act. The true comparison with the rating cases would be if the Act provided that each 'division' of an organisation (including, relevantly in this case, the Bethel Funerals division of Word) must be charitable in order for it to qualify for endorsement. It stands to reason that the lower the level of abstraction at which one examines an organisation, the more likely it is that a particular part of the organisation (or of its property) is found to be of a different character from that of the organisation viewed as a whole at a higher level of abstraction. 42 There is a large body of law on this question in the United States: see D E Buckner, 'Property Used as Dining Rooms or Restaurants as within Tax Exemptions Extended to Property of Religious, Educational, Charitable, or Hospital Organizations' 72 ALR 2d 521. Some decisions favour the taxpayer and others favour the authorities. In some cases, the different results can be explained by differences in the wording of the relevant statutes or the degree to which the property of disputed use is integrated into the remainder of the property of the organisation. The leading textbook on trusts in the United States, Scott on Trusts , cites the decision of the Supreme Court of Illinois in School of Domestic Arts and Science v Carr 322 Ill 562, 153 NE 669 (1926) and concludes that where a charitable organisation applies any profits made by it to its charitable purposes, it will not thereby lose its charitable status: A Scott & W Fratcher, The Law of Trusts , 4 th edn, Little, Brown & Company, 1989) SS376. The School of Domestic Arts case was concerned with a tax on the property occupied by the School. The School conducted a restaurant located within its premises. The facts alleged and admitted are that no profit whatever is made; that a deficit exists each year and is paid by gifts from benevolent women; that every cent of revenue goes toward the operation of the school ... It cannot be questioned that such teaching in all its several branches is a benefit to the students, makes it possible for some of them to earn a living, and indirectly benefits the public and improves the happiness of man. The premises at No 6 North Michigan Avenue comprise the entire fifth floor of the Tower building and are primarily used as a school; 699 students receiving instruction when the bill was filed. Though the restaurant is also operated upon the same premises it is used in connection with the school and as an outlet for food cooked by the students, some of whom act in the capacity of waitresses. The restaurant also furnishes practical training for some of the students studying that branch of work. No part of any of the property was used for any purpose except in connection with and for the benefit and advancement of the school. As will have been apparent, I agree with this approach. It accords with the thrust of the decisions I have cited at [33]---[35]. 43 The Commissioner argued that, consistently with the judgment of Dixon J in Roman Catholic Archbishop of Melbourne v Lawlor [1934] HCA 14 ; (1934) 51 CLR 1, it is necessary to draw a distinction between purposes of religion and things conducive to the good of religion. He characterised the generation of funds and distribution of those funds to Wycliffe as possibly being conducive to the good of religion, but as not being for the purposes of religion. The distinction is derived from the decision of the Privy Council in Dunne v Byrne [1912] AC 407, where it was held that an activity may be conducive to the good of religion but not itself be charitable. An example, taken from the judgment of Griffith CJ in the High Court in the same case ((1910) [1910] HCA 75 ; 11 CLR 637), is of advances made to government bodies for the purposes of obtaining funding to be used for religious purposes. Such advances would not themselves be for the purpose of religion although they might be conducive to the good of religion. 44 I do not think the distinction referred to by Dixon J in Lawlor assists the Commissioner. It is clearly directed at the difference between activities that have a direct religious purpose and other activities that are incidental and beneficial to the religious purpose but are not themselves directly religious in purpose. The distinction that the Commissioner really calls for is one between an activity that is clearly religious in purpose and that, on the one hand, is conducted by the taxpayer itself and, on the other hand, is conducted through an intermediary such as Word. That is a wholly artificial distinction. The charitable purpose of an activity cannot depend on whether it is conducted from start to finish by one entity or whether two or more entities with different skills join together to jointly conduct it. The Commissioner's argument is inconsistent with the corporate structure of many contemporary charities which are complex and involve the use of separate legal entities to perform separate functions. Where they are all working together to pursue a common, charitable purpose it is artificial to consider the purpose of each entity separately. 45 The final question of law which the Commissioner contends was wrongly answered by the Tribunal in the paragraph cited above at [29] concerns the place where Word conducted its business. It will be remembered that s 50-50 of the Act requires a charitable institution to satisfy one of four alternative tests, one of which (paragraph (a)) is that the institution "has a physical presence in Australia and, to that extent, incurs its expenditure and pursues its objectives principally in Australia" . The Tribunal held that Word satisfied this test. It is not suggested that Word could satisfy any of the other tests in s 50-50. 46 Paragraph (a) of s 50-50 is curiously drafted. It requires three tests to be met: (a) that the institution has a physical presence in Australia; (b) that the institution incurs its expenditure principally in Australia; and (c) that the institution pursues its objectives principally in Australia. Each of these tests is, of itself, relatively straightforward to apply. The difficulty is the words "to that extent" that connect requirement (a) to requirements (b) and (c). The words appear to cover the situation of an institution that has a presence both in Australia and elsewhere. In such a case, it seems that the institution is only required to incur its Australian expenditure principally in Australia and pursue its Australian objectives principally in Australia. In other words, were an institution to have an office in Australia and a similar office in New Zealand, and the expenditure of the Australian office was incurred principally in Australia and the objectives of the Australian office were pursued principally in Australia, then the fact that the New Zealand office may incur expenditure and pursue objectives principally in a place that is not Australia, does not disqualify the institution from satisfying the paragraph. 47 This is not the position of Word. It is not disputed that Word has a physical presence in Australia and therefore satisfies requirement (a). There was no evidence before the Tribunal that Word has any physical presence outside Australia. It follows that the words "to that extent", which might otherwise qualify requirements (b) and (c) do not have such an effect in the case of Word. 48 It seems to me to be equally clear that requirement (b) is met. Word's principal expenditure is the provision of funds to Wycliffe. This it does exclusively in Australia. It should be remembered that while Wycliffe Bible Translators (International) is a worldwide organisation, Wycliffe itself is an Australian entity. It would, I think, be wrong to say that because Word knows that the money it passes to Wycliffe will be expended principally outside of Australia, its expenditure is thereby incurred overseas. 49 Requirement (c) is more difficult. On the one hand, Word must argue that Wycliffe's activities, including their location, are relevant to whether Word has a charitable purpose, since without reference to them, Word's activities consist of no more than making payments to an empty shell organisation. But on the other hand, in order to satisfy requirement (c), Word must say that even though it knows that the funds it provides to Wycliffe are used predominantly overseas, this is not relevant to the enquiry under paragraph (a) of s 50-50. 50 It is clear from the passages from the Incorporated Council of Law Reporting case and the Scottish Burial case that the key to determining charitable status is motive. An investigation of motive cannot be conducted without considering the ultimate object of an organisation's activities. It follows that Word is right to argue that Wycliffe's activities are relevant to whether Word is entitled to charitable status. I also accept the corollary, namely that the location of Wycliffe's activities is also relevant. 51 It is not disputed that Wycliffe's activities are conducted principally outside of Australia. Wycliffe apparently had a small presence in Darwin, but this has diminished over time. Other than this, the evidence was that Wycliffe's activities were conducted principally in the third world. If the motivation behind the requirement that a charity's objects be pursued principally in Australia is that 'charity begins at home', does this not mean, as the Commissioner contends, that Word's objects are not pursued principally in Australia? 52 The answer to this is that paragraph (a) of section 50-50 addresses a fundamentally different question from that asked in an enquiry as to the charitable nature of an organisation. Whether an organisation is charitable depends in large part on the motivation of the organisation --- it is a question about the mental state of the organisation and so cannot be answered without a consideration of the knowledge (including knowledge of the destination of funds raised) informing that motive. On the other hand, paragraph (a) of section 50---50 asks a physical question, a nexus question. Viewed in this light there can be no doubt that Word's nexus is exclusively with Australia. What it does, namely handing money to Wycliffe, it does in Australia. There is nothing it does that has any connection to any other country. 53 It follows that, for the period prior to 1996, Word satisfied the requirements of paragraph (a) of s 50-50 of the Act and was a charitable organisation. It does so broadly on two grounds. Firstly, it says that it is a charitable institution under item 1.1 in the table at s 50-5. The fact that it conducted a funeral business does not change the essential character of Word, namely an institution committed to raising funds for provision to Wycliffe and other similar organisations for the advancement of the Christian religion. Secondly, Word says that the Tribunal erred in finding that its memorandum and articles of association did not constitute an instrument of trust. Properly characterised, Word is a fund established for public charitable purposes. 55 Word does not need to succeed on both of these bases since the itemised list at s 50-5 comprises alternatives. If Word is a charitable institution it need not also be a fund established for public charitable purposes. 56 The Tribunal found that "it is difficult to consider a commercial funeral business as having an objective of the advancement of religion" and that "the business was a commercial operation for the purpose of making a commercial profit" . It was a statutory corporation doing commercial work within limitations fixed by reference to religious principles. It was staffed by persons who wished to observe the religious principles giving rise to the limitations on the Board's commercial activities. The property in its ownership both increased in value and gave rise to revenue. Capital was held for the benefit of a religious institution and large amounts of revenue were handed over to that institution. To my mind all these matters result in it being accurate to describe the Board as a legal entity working in a commercial area, guiding its commercial conduct by the principles of a religious institution and, in ordinary language, working for that religious institution. I do not think that this legal entity can either by an ordinary or a technical use of language be accurately called a religious institution. Its facts are distinguishable from the present case. It concerned a statutory body exercising property ownership and investment powers given to it by statute. The Board was required by statute to hold and invest church property and to deal with any proceeds. Its purposes were thus defined by statute. This is to be contrasted with Word, which is an independent organisation which has chosen to apply funds that it raises to Wycliffe and other religious bodies. The Board's manner of operation was also different from Word's. It lent money for short terms at commercial interest rates and applied funds for church activities generally, rather than the specific activities supported by Word. Finally, the Board claimed to be a religious institution not, as in the present case, a charitable institution. Word concedes that it cannot be a religious institution. 58 In my view, in concluding that the running of a funeral business could not advance religion, the Tribunal fell into two errors. The first was to consider the funeral business in isolation from the remainder of Word's operations. There was no evidence to suggest that, from the commencement of Bethel Funerals, Word ceased receiving money from investors. The entity claiming to be a charitable organisation is Word, not the Bethel Funerals operations of Word. Word's activities as a whole must be considered when determining whether its purposes were charitable. 59 When such a consideration is undertaken, the second error becomes clear. Word's purposes as a whole were to raise money for provision to Wycliffe and similar organisations. This was true both before and after the establishment of Bethel Funerals. It was only the manner of raising the money that changed; the purpose for doing it remained the same. The Tribunal's error appears to have involved drawing an unwarranted distinction between active and passive investment. It seems to have assumed that it may be charitable for an organisation to receive funds from investors who may or may not have been encouraged to support its goals and ideals, but that it cannot be charitable for the organisation to actively establish a business to derive similar income. 60 The Tribunal's distinction is at odds with the practice of contemporary charitable organisations. With the decline of the welfare state, charitable organisations are expected to do more with the same resources. Reliance on donations alone will, in many cases, be insufficient. Hence many charitable organisations have established business ventures to generate the income necessary to support their activities. There may appear to be a vast difference between selling lamingtons at a church fête and selling funeral services, but where the object of raising the funds is the same, I can no see no reason to draw a legal distinction between the two. I again refer in this connection to the cases referred to at [33]-[35]. 61 It follows that, for the period from 1 July 2000 to 1 July 2002, Word was a charitable institution under item 1.1 of the table at s 50-5 of the Act and is entitled to endorsement accordingly. The cross-appeal is therefore allowed. Word's alternative argument --- that its articles and memorandum of association created an instrument of trust --- need not be considered. This effected a significant change from the position prior to that date, when Bethel Funerals was merely a part of Word rather than run through a separate legal entity. The Tribunal held that "the activities after 1 July 2002, being the same as those prior to 1996, entitle [Word] to endorsement as a charitable institution from that date. First, he says that even assuming the factual finding is correct, Word was not entitled to endorsement prior to 1996 and so cannot be entitled to endorsement from 1 July 2002. I have already set out my reasons for concluding that Word was a charitable organisation prior to 1996. The Commissioner's first submission therefore fails. 64 Secondly, the Commissioner says that the period from 1 July 2002 was not, as a matter of law, properly before the Tribunal. The difficulty arises because Word applied for endorsement prior to the establishment of the Foundation. The Commissioner's decision not to endorse Word was therefore made on the basis that Bethel Funerals was a part of Word, and was not run separately by the Foundation. Consequently, according to the Commissioner, argument and evidence in the Tribunal was directed to this situation. The decision on appeal was the decision that, at the time that Bethel Funerals was part of Word, Word was not entitled to endorsement as a charitable entity. 65 This argument must be rejected. A decision to endorse (or not to endorse) an entity as charitable under the Act is not for a limited period. It operates until such time as the Commissioner decides that circumstances have changed or the taxpayer applies to have a different decision made. In this case, the Commissioner made one decision. Namely, that Word was not entitled to endorsement under sub-division 50-B of the Act. This decision, were it to stand, would have continued operation until Word re-applied for endorsement. The appeal brought by Word in the Tribunal was against the decision at large, not merely against the decision as it operated up until 30 June 2002. 66 Section 43 of the Administrative Appeals Tribunal Act 1975 provides that, for the purposes of reviewing an administrative decision, the Tribunal may exercise all the powers and discretions that are conferred on the original decision-maker. 68 Thirdly, the Commissioner says that the evidence before the Tribunal was insufficient to establish the finding that the activities of Word from 1 July 2002 were the same as those prior to 1996. The Commissioner points to the relative paucity of material in evidence for the period from 1 July 2002. I accept that if the only question for the Tribunal had been Word's operations from 1 July 2002 and there had been no evidence of its operations prior to then, the Tribunal would have had difficulty reaching a view on whether Word qualified for charitable status. However, this was not the situation. Word's case was that the only significant change in its operations from the period immediately prior to the establishment of Bethel Funerals in 1996 to the termination of its activities in 2005 was the existence and operations of Bethel Funerals. A taxpayer that seeks to establish that it is a charity is not required to prove that status on every single day in the period for which it claims that status. Once it has established that it is a charity at a particular time, it is entitled to rely on that finding until such time as it is proved that its activities have changed to the extent that it is no longer charitable. The Commissioner has not pointed to any additional changes to Word's operations from 1 July 2002. He did not seek to cross-examine Word's witnesses on its activities from 1 July 2002. In these circumstances, there was evidence before the Tribunal that entitled it to find that Word's operations from 1 July 2002 were the same as those prior to 1996. 69 It follows that the appeal must be dismissed. The Court was informed that the Commissioner has agreed to fund Word's legal costs under his test case program. In those circumstances, I will make no order as to costs. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | charities exemption from paying income tax whether organisation that raised funds exclusively for provision to an exempt charity was itself charitable whether running a commercial business caused organisation to lose charitable status whether organisation that raises funds for charitable work overseas pursues its objectives in australia taxation |
The Tribunal's decision affirmed a decision of a delegate of the Minister for Immigration and Citizenship ('the Minister') to refuse to grant a protection (Class XA) visa to the appellant. On 24 May 2000 the appellant lodged an application for a protection visa with the then Department of Immigration and Multicultural Affairs. A delegate of that Department refused the application for a protection visa on 25 August 2000. On 25 September 2000 the appellant applied to the Tribunal for a review of that decision. The first Tribunal decision affirming the delegate's decision was handed down on 27 November 2002. On 29 April 2003 this Court made orders by consent quashing the decision and remitting the application to the Tribunal for a second hearing. On 22 September 2003 the Tribunal (differently constituted) affirmed the delegate's decision. Some time after the making of that decision, the Tribunal wrote to the Ahmadiyya Muslim Association Australia ('the Australian Association') in December 2004 seeking general information concerning the followers of that faith. Such enquiry was not made specifically in connection with any review of the appellant. However, a copy of the response of the Australian Association (the '2004 letter') formed part of the Tribunal's file. On 23 March 2006, this Court again made orders by consent quashing the decision mentioned above at [3] and remitting the application to the Tribunal. The third Tribunal (differently constituted) affirmed the delegate's decision in a decision handed down on 4 July 2006. On 22 June 2007 Federal Magistrate Scarlett remitted the application to the Tribunal for a rehearing (the fourth hearing). Before the Tribunal at its fourth hearing (the hearing to which this appeal relates), the appellant claimed that he was a member of the Ahmadi community and that on a number of occasions he was beaten by fanatical Muslims. The appellant claimed that his family was subject to trouble from Sunnis after they noticed the appellant and his family had been attending a Qadiani mosque. The appellant also claimed that he was attacked while attending college and that in 1998 he was kidnapped by people from the Awami league who tried to extort money from him. The appellant claimed that on 18 March 1999 after coming out of a Qadiani mosque he engaged in an argument with people from Jamaat-e-Islami who attacked him. The appellant claimed that he went into hiding but after some time he resumed living at his home. The appellant claimed that he was attacked on 20 January 2000 at a bus stop by members of the Awami League and the Chhatra Shibir, who left him for dead. During its hearing on 10 September 2007 the appellant provided the Tribunal with a letter. Such letter, purportedly written by the National Amir of the Ahmadia Muslim Jamat, Dhaka was dated 2 September 2007 and addressed 'TO WHOM IT MAY CONCERN'. I know him. He is very good man. He bears a moral character. He does not engage of terror work of this country and society. I wish him every success in life. During the course of the fourth hearing the Tribunal asked the appellant whether he had any objection to the Tribunal contacting the Australian Association to request that it communicate with the National Amir (or Ameer) of the Ahmadiyya Muslim Jamat, Bangladesh ('the Bangladesh Association') to verify whether the appellant was an Ahmadi as claimed in letters purportedly written by the National Amir dated 25 July 2000 and 2 September 2007. The appellant agreed to such proposal. The Tribunal accordingly wrote to the Australian Association by letter dated 12 September 2007 (the 'September 2007 letter') seeking information concerning the validity of the appellant's documents and requesting that the Bangladesh Association be consulted. A response was received from the Australian Association dated 11 November 2007 which attached a letter dated 9 November 2007 from the National Ameer of the Bangladesh Association. The letter signed by the National Ameer was entitled ' Country information request Ref: BGD 32360 Dt. 24/10/07 regarding above request. For your kind information both the certificates dt. 25/7/2000 and 02/9/07 attached with the subject letter which were submitted by [the appellant] are false. The letter head is fake, the signature of National Ameer is also fake. Otherwise such fraudulent person can not be a member of our Community. The appellant was invited to submit any comment. By letter dated 3 December 2007 the appellant acknowledged receipt of the Tribunal's s 424A letter, and requested a period of three weeks to make a response. By letter dated 4 December 2007, the Tribunal advised the appellant that it would allow him until 10 January 2008 to provide a response. The Tribunal also advised that in the absence of any comment, it might proceed to make a determination. By letter dated 8 January 2008, the appellant requested a further three weeks to respond. By letter dated 9 January 2008, such request was declined. No further communication was received from the appellant. On 6 February 2008 the appellant was notified that the Tribunal's decision would be handed down on 26 February 2008. The Tribunal found numerous inconsistencies in the appellant's evidence regarding the various incidents of persecution claimed, including the alleged attack at college, the attack on the appellant's family home, the kidnapping, the attack on leaving the mosque and the attack at the bus stop. The Tribunal found that such inconsistencies cast doubt on the veracity of the appellant's claims and on his credibility. The Tribunal considered the appellant to be untruthful. The Tribunal found that there was no real chance of persecution if the appellant returned to Bangladesh, and upheld the delegate's decision. Before Driver FM the appellant claimed: The Tribunal did not consider an integer of the appellant's claims, namely that on a number of occasions he was attacked by the extreme Sunni Muslims in Bangladesh. The Tribunal failed to allow the appellant further time to produce documents relevant to the determining factor in the Tribunal decision. The Tribunal failed to consider the current prevailing situation in Bangladesh. The Tribunal breached s 424(2) of the Act because there is no evidence that the approach to the Bangladesh National Ameer (through the Ahmadiyya Muslim Association Australia) was in writing. The Tribunal decision was in breach of s 425 of the Act. Driver FM found that the Tribunal had considered each of the alleged attacks or kidnapping claims made by the appellant. However, as the Tribunal had rejected the appellant's claims to be an Ahmadi, his Honour concluded that it was unnecessary for the Tribunal to deal with each and every assertion of harm suffered by the appellant. As to the second ground, his Honour found that the appellant had ample time to respond to the Tribunal's s 424A letter and that no attempt had been made by the appellant to provide the information sought by the Tribunal. His Honour found the third ground had no substance as the issue of the current situation in Bangladesh was raised by the appellant, and the Tribunal was entitled to have regard to independent country information. As to the fifth ground of appeal regarding the alleged breach of s 425 of the Act, his Honour was satisfied that the Tribunal put the appellant on notice that his claim to be an Ahmadi was subject to question. His Honour noted that the Tribunal recorded that it ' asked the appellant if he had any objection the Tribunal checking with the Ahamdiyya Muslim Association of Australia to ascertain whether he was in fact an Ahmadi as he claimed '. His Honour noted that the appellant told the Tribunal that he wanted the Tribunal to make such an inquiry of the Australian Association. His Honour found no breach as alleged. Driver FM then considered whether the Tribunal failed to comply with the requirements of s 424B of the Act in respect of the enquiry made of the Australian Association. His Honour found that the Tribunal's request for information from the Australian Association was a request falling within s 424 of the Act and that consistent with SZKTI v Minister for Immigration and Citizenship and Another [2008] FCAFC 83 ; (2008) 168 FCR 256 the Tribunal was bound to meet the requirements of s 424B of the Act in making the request. His Honour observed that the request was made in writing and found that this implicitly required a written response, given that the request was formal and written. His Honour considered that the role of the scheme of s 424B of the Act is to distinguish between invitations calling for a written response and invitations calling for an oral response at an interview, and that in the absence of an invitation to attend an interview it was clear that a written response was called for. His Honour found that the obligation to specify the manner of response contained in s 424B(1) of the Act is not breached when the manner of response is obvious from the invitation. His Honour observed that in the absence of the application of the deemed receipt provision in s 441C(4) of the Act, the date of receipt was unknown, and that in these circumstances the prescribed time periods could not have any relevant application. His Honour found that there was no obligation on the Tribunal to specify a prescribed period for response and that the Tribunal did not specify any period for a response. The fact that it waited until well after any potentially relevant period would have expired for a response suggested that the Tribunal took the view that no period for a response was prescribed and that the response was to be given within a reasonable period for the purposes of s 424B(2) of the Act. His Honour observed that before sending its request to the Australian Association, s 441A(4) of the Act required the Tribunal to confirm the address of such Association with the Association for the purposes of that review but that there was nothing to indicate that the Australian Association had provided its address to the Tribunal in connection with the Tribunal's review. Driver FM inferred from the evidence that this was not done and found that since s 441A of the Act was not followed, s 441C(4) of the Act and r 4.35 of the Migration Regulations 1994 (Cth) did not apply. Finally, his Honour considered whether the breach of s 441A(4) of the Act was a jurisdictional error. His Honour concluded that Parliament did not intend to deprive the Tribunal of the ability to write to a recipient at an address already known to it subject to the proviso that the recipient could not be deemed to have received the correspondence and must be given reasonable time to respond. His Honour concluded that the Tribunal did not commit a jurisdictional error in failing to follow s 424B of the Act. The appellant raises the following grounds of appeal: The Tribunal failed to comply with s 424B of the Act. The Federal Magistrate erred in failing to consider the application of ss 424 , 424B and 441A of the Act to a request by the Tribunal to the office of the National Ameer of the Ahmadiyya Muslim Jamat in Bangladesh made via the intermediary of the Ahmadiyya Muslim Jamat in Australia. The Tribunal failed to comply with its obligations under s 425 of the Act. The third ground of appeal was not pressed. However, since the decision in SZLPO v Minister for Immigration and Citizenship and Another (NSD 1227 of 2008); SZLQH v Minister for Immigration and Citizenship and Another (NSD 970 of 2008); SZLPP v Minister for Immigration and Citizenship and Another (NSD 1486 of 2008) [2009] FCAFC 51 ; (2009) 255 ALR 407 was then pending before the Full Court of the Federal Court of Australia, the hearing of these proceedings was adjourned. On 4 May 2009 the Full Court gave judgment in SZLPO . The Court then contacted the parties to enquire whether they wished to make further oral or written submissions. The parties replied in the affirmative. The Minister filed a Notice of Contention on 18 August 2009, both parties made further written submissions and the Court listed a further hearing on 18 August 2009 for oral submissions. b it was not a request seeking " additional information " within the meaning of s.424 of the Act as no information had previously been provided by the Australian Ahmadiyya Association or Mr Mahmood Ahmed in connection with the appellant's review. c Even if the Tribunal did breach s.424 of the Act, any such error arguably did not go to jurisdiction. The critical issue is whether s 424(2) of the Act applied to the inquiry made by the Tribunal in its September 2007 letter. The resolution of this issue in the negative would have the consequence that the issues raised by the appellant, each of which concern the application of the requirements of s 424(2) , will not arise. The appellant relies upon the letters of 25 July 2000 and 2 September 2007 ('the false letters') as constituting original 'information' supplied to the Tribunal, and submits that the Tribunal's September 2007 letter is therefore a request for 'additional information'. The appellant alternatively submits that the Tribunal obtained 'information' by its request of the Australian Association made in 2004. Accordingly, its 2007 request was one for 'additional information'. The appellant submits that as the September 2007 letter was seeking 'additional information', the Tribunal was required to comply with the requirements of s 441A by giving notice of the request to the last address provided to the Tribunal (s 441A(4)(c)(i)) or to the last residential or business address of the person (s 441A(4)(c)(ii)); that the invitation to provide the additional information was required to specify the way in which the information was to be provided as required by s 424B(1); and also to specify the time in which the information was to be furnished as required by s 424B(2). The appellant submits that failure to comply with such procedures led to jurisdictional error. The Minister submits that the learned Federal Magistrate erred in his finding that the request to the Association made by the September 2007 letter ' was a request falling in the purview of s 424 '. Prior to the amendments made by the Migration Legislation Amendment Act (No. However, if the Tribunal gets such information, the Tribunal must have regard to that information in making the decision on the review. (2) Without limiting subsection (1), the Tribunal may invite a person to give additional information. The Explanatory Memorandum states that these sections provide a code of procedure to be followed by the Tribunal in conducting its review. In his decision, Driver FM relied upon the decision of the Full Court in SZKTI . In that decision at [53], the Full Court considered whether a telephone call made by the Tribunal to a church leader who had previously signed a letter concerning the appellant in those proceedings was a request for 'additional information' within s 424. The Full Court found that the telephone enquiry sought 'additional information', and that the Tribunal was required to comply with s 441A. The High Court of Australia has reversed the decision of the Full Court in SZKTI : see Minister for Immigration and Citizenship v SZKTI and Another (2009) 258 ALR 434. The High Court found that the Tribunal was entitled to obtain information as it required and that the requirements of s 424(2) did not restrict the general power of the Tribunal to obtain information under s 424(1) which does not specify how the information is to be obtained. Accordingly, it was unnecessary for the Tribunal to provide an invitation when it sought to obtain the information, because it sought to obtain the information via s 424(1). It would appear from [47] of the High Court's decision that the Tribunal, at least when making enquiries by telephone, can seek information under s 424(1), even if the information as sought would be classed as 'additional information' for the purposes of s 424(2). That is, the mere fact that the Tribunal is seeking 'additional information' does not require it to proceed under s 424(2) and the procedural requirements which flow from it, at least where phone enquiries are concerned. It would appear that this is a significant change in the s 424 jurisprudence, as will be shown below. The Court notes that the parties have not had the opportunity to make submissions based on the High Court's decision in SZKTI because such decision was still reserved at the time the parties made their further submissions. Each indicated that they wished the Court to proceed to deliver judgment in this appeal notwithstanding the decision of the High Court in SZKTI . The Court therefore makes the above observations in respect of the consequences of SZKTI with that wish in mind. The Court does not consider that SZKTI alters the law in relation to the specific issues arising in this appeal. Accordingly, further submissions from the parties are not required. In SZKCQ v Minister for Immigration and Citizenship and Another [2008] FCAFC 119 ; (2008) 170 FCR 236 the Tribunal requested during the hearing that the appellant provide information to confirm his membership of a political party. Subsequently documents were provided to the Tribunal by the appellant in those proceedings from two persons purportedly verifying the appellant's membership of that organisation. These documents were then referred by the Tribunal to the Australian High Commission in Islamabad seeking answers from party officials concerning the appellant's claims. A response was received and was forwarded by the Tribunal to the appellant inviting comment. The Full Court held that the Tribunal's enquiries made of the Bangladeshi persons and the replies constituted 'information'. The Full Court in SZKCQ found, consistent with the Full Court's decision in SZKTI , that the provisions of ss 424(3) and 424A(1) had not been satisfied. In view of the High Court's decision in SZKTI as discussed above, the decision in SZKCQ must be treated with reserve. In SZLPO the Full Court considered the nature of 'additional information' within s 424 of the Act. In those proceedings the appellant claimed to be a member of the Ahmadiyya faith and to have suffered persecution by Sunni Muslims in Bangladesh. In support of his claim he provided the Tribunal with a letter on the letterhead of the ' Ahmadiyya Muslim Jamaat, Krora, Bangladesh ' apparently signed by the President of that organisation which purported to commend the appellant as an Ahmadi. The letter was addressed 'To Whom it May Concern'. Such letter had been provided prior to the hearing and at the hearing the appellant agreed that the Tribunal should make inquiries to verify his claims. As a result the Tribunal accordingly wrote to the Department of Foreign Affairs and Trade ('the Department') asking it to conduct inquiries with the office of the National Amir in Bangladesh via the Ahmadiyya Muslim Association of Australia. Subsequently the Department furnished the Tribunal with information provided by the National Amir. It confirmed that the appellant was not a member of the Ahmadiyya Muslim Jamaat. The Tribunal thereafter wrote to the appellant furnishing the information it had received from the Department and inviting the appellant to comment. The appellant claimed that the Tribunal's decision was affected by jurisdictional error because the Tribunal had ' invited the Amir to give additional information ' and as such s 424(3) required the Tribunal's invitation to be given to the National Amir by one of the methods specified in s 441A. The Full Court in SZLPO referred to the decisions in SZKTI and in SZKCQ . The fourth proposition above leaves to be resolved by us the question whether information can be "additional information" within s 424(2) if it is additional to information obtained by the Tribunal from sources other than the invitee. However, the High Court's decision in SZKTI does not appear to disturb the observation in (4) above, which is the relevant matter for consideration in this appeal. The written invitation régime would then apply to all information that the Tribunal might invite a person to give after the Tribunal first became seized of any information at all unless a contrary indication could be found (cf SZKCQ at [49]-[51])). Presumably the first time the Tribunal becomes seized of information is when the Secretary sends documents to the Registrar under s 418(3). We suggest that a more limited meaning of "additional information" must be looked for. Again, that which suggests itself is "information additional to information previously given to the Tribunal by the invitee". Please do not hesitate to contact William Poh ([mobile telephone number]) should you have a further enquiry. Rather, it was given to the Tribunal by the appellant. Thus, as at the time when the Tribunal telephoned Brother Poh, Brother Poh had not given any information to the Tribunal concerning the appellant. Section 424(2) refers to the Tribunal inviting the person to give additional information . A question arises as to whether that refers to information that is additional to information that the Tribunal has already obtained from any source, such as from the applicant or pursuant to s 424(1), or to information that is additional to information that the Tribunal has already obtained from the person to be invited. The possible inconvenience referred to above might suggest that s 424(2) is concerned with inviting a person who has already given information to the Tribunal to give additional information. In such a case, the person may well have provided an address to the Tribunal in connection with the review. Accordingly, the preferable view is that s 424(2) refers to information additional to information previously given to the Tribunal by the person to be invited (see SZLPO v Minister for Immigration and Citizenship [2009] FCAFC 51 ; (2009) 255 ALR 407 at [99] - [100] ). At most the Tribunal was making an enquiry as to whether Brother Poh had relevant information to give to the Tribunal. It did not invite him to give information, much less additional information. In the present appeal, the Tribunal was aware of the address of the Australian Association at the time it determined the appellant's application. As mentioned at [4], by letter dated 7 December 2004 the Tribunal had written to Mr Nasir Kahlon, General Secretary of the Australian Association, seeking information in respect of persons of the Ahmadiyya community generally. Such letter was written by the Senior Researcher, Country Research of the Refugee Review Tribunal. If so, how would the Ahmadiyya Association test his credibility? How else might an applicant have his claim to be an Ahmadiyya verified? In a letter, dated 3 September 1997, you informed the Tribunal that when an Ahmadi submits an application to the Department of Immigration "he/she always provides a letter with the application issued by us stating that the person is a member of our community". Is this still the case? Or was your statement in reference to the now defunct Ahmadi (Special Assistance) (Class BJ) visa? A copy of your earlier letter is attached. Our website URL at http://www.rrt.gov.au contains more information about the Tribunal. One of the functions of the Country Research Unit is to obtain information to support the review function of the Tribunal. There is no question of charging any fee for supplying any information, which may be of any help to you in discharge of your responsibilities. Such information was not supplied in connection with any relevant review, but was information sought generally relating to persons who claimed to be of the Ahmadiyya faith. The information provided by the 2004 letter of the Australian Association was not therefore 'information' for the reasons provided in SZMBS at [36]. It must follow that the September 2007 letter could not therefore be a request for 'additional information' within s 424(2) of the Act. The Court rejects the submission of the appellant that the mere placing of the 2004 letter from the Australian Association on the Tribunal's file rendered such letter 'information' for the purpose of the specific review in question as referred to in SZLPO and SZMBS . Were the false letters 'information'? The appellant further submits that the Tribunal, in seeking information from the Australian Association was using that Association merely as an agent to obtain 'additional information' from the National Amir in Bangladesh. The appellant relies upon the false letters which he provided to the Tribunal in support of his application as being 'information' and submits that the Tribunal's 2007 request to the National Amir was a request for 'additional information' from him. In this instance, the false letters provided by the appellant were not addressed to the Tribunal, nor were they provided to the Tribunal as the result of an invitation from the Tribunal. Consistent with the finding in SZMBS at [36] the letters were not 'information' provided by the National Amir. Any subsequent request by the Tribunal of the National Amir of Bangladesh could not therefore have been a request for 'additional information'. It follows that the alleged agency of the Australian Amir for the purpose of obtaining additional information does not arise, since no 'additional information' as referred to in s 424 was sought. There is a further reason for finding that the Tribunal's enquiry did not constitute a request for 'additional information'. The two letters provided to the Tribunal by the appellant and purportedly signed by the Amir were fabricated. They had not been written by the Amir. Accordingly, it could not be said that the Tribunal's request of the Amir was for 'additional information' if no information had previously been provided by him. Further, the Tribunal's enquiry of the National Amir by its September 2007 letter was not a request for 'additional information' since the Amir had not previously been invited to provide information. That is, neither the National Amir nor the Australian Association had provided ' information additional to information previously given to the Tribunal by the invitee ': see SZLPO at [99]. It follows that the September 2007 letter was not a request for 'additional information' within s 424(2) of the Act. It follows from the above that the Federal Magistrate erred in concluding that the September 2007 letter from the Tribunal to the Australian Association was a request falling within the purview of s 424 of the Act, enlivening the requirements of s 424B of the Act. In view of the Court's conclusion, any issue of non-compliance with ss 424A, 424B or 441A of the Act does not arise for consideration. Accordingly, it is unnecessary to determine other issues raised by the Notice of Contention and by the appellant in his submissions. Ground 1 of the Notice of Contention is upheld and the appeal is dismissed with costs. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | refugee review tribunal whether letter from tribunal to individual requesting verification of documents constituted 'additional information' for the purposes of s 424(2) of the migration act 1958 (cth) whether documents provided by appellant to tribunal constituted 'information' whether falsified documents constituted 'information' migration |
The substantive proceeding is an application under s 5(1) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) and s 39B of the Judiciary Act 1903 (Cth) to review a decision made by the first respondent Minister to approve the construction and operation by Gunns of a bleached Kraft pulp mill at Bell Bay, Tasmania. The Minister made the impugned decision under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) ("EPBC Act"). 2 LFF is an association incorporated pursuant to the Associations Incorporation Act 1981 (Vic). Its purposes include the promotion of the conservation and better management of Australia's native forests and the stimulation and encouragement of public interest in the value and importance of protecting native forests and related environmental issues. 3 Under s 487(3) of the EPBC Act , LFF has standing to bring this proceeding as a person aggrieved by the Minister's decision. That is because in the two years immediately before the Minister's decision LFF has engaged in a series of activities in Australia "for protection or conservation of, or research into, the environment": see s 487(3)(b). Further, the time of the Minister's decision its purposes included "protection or conservation of, or research into, the environment": see s 487(3)(c). 4 In support of its application for security for costs, Gunns refers, in an affidavit of its solicitor, to the meagre assets of LFF which stood at about $6,450 as at 30 June 2006 and to the considerable expenditure required by Gunns to defend the proceeding, running to over $100,000. 5 In a reply affidavit, a member of the committee of LFF says that as at 31 January 2008 LFF had assets of approximately $8,700 which it intends to use to pay for disbursements in the proceeding. The affidavit also states that LFF is funded by voluntary contributions and that LFF could not provide security for costs in the sum of $103,445 as requested by Gunns. If such an order was made, the proceeding could not continue. From an affidavit filed this morning it appears that LFF's financial position has improved by a few thousand dollars as a result of fundraising. 6 Section 56 of the Federal Court of Australia Act 1976 (Cth) permits the Court to order that an applicant in a proceeding give security for the payment of costs that may be ordered against it. If security is not given in accordance with any order made to provide it, the Court may order that the proceeding be dismissed. 8 Gunns submits that the subject matter of the proceeding is concerned solely with the conditions of approval granted by the Minister concerning the effluent discharge into Bass Strait at an outfall, some 1.2 kilometres off-shore. Gunns says that that issue is not relevant to the question of the conservation and protection of native forests. 9 Gunns submits that LFF is not authorised to bring the current proceeding. That submission is without merit. LFF's purposes include the stimulation and encouragement of public interest in the value and importance of native forests and related environmental issues. Opposition to the operation of a pulp mill which may lead to adverse environmental effects and use wood sourced from native forests, fits well within the purposes of LFF. The application is one capable of being made by LFF and one which it is acknowledged to have a special standing to make in accordance with s 487 of the EPBC Act . 10 Gunns also contends that there is no evidence that those persons who stand behind LFF do not have the funds to provide security, so that it can't be concluded that the litigation would be stifled because of a security for costs order. That submission is rejected. There is a relevant difference between members of a non-profit voluntary association formed for some public policy purpose and shareholders of a company. Members of LFF do not stand to gain any financial benefit from the proceeding. The proceeding is one in which LFF sues for its own benefit to advance a purpose or purposes for which it was formed; see Friends of Hinchinbrook Society Inc v Minister for the Environment (No 1) (1996) 69 FCR 1 at 21-22, per Branson J and Tigers AFC (Mayne) Inc v The AFL and Others [2000] FCA 1650 at [28] to [29] per Spender J. 11 It must also be borne in mind that there is uncontradicted evidence before the Court from a committee member of LFF that LFF would be unlikely to continue the proceeding in the event of a security for costs order. 12 The only factor of any substance which supports the making of a security for costs order is LFF's impecuniosity. To make such an order in those circumstances would deprive LFF of its right of access to this Court in circumstances where it qualifies as an aggrieved person pursuant to expanded standing provisions made under s 487(3) of the EPBC Act in litigation which is asserted to be in the public interest. However, that is not to say that public interest litigation will necessarily be immune from a security for costs order. 13 Some of the submissions advanced by Gunns in favour of an order for security for costs concerned the prospect that LFF would be liable to pay Gunns' costs if its application failed. Whether or not that is so is not the question currently before the court. It would not be a proper exercise of the discretion to award security for costs simply to do so because an impecunious applicant may be ordered to pay costs. Further, a court should be cautious about making an order for security for costs in circumstances where the respondent whose decision is under challenge doesn't seek such an order. 14 The discretion to make a security for costs order is wide and unfettered but must be exercised judicially; see Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 3. As the only factor of any substance raised in support of the proposed order is LFF's impecuniosity, Gunns has not satisfied its onus of demonstrating that a security for costs order should be made. To hold otherwise would stifle the litigation and prevent an applicant with standing to bring the application from agitating a matter which it considers to involve questions of public importance and which seems, on the material currently before the Court, to be made bona fide and raises arguable questions of law. The second respondent's motion dated 24 January 2008 is dismissed. 2. The second respondent pay the applicant's costs of, and associated with the motion, including the costs of compliance with subpoenas, to be taxed in default of agreement. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | security for costs impecunious applicant public interest litigation whether second respondent should be granted security for costs bona fide and arguable case poverty no bar to litigation practice and procedure |
The applicant now seeks an order that this Court determine the matter, rather than remit the matter to the Tribunal. Counsel for the Repatriation Commission submits that is not a step which ought to be taken and I have been referred to a series of authorities, culminating in Repatriation Commission v Butcher [2007] FCAFC 36 ; (2007) 94 ALD 364, which stress the sparing nature of the potential use of the power granted by s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) generally, and in particular, by s 44(7). 2 I need no persuasion about the caution which the Court must exercise in determining the matter, as is evident from my judgment in Byrne v Repatriation Commission [2007] FCAFC 126 ; (2007) 92 ALD 359, where I took the view that that matter should be remitted. In my opinion, the nub of the question is that raised in the last submission by counsel for the Repatriation Commission, when it was put that if the matter goes back, the Tribunal would be able to reject the claim. 3 In my opinion, that submission is contrary to the principal decision --- see Hall [2007] FCA 2021 at [22] ). In my view, once the hypothesis was found to be reasonable, and once the facts were found as the Tribunal did, then, when the concept of beyond reasonable doubt is properly understood, the Tribunal could not properly find, as required by s 120(1) of the Veteran's Entitlement Act 1986 (Cth), that there was no sufficient ground for making the determination beyond reasonable doubt. 4 In my opinion, it is only at a very high level that to so hold may be regarded as a finding of fact. The findings of primary fact have been made by the Tribunal, and if it be a finding of fact that is made, then it seems to me that this is a very benign use of s 44(7). The course of having the matter remitted would lead to further delay and cost, and risks a misunderstanding of the effect of the principal decision if a submission such as that just made to me was made to the Tribunal. 5 Accordingly the decision of the Repatriation Commission under review is set aside and in lieu thereof I determine that the death of Robert Thomas Butler was war caused and that the applicant, Ruth Isobel Hall, is entitled to a war widow's pension as from 27 February 2005. Liberty to apply is reserved. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | whether matter should be remitted to administrative appeals tribunal or decided by court where error found. administrative law |
The exclusivity of the power prevents not only the States but each of the two inland Territories from imposing a duty of excise ( Capital Duplicators Pty Ltd v Australian Capital Territory [No 1] [1992] HCA 51 ; (1992) 177 CLR 248). This case concerns allegations that the second respondent ("the ACT") invalidly imposed duties of excise on the first respondent ("ACTEW") which were to be passed on to the applicant ("QCC"). QCC obtains water from ACTEW and supplies it to businesses and residents in and around Queanbeyan, a small city in New South Wales close to the border between New South Wales and the Australian Capital Territory. QCC is established under the Local Government Act 1993 (NSW). The ACT was established as a body politic under the Crown by s 7 of the Australian Capital Territory (Self-Government) Act 1988 (Cth). The Legislative Assembly for the Australian Capital Territory has powers to make laws (s 22). The Australian Capital Territory Executive has the responsibility of governing the Australian Capital Territory with respect to an extensive list of matters including water resources and taxation (s 36 and Sch 4). ACTEW is a statutory corporation owned by the ACT. ACTEW was established under the Territory-Owned Corporations Act 1990 (ACT). Its voting shareholders are Ministers appointed by the Chief Minister of the Australian Capital Territory. The voting shareholders retain an ultimate power of direction and may require ACTEW to act contrary to the wishes and decisions of its own board of directors, although there is no suggestion that such a power has been exercised with respect to any of the issues which arise for consideration in the present case. Amongst ACTEW's functions is the supply of water to residents and businesses within the Australian Capital Territory and to Queanbeyan. ACTEW charges QCC for water pursuant to a set of principles agreed between it and QCC which are based in part upon the premise that ACTEW will recover from QCC its costs of supplying water to QCC. Commencing on 1 January 2000 the ACT began to impose a charge on ACTEW it called a water abstraction charge ("the WAC"). The charge commenced at the level of 10 cents per kilolitre and rose over a period of time to 55 cents per kilolitre. Various reasons were advanced from time to time for its existence and level which will be discussed in due course. Owing to a change in the basis of the charge, from a charge upon water actually delivered by ACTEW to its customers to a charge upon water abstracted by ACTEW, the current level of the charge is 51 cents per kilolitre of water delivered rather than 55 cents per kilolitre of water taken. The change was said to be revenue neutral owing to the fact that there was always some loss between abstraction and delivery. Commencing on 1 January 2007 the ACT also imposed upon ACTEW, and others, a liability to pay a utilities (network facilities) tax ("the UNFT"). The tax was charged upon various networks which were distributing water, electricity, gas, sewerage and telecommunications. The charge applies to ACTEW's infrastructure for the delivery of water to its customers. It is a charge imposed by reference to the length of the network route. Both the WAC and the UNFT were "passed through" from ACTEW to QCC. They were shown as separate amounts in invoices rendered to QCC by ACTEW and were in addition to the recovery of other water supply costs. QCC refused to pay the UNFT and has not paid the WAC since 30 June 2007. It is now seeking to recover the amounts of WAC paid since 1 January 2004 when the level of the WAC was raised from 10 cents per kilolitre to 20 cents per kilolitre. QCC claims that both the WAC (above 10 cents per kilolitre) and the UNFT are duties of excise which may not be levied by the ACT. The fundamental question in the present proceedings is whether those contentions are correct having regard to the characteristics of the charges in question. That fundamental question turns, in the first instance, on whether each of the WAC and the UNFT is properly characterised as a tax. The respondents deny that either of the WAC or the UNFT is a tax, notwithstanding the legislative characterisation by the ACT itself of the UNFT as a tax. If either the WAC or the UNFT is a tax the next question to be determined is whether it is a tax on a step in production, manufacture, sale or distribution of goods. If so, it is duty of excise (see Ha v New South Wales [1997] HCA 34 ; (1997) 189 CLR 465 ( "Ha" ). Those rights were exercisable by the responsible Minister (see also Legislation Act 2001 (ACT) s 162(2)). Section 7 of the Water Resources Act 2007 (ACT) ("the 2007 WR Act") now makes similar provision. ACTEW possesses various licences authorising it to provide water services and sewerage services and to take water from various places for the purposes of urban water supply. All of the water abstracted by ACTEW lies or flows in areas under the direct control of the ACT. The ACT controls two water catchment areas, one in the Australian Capital Territory, known as the Cotter Catchment, and one in New South Wales. The New South Wales catchment is the Googong Dam Area which was acquired by the Commonwealth in October 1973 for the purpose of the provision of facilities for the storage of water and its supply for use in the Australian Capital Territory. The Canberra Water Supply (Googong Dam) Act 1974 (Cth)) vested the rights to use and dispose of all waters in the Googong Dam Area in Australia but gave the ACT Executive the power to exercise such rights (s 11(2)). Recently the ACT has been granted a 150 year lease by the Commonwealth over the Googong Dam Area. Water is also taken from the Murrumbidgee River within the Australian Capital Territory. The Independent Competition and Regulatory Commission for the Australian Capital Territory ("the ICRC") was established under the Independent Competition and Regulatory Commission Act 1997 (ACT). The ICRC's functions include the provision of price directions and recommendations about price regulation (s 8). The responsible Minister may provide a reference to the ICRC in relation to prices for regulated services (s 15). On 29 June 2001 the ICRC, which also has functions under the Utilities Act 2000 (ACT) ("the Utilities Act "), granted ACTEW a license to provide water services and sewerage services. ACTEW was also granted a licence under s 35 of the 1998 WR Act to take water for the purpose of urban water supply. On 21 February 2008 ACTEW was granted a licence under the 2007 WR Act to take water for the purpose of urban water supply. Various agreements have historically dealt with the supply of water from ACTEW to QCC. Some were called "service level" agreements. The most recent was made on 8 January 2002. It included some basic pricing principles. Schedule 8 set out the agreed pricing principles. At first they were very simple. Over time they became more formal and more complicated. A pricing agreement signed on 30 June 1999 recorded that ACTEW anticipated it would be required to pay a fee for water abstraction. The agreement provided for that charge to be made against QCC as an additional charge. From 30 June 2000 the pricing agreements recorded that ACTEW was required to pay the WAC and that it would charge the same amount to QCC. QCC made such payments from 2 March 2000 to 30 June 2007. On 12 November 2007, QCC commenced the present proceedings. The latest pricing agreement, made for the first time for a five year period (1 July 2008 to 30 June 2013), contained express terms which provided for the cessation of payment of WAC and UNFT in the event that, and to the extent that, QCC succeeds in its present application and for the repayment of any amounts paid with respect thereto under the latest agreement. The WAC has not been paid by QCC to ACTEW since 30 June 2007. No UNFT has been paid by QCC. There would therefore be no amount paid under the latest agreement to be repaid. The parties were agreed that, to the extent QCC succeeds in the present proceedings, unpaid amounts of the WAC or UNFT need not be paid. QCC is seeking an order that payments for the WAC paid from 1 January 2004 to 30 June 2007 be refunded to it. ACTEW argued, in opposition, that there was no legal basis for an order requiring repayment of any amount of the WAC which might be found to have been invalidly imposed on ACTEW, passed through to QCC and paid by it. Pursuant to the 1998 WR Act, taking water without a licence was prohibited. Maximum penalty: 50 penalty units. It could be subject to conditions. Under s 78 the responsible Minister was given a general power to set fees for the purposes of the Act. Section 28 provided, in similar terms to s 33 of the 1998 WR Act, that water may not be taken without a licence. Licences may be granted pursuant to s 30 and conditions imposed pursuant to s 31 of the 2007 WR Act. To complete the picture it is necessary to refer to the Legislation Act 2001 (ACT). Subject to that, and other limitations upon the legislative power of the ACT, the Minister was authorised by both the 1998 WR Act and the 2007 WR Act to set fees in terms sufficiently broad to include the WAC. It recommended the establishment of a water abstraction charge at around 10 cents per kilolitre. As these (external) costs are not charged for, consumption of the relevant resource is higher than it would otherwise be. Failure to include these costs means that consumption and investment decisions are made without considering the full economic costs of using resources. If environmental costs were included, customers' decisions could be made with an appreciation of the economic and environmental considerations of their consumption of water. However, this implies that environmental costs can be readily measured in financial terms. The primary reason for a water abstraction charge is to signal impact on the environment. If these signals are to reach end use consumers, the charge must be passed through. Setting the water abstraction charge at around 10c/kL would also make a contribution towards environmental management costs. In these proceedings no contention was advanced that the WAC at this level was either a tax or a duty of excise. The current Water Abstraction Charge is 10 cents per kilolitre ($100 per megalitre). This charge has applied since December 1999. The Water Abstraction Charge is an important part of the overall water management strategy and is consistent with the Council of Australian Government water reform requirements. These require that the full economic cost of obtaining water, including the cost of externalities such as catchment management, be charged. The current severe drought highlights the need for charges to reflect the true value of water. If consumers restrict their water usage, as they have done under voluntary and mandatory water restrictions, they will limit the cost faced under the Water Abstraction Charge. The ICRC reported in October 2003. First, it sends a signal to consumers about the true costs of water. This encourages efficient water use and investment in water saving devices. Second, the WAC recovers those costs of water provision not covered by the regulation of ACTEW. This ensures that there is appropriate recovery of costs incurred and reduces the potential for cross-subsidisation of costs associated with use of water for consumptive purposes from other sources of revenue available to the Government. The first class is those costs that apply to all units of water abstracted within the ACT --- for example, costs spent on catchment management as well as other government expenditures. These costs are called water supply costs. In calculating the WAC, water supply costs are apportioned over the amount of water abstracted to obtain the cost per kilolitre. Currently, of the 65 gigalitres of water per annum abstracted, only 35 gigalitres are returned through the water treatment facility, with thirty gigalitres lost to the water system each year. Costs that relate to the water not returned to the system are called flow costs, and will vary with the volume of water not returned to the system: the scarcity value of water is such a cost. The scarcity value of water is the opportunity cost of not using this water in an alternative use. In calculating the WAC, flow costs are ultimately apportioned over the abstracted level of water. It explained the way in which, in its view, each type of cost should be calculated. To calculate the scarcity value of water it used "the weighted average of trading prices" for temporary water entitlements. The commission has applied a risk free rate of return to this investment in order to derive an annual environmental cost. The commission also notes that additional appropriations for catchment management in the government's 2004-05 budget may increase this number with effect from July 2004. On 10 August 2005 the Minister for the Environment determined increased fees under the 1998 WR Act. Most increases represented a consumer price index adjustment of 2.5%. Two types of fees were not subject to an increase of this magnitude. Water administration fees for a licence to take water in the lower volume categories, which had been substantially increased from 1 July 2004, were not increased at all. The WAC was increased from 20 cents per kilolitre to 25 cents per kilolitre from 1 July 2005. The unaltered fees reflect a decision by the Independent Competition and Regulatory Commission on water abstraction fees to reflect scarcity value, and the Minister's 2004 determination that substantially increases the administration fee for a licence to take water in the lower volume categories. The explanation given in relation to the WAC did not. The explanation suggested that the WAC was not increased and that it continued to reflect the decision of the ICRC. Neither statement was correct, at least so far as the evidence in the present case shows. However, the 2003-04 Budget Papers had foreshadowed a further 5 cents per kilolitre increase. In the Budget Papers for the 2006-07 Budget the ACT government announced that it would increase the WAC by a further 30 cents per kilolitre (to 55 cents per kilolitre). As well as providing the Government with a return on a valuable resource, this initiative will assist in managing demand for water. This increase mainly reflects the introduction of the water fee. Water is a valuable resource, and prices need to encourage a more efficient use of this scarce resource. This initiative continues the Government's commitment to the Think water, act water strategy , which has a focus on reducing per capita consumption of mains water in the short term. Currently ACTEW is the only such licensee. This value represents an appropriate price for a scarce resource and is likely to achieve a more economically sustainable approach to water consumption within the Territory . No explanation or calculation of the kind earlier carried out by the IPARC or by the ICRC was provided by the ACT government to justify either the 5 cent per kilolitre increase to the WAC effective from 1 July 2005 or the further 30 cent per kilolitre water fee which was incorporated into the WAC from 1 July 2006. In particular, the last increase determined by the ACT government is not adequately explained by reference to matters listed in the "fact sheet". It appears to have been principally the result of a political decision to raise additional revenue. In April 2008 the ICRC issued a Water and Wastewater Price Review --- Final Report and Price Determination. ACTEW's urban water prices are currently the highest in Australia (and are substantially higher than in some capital cities) and at the date of this final report Stage 3 restrictions are in place. In 2007-08, larger water customers --- those using more than 300 kilolitres per annum --- are paying more than twice what they paid for water in 2004-05. Bushfires in 2003 and an unprecedented drought have imposed additional costs on ACTEW and substantially reduced supply. During these tough times the ACT community has responded well by reducing consumption but the Commission recognises that water restrictions must never be more than a short to medium term solution as the economic and social costs of restrictions are high. The current drought has focused attention on the scarcity of water and the importance of effective resource management regimes and pricing methodologies. A common theme, which appears to be emerging, is that water is under-priced, so water prices need to increase to reflect the true value of water being consumed. Related to this issue are suggestions that water pricing can be used as a demand management tool during times of water shortage. The first 25 cents per kilolitre is used to offset costs incurred by the ACT Government related to catchment management, the scarcity value of water and environmental costs such as environmental flows. The revenue received from the remaining 30 cents per kilolitre 'provides a return on a valuable resource and assists in managing demand'. Under this approach ACTEW was charged for a greater volume of water than before because approximately 9.64% of water extracted was lost in distribution. At the same time the WAC was reduced from 55 cents per kilolitre of water delivered to 51 cents per kilolitre of water extracted. The change was said to be revenue neutral. The issues in the present case may be addressed, therefore, by reference to the character of the various increases to the WAC before 1 July 2008. The Territory incurs the costs of maintaining these land corridors and easements. To reflect that cost and to compensate the Territory, a Utility Infrastructure Charge will be introduced. Net revenue from this measure is estimated at $15 million a year. In the 2006-7 Budget Papers the proposed charge on utilities was given the title of Utility Land Use Permit. The ULUP will therefore extend the revenue the Territory receives for the use of its land. The proposed ULUP was nominated as a user charge. In due course however the proposed charge was carried into effect legislatively as a tax rather than as a user charge. The UNFT is authorised by the Utilities (Network Facilities Tax) Act 2006 (ACT) ("the UNFT Act") which came into operation on 21 December 2006. When is a charge a tax? In Matthews v Chicory Marketing Board (Vic) [1938] HCA 38 ; (1938) 60 CLR 263 ( "Chicory Marketing Board" ) Latham CJ stated the characteristics of a levy which would constitute it a tax and, potentially, a duty of excise. Both the WAC and the UNFT were supported in the present case by the contention that they were payments of a kind which, like payments for services rendered, are not a tax. In Parton v Milk Board (Vic) [1949] HCA 67 ; (1949) 80 CLR 229 the majority was constituted by Rich, Dixon and Williams JJ. Rich and Williams JJ adopted (at 251) the distillation by Latham CJ in Chicory Marketing Board . It is an exaction for the purposes of expenditure out of a Treasury fund. The expenditure is by a government agency and the objects are governmental. It is not a charge for services. It was then the subject of closer attention in Air Caledonie International v The Commonwealth of Australia [1988] HCA 61 ; (1988) 165 CLR 462 ( "Air Caledonie" ). The first is that it should not be seen as providing an exhaustive definition of a tax. Thus, there is no reason in principle why a tax should not take a form other than the exaction of money or why the compulsory exaction of money under statutory powers could not be properly seen as taxation notwithstanding that it was by a non-public authority or for purposes which could not properly be described as public. The second is that, in Logan Downs Pty. Ltd. v. Queensland , Gibbs J. made explicit what was implicit in the reference by Latham C.J. to 'a payment for services rendered', namely, that the services be 'rendered to' ― or (we would add) at the direction or request of ― 'the person required' to make the payment. The third is that the negative attribute ― 'not a payment for services rendered' ― should be seen as intended to be but an example of various special types of exaction which may not be taxes even though the positive attributes mentioned by Latham C.J. are all present. Thus, a charge for the acquisition or use of property, a fee for a privilege and a fine or penalty imposed for criminal conduct or breach of statutory obligation are other examples of special types of exactions of money which are unlikely to be properly characterized as a tax notwithstanding that they exhibit those positive attributes. On the other hand, a compulsory and enforceable exaction of money by a public authority for public purposes will not necessarily be precluded from being properly seen as a tax merely because it is described as a 'fee for services'. If the person required to pay the exaction is given no choice about whether or not he acquires the services and the amount of the exaction has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be seen as a tax . One question debated was whether a compulsory exaction for the acquisition or use of property should be tested against a requirement that it should have some "discernible relationship with the value of what is acquired". It was an important part of QCC's challenge to the various increases in the WAC that they had no discernible relationship with the value of water abstracted. Equally important to the argument for ACTEW and the ACT was the proposition that any requirement that a charge not lack a discernible relationship with value does not apply to a charge for the use or acquisition of property. In Air Caledonie a charge was imposed upon passengers arriving in Australia. It was described as a "fee for immigration clearance". It was the result of a prior conclusion that no relevant services were rendered. As the amending statute which imposed the immigration clearance fee was a taxing law it could not become part of a non taxation law (the Migration Act 1958 (Cth)) and was declared invalid. A number of cases in which it was pointed out that no 'particular' service was provided, for which an exaction could be regarded as a charge or fee, were cases in which either no service at all was provided to the person required to make the payment, or there was a colourable attempt to represent that the exaction was in consideration for services. The case turned on the lack of services provided. There seems no reason in principle why an exaction justified as a charge for the acquisition or use of property might not also be revealed as truly a tax because it bore no discernible relationship with the value of what was acquired. Such a circumstance might reveal the description of the charge to be colourable or misconceived. The question is ultimately one of characterisation of the charge in question. It seems to me that no universal protection is given to a charge described as one for the use or acquisition of property any more than one described as a fee for services. A charge for the use or acquisition of property is unlikely to be a tax. So is a fee for services. Ultimately, in my view, the true test is whether the charge is appropriately characterised in accordance with the description applied to it. Misdescription will afford no protection against a claim that a particular charge is a tax, whether it is said to be a fee for services or for the use or acquisition of property. More difficult issues arise from the additional suggestion in Air Caledonie that an exaction might be a tax to the extent that it exceeds the value of something acquired without choice. There does not appear to be any case where such a potentially elusive test has actually been applied to characterise part of an exaction, but not all of it, as a tax. In principle, the same question must be examined, namely: to what extent a charge possessed of the necessary "positive" attributes of a tax is not accurately described as a charge of a different character. I cannot imagine that the High Court intended that any court required to make a judgment about the extent to which a particular exaction was a tax, or not, would do so by attempting its own assessment of the policy justification for a particular charge or by any subjective evaluation of the "value" of what was acquired. Clearly, some objective standard would be called for. The suggested criterion, even in a more flexible assessment which might not strike at the whole of a charge, of a lack of any "discernible" relationship with the value of what is acquired suggests that the matter should be beyond reasonable argument and not tested simply by reference to competing opinion or subjective assessment. The view which I take of the significance of the passage from Air Caledonie appears to me to be confirmed by Harper v Minister for Sea Fisheries [1989] HCA 47 ; (1989) 168 CLR 314 ( "Harper" ). Harper concerned the imposition by the State of Tasmania of a licence fee for taking abalone in State fishing waters which included waters within the limits of the State and the coastal waters of the State which were part of the territorial sea of Australia and also waters of the Australian fishing zone. The licence fee changed from time to time. At the time of the events which prompted the litigation the fee was $28,200 for abalone not exceeding 15 tonnes and $40,000 for abalone exceeding 15 tonnes. The licence fee was found not to be a tax and so not, as alleged, a duty of excise. The leading judgment was delivered by Brennan J. Although there had been arguments related to the existence of a public right of fishing and, in response, a contention that Tasmania was, for various reasons, the owner of the abalone attached to the sea bed in the relevant areas, they were not the arguments upon which the outcome of the case turned. In my opinion, that argument should be upheld. Accordingly, it becomes unnecessary to consider Tasmania's proprietary rights in the seabed and the arguments that the amounts paid by the plaintiff to obtain a licence are royalties charged by the Crown in right of Tasmania as the owner of the seabed or are payments for a profit à prendre in or over the seabed so owned. A limited natural resource which is otherwise available for exploitation by the public can be said truly to be public property whether or not the Crown has the radical or freehold title to the resource. A fee paid to obtain such a privilege is analogous to the price of a profit à prendre; it is a charge for the acquisition of a right akin to property. Such a fee may be distinguished from a fee exacted for a licence merely to do some act which is otherwise prohibited (for example, a fee for a licence to sell liquor) where there is no resource to which a right of access is obtained by payment of the fee. They are not duties of excise. There is no indication that, in Harper , it was contended that the payment of a licence fee had no discernible relationship with the value of the licence. Accordingly, the analysis and conclusions stated by Brennan J are not dispositive of that area of controversy in the present case. Mason CJ, Deane and Gaudron JJ expressed specific agreement with Brennan J's conclusions and general agreement with his reasons, which general agreement was subject to observations which followed. We agree with his Honour's conclusions and, subject to what is said hereunder, we are in general agreement with his reasons for them . ) and the Sea Fisheries Regulations 1962 (Tas. ) establish in relation to abalone fisheries in Tasmanian waters is not a mere device for tax collecting . Its basis lies in environmental and conservational considerations which require that exploitation, particularly commercial exploitation, of limited public natural resources be carefully monitored and legislatively curtailed if their existence is to be preserved. Under that licensing system, the general public is deprived of the right of unfettered exploitation of the Tasmanian abalone fisheries. What was formerly in the public domain is converted into the exclusive but controlled preserve of those who hold licences. The right of commercial exploitation of a public resource for personal profit has become a privilege confined to those who hold commercial licences. This privilege can be compared to a profit à prendre. In truth, however, it is an entitlement of a new kind created as part of a system for preserving a limited public natural resource in a society which is coming to recognize that, in so far as such resources are concerned, to fail to protect may destroy and to preserve the right of everyone to take what he or she will may eventually deprive that right of all content. So seen, the fee is the quid pro quo for the property which may lawfully be taken pursuant to the statutory right or privilege which a commercial licence confers upon its holder. It is not a tax . That being so, it is not a duty of excise. Most important is the fact that it is possible to discern a relationship between the amount paid and the value of the privilege conferred by the licence , namely, the right to acquire abalone for commercial purposes in specified quantities. In discerning that relationship it is significant that abalone constitute a finite but renewable resource which cannot be subjected to unrestricted commercial exploitation without endangering its continued existence . If such an exaction otherwise exhibits the characteristics of a tax it will properly be seen as such. In particular, if the exaction 'has no discernible relationship with the value of what is acquired, the circumstances may be such that the exaction is, at least to the extent that it exceeds that value, properly to be seen as a tax': Air Caledonie International v The Commonwealth . This may be so notwithstanding that the exaction is one means of ensuring the conservation of a natural resource; there are, of course, other ways in which such a resource may be protected. Clearly the line between a price paid for the right to appropriate a public natural resource and a tax upon the activity of appropriating it may often be difficult to draw. But what is otherwise a tax is not converted into something else merely because it serves the purpose of conserving a natural public resource. In particular, it would appear that they were not prepared to subscribe unreservedly to the idea that a right to appropriate a limited public natural resource might in every case suffice as the quid pro quo for whatever fee a government might impose as the price of that entitlement. Dawson, Toohey and McHugh JJ must be taken as subscribing to the view expressed by Brennan J that an exaction for the right to take a natural resource has the same character as a charge for the acquisition or appropriation of property. On that approach it might reasonably be supposed that, in their view, the requirement that there not be an absence of a discernible relationship with value is not confined to charges justified as a payment for services rendered or a fee for service. I do not read Mason CJ, Deane and Gaudron JJ as expressing a contrary view. An absence of any discernible relationship with the value of what could only be acquired by payment of a fee or other compulsory exaction might indicate that a charge, whatever its ostensible character, was "a mere device for tax collecting" even if what was acquired was akin to property. Applying the observation in Air Caledonie , that conclusion might be available with respect to so much of the charge as had no discernible relationship with the value of what was acquired. Accordingly, an exaction under colour of a charge for the use or acquisition of property may, in my view, be vulnerable to characterisation as a tax if, or to the extent that, it has no discernible relationship with the value of what is acquired. I propose to test the issues in the present case in that way. However, it is as well to emphasise two matters. The first is that, according to the authorities, no single feature of a charge is normally determinative. The second is that the test suggested by Air Caledonie was not articulated as one involving an assessment of value but whether there was no discernible relationship with the value of what was acquired. Expert evidence was first filed in the proceedings by the ACT. In due course, in final submissions, the ACT contended that all the expert evidence filed, including its own, was irrelevant. QCC substantially agreed with that contention save as to a small number of specific issues. Without intending any disrespect to the experts who made a contribution to the proceedings I agree that their opinions are not helpful in resolving the issues in the present case. I will indicate briefly why that is so. Professor Rupert Grafton is Professor of Economics and Research Director at the Crawford School of Economics and Government at the Australian National University. He was asked to express an opinion on whether there was a discernible relationship between the value of water for urban supply in the ACT and the WAC at each of the levels fixed above 10 cents per kilolitre and also whether any relevant matters had emerged post October 2003 which might bear upon that question. Professor Grafton's opinion was that the ACT could, and should, have charged more for the abstraction of water than it actually did at any relevant period in time. His approach involved a form of retrospective justification for the amounts charged. QCC responded to Professor Grafton's report with a report by Dr Stephen Beare, Principal Economist and Head of Modelling at Concept Economics. Dr Beare specialises in quantitative economic analysis. He also was asked to express an opinion on whether the WAC had a discernible relationship with the value of untreated water taken by ACTEW at the various levels above 10 cents per kilolitre. Dr Beare argued that direct charges were a highly inefficient method of constraining demand and in particular they were much less effective than water restrictions. He challenged the methodology adopted by the ICRC in 2003 of including the flow charge component of the WAC saying: "The scarcity or flow charge component of the WAC has not been determined using sound economic or accounting principles and overstates the opportunity cost to downstream users of water abstracted in the ACT. " He challenged Professor Grafton's approach. He opined that: "The manner in which environmental costs have been taken into account is fundamentally incorrect". This criticism was made of both ICRC and Professor Grafton. He also challenged the way in which the ICRC and Professor Grafton dealt with the scarcity value of water. Commencing with the components of the WAC calculated by the ICRC in 2003 Dr Beare concluded that no amount should have been included in the WAC to reflect flow costs (i.e. scarcity value or environment costs) and that in lieu of the levels of the WAC fixed by the ICRC at 20 cents per kilolitre and the ACT government at 25 cents and 55 cents per kilolitre the appropriate charge would have been 10.2 cents, 10.5 cents and 24.4 cents per kilolitre respectively. I do not see it as the function of the Court to enter this debate at all. The question of whether there is no discernible relationship between the WAC and the value of water abstracted by ACTEW, assuming that to be the test, cannot be resolved by the preference for one set of value judgments over another. What is critical to the examination of such a question is not which approach to the estimation of value is to be preferred but whether it can be said that there is an absence of any relationship between the charge and the value of the commodity or service in question. In the end Dr Beare's opinion could not sustain any proposition that there was an absence of such a relationship. At its highest it involved a debate about the justification for a remainder over the specific values which he conceded. A failure to simultaneously account for both impacts (flow or short run effects and stock or long term effects) will result in an economically inefficient outcome. The debate involved disagreement amongst economists. It moved further and further away from an examination of whether it could be said, if necessary, that the WAC, at particular levels, had no discernible relationship with the value of water. Expert evidence was also given by Professor Thomas McMahon, Professor Emeritus in the Department of Civil and Environmental Engineering at the University of Melbourne. Professor McMahon's opinion was directed to the question of whether water was scarce in the ACT at present or would be in the future. However, under climate change and reduced flows, I conclude that the natural surface flows compared to the demand will be scarce. However, under climate change, reduced flows and increased demands, I believe the balance of evidence points to the conclusion that the available water in the ACT Catchment Area will be scarce. His evidence was intended to provide, no doubt, justification for including a component in the WAC for scarcity value. His evidence, also, involved value judgments. More importantly for present purposes, it exposed the fact that any argument that the Court should enter the field of debate is an invitation to pronounce upon matters which are very far removed from the legal and constitutional issues presented by the proceedings. I am quite confident I should not succumb to any invitation to express some view about whether the ACT government, or the ICRC, should attribute a scarcity value to water in the public interest. The expert evidence may, in my view, be put aside in its entirety. The question of its relevance was reserved, during the proceedings, for later consideration. It may now be said, in my view, as the ACT contended, to be not relevant. QCC and the ACT appeared agreed that the ACT was also entitled to sell the water if it wished to do so, but the precise character of the interest which the ACT has in the water is, nevertheless, a matter of some complexity. Mr Robertson SC, appearing for ACTEW, referred me to a judgment of the Supreme Court of the Australian Capital Territory in Environment Protection Authority v Rashleigh [2005] ACTCA 42 (" Rashleigh" ). In Rashleigh the ACT Court of Appeal was concerned with rights to take ground water below a property and the extent to which they had been limited by a statutory requirement to secure a licence. Flowing water is only of public right in the sense that it is public or common to all who have a right of access to it . Water rights are riparian rights. They have been applied in England in innumerable cases to determine and define rights and obligations in relation to streams along the banks of which men have been settled for centuries, using the waters and enjoying the benefits of their flow. The conditions of settlement, of climate and of geography in which this body of customary law developed are very different from those prevailing in many parts of Australia. And this is to be borne in mind when particular decisions of English courts are brought forward as analogies. But it is beyond doubt that these rules are a part, and an important part, of the common law that Australia has inherited: e.g. Dunn v. Collins . He cannot either deprive those lower down the stream of its flow nor pen it back upon the lands of his neighbour higher up. These rights and obligations do not depend on prescription or grant. They are proprietary in character, natural incidents of the ownership or lawful possession of the land abutting on the stream: Mason v. Hill; Wood v. Waud; Chasemore v. Richards, per Lord Wensleydale. They do not depend upon the ownership of the bed of the stream, but of its banks: Lord v. Commissioners of Sydney; Lyon v Fishmongers Co., per Lord Selborne. They are thus called riparian rights. It is unnecessary to multiply references to cases in which these rules of the common law have been enunciated and followed in Australia. It is enough to refer to H. Jones & Co. Pty. Ltd. v. Kingborough Corporation , in this Court, and especially to the judgment of Fullagar J. Generally speaking the owner of land through which an artificial watercourse runs may block or divert it at his will, unless some easement over it has been acquired by grant or prescription. It depends upon statute. The effect of statutes which interfere with, or modify the exercise of, riparian rights has been considered by the High Court on a number of occasions. The rights thereby granted have been variously described, including as proprietary rights and exclusive rights (see e.g. H Jones & Co Pty Ltd v Kingborough Corporation [1950] HCA 11 ; (1950) 82 CLR 282 per Dixon J at 320, 328). For the attainment of that object it was not necessary to destroy anybody's rights, but it was necessary to give to the Crown, or to some statutory authority, overriding rights to which private rights must, if need arise, give way. The resource is vested in it. It has the exclusive right to the use and control of the water. It may exercise "full dominion" over it. Nevertheless, it does not sell the water to ACTEW. Rather, it authorises ACTEW to take it upon payment of various fees and charges, including the WAC. Although the various charges made for that right, which include licence fees and water supply costs, as well as the WAC, may not be readily described either as charges for the use or acquisition of property or as fees for services rendered, the interest which the ACT has in water in the Australian Capital Territory, and in the Googong Dam Area, is more direct than the interest and role of the Tasmanian government which was considered in Harper . If the WAC, therefore, is not a mere device for tax collecting (or to the extent that it is not) it will not be appropriately characterised as a tax. There were three such increases: the increase by the ICRC from 10 cents to 20 cents per kilolitre, of which approximately 2 cents was related to a recovery from the January 2003 bushfires; the increase from 20 cents to 25 cents; and the imposition of a new "water fee" of 30 cents, taking the WAC to 55 cents per kilolitre. QCC argued that the ACT and ACTEW bore the onus of showing that the WAC was not a tax at its various levels above 10 cents per kilolitre. In my view questions of onus do not arise, but if they did the onus would lie on QCC to provide a persuasive reason to go behind the explanations advanced from time to time for the various increases in the WAC, as well as to make good a case that the increases bore no discernible relationship with the value of water abstracted. In accordance with the observations in Air Caledonie I am prepared to accept that it is open to QCC to argue that each of the increases was a tax rather than a charge of some other character on the basis that, to the extent of the increase at least, the charge had no discernible relationship with the value of what was acquired by ACTEW. At its inception the WAC was a charge recommended by an independent body to reflect actual or imputed costs of various kinds, either direct or more general, including environmental costs. It was intended, amongst other things, to send a signal to consumers about the value of water. There was no contention in the present case that, at its original level of 10 cents per kilolitre, it was a tax. There are a number of immediate difficulties with any attack on the first increase to 20 cents per kilolitre or its attempted characterisation as a tax. First, although it was the result initially of a political decision it received the effective endorsement of the ICRC after an independent examination. Secondly, there remained an obvious link to costs and value, variously identified and calculated. The original 10 cents per kilolitre charge included flow costs of 8.5 cents (scarcity value and environmental costs). When the increase to 20 cents was endorsed, flow costs had only risen to 9.5 cents per kilolitre while catchment management costs, upon which no attack is made in the proceedings, had risen from 1.5 cents to 8.2 cents per kilolitre. The balance of approximately 2 cents per kilolitre, although initially explained as a temporary adjustment to water supply costs arising from the January 2003 bushfires, is readily accommodated by the explanation of the ICRC that there might be ongoing elevated water supply costs. Those matters make it impossible to conclude that, either as an increase or as part of a total charge, the additional 10 cents per kilolitre lacked any discernible relationship with value. I emphasise that I am not referring to, or making any judgment about, the factors identified as elements of the WAC at either of those times or their relative or calculated values. The present task concerns characterisation rather than justification. A challenge to the increase from 20 cents to 25 cents per kilolitre does not succeed either. Although it was originally announced in the 2003-04 Budget Papers as a further increase to take effect in 2005-06 it is clear that both the increase to 20 cents per kilolitre and the foreshadowed 5 cents further increase were related by the ACT government to "the full economic cost of obtaining water". In its October 2003 report the ICRC referred to the fact that the 20 cents per kilolitre charge which it endorsed might be increased because of additional appropriations "for catchment management in the government's 2004-05 budget". In its April 2008 Review the ICRC identified the first 25 cents of the WAC as a charge "to offset costs incurred by the ACT Government related to catchment management, the scarcity value of water and environmental costs such as environmental flows. " In the circumstances, in my view, it is not open to conclude that the further increase of 5 cents per kilolitre, or any part of the WAC up to a level of 25 cents per kilolitre had no discernible relationship with value, however value is measured. Different considerations apply to the increase in the WAC by 30 cents per kilolitre from 1 July 2006. The increase was not recommended, or later endorsed, by the ICRC. It was the result of a political decision to charge an additional "water fee". It was plainly designed to raise revenue. A purpose of raising revenue does not necessarily stamp a charge as a tax (see Airservices Australia at [91]). Many charges are designed to raise revenue, even if they also serve the purpose of recovering costs or realising value. However an objective to raise revenue is one of the indicia suggesting that a particular exaction may be a tax, rather than a charge of some other kind. The ACT and ACTEW argued that the charge was not compulsory in the sense necessary to identify it as a tax because ACTEW was not under any obligation to supply its customers from water under the control of the ACT and thereby incur the WAC. In my view such an approach is unrealistic. At the time the 30 cents water fee was imposed there simply was no practical alternative supply of water available to ACTEW. Nor is there now. Any speculation about alternative sources of supply was about remote, costly, future possibilities, not present realities. As a matter of practice and commercial reality, to the extent necessary to meet the demands of its customers, including QCC, ACTEW must take water under the control of the ACT in quantities determined by the consumption of those to whom it, directly or indirectly, supplies water and pay the WAC upon such abstractions. Although consumers are under no compulsion to maintain any particular level of water use, their day to day needs are in fact met from water under the control of the ACT. Any other possibility is merely theoretical for reasons which include the fact that ACTEW is subject to control by the ACT. On its face, therefore, the 30 cents per kilolitre water fee possesses the positive characteristics of a tax. The principal argument put by ACTEW and the ACT was that, as a charge for the acquisition and use of property, or something akin to property, no occasion arose to consider whether the charge had any discernible relationship with value. It was argued that any such enquiry was misplaced and unnecessary. However, I have already indicated that there seems no reason in principle why a charge described or justified in that fashion should be shielded from the requirement that it not be imposed in the absence of a discernible relationship with the value of what is acquired because the absence of such a relationship might indicate that any explanation given for it was colourable or misconceived. Accordingly, some further examination of that question is appropriate, although it is not without its complexities. In Airservices Australia McHugh J (at [292]-[298]) referred to a shift in emphasis, when determining whether a fee for services is a tax, from cost or expenses to value. Unless this shift had been made, it would have been difficult, if not impossible, to describe the charge in Harper v Minister for Sea Fisheries as a fee for services. In that case, the formula for determining the licensing fee was explicitly related to the market value of abalone taken in the previous licence period and there was no attempt to relate the amount of the licence fee to the cost of administering the licensing scheme. Thus, the expenses incurred in providing, or the costs of providing, a service are simply one criterion of the relationship. In Harper v Minister for Sea Fisheries , on the other hand, market value, as promulgated by declaration in the Gazette by the Director of the relevant government department, was the relevant criterion for determining whether the payment was for the benefit acquired. Nor, unlike Harper , may it be assessed by reference to its value to an immediate chargee. The WAC is not a charge intended to be borne by ACTEW. ACTEW operates, figuratively and literally, as a conduit. ACTEW's abstraction costs are passed on to its customers. The 30 cents water fee was, in addition, only imposed on water taken for urban water supply. It was intended to be, and was, passed on to domestic consumers specifically. The intended, and actual, effect was that it was, ultimately, an impost on households. It is hard to see the water fee as a charge having, in this context, any relationship to the value of water to ACTEW. Any concept of value, applied in this fashion at least, must be considered in its application to end users. One available view is, therefore, that the 30 cents water fee was just a device to impose a charge upon ultimate consumers. Moreover, unlike Harper , the 30 cents water fee was not imposed only on those who sought a privilege to exploit a natural resource which had been withdrawn from the public generally. The 30 cents water fee was a universal and unavoidable one in three senses. First it was imposed on the only licensee, ACTEW, and ultimately on all households in the ACT and Queanbeyan. Secondly, water should be regarded as so basic in Australian society that consumers have no real choice but to use it in some form or other, even if they have some control over their consumption. Thirdly, ACTEW has no real control over the volume of water which it abstracts, which is determined by the demands of its customers. On the other hand, water is a commodity. Apart from other uses it may be consumed in its potable form. ACTEW is in the business of supplying water. It pays to abstract it and charges for its supply. Clearly, therefore, water has some value in its own right. One justification advanced for the 30 cents water fee was, in effect, that it tapped into unrealised value. In other words, ACTEW had been taking and supplying water, and consumers were paying for it, at either less than market value or, possibly, less than the market would bear. As earlier indicated, by April 2008 water prices in the ACT were, the ICRC found, the highest in Australia and substantially higher than in some capital cities. That is the case also for the residents of Queanbeyan. Use of monopoly power to raise the cost of supply of a basic and essential commodity in order to raise revenue is unappealing, particularly in circumstances of strict water restrictions which, in any event, are intended to curtail or discourage unnecessary consumption. However, use of a monopoly position to impose high water charges on residents of the Australian Capital Territory and Queanbeyan raises political and policy questions rather than legal ones. The ACT is not confined to acting only on the advice of the ICRC as that body itself recognises. Questions of fairness do not enter the debate and neither do differences of opinion or competing economic models. The value of water is not necessarily to be measured only in terms of the cost to the ACT government, or to the environment, of making it available. There seems no reason why the ACT may not realise the underlying value of a commodity vested in it. For that reason alone, I do not think that it is open to conclude that the additional charge had no discernible relationship with the value of water which ACTEW is permitted to abstract, even though the charge is ultimately passed on directly to its customers. The second element justifying the 30 cents water fee was the stated broader policy objective of assisting in the management of demand for water. Such an objective appears to fall within the views expressed by Mason CJ, Deane and Gummow JJ in Harper . It is not inconsistent with the views expressed by Brennan J. It does not attract the reservation expressed by Dawson, Toohey and McHugh JJ unless, first, it is a charge exhibiting the characteristics of a tax. Again, I do not think that the justification for a charge directed to this end is examinable on policy grounds. It would be necessary to be satisfied that the charge was, in truth, a device to collect a tax, whether or not some collateral justification for it was, at the same time, advanced. There is nothing on the face of the explanation given to suggest that it ought not be accepted as genuine. There is nothing improbable about the proposition that price increases might serve the purpose of encouraging a moderation in demand. Even if they did not, a higher price might be seen as a justified response to immoderate demand. Given the extent of the control vested in the ACT over the use and abstraction of water, and the undeniable public purpose in water conservation, whatever may have been the revenue raising objective of imposing the water fee of 30 cents per kilolitre, it may not be said, in my view, that the 30 cents per kilolitre water fee has no discernible relationship with the value of what is acquired, even though those who ultimately pay the charge are end-users. Accordingly, whether the ACT may charge for water as a commodity over which it may exercise "full dominion" or whether it is the custodian of a limited natural public resource I see no legal basis for denying to it the legal and practical authority to realise an economic value of the water if it chooses to do so or to attempt to impose a fiscal discipline on its ultimate use. If the WAC, or any part of it, was a tax then there is no doubt it would be a duty of excise because, necessarily, it would be a tax on a step in the production and distribution of potable water intended to be, and actually, passed on to customers and consumers. However, in my view it is not a tax. It is therefore not a duty of excise. Is the UNFT a tax? The UNFT Act describes itself in various ways as a tax law and the UNFT as a tax. The UNFT Act has the following long title: "An Act to Impose a Tax on Owners of Utility Network Facilities, and for Other Purposes" . As a tax law, this Act is subject to provisions of the Taxation Administration Act 1999 about the administration and enforcement of tax laws generally. However, although the note to s 1 of the UNFT Act may not be regarded as part of the Act itself it is clear from s 4 that it may be regarded as explanatory and, accordingly, used to assist in the resolution of any ambiguity. The purpose of the amendment is to include the Utilities (Network Facilities) Tax Act 2006 as a tax law. This is one of the revenue measures that will enable us to continue to deliver the important services the community expects and demands. As the Assembly is aware, the government has embarked on a comprehensive program to cut costs across the public sector, but we also need to raise sufficient revenues. After consulting with utility companies, the government has decided to use its existing taxation infrastructure to collect the new charge on network facilities. This is because the charge can be applied far more simply this way, with less administrative burden for the utilities, rather than through a more complex permit system. In particular, it will remove the burden on utilities of separately identifying and measuring their networks on unleased land. In raising the revenue necessary to support important public services for the community, the bill recognises that utility companies derive considerable benefits from being able to run their networks within the ACT. This charge will be applied equally to all utilities and will not discriminate between government and privately owned utilities. I commend the Utilities (Network Facilities Tax) Bill 2006 to the Assembly. There seems no doubt that the UNFT has the positive attributes identified in Air Caledonie which give a charge the character of a tax. It is compulsory, for public purposes, and enforceable by law. The ACT and ACTEW contended, however, that the UNFT is not a tax because it is properly to be seen as a charge for the use or occupation of land. There are a number of difficulties with that contention. First, there is the fact that the UNFT was described as a tax and is administered as a tax. Furthermore, the charge applies to all land in the ACT excluding only land identified by s 6 of the UNFT Act which is already the subject, "in relation to the use of the land for the utility network", of a lease, a licence granted by the ACT or a right prescribed by regulation. National land, under the control of the Commonwealth, is not excluded from the calculation of the charge even though the ACT may have no control over its use or occupation. Moreover, ACTEW's right to operate the water network to which the charge applies does not depend on the UNFT Act. The UNFT Act simply requires registration of a person who is the owner of a network facility on land in the ACT. The owner of a network facility must lodge a return each year stating the length of each network facility. Tax is then assessed by the Commissioner of Taxation under the Taxation Administration Act 1999 (ACT). ACTEW's right to operate its network facility is not granted by the UNFT Act but by the Utilities Act . The Utilities Act separately, and independently of any registration under the UNFT Act, requires ACTEW to hold a licence to operate a water network (s 21). ACTEW must pay to the ICRC an annual licence fee which is determined by the ICRC (ss 44, 45). The ICRC may revoke a licence if the annual licence fee is not paid (s 42(2)). It is clear, therefore, that continuation of a valid licence and, accordingly, the right to operate the water utility, depends on the Utilities Act rather than on the UNFT Act. Nevertheless ACTEW and the ACT drew attention to a requirement stated by s 25(2) of the Utilities Act , that a licensee comply with "a requirement under any other law in force in the Territory that applies to the utility in relation to the provision of a utility service". It was argued that was sufficient to activate the power in the ICRC to revoke a licence if ACTEW was convicted of two or more offences against the Utilities Act and the offences involved a contravention of one or more licence conditions. It was suggested that a failure to comply with the UNFT Act might, accordingly, jeopardise ACTEW's right to operate the water network, thus providing the necessary linkage between the UNFT and a right to operate. In my view the argument should not be accepted. Section 47 of the Utilities Act provides that a utility must not without reasonable excuse contravene a condition of its licence and that it commits a separate offence for each day during which the contravention continues without reasonable excuse. Assuming, for the purpose of considering the contention of ACTEW and the ACT, that the combination of: a requirement to comply with laws, other than the Utilities Act , as a condition of a licence; the designation of contravention of a condition of the licence as an offence; and the power in the ICRC to revoke a licence for conviction of two or more offences, may be taken into account, nevertheless the connection is insufficiently made between the obligations imposed by the UNFT Act and the possibility of licence revocation. That is so for a number of reasons. First, contravention of a licence condition is a daily offence. Revocation of a licence is only available at the instance of the ICRC for conviction of two or more offences, other than daily offences. Secondly, it cannot be assumed that a prosecution would be brought under the Utilities Act in circumstances where recovery of the UNFT is available directly under the Taxation Administration Act . Thirdly, it cannot be assumed that the ICRC would revoke a licence acting as agent for the taxation authorities. For these various reasons it seems to me clear that the UNFT ought not be regarded as a charge for use or occupation of land because there is no necessary consequence relating to use or occupation of land which would flow from a failure to pay it. Two further arguments should also be referred to. The ACT referred to the judgment of Wilcox J in Telstra Corporation Ltd v Hurstville City Council [2000] FCA 1887 ; (2000) 105 FCR 322 in support of the proposition that the UNFT was not a tax. In that judgment Wilcox J considered the character of rates or charges imposed upon Telstra and Optus by local councils under s 611 of the Local Government Act 1993 (NSW) and Pt 8 of the Local Government Act 1989 (Vic). It was accepted by the Victorian respondents in that case that the charges under the Victorian Act were taxes. A similar concession was not made by the New South Wales respondents. The charges under s 611 of the New South Wales Act were to be annual charges "to be based on the nature and extent of the benefit enjoyed by the person concerned. " Wilcox J preferred the view that the charges were not taxes. Such charges are not of the same character as UNFT in the present case. Moreover, the conclusion was not necessary for the resolution of the issue with which Wilcox J was dealing. His Honour concluded that electrical impulses were not goods within the meaning of s 90 of the Constitution . It was upon that conclusion that his decision, that neither the charges under the Victorian Act or the New South Wales Act were duties of excise, really depended. The ACT also argued that the UNFT was akin to land tax and for that reason not a duty of excise. It relied on Mutual Pools & Staff Pty Ltd v Federal Commissioner of Taxation [1992] HCA 4 ; (1992) 173 CLR 450 at 454, 468. That case dealt with an attempt to deem swimming pools constructed in situ to be goods so that they might be taxed under the same legislation as imposed a tax on manufactured goods. Section 55 of the Constitution required a law imposing a duty of excise not to deal with other forms of taxation. The tax on swimming pools constructed in situ was found to be a tax on land and not a tax on goods. Accordingly it was not validly included in the legislation. The decision does not conclude the position in the present case. In my view, in substance the UNFT is not a tax upon land but a tax on a step in the distribution of water. In my view the UNFT is what the UNFT Act declares it to be, what the note to s 1 of the UNFT Act explains it to be and what Mr Stanhope described it as. It is a tax. The next question, therefore, is whether it is a duty of excise. But the judicial formulation of the nature of a duty of excise within the meaning of the Constitution has progressed over the intervening years. It has now, however, in my opinion, received definitive exposition by this Court, and, however much other views might have been possible at an earlier stage, it ought now to be taken as settled that the essence of a duty of excise is that it is a tax upon the taking of a step in a process of bringing goods into existence or to a consumable state, or of passing them down the line which reaches from the earliest stage in production to the point of receipt by the consumer . The 'indirectness' of the tax, its immediate entry into the cost of the goods, the proximity of the transaction it taxes to the manufacture or production or movement of the goods into consumption, the form and content of the legislation imposing the tax --- all these are included in the relevant considerations. But in the end what must be decided is that the tax is in substance a tax upon the relevant step . That being the central question in a controversy as to the nature of the tax, it will not, in my opinion, necessarily be resolved by the form of the tax or by identifying what according to that form the legislature has made the criterion of its imposition, however important in any particular case those matters may be. But the decision in that case has never been doubted, and it has never been doubted that the term 'duties of excise' in s. 90 of the Constitution does not include many classes of impost which in England have been commonly described by that name. If an exaction is to be classed as a duty of excise, it must, of course, be a tax. Its essential distinguishing feature is that it is a tax imposed "upon" or "in respect of" or "in relation to" goods. It would perhaps be going too far to say that it is an essential element of a duty of excise that it should be an "indirect" tax. But a duty of excise will generally be an indirect tax , and, if a tax appears on its face to possess that character it will generally be because it is a tax upon goods rather than a tax upon persons. ' ... a direct tax is one that is demanded from the very person who it is desired and intended should pay it. An indirect tax is one which is demanded from one person in the expectation and with the intention that he shall indemnify himself at the expense of another' . Duties of excise are inland taxes in contradistinction from duties of customs which are taxes on the importation of goods. Both are taxes on goods, that is to say, they are taxes on some step taken in dealing with goods. So long as a State tax, albeit calculated on the value or quantity of goods sold, was properly to be characterised as a mere licence fee this Court upheld the legislative power of the States to impose it. But once a State tax imposed on the seller of goods and calculated on the value or quantity of goods sold cannot be characterised as a mere licence fee, the application of s 90 must result in a declaration of its invalidity. It emphasises the necessity, as their Honours said elsewhere, to have regard to the substance and practical operation of a law as well as its terms. This important principle has particular significance for the UNFT. The principal foundation for the argument that the UNFT, if a tax, is nevertheless not a duty of excise was that it was not a charge levied on goods but upon persons, namely the owner of a network facility. However, in accordance with the authorities, and as emphasised in Ha , attention is required to the substantive effect of the charge. A definition which makes quantity and value the only basis of taxation which would satisfy the notion of 'excise' has no foundation either in history, economic or fiscal principle, nor in any accepted specialization. The basal conception of an excise in the primary sense which the framers of the Constitution are regarded as having adopted is a tax directly affecting commodities . 90 to evasion by easy subterfuges and the adoption of unreal distinctions. To be an excise the tax must be levied 'upon goods,' but those apparently simple words permit of much flexibility in application . The tax must bear a close relation to the production or manufacture, the sale or the consumption of goods and must be of such a nature as to affect them as the subjects of manufacture or production or as articles of commerce. But if the substantial effect is to impose a levy in respect of the commodity the fact that the basis of assessment is not strictly that of quantity or value will not prevent the tax falling within the description, duties of excise . It was common ground that the fee was not a fee for services rendered but was a tax. The issue was whether it was a duty of excise. By an amendment to the relevant legislation the legislature identified particular pipelines as "trunk pipelines". It did so by reference to pipeline licence numbers and without identifying the pipelines or their owners. Trunk pipelines were to be charged an operation fee of $10 million in the relevant financial year. Other pipelines were charged a maximum of $40 for each kilometre of pipeline. The $10 million charge applied only to three pipelines. It applied only to pipelines carrying hydrocarbons from the Bass Strait oil and gas field and it applied to every such pipeline, there being only three in existence. The fee is not an exaction imposed in respect of the plaintiffs' business generally; it is an exaction of such magnitude imposed in respect of a step in production in such circumstances that it is explicable only on the footing that it is imposed in virtue of the quantity and value of the hydrocarbons produced from the Bass Strait fields. To levy a tax on the operation of the pipelines is a convenient means of taxing what they convey for they are the only practicable method of conveying the hydrocarbons to the next processing point. Like Dixon J in Chicory Marketing Board his Honour thought such a possibility insufficient to deny the tax its character as a duty of excise. And that is so whether or not the tax is calculated upon the quantity or value of the goods produced, manufactured or distributed. In its most obvious form, it is a tax which is imposed upon either the general process of manufacture or production of goods or upon the taking of a particular step in such manufacture or production and which is calculated by reference to the quantity or value of goods manufactured or produced. It is, however, established by the cases that a tax on goods which is imposed at a point which is either preliminary or subsequent to actual manufacture or production, including a step in the acquisition of raw materials and a step in the distribution of the finished product, may be a duty of excise. It is also established that a tax may be a duty of excise notwithstanding that it is not calculated by reference to the quantity or value of the goods manufactured or produced. The only water network to which the charge applies is that operated by ACTEW pursuant to licences held by it under the Utilities Act . The UNFT applies to network facilities other than those concerned with water, as operated by ACTEW. There is no evidence before me concerning those other network facilities. My task in the present proceedings is only to decide whether the UNFT imposed on ACTEW is a duty of excise. That task only requires attention to the character of the charge imposed upon ACTEW. A conclusion about that matter is neither dictated by, nor dictates, the character of the charge on any other network facility (see Western Australia v Chamberlain Industries Pty Limited [1970] HCA 5 ; (1970) 121 CLR 1 per Barwick CJ at 15). Although, in form, the UNFT is charged to the owner of a network facility the charge is in fact converted into a charge to customers and consumers. In the case of QCC it was identified separately in accounts provided by ACTEW. As the network facility is the means by which water is carried, first for treatment and then, as potable water, distributed to customers, I think it right to regard the UNFT as a tax on a step in the production, sale and distribution of goods. That conclusion, it seems to me, accords with the requirement to pay regard to the practical operation of the UNFT Act, as well as its terms, and with the approach taken by the High Court in Chicory Marketing Board and Hematite of acknowledging the inevitable operation of the charge as an indirect tax on consumers. Accordingly the UNFT is a duty of excise. To the extent that the UNFT Act authorises it, that Act is invalid. However, I should indicate that if I had found that the WAC was, to any extent, invalidly imposed upon ACTEW, I would have ordered that any amounts passed through under the pricing agreements be refunded. QCC contended, and I agree, that the imposition of the WAC pursuant to earlier pricing agreements was expressly conditioned upon the legal premise that ACTEW was required to pay the WAC to the ACT. Failure of that premise would in my view have left the pricing agreements, to that extent, devoid of the consideration which sustained them. The authorities referred to by Deane J, in his discussion of the common law count for money had and received in Muschinski v Dodds , show that the concept embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared. It would have been the position that ACTEW had not been under a legal obligation to pay the charge. Any fetter upon its ability to recover any amounts paid to the ACT would not be to the point, as between ACTEW and QCC. I do not accept a submission by ACTEW that QCC would have been statute barred from seeking recovery. Under the Limitation Act 1985 (ACT) there is a general limitation period of six years in which to commence legal proceedings. In the case of a "revenue amount", proceedings must be commenced within six months. It was a contractual payment. In my view there would have been no limitation upon QCC's right of recovery. As I have rejected the argument that the WAC was invalidly imposed it is not necessary to consider a claim for the WAC made on some other basis although it follows from my earlier conclusions concerning the claim for a refund that I would not have upheld the claim for unpaid amounts of the WAC if it was invalidly imposed on ACTEW. ACTEW anticipated that it would not be disputed that, if the WAC was valid, it would be payable under the pricing agreements. I will allow the matter to rest at present on that assumption without a further order. This issue may be revisited if necessary. As to the UNFT, ACTEW accepted that if the UNFT was found to be a duty of excise there would be no basis for a claim that it be paid nevertheless. I will make no formal order dealing with the cross-claim at present but will allow the parties an opportunity to consider what order is necessary in light of the findings above. I will hear the parties, if necessary, on whether any further or consequential relief is necessary or desirable to give effect to these reasons for judgment. I will hear the parties if any application is made for costs. I certify that the preceding one hundred and seventy-four (174) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | duties of excise whether the act invalidly imposed duties of excise on a statutory corporation whether a fee imposed on infrastructure constitutes a duty of excise. whether a charge to abstract water is a tax and, accordingly, a duty of excise whether a charge imposed to conserve a natural public resource is a tax whether a charge should have a discernible relationship with the value of what is being acquired. control by government of scarce natural resources whether a charge to abstract water is a mere device for tax collecting. constitutional law taxation energy and resources |
HID is a wholly owned subsidiary of ASSA ABLOY, a Swedish corporation specialising in door opening security technology. Keycorp is a corporation registered in New South Wales. In or about 19 July 2008 William Edward West III ('Mr West'), the Chief Financial Officer of HID, became aware through a third party namely Mr John Dukellis of Dukellis Capital Advisory, that Keycorp was intending to dispose of its business including its smartcard business. HID wished to acquire only that portion of Keycorp's undertaking. However, Mr West was informed that Keycorp had already entered into an exclusivity arrangement with a prospective purchaser for the whole of the business. Shortly thereafter Mr Dukellis informed Mr West that Keycorp was nevertheless prepared to entertain offers for the purchase of its entire business. Since HID was keen to acquire such business in order to secure the smartcard operations, it was prepared to enter negotiations for the whole of Keycorp's undertaking. Accordingly, Mr West instructed Mr Dukellis to enter negotiations. On 1 August 2008 Mr Dukellis reported to HID that he had discussions with Mr Ken Carr, the Chief Executive Officer ('CEO') of Keycorp. Mr Dukellis was informed by email dated 1 August 2008 from Mr Carr that Keycorp did not wish to proceed with any negotiations. However, Mr Dukellis thereafter had a conversation with Mr West in which Mr West was informed that Mr Carr had told Mr Dukellis that the exclusivity arrangement with the prospective purchaser had lapsed due to some failure by the bidding party to perform, and that in consequence Keycorp was free to discuss the sale of only the smartcard business even though Keycorp was continuing its discussions with the original bidder. On 2 August 2008 a letter was sent by email to Mr Robert Bishop, the Chairman of Keycorp, attaching an expression of interest by HID to purchase the smartcard business for the sum of $33,500,000, subject to conditions. On or about 4 August 2008 Mr West travelled to Sydney accompanied by Mr Dukellis and Mr Tim Moxon, HID's Mergers & Acquisitions Director. On 5 August 2008 they attended a lunch at a Sydney restaurant with Mr Ken Carr and Ms Melissa Letford, Keycorp's general counsel ('the lunch meeting'). Mr West has deposed that in such meeting he raised with Mr Carr the subject of the exclusivity arrangement which had been referred to in the email from Keycorp dated 1 August 2008. I don't want to start doing due diligence and developing a bid if Keycorp is still required to give another party exclusivity. We are free to do a deal with you, provided you can put together terms acceptable to us. The only issues in the way of doing a deal with HID are timing, price and certainty of terms. HID engaged solicitors and accountants for this purpose and such consultants were provided access to Keycorp's due diligence data room on 7 August 2008. Due diligence commenced on that day. In the ensuing two weeks HID and its legal advisors engaged in negotiations with Keycorp concerning the terms of a possible sale agreement for the sale of the smartcard business. On 18 August 2008 Mr Moxon forwarded to Ms Letford a draft letter offering to purchase the business for $31,500,000. On 19 August 2008 Mr West had a telephone conference with Mr Moxon, HID's solicitors, Mr Carr and Ms Letford, during which Mr Carr referred to various issues which were still to be addressed. The proposed consideration of $31,500,000 remained unchanged. On 21 August 2008 HID forwarded to Mr Bishop a binding letter of offer for the sum of $31,000,000 for the purchase of the smartcard business. No response was received to such letter and accordingly on 22 August 2008 a further letter was forwarded to Mr Bishop relating to such offer. However, on 25 August 2008 Keycorp issued an announcement through the Australian Stock Exchange that it had entered into an agreement with an unnamed party for the sale of its smartcard business in the amount of $25,300,000. The successful purchaser was an entity known as Gemalto. HID seeks to claim its costs and expenses of undertaking such due diligence; damages representing the loss of opportunity to purchase Keycorp's smart card business; and the loss of a chance to obtain the financial benefits that might have accrued to it over time arising from the ownership of the smartcard business. HID has also foreshadowed a possible claim under the principles of promissory estoppel. HID seeks limited discovery of Keycorp's records to determine whether in fact its belief that Keycorp has engaged in conduct proscribed by the Trade Practices Act is justified. It submits that its belief that it may have a cause of action against Keycorp is justified in view of the fact that the offer made by Gemalto which was ultimately accepted by Keycorp for its business was $25,300,000, namely $5,700,000 less than that offered by HID. HID submits that the only commercially reasonable explanation for Keycorp accepting the lower offer was that Keycorp was still bound, or believed there was a real risk it was still bound, by the exclusivity agreement with Gemalto. Mr West was extensively cross-examined, especially in relation to his recollection of the conversation with Mr Carr said to have taken place at the lunch meeting. It was put to Mr West that the allegation that the exclusivity arrangement had been terminated was inconsistent with all relevant documentation. It was further put to Mr West that he had failed to mention in his affidavit that he had received a letter from Keycorp dated 4 August 2008. This is particularly so given we are well down the path of negotiations with another party and have given that party exclusivity, subject to a narrow fiduciary out. Keycorp relies upon the fact that any reimbursement of costs and expenses for conducting the due diligence and negotiations was the subject of specific provisions in the letter from HID to Keycorp of 2 August 2008, the draft offer of 19 August 2008, the revised draft offer of 20 August 2008 and the offer of 21 August 2008. In such letters it was made plain that such costs would be reimbursed by Keycorp only if the draft offer by HID was accepted. Accordingly, Keycorp submits that HID pursued a course knowing that it risked incurring its own costs if it were the unsuccessful bidder. Keycorp relies upon its letter of 4 August 2008 to HID which confirmed that it had an exclusivity arrangement with the other potential purchaser and its conduct in repeatedly rejecting the draft offers made by HID was wholly consistent with its stated attitude towards HID's offers. Keycorp submits that HID was aware at all times that it was at risk of being the unsuccessful bidder for the smartcard business as both HID and Keycorp were clearly in the stage of preliminary negotiations. Keycorp submits that despite the early stage of negotiations, HID was attempting to secure exclusivity for itself in the knowledge that an exclusivity arrangement with Gemalto had already been entered into. For the above reasons, it is submitted that the Court should not accept Mr West's statement that the exclusivity arrangements had lapsed. In ascertaining whether there is reasonable cause to believe that the necessary elements exist for a cause of action, the Court must determine that there is at least a reasonable cause 'to believe that each of the elements of the relevant cause of action might be established' : see Middleton J in Dartberg Pty Limited v Wealthcare Financial Planning Pty Ltd and Another [2007] FCA 1216 ; (2007) 164 FCR 450 at [44] . Such test is objective. There is no requirement that every element of the potential cause of action in fact exists but rather that there may be entitlement to relief: see Hooper Hooper and Others v Kirella Pty Ltd; Transfield Pty Ltd v Airservices Australia [1999] FCA 1584 ; (1999) 96 FCR 1 at [39] ; Malouf v Malouf [1999] FCA 710 at [16] ; Quanta Software International Pty Ltd v Computer Management Services Pty Ltd (2000) 175 ALR 536 at [24]; Alphapharm Pty Ltd v Eli Lilly Australia Pty Ltd [1996] FCA 391 ; St George Bank Ltd v Rabo Australia Ltd and Another [2004] FCA 1360 ; (2004) 211 ALR 147 at [26] ; Leighton Contractors Pty Ltd v Page Kirkland Management Pty Ltd [2006] FCA 288 at [5] . The foreshadowed cause of action under the Trade Practices Act is largely predicated upon the alleged conversation which took place during the lunch meeting in which Mr Carr is said to have stated that exclusivity in relation to the potential purchaser no longer existed. The Court has taken into consideration the fact that such conversation is challenged and that such statement is inconsistent with the documentation and with Keycorp's refusal to accept any of the offers for the purchase by HID of Keycorp's smartcard business. However, there is some evidence to suggest that Keycorp may have been willing to negotiate with HID. The draft letter, having indicated that negotiations were 'well down the path' with the other party which had exclusivity, then invited HID to undertake a week of due diligence. Within a further 5 business days, you must confirm your price, the amount of the hold back and the period of such hold back. That price must be final, with the only variation being in the nature of ordinary working capital adjustments as at Closing. Given the stage of our existing negotiations, we would only consider an offer that included a non refundable deposit of 10% of the proposed purchase price, to ensure that we are not disadvantaged over and above our present strategy. Further, we would expect a settlement date of 30 th August 2008. The draft letter was apparently intended to be relied upon, otherwise it is not possible to determine any reason for it being sent by Keycorp to HID. The evidence of Mr West also establishes that in the two weeks following 5 August 2008, meetings were held between the legal advisors of HID and Keycorp concerning the terms of a possible share sale agreement relating to the smartcard business. The Court has considered the claim by Keycorp that there is no evidence of reliance by HID upon any statement, assuming it were made at the lunch meeting by Mr Carr that exclusivity had terminated. Against such submission, the Court notes the evidence of Mr West that it was only after the assurance was provided by Mr Carr that exclusivity no longer existed that HID directed its accountants and lawyers to undertake due diligence. Taking into account the above maters, the Court concludes that there is reasonable cause to believe that HID may have the right to obtain relief from Keycorp pursuant to s 52 of the Trade Practices Act . Have all reasonable enquiries been made? Keycorp submits that HID knew on 22 July 2008 of the exclusivity arrangement between Keycorp and Gemalto and that such became obvious from a press release published on 1 September 2008. It submits that HID should have made inquiries of Gemalto to ascertain whether it had any exclusive arrangements with Keycorp. Accordingly, Keycorp submits that HID has failed to make 'all reasonable inquiries' as referred to in O 15A r 6(b) of the Rules. Keycorp submits that a letter of HID's solicitors dated 27 August 2008 notified Keycorp of HID's anticipated claim under the Trade Practices Act , and that no qualification or doubt existed concerning HID's intention. Reliance is also placed upon the statements by Mr West in his affidavit to the effect that representations by Keycorp were misleading and deceptive. Based upon the facts, Keycorp submits that no basis exists for preliminary discovery. Keycorp submits that the inference can be drawn from such statements that HID was able to make a decision whether to commence proceedings against Keycorp. The necessity to make enquiries from other sources was considered by Tamberlin J in CGU Insurance Ltd and Others v Malaysia International Shipping Corporation Berhad [2001] FCA 1223 ; (2001) 187 ALR 279 at [23] - [27] . It appears to contemplate a reasonable exhaustion of alternative sources of information and, in any particular case, involves a pragmatic balancing of considerations. The power of the Court arises after the applicant has made all reasonable inquiries and finds that there is insufficient information to enable a decision to be made. However, the question is whether it is reasonable to expect that HID would, prior to commencing litigation, inquire of Gemalto whether it held an exclusivity arrangement. That is, whether it was reasonable to expect that it would ask its competitor to provide information which relates solely to a commercial transaction made between Gemalto and Keycorp, in respect of which HID was an unsuccessful bidder. The Court is not persuaded that it was reasonable for HID, a commercial competitor of Gemalto, to have made such inquiries of Gemalto concerning the existence of any exclusivity arrangement between Gemalto and Keycorp. Therefore, such an inquiry was not necessary to satisfy the first requirement of O 15A r 6(b), namely that HID make 'all reasonable inquiries . ' The Court considers that any confidence exhibited by HID in its pre-trial correspondence relating to the likelihood of initiating proceedings against Keycorp is not relevant to the issue to be determined under O 15A r 6(b). The only issue is whether, having made all reasonable inquiries, HID does not possess sufficient information to institute proceedings. Such purpose would be contrary to the purpose of O 15A r 6 of the Rules. Further, Keycorp submits that HID has not justified any basis upon which it is necessary for each of the categories of documents to be discovered to enable it to assist in making a decision to commence proceedings for relief under the Trade Practices Act . In Matrix Film Investment One Pty Ltd v Alameda Films LLC [2006] FCA 591 at [14] Tamberlin J referred to the principle that 'O 15A r 6 is to be beneficially construed and given the fullest scope that its language will reasonably allow, with the proper brake on any excesses lying in the discretion of the Court in the light of the specific circumstances' . However at [19] his Honour referred to the necessity for an applicant for preliminary discovery to show 'more than a mere assertion that there is a case against a prospective respondent' . If an exclusivity agreement in writing between Keycorp and Gemalto exists, it may contain details concerning the date or events causing its expiry. Accordingly, the existence of any such agreement would be a significant matter to HID in its determination of whether it should commence the foreshadowed litigation. Further, any correspondence between Keycorp and Gemalto which might indicate that Keycorp treats the exclusivity agreement to be at an end could also be of significance for such purpose. Any written memorandum or record, for example of a telephone conversation, between Keycorp and Gemalto relating to the termination of such exclusivity agreement in the relevant period, namely between 4 August 2008 and 25 August 2008, would serve the same purpose. The Court does not regard the claim for preliminary discovery as being one designed to strengthen or enhance the decision to commence proceedings. No such decision has yet been made, although HID has grounds for believing that it may be entitled to make a claim under the Trade Practices Act and possibly under promissory estoppel. The documents are sought for the purpose of providing sufficient information to enable a decision whether to make a claim. In this respect, any documents of the kind referred to in subparagraph 1(d) of the Application could be relevant. The Court is satisfied that HID does not have sufficient information to institute proceedings. The present circumstances are accordingly different to those considered by Lindgren J in Alphafarm . For the above reasons, the Court grants the application for preliminary discovery, in respect of the documents referred to in paragraphs 1(a), (b), (c) and (d) of the application. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | preliminary discovery whether all reasonable inquiries have been made whether the applicant had sufficiency of information practice and procedure |
The Official Trustee in Bankruptcy became trustee of Mr Hudson's estate ('the Estate') pursuant to s 160 of the Bankruptcy Act 1966 (Cth) ('the Act'). In November 2001, Mr Pascoe was appointed trustee ('the Trustee') of the Estate pursuant to s 157 of the Act. The Trustee seeks leave of the Court to distribute the sum of $56,617.50, received by him as trustee of Mr Hudson's property. Those moneys are presently held by the Trustee pursuant to an order made by a Judge of this Court, after the moneys were transmitted from New Zealand under circumstances which I do not need to address, that the moneys be held by the Trustee until further order. The FMC application, broadly, concerned the question of whether Mr Pascoe was validly appointed as Trustee of the Estate and whether the procedures subsequently adopted by him by which he objected to the discharge of Mr Hudson from bankruptcy were effective. On 10 August 2007 Wilson FM determined in Hudson v The Official Trustee & Ors [2007] FMCA 1357 that the Trustee was validly appointed and that the procedure by which he objected to the discharge of Mr Hudson from bankruptcy was effective. Subsequently Wilson FM dismissed the remaining matters in Mr Hudson's application, those orders being made on 17 August 2007. 4 The Trustee has established service of this application, effected on 10 November 2006. On none of the occasions when this matter has been before me has Mr Hudson appeared, despite service by the Trustee of letters informing him of each date on which this matter was next to be before the Court. As outlined in an affidavit of service of Melanie Cavanough sworn 2 July 2007, Mr Hudson was notified that the matter was to be heard today. The matter was called outside the Court and there was no appearance. 5 On 28 August 2007 a fax was received in my Chambers containing a notice of appeal from the decision of Wilson FM. The fax was not accompanied by any other documentation. In particular, there was no application for any stay of these proceedings pending the hearing of that appeal. Mr Pascoe presses to have the matter determined today. Apart from the number of times that the matter has already been before the Court, Ms Nash, who appears for Mr Pascoe, points to the remuneration and costs that have been incurred by the Trustee to date, which are well in excess of the amount available for distribution. Ms Nash also points to one of the proposed payments, namely, payment to the former wife and only creditor of Mr Hudson in the sum of $5,130.00. The evidence is that those moneys are due to Mrs Hudson as part of a settlement on her divorce from Mr Hudson, by reason of a miscalculation when the amount due was translated from New Zealand dollars to Australian dollars. 6 The affidavit of the Trustee sets out in some detail the matters supporting the proof of debt of Mrs Hudson and also the details of the costs and disbursements and remuneration due to the Trustee as part of the administration of the bankruptcy. There does not seem to be any dispute that the sum is owing to Mrs Hudson. From the reasons of Wilson FM, it does not seem that there was any dispute raised before him and, indeed, there is none that has been raised before me, as to the quantum of costs and disbursements due to the Trustee. 7 Bearing in mind the costs that have been incurred to date, the fact that on no occasion has Mr Hudson chosen to appear, his apparent failure to respond to any of the letters sent to him by the solicitors for the Trustee and the delay that has been occasioned in the administration of the Estate to date, it is appropriate to proceed today. 8 The Trustee has filed detailed evidence establishing the basis for the proposed payments and the quantum of those payments. I am satisfied that the Trustee has established the basis for the amounts proposed to be distributed and that it is appropriate to pay those amounts out of the Estate. The total amount proposed to be paid is less than the moneys held by the Trustee. The Act governs the way in which the moneys held by the Trustee should be applied. I order that the moneys presently held by the Trustee be released to the Trustee and that the Trustee have leave to distribute the sum of $56,617.50 received by him in accordance with the Act. 9 As the notice of appeal has been filed from the decision of Wilson FM and as it is by no means clear that Mr Hudson intends or has intended to apply for a stay, I will stay the order releasing the moneys to the Trustee for a period of 14 days. I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | leave to distribute money received by the trustee of the property of the bankrupt bankruptcy |
At that time Mr Charlie had a substantial criminal record both as that expression is commonly understood and as it is defined by s 501(7) of the Migration Act . 2 Mr Charlie has applied to this Court for declaratory and other relief in respect of the purported decision of the Minister on the ground that the purported decision was of no legal effect because Mr Charlie is and always has been an Australian citizen. He claims to have acquired Australian citizenship by birth pursuant to s 10 of the Australian Citizenship Act 1948 (Cth) ("the Citizenship Act") and to have maintained Australian citizenship to this day. 3 Mr Charlie was born in Daru Island, Papua on 6 October 1973. At that time Papua was administered by Australia as a possession of the Crown and as part of an administrative union known as the Territory of Papua and New Guinea. However, Papua maintained its separate identity as an external territory. 4 In April 1975 Mr Charlie, who was then approximately 18 months old, moved with his mother and two siblings to Darnley Island to join his father and take up residence there. 5 Darnley Island is situated approximately 92 miles in a north-easterly direction from the tip of Cape York Peninsula. It has at all material times been part of the State of Queensland. It is accessible by small boat from Daru Island. 6 On 16 September 1975 Papua New Guinea became an independent sovereign State. That date will hereafter be referred to as "Independence Day". 9 Nonetheless, under the Migration Act a person born in Papua after the commencement of the Citizenship Act required an entry permit to be entitled to enter or reside in any of the States or internal territories ( Re Minister for Immigration and Multicultural Affairs; Ex parte Ame [2005] HCA 36 ; (2005) 222 CLR 439 at [1] ). This was because Papua, as an external Territory, was not part of "Australia" for the purposes of the Migration Act ( Minister for Immigration and Multicultural Affairs v Walsh [2002] FCAFC 205 ; (2002) 125 FCR 31 at [15] - [21] cited with approval in Ex parte Ame at [1]). 10 The Papua New Guinea Independence Act 1975 (Cth) recited that "on 16 September 1975 Papua New Guinea is to become an independent sovereign state by the name of the Independent State of Papua New Guinea, having a constitution established, adopted and given to themselves by the people of Papua New Guinea acting through their Constituent Assembly". This Act provided by s 4 that on the expiration of the day preceding Independence Day Australia would cease to have any sovereignty, sovereign rights or rights of administration in respect of any part of Papua New Guinea. 12 Part IV of the PNG Constitution is headed "Citizenship". DUAL CITIZENSHIP. As a consequence, in 1980 a retrospective provision was enacted to re-confer Australian citizenship on such persons. Darnley Island is a Torres Strait Island within the meaning of the TSI Act. Section 4 of the TSI Act operates to deem Darnley Island to have been reserved for Islanders under that Act (see the Order in Council dated 14 November 1912 made pursuant to The Land Act of 1910 (Qld) relevantly continued in force by The Torres Strait Islanders Act 1939 (Qld) and the Aborigines' and Torres Strait Islanders' Affairs Act 1965 (Qld)). 17 Section 17 of the TSI Act makes it an offence for a person to be on a reserve unless entitled under that Act so to be. Section 19 authorises Island Councils to grant permits granting entitlements to be on reserves. He contends that the purported decision of 6 August 2007 was therefore of no effect because he does not need a visa to reside lawfully in Australia. 19 Mr Charlie's claim to be an Australian citizen is advanced on two bases. First, that he had become absorbed into the Darnley Island community, and thus into the Australian community, prior to Independence Day. He argued that he thus has a right to permanent residence in Australia because he could not, as at Independence Day, have been deported from Darnley Island under the Migration Act as he was no longer an "immigrant". Secondly, Mr Charlie submitted that, as at Independence Day, he was a person who had a right of permanent resident in Australia within the meaning of s 65(4)(a) of the PNG Constitution because, as a member of his family unit, he had the permission of the Darnley Island Council to reside on Darnley Island. He was then approximately 18 months old having been born in Papua on 6 October 1973. Mr Charlie's father ("Mr Charlie Snr") had apparently arrived on the island some months earlier to undertake work as a labourer for the Darnley Island Council. However, Mr Charlie Snr's affidavit evidence, which I accept, was that he and his wife moved permanently to Darnley Island only in April 1975. Mr Charlie's case on absorption is thus that he became absorbed into the Australian community within six months of his family's taking up residence on Darnley Island; that is, before he obtained the age of two years. 22 The notion of membership of a community with a concomitant right to live in that community was discussed by members of the High Court in Potter v Minahan [1908] HCA 63 ; (1908) 7 CLR 277. That case concerned the right of the illegitimate son of a Victorian woman to return to Australia from China. His original home was in Victoria but he had been taken at the age of 5 years to China by his father. Although he remained in China for 26 years he was found by a majority of the High Court never to have abandoned his original home. From this it follows that every person becomes at birth a member of the community into which he is born, and is entitled to remain in it until excluded by some competent authority. It follows also that every human being (unless outlawed) is a member of some community, and is entitled to regard the part of the earth occupied by that community as a place to which he may resort when he thinks fit. ... At birth he is, in general, entitled to remain in the place where he is born. ... If his parents are then domiciled in some other place, he perhaps acquires a right to go to and remain in that place. But, until the right to remain in or return to his place of birth is lost, it must continue, and he is entitled to regard himself as a member of the community which occupies that place. These principles are self-evident, and do not need the support of authority. [ie the Immigration Restriction Act 1901 (Cth)] To prevent the entry into Australia of persons from other countries whom the Legislature has determined ought not for various reasons to be permitted to become members of the Australian community. ... That being so, the foundation in law of the respondent's case is the unimpeachable proposition that a person cannot be an immigrant into the country which is his home. The ultimate fact to be reached as a test whether a given person is an immigrant or not is whether he is or is not at that time a constituent part of the community known as the Australian people. The entry into the Commonwealth of a person who at the moment of entering is already one of the people of Australia could hardly be described as an immigration into the Commonwealth; it would in truth be the return of an Australian to his homeland. ... Whether any given person is one of the people of Australia is necessarily a question of fact. 27 The notion that a person might become one of the people of Australia by absorption into the Australian community seems first to have been discussed by the High Court in Ex parte Walsh and Johnson; In re Yates [1925] HCA 53 ; (1925) 37 CLR 36. He may, so to speak, grow out of the condition of being an immigrant, and thus become exempt from the operation of the immigration power. 28 Whether the view expressed by Knox CJ in Ex parte Walsh and Johnson remained the position in 1975 in respect of a person who had entered Australia after the Migration Act came into operation seems to me to be open to doubt. Parliament clearly has authority to legislate with respect to both elements and laws which control those elements can be made under s 51(xxvii). It can say who may enter and it can say on what terms if at all a person so entering may become a member of the Australian community. In the Act Parliament has exercised these powers. It is there provided quite unequivocally that a person who is not already a member of the Australian community may not enter Australia except in pursuance of an entry permit. See definition of "immigrant" s 5(1) ss 5(2), 6(2). If he has no permit and enters Australia he is a prohibited immigrant. It scarce needs saying that a prohibited immigrant may not by any means become a member of the Australian community whilst he is a prohibited immigrant. By the very description he is not a person having any title to remain in the country. ... But as I have indicated it is otherwise under the Act [ie the Migration Act 1958 (Cth)]. Consequently, many of the statements to be found in reasons for judgment given in cases decided by this Court under the provisions of the former Act have little, if any, relevance to situations which arise under this Act. 30 However, as no reliance was placed in argument on The Queen v Forbes or on Mr Charlie's status under the Migration Act at the time of his arrival on Darnley Island , I will not consider this issue further. 31 The question of the absorption of a child into the Australian community was considered by the Full Court in Moore v Minister for Immigration and Citizenship (2007) 161 FCR 236. It is important to bear in mind also that it is a metaphor used in aid of the resolution of a question of constitutional fact, namely whether the person to whom it is applied has ceased to be an immigrant. The metaphor must not obscure the primary question. The time that has elapsed since the person's entry into Australia. The existence and timing of the formation of an intention to settle permanently in Australia. The number and duration of absences. Family or other close personal ties in Australia. The presence of family members in Australia or the commitment of family members to come to Australia to join the person. Employment history. Economic ties including property ownership. Contribution to, and participation in, community activities. Any criminal record. Rather, it illustrates the multi-dimensional character of the judgment involved. It is also necessary in making that judgment to avoid narrow mono-cultural assumptions about what constitutes membership of the Australian community. This may not always make the judgment an easy one -- see generally D Wood, "Deportation, The Immigration Power and Absorption into the Australian Community" (1986) 16 Fed Law Rev 288. If (say) a boy entered Australia with his parents and his siblings, as an immigrant, when only one month old, different considerations would apply to deciding the question of his absorption than those which would apply if (say) a boy entered Australia as an immigrant with his parents and siblings when he was already 17 years of age. ... Absorption, to be complete, will invariably require the passage of a considerable period of time. 33 It may be assumed that the contrast that the Full Court drew in Moore between a one month old boy and a boy of 17 years of age was between (a) an infant entirely dependent on his parents and incapable of forming an intention of his own to make a home in Australia, and (b) an adolescent approaching adulthood who might well have adopted the Australian way of life for himself and formed an intention to remain part of the Australian community. 34 As mentioned above, as at Independence Day Mr Charlie was less than two years old. During the proceeding six months he would have been entirely dependent on other family members, and in particular his parents. He would have been, by reason of immaturity, incapable of forming an intention of his own of making a home on Darnley Island as opposed to in Papua. I conclude that the question of whether he had been absorbed into the Darnley Island community prior to Independence Day is to be determined by reference to whether his parents had by that time been absorbed into that community. 35 Nothing in the authorities seems to me to provide any support for a contention that Mr Charlie's parents could have become absorbed into the Darnley Island community in the short period of time between April and September 1975. It is to be remembered that a consequence of absorption into the Darnley Island community would probably have been loss of membership of the family's former Papuan community. 36 As noted above, the Full Court in Moore referred to a "considerable period of time" being invariably required for absorption. Their Honours' view finds support in Ex parte Walsh and Johnson where Knox CJ spoke of a person growing out of the condition of being an immigrant "in course of time and by force of circumstances" (see [27] above). It seems to me that the period of approximately five months between the arrival of the infant Mr Charlie on Darnley Island and Independence Day was not a "considerable period of time" within the meaning of that expression as used in Moore. Their Honours, in my view, plainly envisaged a period of some years as being required for absorption. The period of approximately five months was, I conclude, plainly insufficient for Mr Charlie, together with his family unit, to have become part of the Australian community by absorption. 37 In the circumstances it is unnecessary for me to determine whether absorption into the Darnley Island community in 1975 is to be equated with absorption into the Australian community at that time as discussed in the above authorities. 38 Mr Charlie's contention that he is, and has at all material times been, an Australian citizen because he was absorbed into the Australian community prior to Independence Day fails. 40 Mr Charlie argued that the evidence established that, as at Independence Day, he had been granted a right to permanent residence on Darnley island by the Darnley Island Council. On this basis he submitted that, as at Independence Day, he had a right to permanent residence in Australia. He accepted, however, that his asserted right of permanent residence was limited to Darnley Island; he did not contend that, as at Independence Day, he had a right of permanent residence on mainland Australia. 41 The relevance of Mr Charlie's asserted right to permanent residence in Australia as at Independence Day derives from s 64 and s 65 of the PNG Constitution . As noted above, these provisions reflect the recommendations of the PNG Constitutional Planning Committee Report 1974 against dual citizenship (see [11] above). The special provisions made by the PNG Constitution concerning persons under the age of 19 years, which explain reg 2 of the Papua New Guinea Independence (Australian Citizenship of Young Persons) Regulations (Cth), may for present purposes be ignored because Mr Charlie did not at any time renounce his purported Australian citizenship (see s 64(2) of the PNG Constitution ). 42 It is accepted that Mr Charlie was born in Papua before Independence Day and has two grand-parents who were born in Papua. Section 65(1) of the PNG Constitution would thus have rendered him a citizen of Papua New Guinea as at Independence Day unless he had "a right (whether revocable or not) to permanent resident in Australia" (see s 65(4)). 43 For the purposes of the PNG Constitution a person who had "a right (whether revocable or not) to permanent residence in Australia" was a person who had "real foreign citizenship" within the meaning of s 64. A person did not have "real foreign citizenship" within the meaning of s 64 unless he or she had been "granted a right (whether revocable or not) to permanent residence in Australia" (s 64(4)(b)). 44 Notwithstanding that s 64(4) constitutes, in effect, a negative definition of "real foreign citizenship", I find it difficult to accept that "the people of Papua New Guinea acting through their Constituent Assembly" (see [10] above) would have described a person with a right to permanent residence on Darnley Island, but no right of entry to any part of "Australia" as defined by the Migration Act , as a person with "real" citizenship of Australia. It concerns the meaning of words in an instrument of nationhood and government, dealing with a practical issue affecting the membership of the new Independent State. When the framers of the Papua New Guinea Constitution referred to persons who had a right to permanent residence in Australia, part of the contextual background in which that reference was made was an Australian immigration law which, according to its terms, and as it was administered, denied people such as the applicant a right to permanent residence in Australia in the absence of a specific grant. That background explains the terms of s 64(4). ... A right of permanent residence (in practice, a right to re-enter Australia free of the constraints of s 6) could be acquired by a person who was granted a permanent entry permit (s 15). ... The [Migration] Act applied, and was administered on the basis that it applied, to persons entering mainland Australia from external Territories. ... ...The right to permanent residence referred to in s 65(4)(a) is the same as the right referred to in s 64(4)(b), that is to say, the right which a small number of Papuans had received by grant, not a right which all Papuans had by virtue of birth in the Territory of Papua at a time when it was an external Territory of Australia. It provided, consistently with the PNG Constitution 's rejection in principle of dual citizenship, that a person who immediately before Independence Day was an Australian citizen and who became a citizen of Papua New Guinea on that day ceased on that day to be an Australian citizen. Subject to the retrospective, but for practical purposes, temporary, operation of the Papua New Guinea Independence (Australian Citizenship of Young Persons) Regulations (Cth), the effect of reg 4 of the Papua New Guinea Independence (Australian Citizenship) Regulations (Cth) was to deprive Mr Charlie of his Australian citizenship (see [15] above). 48 The contention that, as at Independence Day, Mr Charlie was a person who had a right of permanent residence in Australia within the meaning of s 65(4)(a) because he had the permission of the Darnley Island Council to reside on Darnley Island fails. 49 The above conclusion renders it unnecessary to determine whether Mr Charlie and his family were, for a period of time after his arrival on Darnley Island in 1975, prohibited immigrants within the meaning of the Migration Act as then in force. Even if it can be assumed that they were prohibited immigrants, and therefore technically subject to removal, it is clear that the Commonwealth did not at that time seek to implement the relevant provisions of the Migration Act in respect of persons residing on Darnley Island. 50 It would appear that at the time that Mr Charlie and his family came to Darnley Island only Queensland sought to control who was present on the island. It did so in the way outlined in [17] above. Any formal approval granted by the Darnley Island Council to Mr Charlie and his family to live on Darnley Island could only have been granted pursuant to the TSI Act. No such approval could have affected the operation of the Migration Act (s 109 of the Constitution ). 52 I note, however, that it is accepted that Mr Charlie has lived in Australia since he was approximately 18 months old. Immediately before the decision presently under review, his membership of the Australian community was reflected in his holding an absorbed person visa. 53 It appears that Mr Charlie has no present links to Papua New Guinea. He claims that since first arriving in Australia as a baby he has only visited Papua New Guinea once. That visit was for a single week when he was 7 years old. He also claims not to speak the language of Papua New Guinea and not to know personally anybody who lives in Papua New Guinea. He accepts that he may have an uncle who lives in Papua New Guinea. 54 While the power of the Minister to cancel Mr Charlie's absorbed person visa has been upheld, there has, of course, been no merits review of the decision to exercise the power. I am not aware of whether the present Minister has had the opportunity to consider the policy implications of removing a person in Mr Charlie's position and of his character to Papua New Guinea. In the circumstances I suggest that, should this matter not already have been brought to the attention of the present Minister, it would be appropriate for steps to be taken to do so before Mr Charlie is removed from Australia. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. | visas process by which a child is absorbed purported cancellation of absorbed person visa on character grounds whether at all times visa holder an australian citizen whether right of permanent residence by reason of absorption into australian community at date of png independence australian citizenship birth in papua papua new guinea independence citizen of papua new guinea cessation of australian citizenship judicial review decision of the minister personally immigration citizenship administrative law |
The Applicant appeared before this Court on the hearing of the Application represented by Counsel. The facts centrally relevant to the Application are within a limited compass. The Applicant is a citizen of the People's Republic of China. He arrived in Australia on 4 September 2000 and applied for a protection visa based upon a fear of persecution in China because of his practice of Falun Gong and participation in demonstrations. The application was rejected by a delegate of the Minister on 18 October 2000 and an application for review by the Refugee Review Tribunal was unsuccessful. The Tribunal's decision was handed down on 26 July 2001. On 22 June 2007 an application was filed in the Federal Magistrates Court. That section permits the Tribunal to make a decision where an applicant " does not appear before the Tribunal ". In this regard, it should be noted that the Tribunal's decision was sent to the applicant under cover of a letter dated 26 July 2001 and these proceedings were not commenced until 22 June 2007. In his evidence to the Court the applicant conceded that he had received the Tribunal's decision two to three months after the date which had been scheduled for the Tribunal's hearing (1 March 2001). The applicant also agreed that he had received the decision and its covering letter from the Tribunal. He said that he did read the covering letter but not fully, did not fully understand it and was upset and puzzled. He said that he did not discuss the letter with his agent even though the agent had rung him to say that he too had received a copy of the letter advising of the Tribunal's decision. The applicant said that he did not ask his agent what to do next in relation to his visa status. This is not a case where the applicant's delay in bringing proceedings is measured in months. It is a delay which is measured in years. The explanation advanced by the applicant for his delay in bringing the proceedings is not credible and I reject it. In his evidence the applicant said that it was through hard work and trying to find information and encouragement from a friend that he became aware of his right to appeal. No explanation was advanced as to why this process matured into an application to this Court only in 2007. Moreover, such evidence is not consistent with the applicant's knowledge that he was denied his hearing before the Tribunal. He knew that he had been invited to appear but had, in fact, been denied the opportunity of so doing. The fact that he did not do so requires an explanation more compelling than that he did not know that he had a right of appeal. He has put nothing before the Court to explain why he did not act on this knowledge. The first was sworn on 12 December 2008 and the second was sworn on 29 January 2009. The Affidavit upon which reliance was ultimately placed at the hearing was one sworn by the Applicant on 4 February 2009. The Respondent relied upon an Affidavit of the instructing solicitor sworn on 6 February 2009. Objection was taken to both Affidavits --- but both were admitted subject to the objections taken as to relevance. At the outset of the hearing on 6 February 2009, the deficiency in the factual account as set forth in the February Affidavit was explored with Counsel for the Applicant --- that deficiency being that it really set forth no explanation for the entirety of the delay as between January and December 2008. The opportunity was extended to the Applicant to adjourn the proceeding and to file further affidavit evidence and evidence in admissible form. The course ultimately embraced by Counsel for the Applicant, however, was to lead on that date further oral evidence from the Applicant. The Applicant was cross-examined. An extension of time may be granted where an applicant can establish " special reasons ": Federal Court Rules 1979 (Cth) O 52 r 15(2). The discretion to extend time is given for the purpose of enabling the Court to do justice between the parties: WAAD v Minister for Immigration and Multicultural Affairs [2002] FCAFC 399 at [7] ; Applicant S1138 of 2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1052 at [11] ; SZKJV v Minister for Immigration and Citizenship [2008] FCA 831 at [10] . An applicant, it has been said, must advance a reason to take " the case out of the ordinary ": Jess v Scott (1986) 12 FCR 187 at 195. The rule confers " a flexible discretionary power ": (1986) 12 FCR 187 at 195. Even where " special reasons " can be established, the Court thus retains a discretion to grant or refuse the extension sought: Kordatos v Sweeney [2004] FCA 1487 at [17] per Cooper J. So much is apparent from the terms of r 15(2) itself --- "... the Court or a Judge for special reasons may at any time... ". Of relevance to the exercise of the discretion, but never conclusive, is the fact that many applicants seeking to challenge adverse decisions made under the Migration Act 1958 (Cth) are not fluent in English and frequently are not represented by legal advisers: cf Vranic v Chief Executive Officer, Centrelink [2004] FCA 1511. And when represented by (for example) counsel appearing on a pro bono basis, the Court is considerably benefited: SZKJV v Minister for Immigration and Citizenship [2008] FCA 831 at [13] to [14]. Also of relevance, but again not conclusive, may be the financial circumstances confronting an applicant: cf QAAH v Minister for Immigration Multicultural and Indigenous Affairs [2004] FCAFC 9 at [7] ; SZKDC v Minister for Immigration and Citizenship [2008] FCA 164 at [12] . The present Application for an extension of time should be dismissed for either of two reasons. First, had the Applicant wished to appeal from the decision of the Federal Magistrate, any such Notice of Appeal should have been filed in January 2008. The Application seeking an extension of time was not filed until 12 December 2008. Not surprisingly, that was not the Affidavit relied upon at the hearing. The Affidavit as ultimately relied upon seeks to remedy this deficiency. The Affidavit as sworn in February 2009 advances an account as to the present Applicant approaching the Registry of this Court in January 2008. Some errors in the documents then sought to be filed were corrected and his attention was then directed by an officer within the Registry as to the requirement of a filing fee. He informed the Registry officer that he could not afford to pay the fee and inquiries were then made as to his circumstances. He maintains that he was reluctant to answer these inquiries because he did not want to expose his friends who were supporting him to " a heavy fine resulting from financing an illegal and would be too much for them to bear ". Those inquiries, on his account, were directed to his capacity to pay the filing fee and to how he was otherwise surviving on a day-to-day basis if he were impecunious. After the events which are said to have occurred in January 2008, the Applicant's Affidavit does not set forth any event prior to April 2008 when he was detained at the Villawood Immigration Detention Centre. He continues to maintain that there has been a failure on the part of the Registry of this Court to " properly assess " his situation and a failure in a " duty of care ". At the outset, it was contended on behalf of the Applicant that he " simply didn't know that having been refused the ability to file that he could then go back and seek review of that in the Federal Court and seek an extension of time ". What was intended to be conveyed by " having been refused the ability to file " his appeal was then explored. Counsel on behalf of the Applicant accepted that he would not go so far as to contend that the Applicant had been " prevented " from filing his appeal --- but the facts upon which any submission was to be advanced remained far from clear. An opportunity was thus extended to the Applicant to adjourn the proceeding so that a further affidavit could be filed more fully setting forth those facts which constituted the " refusal ". No adjournment was sought and Counsel for the Applicant proceeded to call further oral evidence from the Applicant. Such oral evidence as was then adduced did not travel much beyond what had been previously set forth in the Affidavit relied upon. Indeed, much of the oral evidence in chief was only remotely responsive to any question asked of the Applicant by his Counsel. All inquiries made of the Applicant when he attended the Registry seem relevant to the exercise of the discretion to waive compliance with the filing fee otherwise required: Federal Court of Australia Regulations 2004 (Cth) Reg 11(1). That Regulation provides that "... a fee is not payable if it is a fee to which clause 1 of Schedule 3 applies ". The further oral evidence also sought to supplement the deficiency in the affidavit evidence as to an explanation for the entirety of the delay as between January and December 2008. The Applicant's oral evidence was that after January 2008 he did not discuss the prospects of further pursuing any avenue of appeal in this Court until November 2008. He did discuss the prospects of seeking Ministerial intervention in April and June 2008 --- but, on his account, not the prospect of further invoking the jurisdiction of this Court. Cross-examination of the Applicant sought to establish ( inter alia ) that the Applicant deliberately refrained from invoking this Court's jurisdiction until after the Applicant had knowledge that the Minister was not going to intervene. Notwithstanding the calling of further oral evidence, there remains an absence of any real explanation for the whole of the delay. Any discretion, it is considered, should be exercised against the Applicant. Any explanation which is put forward as an explanation for delay must set forth an explanation for the entirety of the delay; an explanation for only part of the delay may normally be regarded as insufficient: QAAH v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCAFC 9 at [7] ; SZKSM v Minister for Immigration and Citizenship [2008] FCA 632 at [20] ; SZGND v Minister for Immigration and Citizenship [2008] FCA 680 at [22] . There must be an explanation " for the whole of the delay ": SZKTN v Minister for Immigration and Citizenship [2008] FCA 633 at [19] . In the exercise of this discretion, some Judges have embraced the proposition that "... in the case of asylum seekers, this court will be circumspect about being too rigorous in applying the normal principles of judicial review in relation to delay because the court appreciates that to refuse an application for [permission] to apply for judicial review solely on the grounds of delay may have very grave consequences for the asylum seeker ": R v Secretary of State for the Home Department; Ex parte Ahmad [1999] Imm AR 356 at 357 per Lord Woolf MR. These observations have been applied by Finkelstein J in Applicants M160/2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 195 at [5] , [2005] FCA 195 ; 85 ALD 532 at 535. And in some circumstances, the Full Court has observed that in refugee cases leave to appeal out of time will " ordinarily " be granted: N1202/01A v Minister for Immigration and Multicultural Affairs [2002] FCA 403, 68 ALD 21. It may be concluded, therefore that in those circumstances "special reasons" have been demonstrated and given that the Minister will not be prejudiced if leave is granted, leave to appeal out of time, ordinarily, would be granted. In those cases where applicants are bona fide seeking asylum, it may well be that the gravity of the circumstances they confront may be a very real reason for granting the extension sought. The observations of the Full Court, it is considered, should not be understood as denying the discretion conferred by O 52 r 15(2) or indicating that any particular exercise of discretion should proceed otherwise than upon the basis of all of the relevant facts presented in any individual application. Those observations of the Full Court must also be understood to have been made in the context where there was an explanation for the entirety of the period for which the extension was there sought and where that extension was for a period far shorter than in the present proceeding. However the Application may be approached, there remains no acceptable explanation for the delay that has occurred as between January and December 2008. A mistaken belief on the part of the Applicant that the events in January 2008 foreclosed further access to this Court cannot --- in the present circumstances ---be considered " special reasons ". Even on the account most favourable to the Applicant there is thus no acceptable explanation for the delay that has in fact occurred. There is, however, reason to question that account. Notwithstanding his evidence to the contrary, it is considered highly unlikely that he did not discuss his ability to again approach this Court with either a refugee advocate or a solicitor with whom he had made contact in mid-2008. On his account, a refugee advocate visited the Villawood Detention Centre and introduced him to a solicitor. But the solicitor, on his account, did not say " anything in relation to the court proceedings " and only advised him about writing to the Minister. His evidence is not accepted. It is considered that the Applicant, when giving evidence, was astute in only providing those answers he knew to be favourable to his case. Another instance of his providing only such evidence arose when asked as to how he came to " find about lodging the appeal in this Court ". The immediate answer was not directed to how he came to find out about his ability to approach the Court; the answer was directed to when he came to find out. And that answer was " the end of October ". But that answer was immediately corrected to " around November last year ". It is equally incredible that the Applicant on his account never spoke to any of the other persons detained at the Villawood Detention Centre who spoke his language. On his account " I didn't mention my case to anybody ". This rejection of his evidence only further undermines the Applicant's case that an explanation has been provided for the whole of the delay. It is considered that he did in fact have knowledge that he could approach this Court by at least mid-2008, but deliberately refrained from approaching the Court until he was advised that his request for Ministerial intervention was unsuccessful. The second reason for refusing an extension of time is that it is not considered that any appeal would have sufficient prospects of success to warrant the discretion being exercised favourably to the Applicant. Subject to one reservation, there is no discernible error in the manner in which the Federal Magistrate exercised his discretion. His Honour considered the evidence then before him. The Applicant was cross-examined. Some of the evidence given was characterised by the Federal Magistrate as " not credible ". His Honour proceeded to exercise his discretion upon the basis of the entirety of the evidence and in full knowledge of his earlier conclusion that there had been jurisdictional error on the part of the Tribunal. Although others may well have exercised the discretion differently on the evidence then available, the exercise of discretion to decline relief was a course open to His Honour. But the reservation, it must be accepted, is of importance. The Federal Magistrate acted upon a concession made by the Applicant that he had received a copy of the Tribunal's decision " two to three months after the date which had been scheduled for the Tribunal's hearing (1 March 2001) ". But " the Tribunal's decision was sent to the applicant under cover of a letter dated 26 July 2001 ". The difficulty of conceding receipt of a letter before it was sent is apparent. A fundamental mistake as to the facts may bring an applicant within House v The King [1936] HCA 40 ; (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ. But the reservation, it is considered, should not prevail. The Federal Magistrate had the benefit of the Applicant giving oral evidence and his conclusions were conclusions based upon the entirety of the evidence, including his assessment as to the Applicant's credibility. It may also be queried whether the finding of the Federal Magistrate as to when the Applicant became aware of the Tribunal's decision does indeed expose error. The words employed by the Magistrate suggest error --- but the contradictory findings are made within the one paragraph of his reasons. It is most likely that the error simply exposes an error in transcription rather than such a fundamental misunderstanding as to the facts as now sought to be attributed to him by the Applicant. To further support the contention that the Federal Magistrate's decision is attendant with doubt, and to rebut the submission that the extension should be refused because an appeal would be futile, Counsel for the Applicant foreshadowed that on appeal he would seek to adduce further evidence confined to the date upon which the Applicant's migration agent ceased business. That date was also of relevance to the time at which the Applicant became aware of the Tribunal's decision. The Applicant's February 2009 Affidavit is also a precursor, should the extension of time be granted, to a more broadly based challenge to the evidence given before the Magistrate. And, on appeal, the Court would have a discretion to admit further evidence pursuant to s 27 of the 1976 Act. It is, however, unlikely that the discretion conferred by s 27 would be exercised in favour of the now Applicant to so fundamentally revisit the evidence previously given. The fact remains that there was inordinate delay as between the date of the Tribunal decision in 2001 and the application for review by the Federal Magistrates Court in 2007. Either for the reasons given by the Federal Magistrate, or by reference to the account now advanced, any decision that the application should be rejected for discretionary reasons remains, it is considered, the correct decision. Relevant to the ultimate conclusion reached by the Federal Magistrate was the conclusion that the Refugee Review Tribunal had committed a jurisdictional error. Even if the discretion were to be exercised afresh by this Court, that conclusion would remain equally relevant. It is proper when exercising the discretion to have regard to the merits of the substantive application sought to be advanced: Applicants M160/2003 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 195 at [14] , [2005] FCA 195 ; 85 ALD 532 at 538 per Finkelstein J. But for the Applicant's delay in invoking his rights, he would in all likelihood have obtained relief: R v Ross-Jones; Ex parte Green [1984] HCA 82 ; (1984) 156 CLR 185. The Applicant has availed himself of his right to seek review by the Federal Magistrates Court and that Court, in the exercise of an admitted discretion, refused him relief. He has now been given the opportunity to again explain his circumstances and the reasons for his delay in a number of Affidavits filed in this Court and the opportunity to give oral evidence. Notwithstanding the finding as to jurisdictional error on the part of the Tribunal, it is considered that an extension of time should be refused. Rather than pursuing an application to this Court, he refrained from doing so and sought intervention by the Minister. The delay in bringing the application does not constitute " special reasons " within the meaning of O 52 r 15. The Applicant is to pay the costs of the First Respondent. I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | application for an extension of time magistrate finds breach of s 425 declines relief by reason of delay in excess of 5 years further delay in seeking to appeal special reasons extension of time sought after approximately 1 year's delay proposal to adduce fresh evidence on appeal extension refused migration |
He entered Australia on 4 January 2006 and departed again on 23 February 2006. He re-entered Australia on 29 June 2006 on a short stay visa permitting him to remain until 29 September 2006. On 13 November 2006, not having left Australia as required, he was located by immigration authorities. He was detained in Villawood Immigration Detention Centre. On 9 January 2007 he made an application for a Protection (Class XA) visa. 2 The appellant is a citizen of Singapore. The delegate of the first respondent ('the Minister') who, on 19 January 2007, declined his application for a visa recorded that he claimed protection in Australia because Singaporean authorities would interrogate him in relation to crimes he has committed in Australia and that if he co-operates with those authorities he will be targeted by criminal elements who will see him as an informer and the authorities will not be able to provide him with protection. Regardless of the credibility of the applicant's claims, I am not satisfied that there is a real chance of a Convention related persecution of the applicant if he returns to Singapore. Taking his claims at face value, I am not satisfied that he would suffer persecution for a Convention reason if he returns to Singapore. His most serious claim is that because of the criminal activities he has committed in Australia he may be interrogated by the Singaporean authorities and if he co-operates with the Singaporean authorities then he may be targeted by the criminal elements. In the absence of detailed information I have been unable to research this aspect of the applicant's claims, and without corroborating evidence I am not satisfied that the applicant would have an imputed political profile as claimed. I consider that threats and intimidation of this kind relate to criminal activity. There is no reason to suppose that this group which the applicant fears may pursue him would have any interest in him for a reason which is included in the Refugees Convention. I do not regard this claim as being of sufficient gravity to constitute persecution of the applicant. The RRT held an oral hearing on 1 March 2007. The appellant appeared at the hearing and was represented by a registered migration agent. Immediately before his departure he lived in a hotel room in Singapore, but before that he shared a house with is brother. He was not in a good financial situation and had applied for a government loan which had been rejected. So, over the years, he had borrowed between $20,000 to $30,000 from loan sharks and private lenders. He worked in a supermarket between 1998 and 2001, but left the job because he was not earning enough money to repay his debts. Subsequently, he was involved in selling pirated DVDs which led to his arrest, conviction and a three month jail sentence. After his release, he participated in selling ecstasy tablets, but fled Singapore before being apprehended. After leaving Singapore, he was told that the police had searched his hotel room and found drugs. He explained that he had 10 ecstasy tablets, 60-70 amphetamine tablets and a few grams of ketamine in the hotel room. In May 2005 he won $15,000 in lottery money and in December 2005 decided to come to Australia to have a good time. He returned to Malaysia in February 2006 and helped a friend set up a toy and clothing company. He was paid $5,000 for this work and returned to Australia in June 2006. After his arrival, he was contacted by a person introduced to him by a Malaysian associate, who also provided him with a false passport. This person asked him to open a bank account and set up a company under a false name. He was arrested soon after and pleaded guilty to the offices [sic] he was charged with. He served a jail sentence and was released into Villawood. Whilst in Villawood he was interviewed by the Australian Federal Police (AFP) in relation to the false passport. He said he did not want to go back to prison and waste his time. He is 39 and not married. He has a girlfriend in Vietnam whom she [sic] met through the internet. If he were to go back to Singapore he would be sent to prison because he sold drugs. Also, he would be beaten up by debt collectors because he had ran [sic] away with their money and was unable to pay it back. He was asked why he had said in his application for a protection visa that he would be punished for a crime he had not committed. He said this was a mistake as there was no interpreter present when he was communicating his claims to his agent. He had told his agent that he had committed a crime, but was not in Singapore when the crime was discovered. The police had found the drugs and his personal documents in his hotel room's safe box after he had left Singapore. He said because he had provided information to the AFP regarding the false passport and the circumstances under which he had obtained it. It was put to him that the friend who had arranged the meeting and had sent him the false passport was in Malaysia. He said his friend was in Bangkok now, but he could pay someone in Singapore to harm him. He was asked if his friend waned [sic] to seek revenge from him for having provided information to the Australian authorities. He said yes. He said he cannot go back to Singapore because he cannot stay in prison. He will also be assaulted by those he owes money to and others who could harm in relation to the false passport matter. He also fears being harmed by loan sharks to whom he owes a large amount of money; and other criminals who consider him an informer for having disclosed adverse information relating to a fraudulent passport to the Australian authorities. The Tribunal accepts that the applicant, if found guilty, would be sentenced to a lengthy term of imprisonment and possibly caned. Nor was there anything in his evidence to suggest that the harm he fears by debt collectors is Convention related. His fears relate to his financial situation and his inability to repay his debt. Similarly, the applicant's fear of his now Bangkok based friend and his associates arise out of having disclosed incriminating information about the friend to the AFP. According to his oral evidence, he fears revenge and not anything even remotely related to a Convention reason. At the hearing, when the absence of a nexus between his claims and the Convention reasons was put to him, he was unable to provide a meaningful response. The Tribunal is not satisfied that the harm the applicant fears is essentially and significantly for reasons of his race, religion, nationality, political opinion, express or imputed, or membership of any possible particular social group which may be identified on the claims. The Tribunal finds that the applicant's fear of harm from debt collectors, criminals and their associates is not for a Convention reason. The evidence before the Tribunal does not suggest and the Tribunal is not satisfied that the authorities in Singapore would withhold protection from the applicant for a Convention reason. The appellant then filed an application for judicial review in the Federal Magistrates Court of Australia on 3 April 2007. The tribunal has make a judicural error while handing down there decision. There was an error in law. He wasn't given proper legal advice as for whatever. Although he was given an opportunity to file an amended application and written submissions after receiving the relevant documents and a referral for legal advice, the applicant has not filed any documents further explaining these grounds. In the course of today's hearing, he passed up a typed written submission. This does not provide any argument raising a jurisdictional error. I am unable, myself, to find any argument coming within the general contentions made in the application of jurisdictional error and error of law. I accept the submission made by the Minister in his written submission that there was no duty on the Tribunal to give the applicant "proper legal advice", if that is the contention made in ground 3. It appears to me that the Tribunal squarely raised with the applicant the central difficulty facing the applicant, which was that the harms he feared were not covered by the Refugees Convention, and that the issues were properly addressed by the Tribunal. The applicant's submissions to me, both orally and in writing, repeated his concerns that he would be severely sentenced if he returned to Singapore, and that he would face economic and other hardships there. However, these are matters to which the Court cannot give recognition by way of any relief in these proceedings. For the above reasons, I am not satisfied that the Tribunal's decision was affected by jurisdictional error. It is therefore a privative clause decision, and I must dismiss the application. They didn't look into my case, because had made errors while making their decision. The real fact to why I will be in danger if I sent back to my country. Legal errors as far as my case are concern was made when the decision handed. My real fear of not going back is, because of my race, religions, poetical view. The preoccupation & will face. My life will be in danger if I am sent back to Singapore. I don't have any family member to go too. I don't have a place to go, I don't have any one to go too and I don't have a house to stay. I don't have any job and how I going to survive. I will be prosecuted for fleeing the country. The punishment will be very sever or if not death. I would like to put all this behind me and start a new life here. Please I wish the court can provide a lawyer for me to fight for my case. I don't have the money to afford to get the lawyer. I have been stay in the detention for a very long time. May I ask to apply for the Ministers intervention under 417 Act? Leagel error was made. I did not understand the leagel terms of the interpreter. I was not given the chance to express my concern with the interpreter. However, at the hearing of the appeal in this Court, in response to my question, the appellant said the difficulty occurred before the RRT. He did not elaborate. There is no indication in the judgment of Smith FM that any complaint was made in the proceedings before him to the effect that the appellant was disadvantaged in the RRT because of any problems of interpretation. The appellant's written submission did not make any such suggestion. 12 The reason the appellant failed before the RRT was that his claims did not, on any view of them, raise a case that he had a well-found fear of persecution for a Convention reason and was therefore a refugee. The reason his application for judicial review failed before the Federal Magistrates Court was that no jurisdictional error appeared in the decision of the RRT. Although inadequacies of interpretation before the RRT (as appears now, and for the first time, to be suggested) may indicate jurisdictional defects in RRT proceedings, with the result that a decision of the RRT is liable to be set aside as not effectively made (see, for example, Perera v Minister for Immigration and Multicultural Affairs [1999] FCA 507 ; (1999) 92 FCR 6 ( 'Perera' ) and M175 of 2002 v Minister for Immigration and Citizenship [2007] FCA 1212 ( 'M175' )) much more is required to demonstrate such a defect than a mere unparticularised allegation of inadequate interpretation. As both Perera and M175 demonstrate there needs to be close attention to the specific manner in which an interpretation is said to be inadequate together with a sufficient connection to the decision of the RRT which establishes that jurisdictional error has occurred. Absence of such a connection will defeat an allegation of jurisdictional error on this ground (see Waco v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 171 ; (2003) 131 FCR 511 at [63] --- [69]). No case has been made that there was any jurisdictional defect in the proceedings before the RRT which calls into question the decision which it made. 13 Moreover, the suggested difficulty concerns lack of understanding of legal terms. In the present case, the matters which were of significance to the RRT were factual matters. There is no basis for thinking that any difficulty with legal terms (as is alleged in the Notice of Appeal to this Court) contributed to a misunderstanding by the RRT of the factual foundation for the appellant's claims to be a refugee. 14 Unlike at the hearing before the Federal Magistrates Court, the appellant advanced no submissions in writing. At the hearing of the appeal, to my invitation to make any oral submission that he wished, the appellant said that if he 'goes back' he will be 'punished harshly' and that 'there are no human rights over there'. He added that if he goes back, when released he will have no job and no place to live and asked the Court for 'another opportunity to be a new person'. This Court has no power to adjudicate on matters of this kind, which do not raise any question of jurisdictional error. 15 No error in the decision of Smith FM has been identified, or suggested. Moreover, no jurisdictional error in the decision of the RRT or jurisdictional defect in its proceedings has been established. It follows that the decision of the RRT is protected from judicial review ( Migration Act 1958 (Cth) s 474) and the appeal from the decision of Smith FM must be dismissed. It is appropriate to dismiss it with costs. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | inadequate interpretation may demonstrate jurisdictional error but close attention is needed to specific inadequacies alleged no earlier complaint before federal magistrate no jurisdictional error established complaint of inadequate interpretation |
It is now known as the Shangri-La Hotel. The hotel was constructed by the applicant, Lilyvale Hotel Pty Limited on land leased for 99 years from the Sydney Cove Redevelopment Authority (now the Sydney Harbour Foreshore Authority). The lease commenced on 30 April 1993 and the hotel commenced operations in September 1992. Pursuant to an agreement with Lilyvale ('Management Agreement'), the hotel was initially operated and managed by ANA Enterprises Australia Pty Limited ('Enterprises Australia'), an Australian resident company. 2 In 2002 Reco Harbour Grand Pte Ltd ('Reco'), a company owned by the Government of Singapore Investment Corporation Pte Ltd ('GIC'), acquired, either directly or indirectly, all the shares in Lilyvale. The Management Agreement with Enterprises Australia was terminated and for a short period after the sale the hotel was operated and managed by Lilyvale under the pre-sale name of the ANA Harbour Grand. Eventually, however, the new owners changed the name of the hotel to the Shangri-La and appointed Mr Michael Cottan as General Manager. An affirmative answer to this question would mean that Lilyvale would be entitled to claim prior year tax losses as a deduction in its income tax return for the 2003 income year. In passing, I note that the income tax assessment for Lilyvale for the income period ending on 31 March 2003 covers the 15 month period from 1 January 2002 to 31 March 2003. This is a practical adjustment that allows for continuity of taxation despite the former owner of Lilyvale accounting to 31 December and the new owners having a financial year ending 31 March. It has no implication for the issue presently under consideration. 4 In its 2003 tax return Lilyvale showed, before deduction of losses, a taxable income of $10,579,458. It claimed a deduction for carried forward losses of the same amount, the effect being to reduce its taxable income to nil. On 1 November 2005 the Commissioner issued a notice of assessment disallowing the whole of the deduction for the tax losses. Lilyvale lodged an objection to this assessment on 9 December 2005. The respondent disallowed the objection and consequently, on 11 July 2006, Lilyvale appealed the objection decision to this Court under s 14ZZ(a) of the Taxation Administration Act 1953 (Cth). 5 The present application is made by way of appeal under Pt IVC of the Taxation Administration Act 1953 (Cth). There is no issue between the parties as to the quantum of the losses or the deductibility of the outgoings which gave rise to them. Similarly there is no issue as to the amount of income derived for the 2003 year. The only issue is the deductibility of past losses amounting to $10,579,458. It was a subsidiary of ANA Holdings Pty Ltd which, in turn, is wholly owned by All Nippon Airways Co Ltd ('ANA Co'), a Japanese resident company. These companies formed part of the ANA group of companies. 8 The Management Agreement referred to Lilyvale as the "Owner" and Enterprises Australia as the "Operating Company". It recited the experience of Enterprises Australia "in planning, technical assistance, management and operation of international standard hotels in various countries ..." and stated that Lilyvale "desires to enter into this Agreement in order to entrust the operation and management" of the hotel to Enterprises Australia. 9 Article II also provided that Enterprises Australia will be acting "only as agent for the Owner" and expressly excluded a partnership or joint-venture or "any other relationship between the parties except that of principal and agent". It also stated, however, that, "subject only to any express limitation which may be contained in this Agreement", Enterprises Australia was to have "exclusive control and discretion in the management and operation of the Hotel". The selection, terms of employment and termination thereof, including rates of compensation, and the supervision, direction, training and assignment of duties of all employees, shall be the duty and responsibility of, and shall be determined or controlled solely by the Operating Company. (b) The establishment of all prices, price schedules, rates and rate schedules. (c) The making of such repairs, or alterations and decorations of the Hotel as the Operating Company may deem reasonably necessary for the proper maintenance and operation thereof. (d) The negotiation and execution of leases and concessions for store, health club and office spaces in the Hotel. (e) The leasing and letting of rooms or space in the Hotel not referred to in sub-paragraph (d) above, or other accommodations in the Hotel in the usual course of business, and the establishment of rates and rate schedules therefore. (f) The obtaining and granting of such concessions and privileges, including, but not limited to cigar stands, news stands, taxicabs and automobile garages, as the Operating Company may deem reasonably necessary or desirable in connection with the operation of the Hotel. (g) The supervision and control of the activities of tenants, concessionaires and holders of privileges and their employees within the Hotel only. (h) The installation of suitable books of control and account to be kept in accordance with the Uniform System of Accounts for Hotels referred to in Section Four of Article III of this Agreement, with the exceptions provided in this Agreement. (i) The granting and limiting of the credit of patrons of the Hotel, including agreements with credit card organizations on terms reasonably arranged by the Operating Company. (j) The negotiation and execution of contracts reasonably necessary or desirable in connection with the operation of the Hotel in the usual course of business, except as otherwise provided in this Agreement. (k) The purchasing of such inventories, provisions, supplies, furnishings, fixtures and equipment as the Operating Company may deem reasonably necessary in order to maintain and operate the Hotel properly. For reasons that were never explained, the General Manager, Mr Art Nigro, was initially employed by ANA Enterprises and then by ANA Hotels Co Ltd; see [26] below. 12 The Agreement provided for Enterprises Australia to determine the schedule of the General Manager's assignment to the hotel. His salary and expenses, which were to be based on the standard of Enterprises Australia, were to be borne by Lilyvale; however Enterprises Australia was entitled to pay the salary, payroll tax and related expenses, and to be reimbursed subsequently. The Agreement provided that the General Manager was to remain an employee of Enterprises Australia and was subject to its exclusive control and direction. In addition to the General Manager, Enterprises Australia also employed Mr Hiroshi Miura, the Executive Chef and Mr Hideo Suzuki, the Executive Assistant to the General Manager for the relevant period from 1 January 2001 to 30 August 2002. 13 With these exceptions all employees of the hotel, "regardless of whether hired by the Operating Company or assigned to work at the Hotel by the Operating Company" were employees of Lilyvale although "subject to the exercise by the General Manager of his duties and responsibilities" under the Management Agreement. Notwithstanding this provision these employees were to be assigned to the hotel by Enterprises Australia or its subsidiaries and affiliated companies. Their salaries and expenses were also to be based on the standards of Enterprises Australia and reimbursed to it by Lilyvale. 14 The operating expenses that Enterprises Australia was entitled to recover from Lilyvale included not only employee salaries and associated expenses but also the cost of all food and beverages used at the hotel, administrative and office costs, repair and maintenance of the hotel, insurance premiums, all taxes and charges, legal and other professional fees related to the operation of the hotel, costs of technical consultants as well as marketing and out-of-pocket expenses. The operating expenses did not include depreciation and amortisation, interest incurred by Lilyvale, rent of the premises, furniture and equipment, real and personal property taxes, premiums for property damage insurance and business interruption insurance, the costs of structural additions or modifications, extraordinary repairs, maintenance and capital improvements or the administrative and overhead expenses of Lilyvale's home-office. 15 The Management Agreement contained detailed provisions relating to the calculation of the management fee and the operating expenses. On 31 May 1996 the fee payable under the Management Agreement was changed to 13% of the annual gross operating profit after deduction of the annual licence fee. Each year Enterprises Australia had to submit a Capital Expenditure Budget to Lilyvale for approval but the approval was not to be unreasonably withheld or delayed. Enterprises Australia also had to submit to Lilyvale a monthly profit and loss statement as well as an annual budget. 16 Compared to the responsibilities of Enterprises Australia, Lilyvale's role was mainly high level supervision and responsibility for capital expenses and finance. In broad terms, Lilyvale had to provide and maintain the premises as well as the furniture and fittings of the hotel, fund the operation of the hotel and pay the agreed management and licence fees to Enterprises Australia. It was obliged to maintain full ownership of the hotel building, its furniture, furnishing and equipment including operating equipment, and was responsible for capital improvements. 17 Lilyvale had a right to inspect the hotel "with appropriate advance notice at all reasonable times" during the term of the Management Agreement. It was also entitled to an annual audit of the books and accounts of the hotel by an auditor appointed by it with the consent of Enterprises Australia. Lilyvale and Enterprises Australia were to schedule regular monthly meetings to discuss all aspects of the hotel's performance. There was also provision for Enterprises Australia, at Lilyvale's request, to advise Lilyvale about the major policies and procedures affecting the conduct of the business at the hotel. The agreement entitled Lilyvale, in connection with the operations of the hotel, to use the name, ANA Hotels, the triangular logo mark of the ANA Group and the name "Unkai" in relation to the Japanese restaurant operated within the hotel. Computer System and ANA Hotels sales offices. (b) To plan, arrange and execute joint promotional events and programs among members of ANA Hotels. (c) To provide other services as may be available from time to time for the members of ANA Hotels. This was amended in 1996 to 1% of Rooms Revenue. On 28 September 2001 the Licence Agreement was novated so as to substitute ANA Hotels Co Ltd ('ANA Hotels'), a Japanese resident company being part of the ANA group, for ANA Enterprises as licensor. The sale of the hotel had been marketed on the basis that it would be sold with vacant possession; that is, not subject to any existing management. Exhibited to Mr Tang's affidavit was a letter dated 26 June 2002 from Sonnenblick-Goldman Company, which specified that if the purchaser wished to have the use of ANA group intellectual property after the sale it would need to negotiate a separate agreement to that effect. 22 On 8 August 2002, in a letter to the Sydney Harbour Foreshore Authority, the solicitors for Reco informed the Authority of the proposed sale and stated there would be a short-term arrangement permitting Lilyvale to continue operating "the property" using the name "ANA Harbour Grand Hotel". The letter also advised that ANA Hotels would not be involved in the management of the hotel but that the then General Manager, Mr Nigro, would be retained as General Manager of the hotel by Lilyvale. Pending completion of the share sale agreements on 30 August 2002, each seller was required to refrain from certain actions in relation to Lilyvale including: admitting new members; altering the share capital; attempting to liquidate the company; encumbering the shares; attempting to alter the company's constitution; and declaring any dividends or making any other distribution. 23 On completion of the share sale the directors of Lilyvale resigned and new directors were appointed. The Management Agreement (with Enterprises Australia) and the Licence Agreement (with ANA Hotels) were terminated however, pursuant to a new Licence and Services Agreement with ANA Hotels, Lilyvale retained the right to use 'ANA Intellectual Property' for 12 months (including the trademarks, ANA Hotels and ANA Harbour Grand Hotel and the Unkai name). The agreement required Lilyvale to ensure that the hotel's services were consistent with "the reputation and prestige of the ANA Group". 24 From 1 July 2003, pursuant to agreements made between Lilyvale and Shangri-La Hotels Pty Ltd on 26 March 2003, the hotel operated under the name Shangri-La Hotel Sydney. Since that time the ANA trademarks and name have not been used in connection with the hotel. The evidence each gave was consistent with that of the others and, although all three were cross-examined, they did not significantly depart from the evidence given in their respective affidavits. Except where expressly indicated, I accept their evidence. The following account of the operation and management of the hotel is taken from their evidence. 26 On 12 April 1995 Mr Nigro entered into a contract of employment with ANA Enterprises. The agreement referred to a number of hotels in the chain of ANA hotels and stated that ANA Enterprises had offered Mr Nigro the position of General Manager of one of the hotels owned and/or managed by it, as selected by it. Mr Nigro took up the position as General Manager of the hotel. He said in evidence that he was aware of the Management Agreement between Lilyvale and Enterprises Australia and understood that he was assigned to the hotel to work on behalf of Enterprises Australia pursuant to an agreement between it and ANA Enterprises. Mr Nigro gave evidence that in July 2001 for reasons that were not known to him, his employment contract was "transferred" to ANA Hotels. The novated contract stated that Mr Nigro would become the "Regional Director of Operations and General Manager of the Hotel" and would remain an employee of ANA Hotels. It provided, however, that he could be seconded to ANA Enterprises to perform his duties under the contract. 27 Mr Nigro's contract with ANA Hotels was initially for a period of eighteen months commencing on 1 July 2001. Mr Nigro stated that the terms of his employment with ANA Hotels were the same "in all material respects" as with ANA Enterprises. While the terms of the later contract do not contain the same detail as is to be found in the contract with ANA Enterprises, I accept that Mr Nigro is correct for all practical purposes. 28 As General Manager Mr Nigro had "full executive responsibility for all strategic and managerial aspects of the Hotel". In his management of the hotel Mr Nigro was assisted by an executive committee of seven senior executives. At fortnightly meetings the executive committee considered the full range of operational and management issues. Both Mr Nigro and Mr Hopcroft said that most of the significant decisions affecting the hotel were made by consensus in consultation with the executive committee, however they agreed that, in the absence of consensus, it was Mr Nigro who would make the decision. The minutes of the executive committee meetings and various operational and management reports, including revenue and financial reports, prepared by Mr Nigro and other members of the senior staff were sent to the ANA Group. 29 In his capacity as Hotel Manager Mr Hopcroft had operational, financial and some strategic responsibilities which, he said, remained unchanged during his tenure. He had "day to day executive control of the operation of the Hotel" and "was responsible for supervising operational staff, implementing service strategies, monitoring guest relations, maintaining service standards and ensuring that Hotel policies were observed". All except five departmental heads reported to Mr Hopcroft on a daily basis. Mr Hopcroft also participated in financial management of the hotel and was involved in the budgetary and inventory control. He also participated in strategic decisions, particularly through his membership of the executive committee. Mr Hopcroft confirmed Mr Nigro's account of the outsourcing of certain of the hotel services. Mr Hopcroft observed that the hotel had a larger sales and marketing team than other hotels of comparable size. He attributed this to the fact that the hotel was not part of a worldwide network of hotels, such as the Shangri-La group of hotels. He also noted that the hotel's marketing strategies were focused on the Japanese market which was the result of the natural synergies between the ANA group's airline, All Nippon Airways, and hotel businesses. By this he meant that the group's airline and hotel businesses were able to offer package deals for flights and accommodation. 31 Over the time that Mr Hopcroft was at the hotel the proportion of Japanese customers declined so that by 2002 the percentage of Japanese customers was about 27% whereas in 1995 it was about 50%. The latter factor had a significant impact because the number of flights available from Japan to Sydney was dramatically reduced. In this regard, I was frequently told by Japanese tour operators ... that they could not book suitable flights for their clients. 32 It was clear from Mr Nigro's evidence that he was concerned about the hotel's reliance on the Japanese market. He said that in 1997 or 1998 he decided that the name of the hotel should be changed for marketing reasons. Up to that point it had been called the ANA Hotel which Mr Nigro thought lacked individuality and "was not a meaningful name to customers other than those in the Japanese market". Mr Nigro would have preferred the name to be changed to Harbour Grand Hotel Sydney, not only because the name would reflect the hotel's geographical location and its status as a "grand hotel", but he also thought that removing ANA from the name would lessen the hotel's focus on Japanese customers. He said, however, that he did not think the ANA Group would agree to remove ANA from the name so he suggested that the name be changed to ANA Harbour Grand Hotel. The change was made at the end of 2000 and the hotel commenced operating under its new name on 1 January 2001. A trade mark was registered in respect of the new name but Mr Nigro was not able to recall why the new trade mark was registered in Lilyvale's name rather than in the name of another company within the ANA group. Initially this was Mr Ryozo Oya and at the time of the sale it was Mr Yasuhiro Nakamura. Mr Nigro said that he involved Mr Oya and Mr Nakamura in "the hiring of key staff such as the Hotel Manager, Human Resources Manager, Financial Controller or Director of Marketing" and kept them advised of all significant policy decisions as well as submitting monthly financial results and other management reports. Mr Nigro said that the Head Office of ANA Hotels International was not involved in the management of the hotel other than in respect of capital expenditure approvals. From 1999 the position was held by Mr Koichi Inokuma whose previous position was General Manager in Australia of All Nippon Airways. As the owner's representative, Mr Inokuma's main role was to monitor and make recommendations in relation to capital expenditure. He was also involved in welcoming and entertaining Japanese guests. ... He was not a member of the Executive Committee, nor did he receive minutes of Executive Committee meetings. He was not involved in any operational or strategic decision making. I did not report to Mr Inokuma and he had no power to override or even influence my decisions or the decisions of other executives in relation to the management or operation of the Hotel. 35 Mr Nigro's understanding was that Mr Inokuma was a director of Lilyvale from 22 July 1999 until he resigned in August 2002. However, because capital works had to be approved by Head Office and the money required to carry them out came from Head Office, I was aware that any recommendations for capital expenditure were directed through Mr Inokuma as the owner's representative. I was also aware that Mr Inokuma and Mr Nigro usually met each month and occasionally I was invited to attend those meetings. I am also aware that Mr Inokuma entertained important Japanese guests at the Hotel from time to time. 36 The views expressed by Mr Nigro and Mr Hopcroft were supported by various documents tendered to the Court which, as the Commissioner submitted, showed both the separate functions of Lilyvale and Enterprises Australia, and Mr Nigro's control and management of the hotel. They included memoranda concerning the car park privileges and entertainment discounts to be granted to Mr Inokuma, a letter concerning complaints from Mr Inokuma about restrictions on concessions available to him in the hotel, and a memorandum seeking Mr Inokuma's opinion about pay increases for management. 37 As mentioned earlier (see [16] above) Lilyvale was responsible for all alterations and capital improvements. We can not order capex items until he has signed the purchase request. Therefore, no matter how many times we talk about buying some capex item, we can not buy it until we have his approval. Capex funds belong to the owner not the hotel management. Mr. Inokuma alone has final approval. Pls abide by this policy at all times. 38 The limited role of Lilyvale in the day-to-day management of the hotel is also reflected in its accounts. For instance, the first entry in the profit and loss statement for the month of November 2001 is, "gross operating profit" against which is shown the actual amount of $2,051,812.67. Under the heading, "Owner's admin expenses" appears the amount of $11,346.59 for "Salaries & Related". It is clear that this amount does not include the salaries of the approximately 500 employees of Lilyvale who worked in the hotel. The Commissioner also noted, in his written submissions, that this approach is also reflected in the Balance Sheets. According to Mr Nigro, Mr Suzuki had no involvement with operational or strategic matters. The focus of Mr Suzuki's responsibilities was the hotel's relationships with its guests. They included all the accommodation, restaurant and function services expected of a five-star hotel including business centre services, car parking, laundry and dry cleaning services, and so on. Mr Nigro said that a small proportion of the services were outsourced to external contractors, generally, where it would be more cost-effective. There were some services, such as outside and inside plant maintenance, window cleaning, waste removal and advertising services that were outsourced even before I started working at the Hotel and continued to be outsourced until the time that I left the Hotel in May 2003. 41 Mr Nigro gave examples of the outsourcing contracts in relation to housekeeping, cleaning and kitchen cleaning services, payroll and car park management services. In the main, the outsourcing arrangements that operated while Mr Nigro was the General Manager were still in operation when he left the hotel. The same was true of the marketing and loyalty programs. Other systems and procedures which remained in place during the whole of Mr Nigro's time at the hotel were the business operating system, the global reservation system, and the Fidelio system software which is used by many hotel chains in front office and accounting administration. He said that the manual was in use throughout the period he was General Manager of the hotel and was not amended in any significant way during this time. In addition to the General Manager's Operating Manual there was an extensive array of manuals (approximately 55 manuals) used in the hotel ranging from maintenance, engineering and fire safety to housekeeping, food and beverage control and hotel minimum standards. Hotel manuals were issued by the Director of Operations, ANA Hotels International and remained the property of ANA Enterprises. In cross-examination Mr Nigro said that all of the manuals which were described as pertaining to the ANA Grand Harbour Hotel would have been used during his time as General Manager. Mr Nigro also identified a document which he described as the Sydney Policy Standards and Procedures Manual. This was the hotel's domestic policy and procedural manual which, Mr Nigro said, most departments would have had access to and would have had a copy in their offices. 43 In his affidavit Mr Nigro said that the hotel's operating procedures were governed by a series of operating manuals which including the Standards Manual, the General Manager's Operating Procedures Manual, the Accounting Manual, the Human Resources Manual and the Safety and Security Manual. Mr Nigro went on to explain how he drafted many of the other manuals during his time as General Manager of the hotel and that these manuals were in daily use by the hotel staff. 44 I accept the Commissioner's submission that, in the absence of any contrary agreement, the intellectual property in those manuals would have vested in Enterprises Australia as they were developed by the General Manager in the course of his employment. These manuals were neither owned by, nor licensed to, Lilyvale and the Share Sale Agreement specifically excluded them from being the property of Lilyvale. On the same date Mr Nigro entered into an agreement with Lilyvale to continue as General Manager of the hotel until February 2003. The period was later extended to 30 April 2003, when it was terminated by agreement. 47 Mr Nigro described the conversations that he had with Mr Tang when the issue of the sale of the hotel first arose. He agreed that he would be happy to stay on as General Manager during a transitional phase, but said that he would like to keep the whole of the executive team together. Mr Tang agreed to that request. Shortly before the sale of the hotel Mr Tang told Mr Nigro that the purchasers had decided to maintain the ANA signage until the new management company was appointed. This was to ensure that the change in ownership caused as little disruption as possible. ANA has agreed in principle and I have decided that we are going to adopt a policy of "seamless transition" until the new management company is appointed. 48 After the hotel was sold Mr Nigro reported to Mr Tang, to whom the minutes of the executive committee and the operational and management reports referred to in [15] above were also sent, however Mr Nigro and Mr Hopcroft both said that the operation and management of the hotel continued as before. In particular he noted that there were no significant changes to the role or composition of the executive committee; the duties and responsibilities of the hotel executives, the department heads and operational staff remained the same; the executive committee continued to meet fortnightly, and all other management meetings continued as had previously been the case. Mr Nigro also said that, until the re-branding to the Shangri-La Hotel, the services provided to the customers of the hotel were identical to the services provided before the sale and that there was nothing in the presentation of the hotel, the services it provided or the price of its services which suggested any change of ownership. 49 While the staffing generally was unchanged, the new owners appointed Mr David Gibson of Jones Lang LaSalle as their representative. The hotel retained its focus on the Japanese market and a new Japanese Director of Guest Relations, Mr Shokichi (Sho) Suzuki, was employed to replace Mr Henry Suzuki who was relocated to Japan. Mr Sho Suzuki's function was to manage guest relationships and to retain a "Japanese face" to the hotel. His role was not materially different from that of his predecessor. 50 The continuity of operation after the sale is in marked contrast to the changes that occurred after 1 July 2003 when branding and operational changes came into effect. A new General Manager was appointed. Hotel menus and beverage lists changed. Staff uniforms were changed and the service, procedure and employee manuals used under the previous management were replaced by Shangri-La service manuals. Performance standards for operational staff were changed and a new performance appraisal process was implemented. There was a new web site and the reservation system previously used was replaced by the Pegasus system which was used by all Shangri-La hotels. The loyalty programs specific to ANA ceased to operate and new loyalty programs specific to the Shangri-La group were introduced with effect from July 2003. 51 Mr Tang explained why, from the purchaser's point of view, it had been decided to continue operating the hotel under the ANA brand for some time after the sale despite his view that it lacked strength in the marketplace. Mr Tang said that from his experience in previous transactions, he believed that the process of attracting, tendering, interviewing and selecting the right management company could take up to a year to finalise. He rejected the option of appointing a temporary or interim new management company as he felt that a short term re-branding followed by the final re-branding would create uncertainty and confusion in the marketplace. Mr Nigro agreed with this assessment which led Mr Tang to adopt what he described as "the seamless transition" policy, by which he meant "an acquisition process whereby the Hotel customers would not be aware of any changes to the hotel until it was re-branded under the banner of the new management company". Division 165 of that Act deals with the income-tax consequences of changing ownership or control of a company. Section 165-10 provides that a company cannot deduct a tax loss unless it meets the continuity of ownership test in s 165- 12 or satisfies the same business test in s 165- 13 . 53 The continuity of ownership test requires that more than 50% of the voting power, rights to dividends and rights to capital distributions be continuously held by the same person or persons for the ownership test period. The ownership test period commences with the year of income in which the tax loss arises and continues to the end of the income year in which the loss is to be claimed as a deduction; s 165- 12 . It is not necessary here to explain the tests by which one determines if the 50% condition has been met, as both parties accept that it was not met here. It is not in contention that, because of its change of ownership, Lilyvale cannot meet the test in s 165- 12 . 54 Lilyvale contends however that it satisfies the "same business test" in s 165- 13 . Apply the test to the business that the company carried on immediately before the time (the test time ) when the continuity period ends. The same business test period is the income year in which the tax loss is claimed. There is no dispute between the parties that the same business test period in this case is the period from 1 January 2002 to 31 March 2003. There is, however, disagreement about the test time , which is the point at which the continuity of ownership test failed to be satisfied. Lilyvale submits that this occurred on 8 August 2002, when the share sale agreements were entered into. Lilyvale's submission is premised on its view that the beneficial interest in the shares passed to the purchasers on 8 August 2002. 56 The respondent contends that the continuity of ownership test failed to be satisfied only on 30 August 2002 when the share sale was completed. In support of its view the respondent pointed to the fact that the purchaser had to meet certain conditions precedent before the share vendors were obliged to complete. Until those conditions were met, the respondent submitted, the beneficial interest in the shares did not pass. 57 While both parties made detailed submissions in support of their respective views, I do not believe that it is necessary for me to decide this issue. If Lilyvale is correct, the issue here is whether it carried on the same business from 1 January 2002 to 31 March 2003 as it carried on immediately before 8 August 2002. If the respondent is correct the latter date is 30 August 2002. The difference would only be significant if the business carried on by Lilyvale changed within the period from 8 August to 30 August. The evidence does not suggest that this is so. 58 The same business test also requires that during the same business test period the company must not derive assessable income from a business of a kind that it did not carry on before the test time; s 165- 210 (2). During that period it also must not derive assessable income from a transaction of a kind that it had not entered into in the course of its business operations before the test time; s 165- 210 (2). The question is one of fact; Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 124 CLR 97 per Gibbs J at 104. There are two elements to the concept of a taxpayer "carrying on the same business" and both must be addressed. First, it is necessary to have a clear understanding of the concept of carrying on a business, taking into account the relevant statutory and commercial context. Then, having established that before the critical date the taxpayer is carrying on a business and the nature or characterisation of that business, it is necessary to ask if the taxpayer carried on the same business after the critical date. 60 In Avondale Gibbs J rejected a submission that the word "same" in the phrase "same business" meant "similar" or "analogous" rather than "identical". His Honour accepted that the meaning, as with any ambiguous phrase, depends on context and held that in the context of s 80E(1) of the Income Tax Assessment Act 1936-1968 (Cth), a predecessor of the provision presently under consideration, the meaning was that of "identity". However the restriction if imposed absolutely would lead to injustice in cases where a company, notwithstanding substantial changes in the ownership of its shares, continued to carry on the same business. No injustice would, in my opinion, result from a refusal to treat an accrued loss as a tax deduction where the company after the change carried on a different business, although one of a similar kind. Lilyvale therefore needs to show that the business it carried on after the share sale was identical to the business that it carried on in the relevant period before the share sale. 61 There was no issue as to the fact that Lilyvale was carrying on a business before the share sale. The parties do differ, however, as to their characterisation of that business. In submissions, Mr Slater QC, who appeared for Lilyvale, characterised its business, both before and after the sale, as carrying on "the business of hotelier or innkeeper at the premises in the Rocks". He submitted that in carrying on its business Lilyvale "provided accommodation for guests, provided restaurant facilities and meals for guests, and food and beverages in bars and so forth, convention facilities, parking facilities, laundry facilities and all the other things that a hotel provides to its customers or guests ... with three exceptions, it employed all the staff engaged in that enterprise". In Hope v Bathurst City Council [1980] HCA 16 ; (1980) 144 CLR 1 , the High Court considered questions of law which raised the issue of whether the activities of the appellant amounted to "carrying on the business of grazing". The New South Wales Court of Appeal had decided, "as a matter of fact", that the appellant's use of his land, "albeit for commercial purposes and for the purpose of profit, was not significant enough to bring it within the scope of the common or general meaning of either of the words 'business' or 'industry'. " Mason J, with whom Gibbs and Stephen JJ agreed, held at 8-9, that the expression, carrying on the business of grazing, denotes "grazing activities undertaken as a commercial enterprise in the nature of a going concern, that is, activities engaged in for the purpose of profit on a continuous and repetitive basis". It is a course of conduct carried on for the purpose of profit and involves notions of continuity and repetition of actions. 63 Similarly the question whether a company is carrying on the same business before and after a certain date involves a consideration of the activities of that company before and after the critical date. 64 In this case the question requires an enquiry into Lilyvale's activities before and after the critical date in August. The applicant has argued that because the Management Agreement provided that Enterprises Australia acted as agent for Lilyvale, the activities of Enterprises Australia could be attributed to Lilyvale so that the business of operating and managing the hotel constituted by the activities of Enterprises Australia was the business in which Lilyvale was engaged. Consequently, it was submitted, the absence of any change in the way in which the hotel was managed by Lilyvale after the change (Mr Tang's "seamless transition") indicates that Lilyvale's operation and management of the hotel after the share sale was the same business as it had carried on before the sale. 65 This submission hinges on the legal characterisation of the relationship between Lilyvale and Enterprises Australia. It is an invitation, under the banner of 'agency', to attribute the activities of Enterprises Australia to Lilyvale --- to deem them to be Lilyvale's activities. The characterisation of the relationship in the Management Agreement as one of agency does not, however, lead inevitably to this conclusion. But in the business world its significance is by no means thus restricted. There is no reason why they should not do that. But whether or not they are successful in achieving that end does not depend simply upon whether, in an express provision of their agreement, they attribute or deny to their relationship a particular legal character -- be this, for example, employer and employee: Australian Mutual Provident Society v Chaplin (1978) 18 ALR 385 ; principal and principal or principal and agent: Board of Trade v Hammond Elevator Co, above; or partners: Ex parte Delhasse; Re Megevand (1878) 7 Ch D 511. The parties cannot by the mere device of labelling, no matter how genuinely intentioned, either confer a particular legal character on a relationship that it does not possess or deny it a character that it does possess: Ex parte Delhasse, above, at 532; see 2A Corpus Juris Secundum, "Agency", SS7; see also the observations of Lord Denning in Massey v Crown Life Insurance Co quoted in the Australian Mutual Provident Society case, above, at 389. This may lead to its being disregarded entirely: Ex parte Delhasse, above; Board of Trade v Hammond Elevator Co, above; or to its being given full force and effect: Australian Mutual Provident Society v Chaplin, above. And such will depend upon whether, given the actual incidents and content of the relationship (that is, "the factual relation") to which the parties have consented, they have consented "to a state of fact upon which the law imposes the consequences which result from agency": Branwhite's case, above, at 587; Restatement, Second, Agency, SS1 comment b. 68 The fact that Enterprises Australia carried out its obligations under the Management Agreement on Lilyvale's account does not mean that the 'agency' was such that its activities must be attributed to Lilyvale, nor that its business was Lilyvale's business. The question of what business Lilyvale carried on before the sale is a question of fact, the answer to which depends on the characterisation of the activities in which Lilyvale was actually engaged (i.e. what Sheppard J in J Hammond Investments Pty Ltd v Federal Commissioner of Taxation (1977) 31 FLR 349 at 357 referred to as "the real nature of the taxpayer's business"), not on its legal relationship to Enterprises Australia and its activities. 69 I am satisfied from the evidence before me that Mr Tang's "seamless transition" was achieved; I accept that a guest in the hotel or indeed the hotel's employees, would not have discerned any material difference between the way the hotel was operated and managed before and after August 2002 until about the time when the name of the hotel was changed to the Shangri-La Hotel. The written submissions for Lilyvale summarised the applicant's evidence comparing the operation of the hotel after the sale. I accept that after the share sale Lilyvale carried on the business of managing the hotel. The critical question remaining is whether the business that Lilyvale carried on before the share sale is properly characterised as the business of managing the hotel in the same way that the business it carried on after the share sale can be characterised. 71 The evidence shows that before the critical date Lilyvale and Enterprises Australia engaged in very different activities. It is true that Lilyvale's income (on which it was liable to income tax) was sourced from the hotel, however it was the activity of Enterprises Australia that generated that income. Lilyvale's involvement in the business of the hotel was so distant from the day to day activities of the hotel that, in my view, the course of conduct carried on in the hotel, bearing in mind the notions of continuity and repetition referred to in Federal Commissioner of Taxation v Murry (see [62] above), could not be said to be the conduct of Lilyvale. 72 As mentioned above, in the pre-sale period the Management Agreement between Lilyvale and Enterprises Australia provided that Enterprises Australia would operate and manage the hotel for a period of 20 years and would also be responsible for sales and marketing. After the sale Enterprises Australia was no longer involved with the hotel, and yet the operation of the hotel continued seamlessly. It must be assumed that Lilyvale had stepped into the shoes of Enterprises Australia. To the extent that the tasks that Enterprises Australia performed before the sale, continued to be carried out after the sale, the evidence indicates that they were carried out by Lilyvale. It follows that the present application must be dismissed and the objection decision of the respondent must be affirmed. The applicant must pay the respondent's costs. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | appeal from respondent's objection decision whether carried forward losses deductible in later year of income application of "same business test" question of fact whether applicant carried on the same business before and after the relevant test time applicant owned a hotel and contracted with another to manage the hotel 'on account of' the applicant management contract declared manager to be the agent of the applicant whether business carried on by manager of hotel could be regarded as being carried on by applicant nature of business as a course of conduct involving notions of repetition and continuity taxation |
The appeal was first listed for hearing on 17 August 2009. On the morning on which the appeal was listed for hearing the appellant sent a facsimile transmission to the registry asserting that she had been ill the previous day, had seen a doctor and could not attend the hearing. A document was attached which was said to be a medical certificate. It was illegible. The appellant asked that the appeal be listed for hearing at some other time. There being no opposition from the Minister, I relisted the appeal for hearing on 19 August 2009. When the appeal was called on 19 August 2009 there was, again, no appearance for the appellant. Mr Reynolds, who appeared for the Minister, has made an application that the appeal be dismissed as a result of the non-attendance of the appellant. He relies upon s 25(2B)(bb)(ii) of the Federal Court of Australia Act 1976 (Cth). In support of the application he called evidence from his instructing solicitor, Mr Conomos, which satisfies me that on 17 August 2009 Mr Conomos caused to be sent to the appellant by Express Post a letter advising her that her appeal had been relisted for hearing on 19 August 2009. I am also satisfied that Mr Conomos made efforts to contact the appellant by telephone on the mobile telephone number which she had nominated in the facsimile transmission sent to the registry on that day, that his telephone call was unanswered and that he left a message for the appellant advising her that the appeal had been relisted for hearing on 19 August 2009, leaving a telephone number where he could be contacted. Accordingly, I am satisfied that the present is a suitable case to exercise the power to which Mr Reynolds has referred and that it is appropriate that the appeal be dismissed for that reason. I take into account that it would be open to the appellant to apply to set aside the order which I propose to make under O 35 r 7 of the Federal Court Rules , provided the conditions attending any such application were satisfied. The Minister also applied for costs. There appears to be no reason why costs should not follow the event. An order for costs is also a matter in respect of which the appellant may, if it is appropriate to do so, exercise her rights under O 35 r 7. The order which I make is that the appeal is dismissed with costs. I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | non-attendance by appellant at hearing of the appeal appeal dismissed pursuant to s 25(2b)(bb)(ii). practice and procedure |
At the hearing on 27 July 2006, the Minister's solicitor submitted that the Court should consider making a costs order personally against Mr Laba-Sarkis, who had spoken on the applicant's behalf at the hearing and, as he acknowledged, assisted the applicant by drafting documents filed in the proceeding on her behalf. The question of costs was reserved and Mr Laba-Sarkis was directed to file any affidavits or written submissions on the issue of costs within 14 days. Mr Laba-Sarkis has provided an affidavit affirmed 19 August 2006 and written submissions. The Minister has also filed written submissions. A "migration decision" is defined under s 5 as a privative clause decision, a purported privative clause decision or a non-privative clause decision. 4 It can be seen that s 486E prohibits a person from encouraging a litigant to commence or continue migration litigation which has no reasonable prospects of success without giving proper consideration to the prospects of the litigation succeeding. A similar prohibition operates if the purpose of commencing or continuing the litigation is unrelated to the objectives which the court process is designed to achieve. The application to this Court for leave to appeal from the decision of the Federal Magistrate was "migration litigation" within the meaning of s 486K. Additionally, it was litigation which had no reasonable prospects of success. 5 Where the Court finds that migration litigation had "no reasonable prospect of success", the Court must consider whether a costs order under s 486F of the Migration Act 1958 (Cth) should be made: see s 486F(2) of the Act. Subsection 486F(1) provides that where a person contravenes s 486E , the Court may make one or more of the orders set out in that subsection. Relevantly, the Court may make "an order that the person pay a party to the migration litigation (other than the litigant), the costs incurred by that party because of the commencement or continuation of the migration litigation": s 486F(1)(a) of the Act. Under s 486G of the Act, a person must be given "a reasonable opportunity" to argue why a costs order under s 486F should not be made against them before such an order is made. 6 The two issues which arise under s 486E are whether Mr Laba-Sarkis gave "proper consideration to the prospects of success of the migration litigation" or whether "a purpose in commencing or continuing the migration litigation is unrelated to the objectives which the court process was designed to achieve". If Mr Laba-Sarkis has engaged in conduct prohibited by s 486E(1) the Court must consider whether to make a costs order against him personally. He is a former registered migration agent. At the hearing, he said he had practised as a migration agent between 1983 and 1996. He denied that he had ever been deregistered as a migration agent and said he had simply chosen not to renew his licence. In 1992, Mr Laba-Sarkis applied to be registered as a migration agent under the new statutory scheme for registration of migration agents which commenced operation in that year. The Department (which is now the Department for Immigration and Multicultural Affairs) referred the question of whether Mr Laba-Sarkis was not fit to be registered as a migration agent to the Migration Agents Registration Board on 6 November 1993. On 17 June 1996, the Board wrote to Mr Laba-Sarkis advising him that his application for registration had been refused. He was also directed to cease holding himself out as available to give migration assistance. On 15 July 1996, Mr Laba-Sarkis lodged an application for review of the Board's decision with the Tribunal. On 23 October 1997, the Tribunal affirmed the Board's decision, making adverse findings in relation to two of the seven complaints before it. The Tribunal found that Mr Laba-Sarkis was not a fit and proper person to give immigration assistance and therefore was not a person who could be registered as a migration agent under s 296 of the Act, as it then was. Merkel J of this Court dismissed an appeal from the Tribunal's decision on 15 June 1998: Toufic Sarkis v Migration Agents Registration Board [1998] FCA 719. 8 Since at least 2005, Mr Laba-Sarkis has, as he conceded, provided assistance in a number of migration proceedings in this Court and the Federal Magistrates Court, to parties seeking to challenge the relevant Tribunal's decision. The Minister's submissions identified fifteen examples of proceedings in 2005 and 2006 in which Mr Laba-Sarkis had provided such assistance. In his written submissions, Mr Laba-Sarkis' identified five additional cases (four from the Federal Magistrates Court and one from this Court) in which he had given or was still giving assistance. 9 On 23 March 2006, Mr Laba-Sarkis wrote to the Minister on the applicant's behalf, in effect requesting that the Minister exercise the discretion under s 417 of the Act in the applicant's favour. The Minister submitted that previous requests had also been made. It is not known whether Mr Laba-Sarkis assisted. One of the matters raised in the letter was that the applicant's cousin and cousin's wife were ill and that their positions would worsen if the applicant left Australia. Medical evidence was attached. 10 The Department's response to the letter, and the subsequent proceedings in the Federal Magistrates Court, are outlined in my reasons for judgment disposing of the application. He said that after the applicant was released from detention, he visited her and was touched by the serious medical condition of "her cousin Bob and Mona". He said that he was asked to write to the Minister on the applicant's behalf. The correspondence sent on the same day to my address by ministerial intervention unit does not reflect proper consideration, it is our belief that officers are required by the law to confirm to certain standards of conduct for the protection of others and such conduct standard is known as non negligence. It appeared to be a document published on the Australian Parliament House website headed "Ministerial Discretion in Migration Matters: Contemporary Policy Issues in Historical Context", by Dr Kerry Carrington. However, it may be that a decision of a case officer not to refer a matter to the Minister could be reviewable by the courts, if for example, the file note showed that the officer failed to consider an issue clearly within the guidelines. 14 Mr Laba-Sarkis also filed written submissions in response to the Minister's submissions filed 5 September 2006 (discussed below). Mr Laba-Sarkis reiterated in his submissions that he had good reason to believe, and still believed, that the Minister's conduct relating to the letter dated 23 March 2006 could be reviewed by a court in the applicant's favour. He submitted that the Minister's costs should be waived "because of the exceptionally difficult circumstances" and also that he was not on regular wages. 15 A number of points of a more general nature were also raised in the submissions. He has never encouraged people to commence legal proceedings who, to the best of his knowledge, "did not suffer or met [sic] convention grounds". In the alternative, the Minister sought an order that costs be paid by the applicant. 17 The Minister's primary submission was that Mr Laba-Sarkis had encouraged the applicant in the relevant sense and had not given proper consideration to the prospects of success of the application. In the Minister's view, there was some evidence that Mr Laba-Sarkis had encouraged the applicant to commence or continue proceedings for the purpose of allowing her to remain in Australia. However, the Minister's position was that, in the context of the other evidence given in his affidavit, it would not be appropriate to conclude that s 486E(1) had been contravened on that basis alone. 18 The Minister submitted that to give proper consideration to the prospects of challenging the decision of the Court below, a person would have to identify some arguable basis for asserting that the Federal Magistrate erred in holding that it had no jurisdiction to deal with the matter. That issue had been, in effect, the only one properly arising from the Federal Magistrate's decision. There had been no indication at all in any of the documents filed in these proceedings, nor from what Mr Laba-Sarkis said at the hearing on 27 July 2006, that he had given any consideration to the issue. It was submitted that, on the basis of all the evidence available, Mr Laba- Sarkis had entirely ignored the jurisdictional issue. 19 The Minister submitted that in the circumstances of the present case, Mr Laba-Sarkis clearly breached s 486E(1) irrespective of any other consideration. The Minister accepted that there might be cases where in the circumstances the Court would be prepared to conclude that the question of whether a person gave "proper consideration" would vary according to the qualifications and experience of that person. In that context, the Minister made the following additional comments. Firstly, it was submitted that it was clear that s 486E was not limited to persons with specialist qualifications, even though the Act imposes restrictions on persons who may give immigration assistance to others. Secondly, Mr Laba-Sarkis was, in any event, clearly a person who held himself out as a person with some knowledge and experience in migration matters and capable of assisting persons such as the applicant. 20 Thirdly, the Minister submitted that Mr Laba-Sarkis' history as a migration consultant and his recent activities should be considered. The Minister submitted that although Mr Laba-Sarkis was not a registered migration agent (and that has been the case for some time), it was clear that he had recently become more active in providing assistance in migration matters. The Minister submitted that it was also clear from the articles annexed to his affidavit that Mr Laba-Sarkis continued to comment on migration issues in what were described as certain publications catering for particular sections of the community. However, in the present case, there can be no real issue, in my opinion, about whether Mr Laba-Sarkis "encouraged" the applicant as required by s 486E(1). By his own admission, Mr Laba-Sarkis prepared the application and draft notice of appeal for the applicant, and made oral submissions on the applicant's behalf at the hearing. It may also be noted that he prepared the letter dated 23 March 2006 which was addressed to the Minister, requesting exercise of the power under s 417 of the Act. It is not clear what role if any he took in the Federal Magistrates Court proceedings, although in any event, it is only the proceedings in this Court which are relevant for present purposes. 22 It is unnecessary to consider whether Mr Laba-Sarkis encouraged the proceedings in this Court for a purpose unrelated to the objectives which the court process is designed to achieve, under s 486(1)(b)(ii) of the Act. It is not a matter pursued by the Minister in her submissions though the point was made, with which I agree, that there was some material which might support a conclusion that the proceedings were for the proscribed purpose. 23 The real issue is whether Mr Laba-Sarkis did "not give proper consideration to the prospects of success of" the application for leave to appeal, for the purposes of s 486E(1)(b)(i). It may well be the case that Mr Laba-Sarkis formed a genuine belief about the merits of the application. 25 However, the subjective views of a person in the position of Mr Laba-Sarkis are not determinative of whether "proper consideration" was given to the prospects of success. The word "proper" invites consideration of whether, in the circumstances, there was a balanced and thoughtful assessment of the prospects of success, such assessment being directed to whether, objectively, the litigant had prospects of success. Mr Laba-Sarkis is not legally qualified. However, he has had experience in the field of migration law. He does not, in his affidavit, explain why the application for leave had any prospects of success having regard to the reasons for decision of the Federal Magistrate and the issues which might be raised in any appeal. In my opinion, the only inference that can be drawn is that Mr Laba-Sarkis did not give proper consideration of the prospects of success of the application for leave. 26 The next issue is whether I should exercise the discretionary power conferred by s 486F to order Mr Laba-Sarkis to pay the Minister's costs. That section is part of a recently enacted costs regime embodied in Part 8B of the Act. That regime was introduced against a background where in both this Court and the Federal Magistrates' Court, there has been an unrelenting stream of applications challenging decisions made under the Act. Those applications are often brought by litigants in person who, in many cases, have been given assistance by others. History reveals that many of those applications are unmeritorious and are doomed to fail. That is not to say, of course, that there are not also applications which reveal decision-making either arguably or actually infected by reviewable error. There are. Mostly, the applications relate to decisions made under the Act concerning applications for protection visas. Legal error resulting in the refusal of a protection visa, in circumstances where such a visa should or might be granted, could have profound consequences for the individual applicant. 27 However, Parliament appears to have taken the approach that, in relation to proceedings concerning decisions under the Act, proper consideration must be given by people assisting litigants about the prospects of success before proceedings are commenced. If that does not happen, the person providing assistance is at risk of being ordered to pay the costs of other parties to the litigation. In the present case, I am satisfied I should order Mr Laba-Sarkis to pay the Minister's costs. However well intentioned his actions may have been, Mr Laba-Sarkis encouraged the applicant to commence proceedings which were bound to fail. There is nothing to suggest the applicant had any real appreciation about whether the application might succeed. 28 Applying well settled legal principles, the Minister should have her costs of the application met by an appropriate cost order. The next question is whether those costs should be paid by the applicant or Mr Laba-Sarkis. It was his encouragement which, I infer, led to the making of the application. He should bear the Minister's costs personally. | costs orders under s 486f of the migration act 1958 (cth) where application for leave to appeal federal magistrate's decision dismissed and finding made of no reasonable prospects of success where applicant assisted by non-lawyer who prepared documents filed and spoke on applicant's behalf at hearing whether contravention of s 486e of the migration act 1958 (cth) whether "proper consideration to the prospects of success" was given, pursuant to s 486e(1)(b)(i) of the act "proper consideration to the prospects of success of the migration litigation" migration words and phrases |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration & Multicultural Affairs to refuse the grant of protection visas to the appellants. 2 The appellants are a husband and wife. The husband claimed that he was ethnically Turkish. The Tribunal found that he was a citizen of Cyprus. Only the first named appellant (the husband) made specific claims under the Refugees Convention, his wife relying solely on her membership of his family. 3 The appellants arrived in Australia on 13 September 2002 on short-term visitors' visas and lodged an application for protection (Class XA) visas with the Department on 14 October 2002. The application was based on claims made by the husband that he feared persecution, and believed that he would be killed if he returned to Cyprus by reason of his active membership of a peace committee that sought to reunite Cyprus into one nation. The appellant said he was involved in several demonstrations organised by the committee which were viewed as a threat to the Turkish authorities. He resided in the northern, Turkish-controlled part of the island. The appellant claimed that as a result of his affiliation and active involvement with the committee, he was classified as a traitor to his people, and was on several occasions picked up and physically abused by the Turkish Cypriot authorities. He claimed that other members of the committee have since disappeared. He further claimed that he had distributed newspapers and brochures which were critical of the Turkish authorities. 4 As already noted, on 4 December 2003, the Tribunal affirmed the delegate's decision not to grant the protection visas. The Tribunal rejected many of the husband's central claims. It did not accept that the appellant was a member of a peace committee. The Tribunal reasoned that if the appellant had been a member of such an organisation, or had participated in its activities, he would have been able to provide details of its name, or at least be in a position to name the organisations represented by it. The appellant when questioned could not supply this information. The Tribunal also did not accept the husband's claims that he had delivered anonymous brochures which were critical of Turkish authorities and had been detained and physically abused by those authorities. They were not well drafted and were argumentative. These grounds are conveniently summarised and reformulated in the learned Magistrate's reasons: see MZWCY & Anor v Minister for Immigration [2005] FMCA 390 at [12] . For the most part they involve the complaint that the learned Magistrate did not provide any adequate reasons for the various conclusions to which he came in the process of disposing of the appellants' judicial review application. The focus of attention is the adequacy of the Magistrate's reasons rather than those of the Tribunal. There is, in addition, a tentative suggestion that the learned Magistrate might not have dealt with the case which the appellants had presented to the Magistrate. The grounds are not drawn with the necessary precision and the necessary particularity is lacking. 8 In written submissions filed on behalf of the appellants some attempt is made to clarify the issues which the appellants seek to raise in this appeal. In an outline dated 16 October 2006 the appellants identify 'two issues' which they say are raised by the grounds. Two issues are sought to be advanced in this appeal ... The first was in relation to the Tribunal's finding that it did not accept that the applicant was a member of a peace committee because he was unable to give the peace committee a name, and that he could not have delivered AVRUPA newspaper because of his job as a marketing manager. The applicant contends that this was a private opinion of the Tribunal and what the applicant was seeking was an examination of the validity of the exercise of the Tribunal's opinion. Therefore if the decision was based on reasoning that was flawed (Minister for Immigration & Multicultural & Indigenous Affairs v Khawar 67 ALD 577, Dranichnikov v Minister for Immigration & Multicultural & Indigenous Affairs 73 ALD 321) or on facts that did not exist (Minister for Immigration & Multicultural & Indigenous Affairs v Rajamanikram 69 ALD 275) the decision was liable to be set aside on the ground of jurisdictional error. The second issue related to the interpretation of s 36(2) of the Act and the decision in NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affiars [2005] HCA 6 ; (2005) 222 CLR 161. (See: SZEEU and Others v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214. 10 In his reasons for decision the learned Magistrate set out in full the grounds relied on by the appellants in seeking to establish jurisdictional error on the part of the Tribunal. He then summarised those grounds in the light of oral argument. That summary is set out at [5] above. The learned Magistrate then explained his reasons for rejecting the application. In respect of the applicant's contention based upon the decision in the NAGV case, it is without substance. The Tribunal made a discrete finding (a finding, in my view, beyond challenge) that the applicant was not a refugee within the meaning of the Convention and its other, in this instance, unnecessary finding that the applicant could relocate does not taint or fatally strike down the Tribunal's decision as one affected by jurisdictional error (see Cakmak v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 257 ; (2003) 76 ALD 333). A reading of the Tribunal's decision, in my view, clearly indicates that the finding of the Tribunal that the applicant was not a refugee was open to it on the evidence before it. The conclusions reached and the findings made by the Tribunal exhibit probative logic. The complaints made about the process of fact finding and drawing conclusions by the Tribunal are unsubstantiated. The process adopted by the Tribunal exhibits the common place process of fact finding and reasoning practised by Tribunals and Courts throughout the land. The contention that the Tribunal failed to consider the applicant's case is without substance. The Tribunal was thorough in its consideration of the applicant's case and in so doing, afforded the applicant every reasonable opportunity to put his case in the manner that exhibited procedural fairness. The Tribunal measured that case against the known circumstances as provided in the country information (which, despite the applicant's contention to the contrary, it did consider), and concluded that the applicant's story was implausible. In respect of his claims concerning the delivery of newspapers, the Tribunal found this inherently implausible, a finding open to it. The process adopted by the Tribunal involved the evaluation of the evidence of the applicant against a background of known circumstances applying in the country. There is no basis for me to find that the Tribunal's finding that the applicant was not a member of 'peace committee' was an example of a Wednesbury type unreasonable decision. The review application, in my view, is a blatant attempt for merits review of the Tribunal's decision with which this Court does not have jurisdiction to entertain. I find no error on the part of the Tribunal whatsoever, let alone a jurisdictional error. The Tribunal explained its reasons for rejecting these claims. It found them to be implausible. It explained why it had come to this view. There can be no justification for characterising these findings as the 'private opinion' of the Tribunal. They were findings made by the Tribunal in the exercise of its statutory jurisdiction. Its findings were based in part on an assessment of the husband's credibility and in part on country information to which the appellants' attention had been directed. As the learned Magistrate rightly observed this was an 'unnecessary finding'. No question of the interpretation of s 36(2) of the Act or the construction placed on it and the Convention by the High Court by NAGV and NAGW of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 6 ; (2005) 222 CLR 161 therefore arose. 14 The third issue relates to the Tribunal's obligations under s 424A of the Act. The appellants complain that certain prejudicial findings were not put to the husband by the Tribunal. They are identified in para 4 of the submissions quoted at [8] above. The first 'finding' is rather a step in the process of reasoning that led the Tribunal to determine that the husband was not, as he claimed, a member of a peace committee. When asked at the hearing to name the committee, the appellant was unable to do so. This was one of the factors relied on by the Tribunal in rejecting the husband's claim. The second 'finding' is of the same character. The Tribunal regarded it as inherently unlikely that the husband, gainfully employed as a marketing manager, would be involved in the distribution of a newspaper which was available for purchase by anyone who wished to read it. The third 'finding' was properly so described. It was the conclusion that the husband could relocate to Government-held Cyprus by making application to do so in Australia. 15 Counsel for the appellants agreed that this third 'issue' had not been raised or argued before the Federal Magistrate. The reason for this, it was contended, was that the submission was based on a decision of a Full Court of this Court in SZEEU and Others v Minister for Immigration and Multicultural and Indigenous Affairs [2006] FCAFC 2 ; (2006) 150 FCR 214 which had not been handed down at the time at which judicial review was sought in the Federal Magistrate's Court. SZEEU dealt with a number of issues arising in relation to the construction and application of s 424A of the Act. These matters were the meaning of the word 'application' in s 424A(3)(b), the question of whether, following the High Court's decision in SAAP v Minister for Immigration and Multicultural & Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162, the Court retained any discretion to refuse relief once a contravention of s 424A was established and what was comprehended by the word 'information' in s 424A(1) of the Act. Of these three matters it is only the last which is relied on by the appellants in this appeal. At the time SZEEU was decided there had been many decisions of this Court in which the meaning of the word 'information' had been examined in the context of s 424A. They had been drawn together by Finn and Stone JJ in VAF v Minister for Immigration and Multicultural & Indigenous Affairs (2004) 206 ALR 471 at 476-477. Relevantly that line of authority held that 'information' did not encompass the subjective appraisals, thought processes or determinations of the Tribunal. This line of authority was not disturbed in SZEEU : see at 235 (Moore J), 254 (Weinberg J) and 295 (Allsop J). It follows that the point is not novel and could have been argued before the learned Magistrate. Were it necessary to rule on the point, I would not be disposed to grant leave to the appellants to argue what is essentially a new ground on this appeal. In any event the ground would fail on the merits. It mistakes the meaning and purpose of s 424A. The section forms part of the statutory procedural fairness regime which is imposed by the Act. That regime does not require the Tribunal to expose its thought processes or subjective assessments to applicants in order to accord procedural fairness. Conclusions based on an assessment of evidence and credibility do not constitute 'information' within the meaning of s 424A: see VAF v Minister for Immigration and Multicultural & Indigenous Affairs (2004) 206 ALR 471 at 476-7. 16 In this case the Tribunal did question the husband about his involvement with the peace committee and gave him the opportunity to explain his involvement with and knowledge of it. It also asked him about his claims to have delivered the newspapers and brochures. The Tribunal was not bound by s 424A of the Act to draw the husband's attention to particular parts of the country information: see s 424A(3)(a). The Tribunal did not reason that 'because the applicant being a marketing manager, [he] could not deliver the AVRUPA newspaper. The applicant had a job as a marketing manager; he would not be delivering copies of a commercial newspaper. His claim that he delivered anonymous brochures for the paper was implausible for the same reason and also because it was inconsistent with what is implied in the country information about the paper: that it is openly critical of the Northern Cypriot authorities in its own pages. So much was conceded by Counsel in argument. The third piece of 'information' which it is said was not put to the husband related to the relocation issue on which the Tribunal did not rely. 17 No error is shown in the learned Magistrate's decision. The appeal will be dismissed with costs. | application for protection visa appeal from federal magistrates court where application of review dismissed whether federal magistrate erred in finding no fault in the tribunal's fact finding process that found the appellant was not a member of a peace committee and had not delivered newspapers or brochures whether for the purposes of s 36(2) of the migration act the tribunal's observation that the appellant could relocate to government-held cyprus constituted jurisdictional error ground of appeal not raised before federal magistrate whether certain prejudicial findings were not put to the appellant by the tribunal interpretation of 'information' in the context of s 424a of migration act whether conclusions based on an assessment of evidence and credibility constitute 'information' pursuant to s 424a of the migration act migration |
The respondent was employed in that business and was injured. The respondent successfully claimed, against the third applicant and two companies controlled by the third applicant, that his employment was terminated in contravention of provisions of Part 12 Division 4 of the Workplace Relations Act 1996 (Cth) (WR Act). A Federal Magistrate accepted there had been a contravention of the WR Act and imposed a penalty, ordered the payment of compensation, ordered the payment of amounts referable to superannuation and redundancy and ordered that the respondent be paid his costs. These orders were made against the first, second and third applicants. The Federal Magistrate made no express finding as to who was the employer of the respondent. 2 The applicants wish to appeal against these orders. For reasons that I will explain shortly, they are out of time. They have made an application for an extension of time in which to appeal. This judgment concerns that application. 3 It is convenient, at this early stage, to set out some of the relevant statutory provisions. They are ss 659, 663, 664 and 665 of the WR Act together with reg 2.12.8 of the Workplace Relations Regulations 2006 (Cth). The respondent (the applicant in the proceedings before the Federal Magistrate) instituted proceedings against the applicants (the respondents in the proceedings before the Federal Magistrate) alleging that his employment had been terminated in contravention of s 659(2)(a) of the WR Act. In his application, the respondent sought orders for reinstatement, compensation, and the imposition of a penalty on the applicants. The Federal Magistrate found that respondent's employment had been terminated in circumstances proscribed by s 659(2)(a) of the WR Act and imposed a pecuniary penalty on the applicants: Barhoum v All Districts Coating Pty Ltd & Ors [2008] FMCA 172 (22 February 2008) . The Federal Magistrate, however, thought that there was insufficient material before the Court to properly assess either the reinstatement or compensation issues, and ordered the filing of further submissions and/or evidence in relation to these issues. The issues of compensation and reinstatement were only determined by the Federal Magistrate on 11 July 2008: Barhoum v All Districts Coating Pty Ltd & Anor (No 2) [2008] FMCA 924. The orders made by the Federal Magistrate on 22 February 2008 (revised on 28 March 2008) were interlocutory (see All Districts Coating Pty Ltd v Barhoum [2008] FCA 1525) , and hence leave to appeal should have been sought: s 24(1A) of the Federal Court of Australia Act 1976 (Cth). Indeed, when the matter was first before the Court, the question was raised about the applicants filing, in addition to the notice of appeal, an application for leave to appeal. The applicants did not take the step of applying for leave to appeal but sought to defend the institution of the appeal on the basis that the orders appealed from were final. The respondents filed a notice of motion, dated 23 May 2008, seeking that the notice of appeal be stuck out as incompetent. On 3 June 2008, I reserved my decision on the question of whether the appeal was incompetent. Meanwhile, on 5 September 2008 the applicants filed a notice of motion (that was amended on 2 October 2008) seeking to amend the notice of appeal to embrace the Federal Magistrate's further orders of 11 July 2008. 6 I did not deal with the applicants' notice of motion of 5 September 2008 and on 14 October 2008 I dismissed the appeal as incompetent. All Districts Coating Pty Ltd v Barhoum [2008] FCA 1525. However as one central element, they challenge the approach of the Federal Magistrate of not determining who the employer was and failing to find, as the applicants contended before the Federal Magistrate, that the second applicant was the employer. The respondents plainly had some difficulty in producing, even before this Court, relevant documentation going to the issue of who, or which entity, it was exactly that employed the applicant, or was given to the applicant during the time of his employment. When his business ran into some difficulties in late 2005 and early 2006, he sought to restructure his affairs such as to isolate the legal and tax difficulties into which his business had found itself. I did not see this necessarily as an issue of transmission of business strictly within the meaning of Part 11 of the Act. The preferable view of the evidence is that Mr Habibeh operated his business using the first and second respondents interchangeably, and then, for the already stated reasons, sought to isolate his business difficulties from the future running of his painting business and he used, the transfer of shares and directorship of one of his companies to his wife as a means of achieving this objective. On the evidence before the Court, that at least since 2004, his business operated using the two companies interchangeably for business purposes. The decision to terminate the employment of the applicant was plainly taken by Mr Habibeh (and from his letter of termination) purportedly acting on behalf of the second respondent. It is clear, therefore, that this order should be made as against the second and third respondents. I take the view that the third respondent continues to be the active force in the operation of the painting business now and conducted through the vehicle of the first respondent. In this regard, and given this circumstance, the order as to penalty should also be made against the first respondent. The first respondent and/or second respondent and/or third respondent, having breached the requirements of s.695(2)(a)[sic] of the Act, pay a penalty of $7,000. There be no order as to the applicant's reinstatement to employment by the respondents. The first and/or second and/or third respondents pay compensation to the applicant in the amount of $26,874.81. The first and/or second and/or third respondents make a payment in respect of the applicant to the ACIRT redundancy trust fund in the amount of $60 per week, as between the date of termination (13 April 2006) and the date of this judgment (11 July 2008) (117 weeks): $7,020. The first and/or second respondents pay the applicant's costs as incurred between at the date of the making of the application (2 June 2006) and the date that the third respondent was joined as a party in the proceeding (13 October 2006). The first and/or second and/or third respondents pay the applicant's legal costs as assessed from 14 October 2006 to 22 February 2008 (the date of the earlier judgement). The first and/or second and/or third respondents pay the applicant's costs set in the amount of $1,000 in relation to the hearing on 14 May 2008. The learned Federal Magistrate erred in holding that the Respondent was terminated from his employment with any of the Appellants by reason of, or for any reason including, temporary absence from work by the Respondent because of illness or injury within the meaning of the regulations to the Workplace Relations Act . The learned Federal Magistrate erred in failing to determine the identity of the employer of the Respondent. Alternatively, the learned Federal Magistrate erred in failing to find that the Second Appellant was the sole employer of the Respondent. Further, the learned Federal Magistrate exceeded his jurisdiction in making orders against persons who were not the employer of the Respondent. The learned Federal Magistrate erred in holding that any of the Appellants should be liable in costs. An order staying the orders of the learned Federal Magistrate pending determination of this appeal. An order that the appeal be expedited. An order that the time for the institution of this appeal be extended to 16 October 2008. Such further or other grounds as the Court consider appropriate. The decision of the Full Court in Jess v Scott (1986) 12 FCR 187 is still viewed as one of the more authoritative discussions on how the discretionary power should be exercised, although I note that O15 r 15 has been amended since that decision. In Jess v Scott, the Full Court observed (at 188) that leave to appeal out of time is to be determined by the Court's view of the demands of justice in accordance with the broad judicial discretion. Other authorities have pointed to matters that might inform the exercise of that discretion as including the explanation for the delay, the issues sought to be raised in the appeal (including the strength of the putative appellant's case), whether the appeal is bona fide and whether the judgment appealed against has been complied with by the putative appellant (on the assumption that no stay has been ordered). 13 In his submissions, counsel for the applicants submitted that, having regard to the history of the proceedings in this Court, there was a clear explanation for the delay in bringing the appeal. He also submitted that the Federal Magistrate was bound to determine who the employer was and, assuming contravention of the WR Act, could only make orders against the employer. The Federal Magistrate had failed to make the relevant finding as to who the employer was and, according to the applicants, had made orders that were, impermissibly, cast too widely. Counsel for the applicants contested the submission made on behalf of the respondent that the failure of the applicants, or one of them, to satisfy the monetary orders made on 11 July 2008 was a relevant consideration militating against extending time. Counsel for the applicants submitted, in effect, that the applicants were entitled to not comply with the orders but on the footing that the respondent could exercise rights of enforcement. 14 Counsel for the respondent submitted that there was no satisfactory explanation for the delay. He submitted that the Federal Magistrate had power to make the orders his Honour did and the failure to find who the employer was was not fatal. This was particularly so having regard to s 728 of the WR Act even though, as he accepted, that section had not been relied on in the proceedings before the Federal Magistrate. He also submitted that the respondent's non-compliance with the orders is a relevant consideration and that it could be inferred that the appeal was not brought bona fide. In that context, and more generally, he referred to the failure of the applicants to file, as required by O 52 r 15(3)(c) of the Federal Court Rules , an affidavit setting out the nature of the matter and the factual and legal issues in dispute. 15 I now consider these competing contentions. I accept that there is an explanation of sorts for the delay in instituting the appeal against the judgment of the Federal Magistrate. The orders made on 22 February 2008, which were finalised on 28 March 2008, were interlocutory and the applicants were entitled to wait until final judgment was given on 11 July 2008 before filing a notice of appeal challenging both sets of orders. I accept that there was uncertainty attending the status of the first orders (and the notice of appeal that had been lodged on 18 April 2008 against those orders), and that uncertainty remained until I gave judgment on 14 October 2008. However, it could not have been (and there was no evidence to this effect) that the applicants and those advising them believed, without qualification or reservations, that the appeal filed on 22 February 2008 was competent and that the notice of appeal could be amended to challenge the later orders of 11 July 2008. 16 The explanation, which I accept, was that there was uncertainty attending the status of the original notice of appeal (that is, whether the appeal was competent) and reluctance on the part of the applicants to incur the cost of filing a further notice of appeal once final judgment was given. If this were a case where there were no other factors militating against the extension of time, I might consider extending time given the position in which the applicants found themselves after they filed the original notice of appeal and before my judgment of 14 October 2008. That said, avoiding the cost of filing a further notice of appeal is a comparatively unsatisfactory explanation for failing to adopt what would have been the obvious and cautious approach, namely, filing within time a notice of appeal against the orders of 11 July 2008 in which the earlier orders could have also been challenged. 17 However other factors point clearly, in my opinion, to refusing to extend time for the filing and service of a notice of appeal. 18 The grounds of appeal challenge the approach of the Federal Magistrate in two respects. Firstly, they allege error on the part of the Federal Magistrate in concluding that the respondent was terminated from his employment by reason of, or for any reason including, temporary absence from work because of illness or injury. No attempt was made by counsel for the applicants to demonstrate error on the part of the Federal Magistrate by reference to his Honour's reasons or the evidence or both. Reading these reasons, one is left comfortable with the conclusion his Honour reached. For the purposes of assessing whether there is a strong or even arguable case, I put to one side this alleged error. This leads to a consideration of the other ground raised in the notice of appeal (separately identified in a number of specific grounds), namely, that the Federal Magistrate was bound to find who the employer was, failed to do so and made orders cast too widely that were beyond power. 19 The starting point is, perhaps, the submission of the applicants that the case is extremely strong in relation to two of the applicants. That is because two of them cannot logically have been the respondent's employer. Counsel for the respondent conceded, correctly, that it is at least arguable that in proceedings brought against an employer under s 663 , the power to make orders conferred by s 665 is limited to making orders against the employer, even though the power to make any other order that the Court thinks necessary, provided for in s 665(1)(d) , is not expressly limited to an order against the employer. That concession having been made, it is logically correct to say that two of the applicants, who could not have been the employer, cannot be ordered to make the payments required by the orders of the Federal Magistrate. 20 It is notorious that businesses, and particularly small businesses, are often structured in a way involving multiple companies and individuals, such that it can be very difficult to determine who the employer is in cases such as the present. The applicants contend that the employer was the second applicant. It is true that the letter of termination, signed by the third applicant, was expressed to be on behalf of the second applicant. However, as the Federal Magistrate found, the evidence was quite inconclusive about who the employer was and showed that the third applicant, who ran the painting business, used the first and second applicants comparatively indiscriminately for a range of commercial purposes associated with the business. The applicants did not take me to any findings or evidence that tended to demonstrate their contention (that the second respondent was the employer) was correct. This, in my opinion, is important in dealing with the applicant's contention that the case is very strong in relation to two of the appellants. The critical question is which two. 21 I presently do not see why whichever of the applicants is the employer should gain the benefit of this uncertainty, the resolution of which could ultimately operate to the benefit of the other two applicants. Putting it slightly differently, why should the applicant that is the employer be allowed to appeal, by the grant of an extension of time, when his or its case on this point is doomed to fail (because a finding will be made against him or it in the appeal that he or it is the employer). In the absence of the applicants pointing to findings or evidence that tended to demonstrate which of the applicants was the employer, I should proceed on the basis that it could be any of the three of them. 22 In any event, the orders, as I earlier indicated, are probably intended to create joint and several liability. Such orders create a common burden between the parties to the judgment, although execution of such a judgment may be directed or levied against and satisfied by one of the parties to the judgment: Trade Practices Commission v Manfal Pty Ltd (1991) 33 FCR 382 at 387. Accordingly, if the applicant that is the employer satisfies the judgment, it does so for the benefit of the other applicants. I have no doubt that the orders were cast in such a way that the intention was to create liability in relation to the specified sum only, which could be paid by one of the applicants or, by contribution, all of them. Thus the liability of the two applicants who are not the employer can be readily satisfied by the satisfaction of the judgment by the employer. This leads me to the last matter raised in argument. 23 Most of the orders made by the Federal Magistrate requiring payment of money have not been complied with (although I accept that the $7,000 penalty that was ordered to be paid in February 2008 has now been paid). No stay of the Federal Magistrate's orders was sought until a few days ago. A failure by an applicant for an extension of time to appeal to satisfy the money judgment against which the appeal is sought to be brought, can, in my opinion, be a relevant factor operating against extending time. 24 The application for an extension of time in which to file and serve a notice of appeal should be dismissed. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | application for extension of time in which to file and serve notice of appeal whether special reasons exist justifying a grant of leave practice and procedure |
The Court is currently hearing an application by Senator Robert Brown under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth). Forestry Tasmania, the respondent in the proceeding, has applied to the Court, by way of motion, for a confidentiality order pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth) in relation to certain parts of an exhibit, tendered by the Senator Brown. The application, as described in the motion, specifically applies to maps reflecting provisional logging coupes over the next ten years in Wielangta and Tasmania generally. Forestry Tasmania also seeks an order under O 15 r 18 of the Rules of the Court that undertakings as to confidentiality of its material continue to apply, notwithstanding the tender of relevant material to the Court. On 15 September 2005, prior to the commencement of the hearing of the proceeding, the Court ordered that the respondent discover "Forestry material" to the applicant. "Forestry material" included digital spatial data developed by the respondent, which the respondent claims to be commercially valuable and strategically confidential. Mr Dell, a witness for the applicant, relied upon this Forestry material to prepare a PowerPoint presentation consisting of a number of maps incorporating aspects of the Forestry material. This PowerPoint was utilised by counsel for the applicant on 5 December 2005 in her opening submissions and projected onto a screen in open court. On 8 December 2005, this PowerPoint presentation was tendered without objection as Exhibit C, in both electronic and hard copy, forming part of the evidence in chief of Mr Dell. The digital spatial data comprising the Forestry material used to develop Exhibit C is generally not made available to the public, by the respondent, and is considered to be politically sensitive. 4. On 9 February 2006, Ms Helen Gee, Mr Mark Agnew and Ms Sally Meredith applied on behalf of the South-East Tasmania Forest Protection Group for the leave of the Court to inspect "maps tendered" and "specifically the 10 yr logging plan". This application was made by letter dated 9 February 2006 and addressed to the Registrar, accompanied by a completed "Media Request for Access to Documents" form. Although Ms Gee, Mr Agnew and Ms Meredith are not media representatives, the Court accepts this application as being in an appropriate form. The application was, in substance, an application for leave of the Court to inspect documents pursuant to O 46 r 6(4) of the Rules of the Court. The application was clarified in Court as merely one to view the maps in question. 5. The application of Ms Gee, Mr Agnew and Ms Meredith is now supported by written submissions of counsel. These submissions also purport to deal with the respondent's motion. Ms Gee, Mr Agnew and Ms Meredith are not parties or interveners in the current proceeding. As such, whilst they may make submissions in support for their application to inspect documents, it is difficult to see any standing they would have to make submissions in response to the applications brought by the respondent. However, the respondent served its motion on those persons and did not resist counsel being heard on their behalf on the motion. 6. The submissions filed by counsel on behalf Ms Gee, Mr Agnew and Ms Meredith, taken with the comments Mr Agnew made in Court on 14 February 2006, confirm that their application relates to certain maps contained in Exhibit C, being maps marked on the hard copies as number 8 and 17 of the PowerPoint presentation created by Mr Dell. Those maps are headed, "Provisional Coupes in Tasmania", being a map of all of Tasmania, and "Coupes Planned for Logging in the Next 10 Years" which is a map confined to the Wielangta Forest region. 7. On 21 March 2006, following the application by Ms Gee, Mr Agnew and Ms Meredith, the respondent filed its motion. The motion seeks an order pursuant to s 50 of the Federal Court of Australia Act that further publication of the maps be restricted to members and staff of the Court, the parties, interveners, and their representatives and the staff of the transcript provider. In its motion, the respondent also seeks an order pursuant to O 15 r 18 of the Rules of the Court that the undertaking made by the solicitor for the applicant on 15 September 2005 continue to apply to the Forestry material, notwithstanding any reading of the Forestry material to or by the Court, or any reference to the Forestry material in open Court. Section 50 of the Federal Court of Australia Act allows the Court to make an order forbidding or restricting the publication of particular evidence as is necessary in order to prevent prejudice to the administration of justice or the security of the Commonwealth. 9. Counsel for the respondent said that the maps in question are produced from confidential information of substantial commercial value. They contended that the damage that would flow to the respondent through wrongful or misleading use of the maps warrants the granting of the s 50 order. They submitted that preventing access to the maps by Ms Gee, Mr Agnew and Ms Meredith would not be contrary to the administration of justice, on the basis that their request does not relate to the substantive proceeding. It was also submitted that the publication of the maps already made was not significant in the scheme of the s 50 order sought. 11. Counsel for the applicant contended that the respondent's status as a public authority should preclude the acceptance of the s 50 claim. Alternatively, it was contended that even if there is a proper claim for confidentiality over some source information, that fact provides an insufficient basis for an order under s 50. Counsel for the applicant also submitted that the public policy principle of open justice outweighs the claims for confidence in the current circumstances. 12. The nature of the order sought by the respondent is that the publication of the maps be restricted to certain parties and otherwise publication to the general public be prevented. It is presumed that the effect of the order sought is to prevent the prejudice which may flow from Ms Gee, Mr Agnew and Ms Meredith or other members of the general public being granted leave to inspect the maps in Exhibit C. The respondent has indicated no other basis on which the s 50 order might be required in the administration of justice. This presumes that s 50 , and the application brought by the respondent in reliance on it, are both wide enough to allow an order preventing inspection, where inspection is sought by a small number of individuals within the Court registry viewing, and not copying, a document. 13. The Federal Court of Australia Act provides no internal guidance on the definition of "publication" in s 50. There has there been no judicial consideration of the term "publication" in the context of this section. In everyday parlance, "publication" means "the act of publishing", and "publish" in its narrowest definition means "to issue, or cause to be issued, in copies made by printing or other processes, for sale or distribution to the public, as a book, periodical, map, piece of music, engraving, or the like"; see Macquarie Dictionary (4th ed). "Publish" has also been ascribed the broader meaning, "to make publicly or generally known"; see Macquarie Dictionary (4th ed); Shorter Oxford English Dictionary (5th ed). 14. Although there has been no direct judicial consideration of the term "publication" in relation to s 50 applications, there appears to be a consensus emerging in the cases on s 50 that this section "deals expressly with the prevention of information given in open court from entering the wider public arena"; see Computer Interchange Pty Ltd and Another v Microsoft Corp and Another [1999] FCA 198 ; (1999) 88 FCR 438 per Madgwick J at [15]. The word "domain" has also been used interchangeably with "arena"; see generally Johnston v Cameron [2002] FCA 948 ; Minister for Immigration and Multicultural and Indigenous Affairs v X [2005] FCAFC 217 ; (2005) 147 FCR 243. In each of these cases, the entering of particular evidence or the name of a party into "the wider public arena" or "domain" contemplates an act of publication and audience much broader than the limited inspection (and not copying) of documents at the Court Registry by Ms Gee, Mr Agnew and Ms Meredith. 15. For the current purposes, where the maps may be inspected by a small and finite number of people within the confines of the Court registry, where there is no opportunity to copy or reproduce complex and detailed information, or in any way transfer specifics of this information into the wider public domain, this cannot amount to "publication" as contemplated by s 50 of the Federal Court of Australia Act . As such, if the prejudice which the respondent seeks to prevent by way of the s 50 order is the viewing of the maps in the manner described, the application cannot be said to be necessary in order to prevent this prejudice. On this basis the application for an order under s 50 must fail. 16. If I am wrong about this form of inspection not amounting to publication, it is incumbent on me to consider whether the particular order sought is necessary to prevent prejudice to the administration of justice. 17. The underlying assumption of s 50 is the principle of open justice. The fact that the order must be necessary to prevent prejudice suggests that the party seeking to invoke a power of suppression carries a very heavy onus; see Madgwick J in Computer Interchange at [16] and Weinberg J in Johnston v Cameron at [89]. As such, the Court must consider the alleged prejudice that would be suffered by the respondent should the s 50 order not be granted. The Court must also determine whether the order is necessary to prevent this prejudice and whether this warrants a departure from the ordinary rule that open justice occur. 18. The elements of administration of justice which the respondent seeks to preserve by way of the s 50 order include the privacy of allegedly confidential information and the commercial value of this information. The respondent also seeks to avoid collateral damage or disadvantage arising from the possible abuse of this information. 19. Mr Martin Stone, a Manager (Resources and Business Systems) employed by the respondent, gave evidence that the digital spatial data used by Mr Dell to create Exhibit C is "commercially valuable and strategically confidential". Mr Stone also said that significant time, cost and specialised skills went into the preparation of the digital spatial data and that these datasets encapsulate significant intellectual property. He also gave evidence that digital spatial datasets represent internal strategies and modelling exercises used to inform corporate, confidential decision-making. However, as noted by Mr Stone, this digital spatial data has not been presented to the Court in its original vector format, but rather in digital images and medium sized paper maps. According to counsel for the respondent, the real issue of concern is that the two maps the subject of this motion are "misleadingly labelled and improperly imply undue status to an internal modelling exercise, which is commercial-in-confidence and a working document produced by the respondent within and for the purposes of its business". 20. That people may be mislead by labels on maps is not itself an issue which necessitates an order forbidding publication to prevent prejudice to the administration of justice. Additionally, the potential injustice that arises from a misleading impression in relation a commercial-in-confidence working document used in running a business is also diminished by the fact that the respondent is a public authority, which although it engages in commercial activity, has no direct competitors. 21. However, that element is focused on the public interest as well as the respondent's commercial interest. Moreover, there is no conclusive or persuasive evidence before the Court as to how publication of the maps would undermine either of these objectives in any real or practical way, other than the possible misrepresentation of the data in the public arena. For these reasons, when considered in the context of the principle of open justice and given the fact that the information has already been read into open Court without objection, the "business purposes" of the respondent in the circumstances do not warrant a s 50 order to prevent prejudice to the administration of justice. 22. The respondent's alternate submission, that it should not suffer or be put at serious risk of collateral damage or disadvantage through the abuse of the maps, is not made out on the evidence before the Court. Mr Stone gave evidence that the release of the maps bearing the labels applied by Mr Dell "would perpetuate and promulgate this misrepresentation, and create an opportunity for abuse". Presumably this "abuse" would be use of the information in a way designed to influence public opinion. However, it is well established that embarrassing or damaging publicity will not amount to prejudice warranting a departure from the principle of open justice; see Merkel J, with whom Finn and Stone JJ agreed in Herald & Weekly Times Ltd v Williams and Others [2003] FCAFC 217 ; (2003) 130 FCR 435 at [34] --- [36]. Further, the description of the maps as provisional plans rather than "indicative scenario models" or some such title cannot elevate the status of any potential use of this information to that of prejudice to the administration of justice. 23. In any event, the maps which the respondent seeks to protect by this s 50 application are already protected from inspection without leave of the Court or a Judge, or without the permission of the Registrar by O 46 r 6(4) of the Rules of the Court. As such, the Court will exercise its discretion to prevent access in circumstances where inspection would be prejudicial to the administration of justice. There has been no suggestion by the respondent that the s 50 order is necessary to prevent prejudice caused by a party other than a third party. Given the existing protection offered by O 46 r 6(4), the s 50 order is not necessary to prevent prejudice in respect to the administration of justice and the motion fails on this additional ground. The respondent has also applied to the Court for an order under O 15 r 18 of the Rules of the Court to prevent the undertakings given by the applicant on 15 September 2005 from ceasing to apply. This application is brought by the respondent "only out of an abundance of caution and in order to prevent there being any argument about this aspect of the matter". Counsel for the respondent submitted that it was the intention of the respondent, evident from the terms of the undertakings, that those undertakings ensue for its benefit during the proceeding and after the hearing of it. 25. The respondent provided the Forestry material to the applicant, as ordered by the Court, in electronic form on a computer disk before this material was copied onto a computer hard drive by the applicant's solicitors. The computer disk containing the information was then returned to the respondent. The Forestry material was used by the applicant in the preparation of the maps in Exhibit C in accordance with the undertaking. The computer hard drive was also tendered as an exhibit. 26. There is nothing before the Court to suggest that it was the intention of either party that the usual rule set out in O 15 r 18 not apply, that is, that the undertaking not to use the Forestry material for any purpose other than those of this proceeding cease to apply after Forestry material has been read to or by the Court, or referred to, in open Court. The express terms of the undertaking deal with the use of the Forestry material and nothing put before me convinces me to exercise my discretion to alter these express terms and the usual application of such an undertaking. If the applicant intends to seek to tend any further material obtained from the "Forestry material" then he should give notice to the respondent of his intention to do so in order that any dispute can be considered at the appropriate time. 27. The respondent's motion dated 20 March 2006 is dismissed. The respondent pay the costs of Ms Gee, Mr Agnew and Ms Meredith in respect of the motion. 3. The applicant's costs of the motion are reserved. | confidentiality application for confidentiality order pursuant to s 50 of the federal court of australia act 1976 (cth) whether proposed inspection amounts to "publication" whether order necessary to prevent prejudice to the administration of justice whether order necessary to protect the confidentiality and commercial value of the document used for business purposes of the respondent whether order necessary to prevent collateral damage or disadvantage through misuse of information whether order necessary given existing protection given to class of documents by o 46 r 6 of the federal court rules 1979 (cth) application pursuant to o 15 r 18 of the federal court rules 1979 (cth) whether supported on the evidence practice and procedure practice and procedure |
The Notice of Appeal recites that the document is in accordance with Form 55A and is filed pursuant to Order 53, r 2, Order 53B, r 2 and Order 59, r 1 of the Federal Court Rules . 2 The reference to a 'Professional Services Review Committee' is a reference to a committee established in accordance with ss 93 and 95 of the Health Insurance Act 1973 (Cth) ('the Act') and the reference to a 'Determining Authority' ('the Authority') is a reference to the Authority established under s 106Q of the Act. These sections fall within Part VAA of the Act. The object of Part VAA is to 'protect the integrity of the Commonwealth medicare benefits and pharmaceutical benefits programs and, in doing so: (a) protect patients and the community in general from the risks associated with inappropriate practice; and (b) protect the Commonwealth from having to meet the cost of services provided as a result of inappropriate practice' (s 79A). Those objects are achieved by establishing a 'scheme' for reviewing and investigating the provision of services by a person to determine whether the person has engaged in 'inappropriate practice' (s 80 , s 82 of the Act). 3 The respondents to the Notice of Appeal comprise the Chairperson and both additional members of a Professional Services Review Committee established under the Act described as Committee No. 445 and the Chairperson and two members of the Authority which considered the final report of Committee No. 445 arising out of a referral by the Director of Professional Services Review appointed pursuant to s 83 of the Act. 4 The respondents to the proceeding filed a Notice of Motion on 3 August 2007 seeking to dismiss the proceeding as constituted by the purported Notice of Appeal dated 3 May 2007 and filed 8 May 2007, pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) ('Federal Court Act') or alternatively pursuant to Order 53, r 18 of the Federal Court Rules , as incompetent; alternatively, an order that the proceeding be struck out pursuant to s 23 of the Federal Court Act or pursuant to Order 11, r 16 of the Federal Court Rules . 6 The elements of the scheme contemplated by the objects of Part VAA of the Act relevant for present purposes are these. The CEO of Medicare Australia may request the Director of 'Professional Services Review' to review the provision of services by a person such as Dr Mitchelson during a particular period (s 86). The Director might elect to undertake a review in response to such a request (s 88A) and take the steps contemplated by the Act consequent upon that decision. The Act contains a sequence of sections which address steps the Director needs to consider and obligations he or she needs to discharge. 7 The Director might elect to establish a 'Professional Services Review Committee' and make a referral to the Committee to investigate whether the person under review engaged in inappropriate practice as that term is understood for the purposes of the Act in providing the services specified in the referral (s 93). Subdivision B of Part VAA (ss 97 - 106F) sets out the considerations governing proceedings before the Committee. The Act makes it clear that the 'duty' of the Committee is to conduct an investigation consistent with the referral, formulate a draft report and deal with that report in accordance with the Act and to ultimately submit a final report to the 'Determining Authority' (ss 106KD, 106L). The Authority is to consider the final report of the Committee; invite the affected person to make submissions as to any directions the Authority should make as a result of the final report (s 106SA); issue a draft determination (s 106T) and ultimately a final determination (s 106TA). 11 The Act does not provide for an appeal to the Federal Court from a final determination of the Determining Authority by way of an application made in the original jurisdiction of the court in the nature of an appeal either on a question of law or otherwise. 12 In the case of Dr Mitchelson, the facts apparent from the affidavit of Mary Margaret Brennan filed 3 August 2007 on behalf of the respondents (the applicants on the motion) are these. On 6 December 2004, a request was made under the Act of the Director to review the provision of services by Dr Mitchelson during a relevant period and to consider whether Dr Mitchelson's conduct amounted to 'inappropriate practice' for the purposes of the Act. On 22 July 2006, the Director established Committee No. 445 and made a referral to the Committee to investigate whether Dr Mitchelson had engaged in inappropriate practice in providing services during the relevant period. The Committee consisted of the second, third and fourth respondents. The Committee conducted a hearing on 3 and 4 November 2005; concluded that Dr Mitchelson had engaged in inappropriate practice; and issued a final report. On 5 April 2007, the Authority made a Final Determination. The solicitor for Dr Mitchelson contends that a copy of the Final Determination of the Authority together with reasons for the decision were provided to Dr Mitchelson on 15 April 2007 although the respondents suggest that the Final Determination and reasons were despatched to Dr Mitchelson by letter dated 5 April 2007 addressed to him care of Ms Karen O'Mullane at United Medical Protection. For present purposes I will proceed on the footing that the Final Determination and reasons were received by Dr Mitchelson on 15 April 2007. There is no sworn evidence on the question. 13 The final report of Committee No. 445 was that Dr Mitchelson engaged in inappropriate practice in connection with 73% of Medicare Benefits Schedule ('MBS') Item 23 services and 83% of MBS Item 36 services examined by the Committee by reference to sampling methodology. The Authority directed that Dr Mitchelson be reprimanded and counselled; Dr Mitchelson pay $137,660.95 to the Commonwealth in respect of the Item 23 services and $50,595.84 in respect of the Item 36 services; that Dr Mitchelson be suspended for a period of six months and fully disqualified from the provision of services to which Medicare Benefits relate for a period of six months. 14 On 8 May 2007, Dr Mitchelson filed a Notice of Appeal in the Court by which he appealed 'against the finding of the Determining Authority of 5 April 2007'. The matter was to be re-listed for further directions on 6 August 2007 although that date was subsequently vacated. On 3 August 2007, the respondents filed the present Notice of Motion returnable on 28 August 2007. On 24 August 2007, the applicant in the proceedings filed an 'Amended Application for an Order of Review' pursuant to Order 54. On the hearing of the respondent's motion, Dr Mitchelson's solicitor sought leave to amend the Notice of Appeal in terms of the Amended Application for an Order of Review filed on 24 August 2007. Dr Mitchelson's solicitor says that it was clear from the outset that the Notice of Appeal would need to be amended; the Notice of Appeal was filed in circumstances of urgency; the Notice of Appeal misdescribes the true character of the initiating document; the Notice of Appeal is in substance an application for an Order of Review; leave ought to be granted to amend the document in terms of the filed Amended Application; and should the Notice of Appeal be struck out and leave to amend not granted, great prejudice would be suffered by Dr Mitchelson. 16 The Amended Application seeks review of the decision of the Determining Authority of 5 April 2007 to make directions as a decision of an administrative character made under an enactment for the purposes of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('ADJR Act'). That the Applicant was denied natural justice. The Professional Services Review Committee did not properly apply the principles identified in Briginshaw ---v- Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 in reaching its findings. The Applicant was denied natural justice in that the determining authority acted upon the draft report of a Professional Services Review Committee which was comprised of metropolitan practitioners. The Professional Services Review Committee should have had a regional practitioner experienced in the issues which face regional practitioners, particularly catering for a high number of patients from a lower socio economic group. The Professional Services Review Committee relied upon a sample of 30 cases out of a total of 7,499 cases. This figure represents 0.4% of the class size, the Professional Services Review Committee has not applied the Briginshaw principle correctly in that a larger sample should have been assessed. The Professional Services Review Committee acted upon inexact proof. The gravity of the consequences which flowed from the Professional Services Review Committee's findings were such that a higher level of proof was required. The Professional Services Review Committee did not consult with any of the patients the subject of the 30 cases to ascertain whether they were satisfied with their treatment or whether they disputed the duration of time the applicant claimed to spend with each. That in applying the Briginshaw principles the Professional Services Review Committee should have considered the nature of the client base the applicant was working with and the limited number of Bulk billing practices in regional centres. Section 11 of the ADJR Act provides that an Application for an Order of Review shall be made in the manner prescribed; set out the grounds of the Application and shall be lodged with the Registry of the court within 28 days after the decision containing findings on material questions of fact is furnished to Dr Mitchelson or within such further time as the Court allows. If Dr Mitchelson received the decision and reasons on 15 April 2007, 28 days expired on 14 May 2007. If Dr Mitchelson received the material on or about 5 April 2007, 28 days expired on or about 3 May 2007. On the assumption that the relevant date is 15 April 2007, the Notice of Appeal is filed within time if it operates as a proceeding enlivening the jurisdiction of the Court as an Application for an Order of Review. The directions made by the Authority 'take effect' (that is, commence their operation) on the 35 th day after the day on which the Authority gave notice to Dr Mitchelson of the decision to make the directions (together with reasons). The time for filing an Application for an Order for Review however is 28 days from service of the decision . 18 The original jurisdiction of the Federal Court is conferred by s 19 of the Federal Court Act and the court's power in relation to matters in which it has jurisdiction, to make orders as the court thinks appropriate, is conferred by s 23. No jurisdiction is conferred upon the court to hear an appeal from a determination of the Determining Authority established under the Act. Plainly, there can be no exercise of the court's appellate jurisdiction conferred by the Act. However, had the Parliament chosen to do so, it could have conferred jurisdiction upon the court to hear in the court's original jurisdiction an application by way of an appeal on a question of law or on some other formulation. 19 Accordingly, as a 'Notice of Appeal', the document filed by Dr Mitchelson's lawyers on 8 May 2007 entirely fails. 20 The document seeks to challenge the decision of the Determining Authority on the ground that the Authority erred by failing to take into account relevant considerations. That statement is an attempt to enliven a ground of challenge that the making of the decision was an improper exercise of the power conferred by the Health Insurance Act 1973 (see s 5(1)(e) and s 5(2)(b) of the ADJR Act). Although the document is misconceived and misdescribed it seems clear enough that Dr Mitchelson was attempting to file within 28 days a document which would enliven the court's jurisdiction under the ADJR Act to determine whether the administrative decision of the Determining Authority is susceptible of review at least on the ground of an improper exercise of power and possibly other grounds. 21 Order 13, r 2 of the Federal Court Rules provides that the court may at any stage of any proceeding order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding in such manner as the court thinks fit. Order 13, r 2(2) makes it clear that 'all necessary amendments shall be made for the purpose of determining the real questions raised by or otherwise depending on the proceeding, or of correcting any defect or error in any proceeding, or of avoiding multiplicity of proceedings'. The powers of the court under Order 13 are remedial and are designed to enable all issues which arise in or in connection with a proceeding to be determined without the necessity of a multiplicity of actions. Plainly, Dr Mitchelson seeks to enliven the court's jurisdiction to make an Order of Review based upon one or more of the grounds identified in s 5 of the ADJR Act. However, the proposed amendment to the document misdescribed as a Notice of Appeal does not properly identify grounds based upon s 5 of the ADJR Act and is not properly particularised. 22 Accordingly, I propose to take the following course. 23 I propose to treat the Notice of Appeal as commencing a proceeding by which orders have been sought to set aside the decision of the Determining Authority on the ground of an improper exercise of power. As a result, I refuse the motion to dismiss or strike out the Notice of Appeal, that is, the originating proceeding. I refuse the oral application by the solicitor for Dr Mitchelson for leave to amend the Notice of Appeal in terms of the proposed Amended Application for an Order of Review filed on 24 August 2007 and direct that the applicant in the proceedings file and serve an Application supported by appropriate material for leave to amend the document described as the 'Notice of Appeal' filed on 8 May 2007 so as to properly formulate having regard to identified grounds and particulars of those grounds, an Application for an Order of Review of an identified decision for the purposes of the ADJR Act. The Application will be heard on Tuesday, 18 September 2007 at 10.15am. Although for present purposes I have assumed that Dr Mitchelson received the Final Determination of the Determining Authority on 15 April 2007, I do so only for the present Application and not for any other purposes. That question will be relevant in an Application for Leave to Amend as the document treated as initiating the proceeding may not have been filed within time in which event an Application for Leave to extend time will be necessary consistent with the Rules. 24 The Notice of Motion filed by the respondents on 3 August 2007 is adjourned generally. The respondents may elect to re-list the motion in the event that Dr Mitchelson and his lawyers fail to file the application contemplated by paragraph 23 either within time or at all. 25 Dr Mitchelson filed the initiating document on 8 May 2007. That document was to be amended in proper form so as to formulate a competent initiating proceeding, by Monday, 30 July 2007. Nothing happened until the respondents filed their Notice of Motion returnable on Tuesday, 28 August 2007 with the result that on the preceding Friday, 24 August 2007, Dr Mitchelson filed the contended Amended Application for an Order of Review. As a result, nothing of any consequence has happened in the conduct of the matter throughout May, June, July and now August. Plainly, this matter needs to be and will be expedited. 26 As to the costs of the Notice of Motion, the respondents quite properly brought on the Notice of Motion to strike out the Notice of Appeal. That Application provoked the filing of the Amended Application on 24 August 2007. The initial document ought to have formulated a coherent Application. There is no excuse for failing to amend a document filed in haste within the time limited by the court in granting leave on 12 July 2007, particularly having regard to the delay caused in failing to do so. The applicant's solicitor says that Dr Mitchelson should not be prejudiced by the delay caused by his lawyers in failing to make the necessary amendments. In delivering judgment on the Notice of Motion, I will hear the parties on the question of costs. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | application to strike out a document described as a notice of appeal consideration of whether the document is a proceeding consideration of an application for leave to amend the initiating proceeding consideration of the relationship between the initiating document and the requirements of a document seeking an order of review for the purposes of the administrative decisions (judicial review) act 1977 (cth) consideration of an order for indemnity costs consideration of an order pursuant to order 62 of the federal court rules that costs be payable forthwith upon determination of the quantum of the costs notwithstanding that the proceeding is not concluded. practice and procedure |
The interlocutory relief falls into two broad areas. The first concerns the alleged use by the respondents of information contained in a client database. The second area concerns the respondents' use of the name 'United Insurance Advisers (National) Pty Ltd'. 2 The application arises from the failed merger of two insurance brokerships, one conducted by the first and second applicants and the other conducted by the first and second respondents. The third respondent is an employee who immediately prior to the merger worked for the first applicant and who now works for the first or second respondents. The principal of the applicant's business is Mr Arthur Kapoulitsa. The principal of the first respondent's business is the second respondent, Mr Andrew Yannopoulos, also known as Andrew Young, and I will refer to him by the latter name. 3 Merger discussions took place between the two businesses from September to December 2004. The merged business commenced trading under the name United Insurance Advisers Group Pty Ltd in January of 2005. The merger arrangement was said by Mr Kapoulitsa to involve the incorporation of United Insurance Advisers Group Pty Ltd; the first respondent changing its name from Andrew Young & Associates Pty Ltd to its current name; the second applicant procuring the third respondent, Mr Peril, to work in the business; and the relocation of the first applicant's business from Ferntree Gully to the premises of the first respondent in Richmond. 4 The parties created a database (the 'combined database'), which they have referred to in this proceeding as the UIAG database, for the purposes of the merged business. Essentially, the combined database contained client and policy details from both businesses. The first respondent contributed information from its database of approximately 2000 clients. The first applicant contributed information from its database of approximately 1000 clients. Commencing in January 2005, all new data relating to the conduct of the merged business, including new policies, renewals, endorsements etc was entered onto this combined database. 5 The merger was not a success. The reasons for its failure are not material to this application. The business demerged with effect from 1 May 2005. The applicants reverted to their original premises in Ferntree Gully. The third respondent, Mr Peril, took up employment with the second respondent. 6 At the time of the demerger discussions, the parties investigated the cost of dividing the combined database into its constituent parts, but they considered that the cost of doing so of some $7000 was excessive. Instead the two principals agreed that a duplicate of the combined database would be created and that each business would receive a copy of the combined database. The duplicate combined databases included the details and histories of both sets of clients and their transactions up to 22 April 2005. 7 It also appears to have been agreed that there would be a transition period immediately after the demerger during which transactions recorded in the combined database would be finalised and administered from the Richmond premises which continued to house the respondents' business. For this purpose the respondents would need to access client records in the combined database regardless of whether those clients came from the applicants' side of the merged business or the respondents' side. 8 This administration period ran from May 2005 until approximately October 2005. After October 2005 there is evidence from Ms Chrisanthi Young that the combined database was no longer required to process any changes to policies. Its status within the respondents' office became 'read only'. This meant it might be necessary to read information recorded there until a full year had elapsed from the date of the merger simply because of the cycle of insurance policies. However, a new database was established to process the first respondent's new business after 22 April 2005. 9 The applicants originally alleged that the respondents had misused confidential information in the combined database merely by cancelling the policies of certain existing clients of the applicants during the course of the post-merger administration period. This allegation was abandoned by counsel for the applicants during the course of the hearing. The allegation was, in any event, unsustainable in the face of the evidence given by Ms Raschella in her affidavit. She explained that policies were cancelled in the normal course during the administration period when renewal premiums had not been received. In essence, the Court must be satisfied that there is both a serious question to be tried in a principal proceeding and that the balance of convenience favours the grant of an injunction. Those two questions are not considered in isolation from each other. The strength or weakness of the claim will have a bearing on what is required by way of the balance of convenience. Discretionary factors such as delay may also come into account. 11 The purpose ordinarily served by an interlocutory injunction is to preserve the status quo. The question essentially is whether the justice and convenience of imposing a restraint pending the hearing of the final action is required so as to prevent the practical destruction of the rights that are asserted. In this context, the adequacy of damages as a remedy also needs to be taken into account. 12 Thus far, I have referred to various introductory facts which are essentially not in dispute. I will turn to the more crucial issues in a moment. Before doing so, it is worth repeating that on an application like this the Court does not embark on anything resembling a trial, and ordinarily the Court will not attempt to reach any conclusion as to the facts or matters in dispute. It will merely inquire whether there is a serious question to be tried, and it will inquire into factual matters that bear upon the balance of convenience or discretionary considerations. 13 For the reasons that follow, I am not satisfied that a case has been made out for the grant of interlocutory relief. The applicants' essential case is that there is an implied agreement or equitable obligation not to use information in the combined database to solicit business from clients who formed part of the applicants' pre-merger client base. The applicants' contention is not only that such an obligation exists, but that there is sufficient evidence that it has been breached at least to raise a serious question to be tried. 15 The respondents contend that the applicants have not defined with any precision the confidential information which they seek to protect. They contend further the combined database belongs to both the first applicant and the first respondent and that the parties envisaged that both sides would have unrestricted access to the information in the duplicate combined databases. Finally, the respondents contend that, in any event, even if an obligation can be found to exist on the facts, there is no evidence of any breach of it. 16 For the purposes of this application I do not need to express a view about some of these contentions. I am prepared to assume, without deciding, even at the level required for this application, that the applicants disclosed client information for the purposes of the combined database on the basis that the information would be used only for the purposes of the merged business. I am also prepared to assume, again without expressing any view about it, that an implied agreement or equitable obligation might be established to the effect that after the demerger the respondents would not use information in the combined database that derived from the applicants' pre-merger client base to solicit business from those clients. 17 I can make those assumptions because it seems to me the claim fails at the next step. There is simply no adequate evidence that any obligation of confidence or implied agreement was breached. The applicants rely on the fact that approximately 20 of its clients, who were previously serviced by the third respondent, Mr Peril, transferred their business to the respondents. Mr Peril serviced most, if not all, of these clients. The respondents have filed affidavits from Mr Peril and from these clients deposing that they were not solicited or, in their words, 'poached', by the respondents to transfer their business in this way but made their own decision to follow Mr Peril to his new employment. 18 The applicants criticise Mr Peril's affidavit where it states that clients contacted him after receiving renewal notices from the first applicant. The applicants point out that this timing does not explain at least one client, which transferred its business to the respondents in May 2005. However, in the face of the direct oral evidence that there was no active solicitation, I do not attach any significant weight to this argument. Mr Peril may only have been making an assumption that the client was provoked by a renewal notice to transfer his business in the same way as others had been. In any event, it is quite possible that the transfer may have been the result of any number of prompts, including simply the client becoming aware that Mr Peril had moved to his new employment. There is, in short, no evidence of solicitation of clients in breach of the assumed obligation of confidence or implied agreement to which I have referred. 19 The applicants also point out that the appointment letters from various clients in favour of the respondents contain information that probably derives from the combined database. Making that assumption, I observe that the information is relevantly also the clients' information, and the clients may have instructed the respondents to draw up the appointment letters. 20 Even if I am wrong in thinking that the evidence does not rise to the level of a serious question, the case would stand at the very weakest end of the spectrum. 21 In any event, I would not grant an injunction in the circumstances of this case, having regard to my assessment of the balance of convenience and discretionary factors. Any alleged misuse of information in the combined database related to a handful of clients who followed Mr Peril. The alleged wrongful conduct ceased by about August 2005. The applicant complained of the conduct in late 2005 but took no action. There is, moreover, no evidence of ongoing conduct by way of continuing misuse of information to solicit clients. These circumstances, in my view, cast further doubt on the foundations of the claim. They do not support the contention that there is a real threat of irreparable harm warranting the grant of injunctive relief. 22 The respondents relied upon delay itself as a discretionary factor, but the respondents' counsel did not point to any prejudice occasioned by the delay. Its only significance may be to cast doubt on the contention that there is a serious question to be tried. For those reasons, the claim concerning the database information does not support the grant of interlocutory relief. The legal claim is founded either in passing off or in misleading conduct. In my view, the evidence does not make out a case for the grant of injunctive relief that would restrain the very limited ongoing use of this name. The adoption of the name by the respondents goes back to the merger. At the time of the merger the first applicant and the first respondent agreed that the first respondent would change its name from Andrew Young & Associates Pty Ltd to United Insurance Advisers (National) Pty Ltd. The Australian Securities and Investments Commission was so advised, and the first respondent had its licensing arrangements changed accordingly. There is certainly no evidence that the name is being used actively as a trading name or promotional name for the respondents' business. On the contrary, the evidence shows that the first respondent uses the name Andrew Young & Associates as its trading name, including on its building, in its logo, on stationery and the like. There is no evidence that the name is used to advertise the respondents' business. 25 There is some evidence that the name was used in the post-demerger transition period between about May 2005 and October 2005 in the course of correspondence with various clients. This is understandable, as earlier in the year the clients were contacted using that disputed name because it was the agreed name for the merged business. It was inevitable that some clients would communicate thereafter for some period of time with the respondents by reference to the disputed name. In my opinion the evidence does not establish a question, let alone a serious question, of passing off or misleading conduct contravening the Trade Practices Act 1974 (Cth). 26 In any event, where there has been for many months now no ongoing use of the name in a promotional, advertising or trading sense, it seems to me that there is no case, on the balance of convenience, for the grant of the relief sought. In addition, he sought an order that would dispense with the ordinary operation of O 62 r 3(3) of the Federal Court Rules . This sub-rule provides that an order for costs of an interlocutory proceeding shall not entitle a party to have a bill of costs taxed until the principal proceeding has been concluded, unless the Court otherwise orders. 28 My attention has been drawn by counsel for both parties to well-known authorities dealing with indemnity costs, including NMFM Property v Citibank Ltd [2001] FCA 480 ; (2001) 109 FCR 77, Colgate Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 and Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397. The Court has a discretion concerning the scale of costs. The discretion is unfettered except that it must be exercised judicially. The cases concerning indemnity costs illustrate that much turns upon the facts of the particular case. The essential principle is that a discretion can be exercised to order costs on an indemnity basis where the actions of the unsuccessful party have been unreasonable or high-handed or where the claim in question was totally frivolous or hopeless or fundamentally flawed. 29 I have already explained why there was a clear case for the rejection of the application. In support of his application for costs, Mr Wilson drew my attention to a letter dated 22 February 2006 from the respondents' solicitors to the solicitors for the applicants. The letter was delivered on the basis that it was without prejudice save as to costs. The letter sets out the reasons why the respondents contended that the application for interlocutory relief was doomed to fail. In addition, it offered that if the applicants withdrew their interlocutory application before further costs were incurred and on the basis that the applicants would pay the respondents' costs of the application up to 22 February 2006 on an ordinary party-party basis, the name of the first respondent would be changed as at 14 May 2006. 30 The letter asserted that if the proposed interlocutory application proceeded and it was lost, then costs would be sought on an indemnity basis and on the basis that they be paid forthwith. It may be that the offer to change the name of the first respondent with effect from 14 May 2006 did not meet that part of the case brought by the applicants which was of most concern to them, which related to the client information in the combined database. Nevertheless, it did address an important part of the interlocutory relief that the applicants were seeking, namely a restraint on the use of that name. 31 This is a case in which there are grounds for thinking that the applicants and their advisers should have known that the interlocutory application was likely to fail. The case is very close to the line of being so fundamentally flawed that it would attract an exercise of discretion to award indemnity costs. On the other hand, I am conscious that until the respondents filed evidence, the case may have appeared much stronger. At the hearing the applicants drew attention to what they said were discrepancies in the evidence and issues of timing that they said gave weight to their allegations. They ought to have realised then that their case was very weak, but it would go too far to say it was totally frivolous. In all the circumstances and despite the fact that I have hesitated about this matter, I have concluded that it is not a case in which I should order indemnity costs or taxation forthwith. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | use of database and business name following demerger of businesses alleged breach of confidentiality or implied agreement not to use information in database whether respondents' use of business name misleading and deceptive or passing off whether serious question to be tried whether balance of convenience favours grant of relief no case for grant of interlocutory relief application for costs on indemnity basis and taxation forthwith whether case so fundamentally flawed no award of indemnity costs and taxation forthwith interlocutory injunction costs |
3 APRA alleged that this conduct occurred, at least in part, by the operation by Siminton of a website under the name 'the Principality of Camside'. The website of the Principality of Camside states that the Principality of Camside is the only legal government of Australia. Siminton is described on the website as 'The Governor, State of Sherwood, HM Government of Camside'. The website of the Principality of Camside includes a webpage relating to the Terra Nova Cache which is described as being 'Camside's new bank'. 4 An application for interim relief was heard ex parte by Sundberg J on 15 December 2005 and his Honour made a number of orders ('the Sundberg J orders'). The Sundberg J orders, inter alia, restrained Siminton from disposing of funds held by himself, the Principality of Camside or the Terra Nova Cache and required Siminton to take certain steps, which included the provision of information and documents. The Sundberg J orders were expressed to be 'until further order'. The application for interim relief was adjourned to 10 January 2006. 5 On 23 December 2005, APRA made a further ex parte application to the Court and orders were made by me restraining Siminton from departing from Australia and requiring him to deliver up any passport held by him. 6 On 10 January 2006, the application by APRA for interlocutory relief was heard inter partes by Gray J. Gray J made orders which, inter alia, restrained Siminton until the trial of the action or further order from receiving money from members of the public by way of deposit in the Terra Nova Cache or the Principality of Camside and from dealing with or disposing of certain assets and moneys: see Australian Prudential Regulation Authority v Siminton [2006] FCA 140. 7 Siminton filed notices of motion seeking to discharge the orders made by Sundberg J, Gray J and myself. I adjourned the motions to a date to be fixed. 8 By notices of motion and statements of charge filed on 29 December 2005 and 19 January 2006 ('the contempt motions'), APRA applied for orders that the respondent be punished for contempt in respect of nine alleged breaches of the Sundberg J orders. Siminton applied to have the hearing of the contempt motions adjourned until after the hearing of the substantive proceeding against him or until after the conclusion of any criminal proceedings that might be commenced. I refused Siminton's application and proceeded with the hearing of the contempt motions. 9 Siminton, through his counsel, pleaded not guilty to the contempt charges and put APRA to proof of the charges. However, the disobedience will amount to a criminal contempt if it involves 'deliberate defiance or, as it is sometimes said, if it is contumacious': see Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 ('Witham') at 530. They certainly do not justify the allocation of different standards of proof for civil and criminal contempt. Rather, the illusory nature of those differences and the fact that the usual outcome of successful proceedings is punishment, no matter whether primarily for the vindication of judicial authority or primarily for the purpose of coercing obedience in the interest of the individual, make it clear as Deane J said in Hinch , that all proceedings for contempt "must realistically be seen as criminal in nature". The consequence is that all charges of contempt must be proved beyond reasonable doubt. The other issue was whether the Sundberg J orders were made without jurisdiction resulting in them being a nullity and not capable of founding a basis for the contempt motions. First, breaches of Sundberg J's orders that Siminton be restrained, inter alia, from dealing with or disposing of moneys standing to his credit and/or that of his nominee. ('the disposal allegations'). Second, breaches of Sundberg J's orders that Siminton file certain documents and an affidavit with the Court ('the failure to file allegations'). Third, a breach of Sundberg J's order that a certain notice be placed on the websites of the Principality of Camside and the Terra Nova Cache ('the website notice allegation'). Each of the categories of charges and the charges themselves are dealt with below in chronological order. Monsted is the managing director of Technocash Pty Ltd ('Technocash') which he described as being 'an internet-based service to facilitate money transfers both within Australian and internationally. On 17 December 2005, the Respondent effected or gave instructions in relation to the transfer of $536,880.18 from the Terra Nova Cache account, held with Technocash, to the Agios account, also held with Technocash. Technocash is an internet-based service that facilitates money transfers within Australia and internationally. At all relevant times the Respondent held the Terra Nova Cache account at Technocash, Account No 6276 2753 8201 2500. The formal name of the Terra Nova Cache account, being Account No 6276 2753 8201 2500, is "Dr David Siminton". The trading name of that account up to and including 21 December 2005 was "Terra Nova Cache". The trading name of the Terra Nova Cache Account changed after 21 December 2005. At the time of the transfer of 17 December 2005, the trading name of the account was "Terra Nova Cache". This is evident from transaction details recorded in Annexure "PCM4" to the Monsted affidavit. "PCM4" is a true copy of a print-out recording Transaction Details for the Agios account. The 5 th item in "PCM4" records a deposit of $536,880. [18] from the Terra Nova Cache account on 17 December 2005 to the Agios account. The corresponding debit entry to the Terra Nova Cache account is recorded in Annexure "PCM2" to the Monsted affidavit. Item 8 records a debit of $536,880. [18] on 17 December 2005. The "Function" column records "Sent to BF", meaning that the funds were transferred to another Technocash BillFold account. The transfer was made from the Terra Nova Cache account to the Agios account. The contact person for the Agios account is Hardy Erhardt, the Respondent's solicitor. APRA submits that the transfer of $536,880. [18] from the Terra Nova Cache account to the Agios account was deliberate. The person who made this internet transfer was required to verify his or her intentions by selecting appropriate responses from drop-down menus after logging-on. The Respondent is the only person authorised to use his Technocash Account. No other persons are listed. Further, APRA submits that the Respondent, or a person acting on the Respondent's instructions, made the transfer. The conclusion that the Respondent deliberately effected, or gave instructions in relation to the transfer of $536,880. [18] from the Terra Nova Cache account to the Agios account is the only rational inference to be drawn from the evidence outlined in paragraphs 32 and 33 above, and in paragraph 48 below [see para 21 of judgment]. Any alternative hypothesis could not be regarded as reasonable in the absence of evidence to support that hypothesis when that evidence, if it exists as all, must be within the knowledge of the Respondent. On 19 December 2005, the Respondent effected or gave instructions in relation to the transfer of $5,000 from the Terra Nova Cache to an account held with an external financial institution. The debit-side of the transaction is recorded in Annexure "PCM2" to the Monsted affidavit. The 7 th item in "PCM2" records a transfer from the Terra Nova Cache account in the amount of $5,000. The funds were transferred to "MyBank", meaning that the funds were transferred to an external bank account. The description of the transaction is "Mommy Help Funds". For the reasons set out in paragraphs 32 to 34 above, APRA submits that transfer was made deliberately by the Respondent or by a person acting on the Respondent's instructions. On 20 December 2005, the Respondent effected or gave instructions in relation to the transfer of $38,000 from the Terra Nova Cache account to the Agios account. The 5 th item in "PCM2" records a transfer from the Terra Nova Cache account in the amount of $38,000 to the Agios account. The 3 rd item in "PCM4" records a deposit of $38,000 from the Terra Nova Cache account (No 6276 2753 8201 2500) on 20 December 2005 to the Agios account. For the reasons set out in paragraphs 32 to 34 above, APRA submits that the transfer was made deliberately by the Respondent or by a person acting on the Respondent's instructions. On 21 December 2005, the Respondent in the company of Mr David John Dodson (Dodson) attended the Pakenham branch of the Bendigo Bank, where they were served by Ms Kelly Stephens, Customer Service Supervisor. Mr Dodson holds two accounts with Bendigo Bank: a 1401 account (transactional account) and a BC01 account (savings account). On 20 December 2005 two direct credits were made into the 1401 account. The first credit was for $205,000 and the second credit was for $324,000. Those credits were the result of transfers from the Agios account, made after the transfer to that account from the Terra Nova Cache account referred to in paragraph 24 above. Dodson told Ms Stephens that he wished to withdraw $500,000 in cash. Dodson requested that the Respondent be made a signatory to his 1401 account, No 108014580. The Respondent and Mr Dodson completed an account alteration form to add the Respondent as a signatory to the 1401 account number 108014580. The Respondent was added as a signatory to this account on 21 December 2005. At approximately 4.45 pm on 21 December 2005 Mr Andrew Loh, Branch Manager of the Pakenham Branch of Bendigo Bank, spoke to the Respondent who told Mr Loh that the money was required to pay the wages of Dodson's brother, and that the funds were cleared funds from the Respondent's company which had been sent via an intermediary called Technocash. On 21 December 2005, the Respondent effected or gave instructions in relation to the transfer of $10,000 from Bendigo Bank account No 108014580, of which he was a signatory, to Commonwealth Bank Credit Card No 4940 5252 7595 0252. The Respondent was provided with internet banking access to the Bendigo Bank account on being made a signatory to the account. The Respondent's internet banking number is 625183902. (Dodon has a separate internet banking access number of 625183901). At 12:06pm on 21 December 2005, an internet Billpay transfer was effected from the Bendigo Bank account by the use of the Respondent's internet banking number. The transfer, in the amount of $10,000, was to the Commonwealth Bank Credit Card No 4940 5252 7595 0252. Harley also stated that Bendigo Bank's terms and conditions require that the password of an internet banking user be kept secret. On 21 December 2005, the Respondent effected or gave instructions in relation to the transfer of $43,000 from the Terra Nova Cache account to the Agios account. The 2 nd item in "PCM2" records a transfer from the Terra Nova Cache account in the amount of $43,000 to the Agios account. The 1st item in "PCM4" records a deposit of $43,000 from the Terra Nova Cache account (no 6276 2753 8201 2500) on 21 December 2005 to the Agios account. For the reasons set out in paragraphs 32 to 34 above, APRA submits that the transfer was made deliberately by the Respondent or by a person acting on the Respondent's instructions. 26 I am satisfied that the evidence adduced by the applicant establishes each of the matters of fact relied upon by APRA. The evidence was not controverted and is strongly supported by the affidavit and documentary evidence. The most that can be said in criminal matters is that there are some cases in which evidence (or an explanation) contradicting an apparently damning inference to be drawn from proven facts could come only from the accused. In the absence of such evidence or explanation, the jury may more readily draw the conclusion which the prosecution seeks. 29 In the present case, Siminton's failure to contradict the 'damning' inferences which APRA claims ought to be drawn from the proven facts, leaves no real scope for a rational or reasonable hypothesis consistent with his innocence. The Respondent did not, on or before 22 December 2005, make and swear and file and serve the affidavit the subject of paragraph 3 of the Order. On 4 January 2006, the Respondent swore an affidavit, claiming privilege against self-incrimination in relation to the making and swearing of the affidavit the subject of paragraph 3. Nevertheless, the Respondent breached paragraph 3 by failing to make and swear any affidavit on or before 22 December 2005. 34 In my view, APRA has not established charge 1.3 beyond reasonable doubt. The requirement to file the affidavit was expressed to be subject to Siminton's right to object to filing the affidavit on the ground of self-incrimination. There is some ambiguity in the order in relation to whether the obligation imposed by it is subject to the objection being made prior to 22 December 2005 or whether the obligation itself is subject to the right to object. As I explained in AIG at [33] and [41], a person will not be committed for contempt where, on one construction of the order said to have been breached, there may not have been a breach. In the present case, two constructions of [3] of the Sundberg J orders are reasonably open and, because the breach only arises on one of those constructions, the contempt alleged cannot be established beyond reasonable doubt. Subject to the right of the Respondent to object to producing any information or document on the ground that to do so may tend to incriminate him, on or before 22 December 2005, the Respondent produce to the Victoria District Registrar of the Court the originals of all statements of account, deposit slips, transfer applications, or records or memoranda of any kind in his possession, custody or control that relate to deposits with, earnings from (including any profit share or interest), or the withdrawal of any funds that relate to the Principality of Camside or the Terra Nova Cache. The Respondent did not, on or before 22 December 2005, produce to the Victoria District Registrar of the Court the documents the subject of paragraph 4 of the Order. On 4 January 2006, the Respondent swore an affidavit, claiming privilege against self-incrimination in relation to the production of the documents. Nevertheless, the Respondent breached paragraph 4 by failing to produce the documents on or before 22 December 2005. The Respondent did not, within two days of 16 December 2005 (the day when the orders of Sundberg J were served on the Respondent) cause a notice to be placed on the internet site of "the Principality of Camside" the notice in the form set out in Schedule 1 to the Order, as required by paragraph 5. On 4 January 2006, the Respondent swore an affidavit in which he attested that the required notice "now appears on the website of the Principality of Camside" and that he had attempted to place a similar notice on "a website for the Terra Nova Cache". The Respondent does not testify as to the date when the required notice was inserted on the website of "the Principality of Camside". Despite his belated claimed compliance with paragraph 5, the Respondent breached that order by failing, by 18 December 2005, to cause the notice to be placed on the website of "the Principality of Camside" --- a breach that continued until at least 23 December 2005. He exhibited to his affidavit a print out of a webpage headed 'Welcome to HM Government of Camside' which had a button with the word 'Enter' on it. The date on the bottom of the print out is 23 December 2005. There is no notice of the requisite kind on that print out. 41 Paragraph 5 of the Sundberg J orders required Siminton to 'cause' a particular outcome. He failed to do so and there is no evidence that he was unable to 'cause' that outcome. In the circumstances, I am satisfied beyond reasonable doubt that Siminton breached [5] of the Sundberg J orders by failing to cause the requisite notice to be posted on the website of the Principality of Camside within two days of service of the Sundberg J orders. I am also satisfied beyond reasonable doubt that Siminton breached [5] by failing to cause the requisite notice to be posted on the website of the Terra Nova Cache within two days of service of the Sundberg J orders. It was submitted that it follows that Siminton was not obliged to comply with the orders and that therefore there could be no breach of those orders. The first is that the matters alleged by Siminton to establish absence of jurisdiction to make the Sundberg J orders do not, even if made out, establish absence of jurisdiction. Counsel for Siminton was not able to cite any authority in support of his submission that any of the above matters, if made out, would result in absence of jurisdiction. Plainly, none of the matters relied upon go to the jurisdiction of a judge of the Court to make the Sundberg J orders. I would add that, in any event, the submission was wholly misconceived as I am not satisfied that the allegations relied upon are justified or would warrant any of the Sundberg J orders being set aside. For example, s 65A(10) of the Act provides that APRA 'cannot be required' to give an undertaking as to damages. Also, it is clear that APRA's proceeding does not fall within O 6 r 6(1A). In so far as any of the above matters go to the merits, Siminton's counsel was unable to persuade Gray J on the later inter partes application hearing that Mareva type orders should not be made or that there was any disqualifying conduct of any kind on the part of APRA. 45 The second fundamental difficulty with Siminton's jurisdiction argument is that the Sundberg J orders were made by a judge of a superior court of record and were therefore valid and binding until set aside, even if the orders were in excess of jurisdiction: see Cameron v Cole [1944] HCA 5 ; (1944) 68 CLR 571 at 590; Wilde v Australian Trade Equipment Co Pty Ltd [1981] HCA 13 ; (1981) 145 CLR 590 at 602 and R v Ross-Jones; Ex parte Green [1984] HCA 82 ; (1984) 156 CLR 185 at 215. 46 The need to obey superior court orders made in excess of jurisdiction was explained in Jackson v Sterling Industries Ltd [1987] HCA 23 ; (1987) 162 CLR 612 in which the High Court considered, inter alia, the effect of an order which ought not have been made. The position is otherwise where it is apparent on the face of a purported exercise of jurisdiction that there is no power or where the court's jurisdiction depends upon matters in dispute which cannot be conclusively determined by the court. 48 Even where jurisdiction is lacking as a result of invalidity of the legislation purporting to confer jurisdiction, an order of a superior court will be binding until set aside. In Re Macks; Ex parte Saint [2000] HCA 62 ; (2000) 204 CLR 158, the High Court considered the effect of orders for winding up made by the Federal Court pursuant to jurisdiction purportedly conferred by invalid legislation. The High Court concluded that the orders of the court were binding until set aside despite the absence of jurisdiction. And, if the Federal Court determines that it has jurisdiction, it is obliged, subject only to limited and well recognised exceptions, to exercise that jurisdiction to determine the rights and liabilities in issue. That is the nature of judicial power. The practical consequence of those two considerations is that, by operation of s 109 of the Constitution , orders of the Federal Court, even if made without jurisdiction, are final and binding unless set aside on appeal or pursuant to s 75(v) of the Constitution . McHugh J also agreed that the orders were binding until set aside in so far as they impliedly determined that the Federal Court had jurisdiction (at 215 [151]). That is so because implicit in an assertion of jurisdiction is the conclusion about the constitutional validity of that assertion. For the reasons given earlier, the authority to decide and the power to provide that the order is binding until set aside is sufficiently rooted in ss 77 and 76. But, if the actual legislature does make the jurisdiction of a court contingent upon the actual existence of a state of facts, as distinguished from the court's opinion or determination that the facts do exist, then the validity of the proceedings and order must always remain an outstanding question until some other court or tribunal, possessing power to determine that question, decides that the requisite state of facts in truth existed and the proceedings of the court were valid. Conceding the abstract possibility of the legislature adopting such a course, nevertheless it produces so inconvenient a result that no enactment dealing with proceedings in any of the ordinary courts of justice should receive such an interpretation unless the intention is clearly expressed. 52 APRA's claims against Siminton constituted a justiciable dispute arising under the Act, which is a law made by the Federal Parliament. The jurisdiction of the Court in respect of that dispute is conferred by s 39B(1A)(c) of the Judiciary Act 1903 (Cth) which confers jurisdiction on the Federal Court in any matter arising under any laws made by the Federal Parliament. It is unnecessary to consider if it also arises under s 39B(1A)(a). Section 65A of the Act and s 23 of the Federal Court Act 1976 (Cth) plainly conferred power to make the Sundberg J orders. In particular, s 65A conferred power on the Court to grant 'an interim injunction' pending determination of an application for an injunction under s 65A(1). The jurisdiction exercised by Sundberg J was one in which his Honour was given power to determine the facts upon which his jurisdiction was based. It was not a jurisdiction that was preconditioned upon facts or any other matters which his Honour was not given the power to determine. Accordingly, the orders were valid and binding until set aside even if, contrary to my findings, there was an excess or absence of jurisdiction. 53 For the above reasons, the arguments of Siminton as to absence of jurisdiction to make the Sundberg J orders are without substance and are to be rejected. I propose to give directions for a further hearing in relation to penalty. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel J. | whether order of a judge of the court made on an ex parte application was a nullity or was valid unless set aside whether the respondent engaged in deliberate conduct in breach of the order contempt |
The applicants have leave pursuant to s 500(2) of the Corporations Act 2001 (Cth) to commence and proceed with proceeding WAD 305 of 2006 against the second respondent herein, such leave to be given nunc pro tunc to the extent necessary, on the conditions set out below. 2. The applicants shall not be at liberty to enter judgment against the second respondent herein, nor to enforce any judgment against I, without leave of the Honourable Court to do so. 3. Unless and until further order to the contrary, the second respondent herein shall not be required to participate further, or take any further steps, in the proceedings WAD 305 of 2006. 4. The costs of this application be reserved until after the determination of WAD 305 of 2006 or until further orders. The opposition to the grant of that leave was substantially based upon argument against the joinder of the Insurers. I shall make an order in terms of the minute proposed by the applicants. I certify that the preceding one (1) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | insolvency leave to proceed against company in liquidation joinder of company insurers as respondents leave to proceed ordered corporations |
In the first part Ms Manning was found to have breached the equitable duty of good faith she owed to her former principal, Arrive Wealth Management Ltd, for having induced Arrive's clients to transfer their business to her new employer, Goldman Sachs JBWere Services Pty Ltd. The purpose of this part of the trial is to determine what compensation Ms Manning ought to pay for the breach of that duty. 2 The principles according to which equitable compensation is to be assessed have been identified. They are set out in my reasons delivered at the conclusion of the first part of the trial. The parties had been invited at that time to make submissions and for their assistance were referred to several relevant authorities. The parties turned down the invitation. Nonetheless, during the hearing on damages Mr Braham, counsel for Arrive, made detailed submissions on the subject, which in some aspects depart from my description of the principles. 3 A convenient place to begin a consideration of the quantum of Arrive's claim is to explain how it arrived at the amount it claims. First it calculated the decline in its annual revenue since Ms Manning's departure. It said the drop was $1,636,130. It attributed this decline solely to Ms Manning's breach of duty by asserting that there was no other cause. (In fact, as will be seen, there were several other causes. ) Then it placed a capital value on the lost revenue. The capital value was derived from prices paid by purchasers of similar businesses. An analysis of those prices showed that the prices represented a multiple of between 2.75 and 3.65 for recurring commission and a multiple of between 0.85 and 0.95 for fees for services revenue. By applying the multiples at the upper end of these scales Arrive calculated its capital loss to be around $4.3 million. 4 In my earlier reasons for judgment I said that Arrive is entitled to compensation that would "restore [it] to the position in which [it] would have been if there had been no breach [by Ms Manning] of [her] obligations". That makes it necessary to determine whether Arrive would have suffered any capital loss if there had been no breach of duty on the part of Ms Manning. Or, put another way, a fiduciary is liable to make good any loss suffered by her principal which, but for the breach of duty, the principal would not have suffered. In Target Holdings Limited v Redferns (a firm) [1996] 1 AC 421, a case dealing with a defaulting trustee, Lord Browne-Wilkinson put it this way (at 434): "[T]here does have to be some causal connection between the breach of trust and the loss to the trust estate for which compensation is recoverable". 5 There are three possible heads of compensation to which Arrive might be entitled: (i) the capital loss arising from the loss of clients to GSJBW; (ii) the income lost in the period between the time when the clients left Arrive as a result of Ms Manning's breach of duty and the time they would have left had there been no breach; and (iii) the value of the lost opportunity to retain the clients. Care must be taken when considering each of these heads to avoiding double counting. I will consider each head in turn. That was a tentative finding, but if it stands it would be impossible to accept Arrive's claim to recover the capital value of its lost clients. It would be impossible because the clients would have been lost even if there were no breach. I will return to this issue after considering the other two possible heads of compensation. In my reasons I suggested that the income to which Arrive was entitled was that which it would have received from the lost clients (that is those induced to go to GSJBW) in the period between 20 January 2004 (the day on which Ms Manning gave notice) and 16 February 2004 (the day on which her employment terminated). Mr Braham sought to persuade me that this period is too short because it usually took three to four weeks for a client to transfer his business from Arrive to GSJBW. However, it seems to me that this is nothing more than a delay. Precisely the same chain of events had to take place but should have taken place approximately one month later. Accordingly, the relevant period for the calculation of damages is the period between 20 January 2004 and 16 February 2004. For some type of revenue the true period is probably more like 13 February 2004 to 11 March 2004 but, in any event, it is a period of four weeks. 8 A more precise calculation of lost income might have been produced by working out the exact date upon which each client to which Ms Manning spoke decided to go to GSJBW, the date of actual transfer and what income was lost during that period. But the evidence does not permit such a detailed analysis. 9 Mr Meredith, an accountant, is a partner in Ferrier Hodgson. He has calculated Arrive's lost income from records provided to him by Arrive. The records did not permit Mr Meredith to determine how much lost income could be attributed to particular clients. He requested documents that would have established those figures but the documents were not provided. I am left to speculate whether or not the documents exist. 10 Without having access to those documents, the only method open to Mr Meredith to assess the loss was to compare Arrive's income before and after Ms Manning's departure, adjust for any differences that could be attributed to other causes and conclude that any remaining difference was due to her breach of duty. Accordingly, he first assessed Arrive's income for the year ending February 2004. The amount is $1,924,859. Next he estimated Arrive's income for the following year. This calculation was complicated by the fact that Mr Meredith did not have access to a full year's figures. He only had figures for the first nine months. By annualising those figures, Mr Meredith estimated the revenue for the year to February 2005 to be between $244,743 and $331,511. The difference in these amounts is explained by the fact that Mr Meredith made three separate calculations by annualising the first three months, six months and nine months of the year. Subtracting those figures from the income for the year to February 2004, he estimated the annualised lost revenue to be approximately $1,600,000. 11 This figure, however, had to be adjusted for losses caused by factors other than Ms Manning's breach, the most important of which was the loss of insurance broking commissions from AXA on behalf of VicSuper. VicSuper (via AXA) had been a client of Arrive's until it terminated their relationship on 19 March 2004. The termination was unrelated to Ms Manning's breach of duty. 12 On the basis of apparently incomplete records provided to him by Arrive, Mr Meredith calculated the annual income for the year ending 29 February 2004 from VicSuper to be $423,331 and therefore he adjusted the annual income to $1,501,530. 13 However, there is a dispute between the parties as to how much the VicSuper commissions were worth. Mr McCarthy, a former Arrive employee who had been responsible for the VicSuper account until January 2004, gave evidence that VicSuper commissions for the 2003 calendar year amounted to approximately $700,000. The problem with this evidence is that the VicSuper commissions were recorded in Arrive's accounts as "trailing commissions" and the total trailing commissions for 2003 was recorded as $790,842 of which $116,975 were non-VicSuper commissions. These figures would indicate that the VicSuper commissions could have been no more than $673,863 and are likely to have been much less because the non-VicSuper commissions that were recorded were only for four months. Mr McCarthy conceded the difficulty his evidence produced and suggested that Arrive's records must be incorrect. 14 I am left to guess at where the truth might lie. The choices are: (a) that the VicSuper commissions were recorded accurately by Arrive (which seems unlikely because, against the evidence, there are several months in which no commission is recorded); or (b) that the VicSuper commissions were higher than shown and accordingly the overall revenue is higher than shown (this will not assist the defendant because the adjusted revenue figure after subtracting the higher VicSuper figure from the higher revenue figure will be the same as before); or (c) that the VicSuper figures were higher than recorded because some revenue recorded as non-VicSuper was, in fact, from VicSuper (this will have the effect of reducing the adjusted revenue for the year to February 2004 and consequently reducing the loss suffered in the relevant period). 15 It is difficult to know which way to turn. Mr McCarthy obviously has direct knowledge of the rates of commission received from an important client, but his view that the commission was in the order of $700,000 is likely to be too high. On the other hand, I am satisfied that the commission was probably more than that reported by Mr Meredith. 16 If Mr Meredith's figures are accepted the annual revenue for the year to February 2004 after subtracting the VicSuper commissions was approximately $1,500,000. If Mr McCarthy's figures are accepted, the figure is nearer $1,200,000. There seems to be no dispute that the annual revenue for the following year was approximately $300,000 and so the difference between 2004 and 2003 is somewhere between $1,200,000 (on Mr Meredith's figures) and $900,000 (on Mr McCarthy's figures). Assuming that revenue is earned evenly throughout the year, the difference (ie loss) for the period between 20 January 2004 and 16 February 2004 (27 days) is between $87,096.77 (($1,200,000 / 12) x 27/31) and $65,322.58 (($900,000 / 12) x 27/31). 17 To this point I have not considered adjustments arising from factors other than the loss of the VicSuper business. There are several other reasons, besides Ms Manning's breach of duty, for Arrive's decreased revenue. These include: the fact that Ms Manning was placed on "gardening leave" as soon as she gave her notice and was not permitted to do any further work; the fact that several other Arrive employees left at around the same time as Ms Manning and many of their clients followed them; and, the fact that many clients not contacted by Ms Manning prior to 16 February 2004 left Arrive when they discovered she had moved on. I do not mean to downplay the effect that Ms Manning's breach had on Arrive's business: the evidence indicates that perhaps sixty to seventy clients took their business to GSJBW as a result of Ms Manning's approach and many of them were important clients. Nevertheless, the loss estimates outlined above will have to be adjusted down to account for these other factors which are not causally related to Ms Manning's breach. 18 To further complicate matters, it would appear that it cannot be assumed that revenue is earned evenly throughout the year. Doing so may present a false picture. It can also be seen that the revenue from the month immediately following Ms Manning's departure, February 2004 --- the first full month of the relevant compensation period --- is more than double the figure for the corresponding month in the previous year. This is partly explained by the fact that in the 2003 figures, the fee for service figures were based on accounts sent out approximately two months after the services had been provided. In February 2004 these fees are much higher than usual because accounts were rendered to clients immediately upon them giving notice that they intended to move to GSJBW. Ordinarily those accounts would have been sent in March or April. 20 Even accounting for the anomalous figures in February 2004, it seems to me that if the loss is calculated by reference to the actual income derived in the relevant periods, it is less than if it is calculated by averaging. 21 In the light of this and the foregoing discussion, it will be apparent that the calculation of loss of income for the relevant periods is far from scientific. It is simply impossible to work out a precise figure. Even a rough and ready calculation is extremely difficult. With a good deal of judicial guesswork, I fix the amount at $45,000. If any client chose to stay with Arrive the contribution that client would make to Arrive's revenue may have a capital value. Mr Kenyon, an expert in valuing businesses, in a report tendered by Arrive said that revenue of this kind has a capital value provided there is "a high degree of confidence [that the revenue] will continue to be received by the business in the foreseeable future. " What Mr Kenyon had in mind is that a purchaser will pay the full capital value of an income stream if the purchaser is reasonably certain that the stream will continue to flow into the foreseeable future; he will pay little or nothing if the stream will not, or is unlikely to, continue; or he may pay something in between, dependent upon the degree of likelihood of the income continuing. I observe that if Arrive is to recover any compensation for the loss of the chance to retain clients it cannot recover both income lost from those clients as well as compensation for the loss of the chance to retain these same clients. Thus, it may be necessary to make an adjustment to the claim. 23 The task is to determine whether Arrive had any chance of retaining the clients who moved to GSJBW and place a dollar value on that chance. Arrive says that with an appropriate strategy it was likely to have retained more than 50 per cent of the clients that left. Mr Regan, a former general manager within the AMP group, outlined the strategy that could have been adopted. First the business would write to the clients advising them of the resignation of Ms Manning assuring them that they were valued clients of the business and forewarning them how their affairs would continue to be managed by the business, allocating a replacement planner and offering to arrange a meeting. Ms Manning would be required to attend meetings with the adviser and the clients to discuss proposed on-going arrangements. The meetings would involve Ms Manning personally informing the clients of her resignation, explaining the circumstances of any contractual restraints or other reasons why she could not continue to provide financial planning services, recommending the replacement planner and assuring the client that high quality services would continue to be provided by the business. In addition to those measures, Mr Regan said that PWC might have been called on to assist because some of the client relationships dated back to the time that the business was owned by PWC. 24 Mr Regan said that this strategy could not be implemented because he soon became aware that Ms Manning had approached clients and encouraged them to move to GSJBW. In fact, as events turned out letters were only sent to 48 of some 400 clients advising them of the "resignation of some staff members", the appointment of two new financial advisers, the intention of Arrive to continue to provide "premium quality wealth management advice" and that Arrive "look[ed] forward to continuing to be of service in assisting with your financial affairs". 25 In my opinion, Mr Regan's suggested strategy was never to be implemented. Immediately upon Ms Manning giving notice Mr Reid and Mr Furness came down from Sydney and took charge of the Melbourne operation. They remained in charge until Mr Regan took over on 29 January 2004. Neither Mr Reid nor Mr Furness called in PWC to assist in dealing with clients. Mr Helmich, a director of AMP Services, did put in a call to a senior partner at PWC and sought an assurance that PWC would continue to refer clients to Arrive. That assurance was given. Mr Helmich did not ask for any other assistance. 26 So far as clients were concerned Mr Furness requested advisers to call clients to advise that Ms Manning had left and to reassure them that she would be replaced and that it was "business as usual" at Arrive. He told advisers that if clients wanted to know where Ms Manning had gone they were to be "evasive". But no one was appointed to replace Ms Manning or to undertake Ms Manning's duties with regard to particular clients. 27 When Mr Regan took control he did nothing for a week while he spoke with Ms Manning to see whether she might change her mind. By the time Mr Regan reached the conclusion that Ms Manning would not return to Arrive, perhaps early in the second week of February, letters had begun to arrive from clients advising of their intention to move. To that point approximately two and a half weeks had elapsed during which no serious attempt was made to keep the clients from leaving. Even when letters began arriving nothing was done. It may be accepted that Arrive had little chance of enticing clients who said they would follow Ms Manning to change their mind. But what of clients from whom a letter had not been received? Moreover, in early February Arrive had no way of knowing how many clients had decided to go. Nor did anyone really appreciate that Ms Manning was the cause of many clients deciding to leave. Yet nothing was done to retain them. 28 It seems to me that nothing was done to retain clients for one of two reasons. First, the view may have been taken that it was a waste of time. Not only does that seem to have been Arrive's attitude, it was hardly an unreasonable attitude, in my opinion. In my earlier reasons I said, albeit on a tentative basis, that given the close relationship between Ms Manning and her clients it was likely that most would follow her to GSJBW. Nothing that has been said during the second trial has altered my preliminary view. The second potential reason is that it was felt Arrive need to do nothing because of the belief (mistaken as it turns out) that Ms Manning was subject to a restraint of trade clause that operated for twelve months. It is not necessary to choose between the possibilities for the consequences are the same. 29 The value of the lost clients must be considered from the perspective of a potential purchaser who, in Mr Kenyon's words, is willing to pay for an income stream that he is confident will continue to be received in the foreseeable future. From the moment Ms Manning tendered her resignation no reasonable purchaser would so regard the income received from Ms Manning's clients. Nor would a reasonable purchaser be encouraged into thinking the income was maintainable by the type of strategy Mr Regan had in mind. A purchaser might be willing to pay a token amount for the client list, but he would do so more as a wager than as payment of a reasonable amount for an asset. I would not award any damages under this head. 30 There will be an order that Ms Manning pay Arrive compensation fixed in the sum of $45,000. I will hear the parties on costs. | breach of fiduciary duties loss of clients compensation for lost income how assessed loss of chance of retaining clients capital value how assessed damages |
At the hearing, ASIC will seek to tender into evidence under s 77 of the Australian Securities and Investments Commission Act 2001 (Cth), certain portions of eight transcripts of examination conducted by ASIC under s 19 of the ASIC Act. The persons who were examined are all employees of Citigroup, most of them occupying very senior positions in that company. 2 Citigroup requires ASIC to call those witnesses in the proceedings in order to comply with the provisions of s 77(b) of the ASIC Act. Mr Stevenson relies in particular upon what he submits to be a tension in the evidence of a number of people who attended the meeting, in particular in relation to a telephone conference call made to Mr Bartels. That call is referred to in [34] of the further amended statement of claim. 4 Mr Stevenson submits that the witnesses are persons in respect of whom it is likely that Citigroup would have had conferences because they are employees of that company. He does not by any means suggest that the witnesses will not give their evidence honestly, but he submits that the more efficient course for the conduct of the proceeding is that ASIC's counsel be permitted to cross-examine the relevant witnesses as to the events which occurred on the evening of 19 August 2005. He submits that the elucidation of the truth as to what occurred at that meeting will be better accommodated by the course that he proposes. 5 I have had the benefit of full argument this morning and I have also been assisted by full written submissions, in particular from Citigroup's counsel. I do not need to set out my reasons in any great detail. 6 I should mention here if I have not already done so, that in seeking the orders or directions that he does today, Mr Stevenson relies upon the provisions of s 26 of the Evidence Act which confers a discretion on the Court to, amongst other things, make such orders as it considers just in relation to the way in which witnesses are to be questioned and the order in which parties may question a witness. 7 In Australian Securities and Investments Commission v Rich [2006] NSWSC 643 ; (2006) 201 FLR 207 at [9] , Austin J said that in his opinion s 26 of the Evidence Act is subject to s 192. As his Honour observed, s 192 provides that in granting leave or making a direction, the Court is to take into account, amongst other things, the powers which it has to make another order or to give directions in relation to evidence; see s 192(2)(e) of the Evidence Act . Austin J was of the view that the Court could not make a determination under s 26 of the Evidence Act as sought in that case because it was premature; see Rich at [15]. His Honour was of the view that the Court was not yet in a position to identify or assess all of the matters which must be taken into account in deciding whether to give a direction. 8 That seems to me to be the position in the present case. I will have, at the trial, power to make orders under a number of sections of the Evidence Act , including s 38 which deals with unfavourable witnesses, s 41 which deals with improper questions and, in particular, s 42 which deals with the power of the Court to limit or disallow the use of leading questions where, for example, a witness has an interest consistent with an interest of the cross-examiner or where the witness is sympathetic to the party conducting the cross-examination. It is unnecessary to address in these reasons the triggers for the operation of the powers conferred by those sections. 9 It does seem to me as Young J said in GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15 at 17 that the course of trials in NSW has always been for a party calling the witness to examine the witness in chief and for all other parties to test the evidence by cross-examination, and then for the person calling the witness to re-examine the witness. 10 I do not see that anything that has been put to me this morning justifies me, at present, in departing from the ordinary course. Whilst there appears to be power to do so under s 26 , as I have said, it is in my view premature for any such order to be made. I think that the appropriate course is for the trial to take place in the ordinary way with objections to evidence being taken as and when they arise. 11 If the jurisdictional triggers set forth in s 38 are enlivened, then no doubt ASIC will make an appropriate application in the course of the hearing. I am, of course, anxious for the trial to proceed in the most efficient and expeditious manner as possible but I am unable to see any reason, at this stage, for making the orders sought in the notice of motion either in the form as filed or in the way in which it was confined by Mr Stevenson during argument. 12 Accordingly, the order I will make is that the motion be dismissed. I will order costs in the cause. | witnesses order in which parties may question witnesses where applicant seeks to call witnesses and then conduct cross-examination where evidence includes transcripts of examinations applicable principles evidence act 1995 (cth), ss 26 , 193 australian securities and investments commissions act 2001 (cth), s 77 motion dismissed evidence |
Servier seeks to amend the AC Patent under s 105(1) of the Patents Act 1990 (Cth) ('the Act') to add an additional set of claims. Apotex opposes the application. The specification states that: ' Perindopril and its pharmaceutically acceptable salts, and more especially its tert-butylamine salt, have valuable pharmacological properties '. The specification describes two actions of perindopril which ' contribute to the beneficial effects of perindopril in cardiovascular diseases, more especially in arterial hypertension and heart failure '. The emphasis is mine: The invention relates to a new α crystalline form of the perindopril salt. The invention relates to a new α crystalline form of the perindopril salt, characterised by a specific X-ray diffraction diagram. The invention relates to a process for the preparation of that salt and to pharmaceutical compositions comprising the salt together with one or more appropriate, inert, non-toxic excipients. It is of prime importance to obtain perindopril with excellent purity. It is important to be able to synthesise it in a form that allows rapid filtration and drying. That form has to be perfectly reproducible, easily formulated and sufficiently stable. The prior art does not specify the conditions for obtaining perindopril in a form that exhibits those characteristics in a reproducible manner. Servier has now found that a particular salt of perindopril can be obtained in a well defined, perfectly reproducible crystalline form that especially exhibits valuable characteristics of filtration, drying and ease of formulation. The process for the preparation of the α crystalline form of the compound is characterised in that a solution of perindopril tert-butylamine salt in ethyl acetate is heated at reflux and is cooled gradually until crystallisation is complete. The salt that is thereby obtained is in the form of individual needles about 0.2mm long. That homogeneous distribution has the advantage of allowing especially rapid and efficient filtration and drying, as well as allowing the preparation of pharmaceutical formulations having a uniform and reproducible composition, which is especially advantageous when those formulations are intended for oral administration. The form thereby obtained is sufficiently stable to allow its storage for long periods without particular requirements for temperature, light, humidity and oxygen level. Claim 1 is to the α crystalline form of the compound of formula (I) (ie. the perindopril tert-butylamine salt) characterised by a particular X-ray diffraction diagram. Claim 2 is to the process for the preparation of the α crystalline form of the compound of formula (I). Claim 7 of the specification as accepted (claim 8 of the specification as filed) is the process according to claims including claim 2, characterised in that the perindopril salt that is thereby obtained is in the form of readily filterable individual needles. That homogeneous distribution has the advantage of allowing especially rapid and efficient filtration and drying, as well as allowing the preparation of pharmaceutical formulations having a uniform and reproducible composition, which is especially advantageous when those formulations are intended for oral administration. The application was published in November 2001. The Examiner rejected the original set of claims on the basis that they lacked an inventive step in light of European Patent No 0308341 ('EP 0308341'). Of these claims, claim 2 was to a process for the preparation of the α crystalline form of the perindopril tert-butylamine salt, characterised in that a solution of the salt in ethyl acetate is heated at reflux and then cooled gradually until crystallisation is complete. Claim 5 was to a process according to any one of claims 2 to 4, characterised in that the solution of the salt in ethyl acetate at reflux is first cooled to a temperature of from 55 to 65°C at a rate of from 5 to 10°C/hour, and then to ambient temperature. On 24 January 2005, Servier sought to amend the AC Patent application to incorporate the feature of (then) claim 5 into claim 2. Servier submitted that the specific crystallisation steps produced an unexpected result and would not have been obvious to a person skilled in the relevant art in light of EP 0308341. The Examiner initially rejected the proposed amended claims on the basis that the ' invention as claimed lacks an inventive step in light of US 4914214 (family equivalent of EP 308341) '. The Examiner stated that there ' does not appear to be any surprising and unexpected advantage in the solution offered '. In response to the Examiner's rejection of the proposed amended claims, Servier submitted that: On 19 July 2005, IP Australia accepted the AC Patent application and amendment. The accepted AC Patent application was advertised as accepted on 28 July 2005. On 9 March 2007, Apotex filed a notice of opposition to the grant of the AC Patent. The notice of opposition was accompanied by a request for an extension of time in which to file the notice, from 28 October 2005 to 28 March 2007. A Delegate of the Commissioner of Patents refused the request for an extension of time. Apotex appealed that decision to the Administrative Appeals Tribunal ('the AAT'). On 19 March 2008, the AAT affirmed the decision not to grant Apotex an extension of time in which to oppose the grant of the AC Patent. On 2 March 2007, Servier applied to amend the AC Patent application further under s 104 of the Act. On 2 August 2007, leave to amend the application was granted by a Delegate of the Commissioner of Patents. The amendments were advertised in the Australian Official Journal of Patents (Supplement) on 16 August 2007. Apotex opposed the s 104 amendments sought by Servier but its opposition was dismissed by IP Australia on 11 April 2008. Apotex appealed that decision to the AAT on 22 April 2008. On the same date, Servier instructed its solicitors, Allens Arthur Robinson ('AAR'), to have the AC Patent sealed immediately. On 1 May 2008, the AC Patent was sealed, without incorporation of the s 104 amendments. On 9 May 2008 Apotex commenced proceedings to revoke the AC Patent and on 26 May 2008 Servier filed its notice of motion to amend the AC Patent under s 105 of the Act. The proposed amendments are in the same terms as the s 104 amendments sought and abandoned and are the subject of this application. The proposed amendments seek to introduce an additional set of claims (set out in Annexure A to these reasons). All of the proposed new claims import the needle requirement in one way or another. Apotex submits that its grounds of opposition identify deficiencies, all of which arise "as a result of the amendment" (s 102 of the Act). In particular, it argues that all of the proposed claims are different in scope from the only existing needle claim, namely, claim 7. Is it the perindopril tert-butylamine salt in the α crystalline form, so that any crystals of the perindopril salt will infringe claim 1 if in the α crystalline form, or must the crystals be in the form of individual needles? This is considered below. However, the parties disagree as to whether or not the specification as a whole is to be looked at when considering a proposed amendment under s 102(2)(b). Apotex argues that, for the purposes of s 102(2)(b) , when considering whether or not the proposed new claims are fairly based on matter described in the specification, the necessary comparison is between the proposed new claims and the body of the specification. Servier submits that, for the purposes of s 102(2)(b) , when considering whether or not the proposed new claims are fairly based, the Court is required notionally to add the proposed amendments and then to consider the whole of the proposed amended specification to determine if it complies with s 40(3). Both s 102(1) and 102 (2) require consideration of consequences that follow as a result of the amendment. The proposed amendments are to the claims. There may be deficiencies in the (existing) complete specification or lack of compliance with s 40 which do not fall for consideration at this time. The question is whether, as a result of the introduction of the proposed new claims, the amendments are not allowable because of the requirements of s 102. Section 102(1) requires consideration of whether the proposed claims claim matter not in substance disclosed in the specification as filed. The specification as filed includes the claims. Section 102(1) requires ( RGC Mineral Sands Pty Ltd v Wimmera Industrial Minerals Pty Ltd (1998) 89 FCR 458 (' RGC Mineral Sands ') (at 466)): Identification of the proposed amendment by identifying the difference between the specification as filed (or the specification as accepted if different from the specification as filed) and the specification as proposed to be amended; and Reading the proposed amended specification as a whole to determine whether, as a result of the amendments sought, the specification would claim matter not in substance disclosed in the specification as filed. In assessing whether a patent complies with the requirement of s 40(2)(a) that the complete specification must describe the invention fully, it is necessary to take into account the whole of the complete specification --- both the body of the specification and the claims. On the other hand, when assessing whether there is fair basing within the meaning of s 40(3) , it is necessary to split the patent into the claims and the body of the specification, in order to see whether the former are fairly based on the matter described in the latter. To the extent that s 102(2)(b) requires compliance with s 40(3) , the relevant comparative inquiry is whether each proposed new claim is fairly based on the body of the specification as proposed to be amended. As there is no proposed amendment to the body of the specification in this case, the question is whether each proposed new claim is fairly based on the present specification. If, as a result of the amendment, a new claim is inserted, then from the language of s 102(2)(b) when read with s 40(3) , that claim must comply with s 40(3) and it is no answer that an existing claim does not comply with s 40(3). That is, s 102(2)(b) requires: Identification of the precise amendment sought by identifying the difference between the specification as it stood immediately before the amendment and the specification as proposed to be amended; and Determination whether, as a result of the amendment, the specification would not comply with s 40(2) or s 40(3). The High Court emphasised in Lockwood (at [43]) that it is important to consider each ground of invalidity and each of the requirements of s 40 of the Act separately. It is wrong to employ the reasoning of one ground in considering another. Further, questions of "inventiveness" and "meritoriousness" do not impinge on the consideration of s 40 issues (at [46]). Fair basing requires a consideration of whether the claims are fairly based on the matter in the specification that describes the invention. The "invention" means the embodiment which is described and around which the claims are drawn ( Lockwood at [53]). That, in turn, involves considering whether a claim as expressed ' travels beyond the matter disclosed in the specification ' ( Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23 ; (1977) 180 CLR 236 endorsed in Lockwood at [57]). For example, an unconditional claim may travel beyond conditional matter in the specification ( Palmer v Dunlop Perdriau Rubber Company Limited [1937] HCA 43 ; (1937) 59 CLR 30 discussed in Lockwood at [62]). The High Court noted in Lockwood at [68] that fair basis is not tested by isolating in the body of the specification "essential integers" or "essential features" of an alleged invention and then asking whether they correspond with the essential integers of the claim in question. The question is whether the subject matter of the claims is broadly described in the body of the specification. However, while the High Court pointed out that it was necessary to consider the whole of the specification, it warned against including ' loose or stray remarks ' in determining the "real" disclosure in the body of the specification. Coincidence of language, such as in a consistory clause, is insufficient, on its own, to provide fair basis if that is inconsistent with the description of the invention when considering the specification as a whole ( Lockwood at [87], [91]). The inquiry is into what the body of the specification, read as a whole, discloses as the invention ( Lockwood at [99]). A consistory clause may not be sufficient to provide fair basis. Servier submits that grounds of opposition 1, 2, 3, 4, 5, 6, 7, 9, 10 and 11 do not arise "as a result of the amendment". It accepts that, on some constructions, the matters raised in grounds 8, 12, 13 and 14 may arise "as a result of the amendment", but says that, on a proper analysis of the evidence and the specification, these grounds should also fail. It is common ground that s 102(1) and s 102(2)(b) (coupled with s 40(3)) require that the specification provide "a real and reasonably clear disclosure" of that which is claimed. It is common ground that the tests for substantial disclosure and fair basis are similar ( Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd (2000) 49 IPR 321 (' Gambro ') at [18]). The Full Court in Gambro said that there must be ' a real and reasonably clear disclosure '. Similarly, in ICI Chemicals & Polymers Ltd v Lubrizol Corporation Inc [2000] FCA 1349 ; (2000) 106 FCR 214 at [118] , the Full Court observed, in obiter dicta , that it would be a rare case where satisfaction of the test for substantial disclosure would not also satisfy the test for fair basis. If there is a difference, the requirement for "in substance" disclosure is a lesser requirement than for a "real and reasonably clear disclosure" or description; "in substance disclosure" does not require express disclosure ( Pfizer Inc v Commissioner of Patents [2005] FCA 137 ; (2005) 141 FCR 413 at [75] ). The product is characterised by reference to an X-ray diffraction table of values and further defined as being in the form of "individual needles". Apotex submits that there is no real and reasonably clear disclosure of individual needles as part of the invention . Apotex submits that the patent specification does not disclose the purported limitation of the crystals being in the form of "individual needles" as part of the invention and that claims 19 to 39 are not fairly based on the matter described in the body of the specification. Apotex relies on the evidence of Dr Brendan Kennedy, Associate Professor in Inorganic Chemistry at the School of Chemistry, University of Sydney, to support its contention that a skilled addressee reading the AC Patent would not understand from the patent specification that the presence of "individual needles" formed part of the invention. Dr Kennedy's evidence is that it is essentially inevitable that any sample of the α crystalline form of perindopril tert-butylamine will contain at least some individual needles. Apotex emphasises that the only reference to needles in the body of the specification of the AC Patent connects the ' especially rapid and efficient filtration and drying ' and a homogeneous distribution of individual needles about 0.2mm long. Apotex contends that the skilled addressee would understand that it is the homogeneous distribution of crystals of about 0.2mm in size, and not their shape, that gives good filtration characteristics. The reference to needles in existing claim 7 refers not to "individual needles" but to "readily filterable individual needles" thereby, Apotex says, attempting to link that claim with the passage in the body of the specification. Apotex submits that the product of the invention is the α crystalline form of the perindopril tert-butylamine salt and that nowhere in the specification are "individual needles" described or disclosed as part of the invention, nor do they define the process of the invention. Apotex points out that the consistory clause relating to the product of the invention on pages 2-3 of the specification makes no reference to needles. Claim 7, a process claim, refers to needles but, Apotex submits, that cannot be relevant to whether the proposed new claims are fairly based as required by s 102(2)(b) read with s 40(3); those sections require a comparison between the claims added by the amendment and the body of the specification. In addition, Apotex argues that, when assessing "in substance disclosure" for the purposes of s 102(1), claim 7 does not assist Servier because, on an intelligent reading of that claim, needles do not characterise the process and because, in any event, the claim highlights " readily filterable individual needles". Apotex's primary argument is that the addition of the limitation of "individual needles" is not disclosed as part of the invention, either of the product or of the process of the invention, with the consequence that the proposed new claims claim matter not in substance disclosed in the specification as filed and are not fairly based on the body of the specification. In summary, Apotex's submissions in relation to whether the proposed new claims are fairly based are: For similar reasons, Apotex argues that s 102(1) operates to disallow the insertion of the new claims, although it accepts that, for the purposes of the test of substantial disclosure, Servier is entitled to rely on the presence of existing claim 7 and that this makes the position less clear. Apotex contends that even though existing claim 7 refers to needles, this is analogous to a "stray phrase" as discussed in Lockwood and should be disregarded . Servier submits that this approach was expressly rejected by the Full Court in RGC Mineral Sands . It contends that Apotex's approach requires more than "a real and reasonably clear disclosure" and involves isolating in the body of the specification "essential integers" of the alleged invention and then asking whether they correspond to integers of the claims in question. The High Court has stated that s 40(3) does not require an over meticulous verbal analysis, nor specific disclosure of features as "essential" ( Lockwood at [68]-[69]). While Servier rejects the need for a real and reasonably clear disclosure as part of the invention it submits that, even if there were such a requirement, there is a real and reasonably clear disclosure of individual needles as part of the invention. Put simply, Servier argues that the feature of individual needles is disclosed in the body of the specification as filed and accepted and in existing claim 7 of the AC Patent and that the needle habit of the α crystalline form of the compound of formula (I) is part of the invention described and expressly disclosed. Servier argues that the ' valuable characteristics of filtration, drying and ease of formulation ' is a consequence of the needle habit of the salt and that existing claim 7 confirms that needles form part of the invention. Servier concedes that, at its broadest, the invention is for the α crystalline form of the compound of formula (I) but says that a patentee is not confined to the broadest form of the invention and that one form of its invention involves individual needles. Servier disputes Apotex's contention that the evidence of Dr Kennedy ' shows that a skilled addressee reading the AC Patent would not understand from the patent specification that the mere presence of "individual needles" formed part of the invention '. Servier submits that Dr Kennedy's evidence, taken as a whole, does not suggest that it is inevitable that any sample of the α crystalline form of the compound of formula (I) will contain at least some needles, as crystal habits can be altered by the addition of a surface modifying substance. Servier also disputes Apotex's contention that, unless the individual needle claims are limited by size and homogeneity or by the requirement that the individual needles be readily filterable, they are not "in substance disclosed" or fairly based. Servier points to the evidence of Professor Christopher Easton of the Research School of Chemistry, Australian National University, who says that the characteristics of size and shape are separately and independently advantageous and that there are particular ways in which shape, and not size, is beneficial in a pharmaceutical context. In my view, there is a real and reasonably clear disclosure of the feature of "individual needles" in the AC Patent specification. That homogeneous distribution has the advantage of allowing especially rapid and efficient filtration and drying, as well as allowing the preparation of pharmaceutical formulations having a uniform and reproducible composition, which is especially advantageous when those formulations are intended for oral administration. That form is not simply the α crystalline form of the perindopril salt, but rather, the α crystalline compound in the form of individual needles. In addition, existing claim 7 (claim 8 in the specification as filed) claims a process according to any one of claims 2 to 6, characterised in that the perindopril tert-butylamine salt that is thereby obtained is in the form of readily filterable individual needles. This strengthens the conclusion that there is a real and reasonably clear disclosure of the feature of individual needles and this is relevant to the consideration under s 102(1), where the whole of the specification is to be taken into account. It is not necessary for me to decide whether or not there must be a real and reasonably clear disclosure of individual needles as part of the invention, the approach for which Apotex contends. The specification provides that the α crystalline form of the perindopril salt obtained by the process of the invention is in the form of individual needles. The whole of the specification indicates that the invention is the α crystalline form of the perindopril salt that exists in the form of individual needles, characterised by an X-ray diffraction diagram and obtained through carrying out the process of the invention. In that regard, Apotex raises further specific complaints. It says that the specification as filed does not disclose the particular dosage form as being part of the invention and that claims 27 and 28 are not fairly based. The specification states that formulations are intended for oral administration. Among the pharmaceutical compositions specified are those suitable for oral, parenteral (intravenous or subcutaneous) or nasal administration and each of the forms specified in proposed claim 27. The original claims include claims to pharmaceutical compositions for use in the manufacture of medicaments. Claim 28 is to a pharmaceutical composition according to claim 27 in the form of a tablet. Example 2 is to the formulation for a tablet. The invention in claims 27 and 28 is in substance disclosed and the claims are fairly based. The dosage range of 1 to 500mg per day in one or more administrations is described in the body of the specification. Example 2 is for tablets containing 4mg of active ingredient. The invention in claims 29 and 30 is in substance disclosed and the claims are fairly based. It says that the specification as filed does not disclose such a combination as being part of the invention and that claims 31 and 32 are not fairly based. The specification describes a pharmaceutical composition which includes a diuretic. Claims 11 and 12 are to a pharmaceutical composition that also comprises a diuretic, specified in claim 12 as indapamide. The invention in claims 31 and 32 is in substance disclosed and the claims are fairly based. Specifically, Apotex argues that the specification does not disclose any method or any best method of producing individual needles. In addition, in relation to claims 20, 26, 36 and 39, Apotex argues that the specification does not disclose how "rapid and efficient filtration and drying" is to be achieved; nor does it disclose how the skilled addressee can know whether or not it has been achieved. Accordingly, Apotex says, as a result of the introduction of claims 20, 26, 36 and 39 and their dependent claims, the specification, as a result of the proposed amendments, does not describe the invention fully. The specification states that the process disclosed in the specification produces the salt described in the form of "individual needles". Professor Easton's evidence is that a crystalline substance in the form of individual needles will allow rapid and efficient filtration and drying. The specification states that the homogeneous distribution of individual needles of about 0.2mm in length allows especially rapid and efficient filtration and drying. The challenge is to the requirement to describe the best method not to utility. The method is described in the specification, including in example 1. Apotex has not established that the specification fails to describe the best method for producing the perindopril tert-butylamine salt in the form of individual needles which will then result in rapid and efficient filtration and drying. Apotex points to the evidence of Dr Kennedy in support of this contention. In particular, it argues that as the length-to-width ratio of a crystal increases, the crystal will change from having a shape described as a "rod" to having a shape described as a "needle", but that there is no clear cut-off point. During oral submissions, counsel for Apotex conceded that, while this ground of opposition has not been abandoned, it is not particularly strong in the light of Dr Kennedy's statement during cross-examination that the term "needle" and the term "rod" are both suitable to describe an elongated crystal shape and may be used interchangeably to define an elongated crystal shape. The concession is well made. The term does not lack clarity or render the claims indefinite. Dr Kennedy's evidence was that he did not know what the patentee meant by this term, because it is not something that is capable of quantification. Apotex argues that the term cannot simply mean "not difficult", as this avoids the natural meaning of the words "rapid" and "efficient". In addition, Apotex submits that the phrase cannot mean that the relevant filtration and drying is quicker than it would be if the compound took another form, because that is also incapable of quantification. Servier accepts that "rapid and efficient filtration and drying" is a relative phrase but submits that evaluating such a phrase requires a practical approach rather than exact quantification. Servier cites a number of cases in which terms such as "rapid" and "efficient" have been held to be clear and says that, in any event, the meaning of the phrase is sufficiently clear when the specification as a whole is considered. Servier contends that the evidence of Dr Kennedy and Professor Easton does not support any lack of clarity in relation to the phrase "rapid and efficient filtration and drying" and that their evidence indicates that the phrase is clear without a specific reference point. I am not satisfied that the phrase lacks clarity, in context, to the skilled reader. Apotex submits that the skilled addressee would not know what is being claimed by these claims. For example, it says that, with respect to claim 25, it is unclear whether the pharmaceutical composition must contain the compound in the form of individual needles or whether it is sufficient for the compound to have been in the form of individual needles at some point during the manufacturing process. Apotex also submits that claims 26, 36 and 39, which are dependent on claims 25, 35 and 38, are not clear because for each of these claims it is a requirement that the "individual needles allow rapid and efficient filtration and drying". However, the claim integer in claims 26, 36 and 39 involving "individual needles" is one that does not relate to the final product the subject of that claim. Servier disputes Apotex's argument that the phrase "has been isolated in the form of individual needles", which appears in claims 25, 35 and 38 and upon which claims 26, 36 and 39 are dependent, is not clear. It submits that the phrase simply means that at the time of isolation, the crystals are in the form of individual needles, regardless of what occurs after the process of isolation is complete and that a skilled addressee would have no difficulty understanding this concept. I accept Servier's submission. Claims 25, 35 and 38 do not lack clarity for this reason. This submission also answers Apotex's complaints about claims 26, 36 and 39. It is now necessary to consider the exercise of the discretion under s 105 to determine whether the amendments should be allowed to be made. That is, even if proposed amendments are otherwise allowable under s 102 of the Act, the Court may still refuse to direct the amendments on discretionary grounds. The Court should consider all relevant factors in deciding the exercise of that discretion. The considerations adverted to in other cases may be of assistance as guidelines but they are not to be elevated to principles or fixed rules to be applied inexorably to every case ( Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 3) (1997) AIPC p91-366 (' Wimmera (No 3) ') at 39,790 per Sundberg J). Bodkin, Patent Law in Australia (Lawbook Co, 2008) at [13510] summarises the guidelines identified in Smith Kline & French Laboratories Limited v Evans Medical Limited [1989] 1 FSR 561 (' Smith Kline ') and cited with approval by Sundberg J in Wimmera Industrial Minerals Pty Ltd v RGC Mineral Sands Ltd (No 2) (1997) 40 IPR 110 (' Wimmera (No 2) ') (and also in Wimmera (No 3) ), as relevant to the exercise of discretion: The Court does not approach the exercise of its discretion in a manner hostile or antipathetic to amendment. However, the onus is on the patentee to satisfy the Court that the amendments should be allowed. The Court is concerned with the conduct of the patentee and not with the merit of the invention ( Smith Kline at 569). Bodkin at [13520]ff conveniently summarises some of the matters that have been considered relevant. They include: The issues raised by Apotex's submissions as to why the Court should exercise its discretion under s 105 of the Act to refuse the amendments sought by Servier are: Apotex's submissions focussed primarily on dot points 1 and 2 above. In Oxford Gene Technology Ltd v Affymetrix Inc (No 2) [2000] EWCA Civ 519 ; [2001] RPC 310 (' Oxford Gene '), Aldous LJ stated (at [20]) that the ' obligation of good faith requires the patentee to put forward correct reasons for the amendment. If there be facts relevant to the exercise of the discretion ... then those facts need to be put before the court '. Servier's solicitor, Mr Richard Hamer, swore two affidavits relating to Servier's application for amendment. No affidavits were provided by any officers or employees of Servier. In particular, that matter related to the crystal habit and filterability of the crystals described in the specification. All of the exhibits to the affidavit were publicly available documents. Mr Hamer accepted during cross-examination that his first affidavit did not provide a complete statement of Servier's reasons for the proposed amendments. That is because the narrower or dependant claim may be valid even if a broader claim is invalid, for example on grounds such as lack of novelty or obviousness. I realised that subject matter was described in the Alpha Crystalline Patent, which was not the subject of relevant claims. Because more than 3 months had passed since the patent application had been accepted, however, new claims would have to be within the scope of existing claims of the patent before amendment. I read that document in the course of January 2007. The document disclosed to me that, according to Apotex, the cooling conditions under which its perindopril erbumine product was crystallised did not fall within the process parameters set out in claim 2 of the Alpha Crystalline Patent. The reference to needles, in the existing claims, forms part of claim 7. Claim 7 is dependant on existing claim 2 so that, if claim 1 were invalid, the Alpha Crystalline Patent would not be infringed by the Apotex product made in accordance with Apotex's confidential process description. These in turn impacted on the filterability of the crystals, it being much more difficult to filter crystals obtained under alternative conditions. I concluded that there was additional and underlying factual support for the statements in the specification about the importance of producing crystals in the form of individual needles and as to the impact that this had on filterability in particular. I also spoke to the UK lawyers for Servier, Bristows. Subsequently, on 23 July 2007, I received the English first instance decision ... and on 14 May 2008 I received the English Court of Appeal decision ... . Both of these decisions post dated the filing for s 104 amendments on 2 March 2007, although I did appreciate, as at 2 March 2007 that there was a risk that the UK equivalent might be held to be invalid. ... Apotex argues that, while Mr Hamer's second affidavit put forward further reasons for Servier's proposed amendments, it still did not constitute full and frank disclosure by Servier on this issue. Like his first affidavit, Mr Hamer's second affidavit indicates that at least one of the reasons for the proposed amendments was the presence of additional claimable matter within the specification of the AC Patent. However, Apotex emphasises that [4] of Mr Hamer's second affidavit suggests that another purpose of the proposed amendments was to reduce the invalidity risk associated with the AC Patent, a reason that was not disclosed in Mr Hamer's first affidavit. It is a reason expressly contemplated in s 104 of the Act. Counsel for Servier explained during oral submissions that, with the benefit of hindsight, the reason for the amendments could have been expressed more clearly within Mr Hamer's first affidavit. However, he submitted, this concession does not mean that there was not full and frank disclosure in the second affidavit and, a fortiori , by the time the case was opened. On 2 September 2008, Apotex's solicitors, Freehills, wrote to Servier's solicitors, AAR, and referred to the invalidity risk associated with the unamended claims of the AC Patent. AAR's response, dated 5 September 2008, stated that ' the reference to invalidity risks in paragraph 4 of Mr Hamer's second affidavit is general and does not relate in particular to the Alpha Crystalline Patent '. In cross-examination, Mr Hamer stated that it is implicit in any application to amend that the amendments are made to introduce narrower claims, thereby reducing the invalidity risk. While Mr Hamer referred in his affidavit and oral evidence to a general purpose of introducing narrower claims within a patent, he stated in cross-examination that one of the purposes of Servier's proposed amendments was to increase the chances of having a valid claim which would be infringed by Apotex. Servier states in its written submissions that the ' amendment is sought because there is additional claimable matter identified in the Specification. This is not a case where a narrowing amendment is made to avoid a specific piece of prior art '. Following the Court's orders of 9 July 2008 for discovery limited by categories, Apotex proposed categories of documents for discovery but, Apotex says, Servier refused to give discovery in relation to many of the categories sought. Servier submits that Apotex's proposed categories of discovery were extremely broad and did not appear to be targeted to the matters in issue. Servier did not agree to discovery on the basis of Apotex's proposed categories. Servier gave discovery in tranches. It served an unverified list of documents on 22 August 2008 and then a supplementary list on 29 August 2008. Subsequently, on 8 September 2008, it served a consolidated list of documents verified by the Head of the Patent Department at Servier. Apotex says that many of the documents listed were either publicly available or already in Apotex's possession. Servier's list of documents referred to privileged documents in five broad categories. Servier does not dispute that it provided discovery in tranches and that it did not individually list privileged documents in its list of documents but submits that this is a common approach to take. On 2 September 2008, Apotex wrote to Servier requesting a further list of documents containing a subset of privileged documents relating to the matters set out in Mr Hamer's affidavit evidence. Servier submits that the parties' exchanges regarding the production of documents and the issue of discovery demonstrates that Servier was ' taking its obligations seriously but at the same time resisting the wasteful and enormously expensive exercise encouraged by Apotex of trawling through its documents and throwing everything at the court and of unnecessarily revealing privileged communications unrelated to the amendment '. On 10 September 2008, Servier provided an unverified list of some of the documents over which it claimed privilege. That list did not include any correspondence from Servier, other than one letter, which predated the amendment application by two years. On 14 October 2008, I ordered that Servier serve on Apotex communications or records of communications between Servier and AAR relating to, inter alia , the application for amendment and the reasons for seeking the amendments. Apotex tendered a bundle of these documents on 1 December 2008, which documents are covered by an inter partes confidentiality order made on 13 October 2008. Apotex submits that it is these documents, and not the evidence given by Mr Hamer, which disclose Servier's reasons for making the amendment application. In particular, Apotex points to correspondence between Servier and AAR in 2007 in which AAR states that the amendments to the AC Patent were designed to overcome potential validity issues raised by the UK proceedings. I note that the content of that correspondence was confidential, but this aspect was discussed in open Court. Mr Hamer's evidence is that he first thought of the amendments in January to February 2007. An application to amend the AC Patent was made to IP Australia under s 104 of the Act on 2 March 2007. Servier contends that any delay which has occurred is the result of Apotex's actions, first in unsuccessfully seeking to oppose the patent application out of time, then reviewing the decision to refuse the extension of time and lastly seeking a review of the decision to dismiss Apotex's opposition to the s 104 amendments. After the AC Patent was granted on 1 May 2008, the present motion was filed on 26 May 2008. Servier was clearly aware of the contents of the specification of the AC Patent, its own prior patent (held to anticipate the equivalent patent in the UK and in the Netherlands), the Coquerel reports written by the inventor of the AC Patent and its own prior product. Servier submits that these matters formed no part of its reasons to amend or to pursue amendment. I find that difficult to accept. Even if the relevant period is from the time when the patentee knows or ought to know of the need to amend the patent until the time when the application for amendment is made ( Novartis AG v Bausch & Lomb (Australia) Pty Ltd [2004] FCA 835 ; (2004) 62 IPR 71) , Servier must have been aware of the issues surrounding needles, crystal size, filtration and drying for some time prior to the application to amend. The time at which Mr Hamer became aware of these matters cannot explain Servier's delay in seeking the amendments. Mr Hamer's first affidavit did not clearly state that Servier was seeking to amend the AC Patent to address the validity issues raised in the UK proceedings. AAR's letter of 5 September 2008 stated that invalidity risks referred to in Mr Hamer's second affidavit were "general" and did not relate particularly to the AC Patent. That is inconsistent with the statement that the amendments were specifically designed to overcome potential validity issues raised in the UK proceedings over the AC Patent. Mr Hamer's second affidavit elaborates on each of the relevant factors having regard, in particular, to the issues released by Apotex. The amendment is sought because there is additional claimable matter identified in the Specification. This is not a case where a narrowing amendment is made to avoid a specific piece of prior art. He said that he expected that there would be an exchange of pleadings and further evidence, as well as the production of documents and discovery and the presentation of oral submissions to the Court. On the other hand, Servier maintains that Mr Hamer's first affidavit accurately states the reason for the amendments in general terms and that his second affidavit elaborates on each of the relevant factors. That is not the case. Servier accepts that inserting the additional claims would also serve to distinguish the AC Patent from the prior art and therefore overcome the invalidity risk. While there is no requirement for an officer of the patentee to give evidence, the onus is on the patentee to provide its reasons. Servier did not disclose the reasons for seeking the amendments until the end of a long process. I do not accept Servier's suggestion that the disclosure of its reasons was part of an iterative process. A process of ongoing disclosure can be sufficient. In Gambro Pty Ltd v Fresenius Medical Care South East Asia Pty Ltd [1999] FCA 1848 ; (1999) 48 IPR 625 , documents relevant to an investigation of Gambro's motives were produced directly to the Court, rather than in discovery or affidavit evidence, and this was held to be sufficient disclosure. However, for its own reasons, Servier declined to disclose the reasons for the proposed amendments at the time of making its application until, in effect, compelled to do so. The proposed amendments to the claims are not deletions of wider claims with the maintenance of narrower claims. Servier proposes to maintain the existing claims and to add a new set of claims with a purportedly narrowing element. From the information ultimately provided by Servier, the purpose of the proposed amendments seems to be to validate the claims in case none of the corresponding existing claims are valid or are infringed by Apotex. Courts have traditionally refused amendment if it was considered that the patentee's conduct had been such that, as a matter of discretion, the amendment should be refused. Following a period of strictness, this rule was relaxed so that it was not applied adversely unless the patentee had deliberately elected to maintain invalid claims which he or she knew or ought to have known required amendment (Thorley et al, Terrell on the Law of Patents (16 th ed, Sweet & Maxwell, 2006) at 9-37). Delay likely to be of some detriment to respondents or to the general public was also considered a factor, although mere delay was not ( Terrell at 9-38). There is no obligation on a patentee to disclose privileged documents, although there may be a need to do so to satisfy the obligation for full and frank disclosure. Failure to disclose documents in those circumstances may result in the exercise of discretion to refuse the amendments unless a reasonable explanation is given ( Wimmera (No 2) at 115). The disclosure of privileged documents is not contingent on a request for discovery by the respondent ( Re Hsiung's Patent [1992] RPC 497). Servier commenced proceedings for infringement on the existing claims. It has moved with reasonable expedition to apply to amend the claims since the commencement of these proceedings. However, Servier says that the presence of the compound in the form of individual needles is part of the invention. Indeed, Servier's analysis of the AC Patent makes it apparent that it is a necessary part of the invention. Yet Servier does not seek to amend the AC Patent by deleting those claims that do not possess this limiting integer. It wishes to maintain both the broad, unlimited claims and the new proposed limited claims. That of itself is not unusual --- it is the way in which independent and dependent claims are often drafted. Further, it is not impermissible for a patentee to amend to attempt to "catch" an infringer or to remove a lawful ground of objection. The latter is specifically provided for in s 104(1) of the Act, so long as the amendment is allowable under s 102. However, maintenance of the existing claims that are wider than the invention together with the proposed narrowing claims that define the described invention may give to Servier an unfair advantage. One of the considerations that has been discussed is whether the patentee has knowingly taken advantage of wide claims. The issue is not whether Servier commenced proceedings on the unamended claims. That itself would not disentitle Servier from obtaining a grant of the proposed new claims. However, Servier advances the proposed new claims as reflecting the invention. That is, the invention is the form of the compound in individual needles, yet Servier maintains the existing, wider claims which are not limited by that form. In other words, Servier intends knowingly to take advantage of the wider claims which do not reflect the invention described in the AC Patent, while at the same time seeking amendment better to defend the validity of the AC Patent and prove infringement by Apotex. Servier is entitled to seek amendments to remove valid objections to validity, as it is to improve its prospects of establishing infringement. It is relevant, however, that after the comprehensive rejection of the corresponding unamended claims in the UK decisions, Servier still wishes to maintain those claims while at the same time seeking to overcome attacks on their validity by inserting the proposed new claims. As the same claims are maintained, the grounds of invalidity asserted in respect of those claims are not removed by the amendments. The equivalent patent in the UK was held invalid for lack of novelty and for obviousness. That decision was upheld by the Court of Appeal in a judgment of 9 May 2008 (see: Les Laboratoires Servier v Apotex Inc [2008] EWCA Civ 445). Lord Justice Jacob, with whom the Lord Chief Justice and Lloyd LJ agreed, was scathing in his analysis of the patent, saying that the application for it was "specious", that the patent was a "type of undesirable patent" and a "try-on". His Lordship then dealt with the questions of novelty and obviousness of the claimed invention and comprehensively dismissed the appeal as being "without merit" on the basis that claim 1 and the process claim lacked novelty. I mention this, not because his Lordship's characterisation and opinion are relevant to this application, but to put in context the decision by Servier to seek to add the new claims and its decision to continue the proceedings for infringement of the existing claims against Apotex. Servier did not say that the UK proceedings were a reason it sought the amendments. However, a document produced following the Court's orders of 14 October 2008 showed that invalidity concerns raised in the UK were a reason. Section 105(2) specifically provides that the Court may make an order for amendment subject to such terms as it thinks fit. Such a term may include an order excluding the right to commence proceedings with respect to any infringement of those claims prior to amendment, even if s 115 does not apply (Bucknell et al, Australian Patent Law (LexisNexis Butterworths, 2004) at 105.9 citing Pracdes Pty Ltd v Stanilite Electronics Pty Ltd (1995) 35 IPR 227). In my view, it is appropriate to exercise the discretion afforded by s 105 to refuse the proposed amendments. I do not accept that there was an "iterative process" in Servier's reasons for amendment. It may well be that Mr Hamer had his own reasons for proposing amendment but I do not accept that those reasons were those of Servier's at the relevant time. The UK proceedings exposed the arguments relied upon to establish invalidity of the AC Patent. Servier was entitled to seek to amend the Australian patent to strengthen it but was then obliged to inform the Court of that reason. To the contrary, Servier put forward other reasons or permitted other reasons to be advanced. It was only when Servier produced documents pursuant to the Court's order of 14 October 2008 that the correspondence between Servier and its solicitors demonstrated that the reasons for the application to amend were not limited or based upon those set out in Mr Hamer's first affidavit. Further, as noted above, the reference in Mr Hamer's second affidavit to the reduction of invalidity risk was said by Servier to be a "general" statement, rather than being of particular relevance to the AC Patent. Servier failed voluntarily to disclose all relevant matters until they were exposed by Apotex. That failure to disclose was not of some minor, though strictly relevant, matter. It was a failure to disclose Servier's reason for the amendments. Full and frank disclosure on Servier's part did not require Servier to trawl through all of its documents to see whether there were any relevant to the exercise of the discretion to permit amendment. Nor did it require Servier to provide all of its documents to the Court as a policy of caution (cf Oxford Gene at [19]-[21]). Servier should have given its reason for the amendments voluntarily and at the time it sought the amendments. It knew the grounds of Apotex's opposition to the amendments and it knew of Apotex's challenge to the validity of the corresponding patent in the UK and its defence to infringement. That clearly raised the scope of the claims and the reasons to amend them ( Vector Corp v Glatt Air Techniques Ltd [2007] RPC 12). Servier had ample opportunity to amend the AC Patent application if it was of the view that it contained additional claimable matter. It litigated the unamended patent in the UK and pursued the grant of the unamended patent in Australia, abandoning the s 104 amendments. Servier has not sufficiently explained why it took this course. At the time of abandoning the s 104 amendments, Servier was aware of the first instance decision in the UK. Servier's conduct in relation to the amendments disentitles it from presently amending the AC Patent in circumstances where litigation over the validity of that patent with Apotex was in clear prospect and the contest over the patent had already commenced. The lack of forthrightness in providing Servier's reasons to amend reinforces that conclusion. It follows that Servier's notice of motion seeking to amend the AC Patent should be dismissed. I see no reason why costs should not follow the event. I will make an order that Servier pay Apotex's costs of the motion but stay that order until midday on 17 September 2009 to allow the parties to consider these reasons and to make any submissions as to costs by 4:00pm on 16 September 2009. I certify that the preceding one hundred and thirty (130) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. The α crystalline form of the compound according to claim 19, wherein the individual needles allow rapid and efficient filtration and drying of the compound. A process for preparation of the α crystalline form of the compound of formula (I) according to claim 19 or 20, comprising heating a solution of perindopril tert-butylamine salt in ethyl acetate at reflux and gradually cooling the solution until crystallisation is complete forming individual needles, wherein the solution at reflux is first cooled to a temperature of from 55 to 65°C at a rate of from 5 to 10°C/hour, and then cooled to ambient temperature. The process according to claim 21, wherein the concentration of the perindopril tert-butylamine salt in the ethyl acetate is from 70 to 90 g/litre. The pharmaceutical composition according to claim 25, wherein the individual needles allow rapid and efficient filtration and drying. The pharmaceutical composition according to claim 25 or 26 in the form of tablets or dragées, sublingual tablets, gelatin capsules, lozenges, suppositories, creams, ointments, dermal gels, injectable preparations, or drinkable suspensions. The pharmaceutical composition according to claim 27 in the form of a tablet. The pharmaceutical composition according to any one of claims 25 to 28 comprising from 1 to 500 mg of the α crystalline form of the compound of formula (I). The pharmaceutical composition according to claim 29 comprising 4 mg of the α crystalline form of the compound of formula (I). The pharmaceutical composition according to any one of claims 25 to 30, further comprising a diuretic. The pharmaceutical composition according to claim 31, wherein the diuretic is indapamide. Use of the pharmaceutical composition according to any one of claims 25 to 32 as an inhibitor of angiotensin I converting enzyme. The use according to claim 33 for treatment of cardiovascular disease. The method of treatment according to claim 35, wherein the individual needles allow rapid and efficient filtration and drying of the compound. A method of treatment of cardiovascular disease comprising administering to a patient in need of such treatment an efficacious amount of a pharmaceutical composition according to any one of claims 25 to 32. The use according to claim 38, wherein the individual needles allow rapid and efficient filtration and drying of the compound. | application to amend patent whether amendments allowable under s 102(1) and s 102(2) of the patents act 1990 (cth) claimed invention relates to the form of the compound whether a real and reasonably clear disclosure of the feature of "individual needles" in the patent specification discretion under s 105 of the act whether court should exercise discretion to refuse amendments whether full and frank disclosure of reasons for amendment amendments add new claims but do not delete existing claims patents |
By notice of motion filed on 23 August 2005, Mr Gary Dates, also known as Worimi, sought to become a party to the proceedings. Worimi has previously filed two claimant applications for a determination that native title exists over the Land. I struck out each application pursuant to s 84C of the Native Title Act 1993 (Cth) ('the Act') for failure to comply with s 61 of the Act ( Hillig as Administrator of Worimi Local Aboriginal Land Council v Minister for Lands for the State of New South Wales (No 2) [2006] FCA 1115 ; Worimi v Minister for Lands for the State of New South Wales [2006] FCA 1770). Worimi had previously indicated that he intended to file a further claimant application. That has not occurred and there is no present suggestion of any intention on Worimi's part to do so. By an amended notice of motion filed on 30 March 2007, Worimi seeks to be joined as a respondent to this non-claimant application under s 84(5) of the Act. The application for joinder is opposed by the Land Council. 2 The non-claimant application was filed on 31 December 2004 and public notification given pursuant to s 66(3)(a) of the Act on 9 March 2005. That notification included a statement that any person wishing to be party to the proceedings should inform the Court of his or her intention to do so by filing a Form 5 Notice by 8 June 2005. Worimi failed to do so. As a consequence, he requires leave of the Court to be joined (s 66(10)(c) of the Act). At the hearing, the parties made submissions as to the interests of justice in the context of Worimi's application for joinder. It was later agreed, however, that the amendment applies only in respect of proceedings commenced on or after 15 April 2007 (Item 78 of Sch 2 to the Amendment Act). As already noted, these proceedings and the amended notice of motion for joinder were filed prior to that date. (2) May that interest be affected by a determination in the proceedings? (3) In any event, should the Court exercise its discretion to join Worimi as a respondent? 5 The Land Council relies on the factual findings made in Hillig (No 2) and Worimi . Worimi, who is represented by Mr Austin of counsel pro bono, relies on Worimi's affidavit in support of this amended notice of motion for joinder. Mr Austin declined to rely on earlier affidavits filed by Worimi in support of his claimant applications. He submits that the previous proceedings are not relevant but does accept that, to the extent that findings of fact were made in respect of those claimant applications, those findings of fact can be taken into account for this application. He does not accept, however, that the procedural history is relevant to the exercise of the discretion to refuse joinder under s 84(5) of the Act. In my opinion, that history is relevant. 6 Worimi's affidavit in support of this application does not differ in any substantial way in the characterisation and description of the native title rights and interests he asserts, from the evidence in support of the second claimant application, the subject of the decision in Worimi . In particular and in summary Worimi says that, for all of his life, he has had an association and connection with the Land and that he believes that he and his family hold native title rights and interests in the Land under their traditional laws and customs, as taught by his ancestors. Worimi learned of those laws and customs from his father, his father's mother and his father's six brothers. Those customs and Worimi's description of his connection with the Land are as described in Worimi at [10] and [11]. He says that he has told his daughters what he knows about the laws and customs of the Land, including those customs relating to what he describes as the women's site. 7 Worimi says that he is a custodian of the Land, that role having passed to him on his father's death, as the eldest son. He asserts that other Worimi people, in particular Worimi women, whom he would have expected to have been taught about the women's site, have not been so taught. He says that ' I now believe that me and my family may be the only Worimi people who were given the native title rights and interests in the Land under traditional laws and customs '. 8 For the reasons set out in Worimi at [42]---[51], the second claimant application based upon Worimi's evidence and assertions was struck out. The claim did not fulfil the requirements of s 61(1) of the Act and could not succeed. In Worimi , persons who held the common or group rights and interests comprising the claimed native title according to the traditional laws and customs asserted by Worimi were not included in the native title claim group identified in the application. That identified claim group was Worimi and some members of his family (at [46]---[47]; [51]). Further, the claimant application was not authorised in accordance with s 251B of the Act (at [54]). 9 Worimi asserts that, as the eldest male, he is authorised to ' speak...about dealing with matters that relate to our traditional country ' by all the persons on whose behalf a claimant application could be made to deal with the Land. Those persons are said to comprise his immediate family, who have "authorised" him as the eldest male of the family. Worimi's mother Beryl Mildred Dates, his sister Debbie Dates, his wife Cynthia Dates and his daughters have now filed affidavits supporting Worimi's right to ' bring [a] native title application and deal with the matters arising under [such an] application ' on their behalf. They state a belief that they have native title rights and interests in the Land under traditional laws and customs, as taught by older family members. Worimi also says that he seeks joinder ' on behalf of all of my sisters and their daughters '. He asserts that all of his sisters support this application. On Worimi's present description of the persons who hold native title rights and interests in the Land, his five other sisters and their children and, indeed, any daughters of his brother, would be part of any claimant group, said to include the women of his immediate family. To the extent that that "claim group" includes family members who are not women, Worimi's brother Kelvin Dates would also be included. There is no evidence of those persons having authorised Worimi to bring a native title claim. Worimi was not cross-examined. 10 A holder of a native title interest in the Land is entitled to be joined to the proceedings (s 84(5) of the Act; Munn v State of Queensland [2002] FCA 486). A claim to native title is ordinarily, of itself, sufficient to justify joinder under s 84(5) of the Act ( Munn at [8]). While the interests relied upon for joinder need not be proprietary or legal or equitable in nature, they must be ' not indirect, remote or lacking substance...the interests must be capable of clear definition ' ( Byron Environment Centre Incorporated v Arakwal People (1997) 78 FCR 1 at [7]-[8] per Black CJ) ('the Byron test'). The Byron test does not recognise interests of an emotional kind ( Byron at [8] per Black CJ). The nature and content of the right to become a party to proceedings for a determination of native title suggest that the interests asserted must be of such a character that they may be affected in a demonstrable way by the determination ( Byron at [7] per Black CJ). 11 In Davis-Hurst v Minister for Land and Water Conservation (NSW) (2003) 198 ALR 315, Branson J ordered the joinder of Mr Kemp, who did not wish himself to advance a claim for native title, to a proceeding for a determination of native title. Mr Kemp's interest as a descendant of the Pirripaayi people, was to avoid the making of a determination by the Court that discounted the traditional connection which he believed to exist between the Pirripaayi people and the land. Her Honour (at [28]) was of the view that this was an interest that satisfied the Byron test and was relevantly affected by the determination (at [27]). Justice Branson contrasted that interest with Mr Kemp's interest in establishing and maintaining the integrity of his own research and dissemination of his knowledge of Pirripaayi language and culture. The latter interests were characterised as "indirect" interests which fell outside the Byron test (at [27]). • Does a person seeking to establish native title as a respondent have an "interest" within the meaning of the Byron test if they are incapable of meeting the requirements of the Act for a claimant application? The Land Council submits that the substance of the application for joinder is Worimi's belief that he and the female members of his immediate family hold such rights and interests. That belief is not, the Land Council submits, an interest that may be affected by a determination in these proceedings within the meaning of the Byron test. The Land Council submits that Worimi's personal belief is no more than an interest of an emotional kind. 14 The Land Council submits that joinder should not be permitted where the person seeking to be joined cannot establish anything more than a personal belief that he and his family hold native title. 15 It is not in dispute that Worimi's claimed native title rights and interests must satisfy the Byron test. As in Davis-Hurst at [27], Worimi is seeking to avoid the making of a determination by the Court that discounts the traditional connection which he believes to exist between the Worimi people and the Land. Worimi's interest is that of a person who claims that native title exists over the Land. That interest is not indirect, remote or lacking in substance. It is not advanced as an interest of an emotional kind. It is clearly directly affected by a declaration that there is no native title. It is not remote or insubstantial. The Land Council submits that it can be no more than a belief. However, Worimi asserts that native title exists, founded on evidence that was not tested. There was no evidence on this application for joinder to contradict Worimi's evidence or to demonstrate that it fails to satisfy the Byron test. The findings in Hillig (No 2) and Worimi do not extend to a determination that native title does not exist or to a rejection of Worimi's factual assertions. Those decisions covered the failure of Worimi to comply with the requirements of the Act in relation to claimant applications. It has not yet been determined whether Worimi's belief is or is not well-founded. 17 It is not a matter of mere speculation as to how Worimi's claim will be affected: it will be extinguished. Regardless, Worimi relies on his claimed native title right to oppose or qualify the Land Council's claim of no native title ( Kokatha Native Title Claim v South Australia [2005] FCA 836 ; (2005) 143 FCR 544 (' Kokatha ') at [50]). He has defined his claim and whether or not it is sufficient to answer the claim of the Land Council will be able to be determined. Should a person seeking to establish native title as a respondent be joined to a non-claimant application if they are incapable of meeting the requirements of the Act for a claimant application? The Land Council points to the scheme of Pt 3 of the Act which it says requires that, when a non-claimant application is made, a putative native title holder should make a claimant application within the notification period (ss 61, 62, 66 and 84(3)(a)). It submits that any person or group wishing to assert native title must do so as a claimant and meet the tests imposed by the Act. Accordingly, although Worimi did not make an application within the notification period, it submits the appropriate course is not to be joined to the non-claimant application but to file a claimant application. Of course, Worimi did this on two previous occasions and those applications were summarily dismissed. 19 The Land Council relies on the consideration of the potential claim group identified by Worimi in his second claimant application, which it says substantively mirrors the claim group described in his affidavit in support of joinder. It submits that the only available conclusion is that Worimi cannot identify a claim group capable of meeting the requirements of s 61 of the Act. 20 In Risk v National Native Title Tribunal [2000] FCA 1589 , O'Loughlin J considered the correct interpretation of "a native title claim group" in the context of an application for a determination of native title and the principle that native title is communally held ( Mabo v State of Queensland (No 2) [1992] HCA 23 ; (1992) 175 CLR 1 at [109] ---[10] per Deane and Gaudron JJ). A native title claim group is not established or recognised merely because a group of people call themselves a native title claim group ( Risk at [60]). In Risk , as here, the family that Worimi represents is, on his own evidence, only part of the group which, according to traditional laws and customs, could hold native title over the Land. Worimi accepts that the members of that group do not claim native title and concludes that they are unaware of the traditional laws and customs. 21 For the reasons discussed in Worimi , in particular at [40]---[51], a claim group comprising Worimi's immediate family alone cannot succeed in a native title claim. The application for a determination of native title by that claim group was summarily dismissed. Worimi on behalf of those persons, his mother, his sisters and their daughters now wishes to be joined to dispute the assertion by the Land Council that no native title exists with respect to the Land. 22 The reasons for summary dismissal of the previous claimant applications were based upon the requirements of the Act for a claimant application. Worimi cannot, on the basis of the evidence thus far adduced, establish that native title exists over the Land, in the sense that he cannot obtain a declaration under the Act to that effect. 23 In Kanak v Minister for Land and Water Conservation [2000] FCA 1105 ; (2000) 106 FCR 31 a non-claimant sought, by a non-claimant application, positively to assert the existence of native title. Justice Madgwick observed at [11] that the Act is structured so that any positive assertion that native title exists needs to comply with the requirements of ss 61, 61A and 62 and that the drafters of the Act evidently assumed that only claimant groups would assert native title. His Honour observed that there is no apparent policy reason why the information required of a claimant group should not also be required of a non-claimant application ' if such a vehicle might be used to seek to establish the existence of native title ' (at [11]). To allow otherwise would, in his Honour's view, ' tend to compromise the claimant application process envisaged by the Act ' and ' leave other potential parties and the Court with little of the information necessary to consider the justification for making any positive determination that some group or person holds native title '. 24 As Finn J noted in Kokatha People v State of South Australia [2007] FCA 1057 (' Kokatha People ') at [9], it is well settled that a native title interest is a sufficient interest for the purposes of becoming a party to proceedings under ss 84(3)(a)(iii) and 84(5) of the Act. As persons with competing claims to native title for an area are entitled to be respondents to the competing claims for the same or overlapping area ( Kokatha at [20] per Mansfield J), so is a person who has a claim that competes with a claim that there is no native title. 25 Justice Emmett recognised in Munn at [8] that the holder of a native title interest may have sufficient interest to warrant participation in proceedings, notwithstanding that the Court could not make a determination in relation to that interest in the proceeding in question. Justice Branson joined Mr Kemp, who asserted native title, to the Davis-Hurst proceedings as a respondent, notwithstanding that Mr Kemp did not wish himself to advance a claim for a determination of native title. 26 In Kokatha , Mansfield J observed that all persons who claim to be entitled to native title rights should be able to become a party to the claim or claims in which those rights may be determined (at [20]). In that case, a number of parties claimed a native title interest in the land which was inconsistent with the native title rights and interests claimed by the claimants. His Honour rejected a contention that s 84(5) does not permit the joining of parties because they assert native title rights and interests. His Honour's view (at [22]) was that the Court has a discretion to join persons notwithstanding that the interests upon which they rely in seeking to be joined are native title rights and interests which cannot themselves be determined in the proceedings. His Honour gave an example of a competing native title group who claim communal rights and interests which may be affected by the determination of native title over the claim area. If there were a potential dilution of the competing interests or a possibility of limitation or qualification of the native title being claimed, the holder of the competing interest was eligible for joinder. The fact that native title rights are communally held does not disentitle an individual from being joined as a party whose rights may, individually, be affected (at [24]). His Honour recognised that an assertion of the rights enjoyed by individual members of a competing native title claim group may ' lead to a more informed decision ' as to whether a determination of native title rights and interests should be made as expressed in the application before the Court (at [24]). 27 Justice Finn recognised in Kokatha People at [18] that '[i] t is difficult to overstate the centrality of the requirement of "authorisation" in the scheme laid down by the Act for the making of a native title application '. His Honour adopted what had been considered in detail by Lindgren J in Harrington-Smith on behalf of the Wongatha People v State of Western Australia (No 9) [2007] FCA 31. Justice Lindgren there observed that '[p] roper authorisation is the foundation for the institution and maintenance of a native title claimant application under s 61 ' of the Act (at [1171] citing Perry M and Lloyd S, Australian Native Title Law (Thomson Lawbook Co, 2003) at [3.140] p 439). At [1172], Lindgren J set out two well supported principles: that non-compliance with the authorisation requirement of s 61(1) is fatal to the success of an application and that authorisation must be by all the persons who constitute the native title claim group in respect of the common or group rights and interests comprising the particular native title claimed. 28 Justice Finn considered directly whether the Court has jurisdiction under the Act to make a determination of native title in favour of a person (or group of persons) that has not made a native title determination application under s 61 of the Act and is a respondent to the proceedings. As in Kokatha , the context was a claim to native title by the Kokatha people ('the Kokatha native title claim'). Mr McKenzie initially became a respondent to the Kokatha native title claim pursuant to s 84(3) of the Act. He was also the named applicant in separate proceedings ('the first Kuyani native title claim') that overlapped the Kokatha native title claim. The first Kuyani native title claim was struck out after six amendments which altered substantially the composition of the claim group and lands the subject of the claim. The claim was struck out as Finn J found that there was no arguable basis on which the requirements of ss 61(4), 62(1)(iv) and (v) relating to Mr McKenzie's authorisation to bring the claim, could be satisfied ( McKenzie v South Australia (2005) 214 ALR 214). A second Kuyani native title claim was then brought by Mr McKenzie. Orders were made in the Kokatha native title claim for it to be dealt with in that proceeding to the extent that there was overlap. The second Kuyani native title claim was discontinued but Mr McKenzie remained as a respondent to the Kokatha native title claim ' apparently on the basis that, notwithstanding the discontinuance, he claimed to hold native title in relation to land in the area covered by the proceedings...or else his interests might be affected by a determination in it ' (at [9]). In addition to opposing a determination that the Kokatha people held exclusive native title rights and interests in the claim area, Mr McKenzie sought a determination that the native title in respect of the area was held by the Kokatha people on a shared basis with Kuyani people. 29 I agree with Finn J in Kokatha People at [48] that the legislative intent to require applicants to comply with the requirements of ss 61, 62 and 251B applies to any person or persons advancing a claim for a determination of native title. A person or group that seeks a positive determination of native title is required to make a s 61 determination application under the Act. 30 However, that does not mean that a person is unable to use claimed native title rights and interests defensively to combat a non-claimant application for a declaration that no native title exists. The assertion of such rights and interests may lead to a more informed decision in the non-claimant application. That discretion is not, however, "at large" ( Gamogab at [56]). Where the interest claimed is a positive claim to native title, it is relevant to that discretion that no such determination can be made unless the requirements of ss 61, 62 and 251B are complied with ( Kokatha at [22]---[23]; Moses v State of Western Australia [2007] FCAFC 78 at [18] ; Kokatha People at [45]) and the person or group of persons has a s 61 application on foot in the proceedings ( Kokatha at [23]; Kokatha People at [46]). 32 The Land Council asserts an absence of native title. The members of the Land Council are adult Aboriginal persons who are listed on the Local Aboriginal Land Council membership roll for the area in which the Land is located (s 53 of the Aboriginal Land Rights Act 1983 (NSW) ('the Land Rights Act')). Once a determination of no native title is made, that will be conclusive with respect to the Land. If the non-claimant application for a determination that native title does not exist over the Land succeeds, that will operate as a decision in rem and will, subject to the possibility of variation or revocation under s 13 of the Act, extinguish all and any native title rights and interests ( Western Australia v Ward [2000] FCA 191 ; (2000) 99 FCR 316 at [190] ). 33 During the course of the various proceedings Worimi has, as described in Hillig (No 2) , changed the description of the claim group and the basis of his own participation, from being the representative of the Worimi/Garuahgal women who claim the women's site on the Land to claiming for himself and his immediate family and as guardian of the Land. He has changed the description of the location of the women's site from being wholly on the Land to only partly on the Land. No Worimi woman has given evidence to support the existence of that site. The procedural history is set out in part in Hillig (No 2) at [39]. • The notice period under s 66 of the Act ended on 8 June 2005. • Worimi first applied to be a respondent to these proceedings on 23 August 2005. • The first directions hearing attended by Worimi was on 10 November 2005. On a number of subsequent occasions, Worimi was granted adjournments to prepare his case, or the proceedings were adjourned because he did not attend. Worimi filed a claimant application on 9 February 2006. The first hearing in connection with his claim, being an application to strike out the claimant application commenced on 13 June 2006. Delay prior to that time was caused in part by Worimi declining legal representation. On 14 June 2006, Worimi notified the court that he was unwell and would not be attending. The proceedings were again adjourned. On 26 June 2006, Ms Jowett appeared pro bono for Worimi. • After the first claimant application was struck out on 22 August 2006, Worimi filed a second claimant application on 15 September 2006. The (then) administrator of the Land Council moved the Court to have the second application struck out. At the hearing, Worimi was legally represented by Ms Jowett and Mr Lenehan, pro bono. That claimant application was struck out on 19 December 2006. • On 6 February 2007, Ms Jowett informed the Court that Worimi intended to file another claimant application. Directions were made for Worimi to file and serve any amended notice of motion for joinder to the proceedings and any affidavit upon which he relied in support of that motion by 6 March 2007. Worimi was unable to comply with the directions. The Court extended the time for him to file the amended motion to 30 March 2007 and the time for him to file any evidence to 24 April 2007. • On 30 March 2007, Worimi filed an amended notice of motion for joinder and a supporting affidavit. • Worimi has had the opportunity over a year and a half to file evidence to support his assertion of native title over the Land and his application for joinder to the non-claimant application. • Worimi originally stated that he brought the application on behalf of Worimi/Garuahgal women and that a women's site existed on the Land. The description by Worimi of the nature and extent of the practices said to have been observed on the Land has changed from being wholly on the Land to being only partially on the Land ( Worimi at [32]). That, in turn, affects and enlarges the extent to which men, including Worimi, are permitted onto the Land to engage in the activities described by Worimi in his evidence ( Hillig (No 2) at [16]-[17]; [21]; [29]). That change coincided with the change in the basis of Worimi's claim. • While Worimi still asserts a women's site on the Land, there is no evidence from any Worimi or Garuahgal woman that that is so. Worimi has previously acknowledged that, to the contrary, Worimi women assert that there is no such women's site. • Worimi originally asserted an association of the Worimi nation, the Garuahgal clan and the descendents of Mary Mahr with the Land ( Hillig (No 2) at [21], [25]; Worimi at [40]). • While Worimi asserts guardianship over the Land as the eldest male of his family, there is no evidence from any other spokesman for any other family supporting the existence of native title. Worimi does not claim that individual or family rights are recognised by traditional law or custom ( Worimi at [43]). • Native title rights are, of their nature, group rights and interests, communally held. Worimi acknowledges that the Worimi community and the women in particular are unaware of such rights or traditional laws and customs associated with the Land and do not observe any such laws and customs in connection with the Land. • The applicant seeking a determination of no native title is the Land Council, which was granted fee simple in the Land. One of its statutory functions is to protect the interests of Aboriginal persons in its area in relation to the acquisition, management, use, control and disposal of the Land (s 52(3)(b) of the Land Rights Act). • The Land Council has attempted to sell the Land, a single lot that represents only a part of the land granted pursuant to the Land Rights Act ( Hillig (No 2) at [5]). In order to sell the Land, not less than 80% of the members of the Land Council present and voting must have determined that the Land is not of cultural significance to Aborigines in the area (s 40D(1)(a) of the Land Rights Act). • Worimi's attempts, via two claimant applications, to establish native title over the Land have been dismissed, on the basis that he cannot establish native title under the Act. He has not sought to appeal those decisions or to file a further claimant application. • The Land Council has urged the hearing of its application since it first came before the Court. It is aware of Worimi's assertions and persists with its application. It has opposed the various adjournments sought and granted to Worimi. The Land Council has a right to have its application heard. • Worimi, through Mr Austin, informs the Court that, if joined, he wants a further 16 weeks in which to consider whether he wishes to adduce additional evidence on the question of native title and to file any such evidence. He is content to accept such a direction as a condition of joinder. Native title exists under the Act as a community title capable of recognition by the common law. Individual non-proprietary rights can be recognised where they are derived from the community's laws and customs and are dependent on community title ( Mabo at [52] per Brennan J). Laws and customs in which rights or interests find their origins must be laws or customs having a normative content and deriving from a body of norms or normative system, that existed before sovereignty ( Members of the Yorta Yorta Aboriginal Community v State of Victoria [2002] HCA 58 ; (2002) 214 CLR 422 at [38] per Gleeson CJ, Gummow and Hayne JJ). If the normative system has not existed throughout that period, if it has not had a continuous existence and vitality, if the laws and customs cease to be acknowledged and observed by that society as a group, the rights and interests will have ceased to exist and cannot be revived or reconstituted ( Yorta Yorta at [47]---[50]). It is not necessary to show that every member of a community or group has acknowledged and observed the relevant traditional laws and customs but the Act requires that a native title claimant group establish rights and interests possessed under the traditional laws acknowledged and the traditional customs observed by that group as a whole ( De Rose v South Australia (No 2) [2005] FCAFC 110 ; (2005) 145 FCR 290 at [58] ). As discussed in Hillig (No 2) at [60]---[62], a sub-group that accepts that it is only part of a larger group of native title holders is not the group that holds the common or group rights within s 61 of the Act. Worimi and his family are such a sub-group. 36 It is not suggested by Worimi that the community of Worimi people recognises the asserted native title. Worimi claims that the traditional laws and customs observed by him and, through him, his immediate family, are laws and customs that should be but are not observed by the Worimi people and, in particular, the Worimi/Garuahgal women. He may not be able to establish that native title does exist but his evidence if accepted, may cast doubt on the Land Council's case. Worimi has no present s 61 application and there is no reason to believe that he intends to file a further application or that, if he did, it would survive an application to strike it out for failure to establish authorisation under s 251B of the Act. The Land Council has not filed any evidence in this application. 37 There is no evidence of prejudice to the Land Council if Worimi be joined, other than that occasioned by delay. As discussed in Gamogab at [59], delay is unlikely of itself to constitute a basis to refuse joinder. Justice Gyles, with whom Sunderg J agreed, discussed the nature of the discretion to be exercised for joinder of a party who has reached the threshold as to affectation of interests. In Gamogab , as here, the Court was considering the application of s 84(5) prior to amendment, that being the section under which the primary judge had considered joinder. At [59] Gyles J said that, if the threshold is reached, the Court ' is to assess the prejudice occasioned to the other parties and the Court by the delay in applying to be joined '. Justice Gyles then observed, consistently with the ' in rem ' nature of the proceedings, that '[i] t would be odd in this day and age if delay in applying, in itself, were to radically prejudice (sic) a potential party '. His Honour emphasised at [60] that it is fundamental that an order which directly affects a third person's rights or liabilities should not be made unless the person is joined as a party. 38 However, the history of the proceedings is relevant. The Court has granted numerous adjournments over the objection of the Land Council (then in administration and represented by an administrator, Mr Hillig) to enable Worimi to prepare his case. Worimi initially declined legal representation which he later accepted and filed two successive claimant applications. As recently as 6 February 2007 he indicated, through his then counsel, that he intended to file another claimant application. This has not occurred. Despite the fact that the original application for joinder was filed on 23 August 2005, it has been stood over repeatedly to allow the claimant applications to be dealt with. 39 This non-claimant application, brought then by the Administrator of the Land Council, was filed on 31 December 2004. The delay attributable to Worimi's various applications based on his assertion of native title is of the order of 22 months. Worimi says that, if he is joined, he would make every effort to file any further evidence within 16 weeks. He later accepted the imposition of such a time limit for the filing of any further evidence on which he relies in the non-claimant application as a condition of joinder. Joinder may be permitted, subject to conditions ( Gamogab at [7]) and, in the circumstances, it would be reasonable to impose such a condition. Bearing in mind the time that has already elapsed and the end of the Court term, it is appropriate to direct that the further evidence be filed and served by 18 December 2007, a period of 14 weeks. 40 I am satisfied that the Court should exercise its discretion to join Worimi to the non-claimant application, subject to the condition limiting the time for filing of further evidence. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | opposed application to be joined as respondent to non-claimant native title application pursuant to s 84(5) of the native title act 1993 (cth) non-claimant application seeking order that no native title exists over land applicant for joinder claims native title exists over land previous claimant applications for determination native title exists struck out for not meeting requirements in act whether applicant has an interest within meaning of s 84(5) of act whether interest will be affected by determination in proceedings whether court should exercise discretion to join applicant as a party applicant has relevant interest under the act discretion exercised subject to condition of imposition of time limit for filing further evidence. native title |
2 He arrived in Australia on 6 February 2003 and applied to the Department of Immigration and Multicultural and Indigenous Affairs for a Protection (Class XA) visa on 11 February 2003. That application was refused by a delegate on 20 February 2003. An application was then lodged with the Refugee Review Tribunal. He attended a hearing before that Tribunal in November 2003 and on 10 December 2003 the Tribunal affirmed the delegate's decision. The Federal Magistrates Court thereafter dismissed an application for review. That decision, however, was set aside by a decision of this Court and the matter was remitted to the Tribunal to be determined according to law. 3 When remitted, the matter came before the Refugee Review Tribunal differently constituted. A hearing before the reconstituted Tribunal took place in October 2007 and on 13 December 2007 the Tribunal as reconstituted again affirmed the decision not to grant the protection visa. That Tribunal made adverse findings as to the credibility of the now Appellant. It concluded that the now Appellant " did not provide an accurate account of his circumstances to either the former or current Tribunal, because he was fabricating his claims throughout the processing of his protection visa application ". It was " not satisfied as to the applicant's general credibility ". An application for review of that decision of the Tribunal was dismissed by the Federal Magistrates Court: SZCQA v Minister for Immigration [2008] FMCA 1300. 4 The Appellant now appeals to this Court. He appeared unrepresented although he did have the assistance of an interpreter. The Refugee Review Tribunal failed to accord my natural justice: Particulars A. I stated before the Tribunal that some documents I could not provided to the Tribunal as it would be difficult to obtain those documents. But the Tribunal did not give any weight to my situation that as a refugee I could obviously face difficulties to obtain relevant documents those support my entire claim as a refugee. As a result the Tribunal ignore the adverse circumstance that did significant impact to my decision. 2. The Refugee Review Tribunal made a wrong assumption in relation to my fear of persecution in my home country: Particulars A. The Tribunal made a wrong assumption in relation to my fear of persecution in my home country by making the following comment: i) the applicant has fabricated the essential claims. 3. The Refugee Review Tribunal's finding about the inconsistency was wrong and unsupported: Particulars A. The Tribunal's finding about the inconsistency was wrong and unsupported. The Tribunal also did not disclose to me the country information that had the element of adverse information and did not support my claim. These Grounds , it may be noted, are expressed in terms of errors allegedly made by the Refugee Review Tribunal. The jurisdiction of this Court, however, is an appellate jurisdiction to entertain an appeal from a decision of the Federal Magistrates Court. 5 No error is alleged in respect to any aspect of the decision of the Federal Magistrates Court. The appeal should be dismissed for that reason alone. 6 Even if the Notice of Appeal were to be construed as a contention that the Federal Magistrates Court erred in not acceding to the same arguments (or similar arguments) as were advanced before him for resolution, the appeal should nevertheless be dismissed. 7 There is no foundation for any contention that the " Refugee Review Tribunal failed to accord my natural justice ". The " Particulars " provided refer to an inability to provide " some documents ". This was understood to be a reference to an inability to provide documents relating to a court appearance by the now Appellant before the Madras District Court on 3 November 2002. This was an issue raised before the Refugee Review Tribunal as first constituted in November 2003. It was also apparently an issue raised before the Tribunal as reconstituted in October 2007. There is considered to be no denial of any opportunity to be heard in circumstances where a party first raises a desire to produce documents relevant to his case in 2003, where such documents are not produced some four years later, and where no explanation is provided as to what steps have been undertaken in the interim to secure the production of the documents in issue or any difficulties encountered in the documents not being produced. Such is the present case. 8 To the extent that the " Particulars " raise a separate contention that the Tribunal failed to " give any weight " to the now Appellant's position as a refugee and his " difficulties to obtain relevant documents ", again the contention is rejected. It may be accepted that applicants for refugee status may well face difficulties in both advancing their claims and in securing documents in support of their claims: Premalal v Minister for Immigration, Local Government and Ethnic Affairs [1993] FCA 82 ; (1993) 41 FCR 117 at 141. 9 Difficulties in obtaining information in support of a refugee claim have been the subject of comment. See: Taylor S, Informational Deficiencies Affecting Refugee Status Determinations: Sources and Solutions (1994) 13 Univ Tas L Rev 43. 10 But, if such difficulties are to be given any weight, consideration must be given to at least the nature of the information which it has been said has been difficult to obtain; the ability to obtain such information; and to the steps which have been taken to secure the availability of such information. It must also be recognised that some information may be more readily available to a Commonwealth respondent or entity than to an unrepresented applicant. Thus, for example, in Singh v Minister for Immigration and Ethnic Affairs (1985) 9 ALN N13, Wilcox J recognised that the applicants there had limited ability to secure information. There may be occasions when the adequate consideration of a relevant matter necessarily involves the making of some inquiry as to the facts. Such a case may arise where the material before the decision-maker indicates cause for concern about a relevant matter but where a person who would be affected by an adverse decision -- and who might normally be expected to put his case to the decision-maker -- had no reasonable opportunity to put the full facts relating to that concern before the decision-maker. An example is furnished by this very case. Mr and Mrs Singh alleged the recent persecution in India -- and particularly in the Punjab -- of members of the Sikh community. In the light of notorious events this was plainly a matter of concern, but it was a matter about which they necessarily had no direct knowledge. Under those circumstances, the matter could be adequately considered only with the benefit of better information than Mr and Mrs Singh might be expected to provide. That information was likely to be obtainable through official channels. Reasonableness required that such information be available to the Panel. The Department recognized that fact in placing before the Panel the information upon the situation in India which it had recently obtained from the Department of Foreign Affairs. 11 In the present appeal, however, the " documents " in issue are documents personal to the now Appellant and information, it would have been thought, available to him to secure and produce. I asked for time to get court documents from India. As I had fled from India in fear of persecution, I couldn't find anyone to get me the court documents, to submit to the Tribunal. Most of the time the police authorities falsely framed charges and held me in remand torturing me. When I was taken to courts my case was dismissed. It is very difficult to get any court documents from India as bribery is thriving and people fear to approach the police or the courts to retrieve documents. As I am here I am unable to convince anyone by phone to obtain these court documents in relation to my old case. The Tribunal obviously drew upon this account in its reasons for decision. 12 So construed, the argument is not really an argument as to any denial of natural justice or procedural fairness. Every opportunity was extended to the now Appellant to secure such documents as supported his case and to present the case he sought to advance. No further opportunity was likely to result in the production of more documents. Indeed, it was unlikely that the now Appellant could himself have secured any greater access to documents, let alone an agent or friend on his behalf. In a letter written to the Tribunal in November 2007 he acknowledged that he did not even know the " court " to which he was referring: " I do not understand the difference between a District Court or any other type of court. As far as I understand I know for certain that I was taken to a court in Madras ". 13 The argument is really an argument as to the " weight " to be given to the " difficulties " confronting the now Appellant. Those difficulties were recognised and taken into account by the Tribunal. Thereafter, the factual conclusions to be drawn by the Tribunal and the " weight " it gave to such evidence as was before it -- including evidence as to the difficulties said to confront the now Appellant -- were matters entrusted by the legislature to the Tribunal and not the Federal Magistrates Court, or this Court on appeal. However, even if it had, it is apparent that the Tribunal did not reach its decision based on the absence of any such documentary corroboration. The applicant failed in his review application because of the inconsistencies and implausibilities in his account, not because it was uncorroborated. There is no reason to question this conclusion. 15 Before this Court a contention was advanced orally by the Appellant that he had been denied natural justice before the Tribunal by reason of the Tribunal member being " rude " to him and by reason of the member " smiling at him in a ridiculing manner ". This further way of developing the argument as to a denial of natural justice is also rejected. The Federal Magistrates Court rejected an argument as to bias and rejected an argument that the Tribunal had not conducted a " proper review ". There is no reason to interfere with these findings. Although a transcript of the Tribunal proceeding was ordered by the Federal Magistrate to be filed, none was in fact filed before that Court. There may have been a lack of understanding on the part of the now Appellant as to the order made -- but the fact remains that there was no transcript filed. As noted by the Federal Magistrate, there was no evidence before that Court to support the allegations then being advanced. Nor was there agreement before this Court as to the relevant facts. The absence of a transcript before the Federal Magistrates Court would have made it difficult for any assessment to have been made as to what in fact took place before the Tribunal. 16 Nor is there any foundation for a contention that the Refugee Review Tribunal " ignore [d] the adverse circumstance that did significant impact to my decision ". 17 The separate contention that the Tribunal " made a wrong assumption in relation to my fear of persecution " is likewise to be rejected. The " Particulars " provided refer to the finding of the Tribunal that " the applicant has fabricated the essential claims ". That is a finding of fact which was both entrusted to the Tribunal alone to make and one which was (in any event) open to the Tribunal to have made. 18 The final contention that the " Tribunal's finding about the inconsistency was wrong and unsupported " is likewise either a challenge to the factual conclusions made by the Tribunal or to its reasoning processes. I found that the questions put to me by you were very few whereas the explanations given by me to you were detailed. As you didn't question me in between I was under the impression that the answers that I gave were satisfactory. 19 That may have been the " impression " of the now Appellant at the time. But there was no obligation imposed upon the Tribunal to raise with him whatever reservations may have been experienced at the time as to the explanations being provided by the now Appellant, let alone any obligation to raise whatever reservations may subsequently have emerged when the evidence in its entirety was being considered and the reasons being drafted. If this were a rule of natural justice only the most talkative of judges would satisfy it and trial by jury would have to be abolished. Procedural fairness does not require the Tribunal to give an applicant a running commentary upon what it thinks about the evidence that is given. On the contrary, to adopt such a course would be likely to run a serious risk of conveying an impression of prejudgment. See also: SZHBP v Minister for Immigration and Citizenship [2008] FCA 1299 at [11] , 103 ALD 595 at 597. 20 Again, the factual findings made by the Tribunal were findings open to it and not susceptible of review on their merits by either the Federal Magistrates Court or this Court on appeal. The reference in the " Particulars " to " country information " was not further explained during the course of the present appeal. The reasons for decision of the Refugee Review Tribunal given on 10 December 2003 refer to " Independent Country Information "; but not the Tribunal as reconstituted. Without explanation, no error on the part of the Federal Magistrates Court is separately discernible in respect to the Tribunal decision then under consideration. 21 An application made by the now Appellant during the course of his oral submissions was for the provision of legal assistance. That application was construed as an application for a referral pursuant to O 80 of the Federal Court Rules . (2) For subrule (1), the Court or Judge may take into account: (a) the means of the litigant; and (b) the capacity of the litigant to obtain legal assistance outside the scheme; and (c) the nature and complexity of the proceeding; and (d) any other matter that the Court, or Judge, considers appropriate. Left to one side is whether or not a referral should or could be made after the commencement of the hearing of the proceeding in which the referral is sought. Even if such a referral could then be made, in the circumstances of the present appeal it is not considered to be " in the interests of the administration of justice " to make such a referral. Although the phrase " the interests of justice " is " wide " ( Taylor v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 319 at [10] per French J), the " nature and complexity of the proceeding " does not warrant the making of any such referral. And it is not considered that either the application for review as made to the Federal Magistrates Court or to this Court on appeal exposes any argument which has any real prospects of success. An assessment as to prospects of success is relevant to the exercise of the " broad discretion " conferred by O 80 r 4: Rivera v Minister for Home Affairs [2008] FCA 1 at [6] ---[8] per Tamberlin J. Moreover, the now Appellant had the benefit of legal assistance prior to the hearing before the Federal Magistrates Court. Such assistance as may otherwise have been warranted was most appropriately received at the hearing before the Federal Magistrates Court rather than on appeal. 22 The appeal is dismissed with costs. The Notice of Appeal as filed on 7 October 2008 is dismissed. 2. The Appellant is to pay the costs of the First Respondent. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | no ground of appeal alleging error by federal magistrates court difficulty in producing documents relevant to case no denial of procedural fairness impermissible challenge to factual findings of tribunal application for legal assistance referral under o 80 refused appeal dismissed migration |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural Affairs to refuse to grant the first appellant an Educational (Temporary) (Class TH) visa made on 25 January 2005. 2 The appellants are husband and wife who are nationals of the Republic of Korea. The first appellant is the primary appellant, whilst the second appellant, the primary appellant's husband, relies on membership of the first appellant's family unit. The first appellant will be referred to as the 'appellant'. 3 The appellant did not appear on the appeal. On 13 December 2006 she was advised by the Court that the matter would be heard on 14 February 2007 at 10.15am. On 19 December 2006 the respondents' solicitors also wrote to her advising her that the matter would be heard on 14 February at that time. On 9 February 2007 the respondents' solicitors sent a copy of the first respondent's outline of submissions to the appellant and advised her yet again of the day and time of the hearing. 4 Section 25(2B)(bb) of the Federal Court of Australia Act 1976 (Cth) empowers a single judge of the Court to make an order that an appeal to the Court be dismissed for the failure of the appellant to attend a hearing relating to the appeal. 5 Order 52 rule 38A of the Federal Court Rules provides an alternative procedure. That rule empowers the Court to proceed with the hearing either generally or in relation to any claim for relief in the appeal if a party is absent when an appeal is called on for hearing. 6 The first respondent did not seek an order under s 25(2B)(bb) but, instead, asked that I proceed with the hearing of the appeal and decide the matter on the merits. That seemed to me to be appropriate and I proceeded accordingly. 7 On 29 July 2004 the appellant applied for the relevant visa to study as a cook in an unpaid traineeship for 12 months on the basis that the appellant had been nominated for occupational training by Shark Australia Pty Ltd ('Shark Australia'). Shark Australia lodged an application that nominated the appellant as a cook. One of the criteria to be satisfied for the grant of the visa was that a 'nomination' in respect of the occupational training had been approved by the Minister: Schedule 2 Item 442.222(1) Migration Regulations 1994 . Shark Australia's own application to become an approved nominator was refused by the Minister on 25 January 2005. Because Shark Australia's application to be an approved nominator was refused by the delegate in a separate decision on the same day, that left the appellant without a nominator and therefore a valid nomination. The delegate refused to grant the appellant a visa. 8 An application for review by the Tribunal of the decision not to grant the appellant a visa was lodged on 24 February 2005. 9 On 13 April 2005, the appellant was invited by letter to comment on the refusal of Shark Australia's application for a nomination. The appellant was advised that the information was required because 'the Member may be unable to find that you meet Regulation 442.222 which requires you have a valid nomination at the time of decision'. 10 On 19 May 2005 the appellant responded by stating there was a misunderstanding regarding the capacity of Shark Australia as a nominator and that the company was qualified to provide occupational training. 11 On 27 June 2005, the appellant was invited to appear before the Tribunal to provide oral evidence and other written material at 10.30 am on 5 August 2005. In a further letter dated 15 July 2005, the Tribunal rescheduled the time of the hearing to 12.00 noon. There was no suggestion the appellant met the key criteria for any other subclasses. Consequently, it affirmed the decision under review. • The Tribunal did not make further inquiries with the nominator 'which is considered an improper exercise of power' and the decision was therefore invalid. • The Tribunal did not review the information about the company which was supposed to provide occupational training. She was unable to expand in any meaningful way on the grounds for review. The Federal Magistrate found the grounds could not be sustained. He found that the Tribunal did specifically refer and apply reg 442.222 in Schedule 2 of the Regulations; that there was no duty on the Tribunal to seek information independently; in any event, the Tribunal specifically requested information from the appellant; and that the Tribunal did not fail to have regard to the information provided. She did not apply for a review of the decision to refuse Shark Australia's nomination for occupational training. The first respondent contended that the decision refusing Shark Australia's nomination was not reviewable by the Tribunal. 19 The Tribunal has jurisdiction to review an MRT-reviewable decision and must do so if an application is properly made under s 347 of the Act: s 348 of the Act. Section 338 provides for those decisions which are reviewable as MRT-reviewable decisions. The decision refusing Shark Australia's nomination was not an MRT-reviewable decision within subsections 338(1)-(8) of the Act. A nomination under subreg 5.19(1B) relates to a nomination for approval of an employment position of an employer and is not specific to a particular visa applicant. 23 Those regulations do not govern the application for a nomination by Shark Australia. They do not require consideration of the criteria in Part 442, specifically subclause 442.223(a) and (b). 24 In those circumstances, the decision to refuse Shark Australia's nomination was not an MRT-reviewable decision as it was not prescribed under s 338(9). 25 In the end, I do not think it matters whether it was a prescribed MRT-reviewable decision or not. If it was not as the first respondent contends and I have found, it was not reviewable by the Tribunal. If it was, in my opinion, for the reasons that follow, it was also not reviewable by the Tribunal at the instigation of the appellant. It follows that the only person who may seek a review of that decision is the person prescribed. 29 It appears that Shark Australia has never sought a review. The decision of the delegate therefore to refuse Shark Australia's application for nomination must stand. The application of this principle to the Tribunal's decision means that the Tribunal was entitled to review, and should have reviewed, the whole process of decision making in relation to the applicant's visa, which included that part of the decision making process which determined that the applicant had not been nominated in accordance with reg 5.19. The Tribunal fell into an error of law by failing to turn its mind to whether the visa criteria were satisfied by reference to the reg 5.19 definitions. The Tribunal precluded itself from considering the reg 5.19 issues by misconstruing the regulations and determining that there was no right of review in respect of employment nominations before 1 July 1999. First, it was not an MRT-reviewable decision. Secondly, if it was, it was only reviewable at the instigation of Shark Australia. 32 It was for the applicant to satisfy the Tribunal that the applicant met each of the relevant criteria for the grant of the visa. It was for the applicant to put forward any evidence in support of her application and make whatever submissions she wished to establish that she came within the relevant criteria in the Regulations: Abebe v The Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at 576. 33 The applicant's application did not require the Tribunal to review the decision of the Minister's delegate to refuse Shark Australia's nomination. In my opinion, no separate duty rested upon the Tribunal to inquire into the decision to refuse Shark Australia's nomination. It would have been pointless for the Tribunal to further inquire into that other decision. That is so because no-one who could seek a review had done so. 34 The question before the Tribunal was whether the decision made by the delegate of the Minister in relation to the refusal of the applicant's application for a visa ought to be affirmed or otherwise. On the information that was before the delegate, it was inevitable that the decision had to be affirmed, as it was. The appellant did not put any material before the Tribunal which the Tribunal failed to consider. The appellant did not attend the Tribunal hearing and her claims were limited to the very brief statements in the letter of 29 May 2005. 35 However, if I am wrong about that, the Tribunal did in fact turn its mind to the nomination assessment as part of its review of the visa decision. I have already mentioned that the Tribunal wrote to the appellant on 13 April 2005 inviting the appellant to comment on the refusal of Shark Australia's application for a nomination and the appellant responded, albeit briefly, on 19 May 2005. However the primary visa applicant has not provided any evidence as requested by the Tribunal in its letter of 19 March 2005 as to how her application meets Regulation 442.222 of Schedule 2 of the Regulations. The nomination of Shark Australia Pty Ltd for occupational training was refused on 25 January 2005 and the occupational training is not being provided by a body corporate incorporated for a public purpose or an authority or body, not being a body corporate, established for a public purpose, by or under, an Act or regulations made under an Act. Therefore on the basis of all the evidence before it the Tribunal makes the finding that at the time of decision the visa applicant fails to satisfy the requirements of clause 442.222 of Schedule 2 of the regulations. 39 The appellant must pay the first respondent's costs. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | appeal from decision of federal magistrate reviewing decision of migration review tribunal consideration of occupational trainee visa whether minister's decision to refuse nomination by employer is reviewable appeal dismissed. migration |
The Second Respondent, Mr Ashley Francis Day, is alleged to have been knowingly concerned in or party to, and aided, abetted, counselled or procured Craftmatic's alleged contraventions. The Third Respondent, Mr Wayne Lugg, is alleged to have been knowingly concerned in or party to certain of Craftmatic's alleged contraventions. As between the ACCC and Mr Day, the proceedings have reached the stage where the ACCC has filed and served a statement of claim and Mr Day has filed served an amended defence. These parties are now at odds in relation to issues of practice and procedure arising from the pleadings. The ACCC alleges that Mr Day's amended defence does not comply with the letter and spirit of the rules with respect to the pleading of the same in the Federal Court Rules . It seeks an order that an amended defence filed on 5 August 2009 be struck out and that Mr Day have no further opportunity to replead. Mr Day alleges that the ACCC has not, upon request, furnished adequate particulars of the statement of claim. The parties have endeavoured, without success, to resolve their differences via exchanges of correspondence between their respective solicitors. My experience of differences such as these is that it is not uncommon for pride and pedantry, as well as professionalism and proper practice, to intrude in such exchanges to the detriment of their informal resolution. Further, especially for those most intimately involved, what to one is insistence on adherence to proper practice is to the other misplaced pride and pedantry and the reverse also applies. I mean no disrespect to the practitioners concerned in observing that I discerned glimpses of each of these features in the course of my review of the exchanges of correspondence between their respective solicitors. That review also disclosed a prospect, though not, as yet the actuality, of what was memorably described in an earlier edition of Bullen & Leake & Jacob's Precedents of Pleadings (12 th Ed, 1975, Sweet & Maxwell at 113-114) as "the particulars game", i.e. where parties deliberately engage in mutual brinkmanship as to the concealing and revealing of their respective cases, see, further, Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 2) [2009] FCA 237 at [7] and [8]. Be this as it may, the ACCC and Mr Day have each filed notices of motion which require determination of the applications they respectively make in respect of these issues of practice and procedure. The issues raised are not unrelated but I shall nonetheless consider each in turn. That makes it desirable to set out in full each of these pleadings. It would detract from continuity and ready comprehensibility of reasoning so to do in the main body of this judgement. I therefore annex the pleadings to it. The ACCC's complaints with respect to the amended defence fall into two broad categories: When employed in pleading, the phrase "at all material times" is used to the end of complying with the requirement to plead material facts. That requirement is a feature of the system of pleading provided for in the rules of court which were made following the enactment in the United Kingdom in the late nineteenth century of the Judicature Acts 1873-1875 (UK) and its local analogues. (2) A traverse may be made either by a specific denial or by a statement of specific non-admission. (3) Subject to subrule (4), every allegation of fact made in a statement of claim or counterclaim which the party on whom it is served does not intend to admit must be specifically traversed by him in his defence or defence to counterclaim, as the case may be; and a general denial of such allegations, or a general statement on non-admission of them is not a sufficient traverse of them. (4) Any allegation that a party has suffered damage and any allegations as to the amount of damages is deemed to be traversed unless specifically admitted. Those rules introduced statements of case which are exchanged in conjunction with witness statements. It is nonetheless possible to discern the influence of these changes in some aspects of practice in this Court; see Practice Note No 30, Fast Track Directions and the provision in Pt 4 thereof for "Fast Track Statements, Responses and Cross-claims" and, in relation to taxation appeals, the provision for "appeal statements" in O 52B r 5, as read in conjunction with the Tax List Directions of 4 April 2008. None of these are applicable to this case. ) [1916] HCA 81 ; (1916) 22 CLR 490 , at p 517 ; they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial ( Miller v. Cameron [1936] HCA 13 ; (1936) 54 CLR 572 , at pp 576-577 ; and they give a defendant an understanding of a plaintiff's claim in aid of the defendant's right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gould and Birbeck and Bacon (1916) 22 CLR, at pp 517, 518 ; Sri Mahant Govind Rao v. Sita Ram Kesho (1898) LR 25 Ind App 195 , at p 207 ). But where there is no departure during the trial from the pleaded cause of action, a disconformity between the evidence and particulars earlier furnished will not disentitle a party to a verdict based upon the evidence. Particulars may be amended after the evidence in a trial has closed ( Mummery v. Irvings Pty. Ltd. [1956] HCA 45 ; (1956) 96 CLR 99 , at pp 111, 112, 127 ), though a failure to amend particulars to accord precisely with the facts which have emerged in the course of evidence does not necessarily preclude a plaintiff from seeking a verdict on the cause of action alleged in reliance upon the facts actually established by the evidence ( Leotta v. Public Transport Commission (N.S.W. ) (1976) 9 ALR 437 , at p 446; 50 ALJR 666 , at p 668 ). A decade later that remains the case. Further, a pleading must be read as a whole. The countervailing consideration is whether, accepting it must be so read, the pleading fairly puts the other party on notice as to the case to be met. A pleading is but a means to the achievement of procedural fairness and of the efficient use of judicial resources and those of the parties by the identification of what is truly at issue. The phrase "at all material times" can be a convenient form of legal shorthand. When employed in the pleading of a statement of claim the phrase embraces those times which are relevant to the cause or causes of action pleaded or at least to an allegation of a material fact which constitutes all or part of an element of such a cause of action. To have that effect the phrase must have a reference point to allow the reader to ascertain the day or period on or during which it is alleged that fact prevailed materially in the sense of being relevant. Convenience is not necessarily to be equated with precision. This statement of claim exemplifies that proposition. It was submitted on behalf of the ACCC that it was, for example, evident from the allegations in paras 5, 8, 11 and 13, what was the commencement of material times and para 3 and para 10 as to their conclusion in respect of Mr Day. The submission on behalf of Mr Day was that the phrase " is intermittently used in the statement of claim with either no date specified or different dates referred to. In a few instances a start date and end date can be deduced. " Subject to substituting the words "indiscriminately" and "uncritically" for "intermittently", I regard the latter as an accurate summary of the way in which the phrase "at all material times" is employed in this statement of claim. In para 2 of the statement of claim, the phrase "at all material times" is employed without an internal reference point. That, in itself, is not a vice if the times concerned are fairly and reasonably ascertainable reading the pleading as a whole. In, for example, a routine running down case in which the alleged tort was committed on a particular date and that date and event are elsewhere alleged in the pleading, it would be idle to suggest that the absence of any internal reference point in a paragraph such as para 2 of the statement of claim was of any moment so far as the pleading of a defence which, in terms of O 11 r 18, "answered the point of substance" was concerned. The time that was alleged to be material would be readily comprehensible as the date of the alleged tort. In this statement of claim though the phrase "at all material times" engages with a number of other paragraphs in the statement of claim which also employ that phrase and do so in a variety of ways. They do so either without an internal reference point (e.g. para 5), with an end point but no start point (e.g. para 6 and para 8), or with an end point but no start point (e.g. paragraph 10 and, especially notably, para 34). This method of pleading truly does leave the reader to speculate as to what is the extent of the period concerned for the allegation made in it. To which other temporal point is the allegation to be regarded as "material" if there are different such points also in part at least defined by "at all material times"? Overall, the pleading seems to refer to conduct that occurred between August 2005 and June 2008 although not all of the conduct alleged occurred over the whole of that period. Such an understanding of the statement of claim, so far as Mr Day is concerned, is consistent with the declaratory relief sought in respect of him in para 3 of the application. If, for example, on the available evidence, the ACCC's case were that particular conduct occurred over the whole of such a period and that Mr Day was knowingly concerned in the same, the following allegations might be made, without any need additionally to allege "at all material times": (a) "During the whole of the period between August 2005 and June 2008 Craftmatic [engaged in the following particular conduct]"; (b) Mr Day was knowingly concerned in the conduct alleged in para (a). Paragraph (b) might then permissibly enumerate each of these paragraphs as the conduct in which it was alleged that Mr Day was knowingly concerned. So pleaded, a complaint of the kind presently made on behalf of Mr Day would not be open. Order 11, rule 18 was relied upon by the ACCC. In that regard, my attention was helpfully drawn to the reference to that rule by French J (as his Honour then was) in Smith v Barron [2004] FCA 1596 ; (2004) 139 FCR 566 at 575-576 as part of his Honour's rationale for striking out a defence which consisted mostly of bare denials including a bare denial in respect of a particular paragraph of a statement of claim which made detailed factual allegations as to events in a particular period by reference to which it was alleged that there were reasonable grounds for suspecting that a company was either insolvent or would become insolvent by reason of incurring those debts. His Honour contrasted these bare denials with an affidavit read before him in which, on information and belief sourced from the company's directors, it was attested that they had reasonable grounds to expect and did expect that the company would be able to pay its debts at these times and with the requirement, found in the certificate in Form 15B which must accompany a pleading and derived from O 11 r 1B, that, inter alia, a legal practitioner certify that there existed a reasonable basis for the denial of allegations. His Honour also drew attention to particular matters alleged in the statement of claim that had not really been disputed by the director concerned in his public examination. Against this background, it becomes apparent why his Honour reached the conclusion that the defence filed was really just a "holding defence" rather than an attempt in good faith to plead to the statement of claim. This case is different. In its prescription that a defence ought not to be pleaded in an evasive way, O 11 r 18 emphasises a principle of pleading practice which is a subset of the more general requirements, found in O 11 r 16(b) and r 16(c) respectively, that a pleading must not have a tendency to cause prejudice, embarrassment or delay to a proceeding or constitute an abuse of process. In the face of a statement of claim noteworthy for its temporal imprecision, it is not, for example, evasive, to admit, as this defence does (para 3.1), that " for a period of time prior to June 2008 [Mr Day] was a managing director of [Craftmatic] ". Nor is it necessarily evasive to admit that one was but "a", rather than "the" managing director. One of the rules with respect to corporations, replaceable by virtue of s 135 of the Corporations Act 2001 (Cth), is that found in s 201J of that Act, which provides, " The directors of a company may appoint 1 or more of themselves to the office of managing director of the company for the period, and on the terms (including as to remuneration), as the directors see fit " (emphasis added) . Further, even if Craftmatic did have but one managing director at any given time, the difficulty with this statement of claim is in ascertaining what is that given time. Mr Day's obligation is to respond to the allegation made, not to speculate by making an admission as to a period of office-holding which may be irrelevant to the contraventions alleged. There is no doubt that O 11 r 18 is directed to the end of requiring a party responding to a pleading to identify what truly are the issues of fact which remain controversial in the proceeding. Other rules directed to that end are, in their application to a defence, O 11 r 1B and r 16, already mentioned, and O 11 r 13 and r 17. I do not regard the first category of complaint with respect to the amended defence as made out. As to the complaints in respect of the non-admission of the existence of the ACCC as alleged in the statement of claim, Mr Day is not obliged to admit that the ACCC exists. Whether it does is a question of law. It is true that, were the non-admission based on a constitutional question, the bare denial would have an evasive quality, but it would be evasive as to a matter of law, not fact. Further, and as the ACCC itself acknowledges in its submissions, the raising of such an argument would require the giving of notices under s 78B of the Judiciary Act 1903 (Cth). Were such a point to be raised in a way which necessitated an adjournment so as to allow for a reasonable time to elapse after the giving of notice, the price of so doing may be an order for costs, perhaps on an indemnity basis, in respect of costs thrown away. That same consequence might attend the belated raising of any other point of law in relation to the existence of the ACCC. Order 11, rule 9 permits a party to raise a point of law in a pleading, Mr Day has not done so in relation to the existence of the ACCC, save insofar as the non-admission Yet further and in any event, especially before the days when a ready search of a national corporations' database could be made, it was not unknown for the allegation in a pleading as to the incorporation of a party not to be admitted. That raised a mixed question of fact and law. Did the statute concerned, assuming it was particularised in the allegation provide for incorporation, which, if that was an Australian statute was only a question of law, and, if so, was it proved that the mechanism for incorporation for which the statute provided had occurred, which was a question of fact? The latter was usually and readily proved by the tender of a certificate of incorporation. Often, in practice, the informal provision of a company search to the opposite party by the party alleging incorporation resulted in the amending of the non-admission as to incorporation to an admission. If not, then the cost of obtaining the certificate of incorporation formed part of the alleging party's costs in the event it succeeded in the action. Given that the TPA directly provides for the incorporation of a body corporate termed the ACCC, as opposed to providing for incorporation upon registration, it does, with respect, seem odd, perhaps even churlish, for there to be a non-admission of para 1 of the statement of claim. I doubt though that this stance will occasion anyone any prejudice, delay or embarrassment in the proceedings. I had the impression that the ACCC drew attention to this aspect of the amended defence as a supposed exemplar of a more pervasive vice of that character in the amended defence. For reasons already given in relation to the difficulty presented by the way in which "at all material times" is used in the statement of claim, that supposition is misplaced. Paragraph 3.4 of the amended defence denies the allegation in para 3.3 of the statement of claim that Mr Day, "with respect to his conduct pleaded in this statement of claim, acted within the scope of his actual or apparent authority as managing director of Craftmatic ". This paragraph of the defence is criticised for not making it clear as to whether it is the alleged conduct which is denied or whether what is denied is that the conduct concerned, though it admittedly occurred, was within the scope of his actual or apparent authority. It was thus submitted, "presumably [Mr Day] seeks only to deny his engagement in the conduct pleaded, not that actions as found by him to be taken were within the scope of his actual apparent authority" [sic]. On behalf of Mr Day, that such a criticism might be made was, not unreasonably it seemed to me, conceded. That done, the submission made was that, read in context, the denial went only to the factual element of para 3.3 of the statement of claim, not to the issue of law with which an allegation of actual or apparent authority was pregnant. The further submission made was that, "it is not entirely clear what specific conduct the [ACCC] is referring to". That, it was submitted, was a subject for the ordering of particulars. The latter of Mr Day's submissions exposes the true pleading vice. Paragraph 3.3 of the statement of claim contains "rolled up" allegations, i.e. multiple allegations rolled up into a single paragraph. That is contrary to O11 r 1(b), which requires that each matter in a pleading, as far as convenient, be put in a separate paragraph. To violate that rule in this manner is to author a pleading which has a tendency to embarrass in the technical way in which that word is used in O 11 r 16(b). For these reasons, the ACCC is the author of its own claimed complaint in respect of para 3.4 of the amended defence. Complaint is also made on behalf of the ACCC that para 6 of the amended defence is inconsistent with para 7 in that, in para 6 of the amended defence "the allegation in para 5.2 [of the statement of claim] that telemarketer representatives of Craftmatic made telephone calls to potential customers [is not admitted] yet, as appears from para 7 of the defence, [Mr Day] makes this very admission". There is no such inconsistency. As is evident from its preamble, para 5 of the statement of claim, to which para 6 of the amended defence responds, is directed to the subject of Craftmatic's sales method . That it adopted that method is expressly not admitted in the amended defence on the expressed basis of absence of knowledge on the part of Mr Day of that alleged method. Paragraph 6 of the statement of claim makes a series of positive allegations as to the actual occurrence in a particular alleged way of one component of that method, the "initial telephone call" as defined in para 5 of the statement of claim. Responding to that in para 7 of the amended defence, Mr Day admits that Craftmatic's "telemarketer" representatives made telephone calls to potential customers but, consistently with the non-admission of method in para 6 of the amended defence, does not admit, on the basis of an asserted absence of knowledge, that an "initial telephone call" occurred as alleged. Order 11 rule 13(2) expressly authorises a traverse by a "statement of specific non-admission". Paragraphs 6 and 7 of the amended defence each comply with that authorisation. In so doing on the basis of an alleged absence of knowledge on the part of Mr Day, they also each exemplify the observation made in Lindgren KE and Branson CM, Federal Civil Litigation Precedents (Butterworths, 1998 at [24,210]) that, "denial is usually employed where the alleged fact is in a party's knowledge and a non-admission where it is not". I respectfully agree with that observation. The practical effect of an express non-admission is the same as that of an express denial ( Warner v Sampson [1959] 1 QB 297 at 319 per Hodson LJ) in that the opposing party is thereby put to proof of the issue but the difference between the two lies in the occasion for their employment as a matter of pleading practice. Paragraph 8 of the amended defence responds to para 7 of the statement of claim. In the way in which it is cast, para 7 of the statement of claim also makes "rolled up" allegations in that it conjoins allegations in respect of the separate matters of the provision of a script and the giving of instructions for the use of that script. Mr Day admits that a script was available but otherwise expressly does not admit the allegations in para 7 of the statement of claim on the basis of absence of knowledge. This he is entitled to do. On behalf of the ACCC criticism is further made of the way in which Mr Day's amended defence responds to the allegations as to his knowledge of pleaded facts. Allegations as to his knowledge are to be found in para 10, 15, 24 and 34 of the statement of claim with the responses to these allegations being found in para 10, 13, 27 and 37 of the amended defence. The responses take the form of express non-admissions on the basis of absence of knowledge. A noteworthy feature of these paragraphs of the amended defence is their engagement with para 3.5 of that document. In para 3.5, in some detail, Mr Day makes positive allegations as to the management and control of Craftmatic and as to the nature and extent of his involvement in that management and control. It is submitted on behalf of the ACCC, with reference to the responsive paragraphs of the amended defence, as read with para 3.5, that, "These paragraphs are in substance and effect pleadings of circumstances by which it might be that [Mr Day] does not know particular things but are vague and evasive and do not address the pleaded issue of whether he knows those particular things (underlining in written submission)". Thus, it is submitted, para 3.5 does not amount to an allegation of material facts, contrary to O 11 r 2. A more detailed critique, which I have taken into account, of para 3.5 follows to the end of seeking to demonstrate that para 3.5 is evasive. Mr Day's response to this inter-related assault on para 3.5, 10, 13, 27 and 37 of the amended defence recognises, as the ACCC does not, perhaps surprisingly in view of the apparent appreciation of the substance of para 3.5 evident in the passage from its submission quoted, that the allegations in para 3.5 form a basis upon which the ACCC's case of Mr Day's being knowingly concerned in Craftmatic's corporate conduct might fail at trial. Mr Day submits he has made permissible non-admissions as to the allegations of knowledge made against him. Paragraph 3.5 is pleaded in further response to the allegations made in para 3 of the statement of claim as to Mr Day's corporate office-holding and shareholding, responsibilities and authority. These allegations are expressly admitted or traversed in para 3.1, 3.2, 3.3 and 3.4 of the amended defence. Were Mr Day to have confined his amended defence with respect to allegations of knowledge on his part merely to an absence of knowledge, he may well have been met with an objection at trial to his leading evidence in relation to the subjects which are detailed in para 3.5 of the amended defence. When permissibly employed, a non-admission in a defence puts an opponent to proof in respect of an allegation but does not constitute an expressly alleged positive factual case to the contrary. In para 3.5 of the amended defence Mr Day is giving notice to the ACCC that he will mount a positive case in respect of the facts there alleged. That is not to say, especially taking into account the more detailed critique which the ACCC makes of para 3.5, that there is no scope for the provision on request of particulars in respect of some of the allegations made in that paragraph. That is not though the nature of the application made by the ACCC. Paragraph 3.5 is not evasive. It may though be wanting in particularity in respect of the positive allegations there made. The ACCC's submission confuses what constitutes an evasive response to an allegation in a statement of claim with what may constitute a positive allegation in a defence which warrants better particularisation if that is sought. Read with para 3.5, para 10, 13, 27 and 37 of the amended defence provide an adequate, comprehensible and permissible response to the allegations of knowledge made against Mr Day. For these reasons, I do not regard the amended defence as a "holding defence". I dismiss the application that it be struck out. It necessarily follows that I also dismiss the ACCC's alternative application that no further time be allowed for its amendment. Insofar as the same is necessary, I grant leave to Mr Day to file the amended defence on 5 August 2009. Mr Day should have his costs of and incidental to the application made by the ACCC. Under cover of a letter from his solicitors dated 16 July 2009 to the ACCC's solicitors, Mr Day has made a detailed request for the furnishing of particulars of the statement of claim. Whether that request might be better described as prolix and unnecessary in whole or in part remains to be decided. As to that, it is only fair to record that, contrary to Mr Day's submission; the particulars request is not of a kind that is familiar, or at least presently familiar, in Queensland. That may perhaps be due to improvements in pleading (including particulars) practice and attitudes to the need for early identification of the real issues in a case which have occurred over the last decade under the influence of the introduction in State jurisdiction of the Uniform Civil Procedure Rules 1999 (Qld). In any event, what the request most called to mind were the discursive interrogatories of a bygone age. Mr Day had already filed a defence. Order 12 rule 5 , which envisages that an order for the furnishing of particulars ought not, without cause, be made before the taking of that pleading step is not therefore strictly applicable. Nonetheless, in deciding to grant leave to him to file the amended defence, I have expressly considered whether or not it would have been preferable first to determine the merits of the request for particulars and to defer the question of leave to amend until an amended defence could be formulated, taking into account the response to such order for particulars of the statement of claim as I was disposed to make. Having regard to the joint expression by the ACCC and Mr Day of a preference that the merits of the ACCC's application first be dealt with, to the basis for that application and its opposition as revealed in submissions, to the nature of the amendments which were made or at least sought to be made to the original defence and to Mr Day's evident desire for leave to file a defence incorporating those amendments, I considered it desirable first to determine the ACCC's application (and so much of Mr Day's as sought leave to file the amended defence). It is evident from the ACCC's submission in reply [at para 29] that a particular motivation for the absence as yet of a detailed response by the ACCC to the existing request for particulars of the statement of claim was its perception of the adequacy of the amended defence that Mr Day plainly felt able to make even in the absence of further and better particulars. The ACCC's submission does not signify a refusal to respond to the particulars request made. Mr Day also now has the benefit, thanks to the candour of the ACCC's submission in reply, of being appraised of bases upon which the ACCC takes issue with some aspects of the particulars request of 16 July 2009. In these circumstances, there is a hypothetical quality with respect to whether and to what extent particulars ought to be ordered. It is therefore better at this stage not to determine the application for an order for particulars. Instead, I shall stand over so much of Mr Day's application as seeks such an order, grant liberty to apply to relist that application either in respect of the request of 16 July or such further or modified request as he may make and reserve costs. Having regard to the observations which I have made in respect of the amended defence, I would also entertain at that time any application for ordering of particulars of the amended defence that may be necessary. I shall hear from the parties as to the directions which ought to be made for the further conduct of this proceeding in light of the disposition of their interlocutory applications. I certify that the preceding forty-four (44) numbered paragraph is a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. The first respondent, Craftmatic: The second respondent, Day: The third respondent, Lugg: 4.1. between April 2006 and May 2007 held the position of sales representative for Craftmatic; 4.2. with respect to his conduct pleaded in this statement of claim, acted within the scope of his actual or apparent authority as sales representative of Craftmatic. Craftmatic identifies potential customers, being persons over approximately 55 years of age, by: 5.1.1. obtaining records of persons to whom seniors cards are issued; 5.1.2. distributing market survey forms in association with shopping mall presentations of its products and reviewing the responses; 5.1.3. obtaining contact details from data service providers; 5.2. telemarketer representatives of Craftmatic make telephone calls to the identified potential customers, for the purpose of arranging an in-home presentation ("the initial telephone call"); 5.3. telemarketer representatives of Craftmatic make telephone calls to the potential customers confirming the appointment ("the confirmation telephone call"); 5.4. a sales representative of Craftmatic attends an interview at the potential customer's home ("the in-home presentation"); 5.5. if the potential customer agrees to purchase a Craftmatic bed, the bed is subsequently delivered to their home. At all material times until June 2008, Day: 10.1. was aware of each of the matters in paragraphs 6, 7 and 8 above; and 10.2. caused, authorised and directed the conduct referred to in paragraphs 6 and 7 above; 10.3. was thereby knowingly concerned in or party to, and aided, abetted, counselled or procured, the contraventions of section 52 by Craftmatic referred to in paragraph 9 above. In the circumstances, by engaging in the conduct set out in paragraph 11.2 above, Craftmatic has in trade or commerce engaged in conduct that is misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the Act. At all material times until June 2008, Day: 15.1. was aware of each of the matters in paragraphs 11, 12 and 13 above; and 15.2. caused, authorised and directed the conduct referred to in paragraphs 11 and 12 above; 15.3. was thereby knowingly concerned in or party to, and aided, abetted, counselled or procured, the contraventions of section 52 by Craftmatic referred to in paragraph 14 above. King Single: $7130 18.6.2. Standard Double: $8440 18.6.3. Standard Queen: $8760 18.6.4. Dual Queen: $13,120 18.6.5. Dual King: $13,370 18.6.6. In the circumstances, by engaging in the conduct set out in paragraphs 18, 19 and 20 above, Craftmatic has in trade or commerce engaged in conduct that is misleading or deceptive or likely to mislead or deceive, in contravention of section 52 of the Act. At all material times until June 2008, Day: 24.1. was aware of each of the matters in paragraphs 16 and 18 to 21; 24.2. further, to the extent each of the representations set out in paragraphs 18, 19.1, 19.3, 19.9, 19.10, 19.12, 20.1, 20.2, 20.4 and 20.5 above was a representation as to a future matter, was aware that Craftmatic did not have reasonable grounds for making the representation; 24.3. caused, authorised and directed the conduct referred to in paragraphs 16 and 18, 19 and 20; 24.4. was thereby knowingly concerned in or party to, and aided, abetted, counselled or procured, the contraventions of section 52 by Craftmatic referred to in paragraph 23 above. At all material times between April 2006 and May 2007, Lugg: 28.1. was aware of each of the matters in paragraph 26 above; 28.2. by reason of the matters in paragraphs 25, 26 and 28.1 above, was thereby knowingly concerned in or party to, and aided, abetted, counselled or procured, the contraventions of section 52 by Craftmatic referred to in paragraph 27 above. At all material times, Craftmatic knew or believed that the class of persons to whom its conduct was targeted, being persons over approximately 55 years of age, included persons who could reasonably be expected to be particularly vulnerable to its sales methods due to illness, infirmity, isolation or other disability associated with their age. At all material times, Craftmatic in the marketing and sales of its products intentionally engaged in the following conduct: At all material times from August 2005, the sales method by which Craftmatic marketed and sold Craftmatic beds to customers in Australia: In the circumstances, by engaging in the conduct set out in paragraphs 6, 11, 16, 18, 19, 20 and 31 above, Craftmatic has, in trade or commerce, in connection with the supply or possible supply of goods to potential customers, engaged in conduct that is, in all the circumstances, unconscionable, in contravention of section 51AB of the Act. At all material times until June 2008, Day: 34.1. was aware of each of the matters in paragraphs 6, 7, 8, 11, 12, 13, 16, 18 to 21, 31 and 32 above; 34.2. caused, authorised and directed the conduct referred to in paragraphs 6, 7, 11, 12, 16, 18 to 20, 31 and 32 above; 34.3. was thereby knowingly concerned in or party to, and aided, abetted, counselled or procured, the contraventions of section 51AB by Craftmatic referred to in paragraph 33 above. As to paragraph 3.2 does not know and cannot admit the allegations of fact as pleaded therein. As to paragraph 4 of the SOC t he Second Respondent: does not know and cannot admit the allegations of fact contained in paragraph 4.1 and 4.2 of the SOC . As to paragraph 5 of the SOC the Second Respondent: As to paragraph 6 of the SOC the Second Respondent: As to paragraph 7 and 8 of the SOC, the Second Respondent: 8.1. admits that a script was available for use by staff of the First Respondent; 8.2. As to paragraph 22 of the SOC the Second Respondent : As to paragraph 23 of the SOC the Second Respondent : As to paragraph 24 .1 of the SOC the Second Respondent: As to paragraph 25 of the SOC the Second Respondent does not know and cannot admit the allegations of fact pleaded in paragraphs 25.1 to 25.6 of the SOC. As to paragraph 26 of the SOC the Second Respondent: As to paragraph 27 of the SOC the Second Respondent: As to paragraph 28 of the SOC the Second Respondent: As to paragraph 29 of the SOC the Second Respondent does not know and cannot admit the allegations of fact pleaded therein as the Second Respondent does not know the dates the Applicant intends to refer to by use of the words "at all material times". As to paragraph 30 of the SOC the Second Respondent: As to paragraph 31 of the SOC the Second Respondent: As to paragraph 32 of the SOC the Second Respondent: 35.1. does not know and cannot admit the allegations of fact pleaded in paragraphs 32.1 to 32.3 as the Second Respondent does not know the end date the Applicant intends to refer to by use of the words "at all material times"; 35.2. otherwise does not know and cannot admit the allegations of fact pleaded therein in so far as they relate to the period during which the Second Respondent was involved with the business activities of the First Respondent. denies the allegations of fact referred to therein; 39.2. refers to and repeats his pleadings at paragraphs 3.5(i) to 3.5(v)(b); 39.3. does not plead to the allegations of law pleaded therein. | pleadings particulars purpose of pleadings and particulars generally application to strike out amended defence and order no further opportunity to replead whether amended defence is within the letter and spirit of the federal court rules cross-application that applicant has not furnished adequate particulars of the statement of claim whether amended defence amounts to a mere bare denial rather than a bona fide attempt to plead to the statement of claim meaning and use of phrase "at all material times" underlying defects in statement of claim held applicant is the author of its own claimed complaint in respect of the amended defence practice and procedure |
Each proceeding was commenced by information and summons. Each information and summons was dated 20 April 2006: see O 49 r 1 of the Federal Court Rules . 2 Proceeding VID 385 of 2006 alleges an offence against s 75AZS(1) of the Trade Practices Act 1974 ("the Act "). 3 Proceeding VID 386 of 2006 alleges an offence against s 75AZC(1)(a) of the Act . 4 Proceeding VID 387 of 2006 alleges an offence against s 75AZC(1)(k) of the Act . 5 Proceeding VID 388 of 2006 alleges an offence against s 75AZS(1) of the Act . 6 It appears that, at some time after 18 July 2006, when one of the then directors of the defendant swore the affidavit referred to below at [9] on behalf of the company the defendant has gone into liquidation. Oral evidence was given to the Court by an officer of the prosecutor, Dianna Kinski, by which I was satisfied that service on the informations and summonses had been effected at the registered office of the defendant prior to it going into liquidation. The defendant was notified of the hearing: its solicitors had signed a consent order on 11 August 2006 fixing the date for hearing as 3 October 2006. 7 When the matter was called on for hearing on 3 October 2006 there was no appearance for the defendant. I directed that pleas of not guilty be entered in respect of each of the charges and the hearing proceeded. It dealt with mitigatory matters. Notice was given to Mr Seroshtan to attend for cross examination on his affidavit but he failed to attend. Accordingly, I have accepted the evidence relied on by the prosecutor where that evidence is inconsistent with the evidence of Mr Seroshtan. As a result the maximum penalty which may be imposed on a corporation for each of the offences with which the defendant stands charged is $1,100,000. 14 In determining appropriate penalties for offences under the Act , the Court is bound by s 16A of the Crimes Act 1914 (Cth) to impose a sentence "that is of a severity appropriate in all the circumstances of the offence. " In undertaking this task the Court is required, by s 16A(2) to take into account a range of matters to the extent that they are relevant and known to the Court. Section 16C requires the Court to have regard to the financial circumstances of a defendant before imposing a fine but the Court can impose a fine even if the defendant's financial position cannot be ascertained. 15 A consideration, which is not specifically referred to in s 16A of the Crimes Act but which has assumed considerable importance in the case law which has developed in relation to Part V of the Act , has been general deterrence. The absence of specific reference to general deterrence has not been interpreted as meaning that it is not a relevant consideration. The contrary is true: R v Sinclair (1990) 51 A Crim R 418 at 430. In many cases decided under the Act , this Court has placed considerable emphasis on general deterrence as being an important factor to be brought to account where penalties or sentences are imposed for contraventions of Part V. This approach finds support in the expressed object of the Act 'to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection' (see s 2) and the significant monetary penalties, provided for in the Act , for contravention of consumer protection provisions such as those presently under consideration. It has become accepted that the imposition of substantial penalties for breaches of provisions which are designed to protect consumers, will serve to alert members of the business community to the provisions of the Act and the serious consequences which may flow from their contravention: see eg Pugh v Clark Rubber Limited (1993) ATPR 41-258 at 41, 473; Miller v Cunningham's Warehouse Sales Pty Ltd (1994) ATPR 41-321 at 42, 269; Australian Competition and Consumer Commission v Dimmeys Stores Pty Ltd [1999] FCA 1175 at [24] . This principle has been applied even where defendant companies have gone into liquidation and there is no realistic prospect of a substantial monetary penalty ever being paid: see eg Australian Competition and Consumer Commission v Vales Wine Company Pty Ltd (1976) ATPR 41-528 at 42, 776; Australian Competition and Consumer Commission v Fila Sport Oceania Pty Ltd [2004] FCA 376 at [23] - [25] . 16 In Australian Competition and Consumer Commission v Dimmeys Stores Pty Ltd [1999] FCA 1175 at [10] - [12] Weinberg J noted certain observations of French J in Gardam v Splendid Enterprises Pty Ltd (1987) ATPR 40-779 at 48, 502 to 48, 503 which he found to be a helpful statement of the principles which governed the determination of penalties to be fixed for breaches of the consumer protection provisions of the Act . His Honour held that these principles remained relevant notwithstanding the introduction of s 16A of the Crimes Act . Their commission was the product of carelessness and lacks management. Of course such contraventions are not in the same order as culpability as those involving an intention to deceive. Skippy Australia Pty. Ltd. ("the defendant") was incorporated on 21 December 2004 in the State of Victoria and is a corporation within the meaning of the Trade Practices Act 1974 ("the Act "). The directors of the defendant at all material times were Artour Balaiants and Boris Seroshtan. The defendant has at all material times carried on business as a retailer and wholesaler of baby products under the name of Skippy Australia, from its warehouse at Factory 2/1-3 Bricker Street, Cheltenham, Victoria ("the warehouse") and via the internet. Baby products sold by the defendant have included baby walkers and cots. The defendant operated its eBay account with the User ID Skippyaustralia from 25 January 2005. Between 9 May 2005 and 14 July 2005, 122 bids were placed on the eBay Australian auction website at www.ebay.com.au for baby walkers advertised by the defendant. Between 7 February 2005 and 31 August 2005 the defendant advertised and sold baby walkers and cots to consumers, from its warehouse and via the internet. The Trade Practices (Consumer Product Safety Standard) (Baby Walkers) Regulations 2002 ('the regulations') provided at all material times that for section 65C of the Act , compliance with sections 6.1, 6.4 and 9.3 of F977-00, which is the American Society for Testing and Materials Consumer Safety Specification for Infant Walkers, was prescribed as the consumer product safety standard for baby walkers ("the walker standard"). Section 6.1 of the walker standard specifies requirements concerning stability. Section 6.4 of the walker standard specifies requirements concerning the prevention of falls down steps. Section 9.3 of the walker standard specifies requirements concerning the labelling of the product with warning statements. On 8 July 2005 the Australian Competition and Consumer Commission ("the ACCC") received a complaint from a consumer, Samantha Louise Ellis ("Ms. Ellis"), concerning a baby walker purchased from the defendant via its eBay website. On 12 July 2005 an ACCC officer visited the defendant's eBay website and identified two models of baby walker advertised by the defendant. The ACCC officer had concerns about apparent non-compliance of the baby walkers with product safety standards relating to labelling and performance characteristics. On 3 August 2005 the ACCC sent to the defendant by email and by facsimile transmission a letter dated 3 August 2005 outlining the ACCC's concerns regarding, inter alia, the baby walkers' non-compliance with the walker standard, and attaching a document titled "Product Recall --- A Guide for Suppliers". On 10 February 2006, one of each model ("tested baby walkers") of the baby walkers was sent by the ACCC to an independent testing organisation to be tested for compliance with product safety standards. Always keep child in view while in walker. At all times the defendant advertised baby products for sale on the eBay Australian auction website at the address www.ebay.com.au ("the eBay website"). On or about 10 June 2005, Ms. Ellis visited the eBay website and placed a bid for a baby walker described as "Baby Walker with Push Bar" from the product list for Skippy Australia. On or about 11 June 2005 Ms Ellis received notification of her winning bid from the defendant, and was provided with details of payment options. Ms. Ellis paid the defendant for the baby walker, by way of direct credit to its account, a total amount of $63 which consisted of a purchase price of $34 and $29 for postage and handling. On or about 16 June 2005 the defendant supplied a baby walker ("the baby walker") to Ms. Ellis. The baby walker was delivered by the defendant to the residential address of Ms. Ellis in Surrey Downs in South Australia. Ms. Ellis had a number of concerns about the baby walker, including the absence of warning labels to advise of possible hazards. She raised those concerns with the ACCC. The ACCC did not refer those complaints to the defendant prior to proceedings being issued by the ACCC. However, prior to her communications with ACCC, Ms. Ellis had directly communicated her concerns regarding the baby walker's performance and quality to the defendant. Always keep child in view while in walker. For the purposes of section 65C of the Act , the cot standard was declared on 1 July 2003 to be the consumer product safety standard for children's household cots, excluding certain types of cots, by Consumer Protection Notice No. 10 of 2003 published in the Commonwealth of Australia Gazette No. GN 25 of 25 June 2003. The cot standard specifies safety requirement for cots, including requirements as to material, design, labelling and marking. The cot standard is applicable to cots in use in household situations with the exception of folding cots and carry cots. At all material times the defendant advertised baby products for sale on its website at the address: www.babygoodsaustralia.com.au . On 19 July 2005 an ACCC officer visited the said website and saw an advertisement for a baby cot ("the cot advertisement"). In the cot advertisement, the defendant represented that the advertised baby cot was of a particular standard, in that the defendant represented that the advertised baby cot "Meets Australian standards". The said representation was false. On 14 July 2005 a cot ("the test cot") of the style that appeared in the cot advertisement had been purchased by an officer of the ACCC from the defendant at its warehouse at Factory 2/1-3 Bricker Street, Cheltenham, Victoria. On 25 July 2005 the test cot was tested by an accredited cot testing organisation, being Furntech --- Australasian Furnishing Research and Development Institute ("Furntech"). Furntech regarded several instances of non-compliance as serious hazards. On 3 August 2005 the ACCC sent to the defendant [a] letter ... regarding, inter alia, its concerns about the baby cot. When an ACCC officer attended the warehouse on 14 July 2005, she observed a sign that appeared to limit the availability of refunds. The sign was fixed to the window of an office located inside the warehouse. At all material times, sub-sections 75A(1) and 75A(3) of the Act gave a purchaser of goods from the defendant the right to rescind a contract for the sale of those goods in certain circumstances, and the right to obtain a refund of the purchase price for those goods from the defendant. Sub-section 68(1) of the Act makes void any term of any term of a contract that purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying the application of section 75A. In addition to rights and remedies that are available to consumers pursuant to the Act , there are rights and remedies available pursuant to the Fair Trading Act 1999 , and the common law. The ACCC officer who attended the warehouse on 14 July 2005 spoke to a director of the defendant, who identified himself as Arthur, being Artour Balaiants. The ACCC officer advised 'Arthur' of the ACCC's concerns regarding the baby walkers' non-compliance with the walker standard. 'Arthur' advised the ACCC officer that he would agree to withdraw the two models of baby walker from sale. On 18 July 2005 the ACCC sent to the defendant by email and by facsimile transmission a letter dated 18 July 2005 outlining the ACCC's concerns regarding the baby walkers' non-compliance with the walker standard and requesting that the defendant confirm its advice on the baby walkers' withdrawal from sale from the warehouse and from the eBay website. On 19 July 2005, the ACCC received an email with an attachment dated 19 July 2005 from the defendant confirming that it would take the baby walkers off the market. On 3 August 2005 the ACCC sent to the defendant by email and by facsimile transmission of the letter dated 3 August 2005 ... outlining the ACCC's concerns regarding the baby walkers' non-compliance with the walker standard, and the cot's non-compliance with the cot standard, and attaching a document titled 'Product Recall --- A Guide for Suppliers') ('the product recall guide'). On 8 August 2005, the ACCC received an email from the defendant dated 8 August 2005 advising of its preparations to take the items in question off the market. On 18 August 2005, the ACCC received by facsimile transmission a letter dated 18 August 2005 from Mr Frank Chila of Dibbs Abbott Stillman, solicitors for the defendant. Product recall notices were placed on the website of the ACCC at www.recalls.gov.au in relation to the specified products on 23 August 2005. By email dated 23 August 2005 to the ACCC, Dibbs Abbott Stillman advised that its client proposed to place a notice of recall in the Herald Sun newspaper. On 25 August 2005 an ACCC officer telephoned Mr Frank Chila of Dibbs Abbott Stillman in relation to the proposed recall notice. The defendant arranged for a product recall notice to be published in the Herald Sun newspaper on 3 September 2005. The defendant placed a product recall in the warehouse from 25 August 2005 until 1 January 2006. By letter dated 6 December 2005 to the defendant, care of Dibbs Abbott Stillman, the Product Safety Policy Section of the ACCC advised, on the basis of the information then available to them, that they had reviewed the information contained in the report, and they considered that an appropriate recall had been undertaken. They advised that no further reports were required on the understanding that the defendant would continue to repair, replace or refund any further affected units that came to its attention. I therefore convict the defendant on each charge. There are, however, some matters that are common to all or most of them which can be noted at the outset. • The offences did not result from a deliberate attempt on the part of the officers of the defendant to flout the Act and relevant standards. Rather, the offences arose from lax management and inadvertence. • When the prosecutor became aware of the contraventions relating to the baby walkers and the cots, it requested the defendant to withdraw the items from sale. The defendant agreed to do this and to issue recall notices. It placed a product recall notice in its warehouse and in a newspaper but not on its website. • No injuries were suffered as a result of the contraventions. • The defendant indicated its intention to plead guilty to the charges at the earliest available opportunity. The prosecutor accepts that this was indicative of remorse, and acceptance of responsibility and a willingness to facilitate the course of justice. • The contraventions involving the baby walkers and the cots placed at risk the lives and physical welfare of very young children. They disclosed accumulated losses of $53,022.45. The prosecutor had sought more up-to-date information shortly before the hearing but the defendant had not provided it. Mr Boris Seroshtan had sworn in July that the financial pressure under which the company was then labouring had led to him and his fellow director considering cessation of operations. I infer that this subsequently occurred. The likelihood then is that the company does not have assets which may be applied to meet any financial penalty which the Court may be minded to impose. The product safety standards applying to baby walkers were developed in the light of experience of the use of such walkers in the United States. Young children using walkers had been injured, sometimes seriously, and died as a result of accidents which occurred whilst they were using the walkers. On occasions, injury occurred when children in the walkers fell down stairs or manoeuvred them so that they came in contact with hot surfaces. The various warnings which form part of the standard were directed to alerting those supervising the children to the type of risk which experience had shown was associated with use of such walkers. The warnings were intended to lessen the risk of harm befalling vulnerable young children. The failure to provide the cautionary notices meant that parents and carers were deprived of essential warnings and advice. The walkers also failed the stability tests prescribed in the relevant standard. This meant that they were more likely to capsize when being used by a child who had yet to learn to walk. For these reasons these offences are, in my view, extremely serious. The walkers were on the market for some six months. Forty seven were sold. Following the issuing of the recall notices 36 of them were returned. The whereabouts of the 11 remaining walkers is unknown. A prospective purchaser of the cot advertised by the defendant on its website was led to believe that each such cot met Australian Standards. This was untrue. Tests carried out on one of the type advertised by the defendant showed that the cot failed to comply with the relevant Australian safety standard in 15 respects. The safety standard was specifically directed to reducing 'the likelihood of death or injuries to children. ' Again, the conduct of the defendant, in contravening the Act by misrepresenting that the standards were met, placed vulnerable children at risk. Twenty two of the cots were sold. Fourteen of these were returned after publication of the recall notices. There was no evidence as to whether or not any of the purchasers of these cots had read and been influenced by the statement about compliance with Australian standards. The option of return of the product and the obtaining of a refund was, so they were told, not available. There would be no point in applying for a refund; any such request would be denied. Contrary to the terms of the notice a wider range of remedies was available to purchasers of defective products. Those remedies were provided by the Act (see eg s 75A) and complementary State legislation. There was no evidence as to the number of customers (if any) who had observed the notice or had been misled by it to act to their detriment. The two charges are linked. The prosecutor's investigation of the conduct of the defendant in marketing the baby walkers was commenced following a complaint from a member of the public who had purchased a walker from the defendant through the internet. The prosecutor then arranged for similar walkers to be purchased from the defendant and caused them to be subjected to analysis. As already noted, this analysis revealed that the walkers did not comply with standards prescribed pursuant to s 65C of the Act . Proceeding VID 385 of 2006 relates to the 'controlled' supply of the walkers to an officer employed by the prosecutor. Proceeding VID 388 of 2006 relates to the supply of the walker to the member of the public who complained to the prosecutor. Any supply of the walkers would constitute a breach of s 75AZS(1) of the Act . Forty seven such sales were admitted. Charges have only been laid in respect to the sales to the prosecutor and the complainant. Of the two sales the one to the complainant is the one in respect of which the defendant bears the greater degree of culpability. It was to be used by her daughter and would have been had the complainant not been alert to the deficiencies in the product and the absence of labelling. The walkers purchased by the investigator were not destined for use by any child. In considering the quantum of the penalties for these two offices (and, indeed, all the penalties to be imposed) I am required also to give effect to the totality principle in order to avoid a crushing aggregate penalty and to ensure, so far as is possible, that the aggregate penalty reflects the totality of the criminality involved: Australian Competition and Consumer Commission v Chubb Security Australia Pty Ltd [2004] FCA 1750 at [141] --- [143]. Having regard to all the circumstances I consider that the appropriate penalty in proceeding VID 388 should be $450,000 and in proceeding VID 385, $50,000. 25 The offence relating to the statement that the cots complied with Australian standards when they did not is also serious. No fewer than 15 departures from the prescribed standard were identified. I consider that a penalty of $350,000 is warranted in proceeding VID 386. 26 The final offence concerned the notice which advised customers that refunds were not available for products sold by defendant during a stock clearance. In my view an appropriate penalty in proceeding VID 387 is $10,000. | prosecution consumer protection offences relating to product safety and product information supply of baby walkers and cots non compliance of requisite product safety standard misrepresentation that the defendant satisfied requisite standards misrepresentation that there was no right to refund appropriate penalties to impose matters to which court to have regard when passing sentence financial circumstances of defendant application of deterrence principle trade practices criminal law |
These are the reasons for those orders. 2 Part 2J.2 of the Act deals with self-acquisition and control of shares. Section 259C of the Act deals with the topic of issuing or transferring shares to a controlled entity. Section 259E sets out when a company controls an entity. Section 259C(1) of the Act provides that the issue or transfer of shares (or units of shares) of a company to an entity it controls is void with exceptions which are immaterial to the present case. Section 259C(2) of the Act provides that the Australian Securities and Investments Commission (ASIC) may exempt a company from the operation of the section. The exemption has to be in writing and may be granted subject to conditions. 3 For relevant purposes, National Australia Bank Limited (NAB) (the fifth plaintiff) controls each of the other plaintiffs. Those companies are all involved in acquiring shares listed on the Australian Stock Exchange in the course of management of funds of various kinds for the benefit of others including life insurance. ASIC provided the NAB group with an exemption from the operation of s 259C(2) of the Act by virtue of an exemption dated 29 June 2000 and varied on 1 August 2000. The first problem was that the exemption expired on 29 June 2001 and was not renewed until 10 April 2003. The plaintiffs acquired a large volume of shares in NAB during the period in which there was no exemption in force. 4 I am satisfied that the circumstances are appropriate for an order to be made pursuant to s 1322(4)(a) ( Re Westpac Banking Corporation (2004) 53 ACSR 288; and Re Commonwealth Bank of Australia (2005) 57 ACSR 28) if the plaintiffs satisfy the conditions in s 1322(6). 5 I am satisfied that the failure to renew was due to inadvertence. The relevant circumstances were disclosed to ASIC in the course of applying for the further exemption, which came into force on 10 April 2003. I am satisfied that the failure to seek orders pursuant to s 1322 of the Act prior to this application was also due to inadvertence. I am satisfied that there was no failure to act honestly. I am also satisfied that prejudice would be occasioned to the plaintiffs and/or the ultimate beneficiaries of funds involved if an order were not made. I am also satisfied that no substantial injustice has been or is likely to be caused to any person by the making of the orders. 6 I would require persuasion, however, that that which is to be regularised is 'essentially of a procedural nature' within the meaning of s 1322(6)(a)(i). If it is not, then the question arises as to whether the conditions set out in s 1322(6)(a) are cumulative in whole or in part, or independent. Carr J (with whom Lockhart J agreed) seemed to proceed upon the same basis but took a wide view of matters which were essentially of a procedural nature (398---400). The issue that arises here does not appear to have been argued. 8 In Jordan v Avram (1997) 141 FLR 275; (1997) 25 ACSR 153 Gillard J accepted that the conditions are not cumulative, relying upon Australian Hydrocarbons NL v Green (1985) 10 ACLR 72 at 83, but without noticing Comcorp. I have difficulty in seeing how the decision of Hodgson J in Australian Hydrocarbons establishes the proposition in question. 10 Whilst the syntax of the provision is not as clear to me as it was to Emmett J, the appropriate course is to follow his Honour's decision, which was operative in the case before him, rather than what amounts to obiter dicta of the members of the Full Court in Comcorp . Judges of the Supreme Courts of New South Wales and Victoria have taken a view similar to that of Emmett J and consistency of decisions in this area is desirable. 11 It was appropriate to make the order without any other party being joined. Each of ASIC and Australian Prudential Regulatory Authority (APRA) has been advised about the proceedings and neither has indicated any substantive opposition to the making of the order. There is no other natural contradictor. 12 There was a second problem. One of the conditions of exemption was that the plaintiffs would not exercise votes attached to NAB shares nor control or influence the exercise of votes attached to NAB shares. This condition was breached on a number of occasions, essentially because of the operation of an automated proxy voting system in relation to the Annual General Meeting of NAB held on 30 January 2006. There have been substantial purchases of NAB shares by the plaintiffs since 30 January 2006. 13 The relief sought assumes that non-compliance with the condition of exemption results in the exemption ceasing to operate. Emmett J took that view in Re Commonwealth Bank of Australia at [15] and ASIC takes the same view. On that basis, relief pursuant to s 1322(4)(a) is appropriate if the conditions pursuant to s 1322(6) are met. I am satisfied that the casting of the votes did not affect the result of the vote taken upon any resolution. I am satisfied that the relevant non-compliance was inadvertent and that the persons concerned acted honestly. I am satisfied that no substantial injustice has been or is likely to be caused to any person by the making of the order. I am also satisfied that it is just and equitable that the order be made. The conditions pursuant to s 1322(6) are satisfied. I am satisfied that it was appropriate to make the order in the absence of the joinder of another party. 14 For those reasons I made the orders sought in substance. The orders followed the form of the section by validating the transactions. The effect of those orders is that the transactions are not void. | validation of irregularities not limited to procedural irregularities corporations |
In that decision the Tribunal had affirmed the decision of a delegate of the Minister for Immigration and Citizenship refusing an application by the visa applicant for a visa under s 65 of the Migration Act 1958 (Cth) ("the Act"). The appellant in these proceedings is the mother of the visa applicant. In summary the Tribunal affirmed the decision of the delegate as it was not satisfied that the express intention of the applicant to only visit Australia was genuine; accordingly the applicant failed to satisfy cl 679.224 of Sch 2 to the Migration Regulations 1994 (Cth) ("the Regulations"). He applied for a Sponsored (Visitor) Class UL (subclass 679 (Sponsored Family Visitor)) visa ("subclass 679 visa") on 25 March 2008. The subclass 679 visa provides for an application by a person seeking to enter Australia for the purposes of visiting an Australian citizen or Australian permanent resident who is, inter alia , a parent of the visa applicant, for a purpose other than related to business or medical treatment. This visa subclass allows a relative (as defined in reg 1.03 of the Regulations) to formally sponsor a visa applicant. In this matter the appellant is one of the sponsors of the visa applicant. It is not in dispute that the appellant is entitled to sponsor the visa applicant as required by the Regulations. The appellant came to Australia in 2005 on a visitor's visa and was granted a protection visa in 2006 due to the risk of persecution. The visa applicant's father subsequently came to Australia on a spouse visa. The appellant has a daughter living in Brisbane, and two sons --- including the visa applicant --- and a daughter still living in Pakistan. The visa applicant has been married since 19 May 2005 and lives with his wife and brother in Rabwah in Pakistan. On his visa application the visa applicant indicated he wants to visit his mother, the appellant, in Australia for 13 days. The visa applicant stated he owns a business, the Nabeel Karyana General Store in Rabwah, and has done so for 3 years and 2 months. He stated that he has sufficient funds in his bank account to visit Australia for a short time. Ministerial Direction No 36 of 2005 applies to visitor applications, including Class UL --- Sponsored (Visitor) visas. The Tribunal observed that it must comply with the Minister's directions made pursuant to s 499 of the Act to the extent that they are consistent with the Act or Regulations. In particular, para 8 of the Direction specifies relevant considerations for determining whether an applicant intends a genuine visit. Paragraph 9 of Direction 36 of 2005 states that generally, offers of support or guarantees given by family and friends in Australia are not sufficient evidence of a genuine visit. Notwithstanding this, when such offers have been investigated and confirmed by the relevant State or Territory Office, decision-makers should pay high regard to that advice in assessing the application. Paragraph 27 of Direction No. 36 of 2005 states that when considering whether or not the expressed intention of a visa applicant is genuine, decision-makers should consider the circumstances of the proposed sponsor but only if those circumstances are directly relevant to the visa applicant's intention. Factors might include: has the sponsor previously sponsored a visa applicant and did that visa applicant (once granted a visa) abide by the conditions of that visa? In this respect, the intentions, assurances and history of a proposed sponsor might be relevant in the process of forming a view of the intentions of the visa applicant although it is ultimately the intentions of the visa applicant that must be ascertained . The Tribunal explained to the appellant that the delegate had refused to grant the visa applicant a visitor visa on the grounds that it did not think that the visa applicant's visit to Australia was genuine, but rather that the delegate was of the view that the visa applicant was likely to seek asylum should he be granted a visitor visa. During the hearing the Tribunal spoke with the appellant and her husband, through an interpreter. The Tribunal also spoke at length with the visa applicant by telephone, through an interpreter. Satisfaction by the visa applicant of other criteria prescribed by the Regulations was not an issue in the proceedings before the Tribunal. In summary, the Tribunal found as follows: In relation to para 8(a) of the Ministerial direction and consideration of personal circumstances which may encourage the visa applicant to return to his home country, the Tribunal accepted that: the visa applicant has a wife in Pakistan as well as other family; the visa applicant owned a business which the Tribunal accepted was successful and making a profit; and the visa applicant owned property. The Tribunal accepted that these factors could encourage the visa applicant to return to Pakistan. In relation to para 8(b) of the Ministerial direction and consideration of circumstances which may encourage the visa applicant to remain in Australia, the Tribunal found that: the visa applicant has significant family ties in Australia in that his parents reside in Australia, as do his sister and her family; the visa applicant is a follower of the Ahmadi religion, and based on independent country information the Tribunal is of the view that Ahmadis are currently persecuted in Pakistan. This is a significant factor which may encourage the visa applicant to remain in Australia. There has been no previous travel to Australia". (at [79]) In relation to para 8(d) of the Ministerial direction and the credibility of the visa applicant in terms of his character and conduct, the Tribunal was not aware of any false or misleading information or documentation presented in relation to the visa application or any other visa application. The Tribunal accepts that as he runs his own store, he does not need to obtain approved leave. As such, the visa applicant's plans are reasonable and consistent with the purpose of a visitor visa. In relation to para 8(g) of the Ministerial Direction the Tribunal was not aware of any such profile information or analysis. In relation to circumstances of the appellant, who was a proposed sponsor of the visa applicant, the Tribunal noted that she had sought protection in Australia after arriving on a visitor visa in 2005. The review applicant has claimed in her oral evidence that it was not her intention to seek protection on first arriving here in Australia, but the circumstances changed so that her husband was at risk of serious harm. It was only because of the change of circumstances that she applied for a protection visa. Her husband supported this claim. However she later agreed that she had sought protection here in 2006 because of the FIR issued in March 2005 against her husband. 86. As noted earlier, based on the independent country information, the Tribunal finds that Ahmadis are constantly at risk of serious harm. Thus, the Tribunal does not accept the claim of the review applicant. Rather, the Tribunal finds that it was the review applicant's intention to seek protection in Australia when she obtained her visitor visa. In reviewing other considerations, the Tribunal found that: the undertaking of the appellant's husband that he could be deported if the visa applicant sought protection in Australia was hollow, as it would not happen under Australian law; although the Tribunal accepted that the fact of the visa applicant seeking protection in Australia would probably disentitle his siblings obtaining visitor visas in future, this would not prevent the visa applicant seeking protection; the claim of the appellant that she could have brought the visa applicant to Australia with her in 2006, because he was a minor of only 16 or 17 at the time, but that he did not wish to come to Australia, lacks substance because at the time the appellant sought asylum the visa applicant, while under 18, was married and no longer a member of the appellant's "family unit" for the purposes of the relevant legislation; although the visa applicant has significant family, business and religious reasons to return to Rabwah, these reasons can be overcome by the visa applicant because he could bring his wife to Australia, sell his business and continue to practise his religion. In light of these findings the Tribunal was not satisfied that the family, business and religious reasons for the visa applicant to return to Pakistan were sufficiently strong to outweigh the likelihood that, because of the risk he faces daily as an Ahmadi in Rabwah or elsewhere in Pakistan, and the fact that his parents now reside in Australia, he would seek to permanently remain in Australia. Accordingly, the Tribunal was not satisfied that the expressed intention of the visa applicant only to visit Australia was genuine, which meant in turn that he failed to satisfy the provisions of cl 679.224 and could not meet the essential prescribed criteria for the grant of a subclass 679 visa. She claimed the following grounds of jurisdictional error: the Tribunal failed to consider all of the requirements that must be satisfied before the grant of a subclass 679 visa, and that the visa applicant had satisfied those requirements; the Tribunal failed to properly apply the correct law to the determination of the application; the Tribunal could not lawfully have refused the application because the visa application satisfied all of the criteria for the subclass 679 visa. In affirming the decision of the Tribunal ( Khanam v Minister for Immigration & Citizenship [2009] FMCA 285) , the Court found in summary as follows: The Tribunal focussed on whether the visa applicant had satisfied the criteria in cl 679.224. Such an approach was neither erroneous nor in contravention of its jurisdiction (at [11]). The Tribunal accepted that the visa applicant had satisfied and continued to satisfy the criteria in subcll 679.211 to 214 (at [12]). The Tribunal correctly identified the relevant legislation which guided its consideration, and did not misconstrue nor misapply the prescribed visa criteria (at [13]). The Tribunal carefully considered the evidence both before the Department and the Tribunal itself (at [15]). The Tribunal member balanced the matters favouring and disfavouring the required state of satisfaction, and concluded that he was not satisfied that the expressed intention of the visa applicant only to visit Australia was genuine (at [16]). There was no ground for concluding that the Tribunal acted in a manner that would attract judicial intervention. Her grounds of appeal from the decision of the Federal Magistrate were as follows: That the learned Federal Magistrate has failed to consider the legal requirements, regarding the family sponsored visitor visa, the appellant fulfilled the requirements of the criteria as laid down under the Migration Act , and the relevant migration legislations, but the decision of the MRT was upheld, the decision of the MRT is full of legal errors coupled with the jurisdictional error. The learned FM simply upheld the decision of the MRT, without giving his own reasons of judgment. That the appellant submitted the whole evidence of the visa applicant that within the allowed time, the visa applicant shall go back, in this regard the appellant requested any bond or any security required in this behalf. The appellant has satisfied the criteria laid down in subclass 679, the appellant also satisfied all the requirement as laid down in cl 679.214 of the Sch 2 of the Migration Regulations . The applicant also duly complied with r 1.03 of the Regulations, and has also fulfilled the criterion as required under cl 679.212, and cl 679.213 of the Migration Regulation. In the MRT decision it has been laid down that the applicant has not satisfied 679.214 at the time of the application read with subclass 679.211, this is the incorrect application of the law. The most important question is of the satisfactions of the respondent, the satisfaction is their will, and discretion to which there is no yard stick to satisfy them. This is a complicated question of satisfaction; the appellant only requests that if there is a question of discretion, it should be exercised in favour of the applicant. That the respondents did not applied the proper law and procedure, this has resulted in the error of law, coupled with the jurisdictional laws, the laws of natural justice have been clearly violated. In written submissions the Minister contended that, although expressed as three separate grounds, the appellant actually only sought to appeal one ground with different particulars, namely that the Tribunal failed to consider relevant considerations being the requirements other than cl 679.224. In summary, the Minister further submitted: The requirements in subclass 679 are cumulative, all of them must be satisfied before the visa can be granted. Determination by the Tribunal that the visa applicant had failed to satisfy requirements of subcl 679.224 was sufficient to resolve the matter against the visa applicant. In light of this finding it was not relevant that the visa applicant may have satisfied the requirements of subcll 679.211-214. The finding by the Federal Magistrate that the approach of the Tribunal was correct, that it had identified the relevant legislative requirements and that it did not misconstrue or misapply the prescribed visa criteria was correct and did not support a finding of jurisdictional error. The third ground of appeal was not properly particularised. In any event, as the Federal Magistrate noted the Tribunal member carefully considered the evidence before him and made a decision after weighing that evidence. The appellant has not contested or raised any alleged jurisdictional error with respect to the consideration of subcl 679.224. The Tribunal considered the evidence of the visa applicant and the appellant and made a credibility finding in relation to whether the expressed intention only to visit Australia was genuine. A credibility finding is a finding of fact, and a matter for the Tribunal. The Tribunal did not accept the visa or review applicants' evidence and found the expressed intention was not genuine. This finding was open to the Tribunal. The Tribunal asked itself the right questions and properly considered the material before it. Wilson FM considered these matters and correctly held that the Tribunal applied the correct test. No error of the Federal Magistrate or jurisdictional error of the Tribunal has been established. I consider that the submissions of the Minister with respect to the appellant's pleaded grounds of appeal have merit. The pleaded grounds of appeal are unparticularised, they do not plead any identifiable ground of jurisdictional error, and they are vague and difficult to follow. In my view the case of the appellant as articulated in her grounds of appeal is not sustainable. However while there is no obligation on the Court, in cases particularly involving a self-represented litigant it is open to the Court to identify other grounds of appeal which the litigant may have missed, but which present an arguable case. This practice is particularly apparent in migration matters where litigants are commonly not only self-represented, but frequently lack English language skills in attempting to address the Court in respect of an area of law of considerable difficulty. The position can be placed no higher --- I agree with the observations of Madgwick J in SZFNK v Minister for Immigration and Multicultural Affairs [2006] FCA 1601 at [4] - [5] that no obligation is imposed on the Court to investigate alternative grounds to advance the case of the self-represented litigant. Clearly reaching a level of satisfaction one way or the other is a factual issue. Notwithstanding this, the decision reached by the Minister as to whether he or she is satisfied is not unexaminable. As observed by Dixon J in Avon Downs Pty Ltd v FCT [1949] HCA 26 ; (1949) 78 CLR 353 at 360 in relation to the satisfaction (or not) of the Commissioner of Taxation in the circumstances of that case. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it. The Tribunal observed --- in my view correctly --- that ultimately it was the intentions of the visa applicant which required ascertainment (at [12]). During the hearing I expressed reservations as to whether the Tribunal had considered the specific circumstances of the visa applicant, as distinct from the position of the visa applicant simply as a member of the Ahmadi religion . The hearing was temporarily adjourned to allow Counsel the opportunity to identify instances where the Tribunal had considered the individual circumstances of the visa applicant. On resumption of the hearing, Ms Wheatley for the Minister submitted, in summary: The Tribunal has clearly taken into account in reaching its decision the visa applicant's claimed reason for wishing to visit Australia (TS p 13 ll 17-18). Matters of weight of evidence are matters for the Tribunal. In setting out in the decision something that the visa applicant has said, it follows that the Tribunal has actually assessed it and taken it into account (TS p 14 ll 18-20). The decision under review is not to be construed minutely and finely with an eye keenly attuned to the perception of error. While the Tribunal gave detailed consideration to the case before it, it is clear that the Tribunal's conclusion that the express intention of the visa applicant to visit Australia was not genuine was based exclusively on the conclusion reached by the Tribunal that the visa applicant could claim asylum in Australia because of his religion. Indeed the line of reasoning of the Tribunal can be summarised as follows: Ahmadi Muslims are persecuted in Pakistan and could claim asylum in Australia. The visa applicant is an Ahmadi Muslim, currently living in Pakistan. Therefore the visa applicant's real motive in visiting Australia is to claim asylum, and not genuinely to visit Australia, as required by subcl 679 of the Regulations. Notwithstanding the acknowledgement by the Tribunal that it is ultimately the intentions of the visa applicant which must be ascertained, the Tribunal formed its opinion based on its view of likely intentions of Ahmadi Muslims as a group in applying for subclass 679 visas rather than based on the circumstances of the visa applicant in this particular case. Indeed, reviewing the reasons of the Tribunal one might wonder whether any Ahmadi Muslim from Pakistan seeking to visit relatives in Australia would receive a subclass 679 visa. The reasons given by the Tribunal suggest not. In my view it follows that the decision of the Tribunal is liable to be set aside on the basis of jurisdictional defect, on two grounds: First, the Tribunal failed to take into account a relevant consideration, namely the reasons given by the visa applicant and the appellant for the visa applicant to visit Australia and the visa applicant's motive for doing so. The fact that the visa applicant was Ahmadi Muslim was also a relevant consideration, but not the only relevant consideration in determining this application. Second, the Tribunal did not properly determine the application before it because in considering the application it asked itself the wrong question --- namely "Is the visa applicant an Ahmadi Muslim from Pakistan? " The answer to that question, while obviously relevant in the circumstances, could not alone determine the application before the Tribunal. However a review of the decision of the Tribunal indicates that the answer to that question was in fact determinative of this particular application. Nowhere in the Tribunal's reasons for finding that the proposed visit to Australia by the visa applicant was not genuine does the Tribunal directly address and consider the stated reason given by the visa applicant (and the appellant) for the visit, namely that the visa applicant wished to travel to visit Australia to visit his mother . The evidence before the Tribunal was that the visa applicant is approximately 20 years old, and has not seen his parents since he was 16 years old. It does not require a leap of imagination to infer that, in view of the visa applicant's relative youth and the time which has passed since the relevant parties last met, it is natural that the visa applicant would wish to travel to Australia to visit his parents. To the extent relevant, given that his mother successfully applied for asylum in Australia, an inference could be drawn that it is not practical for the visa applicant's parents to travel to Pakistan to see the visa applicant. However the Tribunal does not deal specifically with this claimed motive of the visa applicant and explain why, in respect of this visa applicant, the Tribunal disbelieved that the reason given was not genuine. While reasons for a decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error ( Collector of Customs v Pozzolanic [1993] FCA 456 ; (1993) 43 FCR 280 at 287, Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271-272; SZCOQ v Minister for Immigration and Multicultural Affairs [2007] FCAFC 9 at [14] , [27]) nonetheless the claimed reason of the visa applicant to visit Australia is clearly a relevant consideration, acceptance or rejection of which goes to the core of his application and the "genuineness" of the proposed visit. During the hearing I asked Counsel for the Minister to identify in the decision of the Tribunal where the Tribunal specifically considered the claimed reason of the visa applicant to visit Australia but rejected that claim. Counsel referred me to the following statements by the Tribunal: "The stated purpose of the visa applicant's travel to Australia is to visit his mother and father for two to three months. " (p 26 para 81) (TS p 13 ll 6-7); "The tribunal acknowledges that there are significant family business and religious reasons for the visa applicant to return. However these reasons can be overcome by the visa applicant if he is successful in obtaining a protection visa. ... If the tribunal is thus not satisfied that the above reasons are strong enough to outweigh the likelihood because of the risk he faces daily..." (p 27 paras 92-93) (TS p 13 ll 33-41). Indeed, the statement at p 27 paras 92-93 of the Tribunal's reasons for decision actually relates to a different issue, namely reasons why the visa applicant may wish to return to Pakistan . Counsel for the Minister also directed my attention to the statement by the Tribunal that the visa applicant is required to satisfy subcl 679.211 of the Regulations (TS p 12 ll 6-45, p 13 ll 1-7). The Minister conceded in submissions (TS p 17 ll 1-2) that the visa applicant had satisfied this criterion. Counsel submitted that this meant that the Tribunal had considered the personal circumstances of the visa applicant, and his wish to visit his mother, for the purposes of subcl 679.224. However because the Tribunal did not specifically discuss subcl 679.211 and the manner of the visa applicant's apparent satisfaction of that criterion, it is difficult to draw any conclusions in relation to this issue from the reasons of the Tribunal. Did the apparent satisfaction of subcl 679.211 simply require an unsupported statement by the visa applicant (which may or may not be genuine) that his or her purpose in visiting Australia falls within subcl 679.211(a) or (b)? (This is consistent with the language of subcl 679.211, namely that the visa applicant "seeks to visit Australia" for nominated purposes. In my view not only is such a process of reasoning tortured, it is not supported by the language of subcl 679.211 (which does not appear to require anything more than a statement of a purpose by the visa applicant), and it potentially gives rise to a denial of procedural fairness. Indeed the Minister conceded that, in determining whether the visa applicant had satisfied the criterion in subcl 679.224, the genuineness of the wishes of the visa applicant required separate consideration of the stated purpose of the visa applicant in visiting Australia. In the circumstances, in light of the absence of discussion or reasoning by the Tribunal, I cannot draw any inferences with respect to the decision of the Tribunal in relation to subcl 679.224 from the apparent satisfaction of subcl 679.211 by the visa applicant. The submission by the Minister during the appeal before me that the decision of the Tribunal was essentially a credibility finding with respect to the evidence of the visa applicant (TS p 8 ll 32-33) appears inconsistent with the positive view specifically taken by the Tribunal in relation to the credibility of the visa applicant in terms of his character and conduct, namely that the Tribunal was not aware of any false or misleading information or documentation presented in relation to the visa application or any other visa application. If the Tribunal subsequently found that the visa applicant lacked credibility in relation to his stated reason for wishing to visit Australia --- again, an issue which is at the core of this case --- the Tribunal should have explained why. Counsel for the Minister also submitted that the findings of the Tribunal as to the genuineness of the visa applicant's visit to Australia involved matters of weight of evidence, which are matters for the Tribunal and not subject to review by this Court. It is clear that findings in respect of the credibility of an applicant are matters for the Tribunal ( Re Minister for Immigration and Multicultural Affairs; ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 at 423) and that the weight given by the Tribunal to material before it, both oral evidence and documentary, is a matter for the Tribunal as an incident of its role as the arbiter of fact ( Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259). However it is also clear that, in accordance with requirements of procedural fairness, in considering whether a claimed visit to Australia is genuine for the purposes of a claim for a visa the Tribunal is obliged to give genuine consideration to a claimed reason to visit. Counsel for the Minister submitted that that, because the Tribunal had stated the claimed purpose of the visa applicant's travel to Australia at p 26 para 81 of the reasons for decision, it followed that the Tribunal had weighed that claim in reaching its decision. However in my view simple statement of an issue is not automatically tantamount to consideration of that issue, and to the extent that Counsel for the Minister relied on that submission I reject it. At the very least, in order to weigh the merit of an issue or of evidence, the issue or evidence must be actually addressed. Generally, the fact that the Tribunal has addressed an issue may be inferred from its reasons, however in this case I am not satisfied that the Tribunal has addressed the visa applicant's claimed reason for visiting Australia based on the statements to which my attention has been directed by Counsel. Procedural fairness requires the tribunal to give real consideration to the claim of the visa applicant and the merits of his case, including his claimed reason for visiting Australia. That failure to do so constitutes a denial of natural justice --- and a jurisdictional defect infecting the decision of the Tribunal --- is clear from such cases as Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 ; (2003) 197 ALR 389 at 394, 406-407, 408 , Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 367 per Kirby J, Minister for Immigration and Multicultural and Indigenous Affairs v Maltsin [2005] FCAFC 118 at [38] , SZEJF v Minister for Immigration and Multicultural and Indigenous Affairs (2006) FCA 724 at [38] - [39] . That the Tribunal did not consider the claimed reason of the visa applicant for visiting Australia, but considered the application before it exclusively in light of the circumstances of the group into which the Tribunal categorised the visa applicant --- namely Ahmadi Muslims from Pakistan --- is evident from the conduct of the hearing and the Tribunal's findings. In particular I note the following: the consideration by the Tribunal of the fact that the appellant had claimed to be at risk of persecution because she was an Ahmadi Muslim (at [23]) and that the visa applicant was also an Ahmadi Muslim (at [22]); the fact that, during the proceedings before the Tribunal, the Tribunal asked the appellant "why her son, as an Ahmadi, would not seek asylum should he come to Australia" (at [32]); the fact that, during questioning of the visa applicant by telephone, it appears that the Tribunal focussed almost exclusively on the fact that the visa applicant was an Ahmadi Muslim, which suggested that the visa applicant faced persecution in Pakistan. I note in particular paras [50]-[56] of the Tribunal's reasons for decision; the fact that, during questioning of the appellant, the Tribunal focussed extensively on the fact that the visa applicant was an Ahmadi Muslim, which suggested that the visa applicant faced persecution in Pakistan and would seek asylum in Australia. I note in particular paras [32], [59]-[60]; the detailing of independent country information with respect to Ahmadi Muslims in Pakistan over several pages; the finding of the Tribunal that, notwithstanding the claims of the visa applicant that he is not persecuted, because the visa applicant was an Ahmadi Muslim he was at risk of serious harm in Pakistan (at [74], [76], [78]) if not constantly at risk of serious harm (at [86]); the finding of the Tribunal that, notwithstanding the visa applicant's reasons to return to Pakistan, "because of the risk he faces daily as an Ahmadi in Rabwah or elsewhere in Pakistan should he return" he would seek to remain permanently in Australia (at [93]). However in the context of the apparent failure by the Tribunal to address any of the personal circumstances of the visa applicant other than his religion --- including the natural desire of a young person to visit his mother --- in my view these findings suggest that the Tribunal member considered the application exclusively from the perspective of the visa applicant's religious affiliations and the likelihood that the visa applicant was being persecuted in Pakistan. In my view the Tribunal's reasons do not support a submission that the Tribunal failed to weigh properly issues raised and evidence of the visa applicant (which in itself would not give rise to jurisdictional defect: cf SZLSA v Minister for Immigration and Citizenship [2009] FCA 23 at [11] ) --- rather the decision indicates that the Tribunal did not weigh the claims or evidence of the visa applicant at all . The Tribunal puts little weight on this return travel as it is to nearby India for religious purposes only; it is not to a free developed country where his parents reside. There has been no previous travel to Australia. " Clearly para 8(c) of the Ministerial Direction is not so limited. The Tribunal appeared to discount travel to India because it was "for religious purposes only". Without further explanation, it is unclear why religious travel should not be relevant to the visa applicant's immigration history in the context of his visa application. Finally, the Tribunal considered return travel to India of little weight because India is not a "free developed country" where his parents reside. ... The Indian economy comprises a wide spectrum of activity, ranging from high technology to subsistence agriculture. After decades of failing to realise its full economic potential, India has been one of the world's fastest growing large economies since 1994. Indian economic engagement with the rest of the world has increased, particularly in the services sector... Despite recent progress, significant challenges remain... In light of the fact that it is public knowledge that India is a constitutional democracy and a growing and significant economic power it is somewhat curious that the Tribunal should have dismissed a visit to India by the visa applicant because India is not "free" and "developed", without elaboration other than the fact that the visa applicant's parents do not reside there. Potentially this approach raises issues beyond weight --- in this case it is questionable whether the Tribunal gave genuine consideration to the fact that the visa applicant had travelled to another country, which is a relevant consideration for the purposes of this application. In the circumstances however it is unnecessary for me to decide whether the Tribunal's approach to the visa applicant's immigration history is also infected with jurisdictional error. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application to review decision of migration review tribunal migration act 1958 (cth) s 499 subclass ul sponsored family visitor visa whether jurisdictional error in decision of tribunal to refuse grant of visitor visa appellant mother of visa applicant previously granted asylum in australia tribunal's treatment of question of whether visa applicant's intention to only to visit australia genuine migration regulations 1994 (cth) cl 679.224 court may but has no obligation to identify other grounds of appeal principles going to "satisfaction of the minister" with respect to a condition whether tribunal failed to take into account a relevant consideration being the specific circumstances of the visa applicant whether tribunal gave genuine consideration to reasons of visa applicant and appellant for the visa applicant's proposed visit australia when assessing genuineness of proposed visit under cl 679.224 whether tribunal considered the situation of all ahmadi muslims in pakistan instead of the situation of the visa applicant whether the tribunal asked itself the wrong question migration |
' banner, one at Cremorne and the other at Blaxland in the State of New South Wales. In April 2007 it had 85 employees at its Cremorne store and 151 employees at its Blaxland store who answered the description of shop assistants, butchers, apprentice butchers, pastry cooks, bakers, apprentice bakers and/or apprentice pastry cooks, some of whom were identified as 'Adult' and others as '-19 years'. 2 One such employee at the Blaxland store was Sandra Elisabeth Stringer who worked for Karellas as a permanent part-time night fill retail assistant. She was a member of the New South Wales branch of the applicant. 3 The applicant alleges that Karellas contravened s 341(1) of the Workplace Relations Act 1996 (Cth) ('the Act') on or about 1 May 2007 when it lodged an employee collective agreement with the Employment Advocate which had 'not been approved in accordance with section 340' of the Act. 4 The applicant also alleges that the respondent made false or misleading statements to another person in circumstances that constituted a contravention of s 401(1) of the Act in or about 19 --- 27 April 2007. These may take the form of an 'AWA' or 'Australian workplace agreement', which is made in writing between a particular employer and a particular person whose employment is subject to the agreement, or collective agreements, variously described as employee collective agreements, union collective agreements, employer greenfields agreements, union greenfields agreements and multiple-business agreements. This case is concerned with the making of an employee collective agreement. 8 Section 418 of the Act provided for the making of regulations in relation to, amongst other things, the signing of workplace agreements by persons bound by those agreements, or representatives of those persons. By virtue of s 347(2), such an agreement 'comes into operation even if the requirements in Divisions 3 and 4 [ss 334-341] and section 342 have not been met in relation to the agreement'. 11 By virtue of s 351 of the Act a workplace agreement that is in operation relevantly binds the employer in relation to the agreement and all persons whose employment is, at any time when the agreement is in operation, subject to the agreement. Ms Stringer, an employee of Karellas who is bound by the 2007 Agreement, requested the applicant to make the application presently before the Court for an order under Division 11 of Part 8 of the Act in relation to the 2007 Agreement. It is common ground that the requirements of s 405(3) of the Act have been satisfied. Accordingly, the applicant is a competent applicant in respect of the present application within the meaning of s 405(1)(d) of the Act, brought by it on behalf of Ms Stringer. 13 In respect of the contraventions which have been alleged it would be open to the Court to order the payment of pecuniary penalties in respect of each contravention up to $33,000. However, no such relief is sought. All that is sought is an order under s 409(a) of the Act. It is 16 pages in length. This status will be permanent, salaried or casual. These rates will be adjusted proportionate to movements in the AFPCS as amended by the Australian Fair Pay Commission from time to time. I counted the votes in a secret ballot of Employees in relation to the Agreement, and on this basis I state that a valid majority of Employees have made this Agreement. Firstly, there have been industrial awards, then there may have been pre-reform certified agreements and, more recently, workplace agreements. In this case it is unnecessary to address the legal significance of an Australian workplace agreement between an employer and an employee which may have been executed by the employer and the employee in the manner for which s 340(1) of the Act provides. 25 The underpinning regime, as I have described it, does not require that the rights and obligations for which it provides should become contractual rights and obligations. 26 The interaction of pre-reform certified agreements with other instruments was dealt with in clause 5 of Schedule 7 to the Act as indicated above. 27 As also indicated above, clause 3(1) of Schedule 7 to the Act provided for pre-reform certified agreements to cease to be in operation in relation to an employee if, relevantly, a collective agreement came into operation in relation to that employee. 28 The 2007 Agreement came into operation on the day that the agreement was lodged with the Employment Advocate notwithstanding that the requirements of ss 334-342 of the Act may not have been met in relation to it. 29 Under s 349 of the Act an award has no effect in relation to an employee while a workplace agreement operates in relation to the employee. 30 In the case of an employee collective agreement the relevant statutory underpinning afforded to it is to be found in s 351 of the Act. Under s 351(b), when in operation, such an agreement binds all persons whose employment is subject to the agreement, regardless of whether an individual employee cast a valid vote deciding that that employee did not want to approve the agreement or not and whether an individual employee was an employee of Karellas at the time when the 2007 Agreement came into operation. The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award and, ... the award operates with statutory force to secure those terms and conditions. Neither from the point of view of the employer nor the employee is there any need to convert those statutory rights and obligations to contractual rights and obligations. The award regulates what would otherwise by governed by the contract. But award rates are imported as a statutory right imposing a statutory obligation to pay them. The importation of the statutory right into the employment relationship does not change the character of the right. As Latham CJ points out in his judgment in Amalgamated Collieries of WA Ltd v True , the legal relations between the parties are in that situation determined in part by the contract and in part by the award. And as the judgment of the Privy Council in that case suggests, a provision in an award may also be made a term of the contract by agreement between the parties, but that is only to emphasise the distinction between an obligation imported by statute and one arising by agreement. It will be seldom ... that an award will lend itself to the "covering the field" test of inconsistency on the subject of the contract of employment. Few, if any, awards reflect an intention to express completely, exhaustively or exclusively the law governing that contract between the parties. It will generally be a case of specific provisions which will, of course, have the effect of rendering inoperative any provisions of subordinate law, whether common law or statutory, touching that employment with which they are inconsistent. In Reg. v Industrial Court of South Australia; Ex parte General Motors-Holden's Pty. First there is a foundation strata being the common law. Superimposed on this are State Acts, regulations and State industrial determinations; in places such State law cuts through and replaces the common law foundational strata. Above this again are Commonwealth Acts, regulations and awards of the Arbitration Commission. Federal law cuts through State law in places, sometimes at the point where State law has already cut through common law, sometimes direct into common law. Ltd. v True . For while the agreement bound Dr Quickenden by force of law, it did not thereby terminate his contract of employment. It created rights and obligations which were statutory in character and could operate in addition to the rights and obligations under his contract and, where inconsistent, no doubt displace them. There is nothing in the agreement however which expressly sets aside or displaces the terms of existing or common law rights generally. The agreement itself is not, on the face of it, and is not expressed to be, exhaustive of the rights and duties of those bound by it. If anything it focuses upon the rights of employees, rather than their obligations. If they conflict, the award or certified agreement may modify the contractual provisions, but otherwise they continue to co-exist. Byrne involved an award, but there does not seem to be any relevant distinction, for present purposes, between an award and a certified agreement. The first document is four pages in length. It is on the letterhead of Karellas and addressed to 'Dear Employee'. It is dated 19 April 2007. On the second page it has been signed by a Peter Smith as 'Operations Manager'. The second document is three pages in length. It is also on the letterhead of Karellas and addressed to 'Dear Employee'. It also bears the signature of Mr Smith as 'Operations Manager'. It is undated. Copies of the two documents are attached to these reasons for judgment as appendices 'A' and 'B' respectively. 38 The two documents were the subject of certain interrogatories administered by the applicant upon the respondent on 25 June 2007. Verified answers to these interrogatories were provided on 26 July 2007. Further verified answers were provided on 10 August 2007 which qualified the original answers. The applicant was content to tender both sets of answers and to allow the respondent to have the benefit of the qualifications. Relevantly, the answers provided establish that copies of the 19 April 2007 document were made available by the respondent to approximately 85 out of 85 employees at its Cremorne store and approximately 151 out of 151 employees at its Blaxland store 'in or about April 2007 and before 3.00 pm on 27 April 2007'. It is agreed between the parties, and supported by the further verified answers, that notwithstanding the terms of the original answers, there were different versions of the four page document. Depending on an employee's job classification, he or she received as part of the document a table of 'Examples of your new pay rates if the Proposed Agreement is approved by a valid majority of Employees' which may have been applicable to (say) 'Shop Assistant Casual --- 19 Years' or (say) 'Shop Assistant Casuals Adult'. Somewhat curiously, one version of the document bears the manuscript date '20/4/07' against Mr Smith's signature and another version bears the manuscript date '19/7/07' (sic) against his signature. 39 The second (undated) document was made available to 65 of the employees of Karellas who worked at the Blaxland store between 4.30 pm on 26 April 2007 and 3.00 pm on 27 April 2007, by leaving copies of it in the 'Tea Room'. Of those 65 employees, between five and ten were handed a copy personally. No copies of it or parts of it were made available to the employees who worked at the Cremorne store. Two copies of the document which are in evidence suggest that Mr Smith may have separately signed each individual copy of it. 40 On Friday 27 April 2007 an organiser employed by the New South Wales branch of the applicant had a discussion with Mr Vasilli Karellas, a director of Karellas at a coffee shop in or near to Cremorne. The single page document was a copy of the first page of the three page (undated) document referred to above. 41 The applicant's case turns upon the four page document dated 19 April 2007 (the particular version being unimportant), the three page (undated) document and, so it was said, a conversation to which Ms Stringer deposed in her affidavit sworn 4 May 2007 with a Mr Chris Kable, whom she described as 'my immediate manager at IGA Blaxland'. In particular, I recall telling Mr Kable that, among other things, our rest breaks, overtime rates and Picnic Day were all removed from the Agreement. I think they are staying as they are. If you vote 'yes', you will still get your meal breaks and rest breaks. At the end of the day, the applicant withdrew its reliance upon the Stringer/Kable conversation. It was acknowledged that there had been compliance with what were described as the 'mechanical provisions' contained in s 340(2)(b). The evidence does not establish what the outcome of the vote was at the Blaxland store. 48 The applicant submits that, by making the false or misleading statements upon which it relies in the four page document dated 19 April 2007 and the (undated) three page document, Karellas deprived persons employed at the time, whose employment would be subject to the 2007 Agreement, of a 'reasonable opportunity to decide' whether they wanted to approve the agreement. 49 It seems to me that if the minds of the relevant employees were or were likely to be contaminated by misinformation about the 2007 Agreement and its effect then it could be said that such employees were denied a 'reasonable opportunity to decide' whether they wanted to approve it. In the absence of any evidence whatsoever as to the effect of any of the matters of alleged misinformation on the minds of any of Karellas' employees, the likely effect of such alleged misinformation has to be considered. 50 The giving of a reasonable opportunity to decide for which s 340(2)(a) provides, is not simply concerned with timeliness of information or access to the relevant employee collective agreement. 52 The respondent submits that a seeming failure to comply with s 340(2)(a) may be ignored, in the absence of evidence that the employer's failure to give all of the persons employed at the time whose employment would be subject to the relevant employee collective agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not caused a person so employed to cast a vote in favour of approval of the agreement which, had they been given a reasonable opportunity to decide, they would not have cast in that way. 53 I am unable to discern any such requirement from the words of s 340(2) of the Act, whether viewed on their own or in the context of the other provisions of Division 5 of Part 8. 54 Undoubtedly, a judgment as to whether or not 'a reasonable opportunity to decide' has been given will require consideration of the likely effect that misinformation, given by an employer, may have upon an employee's decision to vote one way or another. A trivial misstatement in a document put around by an employer could hardly amount to a failure by the employer to give all of the persons employed at the time whose employment would be subject to the proposed employee collective agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not. 55 In my opinion the ultimate consequence that may flow from the failure by an employer to give 'a reasonable opportunity to decide' is an irrelevant consideration. Whether an employer has or has not given all of the persons employed at the time whose employment would be the subject to the agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not should be capable of being determined immediately prior to the ballot at which votes may be cast one way or the other. 56 It seems to me that there is some force in the respondent's submission in this case to the effect that judgment on the question of whether Karellas gave all of the persons employed at the time whose employment would be subject to the proposed employee collective agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not, should have regard to the lack of any evidence whatsoever from employees expressing dissatisfaction with the outcome that was secured as a result of a majority of those persons casting valid votes that they wanted to approve the 2007 Agreement. 57 That, however, is not the end of the matter. The applicant has identified numerous representations said to have been made by Karellas in the documents which it put around, which the applicant submits were false. 58 The applicant alleged that representations numbered 1 and 2 were to be found in the four page document dated 19 April 2007 and that the remaining representations were to be found in the three page document. As such, Karellas Investments Pty Ltd is proposing to implement a collective workplace agreement that will cover all employees whilst complying with the current complex workplace relations laws. Please show your support by voting YES for the proposed agreement. This agreement shall be known as the Karellas Investments Pty. Ltd. Enterprise Agreement 2003. This agreement shall be binding on Karellas Investments Pty. Saturday --- 5.00 am to 10.00 pm. Sunday --- 7.00 am to 7.00 pm. A casual employee shall be paid at the ordinary rate for all time worked in ordinary hours plus an additional 24.58% for all time worked during each engagement. Such day shall be treated as an additional day off or pay in lieu. However work on this day will not attract holiday penalty rates. These included 'Discussions Before Terminations', 'Transfer to Lower Paid Duties', 'Transmission of Business', 'Time off Work During Notice Period', 'Notice To Employment National', 'Severance Pay', 'Employee Leaving During Notice Period', 'Incapacity to Pay', 'Alternative Employment', 'Employees Exempted' and 'Employees With Less Than One Year's Service'. 68 In the Schedule of Wage Rates appearing at the end of the 2003 Agreement the full-time adult employee weekly rate of pay for January --- July 2006 was recorded as $572.00. Employee must be aware of the facts, truths and key benefits of the Agreement. This includes Easter Saturday, Queens Birthday and Labour Day in accordance with clause 13 of the Agreement. However, this is still protected under common law termination obligations including redundancy. 71 There can be no doubt that when the three page document referred to 'Key Benefits' that were being retained it was referring to the retention of benefits within the terms of the 2007 Agreement which were to be found in the 2003 Agreement. However, the statement that employees retained an entitlement to ' ALL gazetted public holidays ' could not, when compared with the 2003 Agreement, which it replaced, be said to constitute a misrepresentation. The three page document made no mention of the loss of an entitlement to a picnic day on the first Tuesday of November or on some other day agreed between the applicant and the respondent, but, equally, it did not imply that such a benefit had been retained. 72 In relation to 'redundancy or severance payments' it is abundantly clear from the three page document that the 2007 Agreement made no provision for such payments. It cannot be suggested that Karellas was representing that any rights conferred by the 2003 Agreement in respect of redundancy were being retained in the 2007 Agreement. In my opinion, the statement 'However, this is still protected under common law termination obligations including redundancy' does not involve any relevant misrepresentation. It is undoubtedly true that the common law provides protection in the event that a person's employment is terminated without due notice and otherwise than for misconduct. One circumstance where compensation may be payable would be where a person's employment was terminated without due notice in circumstances where that person had become redundant. In my opinion, by putting the two documents around the respondent denied the persons employed by it at the time whose employment would be subject to the employee collective agreement a reasonable opportunity to decide whether they wanted to approve the agreement or not. The obligation cast upon Karellas to give all of the persons employed the necessary 'reasonable opportunity to decide' was not satisfied. 74 In my opinion the four page document represented that the 2007 Agreement itself provided for a pay rise of at least 5% above the rates of pay for which the 2003 Agreement made provision. 75 The applicant accepts that if the rate of pay under the 2007 Agreement was less than the rate of pay under the 2003 Agreement the difference may be viewed de minimis and, for present purposes, ignored. However, the applicant maintains that the 2007 Employee Collective Agreement did not provide for a 5% pay rise when compared with the prevailing rate under the 2003 Enterprise Agreement. 76 It was acknowledged by Karellas that the 2007 Agreement included no such provision. My understanding is that Karellas would say that its employees in fact received under their individual contracts of employment a pay rise of at least 5%. This may be so, but, in my opinion, it was misleading, to say the least, to suggest that the 2007 Agreement provided for such a pay increase. 77 In my opinion, the three page document represented that the 2007 Agreement provided for the retention of the penalty rates for which the 2003 Agreement provided. 78 Once again, it was acknowledged by Karellas that such a representation, if made, was false. Whilst the rate of pay for work between (say) 7:00 am and 7:00 pm on a Sunday may have remained at time and a half, nevertheless for (say) work between midnight on a Monday and 5:00 am on the following day, the penalty rate was reduced from normal rate plus 30% to normal rate plus 25% for full-time and part-time employees. 79 Whilst the relevant bullet point under the heading 'Key Benefits are Retained' in the three page document was cleverly worded, in my opinion, it was at the least misleading in relation to the retention of penalty rates when it said that employees were 'still entitled' to penalties under the 2007 Agreement and failed to mention that in some circumstances those penalty rates had been reduced. 80 Similar observations may be made in respect of the paragraph numbered 3 in the four page document dated 19 April 2007 under the heading ' Key advantages of the proposed Agreement are: '. 81 In relation to the representation contained in the three page document that under the 2007 Agreement the casual loading of 24.58% had been retained, it seems to me that this is also false or misleading. The relevant casual loading was reduced from 24.58% in the 2003 Agreement to 20% under the 2007 Agreement. 82 In the foregoing circumstances I consider that the representations relied upon by the applicant and identified by it as 1, 2, 4 --- 9, 10 and 13 were false or misleading. The employees of Karellas were misinformed in relation to the true effect of the 2007 Agreement when contrasted with the 2003 Agreement. In the circumstances all of the persons employed by Karellas in April 2007 whose employment would be subject to the 2007 Agreement, if approved, were not given by Karellas a 'reasonable opportunity to decide' whether they wanted to approve the 2007 Agreement or not. Accordingly, the 2007 Agreement was not approved within the meaning of s 340(2) of the Act notwithstanding that a majority of those employees who cast a valid vote may have decided that they wanted to approve the 2007 Agreement. In the circumstances Karellas contravened s 341(1) by lodging the 2007 Agreement with the Employment Advocate when it had not been 'approved in accordance with section 340'. 85 In relation to s 401(1) of the Act the applicant submits that all of the required elements covered by subparagraphs (a), (b) and (c)(i) have been satisfied in the circumstances of this case. 86 In relation to the use of the word 'reckless' in s 401(1)(b) of the Act the respondent draws attention to certain references to when a person is reckless 'with respect to a circumstance' or 'with respect to a result' as found in s 5.4 of the Criminal Code , being the criminal code set out in the Schedule to the Criminal Code Act 1995 (Cth). Plainly that standard has no application to the current proceedings. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words: it is a matter of critical substance. 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. Furthermore, there was no evidence as to the circumstances known to Karellas which may have made any risk unjustifiable. 93 Turning to subparagraph (c)(i) of s 401(1) of the Act, there was no evidence to support a finding that the making of any false or misleading statement, in one or other of the two documents mentioned, to another person or persons, caused that other person or persons to approve the relevant employee collective agreement. Approval under s 340(2) of the Act requires, of course, a collective decision by a majority of employees who may cast valid votes on the question of approval. 94 The applicant submitted that it may be inferred from the making of false or misleading statements in the four page document and/or the three page document that the making of the statements caused persons to whom the statements were made to approve the 2007 Agreement. In support of this submission reliance was placed upon certain statements of principle enunciated by Wilson J in Gould v Vaggelas [1985] HCA 75 ; (1985) 157 CLR 215 at 236. Gould v Vaggelas was a case of fraud where Gould Holdings Pty Limited purchased the South Molle tourist resort from a number of companies associated with Vaggelas. Mr and Mrs Gould sought damages for deceit in respect of representations made to Mrs Gould that the business was very profitable, the Vaggelases having submitted false figures as to occupancy rates and financial returns. Notwithstanding that a representation is both false and fraudulent, if the representee does not rely upon it he has no case. If a material representation is made which is calculated to induce the representee to enter into a contract and that person in fact enters into the contract there arises a fair inference of fact that he was induced to do so by the representation. The inference may be rebutted, for example, by showing that the representee, before he entered into the contract, either was possessed of actual knowledge of the true facts and knew them to be true or alternatively made it plain that whether he knew the true facts or not he did not rely on the representation. The representation need not be the sole inducement. It is sufficient so long as it plays some part even if only a minor part in contributing to the formation of the contract. When all the facts are in, the fact-finding tribunal must determine whether or not it is satisfied on the balance of probabilities that the misrepresentations in question contributed to the plaintiff's entry into the contract. The onus to show that they did is a condition precedent to relief and rests at all times on the plaintiff. It is quite possible that, the causal link between the making of a false or misleading statement to another person or persons and the approval of, in this case, the 2007 Agreement by a majority of those persons who cast a valid vote deciding that they wanted to approve same, is missing because the employees of Karellas who cast valid votes indicating that they wanted to approve the agreement, did not even read the documents containing the false or misleading statements upon which the applicant has relied, let alone pay any regard to them. 98 It follows that the applicant's case for contravention of s 401(1) must fail. 100 By virtue of s 412(1) of the Act it is clear that an order declaring the 2007 Agreement 'void' would only take effect from the date of the order or a later date specified in the order. 101 In my opinion, an order declaring that the 2007 Agreement was void would not breathe new life into the 2003 Agreement as a pre-reform certified agreement. By virtue of clause 3(1) of Schedule 7 to the Act, when taken with clause 3(5), the 2003 Agreement ceased to be in operation when the 2007 Agreement was lodged with the Employment Advocate and once it ceased operating, it could not be revived. To use the words of clause 3(5) it could 'never operate again in relation to' Karellas' employees. This may seem a curious outcome. Nevertheless, s 347 of the Act made it clear that the 2007 Agreement came into operation on the day that it was lodged with the Employment Advocate and that it did so notwithstanding that, relevantly, the requirements of s 340(2)(a) had not been met in relation to it. 102 Had s 409(a) empowered the Court to make an order declaring the 2007 Agreement to be void ab initio, it certainly would have been a curious outcome to have the 2003 Agreement permanently displaced. But that is not what the legislature had in mind. Plainly, when one has regard to the terms of s 412(1) of the Act it is apparent that what the legislature intended was that from the date of the relevant order declaring the agreement void or a later date specified in that order, the relevant workplace agreement would cease to have any force and effect. In particular, where ... a disposition between two parties is described as "void" at the will of a third, the preferred construction is to read "void" as "voidable". I have in this judgment used the words "invalid", "unenforceable" or "ineffectual", as, in similar cases, other judges have done. Other words and phrases can be used. For example, in the judgment under appeal the appellant's covenant is called "illegal and void". A similar promise was called by Asquith L.J. "void and unenforceable": Gaisberg v. Storr .... The words used do not matter if the actual legal result they are used to express be not in doubt or debate. But it has always seemed to me likely to lead to error, ... to adopt first one of the familiar legal adjectives - "illegal", "void", "unenforceable", "ineffectual", "nugatory" - and then having given an act a label, to deduce from that its results in law. That is to invert the order of inquiry, and by so doing to beg the question, and allow linguistics to determine legal rights. That need not happen if words be used, as Hobbes said that by wise men they should be, only as counters to reckon with; but reckoning becomes difficult if the values of counters are not constant. There may be no difficulty for adherents to Humpty Dumpty's principle as expounded by him to Alice. But his latitude and his command of his words as his servants are not generally allowed to lawyers. They are called upon to interpret other men's words. It is commonly said that when it describes a juristic act it means that it was always devoid of legal consequences. But this in itself is ambiguous, as witness the difference (which I have emphasized by italics) between the first edition of Sir George Paton's Text Book of Jurisprudence (1946) and the second edition (1951). In the first it was said (at p. 241) that "if the defects [of a juristic act] are such that the act has no legal effect at all , then the act is said to be void". The relevant passage in the latter edition (at p. 250) states - more accurately perhaps, and influenced probably by Professor Cohn's remarks in Law Quarterly Review, vol. 64 (1948), at pp. If the defect is such that the act is devoid of the legal results contemplated then the act is said to be void. A void act is sometimes said to be a nullity in law, but this is not strictly so, as an act void in its primary intent may nevertheless have an effect in another way. The word "void" is inherently ambiguous ... . It sometimes means that the act in question has not, and never has had, any legal effect (void ab initio). But sometimes it means that the act becomes void as against the world or against those who cannot enforce or take advantage of it subsequently (void ex post facto). "Void" is in some contexts treated as synonymous with "voidable" or voidable at the election of the party for whose benefit a legal rule makes the transaction void. The task of a court, in differentiating between the available meanings of the word, is to ascertain the objective of the lawmaker in the particular circumstances. It is to discover the meaning to be attributed to the word which is natural to its context. Many past cases demonstrate that the use of the word "void" presents a problem of statutory construction. There is no settled meaning. 107 The key words in s 412(2) are 'resulting from' the contravention. 108 There is absolutely no evidence to suggest that by virtue of the 2007 Agreement coming into operation when lodged with the Employment Advocate otherwise than in accordance with s 341(1) of the Act any Karellas employee suffered any monetary loss or damage. The highest that the applicant can put the case which it brought on Ms Stringer's behalf is to say that by virtue of Karellas' contravention of s 341(1) of the Act in relation to the 2007 Agreement, the employee collective agreement underpinning her own contract of employment has become one which contains some terms that are less favourable than those for which the 2003 Agreement provided e.g. in respect of the applicable penalty rate payable for work on (say) a Tuesday morning between midnight on the previous night and 5.00 am where the relevant penalty rate would be the rate of time and a quarter of her ordinary hourly rate of pay, instead of her normal rate of pay plus 30%. 109 It may be observed that subparagraphs (a) and (b) of s 412(2) of the Act are not expressed conjunctively or disjunctively. However, reference to the Explanatory Memorandum circulated by authority of the then Minister for Employment and Workplace Relations in respect of the Workplace Relations Amendment (Work Choices) Bill 2005 makes it clear that the disjunctive was intended. 111 The applicant relied upon the judgment of the Full Court in Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 ('Demagogue') to support the proposition that 'loss or damage' did not have to be loss or damage for which monetary damages could be awarded. That may well be correct but Demagogue may be distinguished on the basis that it concerned misleading or deceptive conduct in contravention of the Trade Practices Act 1974 (Cth) ('the Trade Practices Act '), in the form of non-disclosure by a vendor of unusual features relating to access to land located at Noosa Heads in the State of Queensland, which the purchasers, who sought relief under s 87(1) and/or (1A) of the Trade Practices Act , acquired by entering into a contract which they would never have entered into had they been aware of the true position with regard to access to the site. The trial judge had clearly found a causal link between the misleading and deceptive conduct and the purchasers' entry into the contract (see per Black CJ at 33 and per Gummow J at 42). 112 Each of Black CJ, Gummow J and Cooper J found that the expression 'loss or damage' where used in s 87 of the Trade Practices Act , and which corresponded in many respects with s 412(2) of the Act in the present case, could include being saddled with an agreement which had been induced by misleading or deceptive conduct. I consider it to be clear that the loss or damage contemplated by s 87(1A) is not limited to loss or damage in the s 82 [monetary damages] sense but was intended to include the detriment suffered by being bound to a contract unconscionably induced. Proof of loss or damage of the sort that would be an "amount of ... loss or damage" for the purpose of s 82 is not a prerequisite for the grant of relief under either subsection. Section 87(1) requires that the court consider that its order will compensate "in whole or in part" for the loss or damage or will prevent or reduce the loss or damage. Section 87(1A) requires that the orders concerned will compensate in whole or in part for the loss or damage suffered "or likely to be suffered", or will "prevent or reduce the loss or damage suffered, or likely to be suffered ...". In the phrase "likely to be suffered", the word "likely" speaks of a "real chance or possibility": Western Australia v Wardley Australia Ltd (1991) 30 FCR 245 at 261. This emphasises that the phrase "the loss or damage", at least in s 87, may be concerned with more than pecuniary recovery as understood in the law of damages in tort; tort law postulates the commission, already accomplished, of a wrong: Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 at 859, 868-869. Why should they not be described as having suffered loss or damage, within the meaning of s 87, by that very reliance and entry into legal relations from which they otherwise would have abstained? If that contract be declared void ab initio as provided for in s 87(2)(a), will that not reduce this loss or damage? At 44, Gummow J expressed his agreement with what Cooper J said in that regard. It is therefore important to distinguish clearly between the need to establish the factual circumstances necessary to enliven the power of the court to grant relief and the circumstances which are relevant to the nature of the relief which it is appropriate to grant. That is a question of fact. This requires giving the words their ordinary meaning in the context in which they appear. "Damage" is defined as "1. Loss or detriment caused by hurt or injury affecting estate, condition or circumstances (Arch) 2. Injury, harm". ( Shorter Oxford English Dictionary at 485). The first is that the loss or damage has been or is likely to be caused by conduct in contravention of the Act. The second is that any order made is to compensate for the loss or damage. However, the compensation is not limited to the payment of a money sum or damages as an examination of s 87(2) discloses. Nor is there anything in s 87(2) which would limit the loss or damage suffered or likely to be suffered to pecuniary loss or damage. In particular, s 87(2)(a) (declaring a contract or collateral agreement to be void) and s 87(2)(ba) (refusing to enforce any or all provisions of a contract) take as their point of focus the denial of the benefit of a contract to a person whose proscribed conduct has caused loss or damage to the other party. Such an order has the consequential effect of releasing the innocent party from the obligations imposed by the contract. In the context of providing compensation it is the obligations imposed by such a contract which is the loss or damage which the order seeks to redress. This is to be contrasted with the context of the phrase in s 82 where it is "the amount of the loss or damage" which is recoverable by action. For the purpose of s 82 it is the quantum or assessment of the loss or damage suffered in monetary terms which must be demonstrated. The rules as to the assessment of damages or the measure of damages in an action for deceit are relevant to the question of loss or damage under s 82. However those rules are not relevant to the meaning of the phrase in s 87(1). The prima facie rule that the measure of damage in deceit is the difference between the value of the property and the price paid is inappropriate where the contract is not completed: Myers v Transpacific Pastoral Co Pty Ltd [1986] ATPR 47,421 at 47,424. Where the contract remains unrescinded the costs associated with the conveyance of the property are costs arising out of the contract and of performing the obligations imposed thereby. Until the contract is rescinded such costs and expenses do not take on the character of costs and expenses thrown away and as such recoverable loss and damage under the general law. The court is not restricted in granting a remedy under s 87 by the limitations under the general law of a party's right to rescind for breach of contract or misrepresentation ( Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83 at 102, 109). Likewise the limitations under the general law as to the assessment of damages and the measure of damage ought not be imported into a definition of "loss or damage" in s 87 to limit the category of actionable loss or damage. That result will always depend upon the particular circumstances which exist when the occasion calls for an exercise of the powers under s 87 of the Act. Nor is there any evidence that the approval, making and/or coming into operation of the 2007 Agreement resulted from the contravention by Karellas of s 341(1) of the Act. 116 Section 412(2) of the Act confines the Court's power to declare a workplace agreement void to those cases where the relevant loss or damage to be remedied, prevented or reduced is loss or damage 'resulting from' the relevant contravention. In order to establish a causal link between the contravention of s 341(1) of the Act and Karellas employees becoming saddled with the 2007 Agreement in this case, evidence would be required from employees of Karellas who voted to approve the agreement indicating that had it not been for one or other of the misrepresentations contained in the four page document or the three page document put around by Karellas, they would not have voted as they did. 117 In the absence of any evidence on the issue, the Court may not make an order declaring the 2007 Agreement void. It is unnecessary, in the circumstances, to address the proper exercise of the Court's discretion to grant relief under s 409(a) of the Act were it otherwise able to do so. 118 In the foregoing circumstances, there should be a declaration that the employee collective agreement styled 'Karellas Investments Pty Ltd Employee Collective Agreement 2007' was not approved in accordance with s 340(2) of the Act. Otherwise, the Amended Application filed in Court on 23 May 2007 should be dismissed. 119 Given the terms of s 824 of the Act, there should be no order as to costs. | what constitutes a failure by an employer to give all of the persons employed at the time whose employment will be subject to an employee collective agreement a reasonable opportunity to decide whether they want to approve the agreement circumstances in which an order declaring a workplace agreement void may be made workplace relations |
The Federal Magistrate summarily dismissed the applicant's request to quash a decision of the Refugee Review Tribunal (the Tribunal) made on 20 December 2006 and provided to the applicant on 11 January 2007. 2 Because the matter was summarily dismissed by the Federal Magistrate, leave to appeal is required. In accordance with the decision in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397, I must consider whether, in all the circumstances, the Federal Magistrate's decision is attended with sufficient doubt to warrant it being considered by the Court on appeal and, secondly, whether substantial injustice would result if leave to appeal were refused. 3 After the matter was argued for some time on 6 August 2007, I indicated that I would adjourn the hearing to today for further submissions and that if I was to give leave to appeal, I would also hear and determine the appeal at the same time. The further submissions concerned a particular issue which troubled me during the course of the first hearing. The parties were given an opportunity to consider and make further submissions on that topic. It is referred to below. 4 The applicant is a citizen of the People's Republic of China. He was born in 1965 and worked as a construction worker in various towns in his province until he came to Australia on 3 November 2005. He applied for a protection visa under the Migration Act 1958 (Cth) (the Act) shortly after that time, but his application was refused by a delegate of the first respondent on 12 January 2006. That decision was then reviewed by the Refugee Review Tribunal and affirmed by that Tribunal (the first Tribunal) on 31 March 2006. The first Tribunal hearing and decision was quashed by consent by order of a Federal Magistrate on 21 August 2006 and remitted to the Tribunal for re-hearing by that order. 5 The Tribunal then was differently constituted (the second Tribunal). It conducted a hearing with the applicant on 13 December 2006 and, as I have noted, provided its decision to the applicant on 11 January 2007. It too affirmed the decision of the delegate of the first respondent not to grant to the applicant a protection visa. As I noted earlier, an application to the Federal Magistrates Court to quash the second Tribunal decision was summarily dismissed on 8 May 2007. 6 The applicant's claim to be entitled to a protection visa was based upon him claiming to be a Falun Gong practitioner. At the hearing before the first Tribunal, he said that he had become a member of Falun Gong in about May 1997, and had progressively become more active and more senior in the Falun Gong. He promoted Falun Gong wherever he worked throughout his province. He was a senior member of Falun Gong in his province by 2003. The Falun Gong was banned by the People's Republic of China in 1999. The applicant claimed that in 2003 he was arrested by the authorities and suffered "physical and mental persecution" during the four days of his detention. After his release, he continued to practice Falun Gong secretly but with a great fear of being re-arrested and mistreated by the authorities. 7 He procured a passport in January 2005 and came to Australia in November 2005. He did not succeed on his application in essence because the second Tribunal did not believe that until he had come to Australia he was a Falun Gong practitioner. Moreover, the second Tribunal disregarded his conduct in becoming an active Falun Gong practitioner in Australia because it was not satisfied that the applicant had done so otherwise than to strengthen his claim to be a refugee, and so to be entitled to a protection visa under the Act. Given that factual finding, the second Tribunal was required by s 91R(3) of the Act to disregard the applicant's conduct of becoming a Falun Gong practitioner in Australia. 8 It is important to understand why the second Tribunal did not accept that the applicant had been a Falun Gong practitioner before he came to Australia. It had regard to what the applicant had told the first Tribunal at a hearing on 31 March 2006 about his knowledge and practice of Falun Gong in China. I think the first Tribunal's conclusions on that topic are an accurate summary of how the applicant at that time presented his knowledge of Falun Gong. The Tribunal finds that the Applicant has no accurate understanding of Falun Gong exercises, and finds that were he a genuine Falun Gong practitioner of many years standing he would have such an understanding. 9 The second Tribunal raised with the applicant at its hearing the apparent lack of understanding he had displayed at that earlier hearing as well as other matters. It had also provided to the applicant a notice under s 424A of the Act inviting him to comment on certain information. That notice was sent on 15 November 2006. In essence it sought an explanation as to how he was able to obtain a passport, bearing in mind his claim to be a Falun Gong practitioner, when it appeared that he should have had difficulty in getting a passport for that reason. It also asked the applicant to provide proof through local Falun Gong centres and societies of his Falun Gong activities in some detail. It did not direct his attention specifically to it planning to have regard to what he had told the first Tribunal about his knowledge of Falun Gong when considering his claim or to comment on that. 10 The applicant responded to that notice on 7 December 2006. He said that he was helped by his brother-in-law to get a passport and that this enabled him to overcome the sort of difficulties the Tribunal had referred to, as his brother-in-law was a government official with some contacts. He also produced two statutory declarations in almost identical terms of two persons who said they were Falun Gong members in Australia and regularly practiced Falun Gong exercises with the applicant. At the hearing he produced a third such statutory declaration as well. The second Tribunal placed little weight on those documents. It said that it could not conclusively identify the deponents as they had provided no verification of their identity and because the applicant told the Tribunal that those deponents could not understand English and that he provided the documents to them to sign in English. He also said that although the documents were apparently witnessed by an independent person they had been signed by each of the deponents on a different occasion from the occasion when the independent person verified the signatures. 11 Clearly, the second Tribunal was satisfied that the applicant by then had a good knowledge of Falun Gong history and practice. That was in marked contrast to his level of knowledge at the hearing before the first Tribunal. Because of that contrast and because by the time of the first Tribunal hearing the applicant said he had been practicing Falun Gong for some nine years, the second Tribunal concluded that the applicant had only become a Falun Gong practitioner after the first Tribunal hearing. It concluded, as I have said, that that knowledge was gained for the purpose of strengthening his claim to be a refugee and so it could not have regard to that finding. 12 Consequently, it concluded that the applicant was not a Falun Gong practitioner at the time of his application for a protection visa or whilst he was in China, that he was not detained by the police and suffered as he claimed, and that he would not practice Falun Gong if he were to return to China. As that was the only basis of his claim, the second Tribunal was not satisfied that he faced a real chance of persecution if he were to return to China. 13 The application before the Federal Magistrate complained that the second Tribunal did not consider all of the information provided by the applicant in support of his protection visa application, including the response to the notice under s 424A of the Act and its enclosures. The applicant asserted that the second Tribunal had failed to address his claims with an open mind. The Federal Magistrate did not find any of those complaints were made out, or indeed were even arguable, and so summarily dismissed the application. 14 The applicant's grounds of his application before this Court are now found in four sources, in his affidavit in support of the application, in the draft notice of appeal and in his written and oral submissions. They are, not surprisingly, somewhat repetitive and, also not surprisingly as the applicant is not represented, somewhat assertive. I have considered each of them carefully. So far as I can discern they raise similar matters to those raised before the Federal Magistrate, namely ostensible or actual bias on the part of the second Tribunal, a failure to have regard to the information provided in response to the notice under s 424A of the Act, and a failure to have regard to the whole of the evidence. In addition, the applicant complains that the Tribunal placed too much or placed any weight upon the independent country information about the attitude of the Chinese authorities to Falun Gong, and he complains in general terms that he should have been found to have been a refugee. 15 In response to my questions to understand the detail of his complaints, in a number of instances he was unable to explain the asserted complaint by reference to any part of the Tribunal's reasons or on any other basis. I shall, however, endeavour to address each of those complaints in turn. There is nothing to indicate that the second Tribunal did not consider all of the information which was presented to it by the applicant or did not understand the nature of his claim. Specifically it referred to the three statutory declarations which had been provided in response to the notice under s 424A. It was entitled to give that information such weight as it considered appropriate in all the circumstances, provided that its approach does not demonstrate ostensible bias on its part or was not unreasonable. The reasons the second Tribunal gave for placing little weight on those declarations are rational and do not indicate that it failed to approach its task of decision-making in a conscientious and careful manner. 16 Nor is there any other material to which I was referred by the applicant, or which I have otherwise been able to discern, which might suggest that a reasonable and informed person would suspect that the Tribunal did not undertake its task with an open mind. The more general claim that the Tribunal failed to consider the applicant's claims in accordance with law was still unparticularised at the end of the submissions. In my view, the second Tribunal properly understood the applicable law and properly applied it in deciding whether the applicant was a person to whom Australia owes protection obligations under the Refugees Convention as amended by the Refugees Protocol. In other respects its reference to independent material was helpful to its decision-making process, including its understanding of the history and practices of Falun Gong. It applied that knowledge in assessing the applicant's current knowledge of Falun Gong history and practices. It was also entitled to have regard to that information when it raised with the applicant the circumstances in which he was able to get his passport. 18 I mention one further matter which the applicant raised in the course of oral submissions. He complained that the Federal Magistrate should not have summarily dismissed his application on the day of the hearing. The file indicates that there was a directions hearing on 6 March 2007. The applicant appeared at that hearing. He was told that the hearing on 8 May 2007 was a hearing at which the Court would decide whether he had an arguable case. He had the opportunity before that hearing to present such further material to the Federal Magistrate as was appropriate. In his oral submissions on this application he said that he should have been given an opportunity to do so, but he had already been given that opportunity, and when I asked him what he would have done, had he been given a further opportunity, he could not identify anything more that he would have done. That matter does not demonstrate error on the part of the Federal Magistrate. 19 There is one further matter which I referred to above, namely the use by the Tribunal of the recording of the hearing before the first Tribunal on 31 March 2006 by the second Tribunal and its use without the applicant having been given a notice under s 424A of the second Tribunal's intended reliance upon that information. I was concerned that the second Tribunal, by acting in that way, had failed to comply with the procedural prescription of s 424A (see SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162). 20 That has been the subject of further submissions by the first respondent. I do not accept one of those submissions. It is put that the fact of inconsistency in evidence provided to the Tribunal is not itself information which activates the obligation under s 424A of the Act. That is of course generally correct. So much was explained in SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609. However, I think that principle relates to inconsistencies which emerge in the course of a hearing and does not necessarily relate to inconsistencies which the Tribunal discerns from other information available to it. In my view, the application of that principle depends upon the Court being satisfied that the information provided at the earlier hearing before the first Tribunal was generally information before the Tribunal which did not enliven s 424A at all. 21 In SZEPZ v Minister for Immigration and Multicultural Affairs [2006] FCAFC 107 it was decided that upon a case being remitted to the Tribunal, the Tribunal is entitled to rely upon the earlier issue of a notice under s 424A and any response to a previously constituted tribunal. The expression does not depend upon the identity of the particular member constituting the Tribunal. Rather, it refers to the function of the Tribunal to review a decision. Until the Tribunal has made a valid decision on the review that has been initiated by a valid application under s 414 , it has a duty to perform that particular review. An invalid decision by the Tribunal is no decision at all but it does not follow that all steps and procedures taken in arriving at that invalid decision are themselves invalid. The Tribunal still has before it the materials that were obtained when the decision that had been set aside was made. The facts of that case are not identical to the present circumstances. 22 However, in SZJBE v Minister for Immigration and Citizenship [2007] FCA 190 , Emmett J addressed precisely the circumstances to which I have been referring. In that case, the Tribunal as reconstituted relied on inconsistencies with the then applicant's evidence from the first hearing at the second hearing before that reconstituted Tribunal. His Honour concluded at [16] --- [17] that doing so did not activate s 424A. That is a decision which is plainly directly on point. I should follow it unless I consider that it is plainly wrong. The applicant has not made a submission to me that it is plainly wrong, and I can readily understand the process of reasoning by which that conclusion was reached. In those circumstances I propose to follow that decision. As I regard that point as a significant and arguable one, I propose to give the applicant leave to appeal in respect of it but for the reasons which I have given I do not accept that the appeal should be allowed on that ground. 23 I have dealt with the other matters raised by the applicant. I have found no jurisdictional error on the part of the Tribunal in relation to those matters, nor any error on the part of the Federal Magistrate. Accordingly I have come to the conclusion that to the extent to which leave to appeal is to be given, the appeal should be dismissed. The applicant should pay to the first respondent costs of the application. | appeal from decision of federal magistrate protection visa application where refugee review tribunal affirmed decision not to grant applicant with a protection visa where earlier decision of tribunal quashed where tribunal relied on inconsistencies between applicant's evidence before reconstituted tribunal and earlier tribunal hearing whether tribunal erred by failing to give notice to applicant under s 424a of the migration act in respect of the inconsistencies whether inconsistencies in evidence provided to tribunal is information under s 424a migration |
I also concluded that, generally, the evidence supports an inference that the native title rights and interests include a right of exclusive possession and occupation of the Yawuru claim area (excluding the inter-tidal zone) where there has been no extinguishment of that right. 4 In the course of the further hearing, I determined some of the disputed issues on an ex tempore basis and gave reasons for doing so. On other issues, I announced the conclusion I had reached and stated that the reasons for the conclusion would be set out in the reasons for judgment. On the remaining issues, I reserved my decision. The parties agreed that, in the event that I regarded it as appropriate to have a further view of any of the relevant sites, the further view may be held without their attendance. 5 In these reasons, which are to be read together with the reasons in Rubibi No 5 and Rubibi No 6 , I have employed the terms that have been defined in those reasons. I have also used the issue headings and numbers used by the Yawuru claimants. 6 The findings set out below resolve all of the outstanding issues between the parties and enable a determination of native title to be made under s 225 of the NTA. The first issue arose because in Rubibi No 6 at [117], I expressed a concern as to how a right of exclusive possession might operate in a practical way in urban and other areas in common use by the general community in the Broome region. The Yawuru claimants addressed that concern by referring me to s 212(2) of the Native Title Act 1993 (Cth) ('the NTA ') which empowers a state to confirm any existing public access to and enjoyment of waterways, beds and banks or foreshores of waterways, coastal waters, beaches, stock-routes and areas that were public places at the end of 31 December 1993. By s 14 of the Titles (Validation) and Native Title (Effect of Past Acts) Act 1995 (WA) (' the State Validation Act '), the State confirmed the access and enjoyment rights referred to in s 212(2). The State's response was that my concern is also addressed either by extinguishment or by long established common law rights that prevent the recognition of exclusive native title rights that can, inter alia , be recorded in the determination as 'other interests' under s 225(c) of the NTA . 8 The second issue arose because at [119] of the reasons in Rubibi No 6 , I raised the question of whether the determination should limit the exploitation of the resources in the Yawuru claim area to non-commercial exploitation. The Yawuru claimants opposed any such limitation and contended that that limitation would be inconsistent with their right to exclusive possession, which they claimed entitled the native title holders to determine the purposes for which the land and waters were to be used. The Yawuru claimants relied upon Sampi v State of Western Australia (No 2) [2005] FCA 1567 (' Sampi No 2 '), in which it was contended that the determination of native title fishing rights should expressly exclude 'non-commercial rights'. They also pointed to s 211(2)(a) of the NTA which only exempts native title holders from the restrictions imposed by that regulation for 'non-commercial communal needs'. 10 The State contended that the native title rights and interests claimed and pursued at trial by the Yawuru claimants did not include any right of commercial exploitation of the resources of the land or waters. The State pointed out that, in relation to a claim under the NTA , the Court is not concerned with the common law rights that might attach to a right of exclusive possession but rather, with the native title rights and interests possessed under traditional laws and customs: see Members of the Yorta Yorta Aboriginal Community v State of Victoria [2002] HCA 58 ; (2002) 214 CLR 422 (' Yorta Yorta ') at 442 [40] and De Rose v State of South Australia [2003] FCAFC 286 ; (2003) 133 FCR 325 (' De Rose FC No 1 ') at 377 [162]. The State then claimed that the evidence adduced at trial did not support a finding of a native title right or interest to commercially exploit the resources of the land or waters. 11 WAFIC submitted that the determination should limit the use and taking of the resources of the inter-tidal zone to non-commercial purposes. WAFIC also pointed out that the Yawuru claimants had expressly disclaimed any entitlement to use or take the resources for commercial purposes. WAFIC adopted the State's contention that the Yawuru claimants' evidence did not support any such entitlement. WAFIC referred to determinations in other cases that included the limitation sought by it and contended that such a limitation is necessary and appropriate in the present case because, in contrast to Sampi No 2 , the Yawuru claimants are contending that they are entitled to use the resources for commercial purposes. Finally, WAFIC noted that the premise on which the Yawuru claimants' submission was based, namely that the entitlement to commercial exploitation was an incident of the entitlement to exclusive possession, did not apply to the inter-tidal zone as there is no entitlement to exclusive possession in respect of that zone. 12 The contentions of the State and WAFIC are correct and should be accepted. Accordingly, the entitlement of the Yawuru community to use and take any of the resources of the land and waters should be expressed as being an entitlement for 'personal, domestic or non-commercial communal purposes (including social, cultural, religious, spiritual and ceremonial purposes)'. At [9] of Rubibi No 6 , I concluded that any special attachment of Walman Yawuru clan members to parts of the claim area is not such as to give rise to a native title right or interest. The difficulty that confronts the Walman Yawuru contention is that s 253 defines an 'interest' in relation to land or waters as meaning, inter alia , a legal or equitable estate, interest or right in, or a restriction on use in respect of, the land or waters. The special attachment of Walman Yawuru clan members is not, and does not give rise to, an interest as defined. The only 'rights' or 'interests' the Walman Yawuru clan members may have in relation to the Yawuru claim area are those held in any capacity they may have as members of the Yawuru community. Those rights and interests are the native title rights and interests that are to be set out in the determination pursuant to s 225(b) and are not 'other interests' that are required to be set out in the determination pursuant to s 225(c). 14 The Walman Yawuru claimants also issued a proceeding in the Court on 16 December 2004 (WAD 285/2004) in which an overlapping claim was made for native title in respect of the Walman Yawuru claim area, which is within the Yawuru claim area. Section 67 of the NTA requires the Court to deal with the overlapping claim in the present proceeding. It was not disputed by the representative of the Walman Yawuru claimants that, as a result of the decisions in Rubibi No 5 and Rubibi No 6 , the overlapping claim of the Walman Yawuru claimants must fail. Accordingly, it is appropriate to order that the proceeding of the Walman Yawuru claimants be dismissed. The reason for the 'formal' submission was that WAFIC accepted that in Sampi (on behalf of the Bardi and Jawi People) v Western Australia [2005] FCA 777 (' Sampi ') at [1146]-[1147], French J had rejected the same submission. WAFIC also accepted that the decision of French J would be followed by other single judges of the Court unless it was shown to be clearly wrong. Although WAFIC wished to preserve the point for any appeal, it did not contend that the decision of French J was clearly wrong. Accordingly, I reject WAFIC's submission for the reasons given by French J in Sampi , with which I respectfully agree. In particular, it was contended that the criterion of general community acceptance should apply where there was only one Yawuru parent. The criterion of general community acceptance referred to in par (c) above is based on the findings and observations I made concerning that matter at [291] and [348] in Rubibi 5 and at [104] and [105] in Rubibi 6 . I have been troubled by whether that criterion should also apply to the situation of a descendant who has only one Yawuru parent but have decided, primarily on the basis of the evidence referred at [105] in Rubibi No 6 , that that criterion is not required by traditional law and custom. However, it should be emphasised that in order for self-identification to be genuine, something more is required than an announcement on a particular day that a person identifies himself or herself as a member of the Yawuru community. The genuineness of self-identification is to be determined by reference to all relevant facts, which can include past conduct in relation to self-identification. In all the circumstances, I am not satisfied that traditional law and custom requires that the additional criterion of general community acceptance must be satisfied in the case of a descendant who only has one Yawuru parent. 18 The Walman Yawuru representative also claimed that the evidence did not justify incorporation into the Yawuru community of a person having high cultural knowledge and responsibilities. In my view, the evidence does justify such a principle, albeit that it will only be activated rarely. It is to be recalled that it can only operate where the person in question is closely associated with the area, has the requisite knowledge and responsibilities, has self-identified as a member of the community and is generally accepted by other members of the community as a Yawuru person. If the grants are valid they extinguish native title. It appeared to be common ground that the freehold grants were future acts under the NTA and that the future act processes that were applicable at the time of the grants were not followed. It is also common ground that the grants were not validated by subsequent amendments to the NTA . 20 Section 22 of the NTA as originally enacted (cf s 240A of the current NTA ) provided that an impermissible future act is invalid to the extent that it 'affects native title'. Section 227 of the NTA as originally enacted provided that an act affects native title if it extinguishes native title rights and interests, or if it is otherwise wholly or partly inconsistent with their continued existence, enjoyment or exercise. The freehold grants were future acts that were not validated by any provision of the NTA , with the result that they were impermissible future acts under the NTA as originally enacted and appear to be invalid to the extent that they affect native title: see Neowarra v State of Western Australia [2003] FCA 1402 (' Neowarra ') at [586]. While it can be accepted that the freehold grants are valid insofar as they do not affect native title, they cannot have any extinguishing effect or confer rights that are inconsistent with the native title rights and interests I have found to exist. However, as a result of my finding later in these reasons that reserve 631 (which included 139 of the relevant freehold areas) was validly created, the native title rights and interests in respect of 139 of the relevant freeholds are not exclusive rights. It also appears that the remaining freehold lot was subject to a similar prior tenure or reserve. Accordingly, such of the rights and interests of the freehold owners as are not inconsistent with the rights and interests of the native title holders can co-exist with those native title rights and interests. 21 The State argued that, as the freehold grants were valid for some purposes, s 47B could not apply to the grants. I doubt that the argument is correct but nothing turns on it because, as explained above, the freehold grants appear to have had no extinguishing effect on native title with the consequence that there was no extinguishment to be disregarded under s 47B. In any event, no relevant occupation was established for the purposes of s 47B so the section would not apply to the areas covered by the 140 freehold grants. 22 The Commonwealth made submissions on this issue because two of the 140 freeholds in question are held by the Aboriginal and Torres Strait Islander Commission. In the course of the Commonwealth's submissions, it became apparent that the 140 freehold grants were in the Cable Beach area and probably had houses constructed upon them by the freehold grantees, or by purchasers from those grantees, who had not been informed of these proceedings or of the likelihood that their rights were subject to the rights and interests of the native title holders. This extraordinary situation apparently came about because the Western Australian statutory regime relied upon by the State (to ensure that freeholds granted by it after 1 January 1994 prevailed over native title) was held by the High Court in State of Western Australia v The Commonwealth (Native Title Act Case) [1995] HCA 47 ; (1995) 183 CLR 373 ('the Native Title Act Case ') to be invalid. Plainly, the situation is one that will have to be resolved between owners of the freeholds, the State and the native title holders. One likely method of resolution is an indigenous land use agreement under which the native title holders may relinquish their native title rights and interests on appropriate terms. 23 When this issue arose at the hearing, I expressed grave concern at how the matter had arrived at this stage without the freehold grantees or their purchasers having notice of the likelihood that the freehold grants are invalid to the extent that they affect native title. The Commonwealth's response to my concern appears to provide the answer which is that, properly construed, the relevant application of the Yawuru claimants did not claim the areas in respect of which the freehold grants were made. If that contention is correct that would preclude the Court from making a determination of native title in respect of the relevant areas but it will not make the problem disappear. As against the State I have found that, subject to extinguishment, native title exists throughout the Yawuru claim area. Even if the 140 lots do not technically fall within that area they are not relevantly distinguishable from the surrounding areas in which native title has been found to exist. It must follow that the problem created by the State by its 140 freehold grants, which were not validated by the NTA , will still have to be resolved by the relevant parties. 24 I now turn to consider whether the 140 lots fall within the Yawuru claim area. The relevant application (#WN95/7) which was filed on 11 January 1995 was known, prior to the consolidation of the various applications, as Rubibi # 5 . The application was lodged with the Native Title Tribunal on 11 January 1995, which was prior to the decision in the Native Title Act Case . After certain amendments, which were made during January 1995, the application was accepted by the Native Title Tribunal. The application was in the form prescribed by Sch 1 of the NTA which, relevantly, provided for a description and a map of the area covered by the application and for the applicants to set out the information known to them about other interests in relation to the land and waters in the claim area: see pars A6 and A7 of the prescribed form. Paragraph A6 of the amended application stated that the area covered by the application was the land indicated on the attached map. Paragraph A7 followed a standard form and stated, inter alia , that any current or former valid grants of estates in fee simple or leasehold estates to persons other than the Crown which, under the laws of the Commonwealth, extinguish native title are excluded from the claim. 26 The attached map showed the designated Crown land or reserves that fell within the claim area. The map also showed residential areas and streets, which included the 140 lots in question, that were within the boundaries of the claim area. 27 In my view, irrespective of whether the application of the Yawuru claimants is construed literally or consistently with the express or implicit intention of the Yawuru claimants, it is clear that they did not claim, or intend to claim, the relevant freehold lots or any other freehold lots in the claim area. The area claimed is confined to areas 'currently designated Vacant Crown Land or Reserve' on the map accompanying the application. While there appears to have been several maps created in respect of the application, each of the maps limits the claim to areas currently designated as vacant Crown land or reserve. There is nothing in the application or the accompanying map or maps that states that any claim to freehold land is being made. I do not accept the contention of the Yawuru claimants that the standard form of exclusion of valid freehold lots that extinguish native title has the consequence of some kind of implicit inclusion in the claim of invalid freehold grants that do not extinguish native title. 28 Plainly, the explanation for no claim being made for freehold land was that at the time the application was made (ie prior to the decision in the Native Title Act Case ), there was probably no expectation that such claims could be made and no intention that such a claim be made. If there had been such a claim, the other interests required to be set out in par A7 could be expected to have included information about the freehold interests that obviously fell within the outer boundaries of the land covered by the claim. No such interests were disclosed. 29 The above is sufficient to lead me to conclude that the Class N freehold areas were not claimed by the Yawuru claimants and therefore cannot be the subject of the native title determination in the present matter. Section 19 of the NTA states that a law of the State or Territory may provide that past acts attributable to the State are valid. It is not in dispute that the State Validation Act was enacted pursuant to s 19 of the NTA and thereby incorporated the relevant provisions of the NTA concerning past acts. One of the kinds of acts validated are category A past acts, which wholly extinguish native title. By s 229, a category A past act includes a freehold grant made after 1 January 1994 to which s 228(3), which is stated by s 229 to deal with such things as the exercise of options, applies. Section 228(3)(b)(i) provides for a past act to take place when the act (ie the grant of the freehold) takes place 'in exercise of a legally enforceable right created by...[an] act done before 1 January 1994'. An act is defined in s 226(2)(f) as including 'an act having any effect at common law or in equity'. 31 Section 45B of the Land Act 1933 (WA) ('the LA ') at the relevant time empowered the Minister to invite applications for the purchase of town and suburban land by advertisement. Section 43 of the LA empowered the Minister to grant licences to occupy to a purchaser of town or suburban land on payment of the first instalment of the purchase price. Prior to 1 January 1994, the State granted certain licences to occupy under s 43 of the LA to persons whose applications under s 45B to purchase land had been accepted. The Crown grants of the land were made to each of the purchasers (who had been granted a licence to occupy) after 1 January 1994 pursuant to s 41(4) of the LA . Under the licence, and the relevant provisions of the LA , each of the holders of the licences was entitled to the Crown grant upon payment of the purchase price, which the purchasers were obliged to pay. The entitlement was subject to any other conditions being satisfied but there is no evidence of any such conditions. 32 The State contends that the licences to occupy created a legally enforceable right to the grant of the freehold title, which crystallised into a presently enforceable right when the purchase price was paid or tendered for payment. 33 The licence to occupy granted under s 43 of the LA is not, relevantly, distinguishable from a terms contract under which a purchaser is entitled to possession prior to payment of the purchase price. The licence is expressed to be subject to the terms specified in it and also to the terms and conditions of the LA . The terms specified in the licence included a requirement to pay the balance of the purchase price and the LA provided for a Crown grant to be made to the purchaser when the purchase price was paid and any other conditions were satisfied. If, as is apparent from s 229(2)(iii), the legislature intended an option to purchase created prior to 1 January 1994 to be a legally enforceable right to acquire land, it must follow that a contract to purchase was also intended to constitute a legally enforceable right to acquire land. 34 In my view, the licences to occupy granted under, and in the context of, the relevant provisions of the LA created a legally enforceable right, albeit in equity, to the freehold grant. Put simply, the act that created the legally enforceable right to the freehold grant was the purchase made prior to 1 January 1994 (evidenced inter alia by the licence to occupy), rather than the payment of the purchase price after 1 January 1994. The payment of the price and the satisfaction of any other relevant conditions merely resulted in the prior legally enforceable right crystallising into a presently enforceable right. 35 Accordingly, the licences to occupy are past acts pursuant to s 228(3)(b)(i) of the NTA , and the freehold grants made after 1 January 1994 pursuant to the licences granted prior to that date, are therefore valid. The parties accepted that the issue of invalidity in respect of each of the reserves may be resolved by considering the creation of reserve 631, which covers a large part of the township of Broome. The parties accepted that that if reserve 631 was validly created, it would follow that the three other reserves were also validly created because all were created for 'public purposes' under substantially the same statutory scheme. 37 Reserve 631 was created pursuant to reg 29 of the Land Regulations 1882 (WA). For the use or benefit of the aboriginal inhabitants. Military or naval defence. Railways, tramways, and canals. Quays, landing places, and ferries. Sites for churches and chapels, with not exceeding 100 acres of glebe land attached, and sites for parsonages. Sites for schools and other buildings for the purposes of education, and land for the endowment of schools and other educational institutions of a public character. Sites for mechanics' institutes, hospitals, and institutions for charitable purposes, markets, court-houses, prisons, or other edifices for public use or purposes for the Colony, or any borough or road board. Cemeteries. Places necessary for the embellishment of towns, or for the health, recreation, or amusement of the inhabitants. For the endowment of municipal corporations within the Colony. For sinking shafts and digging for coal, iron, copper, lead, or other minerals and metals. Resting places and commonage for horses, cattle and sheep. Any purpose of safety, public utility, convenience, or enjoyment, or for otherwise facilitating the improvement and settlement of the Colony. The lands described in the Schedule were to be set aside as reserve 631. Having regard to reg 30 and the presumption of regularity, that contention should be accepted. The Yawuru claimants then claimed that, because 'public purposes' was not a purpose specified in reg 29, the reserve was not validly created. 41 The law applicable to a challenge to the validity of a regulation made in the exercise of a statutory power to make regulations would appear to be applicable to the analogous exercise of a power to reserve land for certain purposes under a regulation that provides for the exercise of that power. In South Australia v Tanner [1989] HCA 3 ; (1989) 166 CLR 161 at 178-9, Brennan J stated that, as the validity of a regulation depends on whether it answers the statutory description, the problem is one of characterisation. His Honour explained that the character of the regulation is ascertained by the court's own assessment of the directness and substantiability of the connection between the likely operation of the regulation and the statutory object to be served. Deane J. in The Commonwealth v Tasmania (the Tasmanian Dam Case); namely, whether the regulation is capable of being considered to be reasonably proportionate to the pursuit of the enabling purpose. In my view, 'public purposes --- adjoining Broome, Roebuck Bay' is plainly capable of being considered reasonably proportionate to the pursuit of the enabling purpose and therefore falls within reg 29(13). It is a purpose that is implicitly, if not explicitly, associated with the development of the Broome township and, as such, is both directly and substantially connected to being a purpose of public 'utility' and is also capable of being characterised as a purpose facilitating the improvement and settlement of Broome in the Colony of Western Australia. 43 It can be accepted that the phrase 'public purposes' has a broad meaning. In Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59 ; (1998) 195 CLR 566 (' Bathurst ') at 590 [58] Gaudron, McHugh, Gummow, Hayne and Callinan JJ stated that the phrase 'public purposes' connotes 'the giving to the public of some rights in the land which subtract from the Crown's full ownership'. Reservation of land under the relevant Western Australian provisions inhibited the Crown's future action in relation to that land. The inhibition, however, was not, and could not be, absolute. As Windeyer J pointed out in Randwick Corporation v Rutledge , even if land were dedicated to a public purpose, it did not take the land outside the authority of the legislature. Moreover, under the Western Australian statutes, reserves, other than those dealt with by the Permanent Reserves Act 1899 (WA) and its legislative successor, could be cancelled or the purpose of the reservation altered by executive act. Even permanent reserves could be cancelled or the purpose of the reservation altered by statute. Further, as had been held in Williams v Attorney-General for New South Wales ('the Government House Case '), the Crown appropriating lands to a particular purpose, without the creation of a trust, did not mean that the land became dedicated to that purpose, or that it could not later be used by the Crown for some other purpose. Nevertheless, by designating land as a reserve for a public purpose, even a purpose as broadly described as 'public utility', the executive, acting pursuant to legislative authority, decided the use or uses to which the land could be put. The executive thus exercised the power that was asserted at settlement by saying how the land could be used. The exercise of that power was inconsistent with any continued exercise of power by native title holders to decide how the land could or could not be used. The executive had taken to itself and asserted (pursuant to the authority conferred in that regard by statute) the right to say how the land could be used. This step was not, however, necessarily inconsistent with the native title holders continuing to use the land in whatever way they had, according to traditional laws and customs, been entitled to use it before its reservation. 46 For the above reasons, I am satisfied that reserve 631 was created for one of the purposes specified in reg 29 (13) and was validly created. 47 Reserves 1637, 1640 and 1644 were created for 'public purposes' under the Land Regulations 1887 (WA), which were not relevantly distinguishable from the Land Regulations 1882 (WA), save that the later regulations assumed that reserves could be created for 'public purposes': see regs 2 and 36 (which defined 'public purposes'). Thus, if there is any distinction to be drawn between the two sets of regulations, it is one that provides added support to the State's argument in favour of the valid creation of the relevant reserves. As it was accepted by the parties that the finding in respect of reserve 631 would determine the issue of validity in respect of all four of these reserves, I need not pursue this aspect of the matter further. It follows that reserves 1637, 1640 and 1644 were also validly created. The lease, which was for a term of five years commencing on 1 April 1930, was for the purpose of 'a foreshore camp, store site and repairing boats'. 49 At the date of the lease, the area leased was reserved land under the LA 1898 . Part III of the LA 1898 (ss 39-46) applied to reserves. Section 39 conferred power on the Governor to reserve any lands vested in the Crown for certain purposes. Section 41A conferred power on the Governor to lease reserved land not immediately required for the reserved purpose from 'year to year, or for any shorter term, for any purpose' on such terms and conditions as the Governor may think fit. Section 42 empowered the Governor by Order in Council to vest reserved land in certain persons and granted power to those persons to lease the land on the terms set out in the section. 50 Part IV of the LA 1898 (ss 47-52) provides for the sale of town, suburban and village lands. Part XII of the LA 1898 (ss 134-161) contains miscellaneous provisions, which include ss 152 and 153. Section 152 empowers the Governor to grant leases of land vested in the Crown for certain specified purposes. Section 153 conferred a general power on the Governor to 'lease any town, suburban or village lands on such terms as he may think fit'. 51 It is common ground that the special lease granted on 1 April 1930 was not a lease that was capable of being granted under ss 41A, 42 or 152 of the LA 1898 . The issue is whether s 153 empowered the Governor to lease land that has been reserved under Pt III. 52 Each part of the LA 1898 contained discrete provisions for lands in Western Australia, save for Pts I and XII which contained 'Introductory and General Provisions' and 'Miscellaneous Provisions' respectively. The structure of the LA 1898 suggests that the legislature intended to provide for the creation of reserves and any transactions concerning reserves in Pt III. The general structure of the LA 1898 , together with the comprehensive and detailed provisions contained in Pt III in relation to reserves, indicate that the legislature intended that Pt III constitute a code in respect of the creation of reserves and transactions, such as leases, in respect of reserved land. For example, Pt III specifically empowers the leasing of reserved land but only upon particular terms, in specified circumstances or for limited purposes. If s 153 were to be construed as empowering the Governor to lease reserved land without any of the fetters imposed upon the leasing of that land by Pt III, the section would render nugatory the detailed restrictions imposed in Pt III on the leasing of such land. Such a lease could be for purposes that are inconsistent with the reserved purpose, for purposes that are not specified purposes in s 42 or for a term beyond that provided for in s 41A. It is implicit, if not explicit, in the statutory scheme for the leasing of reserved land that the lease must comply with the provisions of Pt III. Put another way, the leasing power conferred in respect of reserved land is set out in Pt III. It follows that s 153 only empowers the Governor to lease town, suburban or village lands that are not reserved lands under Pt III. 53 Accordingly, the Governor did not have the power under s 153 to grant a special lease of Lot 622 on 1 April 1930 and the special lease granted on that date was invalid. However, part of the reserved land has not yet had any construction take place upon it. The State relied upon Ward HC at 136 [215] to contend that, by reserving land for the purposes of a gaol and police station, and then erecting a gaol and police station on part of the reserved land, the State has asserted rights over the whole of the land that are inconsistent with the native title rights and interests of the Yawuru community. The issue raised by the State is whether the construction of the gaol and the police station on the parcels of land reserved for those purposes has extinguished native title rights and interests in relation to the whole of the respective reserves. 55 The Yawuru claimants did not contest the extinguishment claimed in respect of the areas on which the gaol and the police station have been constructed. As I later explain, it is common ground that extinguishment has occurred in any event in respect of those areas because the gaol and police station are public works. The contest relates to the vacant land in the reserves that has not yet been used for the purposes of a gaol or police station. Although a similar issue was considered in Daniel v State of Western Australia [2003] FCA 666 (' Daniel ') at [688] and [698], the question of whether the assertion of the right to build a gaol or a prison on part of the reserved land extinguished inconsistent native title rights over the whole of the reserved land was not considered in Daniel or Ward HC . It is important to recall that the ultimate question is whether, by the steps that were taken, the Crown created in others, or asserted, rights in relation to the land that were inconsistent with native title rights and interests over the land. It was submitted that the features of the statutory regulation of public reserves which we have mentioned indicated that reservation, even without vesting, amounted to dedication to the purpose specified in the instrument of reservation in the sense, so it was submitted, that reservation prevented the Crown from applying the land to some other purpose and created some right in members of the public generally or a section of the public. The reference by Brennan J, in the passage of his reasons in Mabo [No 2] that is set out earlier, to use of the land that is reserved, may distract attention from the relevant inquiries. They are, as we have said, whether rights have been created in others that are rights inconsistent with native title rights and interests, and whether the Crown has asserted rights over the land that are inconsistent with native title rights and interests. Use of the land may suggest, it may even demonstrate, that such rights have been created or asserted, but the basic inquiry is about inconsistency of rights, not inconsistency of use. Further, as has already been pointed out, it is often necessary to examine inconsistency by reference to the particular native title right and interest concerned. Nevertheless, by designating land as a reserve for a public purpose, even a purpose as broadly described as 'public utility', the executive, acting pursuant to legislative authority, decided the use or uses to which the land could be put. The executive thus exercised the power that was asserted at settlement by saying how the land could be used. The exercise of that power was inconsistent with any continued exercise of power by native title holders to decide how the land could or could not be used. The executive had taken to itself and asserted (pursuant to the authority conferred in that regard by statute) the right to say how the land could be used. This step was not, however, necessarily inconsistent with the native title holders continuing to use the land in whatever way they had, according to traditional laws and customs, been entitled to use it before its reservation. The reason that the right to use the land may have survived reservation is the same reason that the grant of a pastoral lease extinguished the right to control access to the land, but not necessarily all the rights of native title holders to use it in accordance with the rights held under traditional laws or customs. The provisions of the Acts providing a penalty for "unlawful or unauthorised use or occupation" of lands (including "lands reserved for or dedicated to any public purpose") did not, on their proper construction, prohibit use or occupation by native title holders. It is, therefore, not right to say, as a proposition of universal application, as Western Australia submitted, that reserved lands could not lawfully be used except for the reserved purpose. The facts that the 1905 amendments to the Land Act 1898 permitted leasing of reserves not immediately required for their purpose or that in 1960 the Land Act 1933 was amended to permit leasing or licensing of certain kinds of reserve for depasturing stock require no different conclusion. Whether a right in native title holders to use the land continued unextinguished depends upon other considerations, particularly what, if any, rights in others were created by the reservation or later asserted by the executive. The designation of land as a reserve for certain purposes did not, without more, create any right in the public or any section of the public which, by reason of inconsistency and apart from the State Validation Act , extinguished native title rights and interests. The majority of the Full Court treated the use that had been made of reserved land, even land that had been vested in a body or person, as determining whether native title had been extinguished. So, for example, it was held in relation to Reserve 1059 (a reserve which had been created in 1886 for "public utility" but had not been vested in any body or person) that "[t]he general use of the area for watering cattle, and as a pastoral lease destroyed the exclusivity of native title rights". Their Honours went on to say that "[t]he close use" of the area of Reserve 1059 which now forms part of another reserve "would have wholly extinguished native title in that area". Similarly, in the case of reserves vested in a body, their Honours looked to the use that had been made of the land. As we have said earlier, we consider that looking to the use that has actually been made of land distracts attention from the central inquiry which is an inquiry about rights created in others or asserted by the executive, not the way in which they may have been exercised at any time. Neither the Full Court nor the primary judge considered that central inquiry. By creating the reserves for a gaol and a police station, the executive did not create rights in others. Rather, the executive asserted its right to say how the land could be used and the assertion of that right extinguished any native title right to control or say how the land could or could not be used. However, that was not necessarily inconsistent with the native title holders continuing to use the land in whatever way they had, according to traditional laws and customs, been entitled to use it before its reservation. 58 There remains the question of whether, by constructing a gaol and a police station on the reserves, the Crown 'created in others, or asserted, rights in relation to the land that were inconsistent with native title rights and interests over the land': see [214] in Ward HC . In my view, the exercise of the right to construct a gaol or police station on part only of the reserved land is not necessarily inconsistent with native title rights and interests in the remaining part of the reserved land if that part of the reserve is not reasonably necessary for, or incidental to, the operation or enjoyment of the gaol or police station: cf De Rose v South Australia (No 2) [2005] FCAFC 110 ; (2005) 145 FCR 290 (' De Rose No 2 ') at 332 [152] and 335 [166]. In De Rose No 2 , that formulation was applied in respect of the extinguishment that occurred upon the exercise by the lessee of the lessee's right under a pastoral lease to construct improvements. In the present context, the exercise of the right to construct an improvement on a reserve in pursuance of the reserved purpose is analogous to the exercise of the right to construct an improvement under a pastoral lease. Accordingly, it is appropriate to apply the same criterion. As that criterion is similar to, but not identical with, the criterion that is to be applied to the gaol and police station as public works under s 251D of the NTA , it is appropriate to deal with both criteria in the context of the extinguishment that resulted from the construction of the gaol and the police station as public works. 59 In summary, construction of the gaol and police station on part of the reserves extinguished native title rights and interests in the areas on which the gaol and police station were constructed and on areas adjacent thereto that were reasonably necessary for or incidental to the operation or enjoyment of the gaol or police station. However, the construction did not necessarily extinguish native title rights and interests in respect of the remaining areas of the respective reserves. It was also common ground that, as a result of the decision of the Full Court in De Rose No 2 at 329-335 [139]-[165], the exercise by the pastoral lessees of their rights under the leases to construct improvements on the land leased was inconsistent with the continuation of any inconsistent native title rights or interests insofar as they related to the land on which the improvements were constructed and any adjacent land the use of which was reasonably necessary for, or incidental to, the operation or enjoyment of the improvements. 61 The issue on which the Yawuru claimants and the State differed concerned whether the native title right and interest 'to live' on the leased land was inconsistent with the rights conferred by the pastoral or mining leases. The State accepted that I was bound by the decision of the Full Court in Northern Territory of Australia v Alyawarr, Kaytetye, Warumungu, Wakaya Native Title Claim Group [2005] FCAFC 135 ; (2005) 145 FCR 442 (' Alyawarr ') at 480-481 [130]-[132] to find that the native title right to live on a pastoral lease is not inconsistent with the rights of the lessee under the lease. The pastoral leases which have affected the claim area in the present case are historical grants. The relevant extinguishment of native title rights and interests derives only from inconsistency with the rights historically conferred by those leases. No question of prospective activity under a subsisting pastoral lease arises. Consistently with what was said by Nicholson J in Daniel (No 2) and Sundberg J in Neowarra , the right to 'live' on the land can be interpreted as a right to live permanently on the land without any conflict with pastoral leaseholders' rights. That right does not necessarily involve permanent settlement at a particular place. The issue therefore reduces to the question whether a native title right of permanent settlement is inconsistent with a pastoral leaseholder's rights. There is no logical reason why it must be so. Just as the right to live permanently on the land does not necessarily give rise to inconsistency with the pastoral leaseholder's rights, neither does the right to erect a permanent structure. The existence of such a structure does not preclude a pastoralist's right to require its removal in the event that it conflicts with a proposed exercise by the pastoralist of a right under the lease. It is not inevitable that such a conflict will arise. The inconsistency posited by the Northern Territory in respect of the grant of historical pastoral leases long expired, is based on a theoretical conflict which would not inevitably have occurred. No inconsistency of rights giving rise to extinguishment of the native title right to live on the land and to erect permanent structures thereon is demonstrated. The concept of "permanency" referred to here is, in any event, a relative one. The right defined in par 3(b) to live on the land, to camp, to erect shelters and other structures, and to travel over and visit any part of the land and waters, should stand. 63 However, the State contended for a different outcome in respect of areas covered by mining leases issued under the Mining Act 1978 (WA) ('the MA '). The State relied upon the extensive rights conferred under s 85 of the MA to use, occupy and enjoy the land in respect of which the mining lease was granted. The rights included the right to do all things that are necessary to carry out 'mining operations' in, on and under the land. The phrase 'mining operations' is given a wide definition in s 8 of the MA . The State also relied upon the decisions in Neowarra (at [522] and [613]) and Daniel (at [741], [768] and [822]) to contend that any permanent native title right to live on the land in respect of which a mining lease has been granted has been extinguished. 64 The Yawuru claimants disputed the State's contentions. They relied upon a later decision of RD Nicholson J in Daniel v State of Western Australia ([2003] FCA 1425 [23]-[25]) to contend that a mining lease is not relevantly distinguishable from a pastoral lease. Under both leases, so it was argued, a native title right to live on the land the subject of the lease is not inconsistent with the rights of the lessees under the relevant leases although the Yawuru claimants accepted that, upon the exercise of some of the lessee's rights, inconsistent native title rights and interests may be extinguished. 65 The passages relied upon by the parties must now be considered in the light of the Full Court decisions in Alyawarr and De Rose No 2 . As was pointed out in Alyawarr , a right to live upon the land does not necessarily involve permanent settlement at a particular place. Thus, even if a permanent structure was erected in pursuance of the right to live upon the land, that 'does not preclude a pastoralist's right to require its removal in the event that it conflicts with a proposed exercise by the pastoralist of a right under the lease': see Alyawarr at [131]. Their Honours added that it 'is not inevitable that such a conflict will arise'. 66 The same reasoning applies to the exercise of the extensive range of rights conferred under a mining lease. A native title right to live on the land leased is not necessarily inconsistent with any of the rights conferred under a mining lease. In the event there is a necessary inconsistency, the lessee's rights will prevail. As is clear from the reasoning in De Rose No 2 , if the right under the lease was, for example, to erect improvements necessary for mining operations, the exercise of that right will extinguish any inconsistent native title rights (including the right to live on the land) in respect of the area on which the improvements have been constructed and any adjacent area necessary for their enjoyment. However, it is not suggested that there has been any exercise of rights that are inconsistent with a native title right to live on the areas the subject of the mining leases that are within the Yawuru claim area. 67 Accordingly, I do not accept the State's contention that the rights conferred by the grant of the mining leases under the MA are necessarily inconsistent with, and therefore extinguish, a native title right to live on the leased land. However, the native title right to live on the leased land is qualitatively different from a native title right to live on land in respect of which the holders of the native title right have a right of exclusive possession because, in the latter case, the right of the holder is not subject to the risk of subsequent extinguishment. Plainly, 'the area' referred to in those sub-sections must be an area within the area the subject of a claimant application. However, as was explained by Sundberg J in Neowarra at [686] and [721], the area need not be the whole of the area claimed as that could lead to clearly unintended consequences in relation to the operation of ss 47A and 47B. Rather, the relevant area is the particular area with which each of the sections is concerned. 70 Textual, contextual and purposive considerations all point to 'the area' that is referred to in s 47A(1)(c) being 'the area' referred to in s 47A(1)(b). That is, 'the area' is the particular area the subject of the defined freehold estate, the defined lease, the defined vesting or the land expressly held or reserved for the benefit of Aboriginal peoples or Torres Strait Islanders. That was the view taken by Sundberg J in Neowarra (at [686]) and, in my view, is clearly correct. Insofar as there may be doubt about that matter, pars 5.45-5.49 of the Explanatory Memorandum for the Native Title Amendment Bill 1997 , which inserted ss 47A and 47B, make it clear that the occupation is to be in respect of 'the land' the subject of the past 'land rights type' grant, trust, reservation or other historical act that would otherwise have extinguished native title in relation to that land. However, as was pointed out by Sundberg J in Neowarra at [721], the relevant area for the purposes of s 47B is 'the particular area in relation to which it has been concluded that, but for the section, native title rights would be extinguished'. The current section 47 allows a claim for pastoral lease land, notwithstanding past extinguishment, where the claimants hold the pastoral lease. This provision will allow a claim for vacant Crown land where the claimants are in occupation of the land, notwithstanding possible extinguishment by any historical act. 73 The more difficult question arising under ss 47A and 47B concerns the requirement that there be occupation of the relevant area. The requirement of occupation in s 47A of the NT Act, which is the same as that in s 47B, was considered by Beaumont and von Doussa JJ in Ward FC 1 . occupancy of the Leregon structures constructed on the claim area by members of the Lee family who are acknowledged to be members of the Rubibi claim group. Its use was consistent with its reserved purpose. His Honour was satisfied that the people occupied the relevant islands. In Daniel at [973] Nicholson J also applied what Beaumont and von Doussa JJ had said in Ward FC 1 . He equated "connection" and "occupation". As Toohey J said in Mabo (No 2) at 188 presence on land does not have to be possession at law to amount to occupancy. He referred to United States and Canadian cases which established occupancy by reference to the demands of the land and society in question "in accordance with the way of life, habits, customs and usages of the [indigenous people] who are its users and occupiers" --- Sac and Fox Tribe of Indians of Oklahoma v United States (1967) 383 F 2d 991 at 998. His Honour observed in particular that "... a nomadic lifestyle is not inconsistent with occupancy. The evidence was relied upon by the Yawuru claimants to contend that the traditional connection with, and use of, the areas in question over a period of time by certain members of the claimant group constituted occupation of those areas at the relevant date. The Yawuru claimants even argued that they did not have to establish use because the entitlement I had found to exclusive possession of the Yawuru claim area (which was subject to the findings on extinguishment) was sufficient to constitute occupation. The argument is erroneous as it fails to distinguish between the criteria under s 223(1) of the NTA that must be satisfied in order to justify a finding of a native title right to exclusive occupation and the discrete requirement in ss 47A and 47B for occupation as a matter of fact. 75 The State contended that the difficulty with the broad brush approach adopted by the Yawuru claimants is that it equates visits to and use of an area from time to time with occupation of that area. While use and visitation may be sufficient in some instances, each case will depend on its own facts. 76 Although occupation is a question of fact involving matters of fact and degree, some general principles can be discerned from the cases. 78 Although it has been accepted that a broad and beneficial construction of the word 'occupy' is to be preferred, there remains the difficulty that, generally, occupation of an area requires something more than a traditional connection with or mere use of or visitation to the area. The cases provide some useful guidance in resolving that difficulty. Although it is not necessary to establish frequent use of the land, it is clear that frequency of the use of the land can be a relevant factor in determining whether or not there is occupation of that land. 81 In Hayes v Northern Territory [1999] FCA 1248 ; (1999) 97 FCR 32 (' Hayes ') at 144 ([162]), Olney J pointed out that, given the context in which s 47B was enacted (namely as part of Parliament's response to the decision in Wik Peoples v Queensland [1996] HCA 40 ; (1996) 187 CLR 1), the requirement for occupation of the land should be understood in the sense that the indigenous people had traditionally occupied the land, rather than in the sense of occupation according to common law principles. 82 In Ward FC at 437 [449], use of the land for the reserved purpose was regarded as an indicator of occupation. In Daniel (at [973]), RD Nicholson J also regarded it as significant that the claimants made use of the land 'for its purpose as and when [they wished] to do so'. The references in the cases to the 'purpose' of the use, at least in relation to s 47A, indicate that a traditional use of the area, or a use that is consistent with the purpose of the reservation, being for the benefit of Aboriginal peoples, may be more likely to result in a finding of occupation of 'the area'. The reason for that was explained by Olney J in Hayes in the passage referred to above. 83 In some cases, evidence in relation to traditional connection has been relied upon to establish occupation: see Daniel at [938] and [973]. Although evidence in relation to connection for the purposes of s 223(1)(b) of the NTA can be relevant to occupation under ss 47A and 47B, it would be erroneous to equate connection with occupation. 84 The State argued that the kind of occupation contemplated by ss 47A and 47B was traditional occupation, in the sense of use of the land in accordance with traditional laws and customs, rather than random or co-incidental use. Whilst random or co-incidental use may be unlikely to constitute occupation, and traditional use may be more likely to constitute occupation, there is no proper basis for reading a requirement of traditional occupation into ss 47A and 47B. However, traditional use was successfully relied upon to establish occupation in Hayes and Daniel . Where the use is not traditional, the question remains whether the evidence about connection, use, habitation or visitation is sufficient to warrant a conclusion, as a matter of fact, that the requisite occupation has been established. 85 Finally, it is not necessary for the occupation of the land to be exclusive or confined in fact to persons who are members of the claimant group. In Ward FC (at 437 [449]), Beaumont and von Doussa JJ noted that it was sufficient for the claim group member to be 'one of many people who share occupancy' and that occupation by non-claimant persons does not preclude the claimants from occupying the area. However, in my view, if the evidence establishes a similar non-traditional use of the relevant area by the general public, the fact that some members of the public using the area are claim group members is unlikely to be sufficient to justify a finding of occupation of the area by one or more claim group members. The Shire of Broome contended that, where the physical presence of a claim group member in an urban area is for a purpose and of a character that is indistinguishable from the physical presence of a member of the public, the presence should not be considered to be 'occupation' for the purposes of ss 47A or 47B. Although there is merit in the Shire's submission, I would not go so far as to accept it as a criterion for refusing to find the requisite occupation. However, general public use of the relevant area is a relevant, if not a determinative, factor. Ultimately, the question is whether the requisite occupation by a claim group member has been established. 86 The Yawuru claimants argued that their traditional connection with the Yawuru claim area, or with specific areas, distinguishes the use of claim areas by claim group members from use by the general public. While that question is a matter for evidence, I do not accept that the connection contended for can be assumed in respect of use of public areas where the use of those areas by claim group members is not a use for a traditional activity and is not distinguishable from use of the areas by other members of the public. 87 In my findings in favour of occupation of a number of areas both within and outside the Broome region and against occupation of certain areas within Broome, I have taken into account the fact that, generally, visits to and use of areas in Broome by the public is largely indistinguishable from visits to and use of those areas by members of the claim group. 88 Plainly, a variety of factors can be relevant to occupation and, as I have just explained, there may be different outcomes, even where the nature of the occupation has superficial similarities. The case put in respect of each area must be considered in its own context and on its own facts having regard to all of the circumstances of the case. 89 The State accepted that ss 47A or 47B applied to a significant number of the areas claimed by the Yawuru claimants. In the light of principles set out above, I turn to consider the s 47A and the s 47B issues that were raised by the Yawuru claimants and disputed by the State. The Shire of Broome ('the Shire') also had an interest in some of the relevant areas but generally adopted the State's submissions. Accordingly, the reasons given in relation to the State's submissions will also apply to the submissions of the Shire. Accordingly, s 47A does not apply to this area. This area is a freehold block held by the Mamabulanjin Aboriginal Corporation. 92 An initial question arises as to whether land held by a body that is incorporated under the Aboriginal Councils and Associations Act 1976 (Cth) ('the ACA Act' ) is land held 'expressly for the benefit' of Aboriginal peoples for the purposes of s 47A. The question arises in respect of Mamabulanjin Aboriginal Corporation, Nirrumbuk Aboriginal Corporation and Broome Aboriginal Media Association ('the associations'), which are associations that are incorporated under the ACA Act and hold areas 354, 1742 and 2128 respectively. 93 The ACA Act is stated to provide 'for the Constitution of Aboriginal Councils and the Incorporation of Associations of Aboriginals and for matters connected therewith'. Section 3 defines an 'Aboriginal association' as an association, society or body whose eligibility for membership is limited to Aboriginals and spouses of Aboriginals. Section 49 provides that a person who is not an Aboriginal or a spouse of an Aboriginal is not entitled to become a member of an Incorporated Aboriginal Association. 94 The objects of each of the associations make it clear that the associations are to generally promote the economic and social development of their members. In fact, the objects of the Broome Aboriginal Media Association and Nirrumbuk Aboriginal Corporation state as their main object, inter alia , the provision of 'direct relief from poverty, sickness, suffering, destitution, misfortune, distress and helplessness' of Aboriginal persons in particular regions. The Rules or Constitutions of the associations provide for the property and funds of the association to be available at the discretion of the Committee for the purpose of carrying out the objects. 95 In Neowarra at [697]-[698], Sundberg J considered the requirement in s 47A(1)(b)(ii) that the area be held expressly for the benefit of Aboriginal peoples. His Honour considered that 'expressly' meant not merely impliedly and not arising merely by inference. His Honour also referred to cases that had decided that for something to be express, rather than implied, it must arise directly from the language used and not by inference therefrom. Kupungarri's property is "available, at the discretion of the Committee, for the purpose of carrying out the objects of the Association". The objects in r 6 are all directed to the benefit of a group of Aboriginal people --- education, job training, housing, health services and so on. The Rules clearly and unmistakably disclose that Kupungarri's property is held by it for the benefit of Aboriginal persons. They make that explicit. There is no need to imply that from the Rules or any other source. The case falls within s 47A(1)(b)(ii). The rules of the associations are not relevantly distinguishable from the rules considered by Sundberg J. It must follow that the property of each of the three associations is held by them expressly for the benefit of Aboriginal peoples. 98 The remaining issue is whether the requisite occupation has been established in respect of area 354. I accept, as did Sundberg J in Neowarra at [708], that a combination of activities in the area can amount to occupation by claim group members, notwithstanding that the area is also occupied by the corporation. The problem with the claim under s 47A in respect of area 354 is that the activity relied upon is residence in one of the two houses on the area by a Yawuru claim group member. As explained above, s 47A requires occupancy of the whole of the area, not merely part of the area. Accordingly, the requisite occupancy has not been established. This area is a freehold block in Broome at which Bidyadanga Aboriginal Community La Grange Inc (an Aboriginal Association incorporated under the ACA) conducts a sobering up centre. The association is not relevantly distinguishable from the associations above. For the reasons given in respect of area 354, the area is held expressly for the benefit of Aboriginal peoples. However, the involvement of some Yawuru persons, as well as others, in co-ordinating and using the centre is not sufficient to constitute occupation of the centre for the purposes of s 47A. For the reasons given in respect of area 354, this area is held by Nirrumbuk Aboriginal Corporation expressly for the benefit of Aboriginal peoples. However, the requisite occupation at the date of the application has not been established by the evidence. For the reasons given in respect of area 354, the area is expressly held by the Broome Aboriginal Media Association for the benefit of Aboriginal peoples. However, the involvement of Yawuru persons, together with others, in the association (whether as members or employees) and participation in some of its activities is not sufficient to constitute the requisite occupation. The area is subject to the Roebuck Plains pastoral lease which has been held by the Indigenous Land Corporation expressly for the benefit of Aboriginal people. Prior to, at and since the relevant date (29 September 2004), the area has been used by various members of the Yawuru claim group to pursue traditional activities as and when they chose to do so. I am satisfied that the requisite occupation has been established. The evidence of continuing traditional use of the area by members of the Yawuru claim group as and when they choose to do so is sufficient to establish, on the balance of probabilities, the requisite occupation as at 2 February 1994. Although the evidence of hunting in the general area of the lease is sparse, I accept it as evidence of continuing traditional use of the general area (which includes the above areas) by Yawuru claim group members as when they choose to do so. In the circumstances, I am prepared to infer the requisite occupation as at the relevant dates. I am satisfied that the general evidence concerning connection with the area and traditional activities in the area by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 2 February 1994. I am satisfied that the general evidence concerning connection with the area and traditional activities in the area by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 2 February 1994. I am satisfied that the general evidence concerning connection with the area and traditional activities in the area by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 2 February 1994. I am satisfied that the general evidence concerning connection with the areas and traditional activities in the areas by Yawuru claim group members as and when they choose to do so, together with the specific evidence of Neil McKenzie's visits as and when he chooses, establishes the requisite occupation as at 2 February 1994. I am satisfied that the general evidence concerning connection with the areas and traditional activities in the areas by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 31 October 1994. These areas are subject to the Waterbank pastoral lease but are presently unallocated Crown land. I am satisfied that the general evidence concerning connection with the area and traditional activities in the area by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 29 September 2004. Although the evidence in relation to these areas is sparse, the areas should be regarded as being occupied at the relevant date (31 October 1994) for the reasons I have given in relation to the other coastal areas that are not within the Broome region. I am satisfied that the general evidence concerning connection with the areas and traditional activities in the areas by Yawuru claim group members as and when they choose to do so, establishes the requisite occupation as at 31 October 1994. For the same reasons given in respect of Area 2500 (ie the area the subject of the lease), the areas are also to be regarded as being occupied at the relevant date by one or more members of the Yawuru claim group. Occupation under s 47B is not established in respect of the section of area 2701 that is associated with and forms part of these areas. The sparse evidence of use falls short of establishing occupation. The sparse evidence of usage relates to usage as a walkway by claim group members. It is not a traditional usage and, more importantly, is not distinguishable from a likely similar usage by the public. Accordingly, the requisite occupation has not been established. As explained earlier, occupation is a matter of fact and degree. The limited evidence is not sufficient to persuade me of the likelihood of occupation at the relevant dates in 1994 or 1995. Accordingly, the requisite occupation has not been established. There was also evidence of hunting of possums, kangaroo and goanna in some of these areas. In relation to the coastal areas, there was evidence of fishing, crabbing and cockling as well as the obtaining of bush medicine and bush tucker. In most instances, the State accepted that the evidence was sufficient to amount to occupation. However, the State claimed that the evidence concerned contemporary usage, rather than usage at the relevant dates, being, for the most part, dates in 1994 or 1995. 120 In my view, the evidence of the Yawuru claimants establishes that these bush areas were visited and used by claim group members in recent times for traditional purposes as and when the members chose to do so. Further, there is little or no evidence that the areas were also visited or used in a similar manner or on an ongoing basis by the public. In those circumstances, I am prepared to treat the visits to and usage of the bush and coastal areas for traditional purposes as similar to the visits and usage of bush and coastal areas outside of the Broome region, and therefore as sufficient to constitute occupation. It follows that the State's concessions were correct. 121 The remaining issue is whether the evidence of contemporary usage by claim group members justifies an inference that the same usage had occurred at the relevant dates, which appear for the most part to be in 1994 or 1995. This question also arose in respect of several of the areas dealt with above. I have found this to be a difficult question. On balance, I have inclined to the view that the same, or a substantially similar, usage by claim group members occurred at the relevant dates. The main reason for that conclusion is that the usage is traditional and of a kind that is likely to have been ongoing over a long period. Accordingly, I am prepared to infer that, at the relevant dates in 1994 and 1995, it is more probable than not that one or more claim group members visited and used these bush areas as and when they chose to do so and in much the same way as those areas are now being visited and used by present claim group members. Accordingly, the requisite occupation has been established. While it would have been preferable for direct evidence to have been given by claim group members of occupation at the relevant dates, the failure to give that evidence does not preclude the inference I have drawn. 122 I am also satisfied that occupation has been established in respect of the section of area 2701 that is associated with and forms part of the relevant areas referred to above. As a consequence, ss 47A and 47B cannot be relied upon to claim exclusive possession because the sections are concerned with past extinguishment, rather than non-recognition: see Gumana v Northern Territory of Australia [2005] FCA 50 at [263] . In my view, the contention is not correct because the past extinguishment only occurred by the grant of the lease or prior interest which conferred the right to construct the improvement. As is clear from De Rose No 2 at [157], the extinguishment arises from the grant of the lease and operates when the improvement is constructed. It follows that, if the grant of the lease or other prior interest is to be disregarded under s 47A or s 47B, there can be no extinguishing effect by the exercise of the right to construct the improvement. The Yawuru claimants accepted that certain public works extinguished native title. However, the status of other works, and the extent of any extinguishment by public works, were the subject of dispute at the extinguishment hearing. " Again, at page 102 (viii), his Honour stated that "... there is no evidence of any building or structure in the nature of a fixture other than possibly a fence ..." Clearly Justice Olney regarded recreation equipment and fences as examples of structures that could be considered as public works for the purposes of the NTA . This accords with the ordinary meaning of structure being simply something "built or constructed". Likewise, it cannot be said as a matter of generality that playground equipment or pine bollard fencing are not fixtures, as it will depend upon the intention of the person or persons who bring it onto the land. There is no reason to deny its beneficial function of ensuring that a public work has the benefit of adjacent land that is necessary for or incidental to the operation of the work, especially in relation to access to landlocked works. 130 Area 122 appears from the air to be roughly the shape of an axe; the drain runs down the side of the part of the area which is the handle of the 'axe' and occupies 17% of the reserve area. It is an open, unsealed shallow pindan storm water drain. It was common ground between the parties that to be a public work, the drain would have to be characterised as a 'major earthwork'. It was also common ground that, if the drain was a public work, native title is extinguished in respect of both the 'axe' head and handle sections because those areas were traversed or used to construct the drain. 131 I undertook a site visit to the area to assist in determining whether there was permanent disturbance and change to the land such that it was appropriate to characterise the drain as a major earthwork. Although the drain was not very wide, its length is such that I am satisfied that it constitutes a major earthwork and therefore extinguished native title in respect of both the 'axe' head and handle sections. This reserve includes an uncompleted sports oval which covers approximately 40% of the reserve. The oval has never been used as an oval. There was uncontested evidence that, in the course of creating the oval, the Shire carried out earthworks and installed drainage ditches and paths. There was also evidence that the whole of the reserve was traversed and disturbed by heavy earthmoving equipment during the creation of the oval and drainage ditches. A water storage tank was installed in the northern corner of the reserve. I undertook a site visit to McMahon Oval. I am satisfied that creation of the oval was a major earthwork the construction of which involved usage of the whole of the reserve. It is therefore not necessary to consider whether the drain on the reserve was also a major earthwork, although it probably was not such a work. 133 The Yawuru claimants also contended that, even if the work was a major earthwork, and therefore a public work, native title was not extinguished because the work was not completed (see ss 15(1)(b)(i) and 23C(2) of the NTA ). It is correct that under ss 15(1)(b)(i) and 23C(2), extinguishment only occurs on completion of the construction of the public work or on its 'establishment'. However, the public work relied upon by the Shire was not the uncompleted oval. Rather, it was the completed 'major earthworks'. Accordingly, as the earthworks that were competed are 'major earthworks', they result in extinguishment under ss 15(1)(b)(i) and 23C(2), notwithstanding that not all of the works planned for the area have been completed. Each of the reserves on which the cemeteries are situated was created for the purpose of a 'cemetery'. The Yawuru claimants accepted that their native title right to control the use of and access to the reserves had been extinguished by the valid creation of the relevant reserves or reserve 631 (which I have found was validly created). 135 The Yawuru claimants and the Shire accepted that the memorial plaque on reserve 1643 and the light, generator poles and iron roofed shelters on reserve 1647 are public works. However, they submitted that a reserve for a cemetery is not itself a public work and that the graves or tombstones in the cemeteries were not public works because they were not memorials constructed by or on behalf of the Crown. 136 On 5 April 2006, I gave an ex tempore judgment in favour of the Yawuru claimants in respect of the public works in these areas. In summary, I found that the evidence did not support a finding that the graves and tombstones were works that were constructed or established by or on behalf of the Crown or a local government body or other statutory authority of the Crown in any of its capacities. It follows that the graves and tombstones in the cemeteries are not public works. 137 The Shire and the State also sought to rely on the creation of reserve 1647 and its use as the Broome Cemetery to argue that the graves were established with the authority of the Crown. The argument raises the issue of whether the exercise of the right to use the reserve as a cemetery has extinguished native title. It is apparent from the material before the Court and from the legislation that has applied from time to time to the use of the reserve as a cemetery that the exercise of the right of use, either directly or indirectly, was authorised by or on behalf of the Crown. For example, Government Gazettes revealed that under the Cemeteries Act 1897 (WA) ('the CA '), the Governor in Executive Council appointed trustees of the cemeteries, made by-laws for the management of the cemeteries, provided for applications for land in the cemeteries to be used as graves and imposed fees for use of the land as graves. Accordingly, it is appropriate to view the exercise of the right to use the land within the reserve as a cemetery as the taking of steps authorised by the Crown, which 'created in others, or asserted, rights in relation to the land that were inconsistent with native title rights and interests over the land': see [214] in Ward HC . It would follow that, to the extent that there has been an exercise of the right to use reserve 1647 as a cemetery for the conduct of burials, the digging of graves and the laying of tombstones, the exercise of that right has had an extinguishing effect on native title in respect of the areas where that has occurred. However, the extinguishing effect does not extend to vacant areas of the reserve where the exercise of the right to use those areas for the purposes of a cemetery has not yet occurred. 138 However, at a late stage, the State raised a further issue in respect of reserve 1647. Under s 10 of the CA , the Governor may not only appoint trustees of a cemetery but may also by deed of grant vest any lands in the trustees of a public cemetery. The section provides that, when notification in the Government Gazette of appointments and removals of trustees (which is required by the section) is served on the Registrar of Titles, that will result in the legal estate in the trust premises vesting in the trustees (or the new trustees). Also, s 212 of the Municipalities Act 1906 (WA) provides for any vesting of property in councillors as trustees under the CA to be a vesting in the municipality. 139 The Government Gazettes reveal the appointment of, inter alia , councillors as trustees under the CA . While the evidence does not disclose whether a deed of grant to trustees under s 10 was made, it is probable that such a deed did exist, and that the legal estate in the reserved land ultimately vested in the Shire. The reason for that conclusion is that it is implicit in the functions of trustees under the CA that the legal estate in the cemetery vests in them upon their appointment. Also, it is difficult to think of a reason why the Governor would appoint trustees but not vest the legal estate in them. 140 When the totality of the statutory scheme is considered, the conclusion is inevitable that the rights attaching to the vesting of the legal estate in the reserve in the trustees and, subsequently in the Shire, is inconsistent with any native title rights or interests in respect of the reserved land. Accordingly, native title in respect of reserve 1647 has been extinguished. 141 The parties accepted that the situation outlined in respect of the Broome Cemetery does not apply to reserve 1643 (ie the Pioneer Cemetery). As I have found that the only public work that has any extinguishing consequence at the Pioneer Cemetery is the memorial plaque, native title in respect of that cemetery is only extinguished by reason of the public work being a past act in respect of the area covered by the memorial plaque. Of course, the creation of the reserve extinguished the native title right to control access to and use of the reserve, but that is not relevant in this context. Earlier in these reasons I explained why the native title right to control the use of and access to area 24 had been extinguished by the creation of reserve 2551 for the purposes of a gaol. As explained above, the Yawuru claimants do not dispute extinguishment in relation to that part of the area upon which the gaol was constructed. The remainder of the area is outside the gaol perimeter and consists of vacant land. 143 The State argued that the vacant land was properly categorised as being a public work as a result of s 251D of the NTA . It argued that the adjacent vacant land is 'necessary for, or incidental to, the construction, establishment, or operation of the work'. As explained earlier in these reasons, a similar question arose in the context of the use of the gaol reserve for the reserved purpose, being whether the adjacent vacant land is reasonably necessary for, or incidental to, the operation or enjoyment of the gaol. The State argued that the adjacent land is required for privacy, recreational purposes and 'future expansion', thus satisfying both criteria. 144 On the evidence, the question of future expansion is no more than a mere possibility and can be put to one side as it is hypothetical. If the expansion occurs, any extinguishing effect of the expansion will need to be considered by reference to the NTA as at that date. 145 Both before, and after, a visit to the site it was not apparent that the vacant land was required for privacy or for recreation. Accordingly, the evidence does not establish that the criteria set out above have been satisfied. It follows that native title in respect of the vacant land has not been extinguished by the construction of the gaol. The Yawuru claimants conceded extinguishment in respect of the area upon which the police station was constructed. However, they maintained that native title has not been extinguished in respect of the remainder of the area, which is vacant land. 147 I undertook a site visit to the area and am satisfied that the vacant land does not fall within the criteria for extinguishment discussed above and, as a consequence, native title in respect of that land has not been extinguished by the construction of the police station. There was evidence that, prior to 1984, a 2.3 metre high and 561.24 metre long wire mesh security fence was erected around the perimeter of the area. A septic leach drain, a storage shed, accommodation units and ablutions were also constructed and the area was cleared. 149 I undertook a site visit of the area to assist in determining the items that were public works in the area and the extent of those works. I am satisfied that the only public works are the actual buildings constructed on the reserve. 150 However, a further issue arose in respect of the reserve. The State contended that the creation of the reserve and the exercise by the State of its right to use the reserve as a depot secured by its perimeter fencing extinguished native title. It was argued that the extinguishment reasoning in respect of the parts of the reserves used as a gaol, prison and cemetery applies to this reserve save that the whole of the reserve has been used and secured as a depot. In my view, the State's contention is correct. The State, by exercising its right to create and use the reserve as a depot (which included perimeter fencing to secure that use), has asserted rights in relation to the land which are inconsistent with the claimant community's native title rights and interests. In particular, the perimeter security fence is an assertion by the State, in pursuance of the reserved purpose, of its right to exclude others from the depot. It follows that native title has been extinguished in relation to the whole of the reserve. It was common ground that the vesting of this reserve in the Conservator of Forests on or about 27 May 1983 had the effect of extinguishing native title rights and interests in the area covered by the reserve. Accordingly, I have considered them together. It was bitumenised in 1998. It may have been bitumenised before that. 155 The Yawuru claimants did not seriously contest extinguishment in respect of the following parts of area 57 in the list above: (b), (c) (d), (f) and (g). The Shire accepted that (a) and (e) did not constitute public works. Therefore, the question remaining for determination is whether the areas adjacent to the public works identified in (b), (c), (d), (f) and (g) fall within s 251D of the NTA because they were necessary for or incidental to the establishment, construction or operation of the relevant public works. 156 There was historical evidence about the use of the areas adjacent to the public works. These were later supplanted by a "puffing Billy" to which were attached two open-sided carriages plus additional trucks for the movement of freight. The train was owned by the Government and the engine driver was Bob Murray, a genial Scotman. Again for a shilling you could ride the train from the jetty to Jap town or for 1/6d do the round trip. It was a chaotic situation in the Customs Office, gesticulating Pearlers claiming their crew and Customs Officers growing more irate by the minute, while endeavouring to process each man who at best spoke little English. In substance, I was satisfied that the Shire had made out its case in respect of the southern part of the area that is the subject of issue 21. It was accepted by the parties that that finding would carry with it the unallocated Crown land which is at the very southern portion of the area that is the subject of issue 22. I was satisfied on the evidence that the probability is that the whole of that southern area is land that falls within s 251D of the NTA as it was incidental to the operation of the jetty and railway facilities and therefore is a public work. In respect of the rest of the unallocated Crown land (the subject of issue 22), which was vacant land, I was not satisfied on the evidence before me that that is a public work or an area that should fall within section 251D. Accordingly, I found that that area is not a public work under s 251D. 158 My ex tempore findings and reasons left as an outstanding issue (in respect of issues 21 and 22), the northern part of the area that is the subject of issue 21. I undertook a site visit to this area to assist in determining whether it would fall within s 251D of the NTA . I am not satisfied that the sparse evidence about the area warrants a finding that the whole of the area falls within s 251D. Accordingly, native title is not extinguished in respect of the northern part of the area the subject of issue 21, save for that part of that area on which the old railway platform (about 40 m sq) and the associated railway tracks (about 1600 m sq) were constructed. The struggle commenced when the first application for that recognition was filed by the Yawuru claimants pursuant to the NTA on 2 February 1994. The matter proceeded in two parts. The first part related to the traditional law ground of the Yawuru community at Kunin. That proceeding involved numerous exhibits, many witnesses, voluminous evidence, a hearing over 18 days and 1488 pages of transcript. The contest in respect of the law ground required resolution of an intra-communal dispute, as well as a dispute between the Yawuru claimants and the State of Western Australia. The determination of native title, which granted exclusive possession of the law ground at Kunin to the Yawuru community, was made on 17 October 2001. Resolution of this part of the matter required two judgments. It was hoped that this resolution might enable a mediated outcome, rather than an adversarial contest, to settle the remaining part of the matter, which was the claim to the rest of the Yawuru community's traditional country. 160 The claim to the Yawuru community's traditional country was not able to be resolved by mediation prior to the hearing. The resolution of that claim, which involved a further intra-communal dispute as well as a dispute with the State, WAFIC and certain other parties again involved numerous exhibits, many witnesses, voluminous evidence, a further 53 days of hearing, further transcript of over 5710 pages and five further judgments. At the conclusion of the substantive hearings in October 2004, the parties requested that the matter again be referred to mediation on the basis that there were promising prospects of a mediated outcome. After the expiration of a further 12 months, during which mediation occurred, I was not satisfied that a mediated outcome was likely to be achieved and fixed a further hearing on the outstanding 160 extinguishment issues. 161 The earlier hearings involved evidence relating the Yawuru community's continuing connection to its traditional country and continuing acknowledgement and observance of traditional laws and customs since 1829. The final hearings, which were held in relation to extinguishment, involved evidence of over 100 years of tenure history in the Yawuru claim area. Although many of the extinguishment issues were resolved consensually during the course of the final hearing, the remaining issues were required to be resolved in these reasons for judgment. 162 The Yawuru claimants have been largely successful in their native title claim as the claim has succeeded in whole or in part over approximately 4900 sq kms of their traditional country in and around Broome. The Yawuru claimants have established a communal native title entitlement to exclusive possession of their traditional country. However, as a result of the criteria laid down under Australian law for extinguishment of native title, the native title of the Yawuru community was partially or totally extinguished in relation to significant parts of the Yawuru claim area. Also, as a native title right to exclusive possession is not recognised under Australian law in respect of the inter-tidal zone and, subject to some exceptions, areas that have been the subject of pastoral or mining leases, the native title rights and interests in respect of most of those areas are not exclusive. 163 I have outlined the history of the present matter for two reasons. The first is to explain why native title claims are not only complex but impose demands on the parties and the Court that are unprecedented in adversarial litigation. In the usual course, proceedings must be commenced within 3 to 6 years of a cause of action accruing. One of the reasons for that requirement is the increasing unreliability of evidence that is more than 3 to 6 years old. Yet native title cases require evidence to be given concerning the claimant community's connection with the claim area and the community's observance and acknowledgment of traditional laws and customs since sovereignty, which in Western Australia was 1829. While it is obviously unsatisfactory for any litigious dispute to take over ten years to be finally resolved, there are special circumstances attending the resolution of native title disputes that make the delay in achieving resolution understandable, even if not acceptable. 164 The second, and far more important, reason is that it would be remiss of me to depart from the present matter without observing that there may be a better, more efficient, more effective and fairer way of resolving native title disputes. In making that observation, I make no criticism whatsoever of any of the parties in the present matter as they were fully entitled to have their disputes resolved by the Court, rather than by mediation or any other alternative method of resolution. However, the fact remains that there are presently 608 applications in relation to native title awaiting resolution in the Court. Most of those applications have been before the Court a considerable time. Four of those applications are either part heard or are reserved for judgment and only one is fixed for a final hearing this year. It follows that 603 of the 608 applications presently before the Court have no final hearing date fixed in the reasonably foreseeable future. In these circumstances, it is fair to describe native title in Australia as being in a state of gridlock. 165 Matters are not failing to proceed to a final hearing because the Court is unable to provide hearing dates or because of the unavailability of the resources necessary for the Court to conduct final hearings. Rather, the reasons include ongoing mediation, lack of financial resources for claimant communities to pursue their claims, the failure to resolve intra-communal disputes and the many logistical difficulties confronting parties when a native title case is to be brought on for a final hearing. Another significant brake on the resolution of native title disputes is that the Court's power under s 87 of the NTA to give effect to an agreement to resolve a native title claim is conditioned upon an 'agreement [being] reached between [all] the parties'. Agreement by all parties is required irrespective of whether the interest of a particular party may, or may not, be affected by the terms of the agreement. Usually, the agreement of numerous parties is required and some parties, including publicly funded parties, may have little incentive to resolve the claim. 166 The purpose of the above observations is to draw the attention of at least the state parties and the indigenous parties to native title disputes to the desirability of seeing the resolution of native title claims as a means to an end, rather than an end in itself. Achieving native title to traditional country can lead to the enhancement of self respect, identity and pride for indigenous communities. However, native title can also be seen as a means of indigenous people participating in a more effective way in the economic, social and educational benefits that are available in contemporary Australia. Obtaining a final determination of native title, where that is achievable, can be a stepping stone to securing those outcomes but cannot, of itself, secure them. The above observations are intended to prompt parties to other native title disputes to increase their endeavours to reach compromises. Those endeavours will necessarily involve give and take on the part of all parties. Native title litigation, like other litigation, need not be conducted on an 'all or nothing' basis. 167 It is also important that indigenous communities appreciate the risk, which recent experience reveals is far from hypothetical, of failure in a native title claim. Where that occurs, it can have devastating consequences for the claimant community. It is equally important for state parties to recognise that their quest to ensure that indigenous communities participate in the economic, social and educational benefits available in contemporary Australia can be advanced when a native title claim is resolved or succeeds, but can be set back when a native title claim fails. If claimant communities and state parties can achieve a mediated outcome, they can ensure that a broad spectrum of mutual benefits can follow the resolution of native title claims. Those benefits can include indigenous land use agreements, traineeship programs and various forms of financial and other support for the native title holding body. 168 If settlements do not occur and native title claims have to be resolved in an adversarial proceeding, there remains the risk for the claimant community that native title may prove to be yet another of the prospects held out to indigenous communities where the realisable gain falls short of that originally expected as a result of the decision in Mabo v Queensland (No 2) [1992] HCA 23 ; (1992) 175 CLR 1. However, if compromises are able to be achieved, the cause of reconciliation between Australia's past and present will be greatly advanced and the economic, social and educational benefits available to all Australians may be better able to be accessed by members of claimant communities. 169 There remains the question of how the present native title gridlock may be resolved by mediation. Plainly, some changes to the present system of mediation and resolution are necessary. It might also greatly advance the reconciliation between Australia's past and present. I certify that the preceding one hundred and seventy (170) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. | extinguishment whether freehold grants made after 1 january 1994 in disregard of the future act provisions were invalid insofar as they affected native title whether statutory licences to occupy land gave a legally enforceable right to be granted freehold title and were therefore valid past acts whether reserves for public purposes were validly created whether the state had a general power to lease reserved land whether the creation and use of reserves for a gaol, police station, cemetery and main roads depot extinguished native title in respect of the whole of the areas covered by the respective reserves whether a native title right to live on land was extinguished by a pastoral or mining lease consideration of the principles that are to apply to claims that past extinguishment is to be disregarded under ss 47a and 47b whether associations incorporated under the aboriginal councils and associations act 1976 (cth) hold their land expressly for the benefit of aboriginal peoples whether visits to and use of land by claim group members as and when they choose to do so constitutes occupation for the purposes of ss 47a and 47b consideration of the principles that are to apply in determining whether works are public works that extinguish native title native title |
Together they hold 6.275% of the issued capital of each of those companies. The fourth and fifth defendants (Mr and Mrs Buskens) hold a fraction over 70% of the issued capital of each of those companies. The third defendant, a company controlled by a Mr Wood, holds the remaining shares in each of the first and second defendants. The third defendant has so far not taken an active role in the proceedings. It appears to be aligned with Mr and Mrs Buskens. 2 The plaintiffs began the current proceedings on 24 April 2006. 3 In an Amended Originating Process filed on 24 May 2006, pursuant to s 233 of the Corporations Act 2001 (Cth) ("the Act "), the plaintiffs sought compulsory purchase orders in respect of their shares. These orders were primarily directed at the other shareholders in the first and second defendants (viz the third defendant and Mr and Mrs Buskens). However, as an alternative, the plaintiffs sought orders that the first and second defendants purchase the shares which the plaintiffs held in each of them respectively with an appropriate reduction in the share capital of each of them. As a third option, they sought orders that the first and second defendants be wound up. Subject to the claim concerning the payment of legal expenses to which I will refer below, the relief currently being sought by the plaintiffs is reflected in their Amended Originating Process. 4 This litigation concerns the Como Marina. The second defendant operates that Marina. The first defendant owns the land and buildings from which the business of the Como Marina is conducted. 5 The proceedings have to date been hard fought. There have already been several contested interlocutory applications determined by the Court. The plaintiffs' claims have been fixed for final hearing. That hearing will commence on 20 April 2009. The final hearing is expected to occupy seven to nine hearing days. 6 The application now before the Court is an application by the plaintiffs for an interlocutory injunction whereby the first and second defendants are to be restrained from paying any of the legal expenses incurred by Mr and Mrs Buskens in connection with the proceedings. Additional and alternative interlocutory relief was also sought in respect of the payment of those legal expenses but those other claims were abandoned at the commencement of the hearing of the plaintiffs' application. This document was filed on 28 October 2008. This document is the fourth version of this pleading. 8 The current Statement of Claim addresses seventeen groups of events or transactions which, when viewed individually and when viewed together or in groups, are said to constitute oppression. As is not uncommon in proceedings of this sort, the facts and circumstances relevant to the plaintiffs' claims are numerous. The period of time covered by the relevant events is lengthy. The first relevant date appears to be January 1988. The oppression is alleged to be continuing right up to the present time. 9 Some of the conduct complained of involves representations made by or on behalf of Mr and Mrs Buskens. Some of that conduct concerns the way in which the affairs of the first and second defendants have been managed by Mr and Mrs Buskens. Some of that conduct involves the refusal by Mr and Mrs Buskens, when requested, to furnish to the plaintiffs documentation and information concerning the affairs of the first and second defendants. Some of that conduct concerns accounting entries and transactions effected by Mr and Mrs Buskens. 10 On a fair reading of the Statement of Claim, Mr and Mrs Buskens are said to be the perpetrators of, or implicated in, most of the conduct which is alleged by the plaintiffs to constitute oppression. 11 No specific allegation of wrongful conduct is made against the third defendant or against its principal, Mr Wood. However, the compulsory purchase orders sought by the plaintiffs are directed to all of the other shareholders in the first and second defendants, including the third defendant. 88F The above expenses of the fourth and fifth defendants are not expenses incurred for the benefit of, or in the interests of, the companies. 88G By reason of the facts and matters pleaded at paragraphs 88E and 88F above, the conduct of the affairs of the companies has been and continues to be contrary to the interests of the members of the companies as a whole and/or oppressive, unfairly prejudicial to and/or unfairly discriminatory against the plaintiffs. 15 Whilst I recognise that the grounds of complaint embodied in pars 88E to 88G are relied upon as acts of oppression which must be weighed in the balance in favour of granting appropriate final relief by way of a Court-ordered purchase of the plaintiffs' shares or the winding-up of the first and second defendants, the specific final relief which would flow from findings in favour of the plaintiffs in respect of the matters raised in pars 88E to 88G is properly characterised as a financial adjustment as between the two groups of shareholders. At most, it will involve the notional (or, in certain circumstances, the actual) repayment of the amounts paid out by the first and second defendants as legal expenses incurred by the fourth and fifth defendants or an adjustment in the compulsory purchase price. 16 The complaints embodied in pars 88E to 88G were added to the Statement of Claim on 28 October 2008 after I granted leave to the plaintiffs to add those paragraphs to that pleading. The best of those offers was for a sum of $250,000.00 plus costs. This was the offer made in July 2007. (b) Where the issue has been raised prior to the final determination and there is a significant risk of the company's resources being expended in the defence of the interests of the majority, there is no reason why the Court would not step in at the interlocutory stage and make appropriate orders. In support of this submission, Counsel for the plaintiffs relied upon certain observations made by Brereton J in Grace v Grace (2007) 25 ACLC 141 ; [2007] NSWSC 6 at [52] and at [61] (second dot point). 19 The first, second, fourth and fifth defendants have resisted the making of any interlocutory orders. In addition, the first, second, fourth and fifth defendants have made clear in their Defence that they are prepared to submit to a Court-ordered purchase of the plaintiffs' shares provided that the purchase price is reflective of the current market value of the plaintiffs' shares. This test is captured in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [8] to [21] (pp 216---220) (per Gleeson CJ); at [59] to [61] (pp 231---232) (per Gaudron J); and at [86] to [92] (pp 239---242); at [98] to [100] (pp 244---246); and at [105] (p 248) (per Gummow and Hayne JJ). Gleeson CJ (as he then was) also specifically cited with approval Spry, Principles of Equitable Remedies , 5 th ed (1997) pp 446---56. 21 It is sufficient for present purposes for me to cite and rely upon a passage from the judgment of Mason A-CJ in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58 ; (1986) 161 CLR 148 at 153. 22 The plaintiffs have chosen to found the present application upon one only of the grounds of oppression pleaded in their Statement of Claim. The ground relied upon is the ground pleaded in pars 88E to 88G of the Statement of Claim. 23 The plaintiffs have established that the legal expenses of the first, second, fourth and fifth defendants are all being paid by the second defendant and that those expenses will continue to be paid by the second defendant unless interlocutory relief along the lines of that which is sought by the plaintiffs is granted. 24 Although reference has been made in the plaintiffs' submissions to the other grounds of complaint pleaded in the Statement of Claim, the plaintiffs have chosen not to support any of those allegations by evidence insofar as the present application is concerned. In those circumstances, whilst my attention can and has been drawn to the nature of the allegations made in the balance of the Statement of Claim, the relevant principles must be applied to the one ground of complaint relied upon in the present application, namely, the complaint concerning the payment of the Buskens' legal expenses by the second defendant. 25 In the present case, Counsel for the first and second defendants and the Buskens has submitted that the plaintiffs put a case which implicates the first and second defendants in the events and transactions about which complaint is made and that the Buskens are not the sole or even the principal targets of the plaintiffs. Counsel then submitted that a large portion of the legal expenses being paid by the second defendant is legitimately the responsibility of the first and second defendants. 26 I do not agree. 27 Most of the allegations of wrongdoing are levelled at the Buskens. As the evidence stands at the moment, there is little to be said for the proposition that the first and second defendants are separately implicated in the complaints made by the plaintiffs so that the second defendant is justified in paying all of the legal costs. 28 It seems to me that there is a serious question to be tried. That question is whether, in the circumstances of this case, the conduct of the Buskens in causing the second defendant to pay all of the legal expenses of the first, second, fourth and fifth defendants constitutes oppression. 29 The authorities cited by the plaintiffs tend to support the case which they will attempt to make on a final basis in respect of this ground of complaint. Indeed, it may be thought that the authorities relied upon by the plaintiffs justify the plaintiffs in submitting that they have strong prospects of making good this ground of complaint at a final hearing. 30 However, that is not the end of the matter. None of the authorities to which I have been referred involved an application for interlocutory relief founded upon the same ground as the ground relied upon by the plaintiffs in the present application. Further, some of those authorities support the proposition that, because it may be difficult to determine on an interlocutory basis which costs may be regarded as the legitimate responsibility of the corporate defendants over which the oppression suit is being fought, courts are reluctant to make a determination in advance, ie, at an interlocutory stage ( Fexuto [1998] NSWSC 413 ; 28 ACSR 688 at 733; 20---28; Re A Company (No 001126 of 1992) [1994] 2 BCLC 146 at 155---156; Grace 25 ACLC 141 ; [2007] NSWSC 6 at [49] to [52] and at [59] to [61]). This latter point may not be a very strong point in favour of the first, second, fourth and fifth defendants in the present case but is one that nonetheless needs to be weighed in the balance. It seems to me that the Court is generally reluctant to interfere at the interlocutory stage with the payment of legal fees and expenses unless there is good reason to do so. 31 In my judgment, the plaintiffs must show that they will suffer irreparable injury for which damages (or compensation) will not be an adequate remedy unless an injunction is granted and that the balance of convenience favours the granting of an injunction. 32 I have come to the view that the plaintiffs have not been able to satisfy either of these additional requirements. 33 The plaintiffs have not tendered any evidence to the effect that, if the final relief which they seek in respect of their complaint concerning the expenditure of the second defendant's funds on legal expenses is made good, the necessary financial adjustments are not likely to be effective. Indeed, on the evidence which is available, it seems to me to be highly unlikely that an appropriate financial adjustment cannot be made and made effectively. The plaintiffs have not attempted to persuade me that the first, second, third, fourth and fifth defendants will be unable to pay any amount likely to be ordered by the Court as the purchase price for the plaintiffs' shares. 34 Furthermore, this is not a case where the injunction is sought in order to preserve property which is the subject of a claim nor is it a case of diversion of assets or funds which cannot be the subject of adequate compensation in due course. In reality, all that is put on the balance of convenience is that there is not a " level playing field " in the sense to which I have made reference above. 35 That submission may be reduced to this: It is not fair that the 70% shareholders can cause one of the companies over which the suit is brought to pay their legal fees and expenses if the plaintiffs (6.275% shareholders) cannot access the same source of funds. This may, in the end, be a sound submission at the final hearing but does not seem to me to bear upon the balance of convenience as far as the present application is concerned. The present state of affairs has been in place for at least two and a half years. 36 In those circumstances, I am not prepared to grant the order sought. The application will be dismissed with costs. Further, the proceedings are going to require the parties to expend significant amounts of money on legal fees if they are prosecuted to finality in the Court. 38 In my view, it is appropriate that attempts be made to assist the parties to resolve their differences as soon as possible and before further significant sums are spent on legal costs. The parties are now well aware of their respective cases. 39 I propose to order the parties to attend and participate in Court Annexed Mediation with a view to deploying one of the other facilities offered by the Court for resolving disputes. Accordingly, there will be an order pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth) (as amended) and O 72 of the Federal Court Rules that the matter be referred to mediation. I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Foster. | payment of legal fees and expenses of the majority shareholders interlocutory injunction refused oppression suit |
This morning, I granted leave to the first, second and third respondents to file in Court a notice of motion seeking leave to amend the defence in accordance with a draft amended defence, being annexure "Y" to an affidavit of Richard Andrew Oldfield sworn 4 September 2009, which affidavit was read in support of the application to amend. The amended defence proposes amendments which fall in two classes. The first class is extremely limited. Indeed, no party addressed me on this class. The amendment (para 5A) is simply to include in answer to the applicant's claim a contention that the representations alleged by the applicant and said to found its right to damages were representations as to a future matter and that there were reasonable grounds for making those representations. That amendment plainly falls within the existing scope of the proceedings. However, the proposed amended defence also includes, in new paras 21 to 168, a detailed set of allegations against various parties, in effect, alleging fraud and misleading and deceptive conduct in relation to the obtaining of loans for the purchase of the properties which are the subject of this proceeding. In short, the defendant says that the various persons nominated in those paragraphs are concurrent wrongdoers, in the sense that the applicant would not have issued lenders mortgage insurance but for the false and fraudulent misrepresentations made as to the identity of the borrower, the borrower's employment, and the borrower's income (or, at the least, the borrower's employment and borrower's income) in respect of all of the properties the subject of the application, perhaps bar one involving a purchase by a Mr Siegel. It follows from these allegations that the respondents say that the proceeding gives rise to apportionable claims within the meaning of the relevant provisions of the Trade Practices Act 1974 (Cth), in particular, ss 87CA to 87CH , and the Civil Liability Act 2002 (NSW), in particular ss 34 and 35 . The consequence, from the respondents' point of view, is that they cannot be liable for more than their proportionate share of any damages, should they be found to be liable at all. All of the parties recognise that these new claims are substantial and amount to a large amendment to the scope of the existing pleadings involving, as they do, allegations of fraud and misleading and deceptive conduct against a range of people who previously had no involvement whatsoever in the proceeding. The affidavit of Mr Oldfield establishes that the reason for the application for the amendment at this stage is that the solicitors for the respondents issued a subpoena on 14 May 2009 to FirstMac Limited. The purpose of issuing this subpoena was to obtain documents relevant to the question of damages or quantum of damages. After a protracted dispute between FirstMac, the lender, the mortgage insurer Genworth Financial Mortgage Insurance Pty Ltd (the applicant in these proceedings), and the respondents, the validity of the subpoena was ultimately upheld, and documents produced on 23 July 2009. Apparently, the documents were produced in a not particularly helpful way. Be that as it may, the solicitors for the respondents analysed the documents. From that analysis, to their surprise, they uncovered information which suggested to them the existence of potentially fraudulent as well as misleading and deceptive conduct by the borrowers, which, the respondents say, must have affected the decision of the applicant to grant mortgage insurance. As a consequence of their analysis of those documents, the solicitors for the respondents took various steps, including obtaining statements from two people who were said to be in one way or another victims of the alleged fraud. These statements are annexed to the affidavit of Mr Oldfield in support of the application to amend. It suffices to say for present purposes that the applicant, through its counsel Mr Newton, accepts that on the evidence that I have before me there is a cogent claim as set out in the amended defence that there may well be concurrent wrongdoers as claimed in that document. I am satisfied that this must be the case, given the evidence to which I have been taken in support of the application to amend, even though that evidence is incomplete at this stage. The respondents say that they should be permitted to amend the defence. First, although the subpoena was only issued on 14 May 2009, and thus more than a year after the proceedings were commenced (6 May 2008), the subpoena was only issued for the purpose of obtaining material relevant to the question of damages. The information that became available through a close analysis of the documents produced under the subpoena in support of the allegations of fraud and misleading and deceptive conduct came as a surprise to the respondents. They were not looking for that information. They had not made any tactical decision to delay the issuing of the subpoena. They simply obtained information which they had not expected, and which provided or provides a cogent basis for the amendments, insofar as they claim the existence of concurrent wrongdoers who, if any liability is found, should be proportionately responsible for any damages. Second, the respondents say that between 14 May and 23 July 2009 there was delay in answering the subpoena, for which the respondents are not responsible. In short, the lender, and subsequently the applicant, refused to produce documents under the subpoena and ultimately filed a notice of motion seeking to set the subpoena aside altogether. That motion was heard on 15 July 2009. Registrar Hedge ordered that all the documents sought in the schedule to the subpoena be produced by 24 July 2009. According to the respondents, they have therefore acted very promptly since receiving the documents on 23 July 2009. I accept that submission, because it is clear from the affidavit of Mr Oldfield that: - (i) it took some time to analyse the documents, and (ii) the respondents, during the time since production, have taken significant steps to obtain evidence which prima facie strongly supports the proposed amendments. Third, the respondents say that there is no other way except through this amended defence that the respondents can put in issue the question of potential proportionate liability. They have no alternative in order to claim proportionate liability other than to plead the amended defence which they have done on the basis of the evidence currently in existence. They say, accordingly, that the amendments, while significant in extent, are significant to the ultimate issue of their potential liability. Accordingly, the importance of the amendment in this case cannot be overlooked. Inevitably my attention has been drawn to the recent decision of the High Court in Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 ( Aon ), particularly at [5], [35] and [96]-[103]. The respondents have noted that there are many differences between the facts in Aon and the present case. First, this is an application to amend a defence by a defendant, not, as in Aon , an application to amend by an applicant which already had the advantage of consent orders reached through a process of mediation. Second, the Federal Court Rules , specifically Order 13 r 2, are different from the rules of the ACT Supreme Court ( Court Procedure Rules 2006 (ACT)), particularly the inclusion therein of the requirement in r 21(1) that in civil proceedings there be a just resolution of the real issues with minimum delay and expense. Third, in Aon , it seems that there was no adequate explanation for the delay in the application to amend, and indeed the delay may have been a tactical decision. The same certainly could not be said in the present case. Finally, in Aon , the majority of the High Court noted at [102] that even where r 21 of the Court Procedure Rules, or a rule to that effect, applied, not every application for an amendment should be refused because it will involve the waste of some cost, and some degree of delay. Factors such as the nature and importance of the amendment to the party applying cannot be overlooked. Much may depend upon the point the litigation has reached relative to a trial when the application to amend is made. There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates. In this case, there has been an explanation for the delay. The only issue of concern, it seems to me, in terms of delay, is that it was not until 14 May 2009 that the respondents issued the subpoena when, as Mr Newton, counsel for the applicant properly said, the issue of damages was always alive and accordingly, the subpoena could have been issued at any time. That having been said, I need to weigh that issue of delay against the nature and importance of the amendment. The amendment is of fundamental importance to the respondents and their potential liability. If the amendments are established, and ultimately succeed, then the respondents' liability will be subject to the apportionment provisions of the Trade Practice Act and the Civil Liability Act . It is true that the granting of the amendment, as I reluctantly accept, will lead to the vacation of the hearing dates. Inevitably, therefore, there will be delay in the resolution of these proceedings. Given the nature of the amendments, and the need for further evidence to support them, I accept that the delay will be measured in the order of months, and not weeks. I also accept that the interests of the applicant and the cross-defendant will not wholly be addressed by orders for costs. They will suffer prejudice which, as the High Court recognised in Aon , is not wholly curable by a costs order. The simple fact of the delay in the resolution of the proceedings will cause them prejudice. That having been said, I am persuaded that the amendment should be allowed. I am persuaded to this conclusion because of the nature and importance of the amendment to the respondents, which I have already explained. Also, while there was delay in the issue of the subpoena, there is an explanation for that delay which, while not wholly satisfactory, is credible. It is clear that the respondents did not expect to obtain documents capable of making out a case of concurrent wrongdoers when they issued the subpoena. Since obtaining the documents, they have acted with due expedition. The documents give rise to an issue which the respondents did not, and could not have, reasonably expected at the time they issued the subpoena. The important of the amendments is real and in these circumstances it seems to me that it would be unjust to deny the respondents the opportunity to run this case, even though the consequence is the vacation of the current hearing dates. I accept the submissions Mr Jones, counsel for the cross-defendant, has made, that I cannot immediately seek to determine the issue of his client's responsibility under the professional indemnity insurance contract, because I may then be involved in a hypothetical factual determination. The consequence is that other than case management and the resolution of the costs issue, nothing useful can happen this week. That is unfortunate, but it seems to me to be an inevitable consequence of what has occurred today. Accordingly, I grant leave to the respondents to amend their defence in accordance with the draft amended defence which is annexure "Y" to the affidavit of Mr Oldfield. | application for leave to amend defence where application made on the first day of a six day hearing where the granting of the amendment would result in delay of the proceedings whether consequential delay outweighed by the importance of the amendment whether leave should be granted to amend defence . practice and procedure |
The proceedings were brought against Mr Gary Hasluck and his mother, Elva. The proceedings arose out of Mrs Hasluck's importation and Mr Hasluck's sale, over the internet, of pirated DVD films bearing the trade marks of the studios. The action was not defended and injunctions were awarded by consent on 8 November 2005 by Lee J. An order for costs in favour of the applicants, was also made at that time. The question of the assessment of damages for infringement of the trade marks was stood over. Following interlocutory directions and an extension of time, it was heard on 4 September 2006 and adjourned to 24 October 2006 to give the applicants the opportunity to file additional affidavit evidence. Further evidence was filed following the completion of the hearing. The evidence relating to the DVDs sold to particular film studios and their trade marks came in fits and starts. The evidence as to damage was sparse despite the fact that some of it, particularly relating to royalties and/or licence fees, could have been adduced by the studios. Loss of sales, particularly where the trade mark owner would ordinarily charge a licence or royalty fee for the sale of a product bearing its trade mark. 2. Devaluation of the trade mark product. 3. Loss of reputation of the trade mark proprietor. Those inadequacies, particularly where they result from the unavailability of evidence within the knowledge of the applicant, are not to be supplied by speculation or guess work on the part of the Court. 3 In this case I propose to award damages under the first head at a nominal level of $500 for each applicant and under the second head at $1,000 for each applicant. I am not satisfied that there is any basis for a finding that the applicants have suffered any loss of reputation as a result of the infringing conduct. For the reasons set out below, exemplary damages are not available under the Act. 5 The applicants, Paramount Pictures Corporation (Paramount), Twentieth Century Fox Film Corporation (Fox), Disney Enterprises, Inc (Disney), Universal City Studios, LLLP (Universal) and Columbia Pictures Industries, Inc (Columbia) are the registered proprietors of a number of trade marks in Australia. PARAMOUNT and mountain and star device in incomplete circle in class 9. Fox FOX No 638739 in class 9. 20 th CENTURY FOX HOME ENTERTAINMENT and two searchlights atop building, incomplete device in class 9. 20 th CENTURY FOX and two searchlights atop building incomplete device in class 9 No 900630. Disney DISNEY No 198329 in class 9. WALT DISNEY No 526923 in class 9. DISNEY No 923758 in class 9. Universal UNIVERSAL No 85482 in class 9. UNIVERSAL No 262956 in class 9. UNIVERSAL and globe with rays incomplete device No 798763 in class 9. Columbia COLUMBIA PICTURES No 443297 in class 9. Statute of Liberty in front of cloud all in rectangle device No 600693 in class 9. 6 Each of the classes for which the trade marks are registered cover motion picture films, video cassettes, DVDs or related technology. It is not necessary for present purposes to set these out in detail. 7 On 7 October 2005 the applicants commenced proceedings against Mrs Elva Hasluck and her son, Gary. They alleged that the Haslucks had infringed their trade marks by importing and selling DVDs bearing them. They sought declarations and injunctions and orders for the delivery up and destruction of infringing articles. They also claimed damages and other relief. 8 The action was not defended. On 8 November 2005 Lee J made orders by consent granting injunctions against the Haslucks to restrain them from further infringing conduct, orders for the delivery up of items bearing the infringing marks and an order for costs. The Second Respondent acknowledges to the Court that his conduct as set out in the Statement of Claim filed in this proceeding on 31 October 2005 is a breach of the Applicants' trade mark rights under the Trade Marks Act 1995 . 11. The proceeding be otherwise dismissed except as to damages payable by the Second Respondent which is to be determined by the Court. The Applicants file an application for an assessment of damages and affidavits in support by 22 November 2005. The Second Respondent file affidavits in response by 6 December 2005. The matter be adjourned to 10.15am on 14 December 2005 at which point one item to be considered is whether there should be a direction under O 38. The time for filing an application for assessment of damages was extended to 15 December 2005. The time for Mr Hasluck to file affidavits in response was extended to 27 January 2006. A motion for the matter to be listed for assessment of damages before a judge was filed on 1 May 2006. 10 On 7 June 2006 the assessment of damages was set down for hearing on 26 July 2006 and directions given for the filing of affidavits. Service of the orders on Mr Hasluck together with an explanatory letter was also directed. Subsequently, the solicitors for the applicants wrote to the Court seeking a relisting of the assessment hearing date on the basis that they had been instructed to file additional affidavit material. The application was relisted to 4 September 2006. Mrs Hasluck wrote to the Court on 11 August 2006 by way of a plea in mitigation for her son. 11 The assessment hearing commenced on 4 September 2006. There was no appearance for Mr Hasluck. He had been contacted on 4 August 2006 by telephone by a solicitor for the applicants and he informed the solicitor he would not be attending the hearing. He was sent a letter on the same day by the solicitors together with the various affidavits relied upon by the applicants. 12 The evidence tendered on 4 September 2006 appeared inadequate for any assessment and the statement of claim filed was not in a complete form as it did not attach annexures referred to in it comprising certified copies of entries in the Register of Trade Marks. A further hearing ensued on 24 October 2006 and an order was made that any further affidavit evidence relevant to the identification of particular trade marks said to have been infringed be filed and served with supplementary submissions by 27 October 2006. Judgment was reserved to today. 2 DVDs bearing Paramount trade marks. 2. 6 DVDs bearing Fox trade marks. 3. 5 DVDs bearing Disney trade marks. 4. 6 DVDs bearing Columbia trade marks. This conduct, without the licence or authority of the applicants, constituted an infringement of their trade marks. 14 Mr Hasluck was said to have manufactured, imported for sale, advertised for sale, supplied and/or sold DVD films under or by reference to marks substantially identical with and/or deceptively similar to the applicants' trade marks. The particulars that followed included a reference to 11 DVDs bearing the Warner Bros trade mark. That reference is irrelevant as Warner Bros is not an applicant in the proceedings. 19 DVDs bearing Paramount trade marks. 2. 9 DVDs bearing Disney trade marks. 3. 22 DVDs bearing Universal trade marks. 4. 17 DVDs bearing Columbia trade marks. Mr Hasluck is also said to have sold pirated DVDs on the internet auction site, eBay, in or about April 2005 under the user ID "3gazman3". By reason of this conduct he was said to have infringed the applicants' trade marks. 15 The applicants say that they have suffered loss and damage by Mr Hasluck's infringing conduct. They also say that the conduct was done "flagrantly", knowing that they held the registered trade marks and that the conduct would constitute an infringement of those trade marks. Alternatively, it was done in reckless disregard of the possibility of infringement. Mr Hasluck is also said to have intended that a substantial benefit would accrue to him by reason of the infringement. For these reasons exemplary damages were claimed. 16 The acknowledgment set out in par 10 of the consent order made on 8 November 2005 stands as an admission by Mr Hasluck of the allegations made against him in relation to the infringement of trade marks by reference to the various DVDs mentioned in par 16 of the amended statement of claim. I do not consider, however, that it stands as an admission of the characterisations of his conduct offered in support of the claim for exemplary damages. DVDs were delivered in a box to the office of Minter Ellison in Perth on 22 December 2005. They were sent to the office of Minter Ellison in Sydney and from there handed over for examination to Michael Kerin, the Director of Operations of the Australian Federation against Copyright, Theft Limited (AFACT). There were 62 DVDs delivered up. 18 Mr Kerin deposed, in an affidavit sworn on 24 July 2006, that AFACT is a corporation formed in Australia and established by the Motion Picture Association of America Inc (MPA). It was formed to protect the interests of the film industry in Australia, particularly in relation to the protection of trade mark and copyright rights of the member film studios. The organisations whose interests are represented within Australia by AFACT include the applicants. Mr Kerin's duties as Director of Operations cover the gathering and collating of evidence relating to infringement of copyright and trade marks concerning films owned and/or distributed by members of the MPA and the various Australian distributors represented by AFACT. His duties extend to the examination and review of DVDs to determine whether they are authorised copies or infringements. 19 Mr Kerin deposed that since joining AFACT he has undergone specialised training in relation to the process of film reproduction and print presentation of the VCDs and DVDs containing MPA members' products. He has visited duplication facilities in Australia and observed the full process of film reproduction and print presentation. He stated that "genuine product" is stamped at the time of production with certain code numbers identifying the factory as well as the specific machine used in its production. He has also examined large quantities of DVDs during his training and in the course of his work at AFACT. He claims an ability to make "judgmental statements" in relation to their "integrity". Precisely what that means was not explained. He also claims to be "adept at recognising unauthorised copies of optical discs (DVDs) and other related material". 20 Mr Kerin examined the 62 DVDs contained in the box which was delivered to Minter Ellison in Perth and ultimately to him in Sydney. He observed that many of their covers contained errors including spelling mistakes. Their packaging and the DVDs themselves bore inferior quality printing, not consistent with legitimately produced products. None of the DVDs he examined featured what he called an "IFPI stamped code". He said that all DVDs legitimately produced by the applicants bear such a code on the disc. He concluded that all of the DVDs contained in the box were pirate copies. 21 Mr Kerin referred also to the practice of regional coding of DVDs. In 1996/97 major film producers announced that their DVDs would be released with specific encoding relating to various regions in the world. The code consists of individual numbers from 1 to 8 included as part of the film image and the packaging and labelling. Each number refers to a region of the world indicating that the film is authorised for release in that region. He set out a list of the DVD regions. Region 4 comprises Australia, New Zealand, the Pacific Islands, Central America, Mexico, South America and the Caribbean. The regional code zone on the film image is not visible when the DVD is played. It can only be viewed using particular computer software. 22 Mr Kerin conducted a forensic analysis of the 62 DVDs which revealed that 27 of the titles refused to play using the software known as "Power DVD" which is normally used to view the code. The same titles were also unable to be read by Nero Info Tool Version 4.03. This failure to operate was an indicator of inferior manufacture which is a feature of infringing DVD copies. A total of 35 of the DVDs were able to be played using Power DVD software and were able to be forensically examined with the Nero Info Tool Version 4.03. In the result, 32 bore the region code "ALL". This indicated that those DVDs were infringing copies as none of the applicants' product is legitimately manufactured with a region coding of "ALL" . Printouts of the results of the examination for the 32 DVDs were exhibited to Mr Kerin's affidavit. The remaining 3 DVDs did not reveal any region coding as a result of forensic analysis. He came to the view overall that all DVDs contained in the box were pirate copies. 23 Mr Kerin gave evidence of what he called the "average sell-through" price in Australia for legitimately manufactured DVDs including those produced by the applicants. This referred to the wholesale price to retail outlets. The average sell-through price for legitimately produced DVDs in the Australian market for the 2005 period was AU$15.57. The average wholesale price to rental outlets was AU$21.18. He relied upon reports which he compiled in his role as Director of Operations. The data is sourced from the Australian Visual Software Distributors Association. It may be noted in relation to this evidence that the Court is not concerned in this case with the infringement of copyright. The proceedings relate to the infringement of the trade marks used in relation to the DVDs. 24 Mr Kerin's affidavit of 24 July 2006 listed the titles of the DVDs which he examined but did not identify any trade marks on them. Nor did the list exhibited to the affidavits of the solicitors for the applicants. 25 By his acknowledgment, in par 10 of the orders made on 8 November 2005, of the conduct alleged in the statement of claim, Mr Hasluck acknowledged that he had sold pirate DVDs on the internet auction site eBay around April 2005 under the user ID "3gazman3". The applicants obtained and exhibited to the affidavit of Graeme Slattery, one of their solicitors, a printout from eBay of a complete copy of the member profile for "3gazman3". The printout covered a period from 6 March 2005 to 5 May 2005 and set out a list of feedback responses from persons who had made purchases from Mr Hasluck. There were 206 positive responses and 24 negative responses. These ranged from "speedy delivery, excellent to deal with, AAA+++" to "BURNT DVD NOT HAPPY WAITED FOR WEEKS FOR THAT CRAP NEVER AGAIN". The printout, interesting as it was, did not identify the titles sold or the trade marks under which they were sold. 26 In a further affidavit sworn on 5 October 2006 Mr Kerin referred to inquiries made on behalf of the applicants following the 4 September hearing where it had appeared that there was no evidence identifying the titles of the DVDs sold by Mr Hasluck over eBay or the particular trade marks which they bore. Solicitors for the operators of eBay informed the applicants' solicitors that it would be necessary to issue a subpoena in order to obtain any documents from eBay. On 28 September 2006 Mr Kerin sent an email to Mr Napper, an employee of eBay asking whether he could obtain a sales history for the user name "3gazman3". 27 A sales history was provided on 29 September 2006. Against the name "3gazman3" it covered transactions from 6 March 2005 to 12 April 2005. In some cases it referred only to the sale of "printable discs". No title was associated with those transactions. Other transactions referred to film titles. A price in US dollars appeared against each transaction. None of the titles indicated studio names from which an inference might be drawn as to associated trade marks. Mr Kerin then marked each of the titles correlating with a DVD title produced by an applicant studio. That mark did not indicate which applicant produced which title. Mr Kerin also asterisked each title which correlated with a title of one of the 62 DVDs delivered up pursuant to the orders of Lee J on 8 November 2005. 28 Mr Kerin's affidavit of 5 October 2006 was the subject of a motion for leave to file it in the assessment proceedings. The affidavit was read in evidence. It did not really take the matter beyond the admission effectively made by Mr Hasluck that he had sold DVDs bearing the applicants' trade marks over the eBay auction site under the user name "3gazman3". 29 Mr Kerin swore a further affidavit on 26 October 2006. He there set out an amended schedule identifying the DVDs sold by Mr Hasluck over eBay. During that period Mr Hasluck sold a total of 608 DVDs on eBay. 30 Of the DVD titles delivered up, two belonged to Paramount; 26 to Fox; none to Disney; 14 to Universal and 6 to Columbia. Mr Hasluck has, by his acknowledgment recorded in the order of 8 November 2005, admitted selling DVDs under or by reference to trade marks deceptively similar to the applicants' registered trade marks through the eBay. On that basis I am prepared to infer that the applicants' titles sold through eBay would be likely to have borne their trade marks. He cannot have both. They are alternative remedies. Damages are compensatory only. The burden of proof lies on the plaintiff but damages are to be assessed liberally. 3. Where a patentee has licensed his patent, the damages are the lost royalty. 4. It is irrelevant that the defendant could have competed lawfully. 5. Accepting the compensatory character of damages awarded under s 126 and the like formulation in s 122 of the Patents Act 1990 (Cth), I accept that the principles enunciated by Jacob J are relevant to the assessment of compensatory damages for trade mark infringement under the Australian Act. 35 In this case the applicants also seek exemplary damages. There is, however, no provision in the Trade Marks Act for exemplary damages to be awarded. Section 126 of the Act may be contrasted with s 115 of the Copyright Act 1968 (Cth). That makes provision for the recovery of damages under s 115(2) in terms similar to those used in s 126. Section 115 also makes provision for "additional damages" in s 115(4). There is no equivalent to that provision in the Trade Marks Act . The head of additional damages for infringement of copyright requires consideration of "flagrancy of the infringement" and "benefit shown to have accrued to the defendant" as well as other factors relevant to both aggravated and exemplary damages as understood at common law. No authority was cited for the proposition that exemplary damages are available for trade mark infringement. Nevertheless it was submitted that, having regard to the purpose of the Act, the absence of any express limitation in the language used in s 126 and the availability of exemplary damages in passing off actions, exemplary damages should be available under that provision. 36 A review of the authorities relating to the availability and principles underlying the award of exemplary damages in tort was set out in Musca v Astle Corporation Pty Ltd (1988) 80 ALR 251. Although not necessarily to be regarded as an anomalous or illogical remedy, it is nevertheless an unusual one. In my opinion where a statute creates a remedy by way of damages for breach of a proprietary right, then absent specific provision or necessary implication, it should not be read as extending that remedy to exemplary damages. In this case a statutory formulation is used which has been construed as compensatory. It contrasts notably with the express provision in the Copyright Act for "additional damages". Exemplary damages are not available under s 126. Loss of sales through eBay. 2. Loss through devaluation of their product. 3. Loss through damage to their reputations. 38 Under the heading of 'Loss of sales" the applicants referred to the numbers of DVD titles relevant to each applicant sold by Mr Hasluck on eBay. They also referred to the number of DVDs delivered up by him relevant to each applicant. As a matter of inference, having regard to the marks on the delivered up DVDs and Mr Hasluck's acknowledgment of his infringing conduct in relation to sales over eBay, each of the DVDs sold through the eBay bearing the title belonging to a particular applicant would have borne the trade mark of that applicant. 39 The applicants acknowledged in their submissions that they had not been able to produce evidence of the loss suffered by the sales on eBay or by the importation as they received their income by way of licences and royalties. Nevertheless it was submitted that the Court could infer that each applicant with rights to a DVD title sold through eBay did suffer loss of licence fees and royalties as a result of each infringement. 40 The Court was not assisted by any evidence as to the licence fees or royalties charged by the applicants in respect of the particular titles at the time of their sale or at all. The reference to "sell through" price in Mr Kerin's evidence did not provide any basis for the estimation of either a licence fee or a royalty. In this connection the evidence necessary to quantify the loss was in the hands of the applicants. Its absence may be contrasted with the extensive evidence of a notional royalty offered by the applicant in Nominet UK v Diverse Internet Pty Ltd (No 2) (2005) 68 IPR 131. In that case damages were assessed, in relation to the infringing use of copyright material "mined" from a domain name register, by the calculation of a "reasonable royalty", that sum which would be agreed between a willing licensor and a willing licensee in a hypothetical arms length negotiation. The approach has been held to offer guidance in other cases of copyright infringement: LED Builders Pty Ltd v Eagle Homes Pty Ltd (1999) 44 IPR 24. Nominet was a more difficult case than the present because the copyright owner was a not-for-profit company which was not engaged in the business of licensing its copyright. 41 The applicants made reference in their submissions to Adidas-Salomon AT v Turner [2003] 58 IPR 67. Goldberg J commented upon the limited evidence available to him upon which to base the assessment of damages for the infringement of trade mark rights. The difficulty arose from the limited information which could be extracted from the respondent as to the sale of infringing items. If the court finds damage has occurred it must do its best to quantify the loss even if a degree of speculation and guess work is involved. Furthermore, if actual damage is suffered, the award must be for more than nominal damages. We should add that we can see no reason why this principle should not apply in cases under the Trade Practices Act as well as in cases at common law. We emphasize, however, that the principle applies only when the court finds that loss or damage has occurred. It is not enough for a plaintiff merely to show wrongful conduct by the defendant. 42 I do not consider that it is a consequence of the principle enunciated in Adidas or Enzed that, where a basis for quantification of loss is entirely within the knowledge of the applicant and no evidence is adduced as to the quantum, the Court should make its own uninformed assessment of a royalty or licence fee that the applicant might have foregone by reason of loss of sales. Speculation and even guesswork may have a role to play where the relevant evidence is inaccessible to the applicant. That is particularly so where the inadequacy of the evidence is caused by a recalcitrant or uncooperative respondent or one who has kept no adequate records of dealings. In so saying, of course, it must be recognised that an applicant may apply to the Court for an order for the examination of the respondent in aid of the assessment of damages. The same principle applies to trade marks which are licensed. 45 Absent evidence from the applicants, I am not prepared to speculate upon, or guess at, the royalty or licence fees which they might have charged in respect of genuine DVDs sold in lieu of those sold by Mr Hasluck. I will therefore allow only nominal damages for loss of sales. I fix the sum of nominal damages at $500 for each of the applicants. The claimant is not entitled to damages for sales to persons who have not been misled, since he has suffered no loss in respect of them, and, arguably, no actionable wrong has been committed in respect of sales to them. If he were to recover damages in relation to such persons, he would be over-compensated. This principle distinguishes passing-off and trade mark infringement from other intellectual property proceedings such as those for patent infringement, where all the defendant's activities of a given kind infringe. For obvious reasons that is an assumption which would be quite unwarranted. The unwarrantable nature of such an assumption is further strengthened, of course, where there are differences in price, differences in quality and so forth, because it is not legitimate to assume that a person who bought the Defendants' article at a lower price, if it was sold at a lower price, would necessarily have bought the Plaintiff's article at a higher price, even if he was deceived into thinking that the Defendants' article was the Plaintiff's. That is a consideration which must be borne in mind. Mr Hasluck was selling DVDs through eBay for between $12 and $20. The recommended retail price was higher. However there was no evidence of what it was. The average wholesale price per unit of DVDs sold to retail (sell-through) stores in 2005 was $15.57 and to rental outlets $21.18. On this basis it may be inferred that Mr Hasluck was selling his DVDs in the range of the wholesale price available to retail stores. 48 There is a question about precisely what is meant by the concept of 'devaluation of product". In Sony Computer Entertainment , Emmett J was concerned with the sale of counterfeit Sony Play Station games. The respondent offered games for sale by advertisements in the Trading Post newspaper. Sales took place by people calling at a private home. In the circumstances I do not consider that purchasers of the counterfeit games would reasonably have believed that the games were genuine Sony products. I would draw the inference that, generally, a buyer would be satisfied that, in order to obtain a genuine Sony game, one would need to buy it through ordinary channels. Ten per cent of the sale value is a very substantial proportion. It is very difficult to place any figure on the loss that would have been suffered by Sony by way of additional devaluation of its products by reason of the conduct of the respondent. However it would not be nominal. He considered it appropriate to order the respondent to pay damages which he assessed at $3,000. 49 In Adidas Salomon , Goldberg J also considered the devaluation of trade marked products. His Honour found that the respondent had offered infringing items for sale over the internet. Their availability for sale was made apparent to the public and such persons as would go his website. As in the case of the Sony Play Stations, he found it unlikely that the purchasers of the items or persons looking at the website would reasonably have believed that the items were genuine Adidas items. I am satisfied that the fact that infringing items were available in the circumstances in which the respondent was offering them for sale tended to diminish the reputation of the genuine product sold by Adidas and tended to devalue the products that Adidas offers for sale. He was satisfied that such damages would not be nominal having regard to the extensive audience available to a website such as the respondent's website. 50 The basis upon which the Court is asked to assess devaluation of the applicants' product is not clear. If the assessment is to be principled, it must be based upon some conclusions about the workings of the market place in which the applicants operate. They contend in their submissions that their income is derived from licences and royalties. The Court has not been told whether those royalties are a percentage of the retail or wholesale price of the DVDs bearing their trade marks. 51 It is difficult to see a rational basis upon which the applicants' products are devalued except to the extent that the availability of the cheap pirate DVDs has a potential competitive impact upon the price at which the applicants' DVDs can be sold and therefore the royalties that they can charge. Accepting that there is some devaluation of that kind, I consider it almost incapable of estimation not simply as a matter of difficulty, but as a matter of principle. By that I mean that, absent evidence of some competitive response by the applicants, the error in assessing changes in the value of a product by reference to infringement may be greater than the value shift itself. A case in which there was evidence of a lowering of the trade mark owner's prices which may have been partially affected by the infringer's conduct was Alexander & Co v Henry & Co [1895] 12 RPC 360. There is, of course, no such evidence here. Nevertheless, in deference to previous authority and the injunction to take a "liberal approach" to the assessment of compensatory damages in this area, I would allow a figure of $1,000 to each applicant for product devaluation. I have not differentiated between applicants on the basis of the volume of sales of products over the eBay. It seems to me that if there is any principle underlying the devaluation of product it is predominantly the availability of the cheaper product, rather than the particular number that might have been sold in a given period. Having said that, I accept that the volume of sales was not trivial for the period between March and May 2005. 52 The applicants also claim compensation for damage to their reputation. It is submitted on their behalf that the Court should be willing to draw the inference, as did Goldberg J in Adidas Salomon , that the infringing items were offered for sale in circumstances which tended to diminish the reputation of the genuine products. The applicants, it was said, have a reputation for producing good quality DVDs. Those sold by Mr Hasluck were of poor quality. 53 The applicants submitted that the feedback on Mr Hasluck's eBay sales record, revealed that some people did not know they were buying infringing copies and complained. It was submitted that it is not until a person plays the DVD and sees its poor quality that it becomes apparent that it is an infringing copy. On that basis it was argued that Mr Hasluck's conduct had damaged each applicant's reputation. Those applicants who had greater numbers of DVD titles sold were likely to have suffered greater damage to reputation. 54 In the eBay member profile for the period from 6 March 2005 to 5 May 2005 the positive feedback score was 89.6%. 206 members left a positive comment, 24 left a negative comment. It is evident that there were some members who, thinking they were buying the genuine item, discovered it was illegal and complained about that fact. It is difficult to see how that kind of discovery would reflect back upon the reputation of the applicants. As to those who made positive comments, again it is difficult to see how their positive experience would reflect upon the reputation of the applicants. This is conceptually distinct from the question of devaluation of the product arising from the lower price at which it was available on the internet. I would add that the feedback comments were not correlated to the purchasers of particular DVDs and therefore not correlated to any applicant's product. 55 No logical basis has been shown for the inference that the reputation of the applicants in the market place for their products has been adversely affected. Where purchasers knew they were buying pirated copies, to suggest that the trade mark owner's reputation is thereby diminished, is a little like suggesting that a person who is the victim of a robbery is thereby lowered in the esteem of the community. In my opinion a more rigorous and principled approach is required before damages under this head are awarded. I do not consider that even nominal damages should be allowed on this basis. Nominal damages of $500 in respect of royalty loss. 2. Damages of $1,000 in respect of product devaluation. 57 I will also allow pre-judgment interest at the rate of 6% per annum from 1 May 2005 to 1 November 2006. This amounts to $135 in respect of each of the applicants. The interest amount is awarded under s 51A(1) of the Federal Court of Australia Act 1976 (Cth) and follows the usual practice of adopting rates of interest applied in the relevant State Supreme Court: GEC Marconi v BHP (2003) 201 ALR 55; Walker v Citigroup [2005] FCA 1866. As to costs, having regard to the applicants' lack of success on the question of exemplary damages and the unnecessarily protracted presentation of evidence in this case, I will order, against the second respondent, half of the costs of the assessment of damages. That is to be taxed as one set. I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | infringement assessment of damages compensatory damages exemplary damages not available heads of compensatory damages loss of sales trade mark proprietor accustomed to receive royalties or licence fees rather than proceeds of sale of product absence of evidence as to royalties or licence fees evidence within the knowledge of the applicants inappropriateness of speculation or guess work in assessment of damages under this head devaluation of product absence of any principled explanation of market devaluation mechanism necessity for rational approach to devaluation assessment loss of reputation absence of evidence of loss of reputation no rational basis upon which loss of reputation could be inferred trade marks |
3 By virtue of s 9(2)(b) of the OHS Act , a member of the ADF is, for the purposes of the OHS Act , taken to be employed by the Commonwealth. Regulation 4 of the Occupational Health and Safety (Commonwealth Employment) Regulations 1991 makes the Chief of the Defence Force the employing authority in relation to a member of the Defence Force for the purposes of the Act (see, in particular, s 10). At all material times, therefore, the respondent is taken to have been the employer of members of the ADF for the purposes of the OHS Act . 5 Subsections 11(1) and (3) provide that the OHS Act binds the Crown in right of the Commonwealth and that the Commonwealth is subject to proceedings for a contravention of cl 2(1) of Sch 2 and liable to pay a pecuniary penalty under cl 4(l) of that Schedule. This resulted in approximately 1,200 Army personnel moving there. Mount Bundey was set up to provide training facilities to serve this Brigade. 9 Use of Mount Bundey is managed by the Defence Corporate Support and Information Group, while Training Command - Army provides training services to "client" units of other commands. Training is undertaken by arrangement with client units according to an Army-wide program by instructors from the Regular Army and Army Reserve. 10 Mount Bundey lies within the coastal monsoon region of Northern Australia. Its climate therefore has two distinct seasons: a dry season from about May to October; and a wet season from about November to April. November is generally regarded as still being in the "build up" to the wet season and, until the rains come, a more trying time than the wet season proper. The average temperatures at Jabiru Airport, the nearest observation point to Mount Bundey, are 18 to 32ºC in the dry season and 24 to 36ºC in the wet season. There is at Mount Bundey a sparse canopy of low eucalypts, giving very little natural shade. 11 November 2004 had the second hottest average maximum temperature in Darwin for November on record and was the fourth hottest month since records were first taken in the area in 1931. Heat exhaustion occurs when the body diverts blood away from the internal organs to the skin leading to an increased heart rate and lowered blood pressure. It is treatable by cooling, resting and elevating the legs of the patient. Its effects are short term. 13 Heat stroke is, by contrast, a life threatening medical emergency that occurs when the body of an individual loses the ability to control core temperatures. It is difficult to predict an individual's susceptibility to heat stroke which varies according to personal and environmental factors and can occur very suddenly. A person who is struck down with heat stroke may or may not show signs of heat injury before symptoms appear. A person suffering heat stroke must receive immediate treatment with appropriate cooling. Core body temperature should be lowered as rapidly as possible. The chances of recovery are directly related to the speed of cooling. 15 Between September 1999 and 7 April 2005, 141 Army personnel, that is to say about 25 per year, were hospitalised for heat injury. (Hospitalisation implies serious illness. ) The incidence of heat illness not requiring hospitalisation is not known because, prior to the death of Trooper Lawrence, there was no internal audit system to monitor the incidence of heat injury. 16 An official Army safety manual known, with the military partiality to acronyms, as SAFETYMAN had been the primary source for strategic safety policy in the ADF since at least March 2002. An ADF Preventative Medicine Manual ("ADFP 717") also contained instructions and guidance on the prevention and control of health problems associated with exposure to heat, cold and high altitude. Some areas of SAFETYMAN and ADFP 717 conflicted, particularly in relation to continuous work/rest cycles and fluid replacement, although the thrust of the provisions was generally the same. Exceeding the guidelines for a training situation will unnecessarily risk the lives of personnel. Unit Commanders are responsible for the activities of their Units and are required by the OH&S Act and SAFETYMAN... to amongst other things, take all reasonably practical steps to protect the health and safety of personnel under their control. Decisions in this regard should be based on the content in Annexures A and B. Annex A contains details of heat stress values... Annex B contains details on preventative strategies which may also be of assistance in the decision making process. If the guidelines in this policy are exceeded for operational reasons, Commanders should anticipate heat casualties in direct proportion to increases in heat stress and the level of physical activity. A WBGT instrument measures 3 parameters: the temperature as reduced by natural evaporation of water/sweat, radiant heat load and the actual air temperature. The readings are a combination, in differing ratios, of these measurements. The resultant temperature index is closely related to the amount of heat stress. Wet Bulb Globe Temperature Index of heat stress readings are to be taken as a measure of the heat stress and recommendations made based on the measured heat stress index. Service members who are required to do heavy work before being acclimatised have a high potential for heat injury. Commanders must require water intake at the recommended rates for the heat stress level of their particular location. (Training courses, such as the Sergeants Course were and are still conducted in the Northern Territory during the summer. That course does not have a field phase as a component part. 24 SAFETYMAN provided at that time that a commander could exceed the work/rest tables if operational requirements were paramount. However, it also provided that training exercises in peace time were not essential situations. 25 There was no operational guidance or management regime for the continuation of physical exertion if WGBT 32[ring] were exceeded. 26 Conditions at Mount Bundey during the wet season generally exceeded WGBT 32[ring]. Accordingly, courses with physical requirements equivalent to the Corporal Course could only be conducted if the Commanding Officer decided to continue outside of the guidelines in SAFETYMAN. Corporals are the first level of command within the Army. They normally command between 8-10 soldiers. They may also have responsibility for equipment such as a tank or armoured personnel carrier. Corporals command the smallest group of soldiers that the Army deploys on operations and are responsible, at the lowest level, for the implementation of operational plans. There is a considerable increase in responsibility in the promotion from private to corporal. 28 Prior to acceptance into the Corporal Course candidates were required to pass a "Barrier Assessment", covering all aspects laid down in the pre-course preparation requirements. Participants were recommended by their superior officers for possible promotion. He concluded that such courses should not be so conducted as it would be "folly" to do so. 30 Prior to 2003, the ADF ran three Corporal Courses each year through the Regional Training Centre ("RTCNT") at Mount Bundey. However, before October 2003 the field phases of such courses were not conducted at Mount Bundey during the wet season. 31 For reasons that are not clear and that apparently involved no similarly well-qualified reassessment to that of 1996/7 of the probable effects of climatic conditions, a decision was taken in 2001 that courses might be undertaken in the wet season. Commencing in October 2003, and again in April 2004 and in November 2004 the field phase of the Corporal Course was conducted at Mount Bundey during the wet season because RTCNT were asked to conduct four courses. During the field phase of the first such Course held in the wet season in October/November 2003 there were 29 reported cases of heat injury. During the field phase of the second Course held during the wet season in April 2004 there were 36 reported cases of heat injury. Four of these cases were Priority 2 events, which meant that "life or limb [was] in serious jeopardy". 32 In May 2004 the Commander of the Army's Regional Training Centres, Brigadier Anstey, directed the Senior Instructor of the Corporal Course at RTCNT, Warrant Officer Lucas, to provide a brief on options to reduce the high number of heat illness cases for the field phase of the Corporal Course. 33 The brief prepared by Warrant Officer Lucas examined the climatic conditions at Mount Bundey and provided statistical evidence that the determining factor for the high incidence of heat related injury was operating in the wet season, rather than the level of activities laid down by the Training Management Package. Conduct low level operation in a Scale A environment. (Scale A was a part of Mt Bundey, a sort of local headquarters. Scale A facilities included: an air-conditioned demountable building for use as a Regimental Aid Post; areas for the erection of 20 x 30 tents; 2 fly screened mess huts; two buildings housing toilet, shower and laundry facilities; a kitchen with cool rooms and a freezer; an Aero Medical Evacuation helicopter landing site, telephone lines and power, water and sewage services. 2. First and last Corporal Courses be conducted south in better climatic conditions that facilitate learning outcomes in the field. 3. A purpose made Company Defensive position be constructed as a permanent facility at Mount Bundey. 4. RTCNT to conduct one Subject 1 for Sergeant Course and three Corporal Courses each calendar year. This was Warrant Officer Lucas' preferred option: it aimed to avoid having any course held at Mount Bundey in the wet season. 37 In 2004 there were no reported cases of heat injuries in Corporal Courses held outside the wet season. 38 After reading the brief, Brigadier Anstey met with the commander of the First Brigade, Brigadier J Cantwell to discuss the matters raised by the brief. Brigadier Cantwell wished to retain the defensive position scenario. He offered engineering support to pre-dig the greater part of the required defensive position. 39 Brigadier Anstey considered this, along with the changes already made, to be a significant way of reducing the risks concerning the Corporal Course. Apparently he decided that the course would so continue, with the promised engineering support. There was no evidence of any consideration of the advisability of consulting any doctor for advice. The initial stages of the course were conducted within Robertson Barracks in Darwin in an air-conditioned classroom environment. There was no compulsory physical training on the course prior to the deployment to the field. There was no structured program of re-acclimatisation to hot, outdoor conditions. 41 The course was deployed to Mount Bundey on 4 November 2004 and to the defensive position on 7 November 2004. 42 The participants in the course had medical support only from two base grade medical assistants. Those medical assistants were not supervised. They were not trained to give unsupervised medical treatment. Basic medical assistants are not permitted to operate in such a way regardless of the level of heat risk. 43 There was no ambulance. A Land Rover equipped with a stretcher was provided. 44 Climatic conditions by reference to the WGBT measurements were not regularly monitored during the field phase of the course. The course was provided with neither the personnel nor the equipment to do so. The only measurements were taken on the morning of 10 November 2004 by visiting environmental health personnel. Nor were they known to those in charge of the course, or medical support personnel. However, the conditions during the course were extreme. Morning and afternoon patrols were conducted from the defensive position. The aim of the exercise was to assess trainees in such elements as: employment of offensive and defensive measures; battle skills; navigation; and giving orders. Trainees worked in sections of approximately eight members with each fulfilling a different role in the section each day (including the role of Section Commander). 47 An instructor at the course was assigned to each section during all activities. Course instructors were experienced soldiers of Senior Non-Commissioned and Warrant Officer rank with broad experience in the conduct of training at Mount Bundey. 48 The participants were given a first aid brief before going out to Mount Bundey for the field exercise component of the course. One of the course lessons was about the role of Section Commanders in defensive operations and the requirement to monitor their section. A briefing was also given on what to expect in the field. 49 On 27 October 2004 an exercise was conducted with the participants which contained a twenty minute session dealing with the signs and symptoms of heat injury. 50 The instructors briefed participants before they commenced patrolling activities about water intake and watching out for signs of heat stress in other members of the patrols. Course participants and supporting staff were instructed in the "clear urine" indicator of adequate water intake. Instructional staff monitored the water intake of course participants. 51 However the instructors did not monitor or enforce the consumption of water in accordance with the tables set out in SAFETYMAN. It was a responsibility of each course member, when acting as the Section Commander, to ensure that members of their section remained adequately hydrated. Neither instructional staff nor the course participants were aware of the water intake requirements in SAFETYMAN. 52 Throughout the field section of the course a supply of drinking water was available to trainees at all times. The drinking water quickly reached ambient temperature. Two full 22 litre jerry cans were available to each section and these were replenished on the defensive position. Flavoured additives were also issued to help replace salts and encourage drinking. 53 Combat rations were largely used in the defensive positions. Fresh rations were supplied during the two days before deploying to the defensive position and on day four of the exercise. No further fresh rations had been provided before Trooper Lawrence's death. Trooper Lawrence ate little in the 48-72 hours preceding his death. According to Colonel Rudzki (now the Director, Occupational Health and Safety --- Army) the emphasis on consuming food during the course appeared to be for the sake of calories and not for replacing salt, the latter being important in avoiding heat stress. Medics told participants on the course to replace electrolytes and gave them sachets of electrolytes and mixed up squeeze packs to help replace salts. 54 In the circumstances of the Mount Bundey defensive positions in November 2004, it seems that there was little or no effective relief from the heat, nor was there any effective shade available on the defensive position or elsewhere during the reduced activity period. "Hootchies" (camouflaged-coloured, open tent-like structures) were available for use by the course participants to provide night-time protection from rain. It is not the primary function of hootchies to provide shade, although they were so used. The material used to make hootchies may radiate heat and actually increase the ambient temperature underneath them in full sun. They were of no real use in relation to heat stress. 55 Engineering support was provided at the commencement of the November 2004 field phase of the Corporal Course. Backhoes were used to pre-dig a part of the defensive position. Despite the assistance of engineering plant, the trainees still needed to do heavy digging to complete the fighting bays, spread soil, and to do other physically arduous tasks. The trenches were dug in open ground rather than using the available shade. 56 While the Corporal Course was deployed to the defensive position, another promotional training course for intending infantry corporals, the 5/7 RAR Subject 2 Corporal RA Infantry Course ("Subject 2 Course") was also deployed to the field at Mount Bundey. Participants in the Subject 2 Course were supported by an advanced medic, two basic medics and an army ambulance. 57 On 5 November, five days before Trooper Lawrence's death and two days before the Corporal Course was deployed to the defensive position, a private participating in the Subject 2 Course at Mount Bundey collapsed with heat injury. He was evacuated to Royal Darwin Hospital as a Priority 1 (highest priority) casualty. The reported circumstances and management of this casualty were very similar to those for Trooper Lawrence. Private Scott was evacuated using the army ambulance which was available to support the Subject 2 Course. He was nevertheless left with some "neurological deficit". 58 Prior to their deployment to the defensive position, staff and students on the Corporal Course were aware that Private Scott had been evacuated to Darwin and hospitalised. 59 It was observed by medics evacuating Private Scott that the air-conditioner in the ambulance did not work. It was not repaired. The same ambulance was subsequently used for the evacuation of Trooper Lawrence. There was evidence from a senior Medical Officer that in his experience the air-conditioners in army ambulances rarely worked. 60 The Subject 2 Course was more strenuous and arduous than the Corporal Course. Nevertheless the field phase of the Corporal Course would be strenuous, tiring and involve planned war-like interruption of sleep. The SAFETYMAN standards were predicated on well-rested subjects. Modifications were made to the Subject 2 Course to reduce the possibility of further heat injury. These included changes to the times of patrol, the abolition of any activities during the reduced activities period and protocols prohibiting the speedy return to the field of participants who attended for treatment associated with heat illness. No further modification was made to the Corporal Course. 61 There were 66 participants, including Trooper Lawrence, in the field phase of the Corporal Course. The course was an "all corps" including, for example, soldiers mainly engaged on clerical duties. Many participants fell well short of battle fitness. 62 In a general sense most participants on the Corporal Course were, as the parties put it, "desensitised" to the risk of heat injury. They simply did not understand the seriousness of the risks to them. Several participants became concerned about the consequences of heat injury following the serious heat illness sustained by Private Scott. 63 In the three days prior to 10 November 2004 five participants had reported to medics with symptoms of heat illness on nine separate occasions. There were eleven cases of heat illness reported on 10 November 2004. 64 Trooper Lawrence collapsed at about 5:00 pm on 10 November 2004 during a training activity. He was evacuated to Darwin Hospital and pronounced dead. Trooper Lawrence died from acute heat stroke. 65 As indicated earlier, the only WBGT measurements that were taken during the course were taken on the morning that Trooper Lawrence died. These measurements were taken by visiting environment health personnel. Warrant Officer Lucas was not informed. There was no procedure in place for him to be informed on that day. There is doubt about the accuracy of those measurements because it appears that the person who took those measurements was not aware of the proper method of using the equipment. 67 The approximate noon temperature at Mount Bundey on 10 November was 35deg.C to 36deg.C, at 4.00 pm it was 40deg.C and the humidity ranged between 35 to 50%. They were picked up in a vehicle and returned to the section position. The course was withdrawn from a defensive position on the next day and then to Robertson Barracks. The field phase of the course continued out of Robertson Barracks for two days. Even there, further heat illnesses were sustained and the field phase of the course was thereafter concluded earlier than had been intended. 1000 - 1200 Reduced activity period started. Trooper Lawrence reported he had vomited a small amount of clear fluid while sitting on gun sentry. He reported that he was feeling sick. He was told to see the medic. 1100 Trooper Lawrence was seen by another trooper (a friend from another section) up against a tree while on gun sentry looking unwell and sweating. 1225 Trooper Lawrence presented to the assigned basic medical assistant attached to the Corporal Course at the rear of the defensive position (see below). 1300 - 1500 Reduced activity period continued. Trooper Lawrence was observed by a number of other course participants to be less energetic than he normally was. 1500 The reduced activity period concluded and Trooper Lawrence's section prepared for patrol. 1530 Trooper Lawrence was seen laughing with others in his section as he was getting ready to go on patrol. He was observed by some participants to be a bit more tired and lethargic than the others. 1545 Trooper Lawrence's section travelled out to the patrol drop-off point on a Unimog truck. One of Trooper Lawrence's colleagues told him "You look like shit". Lawrence replied "Yeah, I'm fucked". All of the patrol members were very fatigued and very hot but they were all sweating. 1600 - 1615 Trooper Lawrence's section dismounted at their drop-off point. The Senior Instructor on the patrol, Warrant Officer Lucas, briefed the section on the outcomes expected from the patrol and asked the section whether there were any problems, reminded them of their duties and responsibilities and the need to be vigilant for signs of heat stress. He did not observe Trooper Lawrence to be suffering any additional fatigue from that of his fellow section members. The section patrolled approximately 700m where a section attack was initiated. 1700 The section attack was completed. This activity was no more arduous than similar activities conducted on previous days. After the attack was completed Trooper Lawrence was observed to be agitated when talking with the Section Commander. Heat stress was immediately identified and Trooper Lawrence was moved to a creek line into the shade, his clothing was removed, he was fanned and water was poured onto him. 1705 The Senior Instructor with the patrol reported a Priority 3 casualty over the radio network. Trooper Lawrence did not register to pain and his breathing was rapid and strong. 1710 Trooper Lawrence lost consciousness. He was reassessed as a Priority 2 casualty [i.e. "Life or limb is in serious jeopardy. Evacuation should be effected as soon as possible"] and the section commenced carrying him approximately 350 metres to the road. 1720 - 1730 Those carrying Trooper Lawrence met up with Army medics and an Army ambulance. Trooper Lawrence was loaded into the ambulance, the medics reassessed him as a Priority 2 casualty and drove to Scale A. 1735 - 1750 Trooper Lawrence was unloaded from the ambulance and taken into the Scale A Regimental Aid Post. IV fluids were started through two cannulae and ice was placed on his body. He was returned to the ambulance which then drove towards Darwin. 1823 The Army ambulance met a St John's Ambulance and Trooper Lawrence was handed over. 1827 The hand over was completed and the St John's Ambulance departed for Darwin. 1933 Trooper Lawrence arrived at the Royal Darwin Hospital Emergency Department. The report concluded that the cause of death was Acute Heat Stress. He reported that he had vomited about 150 millilitres of clear fluid while he was on gun sentry and that he had shortness of breath afterwards, chest ache, head ache and slight dizziness, and had experienced slight dizziness after vomiting. He said that he had drunk 8 litres of water since 4.30 am and had urinated six times. He presented with a raised temperate and an increased pulse rate. He claimed to feel better after 30 minutes. He had some cold water, some sweet biscuits and the fan for 30 minutes. 73 At 12.55 pm Trooper Lawrence was permitted to return to work. He was advised to rest and reduce the pace of work. The medical assistant initially believed that Trooper Lawrence had suffered a heat injury. He ultimately assessed the cause of vomiting as due to Trooper Lawrence gulping his water too fast. Trooper Lawrence still had a significantly increased pulse rate when he was permitted to return to work. The medical notes record that when sent back to duty Trooper Lawrence had a pulse of 88 beats per minute having arrived with a pulse of 90 beats per minute. The normal pulse of a fit young solider should be between 60 to 70 beats per minute at rest. 74 There was no protocol for the instructor to be advised that a soldier had received treatment for heat related illness. Warrant Officer Lucas was not aware that Trooper Lawrence had reported to the medic. 75 The medical care provided to Trooper Lawrence from the time he became a casualty was as follows. Trooper Lawrence was carried to shade, his clothing was loosened, his shirt was removed and water was poured on his undershirt and body. He was observed to stop breathing for approximately 30 seconds. He was carried to the road. Action by Army medics. The Army medics met Trooper Lawrence approximately 50 metres from the road. They applied oxygen, which was hooked up to oxy-viva. Trooper Lawrence was taken by stretcher into an Army ambulance. Trooper Lawrence did not respond to questions, shaking his shoulder or rubbing his sternum - he appeared to be unconscious. The Army medics drove Trooper Lawrence 6 kilometres to Scale A. At Scale A. Army medics removed Trooper Lawrence on a stretcher to an air-conditioned room, cut his clothing off, placed ice on his groin, armpits and neck. Oxygen was supplied. Cool running water was poured on him. Cannulae were inserted in both arms and two litres of Hartmanns fluid was administered. His mouth and airway were suctioned to keep them clear. A rectal thermometer was inserted and measured Trooper Lawrence's core temperature as 42.5 degrees C. The medics moved Trooper Lawrence back to the Army ambulance and hooked him up to oxygen. Bags of ice (rubber gloves full) were applied to his body. One bag of fluid was finished and replaced and the other bag almost finished. In the Army ambulance. Both bags of fluid were started again. They drove for about 20 minutes until they met the St John's ambulance. Along the way medics inserted a Gueddels airway as Trooper Lawrence had stopped supporting his own airway. Transfer to St John's Ambulance. The two ambulances met at 6:23 pm. The St John's ambulance left at 6:27 pm. 77 None of the staff responsible for directing the Corporal Course was adequately trained about the provisions of SAFETYMAN. 78 Colonel Rudzki, who prepared a medical report for the Charles inquiry, noted that none of the soldiers who were with Trooper Lawrence appeared to understand the true hazard posed by exposure to high temperatures. He said that the Army's prevention and treatment strategies for heat related injury were focused largely on hydration. He stated that this approach dominated management practices to the point that the cannulation of soldiers had become an accepted consequence of training in northern Australia. The soldiers expected to be "bagged", that is, cannulated. The death of Trooper Lawrence exposed the inadequacies of this approach. 79 The matter does not however rest there. Numerous witness statements referred to how affected troops were by the heat and how poorly they felt. Lawrence looked unwell but no more so than his peers. Commencing a patrol activity in poor physical condition increases the risk of potential harm. ... Acclimatisation is likely to have been a key issue in the high rates of casualties seen. Traditional army acclimatisation regimes for WW2 in Vietnam have involved 7 to 10 days exposure to non air-conditioned environments with regular physical activity in the heat which was progressive over time. ... It is possible that the troops deployed to MBTA were not acclimatised. The work/rest tables in SAFETYMAN are predicated on troops being acclimatised. ... It is my view that a defeatist culture had evolved regarding heat injury . Everyone expected to fall victim to heat and this reflected in the a heat casualty rates. It is also reflected in the high numbers of hospitalisations over the past 5 years for presumed heat stroke. Failure to appreciate the threat posed by heat itself and the consequent failure to measure both environmental and individual temperatures meant that effective risk management could not occur. This represents training failure. ... Failing to appreciate the incidence and severity of heat stroke is also a reflection of training failure . (Emphasis added. 07/04 "Prevention of Heat Related Illness" to all training establishments. (That Improvement Notice was revoked and replaced with another). 82 The Army continued its review of its approach to heat injury and on 8 April 2005 Brigadier Anstey issued a revised directive: Prevention of Heat-Related Illness and Injuries. The revised directive was a significant improvement on the earlier one in many respects. It began with a statement recognizing that heat stress had been responsible for fatalities and very serious illness during training in the Australian Army. It contained a clear direction that commanders and other trainers at all levels were to cease training if they believed it unsafe to continue, regardless of WGBT readings. Readings were to be taken hourly during daylight. WGBT training was to be undertaken immediately by qualified instructors. On behalf of Comcare, Mr Wray accepted this response as fulfilling the action requirements contained in the Improvement Notice. 84 On 28 February 2005 Colonel Charles was appointed to inquire into and to report upon the circumstances of the death of Trooper Lawrence. He issued his report containing 67 findings on 6 May 2005 and two follow up reports on 16 August 2005 and 25 January 2006. The inquiry was thorough and the report candid. 85 In August 2005 Mr Wray provided a report into his findings relating to circumstances of Trooper Lawrence's death. 86 As a result of Trooper Lawrence's death the Deputy Chief of Army, Major General Ian Gordon, established a Heat Injury Remediation Project to systemically review and improve the Army's Heat Injury Management Policy and Procedures. The Heat Injury Remediation Project is currently led by the Director, Occupational Health and Safety - Army, Colonel Rudzki. The project reports regularly to the Army Safety Board. 87 The parts of SAFETYMAN which dealt with Defence Heat Injury Policy were amended and additional chapters were issued. The revised policy was delivered directly to units in an electronic format and was made available on the ADF's intranet. 88 Ninety heat stress monitors, which enable estimation of a person's core temperature without the necessity for taking the temperature rectally, were purchased and distributed to units in northern Australia by June 2005 and a further 156 heat stress monitors were issued to units not located in tropical regions by late December 2005. The Army spent $685,000 on the monitors. 89 Other training sources in the form of DVD, CD-ROM and e-learning training packages were distributed to ADF units by 30 September 2005. All Army personnel now undergo annual heat injury training using these resources. 90 An incident report is now raised any time a soldier requires intravenous fluid so the Army has a clearer indication of what is actually happening in the field. The information is collated and used to determine emerging trends and provide feedback to commanders. 91 The Army's Director, Occupational Health and Safety has initiated two priority research tasks with the Defence Science and Technology Organisation on the effect of air-conditioning on acclimatisation, and the most rapid and effective means of cooling soldiers in a field setting. 92 On 20 May 2005, the Army began the implementation of the Army Occupational Health and Safety Management System known as ArmySAFE. This is apparently intended to be a comprehensive and modern response to all the demands of occupational health and safety in the Army. This initiative coincided with the Army's entering into a formal partnership arrangement with Comcare to improve the Army's health and safety performance. The system's objectives include a 10% annual reduction in injuries and in medical discharges. This is to be achieved in part by the establishment of 42 permanent and 45 reserve positions dedicated to occupational health and safety. The cost of the permanent positions is approximately $6 million per annum. Colonel Rudzki occupies the new position of Director, Occupation Health and Safety - Army, and is responsible for the implementation of ArmySAFE. All incidents involving injuries (including minor heat injury), near misses and dangerous occurrences must now be reported and recorded in an incident report and monitored by Colonel Rudzki. 93 The Army no longer conducts Corporal Courses in the Northern Territory during the wet season. Only three Corporal Courses are conducted each year by RTCNT. 94 On 23 September 2005 the Chief of Army issued a Directive on heat injury management which included the Army's Heat Injury Remediation Project (CA Directive 5/05). 95 On 28 October 2005 the ADF amended its SAFETYMAN, chapter 6 - Defence Heat Injury Policy. Chapter 6, as amended, sets out the ADF's current heat injury policy, including revised work/rest tables. The objectives of the policy are prevention, effective management, reduced occurrence and improved treatment. The policy aims to reflect world's best practice and was to be reviewed by an international panel of experts in November 2006 to ensure that it did just that. As at the date of trial, Colonel Rudzki believed the policy did reflect world's best practice. 96 The applicant accepts that ADF personnel have been and will continue to be required to serve overseas in conditions of extreme heat and humidity. 97 The respondent accepts that it would not be justifiable to expose participants on routine training courses or promotional courses such as the Corporal Course to the perils of heat injury by training in extreme conditions. The risk to health and the extent of support required under the revised SAFETYMAN tables means that, in practice, courses such as the Corporal Course will not be conducted in extreme conditions. 98 By the time of the hearing, upon receiving advice from senior counsel, the respondent properly abandoned any contention that it ought to be excused for its contravention of the OHS Act under cl 13 of Sch 2 of the Act. • The ADF did not appropriately promulgate its own policies and procedures contained in SAFETYMAN and train relevant personnel about those procedures. • The ADF failed to provide a structured system of acclimatisation prior to the field phase of the Corporal Course. • The ADF did not effectively monitor the heat conditions of Mount Bundey and then adjust, discontinue or suspend the field phase of the course in accordance with the Policies and Procedures contained in SAFETYMAN according to WBGT readings or when participants began to experience symptoms of heat injury. • The ADF did not introduce rest/work cycles as required by SAFETYMAN. • The ADF did not provide for appropriate rest periods in shaded areas as required by SAFETYMAN. • The ADF did not have available Advanced Medical Assistants to monitor participants for signs of heat injury, treat them and supervise more junior Medical Assistants. • The ADF did not provide a fully qualified medical officer and resuscitation team, as is now required by ADF policy where training is to be undertaken in conditions of extreme heat. • The ADF failed to provide an ambulance with working air-conditioning. 101 Ultimately the parties agreed upon the text of a declaration which, with some formal changes, I will make. The Explanatory Memorandum to the amending Act stated that it was modelled in large part on the enforcement approach of the Commonwealth Authorities and Companies Act 1997 (Cth) , in turn modelled on the Corporations Law . 103 The object of Sch 2 to the OHS Act is to secure compliance with the provisions of the Act. While cl 2 makes it mandatory for a court to make a declaration of contravention, in contrast, cl 4 gives the court a discretion to order "a person to pay the Commonwealth a pecuniary penalty". Clause 4(3) provides that a penalty is "a civil debt payable to the Commonwealth". It may be enforced by Comcare 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. Section 11(3) of the Act nevertheless shows a clear intention that the Commonwealth itself should be liable to a penalty. 104 There is some oddity in the notion of a court established under Chapter III of the Constitution being required to consider ordering the Commonwealth to pay a penalty by way of civil debt to itself, albeit that the debt is enforced by Comcare, itself a manifestation of the Commonwealth (although cloaked with legal personality). Neither party ultimately raised any such issue or any constitutional question and, having regard to the gravity of the subject matter, this was not the case for the Court to insist upon a close demonstration that it validly has jurisdiction. • For reasons which are not clear, little regard was paid to the risk of heat injury or to compliance with the policies and procedures contained in SAFETYMAN. The provisions of SAFETYMAN dealing with heat injury were virtually disregarded at all levels. • The centrepiece of SAFETYMAN was the regular monitoring of conditions by reference to the WBGT. The requirements of SAFETYMAN varied according to the particular reading that was taken. It is self evident that if readings were not taken, as they were not, the requirements of SAFETYMAN could not be implemented. • There was systemic disregard for SAFETYMAN, shown by the fact that equipment was not issued to units to enable them to monitor the conditions. Not until after the death of Trooper Lawrence were units issued with such equipment. • At the time of the contravention and previously, WGBT measurements were only taken irregularly, on request, by visiting environmental health personnel. When such readings were taken they were not then communicated to the commanding officer. Further, the environmental health personnel were not properly trained in the taking of measurements. Therefore reliable measurements were not available, even on the few occasions when they were taken. • It was obvious that the procedures and policies in SAFETYMAN were being disregarded. According to Colonel Rudzki, these were probably heat stroke and represented "near misses". (ii) Colonel Rudzki stated in his report to the Charles inquiry: "Given the high rate of hospitalisation (approximately 25 per year) it is not surprising that a fatality eventually occurred. (iv) Warrant Officer Lucas, in the briefing paper he prepared prior to the course, set out in some detail the previous incidence of heat injury and referred expressly to the provisions of SAFETYMAN. It was self evident from the paper that SAFETYMAN was not being complied with. It was apparent that regular WGBT readings were not taken. The very serious incident involving the participant on the other training course at Mount Bundey occurred two days before the deployment of the Corporal Course to the field. (vi) There was also an unexplained failure to support the Corporal Course with proper equipment and adequately trained medical personnel. These were significant failures which increased the magnitude of the risk occasioned by the failure to comply with SAFETYMAN and the remote location. Further, relevant personnel, including medics and those in charge of the Corporal Course, were either not aware of the existence of the heat injury policies in SAFETYMAN or not aware of their detailed contents. The reason for this has not been explained. 107 The applicant contends that the seriousness of the breach is compounded by the fact that the ADF was able, within a relatively short period after Trooper Lawrence's death, to put in place systems so that the requirements of SAFETYMAN were implemented rather than disregarded. For instance, within a short period units were equipped and trained to take WGBT readings. These issues were not, however, addressed until after the preventable death of a young soldier on a training exercise. 108 The 11 other attendances on medics, including a Priority 2 attendance, for heat illness on the day that Trooper Lawrence died, indicated a serious threat. Trooper Lawrence himself attended a medic on an earlier occasion on the day of his death, reporting symptoms consistent with heat illness. There was no procedure in place for Warrant Officer Lucas to be informed about those attendances or the incidence of heat illness generally. He was not aware of the extent of heat illness on the day of Trooper Lawrence's death, or of the fact that Trooper Lawrence had attended a medic earlier in the day. He was also unaware that WGBT readings had been taken that day that exceeded 32[ring]. 109 According to Warrant Officer Lucas he was not aware of the detail of the work/rest cycles in SAFETYMAN. (How it was that he was aware of some provisions, but not others, is not clear. ) Medical assistant personnel were also unaware of the provisions. Such lack of awareness represents a significant failure in training and promulgation of ADF policy. 110 As steps were not taken to implement the policies and procedures in SAFETYMAN, it may be inferred that the persons responsible for its implementation either made a conscious decision not to do so, that they were unaware of its terms or a combination of both. Whichever may be the case, this represents a serious breach of the respondent's obligations. 111 The reduced activity period provided little practical protection against the risk of serious heat injury because no respite from the heat was provided. Colonel Charles in his report recognised the cumulative effect of heat exposure. He found that the absence of relief from the heat had the consequence that the reduced activity period was of little value. Participants sat in the sun during rest periods or sought to take shade under hootchies, which did not relieve the trainees from the heat. Appropriate shade could have been provided either by conducting the course in an area where natural shade was available, erecting artificial shade structures, or using the facilities at Scale A during the reduced activity period. 112 A program of acclimatisation was not introduced prior to the introduction of the field phase. It is not apparent why there was no such program. SAFETYMAN provided that personnel required a program of gradual acclimatisation. Warrant Officer Lucas referred to the effects of declimatisation in his brief prior to the commencement of this course. The expert evidence of Colonel Rudzki was that "acclimatisation is likely to have been a key issue in the high rates of casualties seen". Such a class was said to be confined to cases where there has been deliberate or wilful disregard of a worker's health or safety --- where the employer or the responsible agent of the employer has said, in effect, "I am aware of the damage to health and safety, but I am just going to ignore it". This led to a failure to manage the risk effectively and a belief that the risk was manageable by the means adopted. The highly experienced senior instructor, Warrant Officer Lucas, had been confident of the Army's ability to deal with heat casualties without any suffering permanent ill-effects. (b) It was a requirement of the course that the participants demonstrate leadership under arduous/stressful conditions. Such training is of the highest importance to successful operational outcomes, including survival of personnel. (c) The Army performs a variety of operational roles in overseas deployments, including East Timor, Bougainville, Afghanistan and Iraq. Trooper Lawrence had himself served a 6 months tour of duty in Iraq. In addition to the dangers involved in suppressing insurgencies, such deployments require soldiers to operate in difficult climates under arduous and stressful conditions. ADF personnel will continue to be required to serve overseas in conditions of extreme heat and humidity. (d) There was a culture that training took priority over other issues - meaning that the Army got the balance between training and safety wrong. Mount Bundey has not since been used in the wet season for such courses. • The Army immediately conducted an initial review of its approach to heat injury, resulting in the promulgation of Brigadier Anstey's new and greatly improved directive: Prevention of Heat-Related Illness and Injuries, dated 8 December 2004. • The Army continued its review of its approach to heat injury and on 8 April 2005 Brigadier Anstey issued a further revised directive, Prevention of Heat-Related Illness and Injuries. • As a direct consequence of Trooper Lawrence's death and the other severe heat stroke case referred to, the Chief of Army established the Heat Injury Remediation ("HIR") Project, which is ongoing. • The Army co-operated fully with the Comcare investigator (Mr Wray). The improvement notices issued were promptly complied with by the Army. • The Army initiated its own inquiry into the circumstances of Trooper Lawrence's death. The results are contained in three reports prepared by Colonel Charles. The first two pre-dated the Northern Territory coronial inquiry and were tendered to the Coroner. Colonel Charles' investigations were thorough and far-ranging, and all of the main criticisms of the Army's approach to heat injury prior to Trooper Lawrence's death were identified in Colonel Charles' first report. All of the recommendations made in that report were implemented. There can be no suggestion that by initiating and publishing Colonel Charles' reports the Army has attempted to minimize or gloss over its failings regarding the circumstances of Trooper Lawrence's death. The reports are highly embarrassing to the Army. • To make itself further accountable for Trooper Lawrence's death, the Army submitted to the Northern Territory Coroner's jurisdiction when it was not legally obliged to do so, a fact remarked upon by the Coroner. • The Army has admitted responsibility for Trooper Lawrence's death and apologised publicly and privately to his family and friends. At the coronial inquiry, Brigadier Bornholdt, on behalf of the Army, accepted responsibility for the soldier's death, acknowledged his service to his country and, in the presence of his family, apologised to them for the Army's failures. The Coroner, who witnessed Brigadier Bornholdt's apology, said the Army had "been accountable in my view and have accepted fault and have made an abject and genuine apology. 117 The relevant circumstances will vary from case to case and by reference to the objects of the particular legislation which has been contravened. This implies constant vigilance. Employers must adopt an approach to safety which is proactive and not merely reactive. In view of the scope of those obligations, in most cases it will be necessary to have regard to the need to encourage a sufficient level of diligence by the employer in the future. 121 The applicant contends that the above approach is particularly relevant in the context of the subject OHS Act . The evident purpose of making the Commonwealth liable to a penalty for a breach of s 16(1) of the OHS Act is to mark the seriousness of the conduct and act as a deterrent to the Commonwealth, Commonwealth agencies and other persons who may be subject to the OHS Act . Unlike subsection 16(1) of the OHS Act , the New South Wales equivalent imposes an absolute obligation on an employer to secure the health and safety of its employees, a circumstance that has guided the New South Wales courts in their approach to penalties in criminal proceedings under the NSW legislation. Subsection 11(2) of the OHS Act very deliberately excludes the Commonwealth and Commonwealth authorities (other than Government business enterprises) from liability for prosecution for an offence under the Act. The reasons for this exclusion must go beyond simply easing the procedural and evidentiary burdens faced by Comcare and its investigators in making the Commonwealth accountable for occupational health and safety breaches. As Giles JA observed in Adler v ASIC [2003] NSWCA 131 ; (2003) 46 ACSR 504, [658]: 'Civil penalties can be regarded as punitive, with a resemblance to fines imposed on criminal offenders, but the resemblance is not identity'. 124 The maximum penalty is 2,200 "penalty units", a penalty in money terms of less than $250,000. While this is, relatively speaking, very low, and would itself be likely to have no deterrent (or otherwise useful) effect, it provides, as does the Court's declaration, an occasion for what I hope is a properly measured denunciation, on behalf of the Australian people, of the Army's breaches of the law. 125 I cannot impose the maximum penalty for the reason suggested by Mr Maurice QC for the respondent, namely that there was no conscious decision to flout the law, this is not quite in the worst class of case. The seriousness of the breaches of the law mean, however, that the case is close to being in the worst class. There were systemic failures of the most serious kinds. 126 I must also abate the penalty to a degree on account of the Army's frank and honest acceptance of its shortcomings and its commendable efforts to mend them. 127 About eight years before Trooper Lawrence died, a sensible and senior expert trainer reported that it would be "folly" to train soldiers in field work in the wet season in the Northern Territory. Among other things, the likely discomfort to participants would prejudice their learning process. Army personnel were at pains to prepare and issue SAFETYMAN in 2002. SAFETYMAN, as it existed before the Corporal Course, was not criticised by Comcare as then being inadequate. Had that manual been followed it is likely that a fine young soldier would be alive today. SAFETYMAN in particular ordered that routine training, "getting the job done", was not to take precedence over the serious and difficult risks of heat stroke. In 2004, over an appreciable period and not just a single day, the Army failed its legal obligations in the ways admitted and in circumstances fairly characterised in the submissions of both parties. 128 It is true that the Army made, through Brigadier Bornholdt an "abject" apology to Trooper Lawrence's family. No less was called for. It is a bitter irony that it fell to the same officer who, had his 1996 (or 1997) warning been listened to in 2004, would have avoided Trooper Lawrence's death, to tender the apology on behalf of the Army. 129 On the other side of the record there was, as submitted, no conscious and deliberate disregard of the soldiers' safety. Rather, on quite inadequate grounds, despite the great experience of those involved, it was decided that the risks could be satisfactorily managed. A broad general experience of living and working, and even Army service, in tropical areas of Australia and elsewhere would not necessarily equip a person with an understanding of all the mechanics of when and how heat illness might be caused, and how serious and unpredictable heat injury might be. Trooper Lawrence does not seem to have had any inherent physical characteristics that might have predisposed him to the fatal injury as mentioned. This was no "eggshell skull" case. The risks were greatly underestimated. 130 The decision to proceed with the Corporal Course in November 2004 was influenced by the "culture" identified by Colonel Rudzki. To the extent that limited resources contributed, as I think they did, to that culture and to the decision to hold the course in November 2004, it is no answer to rely on such a limitation. Resources are always limited. If the law obliges employers (as it does) that, as far as is reasonably practicable, they must take steps to protect employees' health and safety, they must allocate resources so as to acquit that obligation. In the judgment of what is "reasonable", the effects on life and limb and on actual resources, if health and safety is not protected, need to be weighed. It was not suggested here that resources could not reasonably have been found to avoid the felt necessity to embark on the November 2004 course or to continue with it after the dire warning implicit in Private Scott's heat injury. 131 The post-accident response of the Army, while it shows how much more might have been done before Trooper Lawrence's death, does deserve, in an imperfect world, the praise given to it by the Coroner. In such a world, one cannot reasonably ask for more. There appears to have been no cover-up, no protection of any officer, senior or otherwise, but on the contrary, a well-organised, expert and determined set of initiatives taken to discover and redress the significant deficiencies and mistakes and to institute new and better forms of protection against heat injury and illness. On such evidence as is before me, the ADF has sought to enter what is hoped to be a new era of service safety, both as to heat illness and generally. 132 I will order a penalty of 1800 penalty units. (That translates, on the somewhat outdated scale of money equivalents for penalty units provided by the Crimes Act 1914 (Cth) and in force as at the hearing, to a money sum of $198,000. Anything less would invite a lack of confidence in the Court as well as concern about the state of the law. 133 I respectfully suggest that consideration be given by the decision-makers for the recipient of the penalty to payment thereof to Trooper Lawrence's family by way of a modest, concrete gesture of consolation. I was informed that the relevant laws are under review. There are no doubt difficult issues as to how best to mandate compliance by public authorities and officers with occupational health and safety laws. There are also, no doubt, further complexities in thus dealing with the armed forces, even as to their peacetime and/or routine domestic operations. That said, the present state of the law is not such as to engender public confidence that proper legal standards of protection of Commonwealth employees, including our service people, is rigorously required of their superiors, on pain of consequences that will really bite. Had this case occurred in the private sector, a criminal prosecution of at least the employer would have been likely. Without apology, I express myself more strongly in this matter than judges normally do. I certify that the preceding one hundred and thirty-four (134) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. | industrial safety, health and welfare the commonwealth penalties for breach of occupational health and safety (commonwealth employment) act 1991 (cth) appropriate considerations inadequacy of available sanctions as against commonwealth industrial law |
Consequential directions were made for the filing of written submissions. A motion by the University of Western Australia (the University) filed on 25 September 2006 for leave to file and serve an amended further substituted statement of claim (amended statement of claim). 2. A motion by Sirtex Medical Limited (Sirtex) filed on 11 September 2006 for leave to amend its further amended defence and cross claim against Dr Gray and the Cancer Research Institute Incorporated (CRI). 3. Dr Gray's motion to join Freehills was adjourned for mention to 23 November 2006 at 9.00 am. A question about the release of funds by the Court appointed receiver of the CRI's Sirtex shares, to enable payment of legal fees, was stood over to 23 November 2006 at 9.00 am. I also made an order that the CRI receiver be released from the obligation of filing security under O 26 r 3. 3 An adjustment of the timetable of existing directions to take account of delays occasioned because of a traffic accident involving the University's solicitor with carriage of the action was deferred until I had ruled on the University's proposed amendment to its statement of claim. That left the University's motion of 25 September 2006 to be determined. Four documents relied upon were described in the affidavit and exhibited to it. Before the inspection of these documents the University understood, based on information available to it, that the only product being commercialised by Sirtex and which the University now knows to be SIRT 1 was unprotected and in the public domain. He referred to an answer given by Sirtex on 18 August 2006 to a request for further and better particulars made by the University. A second SIRT 1 Australian Application was filed on or about 25 October 2000 in Australian Provisional Patent Application PRO983. Paragraph 15 would allege that the SIRT 1 applications were filed without the knowledge, approval or authority of the University and were in respect of a 'patentable invention developed and/or discovered while Dr Gray was an employee of the University'. 10 In proposed par 16 it would be alleged that, by making and maintaining the SIRT 2 application and causing or procuring Sirtex to make each of the SIRT 1 applications, Dr Gray breached his fiduciary duties to the University. In par 16A it would be asserted that Sirtex was aware of the relevant facts and was knowingly concerned in Dr Gray's breaches of his fiduciary duties. Paragraph 17 would assert constructive trusts in relation to any rights or entitlements received by Dr Gray and Sirtex in relation to SIRT 2 and SIRT 1. 11 In a new par 19A it would be alleged that, on or about 25 October 2001 Dr Gray caused or procured Sirtex to file and Sirtex did file the SIRT 1 PCT Application. Consequential allegations of breach of fiduciary duty by Dr Gray and knowing involvement in the breaches by Sirtex are made at proposed pars 19B and 20A. Other SIRT 1 patent applications are alleged in Canada, Europe and the United States of America in par 23A and breaches of fiduciary duty arising therefrom asserted against Dr Gray in par 23B. Sirtex's knowing involvement would be asserted in par 25A. The constructive trust of any right or entitlement arising from making those applications is to be pleaded in amended par 26. 12 Some further amendment is proposed to par 42. This relates to the DOX-Spheres PCT application and incorporates particulars previously subjoined to par 36 as particulars (g)-(u). SIRT 1 could not have been the subject of a patent assignment from Dr Gray because the patent application was made after both the date of the Deed and the public listing of Sirtex. 2. SIRT 1 had not been the subject of any grant of patent at the time of the answer albeit it was the subject of a patent application. 3. SIRT 1, albeit not specified, formed part of the rights in the Gray Assets. That understanding was based on the dates of the patent applications. It also notes that discovery by Sirtex has already been given in relation to SIRT 1. 15 Dr Gray relies upon an affidavit of Cinzia Lee Donald sworn 16 October 2006 as establishing that patent registration for SIRT 1 has been finally refused by the United States Patent and Trade Mark Office (USPTO) on the ground of prior disclosure. To the extent that the University seeks an assignment of patent rights with respect to SIRT 1, it is said that the amendment is of no utility. There is no registered patent. To the extent that the application seeks damages in lieu of an assignment, the relief is unavailable if the invention is not patentable. 16 A copy of the response to the SIRT 1 patent application by the USPTO is exhibited to the affidavit of Ms Donald. The Office notified Dr Gray's patent attorneys in the United States on 17 March 2005 that a number of claims in the application had been rejected as anticipated or obvious. Other claims were objected to as dependent upon rejected base claims but could be allowable if rewritten in an independent form. This action was described in the notice as 'final'. 17 Sirtex also opposes the proposed amendment. However it takes a different stance as to the patentability of the invention claimed in the US patent application. The true position with respect to the United States application is that it remains pending and that Sirtex awaits further examination of the patent by the USPTO. Sirtex's position is supported by an affidavit sworn by one of its solicitors, Ms Turner. The affidavit exhibits correspondence indicating that Sirtex's Australian patent attorneys, Wray & Associates, instructed United States patent attorneys to file a Notice of Appeal against the decision of the USPTO. This had the effect of extending time for responding to the Final Office Action. A request for continued examination was lodged on 23 November 2005 and, according to information provided to Ms Turner by Wray & Associates, the application is still pending before the USPTO for the continued examination. 18 The substantive basis upon which Sirtex opposes the amendment is that the relevant patent application was filed after any employment of Dr Gray by the University and after the assignment of other patents to Sirtex in April-May 1997. It also post-dated the public listing of Sirtex in August 2000. 19 Sirtex rejects the contention by the University that the invention claimed in the new patent application was developed or discovered prior to April 1997. Sirtex's position is that the invention claimed in the patent application is novel and inventive as at its priority date of 25 October 2000. The invention must be understood by reference to the exact words of the claims set out in the patent application relevant to it. Sirtex says it is wrong to assume, as the University evidently does, that the invention as so claimed correlates to the product or technology referred to as 'SIRT 1' in the proposed pleading and the documents exhibited to Mr Cox's affidavit. 20 Sirtex submits that unlike the patents currently included in the University's pleading, the new patent application has been the subject of significant commercialisation by Sirtex. It would follow that the University's proposed amendments will open a range of new factual issues. In so saying, Sirtex acknowledged that its view was that the additional allegations would not give rise to any further documentary discovery. 21 Sirtex submits that the Court ought not to grant leave to the University to introduce the proposed amendments at this late stage of the litigation. Any disruption to the existing timetable should not threaten the current trial date of 12 March 2007. Sirtex would be prejudiced by any postponement of the trial because it would prolong the alleged commercial uncertainty as to the true ownership of its patents which have been created by the University's claim in its present form. 22 In oral argument counsel for Dr Gray pointed to the previous form of par 12 of the statement of claim which was dealt with in my decision on 11 November 2005 --- University of Western Australia v Gray (No 2) [2005] FCA 1633. It is not enough to describe the invention in the broad terms adopted in the present case. The question of patentability at the time that the alleged invention was 'invented' could only be judged by formulating a notional specification and an invention or inventions in notional claims which could have been made at the time. Patentability can then be determined by, eg, testing the invention, as notionally claimed and properly construed by reference to the specification, against prior art to determine whether it would have been invalid for want of inventive step or novelty or on any other ground relating to patentability. I suggested, inter alia, that if the University were content to rely upon the inventions as claimed in the claims set out in the patent for which Dr Gray had applied as reflecting what he had 'invented', then any defence on the ground that the invention was not patentable could be raised on conventional criteria narrower than those pleaded in the defence as it then stood. It is submitted, for Dr Gray, that the same problem that afflicted par 12 in the substituted statement of claim, afflicts the proposed amended par 12. In this case, however, the proposed amendment identifies the relevant invention by reference to the disclosure in the Australian provisional patent application, PRO983. The paper dealt with resin micro-spheres as a delivery mechanism for the treatment of liver cancer. The SIRT 2 invention deals with ceramic micro-spheres. The introduction of SIRT 1 would take the inquiry back to 1983 and earlier and an inquiry into what was happening at the University of Melbourne prior to Dr Gray's employment at the University by reference to prior art there developed. 24 In answer counsel for the University contends that the factual implications are not large. Nobody has suggested any witnesses that would need to be called beyond those identified and the various prior art papers pleaded against the University. 25 In par 18 of Dr Gray's defence in answer to the existing par 12, Dr Gray says that at all material times prior to 1980 microparticle preparation incorporating radio active material to be used in the treatment of cancer was a concept in the public domain. This contention is particularised by reference to a number of articles published in scientific journals dating back to 1951. Some eight papers are identified. It is also asserted that before his employment by the University, Dr Gray carried out research into the use of micro-sphere and micro particle preparations incorporating radioactive material to be used in the treatment of cancer and primarily liver cancer and published his research. Particulars of the published research are given by reference to articles dating from 1982 to 1987. Some nine articles are cited. They include the article relied upon by the USPTO for the rejection of the patent application, namely Chamberlain M, Gray BN, Heggie JCP, Chmiel R, Bennett RC; Hepatic metastases: A physiological approach to treatment. British Journal of Surgery. 1983, 70;596-598. 26 In my opinion the proposed amendments are viable and are unlikely to unduly extend the scope of the factual inquiry. I do not see any basis upon which it could be suggested that the present trial dates should be affected as a result of these amendments. There will necessarily be an opportunity for the respondents to adjust their pleadings accordingly. I would need to be satisfied that any further discovery was in fact required. I will allow the amendments. | pleading amendment viability of amendment whether factual implications amendment allowed practice and procedure |
The application before the Federal Magistrate sought judicial review of a decision of a delegate of the Minister, made on 19 June 2003, refusing to grant a protection visa to the applicant. 2 The applicant is a citizen of India who arrived in Australia on 20 March 2003. On 30 April 2003 he lodged an application for a protection visa with the Department of Immigration and Multicultural Affairs. The applicant claims fear of persecution in India by reason of his political opinion, in particular his involvement with the Indian Muslim League. The applicant claims that he was targeted by members of the Bharatiya Janata Party ("BJP") and was forced to relocate. As a result of his relocation the applicant claims that he became involved with the Indian Union Muslim leader and was given voluntary employment. The applicant claims that he organised a rally and was subsequently arrested by "Tamil Nadu Q Branch" and spent two days in custody. He claimed to have been tortured. The applicant claims false charges were laid against him and that he was imprisoned for one month. The applicant claimed that the BJP and All India Anna Dravidian Progressive Association ("AIADMK") cause problems for the Muslim community in India. The delegate refused the application for a protection visa. The Tribunal did not accept the claims of the applicant in relation to his detention and imprisonment because the evidence presented was insufficient and conflicting and there was no attempt to obtain supporting material. Nor did it accept that the applicant was of particular interest to the BJP or to the AIADMK. The Tribunal considered that the applicant could return safely to India. On his own evidence the applicant had admitted that he could return to a certain village without difficulties caused by his religious beliefs or any other Convention reasons. He was nonetheless concerned that there were limited employment opportunities for persons of his age. Relying on independent country information the Tribunal found that there was no evidence to support the applicant's assertions of mistreatment in Chennai or Tamil Nadu became the AIADMK, the ruling party in Tamil Nadu, had strong secular and pro-minority views. There was no evidence that that the applicant suffered harm amounting to persecution for a Convention reason in Tamil Nadu in the past; nor was there a prospect of this occurring in the future. This application was dismissed: see SZCLK v Minister for Immigration and Multicultural Affairs [2005] FMCA 1456. An appeal to this Court from the Federal Magistrates' Court was dismissed by Wilcox J on 23 November 2005: see [2005] FCA 1735. The applicant thereupon commenced the present proceeding seeking review of the decision of the Minister's delegate which had earlier been the subject of appeal to the Tribunal. A breach of the rules of natural justice occurred in connection with the making of the decision. The decision was not notified of the applicant and therfore the procedures that were required by law to be observed in connection with the making of the decision was not served. The delegate who purprted to make the decision did not have jurisdiction to give the decision. The Minister does not have the power to make the decision into effect s.66(1) and s. 66 (2) of the Migration Act 1958 was not observed. The decision was infected by error of law. The decision was an improper exercise of the power conferred by the enactment in pursuance of which it was purpoted to be made. The application is late. However the applicant refers to Chan Ta Srey v Minister for Immigration & Multicultural and Indigenous Affairs, Plaintiff S157 of 2002 v Commonwealth (2003) FCA 1292 and [2003] HCA 2 ; (2003) 195 ALR 24. This application is not vexation nor the abuse of process. A delegate decision can be reviewed by the Court under certain circumstance. The Court previously reviewed decision of the delegate in mater of: SZCTH v Minister for Immigration (No. 1) [2004] FMCA 211 , NAMG v Minister for Immigration (No. 1) [2003] FMCA 541 , Alam v Minister for Immigration [2005] FCAFC 132. She relied on the grounds that the Court did not have jurisdiction to review the decision of the delegate, that the proceedings were an abuse of process, that the proceedings were vexatious, and further, or in the alternative, that the applicant was barred by operation of the doctrine of res judicata and/or was estopped from bringing proceedings. He also held that any error on the part of the delegate had been "cured" by the Tribunal. The Single judge of the Federal Magistrate Court in his Honors judgment delivered on the 8 September 2006 failed to find error of law, jurisdictional error procedural fairness and relief under section 39 B of the judiciary Act. 1903. Recent Federal Court of Australia judgment : AGDV V Minister for Immigration and Multicultural Affairs. 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 and member of an Islamic Student Association. 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 the Tribunal erred in law under section 476, section 426 and Migration Act 1958 . The FM in his honor judgment delivered on 24 August 2006 failed to find 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 with section 424A as decided by majority Judge of the High court in SAAP. These grounds are either identical or substantially the same as those advanced by appellants in other cases with which I have recently dealt. They have no obvious relevance to the issues in this case. 9 At the hearing before me, the applicant submitted appeared in person. He was assisted by an interpreter. He told me that he could not point to any legal error which would warrant this Court reconsidering the decision of the Federal Magistrate. 10 The principles to be applied in dealing with an application such as the present are laid down in Décor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. In my opinion the learned Magistrate's decision is not attended with sufficient doubt as to warrant reconsideration by this Court. Indeed it is, in my view, correct. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | no point of principle migration |
The Application and Statement of Claim as against the First Respondent be dismissed. 2. The Application and Statement of Claim as against the Second Respondent be dismissed. 3. Costs are reserved. 4. Any Amended Application and any Amended Statement of Claim is to be filed and served by 5pm on 29 February 2008. 5. The matter be stood over for mention at 9:30am on 10 March 2008. Those orders have been entered. The proceedings be dismissed as against both Respondents. 2. The First Applicant is not to commence any proceedings in this Court without the prior leave of the Court, excluding any application to appeal or seeking leave to appeal from this decision. 3. The Applicants to pay the costs of the First Respondent of and incidental to these proceedings, including any reserved costs. 4. The Applicants to pay the costs of the Second Respondent of and incidental to these proceedings, including any reserved costs. Those orders have not as yet been entered. 4 The matter thereafter came before Branson J on 17 June 2008 when her Honour raised questions as to whether the orders previously made reflected " the intention of the Court ". Rather than the Full Court considering any order which did not truly reflect the intention of the Court, the opportunity was extended to the parties to have the form of the orders previously made further considered (if that was considered appropriate). That is now the application before the Court. (2) The Court, where it is not exercising its appellate or related jurisdiction under Division 2 of Part III of the Act, may if it thinks fit vary or set aside a judgment or order after the order has been entered where: ... (e) the order does not reflect the intention of the Court; or ... In addition to such power as is conferred by Rule 7, the Court also has an implied power to vary an order: Owston Nominees No 2 Pty Ltd v Branir Pty Ltd [2003] FCA 629 at [27] ---[29], [2003] FCA 629 ; 129 FCR 558 at 569---70 per Allsop J. 6 Within the constraints imposed by that Rule, it is considered that Orders 1 and 2 as made on 30 November 2007 should be varied. Order 35, r 7(2) relevantly confers power where, as in respect to these orders, they have been entered and where an order " does not reflect the intention of the Court ". The intention of the Court was that the then form of the Statement of Claim should be struck out. The reasons for decision then given expressed reservation as to the utility of the Respondents' Notice of Motion being heard in advance of further amendments being made, as contemplated by the Applicants. But the intent of the Court was that the Applicants were to file any Amended Statement of Claim in the same proceeding within the time then specified. The reservation expressed arose because the Applicants had not previously amended their pleadings and could do so unless the proceeding itself was dismissed: Federal Court Rules, O 13, r 3. The intention was not to foreclose the opportunity to be extended to the Applicants to amend the then existing Statement of Claim . 7 Order 4 as made on 30 November 2007 contemplated an " Amended Application " also being filed. None was in fact filed -- but the intention of the Court was to permit such an amendment to be made should the Applicants so have wished. That order reflected the intention of the Court and should thus not now be varied. 8 Orders 1 and 2 as made on 30 November 2008 should be varied so as to remove such ambiguity as may otherwise have arisen. 9 Insofar as the orders as made on 31 March 2008 are concerned, it was the intention of the Court to resolve " the proceedings generally ": [2008] FCA 430 at [8] . On that occasion there had been non-compliance with a previous order that any Amended Statement of Claim was to be filed by 29 February 2008. There was, however, before the Court on 31 March 2008 a draft document which the First Applicant accepted " reflected the principles which she wished to agitate ": [2008] FCA 430 at [5] . An order was made that the " proceedings be dismissed ". This order has not been entered and may be varied or set aside pursuant to O 35, r 7(1). This order should be varied -- but only to the extent of referring to a singular " proceeding ". In seeking such an order, reliance was properly placed by the Respondents upon either s 31A of the Federal Court of Australia Act 1976 (Cth) or O 20, r 5 of the Federal Court Rules . Both of those provisions refer to an order being made in a " proceeding ". Order 20, r 5 was the power invoked. It was considered appropriate to dismiss the proceeding. 10 Order 2 as made on that occasion, the Court has been told, has been the subject of leave being granted to appeal to the Full Court. It is thus inappropriate to revisit either the form of that order or whether such an order should have been made given the dismissal of the proceeding. 11 The orders made on both occasions should be varied to reflect that which was intended. Whether such orders as now varied have been properly made remains a matter for the Full Court. 12 In varying and setting aside these orders it must be acknowledged that there has been both an imprecision in the language previously employed in the reasons for decisions and the orders made. The reasons previously provided could also have been expressed in greater detail. But an application made pursuant to O 35, r 7 to vary or set aside orders previously made is not considered to be the occasion to supplement reasons previously provided or to make findings which could more conveniently have been made on earlier occasions. In a civil action there is a limited ability to alter reasons previously given, provided that the alteration is not one of substance: cf. Todorovic v Moussa [2001] NSWCA 419 , 53 NSWLR 463 at 468---9 per Beazley JA (Powell JA and Sperling J agreeing). To supplement the reasons previously provided would not fall within that limited exception. The Statement of Claim as filed on 7 August 2007, as against the First Respondent, be struck out. The Statement of Claim as filed on 7 August 2007, as against the Second Respondent, be struck out. The proceeding be dismissed as against both Respondents. There be no order as to the costs of 7 July 2008. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | slip rule intention of the court practice and procedure |
In order to avoid repetition and to give relevant context, these reasons ought to be read together with the reasons for making those orders: Clough Engineering Ltd v Oil & Natural Gas Corporation Ltd [No 3] [2007] FCA 2082. 2 Immediately following the pronouncement of those orders the applicant, Clough Engineering Ltd, by an amended motion invited the Court to stay their execution and further, to extend the injunctions previously made, pending the determination of an application for leave to appeal from my judgment in respect of those orders. 3 In an ex tempore judgment I granted the stay of execution and extended the injunctions. 4 The reasons which follow in substance reflect the reasons I gave orally on 21 December 2007. 5 Although interlocutory, the orders, particularly those for the discharge of the injunctions, will operate, in a practical way, to finally determine the matters and issues in the proceedings. 6 An application for leave to appeal against the orders could be heard as early as 8 February 2008. 7 I take into account that on such an application, points of substance will be raised and not merely procedural matters. In such circumstances the threshold for obtaining leave is somewhat lower than otherwise might be the case: Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572 at [45] ; Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission [2007] FCAFC 147 at [39] . 8 There will be undoubted prejudice to the applicant which, to an extent, at least arguably, may be irreparable, if the stay is not granted and the injunctions are not extended to enable the leave application to be made. Certainly, any appeal would be rendered nugatory, because $US21.5 million would otherwise be paid immediately to the first respondent, Oil & Natural Gas Corporation Limited under the performance guarantees by the respondent Banks. Counsel for the second to fourth respondent Banks has so informed me, at least in relation to the second and fourth respondents. I have no reason to think that the position of the third respondent would be any different; certainly that was its position on a previous occasion in argument before me. 9 Against this must be balanced the risk of prejudice to the respondents. The first respondent, ONGC, will, if a stay is granted, be kept out of a substantial sum, namely the $US21.5 million, under the performance guarantees. However, that loss can be measured and compensated for by an appropriate award of interest in due course. None of the respondents has pointed to any specific prejudice beyond that. 10 Such a limited stay and injunction is open to be made, although the court has ordered the dissolution of the injunctions already made: Erinford Properties Ltd v Cheshire County Council [1974] 1 Ch 261 at 267-268. It is necessary for the applicant to establish that there are reasonably arguable grounds of appeal: Smith v New South Wales Bar Association [1991] HCA 59 ; (1991) 66 ALJR 219 at 220. 11 It cannot be said, emphatically, in my opinion, that the correctness of my construction of clause 3.3 of the Construction Contract, and in particular clause 3.3.3, is unassailable. The applicant's construction is not so untenable that an application for leave to appeal must necessarily fail. I conclude that in the context of an application for a stay, therefore, that Clough's construction of that clause is reasonably arguable. 12 Likewise, it cannot be said that the applicant's case, based in s 51AA of the Trade Practices Act 1976 (Cth) is, again, in the present limited context, not reasonably arguable. The same is the position in relation to my findings on the balance of convenience. 13 In my opinion, it is appropriate to grant a stay and to extend the injunctions: Australia and New Zealand Banking Group Ltd v Merribee Pastoral Industries Pty Limited [1998] 84 FCR 367. 14 In light of those reasons, the orders that I will make, therefore, are, as to the first four orders, in terms of paragraphs 1 to 4 of the notice of motion as amended. As to 5, I will order that costs be reserved. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | orders discharging ex parte and inter partes interlocutory injunctions injunctions to restrain calling upon and payment under performance guarantees application for stay of execution of orders and extension of injunctions pending determination of foreshadowed application for leave to appeal from the orders stay and extensions granted. injunction |
Tony Hannaford, Roselyne Nurseries Pty Ltd ('Roselyne Nurseries') and Geoffrey Robert Britton are the respondents in the original proceeding. 2 It is convenient at this point to set out the applicants' claims and Mr Hannaford's cross-claim, as currently pleaded, and the major issues that would be in contest at trial. Pursuant to the orders of Justice Weinberg dated 10 March 2006, leave was granted to Mr Hannaford to file and serve his cross-claim dated 28 February 2006 against the respondents. Further, on 29 May 2007, Justice Marshall granted the applicants leave to join Roselyne Nurseries and Mr Britton to this action on and from 23 March 2007. The matter has been transferred into my docket following the publication of a Notice to Practitioners dated 15 April 2008. Canada has, since 3 February 1994, been the registered proprietor under the Plant Variety Rights Act 1987 (Cth) or the Plant Breeder's Rights Act 1994 (Cth) (PBRA), of the plant breeder's rights in the cherry plant variety prunus avium 'Sumtare', known as Sweetheart ('Sweetheart cheery'). In particular, Canada claims rights conferred by s 11 of the PBRA in relation to the Sweetheart cherry. 2. Mr Hannaford conducts an orchard business, growing and selling fruit, at Torrens Valley Orchards, Gumeracha in South Australia under the registered South Australian business name "Torrens Valley Orchards". 3. Canada alleges that Mr Hannaford has, without its licence, authority or consent, propagated and planted Sweetheart cherry trees. Further, Canada alleges that Mr Hannaford has, without the licence, authority or consent of Canada, licensed Roselyne Nurseries and Mr Britton to propagate Sweetheart cherry trees. Canada claims that these acts constituted a contravention of s 53(1)(a) of the PBRA, and thereby an infringement of Canada's rights in Australia in respect of the Sweetheart cherry plant variety, as conferred by the PBRA. Amongst other things, Canada seeks declaratory and injunctive relief and damages or an account of profits pursuant to s 56(3) of the PBRA, and delivery up of the Sweetheart cherry plant varieties in Mr Hannaford's possession. 4. Fleming's Nurseries conducts a nursery business selling, among other plants, Sweetheart cherry trees and Black Star cherry trees pursuant to Non-Propagation Agreements. 5. Between 1997 and 2004, Fleming's Nurseries sold and supplied to Mr Hannaford Sweetheart cherry trees under a number of Non-Propagation Agreements. In 2004, Fleming's Nurseries also sold and supplied Black Star cherry trees to Mr Hannaford under a Non-Propagation Agreement. 6. These Non-Propagation Agreements contain a term to the effect that Mr Hannaford would not undertake or attempt to propagate, or part with possession of, the cherry trees supplied under these agreements. 7. Fleming's Nurseries alleges that Mr Hannaford has, without its licence, authority or consent, propagated or attempted to propagate the Sweetheart and Black Star cherry trees. Fleming's Nurseries also alleges that Mr Hannaford parted with possession of the Sweetheart and Black Star cherry trees, and permitted Roselyne Nurseries or Mr Britton to propagate or attempt to propagate these cherry trees. By reason of these acts, Fleming's Nurseries claims that Mr Hannaford has breached his obligations under the Non-Propagation Agreements, entitling Fleming's Nurseries to seek relief against him. Fleming's Nurseries seeks injunctive relief and damages against Mr Hannaford, as well as other relief. Roselyne Nurseries carries on a plant nursery business known as "Roselyne Nurseries". Mr Britton is, amongst others, a director and shareholder of Roselyne Nurseries and is involved in its plant nursery business. 2. Canada alleges that Roselyne Nurseries and Mr Britton have, without its licence, authority or consent, propagated Sweetheart cherry trees and sold them. 3. Canada alleges that Mr Britton has procured, induced and/or directed the infringing acts of Roselyne Nurseries, or, acted in concert with Roselyne Nurseries and is thereby a joint tortfeasor in those acts. There is an equivalent allegation against Mr Hannaford in relation to both Roselyne Nurseries and Mr Britton. 4. Accordingly, Canada claims that there was an infringement by Roselyne Nurseries and Mr Britton of Canada's rights in Australia in the Sweetheart cherry plant variety under the PBRA. 5. Against all respondents, Canada claims declaratory and injunctive relief, damages and/or an account of profits, and delivery up of Sweetheart cherry plants in their possession. The Sweetheart cherry plant variety, although originally bred by the Agriculture Canada Research Station in Canada, was imported into Australia by the Tasmanian Department of Agriculture in 1986. Thereafter, this variety of cherry tree was released from quarantine and grown by various industry participants in Tasmania as well as available for release and use in Australia. Therefore, the Sweetheart cherry plant variety was not a new variety in 1994 when Canada was granted the rights under the PBRA. 2. For these reasons, Mr Hannaford asserted that, as at the time Canada made applications for Plant Breeder's Rights and as at the time those rights were granted, facts existed which, if known, would have led the decision-maker to refuse the rights. In particular, the Sweetheart cherry tree plant variety would not have been registrable under the PBRA because the statutory criteria under ss 43(1)(b) and 43(1)(e) --- that the variety is distinct and has not been exploited or has been only recently exploited - were not met. Accordingly, Canada's rights ought to be revoked under s 54(3) of the PBRA. In substance, he claims to have propagated another variety, which is referred to in his pleading as "the late maturing Sutcliff cherries". Insofar as the Non-Propagation Agreements contain a term that purports to give Fleming's Nurseries the right, upon breach, to remove and/or destroy the Sweetheart and Black Star cherry trees for which he paid, the term constitutes a penalty and is unenforceable. Further, he claims that if the terms are enforceable, then he is entitled to relief against forfeiture. 10 In their Amended Defence dated 10 August 2007, Roselyne Nurseries and Mr Britton denied all the allegations made by Canada against them. Whether the term in the Non-Propagation Agreements, entitling Fleming's Nurseries to destroy the cherry trees purchased by Mr Hannaford under these contracts, constitutes a penalty and/or whether Mr Hannaford is entitled to relief against forfeiture. Issues 2 and 5 also involve some questions of construction. The applicants foreshadow that they will argue that, when properly construed, the so-called penalty clause does not provide for a penalty at all but is merely intended to provide further protection against unauthorised use. Counsel for Mr Hannaford, on the other hand, states that, on the matter of penalty, Mr Hannaford wishes to adduce evidence of the value of the asset to him, the value to Fleming's Nurseries, the sum paid in respect of it, and related matters: see in this connection Ringrow Pty Ltd v BP Australia Pty Ltd [2005] HCA 71 ; (2005) 222 ALR 306 at 309-309 (citing Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1914] UKHL 1 ; [1915] AC 79 at 86-87). 13 At trial, the applicants need to establish their entitlements in respect of issues 1 and 2 before any question of relief could arise. Similarly, the questions of relief would be affected by answers given to issues 3, 4, and 5. Roselyne Nurseries and Mr Britton have consented to the making of such an order. Mr Hannaford opposes it. If the trial is not split, it would be necessary for the applicants and the respondents to call additional evidence to deal with both damages and account of profits, and to do so would involve considerable time and expense. Accordingly, the applicants submit that a "split trial" is just and convenient because, if they fail on any or all liability issues, it will diminish or remove the need to assemble or call evidence for damages or an account of profits. This will result in significant savings in time and expense. 2. Should the applicants succeed on liability issues, there is a strong prospect that the quantification of any pecuniary relief to which the applicants are entitled will be settled between the parties. 3. Should the applicants succeed on liability issues, they would be entitled to injunctive relief and delivery up. In turn, this would provide an "end point" to the respondents' infringing conduct and a proper foundation for a consideration of the quantum of pecuniary relief to which the applicants would be entitled. The bases for the claims against him for delivery up and/or destruction of the trees are the terms of the Non-Propagation Agreements pleaded in subpars (c)(ii) of pars 11, 14, 17, 20 23 and 26 of the applicants' Further Amended Statement of Claim. As Mr Hannaford observes, he pleads that these are unenforceable since they are penalties and/or seeks relief against forfeiture. Mr Hannaford further submits that this claim, which will have to be determined before the applicants' entitlement to relief in the nature of delivery up or destruction is granted, "will require a determination of the factors which may have led to the subject clauses being inserted into the agreements and whether ... the rights sought to be granted by the clauses were extravagant or oppressive at the time of entry into the agreements". He added that "[t]he question of relief against forfeiture will require a consideration of the circumstances as at the date of the breach and will require a consideration of the effect of the proposed delivery up or destruction orders on [him]". Counsel for Mr Hannaford submits that these matters "sit ill" with a trial as to liability only since the witnesses in relation to these matters may also be witnesses in connection with damages issues. Findings regarding their credit may need to be made prior to the damages hearing if a split trial is ordered. In an amendment to his written submissions filed prior to the hearing, Mr Hannaford noted that his defence "rests significantly on his credit" and that, if unsuccessful, he would also be a likely witness in relation to assessment of damages or account of profits. He argued that, therefore, an order for a split trial would have the potential to cause embarrassment and the need for the judge hearing the trial on liability to disqualify herself from hearing the latter part of the proceeding. 2. Zee Sweet Pty Ltd v Magnom Orchards Pty Ltd [2003] VSC 486 (" Zee Sweet ") is distinguishable. 3. If there is an enquiry as to profits at the trial on liability, as suggested by the Notice of Motion, then issues will plainly overlap. (I note that the applicants disavowed this suggestion at the hearing. The relief sought by the applicants includes discretionary relief such as declarations and injunctions, which ordinarily weigh against the splitting of a trial. They are discussed by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718 ; (1999) 217 ALR 495 (" Reading ") at [7] and [8] and by French J in Olbers Co Ltd v Commonwealth (No 3) [2003] FCA 651 at [7] . Ultimately, the question is whether, in the exercise of the Court's discretion, this is an appropriate case for the departure from the ordinary course that all issues of fact and law should be determined at the one time, on the basis that it is just and convenient for the order to be made: see Reading at [9]; Tallglen Pty Ltd v Pay TV Holdings Pty Ltd (1996) 22 ACSR 130. As counsel for the applicants pointed out, the outcome of the reported decisions on O 29 r 2 turns in each instance on the nature of the case and the particular circumstances relevant to it. 18 It is customary in intellectual property cases, however, to hear and determine issues of liability separately and before issues of pecuniary relief. This is largely because it is generally thought just and convenient to so order on account of the fact that an applicant in such a case is not compelled to make an election as between damages and an account of profits at least before the evidence on liability has been received: see Reading at [9] per Branson J; Dr Martens Australia Pty Ltd v Bata Shoe Company of Australia Pty Ltd (1997) 75 FCR 230 ; Digi International Inc v Stallion Technologies Pty Ltd (2001) 53 IPR 529 at [40] per Ambrose J; and Novartis Crop Protection Australasia Pty Ltd v Orica Australia Pty Ltd [2001] FCA 1013 at [7] - [9] per Stone J. Under s 56(3) of the PBRA, in an action for infringement, Canada is entitled to make an election for damages or an account of profits. That is, the nature of Canada's case attracts the same considerations as other intellectual property cases requiring an election between the remedies in the event that liability is established. 19 Furthermore, if Mr Hannaford were successful in his cross-claim against Canada, there would be no occasion to consider either Canada's claim for damages or account of profits. The applicants assert, and Mr Hannaford accepts, that any pecuniary assessment is likely to require the disclosure and evaluation of the parties' commercial records. There will also be a need for expert evidence. It would be unfortunate, so far as the parties and the management of Court resources were concerned, if time and expense were spent without any corresponding utility. 20 Furthermore, I do not consider the argument for a split trial is weakened by the fact that Fleming's Nurseries' claims are made in contract. Again, if Fleming's Nurseries failed on this aspect of its claim, there would be no need for an assessment of damages. 21 I accept that, if the applicants succeed on their principal liability issues, they will have a good basis for injunctive relief. In turn, to quote Sundberg J, this would provide an "end point" to the respondents' infringing conduct and a proper foundation for a consideration of the quantum of pecuniary relief to which the applicants would be entitled: see Polaris Communications Pty Ltd v Dynamic Hearing Pty Ltd [2007] FCA 627 at [5] . 22 Any trial on liability would, of course, include a hearing and determination of the penalty and/or relief against forfeiture issues that Mr Hannaford pleads by way of Defence. On account of these claims, however, Mr Hannaford argues that the applicants exaggerate the savings in time and expense if a split trial were ordered. He maintains that the penalty and/or relief against forfeiture issues would necessitate discovery of certain of his and Fleming's Nurseries' financial records since the value (to him and to Fleming's Nurseries) of the asset (the cherry trees) subject to the so-called penalty clause is in issue. There would, so his counsel says, be a corresponding need to prepare and present financial evidence directed to these matters. Accordingly, his counsel submits that the cost to Mr Hannaford of a trial on all issues would not be appreciably greater than the cost of a trial on liability alone. 23 The applicants respond that, so far as they are concerned, the evidence as to penalties and/or relief against forfeiture is not co-terminous with the evidence as to monetary relief. They affirm that, so far as they are concerned, there would remain significant cost and time advantages with a split trial. 24 I observe that Mr Hannaford's pleading on the penalty and/or relief against forfeiture issues is brief and gives slight indication of the subordinate facts upon which the pleading depends. This does not assist in determining the scope of the trial on this issue. Further, I accept that, at least from the applicants' perspective, the expense of a trial on liability is less than the expense of a trial on all issues. There is a possibility, as I pointed out to Mr Hannaford's counsel, that these savings might also ultimately affect him. There is also the allocation of the Court's resources to be considered. A related issue is the prospect of settlement, if the applicants were successful in some part. If they were not, of course, there would be no need for any further trial. 25 At the hearing, counsel for the applicants submitted, and counsel for Mr Hannaford did not deny, that there is a good prospect that, if liability is determined, then the parties may proceed to settlement. Experience indicates that this is so. Accordingly, I am not persuaded that the penalty and/or relief against forfeiture issue alone should prevail over the other considerations in favour of a split trial. 26 The parties did not rely at the hearing on Zee Sweet and I do not consider much turns on its conduct. It is, plainly enough, a different case from the present, although involving a similar subject matter. 27 Mr Hannaford raises the possibility that, after the trial on liability, it may be necessary to make adverse credit findings against some witnesses, who may later be required for the trial on pecuniary relief. Mr Hannaford claims and, for present purposes, I accept that his credit will be in issue on liability. Mr Hannaford places particular reliance on the evidence that he foreshadows in connection with his penalty and/or relief against forfeiture claim, which, according to him, would overlap with evidence he is likely to give at a trial on monetary relief. His counsel points out that he is a sole trader and, as such, is the person most familiar with all aspects of his business. 28 I accept that there is a risk that I might take an adverse view of Mr Hannaford's credit at the trial on liability. Whether or not Mr Hannaford will need to give evidence at a trial on monetary relief is uncertain, although I accept that he may. I accept that if I were to make adverse credit findings against him, he might perceive that he was at some disadvantage at the second stage of the proceeding. Whether or not this possibility is realised remains to be seen. I doubt, however, that any real disadvantage is likely to arise for him. The possibility of disadvantage is limited because at this second stage it is likely that much would turn on documentary business and other records and expert accountants' evidence. Notwithstanding this, I accept that the possibility that I may take an adverse view of Mr Hannaford's credit at the trial on liability, which will impact on him if he is needed to give evidence at the trial on monetary relief, is a factor tending against a split trial. 29 Whether there are likely to be other witnesses at the trial on liability that might be placed in this position of perceived disadvantage at a subsequent trial on monetary remedies is unclear. None besides Mr Hannaford was specifically mentioned. Mr Hannaford has not sought to adduce any evidence in connection with this possibility. The extent of this risk in relation to anyone apart from him is most uncertain. 30 In the circumstances as they appear on the hearing of the motion, it does not appear that the extent of overlap between witnesses at the trial on liability and at any trial on monetary relief is likely to be very great and, in any event, as I have already said, I doubt that Mr Hannaford would be as disadvantaged as he contends. 31 Accordingly, I would not have this consideration alone, or with the penalty/relief against forfeiture issue mentioned above, prevail over the other considerations in favour of making an order under O 29 r 2, as sought by the applicants. For the reasons stated, I consider that this is a case in which it is just and convenient to make an order under O 29 r 2. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | whether orders should be made for later determination of any questions of quantum of damages and account of profits orders granted practice and procedure |
In particular, it is concerned with the phrases " kind of death " and " particular kind of death " in s 120A and other provisions of the Act. 2 The appellant, Ms June Collins, is the widow of Mr Donald Collins ( the Veteran ). The Veteran served in the Royal Australia Air Force from January 1943 until January 1946. That service constitutes eligible war service for the purposes of the Act. Because the Veteran served overseas during World War II, the whole of his service constitutes operational service for the purposes of that Act. 3 The Veteran died in March 2005 at the age of 83. Ms Collins claimed a war widow's pension on the basis that the veteran's death was war-caused. The respondent, the Repatriation Commission ( the Commission ), refused the claim and the Veterans Review Board affirmed that refusal. Ms Collins then applied to the Administrative Appeals Tribunal ( the Tribunal ) for review of the decision. On 2 May 2008, the Tribunal affirmed the decision under review. The appeal before this Court was brought from that decision under s 44 of the Tribunal Act. Under s 44, an appeal lies only on a question of law. Before stating the contentions of Ms Collins as to the error of law asserted, it is necessary to say something about the Tribunal's decision and the statutory context. 4 Section 13 of the Act imposes a liability on the Commonwealth to pay a pension to a veteran's dependants where the death of the veteran was war-caused. Section 8 of the Act relevantly provides that the death of a veteran is to be taken as being war-caused if the death arose out of or was attributable to any eligible service rendered by the Veteran. 5 Section 120(1) provides that where a claim for a pension in respect of the death of a veteran relates to operational service rendered by the veteran, the Commission must determine that the death of the veteran was war-caused unless it is satisfied, beyond reasonable doubt, that there is no sufficient ground for making that determination. Section 120(3) provides that the Commission is to be satisfied beyond reasonable doubt that there is no sufficient ground for determining that the death was war-caused if the Commission is of the opinion that the material before it does not raise a reasonable hypothesis connecting the death with the circumstances of the particular service rendered by the veteran. 6 Section 120(4) relevantly provides that, except in making a determination to which s 120(1) applies, the Commission, in making any determination or decision in respect of a matter arising under the Act or the Regulations made under the act, is to decide the matter to its reasonable satisfaction. However, those provisions are then qualified, relevantly, by ss 120A and 196B. Section 120A applies to a claim that relates to the operational service rendered by a veteran. Section 120A(2) provides that if the Repatriation Medical Authority ( the Authority ) has given notice under s 196G that it intends to carry out an investigation in respect of a particular kind of death, the Commission is not to determine a claim in respect of a death of that kind unless the Authority has determined a statement of principles under s 196B in respect of that kind of death or has declared that it does not propose to make such a statement of principles. 7 Under s 120A(3), an hypothesis connecting the death of a person with the circumstances of any particular service rendered by the person is, for the purposes of s 120(3), reasonable only if there is in force a statement of principles that upholds the hypothesis. However, s 120A(3) does not apply in relation to a claim in respect of the death of the person if the Authority has neither determined a statement of principles nor declared that it does not propose to make such a statement of principles in respect of the kind of death met by the person. 8 Section 196B(2) relevantly provides that, if the Authority is of the view that there is sound medical-scientific evidence that indicates that a particular kind of death can be related to operational service rendered by veterans, the Authority must determine a statement of principles in respect of that kind of death , setting out the factors that must, as a minimum, exist and which of those factors must be related to service rendered by a person before it can be said that a reasonable hypothesis has been raised connecting a death of that kind with the circumstances of that service. Section 196B(14) provides that a factor causing or contributing to a death is related to service rendered by a person if it arose out of or was attributable to that service. Both witnesses expressed some misgivings about the accuracy of the medical information on the death certificate. 11 Dr Butler's view was that ischemic heart disease suffered by the Veteran had no causative relationship to pulmonary embolism, but was a separate factor contributing to death. Dr Butler said that the Veteran's ischemic heart disease increased his likelihood of dying once the pulmonary embolism had occurred. He said that the death rate from pulmonary embolism is high, but ischemic heart disease would make it even higher. In his view, the chance of dying would have been around 90 to 95% without the coronary artery disease, but with the disease it would be almost 100%. In summary, Dr Butler considered that the Veteran may have died more quickly by reason of the ischemic heart disease. He said that it was more likely than not that the ischemic heart disease contributed to the Veteran's death and that he died more rapidly than he would have done in the absence of ischemic heart disease. He considered that, while the magnitude of that effect was difficult to assess, it was probably a matter of hours or, at most, a few days. He agreed that that was a reference to the timing of the Veteran's death rather than to its likelihood. 12 Professor O'Rourke did not consider that ischemic heart disease played a significant part in the Veteran's death, which was attributable to massive pulmonary embolism. He expressed the view that pulmonary embolism caused hypertension and shock and that that caused troponin elevation. While there was evidence of troponin elevation in the Veteran, Professor O'Rourke considered that that was due to extreme hypertension. Professor O'Rourke's view was that the Veteran's death was caused by massive pulmonary embolism originating from venous thrombosis in the presence of debilitating neurological disease. Professor O'Rourke considered that the contribution of ischemic heart disease to the Veteran's death was negligible. He considered that his evidence and that of Dr Butler were in agreement, in that they agreed that ischemic heart disease may have made a difference of a matter of hours or days to the timing of the Veteran's death. 13 In the light of that evidence, summarised by the Tribunal in its reasons, the Tribunal considered that the evidence showed that ischemic heart disease hastened, but was not the cause of, the Veteran's death. The Tribunal found that the Veteran's death was caused by the pulmonary embolism, which, it found, occurred as a consequence of motor axonal neuropathy which the Veteran had suffered for many years. The Tribunal found that, while the Veteran may have died when he did, rather than some hours or days later, because he had ischemic heart disease, the ischemic heart disease was not the cause or even one of the causes of the Veteran's death. Rather, the Tribunal found the cause of death was the pulmonary embolism. The Tribunal then said that, in the language of ss 120 and 120A of the Act, the kind of death met by the Veteran was death by pulmonary embolism . 14 The Tribunal stated its task as being to consider all of the material before it and to determine whether that material pointed to a hypothesis connecting the death of the Veteran with the circumstances of the particular service rendered by him: if no such hypothesis arose, the application must fail. The Tribunal observed that Mrs Collins' case proceeded on the basis that the kind of death met by the Veteran was death by ischemic heart disease . The material presented to the Tribunal on behalf of Mrs Collins sought to draw a connection between the Veteran's operational service and that ischemic heart disease. However, there was no material that sought to draw a connection between the Veteran's service and his death by pulmonary embolism. The Tribunal concluded that, in the light of its finding that the kind of death met by the Veteran was death by pulmonary embolism, the application must fail. The Tribunal incorrectly held that a medical condition found to be contributory to the death of the Veteran, namely ischemic heart disease, was not a kind of death of the Veteran for the purposes of s 120A of the Act. 2. Further, or in the alternative, the reasons for the decision of the Tribunal do not clearly set out its finding as to whether or not ischemic heart disease contributed to the death of the Veteran, in that the reasons do not refer to the evidence or other material upon which the Tribunal made that finding. 16 There is no substance, whatsoever, in the second ground. I have indicated the findings that were made by the Tribunal, which appear to me to be unequivocal. The Tribunal expressly found that ischemic heart disease hastened, but was not the cause of, the Veteran's death and that, while the Veteran may have died when he did rather than some hours or days later because of his ischemic heart disease, the ischemic heart disease was not the cause or even one of the causes of his death. The Tribunal made patently clear the evidence upon which it based those findings, namely, the evidence of Professor O'Rourke and Dr Butler. 17 The first ground arises because of the difficulty of the language of the relevant provisions of the Act. At the end of the day, I do not consider that there was any error of law on the part of the Tribunal and it may be that there is really no question of law raised. Nevertheless, in light of the arguments that have been put and the complexity of the provisions, I will say something about my understanding of their effect. 18 It may be that, if death is hastened because of the accelerated progress of a disease, being acceleration caused by a war-caused condition, the death was attributable to war service (see Doolette v Repatriation Commission [1990] FCA 178 ; (1990) 21 ALD 489 at 492). Further, where a veteran contracts a disease that he was likely to have contracted in any event but, because of war service, the contraction of the disease has been accelerated, it may be possible to conclude that the disease is attributable to war service (see Langley v Repatriation Commission [1993] FCA 299 ; (1993) 43 FCR 194 at 204). However, the situation in the present case is different from the circumstances to which I have just referred. In the present case, the ischemic heart disease did not contribute in any way to the pulmonary embolism that was the cause of the Veteran's death. 19 If the ischemic heart disease had been shown to have had some cause or connection with the pulmonary embolism, the position might have been different. However, there was no material before the Tribunal that would support such a contention. It may be that multiple medical conditions cause a particular death. In such a case, it may be necessary that all of those conditions be considered for the purpose of determining whether there is a relevant statement of principles applicable. If one of the multiple medical conditions is a cause of death and that condition was itself caused by war service, then that may be sufficient to establish an entitlement to a pension (see Repatriation Commission v Hancock [2003] FCA 711 at [8] ). 20 Certainly, in order to ascertain whether a statement of principles applies, it is necessary to identify the kind of death met by the Veteran. The identification of the kind of death is the critical step in the analysis, but in determining the kind of death, the proof is on the balance of probabilities (see Hancock [2003] FCA 711 at [9] ). Clearly enough, the phrase "kind of death met by a person" is concerned with causation. It is not a question about whether the death was slow, fast or otherwise, it asks questions of medical causation about the cause of death in the context of the Act. 21 The question of the kind of death met by a veteran is a question of medical causation of the death, although that might include contributing or underlying causes in the sense to which I have already referred (see, for example, Repatriation Commission v Codd [2007] FCA 877 ; (2007) 95 ALD 619 at [31] and [39]). That is to say, if there is a cause that contributes to the ultimate cause of death, then that cause may have some relevance. The factual finding made by the Tribunal in the present case, however, is that, while the ischemic heart disease may have caused the Veteran's death to occur hours or days earlier, it did not in any way contribute to the pulmonary embolism, which was the actual cause of death. 22 I do not consider that there was any error of law on the part of the Tribunal. It follows that the appeal must be dismissed. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | determination of 'kind of death' degree of causation of or contribution to death necessary for characterisation as a particular kind of death veterans' entitlements |
3 Neither the first respondent ('the Territory') nor the third respondent ('the Commonwealth') seeks an order for costs in its favour. The appropriate order, therefore, is that there be no order as to costs. Section 13(2) is within Div 1 of Part 2 of the NT Act. Thus the second criterion specified in s 13(2) is satisfied. 6 The Commonwealth submits that the first criterion is also satisfied. It says that the Court 'is making a determination of compensation in accordance with Division 5' for the purposes of s 13(2) of the NT Act, when it makes a final determination of the compensation application. This is true, so the Commonwealth submits, even where the Court dismisses the application for a determination of compensation. 7 As recorded in the principal judgment, at [6], there is no dispute that all native rights and interests that otherwise might have existed over the Application Area have been extinguished. Indeed, the applicants in the Third Further Amended Points of Claim sought 'a determination that native title does not exist in relation to the lands and waters subject to the application'. In these circumstances, the Commonwealth submits that a determination should be made that no native title rights and interests exist in relation to the Application Area. 8 The applicants resist the making of a current determination of native title on the ground that the Court has not made 'a determination of compensation in accordance with Division 5' within the meaning of s 13(2) of the NT Act . They submit that the Commonwealth's interpretation of s 13(2) strains the statutory language. In effect, so the applicants argue, the Commonwealth seeks to rewrite s 13(2) by suggesting that the words 'is making a determination of compensation' should be taken to mean 'is making a determination of liability or quantum with respect to compensation'. They submit that such a construction is untenable. While s 13(2) refers to 'a determination of compensation in accordance with Division 5 [of Part 2]', the entitlement to compensation is not created by Div 5, but by provisions located elsewhere in Part 2 of the NT Act . 10 Section 17, which is within Div 2 of Part 2 provides, for example, that if certain 'past acts' attributable to the Commonwealth extinguish native title, the native title holders are entitled to compensation for the acts. Section 20, also within Div 2, provides that if a law of either a State or Territory validates a past act, the native title holders are entitled to compensation if they would be so entitled under s 17 'on the assumption that section 17 applies to acts attributable to the State or Territory'. Section 23J, within Div 2B, provides that the native title holders are entitled to compensation in accordance with Div 5 for any extinguishment under Div 2B of their native title rights and interests by certain other acts attributable to the Commonwealth, or to a State or Territory. 11 Division 5 of Part 2 of the NT Act (ss 48-54) is headed 'Determination of compensation for acts affecting native title etc'. Section 48 provides that '[c]ompensation payable' under Div 2 or Div 2B in relation to an act is only payable in accordance with Div 5. Section 48 therefore appears to equate an entitlement to compensation created by Divs 2 and 2B with 'compensation payable'. 12 Section 49(a) states that compensation is only payable under the NT Act once for acts that are essentially the same. Section 49(b) provides that the court determining compensation in accordance with Div 5 must take into account any compensation awarded under Commonwealth, State or Territory law for essentially the same act. 13 Section 50(1) states that a 'determination of the compensation may only be made in accordance with [Div 5]'. The note to s 50(1) records that '[s]uch compensation is generally for acts that are validated or valid'. Section 61(1) has since been amended to provide that a compensation application may be made by a person or persons authorised by all the persons who claim to be entitled to compensation: see the primary judgment, at [25]. 15 Section 51 is headed 'Criteria for determining compensation'. Section 51(1) provides, subject to certain qualifications, that the entitlement to compensation under Divs 2 or 2B is an entitlement on just terms to compensate the native title holders for any loss, diminution, impairment or other effect of the act on their native title rights and interests. 16 Subject to s 51(6), the compensation may only consist of the payment of money: s 51(5). This provision is subject to s 53, which deals with the requirement to provide 'just terms' compensation: s 51A(2). The NT Act does not define this expression. 19 By contrast, s 225 of the NT Act defines 'determination of native title' to mean a determination whether or not native title exists in relation to a particular area. The expression 'determination of native title' appears in a number of places in the NT Act . One of these is s 13(1), which provides for an application to be made to the Court for a determination of native title in relation to an area for which there is no approved determination. One way of formulating the issue raised by the respondents' argument is whether the statutory definition of 'determination of native title' should be applied mutatis mutandis to the expression 'determination of compensation'. 20 Section 13(2) refers not merely to 'a determination of compensation' but to 'a determination of compensation in accordance with Division 5'. As I have noted, the entitlement of a person or group of people to compensation under the NT Act is not created by Div 5, but by other provisions in the NT Act . It is fair to say that Div 5 is concerned with determining the quantum of compensation payable to persons entitled to compensation under those other provisions. 21 Thus s 48 states the overriding rule that '[c]ompensation payable' under other provisions of the NT Act , including Divs 2 and 2B, 'is only payable in accordance with this Division'. Section 49 provides that only one award of compensation is payable for essentially the same act. Section 51 sets out the criteria to be taken into account in determining the amount of compensation to be paid. The heading to s 51 ('Criteria for determining compensation') appears to equate 'determining compensation' with 'determining the quantum of compensation'. Section 51(6) distinguishes between 'determining the whole or any part of compensation' and a person's liability 'to give [...] compensation'. Section 51A imposes an upper limit on the total compensation payable under Div 5. 22 It seems to me that the intent of the statutory language is clear enough. The Court is 'making a determination of compensation in accordance with Division 5' when it is determining the quantum of compensation payable to particular applicants. It is not making such a determination when it decides that the applicants are not entitled to any compensation under the NT Act . 23 Had Parliament wished to adopt the meaning urged by the respondents, it might have been expected to define the expression 'making a determination of compensation' so as to include a determination that no compensation is payable. After all, Parliament took that course when it defined a 'determination of native title' to include a determination that native title does not exist in relation to a particular area: see s 225. However, it has not done so. 24 The construction of s 13(2) of the NT Act that I favour not only accords with the ordinary meaning of the statutory language but is, in my view, readily understandable as a matter of policy. The Court can make an award of compensation under the NT Act only where native title over land has been extinguished. If a compensation award is made, the Court will have before it the evidence necessary to conclude that native title does not exist over the land. Accordingly, there will be no difficulty in the Court making a determination to that effect. 25 However, an application for compensation under the NT Act may fail for many reasons. The evidence adduced on an unsuccessful compensation application may be insufficient to enable a current determination to be made as to whether or not native title exists over the land. In these circumstances, it may simply be impossible for the Court to comply with a statutory requirement that it make a determination as to whether or not native title exists in relation to the land. This is presumably one reason why Parliament did not define 'determination of compensation' to include a decision to dismiss an application for compensation. It follows that I disagree with the Commonwealth's submission that there can be no rational reason for distinguishing between a case where compensation is payable and a case where the Court decides that there is no entitlement to compensation. 26 The Commonwealth contends that a 'broader' interpretation of s 13(2) of the NT Act would promote the statutory objects of providing certainty as to the status of land and reducing the potential for multiple litigation concerning the same area. It is by no means clear that this is necessarily the case. For example, a declaration that native title does not exist over particular land, made in the context of an unsuccessful application for compensation under the NT Act, may not prevent a subsequent application by other claimants seeking compensation. In any event, for the reasons I have given, the 'broader' interpretation may prove to be unworkable in a given case. Moreover, as I have explained, had Parliament intended to promote the objects of certainty and finality in the way suggested by the Commonwealth, it would have been easy for it to incorporate in the legislation a definition that achieved the desired result. 27 For these reasons, I do not consider that s 13(2) of the NT Act requires the Court, in the circumstances of the present case, to make a current determination of native title. The respondents do not point to any other source of power which would support the making of a determination of native title. Accordingly, I do not propose to make any such determination. | determination of native title whether dismissal of an application for a determination of compensation is a 'determination of compensation' whether the court is required to make a determination of native title native title act 1993 (cth), s 13(2) native title |
On 4 July 2008 I gave judgment on a discovery dispute between the parties: see The University of Sydney v ResMed Ltd [2008] FCA 1020 (the Discovery Judgment). The claims made and remedies sought by the University in this proceeding are extensive. The parties' dealings began in 1991, and possibly earlier, and it seems that if the case proceeds to a hearing, the evidence will be, to put it mildly, vast and detailed. No doubt such considerations have played a part in prompting ResMed to challenge the University's entitlement to discovery against it, and now to challenge the University's pleading. I do not blame ResMed for seeking to confine the University's case. However, my task is to deal with the motions in accordance with the legal principles that govern pleadings. It is not to the point that the proceeding was not commenced until 2007, 16 years after the Licensing Agreement of 17 May 1991 which lies at the heart of the proceeding, or that in certain respects the University, in its SFASOC, has taken a stance different from that which it took in earlier forms of the pleading. ResMed filed and served its original notice of motion on 4 July 2008, the date of delivery of the Discovery Judgment. On 15 August 2008 the University filed a notice of motion seeking leave to file its SFASOC. Certain aspects of the University's SFASOC amend parts of its FASOC which were the subject of attack in ResMed's amended notice of motion. On the hearing, argument took place with reference to the SFASOC. When the mask is placed in contact with the wearer's nose, the membrane begins moulding around the wearer's nose and in fact moulds completely around the nose and conforms to the facial contours which are actually overlaid by the membrane. Hand drawn figures numbered 1 to 8C were annexed to the Provisional Specification (in professionally drawn form, these were subsequently to form part of the patent specification referred to below). The expressions "bubble mask" and "membrane mask" have been used by the parties to refer to the invention. (2) On 25 February 1991, the University and ResMed entered into a "Confidential Disclosure Agreement" (CDA). The CDA recited that the University had agreed to supply to ResMed in confidence information relating to the "Nasal Mask (Provisional Patent No PK0228) ...". In the CDA that information was called "the Information" (the term "the Information" as used in the CDA is to be distinguished from that term as it is used in the SFASOC --- see [33]ff below). The Company shall make no commercial use of the Information unless it enters a further agreement with respect to the use of the Information, and 1.3 not to disclose the Information to any third party from the date hereof without the written consent of the University. The stated title was "Nasal Mask". The stated priority date was the date of the filing of the Provisional Specification --- 21 May 1990. (4) On 17 May 1991, the day following the filing of the patent application, the parties entered into the Licensing Agreement which lies at the heart of the present proceeding. Because many of the provisions of the Licensing Agreement are referred to, I have annexed a copy of it to these reasons for judgment (Annexure A). It will be noted that the Licensing Agreement provided that it commenced on 1 January 1991, some 41/2 months before its date, and continued until 7 December 1992 (cl 2). (5) On 21 November 1991, the University's patent application and complete specification were published. Accordingly, by that date, if not before, all information contained in the complete specification had become part of the public domain through the actions of the University. For this reason, any part of the information the subject of the CDA that was included in the patent application and accompanying complete specification was excluded by cl 2.3 from the scope of the CDA. (6) On 24 December 1992, shortly after the Licensing Agreement had expired on 7 December 1992, ResMed wrote to the University referring to a discussion in which the University's representative had indicated his wish to extend the Licensing Agreement "for the life of the patent(s)". At that time, no patent had been granted. Could you please confirm the University's agreement to this by signing and returning the enclosed duplicate of this letter. The reference to "the above agreement" was a reference to the Licensing Agreement. (7) On 2 December 1993 Australian Patent No 643994 (the Patent) was issued. ResMed does not dispute that it must appear "clearly" or "plainly" or "obviously" that the pleading discloses no reasonable cause of action before it is appropriate to order a striking out. It is important to remember that O 11 r 16 is concerned with what is disclosed by the pleading. The emphasis on the word "no" reminds us that "a cautious approach" should be taken to the exercise of the Court's power under s 31A: cf Bonnell v Deputy Commissioner of Taxation (No 5) [2008] FCA 991 at [81] per Graham J. I do not propose to deal expressly with every aspect of every one of them. To the extent that any detailed aspect of an attack is not dealt with expressly in these reasons, it is not sustained. Also, my views expressed in relation to the construction of the Licensing Agreement and the CDA are preliminary views only --- I decide nothing finally. ResMed contends that it is unclear whether, when the University uses the expression "the Membrane Mask" later in the SFASOC, it does so consistently with this definition. Similarly, the particulars to paras 18A, 26A and 41 of the SFASOC refer to "the Membrane Mask disclosed in the Provisional Application and the Patent". The full expression in para 3(a) is "the Membrane Mask disclosed in United States patent no. US5243971, as also disclosed in Australian Patent No AU643994" and the full expression in the other paras mentioned is "the Membrane Mask of US5243971". I do not think that there is any ambiguity. The University is alleging in para 5 of the SFASOC that the Patent, in the particulars to paras 18A, 26A and 41 that the "Provisional Application" and the Patent, and in Annexure B that US Patent No 5243971, are all in respect of a facial gas delivery mask involving the use of a thin, flexible membrane to provide an airtight seal between the mask and the face of the wearer. It does not necessarily matter that the "Provisional Application", the Patent or the US Patent may not be expressed in the terms of the definition found in para 4A of the SFASOC. The SFASOC relies on the 13 items of information comprising the Information in three ways, pleaded in the alternative: 1. as Intellectual Property within the meaning of the Licensing Agreement and therefore as the basis of a contractual cause of action under the Licensing Agreement (para 11E); 2. as information the subject of an equitable obligation of confidentiality owed by ResMed to the University (para 11G); and 3. to the extent that any of the Information does not form part of the Intellectual Property within the meaning of the Licensing Agreement, as information subject to the provisions of the CDA and therefore as the basis of a contractual cause of action under the CDA (para 11I). As a preliminary point, ResMed submits that some or all of the 13 items (a) to (m) of the Information do not set out any identifiable information. I do not accept this submission. (m) A suitable shape for a children's version of a facial mask with membrane. Item (m) was information as to what was a particular suitable shape for a children's version. Both are identifiable pieces of information. Further, ResMed submits in relation to each category that the University has not pleaded and particularised facts capable of supporting that ground. I agree with ResMed that the University must indicate all of the facts, matters and circumstances on which it relies as establishing each of the three categories of legal obligation. However, in my opinion, the University does so. Paragraphs 11A, 11B, 11C, 11D and 11E plead the facts on which the University relies as establishing that the items of the Information formed part of the Intellectual Property for the purposes of the Licensing Agreement (later paragraphs of the SFASOC also plead elements of contractual claims based on the Licensing Agreement). Paragraphs 11B, 11F and 11G plead the facts relied on as giving rise to the equitable obligation of confidentiality. Paragraphs 11B and 11I plead the facts giving rise to a liability under the CDA. The Licensing Agreement was dated 17 May 1991, and was deemed to commence on 1 January 1991 (see [18]-[19] above). On its face it purported to operate prospectively from 1 January 1991. However, according to para 11B of the SFASOC, the Information was supplied by the University to ResMed during the period 21 May 1990 to the end of 1991. If it is to be alleged that some of the items of the Information were supplied prior to 1 January 1991, facts should be pleaded showing the basis on which it is said that those items constituted "Intellectual Property" within the meaning of the Licensing Agreement. Likewise, the CDA purported to operate prospectively from its date, 25 February 1991. There is no pleaded basis on which the para 11B items of Information supplied by the University to ResMed during the period 21 May 1990 to 25 February 1991 could have been supplied pursuant to the CDA. The pleading should be amended in order to make clear to ResMed and the Court precisely what the University's case is in these respects. It is not enough to say, as counsel for the University said, that the evidence may disclose pre-contract facts which would cause the contracts to be construed in such a way so as to catch the pre-contract supplies of items of the Information. The express terms of the contracts point too clearly in the opposite direction to make it fair to ResMed for such an unexpected construction to prevail on the hearing without advance notice. I do not, however, accept ResMed's submission that any item of the Information supplied on or after 17 May 1991 could not have been supplied pursuant to the CDA. It may be that an item of Information constituted information supplied pursuant to the CDA, but that the item did not satisfy the definition of Intellectual Property in, or was otherwise excluded from, the Licensing Agreement. In these circumstances, that item of the Information could have been supplied pursuant to the CDA and remain subject to its provisions (see cl 1.2 of the CDA set out to at [16] above). ResMed argues that the expression "like rights" in the definition of Intellectual Property in cl 1 is referring to a more conventional notion of intellectual property than "mere information". It may be, as ResMed submits, that para (b) of Schedule 2 should be construed so as to refer only to information of a kind falling within conventional intellectual property rights so that it does not go beyond the definition of "Intellectual Property" in cl 1. Furthermore, the information referred to in para (b) of Schedule 2 is limited to information "relating to" the Nasal Mask, being the invention described in the Provisional Specification and later the subject of the Patent (see the Discovery Judgment at [52]). ResMed submits that the "information" relating to the Nasal Mask referred to in para (b) of Schedule 2 must be information distinct from any part of the information contained in the Provisional Specification or the Patent. Therefore, so the argument goes, the Information cannot be simply any of the features of the invention described in the Provisional Specification or integers of the invention described in the Patent disaggregated from the combination of those features or integers that comprise the claimed invention. ResMed submits that upon analysis many of the items of Information (a) to (m) within para 11B of the SFASOC will be found to be no more than such features or integers. In the Discovery Judgment I said (at [48]) that I could not be precise as to the meaning of "relating to" for the purposes of the discovery dispute. Nor do I think that I should rule on the present argument that a feature described in the Provisional Specification, or an integer within a claim of the Patent cannot also be information relating to the Nasal Mask for the purposes of para (b) of Schedule 2 to the Licensing Agreement. Nor should I decide conclusively as to the meaning of "information", or indeed, whether any particular item of the para 11B Information is capable of being "information" within the Licensing Agreement. There are two reasons why it would be inappropriate to do so. First, it is conceivable that evidence on the final hearing as to the background against which the Licensing Agreement was entered into may throw some light on the meaning that both parties should be taken to have intended the expressions "relating to" and "information" to bear. Second, it would be necessary to have a protracted argument as to whether particular items among the 13 constituting items (a) to (m) constituted such features or integers of the invention the subject of the Provisional Specification and the Patent. However, the University's case of breach of an equitable obligation of confidentiality is not one of breach of cl 3.4. Nowhere in the SFASOC does the University expressly refer to cl 3.4. I do not think it is appropriate for me to decide conclusively that in the circumstances of this case an equitable obligation of confidentiality cannot exist unless cl 3.4 of the Licensing Agreement is activated. ResMed also asks me to strike out certain items of para 11B on the basis that they are not capable of founding an equitable obligation of confidentiality (or alternatively of being information subject to the CDA). ResMed submits that certain items of the Information are disclosed in either the Provisional Specification, the Patent, or various pieces of prior art, or are disclosed by the manufacture, sale and use of a mask embodying any features described in the items of the Information. The prior art on which ResMed relies form Annexure A(2) to its submissions and exhibits AM-6 to AM-11 to an affidavit of Anthony Muratore sworn 25 August 2008. The construction of the Provisional Specification, the Patent , and disclosures in the prior art are matters that are too complex and arguable to provide the basis for a striking out. On a related point, ResMed also complains that the University has not pleaded that the Information remained confidential at the time of the alleged breaches of the equitable obligation of confidentiality pleaded in paras 18A, 18B and 38 of the SFASOC. ResMed points to the fact that by applying for the Patent, the University made public the information contained in the complete specification. I agree with the University that it is for ResMed to plead in its defence that particular items of the Information or particular parts of such items were made public by the University and therefore lost their confidential character: see, for example Bullen & Leake & Jacob's Precedents of Pleadings (16 th ed, London, Sweet & Maxwell, 2008) vol 2, 66-R3, 66-R6, pp 1062-1063. As I understand it, ResMed's defence will so allege (without admitting that the items of the Information were ever confidential in the first place). Finally, ResMed referred to numerous legal authorities in support of an argument that the Information is too "vague" or "imprecise" to be subject to an equitable obligation of confidentiality. I discussed two particular items of the Information at [36] above. With some misgiving, I have come to the conclusion that the 13 items of the Information are sufficiently precise to permit the pleading of an equitable obligation of confidence. However, it is often the case that the more general the scope of the information, the more likely it will ultimately be found that it was not originally, or did not continue to be, confidential. However, cl 2 makes it plain that the onus is on ResMed to demonstrate that a particular item of Information fell within one of the exceptions. Clause 11.4 gives the meaning of the term "improvements" for the purpose of cl 11. In para 26A of the SFASOC, the University alleges that, in respect of each "Mirage Mask", ResMed has made and incorporated in the mask one or more discoveries or improvements in connection with the Intellectual Property. In para 26B of the SFASOC, the University alleges that use by a person other than the University or its licensees of those discoveries or improvements would infringe the Patent. Particulars of the alleged discoveries or improvements are set out in Annexure A to the SFASOC. "Mirage Mask" is the term used in the SFASOC to refer to any one of a series of masks (set out in the particulars to para 14 of the SFASOC) sold by ResMed since about August 1997, and in respect of which ResMed has paid no licence fee to the University. In my preliminary opinion, the expression in cl 11.3 "any application for Letters Patent or other equivalent protection in respect thereof" is a reference to any application for Letters Patent or other equivalent protection that the University may make in respect of any improvement made or discovered by the University in connection with the Intellectual Property. However, ResMed raises a difficult issue as to the construction of cl 11.4 of the Licensing Agreement. The question which arises is whether the expression "the said Letters Patent" in cl 11.4 refers to the application for Letters Patent referred to in the immediately preceding cl 11.3, as the University submits, or to the Patent, as ResMed submits. ResMed attacks parts of the SFASOC, such as para 26A, that allege that a discovery or improvement could be other than an infringement of the Patent. A problem with ResMed's construction is that there is no explicit reference anywhere in cl 11 to the Patent (although I accept that it is captured by the references to "Intellectual Property" in cl 11). On the other hand, the difficulty in treating the expression "the said Letters Patent" in cl 11.4 as referring only to the "application for Letters Patent" of cl 11.3 is that there may never be such an application. Both constructions are arguable and I do not dismiss other possible constructions. However, I am inclined to think that the meaning of the expression "the said Letters Patent" in cl 11.4 refers to the expression "Letters Patent" in cl 11.3. There is no other reference to Letters Patent anywhere in cl 11. The relevant paragraphs of the SFASOC should be allowed to stand. Another attack which ResMed makes on the "improvements" cause of action is that there is no pleading of "a relevant connection" between the discoveries or improvements allegedly incorporated into the Mirage Masks, and the Intellectual Property. I agree with ResMed that the University must plead facts showing "the connection" it alleges between the discoveries and improvements identified in Annexure A to the SFASOC and the particular aspects of the Intellectual Property. The improvements described in Annexure A to the SFASOC and the patent applications, patents and designs described in Annexure B to the SFASOC speak for themselves. The expression "Intellectual Property" for the purposes of the SFASOC is defined in the particulars to para 10. The University should identify in the SFASOC the particular piece or pieces of the Intellectual Property with which each improvement is alleged to have a connection. ResMed points to University of Western Australia v Gray (No 20) (2008) 246 ALR 603 at [1355] per French J and SPI Spirits (Cyprus) Ltd v Diageo Australia Ltd (No 6) (2008) 77 IPR 62 at [32] per Edmonds J. My present view is that there is no property in an application for a patent and so a constructive trust could not subsist over such an application. However, I think it appropriate that the matter be left for determination on the final hearing. Schedule 4 refers simply to "Nasal Mask". Paragraph 15(f) of the SFASOC states the claim that each Mirage Mask is a "Product" because it "incorporates" one or more items of the Information. Paragraph 15(g) pleads the claim that each Mirage Mask is a "Product" because it "has been developed by the use of" one or more items of the Information. It appears that in para 15(g), the University is alleging that an item of the Information may be incorporated in a Mirage Mask, notwithstanding that the incorporation is not apparent from a visual inspection of the relevant Mirage Mask. Rather, the item of the Information may be incorporated in the relevant Mirage Mask if ResMed used the item of the Information to develop the Mirage Mask. However, there is no pleading of extraneous facts showing a chain of causation (except perhaps by way of the concept of "development by use"). If the University intends to rely on anything more than a visual comparison to establish the chain of causation, the SFASOC must be amended, at a minimum, to allege chain of causation facts. However, the SFASOC does not indicate that the allegations made at SFASOC [18]-[18D] are limited to those circumstances. Indeed, it is not clear whether, in repeating SFASOC [15](a) --- (g) at SFASOC [18] & [18A], the University should be taken to repeat the assertion at SFASOC [15] that "each Mirage Mask is a Product within the meaning of the Agreement". For this reason also, the pleading at SFASOC [18]-[18D] tends to cause embarrassment. ...it would be implausible to suggest that the use by ResMed of the Intellectual Property for the purpose of manufacturing and marketing the Product, being expressly authorised under clause 3.1 of the Agreement, constituted a breach of an equitable obligation of confidence owed by ResMed to the University. Logically, use of the Intellectual Property in developing the Mirage Masks could only be in breach of an obligation of confidence if those masks are not Products within the meaning of the Agreement. However, the pleading at SFASOC [18]-[18D] is not so limited and, for that reason, is embarrassing. However, the Annexures to the SFASOC allege some facts that should be alleged in the text of the SFASOC, not necessarily verbatim but through a cross reference. This should be corrected. Both parties have had a measure of success and there should be no order for costs on the motions. | pleading s motion to strike out both parties having measure of success no order as to costs. practice and procedure |
He was a member of the Australia Post Superannuation Scheme. Under that scheme, a payment was to be made if he died though he had not nominated who should receive any payment in the event of his untimely death. A dispute then arose between his parents and a young woman who was the mother of his child, about how the payment should be made. The trustee of the scheme decided the mother of his child was his de facto spouse and the payment should be made to her (as to 75%) and their child (as to 25%). No payment was to be made to his parents. The parents challenged this decision in the Superannuation Complaints Tribunal. In effect, the Tribunal decided not to disturb the decision of the trustee. The parents contend in this Court that in making its decision, the Tribunal fell into legal error. 2 The proceedings take the form of an "appeal" from the determination of the Tribunal reflected in determination number D05-06/121 dated 17 January 2006. The appeal is under s 46(1) of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("the Complaints Act ") which enables an appeal to this Court from the Tribunal on a question of law. The first respondent is the trustee of the Australia Post Superannuation Scheme. The Tribunal has been joined as second respondent and has filed a submitting appearance. At the date of his death, the deceased was 25 years of age and, on the finding of the trustee and the Tribunal, was in a de facto relationship with Hayley Ifield (though this has been challenged by the parents). On 13 May 2003, a daughter was born of that relationship. 4 As noted earlier, the deceased was a member of the Australia Post Superannuation Scheme ("the scheme"). He did not complete a 'Nomination of Beneficiary form' for the scheme and died intestate. The total amount of the superannuation death benefit as at 2 December 2004 was $221,509.65. The Australia Post Superannuation Trust Deed in effect at the date of the deceased's death was that amended to 1 July 2000. The complaint was made pursuant to s 14(2) of the Complaints Act , which enables a person to make a complaint about certain decisions made by a trustee to the Tribunal "that the decision was unfair or unreasonable". The appellants sought a decision that 75% be paid to the appellants and the deceased's siblings instead of Ms Ifield, with the remaining 25% still to go to the daughter. Ms Ifield and the daughter were joined as parties in the Tribunal proceedings. 9 The Tribunal conducted the review on the papers. The second appellant and Ms Ifield were both granted requests to be legally represented. The daughter was represented by her grandmother. The request of the first appellant to be legally represented was refused. Submissions were received from the appellants, Ms Ifield and the daughter. 10 The appellants' case before the Tribunal was that they were financially dependent on the deceased. They said that they were seriously disabled and unable to work and that the deceased provided them with $50 per week towards rent and had assisted them financially in other ways. He had also assisted one of his siblings to buy a boat. The appellants claimed they had been very close to the deceased and saw him daily, and that had he not died, the deceased would have continued to provide emotional and financial support to his parents and siblings. 11 The appellants claimed that Ms Ifield was not a potential beneficiary, being neither his spouse nor financially dependent on him. They disputed that Ms Ifield and the deceased had lived together as husband and wife, even though they had shared a house. Evidence relied by the appellants included that Ms Ifield was receiving the sole parent pension at the time she claimed to have been in the de facto relationship and that the deceased had not nominated her as a spouse on his tax returns. 12 Ms Ifield claimed that she was the deceased's de facto, having lived with him as his wife for two years prior to his death. She disputed that the appellants were financially dependent on the deceased and that he had given them $50 per week. She submitted that the evidence showed that the appellants and siblings were merely recipients of the deceased's generosity but not that they depended upon him. In the submissions, there were many disputes of fact on minor issues, as well as accusations. The Tribunal does not propose to involve itself in these issues as they are of little relevance in the determination of this complaint. 14 The Tribunal was not satisfied that the appellants or his siblings were financially dependent on the deceased and found that there was no evidence that he had provided them with regular monetary support. Although it accepted that the deceased had made many gifts to his family, the Tribunal did not accept this as evidence that the appellants were financially dependent on him. The Tribunal concluded that both Ms Ifield and the daughter were financially dependent on the deceased, and that he would have wished to support them. It was satisfied that the deceased member and Ms Ifield were in "a loving, committed relationship" at the time of his death. Pursuant to s 37(6) of the Complaints Act , the Tribunal found that the trustee's decision was "fair and reasonable in the circumstances" and affirmed the decision. The written submissions of the appellants articulated the grounds differently. They identified five issues. I will address the grounds as they emerge from the written submissions. The appellants submitted that the Tribunal had failed to consider whether the term "Dependant", which included "any other person whom in the opinion of the Trustee is ... in any way dependent on the Member or Beneficiary" (emphasis added), included not only financial dependence but also encompassed either or both emotional dependence and other forms of dependence, such as financial contribution to the appellants' outgoings on a frequent but not necessarily regular basis. 17 The failure to consider or give reasons whether emotional dependence or other dependence was sufficient to constitute dependence for the purposes of the scheme was framed as a failure to take into account a relevant consideration and a failure to make a finding on a material question of fact. 18 The appellants submitted that the Tribunal had narrowly and unreasonably focussed on whether the appellants, as potential beneficiaries, could establish financial dependency. It had narrowly construed the term "in any way dependent" to require evidence of financial dependency and thereby posited a test which was incorrect as a matter of law. 19 The appellants relied on the decision of the Court of Appeal of New South Wales in Petrohilos v Hunter (1991) 25 NSWLR 343. The appellants submitted that, in that case, in a different but related context, Hope AJA (with whom Clarke and Sheller JJA agreed) refused to confine the term "Dependent", "as used in the statute or otherwise", to the "very limited meaning" of financial dependence (at 386). Hope AJA instead adopted the definition applied by Samuels JA in Ball v Newey (1988) 13 NSWLR 489 at 491, namely that 'Dependent' in the ordinary sense of the word, means the condition of depending on something or someone for what is needed". The appellants submitted that dependence may arise by reason of expectations of support as manifested by patterns of behaviour which may or may not have monetary value: see Petrohilos at 346. They submitted that their evidence to the Tribunal confirmed that they were in need of both emotional and financial support from the deceased, and that he was the only person in the family who was employed and who provided constant comfort, gifts, financial support and contributions. The appellants also relied on the decision of the Administrative Appeals Tribunal in Re Cornish and Commissioner for Superannuation (1987) 18 ALD 418. 20 The respondent resisted the appellants' contention that the term "Dependant" as defined in the trust deed extended to emotional dependence and contended that the notion of dependency in the trust deed was limited to financial dependency. It is unnecessary to detail this argument. The Tribunal said that "[t]he issue is not what the decision of the Tribunal would have made on the evidence before it". The appellants submitted that the intention of the Complaints Act is to place the Tribunal in the shoes of the trustee when making a determination in respect of a complaint and, under s 37(1) of the Act, the Tribunal was vested with all the powers, obligations and discretions of the trustee. The Tribunal had also erred by affirming the decision of the trustee as fair and reasonable in circumstances where it was not fair and reasonable. 22 The respondent submitted that, contrary to the appellants' submission, the Tribunal was not required to conduct a hearing de novo and had approached its task in accordance with the authorities. It relied on the Full Court in Cameron v Board of Trustees of the State Public Sector Superannuation Scheme [2003] FCAFC 214 ; (2003) 130 FCR 122 where it was held that the Tribunal's task in reviewing a decision pursuant to s 37 of the Complaints Act was not to determine whether the decision complained of was the correct or preferable decision but to form a view, from the perspective of the trustee, as to whether the trustee's decision was fair and reasonable having regard to the framework of the governing rules and terms of the applicable fund. It held also that the Tribunal could be satisfied that a trustee's decision was fair and reasonable without reaching its own preliminary view of the issues on the material before it. It relied also on the decisions of Mansfield J in Hornsby v Military Superannuation & Benefits Board of Trustees No 1 [2003] FCA 54 ; (2003) 126 FCR 484 and Lykogiannis v Retail Employees Superannuation Pty Ltd [2000] FCA 327 ; (2000) 97 FCR 361 at [48] . The appellants submitted that the Tribunal had erred by giving undue weight to irrelevant matters and failing to give adequate weight to relevant matters. It instead proceeded on the basis that she was his spouse, without providing its reasons for this finding. • The Tribunal failed to give any weight to a number of relevant facts. These facts were that the deceased member did not claim Ms Ifield as a de facto on his tax returns, that the de facto was receiving the sole parent pension at the time she claimed to be in a spousal relationship with the deceased, that the deceased member earned almost five times that of the de facto spouse (in relation to The Tribunal's finding that household expenses were shared between the deceased member and the de facto), and that Ms Ifield was not named as a co-tenant on the lease of the premises at which the deceased member lived at the time of his death. • The Tribunal found that the deceased intended sharing his future with Ms Ifield and that they were "in a loving, committed relationship" on the basis of an unexecuted loan application. • The Tribunal reached its conclusion that the deceased and Ms Ifield were in a loving and committed relationship despite the failure of the deceased member to nominate her as a beneficiary for the purposes of the superannuation scheme, to claim the existence of a de facto relationship on his tax returns or to include her name on the lease of the premises where he resided at the time of his death. • The Tribunal said that it was not prepared to involve itself in "disputes of fact of minor issues" without explaining the facts and issues to which it was referring. By ignoring or not involving itself in many disputes of fact, the Tribunal had failed to address whether the trustee's decision was fair and reasonable in all the circumstances and unfairly restricted its review task. Further, the Tribunal was not constrained by the rules of evidence and it was entitled, if not required, to consider disputes of fact. 24 The respondent submitted that the Tribunal's finding that Ms Ifield was a de facto spouse was a finding of fact. The Tribunal had clearly satisfied itself that the definition of "Spouse" was satisfied on the evidence. The appellants' submissions went to issues of weight to be given to the evidence and were not susceptible to challenge on appeal for error of law. No issue of Wednesbury unreasonableness had been raised by the submissions. 25 The respondent also submitted that the Tribunal was not obliged to explain what were the "minor matters" it regarded as irrelevant: see Cameron at [32], where the Full Court refers to Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 39-43 per Mason J. It was clear that the Tribunal had taken into account all the submissions made to it: see HEST Australia Ltd v Sykley [2005] FCA 1381 ; (2005) 147 FCR 248 at [48] - [52] . This is linked to the second issue. 28 The respondent submitted that there was no necessary contradiction between the Tribunal's finding that "all household expenses were shared" and that the deceased paid most household expenses. This was because the evidence was capable of supporting the finding that the expenses were shared in unequal proportions. In any event, it was submitted, this was not a critical conclusion of fact for this appeal and had no bearing on the appellants' position. The assumption is that the Tribunal acted on the basis that a "Dependant" for the purposes of the trust deed was only a person who was financially dependent on the member. It is true that the Tribunal, in its determination, said that in order for the appellants and other members of the deceased's family to be potential beneficiaries, they had to show they were in some way dependent on the deceased. However, in its reasons the Tribunal discussed various aspects of the relationship between the deceased and the appellants including whether there was financial dependency. The Tribunal did not say that it would only consider the appellants as potential beneficiaries if they could demonstrate financial dependency. Indeed the Tribunal's discussion appears to proceed on the basis that the appellants could be potential beneficiaries notwithstanding its conclusion that they were not financially dependent on the deceased. Were it otherwise, it would have been unnecessary for the Tribunal to address the wishes of the deceased and the nature of the relationship between the deceased and both Ms Ifield and his parents and siblings. The Tribunal appeared to consider the issue of whether the trustee's decision was fair and reasonable on the basis of an assumption that the appellants were dependants. It is unnecessary to determine whether, as a matter of construction, the word "Dependant", and notions of dependency in the trust deed, concern only financial dependency as the second respondent submitted. 30 The appellants' submissions on the second issue also involved an assumption that is not correct. The task of the Tribunal was to review the trustee's decision. It has considerable licence in doing so, and was not, in the present case, bound to decide how the payment should be made. Its task was to determine whether the trustee's determination was unfair or unreasonable. In engaging in this process it was not necessary for the Tribunal to decide afresh all findings of fact made by the primary decision maker. It was necessary for the Tribunal to make its own findings sufficient to determine whether the decision under review was fair and reasonable: Cameron at [42] and [43]. 31 The third issue does not, in substance, concern a question of law but rather is an attempt to have the Court re-evaluate the material considered by the Tribunal. It was a matter for the Tribunal to make what use it wanted of the material before it, having regard to its role as discussed at [30] above. It was not incumbent on the Tribunal to resolve all disputes of fact on minor issues. 32 The comments in the preceding paragraph are equally applicable to the fourth issue. 33 Similarly the fifth issue is answered by the observations made at [30] above. 34 The appeal should be dismissed. I certify that the preceding thirty four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | appeal from superannuation complaints tribunal affirming decision of trustee of superannuation fund to distribute death benefit to deceased's daughter and de facto whether tribunal erred by confining meaning of "in any way dependent" in definition of "dependant" in trust deed to financial dependence whether tribunal erred in finding that mother of deceased's daughter was deceased's "spouse" whether tribunal erred by not making findings on what it called "disputes of fact of minor issues" whether tribunal correctly understood its review role under s 37 of the superannuation (resolution of complaints) act 1993 (cth) superannuation |
Order 2 as proposed by Optiver is expressed to be without limiting Order 1, and particularises a series of detailed orders relating to computer program source codes and object codes, to be produced by the Respondents within 7 days. The first to ninth respondents (Tibra) submit that, in the circumstances, proposed Order 1 is oppressive and unnecessary and that, by formulating proposed Order 2, Optiver in an exhaustive way has identified documents which would provide it with sufficient information to enable a decision to be made whether to commence proceedings. In my view, the preferable course at this stage is to make specific orders rather than the vague general orders proposed by Optiver, subject to specific subclauses of Proposed Order 2. If, after this specific discovery has been made, there is shown to be a need for further discovery, a subsequent application can be made by Optiver. The expression "Optiver programs" is defined to mean twelve specific programs in a definition to the Proposed Minutes of Order, and "documents" is given the meaning in O 1 r 4 of the Federal Court Rules and this covers a broad range of records. The definition of "functions" in the proposed orders refers to groups of program functions. Under proposed Order 2, documents relating to source and object codes and any historical source code repository are sought, together with source codes for share auto trading. Also included in the proposed order are all source code revision logs relating to the development of computer programs and documents evidencing communications as to the location of programs and the source or origin of computer programs that perform any of the functions, as defined. An affidavit was filed on behalf of Tibra by Mr Andrew King (Mr King), sworn on 17 December 2008. Mr King is the eighth respondent in the proceedings and he is employed by Tibra Global, the fourth respondent. He is an experienced software developer. He points out that the source code repository is an historical facility which stores source codes written by software developers for Tibra Global's computer programs. During his employment with Optiver, Mr King worked on maintaining an automated trading program for twelve months, and was a team leader of the relevant project for approximately six months. He says that in relation to the expression "functions as defined in proposed draft orders," the programs did not perform some of those functions mentioned. In relation to the difficulty, cost and expense of production of the documents sought in Order 2, Mr King says there are approximately 35 software developers world-wide employed at Tibra Global, with many additional staff involved in the production of trading systems, and that there would need to be at least 35 hard disk drives that would need to be duplicated to provide a digital copy for inspection by an independent expert. He says that approximately 30 percent of the hard disk drives are not located in Australia and that it would take at least one to three hours for each hard disk drive to be imaged in relation to the production to the disk drives data storage disks and memory sticks by the fifth to ninth respondents. Mr King notes that Optiver has not limited its requests for production of the documents as to time, and says that compliance would involve a major interruption to work performed by each of the fifth to ninth respondents. Mr King refers to the expression "object code," in respect of which the records are sought. He explained that computer programs are developed in stages and in the first stage a series of documents in a particular programming language are written in a way similar to writing which can be understood by humans. These documents are known as the "source code" and cannot be used by a computer. The second stage involves use of a compiler, which is a computer program that understands the programming language and which converts the source code into an object code. The latter is only created if the compiler can understand the source code, so that the object code is the final working computer program understandable by a computer which is used to run the computer. Where development involves a continual compiling of the source code into an object code this can involve carrying out the above process at least twenty times a day. When a particular code is satisfactorily developed then the change will be committed to the historical source code repository. Object codes are not stored. However, source codes are stored and if an object code is required in order to use a program at a later date the source code is run through the compiler. Mr King's evidence is that to produce an object code for a particular version of the source code it would be necessary to obtain the source code from the historical source repository and run the program. He says that the automated trading application the subject of this proceeding was developed between June 2006 and December 2008, and there have been approximately 10,000 different versions or iterations of the source code developed collectively, and that in order to produce the object code for each of the 10,000 versions held in the repository of Tibra Global it would take in the order of 20,000 hours. The evidence of Mr King was not challenged. In the light of the above, Tibra contend that the discovery sought in Order 2 is excessive. In relation to a number of the paragraphs in Order 2, no time period is specified. The relevant time frame is over about two and a half years. However, in regard to the evidence of various versions of the programs over time and the importance of later versions in determining whether there has been a use of the original programs, I do not consider that the existence of a time limitation is determinative. The Full Court indicated that the current source code used by Tibra could be relevant but various iterations may, for example, bear the hallmark or footprints of copying from Optiver's program and information by and of indirect copying adaptations from intermediate versions. I agree that with regard to the continuing period of development of what is now the current Optiver program there may be a number of iterations of that program which may be relevant and I do not think the objection to specific dates or specific versions is appropriate. That is too restrictive. I do not therefore accept the submission by Tibra that Optiver's entitlement to inspect source codes should be limited to computer programs which performed the functions for example as at 5 September 2006 and 19 June 2007. Having regard to the evidence in relation to the close connection between the object code and the source code as stated by Mr King, I do not agree with the proposition that the relevance of the object code to Optiver's case has not been made evident. In the light of the material provided by Optiver on this application, I am not persuaded that the historical repository of source codes is irrelevant, nor am I persuaded that documents relating to it are unnecessary to enable a proper decision to be made under O 15A r 6 of the Federal Court Rules . Some objections to Proposed Order 2 were made by Tibra on the basis that some of the sub-paragraphs replicate documents that will be produced under other subparagraphs, however I do not think this is a sufficient ground for objecting to those paragraphs. Accordingly, my conclusion is that the documents as sought in Proposed Order 2 should be discovered. The role of the independent expert is to consider the material produced and advise Optiver's solicitors whether there is sufficient material to support the making of a claim. This is to be done on the basis that there is no disclosure of the material to Optiver. Tibra seek to know the name of the expert before inspection takes place and this, in my view, is a reasonable request. Tibra also wish to have a copy of the expert's report given to their solicitors, to ensure that the report does not disclose any sensitive information to Optiver. Again, this in my view is a reasonable request Tibra propose that the discovered material be lodged with an independent third party, such as PriceWaterhouseCooper, to be kept at the premises of the third party and to be inspected by arrangement with the third party. Optiver objects to this proposal on the basis that it is expensive, time consuming and inconvenient, and submits that custody of the documents and control of access should be given to its solicitors, who have signed a stringent confidentiality undertaking. In my view, having regard to the matters raised by Optiver, there is no justification or necessity for third party custody in this matter. Optiver's solicitors will be subject to a confidentiality undertaking, and they are officers of the Court. This is a sufficient protection of confidentiality. There is no basis for believing that the solicitors or the expert will fail to fulfil their obligations pursuant the undertaking, or as officers of the Court. See Seven Network Ltd v News Ltd (No 3) [2004] FCA 836 at [25] . The only point of difference is minor and semantic, but for the sake of clarity I would delete the words "applies fully" and substitute the words "has observed its lists of documents" in accordance with the suggestions of the respondent. I direct the parties to bring in Short Minutes to give effect to these reasons at a suitable time to be arranged with my associate. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | preliminary discovery form of orders for discovery of documents and computer codes level of discovery which should be made form of confidentiality orders practice and procedure |
The circumstances in which Mr Gulson's psychiatric condition, real or perceived, may be relevant in the trial which I have begun to hear were discussed by me in my reasons for judgment of 10 July 2006 ( The Food Improvers Pty Ltd v BGR Corporation Pty Ltd [2006] FCA 1238). At this point I have heard an opening and the affidavits of the second plaintiff, Mr Bax, have been read. They, together with some of the documentary material within them, suggest that there will be a deal of evidence in the proceedings concerning the way in which Mr Gulson was behaving, particularly at the time of critical meetings in late May 2005 and thereafter. The way in which it was put, I described in my earlier judgment as going to the manner in which Mr Gulson was exercising his powers as the person controlling approximately 70 per cent of the shares in BGR and thus the group of companies of which BGR is the relevant principal. Mr Bax's company The Food Improvers Pty Ltd, was a shareholder in control of shares constituting about 22 per cent of the voting and issued capital in BGR. 3 The defence of the companies which Mr Gulson controls to the plaintiffs' claim asserts that the allegations concerning Mr Gulson's conduct amount to a ruse to deflect responsibility for the refusal by Mr Bax and a senior employee of the BGR group, Mr Gobert, in late May 2005 to continue to participate in business travel and arrangements overseas that were of significance with the BGR group's business. The defendants assert that it was Mr Gobert and Mr Bax who were supposedly completely unprofessional, intentionally disobedient, in serious breach of their duties and wilfully neglectful in the discharge of their obligations under their employee or consultancy arrangements with the BGR group. 4 As I noted in my earlier judgment, there is a real issue as to how Mr Gulson was conducting himself among others and whether it was his behaviour and the way in which he was behaving was capable of making out the claim for oppression or was irrelevant to it depending on which side's point of view is ultimately to be accepted. 5 I noted in my earlier judgment (and it is accepted for present purposes, that this is the position) that Mr Gulson said in his affidavit of 20 July 2005 that on 3 July 2005 he checked himself into the Caritas Centre and was at that time under extreme stress. He said that it was on a recommendation that he decided that it was in his best interests to rest and receive dedicated medical attention. He said that he wished his condition to remain a private matter and for that reason he and his wife told friends, family and staff of the Main Camp group, which at that time was the substantial business of the BGR group of companies, that he had acute bronchitis. 6 The defendants argue that Mr Gulson has had an involvement in other litigation concerning the behaviour of his former employers in the tobacco industry. They seek that the portions of the trial and the evidence concerning Mr Gulson's mental state be kept confidential and that they not be revealed unless and until those matters are dealt with in my final reasons for judgment. 7 Alternatively, they say that those parts of Mr Gulson's evidence and/or his medical records be kept confidential because they are confidential medical records or contain confidential information concerning his health which would ordinarily be regarded as private: see Australian Broadcasting Corporation v Lenah Game Meats Pty Limited [2001] HCA 63 ; (2001) 208 CLR 199 at 226 [42] per Gleeson CJ. 8 The defendants have tendered evidence to show that Mr Gulson has had significant involvement in what I might describe as tobacco industry related litigation. For example, he was a key witness in litigation known as United States of America v Phillip Morris ML in which Kessler J of the United States District Court for the District of Columbia Circuit gave judgment on 17 August this year. At some point during the course of those proceedings, Mr Gulson had been offered 24-hour witness protection, seven days a week for a number of weeks while he was both in the United States and Australia. A number of articles were tendered by the defendants to show that his testimony in that case was the subject of widespread publicity. The defendants said that this established his participation in at least that litigation and the public interest aspects involved showed that there was a degree of notoriety about Mr Gulson's participation and his evidence. He was also a key witness in litigation in the Dust Diseases Tribunal of New South Wales decided earlier this year by Curtis J: Re Mowbray; Brambles Australia Limited (formerly known as Brambles Holdings Limited) v British American Tobacco Australia Services Limited on 30 May 2006 (an interlocutory decision). 9 The Attorney-General for the State of Victoria in Parliament on 18 July 2006 referred to Mr Gulson's role as a whistleblower and the steps he had taken to challenge one of, what was said to be, the world's largest tobacco giants. Mr Gulson is apparently to give evidence in a forthcoming trial of the Dust Diseases Tribunal of New South Wales and is likely to be called as a key witness on what is known as a document destruction policy said to have been adopted by British American Tobacco in a number of cases both in Australia and overseas. The defendants argued that what would otherwise be confidential information concerning his mental state should not be made publicly available. 10 Ms Cook, solicitor for the defendants, deposed to the fact that one of the plaintiffs' solicitors told her of an approach by third parties seeking to share information concerning the present proceedings. When the matter was before the court on 10 July 2006, Ms Cook noticed a lady sitting at the back of the court and sought to ascertain who she was, speculating, after her attempts to find out proved unsuccessful, that she may have been a lawyer. There is also evidence that British American Tobacco Australia Services Limited affiliates in the United States indicated that in the past they had sought to investigate Mr Gulson's background for the purposes of being able to cross-examine him in relation to any matters which may be the subject of questions in forensic proceedings. 11 Currently, Mr Gulson has become aware of a pending suit in the United States concerning what are known as 'light' cigarettes which has attracted a great deal of publicity. He believes that the class action brought in the United States courts has a class in the order of 50 million citizens of that nation. He says that he has not made any decision about giving evidence in other litigation concerning the tobacco matters except at the forthcoming trial in the Dust Diseases Tribunal. 12 Recently, the New South Wales Police have written to him asking for his assistance in relation to the so-called document 'destruction policy' of a previous employer, WD and HR Wills, in which he had a role as company secretary. 14 The defendants also argued that there was a public interest in protecting confidential information in Mr Gulson's medical records where that information was only relevant in the present case and may ultimately, in essence, not be found to be material in the matters about which I have to give judgment. They relied on the inherent confidentiality of the medical records of a patient as suggesting an important reason which would enliven the court's jurisdiction under ss 17(4) and 50 of the Federal Court of Australia Act 1976 (Cth) and the inherent jurisdiction of the court to protect its processes from publicity. 15 The defendants argued that the interests of justice were not closed categories. Those interests are protected by the court's power to close the court or restrict the publicity which might be given to what is deployed in open court. The defendants submitted that the power could extend to a case to protect the interests of a person who had performed what might be perceived as being a public service, such as a whistleblower with what was said to be the significant public interest and public spirit that Mr Gulson had displayed in tobacco-related litigation. The defendants argued that publicity given in the future to confidential medical records might deter Mr Gulson from giving that assistance to persons other than himself, including large numbers of persons. This result was possible if his own private affairs and revelation of material in his confidential medical records received extensive publicity. 16 The defendants also referred to a decision of Tamberlin J in Gianni Versace SPA v Monte [2001] FCA 1565 where he made an order that the whole of the book - the subject of an application for injunctions suppressing its publication --- not be published during the course of the proceedings pursuant to s 50 of the Federal Court of Australia Act 1976 (Cth). 17 Counsel for the defendants was unable to point to any judgment in which the principle of open justice had been qualified in the way in which they now seek. A court can only depart from this rule where its observance would frustrate the administration of justice or some other public interest for whose protection Parliament has modified the open justice rule. The principle of open justice also requires that nothing should be done to discourage the making of fair and accurate reports of what occurs in the courtroom. Accordingly, an order of the court prohibiting the publication of evidence is only valid if it is really necessary to secure the proper administration of justice in proceedings before it. Moreover, an order prohibiting publication of evidence must be clear in its terms and do no more than is necessary to achieve the due administration of justice. The making of the order must also be reasonably necessary; and there must be some material before the court upon which it can reasonably reach the conclusion that it is necessary to make an order prohibiting publication. In that case it was sought to enforce, by a process of contempt, an order made to keep issues in a divorce suit secret. The suit had been heard in camera and their Lordships unanimously held there was no power in the court to do so. ' (Namely, the cases of children and those with mental impairment. But the burden lies on those seeking to displace its application in the particular case to make out that the ordinary rule must as of necessity be suspended by this paramount consideration. The question is by no means one which, consistently with the spirit of our jurisprudence, can be dealt with by the judge as resting in his mere discretion as to what is expedient. The latter must treat it as one of principle, and as turning, not on convenience, but on necessity. He who maintains that by no other means than by such a hearing can justice be done may apply for an unusual procedure. But he must make out his case strictly, and bring it up to the standard which the underlying principle requires. There does, indeed, remain a danger that a Court may not be so jealous to do right when its proceedings are not subject to full public criticism. I acknowledge that this is always possible, and it is not an adequate answer to say that the judges can be trusted, though I believe entirely that they can be trusted. It comes to a choice between the administration of justice in some cases without the safeguard, on the one hand, and on the other hand no administration of justice in such cases at all. I think that to justify an order for hearing in camera it must be shown that the paramount object of securing that justice is done would really be rendered doubtful of attainment if the order were not made. Power to exclude may be conferred expressly by law, but there is no law which empowers us to proceed otherwise than with the ordinary publicity of a Court of justice. Disclosure would prejudice the court's proper exercise of the function it was appointed to discharge, to do justice between the parties. The possible cases where an order may be necessary to prevent prejudice to the administration of justice range fairly widely. The categories of this public interest are not closed and must alter from time to time whether by restriction or extension as social conditions and legislation develop. This rule has the virtue that the proceedings of every court are fully exposed to public and professional scrutiny and criticism without which abuses may flourish undetected. Further, the public administration of justice tends to maintain confidence in the integrity and independence of the courts. The fact that courts of law are held openly and not in secret is an essential aspect of their character. It distinguishes their activities from those of administrative officials for "publicity is the authentic hallmark of judicial as distinct from administrative procedure" ( McPherson v McPherson [1936] AC 1777 at 200). If that situation arises it can be waived in the discretionary balance that is to be struck between the public interest of open justice and preventing prejudice to the administration of justice. It is engaged when parties bring litigation to a court to decide. Judicial power is an element of the government of society. Its purpose is to quell controversies between subject and subject, subject and State, or State and State; see D'Orta Ekenaike v Victorian Legal Aid [2005] HCA 12 ; (2005) 79 ALJR 755 at 761 [31-33] per Gleeson CJ, Gummow, Hayne and Heydon JJ. John Fairfax & Sons Ltd v Police Tribunal (1986) 5 NSWLR 465 at 476E-G per McHugh JA). 30 The essence of this motion is that there is potential for confidential medical information concerning Mr Gulson's state of health at a particular point of time in 2005 to be deployed in the proceedings. That material necessarily goes to an issue raised as to his conduct at that time and the circumstances in which it did or did not occur as alleged by one side or the other. That alleged conduct is material to a central aspect of the plaintiffs' case, namely whether Mr Gulson's conduct amounted to or was evidence of oppression in the corporations in which he, Mr Bax and Mr Cordato were effectively alleged to be in a quasi partnership or similar relationship (such as enlivens the jurisdiction of the court in oppression cases concerning the running of a corporation in which the relevant individuals have had control of its management before a falling out excludes one or more persons). 31 The fact that Mr Gulson's state of health may become the subject of evidence and of written reasons for judgment in the proceedings may, I recognise, have some impact on his reputation and on the material which others may wish to investigate in other litigation in which he may give evidence. There is of course a public interest in the tobacco related proceedings in which Mr Gulson has given evidence in the past and which he may or may not wish to give evidence in the future. 32 But that public interest is not solitary. There is a public interest in knowing what occurred in court just as much in the administration of justice from a side opposed to interests who might call Mr Gulson. Others may wish to know what happened in open court, or what happened in court in these proceedings. 33 But more than that, the administration of justice in these proceedings can be achieved in the ordinary way. What is sought is that the ordinary manner of hearing and deciding this case, at least up to the time of publishing written reasons, should be derogated from because of the possible impact on Mr Gulson's reputation vis-à-vis other litigation in which he has been involved. There, what is in the public interest has been asserted by one side in that litigation for whose interests Mr Gulson's evidence has been of assistance. And, his evidence has been of assistance to judges who have decided those cases accepting his evidence and acknowledging its significance. However, there was a public interest in those cases, of course, to ensure the due administration of justice in them. The function of this Court, when called upon to exercise the powers under ss 17(4) and 50 and the inherent and implied powers to limit publicity, is to ensure the due administration of justice in this court or, in certain other limited circumstances, generally. 34 In cases involving informers, the courts traditionally have taken the view that it is necessary in the interests of justice to suppress not only the name of the informer but also material that might lead to the disclosure of the informer's identity so as to protect sources of information to law enforcement or other authorities or parties whose participation in vindication of public or private rights would be endangered or threatened if they were revealed; see, for example, Cain v Glass (1985) 3 NSWLR 230. 35 Mr Gulson has already been a very prominent witness associated with a number of pieces of, what I have been told, is other public interest litigation. His role has been public. He has not only given his evidence in public but his role has been acknowledged in public judgments. The issue raised about his state of mental health has been the subject of my judgment given in open court; that is, it has been available on the internet: The Food Improvers Pty Ltd v BGR Corporation Pty Ltd [2006] FCA 1238. As Ms Cook's affidavit revealed, at least one other person who was a member of the public exercised her right to be present in court and to hear and see what was said in open court on that earlier occasion. That that involved, among other things, the reading of the evidence and the recounting, as I did in my ex tempore judgment, of the nature of the evidence and issues involved in the then application together with the identity of Dr Newman Harris and of the Caritas Centre to whom Mr Gulson in part confided his own medical care. In those circumstances I find it difficult to see how I could now cast a veil over evidence that dealt with the issue of Mr Gulson's alleged medical condition at the time in May, June and July 2005 to which I understand the medical records and medical evidence may be directed. There will also be, as there already is in the affidavits of Mr Bax which have been read, evidence making assertions about or observations of Mr Gulson's behaviour and apparent state of health. 36 For the Court to now seek to remove from the open administration of justice some part or parts of the evidence would in my opinion be for it to do something which was not necessary in the interests of justice. Mr Gulson has not said that he would not be able to come to this Court or have his case litigated. He has not said, and there is no evidence, that he would not be able to give evidence in other cases. The fact that it may be embarrassing to him and no doubt distressing and upsetting to him to have confidential medical records about observations of him and his perceived mental condition made public is not a reason in itself to suppress either by closure of the court or some other means under ss 17(4) and 50 or in the exercise of the inherent powers of the court the availability of public access to everything that is sought to be raised about those matters. 37 It seems to me that his behaviour in the case on the pleadings and arguments as I have outlined them, understood them and had been told about them in July this year are of fundamental importance in determining a material issue. This has already been exposed in open court. And the broad thrust of the allegations about that condition have been revealed including by Mr Gulson himself saying that he checked himself into the clinic in early July 2005 as was tendered in the application before me on the previous occasion. 38 Those matters are now in the public domain. They cannot sensibly be recalled. Members of the public cannot be put into a position where they may be put at risk of being in contempt because I now make an order suppressing something intimately connected to what has already been revealed in open court. Any member of the public if he or she wishes to, including the media, should be free to discuss that matter. Moreover, the material which has already been identified, or the source of whatever the material has already been identified in my previous judgment, is available for any other third parties to subpoena if there is a legitimate and proper basis for doing so in some other proceedings. So, the suggestion in the affidavit material that others in litigation on the side opposed to the interests who seek to call Mr Gulson might wish to subpoena that material or use it if it is revealed in open court could come to nothing. That information is already in the public domain and available for them to use as they wish. 39 It cannot now be necessary in the interests of justice to suppress knowledge of that source because it is public and available. Therefore, it cannot be necessary for the Court to stop further publicity of it in order to prevent any publicity of it. The cat, in this respect, is out of the bag. 40 For these reasons I am of opinion that I should dismiss the motion dated 15 September 2006 filed by the defendants and Mr Gulson. | courts and judges generally courts proceedings in open court or in camera exception to general rule interests of justice application to close the court during cross-examination of witness in relation to medical condition where witness involved in tobacco industry related litigation as key witness or 'whistleblower' whether likely doctrine from participation in tobacco related litigation if confidential medical records disclosed where some parts of evidence already revealed in open court s 17(4) and s 50 of the federal court of australia act 1976 (cth) procedure |
2 The applicant's principal argument is that the respondent breached clause 4 of the 7 January 1994 agreement on or about 2 May 1994 and again on or about 6 May 1994. Thereafter, it is contended that by a number of actions, viewed on their own or taken together, the respondent constructively breached clause 4 of the agreement. These actions are said to have occurred on or about 24 June 1998, 7 August 1998, 11 August 1998, 12 --- 13 August 1998, 19 August 1998, 21 August 1998, 23 October 1998, 19 November 1998, 24 November 1998, 18 December 1998, 17 February 1999, 24 May 1999, 28 July 1999, 20 August 1999, 15 August 2000 and 25 January 2001. The last two actions complained of can have no bearing on the non-award of the Moruya Heads subcontract. By using the expression 'constructively breached clause 4 of the Agreement' I understood the applicant to be submitting that the respondent impliedly repudiated the 7 January 1994 agreement by rendering further commercial performance of clause 4 thereof impossible, even though it may not have, by word or conduct, renounced its intention to fulfil its obligations under that clause. 3 The secondary arguments advanced are that the Superintendent's Representative under the Kremur Street Pumping Station contract breached a duty of care owed to the applicant, that the respondent committed the tort of unlawful interference with the applicant's trade or business, that the respondent contravened s 46(1)(c) of the Trade Practices Act 1974 (Cth) and that the respondent was guilty of negligent misrepresentation. 5 Mr Hibbert's evidence is that on or about 7 January 1994 he attended a meeting with Mr Cesare Filardo ('Mr Filardo'), Ms Karen Harrison, who was from the New South Wales State Crown Solicitor's Office, and Mr Anthony Barry ('Mr Barry'), who was then Manager Contracts for the Department. Mr Filardo was, nominally at least, a Director of Eden Constructions (NSW) Pty Limited which had been a party to the Norah Head contract. That company had been registered on 26 June 1984 and was deregistered on 7 July 1995. Between 2 July 1984 and 7 July 1995 its directors had been Mr Filardo and his wife, Immacolata Filardo. 6 The applicant was registered on 28 October 1991. Between 1991 and 30 January 1996, Mr Filardo, who was during that period an undischarged bankrupt, served as the applicant's 'project manager'. On 30 January 1996 he became a director of the applicant. Members of his family who formerly owned shares in the applicant were bought out, the former directors resigned and Mr Filardo became the sole director and also the managing-director. 7 At the time of the meeting on 7 January 1994 Mr Hibbert says that 'Eden' and Mr Filardo felt that it was very unlikely that they would ever get a contract with the Department again. 8 It would appear that on 30 June 1987 Mr Filardo had written a letter to a Mr Akister at the Department complaining about 'collusion' between the Department and the Eurobodalla Shire Council and about 'bias, inconsistency and improper motivation' on the Department's behalf to the disadvantage of Eden Constructions Pty Limited, another company associated with Mr Filardo. This letter had been the subject of some discussion between the Department's solicitor, Mr Philip Davenport, and Mr Hibbert. Following this discussion Mr Hibbert wrote a letter to Mr Filardo on 9 July 1987 proposing certain alternative courses of action which Mr Filardo could follow. It would appear that, at least so far as Mr Hibbert was concerned, the matter then became dormant. We are the lowest. Are you going to give me the job? If the job has not gone too far into its assessment, I will give it to you. If it hasn't gone too far, then we should be able to give it to you'. In that context there was no addition of any qualifications about process or further analysis. See also Mr Filardo's letter to the Department of 23 September 1994 referred to below and the Department's reply of 13 October 1994. Yes we will. Eden shall pay the PWD $50,000.00 in full & final settlement of both its & the PWD's claims & rights under the contract or arising out of the Nora (sic) Head project. If it has not it, plus interest, will be credited against the $50,000. Interest shall be calculated as simple interest, at Supreme Court Rates. Subject to normal prudential requirements by the PWD, the PWD will permit restore Eden to the tender list and to the PWD, & permit Eden to do work for the PWD, provided always all other normal Dept. requirements are satisfied. The PWD will release Eden's Bank Guarantee following receipt of the money from Court the full $50,000. For reasons which will shortly emerge, it is unnecessary for me to consider whether this construction of the agreement should be adopted by me. This is because on the pleadings, at least so far as the matter presently before the Court is concerned, the respondent has conceded that the applicant is entitled to the benefit of clause 4 of the agreement as if it were a party to it. However, I should say that the reasoning of Einstein J is highly persuasive. 12 On 7 January 1994 Mr Hibbert wrote a letter to the Crown Solicitor's Office which had been acting for the Department in relation to the resolution of the Norah Head contract issues. Accordingly, you might confirm on a copy of this letter, or separately, that the matters have been settled as noted above. However, according to Mr Filardo, Giles J's findings made in 1989 in the Supreme Court of New South Wales provided a foundation for later claims by Eden Constructions (NSW) Pty Limited for an amount of $55,475.26 (an amount that Mr Filardo contended had been certified but remained unpaid) plus interest and a further amount of $110,500 referable to quantities of rock said to have been encountered in executing the Norah Head works. Hence, as at 7 January 1994, there would appear to have been claims both ways. The respondent's submission that 'there was no consideration for the contractual promise in clause 4 of the Settlement Agreement' should be rejected (see Wigan v Edwards (1973) 47 ALJR 586 especially at 594-5). The primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust, 'even though the construction adopted is not the most obvious, or the most grammatically accurate', to use the words from earlier authority cited in Locke v Dunlop ((1888) 39 Ch D 387 at 393), which, although spoken in relation to a will, are applicable to the construction of written instruments generally; see also Bottomley's Case ((1880) 16 Ch D 681 at 686). Further, it will be permissible to depart from the ordinary meaning of the words of one provision so far as is necessary to avoid an inconsistency between that provision and the rest of the instrument. Finally, the statement of Lord Wright in Hillas and Co. Limited. v Arcos Limited. ((1932) 147 LT 503 at 514) that the court should construe commercial contracts 'fairly and broadly, without being too astute or subtle in finding defects', should not, in my opinion, be understood as limited to documents drawn by businessmen for themselves and without legal assistance (cf. Upper Hunter County District Council v Australian Chilling and Freezing Co. Ltd . [1968] HCA 8 ; (1968) 118 CLR 429 at 437) (per Gibbs J, as his Honour then was, in Australian Broadcasting Commission v Australasian Performing Right Association Limited [1973] HCA 36 ; (1973) 129 CLR 99 at 109-110) . What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon in Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52 ; (2004) 219 CLR 165 at 179 [40] ). Actual beliefs and intentions are, generally speaking, irrelevant in the determination of the legal rights and obligations flowing from a written agreement (see per Gleeson CJ, McHugh, Kirby, Hayne and Callinan JJ in Equuscorp Pty Ltd v HGT Investments Pty Ltd ('Equuscorp') [2004] HCA 55 ; (2005) 218 CLR 471 at 483 [34] ). Where the language of a contract has a plain meaning evidence of surrounding circumstances is not admissible to assist in the interpretation of the contract (per Mason J in Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales ('Codelfa') [1982] HCA 24 ; (1982) 149 CLR 337 at 352). There is no definitive statement in the Australian authorities concerning the regard, if any, that should be given to deletions such as those appearing in clause 4 of the 7 January 1994 agreement. His Honour found the inference to be drawn from the omission to be clear. In NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 Rogers CJ Comm D, held that a deliberate deletion of a clause in a loan agreement expressly providing for repayment by a borrower ousted an obligation, said to be implied, to the effect that the borrower repay the loan. His Honour relied in coming to this conclusion on the remarks of Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW at 352-353. In my opinion the same reasoning is applicable here. Once the parties agreed to exclude from the Final Deed the subject to finance condition that was contained in the First Deed, it is not open to imply a condition in the Final Deed to substantially the same effect as the one deliberately excluded. A further implied term was alleged that 'the status of the Plaintiff [applicant] and/or its Directors as a suitable contractor would be restored'. One issue that has not been specifically addressed by the parties is the duration of the rights and obligations conferred by clause 4 of the 7 January 1994 agreement. As a commercial agreement of indeterminate duration it seems to me that there would be a presumption against permanence. As McNair J said in Martin-Baker Aircraft Co. Ld. v Canadian Flight Equipment Ld. It lies upon a person who says that a contract is revocable or determinable to show either some expression in the contract itself, or something in the nature of the contract, from which it is reasonably to be implied that it was not intended to be permanent and perpetual, but was to be in some way or other subject to determination. Contracts which involve more or less of trust and confidence, more or less of delegation of authority, more or less of the necessity of being mutually satisfied with each other's conduct, more or less of personal relations between the parties will fall into the last mentioned category (per Sir W M James LJ in Llanelly Railway and Dock Company v London and North-Western Railway Company (1873) VIII LR Ch App 942 at 950). In Prints for Pleasure Ltd. v Oswald-Sealy (Overseas) Ltd. (1968) 88 WN (Pt 1) (NSW) 375 at 383 Macfarlan J concluded that the agreement there under consideration was not one where the parties had said that it was to continue for an indefinite period of time which was not determinable except by breach. His Honour construed it as an agreement that would continue until and when Australian orders for fine art prints under the contract were less than 10,000 per annum. His Honour considered that the provisions of the agreement demonstrated that at the time when the agreement was made the parties had considered the period of time during which it was to continue. The applicant eschewed any notion that clause 4 of the 7 January 1994 agreement gave the applicant any special right to be on a pre-tender or pre-qualification list. Furthermore, it does not contend that clause 4 obliged the respondent, through the Department, to award contracts to the applicant. Rather, it was submitted that it required the respondent to permit the applicant to submit tenders to the Department which would be assessed bona fide by the Department without any closed mind being brought to bear requiring any tender so submitted to be rejected. It could hardly be said that the agreement was expressed in felicitous terms. It uses the word 'prudential' in the phrase 'Subject to normal prudential requirements by (sic) the PWD'. It also uses the phrase 'provided always all other normal Dept. requirements are satisfied'. It secured the release of Eden Constructions (NSW) Pty Limited's bank guarantee in relation to the Norah Head contract. It also secured an agreement in relation to the burden of costs with respect to the several claims and counterclaims under the Norah Head contract. In my opinion it could not be contended that clause 4 of the agreement conferred any rights in perpetuity on Eden Constructions (NSW) Pty Limited or, given the respondent's concession referred to above, on the applicant. But the arrangement had no permanence. It simply provided a starting point and an opportunity for a new relationship to be established. Dissatisfaction with any work undertaken by the applicant after 7 January 1994 could properly be taken into account by the Department in relation to any future opportunities for work for which the applicant might see fit to tender thereafter. Plainly, normal prudential requirements and other normal Departmental requirements entitled the respondent to limit the scope of the work for which the applicant, as a company with which it had not had any prior dealings, could tender. The respondent was not obliged by its settlement with Eden Constructions (NSW) Pty Limited to put to one side its normal prudential and other requirements in allowing a new working relationship with the applicant to be established. The only relevant implications are those which arise from the nature of the contract and/or are contained in the express words of the contract itself. These have been addressed in the above observations on the true construction of the 7 January 1994 agreement. The applicant acknowledged that, following the 7 January 1994 agreement, it secured the contract with the Albury City Council for the Kremur Street Pumping Station. It accepted that there were 'some issues' in relation to the performance of that contract but submitted that it performed it 'fairly well'. For reasons that will appear later, I am not prepared to find that any tenders submitted by the applicant subsequent to the award of the Kremur Street Pumping Station contract were evaluated by the Department with a closed mindset, adverse to the applicant, because of events that may have occurred prior to 7 January 1994 i.e. because the Department did not treat the slate as having been wiped clean by the 7 January 1994 agreement. Clause 4 of the agreement was not directed at depriving the Department of the opportunity to exercise its business judgment, against the wishes of the applicant, in circumstances where it considered that performance by the applicant of contractual obligations subsequent to 7 January 1994 had been unsatisfactory. This approach was made in view of protracted discussions between Public Works and the firm over various past contracts. I obtained the following comments. NO problems with cooperation, just with understanding. Tried to do too much himself. Reluctant to engage other manpower, subcontractors. My thoughts on paragraph above may be because of lack of cash in firm at this early stage of reestablishment. Les Crossman would recommend firm for other work. ) subject to satisfactory financial assessment and subject to one job at a time till firm's performance proven with Public Works. Such information was provided by Advance Bank Australia Limited to the Department on 15 April 1994. In addition, on 19 April 1994 the applicant's accountants submitted a set of financial statements to the Department. These disclosed net assets of $34,248.37 as at 31 December 1993 and an operating profit for the period 1 July --- 31 December 1993 of $36,314.98 on a turnover of $504,155.23. 43 On 3 and 4 May 1994 a number of officers within the Department signed off on a Panel of Assessors' Agenda item in relation to two Eden companies, namely the present applicant, Eden Construction Pty Limited ACN 054 090 372, and Eden Constructions Pty Limited ACN 008 508 129. No reference was made in that Agenda item to Eden Constructions (NSW) Pty Limited ACN 002 800 544. Cesario Filardo is employed as the project manager. (Letter of agreement between Eden Construction P/L (ACN 054 090 372) is attached. 45 The Panel of Assessors would appear to have comprised Mr E Shestovsky as Chairman, Mr Barry as Manager Contracts, Mr H Ruckert as Inspecting Engineer and Mr C Crundwell as Inspecting Architect. The meeting appears to have reviewed the performance of five companies including Eden Constructions Pty Limited ACN 008 508 129 and also the applicant. The recommendation of the Panel of Assessors in respect of Eden Constructions Pty Limited ACN 008 508 129 was 'Retain on the Review List, change from business to financial category'. In respect of the applicant the recommendation was 'Add to Review List under business category, letter to be sent'. 46 The recommendations of the Panel of Assessors would appear to have been submitted to Mr M J Hannon, the Director Asset Management & Construction Policy within the Department who, by his signature on 6 May 1994, appears to have accepted the Panel of Assessors' recommendations. 47 In accordance with the Panel of Assessors' recommendation in respect of the applicant a letter was sent by Mr Shestovsky as the Acting Manager Construction, Asset Management & Construction Policy Division of the Department to the applicant on 9 May 1994. Ltd. and Public Works on 7 January, 1994 and your letter of 4 March, 1994 seeking registration as a Public Works Contractor. Ltd. indicating its capacity to successfully complete contracts, Public Works is prepared to accept tenders from this Company to a limit of $250,000. Ltd. has demonstrated its capacity to carry out works under contract at this level then consideration will be given to a reassessment of this limit, based on the company's performance record and financial position at that time. The reported comment of Mr Les Crossman that 'firm [referring to the applicant --- a company which had only been registered on 28 October 1991] had some difficulty with cash flow', coupled with the financial position of the applicant as at 31 December 1993, as disclosed to the Department by the applicant, clearly entitled the Department to take a cautious and conservative approach towards the ability of the applicant to undertake major contracts at that stage. The Department's decision of 6 May 1994 to permit the applicant to tender for work valued below $250,000 in the first instance and to place the applicant on the Department's 'Contractors & Consultants Review List' under a 'business' category until all of 'Eden's' obligations under the 7 January 1994 agreement had been met, was fully justified and consistent with prudential management of the Department's affairs. The observation in the last paragraph of the Department's letter to the applicant of 9 May 1994 was, in my opinion, fair and reasonable. Neither Mr Barry's note of 2 May 1994 nor Mr Hannon's acceptance on 6 May 1994 of the Panel of Assessors' recommendations constituted a breach by the respondent of clause 4 of the agreement of 7 January 1994. It is hardly consistent with the applicant's allegation that the respondent breached the 7 January 1994 agreement on or about 2 May 1994 and again on or about 6 May 1994. 51 On 17 May 1994 the applicant forwarded a cheque for $4,783.61 to the Crown Solicitor for the respondent. as result of our meeting on 7/1/94 in Stephen Hibbert's office at Allen's. It is, however, appropriate to note the terms of a memorandum issued by the then Premier of New South Wales on 13 November 1991 to all of the respondent's Ministers in relation to the letting of government contracts. The memorandum (TM91/7) was headed 'Reform of the Capital Works Planning and Implementation Process in NSW'. The revised procedure for capital works planning and implementation was recorded in an attached paper. All Ministers were requested to 'ensure that all agencies under their administration are informed of the new arrangements'. All Ministers were requested to require 'all agencies under your responsibility to review their Capital Works Strategic Plan and planning processes to ensure conformity with the approach set out in the attached paper'. From the point of the State's overall interests, it makes sense for this to occur. However, it is necessary to provide agencies with the choice in those parts of the contracting and project management process that are open to competition, in addition to ensuring that there is a benchmark for PWD's performance. It is also essential that the role of Public Works be defined as serving the needs of the client and in this regard acting as an extension of agencies' corporate support function. Appointment of Public Works Department to undertake in conjunction with client agencies the private sector interface role for all Budget sector and nominated non Budget sector Agencies (including PSG), for capital works over $500,000, (including those funded by the private sector and those associated with property development) on a fee-for-service basis. We thought and reasonably expected that projects within $1.0M to $2.0M would be within our grasp. This was a personal undertaking by Mr Barry to the effect, "Leave it with me Ces. If things have not progressed too far with Moss Vale, I'll see what I can do for you". This was in the context of our mutual understanding that Eden Construction was the lowest tenderer for the Moss Vale project. around the $1.0M, we would have never agreed to pay $50,000.00 to the Department. It was the premise (sic) of continuing meaningful work that would enable us to recover the $50,000.00 settlement monies, all we wanted was a fair opportunity to restore our financial position through a mutually beneficial work relationship (all other things being equal). As a result we were wrongfully drawn into dispute. We were also correct about the amount of work being more than double that documented. As we were wrongly punished by the events as they unfolded, it is distressing that for the third time around, we are now discriminated against and denied the opportunity to offer our services in a meaningful way to the community. We also made the Department and Mr Barry aware that the company is pre-qualified with the A.C.T. Local Government Department namely Electricity & Water for projects up to $1.0M. We provided a copy of Eden's Quality Assurance Manual. It is also worth noting that such assessment came into being apparently to deny us the job at Dora Creek, and to justify once again the Department's rejection of our just entitlement to tender for such projects. We believe based upon recent past events, that our effort to carry on a normal contracting business are still frustrated despite the January 7 th agreement and payment in full of $50,000.00 to the Department. We wish to have this rectified in a manner to reflect and enable us to tender for projects similar at least to the ones we carried out in 1992, for the A.C.T. Public Works & Services. criteria adopted nation wide was used to pre-qualify us for projects up to $1.0M with the A.C.T. Electricity & Water. We are led to believe that similar criteria are going to be accepted and used by other Government Departments for which we have registered an interest in pre-qualification. working Authorities. Mr Barry did undertake to ensure that your company's tender for the Moss Vale Treatment Works would, provided a decision had not been reached, be considered in light of the 7 January 1994 agreement i.e. it would be considered subject to normal NSW Public Works requirements for the review of tenders. These requirements include an examination of the tenderers financial and technical capacity to carry out the works. In the case of Moss Vale your tender was 33% less than the estimate for the work and some 27% below the accepted tender. Your tender showed a serious misunderstanding of the requirements and scope of the specification. However to prevent your company needlessly preparing tenders which could be unacceptable in terms of NSW Public Works tender assessment criteria, you were invited to submit financial and technical information in relation to your company for review. I am satisfied there is no evidence of any discrimination being applied to your company by Mr Barry or any other officer in NSW Public Works. 60 It is appropriate to note that no collateral contract has been pleaded by the applicant in respect of the award of a contract for the Moss Vale sewerage augmentation works, a breach of which by the respondent is said to have occurred. around the $1.0M, we would have never agreed to pay $50,000.00 to the Department. It was the premise (sic) of continuing meaningful work that would enable us to recover the $50,000.00 settlement monies, all we wanted was a fair opportunity to restore our financial position through a mutually beneficial work relationship (all other things being equal). A certificate to this effect is enclosed, which qualifies you to tender for any value of work "up to $1,000,000" in the prescribed work type category CC to 31 May 1998. The contract was signed on behalf of the applicant by Mr Filardo. It is voluminous, to say the least, the Specification (Volume 1) comprising almost 300 pages. The Standard Technical Specifications and Electrical Installations Minimum Requirements (Volume 2), Drawings (Volume 3) and the Geotechnical Report (Volume 4) have not been included in the material which is before the Court. 66 Sections 3 to 23 of the Specification were referred to in the Table of Contents as the 'TECHNICAL SPECIFICATION'. It nominated hold points and witness points for concrete construction, earthworks, pipeline construction, clearing of work area, metalwork, joint sealant, electrical, mechanical, building work and commissioning. Twenty four (24) hours notice is required to be given by the Contractor for a witness point. Within 14 days of the receipt of the request the Superintendent shall give to the Contractor and to the Principal a Certificate of Practical Completion stating the Date of Practical Completion or give the Contractor in writing the reasons for not issuing the Certificate. Mr Liu's Contractor Performance Report of 7 May 1999 certainly refers to 29 April 1999 as the 'Date of Practical Completion'. The original certificate was replaced by a further certificate stating the date of practical completion as 10 March 1999. The reissued replacement certificate was prepared for signature by the Superintendent by Mr Liu as the Superintendent's Representative who on 3 September 1999 recommended the issue of the revised certificate. 71 In an office memorandum to the Director, City Services of the Albury City Council of 2 June 1999 reference was made to Mr Liu's assessment of 29 April 1999 as the date of practical completion. It also referred to the applicant's claim in a letter of 12 May 1999 that the works were 'fit for intended purpose' from 9 March 1999. The author of the office memorandum, Mr D L McGregor, the Council's Manager, Asset Design Services, noted that 'pumping to and hence commissioning of the Waterview Treatment Plant commenced on 10 March 1999'. I am prepared to accept that the Date of Practical Completion was 10 March 1999. In a letter to the Department of 29 August 2000 the Contract Superintendent, Mr McLennan of the Council, asserted that the 'subsequent agreement to issue a revised Certificate of Practical Completion was ... based entirely on a need to resolve the dispute with' the applicant. 74 This attribution of a reason is somewhat difficult to comprehend given that the relevant determination that the Date of Practical Completion was 10 March 1999 was made by the Superintendent on 3 June 1999. 75 Clause 23 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED) dealt with the appointment by Albury City Council of a Superintendent. If, pursuant to a provision of the Contract enabling the Superintendent to give directions, the Superintendent gives a direction, the Contractor shall comply with the direction. These included directions to remove persons employed in connection with the work, who were considered to be guilty of misconduct or to be incompetent or negligent, from the site; approval for work to commence and materials to be delivered; directions to refrain from removing constructional plant or materials from the site; directions to the Contractor to supply particulars of the manufacture and source of supply of materials etc. In that event the resulting increase or decrease in the value to the Principal of the Works and any other loss suffered by the Principal shall be valued under Clause 40.2. The Superintendent may give the direction or notice at any time before the issue of the Final Payment Certificate under Clause 42.8. The appointment of a Superintendent's Representative shall not prevent the Superintendent from exercising any function. It would be appreciated if you would contact Mr Trevor Liu, Public Works, on phone (02) 6023 2193 in order to complete the necessary contract documentation as soon as is possible. The Public Works Office is located in the CWA Building adjacent to Council's Administration Building. Please note that you are required to lodge the necessary Contract Security Sum, provide the required insurance documents and submit evidence of payment of Long Service Levy. It is demonstrable that the Department, as the Council's Construction Manager, permitted the applicant to tender for the Kremur Street Pumping Station works and to undertake that work. In my opinion the award of the Kremur Street Pumping Station contract to the applicant demonstrates that the respondent permitted the applicant to submit a tender to the Department which would be assessed bona fide by the Department without any closed mind being brought to bear requiring that the tender be rejected. Having done so, it could be said that it was then for the applicant to 'stand on its own two feet'. 83 It would appear that in October 1996 an agreement had been entered into between Albury City Council and the Department in relation to the Albury Sewerage Scheme. The agreement was expressed to be one for the provision of construction management services to the Council by the Department. . Reflecting the Construction Manager's responsibility for incorporating the Client's requirements, liaison on the project will be between the Project Director and the Project Manager. Clause 24 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED) empowered the Superintendent to appoint an 'individual' to serve as the Superintendent's Representative. It is arguable that the applicant acquiesced in the nomination of the Department (the relevant legal personality being the respondent) as the Superintendent's Representative, the Department's obligations being discharged by Mr Trevor Liu. Alternatively, it can be argued that the requirement that an 'individual' be appointed leads to the conclusion that it was Mr Liu personally who became the Superintendent's Representative. Mr John Ellwood, the Council's Chief Engineer, certainly so understood that to be Mr Liu's position. At a pre-contract meeting with Messrs Filardo and Densley from the applicant and Mr Johnson and himself from the Council on 18 December 1997, Mr Ellwood tabled an apology from Mr Liu who was described as the 'Superintendent's Representitive (sic) from the State Public Works Department'. 88 A file note, prepared by Colin Johnson, an Engineering Designer with the Albury City Council, of 24 December 1997 minuted certain aspects of the meeting between Mr Malcolm Densley, the applicant's Engineer, and Mr Filardo with Mr Ellwood and Mr Johnson of the Council on 18 December 1997. That file note included a reference to Mr Ellwood tabling 'apologies for Daryl McGregor, Project Manager [with the Council] and Trevor Lui (sic), Superintendent's Representative from the State Public Works Department'. 89 The file note also referred to discussion on the disposal of surplus excavated material. The file note suggests that the applicant queried what to do with the excavated material (approximately 2,000 m 3 ). The note continued 'John [referring to Mr Ellwood of the Council] indicated that Eden to take this up with Trevor Lui (sic)'. In the 'Responsibility' column against the item, reference was made to 'Eden Construction & Trevor Lui (sic)'. 90 When cross-examined about his knowledge of the appointment of a Superintendent's Representative under the contract, the relevant functions having been entrusted to Mr Liu in December 1997, Mr Filardo at first disputed that any mention had been made of Mr Liu's intended involvement in the contract at the meeting on 18 December 1997. After having his attention drawn to the note of the discussion concerning surplus excavated material, Mr Filardo backed away from his earlier denial that Mr Ellwood had tendered the apologies of Mr Liu for his non-attendance at the meeting on 18 December 1997. 91 Mr Ellwood proceeded to prepare the Council's letter of 28 January 1998 for Mr McLennan, the Council's Director of City Services, to sign. 92 Given the functions which the Superintendent's Representative may perform, the idea that a State may give instructions, authorisations, permissions, rejections with which a contractor may be expected to comply on a 'jump' --- 'how high? ' basis, leads me to conclude that Mr Liu, personally, was, until removed, the Superintendent's Representative for the purposes of the contract between the applicant and the Council for the construction of the Kremur Street Pumping Station. Mr Liu certainly dealt with the Council throughout as the Superintendent's Representative; for example, on 10 March 1998 he issued Payment Certificate --- Valuation No. 1 to the Principal signing same as 'Superintendent's Representative'. There was never any demur from the Council or the applicant. 93 It is apparent that the Director of City Services, Albury City Council, could have appointed different individuals to discharge different discrete functions of the Superintendent under the contract as the Superintendent's Representative. However, he chose not to do so. In the notification of Mr Liu's appointment, no limitations were imposed upon the functions which were delegated to him such as those contemplated by clause 3.1 of Annexure B to the October 1996 agreement between the Council and the Department. I would conclude that Mr Liu was empowered to exercise all of the functions of the Superintendent under the contract, except where the contract between the applicant and the Council may have expressly provided otherwise. Any limitations upon the authority of Mr Liu springing from the October 1996 agreement between the Albury City Council and the Department could not qualify the rights and obligations of the applicant in terms of its dealings with Mr Liu as the Superintendent's Representative. 94 Neither Mr Kevin Ellison, who performed the role of Construction Superintendent and was based in Wagga, nor Mr Peter Grove, a civil engineer who served as the Department's Project Manager and was also based in Wagga, nor Mr Albert Williams, who served as the Department's Works Supervisor on site in Albury with responsibilities for surveillance on about four Council sewerage projects in 1998-9 including the Kremur Street Pumping Station, could give directions to the applicant as the Superintendent's Representative. Furthermore, they were without power to direct Mr Liu as to the manner in which he should discharge his functions in relation to the giving of certificates, and the making of decisions or determinations as the Superintendent's Representative. When Mr Liu was on leave, Mr Grove apparently acted in the position of Superintendent's Representative. Mr Liu says that he delegated the function of signing off checklists of work to be performed under the contract to Mr Williams, but exercised this power himself in Mr Williams's absence. Mr Grove says that he had no role to perform under the contract even though within the Department, he was responsible for supervising Mr Liu. 95 No objection was made by the applicant to the appointment of the Superintendent's Representative in accordance with clause 24 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED). Lodgement of a tender will be evidence of the Tenderer's agreement to comply with the Codes for the duration of any contract that may be awarded. If any Tenderer fails to comply, the failure may be taken into account by the Principal when considering this or any subsequent tender by the Tenderer and may result in such tender being passed over. For present purposes it is not necessary to detail the relevant provisions. Accept defective work or permit omissions. One issue in relation to the Kremur Street Pumping Station was whether the finish for the relevant off-form concrete was varied from an 'F3' finish to an 'F2' finish. Mr Liu opined that 'TR' was a reference to 'technical requirements'. It dealt with those elements of quality systems which give the customer confidence that the supplier will deliver what the customer wants. It contains 20 requirement clauses which cover the full process of developing a project or part of a project from design through to servicing. Australian Standard AS 3905.2: 1997 is a guide to the operation of AS 9002: 1994. The required inspection and testing, and the records to be established, shall be detailed in the quality plan or documented procedures. Blowholes to Appendix B, Figures B3 (a) and (b). Blowholes to Appendix B, Figures B2 (a) and (b). Blowholes to Appendix B, Figures B2 (a) and (b). The relevant figure B2 within the supplement contains photographic depictions of concrete finishes presented on a scale of 1:5 and 1:1. These photographic depictions are each identified as 'FIGURE B2 CLASS 2 FINISH (in part)'. 103 It can be seen that an F2 finish may be provided by compliance with less stringent standards than those required for an F3 finish. 104 It is common ground that a meeting was held on 18 December 1997 to discuss certain matters in relation to the applicant's tender for the Kremur Street Pumping Station works. As indicated above that meeting was attended by Mr Filardo, Mr Malcolm Densley, the applicant's engineer, Mr John Ellwood, the Senior Design Engineer of the Albury City Council and Mr Colin Johnson, an Engineering Designer from the Council. The meeting took place at about 2.00 pm in an office located at Kiewa Street, Albury either in or adjacent to the Council Chambers. The applicant's case is that the conversation included a discussion of the proposed finish for the concrete walls of the pumping station. When, according to Mr Filardo, Mr Ellwood said words to the effect, 'We are concerned about your price for the concrete. Can you do it for that price? ' Mr Filardo says that he responded, 'We can provide an F2 finish for that price', whereupon Mr Johnson then said words to the effect, 'We don't want a super duper Taj Mahal finish for a pump station. It is common ground that the specification called for an F3 finish and this was not altered when the contract was executed. Mr Filardo acknowledges that a number of opportunities presented themselves pre-contract when, in correspondence between the parties, the applicant could have confirmed what it says was an agreed change to the specification. 106 Mr Filardo says that he simply forgot to do so and that it was a 'mea culpa' situation. He acknowledges that no mention of the alleged change was made in his letter to the Council of 22 December 1997, which priced some 19 variations; it was not referred to in the Council's letter to him of 24 December 1997; he made no mention of it in his letter to the Council of 29 December 1997; the Council did not mention it in its reply of 14 January 1998 and he did not mention it in his letter of 19 January 1998 to the Council. Furthermore, no mention was made of it in the Council's letter of 27 January 1998 nor was it raised in Mr Filardo's reply of the same date. 108 In support of the applicant's contention that there was, at least, an oral agreement reached on a change from an F3 finish for the concrete to an F2 finish, Mr Filardo's diary note of 18 December 1997 is instructive. It records that the meeting took place at 2.00 pm. At the time Mr Filardo was uncertain as to the spelling of Mr Johnson's surname. He recorded it as 'Johnston' followed by a question mark. Q.A. Concrete price (Council) John is a bit concerned. Told him that an F2 finish is not a problem with our price. John agreed with F2 finish. John to wait until next year before issuing letter of acceptance. No problem . John said that he used to work at Wagga and would check with Mick Rudd. There is a possible variation because Council wants to change the height of the floor? He'll provide plans and we will give him a revised price. Council would be in touch. Can you do it for that price? ' at the pre-contract meeting on 18 December 1997 is somewhat perplexing as Mr Ellwood would appear to have expressed concern about the applicant's tender price for the concrete works back in November and put the matter to rest. 111 On 18 November 1997 Mr Filardo had apparently received a telephone call from Mr Ellwood. Amongst other things Mr Ellwood sought more information in respect of the price of concrete. Mr Filardo told him that no allowances had been made for any extra joints on the walls of the concrete. His observation was that Mr Ellwood was not too worried about that. He could not contact Greg McTaggart for reference. He also wants confirmation for the price of concrete and the incorporation of the Addendum No 1. I told him that no allowance were made for any extra joints in the price of the concrete. He was not too worried about that. He asked whether I would have another number for Greg McTaggart at O.A.C. The reference to 'Addendum No. 1' in Mr Filardo's diary note is explained by a circular form of letter which emanated from the Council on 30 October 1997. 1 describes items of work as listed in Addendum No. 1 which are to be included and will form part of the tender document. We wish to advise you that we have scrutinised our tender worksheets and the tender documents and are happy with our price for the works. 1 and its contents were fully taken into account and incorporated in our price accordingly. 114 Upon a careful examination of Mr Filardo's diary entry for 18 November 1997 with the benefit of a magnifying glass, it is apparent that part of the record of the telephone conversation between Mr Ellwood and Mr Filardo as originally made on 18 November 1997 was recorded differently from what now appears in the diary. The words 'of the concrete. He was not too worried about that. ' appear to have taken the place of words that were formerly included in the diary note and erased. Mr Filardo concedes that he made an alteration to the text as originally recorded, but I do not consider the alteration to have any sinister overtones. 115 A tender analysis prepared on 19 November 1997 for a meeting of the Finance and Administration Committee of the Albury City Council on 24 November 1997 recommended that the applicant's tender be accepted. On the basis of price the remaining tenders will not be further considered unless it is demonstrated that the lowest two (2) tenderers are not considered suitable. Eden Construction P/L have subsequently advised by fax that they have reviewed their costings for concrete works and that their lump sum price holds firm. 117 Not only did Mr Filardo fail to take any initiative to cause what he says was an agreed change to the specified concrete finish from F3 to F2 to be incorporated into the contractual documents, at no stage did he contend, in any later correspondence, that Mr Ellwood and he had agreed on 18 December 1997 to such a change. 118 Having said that, no suggestion was put to Mr Filardo by counsel for the respondent that item 2 as recorded under the heading 'TOPICS' in Mr Filardo's diary note of 18 December 1997, or indeed any of the other topics mentioned, was a matter of recent invention or recent modification or devious forward planning. There was no suggestion that the seemingly authentic reference to 'next year', i.e. 1998, was inserted after 1 January 1998. There was no suggestion that the reference to a prospective letter of acceptance was inserted after 28 January 1998. Counsel for the respondent did put to Mr Filardo that the diary entry was made 'considerably later' than 18 December 1997, but this was rejected. In later questioning by counsel for the respondent Mr Filardo said that the diary entries were made in his car immediately after the conclusion of the meeting. There was no suggestion that he was making this up. The Respondent must be taken to accept that the entry 'Concrete price (Council) John is a bit concerned. Told him that an F2 finish is not a problem with our price. John agreed with F2 finish. ' was to all intents and purposes a contemporaneous note made by Mr Filardo shortly after the conclusion of the meeting with the Council's representatives on 18 December 1997. I find that it was in fact made, as Mr Filardo said in his evidence, immediately after the conclusion of the meeting, in his car. 119 Mr Ellwood's contemporaneous manuscript note made during the course of the meeting with Mr Johnson, Mr Filardo and Mr Densley on 18 December 1997 recorded that alterations would only be agreed if in writing. It made no mention of the concrete finish for which the applicant says that its tender had allowed. Equally, other matters referred to in Mr Filardo's diary note of matters discussed at the meeting on 18 December 1997 were not recorded in Mr Ellwood's notes. For instance, Mr Ellwood's notes make no mention of Mick Rudd and Mr Ellwood's previous work at Wagga yet he acknowledged that he knew a Mick Rudd and had worked with him previously at Wagga. This evidence provides verisimilitude for Mr Filardo's diary note. 120 Counsel for the respondent submitted that Mr Filardo gave him inconsistent accounts of the so-called conversation regarding the F2 finish issue. I do not consider this submission to be particularly helpful. The documentary record is, in my opinion, reliable and one does not need to go beyond that. 121 However Mr Liu's evidence concerning the concrete finishes that were being achieved as the job progressed does suggest an awareness on Mr Filardo's part that under the contract, he was still obliged to provide a level of finish that was superior to that which was being achieved. Prior to 7 August 1998 Mr Liu said to him words to the effect 'Your formwork is not going to achieve the specified finish'. I am satisfied that, as Mr Liu said, Mr Filardo, who prevaricated on the issue, responded with words to the effect 'Don't worry. I'll grind back the imperfections at the end of the job. I am satisfied that Mr Ellwood once again said words to the effect 'We are concerned about your price for the concrete. Can you do it for that price? ' I am also satisfied that Mr Filardo responded 'We can provide an F2 finish for that price', whereupon Mr Johnson said 'We don't want a super duper Taj Mahal finish for a pump station' or words to that effect. I am further satisfied that Mr Ellwood expressed his agreement to the applicant providing an F2 finish for the Kremur Street Pumping Station as noted in Mr Filardo's diary entry for 18 December 1997. 123 The explanation for the disparity between the two sets of notes of the same meeting seems to lie in the fact that Mr Ellwood did not have a clear understanding of the differences between the various concrete finishes --- F2, F3 and so on. At that time he believed an F3 finish to be of a lesser standard, rather than a higher standard. Because he believed that the lesser (F3) standard had been provided he was concerned to have a deduction made from the contract price of the difference between the value of an F2 finish (a greater amount), which he understood the contract to require, and an F3 finish (a lesser amount). I would look up what those words meant and I would use that to judge what an F2 and an F3 finish was. 126 It is reasonable to conclude that this misunderstanding by Mr Ellwood as to the standard of finish that was required carried through from an earlier point in time. That being the case, it is hardly surprising that Mr Ellwood made no diary note in respect of Mr Filardo's observation on 18 December 1997 that 'we can provide an F2 finish for that price' and now has no recollection of that matter having been discussed at the meeting. I am not persuaded that if at the meeting on 18 December 1997 Mr Filardo indicated, as I find that he did, that he could provide an F2 finish for the price tendered, Mr Ellwood would have interrupted the meeting, searched the draft contract to find the Schedule of Finishes in section 8.9 and then looked for section 6 to find that section 6.1 required all concrete to comply with section TR2 and then searched for section TR2, a Departmental document which did not form part of the Standard Technical Specifications in Volume 2 of the contract documents, to find clause 6.9 thereof which specified the differing requirements for Class F1, Class F2 and Class F3 finishes for formed concrete surfaces. 127 It may also be observed that Mr Johnson has not been called as a witness by the respondent and his absence is unexplained. In the circumstances the Court can more comfortably reach the conclusion that Mr Filardo's account of the conversation should be accepted in relation to the concrete finish issue. Whether it has any relevant legal significance is another matter. 128 Having executed the agreement with the Albury City Council, the applicant was bound by it unless it was able to rely on a defence of non est factum, or able to have it rectified. The applicant has attempted neither. The parol evidence rule, the limited operation of the defence of non est factum and the development of the equitable remedy of rectification, all proceed from the premise that a party executing a written agreement is bound by it. Yet fundamental to the respondents' case that the operative agreements between the parties were wholly oral, and reached earlier than the execution of the written agreements, was the proposition that the written agreements subsequently executed not only may be ignored, they must be. That is not so. Having executed the agreement, each respondent is bound by it unless able to rely on a defence of non est factum, or able to have it rectified. The respondents attempted neither. First, it accords with the "general test of objectivity [that] is of pervasive influence in the law of contract". The legal rights and obligations of the parties turn upon what their words and conduct would be reasonably understood to convey, not upon actual beliefs or intentions. Resolving such disputation is commonly difficult, time-consuming, expensive and problematic. Where parties enter into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case. Different questions may arise where the execution of the written agreement is contested; but that is not the case here. In a time of growing international trade with parties in legal systems having the same or even stronger deference to the obligations of written agreements (and frequently communicating in different languages and from the standpoint of different cultures) this is not a time to ignore the rules of the common law upholding obligations undertaken in written agreements. It is a time to maintain those rules. They are not unbending. They allow for exceptions. But the exceptions must be proved according to established categories. The obligations of written agreements between parties cannot simply be ignored or brushed aside. In another case it may leave open the possibility that the contract is partly oral and partly in writing. But that cannot be so here. The oral limited recourse terms alleged by the respondents contradict the terms of the written loan agreement. If there was an earlier, oral, consensus, it was discharged and the parties' agreement recorded in the writing they executed. It is the written loan agreement which governed the relationship between Rural Finance and each respondent. Performance assessment reports, including substantiated reports of unsatisfactory performance, can be taken into account by NSW government departments and agencies and may result in future opportunities for NSW government work being restricted or lost. Such information may be used by the recipients for NSW government purposes including assessment of suitability for registration, pre-qualification, selective tender lists or the award of a contract. Albury City Council and did not extend to the Department or the Superintendent's Representative. Such information may include, but is not limited to, any information provided by the Contractor to the Principal and any information relating to the Contractor's performance under the Contract. Without limitation of the above, the Contractor releases the Principal and the State of NSW from any claim it may otherwise have for any loss to the Contractor arising out of the Contractor's performance under the Contract by the Principal, the communication of information relating to such assessment to any NSW government department or agency, or the use of such information by the recipient. This is essential where adverse performance is being reported: see Section 5.57 . If the Contractor requests information on the Company's performance other than that discussed under Section 5.57 , that information is to be made available to the Contractor, following the Contractor's request in writing to the General Manager Procurement Management, Strategic Procurement Services. 136 As contemplated by CT-3.04 of the Conditions of Tendering periodic Contractor Performance Reports were issued by the Department on a quarterly basis. There was a standard report form which contemplated completion by the relevant 'Reporting Officer', normally the Superintendent's Representative. The standard form of Contractor Performance Report comprised three pages. Revision B of the form was dated 9/8/96. The first two and a half pages made provision for the reporting officer's assessment and comments and also for the reporting officer's signature and date. The bottom half of the third page made provision for the observations of the 'Recommending Officer', following his review of the reporting officer's assessment and comments. The recommending officer was required to indicate whether the contractor was recommended for future work or not. 137 In the case of the Kremur Street Pumping Station the reporting officer throughout was Mr Trevor Liu, who was based in Albury. The recommending officer was Mr Kevin Ellison, the Department's Regional Contracts Superintendent in Wagga. 138 Whilst Mr Liu was the 'Reporting Officer' for the purposes of the Kremur Street Pumping Station works, he discharged his duties as such as an officer of the Department and not as Superintendent's Representative under the contract for the execution of those works by the applicant. Perf ( ); 3 monthly ( ); Pract. Compl. Unsatisfactory Many weakness (sic) --- cannot meet the acceptable standard of performance. compliance with the requirement set out in the Code of Practice including management, administrative, scientific or industry skills and overall experience relevant to the tasks undertaken. Mr Liu said that it was his practice to record important matters that had occurred since the date of the previous report but to omit relatively unimportant matters. On 30 August 1999 he wrote 'I didn't want to comment on issues that I felt were "minor" or just my personal opinion'. It was the practice of Mr Liu to make a copy of his section of the report available to the applicant upon its completion and signature by him. His practice was to deliver a copy to Mr Filardo on site at the Kremur Street Pumping Station and to forward a copy of his report by facsimile to the Department's Wagga office. Copies received in the Department's Wagga office were invariably delivered to Mr Ellison. He processed approximately 40 quarterly Contractor Performance Reports in relation to various projects with which the Department was associated in mid-1998. Of those 40-odd there was only one project for which Mr Liu was the reporting officer. Mr Ellison could not recall having any prior experience in dealing with reports from Mr Liu referable to other projects. 141 Mr Ellison as the recommending officer was obliged to make a copy of the Contractor Performance Report available to the applicant following its completion by him. 142 Mr Grove contends that Mr Liu was meant to discuss his Contractor Performance Reports in draft before sending them off. He says that after August 1998 this occurred, but it did not up to that point in time. I am not persuaded that Mr Liu departed from his practice with respect to the issue of reports even though the content of them changed dramatically. 143 Mr Liu's first Contractor Performance Report of 13 February 1998 and the recommending officer's, Mr Ellison's, comments thereon of 16 February 1998 were unexceptional. 144 On 19 February 1998 a meeting was held at the Department's Albury office attended by Messrs Ellwood and Johnson from the Council, Mr Densley from the applicant and Mr Liu from the Department. Mr Liu prepared 'site meeting minutes' in respect of the meeting. He acknowledges that no issues were raised suggestive of unsatisfactory performance by the applicant. 145 Mr Liu's second Contractor Performance Report of 8 May 1998 referred to the work as being 13.1 per cent complete and noted that extensions of time of 4.5 working weeks had been approved, the extended date for practical completion then being 24 December 1998. It also indicated that the contract value had increased to $2,311,447.09. In relation to the contractor's performance Mr Liu ticked each of the 'acceptable' boxes. 148 Mr Ellison's observations as recommending officer are somewhat surprising. He disavowed any personal knowledge of the contractor's performance as at May 1998 and recorded his comments simply on the basis of what he had read in Mr Liu's report of 8 May 1998. Mr Ellison described the 'above concerns' as the issues which Mr Liu had raised in his 'Overall Comments' section of the report. Mr Ellison described the applicant's performance as 'only marginal' and as requiring monitoring because Mr Liu had simply categorised the applicant's performance as 'acceptable' rather than as 'good'. 149 When Mr Ellison indicated that he would be looking for a 'big improvement before the next report due in August' he says that he was simply intending to pass on constructive comments to the contractor. It is the policy of the Department to give Contractors the opportunity to comment on their performance reports. 152 In May 1998 Mr Filardo made a copy of the applicant's ' QUALITY/OHS & R MANAGEMENT SYSTEM ' available to Mr Liu. That 200 page plus document, as it existed in May 1998 (it being subject to periodic revision from time to time) included the applicant's OHS & R manual, quality assurance manual, system procedures and system record forms. The manual identified the applicant's goals and objectives in respect of quality assurance and included a quality policy statement signed by Mr Filardo and dated June 1996. Items found to be non-conforming or deficient in meeting requirements will be remedied through the use of the corrective action system, which shall be subject to regular Management review. Department of Urban Services (formely (sic) A.C.T. Public Works & Services, and its Quality Manual and implementation thereof was Audited by Mr Mike Evans of Construction QA who is one Accredited Senior Auditor registered with the N.S.W. Department of Public Works. Eden's Quality System meets the requirements of any N.S.W. Government Agency. It was implemented on a project at Penrith with the Olympic Coordination Authority for the Penrith Lakes Sewerage Scheme and most recently with the Wagga Wagga City Council on a project for the construction of 33 mt. clarifier at the Narrung Street Sewage Treatment Works. Eden's O.H.S. & R Management System has been Accredited by the N.S.W. R. T. A. (Copy enclosed. I have made some comments on your Inspection and Test Plans as well as your standard Checklists. The Revised forms should be used as soon as they become available. SHONKY SITE? WILL VISIT OFFICE MEETING 10:30 AM NEXT FRIDAY. CONDITIONS + WAGES. GB NOT STRICTLY REQ JUST WANTS TO "TALK". IS SUPERANNUATION REALLY BEING PAID. ... ARE HOLIDAYS, TRAVELLING, SICK DAYS, WET WEATHER BEING PROPERLY PAID. WORKERS NEED EDUCATION! His practice was to do so about once a month, leaving Wagga mid morning and returning, usually, on the following morning. His practice was to meet with Mr Liu in his office in Kiewa Street, Albury adjacent to the Council Chambers and also to spend about a half an hour to an hour and a half on site at each of the sites at which work was then proceeding, including the Kremur Street Pumping Station site. 165 By this stage, the concrete sections of the Kremur Street Pumping Station works were well underway. On 17 April 1998 Mr Williams had signed off on a reinforcement checklist, a formwork checklist and a concrete checklist. In relation to the question 'Will the class of finish be provided with this form [referring to formwork]? ' Mr Williams had provided a tick. 166 Mr Williams had signed off on a further reinforcement checklist, formwork checklist and concrete checklist on 4 May 1998. He did so again on 11 May 1998, 15 May 1998 and 26 May 1998. 169 On 14 May 1998 a further 'Site Meeting' was held which was described in the minutes of 21 May 1998 as 'Meeting No. 1'. The meeting took place in Mr Liu's office in Kiewa Street, Albury. It was attended by Messrs Filardo and Densley of the applicant and Messrs Liu and Williams of the Department. Eden Construction's has agreed that practice will be improved in line with the requirements of their Quality Manual. Due to access considerations for the kibble future concrete placing will be only by concrete pump. 172 Mr Liu indicated that if anything important was discussed at a site meeting it would be minuted. He also indicated that he may selectively fail to include in his minutes notes of any unimportant matters that may have been discussed. 173 On 6 June 1998 Mr Mike Evans of Construction QA Services Pty Limited submitted a proposal to the applicant for the provision of a Substantial QA Certification assessment for the applicant. 174 On 9 June 1998 Mr Filardo submitted a Revised Construction Program for the Kremur Street Pumping Station works. 175 On 29 May 1998, 2 June 1998 and 10 June 1998 Mr Williams signed off on a further series of reinforcement, formwork and concrete checklists. He returned to work at about 1.00 pm on the following Friday. 178 In Mr Liu's absence Mr Grove signed off on a formwork checklist and a concrete checklist on or about 18 June 1998. On the formwork checklist he placed a tick against the question 'will the class of finish be provided with the form [formwork]? ' and added a note 'flare at the end of the wall section to be incorporated in the next lift'. 179 Mr Grove described Mr Liu as a 'pretty independent operator'. He did not receive a lot of phone calls from him. He also considered Mr Liu to be 'a pretty competent project officer' who was seen to be handling the project reasonably well both as Superintendent's Representative and also in relation to his preparation of minutes of meetings, valuations, variations, extensions of time and the running of the Department's Albury office. 180 When Mr Grove signed off on the concrete checklist on 18 June 1998 he recorded his observations both before and after the relevant pour. He initialled against the words 'Check type of finish a/Required' on the basis that the formwork appeared to be satisfactory prior to the pour occurring. 181 In relation to the reinforcement checklist Mr Grove noted 'some bars to be cleaned and concrete taken off' i.e. he required the concrete splatter to be taken off the reinforcement bars. This was a relatively minor item. 182 On 20 June 1998 Mr Liu signed off on a concrete checklist and on 30 June 1998 and 6 July 1998 Mr Williams signed off on a series of checklists. 183 Mr Liu's diary for 24 June 1998 includes a notation suggesting that he had spoken with Kevin Ellison from the Department on that day. However, where there is an inconsistency between a contemporaneous documentary record and a distant recollection from 6 or more years ago, I have a strong preference for the reliability of the contemporaneous records. Each of the Departmental officers had different mannerisms and expressions which coupled with their oral evidence suggested to me that much of their 'recollection' was no more than reconstruction. By this I do not intend to imply any suggestion of dishonesty. 185 Counsel for the respondent urged me to accept the accounts of past events as recorded in the affidavits of the various Departmental officers. Given the passage of time and the openness of the witnesses in acknowledging difficulties with their recollection I am more comfortable with accepting the mosaic of facts as recorded in the contemporaneous records of the various participants in the relevant events. This is not to say that the significance of the documentary evidence has not been elucidated by the evidence of the participants. Having said this about the Departmental officers, I should say that, in broad terms, I view Mr Filardo's evidence in much the same way. Given Mr Filardo's intimate involvement in the relevant events and their significance for him and for his business, my inclination is to the view that he actually has a better natural recall than that of the Departmental officers. The problem with his evidence is that he had a most unhelpful disposition to refrain from providing direct answers to straightforward questions. He constantly wanted to argue the reasonableness of his answers. I have no doubt that on occasions he gave answers which were designed to present the applicant's case in a favourable light. Nevertheless, I do not believe that he set about deliberately misleading the Court on any issues. He frequently acknowledged that answers he had given were incorrect and apologised unreservedly to the Court for what might have appeared to have been an exercise in deception. Counsel for the respondent asked me to find that he was a liar. Whilst I do not accept much of his evidence, he did not suffer from the degree of unreliability with which he was said, by counsel for the respondent, to be tainted. 186 I have no doubt that, as Mr Ellison said, he would not have used the words 'banned list' when speaking with Mr Liu on 24 June 1998. Mr Ellison had no recollection of speaking with Mr Liu on that date. I have no doubt that he did and that during the course of the conversation he disclosed to Mr Liu that at one time 'Edens' had been on one of the Departmental contractor review lists, an observation which obviously coloured Mr Liu's assessment of the applicant thereafter. I should add that the description of the Department's contractor review lists as 'banned' contractor lists was part of Mr Grove's lexicon (see [355] below at para A(iii)). 187 By 7 July 1998 the value of the works completed at the Kremur Street Pumping Station had reached 24 per cent of the contract sum. Mr Liu's assessment was that the value of the concrete works that had by then been completed had reached 56 per cent. 188 Mr Liu's diary entries for 17 July 1998 indicate that Mr Peter Grove from the Department's Wagga Wagga office was in Albury with his son. Between approximately 10.00 am and 12.30 pm Mr Grove spent time with Mr Liu in Mr Liu's Kiewa Street, Albury office and also visited approximately six current sites in which the Department was involved. Mr Liu's diary entry makes reference to 'check Eden's --- form pressures' which he says was either an indication that the formwork had been checked or was thereafter to be checked to ensure that it could withstand the pressures which wet concrete would exert upon it. Mr Liu's diary also indicates that on 17 July 1998 one of the other contractors who was performing work for the Albury City Council provided a long service leave form to Mr Liu. It then indicated 'Edens to supply [long service leave form] next Wk'. 189 The next 'Site Meeting' was held in the Department's offices in Kiewa Street, Albury on 23 July 1998. The meeting, described as 'Meeting No. 2', was attended by Messrs Filardo and Densley from the applicant and by Mr Liu from the Department. Notes for minutes in respect of the meeting were made by Mr Liu contemporaneously using a copy of the typed minutes for the meeting on 14 May 1998 as a template. 190 Typed minutes of the 23 July 1998 meeting were not prepared by Mr Liu until 11 --- 12 August 1998. In the meantime some significant events had occurred. 2 held on 23 July 1998 indicate that the extended completion date had by then become 7 January 1999. This extended completion date was also included in the formal site minutes signed by Mr Liu on 12 August 1998. In his draft minutes there had been no qualification of the assessment that the construction was then ahead of program. 192 Mr Liu's evidence is that in respect of the matters raised in the minutes of Site Meeting No. 2 he either had no criticism of the applicant's work or alternatively any issues which had been raised were satisfactorily resolved by 11 August 1998. 193 In relation to the then estimated date of completion Mr Liu was of the opinion that the extended completion date of 7 January 1999 would be met. The minutes noted the applicant's estimate of 20 January 1999 but this was an estimate with which Mr Liu disagreed. 194 In relation to quality assurance and industrial matters the minutes in respect of Site Meeting No. DPWS have requested that the construction program be revised to show the planned sequence of events for concrete construction, in particular walls. The Program is to comply with Clause 33.2 of the General Conditions of Contract and Clause PE-02 of the Specification. The installation and removal of stopboards was also discussed. DPWS have issued revised drawings for the Wall reinforcement and Stopboard details. Flows continue to be observed and minor movements of the sheetpiling recorded. It is believed that the flumes themselves continue to occasionally overflow and may be leaking. It is intended that the area will soon be backfilled and the sheetpiling removed, while this will relieve this problem the situation will continue to be monitored. The correct forms and approvals are also to be provided. As a result of the incorrect placement of steel reinforcing in the pump station suction wells. Eden Constructions will check and confirm that the formwork constructed will be adequate for the loads imposed. Eden Constructions (sic) will provided (sic) a record of available test results. Eden have advise (sic) that their subcontractor Weir Engineering has provided a proposed layout for the pumps. A meeting needs to be held to discuss the proposal. Eden's are presently briefing and working with a replacement Consultant. On 31 July 1998 he signed off on a further formwork checklist and a further concrete checklist. In the formwork checklist against the question 'What class of finish is specified? ' the words 'off form' were added. Then in the concrete checklist signed off by Mr Williams on 31 July 1998 the item 'check type of finish ... b/Achieved' was ticked. 200 On 27 July 1998 the applicant issued revisions of its reinforcement, formwork and concrete checklist forms picking up a number of the recommended alterations which Mr Liu had proposed. 203 On Tuesday 4 August 1998 Mr Williams signed off on further reinforcement and concrete checklists. On 6 August 1998 he signed off on a further reinforcement checklist. These utilised the revised checklist forms which had been prepared by the applicant. Ultimately there were three versions of it, all of which were nominally dated 7 August 1998 respectively. The second and third versions were in fact issued by Mr Liu on 12 and 13 August 1998 respectively. Performance on evaluation items is considered marginal the Contractor needs continued direction and surveillance in the following areas. While initial progress was good current progress is only just acceptable. There have been. some delays due to inclement weather. Work Standard can be improved, with attention to detail and specification requirements. 2. 210 On 17 August 1998 Mr Liu as Superintendent's Representative issued Payment Certificate --- Valuation No. 6 to the Albury City Council expressing the opinion that the applicant was entitled to receive payment of $133,156.68 as at 10 August 1998. His Valuation No. 6 assessed that the concrete works were then 66 per cent complete. Mr Liu indicated that by reference to a document headed 'Estimated concrete volumes' prepared by him on 13 August 1998 the amount of the concrete work completed was 59.55 per cent even though the work completed had been valued at 66 per cent. 211 On 10 August 1998 Mr Williams signed off as the 'client's representative' on formwork, reinforcement and concrete checklists. 212 On Tuesday 11 August 1998 Mr Liu appears to have received a telephone call from Mr Peter Grove, the Department's Regional Projects Coordinator in Wagga to whom Mr Liu reported. By a Memorandum dated 1 September 1999 to the Department Mr Grove confirmed that he had requested Mr Liu to revise his Contractor Performance Report to reflect what he (Mr Grove from the Department's Wagga office) considered to be the actual performance of the contractor on the job in Albury (see [355] below). DECL. [statutory declaration] HE HAS THE QUARTERLY REPORT READY & WAS NOT GOOD. HE ALSO SAID THAT PETER GROVE RANG HIM UP DURING THE MORNING & TOLD HIM THAT THE REPORT "IS NOT HARSH ENOUGH". HE ALSO COMMENTED THAT WE SHOULD RECOMMEND THAT NO FURTHER WORK SHOULD BE GIVEN TO EDEN. I WAS A BIT ROPABLE (sic) AT TREVOR'S REMARKS & LASHED OUT AT TREVOR FOR THE UNJUST TREATMENT WE ARE GETTING. I SAW TREVOR CONCERNS AT MY FIREY (sic) REMARKS & LEFT THE OFFICE NOT TO UPSET HIM FURTHER. REGARDING THE REPORT. 215 At about 5.25 pm on Wednesday 12 August 1998 Mr Liu provided a revised version of his Contractor Performance Report, still bearing date 7 August 1998, by facsimile to the Department's Wagga office. This version bore Mr Liu's signature on the third page thereof, but no signature on the two-page attachment thereto. 218 On, presumably, Thursday 13 August 1998 an officer of the Department in Wagga reviewed Mr Liu's revised version of the third Contractor Performance Report bearing date 7 August 1998. Thereupon, he forwarded the corrected version of the second page of the new attachment by facsimile to the Department's Wagga office shortly after midday on Thursday 13 August 1998. Whilst the attachment was not brought into existence until 12 August 1998, the corrections to the second page being made on 13 August 1998, it was still given the appearance of having been prepared on 7 August 1998. 221 It would appear that the revised version of the third Contractor Performance Report bearing date '7 August 1998', in the form in which it existed on 12 August 1998 following its transmission by facsimile to the Department's Wagga office at about 5.25 pm on that day, was submitted to Mr Ellison as the recommending officer for his consideration. The corrected second page of the attachment was not within the report which he considered when he signed off with his remarks in relation to it on 17 August 1998. However, a copy of the corrected revised version of the report signed by Mr Liu against the date 7 August 1998 in the body of the report and at the end of the attachment was provided by Mr Liu to the applicant. 222 It appears that the corrected second page, which was forwarded by Mr Liu to the Department's Wagga office shortly after midday on 13 August 1998, was directed to Mr Grove in the Wagga office for his consideration. I feel that the contractor can take these issues and review the work procedures and improve the efficiency of his operation on site'. A draft of this report (attached) was indeed given to the contractor prior to the issue of the Superintendents completed CPR [the reference to 'Superintendents' was plainly intended as a reference to Mr Ellison as the Department's Contract Supervisor and not Albury City Council's then Director of City Services as the Superintendent under the Kremur Street Pumping Station contract] . I do not recall at this time whether I told the contractor that, at the time, that the report was a DRAFT. I believe that my DRAFT comments did not fully reflect my on-site experiences with this contractor. I believe that I was not fully objective and had allowed myself to be subjective, in that I didn't want to comment on issues that I felt were "minor" or just my personal opinion. Following the discussions concerning the value of the CPR to DPWS as an organisation it was agreed that an objective report would be of more value. Plainly, it only became a 'draft' after Mr Grove called upon Mr Liu to submit a more critical report. 224 In the revised version of the third Contractor Performance Report bearing date 7 August 1998 Mr Liu ticked the 'Unsatisfactory' box in respect of 'Time Management', 'Standard of Work', 'Quality Assurance' and 'Management and Quality of Personnel'. In the first version the 'Unsatisfactory' box had only been ticked in respect of 'Quality Assurance'. Performance on evaluation items listed below is considered unsatisfactory and disappointing. (cf marginal) DPWS has provided the Contractor with continued direction and surveillance in the following areas. (cf Time, improvements to published program and on site estimates for work production) While initial progress in excavation and concrete construction was good, current progress has slowed and is only just acceptable. (cf While initial progress was good current progress is only just acceptable) There have been some delays due to inclement weather but it is considered that with the current rate of progress the Contractor may not meet the contract period. The contract is 50% through the approved period yet is estimated at 25% complete by contract value and work performed. The following incidents are a matter of record. It is felt that the Site Manager must have more control and take responsibility for the work being performed and not simply rely on DPWS surveillance to identify where work is non confirming. Examples. Eden's Site Manager does not appear to check the work of workers and subcontractors. There have been a number of repetitions of the same non-conformance being detected by DPWS, just prior to concrete pours, despite work being "passed" by Eden Site Management (cf Work Standard can be improved, with attention to detail and specification requirements). 225 Mr Liu's evidence was that the second version of his report for August 1998 did not raise any matters that weren't covered by his first report of 7 August 1998 that were other than minor matters. It is perhaps unfortunate that the revised report did not make it clear that the fresh matters which were raised were in Mr Liu's opinion nothing other than minor matters. But this will be subject to an improved performance prior to the next report. The 13 August 1998 version of the last page of the attachment had been endorsed as indicated above by Mr Grove who did so as 'Project Manager'. It is uncertain who Mr Ellison had in mind when he referred to the 'Project Supervisor' but I would incline to the view that he was referring to Mr Grove as Mr Liu's supervisor. It may be observed that Mr Liu made no mention in his report of the industrial organisation known as the 'CFMEU' [Construction, Forestry, Mining and Energy Union]. 227 Mr Ellison signed his report as recommending officer with a notation that the contractor was recommended for future work 'Subject to review'. 228 Mr Ellison's report did not include the normal confirmation that a copy of it had been sent to the contractor on a specified date. However, it would appear that under cover of a letter dated 17 August 1998 Mr Ellison, as the Contracts Superintendent for Riverina/Western Region of the Department, forwarded a copy of the revised, but uncorrected, third Contractor Performance Report, signed by Mr Liu in the body of the standard form of document on page 3, and by Mr Ellison on 17 August 1998 on the same page. It is the policy of the Department to give Contractors the opportunity to comment on their performance reports. Any unexplained non compliances that are found may be grounds to sanction your company for future work with this Department. 229 In the course of his cross-examination by counsel for the respondent Mr Filardo said that in a conversation with Mr Liu in August 1998 Mr Liu said to Mr Filardo that if the Department had any role at all in the Kremur Street Pumping Station contract, the applicant 'would never have got the job in the first place'. This assertion cannot be construed as an admission on the part of the Department. Furthermore, it is inconsistent with the facts. The Department clearly had a role in the contract. 230 Mr Filardo's diary for 14 August 1998 included an entry 'Trevor & Pud on site to check the floor of the upper chamber of inlet pit'. On 20 August he signed off on a concrete checklist. On 2 and 3 September 1998 he signed off on further reinforcement checklists and a concrete checklist. On 8, 10 and 11 September 1998 he signed off on further concrete, formwork and reinforcement checklists. Again on 15 September Mr Williams signed off on formwork, reinforcement and concrete checklists indicating with ticks in each of the 'yes' boxes as 'client's representative' that '... WE CERTIFY THAT THE ABOVE WORK HAS BEEN COMPLETED IN ACCORDANCE WITH DRAWINGS AND SPECIFICATIONS'. I HAVE NOT BEEN ABLE TO FIND OUT THE PRE-TENDER ESTIMATE. That list was followed by a 'Contractor and Consultant Review List' which recorded the names of 43 businesses. The lists were preceded by a five page preamble. The Department's Panel of Assessors comprises two Branch Managers and one Policy Manager from Strategic Procurement Services Division. Past and current performance must be taken into account when new business opportunities, including tenders and consultant proposals, are being considered for the contractors or consultants included on the Provisional Review List. (see DPWS Contracts Manual Section 2.54; Consultant Management Manual Section 3.4.6). The continued inclusion of the names of contractors and consultants on the Review List is reassessed by the Department's Panel of Assessors when the status of such contractors and consultants has changed. The meeting took place between about 10.00 am and midday. E.O.T. [extension of time] 1/2 day. It considered subpoenaing him but elected not to do so. Whilst the diary note may provide evidence as to what Mr Densley told Mr Filardo, it does not prove the terms of Mr Liu's alleged conversation with Mr Densley. Furthermore, it does not establish anything that may have been said to Mr Liu by officers within the Department. Mr Liu had no recollection of saying anything to Mr Densley to the effect of 'the word came from Sydney high up that Ces [referring to Mr Filardo] is a bad boy. Eden is on the blacklist and should not have been given the Albury job at all'. He denied having received any such advice form anyone in the Department. Minor delays have been as a result of inclement weather'. In September 1998 the Department published a manual identified as 'Document PWM-0601'. That tender may not be the tender with the lowest tender amount as submitted through the Tender Box. errors in extension; errors in the tender documents; removal of qualifications; conformance with the documents). When these variations occur, they must be fully explained. See Section 5.63 This list contains the names of firms which require further investigation before engagement. Prior to recommendation of the award of a tender, the list is to be checked to ascertain whether or not the recommended Tenderer appears on the list. Any person proposing to accept a tender must ensure that the Strategic Procurement Services Group is consulted if the recommended Tenderer is included on the List. The first step should be examination of the Contractor Performance Reporting System . These records should be supplemented, when necessary, by reference to information held by the office reviewing tenders, other offices currently administering or which have recently administered a contract with the Tenderer and information obtained from other Clients of the Tenderer. Both the financial and contract information should be sought at this stage. Submission of details may be requested of a number of Tenderers simultaneously in order to save time in the tender review process. Primarily, these will be the consideration of recommendations by officers of the Department for the acceptance of tenders. The Board is not delegated the authority to accept a tender. That is the role of the Minister or someone with a delegation from the Minister as set out in the Department's Authorities Manuals (including those for individual Divisions/Product Groups). If it does not concur, it should give reasons and advise what action it considers should be taken. Before refusing to concur, the Board must be satisfied that the recommendation does not take into account, or give due consideration to, important factors. The Board is not authorised to recommend which tender should be accepted but to scrutinise the recommendation. • To ensure that all tenders have been given fair consideration and that the reasons for passing over any or all tenders appear to be justified and will stand up to scrutiny. If it finds unfairness, dishonesty or favouritism, it must report the details to the Group General Manager, Strategic Procurement Services for investigation . • To consider if the recommended tender appears to give value for money. This will involve consideration of more than the price of a tender and means that the lowest tender is not necessarily recommended for acceptance. • To rule whether a late tender should be accepted when a tender submission details reasons for accepting that late tender. This will involve considerations of whether the cause of lateness was circumstances which were beyond the Tenderer's control and the integrity of the tendering process will not be compromised by accepting the late tender. • To not substitute its own opinion and recommendation as to which tender should be accepted in lieu of that recommended in the submission, even though the Board may prefer one Tenderer to another. • To be satisfied that, where the reason for passing over a tender is on technical grounds, the reason appears to be sound. It should not be concerned with technical matters or consider the technical merits of a tender. If it is not satisfied the Board would not concur. • To be satisfied that the recommended Tenderer has been fully assessed as being capable of completing the work. The person recommending the tender acceptance must have considered the relativity of estimates, current market prices and tender prices. A tender which is considerably below the estimate or current market price should have been carefully scrutinised. The review must have considered the Tenderers managerial and technical ability, current work load, current financial status, previous experience with the Tender and current litigation on arbitration. It is not unfair to take into account the current or previous experience of the Department of Public Works and Services with a particular Contractor. • To reach decisions by consensus. There can be different opinions on matters raised. Should one member of the Board record a dissentary opinion, the reasons must be carefully examined. Should the Chairman of the Board elect to concur or not concur in a recommendation despite such a dissention, the dissention should be noted in the Minutes of the Meeting. • Responsibility for a recommendation always remains with the officer making the recommendation. Consideration of the recommendation by the Board does not transfer responsibility from the recommending officer to the Board. The Board's function is not to recommend a tender but to scrutinise the recommendation to ensure probity, fairness and value for money. The submission recommending that no tender be accepted must detail the reasons for not accepting any tender and must advise if fresh tenders are to be called. Approval to recall tenders must follow the procedures for approval to call tenders. An opportunity to submit a fresh tender is to be given to each of the original tenders unless there are sound reasons for not doing so. Duty statements need to reflect this and the role of the Quality Assurance Co-ordinator in assisting in this role. 4.1-7 & 18. (eg the marking up of construction drawings in response to site instructions. There are also some specific actions (A to H) required for substantial QA certification. Mr Filardo's diary notes for 14 September 1998 indicate that on this day he took some quality assurance papers to Mr Trevor Liu for his assessment. Mr Liu's diary notes for the same day indicate that the applicant provided information to him which he noted as 'QA CONC TESTS'. Between 25 September 1998 and 15 October 1998 various reinforcement, formwork and concrete checklists were signed off by either Mr Williams or Mr J Sarandis as the 'Client's Representative'. Thereafter between 22 October and 23 December 1998 Mr Liu, as the client's representative, signed off in respect of some 40 odd formwork, reinforcement and concrete checklists. These included check lists where Mr Liu had signed his initials against the question 'Are the forms clean? ' and checklists where he signed his initials against 'Type of finish a Required'. When Mr Liu signed off on the formwork checklist of 22 December 1998 he observed that Mr Filardo had placed a tick against the 'F2' box in respect of 'Class of Finish Specified'. Mr Liu did not initial against that item. Rather he circled the notation 'F3' and added the word 'REQUIRED' against which he added his initials. Mr Liu's evidence was that each time he inspected the formwork he observed that it was second-hand formwork rather than new formwork. He was aware of the fact that each time he made an observation concerning the formwork he realised that it would only end up producing an F2 finish. Sth COAST --- PIPELINE JOB --- EDEN REFEREE REQUIRED. He was responsible for reviewing tenders for the Bamarang to Nowra Hill pipeline for which the applicant had been a tenderer. It indicated that the contract amount as varied was then $2,311,447.09. The report indicated that the extended date for practical completion was 1 February 1999 and that 50 per cent of the work was completed at the date of the report. Somewhat curiously Mr Liu placed ticks in both the 'Unsatisfactory' and 'Acceptable' boxes in respect of three of the evaluation items, namely 'Time Management', 'Quality Assurance' and 'Management and Quality of Personnel'. By this he intended to indicate that the contractor's performance was acceptable but marginal. Given the definition in the form of 'Acceptable' as 'Generally meets acceptable standard of performance with few weakness' and the definition of 'Unsatisfactory' as 'Many weakness --- cannot meet the acceptable standard of performance', it is incomprehensible that Mr Liu could have identified performance that was acceptable but marginal as anything other than 'Acceptable'. See also Mr Liu's observation at [254] that performance on these evaluation items was 'only just acceptable'. Performance on evaluation items listed below is considered improved from the August Contractor Performance Report but only just Acceptable. The most recent valuation is for 50% of the contract value. On-site work production has continued to average 1 major concrete pour per week. It is envisaged that major civil works will be complete by early December 1998. It is felt that progress of the on-site work can still be improved. In reference to my previous CPR Aug98, work has generally continued employing all workers on one workface at a time. The Contractor has had 3 rd Party Examination and Audit of his Quality System. Basic or Substantial Implementation has yet to be demonstrated, the System is presently undergoing Certification. Notwithstanding his assessment that the work was 50 per cent completed as at 10 November 1998, Mr Liu's assessment of the quantity of concrete poured as at 1 November 1998 was that 79.34 per cent had been poured. Some improvement is noted. I reserve my final assessment to the completion of the contract. Keep up the improvement. It is the policy of the Department to give Contractors the opportunity to comment on their performance reports. The Project Engineer Contracts Group reported that the applicant had 'recently performed poorly on a project of similar nature'. It was further reported '[a] review of the rates submitted suggests that this firm has underestimated the complexity of the work involved in key areas such as the pumping stations'. On 25 November 1998 a confidential paper was presented seeking Board approval for the award of the relevant contract. ... The Superintendent's Representative has reported that in his opinion the performance of Eden Construction has been unsatisfactory with regards to Time Management, Standard of Work, Quality Assurance and the Management and Quality of Personnel. [It may be noted that these were not observations which flowed from the Contractor Performance Report signed by Mr Liu as reporting officer on 10 November 1998 and by Mr Ellison as recommending officer on 19 November 1998. Their source is the revised version of Mr Liu's August Report issued on 12-13 August 1998 against the date 7 August 1998]. Based on this report the Albury Superintendent has advised Eden Construction that it will not be recommended for future work with the Department unless performance is improved. [Such a recommendation is not to be found in the Recommending Officer's Reports of August 1998 or November 1998. The last sentence is quite inconsistent with Mr Ellison's report as recommending officer of 17 August 1998 where he said: 'On the advice of the Project Supervisor [referring to Mr Liu] I will not be indicating that you be given no further work with this Dept. But this will be subject to an improved performance prior to the next report. When considered with the above report on the firms performance at Albury these lump sums demonstrate a lack of understanding of the complexity of constructing major pumping stations. Mr Murphy's responsibilities include management of the tender process and supplier performance for the Department. Mr Murphy has advised that in his opinion Eden Construction is not capable of completing a contract the size of that for the Medowie to Raymond Terrace Wastewater Transfer System. He has also formally reported that in his opinion the performance of Eden Construction with regards to Time Management, Standard of Work, Quality Assurance and the Management and Quality of Personnel has been unsatisfactory. Mr Murphy's responsibilities include management of the tender process and supplier management performance for the Department. Mr Murphy has advised that, based on his knowledge of Eden Construction, in his opinion Eden Construction is not capable of completing a contract the size of that for the Medowie to Raymond Terrace Transfer System. In Schedule 9 Schedule of Quality Assurance Documentation, Eden Construction stated that confirmation of substantial implementation should be sought from Mr Trevor Liu. Mr Liu has advised that Eden Construction has neither submitted documentation as evidence of substantial implementation nor demonstrated that the quality system has achieved substantial implementation. Prepare Inspection and Test Plans in accordance with the requirements in AS 3905.2 Clause 3.3.8 and Appendix B, Clause B1. Update the plans as required. The required inspection and testing, and the records to be established, shall be detailed in the quality plan or documented procedures. On 4 December 1998 the applicant issued a Construction Programme which showed 12 February 1999 as the date for practical completion. Somewhat inconsistently, Mr Liu expressly signed off in respect of a nomination that the class of finish specified was 'F2' on 8 December, 9 December, 14 December and 17 December 1998, amongst other dates. On 7 December 1998 Eric Raymond as the Project Manager, Shoalhaven, for the Department made a recommendation to the Department's Board of Advice and Reference in respect of the award of a contract for the Bamarang to Nowra Hill pipeline for the Shoalhaven City Council and the Department of Land and Water Conservation. The recommendation was that the tender submitted by the applicant be passed over 'because of unsatisfactory past performance' and that the contract be awarded to another company, being the second lowest tenderer. The recommendation was signed off by Mr Craig Summerhayes as the Department's Regional Projects Co-Ordinator on 17 December 1998. It would appear that the Board of Advice and Reference accepted the recommendation on 18 December 1998. This company is on the DPWS "Provisional Review List". When reviewed in detail it was concluded that this tender presents an unacceptable risk (See Appendix B attached). It is recommended that this tender be passed over. The company was rated as unsatisfactory in several aspects --- Time Management, Standard of Work, Quality Assurance and Management of Personnel. Peter Grove (DPWS Wagga) and Trevor Liu (DPWS Albury) were contacted regarding Eden Construction's subsequent performance on that contract. They advised that the contract was valued at approximately $2M and was for the construction of a Pumping Station. They advised that subsequent to the unsatisfactory report, there has been minimal improvement in performance, and the contractor was 'struggling'. The work runs through relatively remote bushland areas where minimal impact is required. Eden Construction was asked to provide evidence of their ability to prepare such plans. They supplied a copy of the Plan for the Albury Contract, and a Plan they offered for the current work. The Plans were not satisfactory. The pipe material is difficult to lay and requires a very experienced contractor. From the information available, Eden Construction has no experience in constructing pipelines of this nature. Completion of two other major contracts is also dependent on timely completion of this contract. A contractor with a current poor record of performance, and lacking relevant pipelaying experience cannot be contemplated. HE SAID THAT HE WOULD RECOMMEND SUBSTANTIAL IMPLEMENTATION OF THE QA SYSTEM TO JOHN WILTON [the Chief Engineer in the Australian Capital Territory Department of Urban Services] . The reasons for rejection in respect of the first two items were 'No evidence of Quality Assurance, no works listed, no current accounts'. In the case of the third item the reasons for rejection were 'No evidence of Quality Assurance, no relevant works listed, no current accounts' and in respect of the fourth item the reasons for rejection were 'No evidence of Quality Assurance, limited experience, no current accounts'. On 8 January 1999 the applicant recorded its first written protest against the manner in which it was being treated by the Department. Specifically it responded to the Department's letter of 23 December 1998 concerning registration as a pre-qualified contractor. On 26 January 1999 Mr Evans of Construction QA Services Pty Limited wrote to the Australian Capital Territory Department of Urban Services forwarding a substantial 'QA Certification Assessment Report' for the applicant. This evidence has now been provided and Substantial QA Certification is recommended. The Report has been noted accordingly. Section 6 --- Concrete, Clause 6.8 Project Specifics, Surfaces. Internal and Exposed, Formed F3. From Volume 2 --- Standard Technical Specifications, TR2 Clause 6.9 Formed Surface Finish. Definition : Offsets resulting from displaced or misplaced form sections, from loose knots or otherwise defective forms, to be classed as abrupt irregularities.....Bagged surface finish prohibited. This showed the contract sum as varied at $2,323,527.00 and the extended date for practical completion as 12 February 1999. The 'Work Completed at Report Date' was shown as 86 per cent. For the second time Mr Liu proceeded to place ticks in both the 'Unsatisfactory' and 'Acceptable' boxes against 'Time Management', 'Quality Assurance' and 'Management and Quality of Personnel'. In relation to each of 'Standard of Work', 'Coordination of SubContractors', 'Contract Administration' and 'Occupational Health & Safety' Mr Liu ticked the 'Acceptable' box alone. By ticking both the 'Unsatisfactory' and 'Acceptable' boxes at the same time Mr Liu said that he intended to indicate that in relation to the relevant evaluation items the contactor's performance was, as mentioned above, acceptable but borderline. There has been little change, (in comparison to CPR November 1998), to the performance on evaluation items listed below. Performance is considered to have improved from the August 1998 Contractor Performance Report but only just Acceptable. The most recent valuation is for 86% of the contract value. Installation of high cost Mechanical and Electrical packages is being completed. Minor Civil Works remain. On-site work production has improved to average 2 major concrete pours per week. It was envisaged that major civil works would be complete by early December 1998, works were complete by early January 1999. It continues to be my opinion that progress of the on-site work could have still been improved. In reference to my previous CPR Aug98, work has generally continued employing all workers on one workface at a time. It is felt that work progress during 1998 has placed the Contractor in the position he finds himself in now. The Contractor has had 3 rd Party Examination and Audit of his Quality System. Conditional Certification for Substantial Implementation has been granted by Construction QA Services Pty Ltd of Canberra. Please see the attached letter. It is my opinion that there should be continued surveillance of the witness and hold points of the work performed by this contractor . On 16 February 1999 Mr Liu visited the Kremur Street Pumping Station site. Later in the day he sent two letters to the applicant concerning 'work site safety' and 'construction progress'. 7.00 pm. Referred to lost project on S/C [South Coast] . I explained his performance was not satisfactory. I expressed my doubts. CF denied this, was surprised. In the body of the Report he added the words '[t]here is concern with defective concrete work' against the item 'Standard of Work'. He also added a comment against 'Occupational Health & Safety' reading 'As inspected 16/2/99, site is not complying to requirements for OH&S'. True it is that Mr Liu raised the requirement for an F3 finish on the checklist dated 22 December 1998 and in his letter to the applicant of 27 January 1999, as Superintendent's Representative. However, on 5 February 1999 Mr Liu recorded in the quarterly Contractor Performance Report that the standard of work was 'Acceptable', as he had done on his previous report of 10 November 1998. The 10 November 1998 report had itself been prepared by Mr Liu approximately three weeks after he had informed the Department's Regional Projects Coordinator for the South Coast, Mr Summerhayes, that the applicant's standard of work was 'generally OK'. At no stage prior to 14 March 1999 did Mr Liu, as the Superintendent's Representative, give a direction to the applicant under clause 30.2 or clause 30.4 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED) that the work was not in accordance with the contract notwithstanding the requirement in clause 30.5 that such a direction be given 'as soon as practicable after the Superintendent becomes aware that ... work is not in accordance with the Contract'. At our discussions of 16/2/99 it was indicated that all works would be completed within 2 weeks --- this to include rectification of defective finish to the concrete walls, electrical, site works, completion of pipe work & testing, hydrostatic testing, installation of ventilators and mixers. Mr Ellison also initialled and dated the attachment to Mr Liu's Report under the words '[i]t is my opinion that there should be continued surveillance of the witness and hold points of the work performed by this contractor'. Under cover of a facsimile dated 17 February 1999 Mr Ellison forwarded to the applicant copies of the Contractor Performance Reports in respect of the Kremur Street Pumping Station works and also the applicant's other Albury contract. A further report on the pumping station will be completed when you have achieved Practical Completion. From your advice all the works will be completed within two weeks. This will permit him to monitor your progress and keep the other Contractors informed on when the pump station may become operational. Mr Ellison endorsed a copy of it with a note 'This does not indicate compliance with DPWS substantial implementation'. Mr Liu's diary notes indicate that he effected a further site visit to the Kremur Street Pumping Station site on 17 February 1999. On 18 February 1999 Mr Ellison sent a facsimile to Mr Liu with copies to Mr Hall and Mr Grove within the Department headed ' KREMUR ST P/STN EDEN CONSTRUCTIONS (sic)' referring to his visit to the site on Tuesday 16 February 1999. Check this to ensure they have included all the requirements of the contract. Include in this all the spec requirements such as testing, commissioning, WAE and manuals. You can give a copy of this detailed list to Edens if you wish as a guide only, not a definitive list. Have been given a safe work method statement for the installation of the ventilation pipework? All these must be lifted up. Request the contractor to have his electrician confirm in writing that all the leads/mains on the site comply fully with the requirements of Workcovers (sic) guidelines 'Electrical Practices for construction work' I believe the lengths of some of the leads and that multiple switching arrangement are suspect. Request what actions under his QA system he will be effecting. Findout (sic) if these will be remade and installed within the two weeks. Check spec. Who is doing the commissioning? Does the contractor have to allow for this in his program? If it is DPWS or others when will this be done. We will do another one at DLP. Try to avoid giving the contractor any extra works, if not essential get Council to do at a later date. From my inspection I do not believe the Contractor can achieve PC in two weeks without taking shortcuts , keep a sharp eye on him. We don't want any more defective work. They may be useful at a later date. If you want me to come back for another talk let me know. These were provided under cover of a memorandum seeking Mr Liu's comments. Mr Liu handed the three manuals back to Mr Filardo on 19 April 1999 for inclusion in training and O&M manuals. When he did so he did not provide any comments recording any dissatisfaction with the draft manuals. In relation to the action required Mr Liu circled the words 'Improve', 'Rectify' and 'Remove' in accordance with the 'NSW Occupational Health and Safety Act, 1983' . The instruction referred to 'Earlier memos + letters' of 16 February. It drew attention to workers without hard hats, electrical leads and boxes incorrectly tagged, excavations greater than 1.5m deep not benched correctly, electrical leads on the ground in trafficable areas and penetrations without warning signs or barricades. The instruction concluded 'You are directed to ensure that theses issues are rectified + your performance improved immediately'. On 23 February 1999 a further Site Safety Instruction was issued by Mr Liu to the applicant supplementary to that of 22 February. It stated 'Works are still not complete' and drew attention to penetrations, electrical tags and benching of rising main. The aforesaid Items should not hinder the successful and normal operation of the pumping station to be used for its intended purpose whilst the contractor completes minor items of works. Particularly benching + barricading of both the road + Kremur St PS sides. Signs are also required to warn pedestrians + motorists. It was indicated that Mr Liu considered the applicant's response (as set out in the applicant's letter to the Department of 26 February 1999) to be inadequate inter alia because it did not provide for 'Rectification of exposed Concrete surfaces to F3 finish'. COMMISSIONING NOT TO HAPPEN UNTIL SITE TESTS COMPLETED & DOCUMENTED --- ACTUATORS, COLLECTION WELLS'. It is envisioned that the works will require at least 2 days to commission the works. Mr Liu's complaint was that the applicant was using its foreman as an excavator and backhoe operator without the 'proper certification'. Between 25 February 1999 and 7 March 1999 Mr Filardo issued a series of pre-commissioning checklists referrable to the Kremur Street Pumping Station. His diary notes include '- leak in main --- OK --- check valves find leak --- before commissiong (sic)'. On 9 March 1999 Mr Filardo completed a Departmental 'Construction Work Site Check List'. On the morning of 9 March 1999 Mark Barber and Brett Martin, officers of the New South Wales WorkCover Authority, visited the Kremur Street Pumping Station site, issuing five notices to the applicant and two to the Department. Those issued to the applicant related to 'Use of Existing Work Box and Associated Gear. ', 'Exposed Concrete Reinforcement Bars', 'Electrical Leads and Power Tools', 'Exposed and unprotected Cable Trays' and 'Open and Exposed Pits'. A report on the issue of the notices was forwarded by facsimile by Mr Liu to Mr Ellison and Mr Grove at about 1.37 pm on 9 March 1999. On 9 March 1999 Mr Ellison forwarded a facsimile to the Department's 'General Manager, Project Management Group'. An inspection was carried out two weeks ago and several verbal warnings were issued by the Workcover Inspector. Subsequently they issued ... seven notices. The Superintendent's Representative is directing the Designer (Environmental Services --- Guy Boncardo) to respond to the Notices issued on DPWS. It allowed three days for 'grinding & cleaning concrete'. It will be recalled (see [70]-[74] above) that the Superintendent accepted, on 3 June 1999, that the date of practical completion was 10 March 1999. Under Clause 42.2 I estimate that the cost to rectify the defective concrete works is $55,000 and will take this figure into account when Calculating the Payment due under Progress Claim No.13. The lists were compiled during the commissioning activities and from onsite observations. The list of ' Construction Defects and Outstanding Items as at 18 th March 1999 ' included as item 11 a reference to 'Concrete Project Specifics (sic) --- Internal and Exposed Surfaces to be F3'. On Friday 19 March 1999 Mr Filardo attended a meeting with officers of the Albury City Council and Trevor Liu. Mr Liu's diary notes suggest that the meeting ran from 8.30 am until 10.00 am and that the purpose was 'to avoid dispute/litigation'. The persons in attendance appear to have been Mr B J McLennan, the Superintendent under the contract, Mr Daryl McGregor, Mr Trevor Liu, Mr John Ellwood and Mr Ces Filardo from the applicant. options & make decision'. Grind off all sharp edges and discontinuous surfaces. Remove bolts, form ties etc that are still embedded in all concrete surfaces and plug. Stone plug hole filler material back to general surface profile. Eden Construction to organise trial bag sections on the back section of NE wall for full height and three panels width. Council to give approval to contractor to be used for bagging after inspection of past work. Approved (by Council) binding application to be provided on concrete surface prior to any bag work. Sample panel of bagging to be ready to start by the 15 April 1999. Council to approve of sample bag panel section prior to any further work proceeding. However given the function of the building in this case it could be said to be quite satisfactory, provided one did not have to judge satisfaction by reference to a technical standard found within the contract. On 16 April 1999 Mr Liu, as Superintendent's Representative, sent a memorandum to the applicant with a copy to the Albury City Council under the heading 'Acceptable Alternative to Specified F3 Finish'. The memorandum identified the bagging treatment which was proposed using a sand/cement mix with binding and waterproofing agents added. It was agreed that 3 coats of this mix would be accepted as an alternative to the specified F3 Finish. The report indicated that the contract sum as varied had become $2,344,679.00. It indicated that the extended date for practical completion was 23 February 1999 and that the date of practical completion had been 29 April 1999 (which, of course, was later adjusted retrospectively to become 10 March 1999). The work was described as being 98 per cent complete at the date of the report. Once again Mr Liu double ticked a number of the evaluation items for 'Time Management', 'Standard of Work', 'Quality Assurance', 'Management and Quality of Personnel', 'Coordination of SubContractors' and 'Occupational Health & Safety'. The only item for which Mr Liu simply ticked the acceptable box was 'Contract Administration'. By ticking both an unsatisfactory box and an acceptable box at the same time Mr Liu was attempting to indicate that the performance in respect of the evaluation item in question was borderline or only marginally acceptable. It may be noted that in respect of 'Standard of Work', 'Coordination of SubContractors' and 'Occupational Health & Safety', Mr Liu's evaluation had gone from acceptable as at 5 February 1999 to marginal as at 7 May 1999. There has been little change, (in comparison to CPR February 1999), to the performance on evaluation items listed below. Performance is not considered to have improved from the February 1999 Contractor Performance Report and is not acceptable. The contractor's time estimates and programs have generally not been met. It is recalled that the contractor stated in February 1999 that the works would be fully complete by the end of the month. The works could never have been commissioned by this time. The contractor has never issued a program that fully meets the specification requirements nor has a critical path been shown. The concrete finishes were specified as F3. During the course of the works the contractor was reminded that the forms used would not provide a finish specified, the contractor insisted that remedial works would be performed afterwards rather than providing the finish specified from the outset. The contractor has since rectified external concrete surfaces to the satisfaction of the client, no work has been done on internal surfaces. A variation valuing the "loss" to the Principal has been applied to the contract. The Contractor has had 3 rd Party Examination and Audit of his Quality System. Conditional Certification for Substantial Implementation has been granted by Construction QA Services Pty Ltd of Canberra. Further to my February 1999 report, the Quality system does not appear to have been utilised in the performance of all the works, notably in mechanical supply (pumps and motors, crane, ventilation) and roofing nor has Substantial Implementation been granted by a third party (Construction QA Services P/L). It is my opinion that there should be continued surveillance of the witness and hold points of the work performed by this contractor. The contractor's response to safety has been reactive (to instructions given) rather than proactive in meeting the contract safety requirements. 22 --- Restoration of Concrete Surfaces' in which he observed that following an inspection on 10 May 1999 the rectification work on the external concrete surface was accepted as an acceptable alternative to the specified F3 finish. He noted that rectification of internal concrete surfaces had not been done to meet the specification requirements. Thereupon he determined that there had been a resulting decrease in the value to the principal. He valued the decrease at $9,000.00 being the cost difference to produce an F2 finish in lieu of the F3 finish specified. On 12 May 1999 Mr Filardo wrote to the Albury City Council for the attention of the Superintendent. Mr Filardo conveyed his comments on what were then current issues between the applicant and the Council, namely 'Liquidated Damages', 'Work done by Council' and 'Repair of busted Rising Main Outside Our Limits of Work'. Whilst reference was made in the letter to Mr Grove, who was acting as the Superintendent's Representative in Mr Liu's absence, there was no suggestion advanced in relation to any improper involvement in the matter by Mr Grove. On 17 May 1999 Mr Liu as the Superintendent's Representative issued a Certificate of Practical Completion recording the date of practical completion as 29 April 1999. On 24 May 1999 Mr Ellison subscribed his remarks as recommending officer on Mr Liu's Contractor Performance Report of 7 May 1999. "2 weeks". Pract. Comp. was achieved (sic) 2 months after this date. On 1 June 1999 Mr Liu as Superintendent's Representative wrote to the Albury City Council for the attention of the Contract Superintendent in relation to ' CONTRACTUAL ISSUES RAISED BY EDEN CONSTRUCTION '. At the time in question he was oblivious to the material which the computer contained. On 3 June 1999 the Superintendent wrote to the applicant in respect of the issues canvassed in the applicant's letter of 12 May 1999. I am prepared to accept that the Date of Practical Completion was 10 March 1999. At this meeting you provided assertions to me that the problems identified with time, safety and quality would be addressed immediately. We address your letter in the same chronology of paragraphs for clarity and convenience, we point out however, that should a satisfactory address to the matters raised not be fairly and properly investigated and replied to, we would then have no option, other than to take the matter further to the appropriate forum and venues, so this discrimination embarked upon by Departmental Officers would stop once and for all and that justice be done. for the A.C.T. Public Works within the same year as the Dora Creek Project. Your Department was aware but conveniently chose to ignore that information at the time. To this date, the Authority for its high regard, regularly sends us pamphlets and updates from the Penrith Lakes, simply because we are held in very high regard. Should the Olympic Authority had been (sic) told the truth at the time about us they would have no hesitation whatsoever to award us the contract, as that was clearly not the case, we were of course by passed by your Department. The letter mentioned the report for the Albury Project ($2,388,945.81) in particular, the "August 1998" report, of which you are no doubt aware. What you may not be aware of is the fact that in August there were two reports issued by Mr Trevor Liu the Superintendent's Representative. We lost two other projects totalling more than $2.0M. as result of detrimental and adverse comments made to inquiring authorities by your Department on those projects. Those two projects were, one for the Liverpool City Council worth approx. $1.3ml. (coincidently under investigation by ICAC) and the other, the Hume dam Project worth approx. $900,000.00 for the Water Authority & SMEC Victoria, both lost as result adverse comments by Public Works & Services. The truth of the matter is, the Department does not want Eden or Ces Filardo on their list and irrespective of what we or put up (sic) , we came to the conclusion that bias and discrimination would prevail and we would never be able to carry out work for the Department of Public Works & Services of New South Wales. Should you think that these comments are not true and correct, then, would you please point out one (1) single contract awarded to us over the past thirteen (13) years by your Department. On 26 August 1999 the Superintendent under the contracts, Mr McLennan, wrote to the applicant offering $45,000.00 as full and final settlement of the applicant's outstanding claims totalling $74,091.16 on the basis that an amended Certificate of Practical Completion would be issued in respect of the Pumping Station works recording the date of practical completion as 10 March 1999 as previously advised by the Superintendent. It would appear that by facsimile dated 27 August 1999 senior officers in the Department sought background information from Mr Liu in respect of the Contractor Performance Reports issued by him. Part of Mr Liu's reply, forwarded by facsimile on 30 August 1999, has been recorded at [223] above. As I recall I was commenting on the contractors "complaints" concerning his perceived ill treatment by DPWS. The Contractor fully believes that he has been wronged and has been driven to bankruptcy by DPWS, he also believes that he has paid his dues (re some form of financial settlement with DPWS) and is now entitled to be treated fairly by DPWS. He does not see how his own decisions, actions, management and quality of work relate to these issues . For example, the inability of his company to demonstrate Substantial Implementation of the Quality System. We have not control over their tendering procedures and control of information. That the organisations did not seek to fully defend their information sources when explaining why they passed over Eden's tenders. He says that he glossed over some issues, trying to ensure that the relationship between himself and the contractor was not disrupted. Accordingly he says in his letter that he refrained from commenting on 'minor' matters and matters of personal opinion. Mr Liu's reference to the inability of the applicant to demonstrate 'Substantial Implementation' of the applicant's 'Quality System' is somewhat curious in circumstances where the Kremur Street Pumping Station contract did not require the contractor to demonstrate 'Substantial Implementation' but only 'Basic Implementation'. On 1 September 1999 Mr Grove forwarded a response to the Department in respect of the applicant's letter of 9 June 1999 upon which Mr Liu had commented in his facsimile of 30 August 1999. system we were obliged to comment on the contractor's performance without fear or favour and that in return for that freedom to comment the D.P.W.S. would back its staff. I therefore had no [idea] about Eden Construction as a company or its ability to perform in a contract. I infact did not know that the company had been placed on the "banned" contractor list. system which was required under the contract, but Albury City Council did not insist on that requirement. The contractor consistently advised that it would be "fixed up". It wasn't until a deduct vary was imposed ($50,000 ) [The evidence does not establish that there were ever 'constant requests for that to improve'. The sign-off by the client's representative on formwork and concrete checklists tends to indicate a general acquiescence in respect of the finish that was being achieved, but Mr Filardo did agree to grind back imperfections at the end of the job]. (iv) The contractor, through his action of wrong placement of reinforcing starter bars, cost the client $3,000 to have a structural analysis done to ensure structural adequacy of the wall. [this could hardly be seen to be a significant matter]. (v) Works programs were consistently submitted showing that he would finish the contract on time. This did not happen and in fact by this action caused delay to the completion/commissioning of the treatment plant. [There was undoubtedly delayed completion but its extent was relatively minor. Mr Liu's perception that the works were not practically complete until April would appear to have been a misjudgment on his behalf, although the Contract Superintendent says that he only agreed to the revised earlier March date to achieve a compromise with the applicant]. (vi) At the start of the contract the contractor lied about the number of people employed by Eden Construction. On investigating the position Eden Constructions (sic) had to add two people to their employee list. This action is inconsistent with the Government's Code of Practice for the Construction Industry. My comments were, in essence, that I considered that Eden Construction was a typical 1980's [type] contractor. That is the company could complete the work but would require close, constant supervision. The DPWS does not have this luxury, except on large projects where the supervision fees form a small part of the overall project costs. For example Albury Sge, the supervision costs were 3.6% of the scheme cost. to reflect what I considered to be the [actual] performance of the contractor. At that time there was considerable problems (sic) on site regarding safety, quality of workmanship, and the critical problem of the wrong placement of steel, which [led to] additional, unnecessary cost. On 14 June 1999 the applicant submitted a schedule of prices for the Moruya Heads Sewerage Reticulation Works to Allied Constructions Pty Limited. In June 1999 the applicant effected a number of revisions to its Quality Assurance Manual. On 26 July 1999 Mel Gillot, Allied Constructions Pty Limited's estimator, prepared comments on the applicant's quote in respect of the Moruya sewerage subcontract. The minutes of that meeting, apparently prepared by Andrew Burns, record that the parties present included Mr Wilfred ('Fred') Brown, Mr A Burns and Mr M Gillot of Allied Constructions Pty Limited and Mr Filardo of the applicant. Q.A. DPWS would need to talk council around. Info given is strictly confidential. They went through various questions in relation to our tender and asked me who our subcontractor would be for pipelaying. I told them that we had considered a number of contractors but were currently considering Eden. DPWS said they were very unhappy with Eden and that the Eurobodalla Shire Council in particular would be very unhappy if we used Eden. I met with their Managing Director and he said to me that they don't take crap from anyone and would litigate if they had to. I gained the impression that Eden are very litigious. We ask that you take into account the fact that we have never before in our long association with DPWS, been forced to take such action. Mr Craig Summerhayes, the Regional Projects Co-ordinator for the Department, prepared a recommendation for a Board of Advice and Reference meeting on 27 August 1999. His recommendation was that the Department proceed to deal with Allied Constructions Pty Limited with a view to awarding the head contract to it. In his report dated 25 August 1999 Mr Summerhayes referred to the client as being 'Eurobodalla Shire Council'. He studied the document for approximately 30 minutes and told me that he thought it was worth the money to avoid a litigious subcontract and he thought that DPWS would be willing to pay for it. In relation to the award of a contract, this was deferred to a future meeting. On 30 August 1999 a facsimile was sent by the Manager, Program Co-ordination in the Department of Land & Water Conservation to the Department recording that the Department of Land and Water Conservation had approved government financial assistance to Eurobodalla Shire Council for undertaking the Moruya Heads sewerage works. On 13 September 1999 Mr Summerhayes, the Regional Projects Co-ordinator of the Department for the South Coast, prepared a further recommendation for the Board of Advice and Reference in respect of Allied Constructions Pty Limited's tender for the Moruya Heads sewerage works, namely that the tender be accepted in the adjusted amount of $4,276,655. That recommendation was supported by Mr Hetherington, the Regional Superintendent, and accepted by the Board of Advice and Reference which concurred with the recommendation on 17 September 1999. They also help to identify areas that the contractor is excelling in and any areas that need improvement. Performance reports are used in the assessment of a contractor for pre-qualification, selective tender list, registration, tender evaluation and --- in the event of termination --- for unsatisfactory performance under a contract. To be in the position to make factual assessments against evaluation criteria on the contractor's performance, the Reporting Officer must have frequent and direct liaison with the contractor. This person will be referred to as the Reviewing Officer. The Reviewing Officer's task is to ensure that the report is objective and accurate so that it can be relied upon by an agency making accountable decisions about selection, registration or regrading of tenderers. He saw his role more as one where his comments should be treated as an exhortation by himself to the contractor to continually seek an improvement in performance. The Reporting and/or the Reviewing Officer must address any issues raised by the contractor and respond in writing. The contractor's comments and the written response by the Reporting and/or Reviewing Officer form part of the performance report. They were, however, guidelines as published in the 2 nd edition, December 1999, of the respondent's Departmental Report. The option should be considered where the contractor's performance is assessed as unsatisfactory. Within the agency, information on a contractor's performance report may be released on a need-to-know basis to persons with authority, eg. to the convenor of a tender evaluation committee. Central co-ordination is therefore recommended. The meeting was attended by Mr Shestovsky as the Acting General Manager, Procurement Management Services, C Cheung as Project Manager, Procurement Strategies, and C Oh as Manager, Environmental Management, Policy Services. 9800075 Kremur Street Pumping Station. Subject to confirmation DPWS risk management role. After that time the Department will consider the above matters, together with any response from your company and will determine whether your company will be considered for future contracts. Mr Filardo, in his letter, expressed concern about the contract that was being referred to, namely Contract No 9800075. That was plainly a Departmental number which was revealed on the various Contractor Performance Reports. The number by which the Kremur Street Pumping Station contract was more consistently identified was Contract No S10/97, which was presumably the relevant Albury City Council contract number. In his letter Mr Filardo indicated that he required more information as to what the Department was talking about before he would be in a position to respond. By letter dated 30 December 1999 the Department advised the applicant that the contract referred to was Contract No S10/97 and explained that 9800075 was the Department's 'internal reference'. You acknowledged receipt of reports in you (sic) letter dated 9 June 1999. The adjusted contract price became $482,985.13. The 21 December 1999 report of Mr Liu was issued following practical completion. It referred to the extended date for practical completion as being 19 May 1999 and that practical completion had been achieved on the same day. In reporting the applicant's performance under that contract Mr Liu ticked all relevant items in the 'Acceptable' box with the exception of 'Quality Assurance' which was the subject of indications that the quality assurance was both 'Unsatisfactory' and also 'Acceptable'. Mr Ellison included a dash in that part of his report which called for confirmation that he had sent a copy of it to the applicant. In addition it included an indication that the contractor was not recommended for future work. No reasons were proffered. On 11 January 2000 SGS International Certification Services Pty Limited issued a certificate of registration certifying that the Quality Management System of the applicant had been 'assessed and registered as meeting the requirements of AS/NZS ISO 9002'. The date of certification was expressed as being 1 December 1999 and the scope of registration being 'Civil engineering and general construction'. & Services Towards Eden Construction P/L. It is of paramount importance is (sic) that public officers be accountable for any wrongdoings they commit to the detriment of the public they purport to represent. The report of August 1998, was at best flawed, intending to put me, my Company and my Project Engineer in the worst possible light. You may not be aware that the impartiality of the (sic) Mr Trevor Liu (the Reporting Officer) was highly compromised. In fact Mr Liu issued two (2) reports the copy of the first was given to us and another copy was sent to Wagga Wagga Regional office. Upon receipt of same Mr Peter Grove, a Senior engineer of the Public Works, who had little or no direct knowledge of the Kremur Street Project, said to Trevor "this report is not harsh enough " and instructed Trevor (somewhat improperly) to issue another performance report putting Eden in the worst possible light. When I asked Mr Liu why he did that and who was Peter Grove or Kevin Ellison for that matter under the contract, he said words to the effect "I know they are no standing under the contract, but I have to follow their instructions because they are my Superior Officers" In the light of the above our performance report was unsatisfactory and from then on life became very hard for us. That is what we have been saying for the past ten years. If that were the case the Council of Albury would had not given (sic) Eden another half Million Dollars worth of extra contract within the star scheme, if they thought Eden was a poor performer. In the eyes of the Albury City Council (Principal) it was certainly not the case. A meeting as suggested above should take place. That certificate was due at the end of the defects liability period i.e. 52 weeks after the date of practical completion. On 20 March 2000 Mr Ellison as Contracts Superintendent for the Riverina/Western region of the Department forwarded a facsimile to Mr Shevstovsky in response to a facsimile apparently sent by Mr Shevstovsky to him on 17 March 2000. Eden Constructions (sic) have requested John Ellwood from Albury City Council attend, but Why? Brian McLean (sic) was the Superintendent on this Contract, he should be attending to represent Albury City Council if anyone. What will the meeting achieve? Peter Grove has written submissions to SPS [Strategic Procurement Services] (George Menzies) on this particular issue and I support his comments. I am prepared to say it --- this Region believes we are not being supported by SPS and the "meeting" is only camouflage to appease the Contractor. The contract representatives will not report poor performance for fear of persecution by the Contractor. He never responded to my knowledge until well after the completion of the Contract. So he had the opportunity. He was intimately aware of Edens poor performance, if Mr Liu did not have the report correct then it is within Peters' authority on the project to have it corrected. Mr Liu is a prime example of what I said previously about truth in reporting. Mr Ellison's resistance to a meeting being held to be attended by representatives of the Department, the contractor and the Albury City Council is consistent with a Departmental concern that expressions of satisfaction by the Council with the contractor's performance may not sit comfortably with the Department's call on 11 August 1998 for the reporting officer, Mr Liu's, Contractor Performance Reports to be more detailed ' & critical '. Such a meeting may also have required distinctions to be drawn between matters which Mr Liu, as the Department's Albury-based Project Engineer, considered to be important and those which he considered to be unimportant or minor. It might also have required a reconsideration of Mr Liu's and Mr Ellison's expressions of concern about the contractor's time management in the May 1999 Contractor Performance Report, which lost their validity once it was recognised that the date of practical completion was 10 March 1999 and not 29 April 1999 as they had thought i.e. the project was 2 weeks late, not 9 weeks late. The meeting may also have required consideration of the Council's and the respondent's acquiescence in the provision of a lesser standard of finish for the formed concrete than the contract required. In April 2000 the Department published 'A guide to performance reporting on construction contractors and all categories of consultants' in respect of which the claim to copyright was made in 1998. Agreement to the meeting minutes should be obtained. For Consultant Performance Reports, the Recommending Officer is generally the Consultant Manager. Before making his recommendation Mr Solano noted that Mr Filardo's main concern was to discuss the poor Contractor Performance Reports from the Albury project. The poor CPR on the Albury project was considered during the tender evaluation for Shoalhaven Pipeline however the BAR [Board of Advice and Reference] report included other reasons for the rejection of the firm including its environmental management experience. The applicant was represented by Mr Filardo and the applicant's then solicitor. The Department was represented by Messrs Ellison, Grove and Solano. It would appear that no invitation was extended to the Albury City Council to participate in the meeting. Mr Solano explained that the Departmental officers involved had carried out their duties as required by the Department and there was not a hint of any wrongdoing on their part. Notwithstanding this, it may be advisable to review our tender and contract documents (particularly with respect to contracts where DPWS is not the Principal) to ensure there can be no doubt over the roles and responsibilities of all parties involved. Mr Filardo stated that the Departments assessment was incorrect. With respect to the issue of concrete finish, Mr Filardo stated that he was only required to produce a F2 finish and not F3. He stated a change to the finish had been agreed with the Department and he had documentation to support his claims. He also stated that our assessment of his OHS&R performance was incorrect as her (sic) had received positive assessments from WorkCover. Mr Grove disputed Mr Filardo's comments and recollection of the facts surrounding the Albury Project. Mr Filardo acknowledged that he has been given numerous opportunities to respond. Mr Solano stated that the CPR's were prepared by the Department in good faith and in accordance with it's reporting procedures and the CPR's would not be withdrawn. Mr Solano again explained the Department's reporting procedures and various levels of appeals available to him to have the reports reviewed however this process required Mr Filardo to furnish evidence to refute the Department's assessment. Despite a lack of any evidence, he is still of the opinion that the Department has treated him unfairly. There does not appear to be any reason for the Department to pursue this issue any further and it would appear that it is up to Eden Construction to either respond to the content of the Albury CPR's or to initiate some other form of action. We still maintain that the Department's objective is purely to destroy my company and my staff, my family and myself. This in our view, is corruptive, collusive and restrictive of fair and reasonable practices within the industries (sic) . It should not be tolerated and should be punished so the officers responsible for these corrupt and collusive practises be made to pay out of their own pockets in an endeavour to stop these things from re-occurring ever again. Somewhat curiously he recorded the date of practical completion as 29 th April 1999. He conceded in his oral evidence that this was not accurate. In respect of 'Time Management', 'Standard of Work', 'Quality Assurance', 'Management and Quality of Personnel' and 'Coordination of SubContractors' Mr Liu again ticked both the unsatisfactory and acceptable boxes at the same time. In relation to the other relevant evaluation items he ticked the acceptable box referable to 'Contract Administration' and 'Occupational Heath & Safety'. Works are presently under the control of the Principal, ACC. The Principal has not advised that the Contractor has improved their performance from what was Reported in May 1999. Mr Ellison once again marked the 'NO' box in relation to the question of whether or not the contractor was recommended for future work. His comments simply read 'refer to previous reports for details'. On 18 August 2000 Mr Ellison forwarded a copy of the completed final report, signed by him on 15 August 2000, to the applicant. The covering letter included '[s]hould you wish to comment on the attached report ..., kindly do so in writing to me within seven days of the date shown on this letter'. The applicant does not appear to have responded to the final report, signed by Mr Ellison on 15 August 2000, notwithstanding the invitation from Mr Ellison to do so. On 25 August 2000 Mr Ellison submitted a memorandum to Mr Solano with a copy to Mr Grove concerning the applicant. All accusations made are a nullity. 9800075 Kremer (sic) Street Pumping Station. However, this was subject to the Department's right to prepare a report in this case where it was the Superintendent's Representative for the Albury City Council. ACC was the contract Principal and Superintendent. Contractor did not issue a program that meets the specification requirements nor demonstrated a critical path. 4. (by DPWS Regional Superintendent) the Contractor personally assured the Superintendent that all works would be completed by 30/2/99 ie 2 weeks. Practical Completion was achieved 2 months after this date. These are dated 17 June 1999 to ACC Superintendent and 21 July 2000 to SPS. The first letter predates the DPWS request for a response to the report from Eden but is used as it does address some of the issues. Eden sought an extension of time for Practical Completion from 10 March 1999 to 16 April 2000 which Eden states was the date the pit was completed. In this case liquidated damages would not apply. It is noted that the liquidated damages were later remitted by the ACC although ACC state that this was only because it was a part of a settlement agreement. Claims (at page 4) that this work was detailed and specified as part of the additional works to the contract discussed shortly after the award of contract and the additional work was accepted as a variation as Eden could not have priced the work at the time of tender. States that Variation 17 arose when Eden realised that these works had not been priced and requested payment for its construction. This is in conflict with the Eden statement. --- Advises under "Construction program" page 5&6 of his requests for the construction program and the unsatisfactory programs provided. Further, the programs: did not serve the purpose of providing a predicted end date for the works; did not appear to have factored in the completion of mechanical and electrical works; and, did not allow for the modification of the flumes. This is, however, provided the Contractor should have not have been given an extension of time for Variation 17. The fact that this work was completed after commissioning means that this work was not on the critical path. In addition the DPWS and ACC documentation describes Eden's performance as very poor with respect to time management. 4. work needs continued surveillance of witness and hold points. Claims that Trevor Liu had signed off the bedding checklist based on a visual inspection. In particular, Trevor Liu's statements that Eden's QA system was not a benefit on the site in producing quality. These related to: unauthorised use of workbox, exposed reinforcement bars; some power tools not tested; exposed ends of cable trays; and, some pits not barricated (sic) . It is noted that other notices were issued on DPWS in terms of design aspects. The unsatisfactory rating appears well founded based on the type of shortcomings in the WorkCover report. The purpose of the meeting was to discuss Eden's grievances and the facts surrounding the Contractor Performance Reports. The minutes of the meeting do not raise any discussion on the specifics of the Contractor Performance Report. It states "In concluding, Mr Solano again offered Mr Filardo the opportunity to formally respond to the contents of the CPR's from the Albury project and to provide evidence to refute the Department's assessment. The report had the same ratings together with the not recommended for future work assessment as the 24 May 1999 report and referred to that report for details. This has only been done partly. Eden Construction Pty Ltd has not provided a satisfactory response to the Time Management; QA; and OHS&R aspects of the Contractor Performance Report dated 24 May 1999. The Department has decided that the overall standard of performance of your firm in the nominated aspects of this contract is unacceptable. Consequently, your firm cannot be recommended for the award of future contracts. A request for review should be addressed to the Group General Manager, Strategic Procurement Services, Level 23, McKell Building, 2-24 Rawson Place, Sydney 2000. Your request must detail grounds for review and give reasons why your request should be granted. Submissions in support of your grounds for review should be accompanied by supporting evidence. However, by letter dated 16 April 2004 the applicant was invited to apply for review of the listing provided that it satisfied the Department's requirements for a review. A further letter to like effect was sent by the Department to the applicant on 22 July 2004. By letter dated 19 July 2004 to the Department the applicant sought reinstatement as a 'preferred Contractor' by the Department, without prejudice to its rights in the current proceedings. On 21 July 2004 the Department responded to Mr Filardo's letter of 19 July 2004 indicating that further information was required for a review of the applicant's listing by a Panel of Assessors. Mr Filardo says that on 2 February 2005 he spoke with Mr Ellwood from the Albury City Council at about 5.27 pm. we also gave you our QA manual and told you that we have basic implementation, and if you recall you said that you were not to fussed about it? remember? Mr Filardo concedes that no formal request for a review of the Panel of Assessors' decision was lodged by the applicant with the Department. However, he refers to a letter from his then solicitor Mr van Gelder of 6 March 2001 to the Department's Corporate Solicitor in which the applicant purported to 'reserve its right to a review' should that prove to be necessary. Unlike other departments DPWS does not receive direct budget funding support from the Government. DPWS is formally classified by the NSW Treasury as a General Government Non Budget Dependent Agency. This return is formally negotiated between the Minister of Public Works and Services and the NSW Treasurer as part of DPWS' annual Statement of Business Intent. This includes the activities it undertakes for, and on behalf of the Government. The separate questions originally ordered on 23 May 2006 were set aside on 2 August 2006. They were replaced by the following separate questions on 2 August 2006, which were themselves modified on 29 August 2006. Did the Respondent make a negligent misrepresentation at common law by the conduct which is complained of by the Applicant? Did the conduct which is complained of by the Applicant, constitute conduct by the Crown in the course of carrying on a business, within the meaning of section 2B of the Trade Practices Act 1974 (Cth)? (a) Was the relevant 'other market' for the purposes of the Applicant's claims under s 46 of the Trade Practices Act 1974 (Cth) as alleged in paragraph 14 of the Amended Points of Claim? Did the Respondent engage in deliberate use of unlawful means to wrongfully interfere with the Applicant's trade or business, by the conduct which is complained of by the Applicant? Did the Respondent breach the terms of a written agreement dated 7 January 1994 entered into by 'Eden Constructions' and the Respondent, by the conduct which is complained of by the Applicant. In his reports Mr Liu failed to distinguish between matters that were important and those that were of minor significance. He plainly misunderstood and misapplied the several gradations by reference to which the applicant's performance was to be assessed and recorded in the Contractor Performance Report forms. Regrettably, these reports led to the applicant's listing on the Department's Provisional Contractor Review List and later its Contractor Review List. It must, however, be recognised that the ticking by Mr Liu of the 'Unsatisfactory' box in relation to 'Quality Assurance' in the first version of the third Contractor Performance Report of 7 August 1998 was itself sufficient to have the applicant's name listed on the Provisional Contractor Review List (see [239] above). It must also be noted that Mr Grove had made one of his periodic visits to Albury on Thursday 6 August 1998. Presumably, what he observed at the Kremur Street Pumping Station site on that day was the catalyst for his instruction to Mr Liu to be more critical. Furthermore, he did not ensure that there had been appropriate discussion with the applicant before he signed off on them. He did not have minutes of any 'formal site meetings' with Mr Filardo at which Mr Liu had discussed aspects of unsatisfactory performance as reported by him. Part of the reason for this was, no doubt, the fact that Mr Liu did not conduct such 'formal site meetings' with Mr Filardo before submitting his Contractor Performance Reports to Mr Ellison, which noted 'Unsatisfactory' performance. He failed to have the change from an F3 standard of finish for concrete surfaces to an F2 finish appropriately documented. He did not progress the development of a quality assurance system for the applicant with appropriate diligence. Worse still, he did not accept one invitation from Mr Ellison to respond in writing to a Contractor Performance Report with which he disagreed, until 8 January 1999. At [39] I indicated that I was not prepared to find that any tenders submitted by the applicant subsequent to the award of the Kremur Street Pumping Station contract were evaluated by the Department with a closed mindset, adverse to the applicant, because of events that may have occurred prior to 7 January 1994. Having reviewed all the actions that occurred between 24 June 1998 and 25 January 2001 upon which the applicant relies to support a finding that the respondent constructively breached clause 4 of the 7 January 1994 agreement (see [2] above), it is clear that none of those actions constituted a breach of clause 4, an anticipatory breach of the agreement or a constructive breach in the sense in which I have understood the applicant to have used that expression, whether taken individually or collectively. 420 The disclosure by Mr Ellison to Mr Liu made on 24 June 1998 which caused Mr Liu to make the entry '-> EDENS ONCE ON BANNED LIST!! ' (see [183]) does not demonstrate that any tender submitted by the applicant subsequent to the award of the Kremur Street Pumping Station contract would be viewed by the Department with a closed mindset, adverse to the applicant, because of events that may have occurred prior to 7 January 1994. In any event, it was factually correct to say that the applicant, which apparently had no dealings with the Department prior to 7 January 1994, had been placed on the Department's Contractors' Review List under a business category on or about 6 May 1994 pending payment of the consideration due by Eden Constructions (NSW) Pty Limited to the Department under the 7 January 1994 agreement. As noted above, that consideration was paid on 17 May 1994, 11 days after the listing. 421 In the circumstances, question 6 in the separate questions should be answered in the negative. 424 As I understand the applicant's case, the duty of care which it was propounding was a contractual duty. Clause 23 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED) in the Kremur Street Pumping Station contract contained an acknowledgement that the Superintendent 'must act impartially in accordance with the provisions of the Contract'. Where the contract enabled the Superintendent to give a direction, that phrase encompassed the making of agreements, the giving of approvals and authorisations, the issue of certificates, the making of decisions, demands and determinations, the provision of explanations, the giving of instructions, the issuing of notices and orders, the granting of permission, acts of rejection and the making of requests or requirements. 425 It is strictly speaking unnecessary to decide whether, upon its true construction, clause 23 required the principal, the Albury City Council, to ensure that the Superintendent appointed by it from time to time would act impartially in accordance with the provisions of the contract. Given that the Superintendent's appointment was a matter for the principal alone and there was no right of objection conferred upon the contractor to take exception to such an appointment (cf the appointment of a Superintendent's Representative under clause 24), I would incline to the view that responsibility for actions that were not taken impartially in accordance with the provisions of the contract would rest with the principal subject, of course, to the other provisions of the contract. Such actions would fall outside the scope of the Superintendent's discretion. It may be that a Superintendent is the agent of a Principal when exercising the functions of a Superintendent only in a very loose sense and that, when exercising certifying functions in respect of which the Superintendent must act honestly and impartially in the context of a contract incorporating clause 23 of the General Conditions of Contract in its unamended form, the Superintendent will not be acting as the agent of the Principal in a strict legal sense (see per Hodgson JA, with whom Mason P and Stein JA agreed in Peninsula Balmain Pty Ltd v Abigroup Contractors Pty Ltd (2002) 18 BCL 322 at 338 [50]). Clause 46 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED) regulated and limited the right of a dissatisfied contractor to make claims on a principal in respect of acts or omissions of the Superintendent and/or the Superintendent's Representative under the contract. 426 I am not aware of any claims having been made by the applicant in respect of any acts or omissions of the Superintendent and/or the Superintendent's Representative, acting as such, under the contract which would fall to be considered under clauses 23 and 46 of the GENERAL CONDITIONS OF CONTRACT (AS AMENDED). 427 Any functions which Mr Liu may have performed as a project engineer working for the Department by issuing Contractor Performance Reports in relation to the applicant's performance under the Kremur Street Pumping Station contract, were not functions which he discharged as the Superintendent's Representative. As an officer of the Department, he was entitled to have regard to information which he gleaned as the Superintendent's Representative, in his preparation of Departmental Contractor Performance Reports (see [131] --- [133] above). 428 Insofar as the applicant argues for a duty of care sounding in tort and said to be owed by the Superintendent's Representative to the contractor because of the role that the Superintendent and, thus, the Superintendent's Representative performs under the contract, I am not disposed to find that any such duty of care arises. There was a clear mechanism for challenging decisions of the Superintendent and/or the Superintendent's Representative with which the contractor may have disagreed under the terms of the Kremur Street Pumping Station contract. No relevant case of vulnerability on the part of the contractor can be made out. (b) Does not arise. 430 Prior to Northern Territory of Australia v Mengel ('Mengel') [1994] HCA 37 ; (1995) 185 CLR 307 a special action on the case was available, independently of trespass, negligence and nuisance, where a person suffered harm or loss as the inevitable consequence of the unlawful, intentional and positive acts of another (see Beaudesert Shire Council v Smith ('Beaudesert') [1966] HCA 49 ; (1966) 120 CLR 145 at 156). 431 In Mengel the High Court overruled Beaudesert and said that the above statement of principle was unsound and should not be followed. Mengel was a case where some graziers had recovered damages for diminished market opportunities experienced in respect of the sale of certain cattle which was delayed because of quarantine notices unlawfully placed upon the movement of stock from their properties, ostensibly in accordance with a brucellosis eradication campaign. The judgment for the graziers was set aside and a verdict entered for the appellants. More precisely, it is that the principle as formulated permits of liability notwithstanding that there is neither negligence nor an intention to inflict harm. So far as intention is concerned, the cause of action does not depend on an intention to harm the plaintiff, but on the doing of an act which is intentional and the inevitable consequence of which is to cause loss to the plaintiff. Such a tort is committed where damages have been suffered as the result of an act done by a public officer with the intention of causing harm to the applicant or which he knows is or ought to know is beyond power and which involves a foreseeable risk of harm. Misfeasance in public office is a deliberate tort in the sense that there is no liability unless either there is an intention to cause harm or the officer concerned knowingly acts in excess of his or her power (per Mason CJ, Dawson, Toohey, Gaudron and McHugh JJ in Mengel at 345). Nor were they found to have known that they lacked the relevant power or to have been recklessly indifferent to its availability (at 360; see also Sanders v Snell (No 2) [2003] FCAFC 150 ; (2003) 130 FCR 149 at 173 [94] ). In Sanders v Snell at 174 [96] the Full Court gave consideration to the House of Lords decision in Three Rivers District Council v Governor and Company of the Bank of England [2000] UKHL 33 ; [2000] 2 WLR 1220. This was said to involve "bad faith" in as much as the public officer does not have an honest belief that the act is lawful. In one form (that of "targeted malice") it must be shown that the public officer in question has acted as such with an actual intent to cause injury to a person or persons. In my opinion, any such claim against the respondent would have failed. Turning to the tort of inducing breach of contract or otherwise interfering with contractual relations, it may be observed that it enjoyed an extended application after the decision in Lumley v Gye (1853) 2 E&B 216; 118 ER 749. In Lumley v Guy , Erle J took the view that it was wrongful to procure the breach of a contractual duty. Furthermore he adopted the view that the liability involved a principle of which liability for procuring a breach of contract of hiring was only an example or illustration. It fell within the class of cases which rested upon the principle that the procurement of the violation of the relevant right gave rise to a cause of action (see James v The Commonwealth [1939] HCA 9 ; (1939) 62 CLR 339 at 370). Sometimes malice is said to be an ingredient; but this seems to mean no more than that the defendant must have knowledge of the existence of the civil right or of the facts from which it arises and must act without lawful justification. What constitutes a lawful justification is a matter of some difficulty. An act which would in itself be wrongful as infringing a legal right of another person may be justified if shown to be no more than was reasonably necessary for the protection of some actually existing superior legal right in the doer of the act being a right in real or personal property or a right or duty found in statute (per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ in Zhu v Treasurer of the State of New South Wales ('Zhu') [2004] HCA 56 ; (2004) 218 CLR 530 at 582 [144] and 587-588 [161]-[163]). Where the superiority of right rests in some characteristic of the general law, temporal priority of other purely contractual rights will not suffice (see Zhu at 587 [160]). It seems clear to me that, on the facts of this case, no case can be made out by the applicant that any conduct of the respondent or any officers of the Department amounted to inducing a breach of the 7 January 1994 agreement or otherwise interfering with the contractual relations between the applicant and the respondent thereunder. Nor can it be said that the respondent or any of the officers within the Department induced a breach of the contract between the applicant and the Albury City Council or otherwise interfered with the contractual relations between the applicant and the Albury City Council under the Kremur Street Pumping Station contract. The intervention by officers of the Department in relation to the award of other contracts following the submission of tenders therefor by the applicant does not correspond with the illustration provided by Dixon J in James v The Commonwealth of an actionable wrong arising from a third party knowingly procuring a common carrier to refuse in breach of his duty goods tendered to him for carriage. The responsibilities of parties to whom the applicant submitted tenders were not equivalent to those of a common carrier. In the foregoing circumstances I would answer question 5 in the negative. This brings me to a consideration of the applicant's claim that the respondent contravened s 46(1)(c) of the Trade Practices Act 1974 (Cth) ('the Act'). Section 46 of the Act has no application unless, because the respondent was carrying on a business, either directly or by an authority of the State, it became bound by Part IV of the Act. The question then becomes did the activities of the Department fall within the expression 'so far as the Crown carries on a business ... directly'. Rather, it described activities which 'do not amount to carrying on a business' (emphasis added). It, amongst other things, generated electricity at stations it operated, owned or controlled and owned and operated electricity distribution infrastructure. It was authorised to license other persons to store, reticulate and sell electricity in the Territory. At 110 [52] McHugh A-CJ, Gummow, Callinan and Heydon JJ observed that one matter was not controversial namely that the Authority 'was carrying on a very substantial business'. At 117 [68] their Honours observed that the Act was seeking to advance 'the broad goal of promoting competition'. While the word "business" in any particular context takes its meaning from that context, normally it is a "wide and general" word. Its meaning in the Act is widened by s 4(1), since "business" includes "a business not carried on for profit". The legislation as a whole is remedial; s 2 provides that the object of the Act is "to enhance the welfare of Australians through the promotion of competition ..." The purpose of introducing s 2A, as explained by the Swanson Committee and noted above, was to ensure that the Commonwealth Government should, in its commercial activities , be subject to the same regime as corporations. One of the goals of the legislation recommended by the Hilmer Report was to ensure that the legislation applied to businesses conducted by the governments of the States and Territories to the same extent as it did to those conducted by the Commonwealth. The Second Reading Speech delivered in the House of Representatives when the Reform Act was introduced as a Bill stated that it and the three Agreements of 11 April 1995 represented "a complete response to the recommendations of the Hilmer committee". It was said that the amendments to the Act, taken with State and Territory application legislation, ensured that "the prohibitions against anti-competitive conduct can be applied to all businesses in Australia". It was further said that one of the main features of the Bill was that it "extends the operation of [the Pt IV] competitive conduct rules to currently exempt businesses". Section 2B was clearly a crucial provision in attaining these goals. The question of the meaning of s 2B of the Act arose only peripherally in Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd ('Baxter') [2006] FCAFC 128. In that case Baxter Healthcare Pty Limited was a supplier of sterile fluids to public hospitals. Exception was taken to a pricing structure whereunder Baxter Healthcare Pty Limited offered to supply sterile fluids on an item-by-item basis at high prices and to offer to supply the same items on an exclusive sole supply basis for substantially lower prices. In Baxter the issue was whether or not the immunity of the various State governments extended to Baxter Healthcare Pty Limited as the relevant supplier of the sterile fluids to the public hospitals. A Full Court comprising Mansfield, Dowsett and Gyles JJ held that the supplier of the sterile fluids was not bound by Part IV of the Act. True it is that cost recovery arrangements were put in place whereby the Department became funded by the 'agencies' which were its 'clients'. However, this was simply an internal government funding arrangement. It would be bizarre to imagine one government department suing another for non-payment of relevant fees. Under the Crown Proceedings Act 1988 (NSW) such an action would be 'State of New South Wales v State of New South Wales'! Apart from the activities of the Department not having the character of a business, I would also incline to the view that the transactions between the Department and its agencies fell within the exclusion for which s 2C(1)(c)(i) of the Act provided. In the circumstances I would answer question 2 in the negative. Given my finding in respect of question 2 it is probably unnecessary to address question 3. Virtually no evidence was directed at the definition of the relevant market. Were it necessary for me to decide what the market was in which the applicant was engaged I would describe it as the market for the provision of civil engineering design and construction services in respect of sewerage treatment, storm water drainage and related works in New South Wales (see inter alia s 4E of the Act). It follows that the answer to question 3(a) should be no. The activities in which the Department was engaged were not activities for a proscribed purpose within the meaning s 46. They were protective of the public interest, even if, in the execution, the relevant flawed departmental advice adversely impacted upon the applicant. To come within the proscription for which s 46(1)(c) provides, were it to apply to the respondent, it would have to be demonstrated that the applicant would, but for the respondent taking advantage of its market power be likely to have entered the 'other market' in competition with the respondent. The respondent was not a participant or potential participant in any market in which the applicant was a participant or potential participant and a likely competitor. In my opinion, question 3(b) should be answered in the negative. I turn now to the applicant's claim that the respondent was guilty of negligent misrepresentation. The first issue to consider is whether the relationship between the applicant and the respondent at the relevant time in or about 1999 was such that a duty owed by the respondent to the applicant should be found to exist which required the respondent to exercise reasonable skill and care in providing advice as to the applicant's past performance and suitability for appointment as a contractor to provide civil engineering design and construction services in respect of sewerage treatment, storm water drainage and related works to third parties who may be contemplating using the services of the applicant. Claims for damages for pure economic loss present peculiar difficulty (per Gleeson CJ, Gummow, Hayne and Heydon JJ in Woolcock Street Investments Pty Ltd v CDG Pty Ltd ('Woolcock') [2004] HCA 16 ; (2004) 216 CLR 515 at 529 [21] ). Damages for pure economic loss are not recoverable if all that is shown is that the respondent's negligence was a cause of the loss and the loss was reasonably foreseeable (per Gleeson CJ, Gummow, Hayne and Heydon JJ in Woolcock at 530 [21]). In Woolcock the High Court found that no duty of care was owed by an engineering company or its employee project manager to a purchaser to avoid damage in the form of economic loss said to have been sustained as a result of the settlement of the footings of a warehouse and office complex, for the design of which they had been responsible, or the foundation material beneath them or both. Those facts do not show that the appellant could not have protected itself against the economic loss it alleges it has suffered. " So also is the actual knowledge of the defendant concerning that risk and its magnitude. If no question of indeterminate liability is present and the defendant, having no legitimate interest to pursue, is aware that his or her conduct will cause economic loss to persons who are not easily able to protect themselves against that loss, it seems to accord with current community standards in most, if not all, cases to require the defendant to have the interests of those persons in mind before he or she embarks on that conduct. In particular cases, other policies and principles may guide and even determine the outcome. But I do not think that a duty can be held to exist in any case of pure economic loss without considering the effect of the application of these general principles. Sullivan was the father of a girl who was taken by her mother to a sexual assault referral centre. The opinion was formed that the child had been sexually abused whereupon the South Australian Department of Community Welfare and the child's mother took steps to ensure that Sullivan did not have access to the child. Allegations against him were pursued in Family Court proceedings brought by the mother which were ultimately resolved in Sullivan's favour. Thereupon he commenced proceedings in the Supreme Court of South Australia claiming that those who had conducted the examinations and assessments owed him a duty of care and that the State and its instrumentalities were vicariously liable for their negligence. The Court, comprising Gleeson CJ, Gaudron, McHugh, Hayne and Callinan JJ found that the duty of care for which Sullivan contended did not exist. Nonetheless, that does not mean that novel cases are to be decided by reference only to some intuitive sense of what is "fair" or "unfair". There are cases, and this is one, where to find a duty of care would so cut across other legal principles as to impair their proper application and thus lead to the conclusion that there is no duty of care of the kind asserted. The core of the complaint by each appellant is that he was injured as a result of what he, and others, were told . At once, then, it can be seen that there is an intersection with the law of defamation which resolves the competing interests of the parties through well-developed principles about privilege and the like. To apply the law of negligence in the present case would resolve that competition on an altogether different basis. It would allow recovery of damages for publishing statements to the discredit of a person where the law of defamation would not. The applicant was not vulnerable in the sense that it was unable to seek redress for what it considered to be inappropriate assessments, which may have founded later adverse comments concerning the applicant, imparted by Departmental officers to others. Furthermore, the applicant did not itself rely upon any representations, which were made concerning it, to its detriment (see Tepko Pty Limited v Water Board [2001] HCA 19 ; (2001) 206 CLR 1 at 16-18 [46] - [51] ). In my opinion the respondent was not under a duty of care to the applicant as alleged. Accordingly, question 1 should be answered in the negative. Given the answers to questions 1 to 6 and the facts and matters referred to above, question 7 should also be answered in the negative. The costs of the determination of the separate questions should be reserved. | principles of construction applicable to a written contract duties owed by a superintendent's representative to the contractor under a civil engineering contract necessary elements elements of the cause of action justification application of part iv of the act to the respondent misuse of market power misrepresentation causing economic loss whether a duty of care should be found contract tort of misfeasance in public office tort of inducing breach of contract or otherwise interfering with contractual relations trade practices negligence |
The Tribunal affirmed a decision of the Veterans' Review Board (Board) that Mrs Gittins was not entitled to a war widow's pension under the Veterans' Entitlements Act 1986 (Cth) (Act). Her husband, Mr Philip Gittins, had died on 25 July 1997. Mr Gittins was a veteran who served in the Australian Army from July 1949 until December 1971. He had served on operations in Japan from July 1953 until July 1955. 3 Mr Gittins died as a consequence of a low grade non-Hodgkin's lymphoma. In 1976, Mr Gittins worked as a teacher at Brighton Grammar School. At that time, at the urging of his headmaster, Mr Gittins saw a surgeon about a mass on the left side of his neck. The mass has been present since about 1960 and, over time, had grown more visible without causing any symptoms. 4 Mr Gittins became unwell in April 1997. He was admitted to hospital on 10 July 1997, with chemotherapy commencing one week later. As mentioned above, Mr Gittins died on 25 July 1997. 5 Mrs Gittins contended before the Board that her husband's death was war-caused in that it arose out of his operational service in Japan. She said that her husband had an inability to obtain appropriate clinical management for his non-Hodgkin's lymphoma because of his fear or phobia of doctors and hospitals, arising out of his experiences when hospitalised in Japan. Under s 8(1)(b) of the Act, "the death of a veteran shall be taken to have been war-caused if...the death of the veteran arose out of, or was attributable to, any eligible war service rendered by the veteran...". 7 According to the Full Court of this Court in Repatriation Commission v Deledio (1998) 83 FCR 82 at 97-98, a four step process is required under ss120 and 120A of the Act to determine if an injury or death is war-caused. If the hypothesis is consistent with the template found in the SoP, the hypothesis is reasonable. If it is not so satisfied, the claim succeeds. If it is so satisfied, the claim fails. There must be a hypothesis, in the words of Riley FM in the judgment below at [21], "which starts with the disease ... and ends with the service". 9 Further, in Hill at [55], the Court said "a hypothesis connecting a disease with war service will only be reasonable if the material that raises it includes all of the essential elements prescribed by the SoP". In particular, she relied on factor 5(j) of the SoP which refers to "... the inability to obtain clinical management for non-Hodgkin's lymphoma. It nonetheless held the hypothesis to be too tenuous and too remote to be reasonable. Having found that the cause of death was non-Hodgkin's lymphoma and that there was an SoP which applied to the disease, her Honour considered at [50] that the Tribunal should have given no further consideration to see if "[t]he veteran's inability to obtain appropriate clinical management of his lymphoma did not fit within the proviso in clause 6 of the relevant SoP". 18 Her Honour held that, as the claim did not fit within the template, it failed. It also considered the Tribunal's dealing with the second hypothesis to be an immaterial error. The Court dealt with other aspects of the Tribunal's decision. Those other aspects are not relevant to the appeal. Section 120A requires the Tribunal to apply any relevant SoPs. The parties initially relied upon SoP No 37 of 2003 concerning non-Hodgkin's lymphoma, and in particular, the applicant relied upon factor 5(j), which states the inability to obtain appropriate clinical management for non-Hodgkin's lymphoma. In the course of the hearing the applicant changed the emphasis on the hypothesis raised, submitting that Mr Gittins' death had occurred as a result of a failure to obtain adequate and appropriate treatment for his condition because of his war-caused phobia for medical intervention including contact with doctors. There is no SoP for a phobia. The so-called second hypothesis was not really a hypothesis at all but an alternative way of stating the first hypothesis. 23 Further, the Federal Magistrate was correct in stating that there was only one cause of death. Mr Gittins did not die of phobia, but because of an inability to obtain clinical management for non-Hodgkin's lymphoma. As there was a relevant SoP for that cause of death, it had to be considered. On having considered the foregoing, it was established by the Court below that Mr Gittins' circumstances did not fit the template contained in the SoP. That was the end of the matter. The claim should have been rejected on this basis alone. However, Riley FM correctly determined that the Tribunal properly applied "the first three Deledio steps" and that it was unnecessary for the Tribunal to consider step four. The Federal Magistrate also correctly determined at [52] that the SoP that applied to the kind of death found "governs the determination of whether the hypothesis that the death arose from relevant service is reasonable. An examination of the Tribunal's reasons reveals no such implicit finding. In any event, a finding should be precise, not implicit. In its reasons for decision, the Tribunal refers at [1] to death, "from a low grade non-Hodgkin's lymphoma". "Phobia of doctors" is an aspect of, or a reason for, the "inability to obtain appropriate clinical management". It was not the actual medical cause of Mr Gittins' death. In fact, at [17], the Tribunal found that any connection between Mr Gittins' death and his experiences in Japan (that is, his phobia) were "too remote and too tenuous". Nor can the claim be categorically refuted. There is merely insufficient evidence. 26 As the submissions of Counsel for Mrs Gittins have failed to identify an error in the reasons of the Federal Magistrate, the appeal from her Honour's decision must be dismissed with costs. | appeal from decision of federal magistrates court of australia pension entitlement for dependent spouse of veteran non-hodgkin's lymphoma whether reasonable hypothesis connecting veteran's death and service application of principles relevant to analysis no error of law. administrative law |
However, I granted leave to replead on or before 30 November 2006: see [2006] FCA 1441. 2 Pursuant to this grant of leave, the applicant filed a second further amended statement of claim. On 27 April 2007 I ordered that this pleading also be struck out and said that I would hear the parties on costs: see [2007] FCA 581. I did so because, at the end of its submissions on the second strike-out application, the respondent sought an order that its costs be paid on an indemnity basis should it be successful in its application. In its written submissions the applicant reserved its position in relation to costs pending a review of my reasons for judgment. When judgment was delivered I gave directions for the filing of written submissions and indicated that I would hear oral argument on 9 May 2007. On that day senior counsel for the applicant advised the Court that certain discussions were taking place between the parties which may have rendered it unnecessary for any costs questions to be further considered and indicated that, for this reason and in an effort to avoid unnecessary costs, his client had not filed written submissions on the issue. Further directions were given for the filing of written submissions and the hearing was adjourned to 8 June 2007. The respondent relies on part of the amended provision in support of its application for costs. • The second further amended statement of claim also failed to plead a cause of action and was embarrassing and that the applicant was or should have been aware of this as a result of my reasons for judgment on the first strike-out application and the written submissions of the respondent in support of its second strike-out application. • The respondent incurred unnecessary costs of the hearing on 9 May 2007 because the applicant had determined unilaterally not to file and serve written submissions relating to costs despite directions having been given by the Court on 27 April 2007. By reason of certain transitional provisions the application is to be determined under s 347 and s 824 does not apply. • Because the proceeding was commenced at a time when s 347 appeared in the Act , the applicant had an entitlement to the "protection" afforded by that provision when it was amended on 27 March 2006 and that protection is properly to be regarded as a right or privilege within the meaning of s 8(c) of the Acts Interpretation Act 1901 (Cth). • In any event the applicant's conduct was not unreasonable at least to the extent that, in framing the second further amended statement of claim, the applicant had proceeded on a reasonable but mistaken understanding of certain of the reasons which I had given for striking-out the first amended statement of claim. • Section 824 applies to some or all aspects of the proceeding. • Section 8 of the Acts Interpretation Act has any relevant application. • If s 347 has application, the proceeding (or relevant aspects of it) was instituted vexatiously and without reasonable cause? • If s 824 applies, any act or omission of the applicant was unreasonable and caused the respondent to incur costs? • If any award of costs is justified, it should be made on an indemnity basis? It was accompanied by a statement of claim. No relevant steps in the proceeding were taken between then and 27 March 2006 when s 347 was amended and renumbered as s 824. Plainly s 347 applied to the institution of the proceeding. The question of whether it continued to have application after 27 March 2006 will be considered later in these reasons. DOES S 824 APPLY? The word "must" has been substituted for the word "shall" but otherwise, apart from an immaterial proviso, the subsection is in the same terms. The question which arises is whether any of the procedural steps, initiated by the applicant, which occurred after the commencement of s 824(1) are comprehended by that subsection. The applicant argues that they are not. It accepts that the filing of the strike-out motions in relation to the first and second amended statements of claim were subsidiary applications made in the course of the principal proceeding. It says, however, that any costs issues arising were governed by s 347(1). It was submitted that s 347 continued to apply after the commencement of s 824 to the exclusion of s 824. 12 The applicant was correct to accept that s 347(1) applied to subsidiary applications made in the course of a proceeding. Although there are conflicting authorities, (as to which see the cases collected in Paras v Public Service Body Head of the Department of Infrastructure (No. 3) [2006] FCA 745 ; (2006) 152 FCR 534 at 536-539), the conflict was resolved by the decision of the Full Court in Commonwealth of Australia v Construction, Forestry, Mining and Energy Union [2003] FCAFC 115 ; (2003) 129 FCR 271. In that case the Full Court (Black CJ, Tamberlin and Sundberg JJ) followed the decision of Wilcox CJ (with whom von Doussa J agreed) in the Industrial Relations Court in Shackley v Australian Croatian Club Limited (1996) 141 ALR 736. There is no reason to believe that the word is used in a different sense in s 347; indeed the word in parenthesis indicates the contrary. If parliament had intended that "proceeding" should be understood, in s 347, as meaning only a principal action that commenced when the Court's jurisdiction was first invoked and concluded with final judgment, it would have been absurd to say that an appeal alone might constitute a "proceeding"". Viewed in that way, the policy choice that s 347(1) reflects would be undermined since the so-called ordinary rule as to costs would often, perhaps nearly always, prevail in interlocutory matters. Only the trial of the principal action would be unassailably a proceeding in a matter arising under the Act . Such a result could not have been intended. If s 824 has any operation it would cover interlocutory applications. 15 The applicant contends that s 824 has no application to the proceeding by reason of reg 4.53 which appears in Division 11 of Part 4 of Chapter 7 of the Workplace Relations Regulations ("the Regulations"). The reform commencement is defined to mean the commencement of Schedule 1 of the WorkChoices Act : see s 4 of the Act . That occurred on 27 March 2006. The applicant submits that the effect of reg 4.53 is that its application, which was made under s 298T and which was not determined before 27 March 2006, continued and was to be determined under s 298U of the Act as if the pre-reform Act had not been amended. It submits that, because the proceeding was to be determined "under s 298U of the pre-reform Act as if the Act had not been amended ", it followed that s 347 continued to apply in relation to the proceeding and that s 824 did not. 16 There is, however, another transitional provision which deals directly with s 347 and 824 . It is clearly implicit in this regulation that, had it not been enacted, the amendments had the potential to apply to acts or omissions which occurred in a proceeding commenced before but not concluded on that date. The draftsman of the regulation no doubt had in mind the common law rule that statutory provisions dealing with the power to award costs are procedural in nature and, in the absence of contrary legislative intention, will operate retrospectively at least to the extent of applying to cases commenced before the amendment: see eg Galvin v Forests Commission of Victoria [1939] VR 284 at 297-8 ; Jackman v Dandenong Sewerage Authority (No 2) (1967) 20 LGRA 413 at 415. It is also implicit that the amendments were intended to apply to acts and omissions which occurred in any incomplete proceeding after 27 March 2006. 17 The two transitional regulations need to be read together and in the light of the particular provisions of the Act to which they relate. Section 298T provided that persons with standing could make an application to the Court for orders of the kind provided for in s 298U in the event of an alleged breach of Part XA of the Act . The applicant alleged that the respondent had breached s 298K which fell within Part XA. The orders which the Court was empowered to make under s 298U included orders imposing pecuniary penalties, injunctions and orders requiring reinstatement of employees or the reengagement of independent contractors. Section 298U was amended and renumbered as s 807 with effect from 27 March 2006. No longer was express provision made for reinstatement or reengagement orders although there was a general provision allowing the Court to make such orders as it considered as appropriate: see s 807(1)(c). The standing provisions relating to the bringing of an application for contravention of Part XA and its successor Part 16 also differed: compare s 298T(2) and s 807(1) and (4). Furthermore, as this case demonstrates, the elements necessary to establish some contraventions of Part XA were varied when the new Part 16 commenced operation on 27 March 2006. Regulation 4.53 can, therefore, be understood as protecting the rights of applicants who had commenced proceedings under the old Part XA but who might be prejudiced, by reason of these amendments. The emphasis is on the removal of obstacles to the making of orders under the old s 298U. It does not, in my opinion, deal with peripheral matters such as the making of awards of costs, which have no direct bearing on the right of applicants to seek the making of orders under s 298U power of the Court to make such orders. Section 347 appeared in a different Part --- Part XIII --- of the Act . 18 Regulation 2.10, on the other hand, does, in my view, make it clear that s 824 governs the making (or the not making) of costs orders in relation to any part of an incomplete proceeding which occurred after 27 March 2006. The Full Court so held in Shanahan v Australian Industrial Relations Commission (No 3) [2007] FCAFC 53. In that case the applicant commenced judicial review proceedings seeking to impugn an order of the Australian Industrial Relations Commission. The proceeding was commenced in the High Court in November 2005. It was remitted to this Court on 1 April 2006 and was determined later that year. The Court referred to reg 2.10 and observed, obiter, that, although the respondent's application for costs fell to be determined under s 347 because the relevant event predated 27 March 2006, this was not to "deny the operation of s 824(2) were it to be the case that by an "unreasonable act or omission" of the applicant occurring on or after 27 March 2006, the second respondent was caused to incur costs in connection with the proceeding. " In such circumstances the Court could order the applicant to pay "some or all of those costs": at [19]. It includes changes to legislation effected by implication and the abrogation or limitation of the effect of a former provision of an Act : see s 8A of the Acts Interpretation Act . The introduction of the extended definition is, no doubt, attributable in part to the observation of Gibbs J in Mathieson v Burton [1971] HCA 4 ; (1971) 124 CLR 1 at 21 that the addition of words to a section in an Act does not constitute a repeal but rather an amendment of the statute. 20 I am prepared to assume, in the applicant's favour, that the amendments to s 347 were comprehended by the extended definition of "repeals" which is provided for in s 8A of the Acts Interpretation Act : It is certainly arguable that the provisions of s 824(2) constitute an abrogation of the limiting effect of the former s 347(1): cf Re Ogston and Repatriation Commission (1998) 52 ALD 392 at 400 [21]. The applicant must, nonetheless, establish that it had an accrued right to the benefit of the provisions of s 347 at the time at which the amendment took effect, namely 27 March 2006. It acknowledges that a statutory power to award costs may properly be characterised as procedural in nature but submits that s 347 confers a right or privilege because it affords protection from the power to award costs. 21 The power of the Court to award costs in a proceeding is conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). Absent the grant of such a power the Court could not order the payment of costs by or to any party: see Garnett v Bradley (1878) 3 App Cas 944 at 962. Section 347(1) placed a constraint on the power conferred by s 43 of the Federal Court of Australia Act . It was not the source of the Court's power to award costs. Rather, it regulated the exercise of that power in matters arising under the Act . I can find no support in the authorities for the contention that a statutory power to award costs is to be treated as procedural but that statutory inhibitions on the exercise of that power are to be regarded as conferring substantive rights or privileges. In Shanahan the Full Court was inclined to regard s 347(1) as being "procedural in nature": at [19]. Jackman involved the substitution of one formula for another to guide the calculation of costs. In Galvin there was reference (at 297) to "[t]wo cases of high authority [which decided] that legislation giving or regulating a power to award costs is retrospective, in that it affects not substantive rights but merely procedure. " (Emphasis added). Those two cases were Freeman v Moyes (1834) 1 Ad & El 338 and Wright v Hale (1860) 30 LJ (Ex) 40. In Freeman the statutory change which occurred between the commencement of the proceeding and the hearing directed that particular parties be liable to pay costs subject to a contrary order by the Court. In Wright an existing entitlement to recover costs was removed where the plaintiff recovered less than a prescribed sum and if the trial judge certified that the action "was not fit to be brought.". All of these cases were concerned with statutory provisions which regulated the exercise of the Court's power to award costs. In each case the amended provision was held applicable to a proceeding which had commenced before it came into force. Section 347(1) was such a provision. 22 There is a further reason for rejecting the applicant's submission that s 8(c) of the Acts Interpretation Act afforded it the protection of s 347(1) after 27 March 2006. In order for s 8(c) to operate it is necessary to identify a right or privilege which was in existence at the time that the amendments to s 347 occurred. Such rights may be inchoate or contingent but they must exist: see Esber v The Commonwealth of Australia [1992] HCA 20 ; (1992) 174 CLR 430 at 440. Section 347 prevented the Court from making a costs order against a party to a proceeding under the Act unless the proceeding (including interlocutory applications) was instituted vexatiously or without reasonable cause. Such "protection" could only avail a party once the relevant procedural step had been taken. In the present case each of the procedural events which give rise to the respondent's application for costs occurred after 27 March 2006. Even if the protective effect of s 347(1) can, contrary to my view, be regarded as a right, the "proceedings" to which s 347(1) are said to apply had yet to be instituted and, therefore, no relevant right or privilege had been acquired or had accrued on 27 March 2006. In order to deal with these applications it is necessary to record, in somewhat greater detail than has thus far been attempted, the circumstances which led to the making of the strike-out applications and the conduct of the hearing on 9 May 2006. 24 The proceeding was commenced by application dated 8 March 2006. A statement of claim was also filed on that day. On 9 June 2006 the applicant filed an amended statement of claim. On 16 June 2006, the respondent filed a notice of motion seeking orders striking-out the proceeding or, in the alternative, striking-out certain paragraphs of the amended statement of claim. The notice of motion was made returnable on 4 August 2006. The notice of motion was supported by a detailed affidavit in which the alleged deficiencies of the pleading were canvassed. Subsequently detailed written submissions were made by the respondent. After argument on the notice of motion had been advanced by counsel for the respondent on 4 August 2006, counsel for the applicant sought leave to file a further amended statement of claim. I granted leave and reserved costs. The revised statement of claim was filed on 28 August 2006. Although some of the alleged deficiencies in earlier versions of the pleaded case appeared to have been rectified in the revised statement, the respondent continued to press its strike-out application. Further written submissions were exchanged, further argument was heard, and, on 6 November 2006, I ordered that the applicant's further amended statement of claim be struck-out and that the applicant have leave to file a further amended statement of claim on or before 30 November 2006. Despite granting leave I noted that I harboured a serious doubt that the applicant could amend its statement of claim to advance a case under s 298K conformably with the reasons which I had given for striking-out the amended statement of claim. No order for costs was sought by the respondent. 25 Not deterred, the applicant, on 30 November 2006, filed a second further amended statement of claim. By notice of motion dated 18 December 2006, which was filed on 17 January 2007, the respondent sought an order striking-out the proceeding, or alternatively the second further amended statement of claim. It also sought its costs of the motion. The second further amended statement of claim retained the same basic allegations which were contained in its predecessor. It also sought to advance a case alleging contraventions of s 792(1) of the Act . The parties filed and served written submissions and a hearing on the strike-out application occurred on 5 April 2007. On 27 April 2007 I struck out the second further amended statement of claim. I did not consider that the deficiencies in relation to the pleaded case, founded on s 298K, had been overcome. I accepted that it may have been possible for the applicant to plead successfully a case alleging contravention of s 792 in respect of events occurring after 27 March 2006. However, I found the pleaded case to be embarrassing because of indiscriminate reliance on events occurring before and after 27 March 2006. I advised the parties that I would hear them on costs and the question of whether leave should be given to the applicant to file a further amended statement of claim. Directions were given for the filing and serving of written submissions and a hearing was fixed for 9 May 2007. The respondent filed its submissions. The applicant did not. 26 At the hearing on 9 May 2007 counsel for the applicant advised the Court that submissions had not been filed because discussions were taking place between the parties with a view to resolving the underlying dispute between them. If those discussions proved to be successful unnecessary costs would be incurred by further pursuit of either the costs or the repleading issues. Counsel for the respondent advised the Court that it did not share the applicant's confidence that the parties' differences might be settled and that it wished its application for costs to be dealt with. I adjourned the hearing to 18 June 2007. In the intervening period further submissions were made by both parties on the costs issues. The applicant did not seek leave to file a further amended pleading. 27 In the circumstances just outlined I do not consider that s 824(1) has application. It protects a party who has instituted a proceeding from being subject to a costs order save in limited circumstances. The party who is protected is the party who has taken the initiative in commencing the proceeding, be it the principal proceeding or an interlocutory application made within the principal proceeding. In this case the two strike-out applications were initiated by the respondent. Whilst it is true that the strike-out applications were provoked by the filing of deficient pleadings, the two interlocutory hearings occurred only because the respondent elected to challenge the efficacy of the pleadings. Costs were thrown away on 9 May 2007 because the applicant unilaterally chose to pursue settlement negotiations rather than abide by directions given by the Court with a view to having outstanding costs issues resolved on that day. The applicant thereby caused the respondent to incur costs by omission rather than by any positive act. 28 Section 824(2) is cast more widely. It applies if a party "has, by an unreasonable act or omission, caused another party to the proceeding to incur costs ...". A party may potentially be liable to pay costs under this sub-section even if it did not institute the proceeding in which the relevant conduct occurred. That conduct may be an act or an omission. The liability may arise, as Young J noted in Paras (at 538 [16]), "irrespective of the outcome of the particular application in question and of the proceeding as a whole. The first amended statement of claim was struck-out substantially for the reasons advanced by the respondent. The respondent contends that "[p]ressing a major cause of action which has no reasonable prospect of success is unreasonable conduct. The respondent noted the reservations which I expressed when granting leave, on 6 November 2006, to the applicant to replead its case insofar as it relied on Part XA of the Act . The second further amended statement of claim contained substantially similar allegations as appeared in its predecessor in seeking to plead a case under Part XA. This, it is said "was not a reasonable action". The respondent also contends that the applicant acted unreasonably by failing to have regard to the Court's reasons when it undertook the repleading the exercise. The respondent again places reliance on the alleged failure of the applicant to heed the respondent's written submissions in which the deficiencies in the pleadings were identified. 31 The further amended statement of claim was struck-out because there was no reasonable prospect of the applicant successfully prosecuting the proceeding as then pleaded. The second further amended statement of claim was struck-out because, insofar as it sought to establish a case under Part XA of the Act , the deficiencies which afflicted its predecessor had not been remedied and, insofar as it sought to plead a case under Part 16 of the Act , it was embarrassing. 32 A pleading which discloses no reasonable cause of action may be struck-out. It does not, necessarily, follow that the party whose pleading has been struck-out acted unreasonably by seeking to rely on the deficient pleading. An objective analysis of the particular party's conduct will be necessary in each case. 33 It is correct, as the respondent submits, that, at an early stage in the proceeding, it put the applicant on notice as to the deficiencies which ultimately led to the striking-out of the first amended statement of claim. The applicant did not ignore or disregard the respondent's submissions. It considered them, accepted some of them and made certain amendments to the statement in August 2006. The respondent again made detailed submissions on why it considered the statement of claim still did not plead a sustainable cause of action. The applicant again considered its position, but, as it was entitled to do, advanced detailed arguments supporting the efficacy of the revised pleading. As is evident from my reasons for decision ([2006] FCA 1441) the arguments were complex and they dealt with the developing case law under the former s 298K of the Act . That case law is not lacking in subtlty and fine distinction. The concepts of injury, prejudicial alteration and threat do not have well settled meanings. 34 As is apparent from my reasons dealing with the first strike-out application, although I harboured doubts to whether a viable case could be pleaded by the applicant under Part XA , I did not regard it as an impossibility. Leave to replead, was therefore, granted. 35 The applicant took advantage of the grant of leave and filed a second further amended statement of claim. This statement of claim alleged contravention of Part XA. It also alleged a contravention of the new Part 16 based, in part, on events which occurred in the course of 2006. This statement of claim was also struck-out. I held that the major deficiencies which I had identified in relation to the case based on Part XA had not been overcome and that the attempt to mount a case under Part 16 failed because various parts of the statement of claim were embarrassing. These conclusions were reached after further detailed argument both written and oral. 36 In dealing with an application for costs under s 347(1) of the Act , in Standish v University of Tasmania (1989) 28 IR 129, Lockhart J was called on to decide whether the proceeding had been instituted "without reasonable cause". His Honour drew a distinction between the pursuit of an argument which does not succeed and the institution of a proceeding which is misconceived in the sense of being incompetent: see at 138-9. This distinction may, in my view, assist in determining whether conduct is unreasonable for the purposes of s 824(2). The prosecution of any incompetent or hopeless case can be regarded as "an unreasonable act" within the meaning of s 824(2). Conversely, in my opinion, the pursuit of a contentious, and ultimately unsuccessful, argument is not an unreasonable act. In my view the applicant's defence of its pleadings in the first strike-out application falls into the latter category. I take a different view of the applicant's conduct in relation to the second strike-out application. The second further amended statement of claim contained the same major deficiencies as its predecessor insofar as it dealt with the Part XA claim. The applicant instituted but then withdrew an application for leave to appeal from my decision. It persisted with pleadings which were inconsistent with my reasons for striking-out the first amended statement of claim. In so persisting, I consider that the applicant acted unreasonably for the purposes of s 824(2). The second further amended statement of claim also sought to plead a cause of action under Part 16. That aspect of the pleading failed by reason of embarrassment, not because it was untenable. I do not consider that it was unreasonable for the applicant to pursue the Part 16 aspect of its claim. In my view it is appropriate to order that the applicant pay half the respondent's costs of the second strike-out application. 37 There remains the issue of whether the applicant should pay the respondent's costs thrown away in relation to the hearing on 9 May 2007. In my view such an order should be made. The hearing did not proceed on that day because the applicant had failed to comply with the Court's directions as to the filing and service of submissions relating to the costs issue. This had occurred because of a unilateral decision by the applicant that it wished to pursue settlement discussions with the respondent. Had it wished to be relieved of the obligation to file submissions, the appropriate course was to apply to the Court to vary the directions which had earlier been made. Had it done so costs would not have been thrown away on 9 May 2007, although costs of any motion to vary the orders may have been payable. In omitting to comply with the Court's directions and not seeking, in an appropriate manner, to be relieved of its obligation the applicant acted unreasonably. 38 The respondent seeks to have any costs order in its favour paid on an indemnity basis. I accept that costs might be awarded on such a basis under s 824(2) in appropriate cases. That is because, if the requirements of s 824(2) are satisfied, the fetter imposed by s 824(1) is removed and the Court enjoys the same wide discretionary power which is conferred by s 43 of the Federal Court of Australia Act . 39 Where costs are ordered by the Court they will ordinarily be paid on a party and party basis. Any departure from this usual practice, according to the authorities collected by Sheppard J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 230-4, will only occur in a limited range of cases. The "tests" used to identify such cases have been couched in general terms such as "when the justice of the case might so require" or whether there exists "some special or unusual feature on the case to justify the Court in departing from the ordinary practice. " These "tests" have, for example, been found to have been met in cases in which unwarranted allegations of fraud have been made, proceedings have been prosecuted for some ulterior motive or in wilful disregard of known facts or clearly established law or where there has been an imprudent refusal of an offer of compromise. To my mind the applicant's conduct, in opposing the second strike-out application and in adopting its bona fide but misguided approach to the Court's directions which led to costs being thrown away on 9 May 2007, do not constitute conduct of the character which would warrant a departure from the ordinary rule. 40 The applicant seeks leave to discontinue the proceeding. The applicant could discontinue the proceeding without leave of the Court under O 22 r 2(1)(b) of the Federal Court Rules . However, given the uncertain costs implications of a discontinuance under this rule because of the provisions of O 22 r 3(1) and s 824 of the Act it was, in my opinion, appropriate for the applicant to seek leave to discontinue the proceeding. The respondent did not oppose the granting of such leave. I consider that leave should be granted subject to the orders for costs which I have foreshadowed in relation to the second strike-out application and the hearing on 9 May 2007 being made. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | industrial law where first amended statement of claim and second further amended statement of claim struck out where proceeding commenced on 8 march 2006 before pre-reform act was amended by workchoices act where s 347 of pre-reform act repealed on 27 march 2006 and superseded by s 824(2) workplace relations act 1996 (cth) whether an order for costs is determined under s 347 and or s 824(2) workplace relations act s 824(2) deemed applicable whether applicant acted unreasonably for the purposes of s 824(2) costs determined where costs hearing adjourned for failure of applicant to comply with the court's directions as to the filing and service of submissions relating to costs whether respondent entitled to costs thrown away costs costs |
That certificate permitted it to carry out certain aspects of aircraft maintenance. Central applied to the Administrative Appeals Tribunal ("the Tribunal") for a review of the Authority's decision. The Tribunal found in favour of Central and restored the certificate of approval but imposed various conditions. From that decision of the Tribunal the Authority now appeals to this Court. It contends that the Tribunal made a number of legal errors. In my opinion, the Authority is correct and the appeal must be allowed. Section 20AB of the Civil Aviation Act 1988 (Cth) ("the Act") makes it an offence for a person to carry out maintenance on an aircraft or any component of any aircraft without being approved so to do under the Civil Aviation Regulations 1988 (Cth) ("the Regulation"). The commission of that offence carries a maximum penalty of two years imprisonment. Regulation 42ZC(4) of the Regulation permits a person to carry out maintenance on a "class B aircraft" if the person holds an "aircraft maintenance engineer licence" and either holds, or works for someone who holds, a "certificate of approval" covering the particular type of maintenance in question. Helpfully, a "class B aircraft" is defined in reg 2(1) to be an aircraft that is not a "class A aircraft". For present purposes, it is useful --- although not entirely accurate --- to say that a class B aircraft corresponds to the layman's idea of a smaller plane not used for commercial transport purposes. As reg 42ZC(4) contemplates, reg 30 permits the Authority to grant certificates of approval to persons who intend to engage in the maintenance of aircraft. It imposes detailed requirements which must be met by an applicant for such a certificate. Without stating them exhaustively, they include matters such as the adequacy of staff, equipment and systems control and the satisfaction of the Authority as to the ability of the person seeking the certificate to carry out the relevant activities in a proper manner. Whilst the text of reg 30 does not strictly require the holder of a certificate of approval to be an organisation, it is apparent that many of its requirements, particularly those relating to the maintenance of systems and the adequacy of employee training, are more likely to be satisfied by organisations than by individuals. In common with many forms of statutory licence, reg 30(3) permits the endorsement upon a certificate of approval of conditions, non-compliance with which is an offence. Just as reg 30 regulates the grant of a "certificate of approval", so too does reg 31 permit the Authority to grant to a person an "aircraft maintenance engineer licence". Again, the provisions of reg 31 are directed, as might naturally be expected, towards ensuring that the holders of such licences are appropriately qualified. Unlike the holder of a certificate of approval, however, the holder of an aircraft maintenance engineer licence must be a natural person; so much flows from the requirement of reg 31(4) that an applicant for such a licence must have attained the age of 21 years. Central is a corporation and is the holder of a certificate of approval pursuant to reg 30. Its certificate of approval authorises it to carry out certain maintenance activities at Bankstown Airport on class B aircraft and aircraft with a take-off weight below 5,700 kg. At all relevant times, its chief engineer, owner and director was Mr Douglas Fawcett. Mr Fawcett was the holder of an aircraft maintenance engineer licence issued pursuant to reg 31. It permitted him to perform maintenance on airframes and engines. Neither the certificate of approval granted to Central nor the licence granted to Mr Fawcett were necessarily permanent. Both could be cancelled, suspended or varied by the Authority pursuant to reg 269(1) if it became satisfied that the holders suffered from certain deficiencies. At the same time as it cancelled Central's certificate of approval, the Authority also cancelled Mr Fawcett's licence on what were essentially the same grounds. It was these decisions which elicited applications for review to the Tribunal from Central and Mr Fawcett. It made three claims: first, that Central's operations were inadequate and that audits in 2004 and 2005 disclosed that it lacked a proper system of quality control; secondly, it claimed that Mr Fawcett had failed to detect corrosion in a rudder hinge bracket and bolt on a Partenavia aircraft, VH-IYB, during a 100 hourly inspection carried out in December 2004/January 2005. That corrosion in the plane's rudder hinge bracket and bolt came to the attention of the Authority after the hinge bracket failed on 7 August 2005, an event noticed by its pilot following landing. Thirdly, the Authority pointed to an accident involving a Cirrus aircraft, VH-HYY, which suffered a crash following engine failure in which both the pilot and his passenger were seriously injured. An inquiry by the Australian Transport Safety Bureau found that the accident had occurred because "a steel blanking cap from the engine's fuel supply system was missing". In ordinary parlance this meant as follows. The engine on the plane could be removed for testing. During testing it was necessary to check the engine's internal pressure. The engine had a specially constructed access port by which the pressure could be checked during testing. When restored to the plane this port should have been closed off with a steel "blanking cap". It was not. There was no dispute before the Tribunal that the engine from the Cirrus aircraft had been removed for a "bulk strip" by Hawker Pacific following a propeller strike, and had, upon its return from Hawker Pacific, been put back into the aircraft by Mr Fawcett. Hawker Pacific had placed a red plastic cap on the test port following its bulk strip. Mr Fawcett had not detected the red plastic cap and, consequently, had not replaced it with a steel one. The Tribunal accepted two of the Authority's three arguments. In relation to the serious accident involving the Cirrus aircraft, VH-HYY, it found that Mr Fawcett had failed to detect the absence of the steel blanking cap because he had not conducted the test which he should have conducted. It also found that he had not conducted this test because he assumed that Hawker Pacific would have done so. The Tribunal concluded that this "was a fundamental failure by Mr Fawcett to understand his duties as a LAME [ scil. licensed aircraft maintenance engineer] which causes me considerable concern. " It also found that Mr Fawcett "failed in his duty as a LAME in a fundamental respect and in a manner which had significant and devastating consequences. " The Tribunal accepted many of the Authority's criticisms of Central and Mr Fawcett's lack of proper systems of quality control. It is clear on the evidence that Mr Fawcett is not a good record keeper. He did get his house in order after the 2005 audit and has made an effort to ensure maintenance data is up to date by employer a person. However, he did not employ a person to audit the Company and he has not used Mr George as a consultant since he assisted him with the 2005 audit. As found earlier, Mr Fawcett's experience has been limited, despite the length of time he has been a LAME. Even given the limited amount of maintenance he was undertaking in 2005, his record keeping was not under control. He also seemed to have little understanding of the concept of quality control which is central to holding a Certificate of Approval under CAR 30. This is a matter of concern. The Tribunal also found that Mr Fawcett was "in effect" Central. This was consistent with the submission made by the Authority that Central's certificate of approval should be cancelled because of Mr Fawcett's failures. Having accepted those two aspects of the Authority's case it rejected its other complaint in relation to the alleged failure by Mr Fawcett to detect the corrosion in a rudder hinge bracket and bolt on the Partenavia aircraft VH-IYB. In Mr Fawcett's favour the Tribunal found that the state of the rudder hinge and bolt was not such as to require replacement. In response to the Authority's case against them, Mr Fawcett and Central sought to make good two points which were both accepted by the Tribunal. First, the Tribunal accepted that Mr Fawcett was an honest man. Secondly, it accepted that the cancellation of Central's certificate of approval would cause Mr Fawcett financial hardship because his only earnings came from the business carried out by Central. If that were established it would satisfy reg 269(1)(c) and the discretionary power to vary, suspend or cancel Central's certificate of approval and Mr Fawcett's licence would be enlivened. The Tribunal accepted the Authority's contentions in the following terms: I conclude that Mr Fawcett and the Company failed in the duty imposed upon each of them with respect to a matter affecting the safe operation of an aircraft, that is the Cirrus aircraft (CAR 269(c)). However, the Authority had also contended that neither Mr Fawcett nor Central were fit and proper persons to hold a certificate of approval or licence so that the discretionary power to vary, suspend or cancel them also arose by reason of reg 269(1)(d). The Tribunal dealt with that argument as follows: I do not consider that Mr Fawcett or the Company is not a fit and proper person to have the responsibilities and exercise and perform the functions and duties of a holder of a licence and a certificate of approval respectively (CAR 269(d)). In coming to that conclusion I have had regard to the authorities relied on by both parties, including Re Snook and Civil Aviation Safety Authority [2003] AATA 285 , Re Brazier and Civil Aviation Safety Authority [2004] AATA 31 and Re Richards Aviation Services v Civil Aviation Safety Authority (AAT, 26 November 1996). The Tribunal had, therefore, found that its power under reg 269(1) was enlivened because it was satisfied of the matter in reg 269(1)(c) as a result of the Cirrus accident. In terms of the powers of the Tribunal, it did not matter that the Tribunal was not satisfied that Mr Fawcett and Central were not fit and proper persons within the meaning of reg 269(1)(d). That being so the Tribunal was permitted to exercise the discretionary power conferred by reg 269(1). Its treatment of how it was to exercise that power was as follows: In my view, the appropriate decision is to set aside the reviewable decisions and vary both the licence and the Certificate of Approval. I consider that they are appropriate to satisfy the paramount consideration of safety of aviation. The power to vary takes its content from the powers conferred on CASA to grant a Certificate of Approval and a licence (CAR 30 and 31). I propose to impose three conditions on the Certificate of Approval pursuant to CAR 30(3). The first is that the Company is to employ a suitably qualified LAME, other than Mr Fawcett, and who is acceptable to CASA, to be responsible on a full-time basis for the supervision and certification of all maintenance activities undertaken at Central Aviation. As this is a term of the existing stay, there should be no difficulty in this condition taking immediate effect. The second condition, is that the Company is to employ an appropriately qualified person acceptable to CASA to undertake audits of the Company's system of quality control at six monthly intervals until such time as CASA determines that such audits are not necessary. The third condition is that the Company employ a technical records clerk to maintain the maintenance data necessary for the Company's operations. Pursuant to CAR 31(3), I propose to impose as a condition of the AME licence N11156 a requirement that Mr Fawcett undergo and satisfy a theoretical and practical examination to test his competency to hold an AME licence within six months of the date of this decision. I grant the parties a period of 14 days in which to provide agreed terms of the decision I have indicated. Those reasons contemplated further action by the parties. The matter came back before the Tribunal for the making of orders on 10 June 2008. At that time it transpired that Mr Fawcett's licence had already expired on 30 November 2007. Since the licence was no longer extant it was neither coherent nor useful to impose conditions upon it. In that circumstance, the Tribunal set aside both of the original decisions to cancel Central's certificate of approval and Mr Fawcett's licence. However, it imposed a series of conditions on Central's licence. These conditions were agreed by the parties. Central Aviation must employ a technical records clerk to maintain the maintenance data necessary for all operation. For present purposes three are pertinent. First, O 53 r 3(2) of the Federal Court Rules discloses an intention that a question of law raised on appeal from the Tribunal should be stated with precision as a pure question of law: see Birdseye v Australian Securities and Investments Commission (2003) 76 ALD 321 at 325 [18] per Branson and Stone JJ. Secondly, a question which is inelegantly drafted may nonetheless be a question of law if its purport is tolerably clear having regard to the context in which it appears: see Ergon Energy Corp Ltd v Commissioner of Taxation [2006] FCAFC 125 ; (2006) 153 FCR 551 at 565 [51] per Sundberg and Kenny JJ. Thirdly, if a question properly analysed is not a question of law within the meaning of s 44 , no amount of formulary such as "erred in law" or "was open as a matter of law" can make it into a question of law: Australian Telecommunications Corporation v Lambroglou (1990) 12 AAR 515 at 527 per Ryan J. By way of an amended notice of appeal the applicant posed seven questions of law for consideration by the Court. The first group relate to the adequacy of the Tribunal's reasoning process. Section 43 of the AAT Act imposes upon the Tribunal in the exercise of its review power an obligation to provide reasons. So far as the argument was based on s 43(2B) it must be rejected. The Full Court of this Court has held that that provision requires the Tribunal to do no more that to state the findings which it has actually made. It does not require the Tribunal to make the findings which it ought to have made: Appellant V324 of 2004 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 259 at [8] per Hill and Allsop JJ; see also Repatriation Commission v Cotton (2006) 93 ALD 118 at 128 [42] per Rares J; Gilkinson v Repatriation Commission (2008) 104 ALD 406 at 410 [14] per Rares J. That conclusion is inevitable in light of the High Court's decision in Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30 ; (2001) 206 CLR 323 at 331-332 [10] per Gleeson CJ, 349 [77] per McHugh, Gummow and Hayne JJ where it was held that s 430 of the Migration Act 1958 (Cth) --- which is not materially different to s 43(2B) --- operated in that manner. The issues which arise from s 43(2) are more subtle. There is no doubt it requires the Tribunal to provide reasons which are adequate. There is also little question but that the question of adequacy, in the present circumstances, directs attention at least to the efficacy of the appeal process contemplated by s 44. The reasons must be at least sufficient in quality to permit that appeal process to be efficacious. However, the appeal process under s 44 is subject to the constraint that there be present a "question of law". Debate exists as to whether a failure to provide reasons is an error of law. There is an obiter dictum of Brennan J in Repatriation Commission v O'Brien [1985] HCA 10 ; (1985) 155 CLR 422 at 445-446 which suggests that a failure by the Tribunal to provide adequate reasons does not result in the invalidity of its decision and that the proper remedy is a mandatory order that reasons be provided. That view has not prevailed in this Court where it has instead been held that a failure to provide adequate reasons is an error of law: Dornan v Riordan (1990) 24 FCR 564 at 573 per Sweeney, Davies and Burchett JJ. The contrary view is set forth in Comcare v Lees (1997) 151 ALR 647 at 658-659 by Finkelstein J. The existence of the debate about the correctness of Dornan has been noted on a number of occasions by Full Courts of this Court, but none have thought it necessary to resolve it. Without expressing a concluded view on the matter there is much to be said, with respect, for the views of Finkelstein J. To his Honour's observations about the difficulties in accepting that deficient reasons constitute an error of law I would add two further observations. First, the reasons which attend an administrative decision are conceptually distinct from that decision and it is the decision, and not the reasons which accompany it, which is the subject of judicial review or, as here, appeal under s 44. The reasons have no legal consequences in themselves. Rather, they provide material from which arguments about the correctness of a decision may be crafted. Their legal relevance is, therefore, derivative from the decision to which they are appurtenant. That derivative quality is illustrated by the circumstances in which they are admissible. Strictly speaking, a statement by a decision-maker as to its reasons for decision would ordinarily be hearsay and inadmissible. However, it is generally accepted that so long as the reasons are reasonably contemporaneous with an administrative decision they are admissible as part of the res gestae: Minister for Immigration and Ethnic Affairs v Taveli [1990] FCA 169 ; (1990) 23 FCR 162 at 168 per Davies J, 187 per Hill J. Tuncok v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1069 at [62] - [63] per Hely J; Nezovic v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 1263 ; (2003) 133 FCR 190 at 205-206 [50] - [52] per French J. The last two mentioned decisions use the language of the res gestae rule, however, it may be that they should be understood as being illustrations of s 72 of the Evidence Act 1995 (Cth) which appears to be its statutory embodiment. Secondly, once that derivative nature is understood it must follow that the legal requirements attending the production of reasons need have no necessary connexion with the legal requirements attending the decision. A decision accompanied by perfectly adequate reasons may be riddled with legal errors just as a decision which is accompanied by inadequate reasons may be legally impeccable. The fallacy in the view that the provision of inadequate reasons is an error of law in the decision springs from the conflation of rules concerned with the making of the decision itself with rules concerned with the provision of reasons, a conflation which is, in my opinion, wholly without warrant. This is not to say that questions of law do not arise from the operation of rules about the provision of reasons. It is only to say that such questions arise dehors the decision and cannot be errors in the decision itself. However, as I have said, the question of whether the Tribunal's reasons are adequate is a "question of law". More formally, the question is whether the Tribunal has complied with its statutory duty under s 43(2) of the AAT Act. That is, without any doubt, a question of law even if a failure to provide adequate reasons might not involve an error of law in the decision of the Tribunal. Thus the question of the correctness of Dornan does not arise for consideration in the context of an appeal under s 44 where what is required is not the identification of an error of law by the Tribunal but rather the existence of a question of law for the consideration of the Court. Of course, any appeal on such a question of law is necessarily delimited by the requirement that there exist a matter in respect of which this Court might exercise its jurisdiction. To the extent that Lees assumes that there is no question of law where there is no error of law I respectfully differ. Every error of law corresponds with a question of law but the converse is not true. Questions of law concerning the processes of the Tribunal rather than its actual decision are likely to give rise to questions of law which do not correspond with any error of law in the decision of the Tribunal. The provision of inadequate reasons is one illustration; a departure from a statutorily mandated procedure during the course of a hearing may be another. There is a textual argument available against this view. Section 44 uses the expression "question of law" when conferring jurisdiction on this Court to hear an appeal. The same expression is used in s 45 which permits, in certain circumscribed circumstances, the referral by the Tribunal to this Court of a "question of law". It may be that the expressions should bear the same meaning; if so, there may be difficulties in contemplating the Tribunal referring the adequacy of its own reasons to the Court. However, the answer to that is either that "question of law" in s 45 does not so extend or, alternatively, that it does and that the Tribunal could refer the adequacy of its own reasons to this Court. For those reasons, I would prefer to regard the adequacy of reasons as reviewable under s 44 of the Act not because Dornan binds me to such a conclusion but rather because the adequacy of reasons is a question of law within the meaning of s 44. The Authority's challenge to the adequacy of the reasons provided by the Tribunal turns upon the content of paragraph 127 of the Tribunal's reasons which is set out at [19] above. In essence the complaint is that there is no explanation by the Tribunal of how it decided that Mr Fawcett and Central were fit and proper persons --- the paragraph merely states a conclusion. This syllogistic infelicity was supported, so the Authority argued, by noting the gulf between the Tribunal's factual findings --- unremittingly negative at least where competence was concerned --- and its conclusions on whether Central and Mr Fawcett were fit and proper persons within the meaning of reg 269(d). Thus, on the one hand, the Tribunal had concluded that Mr Fawcett had, in his approach to the installation of the engine of the Cirrus plane exhibited "a fundamental failure to understand his role" (at [109]) and that his explanation proffered for that failure did not "excuse what I consider to be a fundamental failure as a LAME" (at [110]) and that he "seemed to have little understanding of the concept of quality control which is central to holding a Certificate of Approval under CAR 30" (at [123]). The Tribunal described this last matter as being "of concern" (at [123]). On the other hand, it found that Mr Fawcett and Central were fit and proper "to have the responsibilities and exercise and perform the functions and duties of a holder of a licence and a certificate of approval respectively" (at [127]). There is considerable force in this criticism. Having concluded that Mr Fawcett suffered from a fundamental failure to appreciate his role and had little understanding of the concept of quality control it is difficult to discern from the Tribunal's reasoning the route which brought it, from those rather adverse findings, to the conclusion that Mr Fawcett (and Central) were fit and proper persons to have the responsibilities and exercise the functions incumbent upon them. I do not say that such a route might not have been able to be charted between these distant points --- only that I cannot discern it in the reasons of the Tribunal. There were two other matters raised by the Tribunal which potentially bear upon this issue. I mention these matters because it is necessary to discern, if it is possible, how the Tribunal connected its findings about Mr Fawcett's failings to its conclusions about fitness and propriety. This is particularly so where the High Court has emphasised the need to avoid over-zealous parsing of the reasons of administrative decision-makers: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. The first is the Tribunal's conclusion that Mr Fawcett was an honest man who would suffer financial hardship if Central's certificate of approval were cancelled. One cannot tell from the Tribunal's reasons where, or even if, these findings were taken into account. It is difficult to see that they had anything to do with the Tribunal's conclusions that Mr Fawcett and Central had failed, within the meaning of reg 269(1)(c), in the duty imposed on them with respect to a matter affecting the safe operation of the Cirrus aircraft. Whatever else might be said about the failure by Mr Fawcett to notice that the steel cap was missing from the engine port, it is difficult to incorporate notions of honesty or financial hardship into that particular field of discourse. On the other hand, it is difficult to see how financial hardship to Mr Fawcett had any relevance to the issue of whether he, or Central, were fit and proper persons: cf. Hughes and Vale Proprietary Limited v State of New South Wales (No 2) [1955] HCA 28 ; (1955) 93 CLR 127 at 156-157 per Dixon CJ, McTiernan and Webb JJ. It is possible that his honesty could be seen as going to fitness and propriety but it is difficult to understand, without more, how honesty might be an answer to a lack of fitness said to be constituted by incompetence. Of course, it may be that those factors were taken into account in deciding how to exercise the discretionary power to vary, suspend or cancel which arose consequent upon the Tribunal's conclusions about reg 269(1)(c). There is nothing to indicate, however, that this is what occurred. Indeed, there is no explanation of how the Tribunal came to the conclusion that it was appropriate to vary the conditions other than that those variations were "appropriate to satisfy the paramount consideration of aviation safety" (at [128]). The second matter to which I should refer is the Tribunal's reference at [127] to having "had regard to the authorities relied on by both parties, including Re Snook and Civil Aviation Safety Authority [2003] AATA 285 , Re Brazier and Civil Aviation Safety Authority [2004] AATA 31 and Re Richards Aviation Services v Civil Aviation Safety Authority (AAT, 26 November 1996). " It has been held, in the context of the adequacy of judicial reasons, that setting out two sets of competing submissions and indicating a preference for one over the other is not a sufficient discharge of the judicial obligation to give reasons: Commissioner for Railways for the State of Queensland v Peters (1991) 24 NSWLR 407 at 415-417 per Kirby P; Fyntray Constructions Pty Ltd v Macind Drainage & Hydraulic Services Pty Ltd [2002] NSWCA 238 at [66] per Heydon JA, [68] per Hodgson JA, [78] per Ipp AJA. It may be fairly deduced from that principle that setting out the names of the cases relied upon by each party and saying that those authorities have been taken into account would also fail to discharge the judicial obligation to give reasons. That does not foreclose the possibility that so doing might be appropriate for some administrative decision-makers. However, I do not think it was adequate for this Tribunal. Its obligation to produce reasons is statutory: s 43(2) of the AAT Act. That statutory obligation to produce reasons has to be read in a context which includes the right of appeal to this Court conferred by s 44. The subject matter of that right of appeal is the question of law identified by the party bringing it. This suggests, at least, that to be adequate for the purposes of s 43 the reasons must sufficiently expose the reasoning process to permit the disappointed party to craft a question of law within the meaning of s 44. Pointing to the authorities relied on by both parties and saying that they have been taken into account does not, at least in the present context, permit that to occur. Having read the reasons with great care and allowing the latitude due to a busy administrative body such as the Tribunal I regret I must conclude that the reasons are inadequate. I do not understand how the Tribunal came to the conclusion that Mr Fawcett and Central were fit and proper persons. Further, I cannot tell whether its process of reasoning did, or did not, involve the use of its finding that Mr Fawcett would suffer financial hardship if Central's certificate of approval were cancelled. Counsel for Central submitted that since that matter was obviously irrelevant to the question of fitness and propriety I should assume that the Tribunal could not possibly have taken it into account. However, I do not think that that can or, in the context of a challenge to the adequacy of reasons, should be presumed. The Authority's notice of appeal also included two grounds which sought to attack the reasons of the Tribunal for failing to make certain findings of fact. In one case it was said that the Tribunal had failed "to make all necessary findings of fact to support its conclusion" in relation to the grounds for the cancellation of Central's certificate. In another case it was said that the Tribunal failed to include in its reasons findings (or sufficient and adequate findings) on material questions of fact. In the former case, the source of the obligation was unexpressed; in the latter, it was said to flow from s 43(2B). There is no obligation to "make all necessary findings of fact" --- the obligation is only to produce reasons which are adequate. In that circumstance, I propose to treat the ground as relating to the duty imposed by s 43(2B). The allegation that s 43(2B) requires the Tribunal to make such findings is, I think, untenable. As I have already noted, that view of s 43(2B) is at odds with the approach held to be required by the High Court to s 430 of the Migration Act 1958 (Cth) in Yusuf . " Question (f) should be answered: "No. The reasons of the Tribunal were not adequate. It follows from what I have said above that it is not possible to discern whether this matter was taken into account or not. Accordingly, this question must be answered: "Unable to be answered. " Third issue: wrong question? Question (b) raises the issue of whether the Tribunal asked itself the wrong question or applied the wrong tests in its approach to the question of whether Central was a fit and proper person within the meaning of reg 269(1)(d). It follows from what I have said above that the answer to this question must be: "Unable to be answered. One condition was that Central employ a licensed aircraft maintenance engineer who was "acceptable" to the Authority; another was that Central employ a person --- again "acceptable" to the Authority --- to carry out audits of Central's system of quality control. The parties subsequently agreed conditions giving effect to the Tribunal's decision and it made orders accordingly. The actual conditions repeated the idea of the person being "acceptable" to the Authority. The Authority submits that the power in reg 269(1) does not extend to imposing a condition that the persons so hired be "acceptable" to it. It put forward three reasons for this. First, it was said to be inconsistent with reg 30(2C), which explicitly imposes conditions on the holder of a certificate of approval in relation to the persons employed by it; secondly, it was said that the regulation did not set forth any criteria by which the acceptability might be measured; thirdly , it was said that the Tribunal had, in truth, remitted its function to the Authority, a course which was said to be forbidden by this Court's decision in Civil Aviation Safety Authority v Allan [2001] FCA 1064 ; (2001) 114 FCR 14. I do not think these submissions have substance. As I apprehend it, the argument is that because of the specific provisions of reg 30(2C) it should be concluded that there is excluded from the power in reg 269(1) any power to impose conditions regulating the qualities of persons employed by a certificate holder. To accept such an argument it would be necessary to identify some negative implication from reg 30(2C) to the effect that no other power might be used to achieve a similar result. I can discern in it no basis for such an implication. As to the idea that the regulations do not set forth any criteria by which "acceptability" might be judged it may be said, at once, that that observation says nothing about the power under reg 269(1). Even assuming that difficulty could be outflanked, I do not see that the word "acceptable" creates difficulties of uncertain operation. The Authority must ask itself whether the proffered person is "acceptable" to it. What is involved in answering that question is no different in kind --- or difficulty --- to the Authority's approach to applying the content of any open-textured standard: cf. reg 61(1) which appears to assume that the word "acceptable" has a discernible and stable content. Further, I do not think that to impose such a condition is to leave the Tribunal's review function incomplete and to involve an impermissible remission of that function to the Authority. Once it is accepted that the powers of the Authority run to the imposition of a condition involving the appointment of a person "acceptable" to the Authority then the imposition of that condition by the Tribunal is not a remission to the Authority but, rather, the exercise of a power granted to the Authority itself. In its oral submissions, the Authority faintly argued that the specific power to impose conditions conferred on the Authority by reg 30(3) should be seen as excluding the exercise of such a power under reg 269(1). This power was said to be a specific power to impose conditions which was subject to a limitation that the power be used only for the purpose of ensuring the safety of air navigation and then only by CASA and not the Tribunal. Regulation 269(1), on the other hand, was concerned with the general topic of licence discipline, could be exercised on review by the Tribunal and was not subject to the requirement that it be exercised only for the purpose of ensuring the safety of air navigation. The argument should be rejected for a number of reasons. First, reg 30(3) confers a power both to impose an endorsement on a certificate of approval that makes it subject to conditions and also a power to set forth those conditions in various ways. Regulation 269(1) permits variation of a "certificate". The word "certificate" is defined in reg 263 in a way which includes certificates of approval (reg 263(1)) and any conditions endorsed thereon (reg 263(2)). The power of variation in reg 269(1) therefore expressly extends to the variation of conditions imposed under reg 30(3). Secondly, reg 30(3) is not to be seen, as the Authority contends, as a specific power to impose conditions but rather as a general one enlivened whenever the safety of air navigation requires it. It is reg 269(1) which is the specific provision. It is concerned, relevantly, with the imposition of conditions for, broadly speaking, disciplinary reasons. So viewed, it is not a question of a general provision being used to defeat the limitations of a more specific provision but rather the ordinary usage of a specific provision to carry out its clearly intended purpose. Nor is this to accept, as the Authority's submissions appeared to assume from time to time, that the power in reg 269(1) might be used for purposes inimical to the safety of air navigation because words of that kind were missing in reg 269(1) whilst being present in reg 30(3). Such a construction of reg 269(1) could succeed only by ignoring the unambiguous command of s 9A of the Act that the Authority "must regard the safety of air navigation as the most important consideration". So too, the proposition that reg 30(3) contains an implicit limitation that it is only the Authority and not the Tribunal which can impose licence conditions should be rejected. A decision to impose a condition under reg 30(3) could itself be reviewed by the Tribunal --- the definition of a "reviewable decision" in s 31(1) of the Act permits no other view. Accordingly, I would answer this question: "Yes. It was open to the Tribunal to impose the conditions in the form that it did. Regulation 30 was not relevant to the exercise of the power under regulation 269(1). The Authority's submissions in this Court proceeded on the basis that it was denied the opportunity to put to the Tribunal "the correct construction of [reg 30]". This I take to be a denial of the opportunity to put the submission I have just rejected. Even if one assumes that the Authority was prevented from arguing against the word "acceptable" and that it was denied procedural fairness as a result, that denial was not material: cf Stead v State Government Insurance Commission [1986] HCA 54 ; (1996) 161 CLR 141 at 145 per Mason, Wilson, Brennan, Deane and Dawson JJ. The Tribunal did not afford the applicant an opportunity to submit that its proposed conditions did not comply with reg 30. However, this was not material. The remedial consequences of this are, I think, as follows. The Tribunal was bound by s 43(2) to produce reasons which were adequate. It did not. The statement of reasons produced by it is not the fruit of the statutory duty and consequent power which required their production. Instead, what were produced were purported reasons flowing from a failure to act within the limits of authority marked out by s 43(2). It follows that the reasons are not reasons at all and are liable to be set aside. If that occurs, the Tribunal will again fall under an obligation to produce reasons under s 43(2). If its new reasons are inconsistent with its current decision then s 43AA(3)(b) will permit the decision to be varied. If the new reasons are consistent there will be no need for variation. In either case, there is no occasion for this Court to set aside the decision of the Tribunal. The appropriate orders are therefore ones which set aside the Tribunal's statement of reasons and which compel the Tribunal to produce reasons in accordance with s 43(2). I see no reason why the Tribunal need be reconstituted for that task. Of course, if Dornan is correct then, additionally, the Tribunal made an error of law. However, the significance of that for present purposes hinges upon whether that conclusion would lead to a different result. Clearly, such an approach would require the Tribunal to produce its reasons again. The difference would be that, if the error of law were jurisdictional the orders of the Tribunal might be set aside, it might have to re-exercise its powers afresh and it might have to do more than just produce reasons. I think it is unlikely that the error of law constituted by inadequate reasons could be jurisdictional. It is true, no doubt, that generally, an error of law will, in the hands of a non-judicial tribunal, be jurisdictional: Craig v South Australia [1995] HCA 58 ; (1995) 184 CLR 163 at 179 per Brennan, Deane, Toohey, Gaudron and McHugh JJ. However, it is to be noted that the errors of law there identified as having that effect were said to be those causing an inferior tribunal to identify the wrong issue. It may be doubted whether an error of law constituted by inadequate reasons could ever have that effect for reasons explained in Yusuf . However, even if Dornan required the conclusion that the decision of the Tribunal were afflicted by jurisdictional error, in the exercise of my discretion I would not set aside the Tribuna's decision. The existence of that discretion is confirmed by s 44(4) which provides that this Court "may" make such order as it thinks appropriate. In the context of a jurisdictional error, it is appropriate that that discretion be exercised in a way which is analogous to the refusal of prerogative relief on discretionary grounds. In that regard, the existence of an adequate alternative remedy is a proper basis for refusing relief: R v Commonwealth Court of Conciliation and Arbitration; ex parte Ozone Theatres (Aust) Ltd [1949] HCA 33 ; (1949) 78 CLR 389 at 400 per Latham CJ, Rich, Dixon, McTiernan and Webb JJ. Here adequate alternative relief is available if the decision is left in place because s 43AA(3)(b) allows the Tribunal to correct its decision to ensure consistency with its reasons. That, of course, will still require an order that the Tribunal produce reasons which are adequate. It is not entirely clear to me how Dornan can explain that necessity but it is not necessary to determine that issue --- any other result would be surreal. Regardless of the approach taken the proper relief is that the statement of reasons be set aside and that the Tribunal produce reasons which comply with s 43(2). Finally, it is difficult to see how the inadequacy of the Tribunal's reasons is the fault of the respondent. I will entertain any application that the respondent may wish to make under s 6(1) of the Federal Proceedings (Costs) Act 1981 (Cth), as well as any other submissions on costs. I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram. | adequacy of reasons whether failure of tribunal to provide adequate reasons error of law whether error of law connotes question of law appropriate order where failure to provide adequate reasons administrative law |
The Tribunal had affirmed a decision of a delegate of the first respondent to refuse to grant a protection (class XA) visa to the applicant pursuant to the provisions of the Migration Act 1958 (Cth) (the Act). Although no application for leave to appeal has been filed, I consider that leave is required. This is because the judgment of the Federal Magistrate dismissing the application pursuant to r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 is interlocutory in character: Federal Court of Australia Act 1976 (Cth), s 24(1A) ; SZHZB v Minister for Immigration & Anor [2006] FMCA 169. I therefore refer to the appellant as the applicant in these reasons. In his application for protection the applicant claimed to have a well founded fear of persecution due to his political opinion from his association with the Tamil Nadu Liberation army (TNLA) and the Liberation Tamil Tigers Elam (LTTE). The applicant claims that he supported LTTE because he was born to a subordinate caste and LTTE were fighting against social injustice. The applicant says he distributed medicines and was the secretary of the Tamil youth organisation unit with responsibilities for organising protests and distributing material about the LTTE. In 1998 when the Indian government prevented basic necessities reaching Sri Lankan refugee camps the applicant claims he organised and participated in a hunger strike. In August 1999 the applicant claimed he organised a political rally but was arrested as a precautionary measure and was mistreated, gaoled for 3 months, hit with a cane tipped with a bronze cap on the end, given no proper food but food which contained stone and no water. The applicant claims to have been imprisoned, beaten, ill-treated and tortured. He asserts that in 2002 a false case concerning illegal ammunition was brought against him and he was imprisoned for seven months. Then in 2003, police searched his house without a warrant and seized LTTE literature and he was again imprisoned for 6 months. The letter was addressed to the migration agent as a consequence of an authorisation signed by him to that effect dated 22 August 2005. On that authorisation, which bore reference to the Australian Government and the Tribunal in its masthead, it was stated adjacent to the place of the applicant's signature 'copies of all documents will also be sent to you at your mailing address. ' No response was received from either the applicant or his migration agent. The letter itself bore the endorsement 'please note that [the applicant] has not been sent a copy of this letter. It is important that you tell the review applicant about the contents of this letter'. In an affidavit filed as the result of a direction made on the hearing of this appeal the applicant deposed that he had not received a copy of the letter. He had consequently not been able to attend the hearing. The Tribunal found that the applicant provided information that appeared to contain anomalies, inconsistencies and a narrative that was detailed in parts and incomplete elsewhere. The Tribunal was therefore not satisfied that the applicant had suffered harm for reason of his political opinion. This was particularised that the Tribunal had relied upon independent country information to reach its conclusion. (3) The Tribunal failed to notice the threat faced by the applicant as being a TNLA member. He had not been given a second chance to appear and give oral evidence. The applicant was given opportunities to amend his application, file any additional information to support it but he declined attendance at the Court sponsored legal advice scheme. The applicant's only oral submission before the Federal Magistrate was that he needed a further opportunity to appear before the Tribunal to explain his case. On this, his Honour referred to the form dated 22 August 2005 by which the applicant had authorised service on his migration agent. He said the Tribunal had invited the applicant to attend a hearing through his migration agent but it had not received a reply. The Tribunal's hearing invitation checklist was completed, indicating that the Tribunal had taken all the necessary steps to ensure notification. It was therefore free to proceed under s 426A of the Act to make its decision without doing more to enable the applicant to appear before it. The Federal Magistrate evaluated the Tribunal's reasons to see if s 424A of the Act was breached, finding that the Tribunal's reasons were based on a perceived inadequacy of information and not information that was the reason or part of the reason for affirming the delegates decision. Therefore the absence of further explanation, requested by the Tribunal, was the basis of its decision of lack of satisfaction. He found the Tribunal is not obliged to make out the applicant's case, investigate his claims or assist him to present his case. Finally the Federal Magistrate noted that it was apparent that the applicant did not comprehend the nature of the proceedings or how to achieve his review outcome but his Honour did not believe that listing the matter for final hearing would change the approach or content of the applicant's application. His Honour reviewed the material provided and could not find any other grounds for review. The applicant only addressed the ninth ground, to which reference will be made below. But the Tribunal dismissed the case and the Federal Magistrate had also failed to consider this aspect. This is jurisdictional error. The Federal Magistrate also accepted this. The appellant fears that these authorities would have accepted this only if the appellant had been killed. Furthermore the application of the principle was not in issue as the Tribunal did not consider the claim to have been made out. The applicant states that he satisfies the four key elements and therefore is entitled to get a protection visa. If the applicant returns to India his life would be in danger and he will be chased and killed. The applicant fulfils all the four elements. The appellant is an ordinary man seeking protection and the courts should have been flexible in procedures. They expect the appellant to be of their standard and failed to consider the mental agony and shock of the appellant. The Federal Magistrate instead of finding this in favour of the appellant has dismissed the case. The Tribunal failed to see that the appellant sought asylum as he could not get any protection or help from any of the authorities. Therefore he fled the country. On or about the 5 August 2005 I made an application to the Refugee Review Tribunal, the second respondent in this matter, to review the decision made by the delegate of the first respondent. In Section D of the review application to the Refugee Review Tribunal I indicated that all correspondence be sent to my residential address in Australia. On or around the 22 August 2005 I signed a document titled Appointment/cancellation of Authorised recipient of the Refugee Review Tribunal. In that document I appointed Jayakumar Vedaranyam, my migration agent as my authorised recipient. When I made my migration agent as the authorised recipient I noticed the following words in the first paragraph of that form: Copies of all correspondence will also be sent to you. When I read those words there was created in my mind a legitimate expectation that I will also receive all the documents the Refugee Review tribunal will be sending. At no stage did I receive a letter from the Refugee Review Tribunal that I am invited for an interview in relation to my review application. Had I been informed by the Refugee Review Tribunal that I am called from an interview I would have attended the interview. Had the Refugee Review Tribunal wrote to me inviting to attend an interview I would have attended the interview and answered the questions of the Presiding member of the Refugee Review Tribunal. The first respondent filed an affidavit of Mr Cox of its solicitors sworn on 1 December 2006. This attaches information which shows that in November 2004 the Tribunal's correspondence policy changed. Prior to that date the Tribunal had sent a 'courtesy copy' of all correspondence to applicants who had an authorised recipient. However, from November 2004 correspondence was only sent to authorised recipients. At the time of the change a new appointment of authorised recipient form was created and posted on the Tribunal's website. A flyer was also generated and sent to applicants with active applications. The first respondent accepts that when the applicant appointed his migration agent as his authorised recipient on 22 August 2005 he completed an old form no longer in use at the time it was signed. However, the affidavit also shows that the Tribunal sent to the applicant a copy of its letter to his migration agent dated 9 August 2005. Please note that after this acknowledgement of lodgement of this review application and your appointment to receive correspondence on [the applicant's] behalf, no further correspondence will be sent to [the applicant]. It is important that you tell the review applicant about all future correspondence. An endorsement at the commencement of the letter stated 'Please note that [the applicant] has not been sent a copy of this letter. It is important that you tell the review applicant about the contents of this letter'. The inference from the evidence is that the authorised recipient failed to do so, with the consequence that the applicant did not receive notice of the hearing. The first respondent points to deficiencies in the evidence of the applicant. This person is known as your Authorised Recipient . If you nominate an Authorised Recipient, all correspondence will be sent to this person. If you have an adviser but you nominate another person to be your Authorised Recipient, the Tribunal will not send correspondence to your adviser. It is submitted that it may be inferred that he received that copy. I agree. The applicant refers in his affidavit to the form of appointment of an authorised recipient completed by him on 22 August 2005, the form which appears to be in the old form. The applicant does not say from whom or how he received that form. Although the Tribunal appears to have sent a form to the advisor/applicant, there is no evidence that it was the same form that was completed and returned. The applicant has not put on any evidence from his authorised recipient. In these circumstances the first respondent submits that the Court ought not to be satisfied by the applicant's evidence either that he had the legitimate expectation which he claims or that, if he did, any such expectation was reasonable or legitimate. This is because it would have flown in the face of what the Tribunal had said in its letter and was inconsistent with the statement in the application for review. Therefore, the first respondent submits that the Court cannot conclude that the applicant suffered any practical injustice or procedural unfairness, so that no breach of the rules of natural justice could result from the failure, if such were the case, of the authorised recipient even apart from any statutory provision: see Minister for Immigration & Multicultural Affairs v SZFDE [2006] FCAFC 142 ; (2006) 154 FCR 365 especially at [205] and [235]-[238] per Graham J and at [138] per Allsop J; Freeman v Health Insurance Commission [2004] FCAFC 335 ; (2004) 141 FCR 129 at [50] - [52] per Kiefel J and at [54] per Marshall J; B41 of 2003, Re an application for a writ of mandamus, prohibition and certiorari against the Refugee Review Tribunal [2004] FCA 30 at [23] - [25] per Dowsett J; R v Secretary of State for the Home Department, Ex parte Al-Mehdawi [1990] 1 AC 876; SZBSZ v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 779 at [14] per Bennett J. As to statutory provisions the first respondent points to ss 441A(4), 441C(4), 441G and 426A of the Act as entitling it to proceed. It is submitted that the Tribunal was deemed to have given the hearing invitation to the applicant by the combination of ss 441C(4) and 441G(2). Therefore the Tribunal was entitled by s 426A of the Act to decide the matter without taking any further step to hear from the applicant. That is so even if the applicant did not personally receive actual notice of the hearing date: see NASF v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 162 at [10] and [16] per Beaumont, Conti and Crennan JJ; Minister for Immigration & Multicultural & Indigenous Affairs v VSAF of 2003 [2005] FCAFC 73 at [11] - [12] per Black CJ, Sundberg and Bennett JJ, describing the interaction of the above provisions with reference to NVAA v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 136 FLR 407 at [16] per Sundberg, Hely and Giles JJ; Minister for Immigration & Multicultural & Indigenous Affairs v SZFHC [2006] FCAFC 73 ; (2006) 150 FCR 439 at [28] - [42] per Spender, French and Cowdroy JJ. Finally the first respondent submits that this is a case to which s 422B of the Act applies. Section 422B is effective to exclude the common law natural justice hearing rule: see SZCIJ v Minister for Immigration & Multicultural & Indigenous Affairs [2006] FCAFC 62 at [6] - [8] per Heerey, Conti and Jacobson JJ, applying their decision in Minister for Immigration & Multicultural & Indigenous Affairs v Lay Lat [2006] FCAFC 61 at [59] -67]. Compliance by the Tribunal with the statutory provisions to which I have referred was all that was required. Compliance with the regime referred to in sections 425, 425A and 441G satisfies the requirements of procedural fairness to an applicant: s.422B'. That scheme having been complied with, no jurisdictional error has occurred --- whether or not there would otherwise be a breach of procedural fairness (which is not conceded). I have examined the sections and authorities to which those submissions refer and accept the effect of them as stated by the first respondent. In relation to the statutory provisions, I do not consider that there is evidence to support that the elements of s 441C(4) (or s 441A(4)) relating to time of dispatch or manner of postage have been complied with. However, I regard s 441G(2) as nevertheless effective. This is because its terms are capable of application to whatever mode has been applied to the giving of a document to the authorised recipient and, in any event, s 441C is only applicable if the document is given in the method referred to in s 441A. If it is the case the statutory provisions are not applicable, I agree the first respondent's submissions should in any event succeed on the common law. Accordingly the application for leave to appeal should be dismissed. | application for leave to appeal whether jurisdictional error procedural fairness change of policy by refugee review tribunal in respect of not sending courtesy copy of correspondence sent to authorised recipients whether notification on prior form that notification would be also sent to applicant gave rise to legitimate expectation on his part whether procedural unfairness in the circumstances migration |
I will describe the applicants on the Notice of Motion as 'Dalvella' and 'Donemate' and the respondents to the motion as the 'Trustees'. I will describe Mr and Mrs Waters, collectively, as 'Waters'. 2 The issues framed by the Statement of Claim prior to amendment are described comprehensively in Duus v Dalvella Pty Ltd [2007] FCA 1921 ( 'Duus v Dalvella' ). That decision determined, largely unfavourably to Dalvella and Donemate, their challenge to the adequacy of particulars given by the Trustees of the Statement of Claim. Some of the arguments dealt with in that decision have been raised again in the present application although on this occasion in the context of whether the Amended Statement of Claim properly pleads a cause of action reliant upon the integers of s 121 of the Bankruptcy Act 1966 (Cth) ('the Act'). An order that Caveat No. Such further or other orders as the Court thinks fit. The transferor's main purpose in making the transfer is taken to be the purpose described in paragraph (1)(b) if it can reasonably be inferred from all the circumstances that, at the time of the transfer, the transferor was, or was about to become, insolvent. Subsection (2) does not limit the ways of establishing the transferor's main purpose in making a transfer. The trustee must pay to the transferee an amount equal to the value of any consideration that the transferee gave for a transfer that is void against the trustee. This section does not apply to a transfer of property under a debt agreement. This section does not affect the rights of a person who acquired property from the transferee in good faith and for at least the market value of the property. In other words, there is an amalgam of the elements of the old s 121(1) and the present formulation of s 121(1). The Trustees say that they have chosen to formulate a case of fraudulent disposition because the facts support that conclusion as to those transactions and the disposition falls within the present formulation of s 121(1) having regard to the pleaded main purpose. There is, it is said, no inconsistency or failure to plead the required elements of the statutory cause of action. Dalvella and Donemate say inconsistency arises on both counts. 8 On 10 August 1999, Richard Waters and Margaret Waters appointed Mr Bevan Schafferius controlling trustee of their property under s 188 of the Act. On 9 September 1999 the creditors of Waters rejected a proposed composition. On 22 September 1999 the estate of Richard Waters was sequestrated (with the appointment of the first applicant as trustee of the estate) consequent upon a Bankruptcy Notice issued to Mr Waters on 4 March 1999 by the Official Receiver and the presentation of a Creditors Petition against him by the liquidator of Delvine Pty Ltd ('Delvine') on 20 April 1999. On 28 September 1999 the Insolvency Trustee Service of Australia ('ITSA') accepted a Debtors Petition filed by Mrs Waters and appointed the second applicant as trustee of her estate. 9 On 23 November 1984, Mr and Mrs Waters had become registered proprietors as joint tenants of a property at 46 Victoria Terrace, Caloundra, in Queensland referred to in the pleading as the 'Property'. 11 On 2 December 1996, Dalvella was incorporated as was Donemate. The directors from 2 December 1996 of each company were John Alexander Guest and Brian James Osborne. On 2 December 1996, the Cliffside Trust was established with Dalvella as trustee and Mr and Mrs Waters as Principals. On the same date, the Kings Beach Trust was established with Donemate as the trustee and Mr and Mrs Waters as Principals of the trust. On 9 December 1996, by deed, Mr and Mrs Waters retired as Principals of each trust, and appointed their children, Jane Waters, Louise Waters, and Adrian Waters, as the 'New Principals'. 12 Between 3 December 1996 and 24 December 1996, Waters entered into ten transactions with Dalvella in its trustee capacity (called, in the pleading, 'the 1996 transactions') implemented by effecting 'simultaneous flexiphone' transfers between the account of Waters at the Caloundra branch of the National Australia Bank ('NAB') and Dalvella's account at the same branch of the NAB. Those ten transactions had one of two characteristics. Some were loans by Dalvella to Waters. The others were gifts of money to Dalvella by Waters. In the result, Dalvella made unsecured loans to Waters in the aggregate of $2,199,960.00; and Waters gave a gift of $2,200,000.00 to Dalvella. By the end of those transactions on 24 December 1996, Dalvella had money receipts (gifts) of $2,200,000.00 and a debt due to it (payable according to its terms) from Waters of $2,199,960.00. 20 On 1 February 1997, Waters by letter to Donemate requested an interest-free loan for 25 years of $2,199,960.00 from Donemate in order to repay the debt due by Waters to Dalvella from December 1996 and thus extinguish that debt. 21 On 3 February 1997, Donemate borrowed that sum from Dalvella interest free for 25 years. Dalvella made the loan to Donemate on the security of a third party mortgage by Waters over the Caloundra property. On 3 February 1997, Donemate made the 25 year interest-free loan to Waters; Waters repaid their debt to Dalvella; and Waters granted a mortgage to Dalvella over 17 lots of land including the Caloundra property. The transfers on 3 February 1997 are said to have occurred this way: Dalvella made one transfer of $99,960.00 and seven transfers of $300,000.000 to Donemate totalling $2,199,960 in all. Donemate made transfers of the same number and amounts to Waters and they made transfers of the same number and amounts to Dalvella. Accordingly, Dalvella, supported by the third party mortgage given by Waters had become a secured lender to Donemate; Donemate a lender to Waters; and Waters had discharged the December 1996 debt to Dalvella. 23 On that date, by REIQ contract subject to the conditions of special Annexure A, Waters sold the Caloundra property to Dalvella at 'market price' and Dalvella agreed to the release of the third party mortgage given by Waters. By para 29 of the Amended Statement of Claim, the Trustees plead that but for the 1997 transactions and the 1999 transaction, the estate of each bankrupt would have included a one-half legal and beneficial interest in the Caloundra property. 26 First, the facts and circumstances relied upon to support the inferences pleaded at para 23 of the Amended Statement of Claim, which in turn relies upon the facts and circumstances pleaded at para 22 and the particulars at 22.2.1 to 22.2.13. 27 Secondly, three letters of demand sent to Waters by BSA on 20 February 1997, 3 April 1997, and 6 June 1997 claiming $14,368.44 (and a further foreshadowed claim of $57,465.00), $33,372.94 and $60,765.94 respectively, and threatening suit if payment should not occur. 28 Thirdly, on 3 February 1997, the liquidator of Delvine commenced proceedings against Mr Waters to recover a contended preference payment of $17,000.00. On 12 February 1997, the liquidators of Freedom Homes commenced proceedings against the DCT seeking to recover a contended preference payment of $200,000.00 and on 17 March 1997, the DCT joined Waters and sought indemnity from them pursuant to s 558FGA (2) of the Corporations Law. 29 Fourthly, between 24 April 1996 and 28 January 1998, Waters paid creditors of Freedom Homes holding personal guarantees from Waters, amounts totalling $823,811.00. 30 Fifthly, on 17 February 1999, the liquidators of Freedom Homes commenced proceedings against Waters to recover damages for contended insolvent trading in an amount of $1,656,127.87. 31 Sixthly, on 24 February 1999, the liquidator of Delvine obtained a judgment against Mr Waters in an amount of $30,536.25. 32 Seventhly, on 26 February 1999, the liquidators of Freedom Homes commenced proceedings against Waters claiming $2,738.184.75 pursuant to s 588M(2) of the Corporations Law, $1,772,324.80 for contended breaches of duties by Waters as directors of Freedom Homes and $1,504,213.20 pursuant to s 588FF of the Corporations Law. 33 Eighthly, on 4 March 1999, the liquidator of Delvine issued a Bankruptcy Notice against Mr Waters; and the liquidators of Freedom Homes, the DCT and the BSA each lodged proofs of debt in the bankruptcy of Waters. 34 By paras 31, 32, 33 and 34, the Trustees plead these matters. By virtue of the matters pleaded in paragraphs 1 to 31 herein, the 1996 Transactions, the 1997 Transactions and the 1999 Transaction were dispositions pursuant to the provisions of section 121 of the Bankruptcy Act 1966 (Cth) and accordingly are void against the Applicants. For the sake of completeness in these reasons, I have recorded the matters pleaded by the Trustees by the Amended Statement of Claim . It should be noted however that there is no change to the formulation of the 1996 transactions nor the pleaded particulars of those transactions. The Amended Statement of Claim introduces a new para 22.3 which pleads the main purpose of Waters in entering into the 1996 transactions. Paragraph 23.1 of the amended pleading adopts para 23 of the earlier pleading but also pleads that in the circumstances the facts pleaded in paras 20 to 22, the amount of the purported gifts by Waters to Dalvella ($2.2m) would probably have been available to creditors, but for the gifts. There is no change to the formulation of the 1997 transactions nor the 1999 transaction. The main purpose of the 1997 transactions and the 1999 transaction pleaded by para 30 of the Amended Statement of Claim is that pleaded by para 30 of the earlier pleading. There is no change to para 31. Paragraph 32 as previously formulated is now simply introduced by the word 'Alternatively'. Paragraphs 33 and 34 are in the same terms as the earlier pleading. 37 The first contention goes to para 22 generally. 38 Paragraph 22 is said to be embarrassing and ought to be struck out because it is inconsistent with para 23. The inconsistency is said to arise in this way. Paragraph 22 pleads that the 1996 transactions were part of a scheme orchestrated by Waters with intent to defraud their 'creditors'. Paragraph 22 does not plead that such creditors included 'future creditors'. Paragraph 23.1 however pleads that having regard to the particulars of para 22 (and thus operating in reliance upon para 22), a reasonable inference is open that the liquidators of Freedom Homes and the Building Services Authority were either 'creditors, contingent creditors or anticipated creditors' of Waters. The two paragraphs are said to operate inconsistently in their scope. 39 There is no inconsistency. 40 Paragraph 22 pleads that the 10 transactions comprising the debt drawdowns and gifts back by Waters were part of a scheme orchestrated by them with the intent to defraud their creditors and involved a disposition by Waters of property for no consideration in favour of Dalvella which did not act in good faith. Similarly, the particulars of para 22 provide the content of the contention that the BSA was either a creditor or a contingent or anticipated creditor. It is true that the particulars of 30 March 2007 of para 22 use the term 'future creditors' to define, in part, the field of creditors Waters is said to have sought to defraud as 'then present creditors and all future creditors' and para 23.1 uses the term 'contingent creditors or anticipated creditors'. It seems to me the distinction is not a real one in the context of the pleading. As I said at [29] of Duus v Dalvella , there must be a relation between the steps taken as part of the contended scheme and an intention to defraud identified creditors. Those creditors however might be existing creditors with provable debts or future creditors or any present or future creditors ( Barton v Deputy Federal Commissioner of Taxation [1974] HCA 43 ; (1974) 131 CLR 370 at 374; PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515 at 525-526; DM Cannane & Anor v J Cannane Pty Ltd [1998] HCA 26 ; (1998) 192 CLR 557 at 566 and 593; Ebner v Official Trustee in Bankruptcy [1999] FCA 110 ; (1999) 91 FCR 353 at 370-371). Future creditors include anticipated creditors (such as the liquidators of Freedom Homes or the BSA) or contingent creditors. 42 The following further observations should be made. 43 Plainly enough, paras 22 and 23 are to be read together; para 23 is the expression of at least two creditors which fall within the broader class of present or future creditors; paras 22 (and the particulars of para 22) and para 23 assert facts arising out of the identified chronological events which give rise as a matter of pleading to an inference that Waters knew particular entities would inevitably pursue claims against them of substance. 44 The remaining contentions are these. 45 First, para 22 is said to be deficient because although it alleges that the 1996 transactions were part of a scheme implemented by Waters with an intent to defraud creditors, para 22 does not plead, as a material fact, that any particular act undertaken by Waters was undertaken by them with the relevant intention. Further, it is said no material facts are pleaded that could, as a matter of law, support an inference of an intent to defraud creditors. 46 Secondly, it is said the particulars of the 'scheme' and the particulars of 'orchestration' of the scheme are inconsistent as two schemes are identified at paras 8 to 21, 11 to 16 and 20 and 21 of the pleading. 47 Thirdly, para 22.1 is said to have no utility as the facts pleaded at para 22.1 do not satisfy the elements of s 121 of the Act and thus provide no basis for relief reliant upon s 121 ; motive is said to be irrelevant and therefore the phrase 'with intent to defraud their creditors' should be struck out; para 22.1 is thus said not to disclose a cause of action; to the extent that the Trustees place reliance upon the facts pleaded at para 22.1, the Trustees, must, it is said, also plead that at the time of the disposition, the effect of the disposition was that creditors would be deprived of payment, not simply that a disposal had the effect of reducing assets available to creditors; and para 22.1 does not plead that the creditors Waters sought to defraud included all present and future creditors at the time of the transaction. 48 Fourthly, para 22.3 fails to properly plead the elements of s 121 as the Trustees plead Waters' main purpose in entering into the 1996 transactions rather than the required statutory main purpose of a transferor 'in making the [relevant] transfer'. 49 Fifthly, para 22.3.2 pleads, it is said, a main purpose in the alternative to a main purpose related to a disposal of the gifted amounts, that of entering into the 1996 transactions for the main purpose of hindering or delaying the process of making the Caloundra Property available for distribution among Waters' creditors. However, the Trustees do not plead facts to the effect that the Caloundra Property has been 'the subject of any impugned transfer'. 50 Sixthly, because the Trustees do not claim in the principal Application any relief in relation to the 1996 transactions and the Amended Statement of Claim confines the relief sought in the action to that sought in the Application, para 34 which pleads that the 1996 transactions are void dispositions, ought to be struck out as the 1996 transactions form no part of the controversy. Similarly, it is said that paras 20, 21, 22 and 23 which concern the 1996 transactions also ought to be struck out. Dalvella and Donemate say that the Trustees do not plead that the void character of the 1996 transactions is relevant to any relief sought in relation to the 1997 or 1999 transactions; nor is there any pleaded nexus, it is said, between the 1996 transactions and either the 1997 transactions or the 1999 transaction. Moreover, it is further pressed that because the scheme to which the 1996 transactions relate is confined to the matters pleaded at paras 8 to 21 of the Amended Statement of Claim which do not include the 1997 transactions or the 1999 transaction and because the particulars of the 'orchestration' of the pleaded scheme are confined to the 1996 transactions, paras 20, 21, 22, 23 and 34 ought to be struck out. The principles guiding the exercise of the discretion for the purposes of Order 11, r 16 are well settled ( Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2000] FCA 1572 ; (2000) 104 FCR 564 at 585-586 at [47] --- [51] per French J; Australian Competition and Consumer Commission v Fox Symes & Associates Pty Ltd [2005] FCA 1071 at [92] to [109] per Lander J; BWK Elders Australia Pty Ltd v Westgate Wool Company Pty Ltd & Ors (No. 2) [2002] FCA 87 at [2] , [3], [20] and [21] per Mansfield J; Pan Continental Mining Ltd v Posgold Investments Pty Ltd [1994] FCA 983 ; (1994) 121 ALR 405 at 414 per Beaumont J; General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 ; (1964) 112 CLR 125 at 129 and 130, per Barwick CJ). 52 In sequence, the elements are these. 53 From about February 1996 companies associated with Waters began to fail financially. Jefferson and Stevenson became voluntary administrators of Freedom Homes on 29 February 1996, David Clout was appointed voluntary administrator of Delvine on 14 March 1996 and official liquidator of that company on 10 April 1996. Mr Waters was the primary examinee in a seven day public examination of the affairs of Freedom Homes and Delvine. In July 1996, Mr Waters sought legal advice as to his personal liability concerning guarantees he had given to the BSA in support of Freedom Homes and in July 1996 Waters were provided with a report to creditors of Freedom Homes prepared by Jefferson and Stevenson postulating a potential claim against Waters on a number of bases in an amount up to $2,647,255.00. 54 On 29 July 1996, the creditors of Freedom Homes resolved to place that company in liquidation. Between June and August 1996, Waters sought advice from solicitors and accountants concerning their liability to creditors and in relation to asset protection steps. In December 1996, the BSA issued letters of demand to Waters. These matters are recited as the particulars to para 22 and are set out in full at [16]. 55 On 2 December 1996, Dalvella and Donemate were incorporated; the Cliffside Trust and Kings Beach Trust were established; and Waters retired as principals of each trust seven days after the creation of the trusts, in favour of their children on 9 December 1996. Between 4 December and 24 December, Waters caused 10 inherently odd transactions to occur by which Dalvella lent $2,199,960.00 to Waters and Waters made a gift of all of it plus $40.00 ($2.2m) to Dalvella. These transactions purportedly gave rise by 24 December 1996, to a debt due by Waters to Dalvella of $2.199m and a gift or disposition by Waters to Dalvella of $2.2m. 56 The pleaded events concerning the incorporation of Dalvella and Donemate, the creation of the two trusts, retirement of Waters and appointment of their children and the drawdowns and gifts back are said to be a scheme (see Particular 1) put in place by Waters with the intention of defrauding their present and future creditors. The Trustees say Dalvella did not give consideration nor act in good faith. The 10 transactions were part of a sham 'orchestrated' by Waters in December 1996 against the background of the adverse financial events emerging throughout 1996 as particularised (22.2.1 to 22.2.13). The Trustees' use the term 'orchestrated' to describe the conduct of Waters in implementing the scheme with intent to defraud their creditors. The events of orchestration are the steps taken on 2 December 1996 to create the trusts with companies (incorporated on the same day) as trustees; Waters retirement as principals and the consequent appointment of their children together with the sequence of simultaneous flexiphone transfers. 57 On 1 February 1997, Waters sought to deal with the resolution of their debt to Dalvella. 58 Waters made a request for an interest free loan for 25 years of $2.199m to Donemate. On 3 February 1997, Donemate borrowed that sum from Dalvella so as to lend it to Waters so that Waters could immediately pay it to Dalvella and thus extinguish their debt to Dalvella leaving Waters with a debt to Donemate and Donemate with a debt to Dalvella. The difference, apart from the new debtor/creditor relationship, was that Dalvella lent the money to Donemate (and thus to Waters with payment to Dalvella) on the strength of a third party mortgage by Waters over 17 lots of land including the Caloundra Property in favour of Dalvella to secure Dalvella's loan to Donemate. The transfers effecting the loans and payment all occurred on 3 February 1997. 59 These transactions and payments are described as round-robin payments. 60 On 25 May 1999, Waters purported to enter into a contract with Dalvella to sell the Caloundra Property to it at market price and secure the release of the mortgage. The elements of that transaction are pleaded at para 28 of the Amended Statement of Claim. 61 The Trustees say that had Waters not entered into the 1997 transactions and round-robin payments nor the 1999 transaction, each of Mr and Mrs Waters would have retained an equal beneficial interest in the Caloundra Property. The Trustees say the main purpose of Waters in entering into the 1997 transactions and the 1999 transaction was to prevent the Caloundra Property from becoming divisible among the creditors of Waters or to hinder or delay the process of making the Caloundra Property available to creditors. 62 The facts from which an inference is to be drawn of this main purpose are the sequence of adverse financial events (and consequent steps taken by Waters) particularised at 22.2.1 to 22.2.13 [16] (and para 23) which identify demands made or claims to be made against Waters by then present or anticipated creditors; three letters of demand made by the BSA; proceedings taken by the Deputy Commissioner of Taxation against Waters for indemnity in respect of a preference claim ($200,000.00); proceedings taken by the liquidators of Freedom Homes to recover damages for insolvent trading ($1,656,127.87) and other proceedings identified in the particulars to para 30. 63 The Trustees say that the liquidators of Freedom Homes, the DCT, BSA and the liquidators of Delvine were either creditors, contingent creditors or anticipated creditors for substantial sums at the time of the 1997 transactions and the 1999 transaction; and those transactions effect a disposition of the Caloundra Property to Dalvella when the property would have been part of the estate of Waters. 64 Alternatively, the Trustees say the 1996 transactions involving the drawdowns and gifts back to Dalvella in December 1996, the transactions and payments in February 1997 and the proposed sale of the Caloundra Property and release of security in 1999, purported to result in a debt due by Waters to Dalvella, compromised and discharged by a payment by Waters, made possible by a loan by Donemate to Waters, in turn, reliant upon a loan by Dalvella to Donemate on terms that Waters provide Dalvella with security, which entitled Dalvella to take a transfer of the legal and beneficial interest of Waters in the Caloundra Property on the terms of the 1999 contract. 65 The Trustees say that the 1996 transactions, the 1997 transactions and the proposed 1999 sale and transfer transaction involving Waters, Dalvella and Donemate are evidenced by circular transfers of funds in which no consideration arose as Waters did not borrow $2.199m from Dalvella nor gift back $2.2m; nor did Dalvella make a loan to Donemate of $2.199m; nor did Donemate advance that sum to Waters; nor did Waters repay a debt due to Dalvella of $2.199m; and nor was a third party security granted for consideration in favour of Dalvella. 66 By reason of these matters, the Trustees say that the 1996 transactions, the 1997 transactions and the 1999 transaction are dispositions for the purposes of s 121 of the Act and are void as against the Trustees. 67 Waters could not seriously be in any doubt that the Trustees say these odd transfers between Waters and the trustees of the trusts in the events described were consciously put in place to defraud present or future creditors and the main purpose of Waters in entering into the 10 flexiphone transfers between them and Dalvella was, as to the gifts back of $2.2m, to prevent those monies remaining available to any present or future creditors of Waters or to hinder or delay the process by which those monies would become available to creditors. Alternatively, the Trustees say Waters entered into the 10 transfers, with an intent to defraud creditors, for the main purpose of hindering or delaying the process of making the Caloundra Property available to creditors. 68 Accordingly, it seems to me that from the Amended Statement of Claim, Waters would understand the challenge by the Trustees to the 1996 transactions and the 1997 and 1999 transactions. 69 Against that background, I reach these conclusions. 70 As to [45], it can be seen that the pleading asserts by para 22 that particular acts, namely, the 1996 flexiphone transfers and the scheme events giving rise to the pleaded disposition were orchestrated or consciously undertaken by Waters with an intention to defraud creditors. Secondly, intention is a question of fact determined, almost always, as an inference drawn from foundation facts. The chronology of the scheme events and orchestration together with particulars of para 22 are capable of supporting an inference of acts undertaken with an intention to defraud creditors. 71 As to [46], the particulars of the scheme are those facts commencing with incorporation of the companies and creation of the trusts (and related structural changes) and concluding with the 10 flexiphone drawdowns and gifts back at the same NAB branch. The particulars of orchestration are the particular sequential steps between 2 December and 9 December 1996 and substitution of the Waters' children for Waters as principals and the implementation of the transfers in the manner and on the dates pleaded. There is no inconsistency. The pleaded scheme of which the transfers are a part are identified and the method of organisation and implementation of the scheme is plain from the pleading. 72 As to [47], it is true that, in terms, s 121(1) of the Act is no longer framed by reference to a disposition of property with an intent to defraud creditors not being a disposition for valuable consideration in favour of a person who acted in good faith. The section operates upon a transfer of property to another if that property would probably have become part of the bankrupt's estate or would probably have been available to the creditors of the bankrupt where the transfer was made for one of two main purposes identified by the Act (s 121(b)(i) or (ii) [4]). Here, the Trustees plead facts going to the identification of property comprising the 10 transactions; the identity, formation and creation of the companies and trusts participating in the events of transfer; the circumstances of transfer and the accounts used to effect the transfers; the intention of Waters in implementing the scheme and their main purpose for doing so. Those facts go to the question of whether a transfer of property occurred; whether, in all the circumstances, that property would probably have become part of the bankrupt's estate or would probably have been available to creditors but for the transfers. In any event, if the Trustees seek to establish that the character of the conduct of Waters was fraudulent, that is, they set about a course of defrauding creditors, the Trustees are simply asserting facts that if proved, satisfy, they say, the statutory standard although on one view they may have set the bar for themselves unnecessarily high. In addition, the assertion that the transfers in December 1996 were part of the identified scheme implemented with a fraudulent intent may be relied upon if proved as part of the factual matrix going to the pleaded main purpose. Therefore, para 22.1 does not suffer the vice of inutility; the facts pleaded of an intent to defraud creditors ought not to be struck out and para 22 does disclose a cause of action. Two further final contentions are identified at [47]. First, the notion that the Trustees must plead that at the time of the disposition, the effect of the disposition was that creditors would be deprived of payment not simply that assets would be reduced. Secondly, para 22 fails to plead that Waters sought to defraud all present and future creditors at the time of the transaction. 73 As to the first, the pleading asserts by para 22 that at the time of the 10 flexiphone transfers, Waters undertook the transactions with an intent to defraud creditors, that is, so as to deprive creditors of the disposal funds. This is not an allegation that steps taken by a transferor had the effect of reducing a pool of assets then available to a person who subsequently became bankrupt coupled with an allegation that the effect of a general reduction of assets from the pool should be regarded as an event of contravention of s 121(1). The Trustees contend for something quite specific: a scheme calculated to defraud creditors at the moment of implementation of the disposition of property undertaken for the main purpose of preventing the monies becoming available to creditors or as part of a process of hindering or preventing the Caloundra Property from becoming available to the creditors of Waters. 74 As to the second matter, the Trustees contend that Waters sought to defraud creditors. The particulars make it clear that the contended intention was held in relation to all present and future creditors. In other words, Waters engaged in the conduct to defeat any person who had a debt then due and payable or any person Waters anticipated would, if put to it, be able to establish in the future a claim against them. Examples of such persons included the liquidators of Freedom Homes and the BSA, not in any class closing way but only in the sense of future creditors emblematic of all future creditors. 75 As to [48], para 22.3 is to be read with paras 22.1 and 22.2 which are in turn reliant upon paras 8 to 21. That is, para 22.3 must be read in context. It pleads that the 1996 transactions were entered into for an identified main purpose. The entry into those transactions resulted in the transferor, it is said, making a disposition for no consideration in favour of Dalvella for the main purpose (put in the alternative) pleaded. Paragraph 22.3 does not fail for the reason contended at [48]. 76 As to [49], the Trustees plead that the 1996 transactions were entered into for, in the alternative, the purpose of hindering or delaying the process of making the Caloundra Property available to creditors. At para 30, the Trustees say the main purpose of Waters entering into the 1997 and 1999 transactions was to prevent the Caloundra Property becoming divisible among the creditors of Waters or to hinder or delay that process. The facts of the circular money transactions of 1997 are pleaded and the 1999 transaction. The facts from which an inference of purpose is invited are pleaded as particulars of para 30. Paragraph 32 pleads the construct arising out of the 1996, 1997 and 1999 transactions. Paragraph 33 pleads the contended true effect of those transactions. Paragraph 34 pleads that the 1996, 1997 and 1999 transactions are void as against the Trustees. In reliance upon the void character of those transactions and instruments, the Trustees seek declarations in relation to the mortgage and the 1999 Contract of Sale. Accordingly, the contention at [49] is not made out. 77 As to [50], the Trustees claim [3] a declaration that the mortgage granted by Waters to Dalvella on 3 February 1997 and the contract of 25 May 1999 is void; an order for removal of Dalvella's caveat; declarations as to the beneficial interest of each bankrupt in the Caloundra Property; and such further or other order as the Court thinks fit, in the resolution of the controversy. The controversy of fact upon which the relief dispositive of the controversy rests includes a contention as to the efficacy of the 1996 transactions, the events surrounding those transactions and the intent and purpose of Waters in effecting those transactions. The controversy comprehends contentions as to the relationship between the money transfers in December 1996, the round-robin of loans and payments in 1997 and the contended transfer of Waters' interest in the Caloundra Property to Dalvella in 1999. Arising out of those events and the identified transactions, the Trustees seek the relief formulated in the principal application and in particular declarations that particular instruments purporting to effect a transfer of property by Waters are void. Section 121(1) of the Act operates so as to render a transfer of property to another void (in the relevant circumstances). Orders declaratory of the legal effect of a transfer of property might well be made in circumstances where declarations are not sought as to each step in a sequence of steps the combined effect of which is to render a transfer made in reliance upon the steps void notwithstanding that findings of fact might be made about each step. The relief claimed by the Trustees is confined to the transfer of property effected by the mortgage and the contract, and the nature of the interests held by Waters in the Caloundra Property. That relief, in part at least, is framed by a controversy extending to the 1996 transactions and the validity of those transactions in the circumstances pleaded. Accordingly, there is no basis for striking out paras 20, 21, 22, 23 and 34 of the Amended Statement of Claim. 78 Accordingly, the application by Dalvella and Donemate must be dismissed with costs. I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | consideration of an application to strike out an amended statement of claim consideration of contentions relating to s 121 of the bankruptcy act 1966 (cth) practice and procedure |
In my reasons at [136] I said that the respondent relied upon a decision Re Java 452 Pty Ltd (admin apptd); Permanent Trustee Australia Ltd (as trustee of Advance Property Fund) v Stout [1999] VSC 252 ; (1999) 32 ACSR 507 (incorrectly cited as Re Java 452 Pty Ltd (administrator appointed) (No 2) [1999] VSC 252 ; (1999) 32 ACSR 507). I then discussed that decision concluding that the decision was not contrary to the construction which I put upon s 444F. Last night counsel for the respondent advised my chambers that I had referred to the first decision in Re Java rather than the second which was relied upon by the respondent. This morning, junior counsel for the respondent advised me that they relied upon both decisions in Re Java. I was told that whilst the respondent had referred to the second decision, the respondent had inadvertently given me a reference to the first decision, which is the decision to which my reasons refer. Today an application has been made under O 35 r 7(1) of the Federal Court Rules to vary or set aside the order. I do not think that such an application need be made because no order has yet been made under s 444F that needs to be recalled or revoked. However, I should give further reasons in relation to the second decision in Re Java 452 Pty Ltd (Administrators Appted) (No 2); Stout & Scales (in their capacity as joint administrators of Java 452 Pty Ltd (administrators appted) v Permanent Trustee Australia Ltd [1999] VSC 273. In that decision, the company occupied premises owned by the respondent. The respondent had terminated the lease by notice given on 6 April 1999. The company entered into a Deed of Company Arrangement to sell the company's assets to a third party. The assets included the company's interest in the lease agreement which had been made between the predecessors of the company and the respondent. This conclusion has a number of consequences for present purposes. First, the Company cannot assign the lease to a purchaser of the business because the lease no longer exists. This means that the purpose of the Deed, namely the sale of the assets, is defeated. Second, the Company will, upon the execution of the Deed, lose its statutory right to possession unless an order is made under s444F(4). Such an order does not re-instate the lease or create a fresh lease which is capable of assignment to a purchaser of the business. I was told by counsel for the Company that his client would be prepared to enter into a fresh lease with Permanent Trustee in terms of the old lease. This may be so, but Permanent Trustee says its (sic) does not want to grant such a term. It was not suggested that I have the power to compel it to do so. Moroever, the power conferred by s444F(6) to impose conditions upon the making of an order does not seem appropriate in a case where it is the respondent and not the applicant upon which the conditions might be imposed. If a lease is terminated under an order under s 444F it does not reinstate the lease or create a fresh lease. Indeed, I said as much in my reasons at [131] and [142]. That being the case, a company which has obtained the benefit of an order under s 444F cannot assign the lease because the lease has been terminated. The point of distinction in Re Java 452 Pty Ltd (Administrators Appted) (No 2); Stout & Scales (in their capacity as joint administrators of Java 452 Pty Ltd (administrators appted) v Permanent Trustee Australia Ltd [1999] VSC 273 is that the applicant in that case was purporting to enter into an agreement to sell a lease. However, because the lease had been terminated it was no longer an asset of the company. That is not the case in this proceeding. DNPW does not wish to sell or assign the Lease. It wishes to continue to occupy the premises which were the subject of the Lease so that it can continue trading. I do not think that either of the decisions in Re Java are inconsistent with my construction of s 444F. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | voluntary administration company subject to a deed of company arrangement seeking order that the lessor not take possession of licensed premises leased by the company corporations act s 444f material adverse effect on achieving the purposes of the deed order subject to conditions corporations |
The first applicant, ITW AFC Pty Ltd, is the proprietor of Australian Patent No 719725 with a priority date of 20 November 1997. The patent is for a type of fastening screw, known in the building industry as a Zips screw. The screw is manufactured by the first applicant's licensee, the second applicant, ITW Australia Pty Ltd. It is convenient to refer to the two applicants jointly as ITW. ITW alleges that the four respondents (directly or indirectly) infringed its patent by importing and selling within Australia screw fasteners known as Clearfix and Bat'N'Fix screws. With respect to the issues in this proceeding, there is no relevant difference between the Clearfix and Bat'N'Fix screws. The respondents deny that their screws infringe the patent and also cross-claim for the revocation of several of the patent's claims, alleging they are invalid. The grounds of invalidity are the common ones; viz, no inventive step, not a manner of manufacture, not novel. 2 The trial was listed to begin on 13 November 2006. It was put off because the respondents were not ready with their evidence. The hearing then commenced on 18 June 2007 and the trial occupied seven days. Without orders to that effect, many of the witnesses filed multiple affidavits. Dr Collinson, the applicants' chief expert, filed ten affidavits, and their director filed five. The respondents' witnesses also filed multiple affidavits. Mr Loi, a director of the first and second respondents, filed six, and Mr Hunter, the respondents' expert, filed seven. Most of this evidence turned out to be irrelevant. As events transpired, by the time of the trial there was little in dispute as regards the facts. There were issues of construction that had to be sorted out and only one or two significant factual disputes. If the parties and their solicitors had early on concentrated on those issues the case would have been over and done with in less than half the time it in fact took, and there would have been a massive saving in costs. 3 The specification of the patent sets out the background to the invention. Fastening screws take a different form if adapted for penetration into metal or timber. Fastening screws intended to drill through sheet metal have a drill tip similar to that of a conventional drill tip, where the end is not threaded. A fastening screw for timber is different. It has a tapered end portion and the thread extends substantially to the end or tip. The thread through to the end is important because it enables the thread to bite into the timber and pull the screw in, thereby requiring minimum endwise pressure. A fastening screw designed to drill through metal is difficult to use to fasten metal to a timber support. The thread does not "bite" into the timber. Substantial pressure is required to achieve self-tapping. 4 Before the priority date, two types of screws were in wide use. The first is known as a Type 17 screw, which was used for drilling and tapping into timber. These screws have shanks that are tapered and threaded. The second, known as an ASD or Teks screw, was used for drilling into metal. These have parallel (untapered) shanks and a wider drilling point with cutting edges designed to penetrate metal. 5 As at the priority date it was widely known that Type 17 screws had difficulty penetrating metal and often broke or caused burrs when used on metal. Similarly, it was also widely known that ASD screws, while able to penetrate metal easily due to the wider drilling point and cutting edges, failed to fasten optimally to wood due to the lack of taper and thread to draw them in. 6 For about ten years from the mid-1980s, ITW and its predecessors invested hundreds of hours in attempting to design a screw that would more effectively affix metal to wood. In 1997 the inventor, Mr Roberts, managed to solve the problem by combining the wider drilling point of the ASD screw with the tapered shaft and threaded shank of the Type 17 screw. The Zips screw, as it became known, was launched commercially in December 2002 to great success. 7 The patent for the Zips screw contains several claims. Claims 2 to 6 are dependent. Claim 7 is a method of forming the fastening screw described in claim 1. Claims 8 to 13 are dependent on claim 7. The rolling die for forming the fastening screw is described in claim 14 and variations are the subject of claims 15 and 16. Claims 17, 18 and 19 are omnibus claims. 8 The interpretation of claim 1 was the subject of both debate and evidence, much of which was not admissible. There are three controversial aspects. These relate to the requirement that the shank of the fastening screw be "tapering to said drilling tip". The first controversial aspect is whether the "drilling tip" is located at the terminal end point (or chisel point) of the screw or whether the tip takes in the terminal end or chisel point of the screw, the cutting edges and either part or all of the flutes. The second aspect depends on the answer to the first. Here the question is: what does "tapering to the drilling tip" require? Does it require a taper all the way to the terminal end or chisel point of the screw, so that the screw can, with more or less accuracy, be described as conical in shape? Or does it merely require a reduction in diameter from the cylindrical or parallel portion of the screw to the point where the drilling tip can be said to begin? The third and most important controversy concerns the degree of taper that is necessary to satisfy the claim. It was common ground that any relevant taper is to be assessed by measuring the root surface of the shank at points at which the valleys lie between the crests of each thread. 9 I propose for the time being to put to one side any discussion about the degree of taper required. In the first instance I will deal with the other two constructions points. Read independently of the specification and the remaining claims, there is a degree of ambiguity in claim 1 as to what constitutes the "drilling tip". The requirement that the fastening screw have "a drilling tip and a head provided at respective opposite ends" of the shank does not clarify the problem, although the head is that portion of the screw used to propel the screw into a surface at the opposite end of the screw, rather than merely the surface of that portion. By analogy the drilling tip could also be a portion rather than the terminal point at the other end of the shank. The phrase immediately following the requirement that "shank [taper] to said drilling tip" is "which has a pair of cutting edges". The word "which" may relate to the shank or the drilling tip. If the word relates to the drilling tip itself, the drilling tip must consist at least of the cutting edges and part of the flutes. 10 The contention that the word "which" refers to the shank, rather than to the drilling tip is at least inconsistent with claim 7, which in large part picks up the wording of claim 1 (as its purpose is to teach a method of forming the screw described in claim 1), but specifically provides for "said drilling tip having a pair of cutting edges". This indicates that the word "which" in claim 1 relates to the drilling tip. 11 In the specification there are figures depicting one embodiment of the invention (figure 5) and the final stage of formation of one embodiment of the invention (figure 10), both of which label the chisel of the screw as the "drilling tip". On the other hand, there is much in the specification that indicates that the "drilling tip" includes the cutting edges and flutes. The drilling tip of the screw is described as being "designed to efficiently cut into metal and for collection and removal of swarf created during penetration of drilling tip". The flutes perform the function of removing the swarf, so this description makes it clear that the drilling tip encompasses not only the cutting edge but at least part of the flutes. Later there is a reference to the "drilling tip cutting edge" and a statement that the "drilling tip preferably includes two cutting edges and two flutes". In the description of the method of forming the screw, a "material displacement operation" is said to "create a drilling tip at an end portion" of the shank. This wording is used in claim 7 and indicates, again, that the drilling tip encompasses a portion of the shank. It is also worth noting that the specification uses the words "terminal end" when the reference is to the apex or chisel of the screw, suggesting that the "drilling tip" is something other than the apex or chisel. 12 When describing the prior art from which the invention derives, similar terminology is employed. Thus, in describing the conventional screws for drilling through sheet metal, the specification refers to the drilling tip as having a "shape". It is difficult to see how an apex or chisel could be said to have a "shape". In describing the conventional screw for penetration into timber, the specification refers to a "tapered end portion which terminates in a pointed terminal end" and a single flute "provided in the drilling tip". Figures 1 and 3 are described as being a "side view of the drilling tip" of the prior art fastening screws, and those figures clearly depict a portion of the prior art fastening screws incorporating both cutting edges and flutes as well as the chisel. 13 Finally, the specification states that the purpose of the invention is to create a screw that can both cut through sheet metal and penetrate into timber in a form "which is essentially a hybrid of the drilling tips of the two prior art fasteners". The invention is clearly not a hybrid of the chisels only of those prior art fastening screws. 14 When claim 1 is considered by reference to the specification as a whole it is clear, in my view, that the "drilling tip" incorporates the chisel, the cutting edges and at least part of the flutes. It is equally clear that the required taper is to be measured to the point where the drilling tip begins. 15 It is convenient next to deal with the attack on the patent. The invention, the Zips screw, is essentially a combination of features found in the generally known prior art. It is for this reason that the respondents argue that the patent is invalid for a lack of novelty and lack of inventive step. On the other hand ITW's case is that, while fasteners in the prior art may each have some of the features of the Zips screw, no one fastener has all of its features. Moreover, ITW says that the idea of combining the best features of the ASD and Type 17 screws into one screw was an inventive step because, although perhaps seemingly obvious in hindsight, no one had managed it (or apparently even thought to try it) before, despite the fact that the metal-to-wood problem had been an issue in the building industry for some years. 16 First of all, with respect to novelty, for a prior publication to destroy novelty: "[It] must give a direction or make a recommendation or suggestion which will result, if the skilled reader follows it, in the claimed invention. A direction, recommendation or suggestion may often, of course, be implicit in what is described and commonly the only question may be whether the publication describes with sufficient clarity the claimed invention or, in the case of a combination, each integer of it. ": Bristol-Myers Squibb Co v FH Faulding & Co Ltd [2000] FCA 316 ; (2000) 97 FCR 524 , 548; see also Pfizer Overseas Pharmaceuticals v Eli Lilly & Co [2005] FCAFC 224 ; (2005) 68 IPR 1 , 67. 17 The respondents did not identify any prior art which referred to a screw that contained all the features of the Zips screw. The best example of a piece of prior art the respondents could come up with was UK Patent GB957626 (the 626 patent). The invention the subject of that patent was a combination hole-drilling and thread forming screw fastener. I do not propose to analyse the invention in any great detail. It is sufficient to say that the 626 patent does not describe with any clarity four integers of claim 1 of the Zips screw patent. First, the 626 patent neither recommends nor suggests a fastener suitable for affixing metal to timber. Instead, the 626 patent describes a fastener "advantageous in the securing together of light gauge metal work pieces". While there was evidence to the effect that a fastener described by the 626 patent was capable of affixing metal to wood, there was other evidence which showed that 626 fasteners are, as the 626 patent language would tend to suggest, neither designed nor suited for such purpose. Second, the 626 patent describes a fastener with either four or six cutting edges, while the Zips screw has only two. Third, the 626 patent specifies fasteners possessing flutes collinear to the cutting edges, in contrast to Zips screws, which have flutes extending from the cutting edges in a longitudinal direction. Fourth and finally, the 626 patent does not describe a fastener having a thread extending from adjacent to the drilling tip rearwardly to beyond the section of the shank in which the flutes are formed, such as described in claim 1 of the Zips screw patent. 18 As regards lack of inventive step, reference should be made to what the High Court said with respect to when the combination of features of known prior art can be said to constitute an inventive step: "The test is whether the hypothetical addressee faced with the same problem would have taken as a matter of routine whatever steps might have led from the prior art to the invention": Wellcome Foundation Ltd v VR Laboratories (Aust) Pty Ltd [1981] HCA 12 ; (1981) 148 CLR 262 , 286. Steps taken as a matter or routine will be deemed an obvious or workshop modification of prior art and do not constitute an inventive step: Gillette Safety Razor Co v Anglo-American Trading Co Ltd (1913) 30 RPC 465 , 480; Woodbridge Foam Corporation v AFCO Automotive Foam Components Pty Ltd (2002) 58 IPR 56 , 58-59. See also Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (No 2) [2007] HCA 21 ; (2007) 81 ALJR 1070 , 1095. 20 A point which is obvious but bears repeating is that the question of inventiveness must be approached from the standpoint of an inventor or screw expert working in the 1980s and early 1990s, not with the benefit of hindsight: Alphapharm 212 CLR at 423; see also Root Quality Pty Ltd v Root Control Technologies Pty Ltd [2000] FCA 980 ; (2000) 49 IPR 225 , 247. 21 The evidence on inventive step is as follows. The starting point is the introduction of Type 17 screws in the early 1980s. In fixing metal to wood those screws suffered from the problems already mentioned. Accordingly, ITW and its predecessors began considering the development of a replacement product in the mid-1980s. A research project was started in 1992 to develop an improved Type 17 screw, on which one ITW engineer alone spent several hundred hours studying the fastening mechanism of Type 17 screws with high speed photography and experimenting with new designs. Over the years, various approaches to the problem were considered, including experiments with: (1) modifying Type 17 screws to place the start of the thread closer to the point to encourage cutting to occur earlier but then interrupting the thread in places to prevent burring; (2) using different flute or slot configurations on a Type 17 screw; (3) trying variations of the "Type AW" point, which is an ASD drill screw point but with threads rolled on the cutting edges; and (4) testing a smaller drill point like a Number 1 point on Type 17 screws. These efforts were unsuccessful. As Mr Roberts put it, ITW had "just totally c[o]me to a brick wall". 22 Despite having spent "years and years and years trying to work out a way to do this," Mr Roberts reached the conclusion "that the efforts that we'd been trying to solve this problem were ... a waste of time and the only way it was going to be [solved was] to get a metal cutting point onto a Type 17 style of screw. " In September 1997 Mr Roberts conceived the idea of combining the ASD drill screw point with the with the threaded Type 17 shaft. 23 Initially, Mr Roberts had "great reservations" whether the idea would work. In particular he "didn't think it was possible" to overcome the technical difficulties of designing a die for the manufacture of the hybrid screw. This design process included modifying a pair of Type 17 forging dies by reducing the length of the point cavity, creating pointed blanks, and rolling the thread onto the pointed blanks. Four variations of die were produced, each with a different thread location, but two were discarded as having the thread either too close or too far away from the point. The remaining two variants were tested with a Type 17 die used as a control. Manual tests of screw samples created from the dies showed improved drill performance. 24 Even though performance was improved, Mr Roberts felt that the threads at the point of the new screws were not well enough defined due to the configuration of the Type 17 die. It was necessary, therefore, to create a new roll point roll die specifically to address this situation. According to Mr Roberts: "The real difficulty was getting a die that would produce a screw that combined the qualities of a drill screw [ASD] point and a Type 17 screw. " The development of such a die was "technically very difficult and took some considerable time. " It was necessary for the die to gather material from higher up on the shank and reposition it closer to the point, by cold forming or cold rolling, in order to provide a sufficient volume of metal to allow a thread to be formed at the point. Mr Roberts estimated that ITW spent approximately one year and 250 man hours in developing a die that worked. The design was eventually completed in October 1998. 25 It is worth emphasizing that Mr Roberts' description of the design process was not challenged by the respondents. Their case is that his evidence is irrelevant because the ITW designers were working on the wrong problem. It is said to be irrelevant because the researchers were focused on the "wrong problem" and "once the correct problem was addressed the solution (the hybrid screw) was apparent and obvious. The combination of the best features of the ASD and Type 17 screws was a step that ITW embarked upon only after years of failed attempts; it was not something the inventor was directly led to try, nor did he even have the expectation it would succeed. It was, in short, an innovative breakthrough. 27 The respondents' argument in substantial part suffers from the hindsight bias warned against by the High Court. The fact that previous researchers were focusing on the wrong problem is of course only apparent in retrospect. Evidence of contemporaneous views, on the other hand, indicates that researchers focused on other approaches to the problem precisely because the so-called "obvious" solution of the hybrid screw was considered at the time to be not only not obvious, but perhaps even impossible. In Lockwood 81 ALJR at 1095, the High Court said that the question whether the combination of known prior art "is inventive will turn on what a person skilled in the relevant art, possessed with that person's knowledge, would have regarded, at the time, as technically possible in terms of mechanics, and also as practical. " (Emphasis added. According to the cases the commercial success of an invention may contribute to the conclusion that it involved an inventive step. Initially, however, not much could be made of secondary indicia. In Firebelt Pty Ltd v Brambles Australia Ltd [2002] HCA 21 ; (2002) 76 ALJR 816 the High Court, by reference to the judgment of Laddie J in Haberman v Jackel International Ltd [1999] FSR 683 , 699 accepted that secondary indicia such as commercial success should be approached cautiously. As Laddie J said: "[I]t is sometimes possible to make large profits by selling an obvious product well. " But the law has moved on. In Lockwood 81 ALJR at 1096 , the High Court referred with approval to the post Graham v John Deere Co 383 US 1 (1966) line of cases in the United States for the proposition that "the enquiry into secondary considerations of non-obviousness has been treated as being an important enquiry which must be taken into account because prior art cannot be evaluated in isolation. " (Emphasis added. In Graham, the Supreme Court certainly approved the use of secondary criteria as part of the enquiry into non-obviousness. The Supreme Court said (at 17-18): "[S]econdary considerations ... might be utilised to give light to the circumstances surrounding the origin of the [invention] ... As indicia of obviousness or non-obviousness, these enquiries may have relevancy. " (Emphasis added. ) But, as was made plain in a later decision of the Supreme Court, commercial success cannot establish patentability by itself: Sakraida v Ag Pro Inc [1976] USSC 133 ; 425 US 273 , 282-283 (1976). 30 The High Court has side-stepped the many critics of the post- Graham approach (see eg Moy's Walker on Patents (2nd ed, 2007) SS 9.62) and "upped the ante" by conferring on secondary criteria generally, and commercial success in particular, almost the status of proof of non-obviousness. Surely this is going too far. Unless there is actual evidence of invention, patentability cannot be made out. In this regard, secondary considerations such as commercial success are, at best, but factors which may be taken into account, and even then their relevance will vary. In no event should they be determinative factors, as some US cases suggest. 31 Giving criteria such as commercial success such a large role to play will fundamentally alter patent litigation. To prove commercial success the patentee will call evidence of market share, growth of market share, or displacement of existing prior art devices. The patentee will also be required to show that this success was due to the merits of his invention and not to other factors, such as advertising or significant sales efforts. Put another way, the probative value of secondary considerations, such as commercial success, must depend on the nexus between the criteria and the invention. The problem is that a good deal of trial time will now be taken up with attempting to demonstrate that nexus. Not only will we have evidence from the usual passing parade of scientists, chemists and engineers, we will now have jobbers, advertising executives and behavioural scientists. Those that bear the cost of litigation may not think this to be a useful development. 32 It is now convenient to turn to the question of infringement. 33 Development of the respondents' screws began in about July 2000 in Taiwan, with the first order for production quantities of Clearfix fasteners being delivered in February 2002, well before the commercial launch of the Zips screw in December of the same year. For this reason, no doubt, ITW did not contend that the developers of the respondents' fasteners had copied the patent in suit in creating their screws. In any event, for the respondents' screws to infringe the Zips screw patent, ITW must show no more and no less than that the respondents' screws possess each and every one of the essential features of the relevant claims of the Zips screw patent. Populin v HB Nominees Pty Ltd (1982) 59 FLR 37, 42; Olin Corporation v Super Cartridge Co Pty Ltd [1977] HCA 23 ; (1977) 180 CLR 236 , 246. 34 ITW alleges that the respondents' fasteners infringe several claims of the Zips screw patent, but the heart of the case boils down to a dispute over whether the respondents' screws in fact possess one of the essential features of the claims of the patent in suit. Claim 1 describes a screw "for fastening metal sheet to timber" with the relevant essential features of (1) a shank tapering to the drilling tip (ie, narrowing in diameter as one moves toward the tip); and (2) a thread which is formed on the shank and extends from adjacent the drilling tip rearwardly to beyond the section of the shank in which the flutes are formed. ITW contends, and the respondents deny, that the respondents' screws possess both of these features. 35 It is convenient to focus first on the term 'taper' found in the first disputed integer. Initially, the existence of a taper in the respondents' screws was hotly contested. It is common ground that such a taper, if it exists at all, is not visible to the naked eye. A substantial part of the evidence was directed to the existence and extent of the taper. The dispute between the experts was resolved when the respondents' screws were submitted for measuring to Thales Australia's metrology laboratory, which maintains some of the most sophisticated measuring equipment to be found in Australia. Even the use of this equipment produced differences in the results of the tests. One thing, however, turned out to be absolutely clear. That is that the "taper" of the respondents' screws, that is the reduction of the thread root diameter to the point at which, on my contention, the drill tip begins, is in the order of 0.04 mm to 0.07 mm although at some point the reduction is about 0.12 mm. That is to say, the reduction in the thread root diameter is in the hundredths of a millimetre. The question in issue is whether a reduction in the diameter of the respondents' screws of that magnitude is, relevantly, a taper. 36 The respondents submit that the reduction in diameter (a taper of sorts) is not legally cognisable both because it is so miniscule and because it conveys no functional advantage. It is to be hoped that common sense does not stop at the Court door. ... The Respondents' fasteners have a different configuration and work entirely differently to the fasteners described [in the ITW patent]. 37 According to the Oxford English Dictionary the literal definition of the verb 'taper' is, in its intransitive form, "to narrow or diminish gradually in breadth or thickness towards one end; to grow smaller by degrees in one direction". When used as an adjective, "taper" is defined as "diminishing gradually in breadth or thickness towards one extremity ...; becoming continuously narrower or more slender in one direction; tapering". When used as a noun, "taper" is defined as "a spire or slender pyramid; a figure which tapers up to a point" or "anything that gradually diminishes in size towards one extremity, as a tapered tube". If the literal meaning is applied to the claims this suggests that all the invention requires is any reduction however slight in diameter along the shank of the screw to the drilling tip. 38 In my view, however, the true question is not whether there is a taper according to the dictionary meaning of the word. The taper in the screw has a purpose. The evidence shows that once the Zips screw penetrates metal and drills into wood, the threads engage to pull the screw into the wood as the pointed drill tip and taper work to force the timber apart. When the screw is removed, the displaced wood tends to reoccupy its original space. In other words, the roughly 0.3 millimetre taper of the Zips screw (which is visible to the naked eye) is an essential feature because it aids the screw in being pulled into the wood. 39 In contrast, the respondents' evidence (which I accept) shows that their screws work by a different mechanism: they simply drill a hole into the wood of the same diameter as the shoulder of the drill tip end of the screw. That is to say, the screws work by boring out the timber such that, if they are removed, there is no displaced timber to fill or reoccupy the space; they do not rely on a taper to draw the screw in but instead bull their way into the wood. 40 This finding is not consistent with the evidence of ITW's expert, Dr Collinson. He said that the taper in the respondents' screw does play a similar role to that of the taper in the Zips screw in the fastening process. But for reasons I will now explain I did not find his evidence to be persuasive on this important point. 41 First, his evidence that the taper in the respondents' screw had the same functional significance as that found in the Zips screw was not unequivocal. Dr Collinson began by conceding that where the taper of a screw is less than 0.3 mm, the fasteners tend to perform like a metal drilling point and bore a hole in the timber, unlike a tapered Zips screw, and that performance or function in the Zips sense "trails off severely with less" taper. 42 Although Dr Collinson attempted to maintain the position that the taper in the respondents' fasteners was not so minimal as to go past the "breakpoint" at which the taper has no functional significance, I am not satisfied that this view held up under cross-examination. First, Dr Collinson was asked to accept that, assuming that the respondents' fasteners were advanced into wood at an infinitesimally slow rate, they would bore a hole into the wood of the same diameter as the shoulder of the drill tip end of the screw. After being pressed, he did accept this. However, obviously a screw is not affixed at an infinitesimally slow rate in real life, so the question was whether Dr Collinson would accept that the same process occurred when the rate of advancement was increased. [A]: [I] have taken fasteners into hard timber and for sake of comparison tried to compare their performance by putting them in infinitesimally slowly. As they go in --- we've been talking a lot about the root diameter of the screw. When it's spun at a point, because of the threads there are[,] well, they're also touching the timber. The further the screw goes in, the more timber is pushed aside, moved around. With the threads, it can't escape the hole and so it just builds up and builds up, and it eventually grabs and drives itself home into the hole; the threads engage. [Q]: Yes. But that is the threads doing that work; do you accept that Dr Collinson? [A]: It's the function of the threads to pull it into the hole, yes. [Q]: It's not any part of the diametric shaft of the fastener after the shoulder has entered the piece that is doing the work that you have just described? [A]: I believe the taper is affecting the way the threads function. [Q]: Well, the next point I will put to you, Dr Collinson, is that for the taper on the respondents' fasteners, as you describe it, to have any effect analogous to the taper on the [ITW] fasteners ..., then the taper must be at the leading end of the screw, otherwise the analogy doesn't work? [A]: I've tested the fasteners into timber, and I believe they work very well. And I've been through my explanation of why I believe that happens. [Q]: But leave aside whether they work, Dr Collinson. For the analogy,... the taper ... has to be identified as a taper at the leading end of the screw, namely at the furthermost point forward of the screw? [A]: No, I don't believe so. [Q]: Otherwise there is just no analogous comparison? [A]: I believe that the taper performs the function. As this exchange shows, Dr Collinson's answers were unsatisfactory. In both this and other exchanges, each time Mr Hess led him to the point of a contradiction or inconsistency (in this case, that it was the threads rather than the taper doing the work), Dr Collinson would retreat into bald assertions such as "I believe the taper is affecting the way the threads function" or "I believe the taper performs that function.". 43 To some degree, these bare assertions were clarified on re-examination. What was not remedied, however, was a more general problem with Dr Collinson's evidence. Dr Collinson's reasoning was infected or underpinned by a faulty syllogism in that his assertions that the "the taper [in the respondents' fasteners] performs the [same] function [as a fastener described by the Zips patent]" were based on the fact that the respondents' fasteners "work very well. " In other words, Dr Collinson appeared to be proceeding on the basis that: (1) ITW's fasteners perform well; (2) the respondents' fasteners also perform well; (3) therefore, the respondents' fasteners must perform in the same way as ITW's fasteners. [The Court]: In a functional sense? [Q]: In any functional sense at all? [A]: No, I would disagree. I think the performance of the [respondents'] product and the commercial success shows its significance. Again, an attempt was made to improve this evidence during re-examination, but resulted only in the clarification that in "performance" Dr Collinson was speaking of the "physical performance of the product. " However, as Mr Hess suggested in his questioning, that the respondents' fasteners perform well does not of itself prove they have a functionally significant taper. To put it bluntly, Dr Collinson's reasoning is unacceptable as the basis of expert opinion in the absence of a foundation that no fastener could adequately affix metal to timber without a taper (for only in such a case could an inference be drawn, without more, from the performance of a screw to the existence of a taper). No such foundation was laid here. It is thus unsurprising that when his opinion was subjected to scrutiny, Dr Collinson retreated into assertion and equivocation. 46 A second and related evidentiary point is the lack of testing and measurement to support Dr Collinson's opinion regarding the functional significance of a taper in the respondents' fasteners. Assuming for the sake of argument, and contrary to what I have in fact found, that his evidence on this point were otherwise satisfactory, I would nevertheless give it little weight. 47 Mr Caine SC accepted that Dr Collinson did not take any measurements. However, it was submitted that he did perform tests on the respondents' fasteners. The primary basis for this submission, apart from the passage earlier quoted, is the evidence of Dr Collinson given during cross-examination as follows: "What I have done is tested I guess the respondents' screws into timber and also other screws which have a large untouched drill point and tapered threads behind it and found that they did perform into timber very well. " (Emphasis added. ) As the emphasized portion suggests, this evidence was not particularly compelling even in its own right, having been delivered by Dr Collinson in a manner lacking in either conviction or confidence, and suggesting that the focus of testing was in fact screws other than those of the respondents. 48 This became clear when the evidence is considered in context. Immediately following the quoted passage, Mr Hess continued to press the point by essentially repeating the question whether Dr Collinson had done any measurements to support his observations. Dr Collinson responded: "What I have done is manufactured fasteners of that kind and noticed that they performed very well into timber. " (Emphasis added. It's reaching the limit of where our current Zips fasteners will actually perform and so in a way to test the performance we've manufactured fasteners as a test to compete with theirs which have a wider area of untouched drill point and the taper behind them and they're performing extremely well. I have also tested other fasteners and they don't perform. (Emphasis added. First, the tests referred to by Dr Collinson were concerned with the performance of ITW's own screws, not the respondents' screws. Second, "the best data" backing Dr Collinson's observations as to the functional significance of the taper in the respondents' screws did not involve testing of the allegedly infringing fasteners ; rather, it involved testing fasteners of Dr Collinson's own manufacture, which he considered to be similar to the respondents' fasteners. While these fasteners may well have been similar to the respondents', the failure to directly test the allegedly infringing screws means that an additional evidentiary foundation was required to be laid in order for this so-called "best data" to be relevant--namely, that the substitute fasteners were in fact similar to the respondents' fasteners in all relevant respects. No such evidence was forthcoming. 50 Moreover, given the hesitant, cursory, and qualified manner in which the reference to testing of the respondents' fasteners was made, I consider it likely that the only data backing Dr Collinson's observations involved tests of screws other than the allegedly infringing screws made for other purposes than the purpose of testing such screws' functions. Even accepting that he did carry out some tests on the respondents' fasteners, I am not satisfied in any event that Dr Collinson's opinion as to the functional significance of a taper in the respondents' fasteners is supported by adequate testing or measurement, and thus I give it little weight. 51 In short, I find that ITW failed to establish to the requisite standard that there is a taper in the respondents' screw--however defined, described, or measured--that performs any function at all, much less the same function as performed by the taper described in the patent in suit and embodied in the Zips screw, namely that of pulling the screw into the wood. 52 Having found as a matter of fact that whatever microscopic taper may exist in the respondents' screws conveys no functional advantage, it remains to consider the legal significance of that finding. In Improver Corporation v Remington Consumer Products Ltd [1990] FSR 181 , 189 Lord Hoffman, elaborating on the purposive approach to patent construction outlined by Lord Diplock in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183 , 242 identified a set of three questions to serve as guidelines in determining whether a skilled addressee of a patent in suit would understand a subsequent product as infringing the claims of a patent. These questions are equally applicable under the Australian legislation: Sachtler GMBH & Co KG v RE Miller Pty Ltd (2005) 65 IPR 605 , 613-614. 53 Most relevant for present purposes is the rule of thumb that a variant that has a material effect on the way an invention works will be deemed not to infringe: Improver Corporation [1990] FSR at 189. Because the microscopic taper of the respondents' screws serves no useful purpose and because the respondents' screws fasten metal to timber by a different mechanism, the respondents argue their screws are a materially different variant from the Zips screw described in claim 1 as possessing the essential feature of a tapered shank. 54 I should emphasize that the rule of thumb described in Improver and relied on by the respondents is just that--a guideline to aid in implementing the purposive approach to patent construction rather than a legal test in itself. On the whole, the judges appear to have been comfortable with the results, although some of the cases have exposed the limitations of the method. When speaking of the 'Catnic principle' it is important to distinguish between, on the one hand, the principle of purposive construction which I have said gives effect to the requirements of the Protocol, and on the other hand, the guidelines for applying that principle to equivalents, which are encapsulated in the Protocol questions. The former is the bedrock of patent construction, universally applicable. The latter are only guidelines, more useful in some cases than in others. I am bound to say that the cases show a tendency for counsel to treat the Protocol questions as legal rules rather than guides which will in appropriate cases help to decide what the skilled man would have understood the patentee to mean. 55 To put the point another way (a way which illustrates the connection between the Catnic and Improver cases alluded to by Lord Hoffman in Kirin-Amgen --namely, that the Protocol questions are merely proxies or a short-hand version of a full Catnic analysis that a court may employ to save time when considering alleged equivalents), I return to the basic question which requires resolution--how the term "taper" found in claim 1 of the patent in suit should be construed--and approach it from first principles. For example, should taper be construed literally to mean a narrowing in the diameter of the shaft? Or should it be construed purposively to mean any narrowing, no matter how great or small, provided the narrowing has a function or purpose similar to that of the taper described in the claim and found in the Zips screw, that is, to draw the fastener into the wood? 56 When framed in this way, the answer to the question becomes obvious, given that literalism as an approach to patent construction was long ago rejected in favour of the purposive approach: Kirin-Amgen [2005] 1 All ER at 679-684 (describing the history of the US and English rejection of a literalist approach to patent construction in favour of a purposive approach in England and the doctrine of equivalents in the US). As explained by Lord Hoffman in Kirin-Amgen , the goal of the purposive approach outlined by Lord Diplock in Catnic and now followed in this country is to give "fair protection to the patentee" (by avoiding the result of a literal approach under which a potential infringer might copy the mechanism of an invention and yet escape liability by making an "immaterial variation"--for example, by making a small change in the taper of a screw that does not affect the screw's function yet causes the variant to fall outside the literal meaning of the patent's terms) on the one hand while still recognising some limits on the scope of the monopoly on the other: Kirin-Amgen at 682-683 (noting, in the course of describing the history of the judiciary's struggle to police the boundaries of patent law, that "once the monopoly had been allowed to escape from the [literal] terms of the claims, it is not easy to know where its limits should be drawn"). 57 Returning to the instant case and applying the principles enunciated by Lords Diplock and Hoffman, it is clear that the term "tapered" in the patent must be understood by focusing on the purpose or function of the taper. In other words, if the purpose of the taper is to draw the screw into the wood, the term "tapered" in claim 1 must be construed to encompass any narrowing in the diameter of a fastener's shaft, regardless of how great or how small, that serves to draw the fastener in. Because the microscopic narrowing in the diameter of the shaft of respondents' fasteners does not serve that purpose, the respondents' screws cannot be said to be "tapered" in the manner described in claim 1. Not possessing this "essential feature" of the claim, it follows that the respondents' screws do not infringe. 58 For the foregoing reasons, I would dismiss both the application and the cross-claim. Given that each side has succeeded and failed in more or less equal measure, my present view, subject to what the parties may have to say, is that there should be no order as to 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 Finkelstein. | validity construction of claims novelty combination patent inventive step hindsight bias commercial success secondary considerations as proof of non-obviousnessness infringement functional advantage purposive construction improver questions "drilling tip", "taper" patents words and phrases |
That company is one of a number comprising the Timbercorp group. The group promoted itself as Australia's leading plantation investment managers. It operated that business mostly through registered managed investment schemes. The Timbercorp group collapsed earlier this year and its operating companies were put into administration. Thereafter the creditors resolved that Timbercorp and several related companies be wound up. Mr Korda and Ms Chesser, who had been those companies' administrators, became their liquidators by virtue of s 446A of the Corporations Act 2001 (Cth). The point that has arisen in the liquidation is whether the so-called In Re Lundy Granite Co principle (sometimes known as the liquidation expenses principle) applies to rent which is accruing under a lease entered into before the liquidation. The essential facts are these. In January 1999 a managed investment scheme known as the 1999 Timbercorp Eucalypts Project, the purpose of which was to conduct forestry operations, was registered pursuant to s 601EB. Timbercorp was appointed as the responsible entity of the scheme. In February 1999 Timbercorp issued a prospectus offering interested persons the opportunity to participate in the scheme. The minimum investment was $11,250. Approximately 3,243 persons took up the offer and became scheme members. (In the scheme documents the members are referred to as "Growers". ) The scheme's forestry operations were conducted on 28,545 hectares of land, most of which was leased from third parties (there are 98 third party leases) and the balance from other Timbercorp companies (there are 34 such leases). Several third party leases are with the defendant, Plantation Land Limited. Those leases are in common form. For the most part the sub-lease contains provisions that mirror those found in the head-lease. For present purposes it is necessary to note only that by cl 5 of the sub-lease each grower is required to pay annual rent on the first 31 May after the date of execution of the sub-lease and each 31 May thereafter during the term of the sub-lease. By a management agreement dated 30 June 1999 each grower engaged Timbercorp first as an independent contractor to carry out plantation services in accordance with a management plan and, second, as an agent to harvest, sell or otherwise account for the wood derived from the trees produced as a result of the scheme's operation. In turn Timbercorp entered into agreements with several forestry contractors by which it contracted out the majority of its obligations under the management agreement. On 4 December 2003 the Australian Securities and Investments Commission (ASIC) granted relief (under s 601FL) to permit Timbercorp to retire as responsible entity and appoint its wholly owned subsidiary, Timbercorp Securities Limited (TSL), in its place. The change of entity took effect on 23 March 2004. Following the change various agreements relating to the scheme, including the management agreement and some of the plantation services agreements, were "novated", with the consequence that TSL assumed the obligations that initially had reposed in Timbercorp. The administrators were appointed to Timbercorp and TSL on 23 April 2009. At the time the rent due to PLL for the year ending 30 June 2009 was paid. But because Timbercorp was hopelessly insolvent it could not pay the instalment of rent that fell due on 1 July 2009. Accordingly the administrators wrote to PLL on 15 June 2009 seeking a "standstill" in relation to the rent. This may benefit all stakeholders including the grower investors, landlords, trade creditors, shareholders and financiers of the Companies and the rural communities who are reliant on the continuation of the Projects. Our clients are willing to consider any proposal put forward by the Administrators concerning forestry assets and will keep an open mind concerning alternate arrangements. However, our clients do intend to issue a notice of termination under the leases if rent due on 30 June 2009 is not paid. In this regard, we ask you to please note that there is a 30 day notice period under the leases with PLL and accordingly, there remains a period of approximately 5 weeks during which it would be open to the Administrators to resolve some alternate arrangements with our clients, should the preservation of the leases be an important element of any such arrangements. In due course, over half the growers paid the rent and the management fee. Following their appointment, the liquidators wrote to PLL advising that they, the liquidators, did not intend to adopt or ratify the leases or use or occupy the leased land. As Liquidators, we again advise that we will not and do not adopt or ratify the Leases. The Liquidators will not enter onto the land or perform any of the obligations under the Leases. However, the Liquidators currently are of the view that they have not personally incurred any cost or expense in the liquidation for using or occupying the land. The Liquidators acknowledge that lessors may take a different view of the law. They have, however, continued to collect the rent and management fees the growers had been requested to pay. The liquidators have given consideration to disclaiming the PLL leases. They do, however, face a dilemma. No doubt it would be prudent to disclaim the PLL leases to stop the rent from accruing. But the growers may be adversely affected by a disclaimer. There is the possibility that the leases, along with other scheme assets, could be sold. It is also possible that another organisation will take over the management of the scheme. In either event the growers might salvage something out of the mess they are in. Unsurprisingly then, there have been discussions with third parties about selling assets and finding an alternative scheme manager. Those discussions commenced well before the appointment of the administrators, were continued by the administrators and are ongoing. Mr Korda explained that those discussions are still in their preliminary stages. He said they have not yet reached the status of "negotiations". Mr Korda put it this way: "We have a number of expressions of interest in relation to the forestry assets, be they maybe a purchase of all the assets, a reconstruction of MIS schemes, etcetera. So, we've been in contact with many of those parties, but we haven't commenced what I would say are our expression of interest campaign or negotiations". While Mr Korda hopes soon to begin the process of seeking formal expressions of interest, no decision in that regard has been taken. Mr Korda said: "We haven't got to a final conclusion of where we should be, but I --- sitting here today, I would think we would go with an expression of interest campaign ... shortly, but that requires us to ... understand where we are on the leases ...". Now, having set out the facts, I come to the question that was argued before me. The first instalment of rent under the PLL leases for the Annual Term ending on 30 June 2010 fell due on 1 July 2009 and has not been paid. The question is whether that rent should be treated as an expense incurred by the liquidator in carrying on Timbercorp's business (within the meaning given in s 556(1)(a)) or as an expense "properly incurred [by the liquidator]" (within s 556(1)(dd)) so as to give the landlord priority for the rent. I should mention that it is not in dispute that if the rent had fallen due before liquidation, the landlord's only recourse would be to prove its debt like any other creditor. The proof might include a claim for the whole of the future rent: see the cases collected in Brash Holdings Ltd (Admr Appt) v Katile Pty Ltd (1994) 13 ACSR 504 , 517; c/f Re New Oriental Bank Corporation (No 2) [1895] 1 Ch 753. The position in relation to rent that has accrued after the commencement of the liquidation may be different. In several cases decided in the 19th century landlords were permitted to distrain for post liquidation rent. In In re Progress Assurance Co; ex parte Liverpool Exchange Company [1870] LR 9 Eq 370 , 372-373, Lord Romilly MR said that a distress after the winding up would be allowed where the company "has retained, not merely formal, but actual possession of the property for the purpose of carrying on the business of the liquidation ...". In In re Lundy Granite Co; ex parte Heavan [1871] LR 6 Ch App 462 , 466, James LJ said : "In some cases between the landlord and the company, if the company, for its own purposes and with a view to the realisation of the property to better advantage, remains in possession of the estate, which the lessor is therefore not able to obtain possession of, common sense and ordinary justice requires the Court to see that the landlord receives the full value of the property. He must have the same rights as any other creditor, and if the company chooses to keep the estates for their own purposes, they ought to pay the full value to the landlord, as they ought to pay any other person for anything else, and the Court ought to take care that he receives it". The applicable principles were rather more fully stated by Lindley LJ in In re Oak Pits Colliery Company (1882) 21 Ch D 322 , 330. There he said: "1. If the liquidator has retained possession for the purposes of the winding-up, or if he has used the property for carrying on the company's business, or has kept the property in order to sell it or to do the best he can with it, the landlord will be allowed to distrain for rent which has become due since the winding up ... But if he has kept possession by arrangement with the landlord and for his benefit as well as for the benefit of the company, and there is no agreement with the liquidator that he shall pay the rent, the landlord is not allowed to distrain ..." [citations omitted]. The point of these cases is that distress for rent is allowed when the liquidator has "elected" to retain possession of the leased land: In re Silkstone & Dodworth Coal and Iron Company (1881) 19 Ch D 158 at 161 per Fry J; see also In re ABC Coupler and Engineering Co Ltd (No 3) [1970] 1 WLR 702 per Plowman J. Whether or not the liquidator has elected to retain possession (ie whether or not he has decided to do so) may involve a subjective assessment of the state of mind of the liquidator but, more usually, will be determined objectively based on what the liquidator has said and done: In re Downer Enterprises Ltd [1974] 1 WLR 1460 , 1466. The principle (no longer confined to distress) was discussed at length by the House of Lords in In re Toshoku Finance UK plc [2002] 1 WLR 671. Lord Hoffman, with whom the other Law Lords agreed, said that the early cases establish that debts arising out of pre-liquidation contracts, such as leases, whether they accrue before or after the liquidation, should prima facie be proved in the liquidation. They are debts "crucially different" from normal liquidation expenses, which are incurred after the liquidation date and cannot be proved. But as Lord Hoffman explained (at 680) "on equitable grounds, the concept of a liability incurred as an expense of the liquidation [may] be expanded to include liabilities incurred before the liquidation in respect of property afterwards retained by the liquidator for the benefit of the insolvent estate". This was not to say that a liability has been incurred as an expense of the winding up. Lord Hoffman said (at 679) that in that circumstance it is "just and equitable ... to treat the rent liability as if it were an expense of the winding up" and to accord it the same priority". So, the issue comes down to this: Have the liquidators of Timbercorp since their appointment elected or chosen to retain possession of the leased land for the purposes of the liquidation. In my opinion they have not. What the liquidators are presently doing is considering whether such a decision should be made. Perhaps they will decide to retain the leased land. Or they may resolve to disclaim it. The decision will, no doubt, depend upon the attitude of the lessors, the views of the growers and the content of legal advice the liquidators are in the process of receiving. But at this point the liquidators' inquiries are incomplete and they are not in a position to make, and have not made, a decision. If so minded, PLL could force the liquidators to hurry up. It could do that by serving a notice under s 568(8) requiring the liquidators to elect within 28 days (or any longer period allowed by the Court) whether or not to disclaim the leases. If they elect not to disclaim it is likely that the rent accruing thereafter will be an expense of the liquidation: see Re HH Realisations Ltd (1975) 31 P&CR 249. In the meantime there will be a declaration that the rent that fell due for payment under the PLL leases on 1 July 2009 is not an expense incurred in the liquidation, or by the liquidators, of Timbercorp. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | insolvency winding up liquidator expenses incurred in winding up priority of payment leases rent accruing before and after winding up order whether liquidator has retained possession of land for the purposes of liquidation whether rent should be treated as an expense incurred by the liquidator scope of the liquidation expenses principle corporations |
2 The contraventions and tortious conduct are said to be constituted by the production and distribution of a series of TV programs entitled 'Mythbusters' ('the Mythbusters TV show') and three books ('the spin-off books'). The spin-off books were brought into existence as a result of the popularity of the Mythbusters TV show. They contain written and pictorial representations of the content of various episodes of the Mythbusters TV show. The spin-off books are entitled, respectively: Mythbusters: The Explosive Truth Behind 30 of the Most Perplexing Urban Legends of All Time , Mythbusters: Don't Try This at Home , and Busted . 3 The first, second and sixth respondents ('Beyond' or 'the Beyond interests') are members of the 'Beyond' group of Australian companies which produced the Mythbusters TV show. 4 The third respondent (Discovery Channel) is the American corporation to whom the Mythbusters TV show was sold by Beyond. It distributed the TV show initially in the USA and later in Australia. 5 I shall describe the development of the Mythbusters TV show and its sale to Discovery Channel in due course. For the moment it is sufficient to say that Discovery Channel accepted the concept for the show in about October 2001. The show went into production in June 2002 and was first screened on TV in the USA on 23 January 2003. 6 The fourth and fifth respondents (SBS and Foxtel) are Australian corporations which have screened the Mythbusters TV show in Australia. Foxtel first screened the Mythbusters TV show on pay television in Australia on 27 September 2004. SBS did so, on free-to-air television, on 3 January 2005. 7 The applicant, Andrew Knight is also known as Bowvayne, or sometimes simply as Bow. He is, amongst other things, an author of children's books. He claims the right to the name 'Mythbusters' as a result of his own use of it in various of his books and in other ways. 8 Mr Knight alleges that the respondents have, by their conduct, misrepresented that the Mythbusters TV show and the 'spin-off' books are in some way endorsed by or connected with him ('the misrepresentation'), and that he has suffered loss and damage as a result. 9 Three of Mr Knight's books have the word 'Mythbusters' in their title ('the Mythbusters books'). They are: Mythbusters: First Cases ; Mythbusters: Nutcases ; and Mythbusters: Real-Life Adventures in the World of the Supernatural . They were published in 1991, 1993 and 1996 by Dynatron Productions, Elfshot Productions and Puffin Books respectively (it became clear from the evidence that the first two books were really self-published by Mr Knight). 10 Mr Knight is the self-styled leader of the 'Mythbusters team' an eclectic group who pursue mystery, myths, ghosts and goblins to various parts of the world. They are in the grand English literary tradition of jolly children who have lots of scrapes and see extraordinary things. But the Mythbusters are real and they're grown men who don't have to be home in time for tea. He feels greatly aggrieved by the entry to the TV market of a show with what he regards as his name 'Mythbusters'. 12 Over the period from about 1993 Mr Knight made a series of efforts, in the UK and in Australia, personally and through others, to interest a TV broadcaster or production house in the development of a TV series, featuring himself and his Mythbusters team, using material and stories of the kind in his books. None of his efforts, or those on his behalf, resulted in any agreement to fund the production of such a series. 13 One of the production houses to whom an approach was made was Beyond. That fact, and certain other circumstances that I shall discuss, provided the foundation for an allegation by Mr Knight that his ideas for a TV series had been taken by Beyond and used to its own advantage. 14 Despite Mr Knight's ambitions for his own TV show, his belief that the name Mythbusters was his commercial property and the fact that in about 2000 he both registered it as a business name in South Australia and obtained the domain name 'mythbusters.com.au' (both of which registrations were allowed to lapse in 2003) he did not, prior to the events which led to this case, make any application to register 'Mythbusters' as a trade mark. Accordingly, he does not have available to him, in the present proceedings, the statutory protection provided by the Trade Marks Act 1955 (Cth). The plaintiff must thereby be damaged to secure an effective remedy. 16 No actionable misrepresentation can occur unless the plaintiff has a relevant reputation in the jurisdiction ( Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302) (' Conagra '). Reputation may be established in advance of actually trading in the jurisdiction (e.g. by advertising or declaration of intent to trade) but a sufficient reputation to establish likelihood of damage, as a matter of fact, must be shown ( Conagra 33 FCR per Lockhart J at 343). 17 The date at which reputation is to be assessed is the date upon which the impugned conduct commenced ( Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd (1980) 55 ALJR 333 at 338). 18 In an action for contravention of s 52 of the TP Act, assuming that the other elements of the case are proved, actual damage to the plaintiff or applicant need not be established. It is sufficient to show misleading or deceptive conduct, or conduct that is likely to mislead or deceive. 19 In a case, such as the present, where both causes of action are founded on the same allegations, there will be little occasion to make a distinction between them, unless damage cannot be shown. 20 Where the case is not one about direct representations to identified persons evaluation of the conduct alleged to constitute a misrepresentation, and be misleading and deceptive, requires identification of a class of persons to whom the representation is made, some objective attribution of characteristics to the 'ordinary' or 'reasonable' members of that class and evaluation of the quality of impugned conduct by reference to the likely reactions of the members of the class thereby established ( Campomar Sociedad, Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 ( 'Campomar' ). 21 In such a case the Court should itself make the necessary evaluation. The test is an objective one ( Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 ( 'Taco Bell' ) per Deane and Fitzgerald JJ at 202; Camponar 202 CLR at [102]). 22 When evidence is relied upon to suggest that identified persons within the class have actually been misled it is necessary to inquire why any misconception has arisen so that a determination may be made whether it is due to misleading or deceptive conduct on the part of a respondent or for some other reason ( Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd [1978] HCA 11 ; (1978) 140 CLR 216 ( 'Hornsby Building Information Centre') per Stephen J at 228; Taco Bell 42 ALR at 202-3; Campomar 202 CLR at [98]). At the time the Mythbusters TV show was first screened in Australia by either Foxtel or SBS the spin-off books had not been published. The causes of action relating to the spin-off books were added by amendment to the Statement of Claim during the course of the proceedings, and require separate consideration. Accordingly, when I come to discuss the competing cases in more detail, I will deal first with the misrepresentation alleged to have been made by the screening of the Mythbusters TV show. I shall later deal separately with the spin-off books in their own right. The Further Amended Statement of Claim does not, and nor did any of its predecessors, identify any particular group to whom a relevant misrepresentation is alleged to have been made. 25 It is not contended that Mr Knight's case is made out by reference to direct representations made by the respondents to identified persons. It is therefore necessary to identify a class (or classes) of persons to whom the representations were alleged to have been made before evaluating the content and quality of the suggested representations, the reliability of the implication relied upon and the likely effect of the representations upon members of the identified class. 26 The case concerning the Mythbusters TV show, as developed by the evidence and submissions, was not limited to members of the general television viewing audience. When Mr Knight's case was opened, Ms Chrysanthou advanced a contention that the persons to whom the misrepresentation was made were not limited to those who might watch the Mythbusters TV show as ordinary consumers. There was, it was argued, a second group made up of 'trade' consumers. The first group is the ordinary consumer who watches television and/or reads books. The second group comprises members of the television and book publishing trade. In that context the essential attribute of members of the relevant class is that they watch television. I shall describe this group as 'TV broadcasters and television production executives'. It includes the television broadcasting stations which might purchase a TV show or series and the executives of both the broadcasting stations and also the production houses which develop and market such shows or series. 31 Because there are two groups of persons to whom the misrepresentation is alleged to have been made by the Mythbusters TV show, and their characteristics differ, it will be necessary, to some extent, to deal with them separately. In particular, different issues arise concerning reputation and the likelihood of deception. To begin with, although accepting that Mr Knight has some reputation as an author of children's books they deny that he has any demonstrated reputation in Australia amongst members of the television viewing public. The absence of reputation, it is contended, renders unnecessary any enquiry concerning deception so far as this group is concerned. Secondly they say that, in any event, no deception of this group was established or should be inferred. 33 As to TV broadcasters and television production executives who are potential purchasers of Mr Knight's intended TV series the respondents say members of this group would never be deceived into thinking the Mythbusters TV show was associated with Mr Knight because the rigour of the scrutiny required for any planned TV series would necessarily dispel any misconception or assumption which could conceivably arise from the use of the name 'Mythbusters'. 34 The respondents make a further answer also. They contend that the name Mythbusters is descriptive --- it is a catchy description of the content of the Mythbusters TV show. By way of support for this contention they point to the evidence, which I shall later describe, about how the name 'Mythbusters' came to be adopted for the Mythbusters TV show. This evidence, it is contended, makes good their proposition that the name is, and was chosen because it is, essentially descriptive of the content and style of the Mythbusters TV show itself. In those circumstances, and in the absence of any statutory protection, it is necessary for Mr Knight to establish, they say, that the word 'Mythbusters' has acquired a secondary meaning which is distinctive of his endeavours. They deny that this has happened. 35 So far as the spin-off books are concerned the respondents argue that the books are really incapable of being confused with Mr Knight's books. They are, by their style and content, so clearly and distinctively reflections of the Mythbusters TV show that no possibility for confusion, much less deception, in the minds of those who might purchase such books, can arise. 36 It is accepted that publication of the third spin-off book can be attributed to Beyond interests but they point out that the first and second spin-off books are not sold, published, or licensed for publication, in Australia by any of the respondents. They were brought into Australia for sale by other interests as permitted by s 44A of the Copyright Act 1968 (Cth). Such conduct the respondents say, if it is relevant at all, is not to be laid at their door. In effect his allegation was that the name 'Mythbusters' was deliberately appropriated by Beyond who had been put into possession of it, as an effective title for a TV series, by associates of Mr Knight during their endeavours to promote his plans for his own TV series. 38 Although it will be necessary to deal with this issue, at one level it represents a distraction from the real issues in the case. This is not a case where the outcome could turn ultimately upon the subjective position taken by the parties or the intentional misappropriation of the name 'Mythbusters', if that were established. The issues in the present case about the Mythbusters TV show must necessarily be resolved by a more objective examination of the effect of the respondents' conduct in producing, distributing and screening the Mythbusters TV show upon the likely perceptions of the two groups identified. Concentration upon allegations of intent risks masking the real issue for examination which is whether a conclusion should be reached that the use of the name 'Mythbusters' was in fact likely to deceive relevant consumers and as a result cause damage to Mr Knight's business, goodwill or reputation. as a musician) or to show the extent of those parts of his work that might evidence his general reputation internationally (e.g. book translations and sales in many other parts of the world). I accept that this is so, but that is no doubt because such matters are not relevant to his present causes of action. They are also properly viewed as works of fiction and the first Mythbusters book in fact describes itself as a novel in the 'About the Authors' section. The themes with which they deal are based in fantasy. 42 The first Mythbusters book was co-authored with Chris Strange. It contains three stories: The Pier Marine Monster, The Hamadryads and Clapham Wood. The authors place themselves at the centre of the stories. The first story concerns what is suggested to be 'an extremely rare species of dinosaur' which, after detection at Worthing Pier eventually 'sinks into the night-ocean like a stone' . 43 The second involves UFOs in the Carpathian mountains near the Czechoslovakian/Polish border. It is not inconceivable that these two well-known phenomena are one and the same thing. Is this something our scientists could learn from? No creature in human experience can be so small and so large at the same time' . 45 The second Mythbusters book also contains three stories: The Ghost and the Graveyard, The Roc and Clapham Wood Revisited. 46 The third Mythbusters book, published by Puffin, republishes three of the earlier stories (Clapham Wood, The Ghost and the Graveyard and The Roc) and adds a fourth --- Bunyips and Big Cats. 47 These three books represent, in Australia at least, the most public use of the term Mythbusters by Mr Knight. It is primarily on them that his reputation in Australia depends, directly or indirectly. 49 In 1988 he appeared on a TV program in the UK called 'Coast to Coast'. Thereafter he appeared on the same program in 1991 and 1992 and on (UK) Channel 4's 'The Big Breakfast' in 1993 and 1996. 50 I was asked to, and did, view relevant excerpts from the 1988 'Coast to Coast' program and the 1993 'Big Breakfast' program. The first excerpt was a short interview of about three minutes. Mr Knight was interviewed as a 'personality' in keeping with the apparent light entertainment genre of this program. The 'Big Breakfast' show excerpt, five years later, also appeared to be a piece of light entertainment with imaginary or contrived 'mythbusting equipment' being used to detect a 'spectral wolf'. 51 Mr Knight also made television appearances in Australia. He appeared on 'The Today Show' with Liz Hayes in 1991, 'Adelaide Today' with Jan Beazley in 1991 and 1995, on Foxtel's 'Klub House' in 1996 and on 'AM Adelaide' in 1997. The principal purpose of these interviews appears to have been the promotion of his books but he also relies on them in their own right to show that he had a reputation in Australia and was to some extent in the public eye. In 1992 he held a concert in the UK called 'Mythbusters and Friends Concert'. I know little about it except that tickets to the concert on 18 May 1992 cost [sterling]5 each. 53 There are in evidence in Mr Knight's case a series of newspaper articles published about him in the United Kingdom between 1988 and 1996. They relate to Mr Knight as a personality and to his literary efforts. 54 Reference was made in his case also to newspaper articles or references to him in Australia between 1991 and 2004 (of 14 such articles 8 were in the Advertiser in Adelaide where he resides a large part of his time). His books were promoted on radio (principally in 1995) and in 1996 the third Mythbusters book was promoted by its distribution to a range of magazines, radio stations, newspapers and journalists. 55 Mr Knight made a 'live' appearance at the Royal Adelaide Show in 1999, talked about his "experiences as a Mythbuster" and donated some books for sale for the benefit of The Spastic Centres. He gave talks at Australian schools in 1991, 1996 and 2000. In 2000 and 2003 he donated books to the Women's and Children's Hospital in Adelaide to be sold for fundraising purposes. 56 In 2000 students at Loreto College in Adelaide had a private screening of a demonstration video made the previous year which was intended to serve as a vehicle for promoting his ideas for a TV show, about which more is said in the following section. This video is available on Mr Knight's web site but has not been shown on television. She also suggested he was in negotiations towards a television series. (It might be noted in passing that although the first Mythbusters book bears a 1991 copyright date, she said it was to be published in the UK in mid-1993. Or they could take a team mythbusting --- there must be a White City Will-o'-the-Wisp they could investigate. MYTHBUSTERS: Nut Cases will follow in November to coincide with the release of the Mythbusters' theme song --- a television series is under negotiation for 1994. This was not the only example of such material. It is one of a number of suggestions in various letters written on his behalf that television programs were under active development or even in production. The evidence before me suggests that was not the case. Clearly it has potential but I feel it would need a considerable amount of further development before we could feel really confident with it. I hope we can transform its potential into exciting television. What makes Mythbusters unique is that we will actually capture monsters and ghosts on screen! The idea of a television program was included in the matters under discussion. In response I have to say that I could not possibly sign or agree to any proposal set in such general terms. Nevertheless Mr Llande promoted the idea of a television series to various people in the UK and Australia. 65 Mr Llande gave affidavit evidence in the proceedings. He confirmed the negotiations. He also deposed to promoting the idea of a Mythbusters television series with David Cowperthwaite (the Group Marketing and Sales Director of Channel 9 Australia) and Teresa Plummer-Andrews (Head of Children's Acquisition and Development at the BBC) at an international conference in 1994. They were each given a small brochure entitled 'Mythbusters --- The Adventure Continues! --- an idea for a television series based on the books by Bowvayne' and subtitled 'Mythbusters --- 13 x 26 minute series for children's television' . 66 This brochure includes a woolly mammoth logo incorporating the name 'Mythbusters', all of which is pictorially represented upon the form of key. Kick Screen's use of these devices in connection with its plans to market Mr Knight's ideas for a television series appears to have led to some discussion about who might be entitled to claim any rights in the designs. Consideration of that matter led to a letter of advice from one of Mr Knight's advisers in the UK, Mr Roger Palmer, to his agent, Ms Beth Macdougall dated 29 March 1994 in which the similarities and dissimilarities between the Kick Screen devices and those used in the Mythbusters books were discussed. However it is not a cheap option --- at least if carried out on a reasonably widespread basis. I would suggest that the moment has not yet come to do it --- at least on the strength of this; though if Bowvayne does want to register it and you would like to do so through me I will of course be happy to help. Prior to the occurrence of the matters that led to the present proceedings there is no evidence of any further consideration being given, either in the UK or Australia, to seeking registration of the name 'Mythbusters' as a trademark. 68 At about this time, 1994, the idea for a television production appeared to concentrate on the idea of a co-production with the BBC. At one stage thought was given to a co-production between the BBC and Mr Cowperthwaite's Banksia Productions in Australia, at another time between the BBC and Nickelodeon in the UK. However, none of the initiatives resulted in any agreement. 69 Things seemed more positive in April 1996. May I first apologise for the long delay in replying. I have been very tied up with the series Out of Tune which had its run extended at amazingly short notice! The budget too looks extremely competitive. Can you really do it for this price? My deadline is 15 April, and for this I would be keen to know how far you have progressed with Nickleodeon [sic] , and whether they are considering this as a co-production. (A contact name there would be useful too). 70 Later, negotiations began with the South Australian Film Corporation and an Australian production company, Rising Sun Pictures. Then, in 1997 it appeared that negotiations began in earnest with Mr Robert George of Bluestone Pictures Pty Ltd ('Bluestone Pictures'), another Australian production company. Bluestone Pictures was the corporate vehicle for a network of six successful Australian television producers. 71 There was discussion around this time between Mr Palmer, Mr Knight's agent Ms Macdougall and Bluestone Pictures about the extent to which Kick Screen might have a residual claim on any right to promote the idea of a TV series. He concedes that the Kickscreen [sic] deal is in limbo and accepts the fact that Bow will need to go elsewhere to get Mythbusters to the screen. Part of the reason appeared to revolve around differences in artistic and commercial priorities between Mr George and Mr Knight. Mr George thought any realistic project depended upon funding being available in response to favourable taxation treatment for the production of children's television programs, in particular children's drama. In order to qualify for these taxation arrangements certain conditions had to be met, both with respect to the storyline and by having children as the primary characters. Application of these conditions would have required Mr Knight to move substantially away from his own Mythbusters concept which involved him and other members of the Mythbusters team in their own dramatised escapades. Mr Knight's formula was designed to appeal to children, and it may be assumed that it did, at least so far as his books are concerned, but it did not meet the test required for the production of children's drama of the category which interested Mr George. 73 There were some other differences of opinion also. Mr George felt that the storylines were undeveloped. Mr Knight for his part had reservations about providing more detail or literary input without a commercial arrangement being reached. The rights and wrongs of the situation do not matter. In the end no agreement was reached and Mr Knight and Mr George went their separate ways. However there is no reason to doubt that the concept, at least with some development along the lines suggested by Mr George, had commercial potential. 74 Mr Knight turned his attention to marketing his ideas for a television series directly to Australian television channels. Accordingly he wrote on 24 July 1997 to Mr David Lyle, Program Development Director of the Nine Network Australia. It would be magazine-style format with an "on-the-hoof" feel. Possessing both the real-life drama of "Real TV", and the supernatural intrigue of "The X-Files", "Mythbusters" unique twist lies in the revelations each show. We're actually going to film ghosts, monsters and UFOs. Exhaustive research over the past decade means we have a lot of prime locations both in Australia and worldwide where "things happen". The idea was 'pitched' to Ms Tamara Burnstock and Ms Virginia Lumsden at the ABC but without success. A company called Beach Street Productions followed up with the ABC on Mr Knight's behalf but also without a positive response. Mr Williams of Beach Street Productions told Mr Knight that he had endeavoured to interest Channel 10 in the project. This also did not lead to any ongoing interest. Mr Williams approached Mr Lyle again with the project. The approach was unsuccessful. 77 On 11 July 1998 Ms Macdougall wrote, on Mr Knight's behalf to both Ms Theresa Plummer-Andrews of BBC Children's Television and Ms Janie Grace, Managing Director of Nickelodeon, seeking to rekindle interest. The letters suggest that a 'proposal and costings have now been accepted by Channel 10 Australia on the condition that matching funding can be found from overseas' . 78 Again, nothing came from this approach. Apparently, a further approach was made on Mr Knight's behalf to the BBC in 2003 but, again, without success. Mr Harley became involved in the attempts to find an interested producer. He apparently contacted and sent material to a number of broadcasters and to XYZ Entertainment Pty Ltd ('XYZ Entertainment'). There is no doubt he also contacted Beyond although there is a dispute about whether he sent any material to Beyond. 80 There is documentary evidence of the approaches to XYZ Entertainment and Beyond. However, it consists only of letters from each of them to Mr Harley dated 28 January 1999 and 29 January 1999 respectively. Here's the material returned as promised on [sic] our phone call today. 82 Mr Knight's evidence was that the material sent in late 1998 / early 1999 to various organisations consisted of a copy of his third Mythbusters book (published by Puffin) and a 'bible' (a television industry term describing a concept for a television production). Mr Knight's case was that receipt of this material was evidenced both by the letter from XYZ Entertainment and also by a letter from Beyond dated 29 January 1999. If you do not want us to examine your material after you have read this letter, please let me know immediately . Once we have read and examined your material , we may find that it is similar or competitive to an existing project. If that happens, we will let you know and you can then decide whether you want to withdraw your submission. If we continue our involvement with the other project or projects, we will have no obligation at all to you, and you will have no claim at all against us, or any of our business partners. Please understand that we cannot be responsible for any loss of, or damage to your material . Signing this letter does not create any obligation for us to make any offer, or for you to accept any offer we may later make to you. There can be no doubt that in some fashion or other Mr Harley had communicated to Beyond his desire to advance, for Beyond's consideration, a project known as 'MYTHBUSTERS'. 85 The parts of the letter which I have emphasised suggest that some material had been sent to and received by Beyond. Stating, for example, that ' we will take all reasonable care of your material ' and ' we expect you have kept copies ' and ' we cannot be responsible for any loss ' etc. are almost meaningless in any other context. That view would also accord with the fact that, as disclosed by the XYZ Entertainment letter, some material had been sent to that organisation. 86 There is other evidence to suggest that Mr Harley sent material to Beyond at about this time. The only available evidence is necessarily hearsay because Mr Harley died in 1999. 87 Mr Robert Williams is a television director. I have already referred to his production company (Beach Street). Mr James Adolph gave his occupation as 'cameraman' but he has worked in the television industry as a television producer, director and production manager. He has a production company called Video Artworks. He arranged a production team to produce a 1999 demonstration video for Mr Knight and was subsequently involved, in 2004, in further efforts to raise funds for Mr Knight's television project. Mr Knight, Mr Adolph and Mr Williams testified to being present in a meeting in late 1998 at which Mr Harley indicated that he had sent material, including 'the bible', to Beyond. Mr Adolph and Mr Williams gave evidence they were surprised and disapproving because they had reservations about Beyond and felt that progress was being made at the time with 'pitches' to Channel 10, Channel 9 and the ABC. 88 The respondent's case, however, was that on the whole of the evidence I should not conclude that any material was actually sent to Beyond. The contention was based both upon submissions that the hearsay evidence of Mr Harley's statements lacked credibility and should not be accepted and also upon evidence about the practices followed by Beyond with respect to 'unsolicited' material. 89 Ms Joanna Telfer was Ms Luscombe's Personal Assistant in 1999. Part of her role was dealing with material sent to Beyond for its consideration. Ms Telfer's evidence was that, as Mr Luscombe's personal secretary, she had a particular responsibility for dealing with 'unsolicited submissions'. Beyond's policy was not to review such material unless a letter like that sent to Mr Harley was countersigned and returned. 90 It was Ms Telfer who signed the letter to Mr Harley and was responsible for sending letters of that kind. In her evidence she said that there were two standard letters sent to persons who provided concept material to Beyond, or proposed doing so. The first, like the one to Mr Harley, began 'We appreciate your interest in Beyond. ' The other began 'Thank you for sending this to us for consideration. We appreciate your interest in Beyond. The second was sent to people who had in fact sent material. However, she had no recollection of the letter to Mr Harley and, in view of its terms, in my view it would be unsafe to conclude solely from this evidence, that no material had been sent and that the letter to Mr Harley was only a response to an oral contact. 92 Ms Telfer was also in charge of ensuring that an entry was made in a database to record receipt of any concept material sent to Beyond in the way it was suggested Mr Harley had done. The invariable practice, she said, was to record receipt of such material in the database. The entry was not removed if the material was returned. Ms Telfer's evidence was that there was no record in the database, or otherwise, of any material ever being received from Mr Harley. 93 She said, in any event, if material had been received, and a letter was sent in the form set out earlier and no signed copy was returned then, after a period of time, she would send the materials back. She attached sample letters where this practice had been followed. There is no evidence that Mr Harley or Mr Knight ever counter-signed the letter to open the way for examination of any material by Beyond. I infer that never happened. 94 Although the matter is very finely balanced I am prepared to assume that some material was sent to Beyond by Mr Harley. This would be consistent with the fact that material was sent to XYZ Entertainment, the terms of the letter to Mr Harley, and the evidence of his statements in the meeting attended by Mr Knight, Mr Adolph and Mr Williams in late 1998. I am also prepared to assume that the material sent was the third Mythbusters book and 'the bible', which was Exhibit AKF in Mr Knight's case. 95 The evidence was too flimsy, however, to support a conclusion that anyone at Beyond ever studied or considered any material sent by Mr Harley. In the end, it does not matter. None of the material which is alleged to have been sent to Beyond bears any real resemblance to the content of the Mythbusters TV show which was later produced by Beyond Productions. 96 Exhibit AKF (the bible) is entitled 'Mythbusters Real-Life Adventures in the World of the Supernatural'. It makes clear that the proposal is based on the Mythbusters books. Ultimately, no such suggestion was seriously pressed. It is use of the name 'Mythbusters' which is at the heart of the case, rather than any replication of Mr Knight's ideas or storylines. 98 It was also suggested by Mr Knight that further material was sent by Mr Harley to Beyond in 2000. The material it is suggested was sent by Mr Harley on this second occasion included a 'gatefold' brochure (the term gatefold refers to the manner in which it is folded and opens), a TV 'pilot' and a written explanation of the 'pilot'. Material of the same kind was sent to other organizations at about this time. 99 In one of his affidavits Mr Knight swore that a draft of a letter sent on this second occasion to Beyond from Mr Harley was annexed to that affidavit. The two pages which make up that annexure comprise a mixture of typing (in two different fonts) and handwriting which was identified as both Mr Harley's and Mr Knight's. The two pages contain passages which are reflected in the gatefold brochure and the explanation of the TV 'pilot'. In his oral evidence Mr Knight abandoned any suggestion that the materials which comprised the annexure were a draft letter. The contention was unsustainable. 100 There is no satisfactory evidence that this material was sent to or received by Beyond. I am not prepared to assume that it was in fact sent to Beyond. Even if it was it would not take Mr Knight's case very far. 101 The TV 'pilot' is a 10 minute video. It was inaccurate to call this video a 'pilot'. That is not how it was described in Mr Knight's own correspondence with his agent, Ms Macdougall, in 2002 where it was referred to as a ' demonstration video (as opposed to a pilot) '. In this correspondence Mr Knight recorded that it was concluded from meetings in 2000 ' that there were problems with the Mythbusters demonstration video. It was a confusing mix of styles and needed to be given a distinct direction '. He conceded in cross-examination that a pilot was conventionally a full-length episode. Presumably a pilot is produced to show how the finished product would appear to the viewing public. The demonstration video was certainly not in this category. The use of the term 'pilot' in his evidence was unfortunate and distracting because it is clearly not how he or his advisers had regarded the demonstration video. 102 However, it may be accepted that the demonstration video provided a tangible indication of the nature and potential content of Mr Knight's proposals for his own TV series. I was asked to watch it and did so. I see no similarity between the content of the demonstration video and the content of the Mythbusters TV show. Apart from anything else (such as the style of the two productions) one is a depiction of fantasy themes (in this case a ghost --- which is represented in the demonstration video moving in the background) while the other depicts an investigation which proceeds by actual demonstration of step-by-step reconstruction of the activity in question. 103 Mr Knight's contention is that the two suggested approaches by Mr Harley put Beyond into possession of a valuable idea which it otherwise would not have developed for itself. As I have already said, ultimately no serious suggestion was advanced that the Mythbusters TV show reflects Mr Knight's storylines or published material so the relevance of this part of his case is doubtful. His complaint is really about use of the name Mythbusters. Obviously Mr Harley communicated the name Mythbusters in some form or other. The response to Mr Harley dated 29 January 1999 certainly makes it clear that was the title under which Mr Harley approached Beyond (in whatever form he did so) and under which Beyond responded to him. 104 Whether Beyond first heard the name from Mr Harley, or happened upon it in some other way, will not determine its likely impact on members of either of the two groups suggested by Mr Knight to have been deceived by the Mythbusters TV show. 105 Later I deal with the history of the development and sale of the Mythbuster's TV show to Discovery Channel by Beyond. It will be seen that, on the evidence about this issue, the use of the name Mythbusters was, whether it came from the depths of Mr Luscombe's consciousness or not, a belated choice. It was used because it was a catchy term descriptive of the activities portrayed by the Mythbusters TV show. There is no evidence of this. The suggestion was part of the theme in Mr Knight's case, to which I have already referred, that Beyond was motivated by an illicit desire to misappropriate his intellectual property. 108 Negotiations with Imagination were conducted between Mr David Day (Mr Knight's manager from early 1999) and Mr Bill Davidson, Head of Television for Imagination. Some suggestions for contractual terms were exchanged in mid-2000. Mr Davidson was not called as a witness. Mr Day gave evidence, however, that Mr Davidson left Imagination in late 2000 and that he thereafter waited throughout 2001 and into 2002 for someone from Imagination to contact him to recommence negotiations. This does not suggest any sense of urgency on either side. 109 Part of the discussions before Mr Davidson left concerned the quality of the demonstration video, which was shown to Imagination personnel, including Mr Davidson. It is clear from the limited evidence of exchanges between Mr Day and Mr Davidson, and from Mr Knight's own communication with his UK agent in 2002, that the demonstration video was not regarded by Mr Knight or his advisers as sufficiently developed to form the real basis of a TV series. I have already expressed my view that it has nothing in common with the Mythbusters TV show. 110 Nevertheless, it was suggested that the real reason for negotiations with Imagination going 'quiet' was that Mr John Gregory, who had left Beyond and gone to Imagination in December 2000, passed to Mr Luscombe details of Mr Knight's proposals for a television series, including the proposal to entitle it 'Mythbusters'. There was no direct evidence to this effect and it was denied by Mr Luscombe. 111 There is other evidence that at about this time Imagination decided to withdraw altogether from its connection with television production and return to its basic core business of producing board games. 112 There is no foundation in the evidence upon which I could simply conjecture that there was collusion by Imagination and Beyond to deceptively take Mr Knight's ideas. A good deal of his work is in connection with the mining industry. Mr James Adolph has been referred to already. He is involved with the Australian television industry and since 1997 has been involved in the advancement of Mr Knight's television aspirations. According to the evidence of Mr Knight, Mr Adolph and Mr Graham, Mr Adolph approached Mr Graham early in 2004 to assist with raising funds for Mr Knight's television project. A face to face meeting occurred in August 2004. Mr Graham's prior commitments prevented anything concrete being done until October 2004. At that time a 'management team' consisting of the three of them was created. Mr Graham deposed that he was subsequently successful in attracting a group of investors known as the 'Winners Alliance' to agree to advance $5 million towards a television production on Mr Knight's behalf. He said the negotiations were quite intensive in December 2004 and early January 2005. 114 The purpose of the evidence about the successful attraction of investors and the suggested commitment of $5 million was to provide evidence of damage, a necessary element in the passing-off action. The major proportion of the damage alleged (as advanced by Mr Graham's analysis) related to the proposition that substantial amounts of 'back end' revenue would be derived from a successful TV series. In other words the revenue from the TV series itself (the front end revenue) although significant, was expected to be minor by comparison with revenue generated by merchandising and spin-off sales. 115 The negotiations came to an abrupt halt immediately after the screening on SBS of the Mythbusters TV show on 3 January 2005. This event prompted a series of telephone calls over the next day or so during which, according to Mr Graham, some investors expressed their lack of satisfaction with this development in very strong terms. The funding plans were suspended and have not been resumed although Mr Graham assured the court in his oral evidence that the investors remained interested in proceeding with a television production if conditions were right. 116 Although it is clear from the evidence that the Mythbusters TV show had already been shown in Australia on Foxtel before the 'management team' was created, Mr Graham said that he had no knowledge, prior to the telephone calls commencing around 3 January 2005, that the Mythbusters TV show had been produced. 117 Mr Adolph conceded in his evidence that before he contacted Mr Graham to secure funding he had seen a magazine article in a publication entitled 'Encore' disclosing the fact that another group was going to produce a show called 'Mythbusters' but said he had not told Mr Graham. Asked why he did not tell Mr Graham about this matter he replied that it was not 'his area to do that' even though he brought Mr Graham into the management team. 118 Mr Knight, on his own evidence, had known from much earlier in 2004 that Beyond was producing a Mythbusters TV show. He also deposed to the fact that he did not inform Mr Graham that a rival TV show had actually been produced. 119 There are features of this evidence which strain credulity. However, I do not need to resolve that issue in this judgment. I will accept, and it does not really seem ever to have been seriously in issue, that some damage to Mr Knight's plans and aspirations has resulted from the production, distribution and screening of the Mythbuster's TV show in Australia. 120 Damage is one ingredient of Mr Knight's passing-off action although not a necessary ingredient in his invocation of s 52 of the TP Act. It only becomes relevant to quantify it in the event that the conduct of the respondents is actionable. According to the arrangements for hearing this case, directed at an earlier stage by Lindgren J, the proceedings are not, at the moment, directed to the quantification of loss or damage. It is not necessary for me, therefore, to make any judgment about whether the optimism reflected in Mr Graham's financial model is well founded. The respondents disputed the levels of book sales in Australia. Mr Knight's evidence about the issue consisted almost entirely of reliance upon secondary evidence of print runs. I was invited, in effect, to infer that this was reliable evidence of the level of actual sales. There was some other evidence of distribution of his books but no figures were given --- e.g. an independent witness confirmed a donation of an unspecified number of books in 2000 and 2003 to assist the Women's and Children's Hospital in Adelaide and Mr Knight said in 1999 he donated some books to be sold for the Spastic Centre. 122 Curiously, no direct evidence of book sales was proffered, nor were any business records produced which might enable reliable calculations to be made --- e.g. receipts related to actual sales, royalties, payments of pro rata fees and commissions to others etc. - or any taxation records. Neither was any convincing explanation proffered for the absence of basic material or records of this kind. 123 Had it been necessary to make positive findings on this issue I could not have been satisfied that the level of sales was as claimed by Mr Knight. However, the question of, at least some, reputation as an author of children's books in Australia was not put in issue. Accordingly it is not necessary to make firm findings about the actual level of book sales. It is responsible for the actual making of all Beyond programs (excluding joint ventures and some co-productions). Beyond International is the parent company of the Beyond Group and is listed on the ASX (Code BYI). He gave affidavit evidence in the proceedings. He was not cross-examined. He worked from about 1997 (prior to his present employment by Beyond) on the general concepts which led ultimately to the Mythbusters TV show. In that year he devised a concept, which he called 'Declassified', for a television series based on military research and development, using urban legends and conspiracy theories as introductions to the scientific and technological aspects of the show. The proposal was submitted to Beyond. 126 At about the same time he submitted to Beyond a proposal for an 'urban adventurers concept' which he had written with another person. The second proposal led a development option agreement and was pitched to the Learning Channel in late 1997. However, neither proposal, Declassified or Urban Adventurers, was ever produced as a television program or series. 127 From January 1999 to 2001 he worked on television documentary programs produced by Beyond Productions entitled 'Stings, Fangs and Spines' and 'Born Against the Odds'. The programs used science to explore common misconceptions or, as he put it, to 'debunk myths'. 128 During the same period he developed an 'urban legends program concept' which he called 'Tall Tales or True'. It was this particular concept which he ultimately developed into the Mythbusters television program. According to Mr Rees' evidence he was also working on the development of other concepts or titles which were linked to the same general idea. The working titles were 'The Buzz: The New Science of Gossip', 'Legend Seekers' and 'Slaves to Superstition'. All these concepts, on Mr Rees' evidence, coalesced with 'Tall Tales or True' into the single production that became titled 'Mythbusters'. 129 Mr John Luscombe is the General Manager of the sixth respondent, Beyond Productions. His duties include the development of new television projects. Mr Luscombe's evidence was that he was approached by Mr Rees in about 2000 to discuss a concept regarding 'urban legends'. He approved Pat McInerney, a Beyond productions employee, working as a researcher for further development work on the concept with Mr Rees. At this time the concept also had the working title 'Legend Seekers'. 130 The Tall Tales or True/Legend Seekers concept was pitched to Discovery Channel in May 2001 in the USA. The pitch was made by Mr Luscombe. Mr Rees was involved in preparing the documents. The pitch documents were tendered in evidence before me. Although they were marked as confidential exhibits (JL1 and JL2), I can mention some salient features without compromising that characteristic. 131 JL1 commences with the title 'The Legend Seeker'. Shortly thereafter there appears in bold capitalised letters 'Tall Tales ... or True'. The second page contains reference to 'urban legends' and two references to 'The Legend Busters'. Page 3 refers to 'Urban Legend" and 'our team of "Legend Busters"'. Page 4 refers to Myth Detection. Page 5 refers to 'Malicious Myths'. The document is seven pages in length. It is widely spaced. It is intended to catch the attention. The concepts it suggests and explores are not ones which find any reflection, so far as I can see, in Mr Knight's books or television proposals. 132 JL2 is entitled 'Tall Tales ... or True?'. It refers on page 3 to 'urban legends', 'the Legend Busters' (twice) and 'tall tales'. Page 4 refers to the team of 'Legend Busters'. Page 5 refers to 'The Myth Busters'. Two people are identified. Both worked in the USA. Neither is suggested in the evidence before me to have any connection at all with Mr Knight. In a photograph of one of these persons appears a poster entitled 'Urban Legend'. Page 6 refers to 'Myth Detection'. There is nothing on the face of this material (JL1 and JL2) to suggest any connection with Mr Knight, his books or his concepts. 133 According to Mr Luscombe confidential exhibit JL2 was given on 31 May 2001 to Ms Andrea Meditch of Discovery Channel during a meeting which took place over the course of a day and at which a number of television concepts were pitched to Discovery Channel including the 'Tall Tales or True? ' concept. He stated that Ms Meditch was enthusiastic about the pitch but not about the title. He then suggested alternative titles of 'Myth Busters' or 'Legend Busters'. 134 By July 2001 the proposal had been renamed 'Myth Busters'. It was to be a program which attempted to validate urban myths. It will be noted that the title was made up still of two words. The separation of the title into two separate words appears to have continued through 2002. It was under the name 'MYTH BUSTERS' that searches were undertaken for trademark and patent search purposes in the USA in July and August 2002 At some point in time, which is not clear on the evidence, the two names were amalgamated into one. 135 A revised proposal was sent to Ms Meditch on 23 August 2001. It is apparent from this proposal for a three episode program that the two presenters who, in due course, appeared in the series had not yet been proposed (or perhaps even identified). Mr Luscombe and Ms Meditch exchanged emails on 19 October 2001. Ms Meditch expressed interest in a three episode program. A 'pitch report' dated 24 October 2001, recording a further meeting with Ms Meditch on that day confirms Discovery Channel's acceptance of at least a three episode program. The presenters had still to be finalised at this time. 136 Pre-production work (including finding suitable hosts) commenced in late October 2001 and shooting of the first three episodes commenced in June 2002. The first series (three episodes) was delivered to Discovery Channel by Beyond on 25 October 2002. To November 2006 a further 69 episodes had been made and delivered. 137 Following the success of the negotiations with Discovery Channel Mr Luscombe set about marketing the broadcast rights in Australia. He had meetings with representatives of the ABC (between 12 September 2001 and 1 October 2004), Channel 9 (between 22 November 2001 and 1 October 2003), Channel 10 (between 21 October 2002 and 11 March 2004) and Channel 7 (between 15 February 2002 and 16 March 2004). He named, in his affidavit evidence, the television executives with whom the meetings were held. 138 No attempt was made by Mr Knight to suggest any deception of, or misrepresentation to, these persons or that there was any likelihood of confusion or misunderstanding about the origins and creators of the Mythbusters TV show. 139 By agreement with Discovery Channel and Beyond, Foxtel obtained pay TV broadcast rights in Australia in July 2004. SBS acquired the rights in Australia for free-to-air broadcasts on 16 September 2004. 140 Interestingly, Mr Rees' evidence was that he had thought of the title Myth Busters but put it aside because it was too close to 'Ghostbusters'. When Mr Luscombe at a development meeting at some time in 2001 offered the opinion that Myth Busters would be a good title two others at the meeting were critical of the name as internally contradictory, one saying 'A myth is a myth because you can't validate it'. According to Mr Rees they were happy however to proceed with the program title because none of the titles which he had suggested (which I have referred to earlier) were acceptable to the broadcaster. 141 There seems no basis upon which to reject the evidence about the development and adoption of the name 'Mythbusters' which was given by Mr Luscombe and Mr Rees. According to that evidence it had nothing to do with Mr Knight or his ideas. Mr Rees said that he had never heard of Mr Knight or his books under the name Mythbusters or at all. 142 I have dealt with the evidence about this matter in a little detail because it is relevant to the suggestion which Mr Knight wishes to advance that the Beyond interests were infected with some fraudulent intent in their adoption of the title 'Mythbusters' for the TV series of that name. On the evidence there is no foundation for the proposition, which appears to me to be borne of Mr Knight's sense of grievance rather than anything else. As I observed earlier, I do not think that, ultimately, this issue bears upon the disposition of his claim. The allegations of misrepresentation and of misleading or deceptive conduct are to be judged objectively by their likely effect, rather than, on the facts of this case at least, by reference to underlying motivation. 144 Section 52 of the TP Act is first and foremost concerned with the protection of consumers but it also may be used to protect business, goodwill or reputation (see Hornsby Building Information Centre 140 CLR at 224-6. 145 Mr Knight must establish a number of matters to succeed. He must establish a relevant misrepresentation, or the likelihood of misleading or deception. This task involves the demonstration of a relevant reputation against which to test the suggested misrepresentation. It also involves an examination of the character of the suggested misrepresentation, or deceptive or misleading conduct, to see whether the conduct is properly so characterised. 146 Because the essence of Mr Knight's complaint is the use, by the respondents, of the title 'Mythbusters', and he has no statutory right to protected use of the term, he must show that he has acquired a proprietary interest in it. Because the name is, to an extent at least, descriptive he cannot do this if the name has not acquired a secondary meaning distinctively associated with him (see Angelides 40 CLR at 60). 147 Finally, because the passing-off action protects or vindicates a proprietary interest he must, to succeed in this action, show damage. The respondents suggested the date of the first screening of the Mythbusters TV show in Australia --- 27 September 2004. Mr Knight suggested October 2001 when the title for the Mythbusters TV show was used or revealed in a non-confidential way. 149 There were two groups of consumers ultimately relied on by Mr Knight in relation to the Mythbusters TV show. The relevant date is bound to be different for each group. In my view for members of the television viewing public the relevant date is the date of first screening in Australia, 27 September 2004. For the other group consisting of TV broadcasters and television production executives the date must accord with the time at which an attempt was made by Beyond to sell the concept of a new TV show, bearing the name 'Mythbusters', to a prospective purchaser. 150 On the evidence this first occurred in July 2001 in the USA when Beyond was marketing the TV show to Discovery Channel and the name 'Mythbusters' was accepted but that was outside the jurisdiction. On Mr Luscombe's evidence, attempts to market the broadcast rights in Australia to TV broadcasters and television production executives commenced on about 12 September 2001. In my view that is the relevant date for that group. 151 However, in my view, nothing really turns on the selection of date. The question of the appropriate date does not affect any of the critical findings made in this judgment. Indeed the respondents did not dispute that he had some reputation in Australia as an author of children's books. 153 It is true that there was little objective evidence of the level of sales of the Mythbusters books in Australia. I found it unusual that he was either unable, or unwilling, to provide financial material from his own resources which might enable appropriate calculations to be made giving an order of magnitude of these sales. Whatever the reason, I was left with the task of drawing inferences from the evidence that print runs had been ordered, that books had been delivered to him in Australia, that some books had been distributed through charity organisations and that the first book was currently available for purchase through Dymocks. It is not possible from this material, especially in light of the fact, as the respondents contended, that he acknowledged that the bulk of any sales occurred outside Australia, to feel a comfortable sense of persuasion that the sales were of an especially high order. 154 Nevertheless, there can be no denying that Mr Knight's success in Australia as an author is in part due to the three books in question. In my view he succeeded in establishing that he has a reputation in Australia as the author of children's books bearing the name 'Mythbusters'. 155 In addition, I feel that I cannot put aside as altogether irrelevant the other evidence of promotion of him personally, the Mythbusters books and his other books. This promotion took a variety of forms. Some of it involved articles by newspaper journalists (perhaps with the assistance of material provided by him but that is not to the point), radio interviews (which were not available to be heard but I accept took place) and television interviews, some of which were shown to me. 156 However, acceptance of his reputation in those respects is far from an end to the matter. An assessment needs to be made first whether Mr Knight's reputation in connection with his Mythbusters books and more generally can be attributed to members of the television viewing public in a way, and at a level, that makes it likely that a significant number would associate him with the Mythbusters TV show. He asserts it should. The respondents take a different position. 157 I have found this issue a difficult one to determine. In the end it turns on an impression formed from reading, listening to and considering the whole of the evidence. I have concluded that there is no basis to positively find, infer or assume an association in the minds of members of the television viewing public between either Mr Knight or his Mythbusters books and the Mythbusters TV show. 158 There is no direct evidence that Mr Knight's reputation with the general public creates an association with television. There is no evidence that Mr Knight has any television presence in Australia other than as an occasional interviewee. He has not had any TV show produced in Australia. He suggests he can rely on the fact his demonstration video was screened to a small private audience in 2000 and has been available on his internet site since 2003. I do not agree. These circumstances do not establish any connection of the requisite kind and significance with ordinary members of the television viewing public. 159 Although reputation may be established by advance publicity or advertising that is not what happened in this case. His own attempts to develop a television series were not public and they were unsuccessful. There was no evidence of any announcement in the public arena which might alert members of the Australian television viewing public to the fact that Mr Knight had concrete plans in the foreseeable future for the screening of a TV show entitled Mythbusters. Any occasional comment to that general effect over the years could not generate a reputation to that effect. 160 In the circumstances, for this reason alone, I am not persuaded that the production or screening of the Mythbusters TV show constitutes a misrepresentation to members of the television viewing public that it was his program or endorsed by or associated in any way with him. I shall, however, return to deal with the issue of misrepresentation and deception shortly on the alternative assumption that my conclusion of lack of reputation with the general television viewing public is incorrect. 161 I am, on the other hand, satisfied that Mr Knight had the requisite reputation with a sufficient number of the second group on which he relies --- TV broadcasters and television production executives. His credentials as an author clearly provided a respectable foundation for his attempts to broaden the exploitation of his concept of mythbusting to include a television series. There can be no denying that he was successful in generating some interest for these ideas in both the United Kingdom and in Australia. 162 His efforts were persistent. The fact that he had no ultimate success did not extinguish his reputation in the market consisting of TV broadcasters and television production executives. It is impossible to resist the conclusion that Mr Knight had a reputation with members of the group whom he tried to interest in the idea of a series based upon his concepts. Reputation alone cannot sustain his causes of action but in this market, at least, I am satisfied it was established. There is no need, for present purposes, to make any distinction. 164 Within the group made up of members of the television viewing public I do not think there is any realistic possibility of deception if reputation had been established. 165 In Campomar [2000] HCA 12 ; 202 CLR 45, the High Court explained the judicial method for evaluating the likelihood of deception when a representation is alleged to have been made to members of the public generally. It is necessary to proceed upon an attribution of presumed characteristics to 'ordinary' or 'reasonable' members of the class. Although a class of consumers may be expected to include a wide range of persons, in isolating the "ordinary" or "reasonable" members of that class, there is an objective attribution of certain characteristics. He called a series of witnesses to depose to their initial belief that he must have been associated with the Mythbusters TV show. They were all friends or associates. Their beliefs were very much coloured by their personal association with him. They knew of his books and were aware of his ambitions to have his own TV series produced. They said in their evidence that they immediately assumed, when they heard of the Mythbusters TV show, that it must be associated with him. This belief was clearly predicated upon an assumption which they made from information they had gleaned from him. It cannot fairly be said to be the result of the use by the Beyond interests of the name 'Mythbusters' or any other conduct of the respondents. 167 The fact that these witnesses made an erroneous assumption about Mr Knight's connection with the Mythbusters TV show, and their beliefs were for that reason misplaced, does not, of itself, deny the possibility of deception, either of them or more generally. 168 In Campomar [2000] HCA 12 ; 202 CLR 45, the High Court pointed out that an action under s 52 of the TP Act cannot be defeated simply by pointing to an 'erroneous assumption' because ' no conduct can mislead or deceive unless the representee labours under some erroneous assumption ' (at [104] quoting Deane and Fitzgerald JJ in Taco Bell 42 ALR at 200). The High Court accordingly rejected the existence or reliability of any general 'erroneous assumption' doctrine that would defeat a claim by showing that a prospective purchaser could only be misled by wrongly assuming some ' endorsement by, or other association with, the plaintiff ' (see 202 CLR at [110]). 169 It follows that the evidence called by Mr Knight from the witnesses in question is not to be rejected simply because their impressions or reactions were coloured or affected by a wrongful assumption. 170 However, the High Court in Campomar expressly approved the observations of Deane and Fitzgerald JJ in Taco Bell 42 ALR at 201 that the ' question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52 ' (202 CLR at [106]). As we read their Honours' judgments, that was a factual conclusion. Their Honours were not suggesting that there is, for the purposes of s 52 of the Act, a necessary dichotomy between "confusion" on the one hand and "misleading or deception" on the other. In some circumstances, conduct could conceivably be properly categorized as misleading or deceptive for the very reason that it represents that confusion or uncertainty exists where, in truth, there is no proper room for either. Ordinarily, however, a tendency to cause confusion or uncertainty will not suffice to establish that conduct is of the type described in s 52. The question whether particular conduct causes confusion or wonderment cannot be substituted for the question whether the conduct answers the statutory description contained in s 52. It is to the quality of the conduct that attention must be given --- not to the subjective reaction of some members of the class. As I indicated earlier, the misunderstanding, by the witnesses called in Mr Knight's case, of the true position concerning the provenance of the Mythbusters TV show cannot be attributed to Beyond or the other respondents. 173 The particular knowledge and association of the witnesses relied on by Mr Knight prevents them, in any event, being regarded as representative of the class as a whole. Upon this point being made by counsel for the Beyond interests, initially in cross-examination, counsel for Mr Knight, in submissions, disclaimed any central role for the evidence of these witnesses. Accepting that the issue of likelihood of deception was to be determined by the court itself she submitted that the evidence of the witnesses was merely additional and I was invited to infer that 'there must be consumers whose identities we do not know, who do not know the Applicant and do not have any special knowledge of the Applicant, but know of his MYTHBUSTERS' . 174 This submission correctly accepts that the reactions of these witnesses, who each had a pre-existing association of some kind or other with Mr Knight, are not a reliable or representative guide to the reactions to be imputed to ordinary or typical members of the class in question. I may turn to deal, then, with my assessment of the perceptions to be objectively attributed to the members of the television viewing public in general, putting aside for this purpose the evidence I have referred to above. 175 I read the Mythbusters books and watched Mr Knight's demonstration video. I studied the 'bible' said to have been sent by Mr Harley to Beyond (and to major Australian TV networks) and also the 'gatefold brochure' and the explanation of the demonstration video which was circulated in 2000. I watched the first episode of the Mythbusters TV show as shown on Foxtel and three others supplied in evidence as later shown on, and sold by, SBS. 176 In my view an 'ordinary' or 'reasonable' member of the public familiar with the Mythbusters books, or even the content proposed by Mr Knight for his own TV show, would not linger under any misapprehension that the books or his proposals were in any way related to the Mythbusters TV show for longer than a few seconds. 177 The first episode of three made initially for the Discovery Channel announces, for example, in the opening moments, that the viewer is going to see what happens when a rocket attached to a Chevrolet motor car is ignited --- 'We're going to find out what happens when you strap a rocket to a 67 Chevvy. Oh yeah! ' . The content and style of presentation of this episode and each of the others that I was asked to watch find no parallel in the Mythbusters books or, for that matter, Mr Knight's other material which was not in the public domain. 178 Mr Knight's endeavours, and the way his concept of mythbusting is portrayed in all its manifestations, are highly idiosyncratic and depend upon an indissoluble connection with his persona Bowvayne. Bowvayne and the Mythbusters' team are the hub around which the concept revolves. Moreover, the concept of mythbusting, as they go about it, involves, as a central component, the idea of mystery and even magic. 179 Both in oral evidence and in submissions on his behalf, it was clear that Mr Knight could not, and did not, suggest that the content and style of the Mythbusters TV show was suggestive of his own work. It clearly is not. The only thing in common between the two concepts is the name. It was the use of the name that was at the heart of Mr Knight's case. The basis for his complaint, in the end, and the sole foundation for his case, is the fact that the Mythbusters TV show used the same name he had used as part of the title for three of his books and wished to use for his own TV show. 180 However, any misconception or confusion which might arise from the name itself would, in my view, or at least should, be immediately dispelled on actually watching the Mythbusters TV show. Even from those witnesses who knew Mr Knight, were familiar with his books or knew of his plans for his own TV show, there was no evidence that those who actually watched the Mythbusters TV show believed, after watching it, that it reflected his concepts or was associated with him. 181 In my view Mr Knight has been unable to establish any misrepresentation by the respondents to ordinary members of the television viewing public. For the reasons I have given, viewed objectively, the production, distribution and screening of the Mythbusters TV show does not misrepresent to members of the television viewing public that it is endorsed by or associated with Mr Knight. 182 What of the specialised class who saw his proposals in detail? Accepting, as I have, the existence of some reputation with those in the market for television programs of the kind Mr Knight was attempting to devise and sell, I also agree with the submissions of the respondents that there was no possibility of deception of members of the second group --- TV broadcasters and television production executives. 183 In this class also there was no evidence of the terms of direct representation by any of the respondents to identified persons and again it is necessary to ' isolate by some criterion a representative member of that class ' ( Campomar 202 CLR 34 at [103]). In the case of this group it is much less likely that any belief would be formed or relied upon without adequate investigation (see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 per Mason J at 209 and 211). 184 The evidence disclosed that the process of developing TV programs involves not only substantial periods of time but close attention to the development of program content. Concepts and ideas are at the beginning of the process. Many are discarded and rejected at an early stage. Those that show commercial promise are subject to development, change and transformation --- sometimes radical. Selection of the right name is a part of the process. 185 It cannot be assumed that those in this second group would proceed upon a casual acceptance, based upon the name Mythbusters, of the association Mr Knight suggests. The rigour of the commercial exercise at the heart of his endeavours, and those of Beyond, render this improbable to the point of being fanciful. An 'ordinary' or 'reasonable' member of this class must be taken to be one who would, even on an initial encounter, on watching the Mythbusters TV show note the attribution of the show to Beyond as producer and, having regard to the content and style of the Mythbusters TV show, conclude that the show had no connection with Mr Knight, his Mythbusters books or his own plans for a television series. 186 There is, accordingly, no realistic possibility of any confusion concerning the possibility of an association between Mr Knight and the Mythbusters TV show. The Mythbusters TV show could not, by reference to its content, or even its name, be confused with Mr Knight's attempts to generate interest in his own TV series based on his books, or any similar idea related to his 'Mythbusters team'. 187 While it is true, for example, that Mr George from Bluestone Pictures and Ms Burnstock from the ABC, whom Mr Knight attempted to interest in his own plans, initially assumed a connection upon hearing the name of the Mythbusters TV show, there is no evidence of any lingering mistake. 188 On Mr Luscombe's evidence he attempted to market the broadcasting rights in Australia for the Mythbusters TV show widely amongst Australian free-to-air television networks. None of the persons identified by him was required to give evidence for Mr Knight. No assumption can be made, much less any inference drawn, that the Mythbusters TV show, whether by content or name, suggested any association with Mr Knight, his books or his plans for his own TV show. 189 I conclude there was no likelihood of deception amongst the group made up of TV broadcasters and television production executives. I have already indicated that I do not accept the evidentiary premises upon which this argument depends. Furthermore, the argument lacks an underpinning logical foundation. 191 Although passing-off may be innocent, in the classic passing-off case (to use the words of Dixon J in Turner v General Motors (Australia) Pty Ltd [1929] HCA 22 ; (1929) 42 CLR 352) there is an 'intention and desire to appropriate ... the advantage of a business reputation which belonged to another' (at 368). 192 That element is absent in the present case. There is no basis to think that Beyond wished to trade off any reputation possessed by Mr Knight or that the success of the Mythbusters TV show would be enhanced with the viewing public if, erroneously, it was believed that Mr Knight was associated with it. Nor is there any basis to think the Mythbusters TV show would more readily be sold, or funds received for its development, if such a belief existed. 193 The Mythbusters TV show was sold in 2001 to Discovery Channel. Rights to broadcast it were sold in Australia in 2004 to SBS and Foxtel. There is no evidence, and was no attempt to make a case, that any of those transactions proceeded upon any misapprehension that Mr Knight was somehow connected with it or that anybody who watched the show would make that assumption. 194 In Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 Dixon and McTiernan JJ said at 657 'when a dishonest trader fashions an implement or weapon for the purpose of misleading potential customers he at least provides a reliable and expert opinion on the question whether what he has done is in fact likely to deceive' . It has not been demonstrated that the Beyond interests set out to copy the 'Mythbusters' name for reasons which I have earlier given. Even if it had done so this would not be sufficient to make out a case of passing off, or of intention to mislead. 199 The respondents claim that the name 'Mythbusters' is a descriptive term (involving the 'busting' of myths) and it must, for Mr Knight to succeed, have acquired a secondary meaning distinctively associated with him. I agree. 200 Mr Knight does not have a registered trade mark in the name Mythbusters. The absence of a registered trade mark denies him enforceable rights under the legislative scheme established by the Trade Marks Act 1995 (Cth). In the absence of any formal protection of the name 'Mythbusters' by its registration under that Act he is obliged to demonstrate a distinctive secondary meaning associated with him, in order to establish a sufficient proprietary interest for his passing-off action and a foundation for the allegation of misleading or deceptive conduct in his s 52 case. In my view he has not done so. 201 I have earlier described the way in which the title 'Mythbusters' came to be selected by Beyond for the Mythbusters TV show. That process emphasises the use and attraction of the descriptive elements in the name. It is a sufficiently practical illustration to deny the proposition that the name is uniquely new and without a descriptive character. 202 The field was not fully occupied by Mr Knight's use of the name, or his own desire to use it in connection with a television series. The way to occupy that field in Australia, and preserve it for his own use, was to register a trade mark. That was not done. No application was made before the Beyond interests commenced to use the name, although competing applications have now been made. I need say nothing about the merits of those applications which are for resolution in another forum. In this sense his plans have been thwarted. It may also be accepted that there was some chance that eventually his efforts may have met with some success, a television program may have been produced and financial rewards may have followed. 204 It is impossible to attribute a value to this possibility although, in my view, it is not open to speculate that the lost chance was very valuable. Allowing for the fact that it takes time to develop such concepts and that initial failure does not spell the end of any realistic commercial possibility, it must be recognised that Mr Knight has endeavoured for many years now to arrange for the production of a television series of his own design both in Australia and in the United Kingdom and that such a series has never, in fact, eventuated. 205 Nonetheless, if the other elements of his case had been established, I am satisfied that damage, sufficient to make out this element of the passing-off case, has been established. 206 In light of my other findings, there is no basis for the grant of any relief concerning the Mythbusters TV show and I need not further explore the way in which any damage might be redressed had the case succeeded. Mr Knight sought to join them to the proceedings. On 10 March 2006 Lindgren J refused this application ( Knight v Beyond Properties Pty Ltd (No. 2) [2006] FCA 192). Lindgren J felt that any causes of action which existed against Simon Schuster and Wiley, who were licensed to publish and sell the books in the United States and Canada but not in Australia, should be pursued separately. Although there may have been some overlap with the present proceedings it was not desirable, in his Honour's view, that the present proceedings be extended to embrace them. 208 During the course of the proceedings I permitted Mr Knight to amend his Statement of Claim to plead causes of action against the first, second, third and sixth respondents in relation to the three spin-off books. The amendment was permitted in circumstances where, although it was opposed by the respondents, counsel for the respondents very fairly and properly conceded that he could not argue any question of prejudice arising from the amendment. 209 All the spin-off books are obviously a representation of the Mythbusters TV show. Had I accepted that the Mythbusters TV show provided a sound foundation for Mr Knight's causes of action the publication of the spin-off books could be seen as a further manifestation, or even aggravation, of that conduct. However, as I have rejected the claims based on the Mythbusters TV show they must be considered in their own right. 210 The Mythbusters books and the spin-off books are markedly different in every respect --- size, appearance, concept and content. In any view there is no possibility of confusion between them. The Mythbusters books are small, slim, typed in modest script and font, consisting of three or four short stories each. The spin-off books are large, glossy with high visual impact, full of still photos from the Mythbusters TV show and with very little story content. 211 Ironically perhaps, any side by side comparison would be likely to produce a strongly instinctive rejection of any suggestion that one implicitly represented an association with the other. In my view Mr Knight's causes of action with respect to the spin-off books must be rejected. To overcome the lack of direct connection to publication of the first and second spin-off books Mr Knight sought to rely on the doctrine of 'instruments of deception' and, by that route, to attribute ultimate responsibility to one or more of the respondents with respect to the first and second spin-off books. 214 That contention faces very substantial obstacles. The application of this doctrine involves proven conduct within the relevant jurisdiction, even though the effects may manifest and complete the cause of action beyond the jurisdiction. 215 One class of case concerning instruments of deception involves the opportunistic registration of domain names which are uniquely connected with a well-known enterprise for the purpose of demanding a substantial premium to ensure they are not used. Examples in the UK include 'marksandspencer.co.uk' and 'britishtelecom.co.uk' (see British Telecommunications plc v One in a Million Ltd (1998) 42 IPR 289). The present is not such a case. 216 Another class of case involves consideration of conduct which, although potentially deceptive, does not ultimately involve a misrepresentation within the jurisdiction itself, but elsewhere. In some such cases it has been held that the conduct is nevertheless actionable as passing-off (see Douglas Pharmaceuticals Ltd v Nutripharm New Zealand Ltd (1997) 42 IPR 407). The rationale appears to be that the tort is justiciable against a defendant within the jurisdiction, even though the cause of action is only completed by the manifestation of a necessary element outside the jurisdiction. 217 Whatever the reach of such an approach it does not fit the facts of the present case. In the present case Mr Knight sought to apply the doctrine to books imported into Australia where not only had licensing for publication, and publication itself, occurred outside the jurisdiction but neither the importers nor publishers were parties to the proceedings. 218 Simon and Schuster and Wiley were licensed to publish the first and second books in the United States and Canada and did so. That conduct is not actionable in the present proceedings. They are not parties to the proceedings. The books were presumably imported into Australia in accordance with the liberty preserved by s 44A of the Copyright Act 1968 (Cth). It has not been shown that any of the respondents are responsible for or have any connection with their importation or sale in Australia. In my view the doctrine of 'instruments of deception' has no application to these circumstances. 219 It follows from these various conclusions that so much of the Further Amended Statement of Claim as attempts to raise causes of action in passing-off or under s 52 of the TP Act with respect to any or all of the spin-off books must also be dismissed. The respondents sought their costs of defending the application and there is no reason why they should not have an order to that effect. 221 The first and second respondents cross-claimed against Mr Knight. The basis of the cross-claim was that letters written by him or on his behalf to customers and prospective customers of the cross-claimants (including the third, fourth and fifth respondents) were themselves misleading and deceptive. 222 After the cross-claim was filed Mr Knight wrote to the BBC and Qantas asserting his entitlement to use of the 'Mythbusters' name, referring to the litigation and indicating that if the BBC or Qantas screened the series made by Beyond (as they proposed to do) they may be joined as additional respondents to the proceedings. This prompted an application by the first and second respondents for interlocutory injunctive relief to restrain any further such correspondence. This application was refused by Lindgren J with costs ( Knight v Beyond Properties Pty Ltd (No 3) [2006] FCA 193). 223 Ultimately, very little time was spent in the actual hearing on the issues raised by the cross-claim. On the last day of the trial I was told the cross-claim was not pressed. That was a principled approach to take but, in my view, it was really a recognition of the inevitable. 224 Although I have been spared a little extra effort in dealing with the matter, Mr Knight's legal representatives were not. No doubt some additional costs were involved in dealing with the issues raised by the cross-claim by way of preparation of affidavits and other work. In the circumstances I do not think it would be right for Mr Knight to be left to bear all his costs on this issue. In my view Mr Knight is entitled to his costs in relation to the cross-claim which I will formally dismiss. I certify that the preceding two hundred and twenty-five (225) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | passing off misleading or deceptive conduct whether reputation in jurisdiction whether real possibility of deception descriptive name distinctive secondary meaning required attributes of class or classes to whom representation made relevance of erroneous assumption doctrine of instruments of deception. intellectual property |
On each of those days they worked their ordinary working hours. Nevertheless, Heinemann withheld all the employees' pay referrable to those days on the basis that the operation of s 507 of the Workplace Relations Act 1996 (Cth) ('the Act') was to prohibit the making of a payment to an employee in relation to a period of industrial action. The main issue in this proceeding is whether Heinemann was in fact prohibited from making any payments to the employees engaged in a ban on overtime referrable to those days. It claimed that Heinemann had breached cl 7 of the Heinemann Electric Pty Ltd Enterprise Agreement 2003 ('the Agreement') by failing to pay certain specified employees for ordinary hours worked. It was contended that Heinemann failed to pay those employees at all, or failed to pay the wages as and when the wages fell due. 3 The applicant sought an order imposing penalties pursuant to s 719(1) of the Act and for the payment of wages owed to each of the unpaid employees pursuant to s 719(6). The applicant also sought interest on the owing unpaid wages pursuant to s 722 of the Act. Tom O'Shea is and was at all relevant times a workplace inspector appointed pursuant to s 167(2) of the Workplace Relations Act 1996 ( the WR Act ). Each of the persons set out in Column 1 of the table attached to this Statement of Agreed Facts (" the table ") and Maria Barros was at all relevant times employed by Heinemann at the Factory in classifications or occupations covered by the Metal, Engineering and Associated Industries Award 1998 ( the Award ). At all relevant times, Heinemann was a party to and bound by the Heinemann Electric Pty Ltd Enterprise Agreement 2003 ( the Agreement ) until it was replaced on 8 January 2007 by the Heinemann Electric Pty Ltd Enterprise Agreement 2006. On any day that overtime is worked there will be no necessity for all employees on that particular job to work. A roster system will be introduced to make sure any overtime worked is fair and equal as far as is practical given the specialisation, continuance and urgency of the jobs at hand. Any suggested measures to address this shall be discussed by the parties and reviewed regularly on all projects throughout the life of this Agreement. At all relevant times, Heinemann employed employees, including the employees listed in Column 1 of the table and Maria Barros who performed work in the Factory. The employees worked the following ordinary hours: 7.1. from 7:45 am to 4:30 pm with a 30 minute unpaid meal break on Mondays, Tuesdays, Wednesdays and Thursdays; and 7.2. from 7:45 am to 12:45pm on Fridays. Overtime was regularly worked by employees of Heinemann on Monday to Friday for at least two hours. The number of employees working overtime on any given day might range between one and 25. The employees Analene Forbes, Sol Attard, Lorraine Attard, George Brandidis, Wen Sang Yong, KY Lui, had not performed overtime work for at least six months prior to the commencement of the industrial campaign referred to in paragraph 11 below. Each of the employees referred to in paragraph 9 above was subject to clause 26 of the Agreement. In about May 2006 Heinemann and the union commenced negotiations for a new union collective agreement in relation to the persons employed by Heinemann at the Factory. By August 2006, the Negotiations between Heinemann and the Union had not resulted in an agreement between Heinemann and the Union about the terms and conditions of a new union collective agreement. A notice advising of bans on the performance of overtime commencing on 22 August 2006 (the overtime bans). 13.2. A notice advising of bans on the testing of equipment commencing on 22 August 2006 (the testing bans): 13.3. A notice advising of a 24 hour stoppage on the performance of all work beginning at 6:00am on 25 August 2006 (the 25 August 2006 stoppage). A notice advising of an indefinite stoppage on the performance of all work beginning at 6.00am on 26 August 2006 (the planned stoppage). 24 August 2006: 13.5. A notice advising of an indefinite stoppage on the performance of all work beginning on 30 August 2006 (the permanent stoppage). A number of employees, including the employees set out in Column 1 of the table, engaged in the overtime bans on each of Tuesday 22 August, Wednesday 23 August, Thursday 24 August, Monday 28 August and Tuesday 29 August 2006. The Union provided written notice to Heinemann of the withdrawal of the testing bans on 23 August 2006. A number of employees engaged in the 25 August 2006 stoppage. The planned stoppage referred to in the 23 August 2006 notice did not take place. The permanent stoppage referred to in the 24 August 2006 notice took place between 30 August 2006 and 16 October 2006. Are you available to work overtime on [Tuesday night]? 19.2. Why will you not work overtime ? 19.3. [If the employee does not respond to Q 2] Are you refusing to work overtime because of the union's ban ? 19.4. [If the employee says that it is not because of the ban in Q 3] Will you work overtime tomorrow then ? 19.5. [If no] Will you work overtime on any day this week ? 19.6. [If no] Will you work overtime on any day next week ? 19.7. [If no] When will you work prior to the end of the overtime ban (ie just name a day) ? 19.8. [If the employee does not respond to Q7) Are you refusing to work overtime because of the union's ban ? Representatives of Heinemann made handwritten notations, in the spaces provided in the list of pro-forma questions, based on the answers given by each of the employees to the pro-forma questions. On each of the days Tuesday 22 August, Wednesday 23 August, Thursday 24 August, Monday 28 August and Tuesday 29 August 2006 the employees set out in Column 1 of the table (with the exception of those employees who were absent from work on the days set out in column 2 of the table) and Maria Barros attended the Factory for work and performed all of their usual duties in the usual manner during ordinary hours, namely between approximately 7:45am and 4:30 pm. On each of the days Tuesday 22 August, Wednesday 23 August, Thursday 24 August, Monday 28 August and Tuesday 29 August 2006 the employees set out in Column 1 of the table and Maria Barros did not perform overtime work at the Factory. Some of the employees set out in Column 1 of the table were absent from work on the days set out in Column 2 of the table. Heinemann did not pay the employees set out in Column 1 of the table and Maria Barros any wages referrable to the days Tuesday 22 August, Wednesday 23 August, Thursday 24 August, Monday 28 August and Tuesday 29 August 2006. From May 2006 until the making of this deed, Heinemann and the CEPU were negotiating for a new enterprise agreement ( the Dispute ). During the negotiations, the CEPU and its members organised and engaged in industrial action ( the Action ). The parties reached an in principle agreement on the terms of the new enterprise agreement on 13 October 2006 As part of that agreement the parties have agreed to settle the Dispute and the Action, and all the claims arising out of the Dispute and the Action, on the terms of this deed. (b) The CEPU agrees not to commence any claims against Heinemann in respect of the Dispute and the Action. (c) The CEPU agrees that it will not fund, support or encourage any of its members to commence any claims against Heinemann in respect of the Dispute and the Action. 2. (b) Heinemann agrees not to commence any claims against the CEPU in respect of the Dispute and the Action. Between 10 and 17 November 2006, Heinemann provided a document titled "Sign on Bonus Conditions and Acknowledgements" (" the sign on document ") to a number of its employees, including the employees set out in Column 1 of the table and Maria Barros. In order to receive the sign-on bonus, employees are required to acknowledge that it is paid in accordance with the conditions set out above. All of the employees in Column 1 of the table and Maria Barros signed the sign on document between 10 and 17 November 2006. All of the employees in Column 1 of the table and Maria Barros received a payment of $1100.00 gross into their bank account on or around 30 November 2006. There were employees at the factory as at August 2006 and during the period of the overtime bans who did not engage in the overtime ban, but nevertheless received the sign on bonus. These included A Rico, F Bacosa, LJ Ferdinads; TL Pui; EF Gonzales; VD Wijeyeratne; SS Chan; SH Chan; M Yan; A Loh; VN Tran; G Caruso and S Reinink, V Plavlianic; AS Falken; M Kostur; TT Ta; NB Luong; RB Allen; KO Lau; P Dillon; GW Gapper; H Abbasszadeh; S Fernando; PE Forbes; DC Gardner; FC MA; J Gao; C Reinink; F Manuse; O Grah. 6 In respect of how overtime was worked at the factory, there were differences in the practices of different sections of the factory. Generally, overtime shifts lasted for approximately two hours, from 4.30 pm to 6.30 pm, and between one and 25 of the factory employees might work on any given evening. However, some sections regularly worked overtime and other sections worked overtime infrequently. The assembly workers generally worked minimal overtime, whilst the qualified fitters were called on frequently to perform overtime because of their specialised skills. It was also clear from the evidence of both Mr Ross, the General Manager of Heinemann, and Mr Aspinall, a Factory Manager of Heinemann, as well as from the employees, that there was not a practice of relying on overtime rosters. Instead, notice of overtime was commonly given to employees either on the day before or on the day that overtime was required. Employees then had an opportunity to accept or decline the extra hours. The evidence was that there was never any difficulty in finding employees to perform the additional work and that employees ordinarily accepted the work. It is also clear that employees could and did decline overtime work without ascribing any cause or reason. 7 There was no evidence of Heinemann's overtime requirements on the days in question. There was no evidence of whether any employees actually performed overtime that week. Heinemann did not have overtime records for 22, 23, 24, 28 and 29 August 2006. The handwritten notations on the questionnaires show which employees of those interviewed were and were not available for overtime over the life of the overtime ban, and a reason for not working overtime. However, they do not indicate whether Heinemann required overtime on any evening, and if so, how much overtime was required, whether requests were made of employees to perform overtime, or whether any employee performed any requested overtime on any evening. 8 Nevertheless, it was uncontested that the employees in Column 1 of the table engaged in the ban on overtime on the days in question, and that they were not paid wages referrable to these days. In addition, Heinemann also failed to pay Ms Maria Barros for the days in question on the basis that she too was implementing the ban on overtime. The applicant submits that Ms Barros was not in fact implementing the ban and should have been paid in full for those days irrespective of the operation of s 507. Ms Barros failed to answer any questions asked of her in the questionnaire. She was initially questioned by her manager, Mr Aspinall, and later by Mr Ross. Her questionnaire was annotated simply, 'Will not answer any questions. Do not understand'. Mr Ross wrote at the end of Ms Barros' questionnaire that he had explained to Ms Barros the position in detail. He was referring to informing those employees, who had confirmed that they were enforcing the ban that they would not be paid for the duration of the overtime ban or any industrial action. Mr Ross told the Court that he believed Ms Barros understood his explanation. Ms Barros told the Court that she did not understand. She said her failure to answer was because she did not know what overtime Mr Aspinall and Mr Ross were referring to (as she rarely performed overtime) and she did not want to answer before speaking with her union representative. 10 Ms Barros agreed that she participated in the strike of 25 August 2006 and participated in the six week strike which commenced on 30 August 2006. Heinemann submitted that Ms Barros' participation in the strikes goes some way to demonstrate that she also participated in the ban on overtime. This does not necessarily follow, although it is a factor to consider in the balance, as to the likelihood of the happening of events. Heinemann also contended that Ms Barros' evidence was unreliable because of the discrepancy in her affidavit evidence and the documentary evidence showing the amount of overtime she had in fact worked previously. 11 My own assessment of the evidence is this. Ms Barros cannot understand English very well; she deposed to this, and it was apparent from her cross-examination. She said she was very confused about the questions asked of her by Mr Aspinall and Mr Ross, and she appeared confused under cross-examination both as to what was being asked of her by Counsel and as to the overtime position. In my view, despite the belief of Mr Ross, she was confused. Ms Barros had little understanding of the matters being asked of her by Counsel, and I consider had little understanding of the matters put to her by Mr Aspinall and Mr Ross at the time of the questionnaire. 12 While I consider that Ms Barros was endeavouring to tell the truth, her recollection as to when her overtime was in fact taken was faulty. She did indicate that she would go to the Union for advice, which had implemented overtime bans. She did participate in the strike of 25 August 2006 and the six week strike commencing on 30 August 2006. In my view, it is more than likely that she did engage in the overtime bans by following the Union's approach. 13 In any event, in view of Ms Barros' obvious confusion, I cannot be satisfied on the balance of probabilities that it has been demonstrated by the applicant that Ms Barros was entitled to be paid in full irrespective of the operation of s 507. The onus rests on the applicant to demonstrate this element of the case, in respect of Ms Barros, on the balance of probabilities: see Briginshaw v Briginshaw [1938] HCA 34 ; (1938) 60 CLR 336 as explained in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66 ; (1992) 110 ALR 449. 14 Therefore, in relation to Ms Barros, I place her in the same category as the other employees listed in Column 1 of the table. (4) For the purposes of subsection (3), overtime is taken not to be a separate shift. (5) An employee must not accept a payment from an employer if the employer would contravene subsection (2) by making the payment. It is uncontested between the parties that the employees engaged in industrial action within the meaning of s 420(1)(b) of the Act for the purposes of s 507. It is well accepted that part performance of work, or performance of work other than as directed, amounts to industrial action. An ongoing ban on the operation of a certain machine, or on performing certain tasks, while otherwise completing a full day's work, is industrial action. A lock-out from, or a ban on, performing overtime, where overtime is not required or expected under a contract of employment may constitute industrial action. 18 In Construction, Forestry, Mining and Energy Union v Master Builders' Association of Victoria [2000] FCA 169 ; (2000) 100 FCR 395 , Goldberg J considered the meaning of the expression 'preventing employees from performing work' for the purposes of the then s 170ML(4). His Honour was addressing the question of whether preventing employees from performing overtime work that they did not have a right to perform under their contracts of employment could constitute a lock-out under that provision. The concept of "preventing" in the context of s 170ML(4) is not limited to a situation of putting up a barrier or bar to something which is going to happen in the absence of some supervening event stopping it; it also covers a situation where something is stopped in circumstances where if it was allowed or granted it would occur in a particular way. 19 The same analysis can be applied in the circumstance here, where these employees imposed a ban on the performance of overtime even where there was no contractual obligation or right to perform it. Using the words of s 420(1)(b) of the Act, it was a ban 'on the acceptance of or offering for work'. 20 The main dispute in this proceeding between the parties was whether the overtime ban constituted ongoing industrial action commencing at the time specified in the notice advising of overtime bans, being the morning of 22 August 2006 and continuing until the ban was removed (after 29 August 2006), or whether there were a series of industrial actions in relation to overtime separated by days of ordinary work. 21 As I have indicated, Heinemann contended that it was prohibited by the operation of s 507 of the Act from paying the employees any wages for any of the days 22, 23, 24, 28 and 29 August 2006. It said that the notice of intention to take protected action (which included the overtime bans) served on Heinemann by the Union was in terms that imposed an ongoing ban on performing overtime, commencing on Tuesday, 22 August 2006 and continuing for 12 months or until agreement was reached on the terms of a new Union collective agreement. Heinemann also contended that the company enquired with the employees whether they intended to implement the ban and the employees advised Heinemann of their intention to do so. Heinemann contended that the ban was clearly in place, and was not lifted and reapplied on a daily basis and as such it constituted ongoing industrial action. 22 The applicant contended that the industrial action implemented by the employees was a series of bans either from 4.30 pm each day until the start of the shift the following day, or for a two hour period between 4.30 pm and 6.30 pm each day being the time that an ordinary overtime shift takes place at the factory. 23 In resolving the main dispute between the parties, it is important to understand and appreciate the purpose of s 507. There has been no judicial consideration of the legislative purpose of s 507, although some consideration has been given to its predecessor, s 187AA of the pre-reform Act. In Independent Education Union of Australia v Canonical Administrators (1998) 87 FCR 49 , Ryan J discussed the policy behind s 187AA of the pre-reform Act, which operated similarly to s 507 to prohibit the payment of 'strike pay'. For the employee those consequences are normally loss of remuneration in respect of the period of the industrial action and for the employer they are the loss of production attendant on a lockout. Consistently with that policy, s 187AA is framed to ensure that the loss of remuneration is not recouped after the bargaining is over and necessarily applies to protected action. 24 Justice Lander also commented on the legislative purpose of s 187AA of the pre-reform Act in Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 ; (2007) 158 FCR 543. The policy of the Act is to discourage industrial action as it is defined in s 4 of the Act. The purpose of Pt VIIIA of the Act, in which these provisions are contained, is to prevent an employer making a payment to the employer's employee in relation to any period during which the employee engages in industrial action. It is the intention of the Act to discourage employers and employees agreeing to the employer paying employees for that period of industrial action engaged in by the employee. To that end, s 187AA makes it a contravention for an employer to make a payment to an employee who has in relation to a period during which the employee engaged or engages in industrial action and at the same time makes it a contravention for the employee to accept a payment from an employer if by doing so the employer will contravene subs (1) by making that payment. The policy of the Act is that if an employee engages in industrial action then it must be at the employee's own expense. The purpose of s 187AB is to discourage unions and their officers from making claims for a payment or engaging in or threatening to engage in or organising industrial action for the purpose of coercing the employer to make a payment to an employee during a period of industrial action. That section has as its added purpose a protection to the employer in the event that a union or its members engage in that further industrial action. 84. Industrial action is discouraged by putting the cost of that industrial action upon the employee rather than the employer. No doubt it is thought that an employee will be less likely to take industrial action if the employee knows that it is a contravention for both the employer and the employee if the employer makes a payment for the period of industrial action. 25 Both Ryan and Lander JJ's considerations of the policy standing behind s 187AA suggest that the purpose of that provision was to make employees carry the expense of any industrial action engaged in by them. Neither Ryan or Lander JJ considered that the provision was intended to operate more broadly to punish the parties for engaging in protected industrial action beyond shouldering the burden of the actual economic loss resulting from the action. 26 Section 507 is in different terms to s 187AA, although basically the same purpose behind the provision is as set out by Ryan and Lander JJ in their consideration of its predecessor. 27 However, it is important to observe that s 507(2) sets out a calculation to assess how many hours' pay an employer must withhold from an employee who engages in industrial action on a day, depending on whether the employee engages in industrial action for a period less than four hours or four hours or more. The effect of the subsection is that an employee who engages in industrial action for any period less than four hours in a day, even if it is a period of five or ten minutes, must have four hours of pay withheld. Notably, an employee who engages in industrial action for four hours or more in a day must not be paid in relation to the period of industrial action on that day, but may be paid in relation to hours worked. For example, an employee who takes industrial action for five hours in a day but works the other 3.5 hours of an ordinary day must not be paid in relation to 5 hours of the day but is entitled to payment in relation to 3.5 hours. 28 It seems one purpose of the operation of s 507 is to deter industrial action for minor grievances. An employee will seriously consider stopping work for just five minutes if the consequence is losing a half day's pay. On the other hand, I do not consider the provision to be punitive. If it were, the provision would operate to deduct a full day's pay from an employee who engages in four hours or more industrial action on a day. Rather the intention seems to be to ensure that industrial action is not taken lightly and that the employee who engages in industrial action bears the economic consequences of that industrial action. 29 The Court must construe the words of s 507 in context. Part of the context of s 507 is that there is a right to take protected action. Another part of the context is that, because of other provisions of the Act, there is a right ordinarily to be paid for the work undertaken. Another part of the context is that the Act is trying to ensure that either employer or employee bears the financial consequence of loss of production; in the case of a lock-out, the employer, in the case of a strike, the employee. ... Whether particular industrial action occurs during a single period, or during separate periods, will also be a question of fact. For my own part, I do not regard it as self-evident that every day upon which industrial action occurs should be regarded as a separate "period". In the present case, for example, I consider that an employee who stopped work on 5 August 2003 and did not resume work until 10.00 am on 6 August 2003 should be regarded as having engaged in industrial action during one period only. If that period were broken by a period during which the employee performed work normally, there would then have been two periods of industrial action. 31 It is important to note that Jessup J's comments were made in relation to s 187AA which did not require looking at industrial action 'on a day'. Section 187AA included the words 'in relation to a period in which'. An important feature of s 507, and the most salient distinction between s 507 and its predecessor s 187AA, is the focus on the industrial action 'on a day' and to calculate the duration of industrial action on a day by day basis. However, his Honour makes clear that the industrial action is not necessarily considered a continuing period of industrial action if it is broken by a period of ordinary work. 32 As I have said, the operation of s 507 has the consequence that employees are to bear the economic loss of their industrial action. In a case where the employees have contributed the benefit of a full day's work to their employer, it seems contrary to the intention of the provision to punish employees beyond the calculation allowed for in the provision. 33 It was agreed that on each of 22, 23, 24, 28 and 29 August 2006, the employees imposed a ban on overtime. On the facts of the case before me, I am satisfied that the ban constituted two hours of industrial action on each of those days. 34 While the ban did not affect the fulfilment of the employees' obligations in relation to ordinary working hours, s 507(4) stipulates that overtime is not to be taken as a separate shift and so a ban on overtime must be seen to be industrial action in relation to the shift of ordinary working hours. It follows that the industrial action, which took place for approximately 2 hours between 4.30 pm and 6.30 pm each afternoon, constituted industrial action on a day and falls within s 507(2)(a). As a result, 4 hours pay must be deducted. 35 The applicant claimed that if Heinemann was the employer required by the operation of s 507 to withhold payment in relation to 4 hours on each day of industrial action, it must be assumed that the usual working day at Heinemann was 7.45 am to 6.30 pm. This was comprised of ordinary work hours, being 8.25 hours, plus 2 hours of overtime. It was therefore argued that Heinemann must withhold the 4 hours pay from a notional 10.25 hour day instead of an 8.25 hour day. It followed that the employees should have been paid for 6.25 hours each day. 36 To deduct 4 hours from 8.25 hours of work performed in full for a ban on overtime that did not affect that ordinary day's work or result in any loss in relation to those 8.25 hours may appear inappropriate. It is, however, the result that the Act requires in this proceeding. There was no suggestion that Heinemann employees were paid or were entitled to be paid for a notional 10.25 hour day. Overtime was requested and worked on an as needs basis. The fact that there was a ban on overtime does not mean that overtime was actually required. Therefore, on the evidence before me, I am not satisfied that the usual working day at Heinemann was 10.25 hours. 37 Putting aside the effect of the sign-on bonus agreement, Heinemann has breached cl 7 of the Agreement by underpaying the employees in Column 1 of the table and Ms Barros in relation to 4.25 hours pay for each of the 5 days (other than where an employee was absent). 39 I should interpolate that even if the sign-on bonus agreement did release Heinemann from its obligation to pay to each employee the unpaid wages, Heinemann may still have breached cl 7 of the Agreement, even if there was no obligation to pay the wages as and when they fell due. I do not hesitate to consider further this matter in view of my conclusion that the payment pursuant to the sign-on bonus agreement has not discharged Heinemann's obligation to pay the unpaid wages. 40 Between 10 November and 17 November 2006, Heinemann entered into a series of sign-on bonus agreements with its employees that it would pay each employee a sign-on bonus of $1,100 gross. The terms of the sign-on bonus agreement reached between Heinemann and each of the employees appears above in the statement of agreed facts. 41 The parties dispute the purpose and effect of the payment and of the sign-on bonus agreement. Heinemann contended that the sign-on bonus agreement was an accord and satisfaction of the employees' award entitlements. Heinemann submitted that if any wages were owed in relation to the five day period, it was released from that obligation by the terms of the sign-on bonus agreement. The applicant contended that the sign-on bonus agreement was not a settlement of the employees' claims pursuant to s 719 of the Act. It contended that the sign-on bonus was just that, a bonus sweetener for the signing of the new enterprise agreement, one agreed to after a long and bitter bargaining process and industrial dispute. 42 It was accepted that one cannot contract out of award provisions: see Josephson v Walker (1914) 18 CLR 691 at 700; Byrne v Australian Airlines Ltd [1995] HCA 24 ; (1995) 185 CLR 410 at 421; Textile, Clothing and Footwear Union of Australia v Givoni Pty Ltd (2002) 121 IR 250 at 256. However, the parties agreed that there was, in theory, no barrier to compromising or satisfying a claim arising under the Act for underpayment of wages. The compromise or settlement of a claim in accord and satisfaction was distinguishable from a contracting out scenario where an employer seeks to avoid award obligations by entering into an employment agreement that strips away award rights. 43 The applicant relied on the principle that ex gratia payments (for example, a one-off bonus) cannot be set off against or deducted in satisfaction of an amount owed by virtue of an award entitlement. The applicant contended that in a situation where there are outstanding award entitlements and the employer pays to the employee a sum of money for a specified purpose other than the satisfaction of the award entitlements, the employer cannot afterwards claim to have satisfied the award entitlements by means of the payment. 44 In Australian and New Zealand Banking Group Limited v Financial Services Union of Australia (2001) 111 IR 227 at 236, the Full Court (Black CJ, Wilcox and von Doussa JJ) considered the circumstances in which a payment under contract could discharge an obligation under an award. The first situation is that in which the parties to a contract of employment have agreed that a sum or sums of money will be paid and received for specific purposes, over and above or extraneous to award entitlements. In that situation, the contract between the parties prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied on in satisfaction of award entitlements arising outside the agreed purpose of the payments. The second situation is that in which there are outstanding award entitlements, and a sum of money is paid by the employer to the employee. If that sum is designated by the employer as being for a purpose other than the satisfaction of the award entitlements, the employer cannot afterwards claim to have satisfied the award entitlements by means of the payment. The former situation is a question of contract. The latter situation is an application of the common law rules governing payments by a debtor to a creditor. In the absence of a contractual obligation to pay and apply moneys to a particular obligation, where a debtor has more than one obligation to a creditor, it is open to the debtor, either before or at the time of making a payment, to appropriate it to a particular obligation. If no such appropriation is made, then the creditor may apply the payment to whichever obligation or obligations he or she wishes: see Halsbury's Laws of England , 4th ed, vol 9, pars 505 and 506. That passage accurately analyses the judgment of Sheldon J in Ray v Radano and enunciates the relevant principle. 48 The first situation noted in the passage is one where "the parties to a contract of employment have agreed that a sum or sums of money will be paid and received for specific purposes, over and above or extraneous to award requirements". In that situation, the Full Court said, "the contract between the parties prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied on in satisfaction of award entitlements arising outside the agreed purpose of the payments. " [Emphasis added]. So the critical question is whether the relevant award entitlements arose outside the contractually agreed purpose. 49 It will usually be easy to determine whether there is a coincidence between particular award entitlements and the contractually agreed purpose. Take the case of an agreement for payment of wages of $1,000 per week to an employee who has an award entitlement to receive wages of $800 per week. Discharge of the contractual obligation will clearly also discharge the obligation to pay wages imposed by the award. On the other hand, take the first example offered by Sheldon J, where an employer agrees to pay a clothing allowance. It is no answer to a claim for underpayment of wages to say there was no award obligation to pay a clothing allowance. Similarly with Sheldon J's second example: it is no answer to an overtime claim to say the employee has received an over-award payment in respect of ordinary time. 46 The principle applicable to the circumstances before me is that there must be a clear correlation between the payment made pursuant to the sign-on bonus agreement and the obligation under the Agreement before the Court can conclude that the claim for underpayment of wages has been satisfied, and this is a question of characterisation. 47 The payments made to each employee of $1,100 gross were paid pursuant to, and in accordance with, the sign-on bonus agreement, so the question arises as to the characterisation of the purpose of the sign-on bonus agreement and the operation of the releases relied upon by Heinemann. The purpose of the sign-on bonus agreement and the operation of the releases are obviously connected. 48 I turn to consider the terms of the sign-on bonus agreement and circumstances existing at the time of the entering into the sign-on bonus agreement by each employee. 49 I have ignored the expressions of subjective intention of the employees, although such were in evidence before me. Obviously, the subjective intentions of any party should not be taken into account when construing an agreement: see eg, DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12 ; (1978) 138 CLR 423 at 429, and Pacific Carriers Limited v BNP Paribas (2004) 281 CLR 451 , 461-62. Of course, the objective background which I may consider does include the purposes and assumptions shared by the parties: see Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24 ; (1982) 149 CLR 337 , 354. It is the fact of their concurrence by the parties which converts what would otherwise be 'subjective intention' into objective elements of an agreement's context. Relevantly, in this proceeding, as I will return to later, I take into account Heinemann's position made known to the Union and the employees that it could not make any payment by reason of s 507 of the Act, and the fact that the issue of the unpaid wages in respect of the overtime ban was not up for discussion or consideration by Heinemann at the time of entering each sign-on bonus agreement. 50 The sign-on bonus agreement was crouched in very broad terms. It did not specifically refer to any claim that the parties had against each other. Specifically, there was no mention in the sign-on bonus agreement that the payment was in satisfaction of a claim for underpayment of wages in respect of five days' wages. Nor does the payment coincide with the amount of wages owing to each employee. In fact, the sign-on bonus agreement was entered into and the payment was made to employees who had no wages claim against Heinemann. 51 The sign-on bonus agreement and payment occurred in the context of the settlement of a protracted industrial dispute over the bargaining of a new certified agreement. The industrial dispute had culminated in a six week strike. At the time the sign-on bonus agreement was raised as a possibility with employees, a number of issues were still in dispute, including rates of pay, back pay of the new rates and employee entitlements under the new certified agreement, as well as the return to work of employees on strike. 52 It is also to be recalled that Heinemann believed and represented to the Union and the employees that it could not legally pay wages in relation to the industrial action over the five days. The payment made under the sign-on bonus agreement was therefore not characterised by Heinemann at the time as compensation for the unpaid wages. In fact, Heinemann was saying the opposite to its employees, that is, that the company could not pay them wages for the period in question because of the operation of s 507 of the Act. The employees in entering into the sign-on bonus agreement would have properly assumed this was the basis of the understanding between Heinemann and its employees. 53 Heinemann did contend that the "elephant in the room" at the time of the entering into of the sign-on bonus agreement was the failure to pay the unpaid wages which all the parties had in their minds. However, the evidence indicated that the issue of the unpaid wages was not under discussion around the time of entering into of the sign-on bonus agreement. I do not regard the evidence given by Mr Ross that a sticking point with the Union was the non-payment of the individuals who had engaged in industrial action as detracting from this conclusion. He was specifically referring to his negotiations with the Union in relation to the new enterprise agreement and not the negotiations with the employees. 54 Further, by 29 September 2006, when the parties were at the final stages of the negotiations, the draft written final offer directed to the employees made no mention of the claim for unpaid wages. This draft was the best evidence as to the matters that were still in dispute between Heinemann and the employees. 55 In any event, the one thing that was clear from Heinemann's point of view, was that they could not as a matter of law pay the unpaid wages for the days in question because of s 507 of the Act, and this was communicated to the employees. This leads me to the view that the issue of unpaid wages was not on the table as a matter for resolution at the time of entering into of each sign-on bonus agreement. That issue, at least as far as Heinemann was concerned, was not alive because of its view of the operation of s 507. I am supported in such a conclusion by the acceptance by Heinemann in its letter to the applicant on or about 13 November 2006 that there was an acknowledgement by the employees that Heinemann considered that it was unable to make payments to employees in respect of the overtime ban period. This supports the view that whatever else was in dispute, the question of the unpaid wages was not in contention between the parties, as Heinemann stance was unequivocal and accepted by the employees. 56 In any event, even if the question of the unpaid wages was a live issue, I do not consider that the sign-on bonus agreement covered or was directed in any way to the question of the unpaid wages. 57 Each sign-on bonus agreement and payment was entered into and paid to encourage the Union and employee to enter into the new certified agreement for the future. 58 It is to be recalled that Heinemann entered into sign-on bonus agreements with, and paid the sign-on bonus to, all employees, not just those with a claim for underpayment. Undoubtedly, each sign-on bonus agreement was a separate agreement between Heinemann and each employee. Therefore, each employee may be releasing Heinemann for different claims. However, the fact that Heinemann entered into many sign-on bonus agreements, on the same terms, and entered into a agreement bringing an end to the industrial action with the Union at the same time, indicates the purpose of the sign-on agreements and payment to the employees was directed to providing the bonus, not in satisfaction of some of the employees' entitlements to wages. 59 In my view, taking into account the terms of the sign-on bonus and the surrounding circumstances, the purpose of the sign-on bonus agreement and payment made there under were not directed to the satisfaction of the employees' entitlements to unpaid wages in respect of the five days. This must be done in the context of the other terms of the sign-on bonus agreement, its purpose, and the surrounding circumstances. As I have said, the purpose of the sign-on bonus agreement and the operation of the releases are connected. 61 The first basis upon which the payment was made (as referred to above) was framed to cover any claims arising from the 'bargaining process for the new agreement'. That phrase refers to the very specific process of negotiating a new certified agreement as set out in the Act. The wage dispute could not be properly characterised as falling within that bargaining process. 62 The second basis of the condition of payment (as referred to above) was framed as a broad mutual release of any claims in respect of both 'the bargaining process' and 'any industrial action'. Again, the wage dispute could not be properly characterised as falling within the bargaining process. The phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends. 64 The wage dispute in respect of the overtime ban could be viewed as in someway connected to the industrial action. The overtime ban was part of the industrial action, as shown by the notice given by the Union. The employees actually engaged this form of industrial action and, as a consequence of that course of conduct, Heinemann withheld all pay for the period. 65 However, the context in which the release appears in the sign-on bonus agreement, and the context of the agreement with the Union, indicates that the basis of the payment was not intended to extend to the unpaid wages in respect of the five days in August 2006. The employees' claim arising from Heinemann's failure to pay the employees in full for the period of industrial action was essentially only a claim for non-payment of wages. While the non-payment of employees occurred during the period of industrial action, this does not mean the employees' claim was 'in respect of' any industrial action as contemplated by the ambit of the sign-on bonus agreement and the releases contained therein. 66 As I have said, the purpose of the payment was to provide a sign-on bonus as part of the incentive to enter into a new certified agreement, between Heinemann and the Union, and the releases were asked 'in order' to receive this sign-on bonus. A release of a general nature must be read in light of the context of the agreement in which it is contained, and the surrounding circumstances in which the release is given by a party. The content of the sign-on bonus agreement and the surrounding circumstances confirm that the scope of the release did not include the claim for unpaid wages for the five days in August 2006. 68 I do not need to consider the truly alternative allegation of the applicant concerning the question of cl 5 of the Award or s 189 of the Act, and the issue of the failure to pay the wages as and when they fell due. (2) The proceeding be adjourned to a date to be fixed. 70 The parties should also direct attention to the calculation of the wages outstanding by reference to each employee, and the amount of interest payable therein in the event an order is made under s 719(6) of the Act. 71 In the circumstances of this case, the applicant may wish to consider whether any separate penalty should be imposed. This proceeding mainly concerned the proper construction of s 507, and it was not suggested that Heinemann did not genuinely hold its view of the construction of that provision as contended by it. However, if the applicant wishes to pursue a penalty, then provision for a statement of facts and contentions to be relied upon should be included with the proposed directions for the further hearing. | ban on overtime ordinary working hours prohibition on payment for period of industrial action what is duration of industrial action. contracting out of award provisions accord and satisfaction compromise for underpayment of wages. release construction 'in respect of' any industrial action. industrial law industrial law industrial law |
LEDs create virtually no heat and, as a result, use about one-tenth the power of incandescent light globes. LEDs do not use a filament that can burn out or break and good quality LED lights can last for approximately 100,000 hours of continuous use. Unsurprisingly, the design, manufacture, importation and sale of LEDs in Australia is a competitive business. These proceedings concern two designs of rear combination LED lights (Registered Design No.302359 --- dual lens and No.302360 --- triple lens) ("the Designs") sold by the Applicant, LED Technologies Pty Ltd ("LED Tech"), under the name "LED autolamps" and registered under the Designs Act 2003 (Cth) ("the 2003 Designs Act "). The priority date for each Design is 22 June 2004. Base to take a variety of 2, 3 or 4 combination lenses for stop, tail, indicator, reverse LED lenses, no visible screws. Representations of each of the Designs are set out in Annexure A. The Designs are not dimensioned. The LED Tech rear combination lights are manufactured in three sizes: 80mm, 100mm and 125mm. The first batch of dual lenses was produced by LED Tech's Chinese manufacturer (referred to throughout these proceedings for reasons of business confidentiality simply as "M") in September 2004 and sold in Australia in September 2004. The triple combination lamps were first sold in Australia in April / June 2005. LED Tech's range of rear combination lamps includes 80BAR, 80BARR, 80BARW, 100BARR, 100BARW, 125BARR and 125BARW. The "A" stands for amber, the "R" for red and the "W" for white. LED Tech contends that the First to Fourth Respondents ("the Corporate Respondents") infringed the Designs and, further, by their conduct, contravened ss 52 , 53 and 65C of the Trade Practices Act 1974 (Cth) ("the TPA"). LED Tech contends that the Sixth and Seventh Respondents ("the Directors") authorised, directed and, further or alternatively, procured the conduct of the Third and Fourth Respondents. LED Tech no longer seeks relief against the Fifth Respondent, Mr Morrison. By cross-claim, the Respondents (except for the Second Respondent, Advanced Automotive Australia Pty Ltd) seek revocation of the Designs on three bases. First, pursuant to s 120(1) of the 2003 Designs Act , the cross-claimants contend the Designs are invalid as the representations are unclear and the monopoly lacks certainty. Secondly, pursuant to s 93(3)(c) of the 2003 Designs Act , the cross-claimants contend that LED Tech is not solely entitled to registration of the Designs because another person also has a co-entitlement and finally, pursuant to s 120(1) of the 2003 Designs Act , the cross-claimants contend the Designs are not new and distinctive but are substantially similar in overall impression to a design that forms part of the prior art base. The cross-claimants also seek relief against LED Tech in relation to what they describe as unjustified threats of design infringement and other relief against LED Tech and Mr Ottobre (a director of LED Tech) in relation to allegedly misleading statements made by LED Tech on its website, in a circular sent to 5,000 prospective customers and on its packaging for its lights. What is disputed is the construction and application of those provisions to the facts. "Design" in relation to a product is defined in s 5 of the 2003 Designs Act to mean "the overall appearance of the product resulting from one or more visual features of the product". The phrase "visual feature", in relation to a product, is defined in s 7(1) of the 2003 Designs Act to include "the shape, configuration, pattern and ornamentation of the product". Chapter 2, Part 4 of the 2003 Designs Act deals with the validity of registrable designs. "A design is a registrable design if the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design": s 15(1) of the 2003 Designs Act . A design is new "unless it is identical to a design that forms part of the prior art base for the design": s 16(1) of the 2003 Designs Act (emphasis added). A design is distinctive "unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design": s 16(2) (emphasis added). The emphasised language is important because it demonstrates that newness and distinctiveness are to be assessed not by comparing the design in question to the prior art base as a whole but by comparing it individually to each relevant piece of prior art. Put another way, a design that combines various features, each of which can be found in the prior art base when considered as a whole but not in any one particular piece of prior art, is capable of being new or distinctive. In addition, subject to s 15(2)(c) of the 2003 Designs Act , the newness or distinctiveness of a design is not affected by the mere publication or public use of the design in Australia on or after the priority date of the design or by the registration of another design with the same or a later priority date: s 16(3). Section 17 prescribes the things that are to be disregarded for the purpose of deciding whether a design is new and distinctive. There is, however, no claim in the present case that the Designs are identical to any prior art (ie not new); rather, the respondents claim that the Designs are substantially similar to the prior art (ie not distinctive). Section 19 prescribes the factors to be considered in assessing substantial similarity in overall impression. (3) If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the person must have regard to the appearance of the design as a whole. (4) In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user ). (5) In this section, a reference to a person includes a reference to a court. It will be necessary to return to consider these and other provisions of the 2003 Designs Act in greater detail later in these reasons for decision. It is sufficient at this point to note that the express provisions of the Act are a complete answer to the Corporate Respondents' submission that because some of them had "registered designs of their own which reflect the commercial products that they sell" it provides a "further indicator that there is sufficient distinction between the [Corporate Respondents'] products and the [Designs] to avoid infringement". In fact, it is another entity based in Mauritius and associated with the Sixth Respondent, Anthony James Keller ("Keller"), Prime Global Brands Ltd, which on 9 October 2006 lodged applications for registration of designs for a single, double and triple tail light assembly which were subsequently accepted ("the Condor Designs"). Representations of each Condor Design are set out in Annexure B. But whatever the relationship of Prime Global Brands Ltd to the Corporate Respondents, two things are clear. First, the Condor Designs are irrelevant to the newness and distinctiveness of the Designs (ie the validity question) because they were published subsequently: s 16(3). Secondly, the fact that the Condor Designs were accepted for registration says nothing with respect to their own newness and distinctiveness (ie the infringement question); s 39 requires the Registrar to register any design (subject to certain exceptions: s 43) that satisfies certain formalities; there is no inquiry into whether the design is registrable. It is only during the examination process that the Registrar considers whether the design is registrable: s 65. (Indeed, in this case an examiner raised the concern that the Condor Designs were not new and distinctive in light of LED Tech's prior Designs. ) Even then, a Registrar's decision upon examination is not entitled to judicial deference: see s 88. In short, the fact that the Corporate Respondents may maintain registered (and even examined) designs in respect of their own products is irrelevant to the judicial determination of whether those products infringe the earlier-registered Designs and whether those Designs are registrable. For their part, the cross-respondents have two responses: (1) Mr Ottobre is the sole author of the Designs and his employer LED Tech is the only person entitled to registration; and in the alternative (2) even if "M" (jointly) created the Designs, it did so pursuant to a contract with LED Tech and therefore would not be a person entitled to registration under s 13 of the 2003 Designs Act in any event. With respect to the first point, the cross-claimants dispute the proper legal characterization of the facts relevant to creation; with respect to the second, they submit that as a matter of law an independent contractor such as "M" must be distinguished from an employee (whose design created in the course of employment they concede would belong to the employer). Who then, in fact, is entitled to be entered as the registered owner of the Designs? Section 13(1) of the 2003 Designs Act lists the persons "entitled to be entered on the Register as the registered owner of a design that has not yet been registered. Unsurprisingly, more than one person may be entered on the Register as the registered owner of a design: s 13(3)(a) of the 2003 Designs Act . However, each of the persons registered must fall within one or more of the categories of persons listed in s 13(1). If not all of the entitled persons are included in the registration, the court may revoke the registration: s 93(3). The registered owner of the Designs is LED Tech. The cross-claimants contend that the Designs should be revoked because when each of the Designs was first registered, LED Tech's Chinese manufacturer, "M," was entitled to be registered in addition to or in lieu of LED Tech and was not so registered. The cross-claimants' contention should be rejected. To understand the flaws in that contention, it is necessary to restate some of the facts. In 1987, Mr Ottobre established a business selling automotive parts under the name "Auto Trade Supplies". In 2002, Mr Ottobre incorporated a company "ATS Auto Trade Supplies Pty Ltd" in relation to that business. In April 2002, Mr Ottobre attended the Automotive Parts Association Trade Show in Taiwan and became aware of the use of LEDs in automotive lamps. At the same trade show, Mr Ottobre met a representative from a Taiwanese company, Valens Company Limited ("Valens"), discussed with that representative the lights that Valens manufactured and ascertained that Valens would be interesting in manufacturing lights for Mr Ottobre's company. After the trade show, Mr Ottobre developed an 80mm x 80mm square lamp comprised of an injection-moulded lens fitted with LEDs. The circuit board containing the LEDs was fitted inside the lens, then held in place and sealed by pouring resin over the top of the circuit board. The lamps were then clipped into a simple base attached to the vehicle. The resulting lamp was both waterproof and dustproof. After corresponding by email with the Valens representative, Mr Ottobre visited Valens in Taiwan in mid-July 2003. Before going to Taiwan, Mr Ottobre prepared sketches of his design for a single square LED lamp, 80mm x 80mm. At the meeting in Taiwan, Mr Ottobre provided the Valens representatives with the sketches and a sample of a conventional 80mm x 160mm lamp. Between July and December 2003, Mr Ottobre requested Valens to manufacture the single lens in three sizes --- 80mm x 80mm, 100mm x 100mm and 125mm x 125mm. There were difficulties and relations ultimately soured. Valens manufactured single LED lamps and the bases for such lamps which were sold in Australia from about February 2004. Valens continued to supply the lamps without the base until about February 2006. In approximately April 2004, either during or after attending another Automotive Parts Association Trade Show in Taiwan, Mr Ottobre met in a hotel board room with "M"'s owner and some of its representatives. Mr Ottobre provided them with samples of a single-lens 80mm x 80mm LED automotive lamp (being the lens manufactured by Valens) and some hand-drawn sketches he had prepared of a lamp base into which individual red, amber and white lamps could be fitted as double and triple combination lamps. Mr Ottobre did not retain copies of the sketches. In addition to the samples and the sketches, Mr Ottobre explained the combination lights and his estimate of the likely sales of such lights. Mr Chao, a representative from "M," gave evidence that he received the samples and the sketches together with an explanation from Mr Ottobre. Mr Chao's evidence was that Mr Ottobre provided three hand-drawn sketches of the base, being a sketch of the dual base from the top view, a sketch of the dual base from the rear view and a sketch of the cross-section of the side view. The drawings did not show dimensions. Although Mr Ottobre's evidence was that his sketches were only of two views, Mr Chao gave evidence that the hand-drawn sketches were of the views set out in the engineering drawings marked "1", "2" and "3" on Annexure C. I accept Mr Chao's evidence. Following the meeting, Mr Chao worked with M's engineers to convert Mr Ottobre's hand-drawn sketches into CAD (Computer Aided Design) format. "M"'s engineers used CAD technology to prepare detailed engineering drawings of a 3D model and 2D drawings of the combination lamp base. At a practical level, the use of CAD enables an operator of the computer software to lay out and develop work on a screen, print it out and save it for future editing. Having converted Mr Ottobre's hand drawn sketches of the base into CAD format, Mr Chao printed the engineering drawings of the lamp base. A copy of the engineering drawing, in the form of Annexure C, was sent by Mr Chao to Mr Ottobre. On 4 June 2004, Mr Ottobre emailed Mr Chao asking "M" to provide him with a price for making a mould to house, in both dual and triple combination, the LED 80mm lamps with the same pattern lenses as the sample Mr Ottobre had provided to "M" back in April 2004. On 11 June 2004, M sent by facsimile an invoice to LED Tech quoting US$7,500 to create a "mold for base holder for two LED80 one mold with one cavity". Mr Ottobre accepted "M"'s quoted price. "M"'s engineers used the CAD engineering drawings to prepare a mould for the two combination lamp base. The CAD engineering drawings were created using the same software that controls the machines which cut moulds from a diecast metal blank from which the products were produced, thus greatly simplifying the process of manufacturing an actual product from the design. M's engineers also produced a three-dimensional model of the combination lights. On 18 June 2004, after receiving a copy of the model, Mr Ottobre printed drawings from the three-dimensional model and used those drawings as the basis for LED Tech's application to register the dual and triple combination lamp designs. Mr Chao gave evidence that "M"'s quoted price (and ultimate bill, which was paid by LED Tech) for production of the mould included, without any separate allocation, the cost of creating the CAD drawings, which, as noted earlier, are used to control the die-cutting machines to cut the moulds. Authorship of a design is in the "person whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form": Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd (1985) 7 FCR 75 , 80. On the facts just described, it is clear that Mr Ottobre is the person who conceived the relevant shape, configuration and pattern of the Designs and reduced it to a visible form; "M" simply converted that design to an electronic form in order to facilitate the production process. Put another way, it was Mr Ottobre, not "M", who had the idea for dual and triple combination LED lamps in one base. It was Mr Ottobre who reduced that idea to visible form in the sketches. As the engineering drawings marked "1", "2" and "3" on Annexure C record, it was Mr Ottobre's sketches which contained the features different from those in any other previous design. Accordingly, Mr Ottobre was "the person who created the design" and his company as his employer was the sole person entitled to be registered as its owner: s 13(1)(b) of the 2003 Designs Act . Assuming, contrary to what I have just found, that the facts set out above would support the conclusion that it was an employee or employees of "M", instead of (or in addition to) Mr Ottobre, who was the author of the Designs, then my conclusion on the entitlement question would not change. I accept (and it was not contested) that "M" was an independent contractor rather than an employee of LED Tech. That being so, "M" and its employees did the work "under a contract with another person" (LED Tech) within the meaning of s 13(1)(b) of the 2003 Designs Act and LED Tech is the person entitled to register the design thus created. There was some dispute as to whether there was in fact any contract between LED Tech and "M" for the creation of the CAD drawings. The proposition was founded on the basis that there was no separate charge or entry on any billing invoice relating specifically to the provision of that particular service. It may greatly be doubted that the absence of an itemised amount charged for the service goes any distance towards showing that the work was not done under a contract. Be this as it may, in the end, I accept the evidence of Mr Chao that the price on the invoice for the moulds included in it the cost of the creation of the CAD drawings, which were necessary and incidental to the manufacture of the moulds themselves. In other words, I am satisfied that the Designs, to the extent that they were created by "M" at all, were so created pursuant to a contract with LED Tech. The only remaining question, then, is whether that contractual relationship in the absence of an employment relationship is sufficient to make LED Tech the owner of the Designs under s 13(1)(b) of the 2003 Designs Act . In my view, it is. As noted above, the plain language of s 13(1)(b) states that if "the designer created the design in the course of employment, or under a contract , with another person - the other person" is the person entitled to be registered as the design's owner. As the disjunctive word "or," coupled with the commas on either side of the phrase "under a contract" indicate, there are two separate and distinct circumstances in which the creator of a design is not entitled to register it: (1) where the designer creates the design in the course of employment, whether or not there is a specific contract; and (2) where the designer creates the design under a specific contract, whether or not there is an employment relationship. This case would fall in the latter category. The cross-claimants submitted that s 13(1)(b) should be found to have the same meaning as s 19(2) of the Designs Act 1906 (Cth) ("the 1906 Designs Act"), which provided that "[w]here, in accordance with an agreement for valuable consideration entered into by a person with another person, the other person or an employee of the other person acting in the course of his employment makes a design for the first-mentioned person, the first-mentioned person is the owner of the design. " I agree that the language of the old provision is substantively not different from the new. It is to be noted, however, that under this provision of the 1906 Designs Act, employees are distinguished from "other persons" acting in accordance with a contract (ie independent contractors) by use of the disjunctive "or" to establish two separate and independent circumstances in which the ownership of a design does not vest in its creator. That is, the text of the former Act bears a construction that I would independently ascribe to the current provisions. Moreover, the cross-claimants cited no case or authority (and my own researches have discovered none) to contradict or otherwise dissuade me from this plain reading of the old and new acts. Accordingly, the submission that an independent contractor such as "M" retains any entitlement to register a design created pursuant to a contract must be rejected. For those reasons, the cross-claimants' contention that the registration of the Designs should be revoked pursuant to s 93(3)(c) of the 2003 Designs Act on the basis that LED Tech is not solely entitled to registration of the Designs because another person also has a co-entitlement is rejected. The invalidity is said to arise because the representations fail to adequately delimit the scope of the monopoly afforded by registration. Before turning to the facts relevant to this issue, it is necessary to look again at the system of registration prescribed by the 2003 Designs Act. A registered design is a design that is registered in conformity with the 2003 Designs Act: s 5. The 2003 Designs Act requires that there be a Register kept at the Designs Office: s 111(1). The Register may be kept by computer: s 112. Particulars of a registered design must be entered in the Register: s 111(2). Those particulars include representations of the design: s 111(2)(c). A "representation" means "a drawing, tracing or specimen of a product embodying a design or a photograph of such a drawing, tracing or specimen": s 5. The public is entitled to access all documents filed in connection with the registration of the particulars of a design: ss 111(3) and 113(1). If the Register is kept by use of a computer, inspection of the Register is satisfied by giving the public access to a computer terminal that they can use to inspect particulars kept by use of a computer: s 113(2). The Register is prima facie evidence of any particulars entered in it: s 118. Moreover, if the Register is wholly or partly kept by use of a computer, a document issued by the Registrar producing in writing all or any of the particulars comprising the Register or that part of it, is admissible as prima facie evidence of those particulars: s 118(2). Finally, a signed copy of or signed extract from the Register is admissible in any proceedings as if it were the original: s 118(3). It will be necessary to return to consider these provisions in further detail. The facts relevant to this issue are not in dispute. The legal characterisation of them is disputed. IP Australia operates a website at www.ipaustralia.gov.au. Access to that part of the Register kept by use of a computer is through this website. A copy of one form of the representations of each Design extracted from the IP Australia website is set out in Annexure A. These representations were also attached to Certificates of Registration produced by the Designs Office and tendered in evidence. The drawings in Annexure A are pink and faint. It will be necessary to return to consider the form of these drawings later in these reasons for decision. To use the IP Australia website to search for representations of a registered design, it is first necessary to go to a webpage headed "AU Designs Data Searching --- Introduction". That page informs users that not all representations are available online and that copies of representations can be obtained from the Designs Office in Canberra. The foot of the page contains a statement that "[c]ontinuing further indicates your acceptance of the terms and conditions defined in 'Legal and Copyright' button above". That "Legal and Copyright" notice states, inter alia, that the databases accessible through the IP Australia website contain errors and inaccuracies. LED Tech's solicitor gave evidence in this matter that, in addition to inspecting that part of the Register maintained by computer, he inspected the physical files maintained by IP Australia in respect of each of the Designs which had been sent from Canberra to Melbourne. Each physical file included a set of six greyscale drawings with perforations on the left hand margin indicating that they were received by IP Australia on 22 June 2004, being the filing date of the application for registration. Each set was kept on the relevant file in an envelope endorsed with the word "Informals". The greyscale drawings are not faint like the pink drawings displayed on the IP Australia website. A review of the file maintained by IP Australia revealed that the application for registration of each design in June 2004 was accompanied by one set of the greyscale drawings. Regulation 4.04(1)(f) of the Designs Regulations 2004 (Cth) states that for s 39(2)(a) of the 2003 Designs Act, part of the formalities check is confirmation by the Registrar that the application includes 5 copies of each representation of each design. Of course, LED Tech's application did not. In November 2004, Mr Ottobre received notice from IP Australia that his application for registration did not satisfy the formal requirements for registration because he had provided the office with only 1 set of representations, namely the greyscale drawings. The notice stated that if the problem was not fixed within 2 months, the applications might lapse. The pink drawings were subsequently lodged by Mr Ottobre in response to that request from IP Australia. Two questions arise for determination. First, what is the registered design (ie what are the legally cognisable representations of the design), and secondly, is that registered design "reasonably clear and succinct"? [Emphasis added. But in design law I think that the design is addressed to a person of some skill who might be called a person skilled in the art, but that a person skilled in the art is not necessarily familiar with particular methods of manufacture per se; I think he knows the prior art articles and the prior art registered designs and knows as much about manufacture as he would reasonably be expected to deduce from a study of those designs and articles, but not necessarily any more. ... I do think that if a design, depicted by reference to an article to which it has been applied, appears difficult to construe, evidence is admissible from persons familiar with those articles and with methods of applying designs to them, at all events where the design is as here confined to configuration. In what follows I use the expression "person skilled in the art" as a shorthand for a person with the elementary knowledge that I have above indicated; that is to say a person in the circumstances of this case, who is familiar at least with the shape and appearance and (so far as obvious) constituents of prior art roof tiles composed wholly or chiefly of metal, as known at the priority date of the registration. (Emphasis added. The cross-claimants submitted that the visual features of the Designs were hard to discern when looking at the pink drawings. Mr Garrard, a consultant to the automotive electrical industry, was called to give evidence by the cross-claimants. He looked at the pink drawings on the IP Australia website and in the Certificates of Registration produced by the Designs Office tendered in evidence and initially said he had difficulty in understanding the features of the Designs such as the side profile of the base and the degree of rounding of the lens. In cross-examination, he modified that evidence to the extent of acknowledging that he was able to discern features of the Designs except for the curved ends. Other witnesses gave evidence about the pink drawings and what they could and could not discern from them. It is therefore necessary to examine the validity of the cross-claimants' premise that no sufficient representation of each Design appeared on IP Australia's website with some care. As I noted earlier, printed representations of some of what was displayed when IP Australia's database was searched were tendered in evidence. Five different views of each Design were tendered. Even if one of those views were to be thought insufficient to convey to the observer all of the relevant features of the Design it by no means follows that the combination of images is necessarily deficient in that respect. In my view, it is possible to discern from the printed representations the visual features of the Designs, including the two particular matters to which Mr Garrard drew special attention, the side profile of the base and the degree of rounding of the lens. Adopting the language of Fullagar J, I consider each Design to be reasonably "clear and succinct" . It may be said that the pink drawings are not perfect or that they could be better or clearer. However, each Design does appear with reasonable clarity, and without necessity for unreasonably prolonged or complicated series of deductions, from the registered representation of an article to which the design has been applied . It is necessary to record, however, that the documents that were tendered show a particular magnification and resolution of the representations appearing in the database. Because the data is held electronically and displayed on the IP Australia website (in Adobe Reader as PDF documents), it is possible, within limits, to reproduce the representations at greater magnification than may first be displayed on the screen. That is, the printed exhibits cannot be taken as necessarily indicating the largest magnification or best resolution of what appears in the database and is accessible by the public. Again, it is possible to observe on IP Australia's website the five different views of each Design. When those views are displayed at higher magnifications, the details and specifications of each Design appear not just with reasonable clarity, but with great clarity. However, when I asked the parties after the hearing whether it would permissible for the Court to have regard to the magnified displays on the website (which were not tendered into evidence by way of printed or electronic copy), the Respondents contended that there was no evidence that the representations on the IP Australia website could be or were in fact magnified by any witness or that a member of the public seeking information as to a registered design would be expected to electronically magnify the online representations. I reject both contentions. First, there was evidence that witnesses had accessed the Designs on the IP Australia website and magnified the representations to some extent. Secondly, the 2003 Designs Act itself makes assumptions and imposes expectations about the public's access to and use of computers to view the registered designs. As noted earlier, the Act provides that the Register may be kept by computer and that the public must be given access in the Designs Office to a computer terminal in order to inspect the particulars of designs: ss 112 and 113. Notably, the Act does not stipulate that the Designs Office must explain to a member of the public how to use the computer to view the designs; rather, the provision of access is said to be sufficient, which necessarily carries with it a presumption or expectation that the public will know enough about computers to be able to make use of that access without further prompting (or that if they do not know enough, the problem will be theirs rather than that of the Designs Office or the registered proprietor of the design). In that context (ie the context of a design registration system which is publicly accessible through a website and provides a tool to enable users of the system to magnify representations to a size larger than that physically filed), it would be absurd to draw a distinction between a presumption or expectation that a member of the public would be able to access the base-level display of a design on the computer (an expectation which the parties implicitly accepted in their submissions) and a presumption or expectation that that person would not be able to go one further step and click on the magnifying lens at the top of the screen in Adobe Reader without prompting (which was effectively what was put by the Respondents). Because no special skill or complicated process is required to magnify an image (the magnifying lens icon, which is used with the same signification in many internet and desktop computing applications, is displayed prominently at the top of screen as soon as the base-level magnification of the design is opened), once one presumes that a person will be able to access the image at all (again, a presumption implicit in the Act and accepted by the parties) then it must also be presumed or expected that the person could magnify that image without prompting. Although I do not consider it necessary in this case to rely on it in light of ss 112 and 113 of the 2003 Designs Act and my primary conclusion that the printed representations of the Designs tendered in evidence were reasonably clear, I should also note that the doctrine of judicial notice stated in s 144 of the Evidence Act 1995 (Cth) provides an additional or alternative basis for reaching the same conclusion. Section 144 provides that proof is not required about knowledge that is not reasonably open to question and that is common knowledge generally, and that a judge may acquire knowledge of that kind in any way he or she sees fit. I consider that it is not reasonably open to question that PDF images may be magnified in Adobe Reader and that this fact has been and is general common knowledge to any user of computers and the internet during the relevant period of 2004 to the present. Accordingly, I would be inclined to the view that proof was not required that a member of the public seeking information as to a registered design would be expected to be able to electronically magnify the online representations, such that the Court is not barred from viewing the Designs online at higher magnifications. These additional considerations provide separate support to reject the contention that the visual features of the Designs are unclear. The representations do not fail to adequately delimit the scope of the monopoly afforded by registration. In the circumstances, I need not express a concluded view as to whether the Register in the case of these Designs is identified as being the representations printed from the IP Australia website and tendered in evidence, as what is held electronically and accessible by the public on the IP Australia website, as incorporating some or all of the hard copy documents held on the file maintained by IP Australia, or as some combination thereof. The reason is that, in my view, each Design that is registered is reasonably clear regardless of which of the foregoing definitions of the Register is used. It is therefore not necessary to resolve the question of what exactly is the Register for the purposes of the 2003 Designs Act or to resolve the question which would otherwise arise of what obligation a person who searches the Register electronically has if that search suggests that what is available electronically is incomplete or equivocal in a way which might be resolved by examination of hard copy documents kept on the relevant file. That contention should be rejected. The relevant provisions of the 2003 Designs Act are referred to above: see [9] to [13]. That a design is required to be "new and distinctive" to be protected under the 2003 Designs Act is a threshold requirement introduced in the 2003 Designs Act. The 1906 Designs Act used very different language. As a result of difficulties in interpretation and application, the Australian Law Reform Commission ("ALRC") recommended that the "innovation threshold" in s 17(1) of the 1906 Designs Act be replaced by the two-step "new and distinctive" test now found in the 2003 Designs Act: Report No 74, Designs (1995) (the "ALRC Report"). Distinctiveness is a term used by the courts to express the quality that a design must have to differentiate it sufficiently from previously published or used designs. To have that effect, the design must be noticeable and have some perceptible appearance of an individual character: [ Dart Industries Inc v Decor Corporation Pty Ltd (1989) AIPC 90-569 , 38, 975. In another case, relating to furniture design, it was said that design in such a field is a subtle thing and, provided it is distinctive to the trained eye, I think that registration should not be denied in view of the element of subtlety which is involved in the combination of old features in a particular way and the manner in which they are combined: D Sebel & Co Ltd v National Art Metal Co Pty Ltd (1965) 10 FLR 224, 227; approved in Australian Building Industries Pty Ltd v Woodman McDonald (Glass) Pty Ltd [1986] AIPC 90-302. The [ALRC] favours the two tiered approach and the distinctiveness test for several reasons. The distinctiveness test is a design approach. It recognises the importance of design in product differentiation. It is consistent with the way in which designers work. It will discourage the tendency to focus narrowly on 'one individual specific appearance' and to count up the differences between designs. It incorporates in a single concept many of the qualities sought in other unsatisfactory expressions such as 'judged by the eye', 'eye appeal', 'immaterial detail', 'trade variants', and 'obvious adaptation'. It is a more focussed test for assessing the degree to which a design is an advance on the prior art. It allows a different prior art base to be defined for novelty as against distinctiveness. This is useful because the aim with the novelty test is to exclude identical designs but the aim with the distinctiveness test is to recognise innovation. It directly addresses the need for greater differentiation between designs, both for registration and infringement purposes, that was evidenced by submissions, consultations and the [ALRC's] survey of design users. (Some formatting altered; footnotes moved to text in brackets. Under the 2003 Designs Act, a design is distinctive "unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design" as it existed before the priority date of each Design: s 16(2) (emphasis added). As noted earlier, that test has an important temporal aspect: anything which occurs after the priority date (the filing date of the application for registration) is irrelevant: s 16(3). Secondly, contrary to the Respondents' submissions, distinctiveness is to be assessed not by comparing the design in question to the prior art base as a whole but by comparing it individually to each relevant piece of prior art: s 15(1) read with ss 16(1) and (2). Part 4 of Chapter 2 of the 2003 Designs Act must be read as a whole. The Respondents cannot, as they do, simply selectively choose ss 15(1) and 19(2) to support their contention that a comparison is made of the design with the totality of the entire relevant prior art base for that design whilst ignoring the express words of the rest of Pt 4 including ss 16 and 19(1). It is those sections which expressly provide that a design is distinctive unless it is substantially similar in overall impression to a design that forms part of the prior art base for the design. As a result, a design that combines various features, each of which can be found in the prior art base when considered as a whole but not in any one particular piece of prior art, is capable of being distinctive: Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [60] ; Karen Millen Ltd v Dunnes Stores Ltd [2008] ECDR 11 at [82]-[84] (stating that the registered design must be assessed with regard to particular prior designs rather than a hypothetical amalgam of a number of prior designs). See also Lockwood Security Products Pty Ltd v Doric Products Pty Ltd [2007] HCA 21 ; (2007) 235 ALR 202 (upholding the validity in the patent context of a combination of features known collectively in the prior art). Thirdly, the judgment is an objective one. In assessing substantial similarity in overall impression, the standard to be applied is that of the informed user - namely, the court standing in the shoes of a notional person who is familiar with the product to which the design relates, or products similar to the product to which the design relates: s 19(4); Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 ; see also Dart Industries Inc v Decor Corporation Pty Ltd (1989) 15 IPR 403 , 408-409. That informed user , in assessing substantial similarity in overall impression: gives more weight to similarities between the designs than to differences between them: s 19(1); considers the state of development of the prior art base for the design: s 19(2)(a); considers the particular visual features of the design described in the statement of newness and distinctiveness in the context in which they appear: s 19(2)(b) and (c); if only part of the design is substantially similar to another design, considers the amount, quality and importance of that part in the context of the design as a whole: s 19(2)(c); and considers the freedom of the creator of the design to innovate: s 19(2)(d). The "informed user" concept in the 2003 Designs Act has been the subject of recent judicial consideration in Australia: Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [19] - [27] ; Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589. It is a concept the ALRC borrowed from European Community Design law, now codified in Council Regulation (EC) No. 6/2002 and in the Registered Design Act 1949 (UK): see ALRC Report, para 5.17-5.21 and 6.12-6.13; Proctor & Gamble Company v Reckitt Benckiser (UK) Ltd (2007) 73 IPR 605 at [32] and J Choo (Jersey) Ltd v Towerstone Ltd [2008] FSR 19 at [7]. The "informed user" concept has also been considered by the courts in the United Kingdom. He could thus be a consumer or buyer or be otherwise familiar with the subject matter say, through use at work. The quality smacks of practical considerations. In my view the informed user is first, a person to whom the design is directed. Evidently he is not a manufacturer of the articles and both counsel roundly rejected the candidature of "the man in the street". " Informed " to my mind adds a notion of familiarity with the relevant rather more than what one might expect of the average consumer; it imports the notion of "what's about in the market? " and "what has been about in the recent past? " I do not think it requires an archival mind (or eye) or more than an average memory but it does I think demand some awareness of product trend and availability and some knowledge of basic technical considerations (if any). In connection with the latter, one must not forget that we are in the territory of designs and thus what matters most is the appearance of things; as Mr Davis reminded me, these are not petty patents. Therefore, focus on eye appeal seems more pertinent than familiarity with the underlying operational or manufacturing technology (if any). I feel uncomfortable with analogy to the "man skilled in the art" whose "nerd-like" (and other) attributes seem too technical: Technip France SA's Patent [2004] EWCA Civ 381 ; [2004] R.P.C. 46 at [6-12] ( CA). This formulation was considered and approved by Lewison J in Proctor & Gamble Company 73 IPR 605 at [31], [32] and [41] and was also applied in Application by Pauline Ann Walton to invalidate UK Registered Design in the name of Zap Ltd [2007] ECDR 10. To the extent that it matters (and it might not), the Australian Designs Office ("the ADO") has indicated that the informed user concept is an objective test where the user is an ordinary or typical member of a sample of users of the product who is reasonably informed, being neither barely informed nor fully expert: Apple Computer Inc (2007) 74 IPR 164 and Icon Plastics Pty Ltd [2007] ADO 2 as discussed in Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [25] . Although it would be dangerous to attempt some comprehensive statement of principles that might be applied to the concept, it is apparent that an informed user : is reasonably informed; not an expert but more informed than an average consumer; is an objective standard. However, expert evidence may still be adduced in court to assist the Court in applying the informed user concept; focuses on visual features and is not concerned with internal features or features that are not visible to the naked eye. In the present case, the Respondents accept that each Design is new when compared to the prior art base as it existed before the priority date of each Design. The question which then arises is whether each Design is distinctive. In order to answer that question, two sub-questions arise for consideration. What was the prior art base before the priority date of each Design? What are the visual features of each Design? The prior art in evidence was extensive. The Respondents placed specific reliance upon the following prior art base products: the products depicted in the Narva Catalogue 2000/2001; the Britax "Squircular"; the products depicted in the Britax catalogue 2000/2001; the products depicted in the Narva Catalogue 2004/2005 (except those marked "new"); some of the products depicted in the Hella Catalogue 2003/2004; SYK Catalogue and products; and LED Tech's single-lens LED lamp. Before turning to consider the prior art base, at this point in the argument it is important to remember that the Respondents accept that the following distinctions existed between the prior art base (which, incorrectly, they would have considered as a whole) and the Designs: the absence of visible screws; the different visual features of the rear or base views of the Designs; the "cut-out" or "recess" at the end of a lamp; and the sloping, rounded mounting bracket surrounding the lenses. The question is whether an informed user - a person familiar with the product to which the design relates, or products similar to the product to which the design relates, and having regard to those matters listed in [56] above - would consider a Design with the distinct features listed in [62] as substantially similar in overall impression to a design that forms part of the prior art base for the design? In my view, such a person would not consider either Design to be substantially similar in overall impression to a design that forms part of the prior art base for the design. If one looks at the designs which comprise the prior art base, one can identify designs and products, including LED Tech's single-lens lamp, with some of the features found in each of the Designs - a lens separate from the base and from each other, a low profile with an open base and no visible screws. However, none of those designs include all or most of the features listed in [62] above, being features described in the statement of newness and distinctiveness for each of the Designs: see [2] above. For example, if one looks at LED Tech's single-lens lamp, it is apparent that, apart from the absence of visible screws, the product contains none of the other features. If one turns to consider the state of development of the prior art base, each of the Designs and the features described in the statement of newness and distinctiveness was a distinct advance over the prior art base in the sense that it combined various existing features in a way that had not been done before. On application to register each Design, the advances recorded in those Designs over the prior art base were substantial. And, as was acknowledged by Mr Garrard, each of the features listed in [62] was quite arbitrary from a design point of view. That is to say, the features were the product of conscious design choice rather than compelled by industry-wide standards or technological constraints. Contrary to the Respondents' contentions, the visual features chosen by Mr Ottobre were not "so little different from the designs available in the prior art base" as to be substantially similar in overall impression. Visually the product was different --- it was modern and streamlined with curved edges. No product in the prior art base incorporated all (or most) of the features listed in [62] in one product. In those circumstances, I do not consider that a person familiar with the product to which the design relates, or products similar to the product to which the design relates, would consider either Design as substantially similar in overall impression to any of the designs that form part of the prior art base. In considering the prior art base and the issue of whether each Design is substantially similar in overall impression to any of the designs that form part of the prior art base, the Respondents submitted that it was necessary to consider a product comprising several of LED Tech's single-lens lamps set side by side. Although at least one witness, Mr Carpenter, gave evidence that he had seen LED's single lenses installed side by side on vehicles, it was by no means clear when he saw such a configuration or what the precise configuration as to number and composition looked like. That lack of detail is probably fatal to the contention that each Design is substantially similar in overall impression to an arrangement of LED Tech's single-lens lamps side by side. Furthermore, even if I were to assume, hypothetically, that a person had physically abutted two or three of LED Tech's single-lens lamps side by side before the priority date of each Design and that such a creation constituted a design publicly used in Australia within the meaning of s 15(2) so as to make it a part of the prior art base, I do not consider that a person familiar with the product to which the design relates, or products similar to the product to which the design relates, would consider each Design to be substantially similar in overall impression to such a configuration. Instead of one continuous base along the long axis, there would be two or three bases with no flat strip or landing between each lens. And the sides of each base would not comprise a sloping, rounded mounting bracket surrounding a lens but would have vertical or straight sidewalls surrounding each lens. The underside of the bases would be different in shape, with mounting holes in different positions. For those reasons as well, the cross-claimants' contention of substantial similarity is rejected. It is common ground that the Condor Designs are not identical to the Designs. The question then is whether the Condor Products embody designs that are "substantially similar in overall impression" to the Designs: s 71(1)(a) of the 2003 Designs Act. The 2003 Designs Act was drafted so that the test of whether an allegedly infringing product is substantially similar in overall impression to the registered design is the same test applied to determine whether a design was distinctive for registration purposes: ALRC Report pars 5.22-5.23. As the ALRC said, "[T]he infringement and distinctiveness tests should be the same so that an infringing design is not a distinctive design and vice versa": para 5.22. Adopting the same test for distinctiveness and infringement broadens the scope of protection. The extent of difference required to make a design distinctive will depend on the state of development of the relevant prior art base. A more developed prior art base will mean that smaller differences will be sufficient to result in a finding that there is no substantial similarity: para 5.23. How then does one assess the overall impression of a design in infringement proceedings? As noted earlier, until recently there has been little Australian judicial consideration of the 2003 Designs Act. The principal cases to date include Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 ; Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd (2008) 166 FCR 358 ; Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589 and World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd (2007) 71 IPR 307. The principles set out in [53]-[59] are equally applicable in the infringement context. As s 71 of the 2003 Designs Act (read with s 19) makes clear, the court assesses whether the allegedly infringing design is substantially similar in overall impression to the registered design by comparing the allegedly infringing product to the registered design in the context of the whole appearance of the designs: see also ALRC Report para 6.25. The whole appearance is relevant as the context for the design even though, strictly, the design is only the distinctive visual features of the product. Greater weight is given to distinctive features than to other parts of the design, although still in the context of the whole of the appearance. The same principles of assessment apply where the distinctive features relate only to part of the design: ss 19(2)(b)(ii) and (c). Moreover, in determining whether a design is infringed the Court must give more weight to similarities between the designs than to differences between them: s 19(1). This legislative approach to the question of infringement ensures that courts assess infringement in the context of the whole appearance of competing designs rather than focusing on the differences between them. In addition, the scheme of the 2003 Designs Act requires the Court looking through the eyes of an informed user to consider: the state of development of the relevant prior art base. As stated earlier, one measure is whether the difference in distinctiveness between the Design and any previously known design is greater than the difference between the Design and the allegedly infringing design: s 19(2)(a); the new and distinctive features of the design: s 19(2)(b)(i); where only part of a design is substantially similar to another design, the amount, quality and importance of that part in the context of the design as a whole: s 19(2)(c); the freedom of the creator of the design to innovate. In other words, the nature and use of a product, or part of it, is a factor in defining the scope of the designer's freedom to choose shape and materials: s 19(2)(d). There is little doubt that first impressions are important when comparing a registered design with an allegedly infringing product in the manner prescribed by the 2003 Designs Act: ALRC Report para 5.15. In the United Kingdom, in applying an "overall impression" test, the approach is to hold a product embodying the registered design (provided that the Court is satisfied that it is a true embodiment of the registered design) and the alleged infringing product in hand and undertake a reasonably careful comparison between the two: Proctor & Gamble Company 73 IPR 605 at [12]. See also J Choo (Jersey) Ltd v Towerstone Ltd [2008] FSR 19 at [6] (citing Proctor & Gamble for the proposition that court may have regard to a physical embodiment of the registered design in making the comparison to the allegedly infringing product); but see Rolawn Lawn Ltd v Turfmech Machinery Ltd [2008] EWHC 989 Pat at [124] (stating that the exercise involves comparing the registered design to a photograph of the allegedly infringing product rather than the product itself). With respect, I disagree with the proposition that as a general matter a court should start out by comparing product with product rather than registered design with product. First and most importantly, such an approach is inconsistent with the statutory language. Section 71(1)(a) directs the court to perform the substantial similarity analysis by comparing a product (the allegedly infringing item) to the registered design. Secondly, Jacob LJ's approach is inconsistent with that taken by Kenny J in Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [28] , [35]. Significantly, the expert evidence in Review was challenged on the basis that the witness had improperly compared product with product (and had even tried the products on): see [33]. Although Kenny J ultimately allowed the evidence, her Honour nevertheless proceeded on the basis that the comparison for the court was between registered design and product and the expert evidence in question had to be taken subject to the complaints made by the other side: see [34]-[36]. I am of a similar view. While there may be circumstances in which it is appropriate (or at least not wholly inappropriate) for an expert witness giving evidence as an informed user to have regard to a product embodying the registered design in providing an opinion on the substantial similarity question, the task for the court itself as laid down by the statute remains to compare the registered design to the allegedly infringing product. Moreover, even if I were not inclined to the view of Kenny J, I could not, in light of the statutory language, consider her Honour's approach plainly wrong, and thus I would follow it in preference to Jacob LJ's approach in any event. I therefore conclude that infringement is determined by comparing the allegedly infringing product against the registered design, not by comparing a product embodying the registered design against the infringing product: s 71. Thus the fact that the actual LED light is similar to the Condor TL light is not relevant. Moreover, infringement is determined by comparing only the visible features of the design to the infringing product: ss 7 and 19. Thus the fact that the products have different materials in the lens or have different voltages is also irrelevant. If a visual comparison is made of the top view of a Condor product (such as the TL80ARW) against the registered design (eg figures 1, 2, 3 and 4 of 6 in Annexure A), the Condor product is "substantially similar in overall impression" to the Designs: s 71(1)(a) of the 2003 Designs Act. There is a continuous base. There is a flat strip or landing between each lens. The sides of the base of both the Designs and the Condor product comprise a sloping, rounded mounting bracket surrounding the lenses. It is true that the Condor Products contain visible screws while the statement of newness and distinctiveness accompanying the Designs emphasises the "no visible screws" feature of the Designs. However, although the Condor product contains two screws in each flat strip or landing between each lens, it is not a feature which in my view substantially distinguishes the Condor product from the registered Design. The presence of the screws does not create a different "visual appeal". The screws are the same colour as the flat strip or landing between each lens and sit low in the socket. They are not "visual" screws as one would describe the screws in some of prior art such as the Narva Model 48 94840 or Hella 2400, where the screws are chrome in colour and protruding. Figures 5 and 6 of the Design are of the rear view of the Design. Upon a visual comparison of the rear view of the same Condor product against figures 5 and 6 of the Design, the Condor product is "substantially similar in overall impression" to the Designs. Again, there is one base with rounded corners. There is an opening for each lens of similar shapes with the shapes in the same configuration. There is the same number of mounting holes for the screws and the holes are in the same position. Moreover, as Mr Garrard properly conceded at trial, the Condor Products are much closer to the Designs than they are to LED Tech's own single-lens LED lamp which forms part of the prior art base. For those reasons, the Condor Product with the code number TL80RA infringes Design No.302359 --- dual lens and each of the Condor Products with the code numbers, TL80RRA / TL80ARR, TL80ARW, TL100 ARR / TL80RAA, TL100ARW, TL125AAR / TL125 RRA and TL125 ARW infringe Design No.302360 --- triple lens. Having determined that the Condor Products infringe the Designs it is necessary to consider the question of relief and whether the respondents have an affirmative defence under s 75(2) of the 2003 Designs Act. However, they did raise s 75 in the context of their argument (considered at [32]-[50] above) about the Register and invalidity of the Designs due to the uncertainty of the representations contained therein. Because s 75 does inform the debate about the limits of the monopoly conferred by registration under the 2003 Designs Act (an Act which has to be construed as a whole), it is therefore still useful to examine it (operating under the assumption that the Respondents had not "taken advice") in order to see whether the Respondents could otherwise have made out the defence. The first question to be resolved is whether each of the respondents is a primary infringer (ie someone who makes an infringing product s 75(5) read with s 71(1)(a)) or a secondary infringer (ie someone who engages in any other infringing conduct s 75(5) read with s 71(1)(b)-(e)). In Review Australia Pty Ltd v Innovative Lifestyle Investments Pty Ltd (2008) 166 FCR 358 ( Innovative ), Jessup J concluded that the word make in s 71(1) also includes those who direct, cause, or procure an infringing item to be made as well as those who make such an item themselves: Innovative at [21]. At first glance, therefore, it would seem that Ren and Olsen would be considered primary infringers. Although they did not make the products themselves, they directed, caused, or procured the Condor lights to be made by issuing purchase orders to their Chinese suppliers based on samples, designs, or other specifications. Elecspess and AAA, having only sold the products, would be secondary infringers. I say "at first glance," however, because in the Review cases, Kenny J added an important qualification to Jessup J's holding in Innovative . Her Honour noted the long-standing common law presumption, codified in s 21(1)(b) of the Acts Interpretation Act 1901 (Cth), that statutes are to be read as being confined to their operation within territorial limits: Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [77] ; Review Australia Pty Ltd v New Cover Group Pty Ltd [2008] FCA 1589 at [48] . Although the Respondents in this case did not raise any extraterritoriality issue, I consider it appropriate to do so because the parties did not have the benefit of Kenny J's judgment at the time of trial and because the issue relates to the Court's jurisdiction - that is, it goes to a matter in respect of which the Court is required to satisfy itself regardless of the parties' submissions or lack thereof. In my view, Kenny J was correct in concluding that operation of the 2003 Designs Act must, in the absence of clear legislative guidance to the contrary, be confined to the territory of this country. To hold otherwise would risk improperly subjecting unwitting foreign companies (assuming a plaintiff could satisfy personal jurisdiction, service of process and other procedural requirements) to liability in Australia for acts which might be perfectly legal in terms of their own domestic intellectual property regimes. It would be tantamount to holding that a company which does business wholly within foreign borders ought to be charged, when doing business with an Australian client, with knowledge of Australian design law as well as a duty under that law to verify the provenance of designs provided to it for manufacture. For those reasons, Ren and Olsen could not be considered primary infringers, even though they procured the making of the infringing Condor lights, because the actual manufacture occurred outside of Australia. That is not to say that they would therefore escape liability completely. Rather, each of Elecspess, AAA, Ren and Olsen must be considered secondary infringers on the basis of their having imported (in the case of Ren and Olsen) or offered for sale (in the case of all four) in Australia the infringing Condor lights. I would consider the Director Respondents as secondary infringers as well, on a similar basis as that given by Jessup J in Innovative - namely, that importing or selling, as the case may be, should be understood to also include directing, causing, or procuring an infringing item to be imported or sold. The relevant provision of s 75 is therefore s 75(2)(b). That subsection requires the court to consider, in determining whether an affirmative defence is available, whether a secondary infringer was aware or could not reasonably have been expected to have been aware that the design was registered. Assuming that Ren and Olsen in fact had taken no steps to ascertain whether the Designs were registered at the time of the infringing conduct, that fact alone might not have disentitled them to rely upon the affirmative defence. The language of s 75(2)(b) ("could reasonably have been expected to be aware") shows that a Court cannot assume that there is always an affirmative duty to search the Register. If a defendant has not searched the register, the court may conclude under s 32B that a search was a reasonable step that the defendant had neglected to take . It should not be mandatory for persons who claim innocence in infringement to search the register . However in exercising its discretion, the court may take into account whether it was reasonable in all the circumstances for a search to have been conducted. (Emphasis added. " I accept that it would be inappropriate to impose a per se duty on secondary infringers. However, in my view, there will be circumstances where a secondary infringer should reasonably be expected to check whether the products' designs have been registered. If, having checked, they would have ascertained the limits of the monopoly (which is the case here), then they would not be able to make out the affirmative defence. The question is therefore whether, in all the circumstances, it would have been reasonable in this case for the Respondents to have searched the Register? In my view, it would have been. That conclusion is dependent on two findings. First, having regard to the substantial similarity between the Designs and the Condor Products and in the absence of any evidence to the contrary, it would be reasonably open to infer that a representative of Ren and Olsen (and for that matter, AAA and Elecspess) saw the commercial embodiment of the Design: Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. Secondly and more importantly, the commercial embodiments of the Designs, in both their packaged and unpackaged form, contain a form of notice that would give rise at least to a duty to check the name LED Technologies on the Register. The notice is at the foot of the packaging and comprises the words "Registered Design". The rear of the base of each lamp has embossed on it a further notice, "Design Certificate Registration Number [NUMBER STATED]. " There is no suggestion here that the notification on LED Tech's packaging was defective for s 75 purposes in any of the ways described by Kenny J or Jessup J: see Review 2 Pty Ltd v Redberry Enterprise Pty Ltd [2008] FCA 1588 at [80] - [81] (accepting that a design notification affixed to the product, such as a swing tag, could be sufficient to put a potential infringer on notice but finding on the facts that there was not such notice at the relevant time); and Innovative at [48]-[52] (finding that the swing tag did put the infringer on notice, but refusing to take the notification into account in determining damages because the tag was misleading in part). Accordingly, none of the Respondents could make out an affirmative defence under s 75. LED Tech submitted it was entitled to damages assessed at $542,529.24. First, LED Tech's claim (set out in the table) proceeds on a false assumption that LED Tech lost every sale secured by Ren and Olsen. The assumption is false because, among other things, the prices of the respective products were not the same, nor was it established that both sides' products were stocked in the same places, such that a customer not able to obtain one would automatically turn to the other. Ultimately, LED Tech properly conceded that the underlying assumption was not accurate. Notwithstanding the concession, LED Tech submitted that because it was "a significant established player in the market", it would have secured a significant number of those sales and the calculation provides a "yardstick of comparison". On any view, however, LED Tech is not entitled to the whole of the amount claimed. Secondly, LED Tech made no claim for general damages. Thirdly, the amount of LED Tech's margin was not in dispute. However, in relation to the TL80 series, it is important to realise that LED Tech produced two products in each of the 80 series. Each product had a different margin. All parties adopted the average of the margins in calculating damages. How then are damages to be assessed? The Respondents used the number of units in fact sold. For the period in which Olsen sold the units, LED Tech estimated the number of units "sold" by taking the actual monthly sales (in $) of each product recorded in the respondents' expert's report and then dividing those sales by the average cost of each unit in a stock report to obtain an estimate of the number of units sold. On the other hand, the Respondents used the monthly sales (showing both volume and amount ($) of sales) for Ren and Olsen since July 2005. Unsurprisingly, the numbers of units sold do not coincide and the discrepancy cannot be resolved based on the evidence before the Court. That is, I do not consider that it would be a useful expenditure of the Court's time (assuming that it were in fact possible on the evidence) to seek to arrive at a precise number. This is particularly so in light of the false one-to-one lost sales premise; no evidence was adduced that would give the Court the ability to calculate a precise discount. In the circumstances, the better approach is to assess damages doing the best I can, even if such quantification necessarily involves a degree of speculation and guesswork: eg Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10 ; (2003) 196 ALR 257 at [37] - [38] ; Adidas-Solomon AG v Turner (2003) 58 IPR 66 at [4]-[5]; Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167 , 183; Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 1852 at [7] . Applying that approach, I consider that it is fair, based on the evidence to which I have referred, to assess damages at the amount contended for by the Respondents, rounded up to $200,000.00. I do so for a number of reasons. First, the figures in the table at [98] were submitted by the Respondents on the basis that the sum of $193,045 was the "limit (maximum) of the ... monetary relief as far as the evidence permits. " Secondly, although even the Respondents' evidence appears to proceed on the incorrect one-to-one assumption identified earlier, having regard to the summary of sales attached to the expert's report, the number of units included in the table appears to be a conservative assessment of the number of units in fact sold by Ren and Olsen. In other words, I consider that the actual sales were higher and thus to award only $200,000 would in fact give the Respondents a discount in recognition of the fact that not all sales by them can properly be deemed lost sales of LED Tech. Before proceeding, I should note that none of the Corporate Respondents attempted to raise a claim of proportionate liability, nor was any evidence led in an attempt to segregate the sales on an individual company basis with respect to Elecspess and AAA. Subject to any agreement among the parties as to the form of final orders, I consider that in the circumstances the proper course at this stage is to proceed on the basis that damages should be assessed jointly and severally. Whether the Respondents come to some agreement among themselves is a matter for them. LED Tech contends that, for differing periods of time, the Corporate Respondents offered for sale, and sold, in Australia Condor Products with the following product codes: Single Lamps - TL80A (amber indicator), TL80R (red stop / position) and TL80W (white reversing); Dual LED Assemblies - TL80 RA (red / amber); Triple LED Assemblies - TL80 RRA / TL80 ARR, TL80 ARW, TL100 ARR / TL 80RRA, TL100ARW, TL125AAR / TL125 RRA, TL125 ARW. There is no dispute that each of Elecspess, AAA, Ren and Olsen offered for sale and sold LED automotive lamps branded "Condor". The role of each of the Corporate Respondent, however, was different. Prior to 1 July 2007, the Condor Products were imported by Ren and distributed by Olsen. Ren's only independent distributors were Brytec Pty Ltd and Elecspess. After 1 July 2007, the position was reversed --- Olsen imported the products and Ren became the distributor. Throughout the period, Elecspess sold the Condor LED lamps through its own distribution network which included other automotive electrical distributors, auto electricians and OEMs ("Original Equipment Manufacturers") in the caravan and trailer industry. AAA was a retailer of Condor Products which it, in turn, had obtained from Elecspess and Brytec. LED Tech's principal complaint is that each of the products listed in [104] bore one of "Complies with ADR1", "Complies with ADR6" or "Complies with ADR 49" together with the phrase "ADR Approved" on the packaging ("the Captions") and that the representations conveyed by those Captions were misleading and deceptive. There were, in fact, a number of versions of those products imported into Australia and sold by Ren, Olsen, Elecspess and AAA - Version 1, Version 2 and Version 3. In June and November 2006, Ren placed orders for Version 1 lamps. There were two shipments of lamps. Ren received the first shipment in November 2006. Brytec placed the first order for Version 1 lamps with Ren in November 2006. Ren supplied the lamps to Brytec, which onsold them to Elecspess for subsequent sale and distribution. The second shipment of Version 1 lamps was received by Ren in January 2007. All Version 1 lamps had the words "Complies with ADR 1/6/49" stamped on the face of the lens. Mr Ottobre obtained two examples of Version 1 lamps (TL80 RA and TL80 ARW) from Mr Carpenter of Elecspess in November 2006. In or about March 2007, the Australian Competition and Consumer Commission ("the ACCC") intervened in the sale of these lamps with the result that the sale of Version 1 lamps ceased and the Version 1 lamps were recalled from the market. In June 2007, Elecspess gave certain undertakings to the ACCC and instigated a program to recall Version 1 lamps which had earlier been sold. There was, in fact, another version of these lights which were referred to in the proceedings as "Version 1A". They differed slightly from Version 1. For present purposes, those differences are not material. The first shipment was received by Ren in late July or August 2007. The lights were not packaged in blister packs. The second shipment (received in August 2007) and subsequent shipments were packaged in blister packs which contained a card showing details of the lamps and the words "ADR Approved". All the lamps had the words "Complies with ADR" stamped on the face of the lens. Ren, Olsen and Elecspess admit that they sold LED automotive lamps branded "Condor" from about August 2007 in packaging bearing the words "ADR Approved". AAA admits that it sold LED automotive lamps branded "Condor" from about September 2007 in packaging bearing the words "ADR Approved". Examples of Version 2 lamps were tendered in evidence. A TL80ARW purchased on about 22 October 2007 and three lamps in February 2008 (TL80ARW, TL100ARW and a TL125 ARW). Version 3 lamps have a different diffusion pattern on the lens. The lamps have the words "Condor Complies with ADR" stamped on the face of the lens. Examples of the Version 3 lamps were purchased from Olsen on about 20 April 2008. Further, LED Tech contends the Representations were false and misleading because the Condor Products: do not comply with ADR 1, which is concerned with the photometric requirements of reversing lamps; do not comply with ADR 6, which is concerned with the photometric requirements of direction indicators; do not comply with ADR 49, which is concerned with the photometric requirements for devices which signal to the road users the position, orientation and movement of the vehicle; were not approved for the purposes of compliance with the ADRs prior to October or November 2007. In considering these claims, it is first necessary to seek to explain the ADRs, their source and how they operate. I say "seek to explain" because the system is complex and the parties were in dispute not only about the way in which the system operated but what it is that the system requires. The objects of the MVSA are to achieve uniform vehicle standards for new vehicles and to regulate the supply of used imported vehicles. Sections 14 and 18 of the MVSA prohibit the supply of new vehicles or importation of road vehicles that are non-standard or do not have an identification plate. A "new vehicle" does not include a vehicle component: s 5 of the MVSA. An "identification plate" is a "plate declaring the status of a road vehicle in relation to the national standards and approved to be placed on vehicles of that type or description under procedures and arrangements provided for in subsection 10(1)". (3) A determination under this section is a legislative instrument. Section 10A provides that "[i]f new vehicles of a particular type, or vehicle components of a particular type, comply with the national standards, the Minister must give written approval for identification plates to be placed on vehicles or components of that type. " There is no suggestion in the present case that any application was made to the Minister for approval for an identification plate to be placed on any of the Condor Products. The reference to "national standard" is a reference to a "vehicle standard" determined under s 7 of the MVSA: see s 5 and the definition of "national standard". A "vehicle standard" is defined in s 5 of the MVSA to mean a safety, security, energy or emission "standard for road vehicles or vehicle components". Section 7 provides that "the Minister may, by legislative instrument, determine vehicle standards for road vehicles or vehicle components " (emphasis added). The Minister may also, by legislative instrument, determine procedures for testing whether vehicles and components comply with the MVSA: s 9. These functions or powers are non-delegable: s 23 of the MVSA. "Vehicle component" is defined in s 5 to mean "a component to be used in the manufacture of a road vehicle, and includes a component of such a component". A component includes an assembly: s 5. There is an Administrator of Vehicle Standards: s 22 of the MVSA. It is common ground that proof of vehicle standards is not required: s 143(1)(b) of the Evidence Act 1995 (Cth). The Minister has determined the following relevant standards as vehicle standards pursuant to s 7 of the MVSA: Vehicle Standard (Australian Design Rule 1/00 --- Reversing Lamps) 2005 --- White dated 21 November 2005 ("ADR 1"), prescribes the photometric requirements for reversing lamps which will warn pedestrians and other road users that the vehicle is about to move or is moving in the reverse direction, and which during the hours of darkness will aid the driver in reversing manoeuvres; Vehicle Standard (Australian Design Rule 6/00 --- Direction Indicators) 2005 --- Yellow / Amber dated 13 December 2006 ("ADR 6"), prescribes the photometric requirements for a device mounted on a motor vehicle or trailer which when operated by the driver signals the latter's intention to change the direction in which the vehicle is proceeding; Vehicle Standard (Australian Design Rule 49/00 --- Front and Rear Position (Side) Lamps, Stop Lamps and End Outline Marker Lamps) 2005 --- Red dated 3 April 2007 ("ADR 49"), prescribes the photometric requirements for light-signalling devices which will indicate the presence, width and position of the vehicle when viewed from the front and from the rear. No such provision exists. For the purposes of this analysis I have assumed that the determination was in fact made under s 7 of the MVSA. None of the parties suggested that this apparent error invalidated or otherwise altered the operation of the standard, and in any event the authorities hold that, as a general matter, judicial redrafting of obvious typographical errors is permitted: Saraswati v The Queen [1991] HCA 21 ; (1991) 172 CLR 1 , 21-22; Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation (Cth) [1981] HCA 26 ; (1981) 147 CLR 297 , 305, 311, 321. Application may be made to the Minister for approval of a vehicle component, being a component that is to be supplied to the market for the manufacture of a new vehicle being an approval that states that the component complies with particular national standards or relevant parts of particular national standards: reg 4 of the Motor Vehicle Standards Regulations 1989 (Cth). It is not suggested that this form of approval was followed or had to be followed in the present case. Before turning to consider the content and effect of the ADRs referred to above, reference should be made to two other items. First, there is the "Vehicle Standard (Australian Design Rule --- Definitions and Vehicle Categories) 2005" which "set[s] out matters, such as definition of key terms, which apply in common to particular [ADRs]" and contains material which needs to be read in conjunction with particular ADRs in order to establish the rights and obligations which those ADRs create. In that ADR, "approved" is defined to mean "approved by the Administrator" but the ADR goes on to provide that where a term is defined within an ADR as well as in the list of defined terms, the definition in the ADR takes precedence for the purposes of the particular ADR. I will turn to consider the relevant ADRs and their contents shortly. The second item is in fact a group of items published by the Administrator and known as "Circulars". The Circulars do not have legislative or regulatory force. The Court cannot have regard to them under s 143 of the Evidence Act 1995 (Cth). What then is the status of the Circulars? One was tendered in evidence (Circular 0-4-26). Others (Circulars 0-2-11, 0-3-2, 0-3-4, 0-3-6, 0-4-18, 0-12-0 and 0-13-1) were provided to the Court following the hearing, although leave to reopen for the purpose of tendering them was neither sought nor granted. I have read the Circulars. They do not contain matters "so generally known that every person may be reasonably presumed to be aware" of them: Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9 ; (2002) 208 CLR 460 at [64] (per McHugh J). Accordingly, the Court cannot have regard to them under s 144 of the Evidence Act 1995 (Cth). Putting Circular 0-4-26 to one side, the other Circulars are therefore not properly before the Court and I have not relied on them in coming to the views expressed in these reasons. Circular 0-4-26 is entitled "Application for Component Registration Numbers (CRNs)". It "sets out the requirements and conditions regarding the application for, and issuing of, [CRNs] for vehicle components": par 1.1. Applicants for a CRN can be the component manufacturer, component supplier or the vehicle manufacturer: par 1.5. The CRN process is directed at registering vehicle components to be used in new motor vehicles. The Department of Transport and Regional Services (now known as the Department of Infrastructure, Transport and Regional Services) ("DOTARS") creates a register of components that are commonly used in new vehicles for administrative convenience. The Circular provides that the Administrator of Vehicle Standards will accept CRNs as evidence of compliance in Summary of Evidence submissions. What those submissions are or the use to which they are put, is not explained. In any event, CRNs will only be issued for components that are fitted to new motor vehicles or trailers (par 1.4) and for, inter alia, "(i) Lighting and light signalling devices (various ADRs)": par 1.6. However, CRNs will not be issued for lighting and light-signalling devices using UNECE (United Nations Economic Committee for Europe) regulation approvals (par 1.7) or for components exclusively for the aftermarket (par 1.8). The Circular then goes on to specify the manner in which an applicant applies for a CRN. For example, a separate application is required for each Make-Model and, in the case of combined lighting and signalling devices, separate applications are also required for each different function (eg stop, position or indicator): par 2.4. The application procedures are prescribed: section 3. Applicants for CRNs must first register with the Road Vehicle Certification System ("RVCS") as a Licensee: par 3.1. An application for a CRN for a Make-Model must consist of a number of nominated forms including what is described as "the relevant SE forms for the particular ADR" and a letter from the new vehicle manufacturer that would be fitting the component: par 3.4. An application that has demonstrated compliance with the relevant ADR will be granted a CRN: par 3.8. CRN documentation is then issued to the CRN holder for information and safe keeping: par 3.8. The Circular goes on to provide that where there are changes in the specification of a component during the production life of the component, it is the responsibility of the CRN holder to ensure the continued compliance of any revised specification component with the relevant ADR: par 5.1. The fact of continued compliance is required to be documented and available for inspection by inspectors if requested: par 5.1. In particular, if a running change to an approved component is likely to have an impact on ADR compliance, the component will need to be re-tested and the results lodged: par 5.2. On the other hand, a running change to an approved component that does not impact on its ADR compliance may be implemented without the prior approval of the Administrator: par 5.3. Finally, the Circular states that CRN holders are expected to put in place a Quality Plan to ensure that only the specified approved components are identified with the CRNs granted: par 8.1. Components that are in any way different from those described in the final form of the applications for CRNs shall not be supplied under those CRNs: par 8.2. Once marketing of the specified components in Australia has ceased, CRN holders are required to notify the Administrator of Vehicle Standards of the date of manufacture of the last specified components supplied to the market in Australia: par 9.1 The interaction, both legally and practically, between the Circular and the system it describes and the ADRs identified above is in issue because (1) LED Tech submitted that the words "ADR Approved" have a prescribed meaning, namely that the product was approved by the Administrator of Vehicle Standards, and none of the Condor Products had such approval and (2) LED Tech alleges that each of Elecspess, Olsen, AAA and Ren contravened s 65C(1) of the TPA because they supplied lamps used, or likely to be used, by a consumer in respect of which there was a prescribed consumer product safety standard (the ADRs) with which the products do not comply. As noted earlier, the approval process for components provided for by the MVSA (see [124] above) was not adopted and can be put to one side. The question which then arises is what is the status of the CRN procedure outlined in Circular 0-4-26 and the interaction between that Circular and the ADRs? With respect to the ADRs, it is clear that by virtue of ss 5 , 7 and 41 of the MVSA they are prescribed consumer product safety standards for purposes of s 65C of the TPA. Circular 0-4-26 purports to create a system for demonstrating compliance with those safety standards in certain circumstances. In the Subject Index of Circulars issued by the Administrator, the Circular is listed under the heading "Certification Procedure". However, it must be remembered that power to set procedures and arrangements for determining compliance with the Act belongs to the Minister, not the Administrator, and cannot be delegated: ss 9, 23. Presumably that is why Circular 0-4-26 states that a CRN is merely evidence a manufacturer of new vehicles can rely upon in demonstrating compliance with an ADR; however, it does not and cannot in itself establish compliance. Therefore, the fact that a person may hold a CRN in respect of a particular vehicle component does not of itself legally entitle the holder to claim compliance or approval. Moreover, as noted earlier, Circular 0-4-26 does not purport to create a generally applicable "compliance" procedure - it provides that CRNs will only be issued for components that are fitted to new motor vehicles. It is not relevant to the aftermarket. Putting aside for the moment the fact that there appears to be no generally applicable or conclusive administrative procedure for establishing ADR compliance, it is also necessary to consider the substance of the standard itself. What standard then do the ADRs require? Although each ADR provides a standard for different types of lamps, so far as is relevant, each of the relevant ADRs is in similar terms. I will use ADR 1 as the example. As noted earlier, the scope of ADR 1 is to "prescribe ... the photometric requirements for reversing lamps which will warn pedestrians and other road users that the vehicle is about to move or is moving in the reverse direction, and which during the hours of darkness will aid the driver in reversing manoeuvres": Pt 1. The standard then specifies that devices complying with the technical requirements of Appendix A as varied by Pt 5 Exemptions and Alternative Procedures and Pt 6 Supplementary General Requirements shall be accepted as complying with the ADR. Appendix A is, in fact, UNECE Regulation No 23/00, the Uniform Provisions Concerning the Approval of Reversing Lamps for Power Driven Vehicles and their Trailers. In general terms, Pt 5 of the Regulation provides that certain provisions of Appendix A are not applicable and Pt 6 provides that certain requirements are supplementary to the requirements of Appendix A. Paragraph 6.1 of the ADR entitled "Supplementary General requirements" provides that "the requirements and procedures set out in Annexes 5 and 6 of Appendix A are acceptable for the purposes of demonstrating compliance with the technical requirements of this rule". The reference to Annex 6 is in fact a reference to Annex 6 as amended by par 5.1 of the Regulation. In addition to compliance in that manner, par 7.1 provides that the technical requirements of any of the editions of the UNECE Regulation No 23/00 are deemed to be equivalent to the technical requirements of this rule. Such a provision is unusual. Part 5 of the ADR substantially amends and, most importantly, substantially weakens UNECE Regulation No 23/00. In particular, the amendments removed from the UNECE Regulation sections 2, 3 and 4 headed "Application for Approval", "Markings" and "Approval". That is significant. Those sections prescribed not only a process for approval but standards to be met to obtain "approval" which are significantly more stringent than those set out in Annex 5 and 6. In other words, the substantive standard to which the CRN process in Circular 0-4-26 applies is much less rigorous than the UNECE Regulation No 23/00 and compliance with the higher standard necessarily means compliance with the Australian standard. However, the question remains, what then is the Australian standard? One thing that does not inform the answer to this question is industry practice. A deal of evidence was led as to what automotive industry experts thought the ADRs required and how the industry tested for compliance in practice. The general thrust of this evidence was that the industry treated much of the removed sections as still being applicable. However, as the Court stated in MHG Plastic Industries v ACCC (2000) ATPR (Digest) 46-206 at [49], any industry practice adopted as to the testing of products against a safety standard cannot affect the proper construction of the requirements under the safety standard. As Emmett J said at first instance in that decision ( ACCC v MHG Plastic Industries Pty Ltd [1999] ATPR 41-712 at [22]), " The Standard means what it says" . Paragraph 6.1 of the Regulation stipulates that "the requirements and procedures set out in Annexes 5 and 6 of Appendix A are acceptable for the purposes of demonstrating compliance with the technical requirements of this rule". Annexure 5 in turn states, "The conformity requirements shall be considered satisfied from a mechanical and geometric standpoint if the differences do not exceed inevitable manufacturing deviations within the stipulated requirements": Annexure 5 at 1.1. In relation to photometric requirements, no measured value can deviate unfavourably by more than 20% from the prescribed values . The values are prescribed in section 6 of Appendix A. (1) Lamp shall comply with the minimum intensity requirement when one light source has failed. (2) When all light sources are illuminated the maximum intensities shall not be exceeded. (The Corporate Respondents did eventually obtain written test reports but only after they had begun making the Representations - that is, after they had begun supplying products marked with the Captions. ) It is this conduct which LED Tech asserts is in breach of ss 52, 53(a), 53(c) and 65C of the TPA and which lies at the heart of the issues to be addressed in this section of the judgment. The relevant legal principles are well known. A two-step analysis is required. First, it is necessary to ask whether each or any of the pleaded representations is conveyed by the particular events complained of: Campomar Sociedad, Limitada v Nike International Ltd [2000] HCA 12 ; (2000) 202 CLR 45 at [105] ; National Exchange Pty Ltd v Australian Securities and Investments Commission [2004] ATPR 42-000 at [18] per Dowsett J (with whom Jacobson and Bennett JJ agreed) and Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2006] FCAFC 22 ; [2006] ATPR 42-106 at [37] . Secondly, it is necessary to ask whether the representations conveyed are false, misleading or deceptive or likely to mislead or deceive. This is a "quintessential question of fact": Australian Competition and Consumer Commission v Telstra [2004] FCA 987 ; (2004) 208 ALR 459 at [49] . Because the conduct complained of in the present matter was not directed at a specific individual, both questions that have been identified must be considered by reference to the class or classes of consumers likely to be affected by the conduct: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 , 199 per Gibbs CJ; Nike at [102], [103], [105] and [106]; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ; (2004) 218 CLR 592 at [36] per Gleeson CJ, Hayne and Heydon JJ. In .au Domain Administration Ltd v Domain Names Australia Pty Ltd [2004] FCA 424 ; (2004) 207 ALR 521 at [12] - [26] , Finkelstein J provided a useful summary of the approach that might be taken where a court is required to assess conduct by reference to a specific class or classes of consumers and did that by particular reference to Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136 ; (1982) 42 ALR 177 , 202-203 per Deane and Fitzgerald JJ and Nike at [100]-[103]. The approach may be summarised in six points, as follows: The question in this case can therefore be stated as being whether an ordinary or reasonable member of each identified class would perceive the Captions as conveying one or both of the Representations? If yes, the next question is whether the representations are false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of each identified class. However, unlike s 52, breach of s 53 is an offence: Pt VC of the TPA. If the conduct complained of by LED Tech contravened s 52 of the TPA, then having regard to its content, that conduct would also contravene ss 53(a) and (c) of the Act. Finally, LED Tech also alleges that the conduct complained of contravenes s 65C(1) of the TPA. Section 65C(1) provides that "a corporation shall not, in trade or commerce, supply goods that are intended to be used, or are of the kind likely to be used, by a consumer if the goods are of a kind (a) in respect of which there is a prescribed consumer product safety standard and which do not comply with that standard. " The Trade Practices (Consumer Product Safety Standards) Regulations 1979 (Cth) prescribe relevant consumer product safety standards: s 65C(2). First, is each or any of the Representations conveyed by one or more of the Captions? If so, are the Representations false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of each identified class? Before turning to the Representations, it is necessary to understand that two classes of consumers are pleaded: the public and / or consumers of automotive lamps. As noted above, the targeted section or sections of the public will vary according to the facts of each case: see [146(1)] above. The parties failed to address the question of the relevant class or classes and the effect (if any) of such distinctions. However, the evidence disclosed that consumers of automotive lamps fell into two general classes --- the manufacturers of vehicles or trailers and the aftermarket. The aftermarket comprises those consumers who purchase tail lights to replace one which has broken or to add another tail light to the existing tail lights on a vehicle or trailer. Many of the aftermarket sales occur through automotive retailers. The division is important. It is important because the Captions convey a different representation to the manufacturers of vehicles and trailers than they do to the aftermarket consumers. What representations then are conveyed? What conveyed to manufacturers of vehicles and trailers? Dealing first with manufacturers of vehicles and trailers, each of the Condor Products bore the Captions. What do those words convey? Compliance with a standard? Tested to a standard? Approved? Those who work in the industry know (or think they know - as we have seen, what the rules and regulations actually require is another matter) that the process is one in which a product is tested by a testing laboratory for particular performance characteristics against criteria set out in an ADR. The laboratory's report is provided to DOTARS together with an application for a CRN and then DOTARS allocates a unique CRN number to the product in relation to the particular ADR against which it was tested. On any view, the Representations (or some combination of them) are conveyed by the Captions to those in the industry. What conveyed to aftermarket? What do the words convey to those who do not work in the industry? They do not know the system. All they know is that the product bears Captions. The Captions represent, at the very least, that the lamps comply with some kind of governmental safety standard. The phrase connotes approval by an authorised (ie government or government-approved) body. Representations false, misleading or deceptive? The next question is whether the Representations were false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of each identified class. As noted earlier, the Condor Products were sold bearing the Captions. Moreover, the Captions conveyed a different representation to each identified class. As noted earlier, those who work in the industry understand that the process is one in which a product is tested by a testing laboratory for particular performance characteristics against criteria set out in an ADR. The laboratory's report is provided to DOTARS together with an application for a CRN and then DOTARS allocates a unique CRN number to the product in relation to the particular ADR against which it was tested. In the present case, at the relevant time none of the Corporate Respondents had obtained a CRN let alone a test result from a certified laboratory that provided any basis for making such a claim. That the entire industry may be operating under a misconception as to the actual procedural and substantive requirements for ADR compliance does not change the fact that an ordinary member of the class would be misled by the Representations in that they would think that the product in question had been tested and administratively "approved" (the quotation marks being necessary to acknowledge that the approval in question was not necessarily legally cognisable) when in fact it had not. It was not "approved" by anybody. Neither the ADRs nor Circular 0-4-26 prescribe an "approval process". DOTARS certainly does not "approve" anything. Moreover, I reject the submission of the Corporate Respondents that a CRN was unnecessary and it was merely sufficient for them to obtain a report from a testing laboratory before labelling the goods "ADR Approved". The testing laboratory does not "approve" anything either. It merely tests lamps given to it and produces a report. The phrase "ADR Approved" was false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of the identified class. The other Caption was the phrase "Complies with ADR". To those who do not work in the industry, the phrase conveys at the very least the message that the product has been properly tested (and by properly I mean that an ordinary consumer would not think that an oral or unsupported assurance was sufficient to justify the representation) and has met the standard prescribed by the relevant ADR (and here again the difficulties in identifying the actual procedural and substantive content of ADR compliance are of course irrelevant - the ordinary consumer would neither know nor care; the point is only that they would think the product had been tested by a reputable body and found "up to snuff"). In the present case, the phrase "Complies with ADR" was false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of the identified class until at least August or September 2007 because none of the Corporate Respondents had obtained written test results from a certified laboratory that provided any basis for making such a claim. However, there is no violation of s 65C of the TPA. As noted earlier s 65C1(a) prohibits the supply of goods which do not comply with a prescribed safety standard. In contrast to ss 52 and 53, s 65C does not ask whether a consumer is likely to be misled, nor does it ask what a consumer might understand about a certain product. To put it even more bluntly, s 65C is not concerned with representations at all. It simply poses an objective question: has a product been supplied for consumer use which does not comply with a prescribed safety standard? To prove a case under this provision, a party must: (1) identify a product; (2) identify the time of supply of that product; (3) identify the relevant safety standard in force at the time; and (4) lead evidence showing that the particular product did not meet the standard: see ACCC v Hercules Iron Pty Ltd [2008] FCA 1182 at [10] . LED Tech, in approaching its case on a misleading and deceptive conduct basis only, failed to establish the elements of its s 65C case in a satisfactory manner. While it led evidence of safety tests and the supply of lamps, it failed to connect particular lamps, having been supplied at particular times, to particular tests demonstrating non-compliance of those lamps with the ADRs. The last bit would in any event have been tricky, if not impossible, because the ADRs, due to the peculiar amendments that have been made to the UNECE Regulation and the uncertain status of the Circulars, do not really prescribe much of a standard. Not only is a 20% variance in luminosity allowed, there is no procedure (notwithstanding any industry practice or understanding to the contrary) as to how compliance with the standard is to be assessed and proved. Based on the evidence, it appears that the tests relied on by LED Tech to establish the non-compliance of the Condor Products may have applied stricter procedural and substantive criteria than those actually imposed by the applicable rules and regulations. Therefore, I cannot be satisfied on the balance of the probabilities that the Corporate Respondents did in fact supply products that did not comply with the ADRs. Although never properly articulated, the causation and damages theory of LED Tech's TPA claims seemed to be a lost sales theory similar to that underpinning the infringement claim: (1) (a) consumers prefer to buy, or (b) in some cases will only buy; (2) products that are marked as complying with applicable safety standards and that do comply with those standards; (3) LED Tech's lamps comply with the ADRs; (4) had it been known to the market that the Corporate Respondents' products did not comply with the ADRs (ie if they did not bear the Captions); (5) all those who purchased the Corporate Respondents' products; (6) would instead have purchased LED Tech's lamps; (7) such that the Representations caused LED Tech to lose sales in the amount of the Corporate Respondents' sales. As noted earlier, LED Tech's claim seemed to assume that every sale made by the Corporate Respondents of a Condor Product would have been a sale that LED Tech would have made. That is not an assumption that can be made in the infringement context, and it is even more remote in the TPA context. It is not supported by human experience or, more importantly, by the evidence. As I noted at the outset, the market in Australia for LED automotive lamps was highly competitive. There was evidence that certain large manufacturers would only buy from suppliers holding CRNs; however, there was no evidence to show that ordinary consumers, particularly aftermarket consumers, considered safety compliance to be so material as to prevail over factors such as price and convenience. Furthermore, it goes without saying that LED Tech's lost sales, whatever the precise number of units, cannot be double counted. In no event could they be more than the number of units actually sold by the Corporate Respondents. As noted earlier, I calculated infringement damages based on the assumption that the Respondents' sales data reflected the number of units actually sold by them, less a certain (not precisely quantifiable) discount based on the fact that their data was on the conservative side. To receive any damages under the TPA over and above the infringement award, LED Tech would have to satisfy the Court that the TPA contraventions caused it to lose additional sales. On the evidence before me, LED Tech has not done that. First, I re-emphasise the absence of any evidence as to the materiality of safety compliance representations to the average consumer. Second, the infringement lost sales claim will, by its nature, tend to encompass a greater sum than a TPA claim on the same basis because by hypothesis the infringing product would not have been in the market. That is to say, had the Corporate Respondents not infringed the Designs, they would not have produced the Condor Products and LED Tech would have had one less competitor. On the other hand, in the hypothetical world in which the Corporate Respondents did not breach ss 52 and 53 of the TPA, their Condor Products could still have been on the shelves alongside LED Tech's lamps; the only difference would have been that they would not have borne the Captions. It is difficult to see how LED Tech could lose more sales in a notional world where the Corporate Respondents were still allowed to sell their products (albeit without "ADR Approved" and "Complies with ADR" endorsements) than in a world where the Condor Products did not exist at all. For those reasons, I am not satisfied that LED Tech established any additional loss arising from any one or more of the TPA contraventions. Accordingly, I would not grant LED Tech any relief in relation to these claims in addition to that identified above. I. DIRECTORS' LIABILITY? During the course of the hearing, LED Tech stated that it no longer seeks relief against the Fifth Respondent, Mr Morrison. In relation to the Directors, that conduct is said to include: that the Directors have acted in concert with Ren and Olsen in respect of its infringement of the Designs or wrongfully procured and or induced Ren and Olsen to infringe the Designs; and that under ss 75B, 80 and 82(1) of the TPA, each of the Directors was a person who aided and / or abetted and or was directly or indirectly knowingly concerned in or party to the contravention by each of Ren and Olsen of ss 52, 53(a), 53(c) and 65C of the TPA. At the time of the "relevant events", Mr Keller and Mr Armstrong were directors of Ren and Olsen with Mr Armstrong acting also as Chairman. Mr Keller's evidence was that he, together with Mr Armstrong, "is the boss" of Ren and Olsen. In relation to Version 1 lamps, the "relevant events" included, but were not limited to, the conception and design of the infringing Condor lights at a time when at least Mr Keller was aware of the existence of the Designs, discussions with manufacturers about the manufacture of the those lights and the subsequent importation and sale of them in Australia. In addition, Mr Keller designed and conceived the Version 2 and 3 lights and arranged for their manufacture and importation into Australia. Moreover, Mr Armstrong was the nominated signatory for all applications for CRNs and the addressee for all correspondence from DOTARS relating to CRNs. In addition, he was involved in photometric testing of Condor LED lights and knew what Mr Keller was doing in relation to the Condor Products. In determining whether this level of conduct and knowledge establishes liability, each cause of action needs to be considered separately. Joint tortfeasors to the design infringement? In relation to the infringement of the Designs, LED Tech alleges that the Directors are joint tortfeasors to the design infringement as each had "a common design" with Ren and Olsen to infringe the Designs. As submitted by counsel for the Directors, the test to be applied is far from certain. One line of cases adopts what is known as the "direct or procure" test ( Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1 , 14-15, while the other line of cases adopts the test in Mentmore Manufacturing v National Merchandising Manufacturing (1978) 89 DLR (3d) 195 that a director is only personally liable if it is reasonable to conclude that the purpose of the director was not the direction of the manufacturing and selling activity of the company in the course of his relationship to it but the "deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it": at 204-205. One line supported what she called the "Performing Right Society test " : whether the director had "directed or procured" the company's infringement. The other line supported "the Mentmore test": whether the director had engaged in "the deliberate, wilful and knowing pursuit of a course of conduct that was likely to constitute infringement or reflected an indifference to the risk of it". Beazley J expressed a preference for the Mentmore test, on the basis that the Performing Right Society test did not "pay sufficient regard, either to the separate legal existence of the company, or to the fact that the company acts through its directors": see [66 FCR at 500]. However, this preference had no immediate consequence; her Honour held (again at [500]) that the appellants were not liable under either test. We are not aware of any case in which it has been held that a director or officer of a company directed or procured the company's infringing act, yet that person escaped liability because he or she did not deliberately, wilfully or knowingly pursue a course of conduct that was likely to constitute infringement or that reflected indifference to the risk of infringement. This may be because, in practice, an act of direction or procurement will generally meet the Mentmore test. It is notable that, in Mentmore itself, the Canadian Federal Court of Appeal declined (at 204) to "go so far as to hold that the director or officer must know or have reason to know that the acts which he directs or procures constitute infringement". The Court declined to do this because that "would be to impose a condition of liability that does not exist for patent infringement generally". To the extent there is a real difference between the tests, each has eloquent supporters. One day it may be necessary, in a practical sense, to choose between them. But it is not necessary to do so in this case. The position here is the same. This is not a case in which Messrs Keller and Armstrong acted only as directors of the infringing companies. Each had personal knowledge of the Designs and of the other facts and matters set out above (see [169]). To adopt the language of the Full Court, it was clear that each of Messrs Keller and Armstrong "was personally an actor invading [LED Tech's] rights: by creating the [Condor Products]" and taking the other steps outlined above. These sequences of actions were "the deliberate, wilful and knowing pursuit of a course of conduct" that was likely to constitute infringement or, at least, reflected a conscious indifference to the risk of infringement. As a result, each of the Directors also engaged in the design infringement. Each is a joint tortfeasor to the design infringement as each had "a common design" with Ren and Olsen to infringe the Designs and is jointly and severally liable to LED Tech for the damages assessed. The principles are well established. Natural persons will be liable in damages for a contravention by a corporation if they had a "close, rather than a remote involvement in the contravention": Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 , 584. Moreover, the participation in the contravention requires actual, rather than constructive, knowledge of the essential matters that make up the contravention: Yorke v Lucas [1985] HCA 65 ; (1985) 158 CLR 661 , 666-670 and 677, Rural Press Ltd v ACCC [2002] FCAFC 213 ; (2002) 118 FCR 236 at [67] and Quinlivan v ACCC (2004) 160 FCR 1 at [8]-[9]. Did Messrs Keller and Armstrong had actual rather than constructive knowledge of the "essential matters" that make up the contraventions under the TPA? As noted earlier, two contraventions were pleaded; namely that the Directors "aided and / or abetted and / or were directly or indirectly knowingly concerned in, or party to" (1) the alleged mislabelling of the Condor Products as to compliance with the ADRs (in contravention of ss 52, 53(a) and (c) of the TPA) and (2) the alleged contraventions of ADRs 1, 6 and 49 as "prescribed consumer product safety standards" (in contravention of s 65C of the TPA). The former was made out, but the latter was not. However, as explained earlier in these reasons for decision (see [162]-[166]), notwithstanding that one or more of the Representations was false, misleading or deceptive or likely to mislead or deceive within the meaning of ss 52 and 53, LED Tech's claims failed because LED Tech did not establish an essential element of the cause of action --- damage. As a result, it is unnecessary to consider whether the Directors "aided and / or abetted and / or were directly or indirectly knowingly concerned in, or party to" the contravention by the corporation. However, if LED Tech had established damage, I do not consider that each of Messrs Keller and Armstrong knew of the "essential matters" that enabled the representations to be characterised in the manner contended: ACCC v Kaye [2004] FCA 1363 at [182] - [186] . To adopt the language of the majority of the Full Court in Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289 ; (2003) 135 FCR 1 at [12-16] , although I accept that each of Messrs Keller and Armstrong knew (1) that the Condor Products were manufactured, sold and packaged and (2) the content of the manner in which they were sold which might lead members of at least one class of consumer to believe that the products complied with "prescribed consumer product safety standards", I do not conclude that either Messrs Keller or Armstrong knew the facts that meant that the Representations were not correct. As to the "ADR Approved" representation, they gave evidence as to their subjective understanding of the representation conveyed, which, while possibly negligent or even reckless, was not such as to suggest wilful blindness or actual knowledge of how a relevant purchaser might understand it. As to the "Complies with ADR" representation, their evidence (which I accept) was that they relied upon oral and written assurances from their Chinese manufacturer and testing laboratories which turned out to be belatedly or never substantiated. Was that conduct less than wise? - Yes. Was it negligent and possibly even reckless? - Again, yes. But on the current state of the authorities that is not sufficient to establish the actual knowledge necessary to establish accessorial liability under the TPA. Significantly, it was never put to either Mr Keller or Mr Armstrong during the course of cross-examination that they knew these "essential matters". Accordingly, even if LED Tech had established that the TPA contraventions had caused it damage, they could not establish the secondary liability of the Directors for those contraventions. J. The first concerned a document circulated by LED Tech on 5 February 2007. The second related to a letter sent by LED Tech's solicitors to Ren and Olsen dated 7 September 2007. Neither of these documents supports such an allegation. First and foremost, I found that the Designs were properly registered and the claim of infringement is made out, so it could not be said that allegations of infringement were unjustified even if they were deemed threats: Nine Network Australia Pty Ltd v IceTV Pty Ltd (2007) 73 IPR 99 at [232] (suggesting that where there is actual infringement a threat will not be unjustified). Secondly, the 5 February 2007 document did not, in its terms, contain any threat of proceedings for design infringement. The document contained 6 paragraphs. The first five related to the ADRs. Taken at its highest, it states that LED Tech was seeking legal advice. It makes no threat of proceedings for design infringement: but cf Occupational and Medical Innovations Limited v Retractable Technologies Inc (2007) 73 IPR 312 (concluding that a similar letter constituted a threat under s 128 of the Patent Act 1990 (Cth)). Thirdly, the second event, the 7 September 2007 letters, contained a threat of legal proceedings at a time when the current proceedings had already been on foot for some 5 months against Elecspess and AAA in respect of infringement of the Designs: see Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 76 IPR 83 at [41] and authorities there cited (stating that threats made after proceedings have already been instituted or that result in the bringing of proceedings are less likely to be deemed unjustified). For those reasons, the cross-claimants' claim of unjustified threats of design infringement is rejected. The conduct said to breach s 52 of the TPA comprised three separate events. The below companies do not have our specially formulated resin and their resin sealing method will crack away from the lenses with temperature changes and vibration. The below companies may claim they have this method, but can you trust them. 1/ China Trailer Industry http://www.china-trailers.com , manufacturers of Condor brand lamps which are inferior copies of our product, leaking lenses, low grade LEDs, product recalled in Australia because they don't meet the necessary standards, lenses stamped ADR approved when they are not. We have instituted copyright proceedings (sic) against Australian importers and resellers in the federal court. At the time that the notice was placed on LED Tech's website, only Version 1 Condor Products had been sold by Ren and Elecspess in Australia. Version 3 Condor Products were not sold until after the notice had been taken down from LED Tech's website in January 2008. On any view, portions of the notice were false at one time or another. At no time were copyright proceedings instituted. Moreover, LED Tech knew no later than 7 August 2007 that China Trailer was not the manufacturer of Condor Products. In the end, however, the conduct does not give rise to any relief. None of the cross-claimants did or could establish loss or damage resulting from the conduct. In fact, assuming that the website caused them to lose sales on the infringing Condor Products, then it saved the cross-claimants money in that it reduced the number of their sales (and thus LED Tech's corresponding lost sales) based on which infringement damages were awarded. The claim should be rejected. With the popularity of LED lamps the market has become inundated with cheap inferior copies of many different original designs. This is extremely disappointing for the original designers and we hope that you support us by not purchasing copied products. Independent testing showed that these lamps failed to meet the light requirements of the design rules. The ACCC considered that by representing that the lamps complied with the rules when they did not, Elecspess falsely represented to consumers that these lamps were of a particular standard. Elecspess also represented that the lamps had performance characteristics that they did not have. Further the ACCC considered that Elecspess had supplied goods not compliant with prescribed consumer product safety standards. Elecspess responded promptly to the ACCC's concerns. It was factual both historically and in relation to the arrangements existing at the time the notice was issued. Consistent with ACCC practice, the notice was and remains on the ACCC's website. The circular was sent to 5,000 automotive part resellers, electricians and truck and trailer manufacturers in Australia in August 2007. At that time, the Corporate Respondents had only sold Version 1 Condor Products in Australia and had not completed the recall of those products. There is perhaps an interesting question whether the further dissemination or adoption of a factually true statement made by another would in these circumstances constitute misleading or deceptive conduct. However, whether the contents of the Circular were false, misleading or deceptive or likely to mislead or deceive can be put to one side because, again, none of the cross-claimants did or could establish loss or damage resulting from the conduct. The claim should be rejected. The change to acrylic occurred in about January 2006. Some of the packaging still contained the Packaging Representation in July 2008. There is no doubt that from January 2006 (at the latest) LED Tech's products were made of acrylic and not polycarbonate. As noted earlier, a two-step analysis is to be undertaken in considering the application of s 52 of the TPA. First, is the representation conveyed? If so, is the representation false, misleading or deceptive or likely to mislead or deceive an ordinary or reasonable member of each identified class? There are two hurdles to the claims made by Ren, Olsen and Elecspess. First, the class was not identified. I suspect, but do not know, that if the classes are those identified earlier (ie manufacturers and aftermarket purchasers), the question posed in relation to each of those classes might produce a different result. In other words, an ordinary or reasonable member of those who work in the industry might be different to a consumer who buys the product in the aftermarket. The former might be interested in the composition of the lamp's lens. The latter I suspect would not be --- his or her interest is likely to be price and possibly how the product looks. As Mr Ransom said in evidence, although polycarbonate was very fashionable many years ago, it has never been a factor in a customer's decision to purchase lamps. This last point brings up the second hurdle faced by Ren, Olsen and Elecspess, which is that they did not and cannot establish that they suffered any loss as a result of the Packaging Representation. Not only did the evidence show that lens composition is not a significant factor in a customer's purchase decision at all (ie no causation generally), there is no evidence to show that an accurate representation would have caused consumers to purchase Condor Products as opposed to some other polycarbonate lens (ie no causation specifically). Furthermore, even assuming that Ren, Olsen and Elecspess had established lost or depressed sales in the period from 2006 to 2008 (which would be difficult, if not impossible, given that the Condor lamps were brought to market well after the January 2006 LED Tech change in lens composition so that there was never a period to which a sales comparison could be made when the Condor lamps were on the market without the Packaging Representation being made), the evidence disclosed numerous other causes for the fact that the sales of Condor Products were likely to be affected. It is unnecessary to address each of them. It is sufficient for present purposes to record that the Condor brand was damaged by the ACCC recall, a recall that was consented to. This second hurdle provides another separate and independent reason why this aspect of the cross-claim fails. I will instead order the parties to confer and jointly file short minutes of final orders giving effect to these reasons for decision, including orders as to the further conduct of this matter, by 4.00pm on 23 January 2009. If the parties are unable to agree, they are to submit a joint statement by 4.00pm on 23 January 2009 identifying: (1) the point(s) of agreement; (2) the point(s) of disagreement; and (3) the respective positions of the parties on the point(s) of disagreement, in which case I will list the matter for further directions or argument as necessary. I certify that the preceding two hundred and two (202) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon. | designs whether designs act 2003 (cth) applies to extraterritorial conduct whether alleged infringer's subsequent registration of designs in respect of her own products is relevant to the questions of infringement or validity of the allegedly infringed design whether a design that combines various features, each of which can be found in the prior art base when considered individually but not collectively in any one particular piece of prior art, is capable of being distinctive whether infringement analysis is undertaken by comparing allegedly infringing product with registered design or with a product embodying the registered design authorship who is an author of a design whether an independent contractor can be a co-author of a design design register what constitutes the design register whether a design will be invalid for lack of clarity if the relevant features appear from the registered representations without necessity for unreasonably prolonged or complicated series of deductions substantial similarity as judged objectively by hypothetical "informed user" whether "informed user" is more informed than an average user but less informed than a expert whether party has duty to check the design register where the product embodying the design carries a registration notice and the substantial similarity of the allegedly infringing, later-designed product permits the inference that the party had access to the product embodying the registered design and did or should have seen the registration notice damages lost sales whether infringer's sales may be claimed by design owner on a one-to-one basis in calculating damages judicial notice whether court may take judicial notice of design representations displayed on ip australia website whether circulars published by the administrator of vehicle standards constitute legislative instruments of which the court may take judicial notice whether substantial similarity of two products permits an inference that designer of later created product had reference to earlier-created work whether court may take judicial notice of matter requiring basic computer literacy accessorial liability actual knowledge whether representation of compliance with law may be misleading where it is based upon a commonly shared mistake of law damages lost sales whether sales lost by virtue of defendant's misleading conduct greater than sales lost by virtue of defendant's infringement "design register," "informed user," "primary infringer," "secondary infringer" intellectual property evidence trade practices words and phrases |
The judgment was delivered on 5 September 2007. Under O 52 r 15(1) of the Federal Court Rules an appeal is available against a decision of the FMCA within 21 days from the date of judgment. Thereafter leave to file an appeal out of time is required. The present application was filed on 3 October 2007. Although the delay is not a very large one O 52 r 15(2) indicates that special reasons must be provided for the grant of an extension of time. 2 The application was supported by an affidavit filed also on 3 October 2007. I am the Appellant in the matter filed against the order judgement of Federal Magistrate Nicholls FM dated 12 September 2007. The Federal Magistrate Court of Australia at Sydney dismissed the matter by an order dated 12 September 2006. I have good grounds to challenge the order dismissed by the Federal Magistrate. I have filed my grounds of appeal in the Notice of Appeal. I request that my appeal may be taken on file and I may be given permission to file additional grounds, if necessary, at a later stage. The Tribunal made jurisdictional error and factual error in concluding that the applicant is not entitled to a protection visa. The Federal magistrate has not noted that point. The Refugee Review Tribunal falied to see that the applicang satsfies all the crieterai that are required for a "refugee" status under the Act and rules. It is surprising how the Federal Magsitrate did not deal with this. The Tribunal committed factual and legal error in failing to conclude the applicant falls under Article 1A(2) of Convention which defines a refugee. The applicant satisfies all the four key elements to Convention definition. But both the Tribunal and the Federal Magsitrate had not given the finding in favour of the appellant. The Tribunal failed to accept the real and correct facts as stated by the applicant in person but has relied on some other facts and stories which are not correct. Therefore the Tribunal has commtted factual error. By committing such factual error the Tribunal committed jurisdictional error and this had been overcome by the Federal Magsitrate. The Tribunal failed to consider the real facts, but ha accepted from an individual. The Tribunal failed to see that such individuals are well placed and protected. The Tribunal is not correct in stating that the applicant did not receive serious harm which will amount to persecution. The Tribunal erred in not accepting the statement of the applicant that he was hunted for religious reason. The Tribunal has erred in stating that no convention reason or reasons for persectioin have been proved. The Tribunal has not applied its mind properly and has hastily dismissed the case. The Tribunal erred in concluding that the applicant will enjoy protection of Indian Police and other security institutions. The Tribunal has completely overlooked the seriousness of the matter. None of it explains the delay in seeking to engage the processes of this Court. 6 At the hearing of his application the applicant did not address such matters at all. 7 These submissions serve to indicate the character of the challenge which the applicant wishes to bring if an extension of time is granted. They confirm (particularly when read with the grounds of appeal set out in the draft Notice of Appeal) that what is really sought is a merits review. 8 In accordance with directions made by a Registrar of this Court the applicant also filed written submissions. The written submissions do not address the question of why an extension of time should be granted. They allege actual bias, jurisdictional error, excess of jurisdiction and failure to exercise jurisdiction on the part of the Refugee Review Tribunal ('the RRT'). These general allegations are not related in any sufficiently specific way to either the decision of the RRT or, of more immediate importance, to the decision of the FMCA. 9 I have concluded that no basis has been shown for the grant of an extension of time in which to appeal against the decision of the FMCA and the application should be refused for that reason alone. 10 In any event, it does not appear to me that there is any respectable case either of jurisdictional error on the part of the RRT or error on the part of the FMCA. Briefly my reasons for that view are as set out hereunder. 11 The applicant is a citizen of India. He arrived in Australia on 3 April 2006 and applied for a protection visa on 2 May 2006. A delegate of the Minister decided to refuse to grant the visa on 22 June 2006. The applicant applied for a review of the delegate's decision to the RRT. 12 The RRT handed down a decision on 26 October 2006 affirming the decision of the delegate. The RRT recorded, in its decision, that the evidence given by the applicant at an oral hearing which it conducted with him on 4 September 2006 was vague and departed from evidence he had provided in writing to the Department of Immigration and Multicultural Affairs. The applicant in his evidence to the Tribunal was very vague and was not able to describe in detail many important aspects of his claims. His testimony lacked essential detail about the time and location of certain events and when prompted to give approximate time-frames, such as months or years, the applicant stated that he could not recall anything. As the visa applicant was not able to place the events that happened to him either in any historical or personal context, the Tribunal does not accept that the harm he claims to fear actually happened or that there is a real chance of it occurring in the reasonably foreseeable future. The Tribunal is not satisfied that any of the attacks as detailed at hearing or in his written statement ever happened, or that they were due to the visa applicant's alleged religious activities. It did not accept that version of events. It was also satisfied that it would be reasonable for the applicant to relocate to avoid the matters of which he complained. 14 The matters dealt with by the RRT concerned the merits of the applicant's claim for a visa. Those are matters, unless jurisdictional error is identified, which are entrusted to the RRT. They are not within the scope of matters about which it is permissible for this Court or the FMCA to make decisions. 15 On 13 November 2006 the applicant made an application for judicial review to the FMCA. On 5 September 2007 that application was dismissed ( SZJQX v Minister for Immigration & Anor [2007] FMCA 1519). The Federal Magistrate found no error in the decision or processes of the RRT. He observed that the great bulk of the challenges made to the RRT decision were, in substance, a request for a review of the merits by the FMCA. It is important to note that these inconsistencies were discussed with the applicant not only during the hearing, but they were also the subject of a letter addressed and sent to the applicant seeking his comment. No error is revealed in the Tribunal's decision in this regard. I think there are no prospects of a successful appeal against the judgment of the FMCA. The futility of granting an extension of time in which to appeal is a further reason why, in my view, such an extension should not be granted. 17 In the circumstances the application at present before the Court must be dismissed. It is appropriate to dismiss it with costs. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | application for an extension of time to appeal against a judgment of a federal magistrate application received outside of time prescribed by the federal court rules no explanation for delay provided no reason why an extension of time should be granted provided no prospect of a successful appeal in any case application futile application dismissed migration |
The plaintiffs claim a reward in the vicinity of A$4.4 --- $A6.6 million. This is opposed by the defendants, who have made an open offer to pay a salvage reward of A$750,000.00 plus interest plus costs. During the hearing, this offer was reduced to A$500,000.00 plus interest. The action began as a claim by the issue of a writ on 28 March 2002 against the "La Pampa" in Matter No. NSD 246 of 2002. The plaintiffs, United Salvage Pty Ltd ("United Salvage") and Gladstone Tug Services Pty Ltd, claimed a maritime lien for services provided pursuant to s 4(3)(g) of the Admiralty Act 1988 (Cth). United Salvage is an international salvage operator that purports to provide salvage services around the Australian coastline. Gladstone Tug Services is the owner of one of the tugs, "Tom Tough," that assisted the "La Pampa" on 27 March 2006. An arrest warrant was issued on 28 March 2006 and the ship was arrested the following morning. Upon the provision of a substantial sum of security, the ship was released from arrest on 3 April 2002. On 6 June 2002, the fourth defendant in the current proceedings, Oltramare Shipping Co. S.A. ("Oltramare"), filed an appearance on behalf of the ship. Oltramare described its relation with the ship as "Demise Charterer". A Statement of Claim was filed in the same Matter No. (NSD 246 of 2002) on 24 December 2002. Queensland Tug & Salvage Co Pty Ltd, owner of the tugs "Wistari" and "Kuttabul," joined the proceedings as the third plaintiff. Oltramare was listed as the first defendant and two other entities, Sollac Meditaranee and Bocimar NV, as second and third defendants. The plaintiffs sought US$1,419,500.00, reflecting five percent of the value of the salved property, or alternatively an amount determined by the Court. The expenses incurred in performing the salvage operation amounted to A$34,944.88 and these were also claimed. On 15 March 2006, an Amended Notice of Appearance was lodged on behalf of the ship by Oltramare, which referred to its relationship with the "La Pampa" as "Registered Owner and Demise Charterer". An Application dated 26 March 2004 was then filed by the plaintiffs in Matter No. NSD 430 of 2004 claiming a salvage reward against the first three defendants in these proceedings, namely Louis Dreyfus Armateurs SNC, Louis Dreyfus SAS and Societe Anonyme Louis Dreyfus et Compagnie. An amount of A$2,729,807.60 was claimed, together with the expenses as detailed above. Oltramare was not named as a defendant on this Application. The Statement of Claim in this matter was filed on the same day. On 21 June 2005, I ordered that the two proceedings - NSD 246 of 2002 and NSD 430 of 2004 - be consolidated. I also granted leave to the plaintiffs to file an Amended Statement of Claim. This was filed by the three salvors on 11 July 2005 in the consolidated proceedings against the present four defendants. An Amended Defence was filed on 5 October 2005 and a Further Amended Defence was filed on 6 March 2006. CENTRAL ISSUES IN THE PROCEEDINGS This matter raises two key questions. The first concerns the determination of the amount of an appropriate salvage reward. It is common ground between the parties that salvage services were provided and that there is an entitlement to a salvage reward. The plaintiffs maintain that having regard to all relevant considerations, this is an appropriate case for a reward approximating A$6 million. The defendants oppose this claim, arguing that the quantum of the salvage reward sought by the plaintiffs is out of proportion to the services actually provided to the vessel on 27 March 2002. The second question relates to the identity and role of the parties involved in the salvage operation. There are two sub-issues related to this second question that require consideration. Firstly, in performing the salvage services, were the second and third plaintiffs acting on behalf of the first plaintiff? The plaintiffs contend that the determination of this question bears on the assessment of the salvage reward, arguing that if this is the case, the reward should be enhanced considering that the first plaintiff operates salvage activities on an Australia-wide basis. The second issue to be determined is whether the third defendant was the "beneficial owner" of the salved vessel at the time the services were provided on 27 March 2006. THE VESSELS INVOLVED IN THE INCIDENT THE VESSEL IN DISTRESS: THE "LA PAMPA" The "La Pampa" is a capesize bulk carrier having nine holds with accommodation, navigating bridge and machinery conventionally arranged at her stern. The vessel was constructed in Poland, and was approximately seven years old at the time of the salvage operation. The registered owner of the vessel is the fourth defendant. The "La Pampa" has a gross tonnage of 91,651 tonnes and a net tonnage of 50,709 tonnes. Her dead weight is 165,289 tonnes with a draft of 17.825 metres. She is 281.84 metres in length with a moulded breadth of 44.9 metres. The vessel is propelled by a two stroke single acting Sulzer diesel engine, and the main engine is rated to develop 12,000 kilowatts ("kw"). At the time of the incident, the estimated value of the "La Pampa" was US$20 million. This is agreed by both parties. When the vessel went aground, she had just been loaded with 160,927 metric tonnes of coal valued at US$5 million. She was fully laden and also carrying in her bunkers 2,993 metric tonnes of fuel oil, 163 metric tonnes of diesel oil and 80 tonnes of lubricating oil. The total value of the bunkers at the time of the incident was US$390,000.00. THE TUGS: "TOM TOUGH," "WISTARI" AND "KUTTABUL" There were three tugs involved in the salvage operation. The "Tom Tough", the "Wistari" and the "Kuttabul" were all mobilised on the morning of 27 March 2006 to assist the "La Pampa" when the Pilot of the vessel requested assistance at 7.10 hours. As noted above, the second plaintiff, Gladstone Tug Services Pty Ltd, owned the "Tom Tough". The "Wistari" and the "Kuttabul" were both owned by the third defendant, Queensland Tug and Salvage Co Pty Ltd. The "Tom Tough" and the "Wistari" are both salvage capable tugs. The tug's dimensions are 34 by 10 metres and it is fitted with an oil engine developing 3,600 horse power ("hp"). The tug has a bollard pull of 52 tonnes and is equipped with salvage gear. It is manned by a crew of three hands. The Master of the "Tom Tough" was a former Harbour Master of the Port of Gladstone and has some salvage experience. The tug's dimensions are 34 by 10 metres and it is fitted with an oil engine developing 3,600hp. The tug has a bollard pull of 52 tonnes and is equipped with salvage gear. It is manned by a crew of three hands. The tug's dimensions are 33 by 10 metres, and it is fitted with two oil engines developing 4,200hp in all, having a bollard pull of 55 tonnes. It is manned by a crew of three hands. SETTING THE SCENE: THE " LA PAMPA" AND THE PORT OF GLADSTONE A plan, outlined below, indicates some of the major locations referred to in these reasons. This plan is to be regarded as a general guide only and is not to scale. Her draft was about 17.6 metres forward and about 18 metres aft. A pilot was on board. High water was predicted for 08.12 hours, with a rise of 4.55m. The three tugs, referred to above, assisted the vessel to unberth, and were released near the A7 marker in the Auckland Channel. They then proceeded back to their berths at the Adsteam tug wharf and arrived there at approximately 07.00 hours. At about 07.10 hours on 27 March 2002, the Pilot on board the "La Pampa" was heard over the VHF radio requesting the assistance of all tugs as the vessel appeared to have suffered steering failure. The Master of the vessel agreed, or acquiesced, to the Pilot's decision to radio for assistance. All tugs immediately mobilised. At 07.12 hours, the Pilot reported that the "La Pampa" was aground in the Auckland Channel. It transpired that the vessel had veered to port and grounded between markers A1 and A3. At this point, the vessel's bow was encroaching into the channel at a maintained depth of 6.8 metres and her aft part protruded into the channel at an angle of approximately 30 degrees. At this time and in this position, the vessel was in a state of distress. At 07.15 hours, all three tugs were moving towards the "La Pampa" stranded in the channel. The "Kuttabul" was the first tug to arrive on the scene and began to push at full power on the vessel's port shoulder at 07.20. The "Tom Tough" arrived shortly after at 07.22 hours and commenced pushing at full power on the port side aft. At 07.30 hours, the "Wistari" arrived and connected to the vessel's starboard shoulder, where she towed at full power. The "La Pampa" refloated shortly thereafter under control of the tugs. Her draft forward was noted to be 17.6 metres. By 08.05 hours, the vessel's draft forward was noted to be 18.2 metres. At this time, members of the vessel's crew were seen near hatches 1 and 2 on the port side taking internal soundings. The "Kuttabul" then connected to the port shoulder and the "Tom Tough" connected astern. With the "Wistari" still towing from the starboard shoulder, the tugs manoeuvred the vessel down the Auckland Channel and the Gatcombe Channel to the South Trees Anchorage. The tugs experienced some difficulty in controlling the "La Pampa" during this passage. When the tugs were manoeuvring the vessel to line up on Manning Reef light, the vessel shifted too far to port. The resultant correction caused the "La Pampa" to sheer to starboard towards the Boyne Wharf, and the "Tom Tough" had to move quickly to apply pressure to the vessel's port quarter in order to correct the swing. The tugs conducted the "La Pampa" down the Gatcombe Channel, bringing her up in the channel opposite South Trees Anchorage at 08.50 hours. In a manoeuvre that took the three tugs one hour to complete, the tugs then swung the vessel through an 180 degree rotation to stem the ebb tide. At 09.50 hours, the vessel let go of her starboard anchor to nine shackles. By 10.00 hours, the tugs had assisted the "La Pampa" to bring up the anchor stemming the ebb tide. As low water was predicted for 14.36 hours with a rise of 0.39 metres, the Pilot asked the tugs to remain in attendance to prevent re-grounding. It was anticipated that the vessel would swing due to the change of tide or the strength of the north/north-easterly wind. From 10.00 hours until 13.45 hours, the "Tom Tough" was connected astern and applied power continuously. At 12.20 hours, the vessel began to swing as the tide changed. At 12.50 hours, the Pilot requested that the "Wistari" position herself to push at the starboard side at the position of hatch nine. At 13.10 hours, the Pilot requested that the "Kuttabul" make contact with the "La Pampa" at the port quarter. With the assistance of the tugs, the vessel was successfully swung to stem the flood tide by 14.54 hours. During this process, the vessel took the ground briefly in way of her port side forward at 14.30 hours. At this point, the tides continued to be monitored closely. The next high water was predicted for 20.40 hours, with a rise of 4.08 metres anticipated. Between 14.54 hours and 16.18 hours, the tugs stood by in preparation for the movement of the vessel out of the port over the forthcoming high water. Discussions were held with the Pilot in considering the best way to deploy the tugs. At 16.18 hours, the Pilot advised all tugs to stand by. The "Wistari" was ordered to push on the port quarter at 16.25 hours. At 16.48 hours, the "Tom Tough" connected to the vessel's centre lead forward, where she pulled to starboard at full power to help the vessel recover her anchor. At this point, the "Kuttabul" began pushing at full power on the port shoulder. The "Wistari" was moved forward at 17.30 hours to push at full power alongside the "Kuttabul". Between 17.30 and 18.00 hours, the vessel's anchor was weighed. During the course of this process, it appeared that the "La Pampa" grounded again. The anchor could not be recovered until full power from all three tugs was applied and when the vessel finally began to move, she did so with a rush. The tugs then immediately ceased to apply power. After the vessel's anchor was aweigh, the "Wistari" connected through the centre lead aft. At 18.20 hours, the "Kuttabul" positioned herself at the port side aft, but later had to move up and down the port side to help control the vessel. At this point, the vessel was veering and yawing across the channel because each time that power was applied with her main engine, her rudder went hard to port. At all material times, the rudder appeared jammed in this position. The "Tom Tough" shifted to the port shoulder at 18.46 hours and connected there. At 19.37 hours, the "Tom Tough" moved to connect when the vessel was entering the Golding Cutting abeam of marker G1. Although the tug masters were aware that the vessel had to leave the port over the forthcoming high water, difficulties in controlling the "La Pampa" kept the towing speed at about 3 knots. As the yawing of the vessel became more pronounced, the "Tom Tough" parted her connection at 20.24 hours near marker S1. The "La Pampa" then veered to starboard, and only prompt pushing action by the "Wistari" prevented grounding. The "Tom Tough" connected to the port shoulder soon after. At 20.50 hours, the "Kuttabul" lost her connection at the port quarter. The Pilot accepted the Master's advice that the "Kuttabul" would be best deployed at the starboard quarter, and the tug soon connected in this position. The wind was now blowing in an easterly direction at a pressure of Force 4. The sea conditions were moderate and a swell of approximately 1-1.5 metres had risen. These conditions caused some inconvenience to the tugs working close to the vessel's hull due to the reflection of the sea and swell from this area. At 21.15 hours, the vessel was abeam of marker S15 and was turned to port into the Boyne Cutting. At 21.44 hours, the vessel was abeam of marker S9 and was turned to port. Each of these turns was made challenging due to the ebb tide which was setting the vessel to starboard in the channel, although this was offset to some extent due to the jamming of the vessel's rudder to port. At 22.16 hours, the "La Pampa" was abeam of the entrance markers S1 and S 2 . At 22.32 hours, she passed the Fairway Buoy outbound. At approximately this time, the swell increased. The "Kuttabul" connected astern at 23.00 hours, but then parted her line when pulling into the wind. The "Kuttabul" subsequently re-positioned at the port quarter and pushed at half ahead. At 23.10 hours, the anchor was let go. At 23.30 hours, the vessel was safely anchored 3.5 miles north-east of the Fairway Buoy and inside the Gladstone pilotage area. ASSESSING THE DAMAGE TO THE " LA PAMPA" After the incident in Gladstone on 27 March 2006, a survey company called "De La Menardiere" inspected the "La Pampa. " The damage caused to the vessel was assessed in a report dated 29 August 2002. De La Menardiere commenced the survey on 8 June 2002, when the vessel had been moved to Brest, France. Photographs attached to this report indicate that the vessel suffered heavy setting-in of the structure of the No. 1 port double-bottom tank. This damage occurred along almost the entire length of the tank, which extends between frames No. 286 and No. 290 at the fore-peak bulkhead. The report also noted that the maximum indentation was at the turn of the bilge. The web-frames and stiffeners had experienced heavy deformation, and associated deformation of other internal stiffening was also present. In addition, heavy indentation and buckling was present on the shell plating. The shell plating had ruptured at or near to frame No. 268, and also near to frame No. 279. The damaged area on the "La Pampa" was situated on the port side at the right of the No. 1 water ballast tank and was caused by the grounding of the vessel. The rectangular zone of damage was 21.5 metres in length and had an expanded height of 10.5 metres. In this area, the spaces between the frames were 900 millimetres. On internal examination, the surveyors noted some damage to the port-side water ballast in the form of deformity between the rear bulkhead of No. 266 and the front bulkhead of No. 290. The report notes that the bulkheads at interior walls No. 266 and 290 did not sustain deformity. On the starboard side, there appeared to be only shallow cavities of no importance. The surveyors noted some traces of wear were practically visible over the whole surface of the underside, where a large part of the keel protection had disappeared. In places, the presence of rust revealed bare iron, with the antifouling layer and the anti-corrosion layer having largely been broached on the port side and, to a lesser degree, on the starboard side up to the rolling keel. The damaged surface represented approximately 75 percent of the 7300 square metres of the vessel's underside. The maximum indentation on the port side was approximately 400 millimetres in the damaged zone at frames No. 273 to No. 275. The repair of the vessel required 63 tonnes of replacement steel consisting of sheet iron, small frames and associated reinforcements. These repairs were carried out between 7 June 2002 and 28 June 2002. PARTICULARS OF SALVAGE SERVICES PROVIDED BY THE PLAINTIFFS In Schedule 2 attached to the Statement of Claim, the plaintiffs outline the particulars of the services provided and present an assessment of the danger and distress experienced by both the "La Pampa" and the tugs in the course of the salvage operation on 27 March 2006. In this document, the plaintiffs note that the salvage services were promptly and efficiently rendered. It is emphasised that the operation was entirely successful and that the local knowledge of the tug masters was an advantage to the vessel. The salvors state that the tugs made considerable efforts over a sustained period of time, demonstrating a high level of skill and good co-operation with each other and the pilot of the "La Pampa. " Second, the plaintiffs note that the vessel was a very large vessel, fully laden and deep drafted. They contend that the size of the "La Pampa" was at the upper limit, if not beyond, the magnitude of a vessel which could safely lie in the South Trees Anchorage. It is claimed that the size and condition of the vessel meant that there was a continuing risk of the salvage work being unsuccessful. It was necessary to swing the "La Pampa" through 180 degrees on two occasions. Handling the vessel in the channel also proved to be difficult due to the combination of the problems she was experiencing with her rudder and the tidal and sea conditions. The salvors contend that the tugs' total available power of 11,400hp power was committed to the casualty for nearly 19 hours. During the provision of the above services, the tugs and their crews were at risk of physical damage and personal injury. Third, the plaintiffs stress that the services rendered by the salvors were of considerable benefit to the port and its users because the duration of the port closure was minimised. It is emphasized that the first plaintiffs are high-class professional salvors of international repute, and that their investment in salvage is reflected in the design and construction of the tugs, which have a dual harbour and coastal salvage role. The "Wistari" and the "Tom Tough" also carry portable salvage equipment. The plaintiffs also note that the first plaintiff's senior salvage Master, who was in New Zealand at the time of the incident, was placed on alert and assembled a standby team of experienced personnel ready to proceed to Gladstone by air from Sydney and Cairns. Moreover, the first, second and third plaintiffs have a policy of performing salvage services whenever required. As demonstrated by the facts in this case, the skilled staff and resources of the salvors were available to the "La Pampa" when the vessel ran into difficulty Fourth, the plaintiffs claim that the "La Pampa" was salved from a position of considerable danger thanks to the salvage services provided. Due to her steering failure, the vessel was immobilised throughout the operations until she was assisted by powerful and well-handled tugs. It is maintained that when she was grounded in the Auckland Channel, there was a serious risk that the "La Pampa" could have suffered from bottom damage caused by mounting pressure during the impending and succeeding low waters. The vessel's immobilisation aground was aggravated by the fact that she was taking water forward. Fifth, the plaintiffs claim that if the "La Pampa" had been fractured in way of a bunker tank, significant pollution would have been released into the area causing significant damage to the marine environment and also increasing the risk of civil and criminal liabilities. The plaintiffs suggest that the potential environmental damage included the possibility of pollution in environmentally sensitive areas within Port Curtis as well as the surrounding areas that stretch out to the Great Barrier Reef. Sixth, the plaintiffs argue that after the vessel's initial grounding, and in the event of a subsequent re-grounding, the "La Pampa" was in danger of pivoting on the ebb tide so that her bow and stern would be grounded on adjacent banks of the channel. The plaintiffs stress that had the "La Pampa" swung across the channel in this way, the vessel's stern gear, double-bottom tank, hull and/or machinery may have been significantly damaged. In addition, it is claimed the vessel faced a significant risk of foundering on the banks of the channel, and, in a worst-case scenario, breaking up and thereby necessitating wreck removal. Finally, the plaintiffs note that even in her original position of distress, the vessel was blocking the Auckland Channel. Once afloat, the "La Pampa" had to be removed to outside the port in order to lie safely at anchor for repairs. This required that the tugs assist the vessel on its trip towards the South Trees Anchorage, where there was also a period of some delay. During this move, the vessel was at risk of re-grounding with all its possible consequences. In the anchorage, the "La Pampa" had barely sufficient water in which to lie. It was submitted that she was at continuing risk of grounding and being damaged, especially when swinging to the tide. Thereafter, the vessel was at risk of re-grounding in the process of being conducted out of the port. By reason of her predicament, the port was closed by the Port Authority. The plaintiffs argue that in the light of these circumstances, the Court should take into account that the owners of the "La Pampa" faced a risk of civil liability to any person whose trading was interrupted by the closure of the port. It is maintained that the salvage services provided enabled the vessel to be taken to a position of safety as quickly and as safely as possible. It is emphasised by the plaintiffs that the salved value of the ship and its cargo was considerable and that no alternative assistance was available when the vessel ran into difficulties. THE 1989 CONVENTION ON SALVAGE AND "LIABILITY SALVAGE" The question of salvage reward is to be fixed by reference to the International Convention on Salvage, 1989 ("the 1989 Convention"). This Convention appears at Schedule 9 to the Navigation Act 1912 (Cth) . By s 315 of that Act, Articles 6 to 8, 12 to 19, 21 to 22, 26 and 30 of the Convention have the force of law in Australia. This section also states that the "common understanding" concerning Articles 13 and 14 similarly has the force of law. In interpreting the Articles listed in s 315, it is necessary to read them in the context of Article 1 of the 1989 Convention which provides definitions for several important terms. For instance, Article 1(a) outlines that for the purpose of the Convention, "salvage operation" refers to any act or activity undertaken to assist a vessel or any other property in danger in any waters, navigable or otherwise. Article 12 states that only salvage operations which have had a useful result give right to a reward. This is a re-statement of the traditional salvage "no cure, no pay" principle. However, an exception is provided under Article 12(2). This paragraph flags that the 1989 Convention incorporates an exception to the traditional position, stating that "except as otherwise provided under this Convention," no payment is due if the salvage operations have had no useful result. In the present proceedings, there is no dispute between the parties that the salvage operation qualifies for a reward or that the salvors achieved a useful result. Article 14 is of particular interest as it provides the exception to the "no cure, no pay" principle as articulated in Article 12. Where a salvor carries out an operation in circumstances where there is threatened damage to the environment but does not qualify for a reward under Article 13 because it has achieved no "useful result," --- that is, the vessel and the property have been lost - there is provision in Article 14 for "special compensation" to be awarded. This is assessed as at least equivalent to the expenses incurred, and may be increased up to a maximum of 30 percent of the expenses. There is also power to increase such special compensation further up to 100 percent of expenses if the salvors are considered to have performed particularly well with regard to the factors listed in Article 13. In these proceedings, Article 14 is not applicable because the eligible expenses available under Article 14 are less than the amount claimed by the salvors. In the present case, the actual expenses incurred by the plaintiffs are approximately A$35,000.00 and the defendants initially made an open offer of settlement in an amount of A$750,000.00 This is greater than the maximum amount the plaintiffs could claim under Article 14 and accordingly that Article has no application. However, the existence of Article 14 bears on the interpretation of Article 13. Article 13 is of central importance. Article 13(1) prescribes the criteria for fixing the salvage reward in the event that the salvors' efforts are successful. Article 13(3) also caps the potential reward available to the salvors so that it must not exceed the value of the salved property, including the value of the vessel. Article 13(1) requires that the reward must be fixed "with a view to encouraging salvage operations," taking into account criteria set out in subparagraphs (a)-(j) inclusive. These criteria are not ranked in any order of weight or significance. The Article is silent as to whether the considerations are exhaustive, or whether other matters can be taken into account. In this document, it is claimed that the Court in fixing the quantum of the salvage reward under the 1989 Convention can consider the vessel's potential exposure to liability in the hypothetical event that the salvage services provided by the plaintiffs had not been provided. It is claimed that the Court should have regard to the fact that had the "La Pampa" received no assistance from the tugs, claims may have been brought against it in relation to the closure of the port, the blockage of the channel or part of it, wreck removal, economic and physical loss to third parties, possible pollution and environmental clean up costs and other liabilities which could have been incurred by the salved vessel. The submission raises an important question as to the basis and extent to which the Court can have regard to questions of the vessel's exposure to liability claims by third parties for losses arising from the incident giving rise to the salvage operation, as well as the operation itself. In other words, in determining the salvage amount, should the Court treat as a relevant consideration whether any potential liability of the vessel or its owners may have been avoided by the actions of the salvors. In these proceedings, the determination of this question had an effect in relation to the admissibility of evidence as well as to the determination of the quantum of an appropriate salvage reward. The issue of "liability salvage" was first raised by way of an objection by the defendants to certain evidence. After hearing detailed argument on the evidentiary point, I decided to allow evidence in relation to this question and to give my conclusions and reasons for my views in this judgment. I considered that it was inappropriate to finally resolve as a question of evidence this important question as to whether liability to which the salved vessel might be exposed is a matter that the Court is required to take into account. The defendants submit that under the 1989 Convention, the Court cannot pay any regard to the consideration that the salvage operations may have had the effect of preventing or reducing the exposure of the vessel to liability to third parties for damage or economic loss. The defendants refer to the language used in Article 13, the Travaux Preparatoires of the 1989 Convention on Salvage ("The Travaux "), the previous Convention for the Unification of Certain Rules at Law Relating to Assistance and Salvage at Sea (1910) ("The 1910 Brussels Convention"), and the fact that the decided cases relied on by the plaintiffs are distinguishable and preceded the 1989 Convention. They conclude that in light of these considerations, liability salvage cannot be considered either in the exercise of discretion or under any specific factor in Article 13(1) in the fixing of a salvage reward. INTERPRETING THE 1989 CONVENTION ON SALVAGE THE TRAVAUX PREPARATOIRES According to the Vienna Convention on the Law of Treaties (1969), a treaty should be interpreted in accordance with the ordinary meaning of its terms in light of its object and purpose (Article 31). Recourse can be taken to supplementary aids, such as the Travaux , where the ordinary interpretation leaves the meaning ambiguous or obscure, or leads to a result which is clearly unreasonable (Article 32). In this case, I do not consider that the language is unambiguous or so clear that recourse to extrinsic material is not appropriate. I have therefore considered the extrinsic evidence. The Travaux , and the other circumstances to which I have been taken in this case, indicate that after the "Torrey Canyon" environmental disaster in 1967 and that of the "Amoco Cadiz" in 1978, there were extensive debates and proposals enlivened in the maritime community representing competing interests as to whether the 1910 Brussels Convention on Salvage should be replaced or modified to provide greater incentives to salvors and to protect the environment. In the "Torrey Canyon" operations, great expense was incurred by the salvors to avoid contamination but because the efforts to save the vessel were unsuccessful, under the 1910 Brussels Convention they were unable to obtain a reward for their skills and efforts. This was perceived by salvors to be plainly inequitable. These discussions led to negotiations which culminated in the 1989 Convention. The extensive discussions, reports and debates to which I have been referred include proposals to provide for the insertion of liability salvage as a separate factor for consideration in fixing the salvage reward. In the decade preceding the 1989 Convention, there were extensive discussions and proposals directed to include liability salvage, but in the final draft these were not successful and are not reflected in the terms of the 1989 Convention. In 1984, the Executive Counsel of the International Maritime Organisation ("IMO") approved a report by Mr Bent Nielsen which discussed the proposals concerning the fixing of the salvage reward. It is expressly stated that the order in which the particulars are enumerated is not intended to provide a guidance on such matters. Nevertheless, the draft convention is not intended to set out the law of salvage in any exhaustive manner . The CMI considers that as regards certain questions the solution adopted in the various national laws on salvage differ to such an extent that the acceptability of the draft convention might be reduced if an attempt were made now to bring about international uniformity by provisions which deal with such matters. In relation to the definition of "damage to the environment", it is notable that the Nielsen Report states that the provision relates to "physical damage" to persons or property, and not to the economic consequences thereof. An important point that emerges from the consideration of this document is that the 1989 Convention clearly represents a delicate balance struck between competing interests. ACADEMIC COMMENTARY AND JUDICIAL AUTHORITIES Experienced text writers differ in their approach as to whether any regard to liability salvage is totally excluded from consideration when fixing salvage reward under the 1989 Convention. In their Shipping and the Environment (1998), La Rue and Anderson categorically assert at 583 that liability salvage, in the context of operations which prevent the escape of pollutants, is not a factor recognised by Article 13. Brice in his Maritime Law of Salvage (1999, 3 rd edn) considers at [6-79] --- [6-85] that the concept of liability salvage should be considered as a distinct new form of salvage which is not yet part of the law of salvage. He notes that there are enormous practical difficulties in the path of its introduction as a separate consideration. Kennedy and Rose in The Law of Salvage (2002, 6 th edn) conclude at 150-170 that under the 1989 Convention, liability salvage lies outside of the range of independent subjects of salvage reward. They observe that while averting or minimizing the risk of a vessel's liability to third parties has not in itself been recognized as a subject for consideration in fixing salvage reward, it is noted that the concept had been treated by some decided authorities as a valid factor in assessing the reward. They refer to five cases including " The Whippingham " (1934) 48 Ll. L.Rep 49. These cases were decided prior to the Convention and are of little assistance. The plaintiffs placed emphasis on the decision of Lynch J, a District Judge of the US Ninth Circuit, in Westar Marine Services v Heerema Marine Contractors, S.A. (1985) 621 F Supp. 1135. That case was decided before the 1989 Convention but having regard to the extrinsic material surrounding its drafting. After considering the relevant decisions in the United Kingdom, his Honour concluded that the Court could not consider the prevention of liability to third parties, the public interest, or benefits to the shipowner as distinct and independent factors in arriving at a salvage reward. It is important to note that his Honour's decision was limited to a finding that such matters could not be considered independently. In the final paragraph of the reasons, his Honour noted that the Court was still left with considerable discretion as to how the specified factors should be weighed so that a fair salvage amount that best serves the interest of the parties and the public can be awarded. Ultimately, the proposition that the Court, in exercising its discretion to take account of the need for encouragement of salvage operations, is not entitled to look at the question of possible liability to third parties, even in a general way, does not find support in this case. Save in the most straightforward case where the existence of liability on the owner of salved property is self evident, all the Tribunal can say is that but for the success of the salvage services claims against the owner by third party owners of damaged property would have been made and would have had to have been investigated and defended. As outlined above, a global figure must be determined having regard to the factors in Article 13. The weight to be assigned to each factor is dependent on the circumstances. In one sense, the higher the monetary reward given, the greater is the incentive to undertake salvage operations. The fact that the Court should apply a liberal and generous assessment to the fixing the reward with this aim in mind does not entitle the Court to award an unreasonable or extravagant amount. In considering the interpretation of Article 13, I set out below my reasons for concluding that on a fair reading, none of the individual paragraphs calls for an investigation of the nature and extent of any possible third party liability which the property salved or the owners of the vessel might attract as a consequence of the circumstances leading to the salvage operation. In my view, a correct construction of each of the paragraphs does not import any obligation on the Court to investigate the extent to which third party liability has been avoided by the vessel as a consequence of the incident. Nevertheless, the question arises as to whether any consideration of potential liability is excluded by the Convention. In an analysis of this issue, the starting point is that the Convention does not specifically in its terms exclude the consideration of such liability. Moreover, I do not consider that the extrinsic aids to construction prevent the Court, if it sees fit, from having regard to this consideration. In an appropriate case, this consideration may support, in a very general way, an enhancement of the reward without the Court investigating in any degree of detail the fact that the salvors' efforts may have resulted in limiting or eliminating prospective exposure on behalf of the vessel. This is not a consideration that should be scrutinized or examined with a view to reaching any specific conclusion. Rather, it should be recognized as one circumstance in the context of the salvage operation. In the light of the fact that the specific enumerated factors listed in Article 13 have been the subject of numerous international debates and agendas, and are discussed in negotiations, proposals, counter-proposals and published opinions over many years, I consider that the paragraphs cannot be read to recognise the concept of third party liability as a specific factor. In my view, the Court should approach the question in the following way. The Court should consider that the factor of potential exposure to third party liability operates generally to inform the fixation of the global figure, which results from the evaluation of the criteria listed in Article 13 that may be relevant in the particular case. It would not be appropriate to investigate, admit and consider detailed evidence as to the nature and extent of such liability. Having considered the authorities, the Travaux , the Convention history and the detailed submissions made by the parties, I conclude that consideration of the vessel's exposure to liability is not excluded by the Convention. It may be appropriate in particular circumstances to take into account the consideration that some liability on the part of the vessel may have been avoided by the intervention of the salvors. And, in appropriate circumstances, this may inform the fixing of the reward as an enhancement without any determination, detailed investigation, consideration of detailed evidence or attempt to form any definitive conclusion as to the amount of any such liability. The possible existence of such liability can be relevant but it does not warrant consideration as an independent factor. In some circumstances, it may not be of any significant weight. It may be said that such an approach introduces an additional element of unpredictability in fixing a reward, but it must be kept in mind that the whole exercise is not one of arithmetic precision. It is an exercise of evaluation, judgment, and the balancing of broad considerations. In this particular case, having regard to the circumstances to which I refer below, the prospective exposure to liability of the vessel is a matter to which I have given little weight as a general enhancing factor in fixing the reward. I now turn to consider the specific considerations. ARTICLE 13 (1) (a) --- SALVED VALUE The salved value is agreed between the parties at A$37,914,691.94. This is one of the matters which I have taken into account and given some weight. And this is consistent with what is said by Lord Stowell in The Blenden v Hall 1 Dodson, 421: "In fixing a proportion of the value the Court is in the habit of giving a smaller proportion where the property is large and a higher proportion where the value is small, and for this obvious reason, that in property of small value a small proportion would not hold out a sufficient consideration, whereas in cases of considerable value a smaller proportion would have afford no inadequate compensation. Of course, there may be a correlation between the size and value of the vessel and the difficulty of the salvage, the degree of skill of the salvor and the risk of liability to the salvor. The vessel in that case was very large, being over 58,000 tons deadweight and carrying 55,000 tons of crude oil. She was also surrounded by large areas of open water. In particular, he referred at 342 to "a quite measurable degree of danger" to the whole of the crew during the transhipment of oil. Twelve out of seventeen tanks had taken water, and the ship was suffering a considerable list to port. After referring in a general way to the evidence, his Honour expressed satisfaction that each of the circumstances contributed to the danger of the operation caused by the potentially hazardous nature of the cargo. At 342-343, his Honour accepted that the work undertaken by the crew concerned with the complex transhipment of crude oil was carried out in a careful and skilful way, and he paid regard to the skill of the first officer in "devising much of the quite complex, imaginative and, to a degree, novel procedures which were employed". Importance was attached to the arduous nature of the work over many hours, and to the considerable responsibility carried by the Captain. He considered the case did not involve any "acts of particular heroism" or the rescue of the salved vessel from "an immediate danger of great magnitude," but rather the performance of a quite difficult and complex task against a background of the possible risk of a sudden disastrous fire if any one of a number of possible mishaps occurred. He then evaluated other matters as indicating a relatively modest award, when compared to the agreed salved value, in selecting a figure of A$20,000. This was a small percentage of salved value. In that case, the Court was not concerned with a consideration of the 1989 Convention. In the present circumstances, the plaintiffs have pressed their case using the salved value of the "La Pampa" of approximately A$38 million as a benchmark by which to evaluate the other criteria. They submit that in this case, it is appropriate that the award be fixed as at least 10 percent of the ship's value. At a maximum, they refer to a figure of between 15 to 20 percent and a figure exceeding A$6 million. The measure of the reward as a percentage of the salved value has been used by the plaintiffs in this case as a point of comparison in relation to rewards given in other salvage operations. For example, they point to the fact that in the case of The Korowa v The Kooraka [1949] SASR 45 the reward was 20 percent of the salved value. Another instance of a 20 percent award (in relation to a low salved value of A$35,000) is referred to in the observation of Olney J in The Kristy Mae v The Santa Rita [1984] WAR 95, where his Honour considered at 100 that $A7,000 was not "necessarily extravagant. " In that case the Full Court reduced the salved value to $A35,000 and remitted an assessment of the salvage amount to the primary Judge. The percentage of salved value is not an arithmetic formula which directs the Court in fixing a reward. As pointed out in " The Amerique " at 473, unlike French courts at that time, English Courts have since the 17 th century consistently rejected any hard and fast rule as to the reward being calculated by the application of a fixed percentage of salved value. In the present case, the Court was taken by counsel to many cases where rewards were made in amounts of over 4 percent. A few rewards were fixed by reference to smaller percentages and there were some instances where rewards of over 2 percent of the salved value were made. These authorities, as an analysis of the facts discloses in each case, involved widely differing factual matrices. It is important to note that given the significant differences in the salvage operations, surrounding circumstances and legal regimes applicable to the fixing of a reward, it can be misleading in the extreme to isolate the salved value and base a reward on a percentage of that amount. There will naturally often be a tendency to award a higher percentage of salved value in the case of property with a lower salved value. There is a useful table of comparative awards, including a sketch of the relative circumstances, which is annexed to the judgment of Sheppard J in Delosa v Clippers Anchorage Pty Ltd (NSWSC, 6 November 1978, unreported). I have considered his Honour's reasons for judgment, the summary in the schedule and other cases in forming a view as to the appropriate lower and upper extremities of a spectrum in which an award could be made in the present case. I have treated these only as indicative, in a general way, in forming an opinion as to the relative importance of the specific matters referred to in Article 13 in the current proceedings. The " Nagasaki Spirit ", for example, was an exceptional case. As a result of a collision between this vessel and a containership named "Ocean Blessing" in the Malacca Straits, 12,000 tonnes of heavy crude oil escaped and caught fire. All the crew of "Ocean Blessing" lost their lives and only two crew members of the " Nagasaki Spirit " survived the fire. In the light of these exceptional circumstances, it was deemed appropriate to make a very large award. However, in no way is that case comparable in any respect with the circumstances before me in this matter. The range and discrepancy between the value-percentage rewards, as reflected in the authorities, demonstrates the highly fact-specific nature of each case. While a uniform percentage may encourage and lead to certainty and predictability of outcome so as to enable parties to resolve their disputes more readily by agreement, such an approach suffers the disadvantage that a proportionate equitable award may not be fixed in a particular case. The fact that specific factors are enumerated, and are required to be taken into account, indicates an intention to focus on those factors insofar as they are relevant in the particular circumstances. It may be that in a specific case, some of the factors carry no weight, carry a negative weight or are significantly outweighed by other factors that are presumed to be more important in light of the particular circumstances. Article 13 expressly states that the criteria are not ranked in any order of importance and there is no justification for concluding that the salved value or a percentage thereof as derived from other cases is to be a controlling consideration. There may be instances, for example, where the salved value is very high, but the care, skill and other factors indicate that the salvage performed was a relatively minor operation. In such a case it would be artificial to contend that any fixed range or percentage should substitute for a careful, although necessarily imprecise, balance struck from a consideration of the specified factors. The salved value as a figure is significant in the context of the 1989 Convention because Article 13(3) specifically caps the salvage reward at the salved value of the vessel and property. Although other cases may provide points of contrast and similarity to the present circumstances, there is no single case or group of cases - and one would not expect there to be --- based on which one could fix a particular value-percentage reward in relation to the salvage services provided to the "La Pampa". Where higher rewards as a percentage of the salved property have been viewed as appropriate, the surrounding conditions and circumstances of those operations have been relatively extreme. In fixing the reward in this case and carefully considering the criteria, I have taken into account the substantial agreed value of the salved property and treated it as an important consideration. ARTICLE 13 (1)( b): SALVORS SKILL AND EFFORTS IN PREVENTING DAMAGE TO THE ENVIRONMENT Under this paragraph, the Court must take into account the "skill and efforts" of the salvors in preventing or minimising damage to the environment. The expression "damage to the environment" in Article 13 (1)(b) is defined in Article 1 of the 1989 Convention to mean substantial physical damage to human health or to marine life or resources in coastal or inland waters or adjacent areas caused by pollution, contamination, fire, explosion or similar major incidents. I accept that within and near the Port of Gladstone, there exist species of world class and highly sensitive marine life and also significant marine resources that may be vulnerable to damage caused by pollution. It is arguable that the Boyne Wharf and other structures could also be encompassed in the term "marine resources" as outlined in Article 1. In the interests of taking a generous approach and bearing in mind the objective of encouraging salvage, I have adopted a broad interpretation and paid some regard to this possibility, insofar as there may have been the potential for physical damage to affect the wharf and other structures in the absence of the skill and efforts of the salvors. Article 13 (1)(b) is premised on the finding that there was a real risk of substantial physical damage which has been avoided by the skill and efforts of the salvors. This risk must be a risk arising from the circumstances in which the vessel was placed as a consequence of the grounding and the consequent movements of the vessel. In the present case, the possible risks that may have arisen had the tugs not provided assistance include the release of oil, damage to or blockage of the channel, damage to adjoining structures or resources or livestock, or even, in the worst-case scenario, the break-up of the vessel. The possible pollutants or sources of contamination include the oil and dirty ballast water that may have escaped from the damaged ship and, in the event of the break-up of the vessel, pieces of wreckage that would be scattered in the area surrounding the vessel. This provision is not concerned with remote, possible or hypothetical damage to those specified aspects of the environment, but with the prevention of substantial physical damage. The paragraph uses the expression " in minimising or preventing " which points to the implementation of some process and the existence of an actual risk or danger. This stands in contrast with the term " threatened " damage as used in the context of Article 14(1). In Article 13 (1)(b), the language does not refer to skill and efforts which "aim" to minimise or prevent damage, but to those used in the process of preventing or minimising damage to the environment. Importantly, the provision is not concerned with economic loss which the vessel may incur by way of liability for environmental damage. Rather, it is directed to the skill and efforts of the salvors in preventing or minimising any potential damage caused by major incidents. The collocation of adjectives listed in this paragraph to describe the type of incident clearly contemplates a significant event. In my view, it is not open on any reasonable reading of this provision to open up, or give weight to, considerations relating to the extent to which the efforts of the salvors avoided any potential liability of the vessel to third parties. The provision is directed to substantial physical damage, and is focused on the level of skill in combination with the amount of work, and difficulty of that work, which is required to prevent physical damage to the vessel and the surrounding environment. In considering this paragraph, the Court must assess whether there was some realistic prospect of significant or substantial physical damage to the environment caused by the incident that is the subject of the proceedings. In considering the events of 27 March 2002, I find that there was no major incident which seriously affected or posed a direct threat to the environment. Nor was there any notable escape of pollutants or contamination into the surrounding areas which required containment or prevention measures to be implemented. The grounding of the "La Pampa" and the consequential salvage operations could be described as incidents, but I do not consider they could be characterised as major incidents which affected or threatened the environment in the manner required by this paragraph. At the time of the incident, the "La Pampa" was carrying 2993 tonnes of heavy fuel oil and 163 tonnes of diesel oil, as well as lubricating oil and engine wastes containing oil and ballast water. Having regard to the position in which the oil was stored, I find that there was merely a remote possibility of a failure such as would lead to the release of any of that oil. Furthermore, the arrangement plans and the tank plans for the "La Pampa" indicate that the fuel tanks were at the rear of the vessel, well away from areas where there was any real prospect of rupture or failure which could lead to the escape of contaminants that might pollute the environment. I have come to the conclusion that there existed only a remote possibility of the escape of any contaminants or pollutants. Although I consider that the salvors have exercised considerable skill and effort in salving the endangered property as specified under this paragraph, I do not consider that there was any imminent, present or substantial threat to the environment prevented by their skill and efforts. In my view, there was virtually no real - as opposed to remote - possibility that oil or ballast water in any significant quantity could escape as a result of the grounding, and therefore I have not assigned any significant weight to this consideration. Nor do I consider that there was any real risk of breakage of the vessel so that the environment would be adversely affected. In light of the evidence, I am not persuaded that there was any danger of substantial physical damage or injury to human health, marine life or resources due to the escape of oil or other pollutants, or the blockage of the channel. Nor was there any danger of substantial damage to marine resources caused by any major incident similar to fire, pollution or contamination. The plaintiffs have not established that that there was any proximate prospect of such a consequence as opposed to pointing to the existence of a remote possibility. I also note that the time frame during which the salvage efforts were made was of relatively short duration. Therefore I have given some, but not great, weight to this consideration in forming my conclusion as to the proper quantum of the reward. ARTICLE 13 (1)( c): MEASURE OF SUCCESS OBTAINED BY THE SALVOR Article 13 (1)(c) requires that the reward is fixed taking into account the "measure of success obtained by the salvor. " In this phrase, the term "success" refers to the salving of the property and ship in danger. The expression "success obtained by the salvor" should not be construed to mean success in avoiding the danger of the vessel or its owners or crew being sued for economic loss by third parties. The salvage operation, as Article 1 indicates, is the operation of salving "a vessel or property" in danger. It is directed to physical loss or damage. It is not directed to protecting the vessel from potential third party litigation claims for loss suffered by third parties by way of damage or economic loss or the expense and expenditure of time in defending any proceeding. In the present case, the salvage operation was a one hundred percent success and I have given significant weight to this factor accordingly. " In considering this criterion, it is necessary to identify the "danger" referred to. Some guidance can be found by examining other Articles in the 1989 Convention. For instance, and as previously noted, Article 1 defines "salvage operations" as activities undertaken to assist a vessel or property in danger. In my view, this paragraph does not contemplate danger to the environment but rather the focus is on the degree of danger to the salved vessel itself and the persons and property in it. This factor is directed to assessing the danger to human life and the risk of loss, injury or damage in relation to the salved property. When considering Article 13.1(d), it is useful to note that paragraphs (a) and (e) support the conclusion that the subject of the salvage operation is the "vessel and other property" salved. The 1989 Convention refers expressly to "the environment" in several other provisions, but does not do so in paragraph (d): see, for example, Articles 1, 6, 8, 11, 13(b) and 14. It is also notable that the 1989 Convention uses the expression "danger" in relation to the "vessel and other property and life" as opposed to the expression "damage", which is used in relation to adverse effects on the environment: see, for example, the Preamble and Articles 1, 8, 10, 11, 13, 14 and 16. In this case, the evidence does not indicate that the events of 27 March 2006 presented any significant danger to life or person. Nevertheless, the vessel itself became vulnerable to danger when the steering gear failed. This led to the grounding of the vessel and rendered it unable to manoeuvre safely. Using considerable skill and effort, the tugs were able to control and manoeuvre the vessel. At times the operation presented great difficulties to the salvors arising from a number of complex interacting factors including the constant yawing and veering of the vessel, the tidal currents, the narrowness of the channel, the weather conditions, the jamming of the rudder to port, the breaking of the tow lines, the limited tolerance for keel clearance and certain time constraints. Having regard to these factors, it is clear that any danger to the vessel and property would have been significantly greater had the tugs had not come to the vessel's assistance. Once the tugs arrived, their efforts in combination with the directions of the Pilot, the co-operation of the Master and the input of the harbour authority enabled the potential risk-generating factors to be contained and danger avoided. Although Article 13.1(d) is limited to a consideration of the actual danger that the vessel experienced during the operation, regard should still be paid to the potential danger the vessel may have faced if tug assistance had not been available. The plaintiffs submit that if tug assistance had not been available, there was a continuing danger of global or local failure to the salved property until the vessel was safely moved from the point of grounding out of the port. It was claimed that the danger of damage to the vessel in the Auckland Channel was of a high degree, and that this danger was present and continuous until the vessel anchored at the deep sea anchorage near the Fairway Buoy. The scenario advanced by the plaintiffs is that with the vessel aground and the bow pinned on the northern side of the Auckland Channel, there was a significant risk of further damage to the vessel in the absence of tug assistance. The plaintiffs maintain this danger would have arisen whether the "La Pampa" remained on the northern bank with the change of tide, or whether she refloated without the use of her rudder and was therefore unable to maintain her position in the channel without further grounding. One risk was said to be that the stern could collide with the northern bank in the Auckland Channel as a consequence of the tide. This could have led to rudder, propeller and local hull failure near the stern, depending on the rate of swing with the remaining tide. The plaintiffs refer to evidence presented by Mr Squire, Captain Hancox, Captain Wilson, Captain Noble, Captain Fraser and Dr Binks, which they say establishes that due to the heavy grounding of the "La Pampa", on the balance of probabilities she was likely to remain aground at high tide if there was no assistance. They contended that the witnesses agreed that the vessel was most likely to swing across the channel, remaining pinned to the bow and hitting the south bank with her stern. It was argued that if the "La Pampa," when swinging on the ebb tide and making contact with the southern bank, remained aground by her stern and bow, she would be subject to bending forces as she was held up on the banks with the falling tide due to a loss of buoyancy. Although there is considerable speculation as to the likelihood of that bending moment and its probable extent, as well as similar conjecture in relation to the resulting shear forces, the plaintiffs submit that the evidence indicates a real and imminent prospect that the vessel could have been exposed to global failure with the consequent escape of oil and blockage to the channel. Reliance was placed on the evidence of Dr Phipps, a geologist, who gave very limited evidence that the southern side of the bank contained hard matter identified by core sampling as very stiff. The plaintiffs' case as to global failure largely depends on evidence given by Mr Squire, a naval architect, to the effect that on one possible scenario, the bending moment and shear forces could exceed the vessel's likely capacity to withstand those forces and this would result in global structural failure. It was also submitted that, given the influence of tides and swell in the channels, there was a risk of global failure if the vessel had re-grounded. It is further contended that if the vessel had struck the south bank and had not been held up, she would have slipped down the bank to the channel bottom or sunk into soft sand or mud with the tide. This would have caused substantial damage to the vessel's stern gear, propeller and rudder, and risked her hull being further penetrated at the stern adjacent to the engine room. Another danger posed by the plaintiffs is that if the vessel had refloated without tug assistance, she would have been unable to manoeuvre down the channel without her rudder, which was either locked to port or moving freely as the vessel's propeller turned. It is submitted that in those circumstances, the vessel was likely to re-ground as she attempted to manoeuvre with her engine alone or as the tide changed. This could have led to further risk of hull damage to different parts of the vessel, potentially resulting in water ingress which would make the vessel unstable and the pumps incapable of preventing or minimising flooding in various parts of the ship. In response, the defendants submit that the "La Pampa" was never in great danger after the tugs came to her assistance. They note that the Pilots were able to safely manage and manoeuvre the vessel with the assistance of the tugs. This is despite the problems referred to by the plaintiffs including the narrowness of the channel, the tidal currents and the yawing. The defendants say the actual risk of danger after the tugs came to the assistance of the vessel was remote. Even when the tow lines had broken, appropriate steps were taken to reconnect the lines and the operation continued. In the defendants' submission, there is no evidence that the vessel came close to contacting the sides or the bottom of the channel. For the plaintiffs, it was argued that the Court should draw adverse inferences based on the defendants' failure to call evidence from the Master or the Engineer of the "La Pampa", and also the fact that no course recorder and depth sounder records from the vessel were produced. It was contended by the plaintiffs that these records would provide information in relation to the depth and the extent of veering and yawing, and thus were relevant to the question of danger. I have taken these matters into account, but I do not consider they carry much weight. The defendants submit that it was not necessary for them to call the Master or the Engineer in the light of the fact that other witnesses on the bridge gave evidence. Moreover, the defendants have acknowledged that there was substantial yawing and veering of the vessel, and agree that the water was shallow under the keel. Having regard to these concessions, they submit that no adverse inference could be brought or strengthened as a consequence of a failure to call evidence from the crew of the vessel or produce the relevant records. In relation to the plaintiff's submission that there was a danger of global failure caused by buckling of the deck and the breaking of the two bottom skins near the middle of the ship, the defendants say that although this was a possible outcome, it was so remote that this fact should not carry any significant weight. The defendants argue the qualified experts were in consensus that the risk of the vessel breaking her back was very low. They note that Mr Squire for the plaintiffs concludes in his first report that the hull was not likely to fail due to sagging, and that although a risk of global failure did exist, it was a small one. The defendants also highlight that of the three potential scenarios described by Mr Squire in his report, the worst-case scenario --- where the hull would be at high risk of failure (Case 2) --- is deemed by Mr Squire to be less likely that the other two. In relation to the other two possible scenarios, Mr Squire states that in Case 1 there is no realistic prospect of the collapse of the hull as a whole and in Case 3 the probability of hull failure is very low. Moreover, the worst-case scenario presented by Mr Squire (Case 2) made the unsubstantiated assumption that the vessel grounds fore and aft at the very top of the tide. As pointed out by Dr Binks, a naval architect called for the defendants, Case 2 is based on several problematic assumptions. Firstly, this scenario assumes that there is no sinkage or slippage of the ship's bow on the north bank or of the ship's stern when grounded on the south bank. Secondly, it is assumed that that the ship's stern swings to such an extent that a length of over 40 metres (measured from the aft perpendicular) makes contact with the south bank of the channel. He does not accept these assumptions, and considers that they are speculative. In addition, Mr Squire points out the difference between Case 2 (high probability of failure) and Case 3 (a very low probability of hull failure) is that in Case 3, instead of the vessel going aground fore and aft at the very top of the tide, she grounds at a lower point or sinks into the sea-bed by a distance of 0.68 metres. This is a relatively small difference. If the distance is less than that, the degree of risk falls between Case 2 and Case 3. Mr Squire accepted that the vessel must ground part of the way up the sides of the channel, and that whether she would drop with the tide would depend on the material and the steepness at the point of contact. The defendants note that there is no definitive evidence as to the shape of the south bank and that the evidence concerning the material of the south bank is limited. It was also stressed that Mr Squire acknowledged considerable uncertainty about his prediction in relation to global failure. On the expert evidence, I am not satisfied that in the present case there was any real probability of global failure, or indeed any danger of global failure. Dr Binks says, and I accept, that it is unlikely that the vessel would have become grounded with her bow on the north bank and her stern on the south bank because one would expect this scenario to have been prevented by the actions of the crew. He also considered that the general blockage scenario as presented in Case 2 could arise in the event that no action was taken by the crew, but he disagreed with the assumptions made by Mr Squire to justify the view that there was a significant prospect of global failure. There was simply not enough material to warrant the adoption of this conclusion based on these assumptions. The plaintiffs also claim that in addition to the danger of global failure, there was a significant chance that the grounding of the vessel could cause "local damage" to the stern plates, the propeller and/or the rudder. The defendants respond that that the evidence as to the potential damage to the rudder, the propeller and the stern plates has not been given by reference to any detailed calculations regarding the likely effect of the impact and extent of the damage. Therefore, they say, the evidence as to the nature and extent of possible local damage is merely speculative. It is acknowledged that the prospective damage, to a large extent, depends on the hardness of the material that could be struck by the rear of the vessel at any particular point. This point was addressed by Dr Phipps, who gave geotechnical evidence based on core data from a number of boreholes referred to in drill logs made in respect of samples taken in 1981. The boreholes drilled were 250 millimetres in diameter. The data obtained did not indicate a uniform pattern in the consistency of the material. In the view of Dr Phipps, the closest bore sample to the position of grounding is borehole number 81/39 on the northern side of the Auckland Channel. The log of that borehole refers to clayey, sandy gravel over fine to coarse sand and containing some pebbles. The depth of this borehole was 4.75 metres. Dr Phipps describes the sediment on the north side as unconsolidated but relatively compact. He considered that this sample showed that the material became more compact with depth. He conceded that no bedrock was shown in any of the samples. On the south side of the Auckland Channel, the most relevant sample is borehole 81/40. The log describes the material here as sandy clay with high plasticity and also notes a penetrometer reading greater than 500 kPa in the additional comments column. At various depths, the recordings of the penetrometer are also shown to be 200 and 400 kPa. The log refers to samples below 1.8 metres in this borehole as being "very slurried" with the bore-hole collapsing. However, I note that in the case of borehole 81/48, which was taken on the south side of the Channel further to the west, there is a description of sandy, silty clay of low plasticity characterised as being very stiff with penetrometer readings of 300 kPa and 200 kPA. In my view, this evidence, which dates back to 1981, is of limited assistance given the considerable variations between the samples and the approximation of the location in relation to the grounding. Because there is considerable doubt as to the precise location where the grounding occurred and where any potential impact with the bottom or the sides of the channel could have occurred, the application of the core samples to form a reliable conclusion as to the potential effect of any impact is of minimal use. When this is taken together with the distances between the core samples and the physical size of the samples, the uncertainty is compounded. While some guidance is given to the interpretation of this data, it is quite inadequate to make any reliable estimate as to the possible damage which may be caused by the impact of the vessel grounding or swinging across the channel to impact on the southern bank. Any such prediction is speculative at best. I do not accept the evidence of Dr Phipps that the vessel grounded on bedrock on the northern side of the channel. He concedes that the information available on the sediments on the north side of the channel is limited and draws inferences from scour marks as to what might have happened. He is not qualified, in my view, to interpret the causes of damage to the hull of the vessel. In these circumstances, given the uncertainties, reservations, difficulties of determining location and the limited size and distancing of the samples, I do not consider that they are of any real assistance. In relation to this matter, I accept the evidence of Dr Binks to the effect that he would not expect there to be much difference between matter with a penetrometer reading of 300 kPa and that of 500 kPa. Dr Binks performed some calculations on the basis of this data in relation to the potential impact on the rudder or propeller of the vessel. He noted that only one of the bore holes was in the order of 500 kPa hardness. He did not consider, as a naval architect, that there would be a significant difference in the impact and damage to the vessel if it struck material of 300 kPa compared to that of 500 kPa. Moreover, he did not accept the assumptions on which the conclusions of Dr Phipps and other witnesses were based. He also considered that, with action by the crew, it was most unlikely that the vessel would even strike the south bank. My conclusion in relation to this consideration is that there was danger to the vessel of suffering further damage if the tugs had not intervened. It is possible, but not probable, that in such circumstances the vessel could have blocked the Auckland Channel. It is not possible to determine for what period this could have lasted. There was also a danger that the "La Pampa" could have re-grounded and suffered further damage. I do not consider there was a danger to life. The vessel may have been unable to manoeuvre out of the port and may possibly have come into contact with the Boyne Wharf. Therefore, I have given weight to these matters but I do not accept the failure scenario posed by the plaintiffs and its witnesses. I prefer the evidence of Dr Binks to that of Mr Squire and the other witnesses where they are in conflict. ARTICLE 13.1( e) --- SKILL AND EFFORT IN SALVING THE VESSEL In fixing salvage reward, Article 13(1)(e) directs attention to the skill and efforts employed by the salvors in salving the vessel, other property and life. The defendants submit that in the circumstances of this case, this is the most important consideration in quantifying the award because it is largely the skill and efforts (including experience) brought to bear by particular salvors which distinguishes one salvage operation from another. They submit that in this case, the level of skill should be rated as a 1 on a scale of 0 to 10. The defendants point to evidence of Captain Noble in particular, and to his assessment of the measure and nature of the skill and efforts employed. They submit that although Captain Noble agreed on several occasions during questioning with counsel for the plaintiffs that many of the actions undertaken by the tugs on 27 March 2006 were not "normal harbour towage," this factor is not important. By contrast, it is contended that the emphasis should be placed on a comparison with other salvage operations to inform a proper appreciation of the demands of the present operation. Captain Noble gave evidence that the skill and efforts employed by the tugs in this instance were, in his experience, less significant than those required in a number of salvage operations of which he was aware. In the view of Captain Noble, normal tug crews are equipped and should ordinarily be competent to manoeuvre large vessels in all weather as well as handle situations where tow lines break. The reality in the present case is that the conditions were favourable at the time of the incident. The vessel was refloated approximately ten minutes after the "Kuttabul" arrived and no "special" methods were used to effect the refloating. It is true there was a movement towards the Boyne Smelter, which brought the vessel approximately one hundred metres from the wharf, but on the evidence there was no substantial danger of collision. Most of the day, the "La Pampa" was at anchor and the tugs were present but idle for substantial periods. Later in the day, their work was concentrated in one location. The vessel was manoeuvred with some difficulty to the outer anchorage using ordinary harbour tow lines and tug operations. There was some shearing and yawing on the way up to the outer anchorage, but these movements were able to be corrected without the use of unusual methods. The breaking of the tow lines was able to be rectified, and at all times the tugs were directed by a pilot. The defendants also emphasise that the tug operations were only one of a number of operations involved in the organisation and implementation of the salvage operation, which was under the control of the Pilots with the co-operation of the vessel's Master, Captain Brailo and the Acting Harbour Master, Captain Fraser. These circumstances, submit the defendants, called for a small degree of skill and little or no unusual efforts on the part of the salvors. The defendants also direct attention to evidence that there was no salvage master appointed but that overall actual control of the salvage was in the hands of the Pilot and the Acting Harbour Master. The crew of the tugs carried out instructions given by the Pilot. No critical decisions were made by the plaintiffs as to where the vessel would be moved, for example. The operation took place within the Gladstone Port limits and not in the open sea. No specialist vessels or equipment were in fact used and none of the tug crew members were called to use any special skill. The crews were not specialist salvage crews and took no steps to deal with contaminants because there was no escape of pollutants or any real danger to the environment. No salvage master was appointed. Neither the tug masters, nor any representative of United Salvage, participated in the making of decisions concerning where the vessel was to be taken and when. At all times, the tug masters acted under the direction of the pilots. Further, no salvage expertise was used or brought to bear by the plaintiffs to assist in the decision-making or in the manoeuvring of the vessel nor in any other aspect of the operation. I have referred to several of these cases earlier in these reasons. None of these are of any direct assistance beyond establishing that particular scenarios and rewards can range from the catastrophic conjunction of extreme circumstances to the simplest of operations. This broad range of factual scenarios is reflected in the numerous awards cited. Even more arbitrary is the conclusion sought to be derived by taking a percentage of the salved value of the vessel as reflecting any meaningful measure or level of award appropriate to this case. In the present proceedings, the comparison of relevant conditions and difficulties in various cases offers only a rough indication of an appropriate reward, although more extreme cases may present guidelines for the outer parameters as to the fixing of quantum. In this case, it is clear that the vessel lost her steering a short time after she released the tugs that had assisted her to leave the Clinton Wharf. Her rudder went hard to port and she ran aground at a speed of six knots in a channel only 180 metres wide shortly prior to high tide. As the vessel came to rest aground, her bow rose and she developed a list to port of between 5 and 10 degrees with part of her anti-fouling visible. It is not clear from the evidence, but I conclude that the vessel did not appear to move at the first push by the "Kuttabul. " The damages to the "La Pampa" and the appearance of a puff of smoke both indicate a significant degree of contact and attachment to the side of the channel. In the video footage, the puff of smoke can be seen rising from the "Kuttabul" shortly after she comes alongside the vessel, suggesting she was applying engine power. The footage demonstrates that it was necessary for both the "Kuttabul" and the "Tom Tough" to push with the "La Pampa's" engines set to full power in order to refloat the vessel. Once the "La Pampa" was refloated in the channel, assistance and backup was given by the three tugs which manoeuvred her through a difficult passage to the South Trees Anchorage. Considerable skill was required in guiding the "La Pampa" through this passage. The rudder of the "La Pampa" was freed from hard to port, but could not be controlled and swung from side to side. The operation was a difficult passage at slow speed, and the vessel veered strongly at times. During this passage the tugs were often making alterations to the direction of the "La Pampa" using a significant amount of power in various positions. The anchoring process at the South Trees Anchorage was a challenging operation. The vessel's engines could not be used as they would have made her turn, and the size of the "La Pampa" posed some difficulties in this position. I accept that without tug assistance, there was some risk of re-grounding at the South Trees Anchorage and that this could have caused additional damage. Low tide occurred at 14.15 hours, and tug assistance was given to enable the vessel to remain at anchor and avoid swinging with the current towards shallower water and re-grounding. The tugs were working in close proximity at full power to maintain the vessel at anchor with the changing tide. By 16.25 hours, a strong tidal current had developed and the tugs were assisting the vessel to maintain her anchorage without moving towards shallower water. One of the tugs applied pressure on the starboard bow, another pushed on the long line centre lead forward and the third pushed up on the port bow. I am satisfied that a significant amount of work was done while the vessel was at anchor in order to maintain her in a safe position. I also consider that the passage to the Fairway Buoy involved considerable skill and effort in light of the tight time frame within which operations had to be carried out in order to take advantage of the next high tide at 20.40 hours. After the "La Pampa" commenced her passage at 18.20 hours and before berthing at the Fairway Buoy, a number of difficult circumstances arose which required significant skill and effort on the part of the salvors. The steering failed again and the rudder jammed hard to port once more. At one point the vessel began to sheer to port, but the tugs were able to control and maintain her in the channel. Lines were used at times by the tugs to assist the steering of the vessel. When the "La Pampa" began to veer towards the channel in the Goulding Cutting, the tugs moved quickly to correct the vessel's change in direction. In order to maintain the speed necessary to guide the "La Pampa" from the channels within the tidal window, the forward tugs were used extensively to push the vessel. The ship's engines could not be constantly engaged because this had the effect of causing the vessel to steer to port. When the use of the "La Pampa's" engine caused the vessel to turn, the power of the after tug was applied to correct this tendency. Apart from the narrow time frame and significant tidal movements, major challenges that necessitated the skill and efforts of the tugs included the tendency of the vessel to veer and yaw and the inability to steer her due to the jamming of the rudder hard to port. In my view, this consideration is important. The skill and effort required and exercised by the salvage operators was of a high order, and I have made appropriate allowance for this. ARTICLE 13.1( f) --- TIME USED AND EXPENSES INCURRED BY SALVORS This paragraph requires that time used and the expenses and losses of the salvors be taken into account in the fixing of the reward. In this case, the period of the operation was in the order of 17 hours. With respect to actual expenses, the plaintiffs claim approximately $A35,000.00. The defendants submit that this must be discounted for an overestimation of fuel expenses requiring a discount to about $A30,000.00. I have taken this discounting into account, but it is of minor significance. The salvors' costs and expenses included fuel in a sum of A$8,093.00, replacement tow lines in the sum of A$26,851.00 and repairs to damage on the "Kuttabul" of A$345.40. In addition, the plaintiffs claim a cost in respect of tug hire in an amount of A$102,389.00, making a total expense claim of approximately A$137,000.00. I am satisfied, notwithstanding the submissions of the defendants to the contrary, that the amount of tug hire should be considered in determining the time and expenses incurred by the salvors. The defendants have stressed the importance of examining the actual costs and expenses as a starting point against which to assess whether an award is appropriate. This submission has some merit. The task of the Court, however, is to consider and evaluate the prescribed criteria in Article 13. There may be many circumstances in which the actual costs and expense of the salvage operation to the salvors is a minor factor in light of adverse circumstances faced and the efforts required by the salvor. For example, the use of great skill may avoid the loss of, or damage to, salved property even when the value of the vessel may be small. In such circumstances, a substantial award which greatly exceeds the actual expenses incurred may well be justified. Although the actual expenses in this case were relatively small, I consider that on balance, a reward very substantially above that figure should be awarded. ARTICLE 13.1( g) --- RISKS RUN BY SALVORS AND EQUIPMENT This paragraph requires that consideration must be given to the risk of liability and other risks run by the salvors or their equipment. In this regard, the plaintiffs point to the extreme difficulty they faced in controlling the movements of the "La Pampa" within a limited space after refloating. The vessel had a tendency to turn to port when the ship's engines were deployed, and extensive tug control was necessary at close range in some instances. It was necessary to use short lines to tow the vessel at certain points and this also exposed the tugs to greater swell reaction. The close interaction of the tugs with the vessel caused several tow line breakages, and the "Kuttabul" suffered some damage to her fenders. There is evidence that when one tow line parted, a very loud noise was heard. This is consistent with a sudden sharp strong strain or force. In addition, the evidence of Captain Beecroft refers to his concerns about a "rush" in the movement of the vessel which occurred on two occasions. He notes that at both the time of the original refloating and also when the vessel began to move at approximately 18.00 hours, it was necessary to control the speed of her movement. Captain Beecroft also expressed his concern that the tugs were in danger at about 08.33 hours when the "La Pampa" began to veer to starboard toward the Boyne Wharf. The "Tom Tough" was relocated to forestall the possibility of a collision, although for a few minutes it appeared that the tug may be unable to stop the vessel coming towards the wharf. The Captain noted that at this point he was concerned for the safety of the tugs as the ship headed towards the berths. Captain Beecroft also stated that later in the day, at 18.28 hours, the "La Pampa" lost steering and it was necessary for the "Tom Tough" to lash up to the port shoulder. At about 19.37 hours, the tug was put back on a long line. The sea conditions deteriorated after the "La Pampa" passed marker G1. The "Tom Tough's" long line parted at 20.24 and the tug was then lashed up to the vessel's port shoulder. Captain Beecroft said that just after the "Tom Tough" had parted her stern line, the vessel veered off to port and nearly ran out of the South Channel, almost colliding with marker S29. It was very difficult to correct the swing at about this point. The tide was dropping and the window of opportunity within which the vessel had sufficient water to exit the harbour was limited. The difficulty of the operation was increased by the swell in the passage out towards the Fairway Buoy, which was approximately 1-1.5 metres and rebounding off the vessel in certain areas. It is common ground that there was some risk to the tugs. However, the defendants contend that the risk was not so great that the reward should be substantially increased on this basis. They also point to the limited cost of repairing the actual damage to the tugs. In my view, however, there was a substantial element of risk to the tugs in the operation arising from the above considerations and other matters referred to in the evidence. In particular, the need to work closely with such a large vessel in a short time frame where there was a narrow channel and varying tidal movements placed the tugs in a position of significant risk. This is an important consideration. The defendants submit that the risk of the salvors incurring liability was very remote since the operation was controlled and directed by Pilots and critical decisions were taken by the Acting Harbour Master. Therefore, it is argued that there was little risk of liability being established against the tugs, their crews or their owners in the event that the tug masters were negligent in the way in which they executed the orders of the Pilot or Acting Harbour Master. Again, I consider that there existed some risk of this nature, but I do not treat this prospect as an important consideration in fixing an appropriate reward. In final submissions, the defendants referred to the limitation of the potential liability of the salvors as regards to third parties provided for by the Convention on Limitation of Liability for Marine Claims (1976), which was applicable in Australia at the relevant time under s 6 of the Limitation of Liability for Maritime Claims Act 1989 (Cth). They point out that at the outer limit, the plaintiffs could only have been liable to third parties in the most extreme case for a maximum of A$785,000.00 per tug for all death and personal injury claims and a maximum of A$395,000.00 per tug for other contractual and negligence claims. In the present case, there was not even a remote possibility that such a claim would be made and these figures do not provide any useful indicator. Therefore, the risk of liability incurred by the salvors, so far as it relates either to liability to the vessel or liability to third parties is not a consideration that should be given any weight. My conclusion in relation to this criterion is that a significant allowance should be made for the risk of damage to equipment and, much more remotely, for the risk of possible injury to members of the tug crews. I consider that in this case, the risk of liability to third parties was remote. However, some minor allowance should be made for the possibility that, notwithstanding the strength of available defences, there was potentially a possibility that the salvors could become embroiled in litigation. In the present circumstances, I do not consider that there was any significant risk of loss of life or injury to the tug crews. ARTICLE 13.1( h) --- PROMPTNESS OF THE SERVICES RENDERED This paragraph requires that the Court consider the promptness of the services rendered in fixing the reward. This criterion is not in dispute. Both parties agree that the services were rendered promptly, and in my view, significant weight should be given to this factor in fixing the quantum of the reward. It is highly desirable that salvage resources and capacity should be available on reasonably short notice in order to promptly and efficiently deal with disasters, groundings, collisions, fires, explosives and other potential maritime incidents. This is particularly relevant to a nation such as Australia, which is so dependent on maritime trade and has such an extensive coastline. ARTICLE 13.1( i) --- AVAILABILITY AND USE OF VESSELS OR OTHER EQUIPMENT INTENDED FOR SALVAGE OPERATIONS This paragraph requires consideration of the availability and use of vessels and other salvage-specific equipment. In the present case, two of the three tugs were "salvage capable" and fitted out with special equipment. The defendants stress that this particular salvage equipment was not utilised during the operation. Nevertheless, the availability of properly equipped salvage capable tugs is an important consideration. There was extensive evidence presented in relation to the different characteristics and costs of salvage capable tugs as opposed to harbour tugs, and I have taken the availability of these special features into account. For instance, there was a salvage tow line stored on board the "Wistari", so this capability was available even though it was not in fact used. Other vessels were also available to assist in the salvage operation, but they were not required. These are considerations of importance in this case, having regard to the difficulty in manoeuvring a vessel of the size of the "La Pampa" which has lost her steering capacity. The fact that the second and third plaintiffs are professional salvors in Gladstone is an additional consideration. I have given weight to this factor on the basis that there were other vessels which could have been made available to service Gladstone Harbour. Finally, I have taken into account the fact that the first salvor operates its business on a national basis, and given this consideration weight. ARTICLE 13.1( j) --- STATE OF READINESS AND EFFICIENCY OF THE SALVOR'S EQUIPMENT AND THE VALUE THEREOF The plaintiffs submit that I should take into account that the first plaintiff is the only national professional salvor with the ability to provide salvage services along the whole of the Australian coast. In addition, it is put forward that I should approach the reward on the general basis that the resources were provided by the plaintiffs as a group. I think this is a proper way to approach the task. The first plaintiff has equipment with a market value substantially above its depreciated value of $A70,000.00. It is agreed that value of the tug owned by the second plaintiff, the "Tom Tough" is $A3.7 million. It is also acknowledged that the third plaintiff is the owner of the "Wistari" (valued at $A3.7 million) and the "Kuttabul" ($A3.3 million) as well as other vessels which were not used, including the salvage capable tugs the "Austral Salvor" ($A6.0 million) and the "Redcliffe" ($A6.0 million). In considering this factor, there is no real dispute. It is common ground that the equipment was efficient and immediately available. It is also significant that Article 13 points to the desirability of ensuring that salvage operations are to be encouraged with a view to saving life and property. There is some suggestion that the tow lines may have broken because they were not up to standard, but I do not accept this. I accept that the lines failed due to the exceptional strain placed on them during the course of the salvage operation. I have given significant weight to this consideration. THE ISSUE OF "BENEFICIAL OWNERSHIP" AND THE THIRD DEFENDANT The parties are at issue as to whether judgment can be entered against the third defendant, Societe Anonyme Louis Dreyfus et Compagnie, on the basis that it is the beneficial owner of the vessel. The plaintiffs contend that the evidence supports such a judgment because, among other considerations, it is recorded as the beneficial owner of the vessel at the relevant time in the Lloyd's Register records. It is also noted that this entity received the hire in respect of the vessel pursuant to the apparent demise charter and that it received the proceeds of the sale of the vessel in 2003. Counsel for the defendant correctly submits that the register is an information service, and that the certificate states that although the information has been obtained from sources believed to be reliable, the accuracy of all details cannot be guaranteed. The certificate notes that the records of merchant ships registered in some countries are incomplete due to a lack of official information, and that the register does not provide conclusive proof of title but records information. In my view, the register cannot be ignored, but it is by no means conclusive. The defendants submit that the evidence shows that the third defendant received funds, not because it was the beneficial owner of the vessel, but rather pursuant to an internal agreement within the Louis Dreyfus Group akin to a cash management agreement. I was taken to an agreement made between members of the group on 7 June 1995. This agreement provides that the third defendant would manage the group cash flow and operate as an agent for the other companies in the group. In my view, this assists the rebuttal of an inference of beneficial ownership which might be otherwise available from the payment of funds to the third defendant. I was also taken by counsel to an extensive series of documents relating to financing, transactions, meeting minutes, insurance contracts and bills of sale which record dealings concerning the vessel. These documents lend support to the conclusion that the third defendant did not have a beneficial interest in the "La Pampa". In particular, there are meeting minutes and bills of sale dated from March-April 2003 which support the conclusion that the third defendant was not the beneficial owner at that time. The plaintiffs submit that since no witness was called by the defendants to testify as to beneficial ownership, an available inference may be drawn that the third defendant was the beneficial owner. The defendants, however, say that this inference is not available because beneficial ownership is not apparent on the documents. Having regard to the documentary records referred to by the defendants, I am not persuaded that at the relevant time --- that is, 27-28 March 2002 - the third defendant was the beneficial owner of the vessel. I therefore do not consider that judgment can be entered against it. CONCLUSION Having regard to all the circumstances in the present case, and taking account of the 1989 Convention and its aim of encouraging salvage operations, I have adopted a liberal view in fixing the salvage reward. Considering the factors outlined under Article 13 and referred to above, I fix the salvage reward in this matter on a global basis at $A850,000.00. I direct the parties to bring in Short Minutes to give effect to these reasons. | salvage amount of salvage reward factors relevant to assessment liability salvage whether excluded from consideration 1989 convention on salvage interpretation extrinsic aids vienna convention travaux preparatoires proof of beneficial ownership shipping |
In April and May 2007 two were instituted by companies in the group, Ann Street Mezzanine Pty Ltd (in liq) and York Street Mezzanine Pty Ltd (in liq). These actions were commenced on the instruction of the companies' liquidators. In one damages are sought against the former directors for breach of duty. In the other there is a claim for the recovery of money paid to related parties. 2 On 23 October 2007, the Australian Securities and Investments Commission (ASIC) decided that each action should be "carried on" by it in the name of the plaintiff. In effect, the decision was to take over the conduct of each action. This resulted in a change in the solicitor on the record from the private firm that had been retained by the liquidators to the Australian Government Solicitor (AGS). One of the defendants, Mr Carey, contended that ASIC's decision was invalid for a variety of reasons, one of which was that it was beyond power. It has been decided that this issue should be determined separately under O 29 of the Federal Court Rules and resolved on the papers. 3 By s 50 of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), ASIC has power to cause "a proceeding to be begun and carried on" in another person's name. In this case ASIC has taken over and is carrying on actions that it did not begin. The question that arises is whether s 50 permits ASIC to "carry on" an action begun by someone else. 4 Section 50 is headed "ASIC may cause civil proceeding to be begun". 5 The principal argument of each party can be stated briefly. ASIC contends that the auxiliary verb phrase "may cause" should be read distributively so that it attaches to each infinitive and should be understood to mean "may cause to be begun and [may cause to be] carried on. " On this reading, ASIC could either begin proceedings, carry on proceedings, or do both. Mr Carey, on the other hand, says that "may cause" should be read to attach to the compound infinitive as a unit. If this were correct, ASIC could not begin a proceeding and then cede carriage to another, nor could it assume carriage of a proceeding begun by another; it could only "begin-and-carry-on" as a unit. 6 I think there is some merit to each side's approach, the section not being as clear as it might be. Before resolving the dispute I should first note that, in the circumstances of this case, the answer is somewhat academic. The parties accept that if Mr Carey's view prevails ASIC can and will simply begin new proceedings in the name of each plaintiff. Moreover, I have pointed out to the parties that in such event, I would, most likely, make an order deeming each step taken in the existing proceedings to have been taken in the new proceedings. It might seem, therefore, that the only consequence of a victory by Mr Carey will be a bit of additional administrative work for those employed by the Federal Court Registry. 7 Whether or not the resolution of the separate question has significance in this case, I accept that it may impact on other cases. Here, the liquidators who commenced the proceedings wished to bow out (presumably due to cost and funding issues), but one can imagine circumstances in which ASIC might want to take over an action that has been started by a company that does not wish to cede carriage of that action to ASIC. This brings to mind the situation that existed prior to 1995 in the US class action contest. There the contest over who may bring a class action was often influenced, or decided, by the so called "race to the courthouse" rule; that is, the first action to be filed proceeded while the others were stayed: Newberg on Class Actions (3rd ed, 1992) SS 17.52; White v National Football League (D Minn 1993) 822 F Supp 1389 , affirmed 41 F 3d 402 (8th Cir 1994). The Private Securities Litigation Reform Act , which was enacted in 1995, got rid of the race, at least as it applied to securities fraud class actions, by providing that parties filing a class action must publish notice allowing others to come forth as plaintiffs, and there is a rebuttable presumption that the plaintiff with the largest financial interest shall be designated the class representative. Interestingly, Mr Carey suggests that a first-to-file rule should be implied in the operation of s 50, contending that where proceedings have already been begun by a party, "section 50 has no application". 8 For purposes of resolving the dispute about the meaning of s 50 I intend to have regard to the context, purpose and legislative history of s 50. Beginning with context, there is a small point, the heading, which states that ASIC may "begin" proceedings. ASIC does not dispute that the heading works against its preferred construction. It submits that the heading is not a permissible aid to construction in the absence of a statutory provision stating that headings are to form a substantive part of the statute (eg s 109D of the former Corporations Law). In my view, however, s 15AB(1)(b)(i) of the Acts Interpretation Act 1901 (Cth) permits reference to the heading. That section states that where a statute is ambiguous extrinsic materials may be consulted to clarify that ambiguity. By operation of s 13(3) , section headings are not part of an Act and are thus extrinsic. The use of only the word "begin" suggests that the legislature had in contemplation that ASIC would initiate proceedings, not take over those brought by another. 9 Reference should also be made to s 1330 of the Corporations Act 2001 (Cth), which gives ASIC power to intervene in existing proceedings in its own name. Mr Carey submits that if the legislature had intended to give ASIC power to take over existing proceedings, it would have done so in express language similar to that in s 1330. The other view, which is put by ASIC, is that s 50 and s 1330 confer "distinctly different" powers and their exercise gives rise to different sorts of proceedings; thus there should be no expectation that the wording of the provisions be similar. While I accept that the provisions arise in somewhat different contexts, their topic is ASIC's ability to play a role in a claim made, or that could be made, by others. Parliament intended to give ASIC an important role. In an existing proceeding ASIC is given a voice by having a statutory right of intervention. If there is no proceeding, it can be brought by ASIC in the name of the person with the claim. That s 1330 was enacted suggests that with s 50 the legislature had in contemplation only the initiation of a proceeding, not the taking over of an action already commenced, being an action in which it could intervene. 10 Neither party referred to s 49 of the ASIC Act, which deals with criminal proceedings and provides that where following an investigation or examination it appears to ASIC that a person committed an offence against the corporations legislation, ASIC may bring a prosecution. It is interesting to note that the same language as s 50 --- "may cause ... to be begun and carried on" --- is found in s 49(2). If s 49(2) were construed in the same way as ASIC contends s 50 should be construed, this would certainly have an unintended result. It would, for example, permit ASIC to carry on a criminal prosecution already commenced (eg by the Director of Public Prosecutions). It is clear, however, that Parliament intended the Director to have that power. 11 ASIC has a third contextual argument; it is a fallback submission to the effect that even if the power to intervene in proceedings already commenced is not expressly conferred by s 50, it is necessary and incidental to its express power to bring proceedings. The legislative context for this submission is the "powers appendant" provisions in the ASIC Act, namely, ss 11(4) and 12A(6). Those sections provide that ASIC has the power "to do whatever is necessary for or in connection with, or reasonably incidental to, the performance of its functions". 12 I have previously considered the construction of "powers appendant" provisions in AA Pty Ltd v Australian Crime Commission (2005) 219 ALR 666 , reversed on other grounds in Australian Crime Commission v AA Pty Ltd [2006] FCAFC 30 ; (2006) 149 FCR 540. There I observed (at 675) that the better approach to construing these provisions is to "enquire whether, having regard to the structure of the [relevant] Act, it was contemplated by Parliament that [the powers appendant provisions] could be used for the purpose for which it is now sought". This involves examining what it was that Parliament had in contemplation by s 50 and then determining whether ASIC's powers appendant included the power to do what ASIC now contends. 13 The history of s 50 and its purpose were thoroughly canvassed by the Full Court in Australian Securities Commission v Deloitte Touche Tohmatsu (1996) 70 FCR 93 , 115-120. The relevant language of s 50 as it currently stands (ie "begun and carried on") was introduced in s 50 of the Australian Securities Commission Act 1989 (Cth). Prior to that the language referred only to "bringing" or "instituting" proceedings. (Emphasis added. After referring to the legislative history just recited, the judge rejected a submission that the bringing of proceedings is a continuous process requiring separate approval for the taking of each step in the proceedings. It would be contrary to the wording of the Act and common sense, so it appears to me, that a separate decision that proceedings should in the public interest be brought, should be required for every step taken in the proceedings. The single decision would cover all such steps. 15 Ungoed-Thomas J's comments were made in the context of resolving whether the 1948 or 1967 Companies Act was the applicable Act where the proceeding was commenced prior to the 1967 Act but a relevant step in the proceeding was taken after that Act had come into force. Nevertheless, I agree with his view that, as a matter of common sense, the power to bring proceedings (and the decision to exercise that power) necessarily includes the power and authorisation to carry those proceedings to their conclusion. 16 The provision in the 1948 Act was reproduced in substantially identical form in the Uniform Companies Acts of 1961. Section 169(7) of the Victorian Act provided that "[i]f from any report under this section it appears to the Minister that proceedings ought in the public interest to be brought by any company ... he may himself bring proceedings for that purpose". Section 178(9) of the New South Wales Act provided that "[i]f from a report of an inspector made under this section ... the Minister is of the opinion that proceedings ought in the public interest to be brought by a company ... the Minister may cause proceedings to be instituted". 17 The immediate predecessors to s 50 maintained the use of the word "bring. " The Explanatory Memorandum to the Australian Securities Commission Bill 1988 (Cth) identified (at [151]) s 306(11) of the Companies Act 1981 (Cth), s 30(9) of the Securities Industry Act 1980 (Cth) and s 36(9) of the Futures Industry Act 1986 (Cth) as the bases for s 50. See also s 48(6) of the National Companies and Securities Commission Act 1979 (Cth). However, each of those provisions employed the phrase "may cause proceedings to be brought" and there is nothing in the Explanatory Memorandum or elsewhere, as far as I have been able to determine, that explains the abandonment of "brought" in favour of the current language "begun and carried on". 18 The direct legislative history of the Australian Securities Commission Bill and s 50 is as follows. Clause 50 of the Bill (introduced and read for the first time on 25 May 1988 in the House of Representatives by then Attorney-General Lionel Bowen) originally provided that the Commission could cause a proceeding "to be brought and carried on" in either a company's or a person's name, without consent. The Government then asked that the Bill be amended to require that written consent be obtained in both cases. The House accepted this amendment. The first Supplementary Explanatory Memorandum (at [16]-[17]) stated that this amendment was necessary so that s 50 could conform to s 1325(3) of the then-pending Corporations Bill. The Senate further amended the Bill by modifying the consent requirement so that it only applied to actions brought in the name of a natural person: Commonwealth, Parliamentary Debates, Senate (11 May 1989), 2253. The second Supplementary Explanatory Memorandum (at [21]-[24]) reveals that the purpose of this amendment was to make s 50 consistent with the rule in Foss v Harbottle (1843) 2 Hare 461 [67 ER 189] and was necessary to allow the Commission to proceed where the wrongdoers were still "in a position to prevent the company [from] recovering its loss" by exercising control over the company and refusing consent for proceedings to be brought. No further substantive changes were made to s 50 from that time until the present day. 19 In Deloitte (1996) 70 FCR at 115 the Full Court identified the purpose of s 50 by reference to a 1969 report to Parliament on the Uniform Companies Acts: "The mischief sought to be addressed by s 50 , and by its precursors both in this country and in England, was considered by the Eggleston Company Law Advisory Committee Report (1969). See also Somerville v Australian Securities Commission (1995) 60 FCR 319 , 324 ("An evident function of s 50 is to permit the Commission, acting in the public interest, to cause proceedings to be taken where persons or corporations have suffered loss or harm arising from fraud, negligence or misconduct, but do not have the resources to maintain expensive and complicated litigation"). 20 The Full Court added that "[s]ection 50 is clearly remedial in character. It thus should be construed beneficially, so as to give the most complete remedy which is consistent with the actual language employed": 70 FCR at 118-119 (internal quotation marks and citations omitted). 21 Based on the legislative history, ASIC argued that the change in statutory language from "brought" to "begun and carried on" must involve a change in meaning, the nature of the change being that "and carried on" conferred a new power to intervene in and carry on existing actions. The argument starts with the premise, which I have already accepted, that the power to bring or begin proceedings necessarily includes the power to carry on proceedings. Thus, the argument goes, the addition of "and carry on" must be construed as conferring an additional power in order to avoid rendering the additional words superfluous, contrary to the well-known maxim that, where possible, all the words of a provision should be given some work to do. 22 In ASIC's favour is the principle, which the Full Court found to apply with respect to s 50 , that remedial statutes should be construed broadly. It is contended that, being the narrower of the two constructions, the construction precluding it from intervening and carrying on proceedings begun by others should be rejected. 23 The difficulty with ASIC's submissions is that they find no support in the legislative history. Crucially, neither the Explanatory Memorandum, the supplementary Explanatory Memoranda nor the parliamentary debates make any reference to the possibility of ASIC intervening in and carrying on existing proceedings on behalf of a company. Indeed, the Explanatory Memoranda and debates do not even recite the "begin and carry on" language; rather, the Explanatory Memorandum (at [152]) states in relation to s 50 that "the ASC will be permitted to commence civil proceedings". Further, the Attorney General noted on the return of the Bill from the Senate (s 50 was not mentioned in the second reading speech) that s 50 "empowers the ASC to commence a representative action in the name of the company": Commonwealth, Parliamentary Debates , House of Representatives (23 May 1989), 2649 (emphases added). 24 The flaw in ASIC's surplusage argument is that the immediate predecessors to s 50 did not read "may cause to be begun. " Similarly, the current statute does not read "may cause to be brought and carried on. " In either of those cases, where the old language would not have been modified, the addition of "and carried on" would be rendered superfluous if the section were construed to retain the same meaning. Here, however, the change was accomplished by abandoning "brought" and replacing it with "begun and carried on. " While it may be inelegant drafting to replace one word with four to achieve the same effect, construing each of the four words together to have the same meaning as the prior version does not render any of those words otiose. As ASIC acknowledges, the "phrase 'begun and carried on' may have some cumulative operation within its own terms. By ASIC's own admission, to construe s 50 as precluding intervention in existing proceedings does not result in any limitation of ASIC's ability to prosecute proceedings in cases where a previously instituted proceeding has been discontinued; it can simply cause a new proceeding to be brought in the company's name. In other words, a narrower construction of the statutory language does not in effect frustrate the statutory purpose of facilitating recovery of damages by the regulator on behalf of a company where no one else is willing or able to bring the action. 26 On the other hand, if the company itself, or with permission another person on behalf of the company, is willing and able to bring proceedings, the purpose of the section --- to facilitate the bringing of actions where there is otherwise insufficient funding or the value of individual shareholder claims is too small to make litigation worthwhile --- is not activated. If the s 50 power were construed to confer a power to intervene, it would presumably allow ASIC to oust the party having brought the proceedings from retaining control. This is because there is nothing in the section that would suggest the consent of the party that originally brought the proceedings is necessary for ASIC to cause them to be carried on. Nor would there be any statutory basis for limiting the use of the "carrying on" power only to situations where the commencing party is no longer willing or able to proceed. I consider it unlikely that Parliament had in mind that ASIC could expend public funds to take over an action when that action, backed by private funding, might continue. 27 Mr Carey refers to the legislative history, as well as to the lack of any reference in the legislative record to intervention in existing proceedings, in support of his submission that what Parliament really had in mind, notwithstanding the change in phrasing, was simply the continuation of the legislative scheme that had been imported from the UK. Under that scheme the regulator had power to "bring" or "commence" proceedings (such power of course including the power to carry on those proceedings) but not a separate and additional power to intervene in and carry on existing proceedings. 28 I am persuaded by this argument. Citing from the first instance decision of Lindgren J in Deloitte Touche Tohmatsu v Australian Securities Commission (1995) 54 FCR 562 , 570, Lockhart J in Somerville 60 FCR at 324 noted, in a passage that was later quoted with approval by the Full Court in Deloitte 70 FCR at 117, that " s 50 confer[s] an 'extraordinary power' on the Commission to cause a proceeding to be begun and carried on, not in the name of the Commission, but in the name of another person in respect of a cause of action of that other person. The section gives the Commission a power not available to it under the general law and renders lawful an act by it which would otherwise be unlawful. " The presumption that the legislature does not casually derogate from the common law is admittedly not as strong as it once was: Commissioner of Taxation v Citibank Limited (1989) 20 FCR 403 , 433-434. However, the absence of any clear indication from Parliament that the s 50 power includes the power to take over and carry on an existing proceeding (perhaps contrary to the wishes of the plaintiff) provides strong support for a narrow construction. 29 Indeed, if ASIC's broader construction were adopted, it would mean that Parliament had conferred a power on ASIC by accident. ASIC submits that "[t]he fact that the words 'may cause' appear in each of [the] two subparagraphs before the provision that states what may be caused, supports [the] distributive effect" (ie that "may cause" should be understood to attach to both infinitives rather than the infinitive phrase as a whole). 30 In other words, the auxiliary phrase "may cause" was not repeated or separated from the infinitive phrase. The legislative history demonstrates that the reason the separation occurred was to distinguish between corporate persons, where consent would not be required for ASIC to bring an action, and natural persons, where consent would be required. There is nothing in the record to show that Parliament intended the separation for the additional or alternate reason of causing the auxiliary to be read distributively so that an additional power of intervention was conferred. I am unable to accept that Parliament accidentally conferred an additional power of intervention on ASIC as a by-product of its attempt to introduce a consent requirement. 31 For the foregoing reasons, the question under O 29 will be answered in the negative. I shall hear the parties on costs. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | powers of asic to begin and carry on proceedings decision by asic to cause a proceeding already begun to be carried on by it whether s 50 of the australian securities and investments commission act 2001 (cth) permits asic to take over a proceeding "may cause ... such a proceeding to be begun and carried on" corporations words and phrases |
He has remained in Australia ever since. In 1995, he was granted a permanent residency visa. In 1998, he was convicted in the District Court of Western Australia of three charges of sexual penetration without consent, the offences having been committed in 1996. He was sentenced to imprisonment for eight years with eligibility for parole. He was imprisoned in the Acacia Prison in Western Australia. 2 In September 2001, the then Minister for Immigration and Multicultural Affairs issued Mr Fernando with a notice of intention to cancel Mr Fernando's permanent residency visa. On 29 November 2001, the then Minister cancelled Mr Fernando's permanent residency visa under the provisions of s 501(2) of the Migration Act 1958 (Cth) (the Act). 3 Mr Fernando challenged the lawfulness of the cancellation of his visa by an application for judicial review made to this Court. In September 2003, the Federal Court set aside the Minister's decision to cancel Mr Fernando's visa on the grounds that Mr Fernando had not been afforded procedural fairness ( Fernando v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCA 975). This was because the Minister had not given Mr Fernando an opportunity to comment on the substance of allegations made in a document, referred to as Annexure L, which were adverse to Mr Fernando. 5 At the hearing before Carr J, the Minister contended that the identity of an informant in respect of the information in Annexure L needed to be protected. Carr J ordered that Annexure L be placed in an envelope, sealed and not be unsealed until further order. 6 In October 2003, Mr Fernando was released from Acacia Prison on parole. Shortly before his release from prison, the then Acting Minister for Immigration and Multicultural and Indigenous Affairs cancelled Mr Fernando's permanent residency visa for a second time. On his release from prison, Mr Fernando was taken into immigration detention. He remained in immigration detention until he was released on 18 January 2007 in the circumstances set out in the next paragraph. 7 Mr Fernando commenced a proceeding in this Court challenging the lawfulness of the second cancellation decision. Before that proceeding was determined, the decision of the Federal Court in the case of Sales v Minister for Immigration and Multicultural Affairs [2006] FCA 1807 ( Sales ) was delivered. In Sales , the Court held that the visa cancellation decision was unlawful. On 18 January 2007, following the judgment in Sales , Mr Fernando was released from immigration detention. He was advised by the then Minister that he was being released because Sales applied to the circumstances of the cancellation of his visa. On 24 January 2007, the then Minister consented to orders in the proceeding setting aside the visa cancellation decision made in respect of Mr Fernando on the basis that Sales was applicable in relation to the decision to cancel Mr Fernando's visa. 8 By a letter dated 16 April 2007, from an officer of the Department of Immigration and Citizenship, Mr Fernando was advised that consideration was to be given to whether his visa may be cancelled, and if it was liable to be cancelled, whether it should be cancelled. The letter was headed "Notice of Intention to Consider Cancellation of Your Visa under Subsection 501(2) of the Migration Act 1958 ". 10 The letter also listed information which it was said may be relied upon to assess whether to exercise the discretion to cancel Mr Fernando's permanent residency visa. Among the information listed was the "[d]ecision of the Federal Court of Australia, W306 of 2002, 16 September 2003" - being the decision of Carr J referred to in [3] above. 12 On 18 December 2007, the Court appointed Mr John Robert Broderick Ley as a tutor to act on behalf of Mr Fernando in this proceeding. 13 By the date of the hearing, there had been no response by the respondent's solicitor to Mr Fernando's tutor's request to be provided with a copy of Annexure L. Senior counsel for the respondent said at the commencement of this hearing that the respondent would not be providing a copy of Annexure L to Mr Fernando's tutor. 14 Mr Fernando's tutor has filed an amended originating application. The Application is brought under the provisions of section 39B of the Judiciary Act 1908 [sic] and section 5 of the Administrative Decisions (Judicial Review) Act 1977 . 15 There are three items of relief claimed in the amended application. 16 The primary relief claimed is an order for certiorari to quash "the decision of the Respondent to issue the Notice of Intention to Cancel Visa dated 16 April 2007". 18 However, as a preliminary matter, the respondent challenged the jurisdiction of this Court to hear and determine the amended application made by Mr Fernando's tutor. It was contended that the application did not fall within s 476A of the Act which prescribes the limits of the Court's original jurisdiction to hear and determine applications for judicial review in relation to migration decisions. 19 It is necessary, therefore, to consider whether this Court has jurisdiction to hear and determine the originating application. A "privative clause decision" is defined in s 474 of the Act. The significance of that distinction arises from the fact that s 501 of the Act distinguishes between circumstances when only the Minister, personally, can cancel a visa (see, s 501(3) and s 501(4)), and those when the decision to cancel a visa may be made by the Minister personally or by his or her delegate (see, s 501(1) and s 501(2)). This is a case where the cancellation decision can be made either by the Minister personally or by his or her delegate. 24 The Act does not expressly provide for the making of a decision to issue a notice of intention to cancel a visa under s 501 of the Act. In Osborne v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 1113 ; (2002) 124 FCR 416 , French J observed that it was implied in the Act that a notice of intention to cancel the visa would be given as a "necessary condition" of the exercise of the power to cancel a visa under s 501 of the Act. 25 In my view, the giving of the notice of intention to cancel the visa under s 501 of the Act, is a privative clause decision within the meaning of s 5 of the Act, because the conduct comprising the giving of the notice falls within the ambit of the conduct described in s 474(3)(g) and s 474(3)(h) of the Act referred to in [22] above. 26 The conduct engaged in the giving of the notice of intention to cancel Mr Fernando's visa was, as is evidenced by the letter of 16 April 2007, the conduct of an officer of the department and not the Minister personally. The privative clause decision was, therefore, made by the departmental officer who wrote the letter and not by the respondent personally. It follows that, because the decision to issue the notice was not made by the respondent personally, the Court has no jurisdiction to review the lawfulness of that decision. 27 The second claim for relief in the application, namely, for an injunction restraining the respondent and his officers from issuing any further notices of intention to cancel Mr Fernando's visa without first affording Mr Fernando's tutor the opportunity to consider and comment on Annexure L, is subsidiary relief which is related to and contingent upon success in the primary application, namely, the setting aside of the existing notice of intention to cancel Mr Fernando's visa. For that reason, there is also no jurisdiction to hear and determine the claim for that relief. 28 However, the third claim for relief, namely, the injunction to restrain the respondent and his officers from cancelling Mr Fernando's visa is capable of being granted independently of the success of Mr Fernando in respect of the primary relief which he seeks, namely, the setting aside of the notice of intention to cancel Mr Fernando's visa issued on 16 April 2007. Counsel for Mr Fernando's tutor accepted that there was no evidence of any intention on the part of the respondent to exercise the power to cancel Mr Fernando's visa personally. In fact, inherent in the submission of the respondent that this Court has no jurisdiction to hear and determine Mr Fernando's application for the injunctive relief in the terms claimed, is the statement that the respondent does not intend to exercise the cancellation power personally. On that basis, the Court has no jurisdiction to hear and determine Mr Fernando's claim for the injunction sought in his originating application. 29 The same reasoning also applies mutatis mutandis to the second claim for relief referred to in [27] above, and constitutes an additional reason why the Court has no jurisdiction to hear and determine that claim. 30 Of course, if the respondent's intention, impliedly expressed in the submission made to this Court, was to change, it would be incumbent upon him to give Mr Fernando's tutor notice that he personally intends to issue a new notice of intention to cancel Mr Fernando's visa and/or to exercise the power to cancel the visa, in sufficient time to permit Mr Fernando's tutor to commence a proceeding in the appropriate jurisdiction for injunctive relief. 31 Mr Fernando's originating application filed on 12 June 2007 is dismissed for want of jurisdiction. 32 I will hear the parties on 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 Siopis. | whether the giving of a notice of intention to cancel a visa under s 501 of the migration act 1958 (cth) is a privative clause decision whether the court has jurisdiction to hear and determine a claim to set aside such a notice migration |
His Honour rejected an application to extend time beyond the 28 day period primarily fixed by s 11(1)(c) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('AD(JR) Act') for the bringing of an application. The applicant was seeking to have declared invalid a decision to extend his period of probation as an Australian Public Service Commission ('APSC') employee, given on 17 September 2004, and a decision to terminate his employment made by a delegate of the APSC on 5 November 2004. 2 The applicant sought urgent consideration of the matter in this Court for reasons related to personal economic hardship, and the respondent cooperated in having the matter urgently heard. It was agreed between the parties, and somewhat exceptionally acceded to by the Chief Justice, that a single judge, rather than a Full Court, should hear an application that appears possibly to have some substance and might touch questions of principle. 3 The urgency has had one unfortunate aspect. It did not apparently occur to either party to order a transcript of the proceedings before the court below in which the applicant gave evidence and was cross-examined, in particular about the adequacy of his explanation for the delay. 4 The matter, so far as it concerned the probation decision may be put aside. It is now, after discussion (and was before the learned Magistrate), agreed that it is futile further to investigate the validity of that decision. Events thereafter, which are de facto irreversible, marched on and no useful remedy could be given even if grounds were made out for one. 5 The matter has been fully debated, and I am in a position to deal with the appeal if leave should be granted. It is enough to say that it seemed to me that there was enough in the argument about the appeal to justify leave to appeal being granted, and it will be granted. I proceed to deal with the substance of the appeal against his Honour's judgment. 6 The judgment was of course, as the respondent points out, a discretionary judgment, and the appeal cannot succeed unless, in accordance with well known authorities, the learned Magistrate has actually misunderstood some fact or consideration, or misapplied the law or some relevant principle. The court below accepted that the appellant, as I will now call him, may have had an arguable case as to some of the matters about which he complained. In discussion today, it appears that there might be other arguable matters upon which he could rely by way of an amendment to his process if the delay should be excused, and I proceed on that basis. 7 The applicant did not come to the court below until six months after the termination decision. There were two pillars of his Honour's decision. The first was that the applicant's explanations of ignorance of the law were not accepted, and the explanation for the delay was insufficiently persuasive to justify the court enlarging, by a considerable number of months, the time for challenging the decision concerned. 8 The learned Magistrate did not accept some of the positive assertions made in evidence by the appellant. However, at the end of the day, there was no finding by his Honour which would contradict the conclusion that it was not until April 2005, about five months after the termination decision, that the appellant knew that the AD(JR) Act might well afford him a remedy. A solicitor friend with some background in employment law, whom he had consulted soon after the termination decision, advised the appellant that he had no legal recourse through the unfair or unlawful dismissal provisions of the Workplace Relations Act 1996 (Cth) because he was, at the time of the termination of his employment, on probation, and that appears to have been correct advice. 9 It did not occur to that solicitor that the AD(JR) Act might apply to a decision to terminate the employment of a public service employee, nor would it have occurred to me. Nor, as Mr Burmester QC, counsel for the respondent frankly admitted, would it have occurred to him. The scheme of the legislation provides an unexpected window of opportunity for a dismissed employee who is a probationer to come to the Court under the AD(JR) Act when a permanent officer/employee apparently could not. 10 The learned Magistrate took a view as to the appellant's explanation for delay that: 'the onus was on Mr Twining to resolve the issue. It is true that he might have made those internet searches after his discussion with his solicitor friend. But, it seems to me, with great respect to the learned Magistrate, that it is an entirely reasonable explanation that when such a solicitor, with such a background, did not consider there was anything to be done, that the appellant did not promptly attempt to second-guess him by lay inquiries. 12 With respect, I think the learned Magistrate applied too heavy a test in relation to the adequacy of the explanation for the delay, although I acknowledge that considerable room must be given for individual reactions to such questions, and nothing I say is intended as any encouragement for people not to take responsibility for their own affairs. 13 The other basis upon which the learned Magistrate rejected the application was that there would be prejudice to public administration. His Honour relied on well known remarks of Wilcox J in Hunter Valley Developments Pty Ltd v Minister for Home Affairs and Environment (1984) 58 ALR 305, at 310 and following. Evidence accepted by his Honour showed that the APSC's current financial year budget provided for a reduction in staff numbers which would continue for at least another three financial years, that at the time the hearing before his Honour there was only one vacancy at the APS 3/4 level (the level at which the appellant had been engaged), and other matters. Although reinstatement of Mr Twining would not be an impossibility it would be difficult and a burden. An adjustment would need to be made to [the respondent's] budget and programs offered by [the respondent, I gather to persons in the Australian Public Service Commission] could be affected. However, I am unable to say that for him to have taken that view lay outside the scope of the sound legal exercise of his discretion. 16 In the course of examination of the matter today, other aspects of prejudice to the respondent emerged. As I observed in the course of argument, to some extent these are co-extensive with questions that might arise in the Court's discretion as to whether a remedy might be granted if, otherwise, purely legal grounds of challenge to the termination decision were made out, and the matters could be more fully debated in that context. However, given the way the matter has proceeded --- including that, for the benefit of the appellant, I have been prepared to review his Honour's findings about the adequacy of the explanation without seeing the transcript, and have perhaps gone further than one ordinarily would in departing from the findings of a court at first instance which has had the benefit of hearing and seeing highly relevant evidence given --- I think that the fact that the matters might later be considered, if time were enlarged, does not prevent them being considered on the question of whether time should be enlarged. 17 One of the factors that motivated Mr Jones, the respondent's delegate, to dismiss the appellant was that he had displayed behaviour to other employees which had very much upset them and made working relationships difficult. The material in the appellant's own affidavits shows that at a time in early 2005 when, albeit in ignorance, he believed that he had no firm legal basis for obtaining a remedy in the courts, he had quite gratuitously, and offensively, abused two officers of the respondent, including the delegate, who were senior to him and quite inappropriately broadcast to other people his offensive and rather unrestrained criticisms of them. The appellant says he was upset, 'out of his mind with worry', about his position at the time. 18 Be that as it may, it is quite clear that it would be irresponsible to put him back in the Programs Group in which he was employed. That means that about 35 to 40 of the 130 positions in the respondent's organisation would not be available to him. The other officer whom he calumniated was the head of the Corporate Group, which comprises another 35 or 40 people. Much less offensive, but quite inappropriate remarks were also directed to the head of the respondent Commission. 19 If time were extended and if the appellant were to succeed, it would be in that environment that his reinstatement on probation for a period of about a month would occur. At the end of that month, if not before, a decision would have to be made about whether overall his conduct and behaviour had been such that he should be taken on permanently. To the extent that there would be difficulty about fitting him in, it would, by reason of his own conduct, be very greatly magnified. Notwithstanding the public interest in decisions affecting the termination of employment of persons in the public sector being regularly and lawfully made, it seems to me that, in the circumstances, there would be likely such a disruption of public administration that the public interest dictates refusal of an extension of time. 20 For these reasons, I consider that the decision of the learned federal Magistrate was correct, even though I would reach it by a slightly different route. 21 Leave to appeal will be granted. | judicial review reviewable decisions and conduct review of particular decisions review of termination of commonwealth public service employment under administrative decisions (judicial review) act 1977 (cth) where employee on probation whether leave to extend time to institute proceedings should be granted. administrative law |
The first (NSD 226 of 2007) is an application for declaratory relief in the form of a declaration that certain distributions from a limited partnership established under the laws of New South Wales ('Industrie LP') to the applicant ('DAPFI') are not subject to withholding tax; alternatively, a declaration that, to the extent of a substantial part of such distributions, they are not subject to withholding tax. The second (NSD 227 of 2007) is by way of an appeal against the decision of the respondent ('the Commissioner') disallowing an objection against the Commissioner's Notice of Private Ruling (Authorisation Number 61512), ruling, inter alia , that DAPFI will not be exempt from withholding tax in respect of such distributions under Art 11(3)(b) of The Convention between the Government of Australia and the Government of the United States of America for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income , as amended by the Protocol ('the Treaty') in Schedules 2 and 2A to the International Tax Agreements Act 1953 (Cth) by reason of the provisions of Art 11(9)(a) of the Treaty ('the private ruling'). In short, both applications raise the same issue. 2 At the commencement of the hearing, Senior Counsel for DAPFI explained that there are two proceedings because at the time they were instituted (16 February 2007), there existed the unfavourable notice of private ruling (dated 4 April 2006) which related to what was then future liability to withholding tax. By virtue of s 359-60(3)(b) of the Taxation Administration Act 1953 (Cth), no objection can be made against a private ruling if it relates to withholding tax that has become due and payable. The declaratory proceedings were instituted to agitate the issue in respect of withholding tax that had already been paid by the time both proceedings were instituted, that is, for the quarters ended 31 December 2005, 31 March, 30 June, 30 September and 31 December 2006; and an amended application filed 22 August 2007 encompassed the quarters ended 31 March and 30 June 2007 as well. 3 It was further explained that since the institution of proceedings, payments to which the private ruling would apply have ceased to be made, so that although the Court is seized with jurisdiction in relation to the private ruling objection decision, the private ruling will have no ongoing application after the determination of these proceedings. 4 Evidence was filed and read in the declaratory proceedings, but there is no factual issue in dispute. In the appeal against the private ruling, there is no evidence apart from the documents forwarded to the Court under O 52B r 5A of the Federal Court Rules . The evidence filed in the declaratory proceedings goes to two matters. The first is the establishment of the partnership and the creation of the obligations to make the payments in respect of which withholding tax is claimed, and the second goes to DAPFI's reliance on a public ruling issued by the Commissioner, namely, Taxation Ruling TR2005/5 dated 16 March 2005 ('the public ruling'), in particular, para (10) of the public ruling. Senior Counsel for DAPFI informed me that there was no issue between the parties as to reliance. Certainly Senior Counsel for the Commissioner did not suggest that there was. There is, however, an issue between the parties as to whether the reliance was misplaced; that is, as to whether the public ruling says what DAPFI believed it to say. It is not a resident of Australia for income tax purposes and has no permanent establishment in Australia at or through which it carries on any activities. It is common ground (Ruling 2 of the private ruling) that DAPFI is a 'United States corporation' and a resident and enterprise of the United States for the purposes of the Treaty, and entitled to the benefit of the Treaty under Article 16. 7 DAPFI was established with an issued capital of $US154 million, and borrowed from Deutsche Bank AG a further $A800 million, to participate in the transaction that is the subject of these proceedings and other financing transactions. 8 DAPFI became a limited partner in Industrie LP, a limited partnership established under NSW law. The general partner of Industrie LP was CBA Investments Ltd, a wholly owned subsidiary of Commonwealth Bank of Australia ('CBA'). CBA was also a limited partner. 9 The capital of Industrie LP comprised $A998 million contributed by DAPFI (for a Redeemable Limited Partner Interest (US) ('RLPI(US)'), $A282.707 million contributed for a Redeemable Limited Partner Interest (and $1,000 for a non-redeemable limited interest) held by CBA, and $A11 million contributed by the general partner. The limited partnership interests are 'debt interests' for the purposes of Div 974 of the Income Tax Assessment Act 1997 (Cth) ('the 1997 Act'). 11 Industrie LP invested the whole of its funds in Luca LP, a NSW limited partnership, as a general partner. DAPFI invested $2 million in Luca LP as a limited partner. Another Deutsche Bank subsidiary invested $1,000 in Luca LP as a general partner. Luca LP applied the whole of its funds to making advances to CBA at interest, save for $2 million lent at interest to other financial institutions. 12 Luca LP received interest income on its investments. Luca LP was treated as a company for Australian tax purposes (Div 5A of Pt III of the - ('the 1936 Act')) and paid tax at the rate of 30%. It distributed its after tax income to Industrie LP and DAPFI as general and limited partners respectively. 13 Under the terms of the Industrie Limited Partnership Deed dated 24 August 2005, as amended by amending deed dated 7 September 2005, the entitlement of DAPFI to annual receipts of income was to so much of the 'Adjusted Net Income' of each year as equalled the 'RLPI(US) Distribution Amount' for the year, subject to a proviso that if the Adjusted Net Income differed from the total of the RLPI(US) Distribution Amount and the GPI Distribution Amount payable to the general partners, the excess or shortfall should be shared pro-rata. 14 The 'RLPI(US) Distribution Amount' was calculated by multiplying DAPFI's capital contribution by the 'Agreed Rate,' which was Reuters BBSW less a stipulated spread. The Managing General Partner will cause the Partnership to pay the amounts so credited to the Partners so entitled on each Distribution Date but only to the extent that there is cash available to make those distributions after allowing for any income tax payments referable to the allocations under clauses 10.1 ("Allocation of Adjusted Net Income of Partnership") and 10.2 ("Allocation of Gain"). The Managing General Partner will debit a Partner's Current Account for amounts paid, to such Partner. Any distribution will be paid to the credit of the bank account of the relevant Partner entitled to that distribution as is notified to the Managing General Partner prior to the Distribution Date. If the Adjusted Net Income is a negative amount, the Partners (other than the Non-Redeemable Limited Partner and the RLPI (Aus) Limited Partner) will be allocated a share of that loss pro rata according to the sum of the balances on each Partner's Capital Account and Current Account, and such amount will be debited to the Partner's respective Current Accounts on each Distribution Date. ' 'Agreed Rate means, in respect of a period, BBSW for that period less the Spread. ' 'BBSW means, for a Distribution Period, the rate determined by the Managing General partner to be the average of the mid rates for bills of exchange, for a term equivalent to the Distribution Period, displayed at or about 10.15 am Sydney time on the Reuters screen BBSW page on the first Business Day of that Distribution Period. ' 'Determination Statement means the document identified as the "Determination Statement" to be entered into between, among others, DCMAL, DBAG, DAL, Hume, CBAIL, CBA, DAPFI and the Partnership. 20 Because the Industrie LP is a corporate limited partnership within Div 5A, that Division directs that the partnership be taxed as if it were a company and that partners be taxed as if shareholders. 21 Although Div 5A provides that income payments by a limited partnership to a limited partner are to be taxed as if they are dividends, it is common ground (Ruling 1 of the private ruling) that the effect of Div 974 is that the receipts by DAPFI are to be treated as a return on a 'debt interest' as defined in s 974-20, and so not as a partnership distribution or a dividend for the purposes of the Income Tax Assessment Acts. 22 By s 94L, the distribution is deemed to be a dividend, but by s 6(1) and s 974-20 it is a deemed dividend on a non-equity share; it is in consequence required by s 128A(1AB)(d) of the 1936 Act to be treated for withholding tax purposes as 'interest. ' This also is common ground: Ruling 3 of the private ruling. 23 In consequence, the distribution is subjected to withholding tax unless relieved of such liability by the Treaty and the operation of s 4 of the International Tax Agreements Act . For the purposes of this Article, the term 'financial institution' means a bank or other enterprise substantially deriving its profits by raising debt finance in the financial markets or by taking deposits at interest and using those funds in carrying on a business of providing finance. Income dealt with in Article 10 (Dividends) and penalty charges for late payment shall not be regarded as interest for the purposes of this Article. 27 It is not in issue that the criteria in Art 11(3)(b) are met. The only issue between the parties is whether Art 11(9)(a) precludes the operation of Art 11(3)(b). There is no analogue to it in any other of Australia's double taxation agreements (which are based on the OECD model). Art 11(5) of the US Model is an 'anti-abuse' provision designed to prevent the relief being claimed on payments in the guise of interest which are in substance a sharing of profits. 31 Article 11(9) of the Treaty (and Art 11(5) of the US Model) protect the provisions of ss 871 and 881 of the Internal Revenue Code [1986] 26 U.S.C. 34 DAPFI submitted that Art 11(9)(a) is not needed or intended to, and does not, perform any corresponding role in relation to Australian tax legislation. The Australian legislation approaches the border between debt and equity investments and the yield on them in a different manner, which finds expression in Div 974 of the 1997 Act and the provisions which carry into effect the policy of Div 974 in other areas, such as the taxation of dividends' and the imposition of withholding tax. 35 The clear legislative policy of the Australian legislation is that what is in substance interest, though in form dividends, should be taxed as interest, while what is in substance a distribution of profits though in form interest on a debt should be taxed as dividends: s 974-1. This policy is carried through into the withholding provisions in ss 128AAA and 128A(1AB) of the 1936 Act. 36 Article 11(9)(a) is the product of a mediation between the different approaches of the US and Australian domestic laws. Its purpose is to permit either Contracting State to exclude from the lower rate of tax permitted by Art 11 what is in form interest, but in substance a division of profits which should be governed by Art 10. But the negotiated policy served by Art 11(9)(a) does not extend to what is in substance interest, but in form a division of profits. Neither the legislative policy of ss 871 and 881 of the IRC nor that of Div 974 and related provisions of the Assessment Acts is achieved by treating Art 11(9)(a) as applying to the receipts by DAPFI. 37 The correct interpretation of Art 11(9)(a) as incorporated into Australian legislation is that it permits the approach taken in Div 974, and in particular in ss 974-75 and 128AAA; but what is properly construed as a debt interest (s 974-20) is to be taxed as interest. 39 Under and for the purposes of the Australian tax legislation, including the International Tax Agreements Act , there are two possibilities: either the distributions by Industrie LP to DAPFI are to be treated as being (as in legal substance they are) a share of the profits of the partnership business, or --- by reason of deeming provisions in that legislation --- they are to be treated as interest. 40 If the distributions are to be treated as a share of partnership profits, then since DAPFI is a United States enterprise with no Australian permanent establishment, Art 7 applies to them and DAPFI is relieved of Australian tax by s 4(2) of the International Tax Agreements Act . As a share of profits, they are not 'interest' and Art 11 has no application to them. 41 If, however, they are to be treated as a return on a 'debt interest' by reason of Div 974, then they fall outside the mischief to which Art 11(9)(a) is directed. Instead they would be treated for the purposes also of the Treaty as interest, but being interest derived from an arm's length transaction by a financial institution they qualify for relief from withholding tax as well as ordinary income tax. There is here no 'disguise' of partnership profits as interest: what is overtly, and in substance, a partnership share is deemed to be interest, by the legislation itself, not covertly disguised as interest. Article 11(9)(a) has no role to play in such a case. But in any event, it is in terms inapposite to the present case. 43 The general law recognises and preserves a distinction between a division or distribution of the fund of profits earned by a business and an expense (such as interest or remuneration by commission) calculated by reference to (e.g. as a percentage of) profits calculated prior to the determination of that expense. Article 11(9)(a) is not directed to the former, which is generally covered by Art 7 or Art 10 of the Treaty, but rather with the latter. 45 It is common ground that those distributions were subject to withholding tax, subject to the operation of the Treaty: see [23] above. It is also common ground that unless Art 11(9)(a) applied, DAPFI was entitled to the benefit of the 'financial institution' exemption contained in Art 11(3)(b) of the Treaty. 46 Article 11 allocates taxing rights between the country of residence and the country of source in respect of 'interest'. The 'interest' to which the Article applies is defined in broad terms in Art 11(5): see [26] above. 47 As the emphasised words at [26] demonstrate, Art 11 applies to any payment which is treated as interest under domestic law, regardless of the legal form which that payment takes. The distinction between payments which are interest as a matter of 'form' and those which are interest as a matter of 'substance', which distinction is central to DAPFI's case, may immediately be seen to be a distinction not recognised by the Treaty. 48 Each of Australia and the USA has also reserved to itself the right to tax certain 'interest' income at a higher rate in the two circumstances stated in Art 11(9)(a) and (b). This case is concerned only with the reservation in Art 11 (9)(a). 49 By its terms, Art 11(9) applies to interest which is otherwise covered by Art 11(3)(b). It also applies (by reason of Art 11(5)) to payments which are treated as interest under domestic law. 50 DAPFI nevertheless submitted that Art 11(9)(a) applies only to a certain category of interest, namely 'legal form' interest. 51 The Commissioner submitted that both of these arguments should be rejected for the reasons which follow. Those domestic policy considerations are different to Australian domestic policy considerations and, so the argument goes, Art 11(9)(a) should be read down to apply only to those payments which would appear to offend US policy. 53 The Commissioner submitted that the Treaty simply does not limit itself in the manner for which DAPFI contends. Those principles permit the object and purpose of a treaty to be considered in construing it, where necessary. 55 The operation of a treaty may be informed by the object and purpose for which it was entered into. Here, the object and purpose of the Treaty was to eliminate double taxation and prevent fiscal evasion. One of the methods by which that object and purpose is achieved is by the Treaty allocating to each country the right to tax certain payments of interest at rates specified by the Treaty (in the case of Art 11(9) at a rate not exceeding 15%). 56 However, there would appear to be no need to refer to the object and purpose of the Treaty in construing Art 11(9)(a). The text of the Treaty is in this respect not open to doubt. Article 11 in terms plainly applies to 'interest' such as that in question here (namely a dividend which is treated as interest under domestic legislation: Art 11(5)). Furthermore, and for the same reason, Art 11(9) applies irrespective of the form of the payment in question. 57 The Commissioner submitted there is thus no ambiguity in the text of the Treaty to be resolved by reference to the object and purpose of the provision. To the extent that any doubt is perceived about the scope of Art 11(9)(a), the object and purpose of the Treaty provides no basis for the submission advanced by DAPFI. The Commissioner accepts that the origin of Art 11(9)(a) is, as it plainly appears to be, in the US law concerns outlined in DAPFI's submissions. 59 Nevertheless, it cannot be assumed that the only concern of the Treaty countries in agreeing on Art 11 (9)(a) was to protect US domestic interests in that or any other respect. Had that been the only concern, there would have been a far clearer statement to that effect in the Treaty and, at the very least, some indication in the secondary materials. 60 The more immediate policy concerns in agreeing to Art 11(9)(a) were inevitably the more familiar concerns common to all double-taxation treaties, namely to prevent double taxation and at the same time to protect Australia's taxing rights as far as possible. On any view, the resulting Art 11(9)(a) was a clause by which both countries agreed to abide. 61 Article 11(9)(a) does not merely 'protect' US domestic provisions nor is it 'linked' to them: DAPFI's submissions at [31] and [33] above. Nor is it correct to say that it is 'directed' only to a US mischief: DAPFI's submissions at [32] above. It is rather 'directed' to allocating a taxing right to Australia in the same terms as the taxing right insisted upon (no doubt) by the US. 63 Division 974 of the 1997 Act contains a set of rules and definitions in relation to the treatment of certain interests as either debt or equity interests. It contains no operative provisions. Instead, depending on the manner in which an interest is classified under Div 974, the Act elsewhere operates to treat that interest accordingly. 64 Division 974 does not 'deem' interests (or payments) to be debt or equity for all purposes, nor even for all purposes of the Act. An interest is only treated in the manner prescribed by Div 974 to the extent the Act otherwise provides in its operative provisions. It is therefore wrong to assume that a payment in respect of a dividend which is 'deemed' to be 'interest' on a 'loan' by reason of Div 974 should be so treated for all purposes of the Act and for all the purposes of the Treaty. Properly construed, there is no inconsistency between Div 974 and Art 11(9)(a). Article 11(9)(a) continues to treat the payment as interest, it merely taxes it at a different rate. 65 To the extent DAPFI relies on the 'deeming' effect of the provisions of Div 974, it is important to note that those 'deeming' provisions should be construed 'strictly and only for the purpose for which they are resorted to': Federal Commissioner of Taxation v Comber (1986) 10 FCR 88 at 96; East Finchley Pty Ltd v Federal Commissioner of Taxation (1989) 20 ATR 1623 at 1643. 66 The Commissioner submitted there is no basis to permit the perceived legislative policy of the 'deeming' provisions of Div 974 to derogate from the clear operation of Art 11(9). It is relevant to note in this regard that Art 11(9)(a) was contained in the Protocol to the Treaty which was inserted into the International Tax Agreements Act by Act No. 59 of 2002, with effect from 3 July 2002. Division 974, on the other hand, took effect from 1 July 2001. Specifically, it is argued that the Art 11(9)(a) only applies where the payment in question is made by an identifiable 'issuer'. 68 The Commissioner submitted that there is little difficulty in concluding that DAPFI's interest in the Industrie LP was 'issued' by the Industrie LP. The term 'issuer' is not a term of art --- it merely identifies the entity (here, Industrie LP) whose profits by reference to which the payments in question (here, the distributions to DAPFI) are determined. Article 11(9)(a), after all, remains subject to Art 11(5) which specifically includes payments which are treated as interest including, necessarily, certain partnership distributions. 70 DAPFI referred to the authoritative exposition of the relevant principles in the judgment of McHugh J in Applicant A 190 CLR applied to the interpretation of double tax treaties in Federal Commissioner of Taxation v Lamesa Holdings BV (1997) 77 FCR 597. Regard should be had to the "four corners of the actual text". The text must be given primacy in the interpretation process. The ordinary meaning of the words used are presumed to be "the authentic representation of the parties' intentions": Applicant A [at 143] . The courts must, however, in addition to having regard to the text, have regard as well to the context, object and purpose of the treaty provisions. The approach to interpretation involves a holistic approach. International agreements should be interpreted "liberally". Treaties often fail to demonstrate the precision of domestic legislation and should thus not be applied with "taut logical precision". 72 A consideration of the interrelationship of the provisions of the Treaty (and other treaties following the same basic model) shows a concern with the substantive nature of the amounts over which the treaties allocate taxing rights (see for example the preference for economic substance over legal form in the conceptions of 'permanent establishment', 'business profits' and 'real estate'). Business profits, which are allocated to the taxing power of the country to which they are most closely economically connected, do not include amounts which are in substance investment income, whether rent, interest, dividends or royalties (Art 7(6)), and investment income is categorised according to the substantive (rather than the formal) rules of the domestic law. Articles 10(4), (6) and (7), 11(5), (9) and (10) and 12(4) and (5) illustrate this concern. 73 It would be an odd outcome that Art 11(9)(a), a provision whose origin manifestly lies in a purpose of confining Art 11 to what in substance regardless of its form is interest on a loan, should be so construed as to exclude from the Article an amount which in substance though not in form is interest. Such a result would seem to be contrary to the 'context object and purpose' of the provision. 74 DAPFI submitted that the Commissioner's argument seeks to elude this oddity by focussing on an absence of express nomination of the purpose of the paragraph in the Treaty or the 'secondary materials'. But none of the treaties (nor the OECD or US models) contains express statements of this nature, in relation to any of their provisions; and while Australian secondary materials make no express reference to the purpose of the paragraph (the provision not having been included at its instance), the US secondary materials do. 75 When regard is had (as properly it should, McDermott at [41]) to the history of the provisions, it is apparent that Art 11(9)(a) served the purpose of protecting US objectives, but no material purpose in the protection of Australian taxes. Amounts 'in the nature of interest' which were (or were deemed to be) distributions on shares were for treaty purposes allocated to Art 10, as 'income from shares' (Art 10(6)), which might be subjected to withholding tax at 15%, and were excluded from Art 1l by the concluding words of Art 11(5); but Australia in any event limited its withholding tax on such amounts to 10%, treating them as the yield on debt interests. Article 11(9)(a) thus had no relevant role to play in an Australian context, and while it was as the Commissioner says 'a power allocated to each Treaty country', its construction is more illuminated by the purpose which --- as a matter of agreement, inserted 'as the necessary price paid for international political comity' ( Applicant A at 256) --- it served in US tax policy than by reference to Australian tax provisions. 76 DAPFI submitted that the Commissioner also seeks support in the 'actual text' of the Treaty, but does so without regard to the whole of the text. In looking to the 'four corners of the actual text', one construes the text in the light of its purpose; as McHugh J said in Applicant A at 253, 'the ordinary meaning of the words are not to be determined in a vacuum removed from the context of the treaty or its object or purpose'. If the words are consistent with that purpose, the construction should serve to fulfill it, not to frustrate it. In this context, the role of Art 11(9)(a) is to exclude what substantively is not interest from its scope: that is, what in form is interest but in substance is profit share. The text of Article 11(9)(a) bears this out: it deals with payments 'determined with reference to profits', a qualifier appropriate to what in form is framed as interest rather than profit share. 78 Nothing in the text of the Treaty conflicts with the approach to its construction which is indicated by reference to the matters of context and purpose on which DAPFI relies. Rather, the text supports that approach. 79 On that approach, the payments to DAPFI --- which as a matter both of calculation and of economic substance (as indicated by the Commissioner's reliance on Div 974 to impose tax on them) are in the nature of interest --- fall properly within Art 10 of the Treaty. If regard were to be had only to legal form, and not to substance or deeming provisions, they would fall within Art 7. (2) The mischief so identified sets the parameters of the interest to which Art 11(9), in this case Art 11(9)(a), applies: it only applies to amounts 'dressed up' as interest (what is referred to as interest in form only) but which in substance are a division of profits; it does not apply to what is in substance interest albeit in form a division of profits. (3) To construe Art 11(9)(a) otherwise would give rise to an odd outcome; Art 11(9)(a), a provision whose origin manifestly lies in a purpose of confining Art 11 to what in substance regardless of its form is interest on a loan, should be so construed as to exclude from the Article an amount which in substance though not in form is interest. Such a result would seem to be contrary to the 'context, object and purpose' of the provision. 81 The principal difficulty I have with the course of this argument is the point from which it starts. While the domestic law policy of a contracting State may explain the existence, and be reflected in the terms, of a provision of a treaty which it negotiates with another contracting State, that policy cannot control the construction and application of the provision as such, particularly where, as here, the other contracting State has no equivalent policy. In the case of Art 11(9)(a) of the Treaty, the United States reserved to itself the right to tax 'interest' paid by a resident of the United States, being interest to which a resident of Australia is beneficially entitled in the circumstances of Art 11(9)(a); not, it should be noted, in the circumstances of the domestic law policy manifest in the relevant provisions of the IRC which actuated or drove the reservation. Moreover, the United States also conceded an equivalent taxing right to Australia. The construction and application of that taxing right cannot be controlled by US domestic policy if the text in context --- the 'four corners of the actual text' --- points to a different construction. It is to that matter I now turn. 82 Under the principles of interpretation referred to, the 'four corners of the actual text' must be given primacy in the interpretation process: see [70] above. So far as the proper construction and application of Art 11(9)(a) is concerned, the 'four corners of the actual text' extend to the whole of Art 11, and any other article of the Treaty that is drawn into the 'four corners of the actual text' expressly, or by implication. This is particularly relevant in relation to the term 'interest'; its definition in Art 11(5) is prefaced as being '... in this Article ...'; consequently, its scope and ambit is uniform throughout the whole of Art 11 and there is no limitation on the term other than what is to be found in Art 11(5) itself. One such limitation is: 'Income dealt with in Article 10 (Dividends) ... shall not be regarded as interest for the purposes of this Article'. Relevantly, the term 'dividends' as used in Art 10 is defined in Art 10(6) (see [25] above) to mean '... income from shares, as well as other amounts which are subjected to the same income tax treatment as income from shares by the law of the State of which the company making the distribution is a resident for the purpose of its tax '. The emphasised words correspond with the emphasised words in Art 11(5) (see [26] above) '... as well as income which is subjected to the same taxation treatment as income from money lent by the law of the Contracting State in which the income arises ', and together provide both a dichotomy and a common boundary between amounts to which Art 11 applies and amounts to which Art 10 applies. That boundary neither contemplates nor accommodates a distinction between interest in form only and interest in substance (but not in form); the only relevant criterion for the application of Art 11 including Art 11(9), rather than Art 10, is whether the income is subjected to the same taxation treatment as income from money lent by the law of Australia. It is common ground that the income in the present case is so treated: see [22] above. 83 So far as context is concerned, it is unlikely that context, in the present case, adds anything to the 'four corners of the actual text' as framed in [82] above. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. Differences of opinion exist as to the circumstances in which the "context ... object and purpose" of the treaty may be used to supplement the "ordinary meaning" of the treaty. Inherent in this debate is the question of whether the textual interpretation of the words, embodied in the phrase "ordinary meaning", should be afforded interpretative precedence. Some commentators have argued that the literal meaning has no precedence and that the object of the treaty must always be taken into account [O'Connell, International Law, 2nd ed (1970), vol 1, p 253]; some have argued that the two general levels of inquiry embodied in par 1 of Art 31 have a single combined operation [Brownlie, Principles of Public International Law, 4th ed (1990), p 628; Ris, "Treaty Interpretation and ICJ Recourse to Travaux Préparatoires: Towards a Proposed Amendment of Articles 31 and 32 of the Vienna Convention on the Law of Treaties:, Boston College International & Comparative Law Review, vol 14(1) (1991) 111]; and some have argued that words and phrases of a treaty are in the first instance to be construed according to their plain and natural meaning and that it is only when the result of such an inquiry is doubtful that one should look to a treaty's context, object and purpose [Shearer, Starke's International Law, 11th ed (1994), pp 435-436]. Australian decisions provide no clear answer as to whether Art 31 requires or merely allows recourse to the context, object and purpose of a treaty in interpreting one of its terms. It is clear that such recourse is, in some circumstances, permissible. On numerous occasions, Australian courts have sought to discern the purpose of a treaty so as to construe a treaty term [Koowarta [1982] HCA 27 ; (1982) 153 CLR 168 at 265-266; Thiel v Federal Commissioner of Taxation (1988) 21 FCR 122 at 160; Chan v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 413; SS Pharmaceutical v Qantas [1991] 1 Lloyd's Rep 288 at 295-299]. What is not clear from the decided cases, however, are the circumstances which require or allow recourse to the context, object and purpose of a treaty. Nor have those cases clarified the nature of the relationship between the context, object and purpose of a treaty and the 'ordinary' textual analysis of one of its provisions. It did this by allocating, or denying, to each contracting State taxing rights over different items of income --- business profits, dividends, interest and royalties to mention some --- in different circumstances. In this respect, the object and purpose of the different provisions of the Treaty 'piggy-back' the object and purpose of the Treaty itself. Relevantly, in the case of 'interest' as defined in Art 11(5), it denied each contracting State the right to tax 'interest' arising in that State to which a resident of the other State is beneficially entitled in the circumstances of Art 11(3)(b) but, by way of override, allocated to each contracting State the right to tax 'interest' (albeit at no more than 15%), that is paid by a resident of that State to which a resident of the other State is beneficially entitled in the circumstances of Art 11(9)(a). 89 In my view, so approached, there is no inherent tension between the 'four corners of the actual text' and the object and purpose of Article 11(9)(a) of the Treaty. In these circumstances, the 'four corners of the actual text' must be given the primacy demanded by the principles of interpretation to which reference has been made. 90 So predicated, that is, that the distributions to DAPFI fit the description of 'interest' for the purposes of Art 11(9)(a) of the Treaty, the remaining issue is whether they fit the description of 'interest ... that is determined with reference to the profits of the issuer'. Having regard to the form and terms of cl 10.1 of the Partnership Deed, as amended, in particular the provisos in (i) and (ii) where 'the Adjusted Net Income is a positive amount', there is no doubt, in my mind, that such distributions fit the description of 'interest that is determined with reference to the profits of' the limited partnership, Industrie LP. Contrary to the submissions of DAPFI, I have no difficulty in regarding Industrie LP as an 'issuer' for this purpose. Juridically, a partnership, even a limited partnership, is not a legal entity, but for Australia's domestic tax law purposes, a limited partnership such as Industrie LP is deemed to be one, a company (s 94J of the 1936 Act), and a partner's interest therein as a share in the notional company (s 94P of the 1936 Act). The concept of the notional company being an 'issuer' in respect of the notional shareholder's (s 94Q of the 1936 Act) notional share in the notional company involves no quantum leap. 91 It follows, in my view, that Art 11(9)(a) of the Treaty applies to the distributions from Industrie LP to DAPFI so as to override the denial of the right to tax under Art 11(3)(b) of the Treaty. 93 The public ruling is entitled ' Income tax: ascertaining the right to tax United States (US) and United Kingdom (UK) resident financial institutions under the US and the UK Taxation Conventions in respect of interest income arising in Australia' . This Ruling applies to residents of the United States and the United Kingdom that are classified as financial institutions for the purposes of either the Australia --- United States Taxation Convention, as amended by the Protocol, (the US Convention) or the Australia --- United Kingdom Taxation Convention (the UK Convention) (collectively referred to as 'the Conventions'). This Ruling applies to those arrangements where interest arises in Australia, within the meaning of Article 11(7) of the Conventions, and is derived by United States (US) or United Kingdom (UK) residents that are financial institutions for' the purposes of the Conventions., The US and UK residents must beneficially own, or be beneficially entitled to this interest. The Ruling discusses the circumstances under which the US or UK resident will not be subject to tax in Australia under the Conventions on interest income arising in Australia. This Ruling focuses on the definition of 'financial institution' contained in Article 11(3)(b) of the Conventions. The definition of 'financial institution' distinguishes two types of entities; those that are 'banks' and those that are 'other enterprises'. Accordingly, payers of interest of this type have no obligation under section 128B of the Income Tax Assessment Act 1936 (ITAA 1936) to withhold tax from such payments made to these US or UK residents. Accordingly, payers of interest of this type have no obligation under section 128B of the Income Tax Assessment Act 1936 (ITAA 1936) to withhold tax from such payments made to these US or UK residents. Accordingly, the Commissioner is bound in relation to DAPFI to treat Australia as having 'no taxing rights under Art 11(2)'. However, where Art 11(9) applies, interest may be taxed at a rate up to 15% despite Art 11(2). Where Art 11(9) applies, therefore, para (10) of the public ruling simply has no application. (2) Furthermore, although expressed in very general terms, the public ruling only deals with certain aspects of Art 11. Article 11 contains numerous provisions, each of which governs the division of the Treaty countries' taxing rights in different ways. Article 11(9) is a substantive provision which applies notwithstanding the general exemption in Art 11(3). Having regard to the complex nature of Art 11, the mere absence of discussion of' some of those provisions cannot be construed as a positive statement that those other provisions do not apply. (3) This is apparent from the terms of para (4) of the public ruling which states that it has a particular focus. On a fair reading, the public ruling could not be understood to be exhaustive of the application of the whole of Art 11 of the Treaty. (4) Importantly, the public ruling applies not only to the Treaty but to the UK Convention, which contains no equivalent of Art 11(9). The fact that the public ruling is silent on Art 11(9) is therefore neither remarkable nor mysterious: the public ruling simply deals with (or 'focuses on') the provisions of the two treaties common to both. (5) The transactions which DAPFI entered into contained features not addressed in the public ruling and for which express provision is made in Art 11(9). interest in an amount equal to a percentage of profits. This reflects the mischief to which Art 11(9)(a) is directed. It should be distinguished from interest the quantum of which is calculated by the application of a commercial rate to a principal sum where the interest is payable only out of net profit of the debtor or where the creditor is limited to particular funds (e.g. profits) or assets for payment of the interest. In these cases, the creditor's recourse for payment is limited to profits or assets of the debtor but the quantum of the interest is not determined by reference to those profits or assets --- they merely limit the liability of the debtor for payment of the interest. 103 The 'RLPI (US) Distribution Amount' is a payment of 'interest' calculated by the application of a commercial rate to the amount of capital contributed. The mere fact that the obligation of the Industrie LP to pay that 'interest' is subject to the contingency that there is sufficient Adjusted Net Income does not mean that it is 'interest ... determined with reference to the profits' of Industrie LP --- the Adjusted Net Income is merely the source from which it is to be paid. The whole of the distribution to DAPFI was required by the terms of the Partnership Deed, as amended, to be determined with reference to the profits of Industrie LP. Furthermore, there is no mechanism in the Treaty or in Division 11A (or elsewhere) which would permit the apportionment for which DAPFI contends. 105 The distributions to DAPFI were governed by cl 10.1 of the Partnership Deed, as amended, by reference to the 'Adjusted Net Income' of the partnership as defined in cl 20. 108 The distribution to which DAPFI was entitled under cl 10.1 was therefore, in all cases, dependent upon the various adjustments to 'Net Income' of the partnership necessitated by cl 20. In these circumstances, the Commissioner submitted that it would be highly artificial to treat only the 'adjustment' itself as being referable to the profits of the partnership. The adjustment was rather the means by which the parties ensured that the whole of the distribution reflected the profitability of the partnership. 109 Furthermore, as noted above, neither the Treaty nor Div 11A contains any mechanism which would permit the apportionment for which DAPFI contends. Article 11(9)(a) applies where the payment may be characterised as having been 'determined with reference to profits'. In a case such as this, where the payment can be so characterised, the whole of the payment is within the Article. 110 Finally, DAPFI argued that the expression 'determined with reference to profits' should be construed narrowly so as not to include a distribution of profits. The authorities upon which DAPFI relies in this regard do not support this proposition. 111 Neither Emu Bay Railway Company Limited v Federal Commissioner of Taxation [1944] HCA 28 ; (1944) 71 CLR 596 nor Federal Commissioner of Taxation v Firth [2002] FCAFC 95 ; (2002) 120 FCR 450 is a useful analogy with this case. 112 The taxpayer in Emu Bay Railway Company 71 CLR had issued a debenture, the interest on which was only payable out of its 'net income' (akin to profit). It sought to deduct interest payments on this debenture under s 51(l), even though none were made because the company had no net income. All that was decided in that case was that no interest expense was 'incurred' because the interest was contingent on net income, of which there was none. 113 Firth 120 FCR also concerned the deductibility of interest, in that case on a so-called 'capital protected' loan. The case does not bear on the interpretation of 'determined with reference to profits' in the Treaty. 114 The Commissioner submitted that the expression 'determined with reference to profits' is well able to accommodate a situation, such as this, where the calculation of the amount paid depends entirely upon the profits (here, the Adjusted Net Income) of the issuer. 116 DAPFI submitted that the first of these contentions, dealt with in the Commissioner's submissions at [105]---[108] above, does not meet DAPFI's submissions at [102] and [103] above, namely, that in so far as each partnership distribution is calculated by reference to the RLPI (US) Distribution Amount (the 'Primary Entitlement' referred to in cl 10.1 (a) of the Partnership Deed), it is not 'determined with reference to profits'. Furthermore, the character of the portion of each partnership distribution which is so calculated is not affected by the fact that in certain circumstances the applicant either (a) may become entitled to receive a further or additional sum as well; or (b) may not receive the full amount of the RLPI (US) Distribution Amount if the Adjusted Net Income is insufficient. 117 As to the Commissioner's second contention, the absence of express provision for apportionment in Art 11(9)(a) is not an exclusion or prohibition of an apportionment. A global sum payable under a contract may be apportioned where the commercial reality is that only part of the payment can be regarded as being determined with reference to profits; the apportionment should be done on the basis of a realistic estimate on sensible commercial grounds (cf., Roadshow Distributors Pty Ltd v Commissioner of State Revenue [1998] 1 VR 523 at 529). This approach is all the more appropriate in the case of a treaty, which should not be construed in a narrow technical way. 118 Here the commercial reality is that the whole payment was an indirect receipt of the interest paid by CBA, and so was interest calculated without regard to any substantive 'profit' calculation. But insofar as there is a calculation with reference to profits, only part of the payment is so calculated, because what is payable includes a basic interest amount identified in the formula, and the apportionment can be readily done in view of the way the distributions were calculated. For a start, Industrie LP was not a mere interposed conduit between CBA and DAPFI. Indeed, Industrie LP did not lend to CBA; it invested the whole of its funds in another NSW limited partnership, Luca LP: see [11] above. And even Luca LP did not lend the whole of its funds to CBA; $2 million was lent at interest to other financial institutions. 120 I am unable therefore to accept the proposition that, from the perspective of commercial reality, the whole payment from Industrie LP to DAPFI '... was interest calculated without regard to any substantive profit' calculation. 121 Moreover, there were in fact profit calculations. There were profit calculations at the level of Luca LP, and there were profit calculations at the level of Industrie LP. The definition of 'Net Income' at [105] above, and of 'Adjusted Net Income' at [16] above, involve a profit calculation for any period ('... income derived ... less expenses incurred ...') and DAPFI's entitlement was determined by reference to that profit calculation. 122 DAPFI's entitlement, contrary to its submission, was never a basic interest amount plus or minus a calculation by reference to profit. DAPFI never had an entitlement to a 'basic interest amount', whether identified in a formula or otherwise. At the very most, it was entitled to a share of 'Adjusted Net Income' and the 'basic interest amount' (referred to as the 'RLPI (US) Distribution Amount') was but a component in the calculation of that share. 123 I agree with the submission of the Commissioner in [108] above that '... it would be highly artificial to treat only the 'adjustment' itself (provisos (i) and (ii)) as being referable to the profits of the partnership. The adjustment was rather the means or mechanism by which the parties insured that the whole of the distribution reflected the profitability of the partnership. 124 In many cases, one can obtain guidance as to the correctness of the conclusion one has come to as to the nature or character of a right or entitlement by asking: How would one plead the right or entitlement in an action to enforce the same? One only has to ask that question to know that the dichotomy for which DAPFI contends cannot be sustained. 125 On the view I take, no apportionment is open. 126 Both applications must be dismissed with costs. I certify that the preceding one hundred and twenty-six (126) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | withholding tax on distribution of share of profit by nsw limited partnership to us corporation deemed to be dividend paid on share in a company by div 5a of the income tax assessment act 1936 (cth) deemed to be return (dividend) on a 'debt interest' (a non-equity share) by div 974 of the income tax assessment act 1997 (cth) and deemed to be 'interest' for the purposes of div 11a of the 1936 act subject to withholding tax whether double taxation convention between australia and the united states denies australia the right to tax the amount by virtue of art 11(3)(b) whether art 11(9)(a) applies to override denial of australia's right to tax application of public ruling whether reliance on applicability misplaced whether relief from withholding tax available in part income tax |
Also by notice of motion dated 23 June 2006, the respondents/cross-claimants ("the respondents") seek orders that they be granted leave to file and serve a second further amended defence and cross-claim. These matters are properly before the Court pursuant to my orders of 16 June 2006. 2 The applicants also seek an order concerning the respondents' alleged non-compliance with an order of Registrar Mussett made on 15 March 2006 for the discovery of certain categories of documents. I have not dealt with this today. This matter is the subject of ongoing discussions between the parties, which may resolve the current dispute. I would refer the matter back to the Registrar for resolution in the event it does not do so. 3 The pleadings currently comprise the applicants' further amended statement of claim dated 10 February 2006, the respondents' proposed second further amended defence and cross-claim; the applicants' amended defence and cross-claim dated 29 April 2005; and the respondents' reply to the applicants' defence to amended cross-claim dated 1 August 2005. A helpful summary of the parties' claims and defences is contained in Annexure A to the submissions filed by the respondents in respect of these motions. For present purposes, I accept that the issues to be investigated in these proceedings are as set out in these submissions at [8]. 4 The respondents seek leave to amend their pleading under O 13 r 2 of the Federal Court Rules . The respondents' counsel submitted, and I accept, that the additional pleading would raise matters within a relatively narrow compass. He further submitted, and I accept, that the applicants themselves repleaded in February of this year and, in effect, the respondents' proposed repleading had to be seen in this light. Seen in this light, I accept that there was no unacceptable delay that would warrant the denial of leave. In the circumstances, subject to a matter that I am about to address, it is proper that the respondents have the opportunity to litigate, in this proceeding, matters of a like nature to their existing cross-claim. 7 In this connection, the remaining matter concerns the applicants' submission that the proposed new defamation claim would not be within the Court's jurisdiction. They opposed leave to amend on this basis too. For the following reasons, I reject this submission. 8 Before discussing this submission, however, I note that, today, the applicants abandoned their strike out application with respect to the first and second publications. The applicants no longer contest that the respondents' claims with respect to these publications are within the Court's associated jurisdiction: see Federal Court of Australia Act 1976 (Cth), s 32(1). The applicants submit, however, that the claim with respect to the proposed sixth publication remains outside the association jurisdiction of the Court. 9 The principles that govern associated or accrued jurisdiction have been discussed by the High Court of Australia in a number of decisions, including Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd [1981] HCA 7 ; (1981) 148 CLR 457 at 474-5, Fencott v Muller [1983] HCA 12 ; (1983) 152 CLR 570 (" Fencott ") at 607-8, Stack v Coast Securities (No 9) Pty Ltd [1983] HCA 36 ; (1983) 154 CLR 261 at 294, Re Wakim; Ex parte McNally [1999] HCA 27 ; (1999) 198 CLR 511 at 585-6, and Australian Securities and Investments Commission v Edensor Nominees Pty Ltd [2001] HCA 1 ; (2001) 204 CLR 559 at 585-6. 10 In Fencott , Mason, Murphy, Brennan and Deane JJ, in a joint judgment, sought to clarify what would be considered a "separate and disparate" matter. But in the end, it is a matter of impression and of practical judgment whether a non-federal claim and a federal claim joined in a proceeding are within the scope of one controversy and thus within the ambit of a matter. 11 The respondents relied on Hunt Australia Pty Ltd v Davidson's Arnhemland Safaris (2000) 179 ALR 738 (" Hunt ") in support of the proposition that this proposed claim fell within the associated jurisdiction. In Hunt , a Full Court held that, on the facts of that case, a defamation claim was not completely separate and distinct from a claim under s 52 of the Trade Practices Act 1974 (Cth) and therefore the court had jurisdiction to decide it. The circumstances of Hunt , though different, are not completely dissimilar to the present case. The parties in Hunt were competitors and the dominant purpose of the defamatory publication was, so the court at first instance found, to injure the other party. The Court held that there was a common substratum of facts even though the publication that gave rise to the misleading and deceptive conduct claim was separate from the publication that gave rise to the defamation claim: see Hunt at 746 [30]. 12 I accept that the alleged sixth publication forms part of the one controversy and, for the reasons I am about to give, can be said to arise out of the same substratum of facts. The respondents' case is that the applicants have waged a campaign of defamatory conduct against them as part of the applicants' attempt to seize market share from the respondents. The cause of action with respect to the sixth publication is related to the other defamation claims pleaded by them. Similar factual and legal issues arise in respect of all the respondents' defamation claims. The applicants conceded that at least some of the respondents' defamation claims arise out of the same circumstances as the federal matters pleaded by them. In any case, as already noted, the applicants no longer contest the court's jurisdiction over the first to fifth defamation claims. I can discern no relevant distinction between the claim with respect to the sixth publication and the other claims. It is to be borne in mind that there is an issue as to whether the applicants were motivated by express malice in making the first publication; and there is a common temporal connection with respect to all the defamation claims and the remaining issues in the proceeding. 13 Accordingly, I would grant leave to the respondents to amend their pleading in the manner they have sought. 14 As noted earlier, the applicants also sought an order for the separate determination of certain questions under O 29 r 2 of the Federal Court Rules . The principles that govern the circumstances in which an order of this kind may be made are well established. They are discussed by Branson J in Reading Australia Pty Ltd v Australian Mutual Provident Society [1999] FCA 718 at [7] and [8] and by French J in Olbers Co Ltd v Commonwealth (No 3) [2003] FCA 651 at [7] . In discussion in court today, the parties agreed upon what I consider, in accordance with these principles, to be an appropriate separation of the questions that arise for determination in the proceeding. Accordingly, I would make the order sought in the terms discussed in court. 15 The parties also made submissions on costs today and, for the reasons discussed in Court, I would make orders as to costs in the form appearing at the commencement of these reasons, as well as a number of other orders that were also the subject of submissions today. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | leave to amend pleadings associated jurisdiction defamation later determination of any questions of quantum on copyright infringement and expert evidence as to damages generally practice and procedure |
On 27 August 2009 a determination was made by the Chief Justice pursuant to s 25(1A) of the Federal Court of Australia Act 1976 (Cth) for the hearing and determination of the appeals by a single judge. In proceeding NSD 774/2009 the Appellant, Ms Yang, appeals against a decision of a Federal Magistrate delivered on 15 July 2009: Yang v Mead [2009] FMCA 636. In proceeding NSD 775/2009 the Appellant, Ms Mead, appeals against a decision of the same Magistrate delivered on the same date: Mead v Mead [2009] FMCA 637. Ms Yang is the mother of Ms Mead and Ms Mead (in turn) is the former wife of Mr Colin Anthony Mead. Prior to the hearing of the present appeals Mr and Ms Mead were engaged in lengthy proceedings in the Family Court of Australia. As the two appeals raised similar issues and interrelated facts, it was convenient to hear both appeals concurrently. The parties did not oppose that course. There are also two Notices of Motion , again one filed in each appeal on 4 September 2009. The relief claimed in each Motion is the same in all relevant respects. SYG 687 of 2008 ... ". What is intended to be embraced within the first order is uncertain. But the first two orders seek in effect an adjournment of the hearing of the two appeals. As neither Ms Yang nor Ms Mead had legal representation, it was considered that the preferable course was to list both the appeals and any applications for interlocutory or other relief together at the first point in time convenient to the parties and the Court. Both matters first came before the Court on 24 August 2009 when the matters were stood over to 4 September 2009. On that date, hearing dates were set for 12 and 13 October 2009. Both on 24 August and 4 September 2009 there was an appearance for the Respondent to both appeals --- but as at those dates no Notice of Appearance had been filed as required by Order 9 r 2 of the Federal Court Rules . Such a Notice , however, was filed in each matter on 10 September 2009. A COUNTER-CLAIM, AN ABUSE OF PROCESS OR A DEFECTIVE NOTICE? In Brink [ Re Brink; Ex parte Commercial Banking Co of Sydney Ltd [1980] FCA 78 ; (1980) 30 ALR 433 , 44 FLR 135] Lockhart J treated (at ALR 438---9; FLR 141) the reference to a "prima facie case" ... as a reference to "a fair chance of success". Accordingly, evidence tendered on an application to set aside is to be tested for admissibility, not as if the proceeding were one in which the debtor's claim was being finally determined, but by reference to the question whether the court should be satisfied that the debtor has a claim deserving to be finally determined. This Court also has an implied jurisdiction to set aside a bankruptcy notice as an abuse of process: Re Sterling; Ex parte Esanda Ltd [1980] FCA 61 ; (1980) 44 FLR 125. An abuse of process may be made out if the purpose in issuing the bankruptcy notice is to put pressure on a debtor to pay the debt rather than to invoke the Court's jurisdiction in relation to insolvency: Brunninghausen v Glavanics [1998] FCA 230 ; Killoran v Duncan [1999] FCA 1574 at [12] per Gyles J. See also: Maxwell-Smith v S & E Hall Pty Ltd [2006] FCA 825 , 233 ALR 81 ; Cavoli v Etl [2007] FCA 1191 at [17] , 5 ABC(NS) 363 at 369 per Heerey J; Slack v Bottoms English Solicitors [2002] FCA 1445 at [15] to [18] per Spender J; Davidova v Murphy [2009] FCA 601 at [88] . It is also an abuse of process for a judgment creditor to pursue bankruptcy proceedings " for the purpose of stifling litigation ": Bayne v Baillieu; Bayne v Riggall [1908] HCA 39 ; (1908) 6 CLR 382 at 396 per Griffith CJ. A substantive defect in a bankruptcy notice may result in its invalidity. Understatement of the amount due, whether it be an understatement of the judgment debt or of interest payable thereon, will thus constitute a defect which is substantive rather than formal only if the understatement is objectively capable of misleading the debtor as to what is necessary for compliance with the notice. In such a case uncertainty arises, not merely from the understatement, but from the understatement in the context of the particular bankruptcy notice. No such uncertainty arises if it is clear that payment of the amount specified in the notice will constitute compliance with the notice. Of present relevance is whether a mistake in the name of the creditor vitiates a bankruptcy. In Re Hansen; Ex parte Hansen (1985) 4 FCR 590 Beaumont J concluded that there was a formal defect in a bankruptcy notice issued in the name of " Mortgage Guaranty Insurance Corporation of Australia Limited ". That company had, however, changed its name to " MGICA Limited ". In the present case, the judgment creditor was identified by a name which it had abandoned some considerable time previously. That name was quite different from the name of the judgment creditor at the time of issue of the bankruptcy notice and the judgment debtor could hardly be expected to connect the two corporate names. The judgment debtor could thus have been misled as to the identity of the party with whom he had to deal in order to comply with the requirements of the bankruptcy notice. But, in Re McSwiney; Ex parte Davies (unreported, FCA, Beaumont J, P 1611 of 1986, 24 November 1986) Beaumont J concluded that a bankruptcy notice was not defective by reason of the debtor being identified as " Trevor John McSwiney " rather than " Trevor Peter McSwiney ". His Honour concluded that "... the defect is cured by s 306(1) ". (2) A defect or irregularity in the appointment of any person exercising, or purporting to exercise, a power or function under this Act or under a personal insolvency agreement entered into under this Act does not invalidate an act done by him or her in good faith. The touchstone of invalidity is thus whether any error is " capable of misleading " a debtor in a manner that results in " substantial injustice ". This sum is founded upon a certificate of taxation in respect to the Family Court proceedings in the sum of $100,143.09 together with interest of $54,123.91. Before this Court, Ms Mead sought to contend that the bankruptcy notice should be set aside because: the notice was said to have been issued to " Victor Michael Dominello " as the " creditor " rather than Mr Colin Mead or, alternatively, because the capacity in which the bankruptcy notice had been issued was uncertain; the certificate of taxation was said to have been improperly issued, it being erroneously based upon a judgment given on 18 October 2001, whereas there was no such judgment; and the notice required Ms Mead to pay the amount claimed or to make an arrangement for payment " within 21 days " in circumstances where she was then in custody and unable to comply with such a demand. It is neither correct to contend that Mr Dominello was identified as the creditor nor that uncertainty was created by the failure to " cross-out " the phrase " the creditor " so that his capacity as the " authorised agent " was unambiguous. The bankruptcy notice had previously unambiguously identified " Colin Mead " as " the creditor ". It is not considered that these matters were relevantly " capable of misleading " Ms Mead. Next, the certificate of taxation as issued under the seal of the Family Court correctly identified the amount of the judgment and the interest then payable. A costs order may constitute a " final order " for the purposes of s 40(1)(g): Goldberg v Morrow [2005] FCA 1038 at [19] per Crennan J. The order upon which the bankruptcy notice was here issued is considered to be a " final order ". A submission that the certificate of taxation had been fraudulently or improperly obtained is without substance. The factual foundation for the attack upon the certificate focussed upon the date of judgment. No date of judgment is set forth in the certificate itself. An order subsequently made on 28 November 2003 by the Family Court, however, corrected under the " slip rule " the date of judgment from 18 October 2001 to 2 November 2001. But that correction, it is considered, does not vitiate the bankruptcy notice. Again, there was nothing on the face of the bankruptcy notice which was " capable of misleading " Ms Mead. Finally, the fact that Ms Mead was in custody when the bankruptcy notice was served does not relieve her of the obligation to comply with the terms of the notice " within 21 days ". And, in any event, she in fact commenced proceedings in the Federal Magistrates Court within that period: [2009] FMCA 637 at [3] . The challenge to the validity of the bankruptcy notice served upon Ms Mead is thus rejected. Before the Federal Magistrate Ms Mead claimed that she had a " counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt " within the meaning of and for the purposes of s 40(1)(g) of the Bankruptcy Act . Cross claim husband breached marriage contract, I singly looked after children 12 years. Set aside & cross claim husband money I put in $446848 Annexure D prior to marriage to purchase Ermington home. Set aside & cross claim husband money I put in $445059 Annexure D by selling Ryde unit at 1/3 Hatton Street Ryde 2112 and others. The sum of $892,907 was said to be the total of $446,848 and $445,059. The total does not correspond. The sum of $446,848 was said to consist of an amount of $60,000 allegedly owed to Ms Mead since 15 September 1982 and interest. The $60,000 was said to be the contribution she had made in 1982 in connection with the purchase of a former matrimonial home. The sum of $445,059 was comprised of a sum of $126,838.73 (claimed to have been contributed to the marriage on 26 April 1994 through a company called Hypec Electronics Pty Ltd) together with interest. I gave her the opportunity in oral submissions to clarify the basis for her application. However her submissions did not satisfy me that she had a counter-claim, set-off or cross demand within s.40(1)(g) of the Act. Her claims about contributions to the marriage have been considered and determined by the Family Court. Indeed, insofar as Mrs Mead raises issues that were the subject of determination in the Family Court proceedings, her application to set aside the bankruptcy notice was adjourned until determination of those proceedings. Final orders have now been made by the Family Court. Hence, if there was such a claim that was not statute barred that was a material claim, it has been dealt with by the Family Court. Many of the purported " Grounds of Appeal " refer to conduct said to have taken place in either the proceedings between Ms Mead and her former husband in the Family Court of Australia or in proceedings in the Equity Division of the Supreme Court of New South Wales. On the hearing date of 29 May 2009 before Her Honorable Federal Magistrate Barnes, my Amended Notice of Grounds Appeal had not been settled to submit to give weight of counter-claim, set off and cross claim, where the Husband refuse to adjourn SYG671/2008 proceeding until further order or determination of the Amended Appeal of EA 51 of 2009 is heard by the Full Court of the Family Court of the Australia. Such was the entirety of the factual basis upon which the Appellants wished to pursue their appeals and the relief sought in the two Notices of Motion and the two Interim Applications . No objection was taken to this Court considering that additional material, other than an objection as to relevance. At least part of the relief thus sought in the two Motions --- namely leave to " file further evidence " --- was thereby achieved. But no error can be discerned in either the reasons for decision of the Federal Magistrate or by reference to the additional material now relied upon. Notwithstanding the manner in which the " Grounds of Appeal " have been expressed, each has nevertheless been considered with a view to determining whether it can in any way throw light on either the manner in which the Federal Magistrate approached her task or whether Ms Mead has any " counter-claim, set-off or cross demand " which has not hitherto been addressed. But no error can be thereby discerned and no " counter-claim, set-off or cross demand " has been identified. Notwithstanding the additional materials now relied upon, there is no reason to question the conclusion as reached by the Federal Magistrate in respect to either the claim for $446,848 or $445,059. Finally, the application as filed in the Federal Magistrates Court asserted both claims for these two sums and a further claim that Ms Mead expressed obliquely as " and others ". Whether or not this was a claim pursued before the Federal Magistrate, it was submitted in this Court that there was an additional claim Ms Mead had as a " counter-claim " against Mr Mead. The claim was quantified in the sum of $327,860. The claim was a claim founded upon the costs of raising the children of the marriage. There is no substance to this final way in which Ms Mead seeks to advance her appeal. Such evidence as was sought to be relied upon had no relationship to the costs incurred in raising the Mead children. No state of satisfaction can be reached for the purposes of s 40(1)(g) of the Bankruptcy Act that Ms Mead has any " counter-claim, set-off or cross demand equal to or exceeding the amount of the judgment debt ". That debt is founded upon a certificate as to determination of costs issued on 27 July 2004 in the Local Court of New South Wales. This notice was sought to be impugned upon two bases, namely: the contention that this notice had been issued by and signed by Mr Dominello in the same manner as had the bankruptcy notice in respect to Ms Mead; and the fact that the amount claimed, it was contended, had already been paid. Support for the submission that the amount had been paid was said to be found in a letter dated 6 April 2004 from a firm of solicitors. That letter recorded the distribution of monies on the sale of a property. The amount retained by the solicitors was recorded as being $18,667.68. But such a letter, it is considered, falls well short of founding any conclusion that the money claimed in the bankruptcy notice had been paid. The challenges to the bankruptcy notice served upon Ms Yang are rejected. Before the Federal Magistrate Ms Yang also claimed to have a " counter-claim, set-off or cross demand ". The basis upon which such a claim was then advanced was apparently not self-evident. The amounts claimed, however, were identified by the Federal Magistrate as being claims for: an amount of $100,000 as from 28 June 1996 together with interest of $184,728; an amount of $177,000 sought to be founded upon a bank statement and copies of bank cheques; an amount of $175,000 as from 20 September 1995 together with interest of $367,616. In respect to the first amount of $100,000 the Federal Magistrate observed that " [t]he basis of the claimed entitlement to interest was not explained further "; in respect to the second amount of $177,000 the Federal Magistrate observed that " [t]here was no explanation as to how these documents established such a claim against Mr Mead "; and in respect to the last amount of $175,000 she observed that " [t]here is no explanation for the claimed entitlement to interest ". Ms Yang was also a respondent to the proceedings in the Family Court between Mr and Ms Mead. Ms Yang and her now deceased husband were the Second and Third Respondents in those proceedings. The Federal Magistrate was not satisfied that Ms Yang " had a counter-claim, set-off or cross demand that came within s.40(1)(g) of the Act that should be determined ": [2009] FMCA 636 at [19] . The Notice of Appeal as filed in this Court by Ms Yang has much in common with the Notice of Appeal as filed by Ms Mead in her own appeal. Again the same approach has been pursued of attempting to discern in any of the purported " Grounds of Appeal " whether there is any error in the reasons for decision of the Federal Magistrate or whether Ms Yang has any " counter-claim, set-off or cross demand " which has not hitherto been addressed. None can be discerned. Whatever may have been the difficulties confronting Ms Yang when before the Federal Magistrates Court, no such difficulties were claimed in this Court. Her appeal was presented on her behalf by Ms Mead. The manner in which each of the sums was claimed was explored as far as the evidence permitted. The further explanation provided in respect to each of these three sums was as follows: the sum of $100,000 was said to be traced back to a mortgage granted in favour of Ms Yang and her then husband over property jointly owned by Mr and Ms Mead at Ermington. The mortgage exposed a stamp apparently recording the value of the monies secured by the mortgage as being $100,000. And that was the amount recorded as the value of the parents' interest in the Family Court proceedings. In addition, two further sums of $1,000 and $5,000 were identified. The discrepancy in the cumulative total may presently be left to one side. The deposit of $50,000 was in turn traced to a cheque dated 28 June 1996 and payable to Hypec Technology Group Pty Ltd. That cheque was said to have been signed by Ms Mead's sister on behalf of Ms Yang. The sum of $37,000 was traced to a deposit slip completed on 10 July 1996 but the name of the person who made the deposit is unknown. And the sum of $72,000 was traced to two bank cheques, one for $50,000 and one for $22,000. Again the name of the person on whose account the two sums were drawn remains unknown. Reliance on three exhibits --- a " Summary of Receipts and Payments To 23 January 2009 " for Hypec Electronics Pty Ltd, an undated " Shareholders' Resolution " and a letter from the Commonwealth Bank of Australia to Mr Colin Mead dated 6 May 1997 --- takes the matter no further. the sum of $175,000 was sought to be traced to a Notice issued by the liquidator on 4 September 2009 inviting " further evidence " from Mr and Ms Yang in respect to an amount claimed of $377,451. That sum of $377,451 was identified by the Federal Magistrate as referring to two deposits of $143,524.53 and $31,476 to cover the wages of Hypec employees. A deposit of $143,524.53 on 26 September 1995 was recorded in a bank statement for a joint account understood to have been held by Mr and Ms Mead. But who made the deposit remains unknown. And a document headed " Paid Wages from Cash Account " records a total of $31,488.20 being paid for a period extending from 22 September to 1 December 1995. But that document records no other information as to where that money came from other than the " Cash Account ". How the 4 September 2009 Notice correlated with the two deposits was left unexplained, as was how the Notice evidenced any basis for a claim that Ms Yang may have as against Mr Mead. Again, no error can be discerned in the reasons for decision of the Federal Magistrate in respect to the conclusions reached as to the claims for $177,000 and $175,000. The conclusion reached in respect to the claim for $100,000, however, is not so certain. It appears from what is described as an " interest table " that Mrs Yang claimed $100,000 from 28 June 1996 and " interest " of $184,728. The basis of the claimed entitlement to interest was not explained further. Of more concern is whether Ms Yang can show that she has a " prima facie case " or " a fair chance of success " in respect to her claim as to the $100,000 ostensibly secured by the mortgage. If the mortgage alone had been the entirety of the evidence, a conclusion may have been reached that a " counter-claim " for the purposes of s 40(1)(g) had been made out. But the mortgage does not stand alone. No constraint was placed upon either Appellant as to the evidence to be now considered. That evidence included cheques, bank deposit slips and bank statements. But no trace could be found of this sum of $100,000 being advanced. On balance, it is thus considered that no state of satisfaction can be reached for the purposes of s 40(1)(g) that Ms Yang has any " counter-claim, set-off or cross demand " as against the Respondent, Mr Mead. AN ABUSE OF PROCESS? That the respondent failed to disclose the Bankruptcy Notice NN0765/08 was not effective and was thus unconstitutional and incapable of enforcement which had been a violation of the applicant's human rights to identify it when the applicant was in prison between January and July 2008 of which caused application SYG671/2008 was filed on 20 March 2008 by family members on behalf of the applicant. That Bankruptcy Notice NN0765/08 either served or issued while a stay of execution Bankruptcy Notice NN1871/03 remains in the Family Court Proceeding No. SYF 3359 of 1997 will be bad, abuse and invalid. That the Bankruptcy Notice NN0765/08 was to put pressure on applicant to pay the default judgment debt while the applicant was in jail and all assets were frozen since 1999 rather than to genuinely invoke the Court's bankruptcy jurisdiction must be subject to the operation of the principles respecting abuse of process. In both appeals both Appellants were invited to again attempt to point to those facts relied upon to support any conclusion that there has been an abuse of process. Other than unsubstantiated allegations, it is not considered that there is any sustainable basis for contending that Mr Mead has engaged in any abuse of process when seeking the issue of the two bankruptcy notices now in issue. The Federal Magistrate was correct in concluding that such allegations should be rejected. It should be noted that any entitlement to monies said to be owed to Ms Mead from her former husband has been the subject of detailed consideration by the Family Court: CAM v LGM [2009] FamCA 251. Both the Husband and the Wife worked very hard to establish and maintain what became a very successful business. This effort enabled significant and valuable assets to be accumulated. However subsequent to the separation of the Husband and the Wife there ensued a bitter and protracted matrimonial conflict. The conflict has been played out in numerous courts. There has now been an extraordinary dissipation of ascertained assets that the Husband and the Wife accumulated with the result that the majority of the identified wealth has gone. As well, as I have said before, the public cost is incalculable. Further, the Wife has been imprisoned and that experience is but one of the destructive outcomes. There are two children who were hardly mentioned but who must be aware of and affected by the enormity of the conflict between their parents. I cannot adequately explain it. However it may be that the explanation is simply that it is a case about money and thus perhaps the conflict has no boundaries. Therefore coming back to what this case is about, I have no doubt that the Wife has undisclosed assets and they are probably located overseas and will never be ascertained. The assets are probably located in Taiwan and the ability of the Wife to control and deal with such assets is assisted by the efforts of various people some of whom are within the jurisdiction and some of whom are not. I am also of the opinion that the actions of the Wife, aided by Grace Yang, the late Mr Yang, Mrs Yang and others to undermine any possible interests and claims of the Husband have resulted in an extraordinary waste of ascertained assets that were accumulated by the efforts of the Husband and the Wife. The reference in Ms Mead's application to the " Ermington home " and the " Ryde unit " were references to property the subject of consideration by the Family Court, as were the entitlements said to arise in respect to Hypec Electronics Pty Ltd. Due to her being in custody, Ms Mead contends that she was not able to attend the greater proportion of that hearing. But she did attend in person or by videolink from her place of custody to the Family Court on each day of the hearing. The learned Federal Magistrate whose decision is now under appeal had also considered the submissions sought to be advanced by Ms Mead and Ms Yang when challenging the bankruptcy notices now in issue. There is also a protracted history of litigation between the parties to the present proceedings, and related entities, in the Supreme Court of New South Wales. This history of litigation has undoubtedly created animosity and ill-feeling. But in issuing the bankruptcy notices there is considered to be no basis upon which it should be concluded that the creditor, Mr Mead, has engaged in any abuse of process. Rather than attempting to resolve applications for interlocutory relief prior to any final hearing, the preferable course, it was considered, was to have all that could be resolved in this Court resolved at the earliest convenient date. As events transpired, a hearing was accommodated and judgment delivered within nine weeks of the matters first coming before this Court. Notwithstanding some initial delay in the preparation of the two Appeal Books , both Appeals Books were filed on 28 September 2009. Further Affidavits of Ms Mead and Ms Yang were filed in this Court on 24 August, 4 September and 7 October 2009. Those Affidavits again sought to canvass much of the prior litigious history with little relevance to any issue in the present appeals. Most, if not all, of the Affidavits were in inadmissible form --- but so much may not be unexpected of litigants who appear in person. Notwithstanding deficiencies, each Affidavit has nevertheless been read with a view to distilling whatever relevance it may contain. Nothing has been discerned which leads to the conclusion that the relief sought in the Interim Applications and Notices of Motion should be granted. No basis was established upon which the liquidators could or should have been joined as respondents and no basis was established upon which any injunctive relief would or could have been granted. And, although applications for an extension of time for compliance with bankruptcy notices are frequently granted, no basis for doing so was advanced in the present proceedings other than the fact of having filed the two Notices of Appeal . Nor is it considered that the resolution of the appeal in the Family Court proceedings will have any impact upon the conclusions now reached. There is no basis upon which either appeal should be adjourned either generally or until after that appeal has been resolved. At the outset of the hearing of the appeals on 12 October 2009, Ms Mead sought to file in her appeal a Notice of a Constitutional Matter pursuant to s 78B of the Judiciary Act 1903 (Cth). Notwithstanding the terms in which that Notice was expressed, Ms Mead explained that it was not intended to raise any matter arising under the Constitution in this Court. Rather than this Court being under a possible " duty ... not to proceed ", Ms Mead was anxious for this Court to hear and resolve her claims immediately. Such a position, it may be noted, was inconsistent with the application to have the appeals in effect adjourned. The Notice was, in any event, understood as being more directed to the alleged failure on the part of the Federal Magistrate to give proper weight to Ms Mead's inability to comply with the 21 day period prescribed in the bankruptcy notice due to her being in custody. In the absence of any matter arising under the Constitution being raised in this Court, the appeal proceeded to be heard on 12 October 2009. Had it been necessary to resolve an alternative contention, namely that the Notice imposed upon this Court a " duty ... not to proceed ", that contention would have been rejected: cf Deputy Commissioner of Taxation v Warrick (No 2) [2004] FCA 918 at [103] , [2004] FCA 918 ; 56 ATR 371 at 396 per French J; Danielsen v Onesteel Manufacturing Pty Ltd [2009] SASC 56 at [30] , [2009] SASC 56 ; 224 FLR 319 at 327 to 328 per Gray J; Pham v Secretary, Department of Employment and Workplace Relations [2007] FCAFC 179. There is no error in the conclusions that neither Ms Mead nor Ms Yang has been able to establish any " counter-claim, set-off or cross demand " within the meaning of and for the purposes of s 40(1)(g) of the Bankruptcy Act . Nor can any such " counter-claim, set-off or cross demand " be distilled from such additional materials as were before this Court. This conclusion is only further reinforced if reference is made to those claims advanced and resolved by the Family Court. More generally expressed, there is no basis for reaching any conclusion other than that Ms Mead and Ms Yang have each been given repeated opportunities to have their claimed entitlement to monies heard and resolved. No defect is exposed in either of the bankruptcy notices such as would be " capable of misleading " either Ms Mead or Ms Yang and no abuse of process in the issuing of the bankruptcy notice has been established. In contrast to the inadmissible form of the Affidavits as filed stands the care and attention to detail displayed by Ms Mead in her oral submissions in support of both appeals. This attention to detail displayed a mastery of such facts as were in evidence and, in addition, the citation of numerous authorities in support of her submissions. The two Notices of Appeal , the Interim Applications and the Notices of Motion are to be dismissed. The Interim Application as filed on 24 August 2009 is dismissed. The Notice of Motion as filed on 4 September 2009 is dismissed. The Appellant is to pay the costs of the Respondent. The Interim Application as filed on 24 August 2009 is dismissed. The Notice of Motion as filed on 4 September 2009 is dismissed. The Appellant is to pay the costs of the Respondent. 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. | counter-claim, set-off or cross demand circumstances in which a bankruptcy notice may be set aside for abuse of process bankruptcy |
The farm comprises approximately 1200 acres, and is contained in five separate certificates of title. From about 1996, the farm was leased to a family which has no connection with this proceeding, but in early 2002 their lease was coming to an end, and they decided not to renew. The applicants, Christopher and Melody Chipper, were and are farmers in the area. By agreement with Peter Smyth and his wife Robin, and with the then lessees of the farm, the Chippers had operated the farm for about the last year of that lease. 2 In about March 2002, Christopher Chipper had a number of conversations with Peter and Robin Smyth, in which he told them that he and his wife were interested in taking a lease of the farm. During one of these conversations, Smyth told Chipper that he would lease the farm for a rent of $25,200 per annum. There was some discussion about the rent, but Smyth was not prepared to negotiate, and the parties did agree on that rent. The conversation ended with Smyth saying that he would ask a farm management consultant based in York, Ken Sevenson, to prepare a lease document on his behalf. 3 On 29 April 2002, Sevenson met with Robin Smyth at his office in York. Mrs Smyth said that a lease of the farm had been agreed with the Chippers. She said that her husband, Peter Smyth, was having health issues, and they wanted the lease to be 'secure'. She said that she wanted a long lease, and instructed Sevenson to draft a lease of the farm to Chippers. Sevenson contacted Christopher Chipper, and made an arrangement to inspect the farm. The inspection took place on 1 May 2002, on which day also Sevenson spoke to the Smyths about the lease, including the proposed term of the lease, an extension to the lease, and a proposed first right of refusal. On 6 May 2002, Sevenson had a further conversation with Chipper, in which he obtained his, and Melody Chipper's, details for insertion into the lease agreement. As a result of these conversations, Sevenson drafted a lease agreement between Peter Smyth of the one part and Christopher and Melody Chipper of the other part. The agreement was in standard form, and contained a provision for the lessee to have a first right of refusal to buy the freehold. Sevenson did not keep a copy of that draft lease. 4 A little later in May 2002, Sevenson spoke to Robin Smyth, who told him that there may be a GST issue with the lease, and suggested that he contact the Smyth family accountant, Mr Hall. On 24 May 2002, Sevenson did contact Hall, and during the conversation which followed, Hall said that, rather than having a lease between Peter Smyth and the Chippers, the lease should be structured so that there was a lease between Smyth and the first respondent, Octra Nominees Pty Ltd ('Octra'), and a sub-lease between Octra and the Chippers. Octra was and is a private company owned by the Smyths, and the trustee of the Peter Smyth Family Trust. Hall said that the rent payable under the lease between Smyth and Octra would be nominal, and that the rent payable under the sub-lease between Octra and the Chippers would be a commercial rent. Hall said that this would be tax efficient for the Smyth family. As a result of that discussion, Sevenson prepared two documents, a lease and a sub-lease as instructed by Hall. 5 On 5 June 2002, Smyth and Octra executed a lease of the farm at a rent of $100 per annum. The common seal of Octra was affixed to the lease in the presence of Peter and Robin Smyth. On the same day, Octra executed a sub-lease of the farm to the Chippers at a rent of $25,200 per annum. Again, the affixation of the seal was witnessed by Peter and Robin Smyth. On 24 June 2002, the sub-lease was executed by the Chippers. 6 By the lease, Peter Smyth leased the farm to Octra for a period of 4 years commencing on 1 May 2002, and granted to Octra an option of a further 4-year term commencing on 1 May 2006. Prospective purchasers of the Property will be able to inspect the Property if the Lessor gives the Lessee notice. The Lessee will have the first right of refusal to purchase the land for the same consideration and conditions as the Property is offered for sale to any other proposed purchaser. Prospective purchasers of the Property will be able to inspect the Property if the Sub-Lessor gives the Sub-Lessee notice. The Sub-Lessee will have the first right of refusal to purchase the land for the same consideration and conditions as the Property is offered for sale to any other proposed purchaser. The one event in that period which is relevant was that, as a result of Peter Smyth's infirmity, his affairs were placed under the joint administration of his son David Smyth and one Robert Avery by order dated 6 May 2003 under the Guardianship and Administration Act 1990 (WA). From that time forward, and for the purposes of all subsequent relevant events, it was David Smyth who effectively represented, and made decisions for, his father, although Avery's participation was necessary for any act of Peter Smyth to have legal effect. I should add that, notwithstanding his infirmity, it appeared that Peter Smyth remained conscious of the events which later became relevant in this proceeding, and that David Smyth made important decisions on his behalf only after discussion with him. 8 In late 2004, Peter Smyth decided to put the farm up for sale. Once he learnt of his father's intentions in this regard, David Smyth effectively took over responsibility for the arrangement of the sale. On 17 November 2004, he and Avery appointed agents for the sale, Elders Real Estate of York. The sale was handled by their Branch Manager, Brian Woolcock. Thereafter, the Smyths dealt with the Chippers as though the latter had a first right of refusal to buy the freehold. That is to say, they dealt with the Chippers in exactly the same way as would have been appropriate if the farm were leased directly to the Chippers, without the interposition of Octra. 9 On 8 November 2004, David Smyth informed Christopher Chipper of the intended sale of the farm. On 23 December 2004, Smyth confirmed that in writing, and told Chipper that the price being sought by the vendor was $1,450,000, or about $1,200 per acre. The Chippers regarded that price as excessive. In February 2005, they signed an open offer to purchase the farm for the price of $1,100,000. This was rejected by David Smyth, who countered with a price of $1,445,000. The Chippers increased their offer to $1,200,000, but Smyth would not move from the price he last nominated. In all of the discussions involving the Chippers and Smyth (or Woolcock on behalf of Smyth) at about this time, the Chippers had left him (and Woolcock) in no doubt but that they considered that the asking price of $1,445,000 was excessive. 10 Nothing presently material happened in relation to the proposed sale of the farm between about February and about August 2005. During that time, the farm continued to be listed with Elders. It was in August that the third respondent, Red Valley Pty Ltd ('Red Valley') came into the picture. Red Valley was (and is) a company controlled by Warren Anderson, and of which he and his wife were directors. Anderson had been a farmer and a property developer for many years although, since the early 1990's, not actively involved in the latter. It seems that Red Valley was used by Anderson to own properties in which he was interested. Anderson gave evidence that, in about early 2005, a farming property near York owned by Red Valley was given to his sister. However, he was concerned that that property might be too small to support her, her husband and their three sons. Anderson was looking for a further property which his sister could use as pasture, and possibly for one of her sons to use as his own farm. He asked one Colin King, a friend, and an estate agent with L J Hooker of York, to look out for properties close to the one which Red Valley had given to his sister. In August, King (who did not give evidence) told Anderson that Elders had advertised the farm, that it was reasonably priced and was 'just what you're after'. Anderson was interested, and asked King to arrange an inspection. King contacted Woolcock, and an inspection was arranged. 11 Woolcock gave evidence that, during the inspection, he told Anderson that the farm was under lease, and that there was a further 4-year option, and that the lessee had the first right of refusal. He said that Anderson said that he would have preferred to have had access to the property at the end of the first term (30 April 2006), but that that was not vital. Smyth, the owner, has leased the farm to Mr and Mrs Chipper until April next year and they have an option for another four years. But I think they will surrender the lease if you pay them a reasonable amount. They're not running much of a farm and can't be making much money out of it. They might accept a buy-out of the lease but it won't cost much. If they're not sensible about it, I can always get you out of the property. It's on 6 titles and I can sell the separate lots to Investors from Perth who are after a country property which they might use as a hobby farm in the future. 12 In anticipation of an offer to buy the farm being made by Red Valley, on 27 August 2005 David Smyth told Christopher Chipper that he expected such an offer to be made, and asked him to indicate if he was interested in purchasing the farm. 13 On 29 August 2005 Red Valley offered to buy the farm for a price of $1,400,000, and subject to various conditions set out in the offer. On 2 September 2005, David Smyth countered with an offer to sell for $1,445,000, together with certain adjustments to the conditions originally proposed. Red Valley agreed to pay the higher price, but rejected one of the adjustments to the conditions. On 16 September 2005, David Smyth accepted the most recent amendments proposed by Red Valley and signed the contract, and on 19 September 2006 Avery too signed. 14 As a result of those signatures, on 19 September 2005 there came into existence a contract for the sale of the farm to Red Valley. Apart from the agreed price of $1,445,000, some of the conditions in the contract are presently material. The contract provided for a deposit of $140,000, of which $10,000 was payable immediately and the balance, $130,000, was payable within 60 days. Settlement was to be 12 months from acceptance (ie 19 September 2006). This offer is subject to the vendor completing the subdivision application 120216 creating 6 locations as shown on Annexure 'A' attached to this contract and this shall be completed prior to settlement. 11. The purchaser is aware and accepts the current lease arrangements on the said property. 12. This contract is subject to and conditional upon the purchaser being satisfied with the terms & conditions of the existing lease. Such satisfaction or otherwise to be confirmed in writing to the vendor or his agent within 28 days of acceptance of this contract. As to condition 10, at the start of these reasons, I indicated that the farm was on five separate certificates of title. There was, apparently, a proposal to create a sixth, but, at the time of trial before me, this had not been completed, and the farm remains on five titles. As to condition 11, I have noted above that, by the time of the execution of the contract, Anderson had received a copy of each of the lease and of the sub-lease. At the time he executed the contract, he had not had an opportunity to consider the lease and the sub-lease, and King suggested to him that it become a condition of the offer to buy the farm that Red Valley be satisfied with the terms and conditions of the existing lease. Anderson agreed with the suggestion, King drafted condition 15, and that was accepted by David Smyth. As to conditions 12, 13 and 14, they are presently relevant only for the fact that they existed as annexures (or the like) to the written contract. Why they are relevant will appear presently. 15 In the period immediately following the execution of the contract, it would appear, Anderson used King to speak to the Chippers on the question whether they would be prepared to be bought out of the sub-lease, including the optional term. King told him that the Chippers had named the price of $50,000 a year, down to the end of the optional term, to be bought out. Anderson was not prepared to consider paying such a sum. 16 Towards the end of September 2005, Anderson read the lease and the sub-lease for the first time. He noted the clauses giving the Chippers a first right of refusal, and was unsure whether that affected the contract which Red Valley had signed. He told King to make sure that Peter Smyth offered the farm to the Chippers, adding 'I don't want this to become bogged down in another court fight'. King said that he would speak to Woolcock about the matter. The first instalment of the deposit under the contract, $10,000, which was due upon execution, had not been paid. 17 As I have indicated above, the Chippers were informed of the proposed sale of the farm to Red Valley, but they did not then take any step to buy the farm under their first right of refusal. Whether or not because of representations made by King as a result of Anderson's concerns, the fact is that Woolcock provided the Chippers with a blank pro-forma confirmation by which they were invited to indicate that they did wish, or did not wish, to exercise their first right of refusal to purchase the farm at the cash price of $1,445,000. By this stage, the only details of the Red Valley contract which had been provided to the Chippers consisted of the first page of that contract (which included the price and the deposit terms, but not the special conditions). On 28 September 2005, Melody Chipper's brother, Christopher Stevenson (a legal practioner), wrote to Woolcock advising that there had not been proper compliance with the lessor's obligation to give the Chippers a first right of refusal. He requested Woolcock to provide the Chippers with 'proper documentation for their consideration'. This was apparently not promptly forthcoming, at least to the Chippers' satisfaction. 18 The 28-day period within which, under condition 15 of the contract, Red Valley had the opportunity to withdraw if it was not satisfied with the terms and conditions of the existing lease expired on 17 October 2005. As this date was approaching, and Anderson still had not resolved his concerns about the lease, he asked King to obtain an extension of time for the operation of condition 15. King spoke to Woolcock about the matter, and on 17 October 2005 Woolcock prepared a written form of variation to the contract which would have done two things: first, extend the period referred to in condition 15 to 15 December 2005, and secondly, provide for the deposit to be paid in full within 7 days of that condition being satisfied (ie, by 22 December 2005 at the latest). 19 Two days later, on 19 October 2005, David Smyth telephoned Christopher Chipper. He asked why the Chippers had not signed the form indicating that they did not wish to buy the farm at the price of $1,445,000. He said that their failure to do so was delaying the sale. Chipper said that he had still not been shown the whole contract, which he required before exercising his first right of refusal one way or the other. On 20 October 2005, Woolcock visited the Chippers' farm, and spoke to Melody Chipper. The Owner Peter Smyth of the above farming property, of which you are the current Sublessee, wishes to advise that further to earlier advice to you that the property is for sale, he has now received a cash offer to purchase the entire farming property at the full listed price of $1,445,000.00. Thus in accordance with Clause 6 item d(ii) of your lease, he is extending to you the first right of refusal to purchase the property on the same terms, for the same cash consideration. A copy of the terms are attached for your information. We note the purchaser has received a copy of the lease agreement. As per your discussion with David Smyth please confirm your intention not to purchase the property, (or purchase) by signing the copy of this letter and sending to us by return by 27/10/05. If we do not receive a reply by this date we will assume you do not wish to exercise your right. They did not sign that statement. 20 It seems that, by the end of October 2005, the Chippers had been provided with a copy of the Red Valley contract, but not with the annexures, or the addendum, referred to in conditions 12, 13 and 14. On their behalf, on 7 November 2005, Stevenson wrote to Woolcock protesting about those omissions. Woolcock immediately brought the complete contract, including the annexures and the addendum, to the Chippers' attention. Having perused these documents, the Chippers decided that they did not wish to purchase the farm for the consideration, and on the conditions, specified in the Red Valley contract. And further take notice that Christopher John Chipper and Melody Jane Chipper have relied upon the representations made to them by David Smyth and Brian Woolcock at various times that the Purchaser is aware of the Sub-lease and agrees to be bound by the terms and conditions of the Sub-lease and that the farming property will only be sold to the Purchaser on the terms and conditions set out in the Offer and Acceptance. 21 The variation to the contract between Peter Smyth and Red Valley which had been prepared by Woolcock, at King's request, on 17 October 2005, was executed by both parties in the days following the delivery of the Chippers' notice referred to in the previous paragraph. It was executed by Anderson on behalf of Red Valley on 17 November, and by David Smyth (and, it appears, Avery) on behalf of Peter Smyth on 22 November 2005. It bore the date 17 October 2005. 22 There is a question whether the Chippers knew of the proposed extension under condition 15 of the contract before they signed off on their first right of refusal on 16 November 2005. In his witness statement, David Smyth said that he told Christopher Chipper (in a phone conversation on 7 November 2005) that Red Valley wanted an extension on the time for the lease review. Chipper denied being told any such thing, and was not cross-examined on that denial. Smyth's recollection of the timing and length of this conversation was assisted by his later referral to his mobile phone accounts. His actual recall of the order and detail of events at about this time was not good, and in a number of respects I was left with the impression that his evidence involved a reconstruction of events in a form now perceived to be favourable to his father's case. I am not prepared to find that Smyth informed Chipper of Red Valley's request for an extension of time allowed under condition 15 of the contract. I should add that the other, possibly more significant, element of the variation proposed by Red Valley at about this time was the extension of the time for the payment of the deposit under the contract, and there is no suggestion, even by Smyth, that the Chippers were told about that at any time before they signed off on their first right of refusal. 23 In December 2005, Anderson travelled overseas. While in Moscow, he received a phone call from King, who told him that the time on the condition in the contract of sale was about to expire, and asked him what he was going to do about it. This was a reference to the fact that the time for Red Valley to express its satisfaction (or otherwise) under condition 15 had been extended to 15 December 2005. Anderson asked King whether the Chippers were going to accept 'a sensible offer on their lease', by which he referred to earlier proposals for Red Valley to buy the Chippers out from the remaining term of the lease, including the extended term. King said that he had heard nothing from the Chippers, adding: 'if you buy it I can on-sale the blocks for a profit. And you never know, Chipper might still come to the party. ' Anderson said, 'put it in motion', and left it up to King. 24 Woolcock too was concerned that 15 December was approaching. Apparently after contact with King and at King's request, on 12 December 2005 he drafted a further variation to the contract to the effect that a first instalment of the deposit, $90,000, would be paid within 7 days, and the balance, $50,000, would be paid on 31 March 2006. At the same time as he prepared that draft variation, Woolcock also prepared, in draft, a waiver of condition 15, to be signed on behalf of Red Valley. However, King was unable to have Anderson execute this variation and the waiver in December 2005. As I have mentioned, Anderson was overseas until shortly before Christmas, but it seems that, even on his return, King was unable to contact him. Eventually, King advised Woolcock to contact Anderson directly. On 30 December 2005 Woolcock prepared a 3-page facsimile which was addressed to Anderson. Also deposit of $90,000 is payable to Elders Trust account and post it to our office at Box 178 York. Thanks. The facsimile was sent to Anderson at about the end of December 2005. However, Woolcock had no greater success prompting Anderson to execute the variation, and the waiver, than had King. As it appeared to Woolcock, Anderson was simply unavailable. 25 As I have mentioned, in December 2005 Anderson still held on to the prospect that the Chippers might agree to be bought out of the remaining term of their lease. That he was, in his words, 'still attempting to sort out the lease', was a reason why he requested that there be a split in the deposit. He said that he was not going to commit himself for anything until 'any arrangements had been made about the lease', and that 'I didn't decide to proceed. But can I just get a short answer to my question, you were deciding whether or not to proceed over that period?---Yes, you could say that. And it wasn't until 22 February, when you signed the document which appears at 248, exhibit R, that you did decide to proceed?---That's correct. And that was subject to, turnover please to 249, to having seven days to complete your due diligence with regard to the lease term?---Yes, that's correct. So you didn't finally commit until 1 March, when you served the notice which waived that term?---That's correct, yes. From about the first half of December until at least the beginning of February, Anderson's failure to respond to Woolcock was no accident. His original idea of buying the farm as an additional resource for his sister was being frustrated by the Chippers' refusal to consider being bought out of the lease, and the extended term, on Anderson's terms. From the outset, King had proposed, as a fall-back position, the sale of individual lots to third parties. Unless Anderson could achieve either his preferred position, or King's fall-back position, the purchase of the farm would have been pointless. I consider that Anderson's conscious objective at around this time was to avoid committing Red Valley to the purchase until one of those positions had been achieved. 26 I would reject any suggestion that Red Valley's failure to pay the deposit, and its failure to come to terms with the variation and waiver which had been drafted by Woolcock, was due to absent-mindedness, preoccupation or even incompetence. I find that these failures were the result of decisions consciously taken by Anderson on Red Valley's behalf. 27 In early February 2006, certain events occurred which, it seems, renewed Red Valley's interest in executing the variation and waiver prepared by Woolcock in December 2005. At the time, Woolcock knew nothing of these developments. On 4 February 2006 King received a written offer for so much of the farm as was contained on one of the certificates of title, Lot 99, from two of the fourth respondents, Riggindale Pty Ltd and Adina Enterprises Pty Ltd (as trustee for the Two-Acre Trust). On the same day, he received a written offer for Lot 97 from Riggindale Pty Ltd. The receipt of these offers caused Anderson to decide that he would proceed with the purchase of the farm. The variation (as amended at King's initiative) was executed by Anderson on 22 February 2006, by David Smyth on 28 February 2006, and by Avery on 1 March 2006. Red Valley paid the first deposit instalment on 9 March 2006. 29 The events to which I have referred involving Red Valley and the non-performance of its contract with Peter Smyth were originally unknown to the Chippers. In January 2006, Christopher Chipper happened upon Woolcock in the street in York, and asked him if the contract with Red Valley had been finalised. Woolcock said that the deposit was 'in the mail', that Anderson was in Russia and that that was holding things up. Chipper said that people were driving over the farm, and that he assumed that they were considering a purchase from Red Valley. He told Woolcock that that had to stop, but Woolcock said that it was not his problem. Also in January 2006, or possibly in early February, and possibly also as a result of his conversation with Woolcock to which I have just referred, Chipper spoke to David Smyth about the purchase of the farm by Red Valley. This was in the course of a conversation otherwise concerned with the negotiation of the rent for the 4-year extension of the sub-lease. Smyth told Chipper that he was still waiting on Red Valley 'to finish on concluding the deal'. According to Melody Chipper, 'in or about February 2006' she asked Woolcock whether Red Valley had paid the deposit under the contract, and Woolcock said that the deposit had not been paid because Anderson was overseas. According to Mrs Chipper, she told Woolcock that she considered that, if the deposit had not been paid, 'there had to be a different contract'. Mr Woolcock disagreed with that, and said that the Red Valley contract had been 'finalised'. 30 It would seem that, at about this time, the Chippers were reconsidering their original refusal to pay $1,445,000 for the freehold of the farm. According to Christopher Chipper, having found out that Red Valley had not paid the deposit under the contract, he 'presumed the contract was void'. He discussed the position with his wife, and they decided to make an offer to purchase the farm for the sum of $1,445,000, and otherwise on the same terms as contained in the Red Valley contract (as then known to them). He said that he called David Smyth on his mobile phone, and left a message for Smyth to call him back. Chipper said that a couple of days later, Smyth telephoned him. He said that he asked Smyth whether Red Valley had paid the deposit, and was told that it had not. He said that he and his wife could purchase the farm for the price being offered by Red Valley, and that Smyth responded that he did not care who bought the farm --- he just wanted it sold. 31 Smyth, for his part, gave evidence that it was not until 12 March 2006 that Chipper first told him that his circumstances had changed and that he could then afford to purchase the farm. According to Smyth, Chipper referred to the new (higher) rental which they would be paying under the extended sub-lease, and said they might as well buy the farm if it was still available. Smyth said that he would need to check with Elders to see if the deposit had in fact been paid. He said that, on 13 March 2006, he rang Woolcock, and was told that Red Valley had paid the first instalment of the deposit, $90,000, by the due date. He said that he then rang the Chippers, and spoke to Melody Chipper. He told her that the farm had been sold. According to Smyth, Mrs Chipper said that she and her husband were aware of the variation to the Red Valley contract, and of the fact that the deposit had not been paid. According to Smyth, he told Melody Chipper that 'it was the original contract to Red Valley ... it was the same price ... and the same people'. 32 In the meantime, King was continuing his efforts to sell the lots constituting the farm to third parties. As I have mentioned, he received offers for two of those lots in the first week of February 2006. On 17 March 2006 a written offer for Lot 203 was made by Peter and Angela Robinson, trustees for the Robinson Superannuation Fund, and Adina Enterprises Pty Ltd, trustee for the Two-Acre Trust. On 21 March 2006, a written offer for Lot 202 was made by Garden Valley Pty Ltd. The four offers were all accepted by Red Valley on 21 March 2006. Each contract thus coming into existence was subject to settlement with Peter Smyth. In each case there was an acknowledgement by the purchaser that settlement would be without vacant possession because of 'a long term lease' and that the purchaser had previously received a copy of each of the lease and the sub-lease. 33 In late March 2006, Melody Chipper asked Woolcock for a copy of the then current contract of sale between Peter Smyth and Red Valley. She did not receive the contract, and again asked Woolcock for a copy of it in early April 2006. She visited Woolcock in his office in York on 10 April 2006, and was provided with a copy of the contract, together with a copy of the variation (but not of the waiver) executed on 1 March 2006. 34 The Chippers consulted Stevenson about these developments. On 16 April 2006, he spoke to David Smyth. He said that he had been informed about the variation to the contract and, according to Smyth, 'wanted to sort it out'. Smyth said that he told Stevenson that he had been more than happy to sell the farm to the Chippers, but they had declined to purchase it. He said that Stevenson replied that he had told the Chippers to pay the full amount for the farm, but that they had not wanted to do so. 35 Over the ensuing five weeks or thereabouts, it seems that the Chippers were taking legal advice. On 5 May 2006, they lodged a caveat over the farm to protect what was said to be an 'option to purchase and/or right of first refusal pursuant to lease agreement dated May 1 2002'. On 26 May 2006, the Chippers' solicitors wrote to Octra, with a copy to Peter Smyth, referring to the variation to the contract with Red Valley which had recently come to their clients' attention. They asserted that, in relation to the deposit, the contract had been renegotiated and was now 'substantially more favourable to the purchaser'. They said that the Chippers wished to exercise the 'right of pre-emption over the freehold of the property' on the terms of the contract, as varied. They sought an acknowledgement of the Chippers' right to purchase the freehold on the terms of the contract as varied, and asked that Red Valley be informed thereof. The solicitors added that they were preparing a form of contract for the purchase of the property, which would shortly be sent, together with the Chippers' cheque for the deposit of $140,000. A similar letter was sent to Red Valley. 36 On 30 May 2006, the Chippers' solicitors again wrote to Octra, enclosing a copy of a form of contract for the sale of land executed by the Chippers as purchasers, together with a trust account cheque in the sum of $140,000. The form of contract purported to be on the same terms and conditions as the contract made between Peter Smyth and Red Valley in September 2005 as amended on 1 March 2006, save that the deposit of $140,000 was payable forthwith. The form of contract also contained a waiver of condition 15 in the original contract. 37 On 13 July 2006 the Chippers commenced the present proceeding against Octra, Peter Smyth and Red Valley. 38 On 10 August 2006, the Chippers' bank, National Australia Bank Ltd, advised them in writing that they had unconditional approval for a $1.3 m finance package for the funding of the purchase of the farm, subject to their execution of the bank's standard security and loan documentation. They allege, both additionally and in the alternative, that, on a proper construction of the sub-lease, Octra was obliged to do all things reasonably necessary on its part to enable them to have the benefit of the first right of refusal in the lease. This last allegation is admitted by Peter Smyth, Octra and Red Valley: indeed, each of them asserts that such is the effect of the sub-lease. Otherwise, the thrust of the Chippers' allegations to which I have referred in this paragraph is denied by those respondents. Additionally, Smyth and Octra allege in their Defence that the effect of the sub-lease was to assign to the Chippers the whole of Octra's proprietary interest arising under the lease, such that Octra was left with its contractual rights and obligations only, including those relating to its, and the Chippers', first rights of refusal. 40 The Chippers allege that Octra held the benefit of the first right of refusal under the lease on trust for them. That is denied by Smyth, Octra and Red Valley. 41 The Chippers refer to the contract of sale of the farm to Red Valley made in September 2005, but do not allege that that event, of itself, triggered the operation of their first right of refusal. Rather, they focus upon the amendments to that contract made on 1 March 2006. They say that, by those amendments, Peter Smyth agreed to vary the contract such that the deposit was payable in two instalments, $90,000 due on 1 March 2006 (it was in fact due within 7 days of that date) and $50,000 due on 31 May 2006, and such that there was a relaxation of the time specified in condition 15 within which Red Valley was obliged to indicate its satisfaction, or otherwise, with the terms of the lease. They allege that, upon becoming aware of the variation, they exercised their first right of refusal (on 26 May 2006) to the effect of indicating a desire to buy the freehold of the farm. Peter Smyth and Octra admit the factual circumstances alleged with respect to the variation of 1 March 2006, but deny that they were, or that either of them was, obliged to notify the Chippers thereof because, they allege, Smyth had previously offered to sell the farm to the Chippers for the same consideration, and on 'materially' the same conditions, as the farm was offered to Red Valley, because the variation was not a 'material' variation to those conditions, and because the variation was made in good faith, and Red Valley remained obliged to purchase the farm on reasonable and 'appropriately adapted' conditions. By way of reply, the Chippers admit that, on 22 October and 8 November 2005, Peter Smyth offered to sell the farm to them on the same terms and conditions, and for the same cash consideration, as the farm was then offered for sale to Red Valley. They join issue on the contention that the circumstances of the variation of 1 March 2006 were not such as to trigger their first right of refusal, and they allege that Smyth and Octra did not disclose, but rather endeavoured to conceal, the terms of that variation. Red Valley admits the making of the contract in September 2005, but alleges that, prior to that contract being entered into, the Chippers were offered the farm on the same terms as were then offered by it itself. Red Valley admits the fact of the variation of 1 March 2006, but contends that, as at 26 May 2006, the Chippers had no right to acquire the farm on the terms set out in the contract between Peter Smyth and Red Valley as varied. 42 The Chippers allege that, in breach of the implied terms of the sub-lease to which I have referred, Octra did not do all things necessary to ensure that they had the benefit of the first right of refusal over the freehold, did not exercise that right, and did not respond to their request to acknowledge their entitlement to a transfer of the freehold on the terms being offered to Red Valley as varied. They allege that Octra's failure to exercise the first right of refusal constituted a breach of trust. They allege that Octra did not do all things reasonably necessary on its part to enable them to have the benefit of the first right of refusal. These allegations are denied by Peter Smyth, Octra and Red Valley. However, there is no suggestion that Octra took any step of the kind referred to in these allegations either after the variation of 1 May 2006, or in response to the Chippers' solicitors' correspondence of 26 and 30 May 2006. I take it that the denials refer not so much to the primary facts embodied in the Chippers' allegations as to the proposition that, for Octra to have failed to act as alleged, constituted a breach of contract and a breach of trust. 43 The Chippers allege that they are, and at material times were, ready, willing and able to perform their obligations under the sub-lease, and under the terms of the contract between Peter Smyth and Red Valley as varied, in so far as it imposed obligations on the purchaser. They say that they are entitled to an order requiring Octra to exercise the first right of refusal under the lease, and to transfer the freehold of the farm to them. These allegations are denied by Peter Smyth, Octra and Red Valley. As the case was conducted at trial, a significant question was whether the Chippers were ready, willing and able to perform the purchasers' obligations under the contract of sale. 44 The Chippers allege that, after the making of the variation on 1 March 2006, Red Valley purported to make contracts to sell portions of the farm to other parties (the fourth respondents). They say that each of those on-contracts is conditional on the settlement of the Red Valley contract as varied, and is subject to the lease, and to their own right to continue possession under the sub-lease. Red Valley admits that it has contracted to sell each of the five lots registered under its own certificate of title and which together constitute the farm, but otherwise denies these allegations. 45 The Chippers next allege that they exercised the option to renew the sub-lease for a further term of 4 years. Both Octra and Red Valley admit that allegation, and accept that the Chippers are entitled to a declaration that they are entitled to a further sub-lease of the farm for the extended 4-year term under the existing sub-lease. 46 In their Application as amended, the Chippers seek declarations that they are entitled to a transfer of the freehold of the farm on the terms of the contract between Peter Smyth and Red Valley as varied on 1 March 2006 and that they are entitled to an extension of their sub-lease. They seek orders requiring Smyth, alternatively Octra, to transfer the freehold of the farm to them on the terms of that contract as so varied. They seek damages for breach of contract. They seek a declaration that their entitlement to a transfer of the freehold of the farm takes priority over the rights of Red Valley and of the fourth respondents. They also seek various other remedies which, for reasons which I need not relate, have now become irrelevant. 47 Red Valley contends in its Defence that, as purchaser of an estate in fee simple of the farm, it has acquired an equitable proprietary interest in the farm in priority to any interest held by the Chippers, or which is superior to, and has extinguished, the Chippers' interest in the farm. In reply to that allegation, the Chippers say that Red Valley has not purchased an estate in fee simple in the farm; that, at the latest immediately before the contract between Peter Smyth and Red Valley was made in September 2005, Octra and/or the Chippers (by virtue of their respective first rights of refusal) acquired an equitable interest in the freehold of the farm; that the contract between Smyth and Red Valley was subject to the terms of the lease and the sub-lease, including the first rights of refusal; that Red Valley was aware of the first rights of refusal held by Octra and the Chippers; that they were not informed of all of the terms of the contract between Smyth and Red Valley prior to 8 November 2005; that their notice dated 15 November 2005 waived their right to acquire the freehold in the farm only in respect of the offer then made by Red Valley, and not otherwise; that the offer involved in the variation completed on 1 March 2006 was not made known to them; that that offer gave rise to an equitable interest in the freehold on the part of Octra and/or the Chippers themselves, as purchasers of the freehold under the terms of a conditional contract; that that offer terminated or modified the equitable interest which Red Valley may have had and, to the extent that it created a new equitable interest, did so not earlier than 1 March 2006; that Red Valley had at least constructive notice of all of the Chippers' rights to, or in respect of, the farm; and that it was not until 10 April 2006 that they became aware of all of the terms of the variation to the contract effected on 1 March 2006. The Chippers say that, to the extent that Red Valley had an equitable interest in the freehold of the farm, it was subject to the first right of refusal in each of the lease and the sub-lease, and that it would be unconscionable for Red Valley now to contend that its contract with Peter Smyth was not subject to the first right of refusal or took priority as against the Chippers' interest. 48 Red Valley cross claims for the removal of the caveat, and for a declaration that the Chippers do not have an interest in the farm such as would enable them to prevent Red Valley being registered as proprietor, or conveying its interest to any other person. It alleges that the Chippers do not have an interest in the farm arising from their first right of refusal, or that any interest which they do have ranks behind that of Red Valley. In their Defence to the Cross Claim, the Chippers admit that Red Valley has an equitable interest in the farm, but say, relying on their Statement of Claim and Reply, that that interest does not have priority over their own. 49 On 4 August 2006, the first four of the fourth respondents were added as parties. On 16 August 2006, the fifth of the fourth respondents was so added. Their interests stand to be affected by the Chippers' claims, but no relief is sought against them specifically. As it happened, they did not appear at the trial. 50 Originally, the Chippers alleged that the execution of the sub-lease by Octra constituted a representation that it would and could cause the transfer of the farm to the Chippers if they exercised their first right of refusal and that the first right of refusal in the sub-lease was valid and effective to ensure that the Chippers had the right to purchase the farm for the same consideration and on the same conditions as the farm was offered to another proposed purchaser; that those representations were made in trade or commerce and were as to future matters; and that the representations were likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act 1974 (Cth). As the case developed, however, the Chippers did not consider it necessary to persist with those allegations, and the case proceeded without further reference to the Trade Practices Act . The promise in question was contained in the lease, and it is to the intentions of the parties to that document that one must turn. In doing so, however, I should be aware of all the circumstances which existed at the time, including the terms of the sub-lease, which was a contemporaneous document manifestly intended to mirror the substantial terms of the lease. 52 All relevant parties agree that the express terms of cl 6(d)(ii) of the sub-lease give rise to an implication as between the Chippers and Octra that Octra was obliged to do all things reasonably necessary on its part to enable them to have the benefit of the first right of refusal contained in cl 6(d)(ii) of the lease. The Chippers, however, go further and contend that Octra held the benefit of cl 6(d)(ii) of the lease on trust for them. They characterise the present proceeding as one in which beneficiaries under a trust join the trustee in an action against the promisor (see Starke, 'Contracts for the Benefit of Third Parties, Part III ' (1948) 21 ALJ 455, 458-459). The respondents deny the trust. They say that the Chippers' rights against Octra are purely contractual, and if it be the fact that Octra did not do everything reasonably necessary to enable them to enjoy the first right of refusal under the lease, the Chippers' remedy would sound in damages only. 53 There is, of course, nothing novel about treating the benefit of a contractual promise as a species of property that may be held on trust: see Heydon and Leeming, Jacobs' Law of Trusts in Australia , 7 th ed, 2006, p 22-23. The trust property is the benefit of the promisor's promise. That was certainly the view adopted by Fullager J in Creamoata Ltd v Rice Equalization Association Ltd [1953] HCA 40 ; (1953) 89 CLR 286, 319. By "the benefit of the promisor's promise" is meant the promisee's right to sue at law for damages or in equity for an injunction or specific performance, should such an occasion arise. 54 In order to understand the submissions made on behalf of Peter Smyth and Octra apropos the Chippers' suggestion that the benefit of Octra's first right of refusal under the lease was held on trust for them, it is necessary to refer to the position that those respondents take about the legal effect of the sub-lease. It is pointed out on behalf of Smyth and Octra that, with insignificant exceptions, the sub-lease was the same as the lease, and that the effect of the sub-lease was to vest in the Chippers everything which Octra itself had under the lease. It is then said that the consequence in law was that the sub-lease operated as an assignment of the leasehold interest, such that Octra no longer had any interest in the land: Milmo v Carreras [1946] 1 KB 306, 310-311; Lee v Ferno Holdings Pty Ltd (1993) 33 NSWLR 404, 410-411. It is submitted on behalf of those respondents that the sub-lease still has contractual force, such that Octra could sue for rent, exercise a contractual power of forfeiture, or re-enter for breach of a condition. It is submitted that, when the lease and the sub-lease were executed, Octra's first right of refusal under the lease was a contractual right, did not involve any interest in the farm as such, and did not 'touch and concern' the interest in land conveyed by the lease: Sandhurst Trustees Ltd v Australian Country Cinemas Pty Ltd [2006] QSC 165. Accordingly, it is submitted, when the sub-lease was executed, the Chippers received the interest in land which was conveyed to Octra by the lease, but the first right of refusal under the lease, being a contractual right only, remained with Octra. Smyth and Octra accept that Octra was obliged to do all things reasonably necessary on its part to enable the Chippers to have the benefit of that right, but no trust thereof was intended. It is said that the parties to the sub-lease did not 'actually' intend that the leasehold interest thereby be assigned to the Chippers: that occurred by operation of law (ie, under the principle in Milmo v Carreras ). 55 I am prepared to accept that, in the circumstances of the present case, by execution of the sub-lease, Octra made itself a stranger to the land in the way described by Lord Greene MR in Milmo v Carreras . I consider that that circumstance, however, is irrelevant both to the present question whether Octra held the first right of refusal on trust and to other questions which have become controversial in this proceeding. As to the trust aspect, the question for the court is whether the contractual promise in the lease was held on trust for the Chippers. That question remains to be answered, by a conventional analysis, whether or not Octra's relevant interest in land was effectively assigned to the Chippers. Indeed, the question would be the same even if the capacity in which Smyth made that promise to Octra were not that of a lessor to his lessee. Smyth and Octra accept that, at all relevant times, Octra was the promisee under the lease in relation to the first right of refusal. The present question is whether it held that benefit absolutely, or on trust for the Chippers. 56 On behalf of Red Valley it is contended that the result of the execution of the lease and the sub-lease was wholly contractual. Peter Smyth leased the farm to Octra, and Octra sub-leased it to the Chippers. Counsel contended that the common law alone would be sufficient to define the obligations arising from those transactions, and that 'equity does not need to intervene'. He pointed out that the present case was not one in which the putative beneficiaries were devoid of any direct contractual basis for enforcing their rights, as was the situation in Trident . He relied upon the express terms of the lease and the sub-lease, and upon the implied term requiring Octra to do all things reasonably necessary. 57 I consider that, essentially, the propositions advanced by counsel for Red Valley beg the question. Merely to assert that the lease and the sub-lease contain a full suite of obligations that would be enforced at law does not come to grips with the question whether the nature of those obligations, and the factual context in which they arose, justify taking the next step of inferring that a trust was intended. Indeed, counsel's propositions about the sufficiency of remedies at law are confounded by his own submission, elsewhere, that the Chippers never had a first right of refusal under the sub-lease because the triggering event, that Octra wished to sell the freehold, did not and could not occur. It does not own the freehold. It cannot form a wish to sell that which it does not own. Whether the implied best endeavours term for which Red Valley contended would be sufficient to overcome the anomaly involved in a literal reading of the sub-lease is a matter to which I shall turn presently. 58 On the other hand, in the facts of the present case, there are several indications of an intention that the benefit of cl 6(d)(ii) should be held on trust. First, there is the nature of Octra itself and its relationship with Peter Smyth. Octra is the Smyths' family trust company. It is inherently improbable that Smyth and Octra contemplated that Octra itself might have desired to take beneficially under the first right of refusal. Had it exercised that right other than in the interests of the Chippers, the persons beneficially entitled would have been Smyth and the other members of his family. In other words, Smyth would effectively have been giving himself a first right of refusal --- an outcome which must be regarded as curious. 59 Secondly, there are the circumstances in which Octra was introduced into the relationship between Smyth and the Chippers. This was done, it seems, because of taxation benefits that would accrue to the Smyth family. I infer that Smyth would not have intended that the Chippers would be any worse off as a result of the arrangement than if they had been the lessees directly (in which case, of course, they would have had the direct benefit of the first right of refusal in the lease). Such an inference is confirmed by the way David Smyth dealt with the Chippers during the period in which he was originally seeking a buyer for the farm and later pressing the Chippers as to whether they were prepared to buy the farm for the price and on the conditions agreed with Red Valley. 60 Thirdly, there are the terms of cl 6(d)(ii) of the sub-lease. They speak of the sub-lessor wishing to sell the freehold. That could occur only if the sub-lessor had the freehold and, given the subject-matter of the provision and the contemporaneity of the execution of the lease and the sub-lease, it is a small step to infer that the parties had in mind that the most obvious means by which Octra would come by the freehold would be by exercising its own right of first refusal under the lease. I can think of no other reason for the reference to the freehold in cl 6(d)(ii) of the sub-lease than to require Octra to hold its own rights under the corresponding provisions of the lease for the benefit of the Chippers. 61 Fourthly, there is the implied obligation upon Octra to do all things reasonably necessary on its part to enable the Chippers to have the benefit of the right of first refusal of the lease (upon which all parties are agreed). Although it is true that such an obligation does not point uniquely to a trust, it is descriptive of a duty which a trustee would have in the circumstances. Octra was in effect under a contractual obligation to exercise its own right of first refusal under the lease for the benefit of the Chippers. That Octra should have been willing to accept a contractual obligation of this kind strongly bespeaks an intention to create a trust. Put another way, the existence of the implied obligation effectively excludes the possibility that Octra might have exercised (or chosen not to exercise) its right to buy the farm in priority to other intending purchasers in its own interests only; and if so, the only other parties in whose interests it might have done these things were the Chippers. If the legal position arising from such a conclusion is something short of a trust, it is a distinction which I find difficult to follow. 62 It may be useful to consider the implied term to which I referred in the previous paragraph in a little more detail. As formulated, it sounds reasonable enough, but what would it mean in practice? What would Octra have been required to do to give the Chippers the benefit of the first right of refusal in the lease? If a situation arose in which Peter Smyth proposed to offer the land for sale for a particular price and on particular conditions, presumably (absent a trust) it is suggested that Octra would exercise its own first right of refusal under the lease (so that the land was not, by Octra's inaction, sold to a third party). Having entered into a contract to purchase the land with Smyth, what was Octra to do next? Perhaps it was obliged to assign its rights under that contract to the Chippers. Or perhaps it was obliged to purchase the freehold and then to re-transfer to the Chippers. Or perhaps there might have been other outcomes. The fact is that, if the Chippers had no more than contractual rights against Octra in relation to the implied term, the practical working out of those rights, and the identification of precisely when Octra would have been in breach of the term by having failed to take precisely what step, would have been problematic to say the least. The inference that a trust was intended is, I consider, strengthened somewhat by reason of the simplicity and obviousness of such an outcome. 63 For the above reasons I hold that Octra held the benefit of Peter Smyth's promise under cl 6(d)(ii) of the lease on trust for the Chippers. Clause 6(d)(ii) contains three sentences. The first sentence requires the lessor to give the lessee one month's notice of intended sale, prior to advertisement. The purpose of this is twofold. First, the giving of such notice is a pre-condition to the lessor's right to bring prospective purchasers onto the farm for inspection as provided for in the second sentence. Secondly, the notice will give the lessee an interregnum, as it were, during which to consider the exercise of the first right of refusal for which the third sentence provides. I shall consider each in turn. 65 Superficially, identifying the trigger under cl 6(d)(ii) is a simple matter: it is the lessor's offer of the property for sale to another proposed purchaser. At this level, there was no controversy about the construction of the provision in this proceeding. The real controversy in the present case concerns the operation of the provision in circumstances where the vendor has complied with the primary obligation to give the lessee the first right of refusal, where the lessee has refused, where the vendor has entered into a contract of sale with a third party, and where that contract is later varied, before settlement, to the advantage of the third party. Does the vendor then have to return to the lessee with the contract as varied, or as proposed to be varied, and give the latter another opportunity to refuse, or to accept, the vendor's offer on the newly-established terms? 66 Peter Smyth and Octra (supported by Red Valley) contend that, where the lessee has been given, and has rejected, the opportunity to purchase under terms being offered to another purchaser, only a second or subsequent offer to that other purchaser which differs materially from the original offer which was rejected by the lessee need be the subject of a further opportunity to refuse under this provision of the lease. They contend that the draftsman could not have intended that the lessee would be presented with the opportunity to purchase at a price, or under conditions, which did not differ materially from those previously offered, and rejected. It was submitted on behalf of the Chippers, by contrast, that to require a departure from a previous offer to be 'material', would be to introduce uncertainty, and great scope for disputation, into the terms of an otherwise uncomplicated provision. 67 I must confess to a difficulty with the proposal to introduce, by implication, a requirement of materiality into cl 6(d)(ii). The word itself is of flexible content; if it were expressly in the provision, the court's first task would be to give it a meaning in context. It may be thought a curious approach to the construction of an uncomplicated provision to introduce a word by implication, only then to face the task of construing that word. The problem is demonstrated by the facts of the present case. It became clear that the respondents' purpose in having the court construe cl 6(d)(ii) as though it were limited by an implied requirement of materiality was not so much the achievement of that implication in itself as the assignment of a particular connotation to the word 'material' which suited their case. Thus, to make the implication would be only the first, and manifestly the less contentious, of the two steps in their argument. 68 If the word 'material' were by implication read into the third sentence of cl 6(d)(ii), on one view it would mean no more than 'relevant' and would present no problems for the Chippers in this proceeding. An example of the latter may be seen in the facts of the present case. Condition 15 of the contract between Peter Smyth and Red Valley gave Red Valley a period of grace within which to consider the acceptability of the terms of the lease to which the farm was then subject. Such a condition would have made no sense in a contract in which the lessee was the purchaser. If the concept of materiality is given a connotation which goes no further than the two provisos to which I have referred, there could be little harm in making the implication. For my own part, I would prefer to reach the same result by a direct process of construction in the manner suggested. If it is suggested that the concept of materiality should have a wider role than this, I would reject the suggestion that it should be used. In particular, I think it would be out of harmony with the scheme of the provision to render it inoperative when a later court might be persuaded that the substantive difference between terms now being offered and terms previously rejected was immaterial only in the sense of being somewhat unimportant. The scheme of the provision is that relative importance is a matter for the lessee. 69 Peter Smyth, Octra and Red Valley also submit, in effect, that the third sentence of cl 6(d)(ii) is exhausted once a contract of sale is entered into with a purchaser other than the lessee (assuming always that the lessee will have been offered, and will have rejected, the opportunity to buy under the relevant price and conditions). They submit that, short of making a new contract with the other purchaser, any subsequent variation of the existing contract with that purchaser will not give rise to a fresh 'offer for sale' within the meaning of the provision. 70 I would accept that, in its most obvious setting, the third sentence of cl 6(d)(ii) is intended to operate prior to a contract of sale being executed. Indeed, execution of a contract under which the land is sold to 'any other purchaser' without the lessee first having been given a right of refusal would be the clearest instance of a breach of the provision. To identify what might be regarded as the paradigm case, however, does not necessarily confine the operation of the provision to those circumstances. The question is not whether the land is offered for sale simpliciter --- it is whether the land is offered for sale for a consideration, and under conditions, which were rejected by the lessee when given the first right of refusal. I do not believe that this question is necessarily to be answered only by reference to the existence or otherwise of a binding contract for sale. The answer in a particular case will depend on the facts, and should not, in my view, be approached a priori on a particular jurisprudential basis that would deflect attention away from those facts and the application to them of the words used in the provision. 71 The third sentence in cl 6(d)(ii) of the lease appears to contemplate, not unreasonably, a vendor wishing to maximise the price for which, and to optimise the conditions under which, he or she would sell the land in question. It contemplates that the vendor might, at first at least, find purchasers unwilling to accept the terms thus proposed. It contemplates, in other words, a situation in which alternative, or successive, purchasers would refuse to accept the vendor's terms. The vendor may have to reduce the price, or make the conditions more attractive to a purchaser, in order to achieve a sale. In this process, it is the lessee who must, at each stage, be given an opportunity to be the first in line to refuse the vendor's price and conditions. That such a cascading series of offers, or opportunities to purchase, is contemplated by a provision such as this was the construction adopted in reaction to a similar provision by Madgwick J in White Property Developments Pty Ltd v Richmond Growth Pty Ltd [1998] FCA 26 , and it is a construction with which I respectfully agree. Consistently, it seems to me, if a contract of sale is made with a third party, but is later terminated before settlement, any new contract with the same or another third party on terms more favourable to the purchaser ought to be regarded as another offer for sale. Whether a variation to the original contract (rather than a termination thereof) on terms more favourable to the purchaser would be regarded as another offer for sale will, in my view, be a question of fact. The prospect that there might be an affirmative answer to that question should not be excluded a priori on the mere basis that there had been a variation, rather than a termination followed by another contract. 72 I would hold that the vendor's obligation to offer the lessee the opportunity to be the first to refuse is not necessarily forever brought to an end by the execution of a contract of sale between the vendor and a third party purchaser. 73 I turn now to the second issue to which I referred in par 64 above: once brought into operation, how does the third sentence in cl 6(d)(ii) operate? What rights does the lessee have upon the operation of the provision being 'triggered'? There are two Australian judgments which are frequently cited in this general area. The first is that of Street J in Mackay v Wilson (1947) 47 SR (NSW) 315. Under a sale of business agreement, the purchasers were given a 'first option for purchasing the property'. When subsequently they sought to exercise what they regarded as an option, the vendors (who by then did not wish to sell the property for the price agreed) claimed that the agreement gave the purchasers no more than a right to be first in line when there were two or more prospective purchasers. The actual outcome of the case has little to do with first rights of refusal, since a majority of the Full Court held that the agreement gave the purchasers an option which could be exercised at any time. The agreement to give the option imposes a positive obligation on the prospective vendor to keep the offer open during the agreed period so that it remains available for acceptance by the optionee at any moment within that period. It has more than a mere contractual operation and confers upon the optionee an equitable interest in the land, the subject of the agreement: see, for example, per Williams J in Sharp v The Union Trustee Co of Australia Ltd [1944] HCA 35 ; (1944) 69 CLR 539 at 558. But an agreement to give "the first refusal" or "a right of pre-emption" confers no immediate right upon the prospective purchaser. It imposes a negative obligation on the possible vendor requiring him to refrain from selling the land to any other person without giving to the holder of the right of first refusal the opportunity of purchasing in preference to any other buyer. It is not an offer and in itself it imposes no obligation on the owner of the land to sell the same. He may do so or not as he wishes. But if he does decide to sell, then the holder of the right of first refusal has the right to receive the first offer, which he also may accept or not as he wishes. The right is merely contractual and no equitable interest in the land is created by the agreement. There, a landowner and his tenant were parties to an agreement in which the landowner covenanted that, after his death and that of his wife, his executors would give to the tenant 'the right of first refusal to purchase' the land in question for a stated price. Their Honours held that, although a 'right of first refusal [meant] a right of pre-emption', they did not regard the expression 'as bearing any very strong or clear prima facie meaning' (92 CLR at 260). They noted, in the facts before them, 'quite strong indications that something real and immediately effective is intended to be given as at a fixed point in time' (at 261) and held that, on the death of the survivor of the landowner and his wife, there was an offer to the tenant for the sale of the land which could be accepted. The term "first refusal" is not a technical term. It is a colloquial term, and indeed a somewhat inept term, because what the potential offeree wants is an opportunity of accepting an offer rather than an opportunity of refusing an offer. It may, and does, occur in various phrases, such as "give the first refusal", "have the first refusal", "give the right of first refusal", "have the right of first refusal", etc. And these phrases may be found in various contexts. It seems clear that a mere promise to give the first refusal should be taken prima facie as conferring no more than a pre-emptive right. If I promise to give you the first refusal of my property, I am making prima facie only a negative promise: I am saying: "I will not sell my property unless and until I have offered it to you and you have refused it". The safer and sounder course is to regard it as an expression of fairly flexible import, to look at the whole of what the parties to an instrument have said, and in the light of that whole to determine whether they have or have not conveyed an intention that an immediate offer is being made or is to be made. Everything will depend on the terms of the instrument by which the right is granted. Not infrequently, a promise of a first right of refusal will be made with less definition that might be ideal, or in terms that are 'so loose and colloquial that it could not be supposed that they would be employed in a professionally drafted document unless the means by which effect is to be given to them are also carefully spelt out': Goldmaster Homes at [39]. On the other hand, once it be accepted that the terms of the instrument of grant will govern the content of the grantor's obligation, there seems no reason why, where the instrument is well-drawn, it might not produce a result which is not only unambiguous but in which it is possible to identify the timing and nature of the grantee's rights in particular circumstances. 76 In cl 6(d)(ii) of the lease in the present case, the lessee's right of 'refusal' is, I consider, a right to refuse (or, necessarily, to accept) an offer to purchase the freehold. The lessor's corresponding obligation has both a negative aspect and a positive aspect. In its negative aspect, it involves an implied covenant that the lessor will not sell the land to a third party without first offering it to the lessee for the same price and on the same conditions as are involved in the sale, or proposed sale, to the third party. I do not hold that a mere offer to the third party without an earlier offer to the lessee would involve a breach of the implied negative covenant. The use of the present tense in the subordinate clause shows that such an offer may be made. However, as between the lessor and the lessee, it would be a breach of the clause for the lessor to put it beyond his or her power to prevent a contract of sale with the third party coming into existence without the lessee being given a right to refuse or accept on the same terms. Thus a conditional offer to the third party, in which that party's rights were subordinated to those of the lessee, would not involve a breach of the implied negative covenant. However, the authorities (to which I shall turn in another context) demonstrate that the execution of a contract of sale with another person, without any offer having been made to the lessee, should generally be regarded as a breach of the negative covenant. 77 In its positive aspect, the provision in the lease requires the lessor, on the occurrence of the triggering event, to make an offer to the lessee for the same price, and on the same conditions, as are involved in the sale, or proposed sale, to the other. The question may arise in some cases whether the lessor is under an implied obligation to leave the offer open for a reasonable period of time. However, if a contract for sale is entered into with another person without an offer having been made, generally it would be held that a failure to make an offer at all constituted a breach of the positive aspect of the provision. I commence with condition 15 of the contract between Peter Smyth and Red Valley executed on 19 September 2005. Fairly clearly, the first sentence thereof makes the existence of the contract subject to Red Valley's satisfaction with the terms and conditions of the lease. An issue arises concerning the second sentence, however. What happens if, within the 28 days, Red Valley did not provide any confirmation as to its "satisfaction or otherwise"? On one view, there can be no contract unless and until Red Valley provides that confirmation, albeit that Red Valley might be in breach of the single obligation which did have contractual force, namely, to provide confirmation within 28 days. On another view, Red Valley had 28 days within which to examine the lease and the sub-lease, after which the contract would be unconditional. The dynamics of the relationship between those representing Peter Smyth on the one hand and those representing Red Valley on the other hand in the period between October 2005 and February 2006 suggests that each side may have perceived a risk that an outcome adverse to its own interests might ensue as a result of the operation of condition 15. The subsequent acts of the parties, however, do not resolve the question of construction. I consider that the second construction to which I referred is the correct one, namely, that Red Valley had 28 days within which to express its satisfaction or otherwise, and if it did not do so, the contract became unconditional after the 28 th day. In part I so conclude because condition 15 was requested, and drafted, by King on behalf of Red Valley. In part I am influenced by the purpose of the condition: to give Red Valley an opportunity to peruse the lease and the sub-lease, not an opportunity by procrastination to defeat the intent of the contract as a whole. And in part I base my conclusion on the oddity of the alternative construction --- that, on 19 September 2005, the only contract which the parties made was one in which Red Valley promised to confirm its satisfaction or otherwise within 28 days. 79 It follows that the contract of 19 September 2005 would have become unconditional on 17 October 2005. That was, however, the date of the first variation to the contract signed on behalf of the parties on 17 and 22 November 2005. Although not signed until about a month later, the date of the document itself, together with the coincidence of the expiry of the 28 days under condition 15, leads me to conclude that the parties intended that the variation should be operative from 17 October 2005. It follows that the contract remained conditional at that stage. 80 However, although the conduct of Anderson may be regarded as bespeaking a different view, I consider that, when 15 December 2005 passed, the contract became unconditional and Red Valley lost its opportunity to avoid the contract on the ground of its non-satisfaction with the lease pursuant to condition 15. Red Valley was then obliged to pay the deposit by 22 December 2005. It did not do so. Under the General Conditions for the Sale of Land (2002 Rev) published by the Law Society of WA and the Real Estate Institute of WA, which were incorporated, Smyth had the ability to require Red Valley to pay the deposit within 48 hours and, in default of payment, to terminate the contract. This was not done. It was apparent from the evidence of David Smyth that he regarded Red Valley as presenting the only realistic prospect of a sale at that time. However that may be, in circumstances where his father could have terminated the contract, he instead procured Woolcock to do what he could to hold Red Valley to the contract it had signed. 81 But David Smyth did not seek to hold Red Valley to the contract in its then terms. To the contrary, he pressed Red Valley for a variation to the contract. Under the variation executed on 1 March 2006, a first instalment of the deposit ($90,000) was payable within 7 days, and the balance by 31 May 2006. The question which arises is whether in the circumstances that variation involved an offer of the farm to Red Valley --- and, should it matter, an agreement to sell the farm to Red Valley --- distinct from that which had been rejected by the Chippers in November 2005. Under the agreement of 19 September 2005, a payment of $10,000 was due on that day and a further $130,000 was due by 18 November 2005. For a purchase under which settlement was not due until 19 September 2006, to have been denied the use of the deposit moneys for about 10 months would, I infer, have been regarded by Red Valley as being commercially detrimental. In chief, on the subject of splitting the deposit, Anderson said that he did not like "having $140,000 sitting around in an agent's trust account doing nothing for so long". Under cross-examination, he made it clear that he did not like the idea of having $50,000 of his own money in an Elders' trust account "so it can sit there for the next year when there is litigation on hand". 82 I consider that the obligation to pay $90,000 by 8 March 2006 and a further $50,000 by 31 May 2006 was, for Red Valley, a very different thing from its obligation under the agreement of 19 September 2005 --- to pay $10,000 then and a further $130,000 by 18 November 2005. Both because of the clearly more beneficial (for the purchaser) terms of the agreement of 1 March 2006, and because, as a matter of commercial reality, that agreement was sufficient to restore Anderson's commitment to the purchase, I consider that Smyth's assent to the variation should be characterised as an offer for sale in its own right. Both legally and commercially, what arose from the transaction concluded on 1 March 2006 was a consensus quite different from that of the previous September: should it be necessary, I would go to the extent of saying materially different. 83 The Chippers were entitled to be given a first right of refusal to purchase the farm on the same conditions as were involved in the Red Valley contract of 1 March 2006. Manifestly, this did not occur. To the contrary, Peter Smyth not only failed to offer the farm to the Chippers on those conditions: he bound himself to sell it to Red Valley. He was in breach, therefore, of both the negative and the positive aspects of his contractual obligations under the first right of refusal in the lease. Ignoring for a moment the position of Red Valley itself, it is hard to see why an injunction would not go in the circumstances. As noted above, one aspect of the first right of refusal in the lease is the negative covenant. The contract of sale with Red Valley was a breach of that covenant. The performance of that contract could be restrained before registration of the transfer. As between Octra (and therefore, beneficially, the Chippers) and Smyth, the case for an injunction would seem to be unanswerable. 85 The real problem, of course, is that the making of such an injunction would oblige Smyth to break his contract with Red Valley. Smyth could not, of course, be heard to complain about that circumstance. But what of Red Valley, considered as a third party seeking to uphold its own contractual rights? 86 Here one finds the applicable principle in the judgment of the English Court of Appeal in Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37. In that case the canal company and the racecourse company owned adjoining lands. Negotiations followed, but the parties were a distance apart on price --- the racecourse company suggesting that the land was worth ₤350,000 and the canal company being prepared to offer ₤200,000. At this point, it appeared that the negotiations had broken down. Unbeknownst to the canal company, the racecourse company then offered the land to a third party for ₤300,000, and ultimately entered into a contract to sell it to the third party for ₤280,000. The court held that the offer to the third party was a breach of the term requiring the racecourse company to give the canal company the first refusal. It held that the former could not rely on its unrealistic offer of ₤350,000. 87 At first instance, Farwell J granted the canal company an injunction restraining the racecourse company from selling the land to any person or company without having first offered it to the canal company at the same cash price as the third party offered, and an injunction restraining both the racecourse company and the third party from completing or carrying out their contract. The Court of Appeal considered what objections there might be to those injunctions. The third party, which had been joined, said that the agreement could not be enforced against it, as it was only the alienee of the land. Farwell J had answered this point by holding that the provision in the agreement gave the canal company an interest in land ([1900] 2 Ch 352, 366). This seems to bring the case within the principle of Lumley v Wagner 1 D M & G 604. The contract here to give the canal company the "first refusal" involves a negative contract not to part with the land to any other company or person without giving that first refusal. If the action had been brought against the racecourse company, the party to the contract, alone, the injunction asked for could not have been granted without affecting the rights and interests of the [third party]. They are necessary parties to the action ...; and, if the [third party], thus brought in, comes and insists on his right to have the second contract carried out, we do not see why the injunction should not be granted against him. 88 In Pritchard v Briggs [1980] Ch 338 (to which I shall refer below), Goff LJ described Manchester Ship as 'the extremely important and controversial case' (at 390). The point of controversy, however, seemed to be the Court of Appeal's finding that the canal company did not have an interest in land, rather than the appropriateness of so much of the judgment as held that an injunction might go in circumstances where the third party, with knowledge of the canal company's rights, sought completion of its later contract to purchase the land. Indeed, his Lordship held that Manchester Ship was authority for the proposition (rejected by the majority in Pritchard v Briggs ) that 'in general a right of pre-emption does not create an interest in land'. (at 393) Templeman LJ did not mention Manchester Ship , and while Stephenson LJ described it as a 'somewhat unsatisfactory decision' (at 423), again his Lordship was dealing with the question of an interest in land, rather than the point with which I am presently concerned. 89 I have not observed any suggestion that Manchester Ship is not, in presently relevant respects, still good law in Australia. Fullagar and Kitto JJ discussed it extensively without criticism in Woodroffe v Box (92 CLR at 256-257). The lessee shall have fourteen (14) days from the date of service upon him of such notice in which to exchange Agreements for the purchase of the demised premises upon the terms and conditions contained in the said Agreement for Sale. In the event that the lessee does not exercise his right of first refusal as contained in this clause by exchanging the said Contract for Sale for the purchase of the demised premises such right shall lapse absolutely and the lessor shall be free to sell the demises premises without any restrictions whatsoever. He asked the lessee's representative if he were interested in purchasing at a price of $1.6 m. The latter said that such a price was more than the land was worth by a considerable margin. Some time later, the two men had a further conversation, in which Kearney J found that the lessee's representative had said that the property was worth approximately $600,000 and the lessor had said that he wanted $1 m. The lessor then entered into a contract with the third party by which the latter was granted an option to buy the land for $1 m., and subject to detailed conditions by which the sale, if the option were exercised, would be governed. One of those conditions was that possession would be 'subject to existing tenancies and occupancies under the vendor, as particularised in the third schedule'. The lease was referred to in that schedule, and a copy was attached. When the lessee learnt of this transaction, and after an attempt by its solicitors to achieve an accommodation with the lessor by correspondence, it instituted proceedings in which it sought an injunction restraining the lessor from selling, and later joined the third party (and its nominee under the option) from exercising the option. There were interlocutory orders made at various stages (during which, seemingly in breach of one of those orders but without knowledge of it, the third party purported to exercise the option), but an understanding of the point of principle by reference to which Kearney J finally disposed of the litigation does not require an examination of those orders or the circumstances in which they were made. 91 In Sterns Trading the lessee relied upon Manchester Ship for the principle that an injunction would go to restrain an act in breach of a negative stipulation in a contract (ie the negative stipulation implicit in a first right of refusal) and that the third party, who had contracted in full knowledge of the stipulation, would not be heard to resist the injunction. It seems that the lessor did not engage the lessee at this level. The third party and its nominee, however, contended in their cross claim that the nominee had an equitable interest in the land, and that the lessee was therefore confined to its remedy in damages. Kearney J dealt with that contention by holding that, at the moment the lessor granted the option to the third party, the lessee acquired an equitable interest which was superior to that of the third party. The judgment of the Court of Appeal in that case is, I consider, authority for the proposition that, where an intending purchaser of land, having knowledge of another person's first right of refusal under a prior contract with respect to the land, enters into a contract in circumstances which constitute a breach by the vendor of his or her obligation to offer that first right to the other person, the interest which equity would otherwise recognise as coming into existence upon execution of the later contract will not stand in the way of the vendor, and the intending purchaser, being enjoined, at the suit of the other person, from completing that contract. 92 The principle which I have extracted from Manchester Ship requires, of course, that the third party purchaser know of the pre-existing rights of the holder of the first right of refusal. In the present case, Anderson had read both the lease and the sub-lease. He knew of the first rights of refusal held both by Octra and by the Chippers. In 2005, he had been concerned to avoid getting involved in a court case arising out of a failure by Peter Smyth to give effect to these rights. But what was Anderson's state of knowledge come 1 March 2006? He said that he did not then believe that the Chippers had any right to seek to buy the farm, and that he did not believe the Chippers were interested in buying the farm. Anderson's belief as to the Chippers' rights was, as expressed, a belief as to a matter of law. To this point in these reasons, I have held the contrary. However that may be, such a belief is of a different quality from the kind of knowledge necessarily involved in the Manchester Ship principle. 93 As to Anderson's belief that he did not believe that the Chippers were interested in buying the farm, so much may be accepted. It may also be accepted that, as at 1 March 2006, the Chippers had not communicated to David Smyth an intention to buy the farm. But neither the Chippers' then intentions nor Anderson's belief on the subject is the issue which arises under Manchester Ship . The issue concerns Red Valley's knowledge of the fact that the Chippers were not given the opportunity to buy the farm on the terms newly agreed by Peter Smyth and Red Valley on 1 March 2006. 94 The factual backdrop to a consideration of this issue includes Red Valley's knowledge of the terms of the lease and of the presence of the first right of refusal therein and the fact that the variation to the contract with Peter Smyth, ultimately agreed to on 1 March 2006, was under discussion as between Woolcock and King in February. It is obvious, from the tenor of his evidence, that Anderson did not consider that there was any need to consult the Chippers again. There is no reason to infer that he assumed that David Smyth might have done so; but the fact is he gave no evidence one way or the other on that aspect. Had Anderson believed (contrary to the fact) that the Chippers had been given an opportunity to buy the farm on the conditions of 1 March 2006, it would have been in his interests to say so, and to state the grounds on which he held that belief. He did not do so; nor did Red Valley allege in its Defence that it had such grounds. King, who was the person dealing with Woolcock on behalf of Red Valley in relation to the variation, would have been ideally placed to state such grounds, if there were any. He was not called. I infer, in the circumstances, that Anderson simply assumed that the Chippers (and Octra) did not need to be given a further opportunity to buy the property, and that he either assumed that they had not been, or did not give the question any thought at all. I find that King had no reasonable grounds to believe, contrary to the facts, that such an opportunity had been given. I would find, therefore, that Red Valley was, on 1 March 2006, in the position of a purchaser with notice of a contravention of an earlier first right of refusal for the purposes of the principle in Manchester Ship . In the present case, I consider that, in circumstances where Red Valley chose to make no inquiries as to whether the Chippers had again (ie in late February 2006) been given the opportunity to buy the farm on the newly-agreed conditions, it is fixed with notice of the fact that no such opportunity was given. 96 For the above reasons, I consider that the Chippers would be entitled to an injunction to restrain Smyth from conveying the freehold of the farm to Red Valley, and to restrain Red Valley from taking such a conveyance. As it happens, the Chippers do not claim an injunction: they seek specific performance of Smyth's promise in cl 6(d)(ii) of the lease, to the benefit of which they claim to be, and I have held them to be, beneficially entitled. It is to that subject that I next turn. It is generally assumed that, prima facie at least, damages will be an inadequate remedy where a party refuses to make, or to accept, a conveyance of such an interest. In the present case, there is nothing in the facts which would lead to a contrary conclusion. If the position is such that, contractually, the Chippers (or, more specifically, Octra as their trustee) became entitled to a transfer of the freehold in the farm, there is nothing in the particular combination of facts in the present case which would make damages an adequate remedy. 98 The real issues on the matter of specific performance are, first, whether the Chippers did become entitled to call for a conveyance of the freehold in the farm; secondly, whether Red Valley's interest under its contract with Peter Smyth would be regarded by equity as superior to the interest of the Chippers in having the lease specifically performed; and thirdly, whether the Chippers were, and are, ready and willing to perform the obligations of purchaser under the contract by which they claim to be bound. 99 In considering the first question, I have found it useful to commence with the judgment of Tipping J in Motor Works Ltd v Westminster Auto Services Ltd [1997] 1 NZLR 762 (to which Warren J referred in Bob Jane T-Marts Pty Ltd v The Baptist Union of Victoria [1999] VSC 346 , [17]-[18]). As in many of the authorities to which I have been referred, Motor Works involved the question whether a caveat had been properly lodged by the holder of a first right of refusal and the question, therefore, of whether, and in what circumstances, such a holder had an interest in land. Stage two is reached when a triggering event occurs requiring an offer to be made to the person with the right of pre-emption. Stage three relates to the time after an offer has been made pursuant to the right of pre-emption and stage four, for completeness, relates to the stage, if reached, when a contract results from the acceptance of such offer. Equally clearly, when the fourth stage had been reached, the purchaser had an equitable interest. As to stage three, where an offer had been made but not yet accepted, his Honour held that the situation could not be materially distinguished from an option in the conventional sense, 'and this creates an interest in land'. In that respect, his Honour referred to Morland v Hales (1910) 30 NZLR 201 and to Bevin v Smith [1994] 3 NZLR 648. To those authorities I would add, in the Australian context, Laybutt v Amoco Australia Pty Ltd [1974] HCA 49 ; (1974) 132 CLR 57, 75-76. 100 Tipping J observed that difficulties arose at the second stage. At this sage an event has occurred which requires the vendor to make an offer to the person holding the right of pre-emption but no such offer has been made. The distinction between stage two and stage one is that at stage one no triggering event has occurred. That is why at that stage it is clear no interest in land can arise because the vendor may never wish to sell during the currency of the right. At stage two the vendor has decided to sell but, in breach of the right, has failed or refused to make the necessary offer to the holder of the right. It is at this point that the holder of the right will usually be most vulnerable. Clearly an injunction may be appropriate but a caveat may well be better because of its effect as notice to others interested in buying. When analysing the point at stage two, it should not matter whether the right of pre-emption is couched as a negative covenant or as positive one, ie not to sell without first offering as opposed to offering before looking elsewhere. In substance the effect is the same. Once a triggering event has occurred, the holder of the right is entitled to receive an offer. The Court can undoubtedly restrain the vendor from offering to a third party without first making an offer to the holder of the right. More difficult is the question whether the Court can order the vendor to make an offer to the holder, a type of specific performance. The vendor may say that if he cannot sell to the third party he repents of his wish to sell at all and thus he cannot be required to submit an offer to the holder. On the other hand, there is greater force in the view that once the triggering event has occurred the holder is contractually entitled to an offer and the Court should order a reluctant vendor to make an offer. In this respect the exact terms of the right may be important. In the present case the right is expressed as springing up "in the event the Landlord wishes to sell". There was here an overt manifestation of that wish. Without something over the point may well be academic. Following that over manifestation it was the duty of the landlord to offer the premises to the tenant first. Subject to questions of certainty, I consider the tenant was thereupon entitled to seek an order in the nature of specific performance requiring the landlord to make the appropriate offer. There may be difficulties about the terms on which the offer is to be made. The Court cannot act without sufficient certainty of terms. Thus, if there has been no overt manifestation of the terms which the vendor is prepared to accept elsewhere the matter can hardly proceed any further. The court cannot tell the vendor what the terms should be. Without prejudice to the question of an injunction, before any question of specific performance can arise, not only must the vendor have manifested a wish to sell but he must also have manifested the essential terms upon which he is willing to sell. Then, but only then, can there be any question of specific performance. Unless the court can order specific performance I do not see how the holder of the right of pre-emption will not have an interest in land unless and until the circumstances are such that specific performance can be ordered and the vendor thereby required to make an offer on sufficiently certain terms. In the light of the evidence in the present case, this state of affairs, ie stage two, may well have prevailed at an earlier stage. Earlier events are now, however, academic and there is no utility in my discussing them. I am faced with the fact that ultimately Westminster Auto did make an offer to Motor Works which offer was refused. Westminster Auto is now free to make the identical offer or an offer no more favourable to the offeree to anyone else it chooses. I consider that Motor Works is now back to being the holder of a bare right of pre-emption. A further triggering event will be necessary before Motor Works could claim that stage two has been reached again. That triggering event would be a decision by Westminster Auto to make an offer to sell more favourable to the offeree than the offer made to Motor Works and declined by it. There is nothing at the moment to say that Westminster Auto will decide to do that; for example, by reducing the price. Thus for the purposes of the caveat I am of the view that while Motor Works may earlier have had an interest in land (a point requiring no final decision), it cannot be said that as things stand at the moment they do have any interest in land. There is nothing of which specific performance could presently be ordered. Thus their caveat, even if originally justified, cannot be justified in present circumstances. What is significant about Motor Works in the present context is his Honour's suggestion that no question of specific performance could arise unless the vendor had manifested the essential terms upon which he was willing to sell, but that, once such manifestation had been made, the tenant was entitled to seek specific performance requiring the landlord to make the appropriate offer. In the present case, by 1 March 2006, Peter Smyth had manifested the precise terms of the contract upon which he was prepared to sell the farm and, if Tipping J's judgment correctly states the law, Octra was (and therefore the Chippers were) entitled to specific performance of Smyth's promise to make an offer on those terms. 101 I consider, however, that the jurisprudence in this area has advanced to the point where the holder of a first right of refusal which has fructified in the sense that the triggering event has occurred, and the terms upon which the vendor is prepared to sell are precisely defined, when faced with a vendor who refuses to make an offer, and upon demonstrating that he or she is otherwise ready and willing to perform his or her obligations in accordance with those terms, is entitled not merely to an order that the vendor make the appropriate offer, but to an order requiring the vendor to make the conveyance, on compliance with the terms. I do, of course, confine that generalisation to a first right of refusal expressed as appears in the lease in this case, namely, where the vendor promises that the holder shall have a first right of refusal for a price, and on conditions, which are sufficiently identified. As I read the authorities, the law now regards the holder of a first right of refusal in such a situation in the same way as it would regard the grantee of an option faced with a refusal by the vendor to convey the subject property. 102 The starting point in contemporary English law is the judgment of the Court of Appeal in Pritchard v Briggs [1980] Ch 338. The facts were rather unusual, in that the freeholders, Major and Mrs Lockwood, had executed two separate agreements with different people in relation to the same land. On the other hand, the covenant with Pritchard was a true option, in that, for a period of three months after an event which had to happen at some stage, he could by his own act, and without any further assent of the personal representatives of the surviving Lockwood, bring a contract of sale into existence. Both covenants were registered under the Land Charges Act 1925 (UK). 103 Mrs Lockwood died before her husband. In October 1971, Major Lockwood had become infirm to the extent of being unable to manage his own affairs, and an order was made under the Mental Health Act 1959 (UK) with respect to his estate. There were certain proceedings in the Court of Protection, the details of which I need not relate; but the result was that, in August 1972, Lockwood's receiver entered into a contract for the sale of the land to the Briggs. However, the contract had not been completed when, in January 1973, Lockwood died. Within the 3 months specified in his agreement with the Lockwoods, Pritchard served a notice on Lockwood's personal representatives purporting to exercise his option. The question for the court was whether the Briggs, under their executed but uncompleted contract of sale, or Pritchard, under his option, were entitled to the land. 104 The Court of Appeal held, in effect, that, in order to defeat Pritchard's registered option, the Briggs had to establish that their right of pre-emption (ie their first right of refusal) constituted an interest in land with priority over Pritchard's option. Each member of the court held that it did not. A majority --- Templeman and Stephenson LJJ --- however, held that, had the event which triggered the Briggs' right to be offered the land occurred before the Lockwood's death, the Briggs would have had priority. That it thereby becomes an interest in land is a change in the nature of the right to which, unlike Goff LJ, I see no insuperable objection in logic or principle. And, as I understand his opinion on this point, its consequences would be that a right of pre-emption could never be enforceable against a successor in title whether it is registered or not. I accordingly prefer the opinion of Templeman LJ on this point. I am concerned with the question whether the offer of the land for sale to Red Valley, and the execution of a (varied) contract in that behalf, effectively converted the Chippers' rights into an option. If I were to follow Pritchard v Briggs , I would hold that they did. The tenant sued on the provision set out above. A vendor can hardly evince a desire to sell land more clearly than by contracting to sell it. 106 In Tuck v Baker [1990] 2 EGLR 195, land was sold under a contract which, for the next 21 years, effectively gave the vendors a right of pre-emption to re-purchase the land, should the purchasers wish to sell. The relevant provision in the sale agreement was expressed as a negative covenant not to sell or dispose of the land unless the freehold had first been offered for sale to the vendors, and the vendors had either refused that offer, or had failed to accept it within two months. In the facts of the case, the purchasers did make such an offer, but they withdrew it before the expiration of the two-month period. The Court of Appeal held that the purchasers were entitled to act in this way. They did not in fact sell or dispose of the land to any other person, and were not, therefore, in breach of the term in the agreement. The judgment is a short one and, by reason of the negative covenant in the agreement and the absence of any agreement to sell to a third party, it does not bear upon the question with which I am presently concerned. If the Lessors shall not within twenty-one days of the receipt of such notice accept the offer therein contained the Lessee may within six months thereafter ... assign the said term to an approved assignee at a price equivalent to or greater than that at which it was offered to the Lessors, but shall not assign the same for any lesser sum than that at which it was last offered to the Lessors without again offering the same in writing to the Lessors at such lower figure. It offered the term to the lessors, and the latter purported to accept the offer by correspondence. For reasons which are not presently relevant, the court held that a binding contract did not come into existence. Within the 21 days referred to in the above provision, the lessee purported to withdraw its offer (as it happened, its whole share capital had been acquired by third parties who desired to purchase the remainder of the term in preference to the lessors). The lessors argued that they had an equitable interest in the term because of their rights arising under the provision of the lease set out above. This argument did not prevail. The Court of Appeal held that the provision in the lease did not prevent the lessee from withdrawing an offer made in compliance with it. The provision merely prevented the lessee from selling the term to another within the 21 days. 108 In Bircham , the question was not whether the lessors obtained an equitable interest in the term upon the lessee doing something which would have amounted to a breach of the provision by which the first right of refusal was granted. It was whether the lessee's offer of the term in accordance with the provision gave rise to such an interest in the lessors. Referring to the passage in the judgment of Templeman LJ which I have set out at par 104 above, Chadwick LJ, who delivered the main judgment, held that it did, but that it would lapse if the offer were validly withdrawn. But, of course, the interest would lapse if the offer were not accepted within the twenty one day period for which the offer was to remain open. (Emphasis in original. The context in Pritchard v Briggs , his Lordship pointed out, was one in which an offer made under the right of pre-emption could not be revoked or altered within 21 days. But, where the offer is made on terms that it can be withdrawn at any time before acceptance, it does not have the characteristic essential to an option. Such an offer is indistinguishable from any other contractual offer. The offeror remains free, at any time before acceptance, to decide that he will not part with the land --- see Tuck v Baker [1990] 2 EGLR 195. That was not the situation in Bircham , but Chadwick LJ's discussion of the authorities appears to involve an acceptance of that proposition. His Lordship relied upon the passage from the judgment of Goff LJ in Pritchard v Briggs which included the statement '... even if the grantor decides to sell and makes an offer it seems to me that so long as he does not sell to anyone else he can withdraw that offer at any time' (82 P & CR at [30]) More significantly, perhaps, Chadwick LJ considered Kling v Keston , and described it as 'an illustration of the principle to which Templeman LJ referred' when he said that upon the making of a contract to sell to a third party in breach of the covenant in question, 'the holder of the right of pre-emption would be entitled to buy and therefore entitled to an equitable interest' (82 P & CR at [36]). His Lordship distinguished Kling v Keston on the very footing that the case before him did not involve a contract to sell the term to a third party. 109 In Speciality Shops Ltd v Yorkshire and Metropolitan Estates Ltd [2003] 2 P & CR 31, what Park J referred to as 'some form of pre-emption or first refusal right' was given by a 'comfort letter' which his Lordship set out in full in an annexure to his judgment. He invited 'the reader who is unfamiliar with the case ... to break from this judgment at this point and read the letter'. Regrettably, it seems that, from every published form of his Lordship's judgment, the annexure has been omitted. Using the resources of the court, I was able to obtain a copy of the annexure, and I gave the parties an opportunity to make short written submissions on the subject. The annexure is a letter dated 8 April 1998 from the plaintiff (a company which owned most of the subject land and had an option to acquire the balance) to the defendant (a company engaged by the plaintiff for project management on a major development on the subject land). We would insist that you were able to confirm your offer, through solicitors, along with proof of funding, within 28 working days of us advising you of our intent and terms of any proposed sale. We would expect you to exchange contracts within 20 working days thereafter. In either case, if you did not do so, we would be entirely free to proceed with the original offer. We concur it is inappropriate and unnecessary to build in pre-emption rights to our current contractual arrangements and believe this letter confirms the continued spirit of that arrangement. It gave the defendant an exclusivity period within which to come up with an offer (albeit that no offer had been made by a third party). The defendant could not do so. Then the plaintiff entered into negotiations with a third party which (on the third party's insistence) were confidential. Eventually a contract was entered into, and the defendant lodged cautions against the relevant titles. The plaintiff commenced the instant proceedings to have the cautions removed. The question was whether the defendant had an interest in land such as was necessary to sustain its cautions. There was, it seems, a deal of urgency about the matter since the contract with the third party was due for completion. 110 Notwithstanding the cautious terms of the plaintiff's letter of 8 April 1998, Park J approached the matter as though the letter was intended to have, and should be given, legal effect. In that case, during the period when the offer cannot be revoked, the pre-emption holder does have an interest in the land. So he can revoke it at any time, as long as he does so before the pre-emption holder accepts it. That it is possible for an agreement to be of this nature was confirmed y the Court of Appeal in Tuck v Baker (supra). In such a case the effect of the Court of Appeal decision in the Bircham case (supra) is that the pre-emption holder does not, on the triggering event, acquire an equitable interest in the land. Chadwick LJ did, however, leave open the possibility that it might be different if the landowner did still want to dispose of the land. A third possibility is where, upon the triggering event, the landowner is not obliged positively to offer to sell the land to the pre-emption holder, but rather he is obliged to notify the pre-emption holder of the situation. Leaving it for the pre-emption holder to make his own offer to purchase the land if he chooses. If the pre-emption holder does choose to make an offer, only a very unusually worded agreement would provide that the landowner was bound to accept it. In all normal cases one would expect the landowner to be free to accept or refuse the pre-emption holder's offer. Of course the landowner would not be entitled (as between himself and the pre-emption holder) to refuse the pre-emption holder's offer and then go ahead with a sale to a third party on the same or worse terms. But it seems to me that, if the landowner actually did that, the pre-emption holder's remedy would be a claim for damages against the landowner for acting in breach of his contractual obligations under the pre-emption agreement. I cannot see how the pre-emption holder could assert any sort of proprietary interest in the land. The letter of 8 April 1998 gave the defendant the opportunity to match an offer which the plaintiff had received from a third party. Albeit that the plaintiff might have been in breach of contract for not giving the defendant that opportunity, the letter did not oblige the plaintiff to offer the land to the defendant such it would be the defendant's act of acceptance which brought a contract of sale into existence. The defendant was not, therefore, in a position analogous to that of the grantee of an option in the Pritchard v Briggs sense. Speciality Shops was, therefore, not an example of a first right of refusal in the strict sense at all: what the defendant had was not the right to refuse (or to accept), but the right to make, an offer. 111 In Tiffany Investments Ltd v Bircham & Co Nominees (No 2) Ltd [2004] 2 P & CR 10 there was again a long lease, and it contained a first right of refusal for the benefit of the lessors in the same terms as that in Bircham . The lessees contracted to sell the term to a third party without first offering it to the lessors. The actual arrangements out of which that contract arose were somewhat complicated, and need not be set out here. Once he found that there was a contract, Sir Andrew Morritt V-C, who delivered the main judgment in the Court of Appeal, was obliged to deal with three arguments advanced on behalf of the lessees. The first was that, under the provision, the lessees were not under a positive obligation to offer the term to the lessors. His Lordship rejected that argument, holding in effect that the expression 'shall first offer' connoted an obligation. The lessees' second argument was that the lessors' rights arose no sooner than the instant before the final disposition of the legal estate by assignment, and not at the instant before entering into a contract to assign. His Lordship rejected that argument too. He noted that the provision used the somewhat wide phrase 'shall wish to dispose of the term', as distinct from a narrower phrase such as 'shall wish to assign the term'. 112 The lessees' third argument in Tiffany Investments was that, even if a triggering event had occurred, no equitable interest arose. I use the word 'land', of course, as a compendious reference to any interest in land which is the subject of the first right of refusal. 114 The question of the nature of the holder's interests under a first right of refusal has arisen a number of times since Pritchard v Briggs in New South Wales. I have referred above to the lease in, and to and the facts of, Sterns Trading . However, it seems to me that, although prior to the granting of the option it may be accepted for purposes of argument that the [lessee's] right under the pre-emption clause did not create any equitable interest in the land, at the moment of the grant of option this right was, in my view, transformed from a mere contractual right into a right involving an equitable interest in the land. Without making such an offer to the lessee, the lessor entered into a contract to sell the premises to a third party. The lessee lodged a caveat claiming an equitable interest in the premises. Brownie J noted that the grant of an option created an equitable interest in land, but held that the circumstances were not such as to amount to an option. His Honour considered a number of authorities, including Mackay v Wilson, Woodroffe v Box, Sterns Trading and Pritchard v Briggs. As to the latter, his Honour noted that the judgments of the Court of Appeal had been the subject of academic criticism, and ultimately aligned himself with Goff LJ, rather than with the majority in that case. He held that the lessee did not, in the circumstances, have a caveatable interest. 116 The matter was touched on by Santow J in Transfield Properties (Kent Street) Pty Ltd v Amos Aked Swift Pty Ltd (1994) 36 NSWLR 321 but, because his Honour found that there had not been, in the facts of the case, a breach of the term in the lease giving the lessee a first right of refusal, the point was moot. By way of obiter , his Honour opined that, until the triggering event occurred, the holder of the right would not have an interest in land but, on the occurrence of that event, such an interest would arise (36 NSWLR at 342-343). His Honour disagreed with the view of Brownie J in Walker Corporation , and expressed a preference for the majority judgments in Pritchard v Briggs . 117 In Beneficial Finance Corporation Ltd v Multiplex Constructions Pty Ltd (1995) 36 NSWLR 510, there was an agreement between interests representing the owner of the subject land (referred to as 'the Bank') and the defendant for the demolition of buildings on the land and for the creation of plans for a major residential development on the land. As to whether an interest in property was thereby created, his Honour referred to the unreported English judgment of Oliver J in Imperial Chemical Industries Ltd v Sussman (unreported, Chancery Division, Oliver J, 28 May 1976) as providing 'the clue as to the real distinction'. If, however, the right of the grantee only extends to impose a personal obligation on the grantor to make an offer, then there is no proprietary right conferred. As Sappideen and Butt say in their work on the Perpetuities Act (1986) ... "A right of pre-emption differs from an option in so far as the grantor of an option has parted with his freedom of alienation and is obliged to sell to the grantee at the request of the latter". ' It followed that the defendant never had an interest in land. Should the lease premises be available for sale during the term of this lease, including any option periods, the Lessor agrees to grant to the Lessee a first right of refusal to purchase the lease premises. 2. Such right of refusal shall be on the same terms as any offer to sell to any other person or company and will be open for acceptance by the Lessee for a period of 14 days from the date of offer by the Lessor. Santow J considered Sterns Trading , Walker Corporation, Beneficial Finance and his Honour's own judgment in Transfield Properties . His Honour said that the balance of opinion at single Judge level in NSW was that a triggering event under a first right of refusal conferred an equitable interest in land. While there is no doubt but that his Honour was correct in that observation --- and would be correct if he made a like observation today --- since his judgment was interlocutory, and since he was able to rely alternatively upon an assumed state of affairs in which the lessee's arguable title to relief was a mere equity, I shall treat his Honour's judgment as a point of consistency rather than a building block in the establishment of the jurisprudence as such. 119 I mention in passing the judgment of the NSW Court of Appeal in Goldmaster Homes but, because of the undeveloped state of the contractual terms in that matter, the judgment does not grapple directly with the issues with which I am here concerned. The Lessee shall have the first option to purchase the premises ... by giving written notice to the Lessor of its intention to purchase the said premises at the same price and on the same terms of any such offer, such notice to be given by the Lessee to the Lessor within twenty-one (21) days of receipt by the Lessee of notice of such offer. The lessor then sent to the lessee a letter enclosing a copy of the deed, stating that it contained the terms which it desired to accept. Within 21 days, the lessee wrote to the lessor purporting to accept the offer to purchase the land on the terms and conditions set out in the deed. The third party contested the lessee's right to accept any such offer, and maintained that the first right of refusal would be relevant if and when the third party exercised its option. Some time later, the third party nominated another to exercise its option (which was its right), and the nominee purported to do so. The lessee did nothing within 21 days after being notified of those events, but purported to nominate another to purchase the land under its original letter purporting to accept what it characterised as the lessor's offer. 121 Campbell J held that the lessee's original letter was an effective exercise of its first right of refusal, whereby it was entitled to require the lessor to grant it an option to purchase in the same terms as that agreed to with the third party. An equitable interest arises in land which is the subject of an option to purchase because the grantor of the option can, in at least some circumstances, be deprived of that land without there being any further action or decision on his part. In that situation, he cannot in conscience regard the land as being completely his own. When the conditions for exercise of a right of pre-emption have arisen, the grantor of that right of pre-emption can likewise be deprived of his land without any further action or decision on his part. Further, such a situation is one where specific performance is capable of being awarded, to require the grantor of the right of first refusal to perform his agreement. While the availability of specific performance might not be the only test for whether one person has an equitable interest in land of another, it provides one test for when such an equitable interest exits. It follows that, from the moment the Parkview Option Deed came into existence, [the lessee's] right of pre-emption under Clause 11 of the Lease transmuted into an equitable interest in the land, and furthermore was an equitable interest which had priority over [the third party's] rights under [its option deed]. If the lessee shall not exercise that right in writing within ten (10) days of being notified in writing by the Lessor then the Lessor shall as between the parties hereto have an unfettered right to sell the leased premises. During the currency of the lease, the lessor received an offer from a third party to purchase the land for the sum of $850,000. A contract to that effect was entered into. Next in time, the lessor notified the lessees that it desired to sell the land, and it offered the land to the lessees (subject to the rights of others who had prior rights of refusal) for the sum of $850,000. The lessees did not accept that offer. They were requested to withdraw their caveat, but refused to do so. Instead, they commenced proceedings in which they asserted that the contract of sale between the lessor and the third party was in breach of their right of refusal under the lease. The lessees relied upon Pritchard v Briggs. But for that to happen it would, I think, be necessary, as was the case in Pritchard v Briggs (supra) that the price and the other terms necessary to establish a completed contract to buy and sell be agreed upon and expressed within the provisions conferring the pre-emptive right. If that be the case, then it may be, the condition being satisfied, that the holder of the pre-emptive right could accept what has then become the standing offer and so conclude an agreement which could be specifically enforced. But that is not this case. In this case, the right conferred was a right of refusal to purchase "the said land at the price and upon the terms and conditions which the lessor shall stipulate as applicable to the sale". So even if the lessor is desirous of selling so that the condition controlling the right is satisfied, there exists no offer which could, by acceptance, create a contract to buy and sell. It would be necessary first for the grantor to stipulate the price and the terms and the conditions. In other words, it would be necessary for the grantor first, in fact, to make an offer. Without that it would not be the case that the grantee would be "entitled to buy". Although, in the facts of Pata Nominees , there had been a contract of sale executed with the third party, that circumstance was not defining under the relevant provision in the lease. In this respect, the terms of cl 6(d)(ii) in the present case are relevantly different, in that the provision requires for its operation the existence of a price for which, and conditions under which, the farm is proposed to be offered to another. 123 With due respect to some of the submissions which were made in the present case, I do not think there is any inconsistency between Pritchard v Briggs and Pata Nominees . In the latter case, Burt CJ accepted the law as stated in the former case, but distinguished it on the facts. I accept that his Honour took a somewhat stricter approach to the identification of the price, and the terms and conditions, which would, when "stipulated', trigger the right to refuse than is evident from more recent English and NSW authorities, but it must be remembered that the lessees' case was that an equitable interest arose at the point of the lessor being desirous of selling the land, and before any relevant stipulation. 124 I should refer also to the judgment of Warren J in Bob Jane which, although interlocutory, provides a further indication of the approach which Australian courts have taken to Pritchard v Briggs . The proceedings before Warren J were commenced by the lessee, and the question for her Honour was whether the lessor should be restrained from going ahead with the registration of the conveyance to the third party. She said that the issue for consideration was whether the lessee had more than a right of first refusal, and arguably enjoyed an option to purchase which constituted an interest in land. I form this view on the basis of the New South Wales and New Zealand authorities. I consider that there is no principle expressed in Pata Nominees that derogates from the approach adopted by the New South Wales and New Zealand authorities in support of my finding that the plaintiff has succeeded in making out at least an arguable case. Necessarily, the terms of the contract under which the Chippers were entitled to exercise that assumed option were established. Consistently with the authorities to which I have referred, I should regard the Chippers as no less entitled to specific performance than the grantee of an option in equivalent circumstances. 126 By their solicitors' correspondence of 26 and 30 May 2006, the Chippers purported to exercise the option which I have held they then effectively had. The grantor refused to convey. Subject to matters to which I next turn, the Chippers' entitlement to specific performance would seem to be complete. 127 The next question is whether Red Valley's interest arising under its contract to purchase the land stands in the way of the Chippers achieving the remedy to which they would otherwise be entitled. It follows from my findings on the facts that the interest which Red Valley had in the farm --- as against the Chippers --- is to be given a priority date of 1 March 2006, not 19 September 2005. It is, I consider, a situation in which the same event --- the making of the variation on 1 March --- gave rise to two competing equities, as did the granting of the option in Sterns Trading . Like Kearney J, I consider that the equity of the grantee of the first right of refusal is the stronger, because that right, by definition, was to stand first in line if Peter Smyth chose to sell the farm for a particular price, and under particular conditions, and because Red Valley knew of the existence of that right and had actual or constructive knowledge of the fact that the grantee thereof had not been offered the farm for that price and under those conditions. This conclusion is, of course, based upon the principle in Manchester Ship , although given expression in the context of specific performance rather than an injunction. 128 Finally on the matter of specific performance, I consider the question of readiness and willingness. The Chippers allege that they were, and had at all material times been, ready, willing and able to perform the purchasers' obligations under the terms of the contract between Peter Smyth and Red Valley as varied on 1 March 2006. In their pleadings, the respondents denied that allegation, but at the trial, they admitted that the Chippers were then able to perform. That admission was, in my view, wisely made, as the Chippers had tendered a trust account cheque in the sum of $140,000, and had the benefit of a letter from their bank indicating a preparedness to advance the balance of the purchase moneys. The respondents, however, made two points. First, they said that the Chippers had not been ready, willing or able to perform the purchasers' obligation under the contract immediately upon discovering the terms of the contract as varied (on 10 April 2006); and Red Valley in particular made much of the time which the Chippers allowed to pass between that event and their solicitors' correspondence in late May in which they asserted their rights under the lease and tendered their cheque for the deposit. It was said that, during this period at least, the Chippers were neither ready nor willing to be purchasers under the contract. Secondly, the respondents contended that, even at the trial, the Chippers were neither ready nor willing to perform, not withstanding that they were able to do so. 129 A party who seeks specific performance of a contract will fail unless able to show that he or she is ready and willing to carry out such continuing or future acts as would be his or her obligation under the contract: Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] 1 WLR 425, 432-433. What is required is readiness and willingness to comply with the essential obligations: Mehmet v Benson [1965] HCA 18 ; (1965) 113 CLR 295, 308; Green v Sommerville [1979] HCA 60 ; (1979) 141 CLR 594, 610. It is suggested by Spry, Equitable Remedies , 6 th ed, 2001, p 218, that the time at which readiness and willingness is to be assessed is the time of the grant of the remedy. It is suggested by Meagher, Heydon and Leeming, p 674, however, that the relevant time is the date when proceedings are commenced. In support of their proposition, the latter authors refer to Gurney v Gurney (No 2) [1967] NZLR 922, 925, in which Gresson J notes that the proposition is 'well settled'. His Honour refers only to the judgment of Walsh J in the Supreme Court of Alberta in Evans v Norris (1912) 8 DLR 652, 667. In that case the plaintiff had been in default under his then existing contractual obligations at the commencement of the proceedings, and tried to patch things up --- including by attempting to show that he would be ready and willing in the future --- during the pendency thereof. The matter is not addressed specifically in Fry, Specific Performance , 6 th ed, 1921, but the author does state (at p 435) that 'when [the plaintiff] seeks the performance of the contract ... [he must] show ... that he is ready and willing to do all matters and things on his part thereafter to be done. ' Consistently with this requirement, it is, subject to any statutory provision or rule of court to the contrary, necessary for the moving party to aver and prove readiness and willingness: Bahr v Nicolay (No 2) [1988] HCA 16 ; (1988) 164 CLR 604, 620. 130 In the present case, the Chippers did allege that they were ready and willing to perform their obligations under the contract. Save for the deposit which they tendered before the commencement of the proceedings, what were those obligations? Only one remaining obligation was the subject of any substantial submission by the respondents: payment of the balance of the purchase price. The Chippers' pleading should be taken as an allegation of readiness and willingness to make that payment. It was not until about a month later that they had arranged finance for the purpose. To the extent that readiness and willingness implies also ability (see Gurney [1967] NZLR at 925), I do not think that a party seeking specific performance of a contract needs to be able to perform a future obligation under the contract until the time arrives for performance. I consider, therefore, that the Chippers' demonstration of an ability to pay the balance of the purchase price on 10 August 2006 is sufficient to justify a finding that they are, and have at all relevant times been, ready and willing to perform their obligations under the contract. 131 The Chippers were both cross-examined on the general subject whether they were seriously prepared to undertake an interest commitment of the kind that would be involved in borrowing $1.3 m from their bank. It seemed to be suggested that, if their bluff should be called by a favourable judgment in this proceeding, they might in effect go weak at the knees and decide not to proceed. As a matter of fact, I am satisfied that the Chippers made their offer to purchase the farm, and arranged finance for that purpose, only after careful consideration of the commitment thereby involved. I do not, however, need to go any further into such matters, since the only relevant obligation, as yet unperformed, which would be required of the Chippers, would be to pay the balance of the purchase price. I do not believe that the respondents have any legitimate interest in questioning the Chippers' capacity to make the required repayments and otherwise to comply with such terms as may be imposed upon them by their bank. 132 As to the position subsisting between 10 April 2006 and 26 May 2006, as I have stated above, I do not believe that lack of readiness or willingness at that stage should be regarded as a proper basis for declining to order specific performance now. On the facts as I have found them to be, over that period Peter Smyth was in breach of his contract with Octra (as trustee for the Chippers). Subject only to the suggestion that the Chippers might have lost their cause of action by delay, I cannot see how the question of their readiness and willingness to perform future obligations under the contract arose at that stage at all. Once the proceedings were commenced on 13 July 2006, the Chippers' title to relief might have been affected by past breaches of the contract on which they sued, but more were alleged. 133 The way the argument was put particularly on behalf of Red Valley was more in the way that one might expect to receive a submission from a party alleging laches. I would deal with such a submission at two levels. First, I would hold that the period which passed between 10 April and 26 May 2006 was no more than was reasonably necessary for the Chippers to absorb the full import of the variation to the contract between Smyth and Red Valley of which they had become aware, and to take legal advice on the matter. As to the latter, I consider that the legal situation which confronted the Chippers and their advisers on and after 10 April 2006 was complex to a considerable degree. There are several factors about the present case which make it more than a straightforward situation in which a vendor has contracted with a third party in breach of a pre-emption clause in a lease. Secondly, it is not suggested that Red Valley was prejudiced in any way by the passage of time between those two dates. I accept, of course, that Red Valley was concerned to bring its on-sales to completion, but nothing in evidence suggests that anything more than the execution of contracts had occurred in that regard, and I note that Red Valley did not itself pay the second installment of the deposit due under the contract with Smyth, due on 31 May 2006, until well after the commencement of the present proceeding. 134 For the foregoing reasons, I find that the Chippers are and have been ready and willing to perform the purchasers' side of the contract which, by the exercise of their first right of refusal, they wish to adopt. 135 It follows that the Chippers should succeed on their claim for specific performance. The contractual obligations which Peter Smyth will be ordered to perform are those of the vendor under the contract between himself and Red Valley as varied on 1 March 2006. For their part, the Chippers might consider the impact of their success in their claim for specific performance upon their claim for a declaration as to their entitlement to the extended term under the sub-lease and upon their claim for damages. Both the Chippers and Peter Smyth might consider what should be done about any provisions in the contract which may have been, in effect, overtaken by the passage of time, such as the date for settlement. The Chippers should consider what they want to do about condition 10. There may be other matters of detail which need to be addressed. Both parties should turn their minds to the terms of the order for specific performance which would be appropriate. Subject to such submissions as are made, I would be disposed to specify a date by which Smyth will be required to take the action to which the order relates. Those parties should, of course, take into account the likely mechanics of a transfer of the registration of the farm from Smyth to the Chippers. 137 I shall also give the parties an opportunity to address me on the question of costs. 138 As I have said in these reasons, the fourth respondents did not participate in the trial. I expect to be addressed on the terms of any order proposed by, or against, those respondents. I certify that the preceding one hundred and thirty-eight (138) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup. | lessee granted first right of refusal when first right of refusal must be offered triggering event contract for sale with third party contract not performed and subsequently varied to purchaser's advantage whether lessee thereby entitled to be offered further right to refuse sub-lease in near identical terms lessee/sub-lessor not at arm's length from lessor first right of refusal to buy freehold contained in sub-lease nature of sub-lessor's obligation to sub-lessee whether first right of refusal in lease held on trust for sub-lessee lease and sub-lease of land both giving first right of refusal to buy freehold whether first right of refusal in lease held on trust for sub-lessee priority of equitable interests in land interest arising from execution of contract for sale of land purchaser on notice of lessee's first right of refusal in existing lease contract varied to purchaser's advantage whether purchaser's equitable interest superior to interest of lessee in being offered right to refuse lessee of land given first right of refusal to buy freehold when triggering event occurs execution of contract for sale with third party whether breach of contract by lessor whether lessee thereupon in position of grantee of option contract to give lessee first right of refusal to buy freehold lessor in breach by executing contract for sale with third party whether lessee in position of grantee of option whether lease entitled to call for transfer whether lessee's rights superior to those of third party whether lessee ready and willing lease lease trust equity contract specific performance |
Leave to appeal was granted on one ground only, namely "the Federal Magistrates Court erred in concluding that no jurisdictional error was apparent in the Refugee Review Tribunal's (the Tribunal) decision in that the Tribunal had erred by having regard to the conduct of the appellant in Australia when determining her application for a protection visa. In so doing, the Tribunal failed to comply with the stipulation made in s 91R(3) of the Migration Act 1958 (Cth) (Migration Act) that such conduct must be disregarded". The Appellant subsequently filed and served a notice of appeal specifying that nominated ground of appeal. The background to the Appellant's application for a protection visa together with the course of subsequent proceedings in the Refugee Review Tribunal, in the Federal Magistrates Court and in this Court are set out in my reasons for judgment in respect of the leave to appeal application. These reasons for judgment should be read in conjunction with the reasons for judgment which I gave in respect of that leave to appeal application. At the time when I granted leave to appeal there was a basis for apprehending by analogy as between the circumstances of the Appellant's case and those in SZJGV v Minister for Immigration and Citizenship [2008] FCAFC 105 ; (2008) 170 FCR 515 that an arguable case for the granting of leave to appeal existed. An application for special leave to appeal by the Minister in SZJGV was then pending in the High Court of Australia. In the interval which has passed between 1 December 2008 and today the High Court has, in respect of SZJGV , granted special leave to appeal to the Minister, heard the appeal and, on 30 September 2009, determined the appeal: see Minister for Immigration and Citizenship v SZJGV (2009) 259 ALR 595. The High Court, by majority, allowed the Minister's appeal in SZJGV . In so doing, the High Court reversed the result before a Full Court of this Court which had provided the foundation for a conception that the present Appellant had an arguable case for a grant of leave to appeal. More particularly, the majority in SZJGV held that on the proper construction of s 91R(3) of the Migration Act it is not necessary for a decision maker to disregard a visa applicant's conduct in Australia and the reason for that conduct for all purposes related to the determination of the visa application. To the contrary, so the majority held, the only conduct which is excluded by s 91R(3) , is that which may favour an acceptance of a visa applicant's claim. In my reasons for judgment in respect of the application for leave to appeal (at para 28) I set out an excerpt from the tribunal's reasons. In the course of the excerpted passage from the Tribunal's reasons the Tribunal voices the opinion that the Appellant's Falun Gong activities in Australia were done for the purpose of strengthening her claims to refugee status. That particular opinion, so the reasons record, was put to the Appellant by the Tribunal on the hearing of her review application. The Tribunal records in the reasons that the Appellant did not respond to that proposition. The Tribunal later records in the passage excerpted a satisfaction that, to the extent that the Appellant had engaged in Falun Gong related activities in Australia, this was not done out of a genuine commitment to Falun Gong but rather to strengthen her claim to be a refugee. The Tribunal then records the view that such conduct must be disregarded pursuant to s 91R(3). The Tribunal further records an absence of satisfaction that the Appellant was a person entitled to a protection visa largely, if not wholly, on the basis of an adverse view formed as to the Appellant's credibility. The Minister's submissions were cast in the alternative on the appeal. In the first instance it was submitted that, having made all primary findings of fact in relation to the Appellant's claims and determined that she had engaged in Falun Gong related activities in Australia for the sole purpose of strengthening her claims, the Tribunal had disregarded that conduct pursuant to s 91(3) , and did not rely on it either to strengthen or discredit her claims. It is true that, read in isolation, there is a passage, to which I have referred and which is set out in the excerpt in my earlier reasons for judgment, which might support such a conception of the Tribunal's reasons. Reading those reasons as a whole, and particularly having regard to the strength of the conclusion reached by the Tribunal in relation to why the Appellant had engaged in Falun Gong related activities in Australia to the extent that she had, it is somewhat artificial not to regard that particular conception of her behaviour as having had no influence on the Tribunal's overall conception of her credibility. The alternative submission made on behalf of the Minister was that even if the Tribunal had made such use of the appellant's activities in Australia, this use did not, having regard to the construction of s 91R(3) , which prevailed in the High Court, make any difference to the outcome of the appeal. In other words, it was permissible, in light of the construction which prevailed in the High Court of s 91R to have regard to conduct in Australia as part of an overall assessment of credibility. In my opinion, that alternative submission is the preferable one. The Appellant did not, in terms, seek to engage at all with the merits of what impact the High Court's judgment in SZJGV had on her appeal. Instead, she sought an adjournment of the hearing of the appeal to a date to be fixed early in next year so as to enable her to have the benefit of further legal advice. She handed up a letter from Macarthur Legal Centre in which reference was made to the lags that would necessarily attend the making of an application for legal aid funding, and then the identification and retention of counsel and the obtaining of advice from and representation by counsel. At interlocutory stages in respect of the hearing and determination of the leave to appeal application, I was persuaded that it was in the interests of justice for the Appellant, then an applicant for leave to appeal, to be granted adjournments for the purpose of obtaining legal advice in relation to her leave to appeal application. As it transpired, the basis upon which she came to seek and was granted leave to appeal was the result of her having had the benefit of those adjournments and the associated opportunity to seek and obtain legal advice. She has, in this sense, been well served, as have the interests of justice by the service provided by the Macarthur Legal Service. I have anxiously reflected on whether there ought to be an adjournment of the appeal itself for the reason set out in the Macarthur Legal Centre letter. That letter not only highlights a basis for seeking an adjournment, but also confirms that the Appellant has been able, in the time available, to attend upon that centre. This appeal was originally to be heard by me in the November sittings of the Court. The hearing date was brought forward after the Appellant made known to the Registry that she had prearranged with her boyfriend to take a holiday commencing on 30 October 2009. Were I of the opinion that the result in the present case was anything other than governed by the High Court's decision in SZJGV in a way which did not admit reasonably of any conclusion other than that the appeal must be dismissed, then I would have been inclined to grant the appellant the adjournment sought. However, the result in SZJGV in the High Court is such that, however one approaches the way in which the Tribunal dealt with the evidence of the Appellant's activities in Australia, either on the basis primarily submitted on behalf of the Minister, or on the basis which I prefer, the Tribunal committed no jurisdictional error. Rather, it was permissible for the Tribunal to have regard to conduct in Australia informing an adverse view of the Appellant's credibility. There is truly no utility, even having regard to the contents of the Macarthur Legal Centre letter, in the granting of an adjournment. It follows, therefore, that the appeal must be dismissed. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | appeal from the federal magistrates court leave to appeal granted on the ground that the federal magistrates court erred in concluding that no jurisdictional error apparent in the refugee review tribunal's decision whether the tribunal erred by having regard to the conduct of the appellant in australia when determining her application for a protection visa whether in so doing the tribunal failed to comply with migration act 1958 (cth) s 91r(3) that such conduct be disregarded when leave to appeal granted there was a reasonable apprehension by analogy that an arguable case for the granting of leave to appeal existed application for special leave to the high court of australia from the full court of the federal court of australia in an analogous case minister for immigration and citizenship v szjgv held by the high court that s 91r(3) does not prevent a decision maker from regarding a visa applicant's conduct in australia and the reason for that conduct for all purposes related to the determination of the visa application whether an adjournment of the hearing of the appeal be granted to enable appellant to have the benefit of further legal advice evidence that appellant has had the benefit of legal advice held only reasonable conclusion is that appeal be dismissed held tribunal committed no jurisdictional error held appeal dismissed migration |
648634. Stena sued the respondents ("Austal") for infringement of its patent and sought to restrain Austal from continuing to infringe. Specifically, Stena alleged that the hull forms of three types of vessels manufactured, sold or promoted by Austal --- namely the Austal 94, Austal 196 and Austal 285 hull forms --- infringed its patent. 2 In response, Austal filed a cross-claim seeking revocation of the patent for invalidity on the grounds of lack of novelty, lack of inventive step or obviousness, and/or failure to comply with the requirements of s 40 of the Patents Act 1990 (Cth). 3 On 21 June 2007, I handed down my reasons for judgment. I decided that the Austal 94 hull form infringed Stena's patent, but that the Austal 196 and Austal 285 hull forms did not. I dismissed the cross-claim for invalidity. The reasons were given effect by orders proposed by the parties and made by me on 20 July 2007. 4 By Orders 7, 8 and 9, I directed the parties to file written submissions on the question of costs, and noted that it would be determined on the papers. I have now had the benefit of those submissions. Stena submits that costs should follow the event and that no apportionment of costs should be awarded. In support of this, Stena notes that it succeeded on all points raised in the proceedings, with the exception of the infringement claims for the Austal 196 and Austal 285 hull forms. Despite its failure on these points, Stena maintains that no apportionment of costs is appropriate due to the overlap in the evidence and submissions concerning the Austal 94 hull form on the one hand and the Austal 196 and Austal 285 hull forms on the other; the acceptance of Stena's submissions on other points such as construction and invalidity; its acknowledgement that the Austal 196 and Austal 285 infringement case was "close to the margins"; its restraint on adducing evidence and making submissions concerning only the Austal 196 and Austal 285 hull forms; and the way in which any such submissions and evidence was interwoven with its response to Austal's invalidity case. 6 As an alternative, Stena argues that any apportionment should be an extremely modest one, in the order of 1 to 2% of the total costs incurred by it in the proceedings. 7 Austal submits that a larger adjustment in its favour is appropriate. It emphasises that Stena succeeded in establishing infringement in respect of only one hull form, which is substantially less than the ten hull forms which Austal sought to impugn earlier in the proceedings. In light of the costs incurred by Austal in defending or preparing to defend an infringement case of much larger scope than that which ultimately succeeded, Austal submits that a substantial reduction is appropriate. 8 Finally, Austal acknowledges that Stena should receive the costs of the cross-claim, but only if those costs are discounted to take account of costs thrown away as a result of Stena's late withdrawal of its reliance on the expert evidence of Mr Beck and its late notice that Mr Wagner (a witness from Germany) was not required to attend for cross-examination. 9 In reply, Stena submits that Austal's submissions do not justify an apportionment. It reiterates that minimal costs were devoted to the question of infringement in respect of the Austal 196 and Austal 285 hull forms. It also argues that it managed its complaint responsibly, abandoning as early as possible its infringement case against seven other Austal hull forms and its reliance on Mr Beck's evidence. Stena submits that Austal's submissions regarding Mr Wagner are irrelevant, and notes that Austal own conduct increased the costs of the proceedings, particularly in relation to its submissions on revocation and novelty which were subsequently abandoned before the hearing. Finally, Stena criticises Austal for not quantifying the apportionment sought. In the ordinary course of litigation costs follow the event; that is, unless special circumstances exist to order otherwise, the successful party should be reimbursed its costs of the litigation: Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 48-134 at 48-136; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271; Beecham Group PLC v Colgate-Palmolive Pty Ltd (2005) 66 IPR 273 at 274; TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (No 3) [2005] FCAFC 194 at [2] . 11 Although courts have in the past been inclined to take a broad approach by looking at the substance of the overall outcome and have been reluctant to exercise discretion to apportion costs according to parties' success or failure on particular issues (see Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 28 ALR 201 at 208), recent authorities accept that in complex commercial matters, and particularly in patent suits where there are numerous issues, the discretion may be exercised to apportion costs concomitant with the parties' respective success or failure on certain issues: JMVB Enterprises (Formerly A'Van Campers Pty Ltd) v Camoflag Pty Ltd (No 2) [2007] FCAFC 6 at 7; and see James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34] . 12 When apportioning costs, however, a Court should be mindful not to discourage litigants from canvassing all material issues for fear of an adverse costs order: Cretazzo v Lombardi (1975) 13 SASR 4 at 12. Equally, litigants should not be rewarded for the injudicious pursuit of issues without substance. 13 In this case, I consider it appropriate to apportion the costs to some extent. Having regard to the authorities and the submissions of the parties summarised above at [5]-[9], I find that it is appropriate to reduce the costs award by 10%. 14 Accordingly, the order is that the respondents pay 90% of the costs of the applicant in these proceedings. I direct the parties to liaise with my associate to arrange further directions in the matter after Austal's application for leave to appeal or, if leave is granted, Austal's appeal from the orders made on 20 July 2007, is determined. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | apportionment of costs costs |
The matter involved an appeal from the Federal Magistrates Court and raised an issue about the power of the Minister to remove the applicant from Australia having regard to the terms of s 198(6)(c)(i) of the Migration Act 1958 (Cth). Section 198(6)(c)(i) imposes an obligation upon the relevant officers to remove an unlawful citizen as soon as reasonably practicable in circumstances where, relevantly, the grant of a visa has been refused and the application has been "finally determined". The circumstances in which the matter came before the Full Court are identified in [2]-[7] of the Full Court's reasons for judgment. In short, the applicant attended a hearing of the Refugee Review Tribunal ( the Tribunal ) in response to an invitation to do so; through some form of administrative error, the applicant was not called into the hearing room to give evidence in support of his application for review of a decision of the Minister's delegate to refuse the applicant a protection visa. Consequently, the Tribunal, pursuant to s 426A(1) of the Migration Act , dismissed the applicant's application for review on the basis of the Tribunal's understanding that the applicant had failed to attend the hearing without any explanation. After a lengthy delay, the applicant applied to the Federal Magistrates Court seeking orders quashing the Tribunal's decision. In SZKUO v Minister for Immigration & Anor [2007] FMCA 2073 the Federal Magistrate accepted the facts relating to the applicant's attendance at the Tribunal. The Federal Magistrate determined that although these factual circumstances amounted to a jurisdictional error by the Tribunal there was a discretion to withhold relief. The six year delay between the Tribunal hearing and the application to the Federal Magistrates Court was not adequately explained. Accordingly, the Federal Magistrate made orders dismissing the application. The applicant attempted to obtain an extension of time in which to file a notice of appeal against the Federal Magistrate's decision but this was refused ( SZKUO v Minister for Immigration and Citizenship [2009] FCA 93). Thereafter, the applicant commenced further proceedings in the Federal Magistrates Court seeking a declaration that he was not liable to detention or removal from Australia because his visa application had not been "finally determined" within the meaning of s 198(6)(c)(i) of the Migration Act . The Federal Magistrates Court dismissed that proceeding ( SZKUO v Minister for Immigration (No 2) [2009] FMCA 498). An appeal thereafter followed to the Full Court of the Federal Court. The decision of the Full Court that the appeal be dismissed was unanimous ( SZKUO v Minister for Immigration and Citizenship [2009] FCAFC 167). The reasoning underlying that decision is set out in [22]-[34] of the Full Court's judgment. In the present application there was no dispute between the parties that I had the power to make the orders sought by the applicant, although there was an issue raised about whether the substance of the orders sought would be a stay of the orders of the Full Court or an order restraining the Minister from exercising his powers of removal under the Migration Act . The Minister, nevertheless, accepted that an order in the nature of an injunction could be made. That acceptance is consistent with the observations of Branson J in Papachristopoulos v Minister of Immigration and Multicultural Affairs (unreported, NG 719 of 1997, 17 December 1997) in which Branson J referred to her own decision in Re Cortaus Ltd (in liq); Sheahan v Joye (1996) 19 ACSR 591 to the effect that a single judge has the power to grant an application of the kind sought in this case, that power being derived from s 20 of the Federal Court of Australia Act 1976 (Cth). Although the parties were on common ground in relation to the issue of power, they diverged about the correct test to apply. In Jennings Construction Limited v Burgundy Royale Investments Pty Limited (No 1) [1986] HCA 84 ; (1986) 161 CLR 681 at 684 Brennan J identified that a "stay to preserve the subject matter of litigation pending an application for special leave to appeal is an extraordinary jurisdiction". His Honour said that "exceptional circumstances" must be shown before exercise of this power is warranted. Mason CJ in Smith Kline & French Laboratories (Australia) Limited v Secretary, Department of Community Services and Health [1991] HCA 13 ; (1991) 99 ALR 417 at 419 also stated that the jurisdiction to grant injunctive relief to preserve the subject matter of litigation pending the determination of an application for special leave to appeal or of an appeal pursuant to such a grant of leave is an "extraordinary one" and would be granted only in "exceptional circumstances". Kirby J in Bryant v Commonwealth Bank of Australia [1996] HCA 3 ; (1996) 134 ALR 460 at 463 referred to a distinction between the general approach in the High Court (where special or exceptional circumstances must be shown in order to secure provision of a stay pending an appeal) and the approach in other courts, specifically the New South Wales Court of Appeal, which have adopted a less stringent approach. There are obvious reasons for a measure of greater stringency at this point. Ordinarily, the case will have proceeded through at least two tiers of the judicial process. The would-be appellant's arguments will have been rejected by the court whose orders are the subject of the special leave application. Only a relatively small proportion of the applications for special leave succeed. To succeed, something more than legal or factual error must be shown. There are reasons for maintaining a higher standard in this court for the provision of a stay then would now usually be imposed by other Australian appellate courts in respect of invocations of their jurisdiction. The applicant referred to decisions of the New South Wales Court of Appeal in which that Court applied the less stringent test to which Kirby J made reference in Bryant . In Minister for Local Government v South Sydney City Council (No 3) [2002] NSWCA 327 at [10] to [12] Spigelman CJ identified that the principles applicable to a stay and an injunction substantially overlap. His Honour read the decisions in Jennings Construction and Smith Kline as being authority for the proposition that an intermediate court of appeal should not be diffident in granting a stay or an injunction in an appropriate case notwithstanding the difficulty that may be occasioned for a member of such a court in making an assessment of the prospect of a grant of special leave in a particular case. McColl J in Miller v Nationwide News Pty Ltd [2008] NSWCA 261 also identified the divergence between the approach of the New South Wales Court of Appeal and that of the High Court. The approach of the New South Wales Court of Appeal, her Honour observed, derives from the decision of Sibuse Pty Limited v Shaw (No 2) (1988) 13 NSWLR 125 in which the Court adopted the test that a stay or injunction would be granted pending an application for special leave to appeal to the High Court only in an "appropriate" case. McColl J adopted the Sibuse line of authority on the basis that it was a decision of three judges of the New South Wales Court of Appeal which had been followed in other cases of that Court and which had not yet been the subject of criticism by the High Court. In so doing her Honour made express reference to the decision of Kirby J in Bryant . The applicant ultimately submitted that, irrespective of the test to be applied, the circumstances of this case met the requisite standard. It seems to me that there is a divergence of approach between the High Court and the New South Wales Court of Appeal, the latter being an intermediate appellate court. Given the status of this Court as an intermediate appellate court, the considerations and approach adopted by Branson J in Papachristopoulos , as well as the other decisions of single judges of this Court to which I have been taken in oral submissions, it seems to me that I should apply the less stringent test; however, I also propose to deal with the matter by reference to both standards given that I have reached a conclusion of a sufficient degree of confidence to be able to do so. However, the Minister said that this was insufficient to warrant an injunction. The Minister emphasised that the Full Court had unanimously dismissed the appeal from the Federal Magistrates Court. Although the applicant sought to identify issues of legal principle about the legal effect of discretionary decisions having regard to the reasoning in Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 ; [2002] HCA 11 , the present case involved nothing more than a matter of statutory construction. Hence, the Minister submitted that Bhardwaj and the issues to which it gives rise should be seen as an interesting side-line in this matter. For these reasons the Minister submitted that there was no substantial chance that the applicant would be granted special leave. The Minister also referred to the fact that the applicant has been in detention, at the cost of the Australian public, since 9 April 2008. In consequence the Minister submitted that the Minister should be entitled to the fruits of his success and be able to implement the removal of the applicant on the date as scheduled, being this Friday, 18 December 2009. It is true and I accept that the applicant has been in detention for a considerable period of time. If I make orders as the applicant seeks, the applicant will continue to be so detained at the expense of the Australian public. As Branson J identified in Papachristopoulos that is a relevant factor. Branson J also identified, however, that very considerable weight should be given to the right of all persons in Australia to approach the Australian courts and to have their legal rights and obligations determined according to law. Ultimately in Papachristopoulos her Honour considered that the Full Court in dismissing the appeal had not identified any point of legal principle with the consequence that the prospect of the grant of special leave to the High Court was "so remote" that no extension of the injunction earlier made in that proceeding should be granted. In Bryant Kirby J said that a decision on a stay application should not become an occasion for a detailed analysis of the issues that will arise in the special leave application and (if granted special leave) the appeal. His Honour noted (at 463) that the evaluation of the prospects of success will necessarily involve a matter of judicial impression. That judicial impression, his Honour noted, does not predetermine one way or the other the substantive application. As both parties are aware I was a member of the Full Court which unanimously dismissed the applicant's appeal. That latter fact, however, does not remove the overall judicial impression that one can obtain from reading the reasons for decision. Specifically, insofar as I am aware, the applicant is correct in identifying that the High Court has not yet had an opportunity to consider the legal effect of a discretionary decision on the Minister's power of removal. Further, the applicant is also correct in identifying that there is scope for debate arising from the High Court's decision in Bhardwaj as to the existence and relevance of a party's underlying rights and the source of those underlying rights in terms of the relief granted on a judicial review application. This emerges from paragraphs to which I have been taken by the applicant particularly at [46], [57] and [58] of the reasons for judgment in Bhardwaj . The applicant also submitted that the definition of "finally determined" (s 5(9) of the Migration Act ), which refers to a decision which is no longer "subject to any form of review", describes a legal rather than a factual condition. The relevant authorities appear to indicate that the concept of a substantial prospect of a grant of special leave includes a prospect which may be described as not insubstantial or not remote. This matter gives rise to issues which satisfy me that the applicant has a not insubstantial or not remote prospect of obtaining a grant of special leave. In addition to my satisfaction about this issue, it is also apparent (and indeed not disputed by the Minister) that an order is required to preserve the subject matter of the litigation. The subject matter of the litigation is the capacity or power of the Minister to deport the applicant from Australia. If the applicant is deported from Australia on 18 December as proposed the subject matter of the litigation will be entirely removed. The balance of convenience also heavily favours the applicant. The notice of removal which was served on the applicant on or about 11 December 2009 appears to identify three restrictions that would apply to the applicant if removed. First, the applicant may not be eligible for the grant of another Australian visa pending repayment of debts owed to the Commonwealth of Australia. Second, the applicant may not be eligible for the grant of another Australian visa for a period of three years because the basis of his deportation is as an unlawful non-citizen more than 28 days after the applicant's last substantive visa ceased. Third, the applicant may not be eligible for the grant of another Australian visa for 12 months on the basis of the statutory powers relied upon by the Minister to remove the applicant. In these circumstances, all of the relevant discretionary factors weigh heavily in favour of the applicant. The only factor which weighs against the applicant is the cost of maintaining the applicant in detention for the relevant period. This factor, even taken together with the fact that the applicant has been unsuccessful before the Federal Magistrates Court and unanimously before this Court, cannot outweigh the other factors to which I have referred. In summary, my overall impression is that there are matters of general importance to the operation of the Migration Act and the Minister's powers (as well as the individual position of the present applicant) which arise in this case. I cannot conclude that there is not a substantial prospect of special leave being granted. It follows that I am comfortably satisfied that this is an appropriate case for the making of an order in the nature of an injunction. I am also able to say, if I need to, that having regard to the factors as identified by Brennan J in Jennings Construction , the matter meets the standard of an exceptional case. It raises new issues about the Minister's powers which have not been previously determined. It raises what seems to me to be an important point about the operation of the provisions of the Migration Act . Accordingly, I am minded to make the orders sought by the applicant. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for an injunction restraining the respondent from removing the applicant from australia injunction sought for the purpose an application to the high court for special leave to appeal test to be applied prospects of the applicant obtaining special leave to appeal balance of convenience considered practice and procedure |
2 A workplace inspector has standing to apply to the Federal Court of Australia to seek the imposition of a penalty or other remedy in relation to a breach of a term of an award (see: s 4 , s 717 , s 718(1) Item 3, s 847(1)). Section 719(1) provides for the imposition of a penalty in accordance with Division 2 of Part 14 of the Act, in respect of such breach. Section 719(6) confers a power on the Court to order an employer to pay the amount of any award underpayment, to an employee. No order for an award underpayment can be made for so much of an underpayment as relates to any period more than six years before the commencement of a proceeding (s 719(9)). 3 The applicant by this proceeding seeks the imposition of a penalty on the respondent and orders for the payment of an award underpayment in respect of a number of contended breaches by the respondent of the Plumbing Industry (Qld and WA) Award 1999 ('the award'). The applicant contends that the respondent failed to pay Jason Cornwell entitlements due to him under the award as a plumber, drainer and gas fitter during three periods between 2 July 2001 to 7 August 2005. 4 The applicant also relies, in the alternative, upon ss 178(1) and 178 (6) of the Act in force prior to its amendment by the Workplace Relations Amendment (Work Choices) Act 2005 on 27 March 2006. 5 The proceeding was commenced on 13 July 2007 supported by an affidavit of the applicant sworn that day. In that affidavit, the applicant asserted that Jason Cornwell became a full time employee of the respondent on 16 July 2001 and remained such an employee until 17 August 2001 (the first full time period). Secondly, Cornwell again became an employee of the respondent on 17 October 2001 and was a casual employee until 20 January 2002 (the casual period). Thirdly, Cornwell again became a full time employee of the respondent on 21 January 2002 and remained so until 7 August 2005 (the second full time period). 6 Having regard to those contended facts, the applicant on 13 July 2007 asserted that the respondent had breached award provisions binding upon the respondent in the following respects. First, the respondent failed to pay Cornwell the appropriate overtime rates for time worked in addition to ordinary hours worked during each of the first full time period, the casual period and the second full time period, as required by clause 18.1 of the award, resulting in an underpayment of $2,415.28. Further, the respondent failed to pay Cornwell the appropriate overtime rates for all hours worked between 7.00am Monday to Friday during each of the first full time period, the casual period and the second full time period, as required by clause 18.1 of the award, resulting in an underpayment of $1,779.72. 7 The clause 18.1 breach was said to result in an underpayment of $4,195.00 in all. 8 Secondly, the respondent failed to provide Cornwell with paid public holidays during each of the first full time period and the second full time period, as required by clause 20.1 of the award resulting in an underpayment of $3,808.00. Thirdly, the respondent failed to pay Cornwell the appropriate penalty rates for time worked on public holidays during the first full time period and the second full time period as required by clause 20.9 of the award, resulting in an underpayment of $765.43. 9 Fourthly, the respondent failed to pay Cornwell the appropriate penalty rates for all ordinary hours worked on Saturdays and Sundays during each of the first full time period, the casual period and the second full time period as required by clauses 19.1 and 19.2 of the award, resulting in an underpayment of $288.32. 10 Fifthly, the respondent failed to pay Cornwell annual leave in respect of the first full time period upon termination of his employment on 17 August 2001, as required by clause 23.4.1 of the award, resulting in an underpayment of $212.97. Further, the respondent failed to pay Cornwell annual leave in respect of the second full time period upon termination of his employment on 7 August 2005, in accordance with clause 23.4.1, resulting in an underpayment of $9,639.19. 11 The total underpayment in respect of clause 23.4.1 of the award was said to be $9,852.16. 12 Sixthly, the respondent failed to pay Cornwell an annual leave loading of 17.5% upon termination of his employment on 17 August 2001, as required by clause 23.4.2 of the award, resulting in an underpayment of $37.27. Further, the respondent failed to pay Cornwell an annual leave loading of 17.5% upon termination of his employment on 7 August 2005 as required by clause 23.4.2, resulting in an underpayment of $1,686.86. 13 The total underpayment in respect of clause 23.4.2 was said to be $1,724.13. 14 Seventhly, the respondent failed to provide Cornwell with paid rostered days off during each of the first and second full time periods of employment, as required by clause 16.1 and clause 16.2.1, resulting in an underpayment of $384.44. 15 Eighthly, the respondent failed to pay Cornwell the appropriate penalty rates for time worked on rostered days off during the first full time period and the second full time period, as required by clause 16.6 of the award, resulting in an underpayment of $8,700.70. 16 Ninthly, the respondent failed to pay Cornwell the appropriate penalty rates for time worked as a casual employee during the casual period, as required by clause 10.11 of the award, resulting in an underpayment of $57.09. 17 Lastly, the respondent failed to pay Cornwell redundancy payments in respect of the first full time period upon termination of Cornwell's employment on 17 August 2001 as required by clause 34.2 of the award resulting in an underpayment of $126.37. Further, the respondent failed to pay Cornwell redundancy payments in respect of the second full time period upon termination on 7 August 2005, as required by clause 34.2, resulting in an underpayment of $5,152.56. 18 The total underpayment in respect of clause 34.2 was said to be $5,728.93. 19 Each contention is denied by the respondent and is in controversy in the proceedings. 20 The fundament of the present application is this. 21 The applicant seeks leave to amend the application to delete particular paragraphs of the application and effect a recalculation of the amounts claimed in respect of those paragraphs of the application to be pressed. Leave was given to amend the application on 25 February 2008. However, the application was not amended pursuant to leave in part because the parties undertook discussions with a view to reaching an agreed set of facts. No agreement could be reached. During the period of those exchanges, the applicant failed to effect the amendments the subject of leave on 25 February 2008. The applicant now seeks leave to amend the application in terms of the leave previously given subject to one further matter, namely, a further amendment to the claim for an underpayment in respect of a contended breach of clauses 16.1 and 16.6 of the award in an amount of $4,602.06 rather than $4,223.82. 22 Leave was not opposed by the respondent on 25 February 2008 although that position was in part due to an expectation that agreement would be reached about particular factual matters. The respondent opposes leave to amend and does so on the basis that each amended claim offends the limitation period. The respondent says each amendment, if now made with leave, is beyond the six year limitation period provided for by s 719(9). Thus, leave ought not to be given, it is said. Apart from the limitation point, the applicant says the history of the amendments proposed by the applicant is such that the Court should refuse leave as a matter of discretion. The respondent says the material as originally filed did not reveal the basis upon which each claim was formulated and, in particular, the period of the contended breaches. Now that the respondent has the benefit of a schedule of underpayments annexed to the affidavit of the applicant sworn 16 June 2008 (KTB-6) in support of the leave application, the respondent says it is clear that the content of each claim reaches back to a period prior to the expiration of the limitation period and leave ought not to be allowed, that is, to a period six years prior to the date of the leave application. The respondent says no claim based upon a contended breach any earlier than six years prior to the date of the application for leave should be granted. The applicant says the proposed amendments simply effect a recalculation of the amount of each claim the subject of the proceeding as filed. 23 Accordingly, it is necessary to examine the claim as originally formulated and determine whether the proposed amendments seek to join one or more claims which are beyond the limitation period and, if so, whether leave ought to be refused on that ground apart from any discretionary issue. 24 On 13 December 2007, the applicant filed a notice of motion seeking leave to amend the application to alter the amount of the contended underpayments in respect of the various contended breaches of the award. The proposed amendment sought to incorporate orders for the imposition of a penalty and an order for the payment of an underpayment ($2,528.36) to Cornwell in respect of a contended breach of clause 24.1 of the award. The application was supported by an affidavit sworn by the applicant on 6 December 2007 (filed 7 December 2007) in which he said that a review of time and wages records provided by the respondent revealed that the amount of each underpayment described in the affidavit of 13 July 2007 supporting the application as filed, was incorrect. The applicant prepared spreadsheets identifying the contended correct calculation in respect of each claim. 25 The proposed amended claim sought an order for the payment of these underpayments: clause 18.1, $1,089.30 rather than $4,195.00; clause 20.1, $4,482.74 rather than $3,808.00; clause 20.9, $171.68 rather than $765.43; clauses 19.1 and 19.2, an amount of $167.84 rather than $288.32; clause 23.4.1, an amount of $9,416.56 rather than $9,852.00; clause 23.4.2, an amount of $1,647.90 rather than $1,724.13; clauses 16.1 and 16.6, an amount of $3,004.18 rather than $8,700.70; clause 10.11, an amount of $404.51 rather than $57.09; clause 34.2, an amount of $5,044.23 rather than $5,278.93. 26 The applicant's affidavit filed 7 December 2007 in support of the application for leave to amend, annexes the spreadsheets in support of the calculation and a schedule setting out particulars of each calculation of the contended underpayment in respect of each clause of the award in issue. The particulars identify the period in which the contended underpayment occurred and the method of calculation of the underpayment. 27 In respect of the clause 18.1 claim, the applicant contended in the application as filed that the respondent failed to pay Cornwell throughout the three identified periods spanning a period from 16 July 2001 to 7 August 2005. The schedule of underpayments annexed to the applicant's affidavit set out a calculation commencing on 26 July 2001 and ending on 7 April 2005 and a second calculation commencing on 5 July 2001 and ending on 23 June 2005. But for items on 5 July 2001 and 12 July 2001, the schedule effects a recalculation of the amount of the clause 18 breach within the period previously identified in the material filed on 13 July 2007. 28 In respect of the clause 20.1 claim, the proceeding as filed claimed the respondent failed to provide Cornwell with paid public holidays during the first full time period and the second full time period that is, in the period 16 July 2001 to 17 August 2001 and in the period 21 January 2002 to 7 August 2005. The schedule of underpayments effects a recalculation of the contended clause 20.1 breach for the period 13 July 2001 to 4 August 2005 which is within the period previously identified in the material filed on 13 July 2007 but for three days. Similarly, the schedule effects a recalculation of the claim under clause 20.9 with the first entry commencing on 16 August 2001. 29 In respect of the claim based on clauses 19.1 and 19.2, the applicant initially formulated a claim based upon a breach during the first full time period, the casual period and the second full time period. The schedule recalculates the amount of the claim by reference to three entries from 20 December 2001 to 3 January 2002. 30 In respect of clause 23.4.1, the applicant contended the respondent failed to pay Cornwell entitlements upon termination on 17 August 2001 and upon termination on 7 August 2005. The schedule effects a recalculation of the claimed entitlements for the period 14 March 2002 to 16 June 2005 being a period within the period originally claimed. As to annual leave entitlements, the schedule effects a recalculation for the period 13 July 2001 to 16 August 2001. The claim as originally framed formulated an underpayment by reference to the period 16 July 2001 to 7 August 2005 being the total scope of the first and second full time employment periods. 31 In respect of clause 23.4.2, the schedule effects the calculation in the period 13 July 2001 to 16 August 2001 and 18 January 2002 to 4 August 2005. The claim as originally formulated related to a period from 16 July 2001 to 7 August 2005. 32 In respect of clauses 16.1 and 16.2, the applicant originally formulated a claim based on a failure to provide Cornwell with paid rostered days off during the first and second full time periods. The schedule effects a recalculation in the period 16 May 2002 to 22 April 2004. 33 In respect of clause 16.6, the applicant originally formulated a claim based on a failure to pay Cornwell appropriate penalty rates for time worked on rostered days off during the first and second full time employment periods. The schedule effects a recalculation for the period 9 August 2002 to 27 July 2005. 34 In respect of clause 10.11, the applicant originally formulated a claim based on a failure to pay Cornwell appropriate penalty rates for time worked as a casual employee during the casual period, that is, 17 October 2001 to 20 January 2002. The schedule effects a recalculation in the period 29 June 2001 to 17 January 2002. 35 In respect of clause 34.2, the applicant originally formulated a claim based on a failure to pay redundancy payments in respect of the first full time period and a similar failure in respect of the second full time period. The schedule effects a recalculation of a redundancy payment upon termination for each termination date. 36 It can be seen that but for the two items the subject of the clause 18.1 contention and a claim under clause 10.11 relating back to 29 June 2001 rather than commencing on 17 October 2001 and the three days differential in relation to clause 20.1, each proposed amendment as at 13 December 2007 simply sought to effect a recalculation of the amount of the underpayment said to have been payable to Cornwell consistent with the period of the claim for each clause of the award reflected in the proceeding as formulated and filed on 13 July 2007. The application for leave to amend filed on 13 December 2007 did not seek to add claims out of time but for the items previously mentioned. 37 The application to amend in terms of the motion filed on 13 December 2007 was adjourned to 25 February 2008. 38 On that day leave was given to amend the application in terms of the amended application attached to the notice of motion (effecting the changes at [25]) subject to further amendments made on 25 February 2008. The further amendments were these. First, the amount of the underpayment claimed by the applicant in respect of a contended breach of clause 18.1 was amended to $524.89 rather than $1,089.30. Secondly, the claims for the imposition of a penalty and an order for the payment of an award underpayment based upon clauses 20.1 and 20.9 were abandoned. Thirdly, the claim based upon clause 23.4.1 was also abandoned. Fourthly, the claim for the payment of an underpayment based upon clauses 16.1 and 16.2.1 of the award was abandoned. Fifthly, the claim for an underpayment based upon a contended breach of clauses 16.1 and 16.6 of the award was amended from $3,004.18 to $4,223.82. Sixthly, the claim based upon a contended breach of clause 34.2 of the award was abandoned. A claim for orders based upon s 178(1) and s 178(6) of the Act in its pre-amendment terms (see: [4]) was also abandoned. 39 The applicant now seeks leave to amend the application in terms of the leave granted on 25 February 2008 subject to the additional matter that the claim for an underpayment based upon a contended breach of clauses 16.1 and 16.6 in an amount of $4,223.82 be further amended to $4,602.06. The applicant relies upon his further affidavit filed on 16 June 2008 which exhibits a further schedule of underpayments (KTB-6). The affidavit explains the recalculation of the amount claimed based upon a contended breach of clause 16 of the award and thus explains the additional amendment from $4,223.82 to $4,602.06. The schedule recalculates the clause 16.6 claim by reference to a period commencing on 9 August 2001 and concluding on 28 July 2005. That period represents a period within the period the subject of the claim as originally filed. The applicant had originally claimed an amount representing an underpayment of penalty rates for time worked on rostered days off during the first full time period and the second full time period. The first period commenced on 16 July 2001. The second period commenced on 21 January 2002. The amendment simply effects a recalculation of an existing claim as filed rather than the joinder of a claim outside the limitation period. 40 As the proceeding was filed on 13 July 2007, all claims of contended breaches of the award contained in the application reaching back to 13 July 2001 are within time. The present application simply effects a recalculation of those claims but for the following matter. In the course of argument, the applicant abandoned any claim in the period 29 June 2001 to 12 July 2001 in respect of a contended breach of clause 10.11. The applicant also abandoned any claim based upon a contended breach of clause 18.1 in respect of the weeks ending 5 July 2001, 12 July 2001 and 19 July 2001. 41 It is true that the applicant failed to amend the application in accordance with the order made on 25 February 2008 within 14 days of that date. Accordingly, the order giving the applicant leave to amend ceased to have effect. Nevertheless, it is clear that the present application for leave simply involves granting leave in terms of the earlier order subject to a further amendment to claim an amount of $4,602.06 in respect of a contended breach of clause 16 rather than $4,223.82. Since the amendments effect a recalculation of an existing claim rather than the joinder of further claims out of time, it seems to me that the correct approach is to ensure that those claims to be abandoned are abandoned with leave and secondly, leave is given to amend the application to reflect the amended calculation of the remaining claims so as to achieve the purpose of enabling the real questions raised by the proceeding to be determined between the parties. The order for leave will reflect the abandonment of those items of claim mentioned at [40]. 42 The respondent says that part of the difficulty with the application for leave to amend is that the respondent has not been able to determine the precise period of the conduct relied upon by the applicant to support the contended breaches of the award. The respondent says the application should have been supported by a statement of claim. However, the application is supported by a schedule of underpayments which has been sworn to by the applicant. Changes to the schedule have been reflected in a further affidavit of the applicant. In addition, I have had the benefit of reading the affidavits of David Bruce Crollick. The first is sworn 14 December 2007 and filed 20 May 2008. The second affidavit is sworn 12 May 2008 and also filed on 20 May 2008. Mr Crollick's affidavits raise a series of contentions which puts the claims of the applicant in controversy in respect of each clause of the award and exhibits a series of calculations based upon the respondent's records. It is clear therefore that the respondent has engaged with the applicant on the content of the various claims and the merits of the respondent's position that no breaches of the award have occurred or alternatively that a proper basis is made out upon which no penalty or underpayment ought to be ordered. 43 Accordingly, I propose to make the following orders. First, leave is given to the applicant to amend the application filed on 13 July 2007 in terms of the amended application handed to the Court and provided to the respondent, in the course of the application for leave to amend, subject to a further amendment to reflect those items of claim abandoned by the applicant described at [40] of these reasons. Secondly, I direct the applicant to file and serve an amended schedule of underpayments setting out the content of the calculation of each contended breach of each clause of the award. Thirdly, costs of the application for leave to amend will be reserved. There may well be a body of costs which have been unnecessarily incurred by reason of the various steps involved in reformulating the amount of the claims. 44 I propose to make the following further directions. First, the applicant shall file and serve any further affidavits (if any) upon which it proposes to rely by 31 July 2008. Secondly, the respondent shall file and serve any further affidavits (if any) upon which it proposes to rely by 28 August 2008. Thirdly, the application shall be set down for hearing on 22 September 2008. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Greenwood. | application for leave to amend an application seeking orders for the imposition of a penalty and an order for the payment of an award underpayment pursuant to the provisions of the workplace relations act 1996 (cth) industrial law |
In paragraphs 80 to 99 I dealt with the question of relief. I reserved for further consideration the appropriate form of declarations and injunctions. I also reserved for further consideration the nature and form of corrective advertising that should be ordered under s 86C of the Trade Practices Act 1974 ( the Act ). Each party has filed written submissions and a proposed minute of orders in accordance with the orders made on 4 December 2009. At the request of the Respondent the proceedings were re-listed for oral submissions in relation to the form of orders. A directions hearing took place on 18 December 2009. Some further argument occurred on that occasion. Neither party sought any further hearing. On 16 December 2009 the Respondent filed a further affidavit of Lesley Francis Hynes sworn the previous day. At the hearing on 18 December 2009 Mr Bevan, who appeared for the Respondent, indicated that the Respondent wished to rely upon that affidavit. Mr Bevan accepted that his client could only do that if it was granted leave to re-open. Ms Higgins, who appeared for the Applicant, indicated that it would oppose any such leave being granted. I will return to the affidavit shortly. As to the appropriate form of declarations and injunctions, there were few differences between the parties and none which I would regard as of any real substance. The declarations and injunctions which I think are appropriate are set out in paragraphs 1 to 4 in the Schedule to these Reasons for Judgment. They do not mirror either party's proposed orders. I had regard to what both parties put forward before settling upon what I considered most appropriate. I now return to the further affidavit of Ms Hynes. As I have mentioned, the affidavit was sworn on 15 December 2009 and filed the following day. The affidavit stated in paragraph 36 that Ms Hynes "... is leaving Sydney on Wednesday, 16 December 2009 at 3.00pm to go to Ireland for a personal holiday. " It states that she had booked this holiday on 22 October 2009. The affidavit did not disclose when she would return. The affidavit was mainly directed to showing what costs would be incurred by the Respondent in complying with the orders for corrective advertising sought by the Applicant. It also made reference to the revenue generated by the Respondent from subscriptions to the Moby Planet service but only for the period August 2009 to October 2009. It therefore presented an incomplete account of revenue received by the Respondent as a result of the scratch card promotion. More troubling were the financial statements exhibited to the affidavit. They included what appeared to be a specially prepared balance sheet as at 8 December 2009. As best as I could judge from that document, the Respondent is most likely insolvent. In any event, Ms Hynes, the deponent of the affidavit, does not appear to be in any position to verify the accuracy of the balance sheet. When I enquired of Mr Bevan whether it might not be more appropriate for such evidence to be given by one of the directors of the Respondent, I was informed that they too had left for Ireland. I came to the conclusion that I would not grant leave to the Respondent to re-open its case for the purpose of receiving the affidavit of Ms Hynes. Quite apart from the fact that she was not available for cross-examination, it is clear that much of the material in her affidavit is inadmissible in any event. One matter of significance that emerged from the parties' written submissions was the fact that the Respondent is apparently able to send a "corrective" SMS to each person who sent an SMS in response to the invitation conveyed by the scratch cards. The way in which the case was presented by the parties up until the time those written submissions were filed suggested to me that such messages could only be sent to those people who continued to subscribe to the Moby Planet service. Apparently that is not the case. The written submissions filed by the Respondent suggest that I make an order requiring a "corrective" SMS to be sent to past and present subscribers who took out subscriptions as a consequence of the scratch card promotion. Ms Higgins pointed out that there was no evidence that the Respondent could send a "corrective" SMS to both past and present subscribers. That is true. But given that the Respondent has informed the Court that it can comply with an order requiring it to do that, I do not think it matters that there is no evidence to that effect. If the Respondent does not comply with any order for corrective advertising that I make it will be guilty of contempt. Ms Higgins also submitted that, in addition to sending such an SMS, the Respondent should be ordered to publish corrective advertisements in a wide range of newspapers and magazines. Some of the relevant publications were identified by me in paragraph 7 of my earlier Reasons for Judgment. She submitted that there were likely to be people who were misled by the scratch cards but who did not subscribe. There may have been people misled momentarily who came to understand that they would incur subscription costs if they attempted to collect a prize in the manner specified in the scratch cards. Whether those people were misled or deceived in any relevant sense is doubtful. In any event, it is impossible to see what damage they would have suffered as a result of the Respondent's contravention of the Act. As I stated in paragraph 98 of my earlier Reasons for Judgment, in this case an order for corrective advertising should be aimed at bringing the key findings of the Court to the attention of people who took out subscriptions to the Moby Planet service including those people who terminated their subscriptions. Since it now appears that this can be achieved by requiring a "corrective" SMS message to be sent to all 114,418 people who subscribed to the Moby Planet service in response to the scratch card promotion, I do not see any justification for an order for corrective advertising in any other form. The Applicant also proposed that there be some form of verification provided for in my orders. I invited the parties to attempt to agree upon an appropriate form of order but nothing has eventuated. Accordingly, I have settled the orders myself which appear in paragraphs 7 to 10 of the Schedule. The Respondent did not contest the provisional view expressed by me in paragraph 100 of my earlier Reasons for Judgment concerning costs. The Applicant has had a large measure of success and I think the Respondent should pay its costs of this proceeding. The orders I propose to make are as set out in the Schedule to these Reasons for Judgment. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Nicholas. Declare that the publication by the Respondent of the Yellow Scratch Card was conduct, in trade or commerce, that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act in that the front of the scratch card represented to consumers that the available prizes included an Apple 3G iPhone when, in fact, the available prize was an Apple iPod Touch. Declare that the publication by the Respondent of the Yellow Scratch Card was conduct, in trade or commerce, that was misleading or deceptive, or likely to mislead or deceive, in contravention of s 52 of the Trade Practices Act and was a false or misleading representation with respect to price in contravention of s 53(e) of the Trade Practices Act in that the Yellow Scratch Card represented that the cost of claiming a prize was limited to " standard carrier charges " when, in fact, in claiming their prize, consumers incurred the cost of subscribing to the Respondent's Moby Planet mobile telephone premium content service at a cost of $10 per six days plus the cost of a standard SMS message. Order that by 5 February 2010, the Respondent file and serve an affidavit made by a director of the Respondent verifying compliance with Orders 5 and 6 above. Order that the Respondent establish and maintain an accurate summary of telephone calls, SMS messages, emails and other communications it receives from consumers regarding the scratch cards, including the consumer's name and telephone number and which provides details of any action taken by the Respondent in response to such communications. Order that no earlier than 9 April 2010 and no later than 16 April 2010, the Respondent file and serve an affidavit made by a director of the Respondent, verifying compliance with Order 8 above and providing an accurate summary of the communications received to date and the action taken by the Respondent in response to such communications. Order that the parties have liberty to apply on 7 days notice in relation to any question that might arise in relation to the operation of Orders 5 to 9 above. Order that the Respondent pay the Applicant's costs of this proceeding. | scratch cards published by the respondent previously held to have contravened ss 52 and 53 (e) of the trade practices act 1974 (cth) relief declarations and injunctions nature of corrective advertising to be undertaken by respondent sms message to be sent to all consumers who subscribed to the respondent's mobile telephone premium content service in response to scratch cards orders for verification by respondent of its compliance with order for corrective advertising costs trade practices |
On 5 November 2007 the Federal Magistrate dismissed an application for judicial review in relation to a decision of the Refugee Review Tribunal ("Tribunal"). 2 The appellant is a citizen of China. He arrived in Australia on 28 January 2006. He applied to the then Department of Immigration and Multicultural and Indigenous Affairs for a Protection (Class XA) visa ("protection visa") on 20 February 2006. On 17 March 2006 a delegate of the Minister wrote to the appellant advising him that his application for a protection visa had been refused. On 19 April 2006 the appellant applied for a review of the delegate's decision by the Tribunal. The Tribunal held a hearing and the appellant attended the hearing and, with the assistance of an interpreter, he gave oral evidence and made submissions in support of his application. On 25 July 2006 the Tribunal handed down its decision affirming the decision of the delegate to refuse to grant a protection visa to the appellant. 3 On 21 August 2006 the appellant lodged an application for judicial review in the Federal Magistrates Court. 4 The application contained four grounds. An amended application was filed on 29 December 2006 and it contained two grounds, although the first ground included five particulars. The grounds were a failure by the Tribunal to comply with s 424A of the Migration Act 1958 (Cth) ("the Act "); a failure by the Tribunal to consider the application in accordance with s 91R of the Act ; a failure by the Tribunal to consider the claims; and a failure by the Tribunal to make a rational and logical decision. 5 The appellant did not claim in either the original application or the amended application that he had had difficulty comprehending the hearing before the Tribunal because he did not have an interpreter who could speak the Fujian dialect. It seems that he made such a claim when his application for judicial review came on for hearing before the Federal Magistrate. Such a claim could, depending on the precise circumstances, give rise to a jurisdictional error on the part of the Tribunal. 8 The Federal Magistrate erred in law in his treatment of the appellant's claim that he did not have a competent interpreter at the Tribunal hearing. The appeal must be allowed and the application for judicial review must be remitted to the Federal Magistrates Court to be determined according to law. 9 Before explaining my reasons for so concluding it is necessary to refer to two general matters. 10 First, as I understand it, in the normal course a hearing before the Tribunal is recorded by a tape recording and copies of the tapes are made available. 11 Secondly, the New South Wales District Registry of the Federal Court organises what is called in the evidence a pilot RRT Legal Advice scheme (NSW). As I understand the scheme, a panel of legal practitioners is formed, and those practitioners are practitioners who are willing to provide advice to applicants on a pro bono basis. If retained under the scheme the practitioner is usually sent a Court book prepared by the Minister and a copy of the tape recording of the Tribunal hearing. The practitioner is asked to provide advice to an applicant as to his or her chances of success on an application for judicial review. In this case, the appellant asked for advice under the scheme and in October 2006 a legal practitioner, Mr M Urquijo, was sent a copy of the Court book and a copy of the tape recording of the Tribunal hearing. 12 At the hearing of his application for judicial review the appellant claimed that the Tribunal had committed a jurisdictional error because he, the appellant, did not have an interpreter who spoke the Fujian dialect at the Tribunal hearing and therefore he did not have a competent interpreter and, as a result, he did not comprehend or fully comprehend what transpired during the hearing. The Federal Magistrate did not say expressly that it was too late for the appellant to raise that claim as a ground of his application for judicial review. At [CB 61] there is found the RRT hearing record. Under interpreters there is a notification that the language/dialect spoken by the interpreter was Mandarin/Fujian. The applicant said that he could not provide us with any evidence about what happened in the Tribunal hearing because he did not have the tape. Ms Kantaria, who appears on behalf of the Minister, advised me that a copy of the tape was sent to the scheme lawyer on 11 October 2006. The applicant said that he had never spoken to the scheme lawyer. In the absence of any clear evidence about this I propose to proceed on the assumption that a scheme lawyer acted as he was required to do under the scheme. No doubt when the applicant makes his inevitable appeal against this decision there will be an opportunity for him to bring evidence to the Full Bench that the scheme lawyer did not act in accordance with his mandate, did not contact the applicant, did not provide the applicant with advice and did not listen to the tape. He can also provide evidence about the interpretation if that is available. If the applicant provides such proof no doubt the Full Bench will take it into account when considering what to do about the matter. However, I would respectfully endorse the submission made by Ms Kantaria that if one reads the grounds and reasons for the decision by the Tribunal it seemed a lot of questions were asked and answered in a way that indicates that the applicant did understand what he was being questioned about. 14 In my respectful opinion, the Federal Magistrate erred in taking the approach identified in the passages from his reasons set out above. It seems to me that in the circumstances before him the Federal Magistrate had the choice of granting the appellant an adjournment so that he could obtain the tape recording of the Tribunal hearing or, upon a proper exercise of the discretion, refusing an adjournment and proceeding to hear the application for judicial review. He must be taken to have rejected the suggestion of an adjournment, but in my respectful opinion he exercised his discretion to refuse an adjournment on a basis which was incorrect in law and, it follows, by taking into account an irrelevant consideration. The Federal Magistrate was exercising original jurisdiction and it is trite to say that in the usual course all evidence will be called before the Court exercising original jurisdiction. Whether or not an appeal is inevitable is irrelevant. Furthermore, it is not right to say that this Court exercising appellate jurisdiction will "no doubt" take into account further evidence. Whilst this Court has a discretion to receive further evidence under s 27 of the Federal Court of Australia Act 1976 (Cth), that discretion is exercised in accordance with well-established principles. One such principle, which I think is uncontroversial, is that the discretion is not to be exercised so as to have the practical effect of obliterating the distinction between original and appellate jurisdiction: CDJ v VAJ [1998] HCA 67 ; (1998) 197 CLR 172 , 201-202 at [111] per McHugh, Gummow and Callinan JJ. 15 In my opinion, the Federal Magistrate erred in law in the manner in which he exercised his discretion whether to adjourn the hearing of the application for judicial review. 16 Even if, contrary to my view, the Federal Magistrate did not err in deciding to proceed to hear and determine the application for judicial review by reference to the considerations he identified, he erred in law in the manner in which he dealt with the appellant's claim that he did not have a competent interpreter at the Tribunal hearing. The tape recording of the Tribunal hearing was, no doubt, likely to be the best evidence in terms of supporting or negating the appellant's claim and even if the appellant were not given an opportunity to obtain it, the first respondent may have wished to obtain it if some evidence in support of his claim was otherwise put forward by the appellant. However, it seems, from his reasons at least, that the Federal Magistrate was saying that evidence from the appellant as to what transpired at the hearing would not be evidence in support of his claim, or could not be, or could not be accepted in the absence of corroboration. Such views are incorrect. Needless to say, whether evidence from the appellant alone would be sufficient to establish his claim or whether it would even be accepted are other matters. It seems to me that if the application for judicial review proceeded (and was not adjourned) and the appellant wished to press his claim that he did not have a competent interpreter at the Tribunal hearing then he should have been told that he would need to give evidence from the witness box and that he would be subject to cross-examination. 17 During the hearing of the appeal, I formed the view that the Federal Magistrate had erred in law in the manner I have indicated, but I was concerned as to whether the error had any practical consequences. There was debate before me as to the contact (if any) between the appellant and the scheme legal practitioner, Mr Urquijo. The appellant put forward an affidavit in which he said that he applied for advice under the scheme, but was never contacted by the barrister. The first respondent put forward an affidavit which detailed a conversation between the solicitor acting for the first respondent and Mr Urquijo. That evidence (which is contained in paragraphs 6 and 7 of the affidavit) is hearsay evidence and there is no evidence to suggest that the relevant sections of the Evidence Act 1995 (Cth) are enlivened: see s 64. Furthermore, the requirements of s 67 have not been met. I have reached the conclusion that I should not receive any of the proposed further evidence on the hearing of the appeal. It is true that ultimately, the appellant's claim that he did not have a competent interpreter at the Tribunal hearing may be unsuccessful and indeed at one point during the hearing of the appeal the appellant seemed to say that he does not know whether he had a competent interpreter at the Tribunal hearing. However, I am not confident that he understood or fully understood what was being put to him and it is not appropriate that I determine that claim on appeal. With respect, the Federal Magistrate should have done so and he should not have assumed that there was an unrestricted right to put further evidence before this Court exercising its appellate jurisdiction. The appellant is and was entitled to have his application for judicial review determined according to law. In my opinion, the Federal Magistrate erred and the appeal to this Court should be allowed. The orders made by the Federal Magistrate on 5 November 2007 must be set aside and the application for judicial review should be remitted to the Federal Magistrates Court for rehearing by that Court. 18 I would add only that the grounds in the notice of appeal largely reflected the grounds in the application for judicial review as summarised in [4] above. If pressed by the appellant those matters should be considered on the rehearing. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from decision of federal magistrate discretion to adjourn hearing on application for judicial review of decision of refugee review tribunal certain evidence not before federal magistrates court error of law to assume evidence able to be put before full court of the federal court exercising appellate jurisdiction appellant claimed not to have had competent interpreter at tribunal hearing error of law to require independent evidence or corroboration of claim appellant himself competent to give evidence appeal allowed and application for review remitted to federal magistrates court for rehearing migration |
2 The present application before the Court seeks an order under s 109(10) of the Bankruptcy Act 1966 (Cth) in respect of a reference sought by creditors Roberts Ltd and Monds Affleck Pty Ltd. The latter is a wholly owned subsidiary of the former. 3 For some years prior to their bankruptcy George and Debra Wagner operated a dairy farm at a property called Rengaw, which was leased from a related company Rengaw Pastoral Co. Pty Ltd (the Company). George Wagner held 25 per cent of the issued capital of the Company and his parents, Alfred and Norma Wagner, held 75 per cent. 4 The transactions with which the present application is concerned are a transfer of George Wagner's shares in the Company to his parents and the debt of $1 million claimed by the Company and Alfred and Norma Wagner. Examinations conducted under s 81 of the Act led the trustees to believe that there were serious doubts as the veracity of the debt, that George Wagner's shares in the Company had not been transferred for market value and that the Alfred and Norma Wagner were aware of the financial difficulties of the bankrupts at the time of the transfer of the shares. 5 In late April 2006 Alfred and Norma Wagner, by their solicitors, offered the trustees the sum of $160,000 plus reasonable legal costs in full and final settlement. The trustees estimated that this equated to an offer of approximately $195,000. The trustees rejected that offer. Subsequently the trustees obtained an indemnity from the Roberts companies of an amount limited to $40,000. According to the trustees there was a general understanding that should the need arise for a further indemnity, it would be considered by the indemnifying creditors. The other creditors were told of the proposed indemnity but did not join in. 6 After obtaining the indemnity the trustees filed an application in the Federal Court (TAD 29/2006) on 7 August 2006 in relation to the undervalue transfer of the shares and the proof of debt lodged by Alfred and Norma Wagner and the Company. 7 On 8 September 2006 Alfred and Norma Wagner and the Company offered the trustee $260,000, including costs, to settle. That offer was accepted by the trustees. The offer included an undertaking by Alfred and Norma Wagner and the Company that they would not make a claim on either of the bankrupts' estates. 8 The present application seeks a preference to the Roberts companies in the amount of $65,000. This amount is the difference between the earlier offer and the later offer, which was accepted. 9 In my opinion it is a fair and reasonable proposal. It is plain that the extra amount would not have been obtained had it not been for the indemnity given by the Roberts companies and the commencement of proceedings. The settlement seems reasonable, especially in light of the fact that substantial and complex litigation would have been involved, including issues of valuation and when insolvency arose and the knowledge of Alfred and Norma Wagner as to that insolvency. 10 The net result is that, on the trustees' estimates, the indemnifying creditors will receive approximately 60.4 cents in the dollar and the other creditors approximately 22.3 cents in the dollar. 11 Notice of this application has been served on the other creditors but they did not appear to oppose the application. In the administration of the bankrupt estate of George Wagner, after payment of the costs, expenses and charges incurred by the applicants in the Federal Court of Australia in proceeding TAD29/2006, Roberts Ltd and Monds Affleck Pty Ltd be paid the sum of $65,000 to be shared rateably between them in proportion to their debts and the balance of the proceeds of the realised funds, after payment of costs and expenses of administration with the order of priorities set out in section 109 of the Act. 2. The costs of Brett Richard Geoffrey Harrison and Paul John Cook of and incidental to this application are to be paid out of the bankrupt estate of George Wagner. | creditor's indemnity of trustee costs in pursuing property for the bankrupt estate discretion of court to distribute funds section 109 bankruptcy act 1966 (cth) bankruptcy |
The summons annexed a copy of the Australian Crime Commission Special Intelligence Operation Authorisation and Determination (Amphetamine Type Stimulants and New Synthetic Drugs) 2007 (the ATS determination) and the Australian Crime Commission Special Intelligence Operation Authorisation and Determination (Amphetamine Type Stimulants and New Synthetic Drugs) Amendment No 1 of 2008 (the ATS determination amendment 2008). By an amended application filed on 26 March 2009 the applicant, SS, challenged the validity of the ATS determination, the ATS determination amendment 2008 and the summons. Before doing so, it must 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 doing so, it must consider whether ordinary police methods of investigation into the matters are likely to be effective. The examiner must also record in writing the reasons for the issue of the summons. As the following summary of SS's grounds of challenge disclose, there are many other provisions of the ACC Act which bear upon the issue of validity. I deal with those provisions in my reasons considering the individual grounds of challenge. (2) The Board's resolution of 5 December 2007 (as disclosed in the redacted minutes) does not accord with the requirements of s 7C of the ACC Act in that it is not a resolution which: - (i) purports to authorise the ACC to undertake an intelligence operation (s7C(1)(c)), (ii) determines in writing that the operation is a special operation (s7C(1)(d)), (iii) determines in writing the class or classes of persons to participate in such an operation (s7C(1)(e)), or (iv) considers whether methods of collecting criminal information and intelligence that do not involve the use of powers in the ACC Act have been effective (s7C(2)). (3) It should be inferred that, in making the ATS determination, the Board was not satisfied as required by s 7C(2) of the ACC Act. (4) It should be inferred that, in making the ATS determination, the Board did not comply with s 7C(1)(e) of the ACC Act. (5) It should be inferred that, in making the ATS determination, the Board did not give any consent with respect to activities relating to crimes under State laws in accordance with ss 55A(3) and (5A) of the ACC Act. (6) In breach of the obligation imposed by s 25D of the Acts Interpretation Act 1901 (Cth) the minutes of the meeting on 5 December 2007 do not record the Board's findings on material questions of fact or refer to the evidence or other material on which those findings were based. (8) Paragraph 11 of the ATS determination does not satisfy the requirements of s 55A(3) and (5A) of the ACC Act. (9) Paragraph 3(c)(xiv) in Schedule 1 to the ATS determination contravenes s 7C(4)(a) of the ACC Act. (3) The examiner failed to record in writing (or failed adequately to do so) the reasons for the issue of the summons in breach of s 25D of the Acts Interpretation Act . (4) It should be inferred that the examiner's reasons are a recent invention or that the reasons have been tampered with. (5) It should be inferred that, in issuing the summons, the examiner erred with respect to the obligations imposed by s 29A(2) of the ACC Act. (6) The summons is defective on its face as: - (i) the summons does not require SS to attend at an examination to give evidence in a capacity as a witness to federally relevant criminal activity within the meaning of the ACC Act, and (ii) the statement of rights and obligations under s 29B of the ACC Act which was annexed to the summons does not set out a person's rights and obligations under s 29B(3) or 29B(4) of the ACC Act as required. SS also made an overriding submission that the documents produced by the ACC (redacted based on extensive claims of public interest immunity) should not have been so redacted in some circumstances. Further, the ACC called no evidence from members of the Board or the examiner. While SS accepted that SS bore the onus of proof, SS claimed that this high-handed and unjustifiable approach of the ACC assisted SS in discharging that burden. SS reiterated and enlarged these submissions in relation to a notice of motion SS filed on 25 May 2009 seeking leave to rely on further submissions. I also deal with that notice of motion below. By s 7(2) the ACC consists of the Chief Executive Officer of the ACC (the CEO), the examiners and members of the staff of the ACC. Under s 7D the Chair of the Board may convene Board meetings. Section 7E provides that the Chair presides over the Board's meetings. Under s 7F a quorum at a Board meeting is constituted by seven Board members not including the CEO. Section 7G regulates voting at Board meetings. Relevantly, questions before the Board are determined by a majority of the members present (s 7G(1)). The person presiding at the meeting has a casting vote if necessary. Provided that the requisite number of Board members indicate that they are in favour of a resolution referred to all members (without the resolution being considered at a meeting of the Board), s 7J(2) provides that "(t)he resolution is as valid and effectual as if it had been passed at a meeting of the Board duly convened and held". As the first aspect of this ground of challenge, SS submitted that there was no evidence that the Board had before it a draft of the ATS determination at its meeting on 5 December 2007. The submission assumes that, in order to discharge the functions vested in it by ss 7C(1)(c), (d) and (e), the Board must have before it a draft document which constitutes the proposed authorisation and determinations. The ACC Act does not so provide. It requires only that the relevant authorisation and determinations be "in writing" and otherwise satisfy the conditions expressed by the statute. Even if the ACC Act did impose such a requirement, there is ample evidence from which it should be inferred that the Board had a draft of the ATS determination before it at its meeting on 5 December 2007. I accept SS's submission that the mere fact of the attachment of the draft ATS document to the single page document does not establish that the draft ATS determination was before the Board on 5 December 2007. Nevertheless, under s 183 of the Evidence Act 1995 (Cth), the Court may draw any reasonable inference from a document in determining a question about the applicability of any provision of that Act. It is reasonable to infer from the face of this document that it forms part of the records of the ACC for the purpose of its business and that the representations it contains are (at least) on the basis of information directly or indirectly supplied by a person who had, or might reasonably be supposed to have had, personal knowledge of the asserted facts within the meaning of s 69 of the Evidence Act . Accordingly, it may be inferred from the document (without regard to the annexure) that, at the meeting on 5 December 2007, the Board had before it a Board paper concerning "Determination Application: Amphetamine Type Stimulants (ATS) and New Synthetic Drugs Special Intelligence Operation". To this evidence may be added a second document. ... The Board unanimously agreed to close the AOSD determination and establish an ATS and New Synthetic Drugs determination at 1.38 pm. ... The Chair closed the meeting at 3.04 pm. As noted, the ATS determination amendment 2008 amended the date in paragraph 4 of the ATS determination to 31 December 2009. Again, the reasoning above in respect of ss 183 and 69 of the Evidence Act applies to the ATS determination. SS relied on a minute relating to a subsequent Board meeting on 3 December 2008, which expressly refers to a resolution "in terms of the draft instrument Australian Crime Commission Special Intelligence Operation Authorisation and Determination (Amphetamine Type Stimulants and New Synthetic Drugs) Amendment No. 1 of 2008 provided to the Board in the agenda papers for this item", to support its submission that there was no evidence that the Board had before it a draft of the ATS determination at its meeting of 5 December 2007. This is in contrast to the minutes of the meeting of 5 December 2007, the disclosed parts of which merely state the Board agreed to "establish" a determination in relation to amphetamine type substances and new synthetic drugs. SS's argument is unpersuasive. There may be many reasons why the Board used a different form of words at its meetings of 5 December 2007 and 3 December 2008 only one of which would be consistent with SS's contention. That contention has to be assessed against all of the available evidence identified above. SS's submissions provide do not provide a cogent reason for the ATS determination itself not being evidence that the Board made the ATS determination at 1.38pm on 5 December 2007. Contrary to the submissions for SS, that inference is overwhelming from the face of the ATS determination as supported by the agenda and minutes. From this it also may readily be inferred that at its meeting on 5 December 2007 the Board had before it the draft ATS determination which, upon being signed and dated by the Chair of the Board, became the ATS determination. SS's submission that there is no evidence to support this inference is thus unsustainable. A similar conclusion must be reached about the second aspect of this ground of challenge (that the minutes of the Board's meeting disclose that all the Board did on 5 December 2007 was "establish" a determination). Presumably, SS's emphasis on the word "establish" is intended to distinguish that function from "resolving", in light of the scheme of the ACC Act providing for the Board to discharge its business by voting at and outside meetings as referred to in ss 7D to 7H and 7J respectively. The submission, however, is misconceived for at least two reasons. First, the provisions of the ACC Act dealing with meetings of the Board do not state that, in order to be effective, a decision of the Board must identify itself as a resolution. The minutes of the 5 December 2007 meeting disclose that the Board unanimously agreed to establish an ATS and New Synthetic Drugs determination at 1.38pm. Even without the ATS determination, which expressly identifies itself as an instrument made under s 7C of the ACC Act "by resolution at 1.38pm", the words "the Board unanimously agreed to ...establish an ATS and New Synthetic Drugs determination at 1.38pm" are apt to record a determination of the Board within the meaning of s 7G(1) of the ACC Act. To conclude otherwise is to elevate form over substance without any justifiable basis. SS's submissions provide no persuasive basis for a contrary conclusion. Second, when the terms of the ATS determination are taken into account, the inference that the Board resolved to make the ATS determination on 5 December 2007 is unavoidable. SS attempted to make something of the difference between the words "made this instrument..." in the ATS determination and the requirement that the Board authorise and determine in writing relevant actions under s 7C. Again, this approach lacks merit. For the reasons given above, the only inferences which should be drawn are that: - (i) the Board had before it the draft ATS determination at its meeting on 5 December 2007, (ii) the Board decided at that meeting to give the authorisation and make the determination as set out in the terms of the ATS determination (paragraphs 4 and 6), and (iii) the Board recorded its decisions both in the minutes and by the Chair signing and dating the ATS determination. Both the minutes and the ATS determination are "in writing". The requirements of ss 7C(1)(c) and (d) for an authorisation and determination to be in writing are thus satisfied. As Mansfield J noted in CC Pty Ltd v Australian Crime Commission (No 2) (2007) 66 ATR 39; [2007] FCA 16 at [26] the ACC Act "does not specify at all how the Board must 'determine, in writing' that an operation or investigation is a special operation or special investigation". Mansfield J held that the draft instrument became the Board's determination in writing on the passing of the vote to adopt the instrument (at [33]). The Full Court dismissed an appeal against Mansfield J's decision ( CC Pty Ltd v Australian Crime Commission (2007) 159 FCR 282 ; [2007] FCAFC 96). SS's attempt to find a point of distinction in the present case (namely, that there was no draft instrument before the Board and thus could be no resolution adopting the draft instrument so as to satisfy the requirement for a determination in writing) cannot succeed in the face of the evidence discussed above. The evidence, particularly the terms of the impugned ATS determination itself, establishes that the Board determined the ATS determination in writing, in accordance with that instrument, on 5 December 2007. Section 7C empowers the Board to authorise and determine certain matters in writing. In deciding whether the Board validly exercised any of those powers the Court must consider all available evidence. The Board's minute papers (the focus of this ground of challenge) are but one source of evidence. Adopting SS's approach of determining whether the Board has discharged its function in accordance with s 7C by looking only at the Board's minutes, incorrectly assumes that s 7C of the ACC Act imposes some requirement on the Board to make resolutions (or, more precisely, record resolutions in minutes) in particular terms. The section says nothing about the Board making resolutions or recording minutes. It requires an authorisation or determination to satisfy the conditions of the applicable provisions. In this case, the ATS determination records in writing an authorisation and certain determinations. Whether the authorisation and determinations in the ATS determination meet the statutory requirements is to be determined on all available evidence, including the terms of the ATS determination itself. The ATS determination, on its face, is signed and dated by the Chair of the Board. It bears a time and date identical to that referred to in the minutes. It bears a title readily referable to the terms used in the minutes ("an ATS and New Synthetic Drugs determination"). In other words, the ATS determination is cogent evidence of the Board's decision on 5 December 2007. The ATS determination records in writing an authorisation (paragraph 4) and a determination (paragraph 6) in precisely the terms required by ss 7C(1)(c) and (d) of the ACC Act. For these reasons SS's second ground of challenge cannot be upheld. It is not to the point that the minutes of the Board's meeting do not, in terms, record the matters identified by SS. There is no requirement in s 7C that the minutes do so. The issue is whether the Board did or did not authorise and/or determine matters in accordance with ss 7C(1)(c), (d) and (e). The minutes, read with the agenda and the ATS determination, prove that the Board authorised in writing in accordance with paragraph 4 of the ATS determination and determined in writing in accordance with paragraphs 6 and 10 of the ATS determination. The same reasoning must be applied to the last aspect of this ground of challenge. SS submitted that the Board's resolution (or, more accurately, minutes) was not to the required effect that the Board considered the matter specified in s 7C(2) of the ACC Act. The answer to this submission is that s 7C(2) does not impose any obligation on the Board to record the fact of its consideration (see, to the same effect, X v Australian Crime Commission (2004) 139 FCR 413 ; [2004] FCA 1475 at [21] and P v Australian Crime Commission (2006) 151 FCR 114 ; [2006] FCAFC 54 at [22] - [23] ). Section 7C(2) provides that the Board may determine in writing that an intelligence operation is a special operation (as referred to in s 7C(1)(d)). Section 7C(2) imposes a condition precedent on such a determination in writing, namely, that the Board consider whether methods of collecting the criminal information and intelligence that do not involve the use of powers in the ACC Act have been effective. The onus is on SS to prove any failure of consideration to the civil standard. SS must do so "in accordance with proper legal requirements and by inference not suspicion" ( Parramatta City Council v Hal e (1982) 47 LGRA 319 at 345). Paragraph 6(a) of the ATS determination records that the Board "has considered whether methods of collecting criminal information and intelligence that do not involve the use of powers in the Act have been effective". There is no proper reason not to treat paragraph 6 as evidence of the Board's discharge of its functions under s 7C(2) of the ACC Act. The use of the past tense "has considered" supports the inference that the consideration occurred before the determination, as s 7C(2) requires. To understand the context in which this submission is made it is necessary to identify further provisions of the ACC Act. Other powers specified in Divs 1A and 2 of Pt II of the ACC Act depend on the existence of a special ACC operation/investigation. Specifically, s 24A, the power of an examiner to conduct an examination, may be exercised only "for the purposes of a special ACC operation/investigation". SS submitted that paragraph 6 of the ATS determination did not record a finding by the Board that methods of collecting criminal information and intelligence not involving the use of powers in the ACC Act had not been effective; accordingly, it should be inferred that the Board did not comply with the requirements of s 7C(2). SS supported this submission by reference to the width of intrusive powers consequential upon a determination that an intelligence operation is a special operation (citing AB Pty Ltd v Australian Crime Commission [2009] FCA 119 at [54] - [58] ). The width of those powers, said SS, meant that the Board was obliged to create a determination in writing which, on its face, disclosed the Board's careful consideration and finding that methods not using the powers under the ACC Act had not been effective. Paragraph 6 of the ATS determination, however, was nothing more than a "formulaic recitation" of the provisions of the ACC Act itself. The difficulty with these submissions is that they attempt to convert an obligation on the Board to consider a relevant matter into an obligation to make and record in writing a particular finding. Section 7C(2) simply does not impose that obligation. It may be accepted that the Board's classification of an intelligence operation as a special operation results in the availability of powers that have the "very real potential to intrude upon the liberty and privileges of an individual" ( AB Pty Ltd at [18]). That fact means that the provisions related to those powers will be construed according to their terms so that "no greater power is in fact exercised than the words employed by the legislature permit" ( AB Pty Ltd at [19]). However, this principle of construction does not allow a court to convert an obligation to consider a particular matter into an obligation more onerous than Parliament has seen fit to impose. SS's criticism of paragraph 6(a) of the ATS determination as nothing more than a formulaic recitation of s 7C(2) is unfounded. Section 7C(2) requires the Board to consider a particular matter and paragraph 6 records the Board's consideration of precisely that matter. In other words, the Board had its statutory obligations at the forefront of its (collective) mind. SS sought to invoke an inference against the ACC on the basis that it had not called evidence from members of the Board about their consideration, relying on Jones v Dunkel [1959] HCA 8 ; (1959) 101 CLR 298. Drawing any such inference against the ACC would be inappropriate in the circumstances of this case. As explained in Cross on Evidence . Australian edition. LexisNexis Butterworths (electronic service, service 117, last updated April 2009) at [1215] the rule only applies where a party is "required to explain or contradict something" and cannot be used "to convert conjecture and suspicion into inference". In the present case paragraph 6 of the ATS determination records the Board's consideration of the very matter which the ACC Act required. Recourse to Jones v Dunkel , in these circumstances, cannot assist SS. The ACC was entitled to rely on the documentary evidence. It had no obligation to call any person to give evidence and the onus never shifted from SS. Insofar as SS submitted that the Board had to explain the basis for its findings, it is sufficient to make two observations. First, the ACC Act imposes no such obligation. Second, I deal with SS's submissions based on s 25D of the Acts Interpretation Act under ground 6 below. This error does not affect the validity of the instrument. The correct cross-reference to the body of the determination would read " (section 10) ". SS observed that the provenance of the post-signature note had not been explained. The post-signature note acknowledges the error in Schedule 2. SS said that the "basis upon which it is asserted that the ' error' does not affect the validity of" the ATS determination is "nowhere explained". Further, that this error was indicative of the Board's lack of care and failure to consider its functions as required by law. These submissions cannot withstand scrutiny. Even if the post-signature note is disregarded, it is clear that the cross-reference to section 6 is an error. SS's submission failed to identify any reason why a mere error in a cross-reference should in any way affect the validity of the ATS determination. SS cited no authority to support the submission. Precedent and common sense would dictate to the contrary. As to precedent, see, for example, the many decisions referred to in Pearce D C and Geddes R S. Statutory Interpretation in Australia . 6 th ed. LexisNexis Butterworths. Sydney (2006) at [2.24]. As to common sense, it is obvious that the sole purpose of the cross-reference is to assist the reader to find the principal provision of the ATS determination to which Schedule 2 relates. Parliament could not have intended that a mere erroneous cross-reference of this character would have the effect of invalidating the instrument ( Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 ; [1998] HCA 28 at [91] - [93] ). SS's submission that the erroneous cross-reference somehow shows a sufficient lack of care to support the inference that the Board failed to have proper regard to its statutory obligations is also misconceived. The error is either one of drafting or typographical. The fact that the Board did not identify and correct this minor error before making its determination is of no legal significance. SS's submission to the contrary is unrealistic. SS also challenged the scope of cll 2(b) and 3(b) in Schedule 2 (being a person identified in writing by the CEO, or a delegate of the CEO, as a person whose duties include providing services in relation to ACC operations and investigations). SS asserted that these items impermissibly sought to delegate to persons other than the Board the power to identify persons authorised to participate in an intelligence operation. Moreover, the purported delegation operates prospectively and thus is not limited to persons having the relevant duties at the time the ATS determination was made. SS acknowledged that Mansfield J dismissed a submission to the same effect in D v Australian Crime Commission (2006) 152 FCR 497 ; [2006] FCA 660. SS, however, did not identify any argument indicating why Mansfield J's conclusions in D v Australian Crime Commission should not be followed. There is no reason why that should be so. Such a construction would not reflect the operational reality that generally the direct selection of the staff of the ACC (other than the CEO and of examiners) is not carried out by the Board of the ACC. Section 7C(1)(e) does not impose that task upon the Board. It is required to address the class or classes of persons who may participate in a particular ACC operation or investigation. It did so. By its determination, at any point in time those who were to participate in the relevant special investigation could be identified. SS contended that paragraph 11 gave rise to a number of problems. First, SS said that there was doubt about the intelligence operation in question because paragraph 11(a) refers to both "an intelligence operation" and "those intelligence operations". There is no such doubt. The meaning of the paragraph is clear. The closing words of paragraph 11(a), "those intelligence operations", do no more than recognise that Schedule 1 to the ATS determination identifies a range of matters within the scope of the intelligence operation and that the intelligence operation to which consent has been granted will inevitably involve numerous activities or "operations". Moreover, SS has failed to identify why any aspect of this submission would affect the validity of the ATS determination. An ambiguity, if it existed, would be resolved by construing the instrument, not declaring it invalid. Second, SS said that paragraph 11 did not identify any "law of a State" or "duty, function or power" within the meaning of ss 55A(3) and (5A) of the ACC Act. Those sections, according to SS, require the Board to identify a particular law of the State and a particular duty, function or power the subject of the Board's consent. This is said to flow from s 55A(1) which refers only to "certain" duties, functions and powers under State laws and the references in s 55A(3) to "a" law of a State and s 55A(5A) to "a" duty, function or power. These words contemplate consent to the particular duty, function or power in question rather than some form of blanket consent as paragraph 11 purports to authorise. I do not accept this submission. Section 55A embodies a scheme. Section 55A(2) grants the legislative consent contemplated by s 55A(1) to confer powers on the ACC under State laws with respect to the nominated matters. Section 55A(3) ensures that the ACC cannot investigate a matter relating to a relevant criminal activity or undertake an intelligence operation unless the Board has consented. These activities are within the scope of the legislative consent in s 55A(2) and ensure that the Board maintains control over these activities. Sections 55A(4) and (5) relate (respectively) to the conferral by a law of a State of a power, function or duty on the nominated bodies and persons with respect to an investigation of a relevant criminal activity and undertaking of an intelligence operation. Section 55A(5A) ensures that two of those nominated persons (the CEO and an examiner) cannot exercise such a power, function or duty under a law of a State unless the Board has consented. The references to "a law of a State" and "a duty, function or power" take the same meaning in each provision. Section 55A(2) does not identify particular State laws. Nor is there any basis for suggesting it needed to do so. "A law of a State" means what it says. Any law of a State, if it concerns the relevant duties, functions or powers may confer those duties, functions or powers on the ACC. The relevant "duties, functions or powers" in question are those identified in ss 55A(2)(a)-(d). Those duties, functions or powers limit the extent of the legislative consent to conferral on those bodies and persons identified in s 55A(1). The same proposition applies to ss 55A(3) and (5A). There is no justification in the language of either provision to conclude that the Board's consent may relate only to a specified State law. Nor is SS's submission about particular duties, functions and powers persuasive. Sections 55A(3) and (5A) identify the relevant duties, functions and powers in terms (that is, investigating a matter relating to a relevant criminal activity and/or undertaking an intelligence operation). In other words, the "certain" duties, functions and powers with which s 55A(1) is concerned are those duties, functions and powers listed in s 55A(2). The use of the indefinite article "a" before each of the references to "a law of a State" and "duty, function or power" does not support SS's submission. To the contrary, the indefinite article indicates that the identity of the law of the State is not required before the Board may consent and that the consent may relate to any law of a State which confers the nominated duties, functions or powers. SS has not advanced any textual, purpose or policy basis which supports the contrary construction. Given that the nominated duties, functions and powers provide the substance of the consent, the purpose of nominating the laws of the individual States in question (presumably by reference to the name and section number of the statutes) is not apparent. Third, SS contended that the consent in paragraph 11 of the ATS determination was invalid because it purported to grant consent to an intelligence operation under laws of a State not yet in existence. SS's submissions described this as a prospective abdication of the Board's responsibilities. The Full Court of the Federal Court considered whether a Ministerial determination could have ambulatory operation in State of Queensland v Central Queensland Land Council Aboriginal Corporation (2002) 125 FCR 89 ; [2002] FCAFC 371. Beaumont J observed that the question was always one of construction of the enabling legislation (at [72]). Nothing in the language of s 55A suggests that the Board cannot consent to the ACC, the CEO and examiners undertaking activities relating to the particular intelligence operation under all relevant laws of a State as in force from time to time until the intelligence operation is complete. Accordingly, and consistent with Beaumont J's conclusion (at [84]) about the statutory provision in question in Central Queensland Land Council Aboriginal Corporation , there is no express prohibition to be found in ss 55A(3) or (5A) against the Board granting consent to the exercise of duties, functions and powers under existing or future State laws and there is no basis for making such an implication. Fourth, SS submitted that the minutes did not disclose the Board of the ACC having granted any consent in accordance with ss 55A(3) or (5A) of the Act. SS did not, however, identify any obligation on the Board to record its consent in the minutes. The Act does not impose any such obligation. If SS's observation is intended to suggest that it should be inferred that the Board did not grant its consent because of the lack of any reference in the minutes, the suggestion must be rejected. The ATS determination records the Board's consent in paragraph 11. In circumstances where, as noted, the ATS determination is signed and dated in accordance with the reference in the minutes, the inference should be drawn that the Board consented in the terms which paragraph 11 records. It follows that SS's challenge to the validity of paragraph 11 of the ATS determination cannot be sustained. According to SS, the obligation to "determine, in writing" imposed by the provisions requires something more than the mere recording of the result (referring to Freeman v Medical Practitioners Board of Victoria [2000] VSC 547 at [24] - [27] and cases cited therein). The expression "determine, in writing", SS said, is analogous to the words "reasons" and "grounds" in s 25D of the Acts Interpretation Act . As the minutes did not disclose the Board's findings on material questions of fact or refer to the evidence or other material on which those findings were based, the ATS determination was invalid. The difficulty with these submissions is that the provisions on which SS relied do not impose any obligation on the Board to give "reasons", "grounds" or any other explanation for the making of the determinations under ss 7C(1)(d) or (e) or 7C(2). The Board's obligation is simply to "determine, in writing" the relevant matters. Contrary to SS's submission there is no basis for concluding that these words mean "something more" than they say. It follows that these sections do not require the Board to give reasons for the making of the determination in issue. Section 25D of the Acts Interpretation Act , accordingly, does not apply to these functions. This argument involves the following steps: - (i) paragraph 4 of the ATS determination authorises the undertaking of an intelligence operation, (ii) this is the function specified in s 7A(b) of the ACC Act (which refers to the undertaking of intelligence operations), (iii) paragraph 6 of the ATS determination purports to declare the intelligence operation to be a special operation, (iv) section 4(1) of the ACC Act defines intelligence operation ("the collection, correlation, analysis or dissemination of criminal information and intelligence relating to federally relevant criminal activity"), (v) the ACC Act does not define "investigation" but it must mean something different from intelligence operation, as the Act distinguishes between the two in ss 7A(b) and (c), 7C(1)(c) and (d) and 7C(2) and (3), (vii) having regard to the ordinary meaning of "investigation" it should be accepted that an intelligence operation involves a higher level of abstraction than an investigation, with the intelligence operation meaning the collection, correlation, analysis or dissemination of criminal information and intelligence relating to federally relevant criminal activity and an investigation meaning a systematic examination in order to identify and build a case against the perpetrator of an activity, (vii) paragraph 9 of the ATS determination must be tested for validity having regard to this difference between an intelligence operation (as purported to be authorised) and an investigation (which is not authorised), and (viii) in any event, paragraph 9 discloses many other textual difficulties. It is true that ss 7C(1)(c), (d), 7C(2) and (3) refer to determinations with respect to operations and investigations (and special operations and special investigations). Moreover, the relevant considerations for special operations and special investigations are different (for the former, the Board must consider whether methods of collecting the criminal information and intelligence that do not involve the use of powers in the ACC Act have been effective, whereas for the latter the Board must consider whether ordinary police methods of investigation into the matters are likely to be effective). Nevertheless, SS's principal submission depends on the functions of undertaking an intelligence operation and an investigation not only being different, but also mutually exclusive. The provisions of the ACC Act do not support that conclusion. Section 7A also specifies functions which inevitably overlap. For example, s 7A(a) is based on the definition of intelligence operation in s 4(1). Yet s 7A(b) refers expressly to the undertaking of intelligence operations. Similarly, s 12, which regulates the performance of the ACC's functions, imposes obligations by reference to an ACC operation/investigation. To the same effect, the powers relating to search warrants in s 22 and of examiners to conduct an examination under s 25A exist in connection with a special ACC operation/investigation. In other words, the provisions of the ACC Act recognise that the functions of undertaking an intelligence operation and an investigation overlap. It follows that SS's approach to paragraph 9 of the ATS determination, which involves labelling certain activities as part of an "investigation" and thereby assuming that the activity also cannot be authorised by an "intelligence operation", is misconceived. In considering the validity of paragraph 9 it is necessary to give "intelligence operation" its defined meaning, with all the generality the words of that definition permit, and without imposing any assumption that the scope of those words is to be implicitly restricted to exclude anything that might otherwise form part of the activity of an "investigation". It refers to "relevant crime" instead of "relevant criminal activity". The ATS determination, however, does not identify any relevant crimes. Schedule 1 identifies only general circumstances and allegations said to constitute relevant criminal activity. Section 4(1) of the ACC Act defines "federally relevant criminal activity" by reference to the definition of "relevant criminal activity", "relevant criminal activity" by reference to the definition of " "relevant crime" and "relevant crime" by reference to the definitions of "serious and organised crime" and "Indigenous violence or child abuse". Section 46(1)(b) of the Acts Interpretation Act applies so that words used in the ATS determination have the same meaning as in the ACC Act. The fact that these definitions are related is implicitly recognised by s 7C(4) of the ACC Act. In this context, the use of "relevant crime" in paragraph 9(a) instead of "federally relevant criminal activity", as referred to in the definition of "intelligence operation", is immaterial. The "relevant crime" is the crime identified in item 3 of Schedule 1. SS's submission that it is "impossible to know the content or scope of the purpose" identified in paragraph 9(a) is not borne out by the language of the paragraph construed in context. (2) SS claimed that the collection, analysis and dissemination of information and intelligence relating to "relevant crime" can only be undertaken in the course of an "investigation" and not as part of an "intelligence operation". This submission depends on SS's assumption, rejected above, that the concepts of an investigation and an intelligence operation are mutually exclusive. For the reasons given I do not accept that the collection and analysis of criminal information and intelligence relating to the relevant crime within the meaning of paragraph 9(a) of the ATS determination falls outside the scope of the Board's power to authorise an intelligence operation and determine that the operation is a special operation. (3) SS claimed that paragraph 9(b) contains the same two "vices". For the reasons given above, I do not accept that paragraph 9(b) of the ATS determination is affected by any vice. Apart from the general submission that the ACC Act distinguishes between an intelligence operation and investigation, SS has not advanced any cogent argument to support the conclusion that identifying persons involved in crime and the nature of their involvement is not part and parcel of collecting, correlating and analysing criminal information and intelligence relating to federally relevant criminal activity. Nor is any such argument apparent on the ordinary meaning of the words "collection, correlation, and analysis" as they appear in the definition of "intelligence operation". SS's reference to paragraph 9(c) (which refers to recommendations about "suggested investigative responses by the ACC") does not support SS's argument. The mere fact that the Board has identified one purpose in those terms does not provide any justification for reading down the ordinary meaning of the other purposes. Again, SS's submissions incorrectly assume that each part of paragraph 9 must be read as if its scope is exclusive of each other part. There is no reason to adopt that construction. (4) SS claimed that paragraph 9(d) (about the making of recommendations about law reforms) both uses the same confused terms (relevant crime instead of federally relevant criminal activity) and has nothing to do with an intelligence operation. I have dismissed the first aspect of this submission above. As to the second, SS's submission disregards the fact that the ACC's functions include reporting to the Board on outcomes of its operations and investigations (s 7A(d)) and extend to things reasonably incidental to the performance of its functions (s 19). Further, the Board's functions include recommendations for law and related reform in terms substantially the same as those set out in paragraph 9(d) (s 12(3) of the ACC Act). In these circumstances the inclusion of paragraph 9(d) in the ATS determination did not exceed the Board's powers of authorisation and determination under s 7C of the ACC Act. For these reasons I do not accept SS's challenge to paragraph 9 of the ATS determination or any consequential effect of paragraph 9 on the validity of the ATS determination as a whole. I reject those arguments for the same reasons as set out at [54] --- [65] above. Paragraph 3(c)(xiv), submitted SS, is not a sub-set of some circumstance or allegation already identified. Rather, the paragraph purports to expand the circumstances and allegations to an unknown extent, in the discretion of the head of the ACC special operation, and without any oversight by the Board. SS's submissions about this aspect of the ATS determination fail to grapple with the terms of s 4(2) of the ACC Act. Paragraph 3(c)(xiv) of Schedule 1 of the ATS determination does nothing more than reflect the terms of s 4(2) of the ACC Act. In light of s 4(2) of the ACC Act, the inclusion of paragraph 3(c)(xiv) in Schedule 1 of the ATS determination cannot constitute an impermissible delegation, let alone a delegation having the effect of invalidating the determination itself. SS, however, did not identify any separate argument supporting the invalidity of the ATS determination amendment 2008. The agenda for the Board meeting of 3 December 2008 discloses that there was a paper before the Board relating to "ATS-extension", being item 7.5. As noted, the ATS determination amendment 2008 replaces the date "31 December 2008" in paragraphs 4 and 5 of the ATS determination with the date "31 December 2009". To the extent that SS's claim of invalidity relates to the grounds of challenge to the ATS determination before its amendment, those grounds have been rejected above. SS did not identify any other ground in support of its challenge. Accordingly, there is no basis to support any declaration of invalidity of the ATS determination amendment 2008. As neither challenge has succeeded, the summons cannot be invalid on this ground. SS developed this argument by the following steps: - (i) s 25D of the Acts Interpretation Act applies to an examiner issuing a summons because s 28(1A) requires the examiner to "record in writing the reasons for the issue of the summons", (ii) consistent with the observation in AB Pty Ltd at [54], persons "against whom the powers conferred by the ...[ACC] Act are exercised are entitled to have confidence that the power is being lawfully invoked", (iii) further, and as also observed in AB Pty Ltd at [58], "(w)here the reasons of an examiner are available, it is considered that they should be carefully construed. Given the width of the powers conferred upon an examiner, a responsible exercise of those powers would require that the reasons disclose on their face that the examiner has given careful consideration to both the nature of the power being exercised and the circumstances of the case before him", (iv) in the present case, the reasons (but not the statement of facts and circumstances) have been produced. The ACC has excised the majority of the statement of facts and circumstances in reliance on its claim of public interest immunity, (v) the examiner's reasons are deficient, being strikingly similar to the standard form reasons criticised in AB Pty Ltd at [54], (vi) the reasons in the present case, however, do not include a notation in accordance with s 29A(1) of the ACC Act, and (vii) accordingly, although the summons contains such a notation, there is no evidence the examiner turned his or her mind to the requirements of s 29A(1) of the ACC Act. The ACC did not concede the application of s 25D of the Acts Interpretation Act (contrary to its position in AB Pty Ltd at [54] in which it was accepted that s 25D of the Acts Interpretation Act applied to s 29(1A) of the ACC Act relating to the production of documents). The ACC was not bound to adopt the same position in the present case. Moreover, the ACC's reliance in the present case on the decision of Barnes v Boulton (2004) 139 FCR 356 ; [2004] FCA 1219 provides a sound basis for its different position. In Barnes v Boulton Finn J rejected a claim that s 28(1A) of the ACC Act required an examiner to give a copy of his or her reasons to the person the subject of the summons. Section 28(2) does specify information that is to be provided to such a person with the summons (ie a copy of the ACC Board's determination), but it notably makes no reference to providing the record of reasons. As evidenced by s 28(3), the section demonstrates an understandable sensitivity about the provision of information, even on the face of the summons, that would "prejudice the effectiveness of the special ACC operation/investigation". 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) 205 ALR 1 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 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. Section 28(1A) of the ACC Act obliges an examiner to "record" his or reasons but, as Finn J held in Barnes v Boulton , imposes no obligation on the examiner to give those reasons to the person summonsed to appear at an examination. Moreover, and as Finn J also noted, s 13 of the Administrative Decisions (Judicial Review) Act 1977 (Cth), imposing the obligation to give reasons for certain decisions, does not apply to decisions under the ACC Act in connection with intelligence operations or investigations of State offences that have a federal aspect (sub-paragraph (ea) of Schedule 2 to the Administrative Decisions (Judicial Review) Act ). Sub-paragraph (ea) of Schedule 2 was inserted by Schedule 2 to the Australian Crime Commission Amendment Act 2004 (Cth). There is no warrant to depart from the ordinary meaning of s 28(1A) of the ACC Act, namely, that the examiner has an obligation to record his or her reasons, but no obligation to give those reasons to the person summonsed. On this basis, s 25D of the Acts Interpretation Act does not apply to the examiner's function under s 28(1A) of the ACC Act. Even if, contrary to my view, s 25D of the Acts Interpretation Act applies, SS has not explained how any failure to comply with s 25D could lead to the summons being invalid. To conclude otherwise would be contrary to the express will of Parliament embodied in s 28(8) of the ACC Act. Accordingly, insofar as SS's submissions under these grounds related to the alleged deficiency of the reasons per se as a source of invalidity of the summons, the submissions must be rejected. SS also alleged that, from the inadequate reasons and the ACC's maintenance of its claim for public interest immunity privilege over the statement of facts and circumstances (which I upheld), I should infer that the examiner could not have been satisfied that it was reasonable to issue the summons, with the consequence that the issue of the summons was an abuse of process. SS said that it was solely within the power of the ACC to produce the statement of facts and circumstances and thus prove that the statement supported the examiner's reasons but the ACC had refused to do so. SS's submissions are misconceived. First, the ACC was entitled to make a claim for exclusion from evidence the whole, or part, of any document relating to matters of state where the ACC considered the public interest in its admission was outweighed by the public interest in preserving secrecy or confidentiality in relation to the information or document (s 130 of the Evidence Act ). The ACC made that claim in the present case over much of the material relevant to its decisions and supported that claim by affidavit evidence. On the basis of the affidavit evidence, I upheld the claim for public interest immunity. The inevitable consequence of that is that the documents on which the proceeding must be resolved are incomplete. But that fact does not alter SS's onus. Nor does it warrant the drawing of an inference that the information in the documents over which the claim for public interest immunity has been upheld would not support the ACC. Consistent with the discussion about Jones v Dunkel at [47] above, to draw that inference would involve converting SS's mere "conjecture and suspicion" into inference, which is impermissible. In other words I must decide the case on the available evidence. Second, SS's submissions appear to preference conjecture and suspicion over the evidence which is available. I was satisfied that it was reasonable in all the circumstances that the Summons be issued to the person. 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 annotation were not included it would reasonably be expected to prejudice the effectiveness of the operation and that as failure to do so might be contrary to the public interest. I do not accept the argument. No reason has been advanced not to take the examiner's statement of satisfaction at face value. It must also be remembered that Flick J's admonition in AB Pty Ltd at [58] was followed by the conclusion at [59] that the deficiencies in the examiner's reasons were insufficient to invalidate the notice. In the present case, similarly, SS has not discharged the onus of establishing that the examiner failed to form the relevant state of mind. Nor has SS pointed to any consideration which the examiner was bound, but failed, to consider in deciding to issue the summons. Accordingly, these grounds of challenge to the summons also fail. As to the facts, SS's argument is that the summons states that it was issued at 10.35am on 14 January 2009. The examiner's reasons record the "date of issue of summons" as "14 January 2009" on the first page. Further, the pseudonym "SS" was allocated to this matter only on the commencement of the proceeding on 20 January 2009. According to SS, the result is that it should be inferred that the examiner was not satisfied that it was reasonable in all the circumstances to issue the summons, could not have been so satisfied, and that the issue of the summons was an abuse of process. There are at least three problems with these submissions. First, even if the examiner created or amended the reasons after the issue of the summons, SS has failed to explain how that fact alone could invalidate the summons given the express words of s 28(8)(a) of the ACC Act. Second, there is a considerable distance between a document exhibiting anomalies and a conclusion that a document is the result of some (implicitly) improper conduct. Third, SS has not explained why it is proper to use the alleged anomalies in the document as a basis for drawing an inference that the examiner was not satisfied that it was reasonable in all the circumstances to issue the summons or could not have been so satisfied or otherwise concluding that the issue of the summons was an abuse of process. As to the first problem, s 28(8)(a) specifies that the validity of a summons is not affected by s 28(1A) insofar as that section relates to the making of a record. Consistent with the approach in Project Blue Sky at [91]-[93], in the case of the examiner making a record under s 28(1A), Parliament has provided an answer to the question "whether it was a purpose of the legislation that an act done in breach of the provision should be invalid". The answer is that Parliament did not intend invalidity to follow from any such contravention. As to the second problem, the alleged anomalies are by no means as suspect as SS's submissions suggested. The fact that the date is missing from beneath the signature is a mere omission in circumstances where: - (i) the reasons record the date of the issue of the summons as 14 January 2009, and (ii) the summons states that it was issued at 10.35am on 14 January 2009. The ACC also relied on an affidavit of Andrew James Cann, the ACC's acting chief information officer with responsibility for the ACC's information communication technology systems. According to Mr Cann, the ACC's computer system shows that the document was first stored at 11.03.59 am on 14 January 2009 and has not been amended since. From Mr Cann's evidence I am satisfied that "first stored" should be understood as a reference to the function of saving the document to disk so that it may thereafter be retrieved. As Mr Cann said, a document may be created on a computer screen before it is saved or stored to disk. The fact that the copy of the document produced to SS and the Court for the purpose of the proceedings has the name of the recipient of the summons blacked out and the pseudonym "SS" inserted in square brackets is most likely a consequence of the Court's order under s 50 of the Federal Court of Australia Act 1976 (Cth) made at the request of the parties on the first return date of the application. Given this order, the anomaly is not so much the appearance of "SS" in the document instead of the recipient's name but, rather, the fact that any amendment to the document made via the ACC's computer system should have been recorded as such by the system and thus disclosed by Mr Cann's evidence. I cannot resolve that anomaly on the evidence. Nor can I be certain as to the cause of the amendment. Nevertheless, I can say that, contrary to SS's submission and as explained in my third point at [107] below, I do not accept that the circumstances lead to the conclusions SS advocated. As to the third problem, given that the reasons are signed and record the examiner's state of satisfaction that it was reasonable to issue the summons, it is not apparent to me why SS's allegations that the reasons were created or amended after the issue of the summons (if true) would lead to the inference that the examiner was not so satisfied before issuing the summons. Once the pejorative terms "recent invention" and "tampering" are put to one side, it is difficult to understand the basis for drawing that inference from the facts SS alleges. To this must be added the fact that the examiner was advised by the legal submissions in support dated 13 January 2009 that it was reasonable for the examiner to issue the summons. In the face of this evidence, considered with the fact the examiner issued the summons, the inference that the examiner was satisfied as required should be drawn. Similarly, SS's submission that the examiner could not have been so satisfied is unsupported. By this submission I understand SS to be alleging that it was not reasonably open to the examiner to be so satisfied. Yet SS pointed to no fact or circumstance which would support the conclusion that for the examiner to reach the required state of satisfaction involved "something overwhelming" and thereby was so unreasonable that no reasonable examiner could ever have come to it ( Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 at 230 and 234; see also Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 ; [1999] HCA 21 at [44] ). The same considerations undermine SS's claim that the issue of the summons involved an abuse of process. Penalty: 20 penalty units or imprisonment for one year. SS observed that, in common with the examiner's reasons, the statement of facts and circumstances contains two references to the pseudonym "SS" even though the purported date of the document is 13 January 2009. In accordance with my conclusions at [98] --- [109] above about the examiner's reasons, the subsequent amendment of the statement of facts and circumstances is probably a result of the order made under s 50 of the Federal Court of Australia Act (which the notation in the summons anticipated if the validity of the summons were challenged). Nevertheless, such speculation is unnecessary because there is no basis in the legislation for concluding that a subsequent amendment of the statement of facts and circumstances to replace the name of the recipient with the pseudonym "SS" would have the effect of invalidating the summons. SS submitted that there was an inconsistency between the statement of facts and circumstances (which said that a notation may, not must, be included in reliance on s 29A(2(B)) and the examiner's reasons (which said that if such a notation were not included it "would" reasonably be expected to prejudice the effectiveness of the operation in apparent reliance on s 29A(2)(a)). According to SS this demonstrated that the examiner failed to appreciate the obligations imposed by s 29A of the ACC Act. The examiner, in his reasons, said he had regard to the statement of facts and circumstances and his conclusion that a summons should be issued was "based upon" that consideration. Yet the former said a notation may but need not be included whereas the latter asserted, in effect, that the notation had to be included. There is a short answer to these submissions. Section 29A(1) imposes an obligation on the examiner. It is the examiner who must turn his or her mind to the questions posed by s 29A(2). The examiner may or may not accept the answer to those questions given in the statement of facts and circumstances (which is a document addressed to, rather than created by, the examiner). In this case, the fact that the examiner may be inferred to have reached a different view from that of the author of the statement of facts and circumstances tends to confirm, rather than undermine, the conclusion that the examiner discharged his statutory function under s 29A. Again, SS's submissions did not explain in any meaningful way why an inconsistency between a document which has the apparent function of a report for the examiner and the examiner's own record of reasons would affect the validity of the summons issued by the examiner. The ACC Act does not require the creation of a statement of facts and circumstances. It is presumably created to assist an examiner in the discharge of his or her functions. An examiner is not bound by a statement of facts and circumstances. Indeed, that would be contrary to the statutory scheme. Accordingly, inconsistency between a statement of facts and circumstances and an examiner's reasons, without more, does not establish any contravention of the ACC Act. SS submitted that there was no evidence that the examiner had turned his mind to or approved the terms of the notation that appears in the summons. In support of this submission SS observed that in AB Pty Ltd (at [53]) an examiner's statement of reasons contained a statement that "I was satisfied that it was also appropriate that the notation pursuant to subsection 29A(1) of the Australian Crimes Commission Act 2002 be in the terms approved by me". However, there was no such statement, said SS, in the examiner's reasons in the present case, which SS described as "significant". In fact, the examiner's reasons in the present case include a reference to the examiner's approval of the terms of the notation; the words are included in the third line of paragraph 6 ("in the terms approved by me"). In any event, I do not consider the alleged difference (even if it existed) bears the weight that SS sought to place upon it. The evidence in the present case should be assessed on its own terms. Reliance on the differences between documents in the present case and other cases is a flimsy basis upon which to found inferences of the nature SS advocated. The summons says it is issued by, and is signed by, the examiner. In these circumstances the submission that there is no evidence that the examiner turned his mind to, or approved the terms of the notation that appears in the summons, is unsustainable. SS acknowledged that the summons notes the obligation in s 29A(3) of the ACC Act (namely, that 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 s 29B on the person who was served with, or otherwise given, the summons or notice). SS acknowledged further that the summons is accompanied by a written statement which sets out or accurately paraphrases the rights and obligations in ss 29B(1), (2), (5), (6) and 7(b) of the ACC Act. SS said, however, that the statement is deficient because it does not set out or paraphrase s 29B(3) or refer at all to s 29B(4) of the ACC Act. Accordingly, SS claimed that the summons contravened s 29A(3) because it did not deal with the rights and obligations of a person "otherwise given" the summons within the meaning of that section. The scheme of ss 29A and 29B of the ACC Act does not support SS's approach to the meaning of "or otherwise given" in s 29A(3). Section 29A(1) imposes an obligation on and vests power in an examiner to include a notation depending on the circumstances. Section 29A(2) identifies the circumstances in which an examiner must and may include the notation. Section 29A(3) requires the summons to 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". Section 29A(4) provides for an automatic cancellation of a notation after an operation or investigation has concluded in the circumstances specified. Section 29A(5) requires the CEO to serve a written notice of the fact of cancellation on "each person who was served with, or otherwise given, the summons or notice containing the notation". Section 29B(1) imposes an obligation of non-disclosure on a person "who is served with, or otherwise given, a summons or notice" containing a notation under s 29A. Section 29B(2) provides exceptions to the s 29B(1) obligation which a person subject to obligations under s 29B(1) may use. Section 29B(3) imposes obligations of non-disclosure on persons to whom disclosure is made by a person subject to obligations under s 29B(1) using one or more of the exceptions in s 29B(2). Section 29B(4) provides exceptions to the s 29B(3) obligation which a person subject to obligations under s 29B(3) may use. Three matters are apparent from this scheme. First, the scheme distinguishes between a person "served, or otherwise given" a summons or notice and a person to whom a person "served, or otherwise given" a summons or notice makes disclosure. 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)). These considerations indicate that the ACC's submission must be accepted. The words "person who was served with, or otherwise given, the summons or notice", wherever they appear in the ACC Act, mean a person served or otherwise given the summons or notice by the ACC. It does not extend to persons to whom a copy of the summons or notice may be given as part of a disclosure by a person served or otherwise given a summons or notice by the ACC. No other construction of the words is reasonably open. It follows that I also reject this argument on behalf of SS. SS also claimed that the summons was defective on its face because it did not require SS to attend to give evidence as a witness to federally relevant criminal activity. Rather, the summons refers only to being required to attend to "give evidence of federally relevant criminal activity". According to SS the summons thereby contravened the ACC Act which confines the power to summons a person to give evidence at an examination to witnesses (referring to ss 25A(6), (7), 26, 27, 28, 30, 31, and 33). SS submitted that a summons which did not require a person to attend to give evidence in his or her capacity as a witness is thereby invalid. This submission is without merit. The summons is issued pursuant to s 28(1). The section states that an examiner may summon a person to appear before an examiner at an examination "to give evidence and to produce such documents or other things (if any) as are referred to in the summons". The section makes no reference to the word "witness". It certainly does not require a summons, on its face, to use the word "witness". In any event, the terms of the section and summons are clear. The person is to attend "to give evidence". Finally, SS (again) has not explained why any such contravention (if it had occurred, which it has not) would result in invalidity of the summons having regard to the principles established in Project Blue Sky at [91]-[93]. SS's amended statement of claim included a pleading to the effect that the summons was invalid because it failed to have attached to it a valid copy of the ATS determination as required by s 28(2) of the ACC Act. It is common ground that a copy of the ATS determination accompanied the summons. I understand this pleading to depend upon the allegation of invalidity of the ATS determination and ATS determination amendment 2008. As I rejected those contentions above this ground does not require further comment. As should be apparent from the discussion above, some of SS's arguments concerned the ACC's claim of public interest immunity over large parts of the documents. Further, SS referred to the fact that the ACC had not called any member of the Board or the examiner. SS relied on both circumstances as assisting in the discharge of SS's onus of proof. Recourse to the reasoning in Jones v Dunkel is inappropriate in circumstances where, as here, the many allegations of impropriety never rose above mere suspicion. In this case, moreover, the available evidence speaks against the suspicions which SS sought to engender. SS relied heavily on the extensive and coercive powers in the ACC Act to support the arguments made about invalidity. There is, however, a difference between construing a statute containing extensive coercive powers strictly to ensure that Parliament's will is enforced and not exceeded (as referred to by Flick J in AB Pty Ltd at [18]-[19] and supported by high authority) and attempting to establish invalidity of an administrative act other than by the orthodox process of fact finding and inference-drawing according to the available evidence. SS's submissions also did not deal with the presumption of regularity on which the ACC relied at least insofar as the Board's compliance with s 7C of the ACC Act is concerned. I have not dealt with the presumption in the above discussion because my conclusions make it unnecessary to do so. Nevertheless, it seems to me that the presumption would operate with respect to all "necessary conditions and formalities" of the making of the ATS determination and amendment ( Industrial Equity Ltd v Deputy Commissioner of Taxation [1990] HCA 46 ; (1990) 170 CLR 649 at 671-672). In deciding whether the presumption of regularity is rebutted, this inference from the ordinary course of human affairs carries some weight, which may vary according to the proved circumstances. SS's submissions not only tended to contradict the available evidence but also failed to explain why any particular allegation, if found to be correct, would have the consequence of rendering the ATS determination or summons invalid. The question posed by Project Blue Sky at [93] as to "whether it was a purpose of the legislation that an act done in breach of the provision should be invalid" and the need, in determining the answer, to have regard to "the language of the relevant provision and the scope and object of the whole statute" did not feature in SS's submissions. One other matter, relating to the ACC's redaction of documents, must be considered. When the hearing resumed on 24 April 2009 the ACC sought leave to re-open to tender a part of the minutes of the Board's meeting on 5 December 2007 which had previously been excised. After objection from SS and an indication from me as to the steps that would be required to explain the late production of this part of the minutes, the ACC withdrew its application. SS made submissions during the hearing about these events as follows: - (i) it would be improper for the ACC to assert that what has been discovered as "(t)he minutes of the board meeting of 5 December 2007" was also "(t)he resolution of the board of 5 December 2007" as that phrase occurs in the ATS determination, (ii) the ACC's case must proceed on the basis that there is no direct evidence as distinct from indirect evidence of any resolution of the Board meeting on 5 December 2007 and that what has been discovered and tendered as the minutes do not show any such resolution, (iii) it would be wrong to dismiss SS's case on the basis that "the Board must have made a determination in writing by resolution when the resolution is not produced, although it exists", and (iv) the ACC's conduct, by withholding the resolution of 5 December 2007, merits "the severest condemnation" from the Court because there is some evidence from which it could be inferred that the ACC has acted in bad faith. After making oral submissions on 24 April 2009 neither party sought or obtained leave to file and serve any additional submissions and I thus reserved my decision. Despite this, on 27 April 2009 a chain of email correspondence commenced by which SS sought to file and rely on a document entitled "Further Outline of Submissions in Reply on Behalf of the Applicant". The ACC objected to the further submissions. My associate advised the parties that SS required leave which should be sought by way of notice of motion. The reason that a notice of motion was required is that it is "quite misconceived" for a party to file supplementary written submissions after the conclusion of oral argument without leave having been given beforehand ( Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20 ; (1980) 147 CLR 246 at 258). It should not occur. If new points of importance arise in the case whilst a matter stands for judgment, the proper course (unless statute or court rules permit otherwise) is for the proceeding to be relisted so that an application to enlarge the record can be made and determined in open court. The ACC opposed the grant of leave and sought to rely on a further reply if leave were granted. I granted leave and have considered all further submissions and the additional oral submissions made today. SS's further submissions contended that the circumstances relating to the ACC's late disclosure of the additional part of the minutes of the Board's meeting on 5 December 2007 warranted the striking out of the ACC's defence or at least that part of the defence concerning SS's claim of a breach of s 7C of the ACC Act (relying on Brookfield v Yevad Products Pty Ltd [2004] FCA 1164 , Londish v Gulf Pacific Pty Ltd [1993] FCA 470 ; (1993) 45 FCR 128 , British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524 ; [2002] VSCA 197 , Fuji Xerox Australia Pty Ltd v Lee [2003] QSC 303 , and Clark v State of New South Wales (2006) 66 NSWLR 640 ; [2006] NSWSC 673). SS said that the ACC had still not discovered the precise resolution because it feared that the deponent of an affidavit of further discovery would be cross-examined. The ACC, SS said, always intended to rely on secondary evidence of the resolution whilst withholding the actual resolution, thereby foisting an abuse of process on SS and the Court (citing Williams v Spautz [1992] HCA 34 ; (1992) 174 CLR 509). The ACC said SS's submissions were misconceived. The late production of the precise resolution was consistent with the ACC's ongoing discovery obligations. No order had been made for a supplementary affidavit and thus SS's assumption of a right to cross-examine and consequential attribution of some improper motive to the ACC was illogical and unfounded. Similarly, no evidence supported SS's attribution of a sinister motive for the late production. The only reason the Court does not have the precise resolution in evidence is SS's objection. There is a difference between a party objecting to a process of discovery and objecting to the Court being furnished with relevant evidence. SS took the latter course and thus cannot complain of an abuse of process when the reason that the document is not before the Court is SS's own objection. It may also be inferred from SS's objection that the resolution supported the ACC's defence, thereby confirming that it is simply illogical for SS to attribute a sinister motive to the ACC. Further, the ACC said that the other evidence before the Court is sufficient to sustain the ACC's defence in any event. It is true that the consequence of these circumstances is that there is not in evidence any actual resolution of the Board of 5 December 2007. Nevertheless, and as discussed above, there is ample evidence from which the existence of such a resolution may be inferred. These circumstances do not affect the conclusions I have reached based on the usual process of drawing inferences from the available evidence. As the ACC said, SS's submissions to the contrary are misconceived. I do not accept that there is a proper basis in the circumstances of the present case for the making of any order striking out the whole or part of the ACC's defence. The decisions on which SS relied are distinguishable. They involved cases of improper destruction or withholding of evidence. SS's suggestion of bad faith and impropriety on the part of the ACC in this case is unfounded. There is no basis to infer that the ACC deliberately withheld a document it knew that it had an obligation to produce for any reason (let alone the reason advanced by SS of an ACC fear that the deponent of an affidavit of discovery might be cross-examined). The basic facts are these: - (i) the ACC produced the minutes, (ii) the ACC excised parts of the minutes that it considered irrelevant or should not be admitted into evidence due to public interest immunity, (iii) after the adjournment of the hearing, the ACC apparently decided that a part of the minutes previously blacked out in fact should be disclosed as it was relevant and was not properly the subject of the claim for public interest immunity, (iv) when the hearing resumed the ACC disclosed that part of the minutes and sought leave to re-open to tender it, (v) SS objected to the late tender, and (vi) the ACC withdrew the application to re-open to tender the document. Those facts do not support SS's allegations of bad faith and impropriety against the ACC. On these facts, it also cannot be said that this is a case where the ACC's failure to produce that part of the minutes at an earlier time, or withdrawal of its tender, has had the effect of defeating SS's claims. As the ACC made clear, it sought to tender the additional part of the minutes to answer one of SS's claims but, on objection by SS, withdrew the tender on the basis that the existing evidence was sufficient to establish its defence. These facts bear no resemblance to cases in which a party's default with respect to discovery has prevented or defeated the making of a claim. Nor can SS's submissions about abuse of process be sustained. As the ACC observed, SS's submissions depended on a distinction between discovery on oath and production of documents. The fact is that the ACC produced the resolution. Hence, SS's description of not being "allowed" the document is simply untenable. SS cannot complain of an abuse of process (or, at least, cannot succeed in sustaining such a complaint) when SS's complaint is a result, in a large part, from the forensic decision SS made to object to the tender of the resolution. As the ACC submitted, late production is one thing; objecting to relevant evidence being put before the Court is another. In this case, only SS took the latter course, not the ACC. Accordingly, these circumstances also do not provide any basis for upholding any part of SS's claims. It follows that the application should be dismissed with costs. I reserve the question of costs relating to that part of the hearing on the morning of 24 April 2009 in connection with the ACC's application for leave to re-open to tender a further part of the minutes of the ACC's Board meeting of 5 December 2007 and the applicant's notice of motion filed 25 May 2009. I certify that the preceding one-hundred and fifty-two (152) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | validity of determination by board of the australian crime commission whether within ambit of the australian crime commission act 2002 (cth) whether determination exceeded powers of the board of the australian crime commission validity of summons issued by the australian crime commission whether examiner satisfied it was reasonable to issue the summons whether failure to record in writing the reasons for the issue of the summons a breach of s 25d of the acts interpretation act 1901 (cth) whether examiner's reasons a recent invention whether summons issued in accordance with the australian crime commission act 2002 (cth) whether summons otherwise defective public interest immunity redaction of documents effect on burden of proof consequences of allegedly unjustifiable failure to discover relevant documents whether defence should be struck out further submissions after close of oral argument requirement for leave administrative law administrative law practice and procedure practice and procedure |
The applicant also seeks the return of the documents. 2 The search warrant was issued pursuant to s 225 of the Proceeds of Crime Act 2002 (Cth) ('POCA') in respect of an alleged breach of Commonwealth law. Accordingly, on 6 February 2006 the Supreme Court of New South Wales transferred the proceedings to this Court. 3 The documents seized from Dimocks are documents to which legal professional privilege would ordinarily attach. They are documents relating to legal advice provided by Dimocks to the applicant. However, some of the documents are identical to documents which had been previously seized by the AFP from the applicant's residence, and in respect of which privilege has not been claimed. Other documents are identical to documents seized from the business premises of the applicant's husband at a later date. The question, therefore, is whether the applicant has waived privilege over the documents by her failure to claim privilege in respect of the other seizures. Robert Norman and his brother Mark Norman were the directors of M & J Norman Pty Ltd trading as Norman & Associates, Registered Tax Agents, at 44 Burwood Road, Burwood. In September 2003 officers of the Australian Taxation Office ('ATO') seized documents from the premises of Norman & Associates. In February 2004 the ATO referred the matter to the AFP for investigation. Charges have subsequently been laid against Robert Norman for taxation-related offences. The warrant authorised the seizure of records and other items relating to several companies and persons including the applicant and Robert Norman. The applicant, Robert Norman and their daughter were present when the search commenced. 6 On arrival at the Concord premises, a federal agent, Susan Cooper, handed Robert Norman a copy of the search warrant, as well as a document entitled 'Rights of The Occupier', a document entitled 'Rights of a Person Searched' and a document entitled 'Claims for Legal Professional Privilege: Premises other than those of a Lawyer, Law Society or like Institution' which set out a procedure agreed between the AFP and the Law Council of Australia by which a claim of legal professional privilege could be made over seized materials. The applicant and her daughter were present when the documents were handed over. 7 During the execution of the warrant, the applicant handed to AFP officers several documents from a folder in the kitchen. The applicant removed other documents from her handbag and gave them to AFP officers. An envelope of documents contained in a basket on top of the refrigerator in the kitchen was also seized by an APF officer. All these documents ('the Concord documents') were taken and were recorded on an AFP Property Seizure Record ('PSR'). 8 During the execution of the warrant, the applicant telephoned her solicitor Mr Andrew O'Brien. She was advised by him not to answer any questions. 9 The documents taken by the AFP included correspondence addressed to the applicant from her family law solicitor, Mr Dimock, relating to a proposed property settlement to be entered into between the applicant and her husband, Robert Norman. Those documents are identical to several documents referred to in the summons which were later seized from the office of Dimocks. The warrant authorised the seizure of records relating to three companies and four persons. One of the named persons was Robert Norman, but the applicant was not named in this warrant. 11 Several documents were seized by the AFP from the Rosebery address. Robert Norman claimed legal professional privilege in respect of some of the documents, although the claim for privilege was not pursued. During the search at the Rosebery premises, a letter from Dimocks, dated 13 April 2005 and addressed to the applicant, was found. The letter was not seized but it was noted that the letter related to proposed property settlement arrangements between the applicant and Robert Norman. Some documents were produced in response to the order but copies of documents which had been obtained in the Concord search, and the letter which had been found at the Rosebery premises, were not included. Accordingly, on 11 November 2005, a search warrant issued under s 225 of the POCA was executed on the offices of Dimocks authorising the seizure of records relating to the applicant and Robert Norman (among others). 13 During the execution of the warrant Mr Dimock made a claim for legal professional privilege in respect of the Dimocks documents. Those documents are the subject of this dispute. Robert Norman made a claim of legal professional privilege in respect of some documents, including two documents related to the matrimonial property settlement. The documents over which privilege was claimed were placed in an archive box and delivered to the Downing Centre Local Court Chamber Magistrate, but the claim for privilege was not pursued and the documents were collected by the AFP. Two of the Dimocks documents are identical to two of the Rosebery documents. I am satisfied that documents specified in paragraphs 1(b), 1(d), 1(i) and 1(m) of the summons are identical to document seized during the Concord search. I am also satisfied that documents 1(a) and 1(n) are identical to documents seized during the second Rosebery search. The AFP submits that the applicant has waived privilege over the Dimocks documents by failing to claim privilege in respect of the same documents obtained by the AFP from the Concord premises and the Rosebery premises. 16 The applicant has indicated that she no longer claims privilege over documents 1(e), 1(f) and 1(h) and those have been released to the AFP. In respect of the remaining documents, namely documents 1(c), 1(g), 1(j), 1(k), 1(l) and 1(o), these are not documents which have been seized by the AFP on another occasion. The respondents claim that if privilege has been waived over the seized documents, then privilege has also been waived over documents 1(c), 1(g), 1(j), 1(k), 1(l) and 1(o), because their contents are substantially the same as the Concord and Rosebery documents. The adequate protection according to law of the privacy and liberty of the individual is an essential mark of a free society and unless abrogated or abridged by statute the common law privilege attaching to the relationship of solicitor and client is an important element in that protection. The freedom to consult one's legal adviser in the knowledge that confidential communications will be safeguarded will often make its own contribution to the general level of respect for and observance of the law within the community --- see an article by Charles A Miller, "The Challenges to the Attorney --- Client Privilege" Virginian Law Review , vol. 49 (1963), p.262. I am persuaded that the general and substantive principle underlying legal professional privilege is of fundamental importance to the protection and preservation of the rights, dignity and equality of the ordinary citizen under the law in that it is a precondition of full and unreserved communication with his lawyer. 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. 21 In Mann v Carnell , the High Court referred to the case of Benecke v National Australia Bank Ltd (1993) 35 NSWLR 110, a decision of the New South Wales Court of Appeal. In that case, a woman gave evidence concerning her instructions to a barrister in related proceedings, apparently believing that she could prevent the barrister giving his version of the instructions. The Court of Appeal held that privilege had been impliedly waived. She may not even have turned her mind to the question. However, her intentional act was inconsistent with the maintenance of the confidentiality of the communication. 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. The present case involves circumstances where documents were provided under compulsion of law. Several authorities have indicated that the considerations in such cases are likely to be different: see Saunders v Commissioner, Australian Federal Police (1998) 160 ALR 469 at 473; Commissioner of the Police Service v Nirta [2002] 1 Qd R 364 at 368-9; Goldberg and Anor v Ng and Ors (1995) 132 ALR 57 at 68. 23 Saunders concerned a claim for privilege in respect of documents seized by the AFP as part of an ongoing investigation into the taxation affairs of the applicant. It had been submitted by the AFP in that case that because the applicant failed to claim privilege at the time of the execution of the warrant, he had impliedly waived privilege over the seized documents. In that case, the AFP relied on observations of Mason J in Baker v Campbell at 80 to the effect that the authorities seemed to suggest that privilege was lost as soon as a document passed into the hands of another who may tender it in evidence. The fact that the seizure may have occurred in circumstances in which the officer executing the warrant was unaware of the subsistence of legal professional privilege in the relevant document does not, in my opinion, lead to the conclusion that the privilege is lost. However in Commissioner of the Police Service v Nirta [2002] 1 Qd R 364, Mullins J held that the right to claim legal professional privilege over documents seized pursuant to a search warrant was not lost because a claim was not made at the time of seizure. Mullins J noted two relevant factors: firstly, that the respondent had been wrongfully informed that he could not contact the solicitors who were acting for him; and secondly, that the claim for privilege was made at the first available opportunity after having spoken with the solicitor acting for him. 25 It is clear nonetheless that the failure to claim privilege can in some circumstances constitute a waiver of privilege. In Spedley Securities Ltd (in liq) v Bank of New Zealand (1991) 26 NSWLR 711 Cole J found that the respondent had waived legal professional privilege because it had failed to make a claim when it knew that a document had been in the hands of the Registrar of the Court, and possibly in the hands of a third party, for a period of twelve days. There is no distinction in principle between failure to claim legal professional privilege for a document by including it in a list of documents discovered and available for inspection, without claiming legal professional privilege, and on the other hand sitting by and allowing use of the document already in the hands of the other party without claiming legal professional privilege, or omitting to take steps to claim legal professional privilege in respect of the document known to be in the hands of the court, or as here, the liquidator, which it was obviously intended to use. Each constitutes an implicit waiver because it constitutes an abandonment of the claim for protection (regarding abandonment see Attorney-General for the Northern Territory v Maurice (at 498) per Dawson J). The first search warrant was executed on the Concord premises several months before the documents which are the subject of the present application were seized from Dimocks. The second search warrant was executed on the Rosebery premises several months after the Dimocks documents were seized. Different considerations may apply to the documents seized in each of these two searches, and in my opinion it is appropriate that they be considered separately. The applicant made no claim for legal professional privilege in relation to those documents at that time or subsequently. In fact, the applicant has never made a claim for legal professional privilege specifically in relation to the documents seized on 20 May 2005. Rather, the claim is made in respect of the documents seized from Dimocks. 28 The search of Dimocks occurred on 11 November 2005, almost six months after the Concord premises had been searched. Mr Dimock made a claim for legal professional privilege at the time of the search and on 18 November 2005, these proceedings were commenced. However, in the preceding six months, the applicant had made no claim for legal professional privilege in respect of the Concord documents, several of which were identical to the Dimocks documents. 29 The applicant submits that she was unaware of her right to claim legal professional privilege. She points out that a copy of the document outlining the right to claim legal professional privilege was given to her husband, but not to her. She submits also that the PSR which was completed in relation to the Concord search did not describe the documents sufficiently, such that it was not clear that the documents seized were documents to which privilege was likely to attach. She submits that in these circumstances, the fact that she took no action to assert a claim for privilege was not inconsistent with the continuance of the privilege. 30 I agree that the PSR which was filled out in respect of the Concord search did not describe the documents sufficiently. If the applicant had sought legal advice subsequent to the search, a solicitor would have been unable to determine from the PSR alone whether the documents attracted legal professional privilege. Nonetheless, I accept the submission of the respondent that in the circumstances of this case, the applicant knew the nature of the documents which were taken. This is not a case in which many boxes of documents were seized, and where it would have been difficult or impossible for the applicant to know precisely what had been taken. There were very few documents taken from the Concord premises. Further, the documents relating to her legal affairs were, for the most part, provided to the AFP by the applicant herself and she was present when the documents were seized. She was aware that the documents which were handed over related to her family law affairs. And we do have the right to search either of you. We'll determine that at a later date if that's needed. And that's your rights there. I think this was unfortunate. I also consider it unfortunate that no further details of the applicant's rights with respect of legal professional privilege were explained to her, given that it was expected under the Guidelines that she assert privilege immediately in respect of any privileged documents. The applicant is a lay person and it is far from clear that she was aware of her rights to object to the seizure of the documents. A brief explanation to the extent that she could object to the AFP taking any documents which were communications with her lawyer may have prompted her to raise an objection at the time. 33 Nonetheless, it is apparent that the applicant was at least alerted to the existence of rights in respect of legal professional privilege by the federal agent who attended the search. The applicant spoke to a solicitor during the course of the search. Unfortunately, the lawyer did not give her any advice in respect of her right to claim legal professional privilege, but rather told her not to answer any questions. There is no evidence that the applicant sought advice from a lawyer subsequently in relation to the Concord search, but if she did, no claim for legal professional privilege was made. I accept that the applicant was flustered at the time of the search and may not have been in a position to consider and assert her rights at that time, but there is no reason why she could not have sought advice, and made a claim for privilege, subsequently. No suggestion was made that the documents were privileged until more than six months later. 34 The applicant says that she was not under suspicion of any offence and that no charges have been filed against her, but rather, it was her husband who was of interest to the AFP. The applicant also submits that at the time of the Concord search, she was not involved in any litigation. She says that these are relevant circumstances which would make it unreasonable to imply waiver from her failure to claim privilege. 35 I do not accept this submission. Whilst it is true that the applicant was not the subject of a police investigation, or involved in litigation, this is not a determinative consideration. It may often be the case that the police seize documents from persons who are not then or subsequently charged with a criminal offence. The police will often seize documents from persons when no proceedings have yet been (or will ever be) commenced against them. Those facts alone do not obviate the need for a person whose documents are seized to make a claim of privilege, if such a claim is to be made, within a reasonable time period after the seizure. 36 In all the circumstances, I consider that the applicant must be taken to have waived her right to privilege over the Concord documents. She was aware of the nature of the documents which had been seized. She had been alerted to the possibility that legal professional privilege could be claimed by the statement of the AFP officer during the search. She spoke to a solicitor during the course of the search, and it was open to her to seek further advice subsequently if she was concerned about the search. The AFP had control of the documents for over six months before there was any suggestion that the applicant claimed legal professional privilege. When a claim for privilege was made, it was made not by the applicant but by her family law solicitor, following a search of his premises. This omission to make a claim of privilege over such a prolonged period was, in my opinion, inconsistent with the maintenance of privilege. Accordingly, I find that privilege in respect of the Concord documents has been waived. The most significant difference is that the documents seized in the second Rosebery raid were seized after the claim for privilege in respect of the Dimocks documents had been made and these proceedings had been commenced. The applicant submits that it was unnecessary, in those circumstances, to assert a second claim of privilege because it was clear that she was claiming privilege in respect of the documents. 38 Legal professional privilege is asserted to prevent the production of documents to which a right of confidentiality attaches. It is a restriction on the powers to require production which are otherwise authorised by the issue of a search warrant. It is my opinion that an applicant must assert legal professional privilege each time a search warrant is executed. If a claim for privilege is not made at the time of or within a reasonable period of the execution of the warrant, the search warrant authorises its addressee to seize and make use of all those documents which fall within the terms of the warrant. The AFP may have had good reasons to suspect the documents seized in the second Rosebery search were the same documents which had been seized in the Dimocks search, and in respect of which a claim for legal professional privilege had already been made. However, as it had never seen the Dimocks documents, it could not be certain that this was in fact the case. It would be unreasonable to expect the AFP to treat seized documents as subject to privilege on the basis of a claim arising from a separate search warrant, when it could not be certain that the documents were in fact the same. The applicant should, in my opinion, have made a second claim of privilege in respect of the documents seized in the second Rosebery search. 39 The question, therefore, is whether her failure to do so is such that a waiver of privilege should be imputed by operation of law. The circumstances of the second Rosebery search were different from those of the Concord search in several respects. The documents in the second Rosebery search were seized from the business premises of the applicant's husband and not her own residence. There is no evidence she had any involvement with the Rosebery premises. The applicant was not present during the search. The applicant was not personally alerted by the AFP regarding the seized documents pertaining to her legal affairs and there is no evidence that she was personally aware that it had seized material in respect of which she might make a claim for privilege. 40 However, by the time of the execution of the second Rosebery warrant, the applicant had instructed Mr O'Brien to act on her behalf in respect of the proceedings under the POCA. No claim was made by Mr O'Brien for legal professional privilege on behalf of the applicant, despite the fact that Mr O'Brien was contacted in respect of a claim for legal professional privilege made by Robert Norman at the time of the search. That claim was apparently abandoned by Robert Norman, because no proceedings were instituted. 41 It is true that Mr O'Brien was not present at the second Rosebery search. However, the PSR from the second Rosebery search clearly described the documents. There is no evidence when the PSR was made available to Mr O'Brien, but it seems likely that it was provided to him by Robert Norman shortly after the search. Mr O'Brien gave evidence that Robert Norman had telephoned him after each search and no evidence was led which suggests that a claim for legal professional privilege was not made immediately because Mr O'Brien was unaware that legal documents pertaining to the applicant were among those seized during the second Rosebery search. In those circumstances, I infer that Mr O'Brien was aware of the documents which had been seized, but did not make a claim for privilege on behalf of the applicant. I note that by outlining the above facts I do not intend any criticism of Mr O'Brien, about whose instructions I have very little information. 42 In my opinion, that conduct is inconsistent with the continuation of privilege in the documents seized. I recognise that the right to maintain the confidentiality of legal advice attaches to the applicant rather than to her legal advisor: see Mann v Carnell at [28]. However, in this case, the applicant had instructed Mr O'Brien to advise her in relation to the privilege claim. Mr O'Brien, having knowledge of the seized documents from both Dimocks and the Rosebery premises, did not make a claim for privilege on her behalf. The fact that the documents were being held pending a claim for privilege was drawn to his attention by the facsimile from the AFP. He did not then make a claim for legal professional privilege and accordingly abandoned Robert Norman's claim for privilege. I am of the opinion that the conduct of Bank of New Zealand in sitting by with knowledge [that material to which a claim for privilege could be made was being used] ... and yet taking no steps to make a claim of privilege on behalf of Bank of New Zealand ... does constitute waiver of legal professional privilege. Litigation obviously was a possibility, if not a probability. In those circumstances a solicitor is "the agent of his client in all matters that may reasonably be expected to arise for decision in the cause" (per Denning LJ in Griffiths v Evans [1953] 1 WLR 1424 at 1431 ...). I have read the additional documents. I am satisfied that the substance of documents 1(g), 1(j), 1(k), and 1(o) has been disclosed in the other documents over which privilege has been waived. Documents 1(c) and 1(l) appear to me to relate to matters which are not contained in the documents over which privilege has been waived. Accordingly, I consider that privilege remains in those two documents. I will make orders accordingly. | legal professional privilege waiver of privilege implied waiver documents seized pursuant to search warrant same documents seized in other searches and no claim for privilege made whether omission to make a claim for privilege amounts to waiver of privilege practice & procedure |
These paragraphs commence at [422] of Mr Stokoe's affidavit and extend to [478]. The method which has been adopted, for the purposes of argument, has been to take some of the earlier paragraphs, and in particular [426], [427] and the following paragraphs, up to about [438], as representative of some perceived fundamental defects in the structure and content of the evidence. These reasons will not fully deal with all aspects of the respondents' objections to the evidence of Mr Stokoe up to and including [478], but they will, to a certain extent, clear the ground for the balance of the perceived problems. 2 The objection to the relevant parts of these paragraphs, in particular [426], [427], [428] and following, are, as I have said, fundamental. The nature of this case should be briefly identified, to put in context what I am about to say. 3 In this proceeding in 2004, I came to the conclusion that Fresenius Medical Care Australia Pty Limited, the respondent, had infringed the Australian patent held by the second applicant. In substance, with one qualification, that conclusion was upheld by the Full Court. Thus, we are dealing with a claim for the monetary consequences of that infringement. 4 The applicants have chosen to seek to prove damages, rather than an account of profits. The case concerns the conduct by the applicants and the respondent of a commercial business in Australia in the haemodialysis market, that is, the market for the commercial exploitation of machinery and goods which go towards remediation and alleviation of renal failure through the use of dialysis machines. There are other methods of dealing with renal failure which are not relevant directly to the proceedings, nor to this particular argument. 5 Shortly before Fresenius entered the market in Australia, Gambro had begun to exploit the relevant invention. The relevant invention was one which allowed the dissolution of water through a cartridge of powdered bicarbonate, which was affixed to or adjacent to the dialysis machine, thereby allowing an onstream saturated solution of bicarbonate (known, in the use of dialysis machines, as "Part B solution") to be fed into a line. The Part B solution would then mix with another type of solution (relevantly called the "Part A solution"), which, in the appropriate combination, would feed into the dialysis machine on one side of the dialyser to form the combination solution to undertake haemodialysis and haemodiafiltration. All this is set out in the main judgment on infringement: Gambro Pty Ltd v Fresenius Medical Care Australia Pty Ltd (2004) 61 IPR 442. 6 The first judgment on infringement attended to, amongst other things, the question of the practical utility of the invention. Now is not the time to make final conclusions about the practical utility of the invention in the full commercial context, which will be debated. However, it can be said, briefly, that there were a number of practical advantages, in particular the lack of the need to store pre-prepared liquid Part B in large, heavy containers and, secondly, the instantaneous or online production of the relevant saturated Part B solution from the dissolution of purified water through the cartridge at the time of the administration of the dialysis. This obviated any risk whatsoever of deterioration of the bicarbonate solution which had been prepared in a premixed fashion. The Part B solution was not entirely stable and did not have a shelf life beyond some months. For this reason, it was perceived that the invention had some advantages. 7 The respondent, Fresenius, began to use its version of the patented invention once it entered the market. It obtained a significant share of the market over the years, until it ceased to provide to the public this dry bicarbonate method in 2006 by reason of the cutting in of the orders in relation to infringement, after the last struggle in the infringement part of the proceedings with the dismissal of the application for special leave to appeal in the High Court. 8 The damages claim, therefore, comes back to a body of issues which, at least on one version of the damages, requires some analysis of what some have called a counterfactual; that is, ascertaining the damage, if any, caused to the applicant companies by Fresenius by the infringement. One inquiry relevant to that is what would have happened in the Australian market had Fresenius not infringed. The hypothesis of non-infringement is not put, as I would understand it, in any other way other than using the pre-existing methodology of pre-prepared or pre-mixed liquid Part B solution. Thus, it is necessary, on this way of putting the case, for Gambro to adduce evidence going to the issue of how many additional sales it or they would have obtained from 1996 without the Fresenius infringement. 9 It is this issue to which Mr Stokoe's affidavit is largely directed. One needs to understand who Mr Stokoe is and what his background is. He was, from 1 January 2005, the Director, People and Organisational Development (that being the title of his position) of Gambro Industries SAS, which is a wholly-owned subsidiary of Gambro AB, which is a wholly-owned subsidiary of the second applicant, Gambro Lundia AB (which used to be known as Gambro AB). The Gambro Group is a Swedish health care consortium, if I may use that expression, operating worldwide in the field of health care, including, relevantly for this case, dialysis and haemodialysis. The respondent, Fresenius, is the Australian subsidiary or member of a German group of companies which is engaged, relevantly speaking, in the same field of commercial endeavour. 10 Prior to Mr Stokoe taking up his employment with Gambro Industries SAS, he worked in Australia for approximately 28 years with the first applicant, being the Australian subsidiary of the second applicant. He began his working life with Gambro Australia a year or two after he graduated from the University of New South Wales in science with majors in chemistry and biochemistry. From December 1976 to 1980, Mr Stokoe was a technical sales representative; from 1980 to December 1986, he was a sales and marketing manager; and from January 1987 to the time he went to Gambro Industries SAS, he was the managing director of the Australian subsidiary of Gambro. In my role as Technical Sales Representative I was responsible for the sales and marketing of all of Gambro Australia's products and services in New South Wales, Queensland, the Australian Capital Territory and New Zealand. In my role as Sales & Marketing Manager I was responsible for the sales and marketing of all of Gambro Australia's products and services in the whole of the territory for which Gambro Australia was responsible, namely Australia, New Zealand and Micronesia. As Gambro Australia expanded its operations in the early to mid 1980s it opened offices in Melbourne, Queensland and New Zealand, which meant that I had a number of employees in those places reporting to me in a number of sales functions. In my role as Managing Director I was responsible for all of the operations of Gambro Australia in Australia, New Zealand and Micronesia, which included sales & marketing, manufacturing, clinics, technical service, warehousing & distribution, information technology and administration. I was also responsible for the development of the Gambro Renal Products business division in Australia and New Zealand, and I reported to one of two Senior Vice Presidents of global sales in the Gambro Renal Products division of Gambro Lundia. I also liaised with the Sweden head office of the Gambro Renal Products and Gambro Healthcare divisions of the Gambro Group on a regular basis and reviewed the strategic plans and business plans of Gambro Renal Products and Gambro Healthcare to fit Australia and New Zealand. I also began attending the annual scientific meetings of the Australian Society of Nephrology and the Dialysis Society of Australasia, which I have continued to attend in almost every year of my employment with Gambro Australia. In each year of my employment with Gambro Australia I also attended technical presentations and briefing sessions conducted by International Product Managers of the Gambro Group in Europe to educate Technical Sales Representatives regarding new HD products and treatments, including clinical and technical developments. I usually also used these visits to conduct meetings with Technical Managers, International Product Managers and research staff of the Gambro Group to discuss particular developments in HD products and treatments in more detail. In the course of these visits I also visited hospitals and renal units in a number of different countries. On my return to Australia after attending overseas presentations conducted by the Gambro Group or international dialysis conferences, or having observed techniques or products not used in Australia, I usually gave presentations to Technical Sales representatives and other employees of Gambro Australia about these topics or developments. In the course of my roles with Gambro Australia, first as Technical Sales Representative, then as Sales & Marketing Manager and later as Managing Director, I have made hundreds of visits to hospitals and renal units around Australia and introduced new HD products and practices to them. In the course of these visits I have observed thousands of HD treatments being performed. I have also given hundreds of demonstrations of the setting up, priming and use of HD machines and of the application and use of HD Consumables and HD Services. I have also assisted hospital staff to set up HD Machines and prime them ready for HD treatments on dozens of occasions. In the course of these visits I also observed nurses and hospital staff preparing Liquid Part B solutions for use in HD treatments and I observed the ways in which nurses and hospital staff in a large number of hospitals and renal units around Australia take delivery of, store and manage inventories of HD Consumables and Additional HD Products. In the course of these visits I also observed nurses and hospital staff managing the day to day practicalities of operating renal units and dialysis clinics and I had many discussions with nurses and hospital staff regarding the clinical, technical and practical problems and difficulties associated with the use of available products for HD and the performance of HD treatments over many years. In the course of my roles with Gambro Australia, first as Technical Sales Representative, then as Sales & Marketing Manager and later as Managing Director, I have had a very large number of discussions with customers of Gambro Australia, as well as those in the market for HD Machines, HD Consumables, Additional HD Products and HD Services, about the relative advantages and disadvantages of HD Machines, HD Consumables, Additional HD Products and HD Services available in the Australian market. I also regularly read articles and abstracts of publications in scientific and medical literature on developments in renal medicine and treatments. It was necessary for me to have a detailed and thorough knowledge of HD treatments and therapies, the products and services of Gambro Australia and those of its competitors and their relative advantages and disadvantages in order to perform my roles. I gained this knowledge and kept it current by many detailed discussions with the Gambro Group's own international product experts, customers and potential customers in the market, by studying the available products of Gambro Australia's competitors, by reading relevant literature and regular competitor updates issued from the Gambro Group, as well as by attending the conferences, technical presentation and information briefings to which I have referred in paragraphs 27 to 31 above. Also, from those positions (in particular sales and marketing manager and managing director), he was involved with the promoting and selling of the equipment which is the subject of these proceedings. 13 At this level of proof, and until Mr Stokoe is cross-examined, and in particular depending upon whether he is cross-examined on the voir dire, I am prepared to work on the evidence set out in the paragraphs to which I have referred. I conclude, for present purposes, that Mr Stokoe is a man with nearly 30 years' experience in the Australian haemodialysis market. He had a close and detailed understanding of the equipment, the market and the people involved in using, as well as purchasing and selling, machines and the equipment. 14 The affidavit of Mr Stokoe then deals in a logical fashion with a number of integers of the market, insofar as it concerns the proceeding. It deals with haemodialysis treatments, with the structure of the Australian market for machines, consumables and services; it deals with and exhibits a detailed body of market intelligence information obtained in the manner described in the affidavit, with which, I conclude (subject to any cross-examination) Mr Stokoe was intimately familiar for the purpose of his discharging his duties to his employer. 15 The affidavit deals with the introduction of the BiCart system, that is, the system of haemodialysis using dry bicarbonate, pursuant to the invention. He deals with the structure of the Australian market both before and after the introduction of that BiCart. He deals with what are, in his opinion, the significant advantages of the method employed by Gambro pursuant to the invention. He deals with the arrival of Fresenius in the market in Australia and, based on information obtained from Fresenius in pre-trial discovery and other pre-trial steps, and also from the market intelligence systems, and partly also from assumed numbers of goods sold by Gambro, he gives evidence of the division of the market. 16 Having dealt with a description of the market, a description of the machines, a description of the method of selling and a description of, in his opinion, the perceived advantages of the invention, he turns to what loss has been caused to Gambro. The first matter that he deals with in this respect is the capacity of Gambro to expand its production and sales to sell more of the dialysis system based on the patented dry bicarbonate, which, it is ultimately said, Gambro would have been able to sell and would have sold, had Fresenius not infringed and taken a portion of the market. 17 After that question of capacity, one then turns to the question of whether Gambro would have obtained any and, if so, what proportion, of the sales made by Fresenius using the dry bicarbonate powder system in infringement of the patent for the 10 years in which Fresenius carried on that infringement. 18 There are a number of ways that this matter could be sought to be proven. One exhaustive way would be to seek to identify every potential customer in Australia of the dialysis machines and consumables and other services from 1996 to 2006. That would involve the identification of each relevant institution, each part of each government or area health authority which did purchase the Fresenius equipment, then identifying the person or persons in each such organisation and inquiring of them what they would have done in a hypothetical situation over the 10-year period. That body of evidence could then be collected, marshalled and deployed in court. 19 That method of dealing with the evidence has both advantages and disadvantages which, from a practical point of view, are evident to anyone familiar with attempts to run litigation about events over a decade long, involving tens, if not hundreds, of third parties who have no interest in dealing with the matter. No attempt has been made by the applicants to prove the matter in that way. At some point, no doubt, comment will be made about that. 20 What has been done is to produce a "before and after" snapshot of the position and, in the intervening period, to identify the relevant shares of the market, together with the identification of factual material, which does show that a significant, if not the total, percentage of the market was given over to the purveyors of the powdered system, that is, Gambro and Fresenius. 21 In addition to that material, Mr Stokoe seeks to give evidence about what he says would have happened. I will come to the form of the paragraphs in a moment, but let me put one matter to one side. It was initially said that this was not opinion evidence but, rather, evidence of fact in a hypothetical state of affairs, and some reliance was initially placed on cases such as Hughes Aircraft Systems v Airservices Australia (No 3) (1997) 80 FCR 276 and Allstate Life Insurance Co v ANZ Banking Group Ltd (No 28) (1996) 64 FCR 55. That contention was, correctly in my view, not pressed. The evidence is not evidence of a person stating what her or his state of mind would have been had another event occurred, thereby identifying, in a sense, a true potential or nascent state of mind at the time. It is not the identification of a personal reaction to a state of affairs which might arise in either a negligent or fraudulent representation case or a case under s 52 of the Trade Practices Act 1974 (Cth), or a case otherwise dealing with state of mind such as estoppel. Nor is it a case about what an individual has been caused to do. Rather, it is an attempt to say what customers in the market would have done in an alternative world hypothesis. It was put by Mr Catterns in submission that this was not state of mind, but existing market trends. I think the distinction is elusive, or really non-existent. 22 The terms of [426] of Mr Stokoe's affidavit are that if Fresenius had not infringed, in Mr Stokoe's opinion, Gambro would have supplied its HD machines with the BiCart system to over 90 per cent of customers. He then goes on in [427] to say how a small number of customers would have behaved. 23 The issue is, I think, whether Mr Stokoe, with his experience, can say what he does about how the customers in the market would have reacted to a posited choice of dry or liquid Part B in the respective dialysis systems. Mr Stokoe does not speak from the perspective of a psychologist or market research expert of the kind discussed by the Full Court of this Court in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354. However, notwithstanding the fact that he does not have Dr Beaton's or Ms Strachan's background, he does, on the evidence to date, have nearly 30 years of working in the specialised and particularised market, being familiar not only with the machines, but also with the participants and their purchasing in the market. 24 In one sense, it goes without saying that he cannot say what any particular individual person would have done on a particular day. However, the evidence of the kind permitted in Red Bull 55 IPR 354, and also dealt with with a degree of generosity in Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 397, indicates that evidence in which an expert, who has some specialised knowledge which equips him or her to say something about how consumers will behave, is not inadmissible in limine as not being capable of being the subject of expert evidence. 25 The question is whether the opinions given by Mr Stokoe can be concluded at this point, on the balance of probabilities, as being wholly or substantially based on some specialised knowledge which equips him to give an opinion about how people would have reacted to a posited choice in a market in the previous 10 years. 26 It was submitted on behalf of Fresenius that there was no area of specialised knowledge. It was said that he could speak to features of the market and of market shares, but he cannot speak about specialised knowledge of the states of mind of third party purchasers. It is said that he is speculating on states of mind of third parties, which is not an area of specialisation. With respect, I think that is an oversimplification. He has a body of specialised knowledge of the activity of people, as well as the subject matter of the activity of people, in a reasonably specialised and confined area of human and commercial behaviour. It was then submitted that he did not have a body of specialised knowledge because the relevant universe of discourse was understanding how people would behave in a market in which both sellers were of dry Part B. With respect, I think that is an overdissection of the area of specialised knowledge. His relevant specialised knowledge is of the haemodialysis market, its structure, the equipment used and sold within it and the people who both used the equipment and purchased the equipment. From the evidence to date, Mr Stokoe has a body of specialised knowledge about all those things in Australia over the relevant period. 27 I am, at the present time, subject to any other matter that is raised in cross-examination in the case or on voir dire , satisfied that there is some body of specialised knowledge which provides a foundation for an opinion about how people in that market would have behaved. From the totality of the affidavit, as well as from what Mr Stokoe has said from [422] onwards, as well as in [3] and the whole structure of the affidavit, I am prepared to accept that the opinion is being given on the basis of his specialised knowledge of the market in the way I have identified. 28 That leads to the next basis of objection, that there has not been laid out a sufficient body of reasoning and assumptions to ground the admissible reception of the evidence. It is necessary to be clear about the legal framework in which I am dealing with this question. I begin with the judgment which I wrote in 2003, not because of any reason other than that it is a convenient starting point. In Evans Deakin Pty Ltd v Sebel Furniture Ltd [2003] FCA 171 , at [68] and following, I said some things about expert evidence. It is important to understand the context of what I wrote, as it is always important to understand the context of the reasons of judges. As can be seen from a discussion of the subject of the objection in that case (and once again with respect to the author of it, who is identified in that case) the expert report was a complete muddle of fact, assertion and opinion that was grounded in common sense only, if that, and with some very minor body of expert opinion sprinkled through over 300 paragraphs. It reflected a trend which is, probably since Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 ; (2001) 52 NSWLR 705 and HG v The Queen [1999] HCA 2 ; (1999) 197 CLR 414 and other cases, somewhat on the wane, of throwing together litigation support reports and tendering them to judges on the basis that the discursive opinions of former auditors and accountants about how damages should be assessed in any particular case should be given weight. That was what I was dealing with: It was that kind of muddled interweaving of argument, fact and assumption with any relevant accounting expertise camouflaged to the point of being unfathomable. This is a somewhat different case. The affidavit of Mr Stokoe does not suffer from that kind of admixture of material, and it was in that context that I said what I did, and from a full reading of HG v The Queen [1999] HCA 2 ; 197 CLR 414, though not a commercial case, it can be seen that it was that very kind of context and problem that the Chief Justice was dealing with in the clear language which he used in that case. 29 Having identified what I was dealing with in Evans Deakin [2003] FCA 171 , it is necessary to say something which was not necessary to say in Evans Deakin [2003] FCA 171. There is a difference, I think, which has been identified between the approach of the Court of Appeal of New South Wales and the Federal Court of Australia about, in effect, the existence of a basis rule for the application under s 79 of the Evidence Act 1995 (Cth). 30 Though the two courts have been dealing with different Evidence Acts, they are in relevantly identical form and spring from the same exercise of law reform conducted in the 1990s. Therefore, they can be seen as coordinate pieces of legislation that were attempts at national legislation, which have failed to obtain universal approval. Nevertheless, they are statutes which are in relatively the same form, springing from the same source and, ordinarily, one would expect a body of coordinate jurisprudence on them conformable with such cases as Australian Securities Commission v Marlborough Gold Mines Ltd [1993] HCA 15 ; (1993) 177 CLR 485. 31 The first case which dealt with the question of the basis rule was a Full Court decision of this court in Quick v Stoland Pty Ltd (1998) 87 FCR 371. In that case, Branson J, with whose opinions on the structure of the Evidence Act 1995 (Cth) Emmett J agreed, expressed the view that the opinion rule, qualified it as it is in section 79 of the Evidence Act , did not incorporate the common law rule that the admissibility of expert opinion depends upon proper disclosure and proof of the factual basis of the opinion. Her Honour went on to identify that this was not an accidental omission, and that paragraph 750 of the ALRC Report No 26, volume 1 (the Interim Evidence Report) dealt with the matter expressly. 32 I should add at this point, without seeking in any way to be controversial, in particular given the debate between intermediate appellate courts, that the practice, at least in some courts in land and valuation matters in years past, can be seen not to have required a full discussion of the reasoning in valuation cases. But valuation cases may be specialised creatures of their own and I do not need to dwell on them for those reasons. 33 In Ocean Marine Mutual Insurance Association v Jetopay [2000] FCA 1463 ; (2000) 120 FCR 146, the Full Court of the Federal Court dealt with the question of the content of an expert report. The matter is conveniently dealt with in Makita [2001] NSWCA 305 ; 52 NSWLR 705, at [86] in which [21], [22] and [23] of the judgment of Black CJ and Cooper and Emmett JJ in Jetopay are set out. The primary judge considered that it was permissible to examine the reports and draw inferences from the form and contents of them. However, it is not permissible to conclude from those matters alone that an author of a report has any specialised knowledge, except to the extent that the report states (or it otherwise appears from admissible evidence) what that knowledge is. Nor is it permissible, by reason of those matters alone, to conclude that any specialised knowledge that the author of a report has is based on any training, study or experience of the author. Thus, it is not permissible to conclude, simply because a person expresses an opinion on a particular subject, referring to particular technology, that that person has any specialised knowledge in relation to that subject. There must be specific evidence as to specialised knowledge of the person in relation to that subject and as to the training, study or experience upon which that specialised knowledge is based. The further requirement that an opinion be based on specialised knowledge would normally be satisfied by the person who expresses the opinion demonstrating the reasoning process by which the opinion was reached. Thus, a report in which an opinion is recorded should expose the reasoning of its author in a way that would demonstrate that the opinion is based on particular specialised knowledge. Similarly, opinion evidence given orally should be shown, by exposure of the reasoning process, to be based on relevant specialised knowledge. The case is not authority for anything further. 35 In 2001, the New South Wales Court of Appeal in Makita [2001] NSWCA 305 ; 52 NSWLR 705 dealt with the question of the admissibility of expert evidence. Relevantly, Priestley JA expressed his conclusions at page 707 in short form. His Honour agreed with the orders proposed by Heydon JA (as his Honour then was). Powell JA dealt with the expert evidence in his own way, by examining the expert evidence and concluding that as to the value which might properly be attributed to Professor Morton's report, he was led to the conclusion that the respondent at the trial failed to make out an essential element, namely, that the stairs were slippery. Powell JA also agreed with the orders of Heydon JA. 36 Heydon JA, in, if I may respectfully say so, a long and careful judgment, examined matters of expert evidence by way of general principle, as well as the particular evidence in the case before him. The most oft-cited paragraph in relation to the matter with which I am dealing is [85]. In the previous paragraph, his Honour had cited relevant passages from HG v The Queen [1999] HCA 2 ; 197 CLR 414 from the judgment of Gleeson CJ, which it is unnecessary to set out. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert's specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ's characterisation of the evidence in HG v The Queen (at 428 [41],) on "a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise. His Honour was apparently not referred to the decision of the Full Court of the Federal Court in Quick v Stoland 87 FCR 391. His Honour did not deal with it. However, it is fair to say that the views expressed by his Honour in [85] are contrary to those expressed by Branson J in Quick v Stoland 87 FCR 391 and, as I read Emmett J's judgment, to Emmett J's views as well. 38 The matter then returned to the Federal Court in Red Bull 55 IPR 354. Makita [2001] NSWCA 305 ; 52 NSWLR 705 was the subject of consideration by the Full Court. There were two judgments, one of Branson J, the other of Weinberg and Dowsett JJ. However, if Heydon JA, in the paragraph set out in [6] above, intended to use the word "sure" in its usual sense of subjectively certain, I respectfully disagree with the view that when determining the admissibility of evidence of an expert opinion (perhaps more accurately, a purported expert opinion), it is necessary for the court to be " sure whether the opinion is based wholly or substantially on the expert's specialised knowledge ". The test is whether the court is satisfied on the balance of probabilities that the opinion is based wholly or substantially on that knowledge (s 142 of the Evidence Act ). However, as identified in [12] above, satisfaction of that test is not sufficient to render the evidence of the expert opinion admissible. To be admissible the evidence must also be relevant. It is the requirement of relevance, rather than the requirement that the opinion be based wholly or substantially on the expert's specialist knowledge, that, as it seems to me, most immediately makes proof of the facts on which the opinion is based necessary. If those facts are not at the close of trial proved, or substantially proved (see Paric v John Holland (Constructions) Pty Ltd [1985] HCA 58 ; (1985) 59 ALJR 844 at 846), it is unlikely that the evidence, if accepted, could rationally affect the assessment of the probability of the existence of the fact in issue in the proceeding to which the evidence is directed. A ruling on the admissibility of the evidence of the expert opinion is, however, likely to be required before the end of the trial. The possibility that a determination of relevance might need to be made before the court has made other relevant findings is recognised by s 57 of the Evidence Act . Further, the requirement that an expert opinion be wholly or substantially based on the witness's specialised knowledge is not, in my view, intended to require a trial judge to give meticulous consideration, before ruling on the admissibility of the evidence of the opinion, to whether the facts on which the opinion is based form a proper (in the sense of logically or scientifically or intellectually proper) base for the opinion. Were the position otherwise the smooth running of trials involving expert evidence could be expected to be interrupted by the need to explore in detail, in the context of admissibility, matters more properly considered at the end of the trial in the context of the weight to be attributed to the evidence. It is sufficient for admissibility, in my view, that the trial judge is satisfied on the balance of probabilities on the evidence and other material then before the judge that the expert has drawn his or her opinion from known or assumed facts by reference wholly or substantially to his or her specialised knowledge. In many cases the relevant evidence and other material that will be before the judge at the time that the judge is required to rule on admissibility will extend little, if at all, beyond the purported expert's affidavit or report or, where only oral evidence is intended to be adduced, the earlier oral evidence of the witness and the form of the question to which objection has been taken. In the Federal Court, the usual practice of requiring expert evidence to be reduced to writing, together with the Guidelines for Expert Witnesses referred to in [13] above, will generally ensure that there is sufficient material before the judge to enable the judge to form a view, on the balance of probabilities, (albeit, in the context of the trial as a whole, a provisional view) as to whether an opinion is wholly or substantially based on the witness's specialised knowledge. In most other jurisdictions there are now comparable equivalent rules or guidelines. Evidence later adduced, most likely in cross-examination, might reveal that an opinion proffered in an affidavit or report is not wholly or substantially based on the witness's specialised knowledge, or that the expert made an error (whether of logic, science or otherwise) in the process of reaching his or her opinion. While that evidence might be relevant to admissibility in a hypothetical sense, it would not, of itself, demonstrate error in the earlier ruling that the affidavit or report be received in evidence. The correctness of that ruling is to be judged by reference to the relevant evidence and other material before the judge at the time of the ruling. The evidence might, however, be of crucial importance with respect to the weight to be accorded the opinion at the end of the day. It should be said that in Red Bull 55 IPR 354, the matter was different from that which lies before me here, in that the evidence, unlike the evidence today, went in at trial without objection. 40 In the helpful judgment, if I may respectfully say so, of Sundberg J in Neowarra v State of Western Australia [2003] FCA 1399 ; (2003) 134 FCR 208, his Honour discussed the course of this authority under the heading "The Basis Rule". He concluded from these authorities that the basis rule does not feature in section 79 of the Evidence Act , and cites and follows, as his Honour was required to, and as I am required to, the Full Court authority of this Court in Quick 87 FCR 371 and Red Bull 55 IPR 354. His Honour noted the views of Heydon JA in Makita [2001] NSWCA 305 ; 52 NSWLR 705 [85] and the views of the Full Court in Red Bull 55 IPR 354. The reality is that, subject to one matter to which I will come, if there be any difference, as I think, strictly speaking, there is, between the approach taken by Heydon JA in the Court of Appeal and the Full Court of this Court, I must follow the Full Court of this Court. 41 In Australian Securities and Investments Commission v Rich (2005) 54 ACSR 326 at [85] --- [137], Spigelman CJ dealt with the issue. The Chief Justice discussed, but did not disagree with, the approach of Heydon JA in Makita . 42 In BHP Billiton Iron Ore v National Competition Council (2007) 162 FCR 234, the Full Court of this Court once again returned to the issue. The evidence was admitted on the basis of contextual elaboration of the extrinsic material. The evidence is relevant if it is evidence that if accepted could rationally affect (directly or indirectly) the assessment of the probability of the existence of a fact in issue in the proceeding ( Evidence Act 1995 (Cth), s 55(1)). Evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed (s 76(1)) although, if a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge (s 79). The normal role of an expert is to give an opinion based on clearly identified facts ( Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305 ; (2001) 52 NSWLR 705), almost invariably assumed to be the facts, on the footing that those facts provide a proper foundation for an opinion within the demonstrated discipline or field of specialised knowledge of the expert witness. Although s 79 of the Evidence Act seems to operate on the footing that the opinion of a person wholly or substantially based on specialised knowledge is not precluded by s 76(1) in the absence of proven foundation facts ( Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354 [10]; Neowarra v Western Australia (No. 1) [2003] FCA 1399 ; (2003) 134 FCR 208), little or no weight will be given to such an opinion ( Ramsay v Watson [1961] HCA 65 ; (1961) 108 CLR 642) although the central point may simply be the question of admissibility, not weight ( HG v R [1999] HCA 2 ; (1999) 197 CLR 414 at [39] --- [44]; Trade Practices Commission v Arnott's Ltd (No. 5) (1990) 21 FCR 324 at 327-330). That question does not arise here. In this case, the experts did not seek to offer an economic opinion related to disputed or undisputed facts probative of a matter in issue. They sought to offer an historical or contextual explanation as an elaboration of extrinsic material going to Part IIIA of the Act. It is difficult to see how that evidence is truly admissible except perhaps in that unusual category of 'expert non-opinion evidence' descriptive of a relevant element of the economic discipline concerning the evolution of economic concepts of access to natural monopoly infrastructure, without offering any opinion about facts in issue. In any event, the material is capable of being received by the court and considered by force of Order 10, rule 1(2)(j) of the Federal Court Rules , by way of a submission rather than admissible evidence. I do not think that [185] should be so read. If Greenwood J were to be intending to depart from a previous Full Court of this court, he no doubt would have expressed it himself in terms of perceived error in the earlier Full Court's reasons. He did not do so. Thus, I am left with the position that I do not judge the admissibility of this material by the quality of the reasoning underpinning its expression. I judge its admissibility by coming to the view whether the opinions are based on the relevant specialised knowledge, a conclusion which I have already reached. 44 Whether or not the reasoning is fully and completely expressed, in my view, is debatable. Mr Catterns put the proposition that he had satisfied even the Makita [2001] NSWCA 305 ; 52 NSWLR 705 test. I am not prepared to accede to that, but for present purposes it probably does not matter. The weight that ultimately will be given to this opinion, in circumstances where the respondent calls people who were actively involved in decisions to buy particular goods in the relevant period, who give evidence as to what they would have done, faced with the choice in question, may be another matter. However, in my view, looking at the material in the whole of the context of the affidavit, I am satisfied that the opinions given are ones that can legitimately be given from a base of specialised knowledge that Mr Stokoe has and thus are admissible. It seems to me fairly plain from Mr Stokoe's evidence that he is putting the proposition that, faced with the advantages of his company's invention, the vast majority of customers would have been driven to the choice of the Gambro machine. Whether or not that opinion is likely to withstand the winds of cross-examination is something that will need to await the cross-examination. However, I think the reasoning process is tolerably clear; whether it is tolerably adequate in terms of the acceptance of the proposition that Mr Stokoe is seeking to put may be another. 47 For those reasons, I propose to allow [426], [427], [428] and [429] of Mr Stokoe's affidavit. I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Allsop. | admissibility whether witness had relevant specialised knowledge whether opinions based on such specialised knowledge evidence |
2 He arrived in Australia on 30 November 2000 and applied to the Department of Immigration and Multicultural Affairs for a Protection (Class XA) Visa on 10 July 2001. A delegate refused that application on 25 February 2002 and an application for review was thereafter lodged with the Refugee Review Tribunal. 3 The Tribunal affirmed the decision of the delegate but this decision of the Tribunal was set aside by a decision of the Federal Magistrate's Court on 12 May 2006. 4 The present decision of the Tribunal, differently constituted, was signed on 25 October 2006 and again affirmed the delegate's decision. On 6 March 2008 the Federal Magistrates Court dismissed an application seeking review of the decision of the reconstituted Tribunal: NBDV v Minister for Immigration & Citizenship [2008] FMCA 309. 5 The Appellant now appeals to this Court. For the same reasons as were provided by the learned Federal Magistrate, neither ground is made out and the appeal is dismissed. 6 The Appellant appeared before this Court unrepresented, although he did have the assistance of an interpreter. Previously filed with the Court were written submissions signed by the Appellant and dated 12 May 2008. INCONSISTENT OR CONTRADICTORY FINDINGS? It accepts the Applicant may have assisted Sikh families through providing(aid) such as food or money through the temple and also his employer Madho, but it does not accept the Applicant actively worked for human rights over a period of 15 or more years."... 8 As was the conclusion of the Federal Magistrate, it is not considered that there is any inconsistency as between these findings. The former finding is a conclusion as to the Appellant's involvement in " humanitarian work " and a conclusion as to the extent of his commitment to that work. The latter finding is a conclusion that the Appellant had not worked for " human rights " but that he " may have " provided assistance, and a conclusion as to the active work undertaken by the Appellant over a " period of 15 or more years ". 9 There is not considered to be any necessary inconsistency or contradiction as between those two findings. 10 When considering the decision of an administrative tribunal, including the Refugee Review Tribunal, considerable caution must be exercised in construing the findings and reasons set forth in that decision: Minister for Immigration & Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272 per Brennan CJ, Toohey, McHugh and Gummow JJ. This approach has since been endorsed: SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [25] , [2007] FCA 26 ; 235 ALR 609 at 617 per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ; Black v Minister for Immigration & Citizenship [2007] FCAFC 189 at [36] , [2007] FCAFC 189 ; 99 ALD 1 at 9. Those findings and reasons thus draw a distinction as between what the Tribunal regarded as " human rights work " and " charity or humanitarian work ". When that distinction emerges, the manner in which the Tribunal expressed itself in the two findings set forth in the Notice of Appeal becomes more readily apparent. It has serious doubts the applicant was involved in working for human rights as he claimed given the number of inconsistencies in his evidence and general lack of credibility as a result. ... The Tribunal also found the applicant's evidence regarding the activities he engaged in as part of his "human rights work" was more accurately described as charity or humanitarian work. The applicant's primary role, as described by him in the hearing, was to identify needy people requiring assistance in the form of food, money or finding employment. Although the applicant claimed he also helped Sikh families find their loved ones who had gone missing, the Tribunal found the applicant's evidence in relation to how he went about locating these missing people to be unconvincing. The Tribunal does not accept getting information from his workers or friends and being on the lookout for these people demonstrated any real commitment to locating people who had been reported as missing by their loved ones. For these reasons the Tribunal does not accept the applicant was active in working for human rights in India. ... The Tribunal accepts the applicant may have taken an interest in helping Sikhs in Bihar from the time of the riots in 1984 following the assassination of Mrs Gandhi and that he had provided assistance to poor Sikhs by distributing money, food and other provisions. However, the Tribunal is satisfied the applicant did not engage in any activities associated with human rights. Nor does it accept the applicant experienced any difficulties because of his humanitarian work. Whatever support may have been provided to the Appellant's argument by reason of the distinction drawn by the Tribunal as between " humanitarian work " and work for " human rights " -- had that distinction remained unexplained -- that support is removed once the distinction is explained and understood. 12 It is an impermissible course for an appellant to seize upon two findings made by the Tribunal and to thereafter attempt to weave a fabric of contradiction or inconsistency founded solely upon those findings and divorced from the balance of the reasoning process. 13 To construe the reasons provided by the Tribunal as involving an " inconsistency ", it is considered, would be to engage in the " over-zealous judicial review " warned against in Wu Shan Liang. See: Huttner R, Judicial Review of Refugee Decisions: The High Court's Decision in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 3 AJ Admin L 222. The reasons provided by the Tribunal adequately explain the basis upon which it proceeded. 14 The first Ground of Appeal is therefore rejected. 16 One difficulty confronting the Appellant is that the second Ground of Appeal does not identify any " information " which falls within the provisions of s 424A(1)(a). The ground only identifies what may properly be characterised as the factual findings made by the Tribunal. The Learned Federal Magistrate was in error in not determining that the Refugee Review Tribunal failed to comply with sec. 424A(1)(a) of the Migration Act 1958 because of the following finding it made and thereby denying the Applicant with the opportunity to comply with this provision in terms of the decisions that were made in SAAP and SZEEU... "The Tribunal does not accept the Applicant was again arrested in 1986. The Tribunal notes the Applicant claimed in the hearing that this incident took place in June or July 1986 and he was detained for 2 days. However, in his Statement, the Applicant claimed it was early 1986, February, according to the evidence he provided to the first Tribunal and was detained for 4.5 days. The applicant submits that this was a serious error made by the Tribunal."... 17 The findings as made by the Tribunal and extracted in the second Ground of Appeal are not " information " which could fall within s 424A(1)(a). This Ground of Appeal is more properly characterised as an impermissible challenge to the merits of the decision made by the Tribunal: NAHI v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 10 at [10] per Gray, Tamberlin and Lander JJ. 18 At best, it is a contention that the Appellant was entitled to be informed of the findings as proposed to be made by the Tribunal and to be afforded a further opportunity to be heard. The Appellant was not entitled to any such further opportunity. Concurrence is expressed with the reliance by the Federal Magistrate upon SZBYR v Minister for Immigration & Citizenship [2007] HCA 26 at [18] , [2007] FCA 26 ; 235 ALR 609 at 616 and his Honour's conclusion that such findings do not fall within s 424A(1)(a). 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 [[2004] FCAFC 123 , 206 ALR 471 at 477] 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. See also: SZICU v Minister for Immigration & Citizenship [2008] FCAFC 1 at [24] ---[25], 100 ALD 1 at 6---7 per Tamberlin, Finn and Besanko JJ; SZLBA v Minister for Immigration & Citizenship [2008] FCA 484 at [23] ---[24] per Cowdroy J. 19 The ground is further without merit for the simple reason that such " information " as is to be discerned from the findings relied upon by the Appellant were -- in any event -- identified in a letter sent to him pursuant to s 424A(1)(a) on 9 October 2006. In the hearing you claimed that the second time you were arrested was June or July 1986 and you were detained for 2 days. However in your statement, you claimed it was in early 1986 that you were arrested the second time, February according to the evidence you provided to the first Tribunal, and you were detained for 4.5 days. This information is relevant because the discrepancies in the evidence you provided at various stages of the process as to when you were detained in 1986 and how long you were detained, raises doubts that you were arrested in 1986 at all. It is also apparent from the reasons of the Tribunal that this issue, as raised in the 9 October 2006 letter, was further pursued with the now Appellant during the course of the hearing before the Tribunal. 20 The second Ground of Appeal therefore is also rejected. APPELLANT'S WRITTEN SUBMISSIONS? Not surprisingly -- and without being critical of the Appellant -- he was unable to assist the Court as to what was intended to be conveyed by either document. 22 The Appellant, not surprisingly, had no knowledge as to the terms of s 424A of the Migration Act 1958 (Cth) or the contents of the written submissions. 23 It is not considered that the interests of unrepresented appellants in this Court are generally assisted by the provision of such purported assistance. Certainly this Court is not assisted by written submissions or grounds of appeal divorced from the issues resolved by the Refugee Review Tribunal and the Federal Magistrates Court. Notwithstanding the Appellant's assertion that these submissions were drafted by a now absent Pakistani lawyer, they have all the hallmarks of having been drafted by an Australian legal practitioner. But that issue need not presently be pursued further. 25 Assuming that the written submissions constituted a previously unexpressed application for leave to amend the Notice of Appeal , the granting of such leave was opposed by the solicitor appearing for the Respondent Minister. Further, and more specifically, submissions focussed upon the fact that s 91R initially had been raised as a ground before the Federal Magistrates Court and an alternative ground expressly " substituted " in lieu. A party, of course, is generally not entitled to raise new grounds which were deliberately or by inadvertence not put to the court from which an appeal is brought: SZIBR v Minister for Immigration & Citizenship [2008] FCA 502 at [38] per Lander J. The contention that there was a failure to " assess information " is simply denied by the very task undertaken by the Tribunal. That, and other grounds, it was submitted were thus without substance, nor was there any specification as to which of the " findings " of the Tribunal were said to have been made without sufficient evidentiary foundation. 26 To entertain the written submissions filed by the Appellant, leave to amend the Notice of Appeal would necessarily have been required. That leave was refused. The submissions as advanced on behalf of the Respondent Minister should be accepted. None of the grounds, it is considered, have merit: VUAX v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 158. That, it should be noted, was the decision communicated to the Appellant during the course of the hearing of the appeal. 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 twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | allegedly inconsistent findings reasons of refugee review tribunal not to be read in an over-zealous manner findings explained by context no inconsistency no need to afford opportunity to comment upon reasoning process of tribunal appellant's written submissions raised new grounds leave to amend refused migration |
The applicant is a former member of the defence forces who claimed compensation from the respondent on the grounds that his medical condition of reactive arthritis and osteoarthritis of the right knee was caused by, or contributed to by, his military service. The Tribunal affirmed the decision of the respondent that it was not liable to pay compensation because the applicant had not proved that his medical condition was caused by his military service: see the Tribunal's judgment ([2005] AATA 1045). The applicant appeals that decision. 2 Two issues are raised in this appeal. The first issue has been resolved by agreement between the parties and relates to whether the respondent was liable for sprain of the applicant's left sacroiliac joint in the period 13 September 1972 until 31 October 1972. The respondent acknowledges that it is liable for such injury. The respondent has undertaken to the Court that any future claim made by the applicant in respect of that previously accepted condition will be entertained by the respondent and determined on its merits. 3 The second issue is whether the applicant's employment contributed to his reactive arthritis. By s 124 of the SRC Act, the applicant is entitled to compensation under the SRC Act if compensation would have been payable under the legislation existing at the time of the applicant's injury, namely the Compensation (Commonwealth Government Employees) Act 1971 (Cth) ('the 1971 Act'). 5 Section 27 of the 1971 Act made the Commonwealth liable to pay compensation in respect of a personal injury ' arising out of or in the course of the employment ' of a Commonwealth employee. By s 29, where the employment is a ' contributing factor ' to the contraction or aggravation of a disease, the disease was deemed to be a personal injury for the purposes of s 27 the 1971 Act. By s 7, a member of the Defence Force is deemed to be employed by the Commonwealth and his employment is ' deemed to be constituted by his performance of his duties as such a member ... of the Defence Force '. 6 Accordingly, by s 29 of the 1971 Act, the applicant must demonstrate that his employment in the Defence Force contributed to the contraction or aggravation of his arthritis in order to succeed in his claim. Reactive arthritis is a medical condition which is triggered by a prior enteric or urogenital infection. The infection may be subclinical, that is, an individual may be unaware of the infection. The period between the contraction of the infection and the onset of arthritic symptoms was a matter of dispute between the medical experts, but the Tribunal accepted that the infection must have occurred at least some days and up to four months before symptoms of arthritis first appeared. 8 The applicant's medical record does not indicate that the applicant suffered any illnesses which could have triggered the reactive arthritis in the four months leading to the onset of his reactive arthritis. Accordingly the Tribunal was satisfied that the illness leading to the reactive arthritis passed unnoticed by the applicant. 9 The applicant served in the Army Corps of Engineers as a driver between April 1971 and April 1974. For most of the four months prior to the onset of his reactive arthritis, the applicant was residing at Lavarack Barracks near Townsville. On completion of his normal daily duties he would return to barracks, although on some weekends he left the barracks to visit the local town. The Tribunal found that there was no evidence that he was required to be at barracks when he was not fulfilling his duties. 10 During the four months prior to the onset of arthritic symptoms, the applicant also spent a period of seven days on exercise in the area, and two weeks confined to barracks for disciplinary reasons. 11 The Tribunal found that the applicant's condition ' occurred during the course of his employment, that is a temporal connection exists '. However the Tribunal found that on the balance of probabilities the applicant's employment had not contributed to his reactive arthritis. 12 In making this finding, the Tribunal rejected the applicant's submission that his employment included all time which he spent at the barracks. The Tribunal found that his employment did not include periods when he was rostered off-duty and not undertaking authorised or expected activities, and did not include periods of local leave. The Tribunal also rejected the submission that a time-based probabilistic analysis could be used to determine whether the applicant had contracted the infection in the course of his employment. First, the applicant submits that the Tribunal erred in its interpretation of ' employment ' for the purposes of the 1971 Act. Second, the applicant says that the Tribunal erred by rejecting a probabilistic approach to the question of whether the applicant's employment contributed to his reactive arthritis. 14 In respect of its first submission, the applicant says that the Tribunal used the term ' defence service ' to describe the applicant's employment. The applicant submits that the Tribunal did not identify what it understood the term ' defence service ' to include. The applicant says that the term ' defence service ' is used in the Veterans' Entitlements Act 1986 (Cth) (' Veterans' Entitlements Act ') rather than in the 1971 Act, and that a test of ' defence service ' was the incorrect test. 15 The applicant further submits that the Tribunal did not apply the correct interpretation of ' performance of duties ' as referred to in s 7 of the 1971 Act. The applicant states that the correct test was that enunciated by the High Court in Roncevich v Repatriation Commission [2005] HCA 40 at [23] (set out at [24] below). 16 The applicant submits that the Tribunal should properly have considered that living in barracks was itself an authorised or expected activity, despite the fact that the applicant was not required to live there. The applicant submits that performance of duties as service personnel includes a wider range of matters than for civilian employment, and extends to ancillary duties or matters incidental to the employment: see Military Rehabilitation & Compensation Commission v Wall [2005] FCAFC 127 at [20] ---[29]; Commonwealth of Australia v Carter (1965) 7 FLR 223 at 227; Commonwealth v Wright [1956] HCA 79 ; (1956) 96 CLR 536 per Dixon CJ at 546; McTiernan J at 547-8; Webb J at 550-1. 17 In relation to its second submission, the applicant says that the Tribunal should have considered the cause as a question of exposure: see Favelle Mort Ltd v Murray [1976] HCA 13 ; (1976) 133 CLR 580 at 584, 601; Re Tully and Comcare (unreported, Administrative Appeals Tribunal, 4 October 1996). It does not include periods where is rostered off duty and not undertaking authorised or expected activities. It does not include periods of local leave. ' Defence service ' was used interchangeably with the term ' employment ' throughout the Tribunal's judgment. I am satisfied that the Tribunal used the words ' defence service ' merely as a description of the nature of the applicant's employment, and not with any intention to invoke a defined term with a specific legal meaning by reference to the Veterans' Entitlement Act. 21 Further, ' defence service ' is defined in s 68 of the Veterans' Entitlement Act as ' continuous full-time service rendered as a member of the Defence Force '. The definition specifies certain dates which delimit the definition of ' defence service '. There is nothing in the definition, however, which circumscribes the activities which are to be understood as constituting ' service rendered as a member of the Defence Force '. I do not consider there is any significant difference between ' service rendered as a member of the Defence Force ' and ' performance of duties ... as ... a member of the Defence Force ', which is the definition of employment contained in the 1971 Act. Accordingly, I consider that the concept of ' defence service ' as contained in the Veterans' Entitlements Act is analogous to the concept of ' employment ' contained in the 1971 Act. 22 The courts have recognised that employment can extend beyond the mere fulfilment of daily duties: see Favelle Mort Ltd v Murray; Henderson v The Commissioner of Railways (Western Australia) [1937] HCA 67 ; (1937) 58 CLR 281 ; Commonwealth v Oliver [1962] HCA 38 ; (1962) 107 CLR 353; Hatzimanolis v ANI Corporation Ltd [1992] HCA 21 ; (1992) 173 CLR 473; Humphrey Earl Ltd v Speechley [1951] HCA 75 ; (1951) 84 CLR 126. Particularly with respect to employment in the armed forces, the courts have recognised that employment entails more than simply those duties which are the subject of commands and orders, and includes matters ancillary or incidental to those duties: see Comcare v Mather and Anor (1995) 37 ALD 463; Roncevich ; Commonwealth of Australia v Carter . 23 However, diseases may be contracted by an employee during the period of his service in a temporal sense which are not contributed to by employment. To establish an entitlement to compensation under the SRC Act there must be a causal connection between the employment and the disease or injury sustained by the employee: see Re Tully and Comcare; Military Rehabilitation & Compensation Commission v Wall; Roncevich ; Treloar v Australian Telecommunications Commission (1990) 26 FCR 316 at 323. 24 The High Court in Roncevich considered the question of the activities which constituted employment in the defence force. In Roncevich the applicant had become intoxicated whilst at a military function and had subsequently fallen and injured himself. There was evidence that attendance at the function had been expected but not compulsory. The majority upheld the decision of the Tribunal, adopting the reasoning of Hely J at first instance. The finding of the Tribunal was based upon a factual finding that the respondent had commenced smoking in part because of the circumstances of his employment. Hely J rejected the submission that there was a necessary distinction between incidents of life in the military and the performance of duties as a member of the Defence Force: see the judgment of Hely J in Military Compensation and Rehabilitation Commission v Wall [2004] FCA 1711 at [47] - [48] . 26 A definition of employment which rests solely on a temporal distinction between periods on-duty and periods off-duty is likely to be inconsistent with the authorities outlined above. As was the case in Roncevich , there may be periods when a person is officially off-duty and yet is engaged in activities which, as a matter of practicality, form part of their employment. In Wall the Court also accepted that employment in the military may contribute to an injury if it places a person in circumstances which lead to an injury, even where the injurious activity is not specifically required or expected by the employment. I note that in the passage of Roncevich quoted above, the High Court referred to the need to take into consideration the circumstances in which employment is undertaken. This is consistent with previous authority to the effect that matters ancillary or incidental to employment form part of employment: see [22] above. 27 Following the above authorities, I consider that the appropriate approach is to consider the nature of the activity being undertaken at the time the injury is received or the disease is contracted, and the circumstances in which that activity is being undertaken. If the activity is the cause of the injury or disease, and that activity is something which is required or expected as part of the person's duties, then clearly the employment contributes to the injury or disease: see Roncevich . 28 However, even where the specific activity which leads to injury or disease is not itself required or expected as part of the person's duties, where the injury or disease flows from the circumstances in which that activity is undertaken, and those circumstances result from the employment, it may be concluded that the injury or disease was contributed to by the employment: for example, where an injury results from drinking contaminated water from a tap at barracks. Similarly, when the activity is undertaken solely or party because of the circumstances of the employment (as was the case in Wall ), the employment may be found to have contributed to the injury or disease. 29 As the Full Court noted in Wall , causation is a question of fact, and it may be difficult to establish that an injurious activity was engaged in as a result of the circumstances in which a person was placed by their employment: see Wall at [35]. In summary, I consider that an injury or disease may be contributed to by a person's employment if caused by an activity which forms part of that employment or if caused by the circumstances in which the employment is undertaken. 30 Living at barracks is, in my opinion, one of the circumstances of employment in the military, even where soldiers are not required to live there. Barracks are specifically designed to provide accommodation for soldiers. This is not to say that any activity undertaken at barracks which caused an injury would necessarily have been contributed to by employment. However, I consider that an injury or disease which arose as a consequence of living at barracks would be an injury which arises out of employment in the military. 31 The Tribunal's findings with respect to the limits of the applicant's employment were set out relatively briefly although it is clear that the Tribunal had considered the decision of Roncevich when making its findings. The Tribunal adopted the correct approach, except for one aspect. It appears to me that in defining the scope of employment to be applied, the Tribunal may have excluded from its consideration the circumstances in which the employment was undertaken as a contributing factor to the development of injury or disease. However, for the reasons which follow, I do not consider that it was material in this case. 32 The principle that emerges from the above analysis is that in order to demonstrate that employment has contributed to an injury or disease, an applicant must be able to indicate, at least in a general sense, some activity which gave rise to the injury or disease. However in the present case, the applicant has been unable to identify the activity or circumstance which was the cause or likely cause of the infection which led to his reactive arthritis. The medical evidence demonstrates that there are two broad types of infection which might cause reactive arthritis: a gastro-enteric infection or a sexually transmitted disease. Which one of these in fact caused the arthritis is a material factor in determining whether it was more likely that the applicant contracted the infection as a result of his employment or as a result of an extraneous cause. 33 Whilst it is true that his infection may have been contributed to his employment, the Tribunal had no evidence to support the applicant's claim that this was the case. The fact that the applicant spent more time in employment than not in the four months leading up to the arthritis does not establish that the employment contributed to the infection. Whether it was more likely for the applicant to have contracted the infection while working depends entirely on the source of the infection. In the absence of any evidence relating to this issue, the Tribunal was right to reject the time-based probabilistic analysis urged by the applicant. 34 This finding does not mean that a person claiming compensation would always need to demonstrate the exact event which caused an illness to occur, or be able to show with certainty which activity was the cause. If, for example, the applicant in this case had demonstrated that an epidemic of gastro-enteric infections had been experienced at the barracks during the four-month period preceding the onset of his symptoms, the Tribunal may have been able to conclude that it was most likely to have been a gastro-enteric infection contracted in the course of employment which was the cause of his reactive arthritis. However, there is no evidence in the present case which allows the Tribunal to determine that the infection was most likely to have arisen from the applicant's employment. 35 I agree with the Tribunal's finding that the applicant's claim is speculative. There is simply no factual evidence enabling the Court to find that the employment by the respondent contributed to the applicant's disease. The fact that the respondent cannot disprove that the infection was contracted as a result of employment is not a reason to accept that the infection was contracted during employment. Accordingly, I consider the appeal must fail. The parties agreed before the Tribunal that this finding should be overturned, and an alternative finding should be made that liability was accepted, but that the applicant suffered no ongoing incapacity from his injury, as the delegate did not have the power to make an original decision in such terms. 37 In affirming the decision under review, the Tribunal failed to overturn the finding of the delegate as sought by both parties, presumably by oversight. The applicant therefore sought an order in this Court overturning that part of the Tribunal's decision which affirmed the delegate's finding with respect to that injury. The respondent has consented to this course before this Court. 38 The applicant says that until receipt of the respondent's submissions in this application, he was not aware that the respondent consented to the applicant's order in respect of the sacro-iliac joint. The applicant therefore claims costs of preparing its case concerning this issue in this Court. 39 I am not satisfied that the applicant should be entitled to its costs on this issue. The applicant was aware that the respondent had not objected to this course before the Tribunal, and therefore was likely to agree to the order sought. Although it may have been helpful for the respondent to have contacted the applicant at an earlier stage, in the absence of such contact the applicant could have sought clarification of the respondent's position before any costs were incurred. There is no evidence that the applicant sought clarification from the respondent at any time before the hearing. 40 Accordingly, I consider the usual order for costs should apply. | compensation claim by veteran whether tribunal applied incorrect definition of employment whether tribunal erred by rejecting time-based probabilistic analysis of cause of infection administrative law |
The respondent company conducts a child care centre which the appellant has attended since 2002. In general terms the appellant's claim was that the respondent received funding from the Commonwealth Government's Special Needs Subsidy Scheme (SNSS) which it was obliged to apply wholly or substantially to assist him to access education and services. The appellant alleged that the respondent had not applied the funds appropriately, thereby limiting his access to the service and education the respondent provided. This was said to amount to discrimination contrary to the Disability Discrimination Act 1992 (Cth) (DDA). 2 The proceeding was heard in the Federal Magistrates Court. At the conclusion of the evidence adduced by the appellant, the respondent made a no-case submission which the Magistrate upheld. His Honour dismissed the proceeding with costs. The appellant appeals from that decision. Pursuant to s 25(1A) of the Federal Court of Australia Act 1976 (Cth) the Chief Justice has directed that the appellate jurisdiction of the Court be exercised by a single judge. 5 The appellant alleges, and the respondent admits, that it provides a service and makes facilities available to him for the purposes of s 24 of the DDA. 6 The appellant alleges that while he has been attending the centre the respondent has been in receipt of funding from the Commonwealth in the amount sufficient to provide approximately five additional hours child care labour per day . 8 The appellant alleges that the funding has been received by the respondent as a result of applications made jointly by it and the appellant's parents in respect of additional assistance required by the appellant on account of his disability to fully access all the benefits provided by the respondent . The respondent denies this, and says it was required to apply the funding in accordance with the requirements set out in (a) to (d) in [8]. 10 The appellant alleges, and the respondent admits, that it was required to apply the SNSS funding consistent with the SNSS guidelines and SNSS funding conditions. 12 The appellant alleges, and the respondent denies, that the respondent has failed to apply the SNSS funding wholly or substantially for the benefit of the appellant or in the manner described in (a) to (d) of [11]. 13 The appellant alleges, and the respondent denies, that it has failed to apply the SNSS funding consistent with the SNSS guidelines and funding conditions. 14 The appellant alleges that in consequence of that failure, he has received little or no benefit from the funding. The respondent denies this, and says that its application of the funding has facilitated the appellant's inclusion in its child care program, resulting in significant benefit to him. It would be inappropriate for the workers employed with SNSS funds to act as one-to-one support for that child to the exclusion of other children or workers. This worker is employed in addition to the standard licensing requirements for the number of workers at that particular service. Individual attention to the child with ongoing high support needs can be provided by any member of staff. It is not necessary to set it out. The imposition of a requirement that the moving party make an election before the Judge entertains the submission, or before he rules on it will depend on the just and convenient disposition of the litigation. ... the nature of the case involves what I regard as [the] serious allegation of unlawful discrimination against a Respondent, which, it is relevant to note, is the operator of a child care centre. To allege that a child care centre has unlawfully discriminated against a disabled child, in my view, is a serious and grave allegation. Hence, in my view, in considering the nature of the case, I am satisfied that these are significant, serious and grave allegations. As to the stage the case had reached, he said that it was at the close of the appellant's case in a hearing that had commenced in March 2006 and had been adjourned to other dates primarily for the convenience of the next friend. His Honour concluded that this was not a case where the respondent should be put to its election. 26 The Magistrate rejected the respondent's submission that there was no evidence that the respondent was an educational authority for the purposes of s 22 of the DDA. 27 The Magistrate then considered the no-case submission in the "broader sense", that is to say on the basis that the respondent was an educational authority. He examined in detail the evidence of Associate Professor Ochiltree, whose expertise in the area of child care he accepted. At the conclusion of this examination the Magistrate said that despite his misgivings about the lack of specifics the Professor provided in relation to certain documents, her untested evidence in chief "would go some way to supporting" the appellant's case. After the cross-examination of Professor Ochiltree, however, it is my conclusion that she accepted that when further materials concerning plans and like matters of the Respondent were brought to her attention she was satisfied overall that the Respondent's plans and arrangements for Applicant N were appropriate. Those extracts ... reveal what I would describe as strong evidence, not in support of the Applicant's claim but rather in support of the Respondent's defence. That evidence of Professor Ochiltree, in my view, directly addresses what I regard as the core issues of the claim set out in the extracts from the Statement of Claim earlier in this judgment and addressed relevantly in other evidence of the next friend ... and another supporting witness. The evidence, as I have indicated, in my view, is evidence which goes not to support the Applicant's claim but rather, effectively and ultimately, to support the Respondent's defence. It does so in what I regard as a clear and concise manner and it is perhaps not surprising given that, in the circumstances, when the witness had completed her affidavit earlier this year, I am satisfied she was not in possession of what might be regarded as relevant documents. 31 The Magistrate examined the evidence of Brian Hoare, an occupational therapist. This witness spoke about the improvement in the appellant's handskills over the period 2002 to 2005. It follows, doesn't it?---It does make some sense, yes. It's an absolute inevitable conclusion, isn't it, Mr Hoare? Do you agree with that?---Yes in terms of his development, he did improve quite a lot over those four years. I'm saying it's an inevitable conclusion that the crèche provided the appropriate therapy to his right hand. That's the only way he could have made significant progress?---I can't answer that because I wasn't at the crèche. On my analysis of the material it is evident and leads to a strong conclusion that in applying the relevant principles, which I am bound to apply, set out in Protean the no-case submission should be upheld. I conclude that the evidence for and on behalf of the Applicant is not sufficient to de-bar the Respondent from obtaining judgment without having to answer the evidence adduced against it. In my view, the evidence against the Respondent is so unsatisfactory and/or unreliable that it should not be acted upon. I am satisfied that the key expert witness, Professor Ochiltree, gave her evidence in what I describe as a fair and genuinely independent manner. She gave answers, however, which I have indicated earlier, effectively support the Respondent's defence rather than the Applicant's claim. My assessment of the evidence ... is based not on the Briginshaw test but rather on the normal balance of probabilities standard of proof. I have done that, out of an abundance of caution, in order to give the greatest advantage that I may to the Applicant when considering this 'no case' application. Putting aside the first two, which the appellant accepts are general grounds covered by more specific ones, the remainder can be grouped under six headings. In Australian Competition and Consumer Commission v Amcor Printing Papers Group Ltd (2000) 169 ALR 344 Sackville J was of the view that Order 35 r 1 of the Federal Court Rules authorises the Court to entertain and rule on a no-case submission. That rule gives the Court power at any stage of the proceedings, on the application of any party, to pronounce such judgment or make such orders as the nature of the case requires. Rule 16.01 of the Federal Magistrates Court Rules is to the same effect. 36 In Rasomen Pty Ltd v Shell Co of Australia Ltd (1997) 75 FCR 216 at 223 (' Rasomen ') the Full Court held that s 79 of the Judiciary Act 1903 (Cth) enables the Federal Court to deal with a no-case submission. In Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 6 Finkelstein J referred to both sources of power (Order 35 r 1 and s 79). The Federal Magistrates Court is a s 79 Court. 37 Accordingly there is no doubt as to the Magistrate's power to entertain the no-case submission. That course would not have been appropriate. The Magistrate was not asked to state a separate question, and did not err in not doing what he was not asked to do, which would in any event have had nothing to be said for it. Over 20 years ago this kind of submission was rejected by the Full Court of the Supreme Court of Victoria in Protean , a decision that has been followed on numerous occasions in this and other Courts. The question he should have posed himself, it was said, was not 'should I find the critical result in the defendant's favour, but would it be open to me to do so if the trial went on'. It was submitted that 'the learned Judge misconceived his function in deciding on the no-case submission, because it reads as a final judgment on the facts, as a final resolution of the issues, with inferences drawn and applied as if he were deciding at the end of the whole case. His true function was very special, to decide whether the evidence before him (treating it in the most favourable way to the defendant) permitted the inferences to be drawn in favour of the affirmative defences, and not to decide whether his Honour should draw these inferences. Were it otherwise the Judge, being the tribunal of fact, would be placed in an impossible position: he would have to assess the validity of the case for the respondent party without being able to assess the worth or weight of the evidence led in support of it .... If it falls to the Judge to decide whether he could find for the respondent party on the evidence so far led, it is quite unrealistic to expect him to do so without being able to consider all questions which bear on the sufficiency of the evidence and without power to draw or to decline to draw all inferences from the evidence given on which the respondent party might seek to rely. The submission is recorded at 75 FCR at 227. It was rejected in reliance on what had been said in Protean . In both situations, the judge must make findings of fact, after assessing the quality of the evidence. Accordingly this ground of appeal has no substance. It is said that the Magistrate misunderstood the test on a no-case submission "by reducing it to an ordinary enquiry following final submissions". For the reasons appearing at [39] to [41] this ground must be rejected. As appears from [23] to [25], the Magistrate took into account the matters adverted to in Protean [1985] VR at 238. 44 As the Magistrate said, the appellant alleged that the respondent had engaged in unlawful conduct. Both ss 22(2) and 24(1) of the DDA begin with the words "It is unlawful ...". Furthermore, the broad complaint was that the respondent, a child care centre operator, had discriminated against a child with a disability. In addition, a particular complaint was that the respondent had misused Commonwealth funding that was intended to benefit the child. The Magistrate was clearly entitled to take into account, in the exercise of his discretion not to require the respondent to elect, the seriousness of the allegations made by the appellant. 45 Many of the cases in which no election has been required have involved allegations of fraud. 46 Amcor was not a fraud case. The allegation was that Amcor had made an arrangement containing an exclusionary provision, in contravention of s 45(2)(a)(i) of the Trade Practices Act 1974 (Cth). Sackville J at 169 ALR at [68] considered that allegation analogous to one of fraud because it was a very serious allegation. 47 The other matters the Magistrate took into account were appropriate: the probable saving of time and expense ( Amcor , Trufloor ), and his obvious, though not expressly articulated view, that the no-case submission was strongly arguable ( Amcor , Puddy and Trufloor ). Further, this was not a case where it was necessary for the Magistrate to assess the credit of any of the witnesses ( Amcor ). This ground of appeal must be rejected. This has no substance. The Magistrate's function, which he carried out, was to determine whether, on the evidence of the appellant's witnesses, his case was viable. That took him to the central allegations in the statement of claim. Unless they were supported by the evidence, the case would fail. The Magistrate concluded that the evidence did not support those allegations. They were his findings of fact. This ground fails on the facts, and discloses a misunderstanding, affecting many parts of the appellant's submissions, as to what is involved in a no-case submission. It is abundantly clear what the evidence was upon which the submission was to be determined. It was the evidence given by the appellant's witnesses together with any exhibits tendered through those witnesses: Trufloor at [11] to [16]. Again this ignores what is involved in a no-case submission. The Magistrate had no control over this procedural mechanism. It is mandated by long-established case law and practice that the submission is to be dealt with on the basis described at [40]. In my view the reasoning is clear. The central parts of the statement of claim, quoted by the Magistrate, were not supported by the evidence, parts of which supported answering allegations made in the defence. Accordingly the no-case submission had to succeed. He went on to record the respondent's contention that there was no evidence to support the claims arising out of the SNSS scheme. His Honour then set out substantial passages from Professor Ochiltree's evidence and concluded that that "strong evidence" did not support the appellant's claim but rather the respondent's defence. 54 The evidence before the Magistrate did not establish that the respondent was required to apply the funding wholly or substantially for the appellant's benefit. The Magistrate had three sources available to him that showed that this was not how the SNSS worked. The best evidence was the formal guidelines and associated descriptions of the scheme which showed that the appellant's understanding of the way the scheme operated was wrong. The respondent's Ms Davison's emails referred to at [64]-[66] accurately render the way the scheme works, and in particular that it does not do so in the manner the father was propounding to her. Professor Ochiltree's evidence about the mechanics of the scheme, which the Magistrate quoted, was accurate and did not support the appellant's case. 55 As indicated at [28], [29] and [33], the Magistrate said the evidence supported the respondent's defence rather than the appellant's claim. The respondent's defence to par 15 of the statement of claim is set out at [9]. A description of the SNSS appears at [17] to [20]. That and the extracts from the evidence set out at [57] of the Magistrate's reasons sustain the contentions appearing at [8]. Professor Ochiltree and Ms Davison both say that is how the scheme operates. See also my summary of the evidence at [57] to [59] below. The respondent denies the allegations in par 18 of the statement of claim and says that it was obliged to apply the funding in accordance with the elements set out at [8], and that it has so applied the funding. The evidence of Ms Davison was that it had done so. As to par 20 of the statement of claim, the respondent denies it and says that the respondent's application of the funding facilitated the appellant's inclusion in its child care program resulting in significant benefit to him. This was borne out by Professor Ochiltree's and Mr Hoare's evidence. 56 In short, the appellant's case was doomed from the beginning by a failure to accept the plain words of the SNSS documents that described a scheme quite different from that propounded in his pleadings. The Magistrate's reasons are concise, but quite adequately explain why he upheld the no case submission. I do not know where this expression comes from. It is not in the statement of claim. It is not in the DDA. Nor is it in the SNSS documents in evidence or in Professor Ochiltree's evidence. The conclusion the Magistrate drew from the Professor's evidence was that she was satisfied overall that the respondent's plans and arrangements for the appellant were appropriate. Assuming he was specifically obliged to address whether the respondent provided the appellant with a specialised program of assistance, he plainly did so. 60 The appellant points to various pieces of the evidence which he says give rise to the inference that the Centre did not provide any assistance to the appellant. As with other submissions, it is asserted that this evidence must be taken "at its highest". As I have said at [39] to [41], there is in my view no such requirement. In any event, the items of evidence relied on, even if taken at their highest, do not give rise to the inference. In questions of this sort, where direct proof is not available, it is enough if the circumstances appearing in evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture .... But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then, though the conclusion may fall short of certainty, it is not to be regarded as a mere conjecture or surmise. The first is the respondent's failure to offer evidence of a program of specialised assistance. This is an example of the appellant's refusal to acknowledge the nature of a no-case submission. What the respondent's evidence was is simply not relevant. 63 Then the appellant says that such evidence of assistance as was offered by the respondent was at best sporadic, piecemeal and ad hoc, reflecting the fact that he was treated like any other child at the Centre. This ignores the evidence of Professor Ochiltree and Mr Hoare, which the Magistrate understandably preferred to the appellant's assertions about the nature of the assistance. As the Magistrate said, the father's attendance at the Centre was such that he could not say anything useful about the service provided to his son. 64 The appellant seeks to draw comfort from a sentence in an email of 14 January 2004 from one of the respondent's officers, Linda Davison, in which she says "It won't therefore be obvious in the program where the SNSS funding is targeted". When the sentence is seen in its context, it is impossible to draw from it the inference contended for. Our advice is that the additional staff should be used 'flexibly across the service in rooms/activities where children approved for the subsidy scheme are being included' and, in particular that the staff should 'not be used for one to one support for any one child, but to allow interaction with other children by utilising the support of all staff members'. It won't, therefore, be obvious in the program where the SNSS funding is targeted. It is unusual to draft a completely new ISP ...". The appellant does not refer to the conclusion of the last quoted sentence --- "but we can get together to do that if that is what you would prefer". Ms Davison then suggests a meeting to discuss the matter. The email as a whole does not support the inference contended for. 66 Another email from the father to Ms Davison is relied on. You are currently of the view that the 5 hours extra labour ought to be dispersed equally among the group of 17 children, of which [the appellant] is one, in the Magic Room on the days. I on the other hand hold the view that the large proportion of the extra 5 hours ought be applied for organising group activities aimed at assisting with [the appellant's] special needs. Perhaps one point that needs to be made clearer is that the funding is not just intended to facilitate the program for the eligible child (in this case [the appellant]) but also to ensure that other children are not disadvantaged by the inclusion of a child with additional needs into their group. That is, the funding recognises that children with additional needs often require proportionately more staff time in the running of the day-to-day program. Without additional staff, extra time spent assisting one child would necessarily reduce the time available for the other children in the group. Hence the emphasis in the directives to services that the funding is to enable services to 'more effectively provide an inclusive and quality childcare program for all children; ... is not to be used for one to one support for any one child; and ... can be used flexibly across the service'. They further note that the funding is 'to allow interaction with other children' rather than to provide any specialist developmental program. Perhaps this will better illustrate the point I was trying to make yesterday. 67 I am unable to see how that exchange gives rise to the inference that the respondent "did not provide any significant assistance to the appellant". As appears from the description of the SNSS at [17] to [20] and the evidence of Professor Ochiltree, the father's understanding of the scheme is wrong, as Ms Davison points out. It is not clear what the appellant means by the claim that there is "no specific denial" in the responding email. There was nothing to deny. The competing claims were clear. The parties were propounding different understandings of the scheme. Ms Davison certainly denied the accuracy of the father's claim --- correctly so. The passage quoted at [66] from Ms Davison's email is a direct statement to the contrary of the claimed inference. 68 The appellant points to the father's evidence that Ms Davison told him the appellant was treated the same as every other child at the Centre and seeks to draw from this that there was no specialised program of support for the appellant. Ms Davison's statement does not give rise to "a reasonable and definite inference" that no specialised program existed. Her email at [66] is to the contrary. So is Professor Ochiltree's and Mr Hoare's evidence. In this case direct proof of the provision of assistance is available, and accordingly there is no occasion to draw inferences about the matter. 69 Next the appellant relies on the father's evidence that Ms Davison agreed that SNSS funding would only provide an extra 20 minutes assistance for the appellant per day. This evidence does not support the suggested inference; rather the contrary. 70 It is then said that the father's evidence that the respondent had not produced any ISP until the dispute arose in May 2004 gave rise to the suggested inference. Other evidence relied on by the appellant is to the contrary. There was an ISP completed by Ms Davison in 2001. She said it was unusual to draft a completely new ISP, but she would do so if the father wanted it. See [65]. In any event, she said that even without a specific ISP, the appellant was being assisted in the manner described in her email at [66]. Once again the appellant chooses to ignore the evidence of Professor Ochiltree and Mr Hoare. The essence of circumstantial evidence is that it fills a gap in the direct evidence. When there is direct evidence, which is accepted, there is no occasion to rely on inferences. 71 Reliance is placed on the evidence of Mr Hoare that the respondent's staff needed to be directly educated about a child's needs by a therapist in order to understand what to do for him or her. The appellant claims that there was no suggestion by the respondent that there had been any such education. That is not so. As appears from [59], Mr Hoare developed strategies for the appellant to use his right side, particularly his right hand. The appellant had made significant progress over the years 2002 to 2005. This was due to Mr Hoare's strategies being implemented on a day to day basis, at the Centre and at home. He accepted, somewhat grudgingly, that the appellant could not have made the significant progress that he had observed "if the place where he spent most of his time was not implementing appropriate therapies on his right hand". 72 Finally, attention is drawn to the father's evidence that there were no special activities or programs of assistance organised for the appellant. Having regard to his evidence recorded at [30] about his non-attendances at the Centre during the period of room care, he is unlikely to have had any actual knowledge of what was or was not provided. His unsupported assertions are contrary to what appears in Ms Davison's emails (on which he relies for other purposes), contrary to Professor Ochiltree's evidence and Mr Hoare's. 73 I have necessarily dealt with the "inference" evidence item by item. Even taking it as a whole, it goes nowhere near satisfying the requirement that such evidence "give rise to a reasonable and definite inference" that the respondent "did not provide any significant assistance to the appellant". The first is that the Magistrate permitted the respondent to proceed with its no-case submission "where it was not clear what material or evidence was being considered by the Court". According to the Magistrate, at the conclusion of the appellant's evidence the respondent made a no-case submission. The transcript of proceedings before the Magistrate shows that the respondent's counsel made the submission on the basis upon which the Magistrate dealt with it, namely that on the evidence the appellant had called he was unable to sustain the central parts of his statement of claim, and his case had to fail, so that it would be improvident for the respondent to consume court time and incur additional expense by calling its evidence. That is the conventional basis upon which a no case submission is made and ruled on. 75 The appellant contends that it was not clear whether the Court was relying on the affidavits and other documents filed by the respondent. The transcript discloses that the Magistrate was not relying of the respondent's affidavits. Indeed, the appellant's counsel's attempt to rely on one of them was ruled out of order. 76 The appellant then says that in the course of his case the Court assumed that in due course the respondent's affidavits would be read as part of its care. This expectation was disappointed. There is no procedural unfairness involved in this. Whether a no-case submission is to be made can only be determined when the respondent has heard the entirety of the applicant's evidence. Until it is made the Court and the parties proceed on the assumption that the case will proceed in the normal course. The respondent will call its evidence to be followed by closing submissions. A respondent is under no obligation to forewarn the appellant that it will or may make a no-case submission. 77 A related submission was that the appellant was denied natural justice because the Court permitted the respondent to proceed with its no-case submission where the respondent's grounds for such application were unclear. This was said to be the case because the respondent submitted that the evidence was "against" the allegations in pars 21 and 24 of the statement of claim, "while the relevant test required 'no evidence' for the case to be unarguable". Reliance was placed on the observations of Dixon J in Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91-92. His Honour was there concerned with an application in the inherent jurisdiction of the Court to stop the abuse of its process when it is employed for groundless claims. The case did not involve a no-case submission, and nothing was said by his Honour about that procedure. All that was said was that a case must be "very clear indeed" to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner. I can find no reference in the judgment to "no evidence", and it has no application to the present case. 78 Then it was said that the respondent submitted to the Magistrate both that there was no evidence to support the appellant's propositions about SNSS funding and that the evidence was against relevant allegations about the funding. This is said to have rendered unclear the way the no-case submission was put. The transcript discloses that the respondent's counsel initially submitted that there was no evidence to support the allegations in the central parts of the statement of claim. Later he said the evidence was clearly against the allegations in pars 15 and 18 (described at [9] and [12] respectively). Later still he said it was overwhelmingly against those in par 18. Putting his submission in this manner did not make its basis unclear. In this case the word "against" and the expression "overwhelmingly against" were not mere barristerial hyperbole. Nor were they only emphatic ways of submitting that there was no evidence to support those particular allegations. The terms of the SNSS Guidelines and Professor Ochiltree's evidence made this a case where in relation to those allegations there really was a difference between "no evidence" to support them and the evidence being "against" them. 79 The appellant then relied on the observation of Tadgell J in Protean [1985] VR at 238-239 that in deciding whether or not the general rule as to election should be followed, the Judge "will sometimes be assisted to know the basis on which the moving party seeks to rest his submission of no case". Tadgell J did not posit any requirement that the respondent's counsel state his position. As appears above, his Honour merely said that "sometimes" the Judge will be assisted to know how the case is put. In any event, the transcript shows that counsel put the matter squarely on the first basis. There was no denial of procedural fairness. 81 Then it was said the respondent relied on untendered affidavit material. Nothing turns on this, because the Magistrate made clear at that the material was not before him for the purposes of the no-case submission. This related submission must be rejected. 82 The final complaint under this head relates to the documents Professor Ochiltree was shown in cross-examination. They were marked for identification, but did not go into evidence because of the no-case submission. The Magistrate made clear in the course of the submission that the respondent's documents did not form part of the material on the basis of which he was to rule on the submission. The Magistrate made clear in his reasons that the documents did not go into evidence. However, as he said, this did not preclude his reliance on Professor Ochiltree's evidence in which she referred to those documents. The appellant's complaint that it is not clear whether the documents were part of the evidence on which the no-case submission was decided is rejected. 83 The second natural justice ground is that the Magistrate required the appellant to "complete the hearing of the matter starting on Tuesday 19 December 2006 when on Friday 15 December 2006 the appellant's counsel was unable to properly prepare to complete the hearing". What appears to have happened is this. Mr DA Perkins of counsel appeared for the appellant on the first four days of the hearing (20, 21 and 22 March and 2 October 2006). On 3 July 2006 the Victorian Civil and Administrative Tribunal found Mr Perkins guilty of misconduct under the Legal Practice Act 1996 (Vic). The appellant's father had appeared as counsel for Mr Perkins before the Tribunal. On 12 and 14 September 2006 the Tribunal heard submissions as to penalty. On 13 November it suspended Mr Perkins' practising certificate for three months. On 28 November the respondent was contacted by the Magistrate's Associate and told that the appellant was unable to proceed on 18 December, when the hearing was to resume, as Mr Perkins would be unable to attend. On 30 November the respondent's solicitors wrote to the appellant's solicitors objecting to any further adjournment as the appellant had known about Mr Perkins' inability to appear since 13 November, when the suspension was imposed. The respondent's solicitors drew attention to the fact that the appellant had approximately five weeks in which to brief alternative counsel. They reminded the appellant's solicitors that the matter had already been adjourned four times at the request of the appellant. On 30 November, at a directions hearing, the Magistrate refused the application for an adjournment and relisted the matter for directions on 6 December. That hearing was later cancelled when the appellant's solicitors advised the Court on 5 December that new counsel had been briefed to appear on 18 December. On 14 December the appellant's solicitors informed the Court and the respondent's solicitors that the new counsel was no longer able to appear. On that day the respondent's solicitors wrote to the appellant's solicitor advising that any further requests for adjournment would be opposed. On 15 December the matter was listed for urgent telephone directions. On that day the Court adjourned the matter from 18 December to 19 December, on which day the hearing recommenced. There was no application for an adjournment or for more time by counsel for the appellant, who thereupon called Professor Ochiltree. In those circumstances there was no procedural unfairness. The transcript of the telephone directions was before me. It discloses a balanced consideration by the Magistrate of the competing contentions, and I do not accept the appellant's submission that "the Magistrate compelled the case to proceed for no apparent reason". The Magistrate pointed out that counsel had the late afternoon and evening of Thursday 14, the whole of Friday, Saturday and Sunday (if necessary) and the whole of Monday 18, in which to prepare for the resumption on Tuesday. The first is that the Magistrate failed to apply the expert evidence dealing with the few occasions on which the appellant was assisted by the respondent. The second is that he did not confine the experts' evidence to their area of expertise. The third is that the experts were allowed to encroach on the "ultimate question". The fourth is that he adopted Professor Ochiltree's evidence "without forming his own conclusion independently". It is to be remembered that these experts were called by the appellant. Understandably his counsel did not object to their evidence or any parts of it. The expectation was that their evidence would assist the appellant's case. In its untested form, some of it did. But as a result of cross-examination, Professor Ochiltree made concessions and qualifications to her evidence in chief that resulted in her evidence ultimately supporting the respondent's rather than the appellant's case. That was because the appellant had allowed her to present her affidavit material without providing her with essential documentary evidence that either was in his possession or should have been. Mr Hoare also made appropriate concessions that assisted the respondent's case. 85 The first of the "expert" grounds has no merit. It ignores what I have said at [84] about the course of evidence. I reject the contention that Professor Ochiltree's affidavit evidence was "undisturbed". That is wishful thinking. What appears at [27] to [29] and [57] to [59] makes that clear. I also reject the contention that the Professor's evidence that significant assistance was provided for the appellant was "clearly wrong". The Magistrate was impressed by the evidence and by the fact that, on seeing the respondent's records for the first time, she departed from central aspects of her affidavit evidence. I am also unable to accept that the records shown to the Professor in cross examination "suggest the assistance to the appellant was ad hoc and sporadic". 86 An apparently related complaint is made about the Magistrate's treatment of Mr Hoare's evidence. It is said that the Magistrate was "critical of the fact he was not able to attest to what had occurred at the respondent's premises", when Mr Hoare said he did not provide that kind of service. The Magistrate described Mr Hoare's evidence as "limited". By this he meant that Mr Hoare had not seen the respondent's staff at work with the appellant and other children in the Centre's rooms. It is wrong to describe this as being "critical" of Mr Hoare on the basis that he was derelict in not visiting the Centre to see what was happening. That was not his job, and the Magistrate knew this. There is no substance in this complaint. 87 The second complaint also lacks merit. As I have said, no objection was taken by the appellant's counsel to any aspect of the expert's evidence. The appellant's central submission relates to the Magistrate's alleged failure to distinguish between the respondent's planning for the appellant's management and what it actually did for him. Professor Ochiltree said there was obviously planning going on, but she didn't feel qualified to comment on the quality of the planning. However, her evidence went much beyond planning. I have, for a different purpose, summarised the essential parts of the evidence at [58]. In the present connection I refer to items (b) to (j), part of (k), and (l) which relate to what the respondent actually did for the appellant (as opposed to planning, to which only item (a) and part of (k) relate). Accordingly I reject the contention that Professor Ochiltree's evidence was outside her area of expertise on the ground that it related to planning matters. The third complaint is disposed of by s 80 of the Evidence Act 1995 (Cth). The fourth mischaracterises what the Magistrate did. He said he was satisfied that the "key expert witness" gave her evidence in a fair and generally independent manner. He noted that no challenge was made to the Professor's expertise and he accepted her as an expert witness on the areas in which she gave evidence. He also said there was "no question that she is indeed an expert in her field". In the circumstances this ground is baseless. This ground is baseless. The two relevant provisions are set out at [21] and [22]. As can be seen, they are short and uncomplicated, even though the facts of some cases will involve matters of degree about which minds may differ. There was no occasion, in this case, for the Magistrate to go beyond setting out the relevant provisions, because his assessment of the evidence meant that the facts the appellant needed to establish in order to mount a case of discrimination had not been made out. He went on to say that he did not draw from this any Jones v Dunkel inference. The Magistrate is said to have thus taken into account an irrelevant consideration. I do not agree that the fact that the mother did not give evidence about what attention the appellant received at the Centre was irrelevant. The Magistrate said the father's evidence about the attention given the appellant was limited, and it was just as relevant to say that the mother gave no evidence on that topic. The point the Magistrate was making was that no one called by the appellant gave direct evidence about the attention given to the child. As his Honour made clear at [74], he did not proceed on the basis Briginshaw . Paragraphs 18 and 19 of the Statement of Claim respectively assert a failure by the respondent to apply the SNSS funding for the benefit of the appellant and a failure to apply the funding consistent with the SNSS guidelines and funding conditions. That is how the appellant chose to plead his case, though that may well be a consequence of the structure of the relevant provisions of the DDA. Nonetheless, the appellant had to prove its allegations or fail. It is not for the Magistrate to dispense with the required proof or allow the case to proceed notwithstanding its absence. This ground does not assert appellable error. It is that the Magistrate failed to give significance to the fact that the central contested allegation in the case "was peculiarly and largely within its own knowledge". I refer to what I have said about the previous ground. Further, the respondent answered the appellant's case by demonstrating, mainly through Professor Ochiltree, that it had in fact done what it was alleged to have failed to do. In addition, the appellant's father was at liberty to inspect the respondent's modus operandi in relation to his son. But he didn't do so. My attention was not drawn to the facts constituting the request or failure. Assuming there had been such a request and failure, they do not give rise to a ground of appeal. 94 A related complaint is that the Magistrate did not treat the failure to provide information as to the assistance it was giving the appellant as evidence that there was a failure to give that assistance. I refer to what I have said about the preceding complaint. If there were a failure to provide information to the father, that would not assist the appellant. His own experts gave evidence, accepted by the Magistrate, that the appellant was provided with assistance. 95 Related to the two preceding complaints is the contention that the Magistrate erred in not taking into account in the exercise of his discretion not to put the respondent to its election the respondent's failure to provide information. I refer to what I have said at [91] and [92]. Even if a failure were established, it would not have borne on the Magistrate's decision not to require the respondent to elect. I certify that the preceding ninety-six (96) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | child in child care centre alleged failure to apply commonwealth funding to benefit child no case submission appellant's witnesses' evidence supported respondent's case whether respondent should have been put to election whether grounds for making no case submission adequately explained whether appellant denied natural justice by being prevented from relying on respondent's evidence disability discrimination practice and procedure |
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