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On 20 December 2004 the appellant made a complaint to the Human Rights and Equal Opportunity Commission ('HREOC') in respect of the conduct of several of his former work colleagues, which he alleged amounted to sexual harassment within the meaning of s 28A of the Sex Discrimination Act 1984 (Cth) ('SDA'). The appellant simultaneously made a complaint against the respondent on the basis of s 106 of the SDA, pursuant to which an employer is vicariously liable for the conduct of its employees. 2 The complaint against the respondent was terminated by the President of HREOC on 1 June 2005. Section 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) ('HREOC Act') provides that following the termination of a complaint, a complainant may within 28 days ('the prescribed period'), or within such other time as the Court allows, apply to have their complaint of unlawful discrimination heard by the Federal Court or the Federal Magistrates Court. 3 The appellant commenced proceedings in the Federal Magistrates Court in relation to his complaint on 26 August 2005, 58 days after the prescribed period had elapsed. Accordingly the appellant required leave of the Federal Magistrates Court to bring the proceedings in that court. Driver FM heard the appellant's leave application on 19 September 2005 and delivered an ex tempore judgment in which his Honour determined not to grant leave to the appellant to bring the proceedings. 4 The appellant appealed the judgment of Driver FM to this Court. Because Driver FM's decision was interlocutory, the appellant required leave to appeal. The alleged sexual harassment commenced in December 1998. In approximately September 2003 the appellant ceased attending the workplace due to an employment-related injury. He alleges that a further incident of harassment occurred on 30 August 2004 when he returned to the workplace to provide documentation to the respondent. In approximately September 2005 the appellant's contract of employment with the respondent was terminated. 6 On 20 December 2004 the appellant lodged his complaint with HREOC. HREOC notified the respondent of the appellant's complaint on 3 March 2005. In his reasons for termination, the President referred to the fact that the respondent was unwilling to attend a conciliation conference to attempt to resolve the matter. 9 For various reasons the appellant did not apply for legal aid until 27 June 2005, two days before the prescribed period was due to expire. Legal Aid was unable to lodge his application with the Federal Magistrates Court until 26 August 2005 due to the time required to process his application and the absence on leave of the solicitor handling the matter,. There is no dispute between the parties concerning the applicability of those principles; rather the dispute relates to the application by Driver FM of those principles. Mr Gurran, for the respondent, put to me that the allegations made to HREOC came as a surprise to the respondent and the respondent rather thought that the issues might have been resolved at the termination of the complaint. A fourth relevant consideration is any prejudice in defending the proceedings occasioned by the delay. I regard the issue of prejudice in this case as a significant factor. The complaint to HREOC was against the employer only even though it was a complaint of sexual harassment by reason of the applicant's sexual preference. No complaint having been made against the alleged harassers, no proceeding can now be brought in this court against those persons. The jurisdiction of the court is limited to considering the claim against the harasser's employer and would be based on asserted vicarious liability. For its part, the respondent asserted before HREOC that the allegations of harassment came as a surprise. The respondent asserts that the individuals allegedly responsible for the harassment are no longer employed by the respondent and one relevant witness is no longer in Australia. There would be real difficulty facing the respondent in dealing with the allegations in this Court. The sixth consideration is that the merits of the substantive application are properly to be taken into account in considering whether an extension of time should be granted. That is not the same thing as establishing a prima facie case against the single respondent, the employer, which would depend upon proof of vicarious liability. At this stage and particularly if the only evidence available is that of the applicant I would have to say that the prospects of success of the application against the respondent are uncertain. He [the applicant] could have brought that complaint forward rather earlier than he did. He certainly could and in my view should have pursued his rights in this court more promptly than he did. In Phillips McInnis FM referred to Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 in which Wilcox J (at 348-9) set out the principles to be adopted in relation to an extension of time under s 11 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ('ADJR Act'). McInnis FM determined that those principles were applicable to the exercise of discretion under s 46PO of the HREOC Act. There is no onus of proof upon an applicant for extension of time though an application has to be made. Special circumstances need not be shown, but the court will not grant the application unless positively satisfied it is proper to do so. The "prescribed period" of 28 days is not to be ignored ( Ralkon v Aboriginal Development Commission (1982) 43 ALR 535 at 550). It is a prima facie rule that the proceedings commenced outside the prescribed period will not be entertained ( Lucic v Nolan (1982) 45 ALR 411 at 416). It is not a pre-condition for success in an application for extension of time that an acceptable explanation for delay must be given. It is to be expected that such an explanation will normally be given as a relevant matter to be considered, even though there is no rule that such an explanation is an essential pre-condition ( Comcare v A'Hearn (1993) 45 FCR 441 and Dix v Client Compensation Tribunal (1993) 1 VR 297 at 302). Action taken by the applicant other than by making an application to the court is relevant in assessing the adequacy of the explanation for the delay. It is relevant to consider whether the applicant has rested on his rights and whether the respondent was entitled to regard the claim as being finalised. Any prejudice to the respondent, including any prejudice in defending the proceeding occasioned by the delay, is a material factor militating against the grant of an extension. The mere absence of prejudice is not enough to justify the grant of an extension. The merits of the substantial application are properly to be taken into account in considering whether an extension of time should be granted. Considerations of fairness as between the applicant and other persons otherwise in a like position are relevant to the manner of the court's discretion ( Wedesweiller v Cole (1983) 47 ALR 528). I consider that they are relevant to an application under s 46PO of the HREOC Act. The principles relevant to this appeal are numbers 4 and 6. 13 The appellant contends that Driver FM erred in his interpretation of prejudice for the purposes of an application to extend time in which to bring proceedings. The appellant also contends that Driver FM erred in assessing the merits of the appellant's case, because his Honour misconceived the basis of the vicarious liability of the respondent. 14 Since the decision by Driver FM was an exercise of his Honour's discretion, the principles referred to in House v The King [1936] HCA 40 ; (1936) 55 CLR 499 in relation to the role of the appeal court apply. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. The appellant says that Driver FM erred in taking into account the prejudice to the respondent resulting from the long period of time which has elapsed since the alleged conduct commenced. The appellant submits that such prejudice is not relevant in the context of an application for an extension of time, because it does not result from the delay of 58 days. 17 There are numerous authorities of this Court in which prejudice has been considered in this context, each of which has related to prejudice which accrued during the period for which an extension is sought: see for example Wedesweiller and Ors v Cole and Ors (1983) 47 ALR 528; Hickey and Ors v Australian Telecommunications Commission (1983) 47 ALR 517; Duff and Ors v Freijah and Ors (1982) 62 FLR 280. I have not been referred to any authority in which a court has taken into account prejudice caused by delay occurring prior to the commencement of the prescribed period. 18 Significantly, the HREOC Act places no time limit on the making of a complaint of unlawful discrimination. Accordingly while the appellant in this case did not make a complaint to HREOC until more than five years after the conduct allegedly commenced, the appellant was entitled to make his complaint to HREOC when he did. Whilst the absence of a time limit in the HREOC Act may cause difficulties to respondents in some circumstances, the legislative scheme permits complaints to be made to HREOC at any time, and to be subsequently brought to the Court. 19 Driver FM did not identify any prejudice to the respondent resulting from the failure to lodge the appeal within the prescribed period. Rather the prejudice referred to by Driver FM was occasioned by the fact that the appellant did not make a complaint to HREOC until 2004. I agree with the submission of the appellant that Driver FM erred by taking into account the prejudice suffered by the respondent which predated the expiry of the prescribed period. The only relevant period for consideration of prejudice is the 58 days following the expiry of the prescribed period. The appellant submitted that Driver FM misconstrued the requirements for vicarious liability under the SDA, and accordingly misconceived the merits of the appellant's application. 21 The complaint made by the appellant to HREOC concerned alleged conduct by employees of the respondent which constituted sexual harassment. 23 Pursuant to s 106 of the SDA, an employer may be liable for conduct of its employees which amounts to unlawful discrimination. Section 106 is contained in Pt VI of the SDA. The respondent submits that that unlawful conduct arising under s 106 would not constitute unlawful discrimination for the purpose of making a complaint under s 46P of the HREOC Act, or for subsequent Court proceedings under s 46PO, because s 106 is not contained in Pt II of the SDA. 26 I reject this submission. The conduct is not made unlawful by s 106 of the SDA, but rather by s 28B. The effect of s 106 is to deem the employer liable for the unlawful conduct committed by individual employees. Section 28B falls within Pt II of the Act. Accordingly a complaint relying upon s 106 is a complaint alleging ' unlawful discrimination ' as defined in s 3 of the HREOC Act. 27 The appellant submits that Driver FM erred in suggesting that the appellant had to prove the liability of the respondent separately from the employees. The appellant submits that, by virtue of s 106 of the SDA, the respondent's liability is deemed where an employee has engaged in unlawful conduct. Since Driver FM found as a matter of fact that there was a prima facie case against the individual employees, the appellant submits that it follows by virtue of s 106 that the appellant has made out a prima facie case against the employer. 28 However, the respondent submits that his Honour's finding that no prima facie case existed against the respondent was made on the basis that the individual employees alleged to have committed the unlawful acts were not parties to the proceedings, with the result that no findings and orders could be made against them. The respondent says since no orders could be made against the individual employees, the respondent could not be vicariously liable for their conduct under s 106 and that s 106 makes an employer jointly, but not severally, liable. It referred to O 6 r 5 of the Federal Court Rules which states that a party which is jointly but not severally liable for relief may apply for a stay of proceedings until all other persons jointly liable are joined to the proceedings. 29 I agree with the submission of the appellant with respect to the effect of s 106 of the SDA. All that is required in order to make out a prima facie case against an employer is to establish a prima facie case against an employee of that employer. Once established, the provisions of s 106 deem an employer liable without the need for an appellant to prove the elements of vicarious liability against the employer. 30 I also consider that an individual employee alleged to have engaged in unlawful discrimination need not be a party to a proceeding in order that the Court make a finding in respect of the lawfulness of their conduct. The words of s 106(1) that ' this Act applies in relation to that person as if that person had also done the act ' indicate that an employer is to be severally liable for the discriminatory conduct of its employee. Such interpretation is supported by Gilroy v Angelov (2000) 181 ALR 57, in which Wilcox J made orders against an employer in circumstances where the employee was unable to be served with the application. 31 This legislative scheme is consistent with common law principles of vicarious liability of employers for tortious conduct of employees. and one way of answering it is: "Is the cause of action against them the same? " Certain classes of persons seem clearly to be "joint tortfeasors": The agent who commits a tort within the scope of his employment for his principal, and the principal; the servant who commits a tort in the course of his employment, and his master; two persons who agree on common action, in the course of, and to further which, one of them commits a tort. These seem clearly joint tortfeasors; there is one tort committed by one of them on behalf of, or in concert with, another. The plaintiff might sue any one of the tortfeasors separately for the full amount of the loss, or all of them jointly in the same action. See also the discussion of vicarious liability in Pinecot Pty Ltd v Anti-Discrimination Commissioner [2001] NTSC 107 at [12] - [24] . 33 At common law joint tortfeasors are jointly and severally liable for any loss occasioned by their tortious conduct. It follows that an employee does not need to be joined into proceedings against an employer for conduct of that employee in respect of which the employer is vicariously liable. The same effect is achieved by s 106 of HREOC Act in relation to an employer whose employee has engaged in unlawful discrimination. 34 It follows from the above that Driver FM erred in his consideration of the merits of the appellant's claim. The errors in Driver FM's decision were errors of principle which materially affected the exercise of his discretion. Accordingly I consider his decision should be set aside. 36 In relation to prejudice, I do not consider there is any demonstrated prejudice to the respondent because of the delay of 58 days from the expiration of the prescribed period. I accept the finding of Driver FM that the explanation for the delay by the appellant is ' only partially convincing '. However, I do not consider that the appellant could be said to have ' rested on his rights ' due to the delay between the date of termination of his complaint (1 June 2005) and 27 June 2005, being the date on which he made application to Legal Aid. Driver FM accepted that the subsequent delay was explained by matters relating to Legal Aid, which were beyond the control of the appellant. 37 As to the merits of the application, I see no reason to disturb the finding of Driver FM, who had all the relevant material before him, that the appellant had established a prima facie case against the employees of the respondent. On the basis of such finding, I find that the appellant has established a prima facie case against the respondent. 38 Taking these factors into account, I consider that leave to bring the application out of time should be granted. | alleged unlawful discrimination in workplace vicarious liability of employer effect of s 106 of the sex discrimination act 1984 (cth) application for leave to file application out of time principles to be applied prejudice whether prejudice relating to events occurring before the commencement of time to file application may be taken into account alleged unlawful discrimination in workplace proceedings against employer on the basis of vicarious liability whether joinder required of employees engaging in unlawful discrimination whether employer severally liable interpretation practice and procedure practice and procedure |
The proceedings arose out of a dispute between Traxon and Emerson connected with the performance of a Confidentiality Agreement and a Distributorship Agreement relating to the marketing and sale, in the USA, of oil level control devices manufactured by Traxon. Traxon's causes of action against Emerson were for misleading or deceptive conduct in contravention of the Trade Practices Act 1974 (Cth), breach of contract, breach of duty of confidence and breach of fiduciary duty. For reasons published on 26 April 2006 the motion was adjourned and Traxon given leave to amend its statement of claim and to file further affidavit evidence in support of its application --- Traxon Industries Pty Ltd v Emerson Electric Co [2006] FCA 450. The principal reason for the decision not to accede to Traxon's motion was its inclusion in the application and statement of claim of the causes of action arising out of breach of confidence and breach of fiduciary duty. These causes of action were based entirely on conduct allegedly committed by Emerson in the United States. They did not otherwise fall within any of the categories of causes of action to which the relevant rule of Court, O 8, authorising service out of the jurisdiction, applies. 2 Traxon has now filed a proposed amended application and proposed amended statement of claim together with a proposed further amended application and further amended statement of claim. It has also filed additional affidavit material. In its proposed amended application and amended statement of claim Traxon seeks to join Traxon International Ltd (Traxon International) as a second applicant. It abandons the claim for breach of duty of confidence but maintains the claim based on breach of fiduciary duty. As an alternative position, it relies upon a further amended application and further amended statement of claim which would also omit the cause of action for breach of fiduciary duty. 3 For the reasons which I now publish, I am prepared to grant leave to serve an application and statement of claim on Emerson in the United States in the form set out in the further amended application and further amended statement of claim. So that Emerson may also be served with a reasonably self contained set of reasons for that decision these reasons repeat elements of those published on 26 April 2006 adapted to take account of the amendments to the pleadings and the additional evidence which has been filed. It claimed damages for misleading or deceptive conduct in contravention of the Trade Practices Act , at common law for breach of contract and, alternatively, in equity for breach of confidence and breach of fiduciary duty. Traxon is an Australian company which carries on the business of manufacturing, marketing and selling oil level control devices, one of which is known as the TraxOil Management System (the TraxOil Device). Emerson is incorporated in Missouri and currently trades under the business name Emerson Climate Technologies. It used to trade as Alco Controls. 5 By a notice of motion filed on 18 April 2006, Traxon sought leave to serve its application, statement of claim and supporting affidavits on Emerson in the USA. Its motion was filed pursuant to O 8 of the Federal Court Rules . 6 For reasons which were published on 26 April 2006, I was not satisfied that the application was one in respect of which I could make the order sought. Before such an order can be made under O 8 the case must be shown to fall within one or more of the classes of case set out in O 8 r 1 of the Federal Court Rules . Although I was satisfied that the cause of action in misleading or deceptive conduct and the cause of action in breach of contract were within the cases listed in O 8 r 1, I was not satisfied that the subrule applies to the causes of action for breach of duty of confidence and breach of fiduciary duty. 7 I also addressed the question whether the requirement in O 8 r 2 that the applicant show a 'prima facie case for the relief sought' was fulfilled. I was satisfied that a prima facie case was raised in respect of the cause of action in breach of contract. I found it questionable whether there was a prima facie case shown for misleading or deceptive conduct without more than the alleged breach of promises embodied in agreements made between the parties. I also noted that there was a disquieting confusion about the documentation comprising the written part of a so-called 'Distribution and Confidentiality Agreement' made in 1998. Traxon, it seems to me, has to address the question whether all of the causes of action pleaded can be brought within O 8 r 1 and secondly, present a somewhat clearer foundation for its contention that there is a prima facie case in relation to the existence and breach of the agreements pleaded. The applicant's motion filed 18 April 2006 is adjourned to 19 May 2006 at 9.45am or such earlier date as may be fixed. The applicant has leave to amend its statement of claim and to file further affidavit material in support of the application. It also filed an amended application and statement of claim. It seeks leave to serve the amended application and statement of claim on Emerson in the USA. 10 The motion came on for hearing on 18 May 2006. At that time I expressed some doubt on whether the claim for damages for breach of fiduciary duty by Emerson was a cause of action to which O 8 r 1 applied. I reserved judgment on the motion until today. In the meantime, on 24 May 2006, Traxon filed a proposed further amended application and further amended statement of claim deleting the claim for damages based on breach of fiduciary duty. A covering letter from the applicants' solicitors to the Court indicated that if it were held that an application including a claim for breach of fiduciary duty could not be served out of the jurisdiction, then that claim would be omitted and reliance placed on the proposed further amended application and further amended statement of claim as a fall-back position. 11 It is convenient to set out in summary form the allegations made in the amended statement of claim. The overview, so set out, does not, of course, involve any findings of fact. Traxon International is incorporated in the United Kingdom. Traxon carries on the business of manufacturing, marketing and selling oil level control devices. Traxon International carries on the business of selling the devices. 13 After pleading their own incorporation and the nature of their businesses and that of Emerson, Traxon and Traxon International allege that at all material times Underwriters Laboratories Inc (Underwriters) which, according to the affidavit evidence, is a non-profit organisation incorporated in the USA, performed a compliance function to certify that products offered for sale in the USA complied with safety laws in force there. Such certification, according to the statement of claim, was at all material times a necessary precondition to the offering of the TraxOil Device for sale in the USA. 14 The applicants say that before November 1997 Traxon had an agreement with a United States company called Sporlan Valve under which Sporlan Valve would market and sell the TraxOil Device in the USA. During the currency of its arrangements with Sporlan Valve, Traxon 'owned' a file maintained by Underwriters in the name of Sporlan Valve in relation to the TraxOil Device (UL File). The nature of the ownership of the file is not explained. The Distribution Agreement with Sporlan Valve ceased in November 1997 and in May 1998 the applicants and Emerson agreed that Emerson would be the exclusive distributor for the TraxOil Device in the USA (the 1998 Agreement). At that time the largest single user of the device in the USA was Hussman, a company which carried on business in that country and used the TraxOil Device on Copeland compressors. They are manufactured by Copeland, a company which also carries on business in the USA and is associated with Emerson. 15 The 1998 Agreement is said to have been partly written and partly oral. The oral terms were agreed during the course of a meeting between Mr Barry Waller of the applicants, Mr Wayne Cattach of Traxon and Mr Robert Kensinger of Emerson held in May 1998 at Perth in Western Australia. The written part of the agreement comprised a document titled 'Confidentiality Agreement' executed by Traxon and Emerson and dated 7 May 1998 and a document titled 'Distribution Agreement' executed by Traxon International and Emerson in or about May 1998. Emerson would market and sell the TraxOil Device in the USA. 2. Emerson agreed not to disclose any data or information it received from Traxon which Traxon designated as proprietary or confidential. Nor would Emerson use that data or information for its own benefit for a period of five years after receipt of it without first obtaining written permission from Traxon. 3. Emerson would undertake any formalities and make any payments required to be made in relation to any necessary amendments to the UL File which flowed from the 1998 agreement. The UL File was to be owned and maintained by Underwriters in the name of Traxon. It is said to be an express term of the agreement that Traxon and Emerson would jointly participate in a program of further development and refinement of the TraxOil Device. They are also said to have agreed that the 1998 Agreement would be governed and construed in accordance with the laws of the State of Western Australia. They say that, in reliance upon that representation, they entered into the Agreement. Traxon purchased capital equipment for the production of the TraxOil Device for the purpose of selling it in the USA and, between May 1998 and November 2003, provided Emerson with confidential information about the device. Particulars of the confidential information are given in the statement of claim. 18 In February 2000 it is said that the applicants and Emerson agreed to vary the 1998 Agreement (the 2000 Agreement). The 2000 Agreement was oral and made in the course of a meeting held on 2 and 3 February 2000 in St Louis. Mr Wayne Cattach of the applicants was present as well as a number of persons from Emerson. It was agreed under the variation that Traxon and Emerson would jointly participate in a program of further development and refinement of the TraxOil Device and would jointly participate in the development of a new model of it. The remaining terms of the 2000 Agreement would be all of the terms of the 1998 Agreement. 21 Prior to October 2003 Emerson and a third party jointly developed an oil management system device. In the course of its development Emerson is said to have used some or all of the confidential information provided to it by Traxon. Moreover it is said to have disclosed some or all of the confidential information to the third party. It is alleged that at all material times from 2004 Emerson has marketed and sold the oil management system device in the USA in competition with the TraxOil Device. 22 The applicants allege that sometime between May 1998 and November 2003 Emerson caused the UL File to be transferred to it and, alternatively, to Traxon and it jointly and to be maintained either in its name alone or jointly with Traxon. Traxon says it was not able to transfer the UL File into its name alone until 29 June 2005. 23 The applicants say that the representation pleaded was made by Emerson in trade and commerce and was misleading or deceptive or likely to mislead or deceive as Emerson did not, at the time the representation was made, intend to comply with the terms of the 1998 Agreement. Traxon invokes, inter alia, s 51A of the Trade Practices Act . 24 The applicants say that Traxon and/or Traxon International have suffered loss and damage of not less than $1,407,889 as a result of Emerson's conduct. This includes $668,646 incurred in the purchase of capital equipment and $18,396 incurred in relocating factory premises for the purpose of manufacturing the TraxOil Device and the TraxOil Generation 2 to be sold in the USA. Loss of profits from the sale of the TraxOil Device in the USA during the period January 2004 to 29 June 2005 are said to have amounted to $70,5744. Traxon also claims damages represented by lower profits because of diminished sales of the TraxOil Device in the USA on or after 29 June 2005 and costs of $15,103 incurred by it in relation to its application for a new file to be maintained by Underwriters. 25 The applicants say that Emerson breached the terms of the 1998 Agreement as varied by the 2000 Agreement and, alternatively, breached the terms of the original agreement and the terms of the substitute agreement. They claim the same damages in respect of the alleged breach of contract as they do in respect of the contraventions of the Trade Practices Act . 27 The applicants raise a further cause of action by way of breach of fiduciary duty. They say that the terms of the 1998 Agreement as varied by the 2000 Agreement and, alternatively, the terms of the 2000 Agreement were such as to give rise to a fiduciary relationship between Traxon and Emerson. It is said that Emerson owed duties to Traxon to not seek to obtain a benefit in circumstances where there was a conflict between Emerson's interests and the interests of Traxon and to not obtain or receive a benefit or gain by using Emerson's fiduciary position or any knowledge or opportunity arising from it. It is said that by reason of its pleaded conduct, Emerson breached its fiduciary duty. Because of that breach the applicants say that Traxon and/or Traxon International have suffered loss and damage in the sum of not less than $1,407,889. 28 The relief claimed is by way of damages under s 82 of the Trade Practices Act and/or compensation pursuant to s 87 of that Act, damages for breach of contract, injunctive relief and equitable compensation or an account of profits for breach of fiduciary duty. Interest on the damages and equitable compensation and any payments made pursuant to an account of profits is also claimed. In support of the amended motion renewing the application for leave to serve Emerson in the United States, two further affidavits sworn by Mr Waller on 15 and 17 May 2006 were relied upon. 30 In his affidavit of 15 May 2006, Mr Waller said that the applicants have common shareholders. Before 1998 both were part of a group of companies with common shareholders. Traxon was responsible, within that group, for manufacturing oil level control devices. Traxon Sales Pty Ltd (Traxon Sales) was responsible for selling such devices within Australia. Traxon Australia Pty Ltd (Traxon Australia) was responsible for managing sales contracts and billing customers within Australia. Traxon International was responsible for selling the devices, managing sales contracts and billing customers outside Australia. In the late 1990s or early 2000s the directors of those companies decided that the group structure and associated intra-group invoicing were uneconomic. The group was restructured so that Traxon assumed the responsibilities of Traxon Sales, Traxon Australia and Traxon International. 31 In his February affidavit Mr Waller said that Traxon manufactures and markets oil level control devices one of which is known as the TraxOil Management System or TraxOil Device. Between 1996 and 1998 the TraxOil Device was sold in the USA by Sporlan Valve, a US company pursuant to a Distribution Agreement between it and Traxon. From 1 September 1996 Sporlan Valve as agent for Traxon, owned a file maintained by Underwriters in the name of Sporlan Valve in relation to the TraxOil Device. Underwriters is a non-profit organisation which conducts compliance tests for products marketed in the USA to ascertain whether they comply with US safety laws. Without the compliance function being performed the TraxOil Device could not be sold in the USA. Mr Waller explained this further in his affidavit of 15 May 2006. He said that the compliance tests for the TraxOil Device were carried out by representatives of UL based in Australia, who inspected Traxon's production facilities every few months. The party who owns the file maintained by UL is the party whose products it tests for compliance. If the products pass its compliance tests, it is the party who owns the file who is entitled to sell the products in the USA. A party that does not own the UL File is not able to request UL to perform compliance tests on its products. 32 Following the expiry of its Distribution Agreement with Sporlan Valve in November 1997, Traxon sought to enter into a new distribution agreement with another entity in the USA. Its biggest customer for US sales at the time was a company known as Hussman, whose primary use for the TraxOil Device was on Copeland compressors. The compressors are components of refrigeration and air-conditioning machines. According to Mr Waller Traxon approached Emerson, trading as Alco Controls, to discuss the possibility of that company distributing the TraxOil Device in the USA. Emerson carries on business in the USA and is based in St Louis. Copeland, which is the manufacturer of Copeland compressors and Emerson are part of the Emerson Group of Companies. The business carried on by Emerson, formerly known as Alco Controls, now operates as Emerson Climate Technology. Mr Waller exhibited to his February affidavit some pages from Emerson's internet site which was downloaded on 12 February 2006. 33 In or about April 1998 Mr Waller had a telephone conversation with Robert Kensinger, Senior Vice President of Emerson. He said that they agreed that their two companies would enter into a Distribution Agreement under which Traxon would supply the TraxOil Device exclusively to Emerson and Emerson would market and sell the TraxOil Device in the USA. They also agreed, according to Mr Waller, that Emerson would enter into a confidentiality agreement with Traxon under which it would undertake not to disclose any information provided to it by Traxon and designated as proprietary or confidential information or use such information for its own benefit for a period of five years after its receipt. 34 Following the telephone conversation Mr Waller met Mr Kensinger in Perth. The meeting was also attended by Mr Cattach. In the course of the meeting Mr Kensinger said that Emerson would undertake formalities and make payments necessary for the UL File to reflect the new Distribution Agreement. He also said that Emerson accepted that the UL File was to remain the property of Traxon. According to Mr Waller, ownership of the UL File for the TraxOil Device was important for Traxon in marketing and selling in the USA. Without it, the company would effectively be shut out of the USA market. He, Mr Kensinger and Mr Cattach also discussed Traxon's plans to further develop and refine the TraxOil Device. Mr Kensinger said that Emerson would participate in that development program. 35 At the conclusion of the meeting, according to Mr Waller's February affidavit, a 'Distribution Agreement' and a 'Confidentiality Agreement' were executed. In his further affidavit of 15 May 2006, Mr Waller said that he recalled that the document entitled 'Distribution Agreement' was executed by Traxon International and Emerson and not by Traxon and Emerson. At that time what he described as 'the old group structure' was still in operation. The Confidentiality Agreement referred to was exhibited to his February affidavit. It took the form of a memorandum from Traxon to Mr Kensinger as Senior Vice President of 'Alco Controls'. It recited the intention of Traxon and Alco Controls to discuss matters relating to refrigeration leak detection, oil level control, time delayed fluid level monitoring technology and other related inventions and in particular the manufacture of parts and or devices incorporating such technology. The memorandum proposed that Alco Controls would agree to accept in confidence such data and/or information designated as proprietary and confidential information by Traxon and would not disclose it to a third party or use it for its own benefit for a period of five years without first obtaining written consent from Traxon. There were some qualifications on the obligation thus proposed which would not be binding with respect to any information demonstrably known to Emerson at the time of disclosure or which became known to the public generally through no fault or other action of Emerson. Nor would the obligation apply to information obtained lawfully from a third party who themselves were under no obligation to keep such information confidential. It would not apply to information developed by the employees, agents or representatives of Emerson as a result of their own efforts and not as a result of the disclosure of the same information by Traxon. 36 There were some specific undertakings proposed, namely that Emerson would make no copies of any information disclosed to it without prior written approval of Traxon, it would disclose the information only to its employees who required it for the performance of their duties and would return all written information received from Traxon if requested to do so. The terms and conditions contained in the confidentiality agreement were said to be governed by and construed in accordance with the laws of the State of Western Australia. The agreement was signed by Mr Kesinger for Emerson and was dated 7 May 1998. 37 There was no written Distribution Agreement exhibited to Mr Waller's February affidavit. A document entitled 'Distribution Agreement' is referred to in par 9 of the statement of claim and in par 11 of the affidavit. No explanation was offered in the February affidavit for its absence in evidence. However, in his affidavit of 15 May 2006 Mr Waller said that neither of the applicants can currently locate a copy of the Distribution Agreement. Documents belonging to each of them, including the documents separately entitled 'Confidentiality Agreement' and 'Distribution Agreement', have for a number of years been stored at the offices of another company, UDC Pty Ltd, of which Mr Waller is a director. That company moved offices and in the course of doing so transferred all of the applicants' documents which it had stored. He has caused administrative staff employed by UDC to search all of the documents in its possession, but they were unable to locate the Distribution Agreement. 38 In a letter dated 17 December 2004, which is exhibited to Mr Waller's affidavit, to Emerson from Traxon's solicitors, Solomon Brothers, reference is made in a paragraph numbered 1 to the agreement executed on 7 May 1998 which, it is said in paragraph 2, 'was made shortly before Alco Controls became the distributor for the Traxoil Oil Management Product'. This suggests that the appointment of Emerson as distributor was made sometime after 7 May 1998 contrary to the suggestion in par 12 of Mr Waller's affidavit that it was made on that day. However according to Mr Waller's affidavit of 15 May 2006 he recalled that the document entitled 'Distribution Agreement' was signed at the conclusion of the May meeting. 39 According to Mr Waller Traxon entered into similar agreements with another company, related to Emerson, trading as Alco Europe, which carried on business in Europe. That company was appointed as the exclusive distributor of the TraxOil Device in Europe. 40 Between 1998 and 2000, according to Mr Waller, Traxon developed, refined and enhanced the TraxOil Device. Matters relating to its ongoing development and refinement were discussed with representatives of Emerson and their feedback received. There was little or no reference, in Mr Waller's February affidavit, to the sales of TraxOil Devices effected by Emerson under its distributorship arrangements during that period. According to Mr Waller it was agreed at the meeting that the two companies and Alco Europe would jointly undertake a program of further development and refinement of the TraxOil Device in order to create an updated version of it which is referred to in the affidavit as TraxOil Generation 2. Annual sales of 50,000 units of the TraxOil were necessary to make the development project commercially attractive. A copy of the minutes of the meeting were exhibited to his February affidavit. The minutes dealt with the requirements for the TraxOil redesign, sales volume versus selling price, other items and action items. It was also agreed following that meeting that Emerson would manufacture some of the components of the TraxOil Device. 42 After the meeting Traxon continued to further develop and refine the TraxOil Device and in so doing had discussions with representatives of Emerson and also Alco Europe about its further development and refinement. 43 In November 2000 Mr Cattach received an email from Mr Al Maier of Emerson requesting an update about any findings resulting from a visit to Isval, an Italian manufacturer of brass forgings. Mr Maier asked Mr Cattach to let him know whether Traxon was pursuing the idea of including an enclosing tube as part of a forging. Mr Maier had reviewed the new unit with some other people at Emerson's office in St Louis and they had some comments for Mr Cattach to consider which the email set out in detail. On the same day Mr Cattach received an email from a Dr Tomski, which was also sent to several representatives of Emerson and contained detailed comments about aspects of the TraxOil Device's development program and sought information about other aspects of that program. 44 On 9 November 2000 Mr Cattach sent an email to Mr Sciuto, another representative of Emerson, with a copy to Mr Maier. Mr Cattach asked to be provided with information regarding enclosing tubes. Emerson was manufacturing the tubes on behalf of Traxon. 45 Further exchanges concerned with the development of the TraxOil Device were referred to in Mr Waller's affidavit. 46 Through 2002 and 2003 Traxon continued its distributorship arrangements with Emerson and Alco Europe and undertook further development of the TraxOil Device together with Emerson and Alco Europe. Various emails were exhibited concerning day-to-day matters relating to the performance of the Distribution Agreements, sales of the TraxOil Device and its further development. 47 Traxon purchased plant and equipment for the purpose of manufacturing the TraxOil Device in 2002 and 2003. In 2002 it relocated its factory to accommodate the new plant and equipment. According to Mr Waller Traxon made those purchases and undertook that relocation in the belief that the TraxOil Device and its successor, the TraxOil Generation 2 would be sold in the USA market. Traxon incurred costs of $668,646 in relation to the purchase of capital equipment and $18,396 in relation to the relocation. 48 In September 2003 Mr Cattach attended another meeting in St Louis with Mr Kensinger. Mr Kensinger told him that approximately 2,000 Copeland compressors had failed because of deficiencies in the TraxOil Device. Mr Kensinger said that Emerson would not renew its Distribution Agreement with Traxon. He also said that Emerson had developed its own oil management system device in conjunction with Copeland and would market it in competition with Traxon. As that device was not currently ready for sale, Emerson still wished to purchase the TraxOil Device from Traxon. According to Mr Waller, neither he nor Mr Cattach had been informed of any Copeland compressors failing because of the TraxOil Device prior to this meeting in September 2003. 49 Mr Waller said that he and Mr Cattach had made numerous oral inquiries about the alleged failures of Copeland compressors because of the TraxOil Devices. His inquiries had extended to representatives of Emerson in Europe and Hong Kong. Neither of them had been informed of any facts supportive of Mr Kensinger's assertion. As a result of their inquiries it is Mr Waller's belief that the cause of any failures of Copeland compressors was unrelated to the TraxOil Devices. 50 He deposed to a further meeting which he and Mr Cattach had with the President of Emerson, Mr David Kirk, and other representatives of that company. Mr Kirk told him at that meeting that Emerson would provide a full report on the alleged failures of Copeland compressors. 51 On 3 October 2003 Mr Waller sent Mr Kensinger a letter about the meeting. The letter said that Traxon had always regarded Emerson as a partner and had freely shared technology and information with it, had made significant capital investments in reliance on the agreements with Emerson and had often re-organised its factory to meet fluctuating orders for the Device from Emerson. He expressed his shock at the outcome of the meeting. He also said that Traxon would continue to supply the TraxOil Device to Emerson on a non-exclusive basis. The tone of the letter is indicative of the surprise with which Traxon greeted the development at the September meeting. The letter referred to the UL File and said that the TraxOil Device had previously used components manufactured by Emerson and some manufactured by Traxon. As from mid-January 2004 the TraxOil Device was not to be made jointly between the two companies and the letter requested that a new UL File be created for TraxOil Devices in Traxon's name alone. 53 Various emails were subsequently exchanged between Mr Cattach and representatives of Underwriters between 6 and 10 September 2004. It appeared that about one year after Emerson had informed Traxon that it was terminating their agreements, the UL File had not been transferred into Traxon's name. During that period therefore Traxon had been unable to market and sell the TraxOil Device in the USA. The transfer was only affected on 29 June 2005. Mr Waller estimated a loss of $705,744 as a direct result of the company's inability to market and sell the TraxOil Device in the USA during that period. Mr Waller exhibited to his affidavit notes of the meeting of 18 October 2004 which he had prepared. Mr Kirk, the President of Emerson, was present at the meeting as was Mr Maier. The notes record allegations made by Traxon. Mr Waller recorded that with goodwill and cooperation Flow Controls and Traxon were in agreement to develop a partnering arrangement, with mutually beneficial projects, with the object of good business and the opportunity for Traxon to recover unnecessarily incurred costs. Any agreements between them were to be documented by their legal representatives so as to make clear the obligations of each party. He noted that by way of conclusion that Traxon would write a draft letter of understanding for perusal and comment by those 'in the communications loop'. When the letter of understanding was agreed on by all, a legal document would be prepared to formalise the understandings. 55 On 1 November 2004 Mr Waller received a letter from Mr Kirk saying that Mr Kirk had discussed the meeting with Mr Maier and Mr Maier's recollection was that Traxon was going to work with Alco Europe on some design changes to the TraxOil Device but that Emerson was going to have to look 'elsewhere' if it wanted cost reduction. The letter also stated that while Emerson had received some periodic reports by way of emails between Traxon and Alco Europe, Emerson did not respond to those emails as it had assumed they were merely for its information and that because at these times it was 'moving in a different direction'. The statements in the letter from Mr Kirk were said, by Mr Waller, to be contrary to Mr Cattach's recollection of the meeting. On 17 November 2004 he received a letter from Mr Maier stating that the cause of the delay in transferring the UL File to Traxon was because the TraxOil Device featured new components. The letter also asserted that the failures of the Copeland compressors were due to the TraxOil Device resetting itself automatically after a trip. However the resetting of TraxOil Devices was within the operating specifications of the TraxOil Device and the effect which it was said it had had on Copeland compressors could easily be avoided. 56 On 17 December 2004 the solicitors for Traxon, Solomon Brothers, sent an email to Mr Kirk alleging that Emerson's conduct constituted a breach of the Confidentiality Agreement, a breach of fiduciary duty and a breach of s 52 of the Trade Practices Act . A response to that email was received dated 21 January 2005 essentially denying the allegations. The letter was signed by Michael K Shannon, a Vice President and General Counsel and Secretary for Emerson. The letter did, however conclude with a proposal that Mr Kirk and Mr Shannon meet with Mr Solomon and his client in Perth to see whether the matter could be resolved. 57 Although the affidavit does not refer to subsequent discussions, the fact that the current proceedings were not initiated until 18 April 2006 suggests that at least some of the time that ensued was taken up with negotiations. 58 A second affidavit, sworn by Mr Waller on 18 April 2006, deposed that on 23 February 2006 he met with Mr Spears of Alco Europe in Brussels. In the course of this meeting he told Mr Spears that Traxon intended to institute proceedings against Emerson in the Federal Court. He provided Mr Spears with a copy of the statement of claim. Mr Spears told him that he would soon be meeting with representatives of Emerson in St Louis and would discuss the proposed proceedings with them. Mr Spears also told him that if Traxon could supply him with the necessary information he would discuss Traxon's dispute with his superiors and attempt to induce Emerson to settle the dispute in a sensible manner. 59 On 4 April 2006 Traxson received a letter from Emerson enclosing a document titled 'Notice and Acknowledgment for Service by Mail' and a summons issued by the Circuit Court of St Louis County in Missouri in the USA. The documents so delivered record that on 29 March 2006 Emerson instituted proceedings in Missouri seeking negative declarations against Traxon. In that respect I have regard to what appeared in Mr Waller's affidavit of 15 May 2006 and the terms of the declarations sought by Emerson. However as earlier noted, the letter from Solomon Brothers of 17 December 2004 does suggest that the Distribution Agreement came into existence after 7 May 2004. The evidence discloses virtually nothing of its terms. 61 Mr Waller further deposed in his affidavit of 15 May 2006 to communications with Emerson and service of the proceedings in Missouri. Nothing turns on these matters for present purposes. This means that Div 2 of Order 8 does not apply. However Div 3, relating to service in non-convention countries, does apply. I conclude therefore that the Court does have jurisdiction in the matter. The misleading or deceptive conduct alleged is said to have arisen out of the making of the Distribution and Confidentiality Agreements. This is said to have occurred in Western Australia. Emerson's entry into 'the 1998 Agreement', is said to have amounted to a representation that it would comply with the terms of that agreement. The representation is said to have been misleading or deceptive or likely to mislead or deceive as Emerson did not intend to comply with the terms of the agreement at the time it entered into it. 69 Failure to honour a promise is not of itself misleading or deceptive or likely to mislead or deceive as the promisor may genuinely intend to honour the promise at the time that it is made. However, to make a promise while not intending to keep it, involves a misrepresentation by the promisor of its intention and can be misleading or deceptive within the meaning of s 52 of the Trade Practices Act . 71 A promise is a representation with respect to a future matter namely, the performance of the promise and ordinarily carries the implication that reasonable grounds exist for the making of the promise including the intention and capacity to perform it. The representation pleaded in this case was said to arise out of the entry into 'the 1998 Agreement'. There is no pleaded representation in relation to the variation to the Agreement and the alternatively pleaded 2000 Agreement. However the continuing effect of the original pleaded representation is asserted in par 16 of the statement of claim. The respondent is a foreign corporation and on that basis the allegations raise a cause of action for breach of an Act of the Commonwealth which occurred in Western Australia and therefore within the Commonwealth. Order 8 r 1(b) therefore applies to the cause of action in misleading or deceptive conduct. 73 The contract said to have been breached is 'the 1998 Agreement pleaded in paragraph 10 as varied by the 2000 Agreement' and alternatively 'the 1998 Agreement pleaded in paragraph 10 and the ... 2000 Agreement pleaded in paragraph 15'. 74 As pleaded the 1998 Agreement was made in Western Australia. Its variation was made orally in St Louis, Missouri in the United States of America in 2000. Alternatively, the parties substituted a new agreement for the old in St Louis, albeit it embodied all the terms of the 1998 Agreement. The 1998 Agreement is said to have contained a term that it would be governed by and construed in accordance with the laws of Western Australia. It may be implied from the pleading of the 2000 Agreement that the varied or substituted agreement contained the same terms. On this basis the claim for breach of contract, as pleaded, is one to which O 8 r 1 applies. 75 The cause of action for breach of fiduciary duty turns on the alleged disclosure by Emerson of confidential information relating to the TraxOil Device. It is not said in the statement of claim where the conduct occurred but, in context, it seems inescapable that the allegation relates to conduct by Emerson outside Australia. Traxon submits that the matters giving rise to the duty occurred in Western Australia. 76 The cause of action in breach of fiduciary duty is based on conduct engaged in in the United States. Even though the duty pleaded depends upon conduct in Australia that does not mean that its breach by acts outside Australia give rise to a cause of action 'arising in the Commonwealth' under O 8 r 1(a). As von Doussa J observed in Delco Australia Pty Ltd v Equipment Enterprises Incorporated trading as Kukla Trenchers [2000] FCA 821 , the authorities establish that 'cause of action' within the meaning of O 8 r 1(a) does not refer to all the elements of the cause of action. It refers rather to the act on the part of the defendant which gave the plaintiff his cause for complaint. The right approach is, when the tort is complete, to look back over the series of events constituting it and ask the question, where in substance did this cause of action arise? That is the rule laid down in Jackson v Spittal (1870) LR 5CP 542, which is an authoritative case, and the rule is inherently reasonable, as the defendant is called upon to answer for his wrong in the courts of the country where he did the wrong. That is to say the proceeding, in so far as it seeks relief for breach of fiduciary duty is one which 'otherwise affects a contract'. In my respectful opinion that contention is unsustainable. While it may rightly be said that the fiduciary obligation, as pleaded, arises out of the asserted contractual relationship, the proceeding based upon breach of fiduciary duty does not of itself affect the contract. In my opinion, therefore, the cause of action for breach of fiduciary duty is not one to which O 8 r 1 applies. 77 As I concluded in the reasons published on 26 April 2006, the fact that the causes of action in misleading or deceptive conduct and breach of contract are within O 8 r 1, would be insufficient to satisfy the requirement that the rule 'applies to the proceeding' within the meaning of O 8 r 2(2)(b) for so long as the claim for breach of fiduciary duty is included. In my opinion r 1(n) makes it clear that an originating process to be served out of the Commonwealth must be confined to causes of action that fall wholly within one or several of the heads in r 1. An originating process that includes a claim that does not fall within one or more of the heads is not an originating process that meets the description of r 1, in that it is not one "in" any of the cases described in the rule. It is not a "proceeding to which rule 1 applies" so as to meet the requirement of r 2(2)(c)(b). A similar conclusion was expressed by Wilcox J in Tycoon Holdings Ltd v Tencor Jetco Inc (1992) 34 FCR 31 at 35. However the minute of further amended statement of claim which is proposed would omit the claim for breach of fiduciary duty and, on that basis, would transform the action into a proceeding to which O 8 r 1 applies. I am therefore prepared to make an order for service on Emerson in the United States of America of an application and statement of claim in terms of the further amended application and further amended statement of claim filed on 24 May 2006. A minute of proposed orders has been filed also to take account of that contingency. I will make orders in terms of the minute. I certify that the preceding seventy eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | service of originating process out of jurisdiction causes of action in misleading and deceptive conduct in australia breach in the united states of contract made in australia breach of fiduciary duty conduct constituting breach of fiduciary duty allegedly occurred in the united states claim for breach of fiduciary duty renders proceeding one to which o 8 r 1 does not apply leave to serve out of the jurisdiction further amended application and statement of claim omitting cause of action in breach of fiduciary duty practice and procedure |
2 The waiver of legal professional privilege was said to be implied and to flow from a reference to the Advice in an affidavit sworn by the Vice Chancellor of the University, Professor Alan Robson, on 2 March 2007. The affidavit was filed in these proceedings. The relevant parts of the affidavit referring to the Advice were not read in evidence. 3 The Advice was said to bear upon the University's plea, in answer to a defence based on the Limitation Act 1935 (WA), that it did not know that it had, and was unable to pursue, any cause of action in relation to alleged breaches of duty by Dr Gray because of his failure to comply with conditions of his contract of employment and University regulations. That non-compliance was said to have come from his failure to notify the University of the development of the patentable inventions and intellectual property which are in issue in these proceedings. A waiver of the privilege attaching to the Advice is now said to have occurred in the course of the Vice Chancellor's evidence when being cross examined by counsel for Sirtex, the second respondent. 4 In its Application the University claims, against Sirtex, a declaration that all rights in the patents and associated intellectual property referred to in the Statement of Claim are held on trust by Sirtex for the University. It seeks also an order for the transfer by Sirtex of those rights. It claims damages including equitable damages and, at its election, an account of profits. 5 In its Statement of Claim the University says that Dr Gray breached fiduciary duties owed to the University in relation to the creation of the patent rights and their ultimate acquisition by Sirtex . Sirtex is said to have been aware of the material facts and knowingly concerned in the breaches. The claim against Sirtex is equitable. 6 Sirtex pleads equitable defences by way of laches and acquiescence. It alleges that in 1999 the University through the Vice Chancellor was aware of various facts upon which the University then asserted that it might have a claim with respect to the disputed rights. Despite its knowledge of these matters the University is said to have failed to take action to vindicate the rights which it asserted against Dr Gray and failed to communicate with Sirtex. It is said to have acquiesced in various actions by Sirtex including its borrowings, the issue of a prospectus and the issue of shares to investors having an aggregate value of $15 million. It is also said to have acquiesced in representations made by Sirtex as to its ownership of the disputed rights. Additionally Sirtex relies upon these matters as supportive of an estoppel against the University. 7 Sirtex also pleads that the actions against it are statute barred by reason of the Limitation Act . To this the University makes a reply similar to that which it makes to Dr Gray's limitation defence. In answer to the acquiescence and laches defences it relies in part upon the alleged adoption or ratification by Sirtex of Dr Gray's action in signing deeds under which Sirtex acquired its interest in the rights. 8 In evidence on 19 March 2007 Professor Robson described the events leading up to the decision by the University to commence these proceedings. 9 Professor Robson was cross examined yesterday by counsel for Sirtex on an affidavit he swore on 20 December 2004 in support of an ex parte application by the University for injunctive relief. When did you speak to the academic staff referred to in paragraph 33 for the purpose of forming that view? A. Over several years, actually. Q. I want you to be careful about this, because you are saying in this affidavit the view has only been recently been formed. A. Yes, but there'd been discussions that we'd had, we hadn't reached an opinion about that, and then we had the additional information that was disclosed in the external advice, it was then convincing to me that there was a reasonable case that the University had and I wasn't going to get the University engaged in litigation unless I believed there was a reasonable case. Q. You've just referred to some external advice have you not? A. Yes. Q. That assisted you in forming the views that you referred to in paragraph 33 ? A. Yes. Consistently with the ruling made on 20 March 2007 the fact that the affidavit was filed referring to the Advice, albeit not to its contents, coupled as it was with an express intention to maintain legal professional privilege is not an implied waiver. 13 The question whether the mere filing of the affidavit referring to the existence of the Advice amounted to a waiver of privilege was the subject of the ruling which I gave on 20 March 2007 --- University of Western Australia v Gray (No 14) [2007] FCA 410. I do not propose to depart from that ruling here. I observe in so saying that Barrett J in Austress v Marlin (2002) NSWSC 958 held that legal professional privilege could not be maintained in respect of the contents of an affidavit filed in proceedings and served on other parties even if not read in evidence. His Honour distinguished that case from cases in which the filing of affidavits in one set of proceedings was said not to involve any consent to their use in another. The cases he distinguished on this basis were Abigroup v Akins (1997) 42 NSWLR 623; (1998) 43 NSWLR 539; Nilsen Industrial Electronics Pty Ltd v National Semi-Conductor Corporation (1994) 48 FCR 337; ACCC v Telstra Corporation Limited [2000] FCA 28 ; (2000) 96 FCR 317 and State Bank of South Australia v Smoothdale (No 2) (1995) 53 FCR 125. The purpose of the communication, in a case such as that is to inform the recipient of the evidence the serving party intends to lead. That communication cannot carry with it any form of restriction upon the use the recipient may make of the material, save that it must be used for the proper purpose of the particular proceedings. That case concerned an application to the Federal Court for leave to use, in proceedings in the Supreme Court of Victoria, an affidavit filed in the Federal Court. It was not necessary for the Full Court to decide upon the correctness of the decisions distinguished by Barrett J. The nature of the privilege asserted in the case before the Full Court appears to have been litigation privilege on the basis that the relevant affidavit had been prepared for use in litigation and that its filing did not destroy privilege because of the implied undertaking limiting its use. It is not a limitation based on confidentiality or privilege. The role intended to be fulfilled by the ... affidavit was inconsistent with the maintenance of the confidentiality of the communications recorded in, and any advice apparent from, the contents of the ... affidavit. Thus it is necessary to posit a limited waiver, within a broad framework of the conduct of proceedings which may bring about the result (as in Austress ) that it is in the other side's power to destroy the privilege entirely by putting the statement or affidavit into evidence or examining or cross examining on its contents. The present case is not concerned with the question, which was before the Full Court, namely whether the content of an affidavit filed in court was privileged. The question in the earlier application for these proceedings for production of the Advice was whether reference in the affidavit to the fact that Advice was taken before commencing proceedings destroyed the privilege in it notwithstanding that the part of the affidavit referring to it was not read and that the claim for privilege was expressly maintained in the text of the affidavit. As previously held I do not accept that there was a waiver of client legal professional privilege in those circumstances. 16 The question now before me is different. It is whether answers given by Professor Robson in his cross examination by Sirtex amount to waiver of legal professional privilege in respect of the Advice. 17 Sirtex does not presently seek to adduce the Advice in evidence. It calls for its production. The position therefore is not directly governed by the provisions of the Evidence Act which restricts the adducing of evidence covered by client legal privilege. It appears to be governed by the common law. If however the provisions of the Evidence Act have the effect that the Advice could not be adduced in evidence then the utility of any call for its production is diminished. It is the client who is entitled to the benefit of such confidentiality, and who may relinquish that entitlement. It is inconsistency between the conduct of the client and maintenance of the confidentiality which effects a waiver of the privilege. Examples include disclosure by a client of the client's version of a communication with a lawyer, which entitles the lawyer to give his or her account of the communication, or the institution of proceedings for professional negligence against a lawyer, in which the lawyer's evidence as to advice given to the client will be received. Sirtex concedes as much in its submissions. It contends however that Professor Robson's evidence in cross examination involved a knowing and voluntary disclosure of the substance of the Advice that he received within the meaning of s 122(2) of the Evidence Act . That section relates to the circumstances in which otherwise privileged material may be adduced in evidence. If however the Advice can be adduced in evidence then its production may be required on the basis that it is appropriate to have regard, in this context, to s 122(2). 20 Had the evidence of Professor Robson gone no further than the statement that he had regard to the Advice before instructing the University's solicitors to commence proceedings there would have been no waiver. In this case however he explicitly linked consideration of the Advice to the formulation of the beliefs as to relevant matters of fact referred to in [33] of his affidavit of December 2004. 21 Counsel for the University submitted that the answer given by Professor Robson did not fit the question asked. However he was cautioned before the question was put and did explicitly link the advice given to the formation of his view about the relevant factual matters. It may be the case that the Advice contained a statement of the factual matters upon which it was based which would reflect a state of knowledge of the relevant factual issues attributable at that time to the University. If that state of knowledge could be seen to have been not materially different from that which the University had some years previously then it has a relevance to the defences and replies to the defences which were mentioned earlier in these reasons. 22 In this context counsel for Sirtex referred to the judgment of Giles CJ of the Supreme Court of New South Wales in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405. In that case parties claiming privilege had put in issue beliefs they held which induced them to purchase certain convertible notes. Ampolex said that those parties had thereby opened up for investigation the source of and basis for their beliefs and that inspection of the documents relevant thereto could not be denied. Reference was made in the judgment to a passage from the judgment of Jordan CJ in Thomason v Campbelltown Municipal Council (1939) 39 SR ( NSW) 347 at 358-359. In these circumstances, since the fact and nature of the advice is an issue in this case, I am of opinion that privilege cannot be raised to prevent the proof of the advice. The position is analogous to that which arises in a suit in Equity to set aside a transaction on the ground of undue influence. In such a suit it has always been the practice for the defendant to cross-examine the plaintiff with a view to proving that the plaintiff had competent legal advice when he entered into the transaction, and to call and examine the legal adviser if he is available; and I have never known it to be suggested that such evidence is inadmissible on the ground of the plaintiff's privilege. It is ultimately founded on the fairness considered in Attorney-General for the Northern Territory v Maurice [1986] HCA 80 ; (1986) 161 CLR 475. Confining attention to the allegation made by GPG Nominees and Allied ... having exposed to scrutiny their corporate states of mind, being states of mind to which their legal advice is likely to have contributed, GPG Nominees and Allied cannot withhold the advice from their opponent. I emphasise that the legal advice is likely to have contributed to the states of minds of GPG Nominees and Allied, as was plain from the dates of and descriptions of the documents: were that not so, the principle may not have applied. The real question is whether the evidence given, in light of the issues raised on the pleadings, is inconsistent with the maintenance of the confidentiality of the material concerned. The test of inconsistency derives from the joint judgment of the High Court in Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 which has already been cited. In my opinion there is an inconsistency between the maintenance of the confidentiality of the Advice insofar as it sets out the factual matters upon which it is based and the reliance placed upon those matters by Professor Robson in the light of the issues pleaded. 25 It does not follow that I would require the Advice to be produced in its entirety. Counsel's assessment of the strength or weakness of the University's case in its various aspects is not relevant to any pleaded issue. Its admission would be likely to be unfairly prejudicial to the University and of limited probative value. I would exercise the discretion under s 135 of the Evidence Act even were it otherwise admissible because of relevant factual material contained in it. 26 What I propose to do in this case is to direct the production of a redacted version of the Advice limited to the factual matters set out in it and any inferences of fact which are offered in it. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice French. | waiver whether knowing and voluntary disclosure of advice whether conduct inconsistent with maintenance of confidentiality and privilege answers by witness for applicant in cross examination stated reliance upon legal advice in the forming of belief as to factual matters underpinning decision to commence proceeding belief as to factual matters relevant to answers to defences of laches, acquiescence and limitations act defences production ordered of redacted version of advice disclosing factual matters relied upon and inferences offered legal opinions as to strength or weakness of causes of action, options and recommendations excluded. legal professional privilege |
It is incorporated in California in the United States of America and is the second largest wine-producing company in the world. It distributes its alcoholic beverages in over 90 countries and its international business is managed from offices located around the world, including California, Canada, England, Florida, Germany, Hong Kong, Japan, Mexico, the Netherlands, Poland and Sweden. 2 By way of a Further Amended Statement of Claim filed on 22 February 2008, the Applicant contends that it is the registered owner under the Trade Marks Act 1995 (Cth) of the word " BAREFOOT ". That trade mark has been registered with effect from 9 March 1999 in respect of " wines ". Prior to 17 January 2005, the registered owner of that mark was Mr Michael Houlihan; E & J Gallo Winery became the registered owner after that date. It contends that it sells wine in Australia under the trade mark BAREFOOT . That trade mark, it is further contended, has been and is being infringed by the conduct of the Respondent by using as a trade mark the words " BAREFOOT " or " BAREFOOT RADLER " in relation to its new radler beer. 3 Declaratory and injunctive relief is sought together with an account of profits. 4 The Respondent, Lion Nathan Australia Pty Limited ( Lion Nathan ), on 5 September 2007 lodged an Australian trade mark application for the mark " BAREFOOT RADLER " in relation to beers and other goods in class 32. On 20 September 2007 the Respondent also lodged an application for the mark " LIFE'S BETTER BAREFOOT " and on 17 December 2007 it lodged an application for the mark " BAREFOOT RADLER " with a bare foot design in relation to beers and other goods in class 32, and " alcoholic beverages (except beers) " in class 33. 5 The Respondent, by way of an Amended Cross-Claim filed on 2 April 2008, contends that there has been a non-use by Gallo Winery of the trade mark BAREFOOT in Australia. The Respondent seeks an order for the removal of the trade mark relied upon by the Applicant pursuant to s 94(2)(b) of the 1995 Act. Gallo Winery denies that there has been a non-use of the mark and further contends, in the alternative, that if there has been a non-use the Court should exercise the discretion conferred by s 101(3) and not remove the mark from the Register. The principals of that business were Mr Michael Houlihan and Ms Bonnie Harvey. The business had its headquarters in Santa Rosa, California. Mr Houlihan was the President and Ms Harvey was the Vice-President. 7 In January 2005 Gallo Winery acquired the share capital of Grape Links Inc and acquired the rights to the BAREFOOT brand. The brand was perceived to be " an attractive acquisition for Gallo Winery because its carefree, slightly irreverent, California 'surf and sand' lifestyle positioning had significant consumer appeal ". 8 By early 2006 there were discussions between officers of Gallo Winery and McWilliams Wines Pty Ltd ( McWilliams Wines ) for the sale of BAREFOOT wine in Australia. McWilliams Wines is one of Australia's largest family-owned wine companies. Samuel McWilliams first planted vines at Cowra in New South Wales in 1877. Gallo Winery has owned approximately 10% of the shares in McWilliams Wines since September 2004. 9 Difficulties began to emerge, however, in mid-July 2007 when Gallo Winery became aware of an application made by Lion Nathan for the removal of Gallo Winery's BAREFOOT trade mark from the Register. 10 In September 2007 Gallo Winery licensed its Australian BAREFOOT trade mark and associated intellectual property rights to McWilliams Wines . On 14 September 2007 the first bottles of BAREFOOT wine were placed on the market in Australia by McWilliams Wines . Twelve thousand 750ml bottles were then released, being cabernet/merlot and semillon/sauvignon blanc. In December 2007 Gallo Winery commenced to ship from California to McWilliams Wines four different types of BAREFOOT wine. The first 225 cases of each type were air-freighted. 11 A limited quantity of BAREFOOT wine originating from California had previously been sold by a wholesaler of wine in Melbourne, Beach Avenue Wholesalers Pty Ltd ( Beach Avenue Wholesalers ), from 2004 to 2007. 12 Proceeding in tandem with the activity of Gallo Winery during 2006 to 2007 were the steps being undertaken by Lion Nathan to attract legal-aged drinkers who did not drink beer. These steps commenced in about August 2006 and involved developing the concept of a beer that was less bitter to the taste than traditional beers. The concept was developed of adding a lemon flavouring which was intended to be " a suitably refreshing taste for the warmer weather ". 13 That was the concept. It was then necessary to create a brand name. 14 The term " RADLER" had already been decided upon as part of the branding. That term is apparently the German word for " cyclist " and describes a traditional Bavarian beer flavoured with a mixture of lemon and lime. The use of the term to describe a beer has its origins in June 1922 when a Munich publican, Franz Kugler, " started mixing dark beer with lemonade to meet the high demand from large groups of cyclists who wanted a more refreshing drink so they could continue on their journey without falling off their bicycles! ". 15 Other distinctive words in addition to the word " RADLER " were also being considered by Lion Nathan . It was in February 2007 that the Consumer Insight Manager for that company, Mr Ralph Simpson, came up with the marketing term " BAREFOOT ". Mr Simpson came up with the idea of using that term from his reading of a " Form Guide" for horse racing where the name of a horse attracted his attention, namely " Barefootonbondi ". He thought that it was an " interesting name " as it " conjured up a positive mental image and feeling of relaxation, summer and the beach ". 16 Checks made of registered trade marks in February 2007 revealed the trade mark BAREFOOT in relation to wine. That did not cause Mr Simpson any concern as beer was his principal focus of attention. Prior to February 2007, Mr Simpson had never heard of a BAREFOOT branded wine in Australia or heard of Barefoot Cellars or E. & J. Gallo Winery. 17 In January 2008 the beer BAREFOOT RADLER was launched on the Australian market. It was launched across all States and Territories. INFRINGEMENT: SECTION 120? The function of a trade mark, it has repeatedly been said, is "to give an indication to the purchaser or possible purchaser as to the manufacture or quality of the goods -- to give an indication to his eye of the trade source from which the goods come, or the trade hands through which they pass on their way to the market": In re Powell's Trade Mark [1893] 2 Ch 388 at 403---4 per Bowen LJ. Use "as a trade mark" in s 120(1) is use of the mark as a "badge of origin" in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods: Coca Cola Co v All-Fect Distributors Ltd [1999] FCA 1721 at [19] , [1999] FCA 1721 ; 96 FCR 107 at 115 per Black CJ, Sundberg and Finkelstein JJ; Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605 at [45] per Sundberg J. See also: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1964) 109 CLR 407 at 424---5 per Kitto J; Rothnie W, Gray Goods Billow onto the Open Main: Section 123 of the Trade Marks Act 1995 (1996) 7 AIPJ 87 at 89---90. 20 One of the principal matters in issue in these proceedings is whether there has been a breach, or a threatened breach, within the meaning of s 120(2) of the 1995 Act by Lion Nathan . ... A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to: (a) goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or (b) services that are closely related to registered goods; or (c) services of the same description as that of services (registered services) in respect of which the trade mark is registered; or (d) goods that are closely related to registered services. However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion. 22 In addition to contending that the Gallo Winery trade mark should be removed for non-use, the Respondent further maintains (at least in its written submissions) that the " sign " that it uses in marketing its beer is the words " BAREFOOT RADLER " and the image of a bare foot; denies that the sign BAREFOORT RADLER is " substantially identical or deceptively similar to " Gallo Winery's BAREFOOT trade mark; denies that the goods in relation to which the sign is used are " goods of the same description as wines " and contends that its use is " not likely to deceive or cause confusion ". (ii) is the " sign " being used by Lion Nathan " substantially identical with " the trade mark of Gallo Winery ? (iii) is the " sign " being used by Lion Nathan " deceptively similar to " the trade mark of Gallo Winery ? (iv) are the radler beers of Lion Nathan " goods of the same description " as the BAREFOOT wine of Gallo Winery ? (v) is the manner in which Lion Nathan uses its sign " not likely to deceive or cause confusion "? (vi) has there been a " non-use " of the BAREFOOT trade mark during the period from 7 May 2004 to 8 May 2007? (vii) if there has been a " non-use " of the trade mark by Gallo Winery , should the discretion conferred by s 101(3) of the 1995 Act be exercised so as to allow its trade mark to remain on the Register? Depending upon the manner in which one or other of these questions may be answered, other questions may not necessarily have to be answered. With the concurrence of the parties, however, the course has been taken of answering each of these questions should the matter proceed further. THE " SIGN " AS USED BY LION NATHAN ? 25 The trade mark of Gallo Winery is the word " BAREFOOT ". 26 In the present proceedings there is a dispute at the outset as to the ability of Lion Nathan to rely upon any sign other than the word " BAREFOOT " or the combination of words " BAREFOOT RADLER ". The dispute centres upon whether the Amended Defence so confines Lion Nathan or whether Lion Nathan is otherwise free to contend that its sign also incorporates the image of a bare foot. 27 Gallo Winery contends that that sign is the simple use of the word " BAREFOOT " or, in the alternative, that the sign is " BAREFOOT RADLER ". Gallo Winery contends that that is the way in which the proceedings have been pleaded and the basis upon which the proceedings have been conducted -- at least for its part. 28 In support of that contention, Gallo Winery relies upon the allegations in its Further Amended Statement of Claim that Lion Nathan intends to offer for sale alcoholic beverages " under the name BAREFOOT " and is offering for sale its " radler beer under the name BAREFOOT ". In response, Lion Nathan in its Amended Defence says that it " intends to offer for sale and sell an alcoholic product (not wine) under the trade mark BAREFOOT RADLER " and says that it " commenced to promote, advertise, offer for sale and sell in Australia a beer under the name BAREFOOT RADLER ". It also denies that its beer is called " BAREFOOT ". 29 Significantly, contends Gallo Winery , there is nowhere stated in the Amended Defence a contention that the sign being used by Lion Nathan is a combination of the words " BAREFOOT RADLER " and the image of a bare foot. Indeed, Gallo Winery contends with some force that the Amended Defence identifies the sign being used as that of the combination of words alone. 30 Albeit only during the course of closing submissions by Lion Nathan , Gallo Winery supplemented its earlier contentions by placing reliance upon O 11, r 10 of the Federal Court Rules . That rule requires a matter to be specifically pleaded if it " might take the other party by surprise ": Dyno Wesfarmers Ltd v Orica Australia Pty Ltd [1999] FCA 554 , 46 IPR 386 ; Delta Metallics v Hawley-Jacobs t/as Fightboi Health & Fitness Centre [2006] FCA 334 at [8] per Kenny J. 31 Lion Nathan contends that as a matter of fact, the " sign " which it is using for the purposes of s 120 is a combination of the words and the image -- and further contends that such a finding of fact is not to be denied by the pleadings. Albeit in response to the allegation in the Further Amended Statement of Claim that it has infringed Gallo Winery's BAREFOOT trade mark, the Amended Defence states in part that it " denies that the sign to be used by the Respondent, BAREFOOT RADLER, is substantially identical or deceptively similar to the Applicant's BAREFOOT Trade Mark ". This can only be construed as conveying to the Applicant at least two things: (i) the position that the Respondent denies that the sign to be used is substantially identical with or deceptively similar to the Applicant's sign; and (ii) the sign " to be used " by the Respondent, and to be relied upon in resisting the Applicant's claim, is the sign it then identifies, namely " BAREFOOT RADLER ". 33 Had the Amended Defence simply denied the infringement being alleged, Lion Nathan may well have been able to advance submissions that the sign to be used was a combination of the words and the image. But the fact is that the Amended Defence goes on to expressly identify the sign which it says is not substantially identical with or deceptively similar to that being relied upon by Gallo Winery , and it identifies that sign as being " BAREFOOT RADLER ". At the very least, that express statement in the Amended Defence is productive of such uncertainty that it was thereafter incumbent upon Lion Nathan to identify in its Amended Defence the sign upon which reliance was to be placed -- if that sign was to be anything other than the combination of words. Without that further express clarification, a contention that the " sign " is the words and the image would be a contention that would " take the other party by surprise " within the meaning of O 11, r 10. 34 The function of pleadings is to state with sufficient clarity the case to be met: Banque Commerciale SA en liquidation v Akhil Holdings Ltd [1990] HCA 11 ; (1990) 169 CLR 279 at 286---7 per Mason CJ and Gaudron J. And written submissions can be no substitute for a properly pleaded case. 35 It is thus considered that Lion Nathan is confined by its pleadings to placing reliance upon the combination of words alone. Its Amended Defence , it is considered, does not state with sufficient clarity the defence that it was raising in respect to the claims of Gallo Winery ; indeed, as pleaded, it was only likely to have misled Gallo Winery . No application was made by Lion Nathan to amend its pleadings. Had such an application been made, it most probably would have been granted. Such limited cross-examination as there had been by Senior Counsel for Gallo Winery was not such as to have given rise to any irremediable prejudice that could not have been accommodated by recalling witnesses. And each of the elements of that " sign " has a degree of prominence. Prominence is attracted to the image of the bare foot and the word " BAREFOOT " by reason of their being printed in white; prominence is also equally attracted to the word " RADLER " by reason of it being printed in green. The words and the image of the bare foot are given additional prominence by all being set against a blue background encircled by a roughly drawn white circumference. The word " BAREFOOT " is also given additional prominence by that word dissecting the image of the bare foot. 37 Given the constraint imposed by the pleadings, however, there is similarly no reason not to conclude that the " sign " being used by Lion Nathan is the combination of the words " BAREFOOT RADLER " alone. This was the sign identified in the Amended Defence. Even without the image of the bare foot, the prominence and distinctiveness of those words remains sufficiently discrete as to be the " sign " used. 38 What is the " sign " being used by Lion Nathan , it is accepted by both parties, is a question of fact. SUBSTANTIALLY IDENTICAL? 41 There is no definition in the 1995 Act of the phrase " substantially identical ". 42 The meaning of that phrase is to be determined by its ordinary or usual meaning, namely that which is in substance the same or essentially the same: Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 at [70] , [1999] FCA 1020 ; 93 FCR 365 at 387 per Branson J. 43 And whether marks are " substantially identical " requires a side by side comparison and depends on the Court's own judgment: Shell Co of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414. "The identification of an essential feature depends", it has been said, "partly on the Court's own judgment and partly on the burden of the evidence that is placed before it": de Cordova v. Vick Chemical Co. [(1951) 68 RPC 103 at] [2], at p. 106. Whether there is substantial identity is a question of fact... In order to determine whether marks are " substantially identical ", they should thus be compared side by side with their similarities and differences noted: Coca-Cola Co v All-Fect Distributors Ltd [1999] FCA 1721 at [38] , [1999] FCA 1721 ; 96 FCR 107 at 121. Black CJ, Sundberg and Finkelstein JJ there observed that the similarities and differences should be noted and the importance of these similarities and differences assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. The two marks are certainly not " identical ". The two marks have in common the word " BAREFOOT ". But the " sign " as used by Lion Nathan also employs the additional word " RADLER ". The question is thus whether there is a substantial identity. Section 120(2), it will be noted, does not require that the two marks be " identical "; s 120(2) is infringed if the mark of Lion Nathan is " substantially identical with " that of Gallo Winery . 45 In reaching the conclusion that the marks are not substantially identical, it has been recognised that the word " BAREFOOT " is both an ordinary English word and a word which has been used in a variety of contexts advertising many different types of goods. An internet search undertaken by a law graduate employed by the solicitors for Lion Nathan (Mr Campbell) disclosed the word " BAREFOOT " being used in the promotion of a beach-side resort; a water-skiing club; a sailing cruise; a coffee roaster; weddings; horse saddles; furniture; and vacations. Other instances were also exposed. Not surprisingly, many of these products had some association with the beach or water. 46 It is a word, however, common to both marks and a word which is strongly associated with a carefree lifestyle. 47 But it is the addition of the word " RADLER " which denies any substantial identity as between the trade mark of Gallo Winery and the " sign " as used by Lion Nathan . Rejected is a submission advanced by Gallo Winery that the word " RADLER " is but a description of a particular type of beer and that it is the word " BAREFOOT " alone which distinguishes its beer from that of others. It is the combination of the words which distinguishes the Lion Nathan beer -- an essential and prominent feature of the sign as used by Lion Nathan is thus not only the word " BAREFOOT" but also the word " RADLER ". Lion Nathan's use of the word " RADLER " is an important and integral part of the sign it uses and is an obvious source of distinction. --- Correct. ... ... because you think that the name of this product is Barefoot Radler don't you? --- Yes. 49 Had Lion Nathan not been confined by its pleadings and had it been free to also include as part of its sign the image of the bare foot, any finding of fact that there was substantial identity would have been more easily denied. The differences would be such that -- and the total impression would be such that -- any similarity as would have been occasioned by the word " BAREFOOT " alone would be of little significance. The similarity, of course, would remain the single word " BAREFOOT ". But the differences would be even more significant if the prominent image of the bare foot were able to be included. DECEPTIVELY SIMILAR? 51 Again, there is no dispute between the parties as to the meaning to be given to the phrase " deceptively similar " -- the dispute is as to the manner in which that phrase is to be applied to the facts. 52 A trade mark is taken to be " deceptively similar to " another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion: s 10. 53 Whether a mark is " deceptively similar " is not to be determined by a side by side comparison, but rather by reference to whether there is a likelihood of deception or confusion from a recollection or impression of the registered mark: Anheuser-Busch Inc v Budejovick[yacute] Budvar [2002] FCA 390 at [143] , [2002] FCA 390 ; 56 IPR 182 at 216. Thus, a side by side comparison is inadequate, and too narrow a test. It is the impression or recollection which is carried away and retained that is necessarily the basis of any mistaken belief that the challenged mark is the same: Australian Woollen Mills Ltd v F S Walton & Co Ltd [1937] HCA 51 ; (1937) 58 CLR 641 at 658 per Dixon and McTiernan JJ. See also: Global Brand Marketing Inc v YD Pty Ltd [2008] FCA 605 at [84] ---[89] per Sundberg J. The " recollection " may be imperfect: Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 at [87] , [2004] FCAFC 196 ; 209 ALR 1 at 21 per Moore, Sackville and Emmett JJ. 55 Whether a mark is likely to deceive or cause confusion is, in the end, a question of impression and common sense: Murray Goulburn Co-operative Co Ltd v NSW Dairy Corporation [1990] FCA 32 ; (1990) 24 FCR 370 at 377 per Lockhart, Pincus and von Doussa JJ. (On appeal, see: NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd [1990] HCA 60 ; (1990) 171 CLR 363). 56 The comparison, it should be noted, is different to that undertaken in a passing off action where the plaintiff points to the goodwill built up around a mark by reason of prior use and then points to the conduct of the defendant as leading to deception, or perhaps merely confusion, and the consequent damage to that goodwill of the plaintiff: Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 49 FCR 89 at 128---9 per Gummow J. Essentially what is required when considering whether a mark is deceptively similar to another is a comparison between the mark of the registered owner and that of the alleged infringer: C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539 at [44] , [2000] FCA 1539 ; 52 IPR 42 at 62. Ryan, Branson and Lehane JJ there considered that it was not appropriate to undertake a wider inquiry of the kind undertaken in a passing off action or in a proceeding in which a contravention of Part V of the Trade Practices Act 1974 (Cth) is alleged. 57 The impression based on a recollection of the " sign " as used by Lion Nathan and a recollection of Gallo Winery's trade mark, it is considered, would lead to a likelihood of deception or confusion. 58 It is considered that the impression which would be left on the mind of a person of ordinary intelligence would be that there was a deceptive similarity as between the mark used by Gallo Winery and that used by Lion Nathan and as pleaded in its Amended Defence . The similarity is such that persons would wonder whether the products came from the same source; an actual probability of deception need not be established: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. It is not necessary, in order to find that a trade mark offends against the section, to prove that there is an actual probability of deception leading to a passing-off. While a mere possibility of confusion is not enough--for there must be a real, tangible danger of its occurring ... --it is sufficient if the result of the user of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source. It is enough if the ordinary person entertains a reasonable doubt. 59 In reaching this conclusion considerable assistance has been gained from the decision of Burchett J in Polo Textile Industries Pty Ltd v Domestic Textile Corporation Pty Ltd [1993] FCA 203 ; (1993) 42 FCR 227. Polo Textile was there the registered proprietor of the mark " Polo " in respect of manchester, including sheets and towels. It was concluded that Domestic Textile did not avoid infringing that mark by selling bed linen products using the mark " Polo Club ". Burchett J concluded that it was of importance that the distinctive impact of the word " Polo " was likely to affect the mind while the presence or absence of the blander word " Club " may escape notice. See also: de Cordova v Vick Chemical Co (1951) 68 RPC 103. 60 In the present proceedings, the strong impression left on the mind of persons of ordinary intelligence by the use of the word " BAREFOOT " would not relevantly be affected by Lion Nathan's use of the word " RADLER " as well. The addition of that word is sufficient to preclude a finding that the two marks are " substantially identical "; but the addition of that word is not sufficient, it is considered, to preclude their being " deceptively similar ". 61 A distinction may be drawn as between the present case and that in Polo Textile -- but that distinction does not lead to any different conclusion. Unlike the use of a bland word such as " Club " -- as in the Polo Textile decision -- the word " RADLER " adds an additional and important distinguishing feature to the product. The word " RADLER " is not an ordinary English word and its use, it is considered, adds an element of both distinction and curiosity, such that persons will query what that particular word means. 62 The word " RADLER " is not a word having any meaning found in either the Macquarie or Shorter Oxford Dictionaries. It is a German word and, not being a word of everyday usage in the English language, its use would unquestionably leave an impression on the mind of a person. The word " RADLER ", it is considered, would leave an impression on the mind of a person who knew what the word meant and would leave an even firmer impression upon the mind of a person who had no such knowledge. And it is a word given prominence in the Lion Nathan sign. But those factors either alone or in combination would not be such as to remove the likelihood of deception or confusion. Contrast: Crazy Ron's Communications Pty Ltd v Mobileworld Communications Pty Ltd [2004] FCAFC 196 , 209 ALR 1. 63 An essential feature common to both the mark of Gallo Winery and the sign as pleaded by Lion Nathan remains the word " BAREFOOT " which, it is considered, would leave a considerable impression on the mind of a consumer of ordinary intelligence. Notwithstanding the distinctiveness which the word " RADLER " brings to the sign of Lion Nathan , it would not be sufficient to remove the likelihood of deception otherwise arising. 64 Again, it should be noted, any deceptive similarity with the Gallo Winery mark would not have arisen had Lion Nathan been free to rely upon the combination of words and the image of the bare foot. GOODS OF THE SAME DESCRIPTION? 66 Again there is no dispute between the parties as to the meaning of the phrase " goods of the same description ". 67 It is again accepted that it is a question of fact and impression whether goods are " of the same description ": Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539 at 545 per Needham J. 68 In resolving this question, the fact that goods serve different purposes is not conclusive; nor is any one particular consideration conclusive. Assistance, however, has been provided as to those matters which may be taken into account: Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592. Nor is the fact that the applicant's goods are not specified by the regulations as being within the same class of goods... There may be many matters to be considered apart from the inherent character of the goods in respect of which the application is made and some indication of what matters are relevant to this inquiry was given by Romer J. in In re Jellinek's Application [(1946) 63 RPC 59]. Romer J. thought it necessary to look beyond the nature of the goods in question and to compare not only their respective uses but also to examine the trade channels through which the commodities in question were bought and sold. Shortly after the decision in Jellinek's Case the Assistant-Comptroller elaborated on the observations of Romer J. in the following manner: "In arriving at a decision upon this issue the reported cases show that I have to take account of a number of factors, including in particular the nature and characteristics of the goods, their origin, their purpose, whether they are usually produced by one and the same manufacturer or distributed by the same wholesale houses, whether they are sold in the same shops over the same counters during the same seasons and to the same class or classes of customers, and whether by those engaged in their manufacture and distribution they are regarded as belonging to the same trade. In the case of Jellinek's Application [(1946) 63 RPC 59] , Romer J. classified these various factors under three heads, viz., the nature of the goods, the uses thereof, and the trade channels through which they are bought and sold. No single consideration is conclusive in itself, and it has further been emphasized that the classifications contained in the schedules to the Trade Marks Rules are not a decisive criterion as to whether or not two sets of goods are 'of the same description'": In re an Application by John Crowther & Sons (Milnsbridge) Ltd. [(1948) 65 RPC 369 at 372]. Much the same considerations are evident in the observation of Dixon J. (as he then was) in Reckitt & Colman (Australia) Ltd. v. Boden [1945] HCA 12 ; [(1945) 70 CLR 84 at 94] when he said: "What forms the same description of goods must be discovered from a consideration of the course of trade or business. One factor is the use to which the two sets of goods are put. Another is whether they are commonly dealt with in the same course of trade or business. In the present case, the goods are quite different, their uses are widely separated and they are not commonly sold in the same kinds of shops or departments". 69 In McCormick & Co Inc v McCormick [2000] FCA 1335 , 51 IPR 102 , Kenny J also identified some of the factors to be taken into account when determining whether goods were of the same description. They are: (1) the nature of the goods, including their origin and characteristics; (2) the uses made of them, including their purpose; and (3) the trade channels through which the goods are bought and sold. 70 The Applicant accepts that other cases which have resolved whether the goods there in issue were " goods of the same description " are not determinative. But it does contend that some guidance may be gleaned from decisions which have held or suggested that the following are " goods of the same description ": namely, " rum and a rum cocktail or a Daiquiri " (" Daiquiri Rum " Trade Mark [1969] RPC 600 at 609 per Lord Reid, at 613 per Lord Morris, at 615 per Lord Pearce); wines and spirits ( In re Australian Wine Importers' Trade Mark (1889) 6 RPC 311) ; and beer and rum ( In re Turney and Sons' Trade Mark (1893) 11 RPC 37 at 44---5). Of these decisions, it is of significance to note that in the Australian Wine Importers case the Court of Appeal dismissed an appeal from a decision of Kay J. We find that they are goods which are generally sold by the same persons, and for the purposes of trade may, in some respects, be considered as the same description of goods; for they are both alcoholic, and although there may be differences in them, they may fairly be considered as coming within the same description of goods, though they are not the same goods. One must look at it from a business point of view. They are alcoholic and spirituous. They are sold in this country constantly by the same people. Wine and spirit dealers are common enough in this country, and I am not sure that they are not the same description of goods ; but whether they are or not, it seems to me that they are so uncommonly near the line that we ought not to depart from the view taken by Mr. Justice Kay, and say to the Comptroller, "You must register in favour of these wine merchants a mark which is already on the Register in favour of a spirit merchant who is also a wine merchant. " It appears to me that Mr. Justice Kay has taken the right view of the case, and that we ought not to interfere with his Order. These observations disclose, at the very least, that questions of fine judgment may be involved. 71 Overall, the matter is to be determined from a business point of view: San Remo Macaroni Co Pty Ltd v San Remo Gourmet Coffee Pty Ltd [2000] FCA 1842 at [35] , 50 IPR 321 at 330 per Goldberg J. 72 The fact that both types of goods may be consumed does not, of itself, make them goods of the same description: Re J Lyons & Co Ltd's Application [1959] RPC 120 at 127---8 per Lord Evershed MR (Romer and Ormerod LJJ agreeing). (Applied: San Remo Macaroni [2000] FCA 1842 at [35] ---[36], 50 IPR 321 at 330 per Goldberg J). 73 It is not considered, however, that the Lion Nathan radler beers are " goods of the same description " as wine. 74 It may be accepted that a number of considerations support a contrary conclusion. Indeed, when developing its new beer product, Lion Nathan deliberately set out to attract people who did not drink beer. To many people, it was recognised, beer had a " bitter taste " and it was to overcome this " hurdle " that the lemon flavouring was added. Later in the development of the product, lime was also added. The product developed by Lion Nathan was developed with the deliberate objective of enticing consumers who previously drank wine but not beer. Inspired by the German 'Radler' tradition but adapted for the Australian climate, the brand is designed to appeal to bring marginal beer drinkers more into the beer category. The way in which the " Business Plan " developed was to recognise that there was a " significant --- and as yet untargeted --- group of consumers ". This " marginal group " was estimated as comprising approximately 2.5 million drinkers. Approximately 2/3 of the projected volume will be sourced from beer, with 22% from wine and 14% from spirits/RTDs. In addressing the " Competitive context --- who are we competing with on premise? The large producers now produce a range of products and market themselves as doing so. Corporations which were once brewers now seek to develop their business through the acquisition of wineries, and joint ventures are developed as between producers of rum and spirits and the brewers. Companies which were once brewers now market and distribute a range of products including beer, wine, spirits, ciders and non-alcoholic drinks. Also distributed are " ready to drink " beverages. Where there is a range of alcoholic beverages, and where the source of that variety may be the same producer or distributor, no clear distinction can any longer be drawn between beer and wine. (v) wine and beer are now frequently distributed by the same retailers. These considerations leave open a finding of fact that the BAREFOOT RADLER beer and wines are " goods of the same description ". 75 But it is not considered that such a finding of fact should be made. 76 One consideration relied upon in reaching a contrary finding is the simple fact that the goods have a different origin. 77 The Sales Strategy Director of Lion Nathan , Mr Kelly, gave evidence that beer is made of water, a fermentable source of starch and yeast. A flavouring, such as hops, can also be added. Malting barley is usually used as the source of starch, although a mixture of sources may be used including corn, rice and sugar. Mr Kelly gave further evidence as to the stages of manufacture and production of beer. According to Mr Kelly, the sooner that beer is consumed the better. 78 The General Manager of the Wine Group for Lion Nathan , Mr Anthony Roberts, gave evidence as to the manner in which wine is made. Wine, according to Mr Roberts, is made of crushed grapes to which are added certain varieties of yeast. The yeast converts the sugars in the grapes into various ingredients, including alcohol and aroma and flavoured compounds. Sulphur dioxide is added to many wines as a preservative. The grapes are grown in vineyards managed on an annual cycle. The details of the production processes adopted for particular wines vary significantly depending upon the type of wines being produced. A wine's shelf life is typically expressed as its " peak drinking period ". In contrast to beer, Mr Roberts stated that wines are typically characterised by reference to the region from which they come. 79 A second consideration which indicates that the BAREFOOT RADLER beer and wine are not " goods of the same description " is the manner in which beer and wine may be sold. 80 Both beer and wine may be sold through restaurants and liquor stores. 81 But within restaurants, wine selection is generally made by reference to a wine list. Beer is usually sold by reference to brand name or sometimes by strength, such as " light ". A typical beer consumer, apparently, has a " repertoire " of perhaps three to four brands that are consumed on a regular or semi-regular basis. 82 Within retail outlets, wine is generally displayed by reference to categories with red and white wines being displayed separately. Within each section, wines are further categorised by reference to wine type and country of origin. Beer, according to Mr Kelly, is rarely sold by reference to where it was produced or from where its ingredients were sourced. Within retail outlets, approximately 20% of shelf space is usually given over to beer and 80% of the coolroom. It is the coolroom which is the main selling area of beer. This evidence of Mr Kelly was also supported by a director of three Porter's Liquor retailers in New South Wales and a person involved in the liquor retail sector since 1973, Mr Malcolm Higgs. Mr Higgs maintained that a lot more wine is stored on the shop floor than beer, the wine displays taking up approximately 80% of the floor space. Within the coolroom, beer is generally not categorised or organised but placed where it is most convenient. In addition, beer producers also tend to rely heavily on signage both inside and outside retail and bar premises. Beer producers also market the products by sponsoring major national and international sporting and music events, such as motor racing, football and cricket. 83 A third consideration is the manner in which beer is consumed. Beer, again according to the Sales Strategy Director for Lion Nathan , is consumed for its thirst quenching and refreshing qualities. Indeed, the labelling of the BAREFOOT RADLER beer states that that beer is " phenomenally refreshing ". In part, beer's thirst quenching and refreshing qualities are due to its lower alcohol content relative to other alcoholic beverages, such as wines and spirits, which tend to be consumed in a " sipping fashion ". Beer can also be served at very low temperatures. For males in particular, according to the Sales Strategy Director, beer performs an important role in bonding and " rights of passage " bringing groups, such as sports teams, closer together. 84 A further consideration is the fact that, although there may be instances provided of producers now brewing beer and making wines, within Lion Nathan the responsibility for the production and distribution of beer and wine is separated. Within Lion Nathan it is Lion Nathan Australia which produces and distributes beer; it is Lion Nathan Wine Group Australia Limited which produces and distributes wines. The two aspects of the business are almost entirely separate in Australia with distinct production, marketing and sales organisations. 85 Within Australia, the major competitors of Lion Nathan are Foster's, Coca-Cola Amatil (which acquired Bluetongue Brewery) and Coopers. With the exception of Foster's, none of these other competitors also produce wine in Australia. Mr Higgs, in this regard, said that he generally dealt with separate sales representatives for beer and for wine as the knowledge and processes used to assist a liquor store to order and sell wine is very different to that used to order and sell beer. Mr Higgs also said that Foster's attempted to send a single sales representative to his stores for both beer and wine following the acquisition by Foster's of the Southcorp wine group in 2005. The Foster's group, however, now sends separate sales representatives with specialist knowledge of wine to two of Mr Higgs' stores. 86 The evidence of Messrs Roberts, Kelly and Higgs, none of whom were cross-examined, as to these differences is accepted. 87 The fact that consumers may drink both BAREFOOT RADLER beer and wine, and the fact that deliberate steps were undertaken to entice some wine drinkers into drinking beer, does not lead to a conclusion -- either by itself or in conjunction with other considerations -- that the beer and wine are " goods of the same description ". As was the case in NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26 it was not suggested that BAREFOOT RADLER beer and wines are " commonly used as substitutes or alternatives ": 14 IPR 26 at 43. And, as was the like assessment of Gummow J in that decision, some reliance may also be placed upon the initial reaction of the Consumer Insight Manager for Lion Nathan (Mr Simpson) when he first learned of the trade mark registration of the word " BAREFOOT " for wines -- he " was not overly concerned about the wine mark as beer was the main category that the project team was initially focusing on ". 88 It is thus considered that the Lion Nathan BAREFOOT RADLER beers are not " goods of the same description " as wine. NOT LIKELY TO DECEIVE OR CAUSE CONFUSION? To fall within this provision, Lion Nathan must establish that its use of the sign is " not likely to deceive or cause confusion ". Lion Nathan bears the onus by reason of the phrase " if the person establishes ". 90 There is little guidance provided to date in respect to the concluding words of s 120(2): Davison M et al , Shanahan's Australian Law of Trade Marks and Passing Off at [18.130] (3 rd ed, 2003). 91 Senior Counsel for Lion Nathan , however, submitted that the terms of s 120(2) permit consideration to be given to the way in which its sign is being used. Thus, in the present proceedings, it is contended that consideration may be given to the shape of the beer bottle in which the BAREFOOT RADLER beer is sold and to contrast that with the traditional wine bottle such as those containing the BAREFOOT wine. Consideration, it was further submitted, could be given to the emphasis placed by Lion Nathan upon the manner in which it has presented its product as a refreshing drink. Both the cardboard carton of its " six pack " and the individual beer bottles themselves thus prominently state that the beer is said to be " phenomenally refreshing ". 92 In support of the submission that reliance may be placed upon not only the sign being used by Lion Nathan but also upon a wider ranger of considerations, including the manner in which that sign is being used and the differences between the competing products, reference was made to Woolworths Ltd v Registrar of Trade Marks (1998) 42 IPR 615. However, the first question cannot be addressed in isolation from the second. The closer the relationship between the services and particular goods, the more likely any similarity in marks will prove deceptive. The examples offered by Lockhart J in Caterpillar Loader Hire make the point. There are extremely close associations between the sale of data processing equipment and the provision of programs for its operation, the sale and sewing of curtains and the sale and tailoring of clothes. Because the relevant service is so specialised, and focused on the particular goods, it would be natural for any member of the public to treat a similarity of name as being an indication of a link between the origin of the goods and that of the service. At the other extreme, the use of even the same name, by traders in different industries, would not usually cause members of the public to assume a link between the traders. On appeal, the decision of Wilcox J was upheld: Registrar of Trade Marks v Woolworths Ltd [1999] FCA 1020 , 93 FCR 365. 93 Reference may also be made to Tavener Rutledge Ltd v Specters Ltd [1959] RPC 355. Lord Evershed MR there referred to the prospect of a plaintiff being able to establish the mark of a defendant causing confusion. If the plaintiffs establish that then, as I have said, the defendants may still have another line of defence and may say, "Though it may generally be as you say a mark likely to cause confusion, in fact the way I have used it and in the circumstances and environment in which I have used it, it is not likely to cause confusion. 94 If, and by way of example, the BAREFOOT wine and the BAREFOOT RADLER beer were to be sold at the same retail outlet, and if the wine and beer were to be displayed for sale in the manner common to those outlets, it is not considered that a consumer would be likely to conclude that they both came from the same source. The manner in which the BAREFOOT wine and the BAREFOOT RADLER beer are presented for sale in liquor outlets, in particular, is such as to negative any likelihood of deception or confusion. A comparison of the two marks may give rise to a deceptive similarity; but any such confusion would be removed when the two products are displayed and stored separately (for example) in a liquor retail outlet. In March 2008 Mr Simpson visited the retail outlets for a number of liquor stores in Pyrmont and Camperdown in Sydney. Exhibited to his Affidavit was a series of photographs revealing the promotion and storage of the BAREFOOT RADLER beer. Those photographs revealed that beer being stored in the coolroom together with other beers and offered for sale in those fridges storing other beers. It is considered that it is this degree of segregation and separation from wines, together with the manner in which the BAREFOOT RADLER beer is stored and sold and consumed, which assists a conclusion that there is no likelihood of deception or confusion. 95 The fact that both products have in common the word " BAREFOOT " is all that they have in common. And that is a word which has been used in respect to a diverse range of goods and services. The submissions advanced by Lion Nathan are accepted. The " circumstances and environment " in which Lion Nathan uses the sign as pleaded is such as to bring it within the concluding words to s 120(2). 96 Albeit of limited assistance, the internet search undertaken by Mr Campbell exposed the word " BAREFOOT " being used in a variety of contexts. A " Buying Guide " annexed to an Affidavit of Mr Raymond, an industry consultant retained by Gallo Winery , also provided instances of beer and wine bearing the same name. A commonality of name, by itself, is not considered to be a sufficient factual basis upon which a consumer would be likely to be deceived or confused. 97 Even though it may be accepted that different minds may have reached a different factual conclusion as to whether the sign of Lion Nathan is " substantially identical with , or deceptively similar to " that of Gallo Winery , it is considered that if reference may be made to the manner in which Lion Nathan actually uses its sign, there is little doubt that Lion Nathan's use of the sign as pleaded is " not likely to deceive or cause confusion " within the meaning of the concluding words to s 120(2). 98 That conclusion would only be further reinforced if Lion Nathan could also place reliance upon its sign being the combination of the words and the image of the bare foot. Even in the context of reliance being placed upon the concluding words to s 120(2), however, the Amended Defence " says that use of the Respondent's BAREFOOT RADLER sign in its intended manner is not likely to deceive or cause confusion ". 100 The Cross-Claim in the present proceedings asserts that during the period 7 May 2004 to 8 May 2007 there was no use of the BAREFOOT trade mark in Australia in relation to wines. The Cross-Claim further contends, in the alternative, that there was no use of the trade mark " in good faith " during the period 2004---2007. Not surprisingly, Gallo Winery denies that there was a non-use, denies that there was not a use in good faith and further contends that, if there was a non-use, there was " an obstacle to the use of the Trade Mark during that period ". ... (4) An application under subsection (1) or (3) (non-use application) may be made on either or both of the following grounds, and on no other grounds: ... (b) that the trade mark has remained registered for a continuous period of 3 years ending one month before the day on which the non use application is filed, and, at no time during that period, the person who was then the registered owner: (i) used the trade mark in Australia; or (ii) used the trade mark in good faith in Australia; in relation to the goods and/or services to which the application relates. Section 7 further defines that which constitutes the " use " of a trade mark. An " authorised use " of a trade mark is taken to be a use of the trade mark by the owner: s 7(3). Section 8 defines that which constitutes an " authorised use ". See: Yau's Entertainment Pty Ltd v Asia Television Ltd [2002] FCA 338 at [75] ---[81], [2002] FCAFC 78 ; 54 IPR 1 at 16 per Hely J (Sundberg and Finkelstein JJ agreeing). The term " during " does not mean " throughout " so as to require a regular and continuous course of conduct for the whole period: NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26 at 44 per Gummow J. See: Luck J, Case Note (1990) 1 IPJ 63. 102 The use of a trade mark is an authorised use only to the extent that the user uses the trade mark " under the control of the owner of the trade mark ": s 8(2). The essential requirement is that there must be a connection in the course of trade with the registered proprietor: Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56 ; (1977) 137 CLR 670. Use by either the registered proprietor or a licensee (whether registered or otherwise) will protect the mark from attack on the ground of non-user, but it is essential both that the user maintains the connexion of the registered proprietor with the goods and that the use of the mark does not become otherwise deceptive. Conversely registration of a registered user will not save the mark if there ceases to be the relevant connexion in the course of trade with the proprietor or the mark otherwise becomes deceptive. There is, in relation to the comparable provisions in the Trade Marks Act 1938 (Eng), authority to the effect that in order to qualify as such use there must be a real or genuine use in a commercial sense, rather than colourable activity and "token" use designed to lead trade rivals to think that the registered proprietor was using its mark in a way which gave it the protection of the legislation: see Imperial Group Ltd v Philip Morris & Co Ltd [1982] FSR 72 ; KODIAK Trade Mark [1990] FSR 49; D R Shanahan, Australian Law of Trade Marks and Passing Off (2nd ed, 1990), pp 272-274. 104 If an allegation is made that there has been a non-use of a trade mark under s 92(4)(b), the burden is on the opponent to rebut the allegation of non-use: s 100(1)(c). And that burden can be discharged if there has been " an obstacle to the use of the trade mark ": s 100(3)(c). (3) For the purposes of paragraph 1(c), the opponent is taken to have rebutted the allegation that the trade mark has not, at any time during the period referred to in that paragraph, been used, or been used in good faith, by its registered owner in relation to the relevant goods and/or services if: ... (c) the opponent has established that the trade mark was not used by its registered owner in relation to those goods and/or services during that period because of circumstances (whether affecting traders generally or only the registered owner of the trade mark) that were an obstacle to the use of the trade mark during that period. See: McKeough J, Stewart A and Griffith P, Intellectual Property in Australia (3 rd ed, 2004) at [19.76]. 106 To fall within s 100(3)(c) it is not sufficient for the owner of a trade mark to point to circumstances peculiar to himself. There must be some circumstance which in a practical business sense caused the non-use of the mark: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 , 107 FCR 166. It is now not necessary to show unusual or abnormal, as opposed to normal or usual, trading conditions (a difficult concept to comprehend and apply) before s 100(3)(c) can operate. Ordinary incidents of the trade cycle commonly encountered by traders, as well as abnormal ones, are now within the provision. Further, it is clear that a circumstance of a trading nature that has an impact only on the registered owner can also now be relied on to justify non-use of the mark. [47] In the context of s 100(3)(c), there are, however, good grounds for reading "circumstances" as not embracing any event of any kind. The circumstances must be "an obstacle to the use of the trade mark by the registered owner". This suggests that they must arise from or comprise events external to the registered owner in the sense of not having been brought about by the voluntary act of the owner. [48] But if any circumstance external to the owner, in the sense of being a circumstance not brought about by the voluntary act of the owner, is within the provision, the Court would be drawn into inquiries of a kind that it is difficult to accept were in the contemplation of the Parliament. Financial impecuniosity could excuse non-use of a trade mark, irrespective of how enduring and intractable the owner's impecuniosity might be. Illness of the registered owner could also excuse non-use of the registered trade mark (as is the contention of the applicants here). A falling out between joint registered owners of a mark that disrupts the use by either of the mark might also be capable of excusing non-use. In all such situations, questions could arise requiring investigation by the Court into whether the obstructing circumstances were due to the conduct of the registered owner. [49] If the Parliament intended any circumstance external to the owner to be capable of providing an excuse for non-use, little purpose would be served by the words in parenthesis in s 100(3)(c), namely, "whether affecting traders generally or only the registered owner of the trade mark". The presence of these words is some indication that the circumstances comprising an obstacle to use of the mark must not only arise externally to the registered owner, but must also be circumstances of a trading nature. His Honour considered that s 100(3)(c) was " sufficiently obscure " to occasion recourse to extrinsic material, including the Second Reading Speech . [55] In my opinion, circumstances within s 100(3)(c) will only exist when events arise that are capable of disrupting trade in the area of commercial activity in which goods bearing the registered owner's mark are traded. For the statutory excuse to be made out, those circumstances must cause (in a practical business sense) non-use of the particular mark by the owner, whether or not they have an impact on any persons other than the owner of that mark who are also involved in that same area of commercial activity. There must be a causal link shown between the relevant circumstances and the mark's non-use. This requirement arises from the fact that s 100(3)(c) creates an excuse only where the mark has not been used by the registered owner "because of" circumstances etc. It will not assist the opponent to removal to show the existence of an impediment to use of the kind referred to in s 100(3)(c) if he does not also establish that, but for that impediment, he would have used the mark. Compare Re James Crean & Son Ltd's Trade Mark [(1921) 38 RPC 155] at 162. [56] Circumstances that do not have a trade character but which only affect a mark owner in his personal character, such as illness afflicting the owner of the mark that is sufficiently disabling to prevent the owner using the mark, can never therefore found an answer within s 100(3)(c) to an application for removal of the mark for non-use. 107 An overseas manufacturer uses a trade mark in Australia if he " projects " his goods into the course of trade in Australia, by means of sales to Australian retail houses, goods bearing his mark and the goods bearing his mark are displayed or offered for sale or sold in Australia: Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd [1967] HCA 51 ; (1967) 116 CLR 254 at 271. USE OF THE BAREFOOT TRADE MARK DURING 2004---2007? 109 Prior to the acquisition of the trade mark in January 2005 by Gallo Winery , there is no evidence that the then registered owner (Mr Michael Houlihan) exported BAREFOOT wine to Australia or caused it to be sold in Australia. And as from January 2005 to May 2007, there is no evidence that Gallo Winery itself exported BAREFOOT wine to Australia or caused it to be sold or offered for sale in Australia. 110 Notwithstanding the fact that neither Mr Houlihan nor Gallo Winery sold or offered for sale BAREFOOT wine in Australia during the 2004---2007 period, it is nevertheless contended by Gallo Winery that there has been a relevant use of the registered mark BAREFOOT during the period from 7 May 2004 to 8 May 2007. 112 The fact of actual sales during this period cannot be denied. The wine sold during that period -- at least in part -- can be traced back to wine originally exported from the United States to Germany and later imported into Australia. 113 The BAREFOOT wine which ultimately found its way to Australia had initially been exported by Barefoot Cellars in the United States to Germany in 2001. The German purchaser, Einig-Zenzen GmbH & Co, had placed the order for 60 cases of wine on 12 February 2001 and the wine had been shipped from the United States on 14 February 2001. Barefoot Cellars , by 2000, had arrangements in place for the international distribution of wine under the BAREFOOT brand with a number of companies, one of them being Einig-Zenzen. 114 What happened to that wine after its arrival in Germany is not known, except to the extent that some of those wines were later imported by Beach Avenue Wholesalers into Australia in July 2002. To the limited extent that it assumes any relevance, the fact that the wine shipped to Australia was part of the shipment to Germany was evidenced by the serial number disclosed in the approval given by the United States Department of Territory on 14 February 2001 to the export of that wine corresponding with the serial number on the carton of wine purchased in September 2007 from Beach Avenue Wholesalers . 115 That wholesaler thereafter sold some quantity of the wine imported from Germany. The first sale took place prior to May 2004, namely on 14 March 2003. During the relevant period, and without being exhaustive, there was a sale of a dozen bottles of BAREFOOT Red Zinfandel to a tavern in Queensland in October 2004. There was also a sale of three bottles of the same wine in Victoria in December 2004. There was a cash sale of a single bottle in July 2005. 116 In addition to these sales there was the supply of BAREFOOT wine during the non-use period to a company related to Beach Avenue Wholesalers , Centre Euro Wines . Centre Euro Wines was supplied some wine free of charge and some was supplied at a price comparable to other sales. 117 In addition to these sales, there was also a purchase of two dozen bottles in September 2007 at the instigation of the solicitors for Gallo Winery. Although that purchase was outside the three year period concluding in May 2007, it was the serial number on this carton of wine which corresponded with the United States Department of Treasury approval. OFFERING FOR SALE? 119 This contention attracted some argument. 120 The argument, it is considered, was somewhat surprising. 121 If the inference may properly be drawn, the importance of the admissibility of the solicitor's search of archived material assumes less (if any) significance. 122 It is considered that the inference may be drawn and should properly be drawn. Wine was imported by Beach Avenue Wholesalers and thereafter sold throughout the 2004---2007 period. There was not an isolated sale to an isolated purchaser on an isolated occasion. The inference that the BAREFOOT wine was offered for sale during the non-use period may safely be drawn from the sales both during and after the non-use period. And that inference, it is considered, may be drawn even though little is known as to the business in fact conducted by Beach Avenue Wholesalers other than the fact that its letterhead includes the statement: " Importers & Exporters of Australian and International Wines, Spirits & Beer ". Nothing is known as to whether the wholesaler has a shop-front or the manner in which its products are displayed, if at all. Notwithstanding those shortcomings, it nevertheless remains a wholesaler which sells wines and, by way of inference, offers its products for sale. 123 Although it may thus assume little continuing significance, it should be noted that had it been necessary to resolve the question as to the admissibility of the solicitor's search, that evidence would have been rejected. The results of the search sought to establish that there were in fact available brochures which had been archived and which offered BAREFOOT wine for sale during the 2004---2007 period. Reliance upon the results of internet searches became necessary because a subpoena issued by Lion Nathan for the production of copies of such brochures resulted in no copies being produced. Access to archived material, on one view, thus became necessary. 124 The solicitor (Mr Gregory Weeks), whose evidence was the subject of objection by Lion Nathan , had accessed a website for Beach Avenue Wholesalers and thereafter accessed what was described as an " Internet Archive WayBack Machine ". Visitors to the Wayback Machine can type in a URL, select a date range, and then begin surfing on an archived version of the Web. Having accessed the facility, two brochures were said to have been found -- one dated May 2004 and the other dated February 2007. Those brochures offered wines for sale, including " Barefoot 2000 Zinfandel ". 125 In support of the admissibility of the results of the internet search evidencing not only what was found if the prompts were followed, but also in support of the proposition that those results were also evidence of what was set forth, reliance was placed by Gallo Winery upon both s 69(1) and (2) and s 146 (and s 147) of the Evidence Act 1995 (Cth). (2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made: (a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact; or (b) 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 fact. ... 146 Evidence produced by processes, machines and other devices (1) This section applies to a document or thing: (a) that is produced wholly or partly by a device or process; and (b) that is tendered by a party who asserts that, in producing the document or thing, the device or process has produced a particular outcome. (2) If it is reasonably open to find that the device or process is one that, or is of a kind that, if properly used, ordinarily produces that outcome, it is presumed (unless evidence sufficient to raise doubt about the presumption is adduced) that, in producing the document or thing on the occasion in question, the device or process produced that outcome. 126 It is not considered that the brochures accessed by Mr Weeks " is or form [ed] part of records belonging to or kept by a person, body or organisation in the course of, or for the purpose of, a business " within the meaning of s 69(1) ; nor is it considered that the representations contained within those brochures were made either " by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact" or "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 fact " within the meaning of s 69(2). 127 Nothing is known as to the " business " of the " Internet Archive Wayback Machine " other than the hearsay statement itself that it " allows people to visit archived versions of Web sites ". And nothing is known as to the knowledge of the persons who recorded the information. 128 Section 146 , it should further be noted, does not provide an exception to the hearsay rule. It simply provides a mechanism of proof. (1996) 22 Mon LR 166, 168. Section 146 , it is considered, does not assist Gallo Winery . The difficulty confronting the admissibility of the brochures is the hearsay nature of the representations contained within those brochures and the failure to satisfy the requirements of s 69(1) and (2). 129 Although it remains unnecessary to resolve this further submission, the reliability of the results of the web search undertaken by Mr Weeks was also open to serious doubt and raised questions as to who it was that recorded the information and how accurately that task was undertaken. The portfolio is out of premium products from Germany, bah blah..........Please provide General discription. BAW distributes premium wines, beer and spirits throughout Australia. Our customers are retailers, restaurants, bars and clubs. The portfolio is out of premium products from Germany, bah blah..........Please provide General description. It is just that the product of those tasks remains, it is considered, inadmissible -- or, even if admissible -- of little reliability. 130 But it was not necessary for Gallo Winery to rely upon Mr Weeks' searches -- the inference of BAREFOOT wine being offered for sale during the non-use period was otherwise available to be drawn from the fact of sales. AUTHORISED USE BY BAREFOOT CELLARS FOR MR HOULIHAN? It is also accepted that Beach Avenue Wholesalers offered that wine for sale during that period. 132 The first contention advanced on behalf of Gallo Winery was that the prior registered owner of the trade mark, Mr Houlihan, licensed it to Barefoot Cellars and exercised quality control over the BAREFOOT wine to which the mark was applied. The fact that such wines were sold and offered for sale by Beach Avenue Wholesalers during the relevant period -- it was submitted -- was sufficient to constitute a use of the mark by Barefoot Cellars and, in turn, Mr Houlihan. That was a " use ", so it was contended, by the then registered proprietor during the non-use period. 133 Neither Mr Houlihan nor any officer of Barefoot Cellars knew that the BAREFOOT wine exported to Germany in 2001 may ultimately find its way to Australia. But knowledge on the part of Mr Houlihan or Barefoot Cellars that its wine would or may find its way to Australia and be offered for sale, is said by Gallo Winery to be irrelevant. But when it is said that a trade mark is used to distinguish the goods of one man from those of another, that abbreviated statement obviously does not refer to the goods of the owner of the mark in the sense of goods which he owns or possesses. After the goods have been sold by him his mark may still, using the definition of trade mark in the Act, be used in relation to those goods for the purpose of indicating a connexion in the course of trade between them and him, the registered proprietor of the mark. The manufacturer who sells goods, marked with his mark, to a warehouseman, wholesaler or retailer does not, in my view, thereupon cease to use the mark in respect of those goods. The mark is his property although the goods are not; and the mark is being used by him so long as the goods are in the course of trade and it is indicative of their origin, that is as his products. Goods remain in the course of trade so long as they are upon a market for sale. Only when they are bought for consumption do they cease to be in the course of trade. 135 The decision of Windeyer J, it may be noted, was affirmed by Barwick CJ, McTiernan, Taylor and Owen JJ. Its denotation is not limited by any concept of the physical use of a tangible object and we have no doubt that when an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer. Indeed, in this case, the respondent is the only person who has the right to use the mark and the retailer to whom the goods have been sold for re-sale does not, in any relevant sense, use it. : [1967] HCA 51 ; (1967) 116 CLR 254 at 271. Further, it is conceded that there is a use by such a manufacturer of his mark where the property in the goods sold by him by wholesale to traders in this country does not pass until their arrival into Australia. It would, in our view, be an extraordinary result if the maintenance of the Australian trade mark of an overseas manufacturer who is projecting goods of his manufacture on to the Australian market by means of sales to retail houses here can be made to depend upon whether the property in the goods the subject of such sales passes on shipment or upon or after their arrival in Australia. : [1967] HCA 51 ; (1967) 116 CLR 254 at 271---2. See also: Colman W J, Use of a Trade Mark in Australia (1968---1971) 6 Syd LR 52. Each time that the product is "traded" there will be, for the purposes of the 1995 Act, a use of the sign by the first trader to distinguish that trader's dealing with the product. The "ultimate consumer", submits Gallo Winery, was the Australian purchaser. 137 Notwithstanding the views expressed by those authors, it is not considered that there could have been a " use " of the BAREFOOT trade mark during the 2004---2007 period by the registered owner simply by reason of the fact that BAREFOOT wine happened to be offered for sale or was in fact sold in Australia during that period. 138 There was certainly no agreement or other arrangement as between either Mr Houlihan or Barefoot Cellars and Beach Avenue Wholesalers whereby the BAREFOOT wine was to be imported, whether from Germany or elsewhere, and later sold or offered for sale in Australia. 139 In the circumstances of the present proceedings, it is not considered that there was any " use " of the BAREFOOT trade mark by the registered proprietor in Australia arising merely by reason of the fact that the BAREFOOT wine, or some of the wine exported originally to Germany, by some unexplained circuitous route ultimately arrived on Australian shores and was thereafter available for sale in Australia. 140 In Estex Clothing the London manufacturer knew that its goods had been sold into Australia. But Gallo Winery contends that the result in that decision would have been the same even had the manufacturer not known to whom the goods were sold or the market into which they were to be sold. So much, contends Gallo Winery , is supported by the reliance placed by Windeyer J on Jackson & Co v Napper (1886) 35 Ch D 162 , 4 RPC 45 at 57---9, a decision which Windeyer J observed " contains much that is instructive ". Now, in considering that, I do not think I can do better than refer to what Lord Westbury said in McAndrew v. Bassett [4 DJ&S 380] with respect to the essential ingredients of a trade-mark. He says [4 DJ&S 384]: "An element of the right to the property in a trade-mark may be represented as being the fact of the article being in the market as a vendible article, with that stamp or trade-mark, at the time when the defendants imitate it. The essential ingredients for constituting an infringement of that right probably would be found to be no other than these : first, that the mark has been applied by the plaintiffs properly (that is to say), that they have not copied any other person's mark, and that the mark does not involve any false representation ; secondly, that the article so marked is actually a vendible article in the market ; and, thirdly, that the defendants, knowing that to be so, have imitated the mark for the purpose of passing in the market other articles of a similar description. " It seems to me, according to that passage from Lord Westbury's judgment, that the trade-mark has been used in England if you find that the articles marked with it have been actually vendible articles in the market in England ; and that is the test which I proceed to apply to the various classes of goods which remain. Gallo Winery's contention is that knowledge or intention on the part of the registered proprietor is not determinative; that which matters is whether its goods, to which its trade mark had been applied, were on the market at all. The trade mark, it is contended, is used in Australia if the product to which the mark is applied is on the Australian market. 141 The decision in Estex Clothing , it is considered, does not support such a contention so widely expressed. 142 Rejected in Estex Clothing was the proposition that the fact that property had passed in the goods outside of Australia was sufficient in itself to establish that there had not been a use of the trade mark in Australia. And, as is correctly submitted by Lion Nathan, if the sale by the retail house of the goods bearing the overseas trader's mark was sufficient on its own to constitute use by the overseas trader, there would have been no reason for the Full Court to have gone on to emphasise the acts of the overseas trader in projecting the goods into the Australian market. 143 In the circumstances of the present proceedings, and leaving intention or knowledge aside, there are no objective criteria comparable to those that existed in Estex Clothing such that it can be concluded that the registered proprietor of the trade mark " projected " its goods into any market other than Germany. 144 Such authorities as have discussed Estex Clothing have not confronted the factual situation where goods have been exported to one country and thereafter arrived in Australia without the knowledge of the registered owner of the trade mark, or without any agreement or understanding being in place whereby the goods exported were to make their way or may make their way into Australian trade, or without any objective criteria such that it could be concluded that goods had been projected into the Australian market. 145 In Estex Clothing the goods exported were being forwarded from England to Australia, and it is not considered that the language employed by their Honours should be construed as contemplating anything beyond what they literally said. By exporting the goods from England into Australia the " overseas manufacturer projects into the course of trade in this country ... goods bearing his mark ". Such other authorities also seem to contemplate that there has to be an export of goods from overseas into Australia. See also: Asia Television Ltd v Yau's Entertainment Pty Ltd (No 2) [2000] FCA 838 at [9] , [2000] FCA 838 ; 49 IPR 264 at 268 per Gyles J. 146 In the present proceedings there was thus no " projection " of the BAREFOOT wine by the registered proprietor of the BAREFOOT trade mark into the Australian market. The only projection of those wines by the registered proprietor into any market was the export of that wine from the United States in February 2001 into the German market. 147 Estex Clothing , it is considered, provides no support for a conclusion that the export of wine from the United States into Germany in February 2001 was also the projection in a comparable manner of that wine into the Australian market as it occurred over a year later in July 2002. 148 This conclusion is consistent with the interpretation of Estex Clothing provided by Aickin J in Pioneer Kabushiki Kaisha v Registrar of Trade Marks [1977] HCA 56 ; (1977) 137 CLR 670. Ltd. v. Ellis and Goldstein Ltd. decided that a retailer who sold imported goods bearing an Australian registered trade mark did not use the mark, and that therefore a "distributor" did not use a mark which was already on the goods. In my opinion the Estex Case is not authority for that proposition. It is authority for the proposition that the foreign owner of an Australian mark uses it in Australia when he sells goods for delivery abroad to Australian retailers and those retailers import them into Australia for sale and there sell them. It demonstrates that such a situation does not differ from that where he sells the goods for delivery in Australia to the retailer or where he advertises the goods in Australia. The Explanatory Memorandum to the then Trade Marks Bill 1995 (Cth) referred to the fact that the Bill incorporated changes implementing the report of the Working Party and further stated that " noteworthy provisions of the Bill include [d] ... recognition of authorised use of a trade mark, that is, use of a trade mark by a person other than its owner, but under the control of the owner ": Explanatory Memorandum at 1 (Senate, 1995). Neither the report of the Working Party nor the Explanatory Memorandum provide much more clarification of the word " control " as used in s 8 of the 1995 Act -- but they do support a conclusion that a registered proprietor does not use a mark in the Australian market unless he retains some connection with or control over the goods when they enter that market. 150 In the present proceedings it is considered that there was no " authorised use " of the trade mark by Barefoot Cellars during the non-use period. 151 Whatever use there had been of the trade mark by its registered proprietor in the course of trade, that use had ended outside Australia. See: Carnival Cruise Lines Inc v Sitmar Cruises Ltd (1994) 120 ALR 495 at 510 per Gummow J. BEACH AVENUE WHOLESALERS AS AN AUTHORISED USER FOR MR HOULIHAN? This, together with the quality control exercised by Mr Houlihan, it is submitted, made Beach Avenue Wholesalers an " authorised user " of the mark within the meaning of s 8(1) of the 1995 Act. Its use of the mark, it is contended, is an " authorised use " within the meaning of s 8(2). (2) The use of a trade mark by an authorised user of the trade mark is an authorised use of the trade mark to the extent only that the user uses the trade mark under the control of the owner of the trade mark. (3) If the owner of a trade mark exercises quality control over goods or services: (a) dealt with or provided in the course of trade by another person; and (b) in relation to which the trade mark is used; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (4) If: (a) a person deals with or provides, in the course of trade, goods or services in relation to which a trade mark is used; and (b) the owner of the trade mark exercises financial control over the other person's relevant trading activities; the other person is taken, for the purposes of subsection (1), to use the trade mark in relation to the goods or services under the control of the owner. (5) Subsections (3) and (4) do not limit the meaning of the expression under the control of in subsections (1) and (2). 154 The " quality control " relied upon by Gallo Winery was the control originally exercised by Mr Houlihan when he owned Barefoot Cellars , and later his retention as a consultant, his responsibilities including the monitoring of the quality of the wine. 155 Section 8(3), contends Gallo Winery , is to be contrasted with s 8(4) and is to be given a more expansive operation. The latter sub-section contemplates circumstances where the " owner of the trade mark exercises financial control over " the " trading activities " of the person who deals with or provides the goods in relation to which the mark is used. That degree of control, it is said, emphasises the more expansive terms of s 8(3) where involvement in the trading activities is not required, but rather the more broadly expressed requirement that there be an exercise of quality control over goods. 156 It matters not, contends Gallo Winery , that Beach Avenue Wholesalers had no idea that such control had been exercised, because of the expansive terms of s 8(3). This provision, it was said, was to be contrasted with s 8(4) which is directed to control over the wholesaler -- as opposed to control over the goods, as required by s 8(3). 157 Even though s 8(3) may be given a more expansive operation than s 8(4), it nevertheless remains necessary to satisfy the requirements of that sub-section that the owner of the trade mark continues to " exercise quality control ". The provision is not expressed in terms of an owner having at some time in the past " exercised quality control "; the provision is expressed in the present tense of an owner who " exercises quality control ". 158 At no time during the period 2004---2007, or for that matter at any point of time after the wine was shipped from California to Germany in 2001, did Mr Houlihan exercise any quality control over the wines exported. 159 The second of the two ways in which Gallo Winery contends that it has used its trade mark during the period 2004---2007 is rejected. 161 During the non-use period, namely at a time commencing in about September/October 2006, there were discussions between officers of Gallo Winery and McWilliams Wines . At a meeting in Sydney in October 2006, an officer of Gallo Winery broached the prospect of a licensing arrangement using wine from McWilliams Wines or an import/distribution structure with wine from California. McWilliams Wines at that meeting was " certainly interested in the BAREFOOT opportunity in Australia and [thought it was] a good concept for this market". The question as to whether the wine to be sold in Australia was to be sourced from Australia or California was left " for a later occasion ". The " main point of contention was whether McWilliams Wines would produce and distribute the wine (as its executives wanted) or only distribute it ". 162 By March 2007 there were further discussions that centred on " the prospect of launching BAREFOOT wine in Australia under the label 'BAREFOOT ON THE BEACH' ". And in March 2007 Gallo Winery were informed that McWilliams Wines had allocated some of its wine production to BAREFOOT wine. 163 These negotiations, contends Gallo Winery , constituted a use of the BAREFOOT trade mark in Australia. Such negotiations, contends Gallo Winery , provide evidence which is at least as strong, if not stronger, than that which constituted a use in Buying Systems (Australia) Pty Ltd v Studio Srl [1995] FCA 1063 ; (1995) 30 IPR 517. 164 In Buying Systems there was activity aimed at setting up a new fashion magazine. That activity included obtaining business cards, printing letterheads, and obtaining advertising space. The activities of the opponent were sufficient to constitute a relevant use of the mark in Australia for the purpose of indicating or so as to indicate a connection in the course of trade between it and the new magazine. This is not a case where those activities occurred without any existing intention to offer or supply the magazine in trade. The case is quite different from activities of the nature discussed in Moorgate. As I have already indicated, the material before this court is far more extensive than that which was before the registrar. 165 The reference to Moorgate is a reference to Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) [1984] HCA 73 ; (1984) 156 CLR 414. That evidence indicates that there were at least three occasions on which such cigarette packets and advertising material were so delivered. At the times when those items were so delivered, there was no intention on the part of Loew's that it would itself trade in the goods in Australia. Nor, for that matter, had it been decided what name would be used if Philip Morris were, under licence from Loew's, to commence to manufacture and market the goods in Australia at some indefinite future time. ... In the present case, there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade. There was no local use of the mark as a trade mark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used. The cigarette packets and associated advertising material were delivered to Philip Morris to demonstrate what Loew's was marketing in other countries and what Philip Morris might market, under licence from Loew's, if it decided to manufacture and trade in the goods in Australia and to use the mark locally at some future time. There was no relevant trade in the goods in Australia and the delivery of the cigarette packets and associated material to Philip Morris did not, in the circumstances, constitute a relevant user or use in Australia of the mark "KENT GOLDEN LIGHTS" for the purpose of indicating or so as to indicate a connexion in the course of trade between the new cigarettes and Loew's. 166 Buying Systems , it is considered, provides no support to the case now sought to be advanced by Gallo Winery. Reference may also be made to NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26. Gummow J there concluded that there had been a use of the mark in issue by reason of such facts during the statutory period as the provision of art work to enable the manufacture of packaging and the production of promotional videos. 167 In the present proceedings there were undoubtedly discussions between Gallo Winery and McWilliams Wines as to the launch in Australia of BAREFOOT wine. But by May 2007 the negotiations had not proceeded beyond just that, negotiations. Compare: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 at [40] , [2001] FCA 261 ; 107 FCR 166 at 179. There was unquestionably an intention to launch BAREFOOT wine in Australia " in around September 2007 ". But, and unlike the position in Buying Systems , there had been no step taken during the non-use period comparable to the placing of advertisements or the printing of letterheads or business cards. The only step which had been taken was the unilateral step taken by McWilliams Wines to allocate some of its wine. Gallo Winery was pleased that such a step had been taken as it preserved the possibility of a launch in September 2007. That was a step taken, however, by McWilliams Wines and not by Gallo Winery. See also: Burrell R, The Requirement of Trade Mark Use: Recent Developments in Australia (2005) 16 AIPJ 231 at 238. 169 Moorgate Tobacco is not authority for the proposition that an intention alone to use a trade mark constitutes a use sufficient to defeat an application for removal for non-use. AN OBSTACLE: THE LOGAN WINES TRADE MARK? This obstacle was the fact that Logan Wines Pty Ltd ( Logan Wines ) had a registered trade mark which it considered was remarkably similar to the BAREFOOT design which Gallo Winery had acquired from Barefoot Cellars . 172 Notwithstanding the difference, Gallo Winery contends that there was an " obstacle " to its use of its trade mark until it acquired the right to use the image previously registered to Logan Wines . It should also be noted that even prior to the acquisition by Gallo Winery of Grape Links Inc in January 2005, Barefoot Cellars and Logan Wines had been contesting their respective rights. Logan Wines had successfully opposed Barefoot Cellars ' application to register its bare foot design as a trade mark in New Zealand and had warned Barefoot Cellars not to use the design in Australia. 173 Negotiations as between Gallo Winery and Logan Wines commenced in January 2005 and by June 2006, Logan Wines had agreed to cease using its bare foot design in the European Union. Negotiations as to the use of the design in Australia, New Zealand and Mexico occurred from August 2006 to September 2007. Those negotiations concluded in September 2007 when an agreement was reached with Gallo Winery paying " a confidential six figure sum " for the rights to the trade mark. 174 Lion Nathan , however, contends that there was no " obstacle ". Indeed, Lion Nathan relies upon the release on 14 September 2007 by McWilliams Wines of 12,000 bottles of the cabernet/merlot and semillon/sauvignon blanc wines on the Australian market and points to the fact that that wine was labelled without the image of the bare foot and labelled relevantly with the word BAREFOOT. This label, according to Mr Kalabokes, a Vice President of Gallo Winery , was not designed by Gallo Winery . The label, described as a " basic label ", was designed by McWilliams Wines and approved by Gallo Winery . The " design process " was " very short ". 175 Mr Kalabokes also gave evidence that the wine was so marketed to increase the leverage that could be placed upon Logan Wines in negotiations to assign its trade mark to Gallo Winery . The marketing of the wine without the image was said to be a demonstration that Gallo Winery could market its wine in Australia with or without the use of the image. But the strategy, according to Mr Kalabokes, was always for Gallo Winery to use the image of the bare foot on its wine together with its trade mark. 176 Although Mr Kalabokes gave no evidence of any conversation with Mr Logan, the Deputy Chairman of McWilliams Wines (Mr Kevin McLintock) did give an account of a conversation which he said took place in July 2007. The parties to that conversation included Mr Kalabokes and himself and there was a telephone " hook-up " with Mr Logan. Relevantly, Mr Kalabokes informed Mr Logan that there was to be a release of BAREFOOT wine and that the wine would be sold " with or without him ". The response of Mr Logan was that he would review his position and put a " counter-offer " to Gallo Winery . 177 It is accepted that the reason for the sale of the BAREFOOT wine without the image of the bare foot was for the purpose stated by Mr Kalabokes, namely to use the fact of such sales as " negotiation leverage to demonstrate to Mr Logan we're going to be in Australia with him or without him ". 178 Even so, the fact remains that there was the ability to use the trade mark -- without the image of the bare foot -- as demonstrated by the release of wine in September 2007. It matters not whether the release of the wine in September 2007 was regarded as a " launch " of the product or a " placement for market research purposes ". --- Yes, the word "undertook a launch", I think is incorrect. That was more placement for market research purposes. A launch of a wine of this size would be significantly greater than that. Thank you? --- So the word "launch" is wrong. You would prefer the word "placement"? Is that so? --- Placement, yes. However the release of the wine be described, and whatever may have been the reason for the release of that wine, the fact that it was released demonstrates that there was no obstacle to the use of the trade mark. Had Gallo Winery wanted to use its trade mark, namely the word " BAREFOOT ", it could readily have done so. 179 The absence of any relevant " obstacle ", Lion Nathan contends, was also demonstrated by both the placing of that wine on the market and the fact that there was always available to Gallo Winery the ability to obtain from McWilliams Wines a supply of wine that could be similarly bottled. The ability to obtain the supply of wine was not confined to 2007 and could have been obtained from as early as 2005 had Gallo Winery so wished. --- I wasn't aware of any difficulty. It's correct, is it not, that if Gallo had wanted to sell in Australia or have McWilliams sell in Australia a wine with a label which just had the word "Barefoot" on it and without an image of a foot, it could have done so a lot earlier than August/September 2007? --- Yes. That's correct. It could have done it in 2005 if it had wanted to? --- If we wanted to, yes, that's correct. This difficulty is the recognition by Mr Kalabokes of the fact that Gallo Winery never had any intention of marketing its BAREFOOT wine in Australia prior to the end of 2007. The strategy which had been developed was to develop the market initially in the United States and thereafter in Europe. That strategy apparently worked well. In 2005, Gallo Winery sold world-wide approximately 942,000 nine litre cases; in 2006 it sold 2.6 million nine litre cases; and in 2007 it sold 4.3 million nine-litre cases. 181 It was only after those markets had been developed, however, that the attention of Gallo Winery was to shift to Australia. And the planned timing of the launch of its BAREFOOT wine was to be late 2007. --- That's correct. He was then further cross-examined as follows: So when you were talking earlier about having an intention to sell in effect which would take effect at the end of 2007 that was only an intention insofar as it had a precondition, namely resolution with Logan. Correct? --- I felt we had a lot of time to work with Mr Logan and we could use the year 2007 to try to make a resolution. But unless and until you got that resolution there was no point setting your sight or identifying a single individual bottle of wine or wine vat for sale to Australia, was there? --- There was a program put in place to start researching the opportunity to start launching a brand here in the latter half of 2007. Our international executive in charge for Gallo sales abroad had begun conversations with the McWilliams chief executive officer. But until you could resolve with Logan you just did not have a path forward, did you? --- Without the foot it was a very difficult launch. ... Is it correct to say that leaving the Logan issue to one side, in any event Gallo's focus was firstly America, correct? --- We chose to focus first on America, correct. Yes, and secondly, Europe? --- Yes, that's correct, we had prior rights in Europe. ... Right, but in any event the --- for its own commercial reasons, Gallo was proposing to develop the market firstly in America, secondly [i]n Europe and thereafter other places in the world, one of which included Australia? --- That's correct That timetable as to which market to concentrate on meant that you would not have been here until the end of 2007 anyway, Logan or no Logan, correct? --- That was our plan, yes. The strategy, according to Mr Kalabokes, " was to have the foot along with the Barefoot name presented on the label. That was our strategy ... The foot very much was the brand and the brand was the foot, Barefoot ". 182 In such circumstances, it is not considered that the non-acquisition of the Logan Wines trade mark until September 2007 provided an " obstacle " to the use by Gallo Winery of the trade mark during May 2004 to May 2007. The non-acquisition of the Logan Wines trade mark may have been an " obstacle " to the use by Gallo Winery of the BAREFOOT trade mark in conjunction with the image of the bare foot had there been any intention on the part of Gallo Winery to launch its product at an earlier point of time. But that was not the intention or the strategy. WHICH MARK WAS BEING USED? 184 Even if there was a use of a mark during the non-use period, Lion Nathan contends that the trade mark which was used by Gallo Winery was not the word BAREFOOT alone -- it was a combination of that word together with the image of the bare foot. 185 Lion Nathan placed reliance upon Colorado Group Ltd v Standbags Group Pty Ltd [2007] FCAFC 184 , 164 FCR 506. Just as in the Colorado case, Lion Nathan contends that the image cannot be divorced from the word such that the words alone had the capacity to distinguish the wine. That device was part of the trade mark use; it had a capacity to distinguish. It did not, in my view, operate as a separate mark, nor as a mere descriptor. It operated as part of a combination with the word "Colorado", in part reinforcing it. In these circumstances, I agree with the primary judge's concluded view that though the word "Colorado" is important in the impression, it cannot be said to have been used alone, rather than as part of a composite mark (with the device) to show origin. Kenny and Gyles JJ gave separate judgments but also agreed with Allsop J. 186 Although it may be accepted that a combination of a word and an image may in some circumstances strip, in the mind of a consumer, the association with a trade source previously associated with the word alone, such is not the present case. Rejected is the contention of Lion Nathan that -- if there was a use of a trade mark during the non-use period -- it was the use of a mark other than the word " BAREFOOT " . If there was a use of a mark during the non-use period, the addition of the image of the bare foot did not have the consequence that the word itself as a trade mark was not also being used. A USE " IN GOOD FAITH "? 188 Lion Nathan denies that any use was a use " in good faith ". Upon its analysis, during the non-use period there were 59 bottles provided to customers, of which 18 were given away free. Forty-three bottles, according to their analysis, were provided to Centro Euro Wines . 189 A single use during the non-use period, it should be accepted, is sufficient: Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 at [14] ---[17], [2001] FCA 261 ; 107 FCR 166 at 171---2 per Drummond J. 190 And " good faith " means a real as opposed to a token use in a commercial sense. It requires a " substantial and genuine " use: NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 14 IPR 26 at 45. In "Concord" Trade Mark [1987] FSR 209 ; Falconer J held that to be bona fide within the meaning of the equivalent provision in the British legislation (s 26 of the 1938 Act) use should be substantial and genuine judged by ordinary commercial standards considered in relation to the trade concerned. ... This approach was endorsed by Drummond J in Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 at [16] , [2001] FCA 261 ; 107 FCR 166 at 171. 191 Lion Nathan's contention is essentially that the limited number of sales of the BAREFOOT wine during the non-use period was not " substantial and genuine ". 192 That contention of Lion Nathan is rejected. If there was a use of the mark during the non-use period, a single use of the mark is sufficient. If there was a use during that period, there is no reason to question the genuineness of the repeated -- albeit limited -- sales in fact made. The Register is that kept by the Registrar pursuant to s 207 of the 1995 Act. 194 Lion Nathan's Cross-Claim seeks an order that the mark be removed. 195 If the condition of exercise of the Court's power has been established, the trade mark should be removed " unless sufficient reason appears for leaving it there ": Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 12 IPR 417 at 481---2 per McLelland J. This seems to me to put the matter the wrong way round. The Stiftung's omission to use the mark for the statutory period entitles the applicant to have the mark removed from the register unless sufficient reason appears for leaving it there. The first is the importance of the public interest -- whether anyone has been deceived or is likely to be if the mark remains on the register; whether, on the other hand, the public has an interest in the preservation of an established mark. The second is the significance of an unimpeached title to the mark and its continuous use in good faith by the person entitled to it. Finally, if the public interest is not adversely affected and such title and use are shown, then technicalities or defects in legal formalities may be overlooked. One aspect of the " public interest " is thus the public interest in the integrity of the Register: NSW Dairy Corporation v Murray Goulburn Co-operative Co Ltd (1989) 14 IPR 75 at 79 per Gummow J. 196 The discretion to allow a mark which has not been used to remain registered is that now set forth in s 101(3) of the 1995 Act. The discretion, it has been said, requires there to be " special facts and circumstances, or an overriding question of public interest ": Figgins Holdings v Beltrami SpA (1998) 46 IPR 411 at 418---19. 197 In applying the terms of the discretion previously conferred by s 23(1) of the Trade Marks Act 1955 (Cth), Foster J observed that it was a discretion only to be exercised in " exceptional circumstances ": Jonathan Ross Sceats v Jonathan Sceats Design Pty Ltd (1990) 17 IPR 28. It is quite clear that the word "may", used in the section, requires that a court, in determining whether relief should be granted, exercise a discretion. Accordingly, a court in considering the matters raised by s 23 may, even though it be satisfied that the desiderata of the section have been made out, nevertheless refrain from ordering the removal of the trade mark in the manner contemplated by the section. The question of the operation of this discretion is considered in Shanahan's Australian Trade Mark Law and Practice, 1982 ed, p 212, under the heading, "Discretion under s 23(1)". The learned author refers to the decision of Kitto J in Carl Zeiss Pty Ltd's Application [1969] HCA 17 ; (1969) 122 CLR 1 , which clearly establishes the existence of the residual discretion in the court, to which I have made reference. It is also clear, as the learned author points out, that the discretion is one of general application and not restricted specifically to sections of the Act. However, he also goes on to say: "It has been said that the discretion should be exercised only in 'exceptional circumstances'; however, there may well be cases where the public interest requires that the registration be retained. " Reference is made to the case of J Lyons & Co Ltd's Application [1959] RPC 120 at 130. I consider that the law is quite clear in this regard: although the discretion not to make an order of removal exists even though the enabling circumstances required by the section are proved, the discretion to refuse such an order is only to be exercised in the exceptional circumstances referred to. 198 The discretion presently conferred by s 101(3) of the 1995 Act, it has been said, confers a " broad discretion ": C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539 at [72] , [2000] FCA 1539 ; 52 IPR 42 at 73. And it is a discretion, it is considered, no longer constrained by any requirement to establish " exceptional circumstances "; it is a discretion which may be exercised " when it is reasonable to do so ": Kowa Co Ltd v Organon [2005] FCA 1282 , 223 ALR 27. Lander J there indicated that he was of the view that it was not reasonable not to remove the mark in issue. There are significant differences in the section considered by the Court of Appeal in Lyons [(1959) 76 RPC 120] and s 101(3). In the English section, regard had to be had to the bona fide use of the trade mark during the relevant period. No such regard is had in s 101(3). It is always dangerous to have regard to a statement of principle in relation to the exercise of a discretion in a section in an Act which is not in pari materia with a section of a second Act for the purpose of considering the way in which a discretion should be exercised in that second Act. [98] In Upjohn [(1998) 42 IPR 576] it was said that the power may be applied in "exceptional circumstances". Section 101(3) does not say that. There is no warrant to read the expression "exceptional circumstances" into the subsection. That would be to give the subsection a construction contrary to its express terms. In my opinion, the discretion which is to be exercised under s 101(3) is to be exercised as the subsection itself says, "when it is reasonable to do so". To suggest that the party against whom the non-use has been put in a case such as this should establish exceptional circumstances is to put too high a hurdle in that party's path. 199 Gallo Winery's final position is to rely upon a favourable exercise of the discretion now conferred by s 101(3). 200 Factors relied upon to support such an exercise of the discretion, so contends Gallo Winery , include the fact that its ability to use its trade mark was constrained by its negotiations with Logan Wines and what was said to be the " complex regulatory and commercial process of integrating the Barefoot Cellars business into Gallo's business world-wide, of which use of the mark in Australia was one element ". Gallo Winery and McWilliams Wines , it is said, have gone " a long way towards commencing sales of wine in Australia under the mark ". 201 Reliance is also placed by Gallo Winery upon the fact that Lion Nathan was aware of the registered trade mark and was aware of a risk attendant upon Gallo Winery establishing sales of its wine during the non-use period. --- Yes, I was aware that was a risk and that could be the case. Yes, thank you. You were aware, were you not, that the decision-makers in Lion Nathan decided to take that risk ? --- Yes. Mr Simpson, and hence Lion Nathan , were aware of the Gallo Winery registered trade mark when it undertook searches in February 2007, well prior to the launch in January 2008 of its BAREFOOT RADLER beer. But the results of the searches caused him no " concern ". --- No. Because you were, of course, trying to attract people who might have previously drunk wine to make a choice in favour of this new kind of beer, weren't you? --- We were trying to attract people who may have previously drunk wine, that's correct, yes. Yes, and your company, Lion Nathan Australia, engaged some people to conduct some investigation into whether the Barefoot Wine mark had been used in Australia. Correct? --- Yes. And the Barefoot Wine mark did give you some concern, didn't it? --- No. Why did you bother investigating whether it had been used? --- It was just the natural thing to do. So part of our gate document process, you would see, has questions around words to the effect of IP availability, so just the logical things to do to understand what the road ahead might be like. If I wanted to make sure --- you wanted to see whether there was a legal obstacle, did you not, to using the word "Barefoot" in relation to this new kind of beer in Australia? --- Well, we got that from the trademark search, when there wasn't in beer. But why did you bother doing the trademark search? --- To establish if the mark was taken within beer. Then having found that there was a trademark in relation to wine, you then retained some people at some expense to conduct investigations as to whether the Barefoot wine had been used in relation to wine, Barefoot market been used in relation to wine? --- Yes, we did go on to get them to do that, but as I say, we weren't particularly concerned about it, it was about --- seemed the natural thing to do, as I say, just clearing the road ahead. 202 Reliance is placed by Gallo Winery upon the obiter comments of Falconer J in Hermes Trade Mark [1982] RPC 425. In that decision an application was made for the removal of the trade mark " Hermes ", in relation to watches, for non-use during a five year period. That application was rejected. Falconer J nevertheless went on to observe that, had it been necessary to exercise the statutory discretion conferred by s 52 of the Trade Marks Act 1938 (UK), his Honour would have allowed the mark to remain on the Register. Relevant to that conclusion were five factors: there had been no abandonment of the trade mark; the registered proprietors still had a residual reputation in the mark; there had been sales by the registered proprietors of watches since the relevant period ended; the applicants for removal had entered the market without having taken steps to ascertain from the Register whether anyone had a right to exclude their use of the mark; and the registered proprietors were not aware of the applicant's sales under the " Hermes " mark. 203 That list of considerations is, obviously enough, not an exhaustive catalogue of factors that may be taken into account. But it does provide some assistance. No attempt was made in the present proceedings to establish any reputation or sale of Gallo Winery's wines in Australia under the trade mark BAREFOOT prior to May 2004. No question of any " residual reputation " thus arises in the present proceedings by reason of earlier sales in Australia. But there have been sales in Australia since May 2007 of Gallo Winery's wines using the BAREFOOT trade mark and there certainly has been no intention on the part of Gallo Winery to abandon its use of that mark. And Lion Nathan knew that there was a risk that Gallo Winery may have been able to establish a use of its mark during the three year period 2004---2007. 204 As is frequently the case with any exercise of discretion, the considerations relevant to the exercise are seldom all one way. 205 Lion Nathan resists the exercise of the discretion in favour of allowing the mark to remain registered. Lion Nathan's primary position is that the Court " should not be deterred from the prima facie position that unused trade marks are to be removed from the Register ". Trade mark ownership and use are " strongly interconnected " concepts: Loughlan P, Trade Marks: Property Rights and Their Limits (2005) 31 Mon LR 273, 279---80. Lion Nathan also relies upon its own steps to develop its BAREFOOT RADLER beer. 206 Notwithstanding the commercial steps undertaken by Gallo Winery to first acquire Barefoot Cellars and thereafter develop the market for the sale of that wine, it is considered that there is little reason to exercise the discretion in the manner being urged by Gallo Winery . That company acquired Barefoot Cellars in January 2005 and thereafter implemented a staged plan to market the wine world-wide. In its commercial judgment, the development of the Australian market was deliberately left until the end of 2007. It could have used its mark during the non-use period. It could have secured suitable wine and commenced selling at an earlier point of time. It did not do so. The consequences of its commercial judgment, it is considered, must now fall upon it -- including an adverse exercise of the discretion conferred by s 101(3). Compare: Nordstrom Inc v Starite Distributors Inc (2008) 75 IPR 418 at 426---7. 207 The present proceedings, it is considered, stand in stark contrast to those confronting both the trial judge and the Full Court in C A Henschke & Co v Rosemount Estates Pty Ltd [2000] FCA 1539 , 52 IPR 42. The trial judge there had indicated that he would have allowed the mark to remain registered, even had it not been used. The registered proprietor of the mark had died in 1972 and no steps had been taken to transfer the mark until 1997. The beneficial interest in the mark had at all times resided directly or indirectly in members of the Henschke family. The only " formal " deception which could be pointed to was an impression that it may have been the partnership, rather than the executors, who owned the " Hill of Grace " trade mark. The persons using the mark were the persons who gave the mark its value. See also: Health World Ltd v Shin-Sun Australia Pty Ltd [2008] FCA 100 at [223] ---[225], [2008] FCA 100 ; 75 IPR 478 at 503 per Jacobson J. 208 More questionable as relevant to the exercise of the discretion is Lion Nathan's reliance upon the money it has expended in promoting its product and its efforts to develop a product which was considered to be " more environmentally responsible " and a " 'carbon neutral' beer ". The Consumer Insight Manager for Lion Nathan , Mr Ralph Simpson, gave evidence that Lion Nathan had spent in excess of $2 million prior to 29 February 2008 in " creating and developing the beer product including the BAREFOOT RADLER branding concept and imagery ". I thought that the "carbon neutral" or "green" angle would be another good point to differentiate our new BAREFOOT RADLER product in the market. It also seemed to tie into the overall theme for the product, as a summer, outdoors, relaxing beer for a more laid back lifestyle. Objection, primarily on the grounds of relevance, was taken to this evidence. Consistent with this evidence of Mr Simpson is the fact that both the cardboard container for the beer and the bottle itself bear a green leaf logo with the words " BAREFOOT TREADS SOFTLY ON THE PLANET ". 209 Justice Woodward in Paragon Shoes was by no means attempting to set forth an exhaustive statement as to the content of the " public interest " when considering the discretion to permit a mark to remain registered. Centrally relevant to that discretion must remain a consideration of whether the public would be deceived or confused. Considerations such as those deposed to by Mr Simpson, and in particular the costs incurred in promoting a product, however, assume some limited relevance and assist the conclusion -- otherwise reached -- that the discretion should be exercised adversely to Gallo Winery . The objection to this portion of his evidence is thus rejected. 210 Although the " guiding principle behind the discretion is public interest, particularly in the integrity of the register " ( Kowa Co Ltd v Organon [2005] FCA 1282 at [92] , [2005] FCA 1282 ; 223 ALR 27 at 41---2 per Lander J), the private commercial interests of both Gallo Winery and Lion Nathan remain matters which may be taken into account when exercising the discretion. Trade mark law, it has been recognised, is more complex than is suggested by the proposition that the supreme -- or, at least -- a predominant interest is the maintenance of the integrity of the Register: Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12 at [40] , [2000] HCA 12 ; 202 CLR 45 at 65. Speaking of the 1955 Act, Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ there pointed out the balance struck by the legislation between various interests. Both the interests of the consuming public and the interests of traders have to be recognised. There is the interest of consumers in recognising a trade mark as a badge of origin of goods or services and in avoiding deception or confusion as to that origin. There is the interest of traders, both in protecting their goodwill through the creation of a statutory species of property protected by the action against infringement, and in turning this property to valuable account by licensing or assignment. The provisions of the 1955 Act with respect to defensive registrations and certification marks were recognitions that the interests of the owners of registered trade marks may go beyond that of indicating trade origin. In Yale Electric Corporation v Robertson [(1928) 26 F 2d 972 at 973], Judge Learned Hand said of this interest: "that one merchant shall not divert customers from another by representing what he sells as emanating from the second. This has been, and perhaps even more now is, the whole Law and the Prophets on the subject, though it assumes many guises. " In this decade, legislation in the United States, the United Kingdom, and now in Australia to varying degrees has extended the infringement action to restrain activities which are likely adversely to affect the interests of the owner of a "famous" or "well-known" trade mark by the "dilution" of its distinctive qualities or of its value to the owner. 211 It was no part of the case presently advanced by Gallo Winery to rely upon its international reputation or to advance any claim founded upon passing off: cf Conagra Inc v McCain Foods (Aust) Pty Ltd [1992] FCA 159 ; (1992) 33 FCR 302. 212 It is not considered that either at May 2004 or May 2007, or at present, that it would be " reasonable " to allow the trade mark of Gallo Winery to remain registered. 213 And there are no " special facts and circumstances " which warrant an exercise of discretion in favour of Gallo Winery . No " sufficient reason " has emerged which would warrant leaving the mark on the Register. No question arises as to any entitlement to an account of profits. 215 It is also considered that the relief claimed in the Cross-Claim should be ordered. 216 The parties should now be able to draft Short Minutes of Orders which give effect to these reasons. Hopefully those Orders can be agreed. Although submissions can be made in respect to costs, there is considered to be little reason why the normal approach should not here also prevail and that costs should follow the event. The parties are to draft Short Minutes of Proposed Orders within 7 days which give effect to these reasons. 2. The proceedings be stood over to 27 June 2008 at 9.30 am with a view to then making final orders disposing of the proceedings. I certify that the preceding two hundred and seventeen (217) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | substantial identity deceptive similarity goods of the same description non-use obstacle to use discretion not to remove trade mark even though non-use use " in good faith " no special facts or circumstances evidence of internet search trade marks |
The Tribunal had affirmed a decision of a delegate of the first respondent that the appellant was not entitled to a protection visa. 2 The Tribunal found that the appellant did not have a well-founded fear of persecution if returned to India in the reasonably foreseeable future. The Tribunal's reasons did not lack logic but disclosed a reasoning process and were not internally inconsistent. The Tribunal correctly assessed that the appellant was not a member of the social group constituted by members of the People's War Group. In any event, that was a question of fact for it to determine. 4 The Tribunal's rejection of the letters was a matter going to the merits of its decision and did not involve any judicially reviewable error. Further, the question of internal relocation did not arise on the basis of the reasoning of the Tribunal that the appellant was not at risk of persecution. The Tribunal did not consider that the appellant was at risk of persecution from the People's War Group. That was a question of fact for it to determine. It found that the People's War Group would not consider the appellant to be a police informer, as he claimed it would. 5 The appellant's notice of appeal contends his Honour in the Court below erred in finding that the Tribunal's decision was not affected by a jurisdictional error. He did not identify any such error in his oral submissions. He failed to file any written submissions. Having read the decision of the Tribunal, and the analysis of it in the Court below, I do not consider that the Tribunal made a jurisdictional error in its consideration of the appellant's claim for a protection visa. 6 The appeal is dismissed with costs. | appeal from federal magistrate no question of principle appeal dismissed migration |
I considered submissions at that time but it did not then prove possible immediately to give judgment and I reserved that question until today. These reasons must be read in conjunction with the orders that I made in default on 30 November 2009. For convenience, I shall annex a copy of the orders which I made that day insofar as they relate to the declarations and injunctions, but not as to the ancillary practice directions then made. The general nature of the conduct which is alleged by the Australian Communications and Media Authority (Authority) to constitute contraventions of the Spam Act 2003 (Cth) (Spam Act), together with pertinent principles in relation to the imposition of penalty are canvassed at some length in reasons for judgment which I delivered on 23 October 2009 in Australian Communications and Media Authority v Mobilegate Ltd A Company Incorporated in Hong Kong (No 4) [2009] FCA 1225 (ACMA v Mobilegate (No 4)). These reasons for the judgment should also then, in respect of those two subjects, be read in conjunction with that earlier (ACMA v Mobilegate (No 4)) judgment in this matter. Some repetition is necessary as to the general background, if only to provide a context against which the particular involvement of Jobspy and Mr Moles falls for assessment of penalty. The essence of the contraventions of s 16 of the Spam Act , which are established by the default judgment, is a contravention, and a repeated contravention, by the sending of unsolicited short message service (SMS) messages to the mobile telephones of users who have been deceived, inveigled even, into providing their mobile telephone numbers to representatives of either Mobilegate Ltd A Company Incorporated in Hong Kong (Mobilegate), or, as the case may be, Winning Bid Pty Ltd (Winning Bid), under the belief that they were corresponding with individuals seeking to meet them and form relationships via dating websites. It was the very essence of the businesses of Mobilegate and Winning Bid to engage in this conduct. That conduct is a form of seduction for reward of those who are vulnerable. It is a particularly vile form of conduct. Moreover, it is a form of conduct which, when the deception is appreciated by its victim, wounds in a peculiarly embarrassing and emotional way, quite aside from its financial impact. Those non-financial aspects of victim impact are such that the perpetrator of the contravention is to some extent rendered immune, or at least afforded a degree of immunity, from a likelihood of complaint, in my opinion. That is a feature, in my opinion, which is not unknown in respect of criminal activity, and I interpolate at once this is not criminal activity, but contraventions of civil penalties, which touches upon a person's sexual nature. In other words, an embarrassment attends the victim of the contravention and that embarrassment in turn provides the degree of immunity from complaint. I regard that as an aggravating aspect of the contravening conduct. The Spam Act , both in respect of corporations and individuals who engage in contravening conduct, provides for very salutary penalties indeed. I canvassed, in the ACMA v Mobilegate (No 4) judgment, the range of penalties in terms of statutory maximum and also particular criteria made relevant to penalty by the Spam Act . I do not propose, in light of that, to repeat the general discussion on those subjects found in that judgment. What is important, in my opinion, is that, where contravening conduct has about it the essence of the contravenor's business, and the conduct is directed to the securing of financial reward, that penalties imposed make it pellucidly clear, not just to those who have engaged in the conduct, but to others who might be tempted, that it is, to use a term employed by me in the ACMA v Mobile (No 4) judgment, "commercial suicide" to engage in that conduct. The penalties must also, in my opinion, be such as to express on behalf of our society an utter revulsion in respect of conduct of the kind employed by Winning Bid or, as the case may be, Mobilegate. What then was the role of Jobspy and Mr Moles in that conduct? I have the benefit in that regard of a summary offered by the Authority in its submissions. Subject to some comments which must necessarily be made in light of submissions in writing made by Mr Moles and through him by Jobspy, I am in general agreement with the nature of the summary of involvement offered by the Authority in its submissions. A way of describing Jobspy's involvement is that it was the service entity for Winning Bid and for Mobilegate. Its sole director and shareholder has been and continues to be Mr Moles. Jobspy was incorporated on 4 February 2005. From at least early 2006 until November 2008, at least, Jobspy obtained mobile telephone numbers of members of third party dating websites. Those third party dating websites were legitimate commercial operations. In modern times, they fulfil a matchmaking role not unknown in earlier times through dating agencies. They are just a means by which members of our society in the electronic age come to correspond and meet one with the other. What Jobspy did was to set up fake profiles on these dating websites. Having so done, it communicated with users of those dating websites to entice them to hand over details of their mobile phone number. It did so on the basis of engendering an understanding, through the use of those fake profiles, that the users were communicating with another genuine user of a dating website. This accomplished, Jobspy was then involved in the sending of SMS messages to those mobile telephone numbers by particular premium number services and engaging the users to participate in and continue to participate in exchanges of SMS messages, exchanges as if the user was communicating with a potential dating partner. It was the staff of Jobspy who engaged in this particular form of deception and seduction. The conduct involved the extension for as long as possible by pretence of those exchanges. There was also a pretence in the sense that users were deceived that premium short codes were being used as a "safe divert" service to enable the sender and the receiver to communicate without the other party directly disclosing their mobile telephone number as a matter of caution. Through this process, Jobspy facilitated Mobilegate and Winning Bid's obtaining revenue from the sending or receipt of the SMS messages via those premium numbers as a result of fees charged to the user of each message. What occurred then was that the provider charged a fee to the user. Mobilegate and Winning Bid then received part, about half it seems, of that fee. The fee itself charged by the provider to the user was legitimate in the sense that it was the fee for the service. The deception came in that, without the provider's knowledge, the author of the messages was a false persona, created by staff of Jobspy on behalf of Mobilegate or, as the case may be, Winning Bid. For this purpose Jobspy employed a workforce of individuals who undertook these communications. Very early in the course of events, Jobspy did this for a company known as IMP, and thereafter for, as I have mentioned, Winning Bid and Mobilegate. The particular premium short code numbers which were operated by IMP, Winning Bid and Mobilegate, and the particular periods over which these were operated and in which Jobspy took part, are detailed in the Authority's submissions. There is no need, for present purposes, to descend into that detail. As best can be ascertained on the evidence, the earnings generated from the operation of these various premium short codes were in the order of something in excess of $2 million. Aside from being the sole director and shareholder of Jobspy, Mr Moles was also director and shareholder of Winning Bid from August 2006 to June 2007. He was, further, a director and shareholder of Mobilegate from August 2007. It is not completely clear as to when Mr Moles's formal involvement with Mobilegate ceased. It seems to have been, at best, some time in the latter part of 2008, but perhaps later. The reason for that uncertainty arises from Mobilegate's being registered as a company in Hong Kong and, further, the absence of clarity in whether there was a succession in office holding and control of Mobilegate. What is clear is that in terms of the holding of office, Mr Moles was involved at the highest level in each of the corporations I have mentioned, ie, Jobspy, Winning Bid and Mobilegate, for most of the period of involvement in contraventions of each of those corporations. Mr Moles, in his submission, seeks to contest the amount of money either derived by Jobspy or by him from the operation. It is noteworthy, however, that he has provided no evidence himself as to earnings, much less thereby subjected himself to cross-examination if the Authority were minded to contest his evidence. In light of that, I place no weight on the bare allegations that Mr Moles makes on behalf of the third and sixth respondents in relation to earnings. It is not clear, on the evidence, precisely how there was division as between IMP initially, Mobilegate and Winning Bid and the service company, Jobspy. Mr Moles, given the position which he held, was peculiarly in a position to offer clarity in respect of division of what one might term ill-gotten gains. He has chosen not to offer such clarity. What Mr Moles has chosen to do is to seek to rely upon an affidavit by another of those individuals involved, Simon Anthony Owen. I had occasion to impose penalties on Mr Owen on 23 October 2009. Mr Owen deposes that from about early 2006 Mr Maughan, yet another on whom I imposed penalties on 23 October, started working for Jobspy from its premises at New Farm. He further deposes that as part of the licence agreement, Mr Maughan was provided with information necessary to access what was termed the Mobilegate software for short code information and other information that was required to access the network and make the licence operational. Mr Moles, I should interpolate, was the person who acquired the licence to operate the software permitting log-in access and password to the system on the premise that the premium SMS business would fully operational. Mr Owen deposes that was further on the premise that that did not require Mr Moles to be actively involved in the business. He deposes that shortly after Mr Moles's licence became operational, it was obvious to everyone involved that there was a significant overlap in the market between the operation being conducted by Mr Salcedo, yet another of the individuals penalised on 23 October, and Mr Owen, and, further, with Mr Moles's licence being operated by Mr Maughan. Mr Owen deposes that the three of them, ie, Messrs Salcedo, Maughan and himself, decided to merge the two businesses into one by extinguishing or retracting Mr Moles's licence. He further deposes that the incorporation of Winning Bid was the result of that. Yet further he deposes that Mr Moles's involvement in the premium SMS business was thereafter negligible, and that he was not involved in the business in any capacity and was slowly ostracised by Mr Salcedo. One takes Mr Owen's evidence in that regard with something of a grain of salt. I say that because it is at odds with communications by email with providers which, on their face, disclose a deliberate copying of correspondence to Mr Moles. That raises, necessarily, the interrogative note as to whether, indeed, his involvement was minimal. So too, obviously, does the fact that judgment is entered in default for particular contravening conduct. It is not permissible for Mr Moles, having chosen not to contest proceedings --- and I recall that he was offered a very particular and personal solicitation of the consequence of default judgment --- to seek to introduce material which he would promote as inconsistent with the judgment entered by default. Yet further, I have before me for penalty hearing purposes the evidence of Ms van Dyke. It is quite apparent from her evidence that Mr Moles was a presence, and a continuing and involved presence, during the era when the business was conducted at New Farm. Her evidence does disclose something of a lesser involvement, directly, in my opinion, in the period after the businesses translated or merged and ended up operating from premises at West End. She does, though, note Mr Moles as still attending at West End. I am prepared to accept that there was a greater degree of remoteness on Mr Moles's part after the businesses came to be conducted from the West End premises. He remained, though, in a controlling position. Further, he remained in that controlling position necessarily seized with the knowledge of the nature of the operation of the corporations which he controlled. I turn to consider the nature and extent of loss and damage suffered as a result of the contraventions. I have already mentioned the revenue derived by the businesses, and, further, I have already mentioned the emotional aspects of the deception practised by the companies serviced by Jobspy and its employees. Not to be forgotten in terms of impact of these contraventions is the impact on the repute of the legitimate businesses of dating website operators. It is impossible, in my opinion, to see any redeeming feature in the contravening conduct of Jobspy and Mr Moles. Neither of them, it must be said, has previously been found by the Court to have contravened either the Spam Act or to have engaged in any similar conduct, nor is there evidence that either Jobspy or Mr Moles has abroad engaged in any similar conduct. There is no direct evidence of Jobspy's size or spread of operations other than that which I have already mentioned. Mr Moles again was uniquely positioned to offer detail of Jobspy, its size and spread of operations, its asset base, its cash flows, etc. As I have mentioned, he has chosen not to offer this evidence. What I do have then is evidence of an overall cash flow coming in at the pinnacle of the businesses but not detailed evidence of how that cash flow was distributed as between subordinate service corporations such as Jobspy and, much less, particular shareholders or officers of corporate entities involved. There is no doubt that the contravening conduct concerned was deliberate. I have already detailed the period over which it extended. Neither is there any doubt that the contraventions arose out of the conduct of senior management. Mr Moles, as I have mentioned, was a director of Jobspy as well as Mobilegate and Winning Bid. Further --- and again as I have already mentioned --- he must necessarily have known at all stages, even if his direct involvement became remote, of the nature of the operations of the corporations of which he was director. I do not accept that he was a mere straw director. Another factor which the Spam Act directs is pertinent for consideration on penalty is whether the company has a corporate culture conducive to compliance with the Act. Nothing could be further from the truth as far as Jobspy, Winning Bid and Mobilegate are concerned. Next, and necessarily, one must have regard to whether there has been on the part of Jobspy and Mr Moles a disposition to cooperate with the authorities --- in other words, the Australian Communications Management Authority particularly --- which are responsible for the enforcement of the Spam Act . In this regard, neither Jobspy nor Mr Moles offered any early acknowledgement of contravening conduct. Their initial disposition, as of course was their right, was to contest proceedings; in the end though the proceedings as against them went by way of default judgment. I do not regard that as evidence of a disposition to cooperate with the authorities. Mr Moles, for his part, makes reference to the endeavours he made to secure the winding up in Hong Kong of Mobilegate as evidence of cooperation. It is not impossible to see that behaviour on his part in that light. That said, that particular conduct looks to me to be little more than tidying up a mess after the event. It does not particularly account for much with me as far as cooperation is concerned. It is next incumbent to consider the financial position of Jobspy and Mr Moles and their capacity to pay. Again, and uniquely, the person in the best position to offer such evidence was Mr Moles. He has chosen not to provide such evidence. All that I have is the evidence of the cash flow generated overall by the contravening conduct and that was significant. Another factor which I took into account in the ACMA v Mobilegate (No 4) judgment is that articulated by Nicholson J in Australian Communications and Media Authority v Clarity 1 Pty Ltd [2006] FCA 1399 ; (2006) 155 FCR 377 (Clarity1) at para 43. By reference to other authorities, his Honour observed that, while he accepted that the issue of capacity to pay is a relevant factor, it is one "of less importance when balanced against the necessity of imposing a penalty that satisfies the objective of general deterrence". Deterrence is a factor of particular importance in this case. I have already adverted to the need for penalties to demonstrate that both in the specific and general senses. Whilst the Act does provide for large penalties, it nonetheless makes provision for a daily maximum, something of a cap in other words. Nicholson J drew attention to this feature of the legislation in Clarity 1 by reference to the explanatory memorandum to the bill which became the Spam Act . 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 and electronic messages each day. Without a ceiling amount for daily contraventions such a spammer could potentially be liable for a million contraventions. Using the maximum penalties under the Spam Act as a guide for calculation that yields, in the case of Mr Moles, a total potential penalty of over $35 million, and in the case of Jobspy over $100 million. Here it becomes important to recall the totality principle of sentencing. I canvassed the authorities in respect of that principle in the ACMA v Mobilegate (No 4) judgment. I bear in mind the totality principle in relation to the imposition of penalty. Another factor of particular importance in relation to the imposition of penalty is relativity with other respondents in respect of whom penalty has been imposed already, and, also, insofar as it is possible, parity as between penalty outcomes in these proceedings and earlier proceedings, or at least reason for differentiation of penalty. The only earlier proceedings in respect of which penalty under the Spam Act has been imposed are the Clarity1 proceedings. I dealt, in the ACMA v Mobilegate (No 4) judgment, with questions of the utility of the outcome in Clarity1 for present sentencing purposes, and I do not propose to repeat what is there stated. It is pertinent, though, to recall particularly the penalties that were imposed by me on 23 October 2009, and to try and achieve relativity as between those penalties and the ones to be imposed in respect of Jobspy and Mr Moles. Jobspy was involved in contravening conduct for a longer period, considerably longer, than either Mobilegate or Winning Bid. That, though, was because it acted as the service entity for each of those. Mobilegate's conduct covered a period of some 331 individual days. That of Winning Bid covered a period of about 187 days. That led to my differentiation of penalty as between those two principal operators of the businesses of $5 million and $3.5 million respectively. Jobspy was involved in a service capacity for some 800 days, or at least in excess of some 800 days if one includes the early period of engagement of it by IMP. The Authority promotes a penalty range of between $5 million and $8 million as apt for Jobspy. It does so in a sense inspired by an observation I made as to the range of penalties it promoted in respect of the respondents dealt with on 23 October 2009. I, at that stage, raised something of an interrogative note as to whether the maximum then proposed was truly an apt maximum. In my opinion, though, the penalties must be assessed relative to those which came to be imposed on 23 October 2009. Further, they must reflect the subordinate role of Jobspy, albeit for a lengthy period in that role. Taking these factors into account, along with all that which I have thus far mentioned, I regard the case as one apt for the imposition of one penalty, and the penalty which I impose is $4 million. As to Mr Moles, the Authority promotes a penalty range of between 2 and 4 million dollars. That, too, it seems is inspired, to some extent, by the observation I made on 23 October 2009. Again, though, in my opinion, the penalty on Mr Moles as an individual must bear relativity with the penalties which I imposed on 23 October 2009 on other individuals, namely, Messrs Owen, Salcedo and Maughan. In this regard, the Authority offers a helpful analysis of relative involvements in its outline of submissions. It observes that each of the individuals, ie, Messrs Owen, Salcedo and Maughan, were involved for a lengthy period over about 800 individual contravention days. Mr Maughan, on whom I imposed a penalty of $1.25 million, had a lower level of responsibility in directing contravening conduct than Mr Owen or Mr Salcedo, upon each of whom I imposed a penalty of $3 million. The Authority submits that, although its evidence indicates a higher level of active involvement by Messrs Owen and Salcedo than that of Mr Moles, it is appropriate nonetheless to take into account that Mr Moles assumed the role of director of each of the corporate respondents. Thus, the Authority submits that he assumed responsibilities which accompany that higher level role of director. The Authority's consequential submission is, therefore, that penalty should be in the order of that imposed on Messrs Owen and Salcedo. I have already observed that I detect a degree of remoteness of involvement on Mr Moles' part in the West End phase of the operation. It does seem to me that Messrs Salcedo and Owen assumed, in a de facto way, a greater degree of control than Mr Moles. Nonetheless, and as I have mentioned, Mr Moles retained a position of director and did so against a background where he must be taken to have known of the activities of each of the companies of which he was director. My impression is, nonetheless, that his involvement was and ought to be regarded as less than Messrs Salcedo and Owen overall, but only slightly less. In that regard, I balance active involvement against the assumption and retention of high office in each of the corporations involved. Taking those factors and all that I have mentioned thus far into account, the penalty which I impose in respect of him is $2.5 million. The formal orders, then, apart from the penalties that I have imposed, will be in terms of those made on 23 October 2009, and I direct the Authority to bring in minutes of orders to incorporate the same. The costs orders, again, I do not see any particular reason why the costs should not be orders which follow the event, and those orders, again, ought to be in the same terms which I made on 23 October 2009. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. A declaration that the Third Respondent, by creating and registering the dating website profiles on behalf of the First and Second Respondents, and further, by writing the messages sent to dating website members via the dating websites on behalf of those respondents which represented that they were from the dating website profiles, has aided and abetted each of the First and Second Respondents' contraventions of s 52 of the Trade Practices Act 1974 (Cth) (Trade Practices Act) set out in paragraph 11 of the declarations made by the Court in these proceedings on 14 August 2009. A declaration that the Third Respondent, by writing the content of the SMS messages sent or caused to be sent by each of the First and Second Respondents, in trade or commerce, to Australian mobile telephone numbers which represented that they written by a dating website member has aided and abetted each of the First and Second Respondents' contravention of s 52 of the Trade Practices Act set out in paragraphs 12, 13 and 14 of the declarations made by the Court in these proceedings on 14 August 2009. 7. An order that the Third and Sixth Respondents pay the Applicant's costs of an incidental to the proceedings to date, including reserved costs, to be taxed if not agreed. That the matter be listed for hearing as to penalty orders against the Third and Sixth Respondents at 10:15am on 11 December 2009. That the Applicant serve these orders, in the case of the Third Respondent, by delivering a copy to its registered office and, in the case of the Sixth Respondent, by delivering a copy of these orders to the address notified by the Sixth Respondent to the Court, being 52 Doggett Street, Fortitude Valley, Queensland 4006. Liberty to apply. | unsolicited sms messages (spam) use of fake dating profiles contraventions established considerations applicable to imposition of pecuniary penalties communications law |
The motions are brought by the respondent (Veda). The present three relate to events in New South Wales. Three of the others relate to events in Victoria and the remaining three to events in Queensland. 3 All nine are brought by individuals on behalf of themselves and others whose complaints concern information provided by Veda to credit providers relating to the creditworthiness of the applicants and of the group members they respectively represent. Veda is a credit reporting agency, that is to say, it is a corporation that carries on a credit reporting business (I am using expressions taken from the Privacy Act 1988 (Cth), ss 6 and 11A ). 4 Credit providers subscribe to Veda in order to have the benefit of information related to the creditworthiness of individuals who apply to them for credit. Veda maintains credit information files on a computer database in relation to individuals. The credit providers who subscribe are able to access, by computer, the credit information files that are part of the system set up by Veda. In addition, the subscribers themselves may update the information on those files by providing information known to them concerning individuals. 5 Accordingly, Veda's subscribers are both the suppliers of information to the credit information files and the recipients of information from those files. I was told that on the final hearing there will be considerable evidence concerning the way in which the system just outlined operates. 6 In the way in which the proceedings have been cast, each of the three relates to the reporting of a particular kind of problem associated with a person's creditworthiness. In the case of proceeding NSD 368/2007 in which Ms Szyczew is the applicant, the complaint is that the word "Bankrupts" was recorded and conveyed to subscribers in respect of Ms Szyczew and the members of the group on whose behalf she sues. In the case of proceeding NSD 371/2007 in which Mr Bailey is the applicant, the complaint is that the expression "Clearouts" or "Clearouts (watched)" was recorded and conveyed to subscribers in respect of Mr Bailey and the members of the group on whose behalf he sues. I infer that what is meant by those expressions is that the person, owing money, has ceased to be contactable. In proceeding NSD 393/2007 in which Mr Knochell is the applicant, the complaint is that the expression "Payment Default" was recorded and conveyed to subscribers in respect of Mr Knochell and the members of the group on whose behalf he sues. 7 In each of the three proceedings, claims are made of contravention by Veda of s 52 of the Trade Practices Act 1974 (Cth) (the TP Act), defamation and negligence. The contents of Form 129 are framed with reference to s 33H(1)(a), (b), (c) of the FCA Act. That is to say, the applicant must identify the group members (para (a)), the claims made and the relief sought (para (b)), and the questions of law or fact common to the claims of the group members (para (c)). 10 An unsatisfactory course was followed by the applicants in connection with the motions. The amended notices of motion were brought in respect of an "amended application (as at 03.08.07)" filed in each proceeding on 3 August 2007. Each applicant then prepared a "proposed further amended application (as at 03.10.07)" but it was impossible to address this document because paragraph and subparagraph numbers were repeated. The confusing nature of that document came to light after the hearing had begun. The applicants then sought leave, which I granted, to file a notice of motion seeking leave to file a further amended application in the form of the "proposed further amended application as at 03.10.07" in which the paragraph numbering had been corrected. Such a notice of motion was filed in Court on 4 October 2007 in proceeding NSD 371/2007 only. 11 There were yet further unsatisfactory features of the hearing. Counsel for the applicant began by indicating yet further amendments the applicants proposed to make to their applications and statements of claim, and invited counsel for Veda to indicate if he would still have any objections. I'll foreshadow the changes that we believe are indicated so that my friend knows what we are proposing to do, so if there's anything else, he can raise it at least at this stage, but it's really just a matter of clearing up a few small aspects, we submit, your Honour. The result was a direction of the Court that the applicant in each proceeding supply a proposed further amended application and proposed further amended statement of claim incorporating all foreshadowed amendments. In Mr Bailey's and Mr Knochell's proceedings (NSD 371/2007 and NSD 393/2007) a "proposed further amended application (as at 10.10.07)" and a "proposed further amended statement of claim (as at 10.10.07)" were distributed on 15 October 2007. By consent between the parties, a proposed further amended application and a proposed further amended statement of claim are to be distributed in Ms Szyczew's proceeding (NSD 368/2007) by 7 November 2007. 13 The course that has been followed by the applicants has been most unsatisfactory. It creates an intolerable burden on the Court, having heard detailed argument on one document, to have to address a new document and work out which arguments remain relevant and which do not. I have no doubt that in these reasons I will refer to some deficiencies that the applicants concede need to be remedied. Moreover, I find it convenient in some instances to refer to parts of superseded documents because the parties' submissions were addressed to them and apparently those parts have been carried forward in the superseding document. 14 As will appear below, Veda succeeds on its motions in many respects and I will give the applicants leave to amend. However, I will require, as a condition of the exercise of that leave, that the solicitors and counsel for the applicants certify that they have carefully checked any amended documents that are to be filed and that those documents are correct so far as form is concerned. 15 The importance of the identification of the group members on whose behalf a representative proceeding under Pt IVA of the FCA Act is brought, and of the specification of the common questions of law and fact hardly needs to be emphasised: see, for example, Bright v Femcare Limited (2002) 195 ALR 574; Petrusevski v Bulldogs Rugby League Ltd [2003] FCA 61. The reasons for careful identification of the group members have been explained in those two authorities. 16 I will address the identification of the group in the amended application and amended statement of claim in Mr Bailey's proceeding (NSD 371/2007) but what I say will also relate to the other two proceedings. 17 (1) Paragraph 1 of the proposed further amended application (as at 03.10.07) refers to Veda's "databases, credit information files and credit reports", yet the "group membership criteria" that follow refer only to a "credit report". I accept Veda's submission that a person reading the description would be left in doubt as to whether the person fell within the group if the reference to "Clearouts" or "Clearouts (watched)" was in only one of the three, and, in particular, if it appeared only in a database or credit information file but not in a credit report. I understand that the applicant accepts that paragraph 1 must be amended to omit the phrase "databases, credit information files and". 18 (2) Also in paragraph 1 of the proposed further amended application (as at 03.10.07), the words "more specifically" are embarrassing since they leave unclear whether it is only persons within the six criteria (a) to (f) who satisfy the criteria for group membership. The words "more specifically" suggest that there may be two groups: one group that satisfies the words that precede the expression "more specifically" and another that satisfies the words that follow that expression. I note that the phrase still appears in the proposed further amended application (as at 10.10.07). 19 (3) Paragraph 1(c) of the proposed further amended application (as at 03.10.07) refers to a document "referred to in Schedule A", but there is no Schedule A, other than the one annexed to the proposed further amended statement of claim. 20 (4) Paragraph 1(c) concludes with the words "which ... the Respondent also described in the Respondent's internet user guide as a "serious credit infringement (confirmed clearouts only)". The words are embarrassing surplusage. 21 (5) Schedule "A" to the proposed further amended statement of claim (as at 10.10.07) relates only to the applicant, not to the group members. 22 (6) Paragraph 2(f) of the same document wrongly contains "particulars". If that which is stated as particulars is truly part of a criterion, multiple groups are suggested. The applicant might well consider omitting the particulars entirely. 23 The defects referred to in (1) and (4) above are repeated in paragraphs 1 and 2 of the existing amended statement of claim (as at 03.08.07). It is not possible to have a mélange of "facts, matters and circumstances" which are "more specifically" questions of fact. 26 I turn now to the paragraphs of the amended statement of claim referred to in paragraph 4 which Veda contends do not constitute common questions of fact. 27 (1) Mr Bates of counsel who argued this aspect of the matter for the applicant conceded that paragraph 7 could not be relied on as stating a question of fact because it posed a question of law as to whether Veda was obliged to take reasonable steps at all material times directed to certain ends. 28 (2) Paragraph 9 of the existing amended statement of claim (as at 03.08.07) relates only to the particular applicant and not to the represented group members. 29 (3) I do not accept Veda's criticism that the extrinsic facts referred to in paragraph 10 of the existing amended statement of claim (as at 03.08.07) do not constitute a common question of fact because I construe that paragraph as meaning that there was only one single internet user guide known to all subscribing credit providers at all times. If the evidence shows that the internet user guide to which subscribers had access was in a different form from time to time, the applicant will fail on this point. However, that is an evidentiary matter for the trial. As a matter of pleading, the applicant succeeds on the point because he has relied on a single form of internet user guide having been available to subscribers throughout. If the applicant accepts that the content of the internet user guide did indeed change from time to time, the applicant will need to seek leave to amend. 30 (4) I agree with Veda that paragraph 15 of the existing amended statement of claim (as at 03.08.07) does not specify a common question of fact, the suffering of loss and damage being a matter peculiar to the individual. 31 (5) Paragraph 19 does not raise a common question of fact for the same reasons. 32 (6) Paragraph 22 of the existing amended statement of claim (as at 03.08.07) does not raise a common question of fact. Whether something was "untrue" or "false and misleading" in relation to the applicant and each of the other group members is a question individual to each of them. 33 (7) Paragraph 4(i) of the proposed further amended application (as at 03.10.07) (set out at [24] above) states "more specifically" before it lists six proposed questions of fact, each commencing "Whether ...". I have previously sustained the objection to the use of the term "more specifically" (see [18] above). 34 I will now address the six questions listed in paragraph 4. (iv) Paragraph 12 of the amended statement of claim (as at 03.08.07) does not specify a common question of fact. (v) This paragraph does not specify a common question of fact, although a question of fact may be able to be got out of it if it were reframed. (vi) This paragraph does specify a common question of fact. (vii) This paragraph does not specify a common question of fact. Generally speaking, the question whether an obligation (I prefer "duty") was owed is a common question of law. (ii) This paragraph specifies a common question of law. (iii) This paragraph commences "The interaction and proper construction, on the pleaded facts, as between s 52 and s 65A of the Trade Practices Act 1974 (Cth). More specifically: ...". The words "more specifically" are objectionable. It suffices to say in relation to (a) to (e) that although there is undoubtedly a common question of law in relation to s 65A , it is not appropriately captured in any of these paragraphs. (iv) This paragraph does not specify a common question of law. It is infected with the "more specifically" defect. The words following "More specifically:" do specify a common question of law, although I do not understand its relevance to the case. (v) This paragraph is again infected by the "more specifically" problem. As in (iv), the words following "More specifically:" do specify a common question of law, although, again, I do not understand its relevance to the case. Each of these subparagraphs follows the same form. Szyczew : "17(b) The Applicant and each Group Member have been unable to pay their debts and were declared bankrupt in the Federal Court through the issue of a Sequestration Order". Knochell : "17(d) The Applicant and each other Group Member was not a properly described as having a Payment Default". (It was agreed that there is an error in this subparagraph and that the words "not a" should be omitted. Veda relies on Harvey v John Fairfax Publications Pty Ltd [2005] NSWCA 255 at [83] ff. In my view the criticism is well made. The pleading does not impute an act to, or state about, the applicant or other group member beyond that which is inherent in the expression used in Schedule "A" to the amended statement of claim. Paragraph 18 (common to all three proceedings) pleads a case alternative to publication to the minds of officers of the subscribing credit providers. Gerard Malouf & Partners replied that paragraph 18 spoke for itself. 40 Ebsworth & Ebsworth also noted that they assumed that the "computer" referred to in paragraph 18 was the credit provider's computer, but asked Gerard Malouf & Partners to specify whose computer was referred to if that was not the case. Gerard Malouf & Partners replied that "It is either the Credit Provider's (subscriber's) computer or the Respondent's computer". 41 It is plain that on the pleading it is the computer of the credit provider (subscriber) only that is referred to. On the current pleading I would disallow the applicant to attempt to prove under paragraph 18 as presently formulated any different case. The applicant will need leave to amend if he wishes to have the option of proving a different case. In this respect the motions raised an interesting and important issue. That issue is whether the claim of contravention of s 52 of the TP Act cannot succeed by reason of s 65A of that Act. It submits that the pleaded publication by Veda to its subscribers was a "prescribed publication" because it was made by Veda "in the course of carrying on a business of providing information". 44 On their face, these two propositions seem straightforward enough. 45 Veda submits that the only exception to s 65A that is arguably relevant is a publication of matter in connection with the supply of services where the services were "services of a kind supplied by" Veda. 46 Senior counsel for the applicant submits that it is inappropriate for this issue to be determined on the present motions. At the foundation of his submission is the special nature of the arrangement by which the information is recorded and supplied. Subscribers themselves cause information to be included in Veda's database, and access that database directly. The argument is, therefore, that Veda is not itself providing the information to the subscribers: they are providing the information to each other. 47 I indicated to senior counsel for the applicant that it seemed to me that this argument raised an acute difficulty for the applicant. It is plain that according to his amended statement of claim (03.08.07) he has pleaded that Veda collected and supplied information. Indeed, in particulars to paragraph 6 of that pleading, the applicant actually refers to s 65A of the TP Act. It is not open to the applicant on the existing pleading to run a case that Veda did not supply the information to the credit providers. 48 But let it be assumed that the applicant chose to run that case. It would seem to be quite clear that he would then be suing the wrong entity since his case would be that subscribing credit providers were the suppliers of the information, not Veda. 49 Both parties referred me to several authorities in which s 65A of the TP Act has arisen for consideration: Horwitz Grahame Books Pty Ltd v Performance Publications Pty Ltd (1987) 8 IPR 25; Bond v Barry [2007] FCA 1484 ; Australian Competition & Consumer Commission v Seven Network Limited [2007] FCA 1505. None of these cases resolves the issue raised here. 50 As I see it, the applicant must elect between saying, as he says at present, that Veda supplied the information to its subscribing credit providers in the course of carrying on its business, in which case the applicant has sued the right entity but s 65A affords a complete answer to his claim, or saying that rather than Veda providing the information, the subscribing credit providers provided it to each other, in which case s 65A may be circumvented but the applicant would be shown to have sued the wrong entity. 51 I would be reluctant to dismiss the claim based on the alleged contravention of s 52 of the TP Act under s 31A of the FCA Act at this stage because Mr Hale SC, senior counsel for the applicant, seemed to suggest that he may wish to amend the pleading to take into account in some way special features of the system operated by Veda with a view to circumventing s 65A. At present I do not see how he can do so, but I would not wish to deny him the opportunity. 52 If the pleading is not amended, I would propose to grant the relief sought in paragraphs 5 and 6 of the amended notice of motion. 54 At present I am inclined to the view that certain paragraphs of the proposed further amended application (as at 03.10.07) should be struck out with liberty to amend; that the amended statement of claim (03.08.07) should be struck out in its entirety with liberty to file a further amended statement of claim, and that the respective applicants should pay Veda's costs of the motions. As noted above at [14], a condition of the applicants' exercise of the leave to amend would be that the solicitors and counsel for the applicants certify that any amended documents that are to be filed have been carefully checked and found to be correct so far as form is concerned. 55 I would urge the parties to seek to agree on the orders to be made. I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | representative proceedings application to strike out paragraphs of pleading application for summary dismissal three class actions by individuals claiming that credit information provider had supplied to subscribing credit providers misleading and deceptive and defamatory information concerning their credit worthiness challenge to identification of group members challenge to specification of common questions of fact and law whether pleaded imputations merely repeated express terms issue whether s 65a of trade practices act 1974 (cth) provides defence to credit information provider to the claim of contravention of s 52 of that act. three class actions by individuals claiming that credit information provider had supplied to subscribing credit providers misleading and deceptive and defamatory information concerning their credit worthiness challenge to identification of group members challenge to specification of common questions of fact and law whether pleaded imputations merely repeated express terms issue whether s 65a of trade practices act 1974 (cth) provides defence to credit information provider to the claim of contravention of s 52 of that act. three class actions by individuals claiming that credit information provider had supplied to subscribing credit providers misleading and deceptive and defamatory information concerning their credit worthiness challenge to identification of group members challenge to specification of common questions of fact and law whether pleaded imputations merely repeated express terms issue whether s 65a of trade practices act 1974 (cth) provides defence to credit information provider to the claim of contravention of s 52 of that act. practice and procedure defamation trade practices |
2 Newcrest moved on the affidavit of Mr Ronald Brown sworn on 17 September 2008. A further affidavit, sworn on 26 September 2008 by Mr Christopher Goddard, was also relied on. Apache Northwest Pty Ltd ("Apache") relied on an affidavit of Mr Murray Durham sworn on 26 September 2008 and Santos (BOL) Pty Ltd ("Santos") relied on an affidavit of Mr Andrew Freeman sworn on 26 September 2008. None of the deponents was required for cross-examination. 3 Before argument concluded the Court was advised that Newcrest had discontinued its application against Santos. Electrical power for the mine is provided by onsite generators. These generators are, for economic reasons, fuelled by natural gas. The gas is supplied pursuant to contractual arrangements between Newcrest and Apache as to 55% and Santos as to 45%. Under the contract Newcrest is entitled to receive certain agreed quantities of gas. Apache Energy Ltd ("Apache Energy") was appointed by Apache and Santos as their Sellers' Representative under the contract. The gas comes from the John Brookes gas field ("the Brookes field") which lies offshore in the Indian Ocean. The gas is processed on Varanus Island and then piped ashore and on to the mine. 5 On 3 June 2008 a catastrophic explosion occurred on Varanus Island which completely interrupted the supply of gas from the Brookes field and other surrounding fields including the Harriet field. Repair work commenced quickly and is continuing. Limited supplies of gas became available in early August but supplies are not expected to return to normal for some time yet. 6 Towards the end of June Apache's American parent company issued a media statement in which it said that it estimated that production to the level of 200 TJ/day would be restored by 15 August increasing to 350 TJ/day by December. [processing] facilities are located the greatest distance from the rupture and sustained less damage. Export pipelines and associated valves, two compressors, instrumentation and control facilities are being repaired to meet the timetable of restoring production by mid-August. Every terajoule of gas that exceeds your base requirements can be used by other customers to meet theirs. Within the constraints of our obligations under our contracts, our goal during the period of limited production is to deliver enough gas to our customers to fulfil their minimum required volume levels but we will need your cooperation to accomplish this. • Initially total gas production would be of the order of 75 to 120 TJ/ day. • By mid to late August production was expected to increase to 200 to 230 TJ/per day. • 200 to 230 TJ/day did not represent the full processing capacity on Varanus Island. • Santos would distribute its share of available gas to its customers "on the basis of a pro-rated share of firm gas delivery obligations. The figure rose progressively between 5 August and 30 September. It then fell back until 15 December when it rose slightly. At no point during this time period did the projected amount of gas to be made available to Newcrest reach the delivery obligation provided for in the contract. Santos advised that the step down from 1 October was due to "a change in Santos' contracted position and some additional contracted supply volume commences. " Newcrest was advised that this additional contractual obligation would impact on all its customers on a pro-rata basis. The step up from 15 December was attributed to an expected full reinstatement of processing facilities on Varanus Island. 11 On 6 August 2008 Newcrest issued a press release in which it announced that partial gas supplies from Varanus Island had begun, supplies were flowing to the Telfer Mine and that Telfer's "remaining requirements" were expected to be supplied by Apache around mid-August. As a result Newcrest had terminated some of its interim gas supply arrangements with other suppliers. 13 On 1 September 2008 Newcrest asked Apache Energy to provide it with the reasons for the anticipated reductions in supply from 16 September onwards. A week later Apache Energy advised Newcrest that the allocation "reflects the supply obligations we have, including existing commitments, contracts that expire and contracts that pre-date the FM event that had a scheduled nomination in place for firm deliveries. " No attempt was made to provide Newcrest with a detailed explanation of the kind which Santos had supplied on 2 August. Although these e-mail exchanges were "signed" by an employee of Apache Energy they were not stated to be replies by Apache Energy in its capacity as the Sellers' Representative. 14 On 9 September 2008 Newcrest wrote to the two suppliers. The letter was addressed c/- Apache Energy. The evidence suggests that the letter was not forwarded to Santos. It advised that Newcrest did not understand the basis on which the sellers were allocating gas supply to customers who had entitlement to gas from the Brookes field. In particular it drew attention to the proposed step down commencing on 1 October 2008. It then asked a series of questions. No response had been received by 16 September 2008 when Newcrest wrote again to the Sellers. Again the letter was addressed to Apache Energy. It drew attention to the proposed reduction in supply between 1 October and 15 December 2008 and asked for the production of documents relating to the allocation of gas in the period between 3 June 2008 and the end of the year to be provided by the following day. 16 On 17 September 2008 Apache responded to Newcrest's letters of 9 and 16 September. It did so on Apache Energy letterhead. Without any way prejudicing our right to adjust or reconsider these allocations, your allocation for gas day ... This is based on the lesser of: 1. your daily gas nomination before the forced majeure occurred (reduced proportionately by the amount of gas not available during the forced majeure); 2. the maximum amount you can take and consume in your operations without reselling the gas (provided that this does not prevent customers who were Gas Retailers on 3 June 2008 from making retail gas sales); or 3. the volume you have told us you need. If you are unable actually to use the above volume in your operations, please notify us of that so that we can reallocate it to other customers who will be able to use the gas in their operations. We have provided you with a projected allocation through 31 October 2008. We have not provided one to you yet for November or December. It stresses the intrusive nature of an order for discovery and submits that the Court should not readily make orders which might undermine commercial confidentiality or impose onerous burdens. It contends that the Court lacks jurisdiction to entertain the application because the only federal claim which is made, that under the Trade Practices Act 1974 (Cth) ("the TPA"), is colourable and bound, in any event, to fail. 18 It is convenient to deal first with Apache's jurisdictional objection. It is not in dispute that, in the absence of the claims which are founded on the TPA, Newcrest could not pursue a case based on allegations of breach of contract in this Court. Nor is it in dispute that the Court will lack jurisdiction to deal with a controversy in circumstances in which the only federal claims relied are either colourable (in the sense of not being bona fide but rather relied on solely to attract the Court's jurisdiction) or trivial or insubstantial. The relevant cases show that if a federal claim which is said to enliven the accrued jurisdiction of the court to dispose of non-federal claims is trivial or unsubstantial, that will not be sufficient to attract that jurisdiction. The cases are collected in the judgment of Merkel J in Johnson Tiles Pty Ltd v Esso Australia Ltd [1999] FCA 165. As Merkel J pointed out, triviality in this context does not require an examination as to whether the federal claim is less likely to succeed than the non-federal claim. Accrued jurisdiction does not depend upon an assessment being made of the strengths of the federal claim; rather the question is whether the federal claim is genuine. If the federal claim is colourable in the sense that it was made for the purpose of fabricating jurisdiction, of course the jurisdiction of the court is not enlivened: see Fitzroy Motors Pty Ltd v Hyundai Automotive Distributors Australia Pty Ltd (1995) 133 ALR 445. How is the genuineness of the claim to be determined? One way is to ask whether the federal claim is bound to fail, that is to say, to ask whether the claim is unarguable. If the federal claim is hopeless then it is difficult to see how an applicant could contend that it was pursuing the claim bona fide. [12] However, it is not only when a federal claim is colourable that the Federal Court would lack jurisdiction to deal with non-federal matters. A federal claim which is a trivial or insubstantial aspect of the controversy must, of course, itself be resolved in federal jurisdiction, but it would be neither appropriate nor convenient in such a case to translate to federal jurisdiction the determination of the substantial aspects of the controversy from the jurisdiction to which they are subject in order to determine the trivial or insubstantial federal aspect. Again, impression and practical judgment must determine whether it is appropriate and convenient that the whole controversy be determined by the exercise of federal judicial power. This is not a claim that would be appropriately and conveniently determined in the exercise of federal jurisdiction. [14] In the result two things follow. First, the court does not have jurisdiction to entertain the non-federal claims. Second, there being no other claims that are relied upon to found jurisdiction in the Federal Court, the proceeding must be dismissed with costs. It relies on ss 51A and 52 of the TPA. 20 It is said that those documents contain representations that, by mid-August, the respondents would be supplying Newcrest with its full gas entitlement under the contract. Newcrest says that, acting on these representations, it cancelled some temporary arrangements and then was forced to make further alternative arrangements when, in mid-August, full supply had not been restored. This led to Newcrest incurring substantial losses. 21 The respondents deny that any such representations were made. Santos went further and said that, if such representations were made, they were not made by it. Apache contends that there was nothing in any of the documents which are relied on to justify Newcrest's conclusion that gas supplies to its Telfer Mine would be fully restored by mid-August. On the contrary, they point to the fact that Newcrest was advised that only 300-340 TJ/day would be available by mid-August and that Santos had told Newcrest on 2 August that reduced supplies could be expected at least until the end of the year. 22 It is not appropriate, on an interlocutory application of this kind, for the Court to make findings of fact on what might, at trial, prove to be contentious issues. 23 Having examined the documentary evidence which is before the Court I am led to reject Apache's objections that Newcrest's federal claim is colourable and bound to fail. 24 As already noted that claim is a claim for loss and damage founded on an alleged contravention of s 52 of the TPA Act. The representations by Apache, on which Newcrest relies, are to be found in Apache's June 2008 press release and its letter to Newcrest dated 30 July 2008. The relevant parts of these documents are set out above at [6] and [7]. There is a certain degree of ambiguity to be found in both documents. The press release does, however, refer to Apache's "timetable of restoring production by mid-August. " The letter refers to Apache's "goal during the period of limited production ... to deliver enough gas to our customers to fulfil their minimum required volume levels ..." (Emphasis added). These passages are open to the construction that full supplies would be restored to Apache's customers by mid August. Whether such a construction would be sustainable having regard to other passages in these documents and other evidence must remain a matter for trial should there be one. For present purposes it is sufficient to note that Newcrest has an arguable case that the representations on which it relies were made. 25 There is no evidence as to whether the projected production levels in August or subsequently were achieved. Production levels are matters peculiarly within the knowledge of the respondents. Apache has not provided any evidence as to actual production levels from the Brookes field at relevant times. It cannot, therefore, be said that Newcrest's claim that the representations were misleading is bound to fail. Newcrest will, if need be, be able to call in aid the reverse onus provisions of s 51A(2) of the TPA. 26 Apache submits that, even if it made the alleged representations in June and July 2008, those representations had, effectively, been superseded by the information contained in Santos's letter dated 2 August 2008. There was, accordingly, no basis for Newcrest's assertion that it had relied on the earlier representations when it terminated some of its interim gas supply arrangements on 6 August 2008 or shortly before that date. Newcrest responds by pointing out that 2 August 2008 was a Saturday and that, even if the Santos letter had been posted on that day it may well have been that Newcrest did not receive it in time to consider its contents before adjusting its gas supply arrangements. The relevant facts will need to be determined at trial. Newcrest's claim to have relied on the representations made by Apache cannot, at this stage, be characterised as hopeless. 27 There is uncontradicted evidence that Newcrest suffered financial loss as a result of its having cancelled some of its gas supply contracts and then having to find alternative sources of energy. 28 It is for these reasons that I reject Apache's principal objections to Newcrest's application. 30 In order for Newcrest to obtain the orders which it seeks it is necessary that the conditions, prescribed by O 15A r 6 be satisfied. Belief is an inclination of mind towards assenting to, rather than rejecting a proposition. Thus it is not sufficient to point to a mere possibility. The evidence must incline the mind towards the matter or fact in question. The question is whether the applicant has sufficient information to make a decision whether to commence proceedings in the court ... 32 In Echo Tasmania Pty Ltd v Imperial Chemical Industries PLC [2008] FCAFC 58 at [43] Black CJ and Sackville J held that Hely J had "correctly summarised" the principles governing the proper construction of O 15A r 6 insofar as his summary dealt with O 15A r 6(a). 33 In his affidavit Mr Brown seeks to establish that each of the conditions, imposed by O 15A r 6, has been met. He deposes that Newcrest believes that it has or may have a right to obtain relief against the respondents on the basis that it believes that the respondents have breached a contractual obligation to provide Newcrest with its fair pro-rated share of gas produced from the Brookes field and that the respondents have made statements which may constitute misleading and deceptive conduct in contravention of s 52 of the TPA and/or s 10 of the Fair Trading Act 1987 (WA). He says that the attempts made by Newcrest to obtain relevant information have proved fruitless and that he believes that the respondents have or are likely to have relevant documents in their possession. 34 For reasons already given in dealing with Apache's argument relating to jurisdiction, I consider that there is reasonable cause to believe that Newcrest may have a right to obtain relief under the TPA. The evidence suggests that each element of a cause of action under s 52 of the TPA may be present. Moreover, Apache did not seriously contest Newcrest's contention that it had, in addition, a viable cause of action for breach of its supply contract with Apache. 35 Newcrest made a series of inquiries of Apache in an effort to obtain the information which it submits it needs in order to determine whether to commence proceedings in the Court. It directed a series of questions in writing to Apache. After some delay it received a guarded response. Most of the answers were lacking in detail. Some were only partially responsive to the question asked. One was non responsive. The questions and Apache's responses to them are set out above at [14] and [16]. In these circumstances I consider that Newcrest has made all reasonable inquiries to obtain the additional information which it needs. I am also satisfied that it is likely that Apache has in its possession documents disclosing the information sought by Newcrest in order that Newcrest may determine whether or not to commence a proceeding. The application should be adjourned sine die so that, if any difficulties arise in relation to the time within which discovery is to be given or orders in relation to inspection become necessary, it can be relisted at short notice. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | discovery preliminary discovery whether court lacks jurisdiction whether federal claim colourable or bound to fail practice and procedure |
The Tribunal's decision affirmed a decision of the first respondent's delegate to refuse to grant the applicant a protection visa. 2 These circumstances raise an issue as to the nature of this application. An order dismissing an application for an order nisi is interlocutory: see NAHQ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 297 ; (2003) 134 FCR 377 at 378 [3] . Accordingly, leave to appeal is required by s 24(1A) of the Federal Court of Australia Act 1976 (Cth). The applicant has not obtained leave to appeal. 3 However, counsel for the first respondent informed the Court that the first respondent did not oppose this application being treated as an application for leave to appeal. I have proceeded on that basis and will treat this application as an application for leave to appeal. 4 An application for leave to appeal falls to be determined by reference to the principles established by the Full Court's decision in Decor Corporation Pty Ltd v Dart Industries Inc (1991) 33 FCR 397. That case applied a two-limbed test to determine when leave to appeal from an interlocutory decision should be granted. First, the decision below must be attended with sufficient doubt to warrant its being reconsidered by this Court; secondly, substantial injustice must be demonstrated if leave were to be refused, supposing the decision to be wrong: at 398. 5 The principal submission made on behalf of the first respondent was that the applicant has not satisfied the first of these requirements. That is, the first respondent submitted that the Federal Magistrate's decision is not attended with sufficient doubt as to warrant its reconsideration by this Court. The applicant filed an application in the High Court for an order nisi on 21 April 2003, which was remitted to the Federal Court by Heydon J on 25 August 2003. The matter was remitted to the Federal Magistrates Court by Emmett J on 5 August 2005. 7 By the time the matter came to be heard by Scarlett FM on 16 January 2006, the applicant had filed what purported to be an amended application under the Migration Act 1958 (Cth) ('the Act') with reference to r 44.05 of the Federal Magistrates Court Rules 2001 (Cth). Scarlett FM dealt with the grounds raised by the amended application, assuming they were applicable. 8 In the Federal Magistrates Court, the first respondent submitted that the proceeding should be dismissed as an abuse of process under r 13.10(c) of the Federal Magistrates Court Rules . Although Scarlett FM said that the prior proceedings could not be overlooked, his Honour addressed the merits of the application. The application was thus dismissed by Scarlett FM on its merits. I also propose to consider the merits of the application. He lodged an application for a protection visa on 9 February 2000. He claims to be a refugee because he feared persecution at the hands of criminals who had taken over his family business. 10 In his application for a protection visa, the applicant stated that he is of Punjabi ethnicity. He previously travelled to Australia legally, using a passport issued in Kuala Lumpur, Malaysia, on 9 December 1998. His Australian visa was issued in Kuala Lumpur on 5 February 1999. From 1996 to 1999 the applicant lived in Malaysia and worked as a member of cabin crew for Malaysian Airlines. 11 The facts concerning the applicant's claims are fully set out in the Tribunal's reasons for decision delivered on 13 August 2002. I have not set out all of those facts in these reasons; I have referred to the relevant factual matters below. 12 The Tribunal found that the applicant was a Bangladeshi national, having been issued with a Bangladeshi passport. The applicant's father moved to East Pakistan, now Bangladesh, from what was West Pakistan in 1969. The applicant's father remained in Bangladesh and took out Bangladeshi nationality and ran businesses in that country until his death in 1986. The applicant was able to obtain an education, work in the family business, obtain a passport and travel in and out of Bangladesh on numerous occasions. 13 The Tribunal accepted that the applicant and his family had been subject to harassment from criminals in respect of their business on an ongoing basis since 1993 or 1994. However the Tribunal did not accept the applicant's claim that the main reason for this harassment was his family's Pakistani background. Rather, the Tribunal found that the essential and significant reason for these events was that criminals wanted to take control of his family's assets. 14 The Tribunal's reasons recount the origins of the dispute surrounding the applicant's family business and the activities of the criminals in respect thereof. In brief, a man called Mohammed Ali was given a 5 per cent share of the business. Mohammed Ali was described by the applicant to the Tribunal as a local muscleman who was involved in organised crime. Mohammed Ali and those associated with him managed to take over the family business of the applicant. The applicant claimed, and the Tribunal accepted, that Mohammed Ali and his associates effectively stole control of the business by means of, inter alia, forged documents. The applicant told the Tribunal that there has been ongoing litigation about who owns the business. The applicant also claimed that Mohammed Ali and his colleagues took over his family business because the applicant and his family were of Pakistani background. The applicant claimed that people of Pakistani background are hated in Bangladesh and treated very badly. Moreover, the Tribunal stated that it could be satisfied that the applicant otherwise has a well-founded fear of persecution because of his Pakistani origins. 16 The Federal Magistrate found that, having regard to the merits of the matter, the applicant had not made out a case of jurisdictional error by the Tribunal. His Honour concluded that the application should be dismissed with costs. 17 The alleged grounds of jurisdictional error raised in this Court are the same grounds as those which were argued before Scarlett FM and rejected in the Federal Magistrates Court. Accordingly, I shall turn immediately to the grounds raised by the applicant in this Court. The applicant submitted that the Tribunal made various jurisdictional errors and claimed that the Federal Magistrate had erred in not recognising those jurisdictional errors and setting aside the decision of the Tribunal. The applicant alleged that this constituted an error of law on the basis that it was not reasonably open to the Tribunal to conclude that the harm suffered by the applicant was anything other than serious and, accordingly, the Tribunal should have found that the criteria in s 91R(1)(b) and (c) of the Act were satisfied. The Tribunal also accepted that these events had contributed to the applicant's fear that he could be targeted again if he returned to Bangladesh. I do not read these later passages in the Tribunal's reasons as suggesting that the Tribunal dismissed the assault and harassment that the applicant suffered as not serious. 21 The question whether conduct is sufficiently serious to amount to persecution is a factual matter for the Tribunal: see Minister for Immigration and Multicultural and Indigenous Affairs v SZANS [2005] FCAFC 41 at [50] - [53] ; Minister for Immigration and Multicultural and Indigenous Affairs v Kord [2002] FCA 334 ; (2002) 125 FCR 68 at [3] , [50]---[53]. On a fair reading of the Tribunal's reasons, the reference to harassment and discrimination not reaching a sufficient level of seriousness to be characterised as persecution referred to the harassment and discrimination suffered by the applicant and his family after the war. In my view, the Tribunal's reference was not directed to the physical assault that the applicant suffered. In any event, I am not satisfied that the Tribunal's findings of fact were unreasonable or erroneous or not reasonably open to it. 22 The Tribunal accepted that the applicant and his family had been harassed over a period of time, however the Tribunal considered that that harassment did not constitute persecution within the meaning of the Convention. I do not consider that this ground reveals any error by the Tribunal, or, more particularly, that it raises a serious doubt as to the correctness of the decision of the Tribunal. The applicant submitted that the Tribunal found that the essential and significant motivation for the harm feared by the applicant was that criminals wanted to take control of his family's assets. According to the applicant, the Tribunal arrived at this conclusion erroneously by considering the 'primary motivating factor' in the actions taken by the criminals. In substance, the applicant's argument is that the expression 'primary motivating factor' departed from the language of the Act and led the Tribunal to address the wrong question, giving rise to a jurisdictional error: cf Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259. 24 The Tribunal's reasons for decision ought not to be read in an over-technical or pedantic way. They must be read fairly and in context. The expression 'primary motivating factor' was used by the Tribunal on one occasion. Elsewhere in its reasons, both before and afterwards, the Tribunal used the phrase 'the essential and significant reason' or 'the essential and significant motivation'. These expressions correctly reflect the test that is required in relation to s 91R(1)(a). I agree with the submission made on behalf of the first respondent that when the various passages in the Tribunal's reasons are considered together and in context, it becomes clear that the Tribunal applied the correct test. In my opinion, there was no error in the Tribunal's conclusion that the applicant's evidence concerning what happened to his family strongly suggest that the essential and significant reason for these events was that criminals wanted to take control of his family's assets. 25 This conclusion was reached by Scarlett FM and I agree with his Honour's reasons. The applicant submitted that the Tribunal had therefore failed to deal with the integers of the applicant's claim, thereby constituting a jurisdictional error: Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244 at 259 [42]; W396/01 v Minister for Immigration and Multicultural Affairs (2002) 68 ALD 69 at [31]-[38]; SAAD v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 65 at [40] . The applicant contended that the criminal activities directed at his family were instigated, and were successful, because the criminals knew that the State would fail to offer protection to the applicant and his family due to their Pakistani ethnicity. The applicant complained that there was evidence before the Tribunal of the State's tolerance and complicity in the criminal activity perpetrated against his family and himself because of their ethnicity. 27 It is not entirely clear that the applicant's claim of the State's complicity in the criminal activities was raised, explicitly or implicitly, by the applicant before the Tribunal. The extent of the claims relating to any tolerance or complicity in the criminal activities relied upon by the applicant appears to be that the criminals, on two occasions, paid the police to arrest the applicant but the applicant was not arrested on either occasion. 28 More generally, the applicant contended that people of Pakistani background were hated and treated very badly in Bangladesh. The applicant submitted that his family had to prove that the business assets belonged to them and were stolen through, inter alia, forged documentation. There was, moreover, evidence that there had been ongoing litigation in Bangladesh about the ownership of the family business for some time. 29 The Federal Magistrate found that the applicant's complaint that the State of Bangladesh had tolerated or been complicit in the harm done to him and his family had not been raised before the Tribunal, and it did not so obviously arise on the material before the Tribunal as to require the Tribunal's consideration of it. 30 In this Court, counsel for the first respondent submitted that it was not implicit in the applicant's claims before the Tribunal that any action or lack of action by the State had any connection with the applicant's ethnic background. In my view, this is a correct assessment of the material and submissions before the Tribunal. Even if such a claim was implicit in the materials and argument that the applicant placed before the Tribunal, it was still open to the Tribunal to find, as it did, that it was not satisfied that there was any persecution for a Convention reason. 31 In my opinion, the contention that the State of Bangladesh had shown tolerance or complicity towards the alleged criminal activity is not apparent on the evidence, or at least not in such a way as to connect it with a Convention reason for persecution. I consider that there is, in this respect as well, no serious argument that the Tribunal or the Federal Magistrate fell into error. There is, therefore, substance in the applicant's complaint that the Tribunal asked the wrong question by stating that the applicant could avoid persecution on his return to Bangladesh. The Tribunal should have inquired into what may happen to the appellant if he returned to Bangladesh. However, I do not regard this deficiency in the Tribunal's reasons as providing a basis for granting leave to appeal. The Tribunal determined the case adversely to the applicant on the basis that it was not satisfied that the essential and significant reason for any harm that the applicant has suffered in the past, or fears in the future, was for a Convention reason. The Tribunal did not fall into error in reaching that conclusion. 34 I am satisfied that the Tribunal applied the right test and it was open on the evidence for the Tribunal to reach the conclusion it did. That remains so, notwithstanding the error that the Tribunal made elsewhere in its reasons, by stating that the applicant could avoid harm if he returned to Bangladesh. The application was rightly rejected on the independent basis that the harm in question, both actual and apprehended, was not essentially and significantly linked to any Convention reason. I have not found it necessary to deal with the contentions raised before the Federal Magistrate that the application was an abuse of process having regard to the previous proceedings. 36 Accordingly, the application for leave to appeal is dismissed and the applicant is to pay the first respondent's costs. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Young. | protection visa application for leave to appeal against decision of federal magistrate dismissing application for order nisi whether tribunal erred in assessing seriousness of harm whether tribunal applied wrong test under s 91r(1)(a) of migration act 1958 (cth) in relation to essential and significant reason whether tribunal failed to consider claim that state was complicit in or condoned or tolerated harm whether tribunal's decision infected by error due to statement in relation to avoidance of harm leave to appeal not granted migration |
Kart racing is a specialised motor sport and has its own licensing regime. There are two types of kart racing --- sprint and endurance. Sprint kart racing is predominantly conducted by karts with two stroke engines and endurance races are conducted by karts with four stroke engines. Kart racing is generally conducted on bitumen kart racing circuits ('kart circuit'). Motorcar racing circuits are generally unsuitable for kart racing due to the length and layout of the circuits. The AKA's principal activity is to promote, co-ordinate and administer all aspects of the sport of karting in New South Wales. It issues karting licences to individual drivers who belong to AKA clubs. This is the principal source of the AKA's revenue. The AKA does not own any kart circuit or supply any kart circuit hire services. It has a number of part-time and casual employees. There are approximately 15 kart circuits which are managed by AKA clubs in New South Wales and the Australian Capital Territory. In addition, there are approximately 7 kart circuits owned or managed by non-AKA members. AKA clubs are allowed to conduct 10 race meetings a year, with one meeting as a signature race for the club. Each of the AKA clubs which is formed around a kart circuit in a particular location manages that kart circuit. It will use that kart circuit to conduct its sprint kart racing series and can hire it to other users. Other AKA clubs which do not manage a kart circuit must hire the use of a kart circuit to conduct their sprint kart racing series. TEKA conducts endurance kart races which are held at various kart circuits throughout New South Wales, Queensland and Canberra. To hold these events, TEKA must hire the use of a kart circuit managed by members of AKA or at tracks managed by private operators. The second, third, fourth and fifth respondents ('respondent clubs') are clubs that form part of the AKA. Each of the respondent clubs is a sporting club run by volunteers which conducts kart racing events, organises sprint kart racing series and hires out kart circuits located at different regions in New South Wales as the name suggests. The Manning Valley Kart Club Inc hires out the kart circuit located in Wingham. The sixth and seventh respondents were officers of the AKA at the relevant time. At the relevant times, the sixth respondent, Mr Erdmann, was the President of the AKA and also the President of the national Australian Karting Association and a life member of the Wollongong Kart Club. Mr Erdmann has resigned as President of the AKA effective from 12 October 2009 and is also no longer president of the national Australian Karting Association. The seventh respondent, Mr Whiting, was a member of the executive of the AKA, the Vice President of the national Australian Karting Association and a life member of the Wollongong Kart Club. Neither Mr Erdmann nor Mr Whiting received any remuneration for the work they undertook as officers of the AKA, the national Australian Karting Association or the Wollongong Kart Club. Mr Erdmann is an engineer and Mr Whiting is a salesman in industrial lighting. Prokart manages a kart circuit in Wollongong called the Wollongong City Raceway and runs approximately 50 kart races each year at venues across New South Wales, ACT and Queensland. ABRA hosts race events at the Butterfly Farm Indy 800 track in Windsor and at other circuits around New South Wales and Canberra. Both of these bodies have hired venues from AKA clubs. There are approximately 20 kart circuits in New South Wales and the Australian Capital Territory suitable for Prokart's racing events. Prior to July 2008, Prokart had hired kart circuits from different AKA clubs and had held races at each of those kart circuits. On those occasions prior to July 2008, Prokart negotiated hire terms and conditions individually with each kart circuit operator. A venue suitable for kart racing must be a kart circuit. The parties agree that there is a market in the New South Wales and the Australian Capital Territory for the supply of kart circuit hiring services ('kart circuit market'). The Commission also alleges that Mr Erdmann and Mr Whiting were knowingly concerned in or party to particular contraventions. Each of the respondents admits the conduct referred to in the declarations contained in the short minutes of order proposed by consent of the parties. The parties made joint submissions in relation to those proposed orders and submitted a statement of agreed facts setting out the conduct which, it is agreed, amounted to the alleged contraventions. Present in person were representatives of 19 different AKA clubs. The Dubbo Kart Club had a representative in attendance for part of the AGM but that representative left the meeting before the passage of the resolution containing the understanding complained of. There were six further AKA clubs which gave proxies. Of the AKA clubs represented in person, ten clubs managed their own kart circuits. The AGM was chaired by Mr Erdmann. There was a transcript of the AGM. During the AGM, Mr Whiting and Mr Erdmann participated in a discussion amongst the representatives of the AKA clubs in attendance at the AGM about fixing the fees charged by AKA clubs to non-AKA members for the supply of kart circuit hire services. The transcript of the AGM records that this agenda item was first raised by Simon Whiting. Mr Whiting introduced the subject of the fees which AKA clubs had charged non-AKA members for hire of kart circuits, as compared to what Prokart charged Wollongong Kart Club for hire of the Wollongong City Raceway. One is to set a minimum fee that anybody is going to charge. That way you are not competing amongst yourselves, right, for this person who continually wants to drive down your price. The minimum fee is $4,000 plus GST per day for country clubs and $6,000 plus GST per day for metropolitan clubs and Canberra Kart Racing Club. Oppose the motion? Any abstentions to the motion? The motion is carried unanimous. The provision of the Understanding set out in paragraph 21(a) was an exclusionary provision within the meaning of s 4D of the Code. During that telephone conversation, Ms Newton advised that she would contact Dubbo Kart Club to confirm availability and would forward Prokart an invoice if the Lincoln County Raceway was available for hire. On 8 August 2008, Ms Newton sent an email to Robert Hay and Trevor Jones, the President of Dubbo Kart Club, advising that the AKA had received a request from Prokart for the hire of Lincoln County Raceway on 23 and 24 August 2008 and advising that once the AKA had the confirmation that the Dubbo Kart Club would accept this request, an invoice would be raised to Prokart for $8,800 (being $4,000 plus GST per day). On 11 August 2008, Mr Jones sent an email to Ms Newton of the AKA advising that the Dubbo Kart Club would accept Prokart's request for the hire of the Lincoln County Raceway on 23 and 24 August 2008 for a fee of $4,050 plus GST per day. On 12 August 2008, Ms Newton sent Mr Pullen an email advising that Dubbo Kart Club had confirmed that the Lincoln County Raceway was available for hire by Prokart for $4,050 plus GST per day. On 12 August 2008, the AKA raised invoice #INV01622 addressed to Prokart for $8,910, and Ms Newton emailed the invoice to Mr Pullen. Prokart did not hire the Lincoln County Raceway on the terms proposed or at all during 2008. On the weekend of 23 and 24 August 2008, Prokart hired the Raleigh International Raceway at Raleigh New South Wales (not owned by an AKA member) for $2,000 plus GST to conduct its race fixture. During the telephone conversation, Mr Fisher advised Mr Pullen that the Manning Valley Kart Club was no longer able to negotiate the hire of the Manning Valley Kart Circuit directly with Prokart and advised Mr Pullen to contact the AKA to arrange the hire. On about 5 August 2008, Mr Pullen had a telephone conversation with Ms Newton of the AKA regarding the availability of the Manning Valley Kart Circuit for hire by Prokart on 20 and 21 September 2008. During the telephone conversation, Ms Newton asked Mr Pullen if he was aware of the new fee structure, advised that Prokart would be required to pay all AKA kart circuit hire fees directly to the AKA 30 days in advance of the booking date and advised that there was no scope for negotiation on the new terms. On 5 August 2008, Ms Newton sent an email to Mr Fisher enquiring whether the Manning Valley Kart Circuit was available for hire by Prokart on 20 and 21 September 2008 for a fee of $8,800 (being $4,000 plus GST per day). On 7 August 2008, Mr Fisher sent an email to Ms Newton advising that the Manning Valley Kart Circuit was available for hire by Prokart on those dates for that fee. On about 8 August 2008, Mr Pullen had a telephone conversation with Ms Newton regarding the hire of the Manning Valley Kart Circuit by Prokart on 20 and 21 September 2008. During the conversation, Ms Newton confirmed the availability of the Manning Valley Kart Circuit for hire for $8,800 (including GST) and advised that she would send an invoice for the hire. On 8 August 2008, the AKA raised invoice #INV01608 addressed to Prokart for $8,800, and Ms Newton emailed the invoice to Mr Pullen. Prokart did not hire the Manning Valley Kart Circuit on the terms proposed or at all during 2008. Instead, Prokart conducted the race scheduled for 20 and 21 September 2008 at its own kart circuit, the Wollongong City Raceway. On 8 August 2008, Ms Newton sent an email to Tony D'Annibale, the President of Newcastle Kart Club, enquiring whether the Newcastle Kart Circuit was available for hire by Prokart on 15 and 16 November 2008 and whether the Newcastle Kart Club was willing to accept the fee of $13,200 (being $6,000 plus GST per day). Between 8 August 2008 and 12 August 2008, Newcastle Kart Club advised the AKA that the Newcastle Kart Circuit was available for hire by Prokart on 15 and 16 November 2008 and that it was willing to accept the fee of $13,200. On 12 August 2008, Ms Newton sent an email to Mr Pullen advising that the Newcastle Kart Circuit was available for hire on 15 and 16 November 2008 for a fee of $13,200.00 ($6,600 per day) GST inclusive. On 12 August 2008, the AKA raised invoice #INV01621 addressed to Prokart for $13,200, and Ms Newton emailed the invoice to Prokart. Prokart did not hire the Newcastle Kart Circuit on the terms proposed or at all during 2008. Prokart did not hold a race on the weekend of 15 and 16 November 2008. The alleged contravening conduct ceased once the AKA became aware of the ACCC investigation and the Resolution made at the AGM was revoked. The conduct in contravention of the Code occurred in the conduct of a meeting of sporting bodies of modest size. The conduct giving rise to the contraventions was not clandestine. Indeed, the meeting was recorded. The first to fifth respondents are run almost exclusively by volunteers without legal training who give their time for no remuneration to assist in the development of the kart racing sport. There is a substantial participation in the sport by children and teenagers. The AKA has three part-time employees. It does not have and has never had in place a trade practices compliance program nor has it provided any officers or those employees with trade practices compliance training. None of the respondents have previously been found to have engaged in any conduct in contravention of the Code or the Trade Practices Act 1974 (Cth) ('TPA') . Each of Mr Erdmann and Mr Whiting admits that they were knowingly concerned in, or a party to, the making of or the arriving at the Understanding which was in contravention of s 45(2)(a)(i) and 45 (2)(a)(ii) of the Code. I am satisfied that in each case those contraventions have been made out. The principles for assessing penalty under the Code are the same as under the TPA ( White Top Taxis at [20] per Finkelstein J). Section 76 of the Code sets out certain matters as relevant matters to which the Court should have regard in determining an appropriate pecuniary penalty. The parties in the joint submissions referred to further relevant factors addressed by French J in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152-52,153 and expanded upon in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 and J McPhee & Son (Australia) Pty Ltd v Australian Competition and Consumer Commission [2000] FCA 365 ; (2000) 172 ALR 532. It is uncontroversial as between the parties that the total penalty for related offences ought not to exceed what is proper for the entire contravening conduct involved ( Mornington Inn v Jordan [2008] FCAFC 70 ; (2008) 168 FCR 383 at [42] - [45] , [91] per Stone and Buchanan JJ). The parties also recognise that a principal object of a penalty under s 76 is deterrence ( NW Frozen Foods ). As elaborated, the concept of deterrence is to deter repetition by the contravener and by others who might be tempted to contravene the Act ( TPC v CSR at 52,125 per French J), or to deter others who might be tempted to think that contravention would be of benefit and detection would lead merely to a compliance program for the future ( NW Frozen Foods at 294---295 per Burchett and Kiefel JJ). The need to achieve general deterrence as well as specific deterrence means that a party's capacity to pay must be weighed against the need to impose a sum which members of the public will recognise as significant and proportionate to the seriousness of the contravention ( Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 3) [2005] FCA 265 ; (2005) 215 ALR 301 at [39] per Goldberg J). It is noteworthy that, in the present case, the participants were totally ignorant that their actions constituted contraventions of the Code and thus they had no intention to contravene the Code. There is no suggestion that any of these parties will re-offend. Bearing in mind the process as set out by the High Court in Markarian v The Queen [2005] HCA 25 ; (2005) 228 CLR 357 for the assessment of criminal sanctions where penalties are not fixed by statute, the ACCC and the AKA jointly submit that a total pecuniary penalty of $10,000 imposed on the AKA is appropriate and within the range of penalties that a Court would order in these circumstances. The parties point out that in considering the proposed agreed penalty, the Court should take into account the fact that a negotiated resolution may be expected to include measures designed to promote, for the future, vigorous competition in the particular market. The imposition of penalty is a matter for the Court ( NW Frozen Foods at 290) and the assessment of the appropriate penalty involves exercising a discretion taking into account all relevant factors ( Markarian at [27]). However, the parties submit that the Court should not depart from an agreed figure merely because it might otherwise have been disposed to select some other figure except in a clear case ( NW Frozen Foods at 291, approved and explained in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 ; (2004) ATPR 41-993). Some of the relevant factors that I have taken into account in the present case include: I note also that, as French J said in Australian Competition and Consumer Commission v Real Estate Institute of Western Australia Inc [1999] FCA 18 ; (1999) 161 ALR 79 at [18] , it is not sufficient, in making a consent order, that it is within the power of the Court to make the order nor that the parties have privately agreed as to the proposed order. The Court is not merely giving effect to the wishes of the parties. It is exercising a public function and must have regard to the public interest in doing so. As to the specific matters relevant in the present case, the parties have made submissions on: the nature and extent of the contravening conduct; the amount of loss or damage caused; the circumstances in which the conduct took place; similar conduct in the past --- whether the contravener has previously been found by the Court to have engaged in similar conduct; the size of the contravening company; the degree of power the contravening company has, as evidenced by its market share and ease of entry into the market; the deliberateness of the contravention and the period over which it extended; whether the contravention arose out of conduct of senior management or at a lower level; whether the company has a corporate culture conducive to compliance with the Code, as evidenced by compliance programs and corrective measures in response to an acknowledged contravention; whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the Code in relation to the contravention; the financial position of the respondents; the deterrent effect of the proposed penalty; and totality and parity. Mr Erdmann and Mr Whiting participated in a discussion amongst the representatives of the AKA clubs in attendance at the AGM, that discussion leading to the motion being proposed. The members voted and passed the Resolution which gave rise to the understanding. The understanding was given effect to on three occasions when Prokart received quotes from the AKA regarding the hire of kart circuits on which to hold its race series. The conduct ceased once the AKA became aware of the ACCC investigation and the possible contravention of the Code, which was less than three months after the Resolution was passed. The Resolution was subsequently revoked. The ACCC submits that on three occasions, Prokart lost the opportunity of hiring, at a rate set competitively, tracks which it felt best met its requirements and that of its customers. Prokart did not ultimately hire any tracks at the rates set by the Understanding. The respondents submit that the loss or damage was nil or, at worst, nominal. There is no evidence of any actual loss or damage suffered. Prokart conducts a business arranging kart racing series. The conduct was not clandestine or covert and took place at a meeting of a sporting body of modest size. The corporate respondents are run almost exclusively by persons without legal training, who give their time for no remuneration to assist in the development of the kart racing sport. The individual respondents receive no remuneration for their services. There is substantial participation in the sport by children and teenagers. The imposition of more significant sanctions than those proposed would act as a significant disincentive for others to volunteer their time to sporting and other activities which are of benefit to society. The contravening conduct occurred as a result of ignorance of the prohibitions contained in the Code. Its annual turnover for the financial year ending 30 June 2007 was $614,378. For the financial year ending 30 June 2007, the AKA made a profit of $2,773. For the financial year ending 30 June 2008, the AKA had an operating loss of $10,082. This left it with reserves of $171,141 as at 30 June 2008. The second to fifth respondents each manage and hire out a kart circuit, being four of the twenty two kart circuits available for hire in NSW. Other AKA clubs manage and hire a further 11 tracks. The ACCC submits that, cumulatively, they could exercise significant market power. The conduct occurred because the respondents and the other AKA clubs who were party to the Understanding did not know that they were engaging in conduct in breach of the Code. As a result, the penalties submitted to the Court as appropriate are discounted in the order of 50% from the penalties which would have been submitted by the ACCC as appropriate, absent such co-operation. It will also make a clear statement to other sporting organisations in a similar position to the AKA. The parties submit that the proposed declarations, in a convenient and abbreviated form, sufficiently identify the contravening conduct ( Rural Press Limited v Australian Competition and Consumer Commission [2003] HCA 75 ; (2003) 216 CLR 53 at [89] ---[90]) and thereby provide context for the pecuniary penalties. Accordingly, the parties submit the declarations operate with the pecuniary penalties to achieve the objective of general deterrence. I am satisfied that it is appropriate to make the declarations in the form sought. The injunctions are available pursuant to s 80 of the Code and are in the nature of public interest injunctions ( ICI Australia Operations Pty Limited v Trade Practices Commission [1992] FCA 474 ; (1992) 38 FCR 248 at 255 to 256 per Lockhart J; Truth About Motorways Pty Limited v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591 at 602 per Gleeson CJ and McHugh J). There is no suggestion that the respondents are likely to engage in the contravening conduct again. However, the public interest may warrant the making of an injunction notwithstanding that the contravener is not likely to engage in that contravening conduct again. Section 80(4) of the Code expressly provides that the Court's power to grant an injunction may be exercised in such circumstances. I am satisfied that similar organisations, despite the fact that they are not being conducted primarily for the purpose of profit and the fact that the participants are volunteers, need to be aware of the need to comply with the Code. I am satisfied that the granting of the injunctions in addition to the declarations reinforces that message. The parties point out that the contraventions occurred because the respondents and the other AKA clubs which were party to the Understanding did not know that they were engaging in conduct in breach of the Code. The orders are sought, it is said, to educate the AKA's members, officers and employees about their obligations under the Code and about the outcome of litigation. As such, the proposed program will raise awareness of the type of conduct that may contravene the Code and is therefore consistent with the purpose of a probation order under s 86C of the Code as defined in that section. On one hand, it seems to me somewhat onerous for a voluntary organisation of the nature of the AKA with three part-time employees and the respondent clubs to require them to implement a compliance program. Certainly it would be totally inappropriate to require them to implement the kind of program that would be appropriate for a large organisation or a large commercial enterprise. However, I see the force in the argument that it is necessary for clubs or organisations such as these not to contravene the Code in ignorance. While in the present case little damage was done, that may not always be the case when understandings are made and implemented in contravention of the Code. Accordingly it is, in my opinion, appropriate to make the orders sought in respect of the trade practices compliance program. I am aware that the AKA can pay the proposed penalty of $10,000 without going out of business or seriously impeding its activities. I am also aware of the strictures as enunciated in the cases of not substituting an amount by way of penalties simply because another sum comes to mind. I am mindful of the fact that the AKA has agreed to pay a contribution to the ACCC's costs of the proceedings in an amount to be agreed. I am conscious of the fact that this is a voluntary organisation conducting kart racing in the interests of an interested section of the public. I have taken into account the various factors elucidated in Mobil Oil regarding the public interest in the settlement of litigation. Further, I take into account the following: I am satisfied that the agreed amount of $10,000 is within the permissible range in the present circumstances. I will make the orders in Annexure A to these reasons, which, apart from one proposed declaration as to which there was no supporting evidence in the statement of agreed facts, accord with the orders proposed by the parties. I certify that the preceding one hundred (100) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. 5. The sixth respondent ("Mr Erdmann") by his involvement in the making of or arriving at the Kart Circuit Hire Understanding with the knowledge of the essential elements of the contraventions of section 45(2)(a)(ii) and section 45(2)(a)(i) of the Code referred to in declarations 1 and 2 above, was a person directly or indirectly knowingly concerned in, or party to, those contraventions, which constitutes conduct of the kind referred to in section 75B(1)(c) and/or section 80(1)(e) of the Code. The seventh respondent ("Mr Whiting") by his involvement in the making of or arriving at the Kart Circuit Hire Understanding with the knowledge of the essential elements of the contraventions of section 45(2)(a)(ii) and section 45(2)(a)(i) of the Code referred to in declarations 1 and 2 above, was a person directly or indirectly knowingly concerned in, or party to, those contraventions, which constitutes conduct of the kind referred to in section 75B(1)(c) and/or section 80(1)(e) of the Code. 15. The AKA shall within three months of the date of this order, cause to be sent to each member of the AKA a letter substantially in the form of Attachment 1. The AKA to pay a contribution to the ACCC's costs of the proceedings in an amount as agreed between the parties. The Competition Code has the same provisions as the Trade Practices Act 1974 (Cth), but applies to individuals and non-trading associations such as AKA clubs. One of the Court's orders is that the AKA must write to each member to notify them of the outcome of these proceedings and to inform them of the illegality of making and giving effect to arrangements which substantially lessen competition or contain an exclusionary provision. The AKA has been ordered to pay a penalty of $10,000 and to pay a contribution to the ACCC's costs. The Court has also granted injunctions restraining the AKA from making arrangements of this kind in the future and has ordered that the AKA establish a trade practices compliance program. You can obtain further information about the ACCC's proceedings against the AKA and the Trade Practices Act 1974 / Competition Code from the ACCC website at www.accc.gov.au . | incorporated association of kart racing clubs ('aka') and individual kart racing clubs admitted to arriving at understanding to set minimum hire fee for kart circuits managed by the clubs respondents admit that the understanding contravened ss 45(2)(a)(i) and 45(2)(a)(ii) of the competition code of new south wales respondents admit to giving effect to the understanding in contravention of ss 45(2)(b)(i) and 45(2)(b)(ii) of the code individual respondents were president of the aka and executive member of the aka and admitted to being knowingly concerned in, or party to, the contraventions the respondent clubs were run by volunteers respondents were ignorant that their actions contravened the code and fully co-operated with accc when informed of the investigations whether the jointly proposed declarations, injunctions, trade practices compliance program and penalty are appropriate relevant factors for determining an appropriate penalty deterrence as a principal object of a penalty whether the court should depart from an agreed penalty trade practices |
In that judgment the Court found that the respondent Union contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) ("the Act"). This judgment deals with the question of the penalty, if any, which should be imposed on the Union for that contravention. These reasons should be read together with the reasons for judgment in the substantive matter ( Duffy v Construction, Forestry, Mining and Energy Union [2008] FCA 1804). The relevant portion of the judgment in the substantive matter is set out at [16] to [25]. Effectively from the afternoon of 21 October 2005 there were no operative bans on the site. There appeared to be a ban, in name only, with respect to earthworks, as the organisers appear not to have been aware that Crushtec came back on site on the afternoon of 21 October 2005. Under s 49(1) of the Act, the Court may impose a pecuniary penalty for its breach. The maximum penalty is $110,000, which equates to 200 penalty units; see s 49(2) of the Act and s 4AA of the Crimes Act 1914 (Cth). Counsel referred to prior conduct of the Union which breached s 38 of the Act. Counsel noted that four of the contraventions were in respect of pre-20 October 2005 conduct. Counsel for Mr Duffy also contended that there was a need for a meaningful penalty which satisfied the requirements for general deterrence. He said that the Union was a large organisation with substantial income and assets. Specific deterrence was also required as it was said that the Union is a repeat offender which has not been deterred by low-scale fines in the past. Counsel for the Union drew attention to the importance for safety in the availability of a contamination report on site and the laxity of the head contractor in not having a female toilet on site. The Union's counsel submitted that the existence of prior contraventions could not justify a heavier fine than might otherwise be imposed if that fine is disproportionate to the circumstances of the offence. On the topic of prior contraventions it was contended by the Union that: Counsel for the Union referred to recent financial records showing the Construction Division had made a loss according to its returns for 2007. Counsel also referred to the Union as not being a profit making body but existing for the benefit of its members. The Union's counsel further submitted that deterrence is of less significance in this case than many others because of the circumstances --- the absence of a contamination report and a female toilet and the short lived bans. The effect of this case is that it is unlawful to place a ban on work at a building site even though there may be a doubt as to the safety of working on that site (in the absence of a soil contamination report) and even though the head contractor did not provide a female toilet. The circumstances do not entirely excuse the breach. The matter could have been the subject of an urgent hearing in the Australian Industrial Relations Commission ("the Commission"). Also it may have been referred to State occupational health and safety authorities. However, the circumstances show that the organisers reacted to incompetent management by the head contractor. In fact the head contractor had a site contamination report but its Site Manager did not know. It was also inexcusable in this modern age for there not to be a female toilet on the site. The bans, although invited by incompetent and bizarre management, were nonetheless illegal bans. However, they lasted a very short period of time, had minimal effect and occurred at a very early stage of the project where no significant disruption or inconvenience occurred. The contravention was deliberate in the sense that it was imposed in a calculated way in response to management incompetence. There is no evidence that senior management of the Union was involved in the placing of the ban. Within about six months of the relevant events, the Union organised a seminar designed to educate its officials about the effects of the Act. This conduct indicates a desire to avoid repetition of conduct in breach of the Act; see Stuart-Mahoney v Construction, Forestry, Mining & Energy Union [2008] FCA 1426 at [53] per Tracey J. There is similar previous conduct, most relevantly in Stuart-Mahoney . The events of which occurred about a fortnight before the current events, although that case is not a prior contravention it shows that similar conduct had been undertaken in the past. I say "similar" in a rather loose sense because the imposition of the overtime ban in that matter was far more serious and had far more widespread effects than the transient bans in this matter. Deterrence is important, both general and specific. That is why, notwithstanding the conduct of the head contractor which led to the short lived bans of little consequence, there should be some monetary penalty imposed to reflect that a statutory provision has been breached. It is not as if there was no alternative but to impose a ban. Focussed talks with the head contractor at a high level and/or a referral of the issue to the Commission and/or Worksafe inspectors were alternative available courses of action. In Stuart-Mahoney , Tracey J imposed a penalty of $20,000 for breach of s 38 of the Act in respect of events occurring about the same time as the instant events. Even taking into account the application of the totality principle in that case, the significance and seriousness of the current breach are far less than the circumstances considered by Tracey J. Accordingly, I consider a fine of $5,500 to be appropriate in the current circumstances. In recording that fine, I acknowledge that Union is a large body with considerable assets but it is a body which does not exist to make profit but exists for the benefit of its members; see Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 at [8] per Gray J. It also should be acknowledged, in mitigation of penalty, that the relevant organisers, in imposing the bans, acted in response to what they perceived to be an unsafe workplace where as they were told by the site manager that no soil contamination report had been obtained for the site. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | penalty hearing contravention of s 38 of the building industry improvement act 2005 (cth) relevant considerations in determining appropriate penalty penalty determined industrial relations |
In referring to the applicant, I refer to Mr Cox. The proceeding purports to be also brought on behalf of an applicant called 'Christian Churches of God' but I am not yet satisfied that any such body with legal personality capable of suing in Australia exists. 2 The requests pursuant to O 8 r 9 are out of order as no leave has been given to serve a document in a foreign country. I indicated to Mr Cox that I would look at the merits of such an application. Before a party can be given leave to serve an originating process out of the jurisdiction, that party must have a prima facie case for the relief claimed in the proceeding (O 8 r 3(2)). I am not satisfied that there is such a prima facie case for relief. 3 The proceeding arises out of a decision by a delegate of the President of the Human Rights and Equal Opportunity Commission (the Delegate) to terminate a complaint of breach of the Racial Discrimination Act 1975 (Cth). I have had regard to the contents of the Form 167 which has been filed, the application, a draft statement of claim and an affidavit of Mr Cox filed on 8 November 2006. The Form 167 includes the information provided by Mr Cox to the Human Rights and Equal Opportunity Commission in support of the claim. I have also had regard to what was said by Mr Cox on 6 November last. 4 The essence of the complaint was that the entity described as the Christian Churches of God, its members and adherents were attacked and vilified due to their adherence to Jewish Biblical doctrines. They claim to be, in effect, Messianic Jewish. They alleged they suffer similar racial discrimination as do adherents of Orthodox Judaism. It was claimed that the Jews are adherents to a religion but qualify for human rights protection on the grounds that they constitute a specific ethnic group due to their religious beliefs. It was claimed that the Christian Churches of God are in exactly the same situation. The faith was described as Sabbatarian. 5 The Delegate gave reasons for terminating the complaint. Having considered the authorities in relation to what constitutes ethnic origin and an ethnic group for the purposes of the Racial Discrimination Act 1975 , the Delegate was not satisfied that the members of, and adherents to, the Christian Churches of God constituted an ethnic group or that any action against them was by reason of ethnic origin. The Delegate was, therefore, of the view that the requirements under s 18C(1)(b) of the Racial Discrimination Act 1975 were not satisfied. 6 The Delegate was also of the view that, even if the members of the Christian Churches of God did constitute an ethnic group, the material complained of could not be considered to be 'reasonably likely, in all the circumstances, to offend, insult, humiliate or intimidate' them on the basis of their 'ethnic origin'. It was pointed out that insult on the basis of religious beliefs is not a ground covered by the racial hatred provisions of the Racial Discrimination Act 1975 . 7 I can detect no error in the manner in which the Delegate dealt with and terminated the complaint. I can see nothing in the information given to the Human Rights and Equal Opportunity Commission, in the additional material that has been provided by Mr Cox or in what Mr Cox said in Court on 6 November 2006 which assists his case. In my opinion, there is no reasonable prospect of establishing that persons who adhere to what is called the Christian Churches of God, being Sabbatarian, are of the same ethnic origin or would constitute an ethnic group for the purposes of the Racial Discrimination Act 1975 . In my opinion, the complaint was misconceived and the proceeding doomed to failure. 8 Leave to serve the proceeding outside the jurisdiction is refused. The requests which have been filed will not be acted upon. This ruling may have consequences for the proceeding as a whole. That is to be considered when the matter is next before the Court. | leave to serve outside the jurisdiction no prima facie case made out leave refused practice and procedure |
The proceeding has been brought against the background of other litigation in the Court between the first respondent, Mr Craig Jephcott, as applicant, and Webcot, Andrew James Webb and Australian Pharmaceutical Partners Pty Ltd ( APP ), as respondents. In that proceeding ( the Oppression Proceeding ), Mr Jephcott seeks orders under s 233 of the Corporations Act 2001 (Cth) on the basis that the affairs of Webcot have been conducted in a manner that is oppressive to him as a shareholder of Webcot. Webcot was incorporated on 25 September 2001. At relevant times Mr Jephcott has owned 35% of the issued capital of Webcot and APP has held 65% of the issued capital. Mr Webb is a principal of APP. Mr Webb and Mr Jephcott were appointed directors of Webcot upon its incorporation and Mr Webb remains a director. Mr Jephcott ceased to be a director on 20 June 2009. Mr Jephcott acknowledges that, as a result of innovation, education and novelty, Webcot has positioned itself as the agriculture industry's leading supplier of do-it-yourself public health products. Webcot's products include WebZone, Vigilanti, Protector and Vortex, which are suitable for home and farm use in the control of termites, wasps, fleas, tick, mosquitoes, cockroaches and spiders. WebZone is an important part of Webcot's range. WebZone is designed to protect structures from subterranean termite damage and controls termites, mite pests and a range of other urban pests as well as pests occurring in crops. Webcot has functioned as part of a group of companies known as the APP Group and the business of Webcot has been and continues to be linked to the business being conducted by APP. APP provides the following facilities to each of the companies in the APP Group, including Webcot: From its formation in September 2001 until 7 May 2008, Mr Jephcott was employed by Webcot. From September 2001 until 1 July 2003 Mr Jephcott's day to day role was that of sales manager. On 1 July 2003, Mr Jephcott and Webcot entered into an agreement ( the Service Contract ) whereby Webcot agreed to retain Mr Jephcott and Mr Jephcott agreed to serve Webcot in the capacity of general manager, reporting to the managing director and chief executive officer, Mr Webb. Mr Jephcott's services as general manager under the Service Contract were terminated on 7 May 2008. Webcot contends that there is reasonable cause to believe that it may have a right to relief in the Court against Mr Jephcott, the second respondent, FreeZone Public Health Pty Limited ( FreeZone ), the third respondent, Mr Nathan Scheuer and the fourth respondent, Applied Environmental technologies Pty Limited ( AET ). Webcot has formulated a putative statement of claim concerning the cause of action that it says may give rise to relief against the respondents, consisting of injunctions and damages or an account of profits. The allegations made in the putative statement of claim may be summarised as follows: During the period from September 2001 until 7 May 2008 Mr Jephcott was employed by Webcot. By the Service Contract Mr Jephcott agreed not to: - disclose Webcot's confidential information - use Webcot's confidential information other than for the benefit of Webcot, - obtain suppliers, customers or clients of Webcot for any person other than Webcot or - solicit or endeavour to entice away from Webcot any supplier, customer or client of Webcot. - Not to use improperly any information obtained by him because of his employment to gain an advantage for himself or someone else or to cause detriment to Webcot. - To exercise his powers and discharge his duties as a director with the diligence that a reasonable person would exercise if such a person were a director of Webcot in Webcot's circumstances and occupied the office and had the same responsibilities within Webcot as Jephcott. - To exercise his powers and discharge his duties as a director in good faith in the best interests of Webcot and for a proper purpose. - Not to use his position improperly to gain an advantage for himself or someone else or cause detriment to Webcot. During Mr Jephcott's employment by Webcot and while he was a director, Webcot was a seller of pest control products, including a product called "Protector", which involves pesticide smoke generator technology. In developing that part of its business involving the sale of Protector, Webcot developed and implemented pricing strategies for the sale of Protector, developed a customer base for Protector and developed and implemented sales and marketing strategies for the sale of Protector. Those strategies are confidential information of Webcot. During the period of his employment and while a director of Webcot, Mr Jephcott was involved in the establishment and development of Webcot's business in so far as it related to its products, including Protector and, in doing so, Mr Jephcott obtained confidential information concerning Webcot, including Webcot's confidential information regarding Protector. No later than 12 November 2008 Mr Jephcott became the chief executive officer of FreeZone. On 1 September 2008, Mr Jephcott applied for the registration of the domain name of FreeZone.net.au and stated that FreeZone was the registrant for that domain name. FreeZone is in the business of selling pest control products and advertises itself as selling as part of its business the product which it advertises as 'Protector'. AET is the manufacturer of Protector. While Mr Jephcott was an employee and director of Webcot, AET became the supplier of Protector to Webcot. While Mr Jephcott was an employee and director of Webcot, Bentz Jaz Singapore Pty Limited, a Singapore company ( Bentz Jaz ), became a customer of Webcot and Mr Jephcott represented Webcot in its dealings with Bentz Jaz. Webcot made sales of Protector to Bentz Jaz in 2006 and 2007. In or about November 2008 an opportunity arose for a sale of Protector to Bentz Jaz and in February 2009, a sale of Protector was made to Bentz Jaz by FreeZone. No later than 27 November 2008 Mr Jephcott became aware of other business opportunities for the sale of pest control products including Protector. In breach of the duties arising under the Corporations Act owed by Mr Jephcott to Webcot, both as employee and as a director, Mr Jephcott procured the sale of Protector to Bentz Jaz by FreeZone in February 2009 and procured sales opportunities for FreeZone in Indonesia. There is no real dispute concerning the background facts alleged in the putative statement of claim. The issue concerns the assertion by Webcot that any sales or business activities of FreeZone in which Mr Jephcott has been involved entail a breach by Mr Jephcott of duties owed by him to Webcot. Following the commencement of the Oppression Proceeding, Mr Webb heard rumours concerning possible business activities of Mr Jephcott. In late 2008, he was concerned that Mr Jephcott might be acting contrary to Webcot's interests and may be using confidential information of Webcot. He acknowledges that he had no evidence to that effect. On 11 November 2008, Webcot's solicitors wrote to Mr Jephcott's solicitors regarding Mr Jephcott's relationship with two suppliers to Webcot, Sorex Limited ( Sorex ) and Brandenburg UK Limited ( Brandenburg ). In the letter of 11 November 2008, Webcot's solicitors said that Webcot had reason to believe that Mr Jephcott had or proposed to enter into a relationship with either or both of Sorex and Brandenburg. The letter asserted that trading operations that might be carried on by either Sorex or Brandenburg in Australia or New Zealand would be contrary to the best interests of Webcot. The letter asked whether Mr Jephcott has entered, or proposes to enter, into a relationship with either Sorex or Brandenburg and, if he has done so, requested particulars of the relationship. On 14 November 2008, Webcot's solicitors wrote again to Mr Jephcott's solicitors asking for further information in relation to Agserv Pty Limited and Agnova Technologies Pty Limited, Univar Pty Limited and Xenex Associates Limited. Mr Jephcott's solicitors responded on 17 November 2008, saying that Mr Jephcott was well aware of his obligations as a director of Webcot and had complied and would in the future comply with those obligations by acting at all times lawfully. They said that, in those circumstances, in was not necessary for the questions raised in the earlier letters to be answered by Mr Jephcott. On 21 November 2008, Webcot's solicitors wrote again to Mr Jephcott's solicitors pressing for an answer to the questions previously posed. Mr Jephcott's solicitors responded on 26 November 2008 saying that Mr Jephcott had no interest in any of the companies referred to in the earlier letters. They asked Webcot's solicitors to explain the reason that Webcot had reason to believe that Mr Jephcott had or proposed to enter into a relationship with the companies if they were to persist in inquiries. There is no evidence of any response to that letter. In December 2008, Mr Webb attended a meeting at the premises of APP with Mr Alec Walker, a representative of the Aldi organisation. Mr Webb asked Mr Walker whether Mr Jephcott had approached Aldi to manufacture any products. Mr Walker responded that he understood that his partner, Kevin Chandler, had recently been approached by Mr Jephcott to ask whether PAKS, the manufacturer of the " Bunnybait " product, would supply him with an alternative to Bunnybait in the future. Mr Walker said that his directors had agreed that they would not supply Mr Jephcott with an alternative product. On 1 April 2009, Webcot's solicitors wrote to Mr Jephcott's solicitors saying that Webcot had reason to believe that Mr Jephcott had approached Webcot's suppliers with a view to obtaining a product that would be in competition with a product offered in Webcot's current range. Webcot's solicitors asked: Whether Mr Jephcott has or proposes to enter into any type of commercial relationship with either Aldi or PAKS. If Mr Jephcott has entered into such a relationship, when that occurred. Whether Mr Jephcott has any similar relationships with any of Webcot's current suppliers. Whether Mr Jephcott has any involvement with a business that is in competition with Webcot. If Mr Jephcott denies that he has breached his obligations as a director on what basis does he say his approach to Webcott's suppliers have been made. The letter said that Mr Jephcott does not presently propose to enter into any type of relationship inconsistent with his duties to Webcot or engage in a business that is in competition with Webcot. Webcot's solicitors wrote again to Mr Jephcott's solicitors on 15 April 2009 asking a specific question about an approach by Mr Jephcott to Vernox and an approach by Mr Jephcott to PAKS. The letter went on to say that Mr Jephcott has an obligation as a director to disclose information known to him that is material to the affairs of Webcot and that, if he contends that he has made no such approach, it would be a simple matter for him to say so. The letter asserted that, if Mr Jephcott has made such an approach, he must disclose the details of that approach. Mr Jephcott's solicitors replied on 22 April 2009, saying that Mr Jephcott had known Alec Walker, who is associated with both PAKS and Vernox, for more than 20 years and that Mr Jephcott had met with other persons associated with Vernox and PAKS on a social basis and had discussed with them, amongst other things, the Oppression Proceeding. The letter said that at a social dinner Mr Jephcott had discussed with the principals of Vernox and PAKS the possibility of engaging in some business with them at some time in the future after the conclusion of the Oppression Proceeding. The letter confirmed that Mr Jephcott had not done anything inconsistent with his obligations to Webcot and did not propose to do so, so long as he had obligations to Webcot. On 29 April 2009 Webcot's solicitors wrote again to Mr Jephcott's solicitors posing further specific questions to Mr Jephcott. Mr Jephcott's solicitors replied on 4 May 2009 saying that he had not and would not breach his duties to Webcot and if Webcot felt that it had a case, the case should be brought forward. On 13 May 2009, Webcot's solicitors wrote again to Mr Jephcott's solicitors. After referring to the earlier correspondence they said that, in the circumstances, it was not inappropriate for Webcot to have concerns regarding the conduct of Mr Jephcott and that Mr Jephcott could surely not dispute that he had an obligation as a director to make full disclosure of information known to him that was material to the affairs of Webcot. They requested a response to their letter of 29 April 2009. There was no further response by Mr Jephcott's solicitors. However, on 16 July 2009, Webcott's solicitors wrote again posing a series of interrogatories for answer by Mr Jephcott. On 17 July 2009, Mr Jephcott's solicitors sent an email to Webcot's solicitors saying that they were obtaining instructions about the letter of 16 July 2009 but in the interim invited Webcot's solicitors to identify the enactment or authority that entitled Webcot to interrogate Mr Jephcott. Webcot's solicitors responded by email later in the day saying that a request for authority was surprising but that it was a matter for Mr Jephcott how he responded to the letter, to which Webcot expected a reply. Mr Jephcott's solicitors responded by email later in the day, saying that, since the Habeus Corpus Act 1640 and as a consequence of the abolition of the Star Chamber, persons could not arbitrarily be compelled to answer questions: they enquired whether the position was different in New South Wales. On 24 July 2009 Webcot's solicitors also wrote letters to Mr Scheuer, AET and FreeZone seeking information involving Mr Jephcott's engagement with them. Mr Scheuer responded by email on 5 August 2009 saying that he was not in a position to comment on the affairs of Mr Jephcott. Neither AET nor FreeZone responded to the letters of 24 July 2009. Webcot relies upon the correspondence that I have described as indicating an attitude of dissembling on the part of Mr Jephcott. Webcot characterises the responses as less than frank and says that, in the light of the exchanges, adverse inferences should be drawn against Mr Jephcott. Webcot points specifically to the acknowledgement in the correspondence that Mr Jephcott had had communications with suppliers of Webcot. However, I do not regard the exchanges as giving rise to any inference. Mr Jephcott was under no obligation to respond to the interrogation propounded by Webcot's solicitors. Webcot points to a number of other matters that it says give rise to a reasonably well founded belief that it may have a right to relief. First, Webcot points to an application lodged on 17 July 2008 by Messrs Jephcott and Scheuer for registration of the trade mark FreeZone in relation to: Pest control agents, pest control formulations, adhesives for pest control. Pest control. Pest control in agriculture. Webcot contends that the registration of a trade mark in relation to those goods and services evinces an intention to engage in business in competition with Webcot. Secondly, Webcot points to the involvement of Ms Belinda Basquil, the fifth respondent in the proceeding, against whom the proceeding as now been abandoned. Ms Basquil has provided services over some years to Webcot in assisting Webcot to obtain registration of pesticides, insecticides and veterinary products by the Australian Pesticides and Veterinary Medicines Authority ( the Authority ). Where a company wishes to introduce a new product onto the market or a new item into a product range, which may utilise a generic formula used by other suppliers, the company must first obtain approval from the Authority. The Authority usually requires details of such things as clinical studies undertaken for the chemicals, efficacy results, allowable rates of dosages, pack sizes and directions to be included on labels. Ms Basquil has provided assistance to Webcot in relation to such matters. On 21 May 2009, Ms Basquil sent an email to Mr Jephcott concerning discussions she had had with the Authority concerning FreeZone products. The email suggests that Mr Jephcott is in the process of registering a product known as FreeZone. Thirdly, FreeZone has established a website describing products that it has available for sale. One of the products offered is Protector. AET is the manufacturer of Protector. It is common ground that the product offered by FreeZone under that name is the same as the product offered under that name by Webcot. Fourthly, on 12 November 2008, Mr Iouri Rozjimaline, a principal of AET, sent an email on behalf of FreeZone to Mr Irawan Hartantio in Indonesia. Mr Rozjimalene said that he was pleased that Mr Hartantio was interested in FreeZone's product. The email said that FreeZone's business had undergone some changes since their last communication. He said that AET was now a manufacturing division of FreeZone and that Mr Jephcott was FreeZone's chief executive officer. Mr Rozjimalene's email stated that FreeZone was focussing on the promotion and distribution of smoke generators as well as supplying and distributing pest control and agricultural chemicals to Australian and overseas markets. It also referred to a plan to start the registration process in Europe and Latin American countries and said that FreeZone was keen to promote pesticide smoke technology to Indonesia. The email went on to say that, because FreeZone's resources were stretched, registration in Indonesia had not been on its agenda but that it would be unreasonable not support Mr Hartantio's registration efforts in Indonesia. Fifthly, there is evidence of a sale in February 2009 by FreeZone to Bentz Jaz of the product known as Protector. Webcot supplied Protector to Bentz Jaz in 2006. Finally, in July 2009, Mr Jephcott approached Bunnings about a new product range of FreeZone. Bunnings is a customer of Webcot. It is clear enough from the material presently available to Webcot that Mr Jephcott is the chief executive officer of FreeZone and that FreeZone is engaged in a business that is in competition with that of Webcot. Further, FreeZone has solicited custom from Bunnings, a customer of Webcot and FreeZone has supplied Protector to Bentz Jaz which has been a customer of Webcot in the past. In addition, FreeZone is endeavouring to establish a business of supplying customers in Indonesia with products of the same category as those supplied by Webcot. Finally, FreeZone is obtaining supplies of Protector from AET, which has also supplied Protector to Webcot. Preliminary discovery is an invasive process and the power given by Order 15A should only be exercised with caution. The imposition of obligations of discovery should not be taken lightly and will not regularly occur. The question is whether the applicant has sufficient information to make a decision whether to commence a proceeding in the Court. The applicant must be seeking to determine whether a right to relief exists and not simply to determine the strength of the right to relief that he believes may exist. Order 15A is intended to give assistance to an applicant who has, because of a lack of significant and vital information, real difficulty in deciding whether to commence a proceeding. Order 15A must be construed beneficially and should be given the full scope that its language will allow. It expressly contemplates what might be characterised as fishing, although it is not design to permit trawling. Nevertheless, an applicant for relief under Order 15A must establish each of the elements provided for in paragraphs (a), (b) and (c) and is not entitled to satisfy deficiencies in the satisfaction of those prerequisites by rummaging through another's affairs. The showing of reasonable cause involves an objective test. It is not sufficient for an applicant simply to state that he believes that he has a case. On the other hand, it is not a requirement that every element of a potential cause of action be shown to exist. It is possible that some aspects of a cause of action might be left to surmise or conjecture but reasonable cause to believe requires something more than mere assertion, conjecture or suspicion. However, the material before the Court must incline one's mind towards the relevant matter or fact that is in question. The mere possibility or speculation or suspicion that the relevant elements of a putative cause of action might exist is not sufficient. Rather, there must be a positive basis for the belief. There is nothing in the material to suggest that Mr Jephcott was engaged in any activities on behalf of FreeZone while he was still an employee of Webcot. FreeZone was not incorporated until 7 July 2008, whereas Mr Jephcott's employment by Webcot ceased on 7 May 2008. However, Mr Jephcott continued to be a director of Webcot until 20 June 2009. The question is whether the material supports a conclusion that there is reasonable cause to believe that Mr Jephcott may have acted in breach of his duties to Webcot as a director and that he is making use of confidential information of Webcot. The putative statement of claim asserts that, in relation to that part of its business involving the sale of Protector, Webcot had developed and implemented pricing strategies for the sale of Protector, developed a customer base for Protector, and developed and implemented sales and marketing strategies for the sale of Protector. It is asserted that those " strategies " constitute confidential information of Webcot and that, in his capacity as an employee and director of Webcot, Mr Jephcott obtained that confidential information. There is no material presently before the Court as to what the so-called pricing strategies and sales and marketing strategies for the sale of Protector or the customer base for Protector that may have been developed by Webcot consist of. It is difficult to conclude that such strategies and customer base constitute confidential information that was obtained by Mr Jephcott during the course of his employment and directorship of Webcot. In the absence of specific evidence in that regard, I am not persuaded that there is reasonable cause to believe that Mr Jephcott has made any use of or taken any advantage from strategies or customer bases that constitute confidential information. Assuming, as the putative statement of claim asserts, that the opportunity for a sale of Protector to Bentz Jaz arose in November 2008, there is nothing in the material to support a conclusion that there is reasonable cause to believe that the opportunity arose by reason of Mr Jephcott's former employment by Webcot or by reason of this position as a director of Webcot. Nor does the material suggest reasonable cause for believing that business opportunities for the sale of pest control products of which Mr Jephcott was aware in 2008 are opportunities that came to the knowledge of Mr Jephcott by reason of his former employment by Webcot or his position as a director. Further, there is no reasonable cause to believe that Mr Jephcott's awareness of any business opportunity involving Indonesia involved the use of any confidential information acquired by Mr Jephcott during the course of his employment or by reason of his directorship. Assuming it be established that Mr Jephcott became aware of such opportunities in November 2008, I do not consider that he was under a duty, simply by reason of his directorship of Webcot, to inform Webcot of those opportunities. It may be that there is a possibility that, in relation to some opportunities, involving both Bentz Jaz and supply of product to Indonesia, Mr Jephcott failed to act in good faith in the best interests of Webcot. It is possible that, as a result of sales of Protector to Bentz Jaz, Webcot suffered detriment in the form of a lost sale. However, on the basis of the material presently available, those are matters of speculation. I do not consider that the material gives reasonable cause to believe that Mr Jephcott has acted in breach of any duty owed to Webcot under the Corporations Act . Clearly enough, Mr Webb has suspicions. Those suspicions must be understood in the context of lack of trust that now exists as between Mr Webb and Mr Jephcott as evidenced by the allegations made in the Oppression Proceeding. However, mere suspicions and concerns are not sufficient to justify the making of orders under Order 15A. The material must constitute reasonable cause for believing that there may have been a breach by Mr Jephcott of his duties as a director of Webcot. While that is a possibility, on the basis of the material presently available, it is no more than speculation. It follows, a fortiori , that the claim that Mr Scheuer and FreeZone and AET have been involved in any breach by Mr Jephcott of his duties to Webcot are speculation. I am not persuaded on the material presently available that an order should be made against any of the respondents as claimed by Webcot. In reaching the conclusion that I have reached, it must be understood that I express no view whatsoever as to whether or not Mr Jephcott has engaged in conduct in contravention of provisions of the Corporations Act . Further, it is possible that, if further material came to light in the future, that material, together with that which is presently available, may constitute reasonable cause for believing that Mr Jephcott may have engaged in such conduct. However, on the basis of the present material, the claim for relief under Order 15A must be dismissed at present. In the light of the conclusions that I have reached, it is unnecessary to deal with the questions raised by rule 6(b) and rule 6(c). If the prerequisites of rule 6(a) were satisfied, there is a basis for concluding that Mr Jephcott may have documents that would assist Webcot in making a decision as to whether it should commence a proceeding against him for breach of his duties as a director. The discovery sought by Webcot was narrowed in the course of the hearing. In its final formulation, Webcot sought correspondence sent or received during the period 1 July 2007 to 20 June 2009 by Mr Jephcott to or from various people and entities relating to: any product sold by Webcot; any product proposed to be sold by Webcot; any product similar to any product or proposed to be sold by Webcot. Webcot also seeks similar categories of documents from Mr Scheuer, FreeZone and AET. The justification for the width of those categories is that, even if material were available to show a breach of duty in relation to Bentz Jaz and the Indonesian connection, Webcot may need to assess the extent of and width of any breaches by Mr Jephcott, before making a decision to commence a proceeding. Even so, I consider that the categories would require further refinement, had I concluded that relief should be given pursuant to Order 15A. Correspondence with all suppliers and customers of Webcot relating to products sold or proposed to be sold by Webcot or products similar to products sold or proposed to be sold by Webcot would clearly encompass documents beyond those that would be necessary to make a decision whether to commence a proceeding against Mr Jephcott or against Mr Scheuer or FreeZone or AET. Mr Jephcott also contends that, even if the prerequisites of rule 6(a) had been satisfied, the Court should not be satisfied that Webcot has taken all reasonable steps to acquire sufficient information to enable it to make a decision as required by rule 6(b). Mr Webb was not cross-examined on his affidavit as to whether or not he had subjectively decided that he had sufficient information. The only evidence of inquiries made by Webcot in relation to a possible claim against Mr Jephcott and the other respondents is the correspondence to which I have referred. No attempt has been made, it seems, to acquire information from Mr Hartantio or from Bentz Jaz. I am by no means satisfied that the prerequisites of rule 6(b) have been satisfied. Relief under rule 6 of Order 15A involves significant intrusion into the private affairs of the object of such an order. It is essential that the parties seeking such an order satisfy the Court that it has taken all reasonable steps to obtain the information that would enable it to make a decision whether to commence a proceeding. Writing to the prospective defendants without more does not in the present circumstances satisfy that requirement. However, as I have said, it is not necessary to form a final view on this question. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | preliminary discovery whether applicant has reasonable cause to believe that it has or may have the right to obtain relief whether applicant has taken all reasonable steps to acquire sufficient information to enable it to make a decision discovery |
One condition is that the claims of the represented group "give rise to a substantial common issue of law or fact": Federal Court of Australia Act 1976 (Cth), s 33C(1)(c). This application questions the possibility of satisfying the commonality requirement in what is essentially a misrepresentation case. 2 The action is one of many that has arisen following the collapse of the Westpoint group. The group was involved in the construction of large commercial and retail developments. It financed the developments by loans from banks and money raised from the public. Two companies were used for each development. One company (the development company) borrowed funds from an institution and undertook the development. The other company (referred to as a mezzanine company) raised the balance needed from small investors by issuing promissory notes (in the pleadings they are called "Westpoint products") and lent the money to the development company. 3 Following the group's collapse, most if not all group companies were placed into liquidation. Investors stand to recover very little in the windings up. As a result, many of them have begun proceedings against those who advised them to invest funds with the group. This is one such action. 4 Here the applicant and group members purchased Westpoint products issued by a Westpoint mezzanine company. It is alleged that they did so on the advice of the first respondent, Barzen Pty Ltd, (formerly Dukes Financial Services Pty Ltd) (DFS), Mr Dukes or a representative of DFS. Mr Dukes was a director with sole responsibility for the management of the business of DFS. According to the statement of claim, the investment advice was provided by several representatives of DFS, including Mr Dukes. The number of representatives involved is not given. Nor is the content of the advice that was proffered, save in very general terms. 5 The causes of action that are pleaded are these. There is a claim in negligence. The alleged acts of negligence are: (a) failing to investigate the risk of an investment in Westpoint products before placing those products on its approved product list (a list of investments which its representatives were authorised to recommend); (b) placing the products on the list; (c) failing to place restrictions on recommendations its representatives could make; (d) failing to warn that Westpoint products were high risk investments; (e) advising group members to invest in Westpoint products. 6 There is also a claim for misleading conduct in contravention of s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth). That section proscribes misleading representations in relation to financial services. The alleged representations are: (a) Westpoint products were appropriate investments; (b) group members should invest in one or other Westpoint product; (c) group members would likely receive the benefits (interest and capital) specified in the promissory notes; (d) Westpoint products were sufficiently secure to make them a reasonable investment; (e) DFS had undertaken a review of those products before placing them on the approved product list. 7 The representations are said to be oral, in writing and to be implied. In so far as the representations are in writing, reference is made in the particulars to written advice given to group members, but no further description is provided. Nor are any details given of any oral representations. The representations are to be implied from the placement of the products on the approved product list in combination with the failure of representatives to advise group members not to invest in the products. 8 There is a claim for negligent misstatement. The same representations are relied upon. 9 Next there are two statutory claims which do not depend upon representations having been made to group members. The first is based on the former s 851 of the Corporations Act 2001 (Cth). That section provided that a securities adviser making securities recommendations must do so on a reasonable basis. This involves giving reasonable consideration to, and conducting reasonable investigation of, the securities recommendation. It is alleged that in breach of s 851 DFS failed to properly consider Westpoint products before placing them on the approved product list and advising or allowing its representatives to advise group members to invest in them. 10 The second statutory claim asserts that the issue of promissory notes by a Westpoint company constituted a managed investment scheme and that when group members were advised to invest in the scheme, a financial product disclosure statement was required to be given by reason of s 1012B of the Corporations Act . It is alleged (and may even be common ground) that no disclosure statement was given. If it had, it is said investors would have been advised of the risk of investing in the promissory notes and also that they were investing in an unregistered managed investment scheme. If that advice had been given it is alleged that investors would not have purchased the notes. 11 On the basis of the pleading as it presently stands, the following is likely to be the case in relation to the claims founded on misrepresentation. First, the representations may be oral or in writing or both. Second, there is likely to be material variations in the representations made. Third, there is likely to be material variations in the degree of reliance upon the representations. 12 In the negligence claim there are also factors that are not common. The existence and extent of the duty (if any) that is owed to each individual investor will differ having regard to the investor's individual characteristics and the circumstances in which advice was given. 13 The fact that representations and issues of reliance raise questions that are not common does not mean that the misrepresentation case or the action based on negligence is not suited to a representative proceeding. First of all, while there will be some factual variations, it does not follow that s 33C(1)(c) is not satisfied. It will be enough if there is at least a common nucleus of operative facts or legal issues. It will also suffice if what is alleged in substance amounts to a common course of conduct directed toward a particular group (for example clients). 14 The questions of law or fact said to be common to the claims of all investors number 41. They range from the trivial (that DFS was incorporated) through to the uncontroversial (that advice was given to investors to invest in Westpoint products) to those where commonality is unlikely (whether particular representations were made to each group member). 15 This is not sufficient to take the case outside the commonality requirement. All that is necessary to show commonality is that there are some substantial common issues, that is to say, common issues that are serious and significant. The issues need not be determinative of the claims of the applicant or any group member. Put another way, the commonality requirement does not involve looking at the quantity of the common issues alleged but at their quality. On the other hand, the quantity of common issues as well as their quality may be relevant in an application under s 33N that a proceeding be ordered to no longer continue as a representative proceeding. 16 Despite raising many points of law and fact that are not common this action is a good vehicle for a class complaint. First, while there may well be variations in the representations and in the degrees of reliance on those representations, there is an important common thread to the complaints. At its base this case is about a financial adviser that it is alleged chose to recommend to its clients an investment that no reasonable adviser would suggest. It may be true that the manner in which the recommendation was made differed from client to client, but the substantial point remains the same. And, as regards that point, several substantial common questions of law and fact do arise, including, the practices and procedures involved in maintaining DFS's approved product list, the circumstances in which the Westpoint products were placed on the list, the provision of financial services or securities recommendations by Mr Dukes, DFS or DFS's representatives to the group members, and the actual or constructive knowledge of Mr Dukes, DFS or DFS's representatives about the Westpoint products. 17 The statutory causes of action also raise common questions. They include in broad terms whether there was a reasonable basis for placing the Westpoint products on the approved product list, whether there was a managed investment scheme within the meaning of s 9 of the Corporations Act , whether the Westpoint products were financial products within the meaning of s 764A of the Act and whether the advice given in relation to the Westpoint products was financial product advice within the meaning of s 766B of the Act. It is true that when one comes to look at inducement and damages, individual issues will arise. But there are serious common questions that must be resolved to finalise these claims. 18 The respondents also make complaint about the pleadings. In substance the complaint is that insufficient information about the case is given in the pleading and particulars. There is something to this complaint. I propose, however, to defer ruling on it because the applicant has promised to amend the statement of claim. It may be that those amendments will overcome the deficiencies in the pleadings. If not, the respondents should notify me and I will rule on any outstanding issues. 19 For the time being I will simply stand over the motion and reserve the costs pending the resolution of the pleading points. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | representative proceeding whether proceeding satisfies s 33c(1) of the federal court of australia act 1976 (cth) meaning of common question of law or fact practice and procedure |
Leo Akiba representing the Top Western Islands. Tabitiai Joseph representing the Western Islands. George Mye representing the Eastern Islands. Father Napoleon Warria representing the Central Islands. The Torres Strait Island communities, on whose behalf the application is brought, comprise the native title claim group and were collectively designated the Torres Strait Regional Seas Claim Group. The area covered by the application is approximately 44,000 square kilometres in the Torres Strait and the Coral Sea seaward of the high water mark around islands in the Torres Strait. It includes beaches, reclaimed areas and inter-tidal zones. Part A claims 'all of the lands, waters, reefs, sandbanks, shoals, seabeds and subsoil on the seaward side of the high water mark contained within' described external boundaries which include the outer limit of the territorial sea of the islands of Aubusi, Boigu, Moimi, Dauan, Kaumag, Saibai; of Anchor Cay and East Cay; of Black Rocks and Bramble Cay; of Deliverance Island and Kerr Islet; of Pearce Cay; of Turnagain Island and of Turu Cay. Part B claims 'the waters on the seaward side of the high water mark, but not the seabed or subsoil, exclusive of the territorial seas, of Aubusi, Boigu, Moimi, Dauan, Kaumag and Saibai', contained within the external boundary so described. 3 The native title rights and interests claimed are divided into two parts. The first part covers areas not subject to certain types of 'public rights' or 'previous acts'. In those parts the claim is for exclusive possession. In relation to other areas the native title rights and interests claimed include rights to 'control the access to, and use and enjoyment of, the land and waters and the taking of resources by others' subject to various exceptions. 4 Following its public notification, pursuant to the provisions of the Native Title Act 1993 (Cth) (the NTA), the application was referred by the Court to the National Native Title Tribunal (the Tribunal) for mediation on 4 February 2003. At that time a number of parties had been joined as respondents. The State of Queensland was named as a respondent. Other respondents included the Commonwealth of Australia, the Australian Maritime Safety Authority and indigenous interests comprising the Apudaham Land Trust and representatives of the Kaurareg People. The Torres Strait Regional Authority, which is the representative body for the area was joined as a respondent. Also joined were a large number of fishermen, the Queensland Rock Lobster Association and some nationals of Papua New Guinea. 5 The matter was allocated to Cooper J as docket judge. On 18 September 2003 Cooper J convened a directions hearing on Thursday Island. His Honour gave directions requiring the applicants, in conjunction with the Tribunal and the State, to prepare and file a program for the mediation of the application by 18 March 2004. 6 On 20 May 2004 his Honour again held a directions hearing on Thursday Island. The applicants were directed to consider any amendments to their application and to file any proposed amended application by 30 November 2004. That order was amended by his Honour on 9 November 2004 and the time limited for amending the application was extended to 29 April 2005. 7 Sadly, his Honour died early in 2005. The matter next came before Deputy District Registrar Connard on 27 June 2005 when the applicants were granted leave to amend their application in terms of a proposed amended application previously filed in 26 May 2005. Also before Deputy District Registrar Connard on that date was a motion, filed on 22 June 2005, by the Torres Shire Council (the Council) seeking its joinder as a party to the proceedings. That motion was adjourned to 27 July 2005. Further directions were given for the filing of affidavits and submissions in relation to the motion. It came on for hearing on 7 July 2006 as an aspect of a general case management directions hearing convened on Thursday Island. The joinder was opposed and after hearing argument, judgment was reserved. Section 63 provides that an application filed under s 61 must, as soon as practicable, be given, by the Registrar of the Federal Court to the Native Title Registrar. Section 66 sets out the obligations of the Registrar to give notice of the application. The Registrar is required to give copies of the application to the relevant Minister of a State or Territory where any of the area covered by the application is within the jurisdictional limits of that State or Territory. A copy of the application must also be given to representative bodies for areas which it covered. In addition the Registrar is to give notice containing details of the application to the various classes of persons or bodies set out in s 66(3) which include 'any local government body for any of the area covered by the application ...' (s 66(3)(a)(vi)). The Registrar is required to 'notify the public in the determined way of the application' (s 66(3)(d)). 9 In the case of a claimant application the notice requirements imposed by s 66(3) are not to be complied with until the Registrar has decided, under s 190A , whether or not to accept for registration the claim made in the application (s 66(6)). The notice given under s 66(3)(a)(d) must specify a date known as the 'notification day' (s 66(8)). 10 The notification provisions are to be read with s 84 of the Act which deals with parties to proceedings in relation to applications to which s 61 applies. The local government area is the fundamental geographical basis of Queensland's local government system. There must be a local government for each local government area. shire. General powers are conferred on local governments by s 36. They have all the powers of individuals and the powers given to them under the LGA or another Act. Not only may a local government exercise its powers '.. inside and outside its territorial unit' but also, rather surprisingly, '... outside the State and outside Australia' (s 36(4) and (5)). 15 Part 4 of the LGA deals with marine and aquatic matters. A local government may construct, maintain, manage and regulate the use of jetties, breakwaters and ramps in or over tidal waters (s 934(1)(b)). It may also occupy and use foreshore, tidal land or waters to undertake work in exercising those powers (s 934(3)). While a local government occupies or uses foreshore, tidal land or tidal waters they are taken to be in its area (s 934(4)). 16 The Governor in Council is empowered by gazette notice to place a foreshore under the control of the local government of the local government area adjoining the foreshore or, if there be no local government area adjoining it, the local government of a local government area convenient to the foreshore. In such an event the local government may manage and regulate the use of the foreshore and while under its control the foreshore is taken to be in its area (s 936). 17 Under the Local Government (Areas) Regulation 2005 there is a defined local government called 'Torres' in the Shire class covering an area set out in a map designated LGB123 edition 4. A copy of the plan was before the Court. The external boundary of the Shire of Torres is shown in red. It is sufficient to say for present purposes that the external boundary encompasses a substantial part of the sea comprised in the Torres Strait Regional Seas Claim. The principal northern boundary of the main local government area of the Torres Shire is defined by the seabed jurisdiction line. The eastern boundary is defined by the outer limits of the Great Barrier Reef. The western boundary follows the line of longitude 141deg.00'04'E until it intersects the 'seabed jurisdiction line'. North of the 'seabed jurisdiction line' the local government area includes waters around Australian cays and islands. The map notes that 'the local government area comprises the mainland and all islands above their respective sea-shores within the encompassed area' and that it '... includes the Australian islands above their respective lowest astronomical tides north of the seabed jurisdiction line'. The local government area is stated to be 'exclusive of any Islander Area excluded under the Community Services (Torres Strait) Act '. 18 In an affidavit sworn on 10 October 2005 David Brown, the Acting Chief Executive Officer of the Council, said that above the 'seabed jurisdiction line' the Council's local government area extends to the 'lowest astronomical tide. Below that line, it extends to the high water mark'. Because the Torres Strait Regional Seas Claim covers land and water seaward of the high water mark, the Council's local government area overlaps the claim area above the 'seabed jurisdiction line' and is adjacent to it below that line. Below that line the Council is said to exercise powers in respect of the intertidal areas including the construction and maintenance of breakwaters, boat ramps and beach protection. Its objects are to regulate the use of jetties, barge loading ramps and boat ramps and the vessels and vehicles using them and to regulate the conduct of persons on such structures (reg 2). Regulation 6 relates to the use of such facilities by private vessels, the maximum vertical loads that can be applied to a jetty (reg 7), the use of vehicles on such structures (reg 8) and the behaviour of individuals on such structures (reg 9). There must be an Island Council for each council area. This is effected by regs 64A read with Schedule 1A. Schedule 1A sets out in column 1 the relevant part of the State. In column 2 it sets out the name of the designated council area. In each case the part of the State is defined by reference to a Deed of Grant of the land in the island to the relevant Island Council, effected in each case under a Deed of Grant in Trust. By way of example, the Saibai Island Council which is declared under the Community Services (Torres Strait) Regulation 1998 holds an estate in fee simple under the relevant Deed of Grant in Trust described as 'Lot 3, Crown Plan TS157'. Mr Kerr asserted, in paragraph 8 of his affidavit, that the Council has interests within the application area that may be affected by a determination of native title. Research and development of the aquaculture industry throughout Torres Strait was also mentioned. As to the community recreation and access issues mentioned in Mr Kerr's affidavit, Mr Brown said that the Council had always been concerned to ensure that residents and visitors to the Shire could access some islands in the Torres Strait including the intertidal zone and some land masses within the claim area. He referred to the Council's general statutory responsibilities which include a general responsibility for the good rule and government of the Shire. Their interests in ensuring adequate ongoing access to such areas was heightened by the limited amount of space on the inhabited islands of the Shire and the growing importance of tourism and outdoor related tourism activities to the Shire's economy. Reference was also made to Local Laws applicable to the claim area. He was not appointed as Chief Executive Officer until 10 November 2002. Prior to his appointment he did not know whether the issue of joinder had been raised with, or considered by, the previous Council. He understood the previous Council's position was that it did not intend joining claims involving uninhabited islands above the high water mark. It was generally supportive of land claims. As to claims over the seas, Council was not adequately briefed in those matters and therefore could not, at the time of notification, fully appreciate the current and future impact of the Torres Strait Regional Seas Claim on its interest. 25 For the most part Mr Brown's affidavit was drawn at a level of some abstraction addressing 'interests' which seemed to have little relationship to any existing or proposed structures or any activity actually carried out, or proposed to be carried out, in the claim area. 26 In its written submissions, the Council argued that its interests which might be affected by a native title determination under the Torres Strait Regional Seas Claim, were sufficient to justify its joinder pursuant to s 84(5) of the NTA. The submissions repeated much of what was set out in Mr Brown's affidavit. They concluded by saying that, having regard to the nature of the Council's interests, powers and function in the area of the claim, it was important that it had the right to participate in the process of the application. 27 The applicants opposed the motion. They argued that it had not been shown that any relevant interest of the Council would be affected if a determination were made. The applicants also submitted that the Court should decline, in the exercise of its discretion under s 84(5) of the NTA, to allow its joinder. This includes any local government body for any of the area covered by the application. It appears not to be in dispute that notice of the application would have been given to the Council. It seems likely, based on Mr Brown's evidence, that that application was treated in the same way as applications in respect of the islands. 29 I assume in favour of the Council, that the interests which have been described in its submissions and in the affidavit of Mr Brown would be sufficient interests for the purposes of s 84. In my opinion, however, those 'interests' do not reflect any actual or proposed engagement or activity of the Shire Council in the area of the claim. As a local government authority the Council would have received notice from the Tribunal Registrar of the application. This express requirement under s 66 to give notice to a local government body in the claim area, indicates a parliamentary view that the powers and responsibilities of local government bodies are sufficient to amount to interests for the purposes of joinder. The theoretical and abstract and limited character of the interests relied upon. The very significant and largely unexplained delay in bringing the motion for joinder. 3. The State of Queensland, as the ultimate supervisor through its executive of the Council's conduct and as the progenitor of the laws under which the Council has its existence and exercises its powers, can be expected adequately to represent the kinds of interests which have been identified and relied upon in this case. 4. Any native title determination will inevitably be expressed as subject to the valid laws and delegated laws of the State of Queensland and its authorities. Given that protection it is difficult to see any further practical basis for the Council's involvement. | parties joinder local government body torres regional sea claim local government area covering intertidal zones joinder based on 'interests' of shire council in relation to exercise of its powers and operational activities no evidence of infrastructure or activities within the claim area application for joinder two and a half years after close of notification adequacy of state government representation joinder application refused on discretionary grounds native title |
2 A party is in default under O 35A r 2(1)(a); (f) if, inter alia , it fails to prosecute the proceeding with due diligence. 3 The first to eighth respondents filed a Notice of Motion on 14 November 2008, which was served on the applicants on 17 November. The Notice of Motion of the ninth respondent (Baldwin Shelston) was filed on 13 November 2008. On 14 December 2007 the applicants filed and served an Application and Statement of Claim, without any Certificate attesting to the allegation and the pleading having any proper basis. On 21 January 2008 the ninth respondent advised the then solicitors for the applicants that no Certificate had been filed and later requested that a Certificate be filed. Thereupon the previous solicitors advised that their instructions had been withdrawn and the present solicitors became the solicitors on the record. 5 On 19 February 2008 Baldwin Shelston, the ninth respondent, filed a Notice of Motion seeking summary dismissal and strike-out security for costs and costs on the Motion. On 4 March 2008 the first to sixth and the eighth respondents filed and served a Notice of Motion seeking summary dismissal of the proceeding or an Order striking out parts of the Statement of Claim. On or about 12 March 2008 the respondents were served with an Amended Statement of Claim, filed on 12 March 2008. Thereupon, on 26 March 2008, the first to eighth respondents filed and served an Amended Notice of Motion seeking summary dismissal or an Order striking out parts of the Amended Statement of Claim. 6 On 1 April 2008 the ninth respondent filed a similar Notice of Motion but also claimed Security for Costs. On or about 22 April 2008 the respondents were served with a Draft Further Amended Statement of Claim. The respondent's Motions were heard by me on 24 April 2008 and on that day the applicants sought to file a Further Amended Statement of Claim. The hearing on 21 November 2008 was conducted by reference to that Further Amended Statement of Claim. 7 On 28 May 2008 I made orders pursuant to the application for summary judgment by Baldwin Shelston and struck out the pleadings in relation to the conspiracy claim in the Trade Practice claim. I gave liberty to re-plead the case within 28 days. This leave was not taken up by the applicant. No further Draft Statement of Claim emerged until 20 November 2008, the day before the hearing of the present dismissal applications before me. 8 Also on 28 May 2008 I ordered that the applicants pay the costs of the strike-out application and the application for security for costs as thrown away by Amendments to the Statement of Claim and the Amended Statement of Claim. I also ordered that the applicant provide security for costs in the amount of $50,000 in respect of the first eight respondents and security in the amount of $50,000 in respect of Baldwin Shelston. I gave liberty to apply. 9 On 4 June 2008 Mr Hasson, solicitor for the applicants indicated that he was going to seek liberty to re-plead the case within 58 days but no such application was made. The matter was not re-pleaded. 10 No security has been provided to date and no satisfactory explanation or evidence has been given as to the reason why security for costs funding has not been provided. There is no evidence before me as to when and whether it is likely that any such security will be provided. 11 At the hearing on 21 November 2008, the first eight respondents indicated they no longer continue to press an application for summary dismissal, but pressed an application for security for costs against the first applicant. The ninth respondent pressed its application for summary judgment and strike out of parts of the Further Amended Statement of Claim. 12 When the matter came on before me for hearing Mr Hasson applied for an adjournment on the basis that his Counsel was otherwise engaged and that he had only been served with the documents on or about 17 November 2008. However, he filed no evidence in relation to the applications apart from tendering a letter. There was no cross-examination of the deponents to the respondents' affidavits, nor any evidence in response on behalf of the applicants in relation to the question of costs. 13 No reason has been provided as to why any Further Amended statement of Claim was not filed within 56 days from the Orders made on 28 May 2008. 14 The solicitors for the respondents wrote to the applicants' solicitors in June 2008 concerning the failure to provide security for costs and in the absence of any response filed a Notice seeking a Stay of Proceedings pending provision of security. As a result of subsequent correspondence, on 12 August 2008 the applicants' solicitors requested the first eight respondents consent to orders that the proceedings be stayed against the second applicant as well as the first applicant. The response of 19 August 2008 was that the fist eight respondents would be prepared to consent to Orders staying the second applicant's proceedings subject to the second applicant paying security for costs and that if the security had not been paid by 16 September 2008 the proceeding be dismissed. The letter was subject to a reservation of the respondents' right with respect to any strike-out application for want of prosecution. The prospect of a strike-out application was foreshadowed at that point. There was no response by the applicants' solicitors to the respondents' solicitors' letter of 19 August 2008. 15 On 8 October 2008 the applicants' solicitors wrote to the fist eight respondents' solicitors and informed them that the applicants had been unable to comply with the timetable set down in the Orders of 28 May 2008, and sought to re-list the matter on the first available date. In due course the matter was re-listed before me on 21 November 2008, in which time the respondents had taken out the applications to dismiss the proceedings with costs. The foreshadowed re-pleaded case was not indicated by the applicants' solicitors, as mentioned earlier, until the day before the hearing on 21 November 2008. 16 A draft document was handed to the parties by the applicants' solicitor on 20 November 2008 entitled "Second Further Amended Statement of Claim" (which is the fourth attempt to plead the matter). This document comprises 254 paragraphs and is some sixty-four pages in length. The extensive underlining of this so-called Amendment indicates the extent of the changes which comprise virtually the whole document. Among other matters it alleges conspiracy to defraud, intent to injure the applicants, fraud, bad faith, falsification of experimental results, dishonest conduct and aiding and abetting. These allegations were an integral part of the attempt by the applicants to formulate their case, and they are manifestly defective and do not comply with basic pleading requirements. They do not disclose any basis for any intelligible cause of action on their face. Many of the deficiencies were referred to in submissions before me by Senior Counsel for Baldwin Shelston, the ninth respondent. There is no requirement of intentional default or contumelious conduct, although the attitude of the applicant to the default and the Court's judgment as to whether or not the applicant genuinely wishes the matter to go to trial within a reasonable period will usually be important factors in weighing the proper exercise of the discretion conferred by the rule. There is no requirement of "inordinate and inexcusable delay" on the part of the applicant or the applicant's lawyers, although any such delay is likely to be a significant matter. There is no requirement of prejudice to the respondent, although the existence of prejudice is also likely to be significant. He sought an adjournment on the basis that Counsel was not available and that Mr Sheiman was overseas and could not be contacted, and thus instructions could not be obtained. He said that efforts had been made to obtain funding for the security for costs from two providers. The first had not given any answer over a long period but kept asking for further material, and apparently nothing positive has been forthcoming. A second provider had been approached and Mr Hasson says that he is "hopeful" that some funds might be provided. He expects an answer within a month. However he neither filed nor gave any oral evidence or details to substantiate these assertions from the bar table. Nor did he attempt to cross-examine any of the deponents of the affidavits as to the history of the proceeding or the issue of costs. 21 Mr Hasson referred to the Second Further Amended Statement of Claim recently produced, but did not respond to any criticisms levelled as to the manifest deficiencies and inadequacies of that document. There was therefore no satisfactory explanation as to the failure to provide security nor was there any reason given for not previously filing a Further Statement of Claim pursuant to the order made on 28 May 2008, notwithstanding that he had previously indicated that a Statement of Claim would be filed within two months of that date. 22 It is now six months since those Orders were made on 28 May 2008. There is no evidence of any likely ability of the applicants to meet the Orders for security for costs or obtain financial assistance, or to frame an intelligible originating process. There is substantial evidence as to the costs, delay and expenses incurred by the respondents to these proceedings, which it now appears highly unlikely they will be ever able to recover. 23 Having regard to the long and unsatisfactory history of this matter, and bearing in mind the substantial costs incurred by the respondents to date, coupled with the absence of any proper pleadings, I am persuaded that there has been a failure to exercise due diligence in prosecuting the claim in accordance with the directions of the Court. There was a failure to prepare or furnish an Amended Statement of Claim until 20 November 2008 and on its face the document is manifestly deficient. I have looked at the Second Further Amended Statement of Claim, which is the fourth attempt to formulate a case on behalf of the applicants, and find that it is totally unsatisfactory and inefficient on basic pleading principles. No explanation has been proffered as to its provenance. It appears to be a total recasting of the case in a form which does not improve on the previous defects pointed out by the Court, together with a general inadequacy as to the formulation of any intelligible cause of action. 24 I am not persuaded that there is any real prospect of the applicant obtaining funding of the security ordered nor of the applicant having any financial backing to pursue his case. There has been a failure to provide any evidence as to steps taken to pursue this matter and no satisfactory explanation has been given for the adjournment sought. 25 In these circumstances I am persuaded that the applicants have failed to prosecute the matter with due diligence sufficient to justify dismissal. Accordingly, I propose to dismiss the proceeding. 26 As to the question of costs, in accordance with the accepted principles, I consider this is an appropriate case in which to award costs to the respondents of the proceedings subject to costs orders already made. I am also persuaded that indemnity costs are appropriate. Having regard to the manifest inadequacy of the Statement of Claim, after four failed attempts to frame an intelligible case, and having regard to the Affidavits filed by the respondents, I am persuaded that costs in an amount of $60,000 should be awarded to the first eight respondents and $70,000 in respect of the costs of the ninth respondent. 27 Therefore, in the exercise of my discretion under O 35A r 3, I dismiss this proceeding with costs. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tamberlin. | application to dismiss proceedings o 35a r 3(1)(a) of the federal court rules applicant in default failure to prosecute with due diligence failure to comply with order of this court failure to provide security for costs failure to frame intelligible case application dismissed with costs intellectual property |
The applicants also sought a declaration that the second respondent, who was a surety approved by the registrar under s 155 , contravened the condition of its bond and an order that the second respondent pay the amount of the bond as surety. 2 There was no serious dispute that the first respondent, who had been convicted of theft, breached his duties as a trustee. Thus, the declarations were not controversial. Rather, at the first hearing of this matter on 20 September 2004, the key question was whether the Commonwealth was entitled to recover the full amount of the bond or only for compensable loss: see Inspector General in Bankruptcy v Bradshaw [2005] FCA 424 ( Bradshaw 1) at [10] and following. 3 At the first hearing, the Commonwealth did not attempt to prove any costs incurred in relation to the investigation and prosecution of the first respondent. Rather, the Commonwealth pursued its claim that it was entitled to recover the full amount of the bond regardless of the amount of loss. I rejected this contention and held that the Commonwealth was entitled to recover only that which was proven to be its compensable loss: see Bradshaw 1 at [79]. 4 I also stated that I would not dismiss the application before giving the applicants an opportunity to adduce further evidence as to the quantum of the Commonwealth's loss: see Bradshaw 1 at [80]. I adjourned the further hearing of the proceeding to allow the Commonwealth this opportunity. 5 Subsequent submissions by the respondents convinced me that the parties should be permitted to make further submissions as to the appropriate disposition of the case. In particular, at a directions hearing of 8 June 2005, I held that it was open to the respondents to submit that the Commonwealth was precluded from recovering its loss and to contest the recoverability and quantification of any loss. The matter subsequently continued before me at a second hearing on 13 December 2005. 6 At the second hearing, the respondents' primary submission, which I ultimately accepted, was that the applicants should not be permitted to reopen their case to prove the quantum of loss: see Inspector General in Bankruptcy v Bradshaw [2006] FCA 22 ( Bradshaw 2) at [28]. Accordingly, I made the declarations sought by the applicants but their application of 12 August 2004 was otherwise dismissed. The issue of costs now falls for determination. They conceded that they must bear the respondents' costs thereafter, although only on a party and party basis. There was, they said, nothing in their conduct of the case that warranted a departure from the usual course, because their reliance on Re Smith; ex parte Inspector-General in Bankruptcy [1996] FCA 1076 (" Re Smith ") was not unreasonable and, in respect of the application to reopen, the Court had itself considered, as at 15 April 2005, that the applicants should be given an opportunity to quantify their loss. 8 The applicants contended that, even though no monetary order was made in their favour, they were partially successful in the proceeding. They noted that: (1) the respondents had not admitted that the first respondent breached the bond; (2) the first respondent argued unsuccessfully that the applicants' claim was statute-barred; and (3) the second respondent argued unsuccessfully that it had revoked its surety. The applicants observed that they had in fact established liability under the bond and as surety, although the applicants properly conceded that arguments (2) and (3) "did not occupy a great deal of the court's time". 9 The respondents contended that the making of the declarations was never controversial and that the real question in dispute was whether "the bond was, in effect, a good behaviour bond, forfeitable without proof of loss". They sought their costs on a party and party basis until 15 April 2005, after which they sought costs on an indemnity basis. They argued that costs incurred after 15 April 2005 were incurred unnecessarily because evidence quantifying loss could have been led at an earlier stage. They contended that they would not have incurred any costs subsequent to 15 April 2005 had the application to reopen not been made. In written submissions, the second respondent said that "[t]he 'special or unusual' circumstances warranting an order for indemnity costs are the loss of time to the parties and the Court by the Applicants taking the approach that they did". 10 The first respondent made an alternative claim for indemnity costs for the period following 28 June 2005. On that day, the applicants rejected a settlement offer, made by letter of 21 June 2005, for $23,248 "in full and final settlement of all the Applicants' claims in this matter (exclusive of costs), being the total sum of all disbursements you have claimed". Referring to Calderbank v Calderbank [1975] 3 All E R 333, the first respondent submitted that he should receive costs on an indemnity basis after that date. A successful litigant is ordinarily entitled to an award of costs: see, e.g., Oshlack v Richmond River Council [1998] HCA 11 ; (1998) 193 CLR 72 at 97 per McHugh J (dissenting in result) and 120-1 per Kirby J. The power to make orders for costs is, however, discretionary, although it "must be exercised judicially and not against the successful party except for some reason connected with the case": see Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 (" Ruddock v Vadarlis (No 2) ") at 234 per Black CJ and French JJ. Ordinarily, if a successful party is denied an order for costs in whole or part, it is because the party's conduct of the proceeding in some respect or respects makes it just or reasonable to do so: see, e.g., Ruddock v Vadarlis (No 2) at 236 and Latoudis v Casey [1990] HCA 59 ; (1990) 170 CLR 534 at 544 per Mason CJ. 12 An unsuccessful party is not automatically entitled to costs in respect of those issues of facts or law on which the successful party failed: see Dr Martens Pty Ltd v Figgins Holdings Pty Ltd (No 2) [2000] FCA 602 at [54] per Goldberg J; also Re Elgindata Ltd (No 2) [1993] All ER 232 at 237 per Nourse LJ, cited with approval in Hayle Holdings Pty Ltd v Australian Technology Group Ltd (No 2) [2000] FCA 1699 at [9] per Hely J; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-2 per Gummow, French and Hill JJ; Mok v Minister for Immigration, Local Government and Ethnic Affairs (No 2) (1993) 47 FCR 81 per Keely J at 84; and Toohey J in Hughes v Western Australia Cricket Association (Inc) (1986) ATPR 40 ---748 at 48,136, citing Cretazzo v Lombardi (1975) 13 SASR 4 at 16 per Jacobs J. 13 The respondents are the successful parties in this proceeding. I accept that, as the respondents contended, the making of the declarations was not seriously contested and that the focus of the dispute at the first hearing was whether, as the second respondent put it, "the bond was, in effect, a good behaviour bond, forfeitable without proof of loss". Whilst it is true that the applicants established that the respondents had breached the conditions of their bonds, these were not matters of significant controversy. Moreover, whilst the first respondent failed in his contention that the applicants' claim was statute---barred and the second respondent failed in its contention that it had revoked its bond, neither issue loomed large in the litigation. Further, the applicants failed at the second hearing to persuade me that they should have leave to reopen their case in order to quantify their loss. The applicants were thus unsuccessful, so it seems to me, with respect to the major issues in this case. Accordingly, at a minimum, the applicants must bear the respondents' costs on a party and party basis for the entire proceeding. 14 In Re Wilcox; Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 at 156-157, Cooper and Merkel JJ said that: (a) the court ought not to depart from the usual party and party basis for costs unless this was warranted by the circumstances of the case; and (b) these circumstances arise "as and when the justice of the case so requires or where there may be some special or unusual feature in the case to justify the court in departing from the usual course". 15 I am of the view that the justice of the case warrants an award of indemnity costs in the respondents' favour for the period after 15 April 2005. The decision in Re Smith may explain the applicants' conduct at the first hearing but it does not explain their conduct thereafter. Further, whilst it is true to say that, as at 15 April 2005, the court itself considered that the applicants should be given an opportunity to quantify their loss, the court formed the contrary view when it was informed of the circumstances known to both parties and relevant to the issue. 16 As already stated in Bradshaw 2 at [23], these circumstances showed that the applicants should be taken to have opened and closed their case at the first hearing on the basis that they would not quantify their loss. Although there were factors militating in favour of a grant of leave to reopen, they were outweighed by contrary considerations. These considerations included that: (1) the applicants deliberately chose not to quantify the Commonwealth's loss at the first hearing; (2) prior to the first hearing, the applicants had plainly led the respondents to believe that the applicants were proceeding on the basis that quantum was irrelevant and, in any case, that the loss could not be quantified; (3) the applicants did not make any application for a split trial, although it was open to them to do so; (4) before the first hearing, the applicants knew that it would be said against them that they could not succeed without evidence quantifying their loss; and (5) whilst there were no pleadings, the issue in debate was clearly addressed in the correspondence between the parties prior to the first hearing. These considerations are also relevant to the respondents' application for indemnity costs. 17 Had had the applicants so chosen, they might have led evidence as to quantification at the first hearing. Had they done so, they could have argued that the Commonwealth was entitled to the amount of the bond but they could also have sought to quantify their loss in the event that the court preferred the respondents' submission on the point to theirs. The applicants took the stance, however, that the quantum of the loss was irrelevant and the loss could not be quantified. In my view, the applicants acted unreasonably in seeking to resile from the position that that they had adopted in communications with the respondents prior to and at the first hearing. The costs incurred by the respondents after 15 April 2005, when Bradshaw 1 was delivered, should be paid by the applicants on an indemnity basis. I reiterate that although, as at that date, I was minded to give the applicants a further opportunity to quantify their loss, I formed a clear contrary view once I was informed of the circumstances known to both parties, though not the court, as at that date. 18 As the first respondent noted, costs may also be awarded on an indemnity basis where a proceeding is unduly prolonged by an imprudent refusal of an offer of compromise: see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233 per Sheppard J. The rejection of a Calderbank offer does not of itself warrant an order of indemnity costs, even if the offeree fails to secure a more favourable outcome in the proceedings. In order for there to be an indemnity costs order, the respondents must show that the applicants' rejection of their offer was so unreasonable as to justify indemnity costs: see, e.g., Port Kembla Coal Terminal Ltd v Braverus Maritime Inc (No 2) (2004) 212 ALR 281 at 287-290 per Hely J. In this case, the applicants acted unreasonably in seeking to resile from the position that they had adopted in communications with the respondents prior to and at the first hearing. In my view, the rejection of the Calderbank offer was unreasonable in all the circumstances because, as at 28 June 2005 (after the directions hearing of 8 June 2005), the applicants should have appreciated that they would not be able to quantify the Commonwealth's loss unless granted leave to reopen their case, and that there were serious doubts that such leave would be forthcoming. This alternative basis would also support an award of indemnity costs in the first respondent's favour in respect of the period after 28 June 2005. 19 In all the circumstances, I would order that: (1) up to 15 April 2005, the applicant pay the respondents' costs on a party and party basis; and (2) after 15 April 2005, the applicant pay the respondents' costs of the proceeding on an indemnity basis. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | indemnity basis whether successful party not entitled to costs in respect of those issues on which the party failed whether circumstances justified awarding indemnity costs effect of calderbank letter costs |
The applicant is a citizen of the Peoples Republic of China. He arrived in Australia on 1 June 2004 and on 24 June 2004 lodged an application for protection (Class XA) visa under the Migration Act 1958 (Cth) (the Act). On 10 August 2004 a delegate of the Minister for Immigration and Citizenship (the Minister) refused to grant a protection visa and on 14 September 2004 the applicant applied to the Refugee Review Tribunal (the Tribunal) for review of the delegate's decision. On 22 December 2004 the Tribunal affirmed the delegate's decision. However, on 20 March 2006 the Federal Court set aside the Tribunal's decision and remitted the matter to the Tribunal for reconsideration. 2 On 5 June 2006, the Tribunal once again affirmed the decision not to grant the applicant a protection visa. It is not clear when that decision was notified to the applicant. However, on 12 July 2006 he commenced a proceeding in the Federal Magistrates Court seeking judicial review of the Tribunal's decision of 5 June 2006. On 9 October 2006, the Federal Magistrates Court dismissed the application pursuant to rule 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth) on the basis that the applicant had failed to demonstrate an arguable case. The Rules of the Federal Magistrates Court provide that such an order is interlocutory. The applicant therefore applied to this Court on 25 October 2006 for leave to appeal from the decision of the Federal Magistrates Court, although, having regard to the time limits under the Act, there may be a question as to whether or not the effect of the order is final. It appears that the proper course is to treat the order as interlocutory. 3 When the matter was called on for hearing today, the applicant appeared in person. Although he did not formally apply for an adjournment, he observed several times during the course of the hearing that he had no legal assistance and had not had time to get any. No attempt was made to indicate what steps he had taken and why it was not possible to get legal advice. It is significant that the application filed on 12 July 2006, and an amended application filed on 20 September 2006, contained legal language that clearly did not originate from the applicant. He simply said that he had obtained assistance from a friend in the preparation of those documents. 4 The applicant claimed that he would suffer persecution if he returns to China because of the fine that was imposed upon him for breach of China's child policy. He also claimed that he may suffer persecution because he is not free to express his views in China. The Tribunal accepted that the applicant is a citizen of China. However, the Tribunal formed the view that the applicant lacked credibility and that his claims could not be accepted. The Tribunal considered that his evidence was inconsistent, contradictory and implausible. The Tribunal was not satisfied that the applicant had suffered any persecution in China prior to coming to Australia. 5 The Tribunal then referred to three specific inconsistencies and contradictions that led the Tribunal to conclude that the applicant was not truthful or credible. Each of them involved a reference to the evidence that had been given by the applicant at an earlier hearing before the Tribunal differently constituted. The three inconsistencies are as follows. 6 First, during his evidence before the Tribunal in November 2005, the applicant mentioned an incident in June 2002 when he was detained by Communist Party officials. During the evidence before the reconstituted Tribunal at a hearing on 26 May 2006, the applicant failed to mention that incident until he was reminded of his evidence before the previously constituted Tribunal. 7 Secondly, in his evidence before the previously constituted Tribunal, the applicant stated that the authorities imposed a fine of 30,000 RMB. During his evidence before the reconstituted Tribunal, the applicant stated that a fine of RMB 35,000 or more was imposed. His evidence regarding the fine and contact with the authorities varied throughout the duration of the second hearing. The Tribunal dealt specifically with the inconsistencies during the hearing before it. 8 Thirdly, the applicant's evidence before the previously constituted Tribunal was that the authorities went to his home and damaged and stole property. The evidence before the reconstituted Tribunal omitted any mention of damage to the property until he was reminded of his previous evidence. 9 The Tribunal, having summarised those three matters, then observed that the applicant's evidence in relation to his material claims varied constantly during the hearing. It observed that his demeanour gave the impression of a person attempting to come up with answers spontaneously without any real history. The Tribunal considered that it was that that led to the many inconsistencies in the evidence that he gave. It is apparent from the Tribunal's reasons that the inconsistency between his evidence before the Tribunal as previously constituted and before the reconstituted Tribunal was put to the applicant in the course of the hearing on 26 May 2006. There was no unfairness in the way in which the Tribunal conducted that hearing and in concluding that the applicant's evidence lacked credibility. The Tribunal had bias against me when considered my application and therefore, the Tribunal failed to consider my claims. The Tribunal failed to consider my application for protection according to section 91R of the Migration Act . The Tribunal failed to carry out its statutory duty. The Tribunal did not consider my application according to 424A of the Migration Act . The Tribunal did not refer to sufficient independent information for the consideration of my application. Migration Act 1958 section 424A. The Tribunal also was required to explain why the information was relevant and provide the applicant with an opportunity to comment upon it. The Tribunal's failed to so act was a jurisdictional error. The only evidence before the Federal Magistrates Court of what occurred at the Tribunal hearing was the Court book. The primary judge observed that there were no particulars of the allegation of bias and that there was no evidence to support that allegation. His Honour concluded, therefore, that the first ground was unarguable. 13 His Honour observed that a breach of s 91R had been identified in relation to the first Tribunal hearing and that is why the first decision was set aside. However his Honour observed, s 91R did not figure at all in the reasons of the reconstituted Tribunal. Indeed, it was unnecessary for that section to be considered by the reconstituted Tribunal, which decided the matter simply on an assessment of the applicant's credibility. 14 The fourth ground referred to an alleged failure by the Tribunal to refer to sufficient independent information. The applicant had ample opportunity to provide information to the Tribunal if he wished. Having rejected the applicant's claims as lacking credibility, there was no reason for the Tribunal to refer to any independent information concerning circumstances in China. No particulars of the inquiries that should have been made were furnished. 15 The primary judge then had regard to the third ground, based on s 424A of the Migration Act . The ground, as particularised, has no substance whatsoever. There is nothing in the reasons of the Tribunal to indicate that it had regard to information provided by the applicant to the Minister in connection with his original application for a protection visa that had not been provided to the Tribunal by the applicant. 16 Nevertheless, the primary judge considered the possibility that there may have been a contravention of s 424A of the Act by reason of the Tribunal having taken into account, in assessing the credibility of the applicant, the fact that the applicant failed to mention before the reconstituted Tribunal matters that he had mentioned to the earlier constituted Tribunal until he was reminded of them. His Honour concluded that there was no contravention of s 424A in adopting that course without giving written notice of information consistent of the evidence given by the applicant to the previously constituted Tribunal. Section 424A does not require such notice to be given in respect of information given by the applicant for the purposes of the application to the Tribunal. Sections 421 , 422 and 422A of the Act refer to a particular review conducted by the Tribunal. In doing so, they identify the review initiated under s 414(1) and culminating in a decision in accordance with s 430. That is a review that a particular person, namely the applicant for review, has initiated in respect of an RRT reviewable decision. 17 An invalid decision by the Tribunal is no decision at all. However, it does not follow that steps and procedures taken in arriving at that decision are themselves invalid, or of no effect. The Tribunal still has before it the materials that were obtained when the decision that had been set aside was made. Specifically, under s 422(2) , where the Tribunal is reconstituted, that Tribunal may have regard to any record of the proceedings of the review made by the Tribunal as previously constituted. In the present case, it may be said that the Tribunal had regard to the statements made by the applicant to the Tribunal as previously constituted. I do not consider that s 424A could be said to have been breached by an assessment on the part of the Tribunal of the credibility of the applicant based upon what he said at an earlier hearing of the Tribunal. Even if that ground were raised in the application to the Federal Magistrates Court, it had no substance. 18 In the draft notice of appeal, filed in support of the application for leave, the applicant has made no attempt to articulate error on the part of the Federal Magistrates Court other than to say that the Federal Magistrates Court did not consider the application for review and that the applicant did not have a hearing before the Federal Magistrates Court. The other grounds are reiteration of the original grounds of review, save for the reference to s 91R. On the other hand, in his oral submissions, the applicant several times referred to s 91R without giving any indication as to how that section had any relevance. 19 I do not consider that an appeal on the grounds in the draft notice of appeal would have any prospects of success. There is therefore no utility in granting leave to appeal. The application should therefore be dismissed with costs. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | application for leave to appeal from orders made by the federal magistrates court where the refugee review tribunal has regard to any record of the proceedings of the review made by the tribunal as previously constituted under s 422(2) migration |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Multicultural and Indigenous Affairs made on 19 August 2003 to refuse the grant of a protection visa to the appellant. Before the Tribunal the appellant claimed to have a well-founded fear of persecution because of his activism with the Trinamool Congress Party ('TMC') and its arm known as the 'Youth Congress of the Trinamool Dum Dum Committee'. The appellant claimed to have been involved in various executive positions and election campaigns, culminating in his being appointed as the Youth Secretary of one of the TMC's District Committees in mid-2002. The appellant's claims extended moreover to having been attacked and kidnapped by the Communist Party of India (Marxist) ('the CPIM'), and having sustained false charges laid against him with a view to the destruction of his political career. The appellant arrived in Australia from India on 31 May 2003 and applied for a protection visa on 25 June 2003. The Tribunal found in particular that his evidence on political matters was expressed in merely general terms and related mostly to the framework of contemporary West Bengal politics. The Tribunal declined to give weight to a certain document submitted by the appellant purportedly from the TMC, and upon which the appellant placed reliance, as it had concerns regarding its provenance. Although the Tribunal was prepared to accept the appellant's assertions regarding his executive positions specifically in the TMC Youth Congress, it was not satisfied that those positions, which were not verified by any documentation, denoted or reflected in reality any political profile or influence on his part. The Tribunal found instead that the appellant's interest and role in West Bengal politics was of at least a low-key nature. 4 The Tribunal gave consideration in the foregoing context to specific events claimed by the appellant in support of his application for refugee status. With respect to the disruptions occasioned to the 2001 elections in India, the Tribunal gave the benefit of the doubt to the appellant's narrative, and hence acknowledged those claims, but found that the alleged attack by the CPIM upon the appellant was inferentially intended to halt the protest and not to target the appellant. 5 The Tribunal gave the appellant the further benefit of the doubt that in the context broadly as testified, he had gone to live in his sister's house, and that in his absence, his family was abused and threats were made against him. However, it found the primary reason for that incident not being reported by the appellant to relevant authorities was because the appellant did not consider it to be serious, and further that the mistrust by the appellant's family concerning the police had been only a secondary consideration. Furthermore the Tribunal observed that there were no such further or similar incidents in 2001 and 2002 in which he claimed involvement. Consequently the incident whereof he complained did not indicate an intention, in the Tribunal's view, to inflict serious harm on him at that time or in the future. The Tribunal did not accept moreover the appellant's claim to abduction in February 2003. 6 The Tribunal addressed the country information regarding politically-motivated violence in West Bengal and the appellant's suggestion that CPIM hoodlums acted with the tacit support of the government in power. However due to a lack of country information and the Tribunal not accepting that CPIM hoodlums generally acted with the support of the CPIM, and due further to what amounted in reality to the appellant's low political profile, the Tribunal concluded that any harm and adverse attention relevantly to the appellant would be remote if he was to return to India. 7 The Tribunal further considered that there existed adequate state protection in India for the appellant in relation to his personal circumstances identified, especially in view of his family's social and economic standing in the community where he lived. The Tribunal did not accept as credible that false charges were laid against the appellant. The Tribunal observed the reality of the appellant's unhurried departure from India and did not accept the appellant had been subject to any persecution in India preceding that departure. 8 The Tribunal did not consider therefore that the appellant had any well-founded fear of persecution in India in the reasonably foreseeable future, and that his low level of political commitment and activity, such as it was, did not mean that it was likely that he would attract adverse attention in the future. The Tribunal also considered that relocation of the appellant elsewhere in India was not unreasonable. The Tribunal affirmed therefore the decision of the Minister's delegate not to grant a protection visa. The appellant provided further grounds and arguments in the written submissions which her Honour also addressed. 10 The Federal Magistrate considered the ambit of s 422B of the Migration Act 1958 (Cth) ("the Act ") and found, in the light of authority, that she was bound to follow the decision of the Federal Court in SZBDF v Minister for Immigration & Multicultural & Indigenous Affairs [2005] FCA 1493 ; (2005) 148 FCR 302, where Branson J considered the possible operation of principles of procedural fairness beyond the scope of the obligations imposed by s 424A of the Act and concluded there was no scope for any wider obligation to provide particulars of information in relation to the Tribunal's review process. Barnes FM found that the appellant's grounds of complaint in relation to the breach of common law rules of procedural fairness could not succeed since the effect of s 422B was that there was no obligation on the part of the Tribunal to put its concerns about the document to the appellant for explanation. 11 The Federal Magistrate considered moreover that the issue arising in WACO v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 171 ; (2003) 77 ALD 1 (Lee, Hill and Carr JJ) was distinguishable, as the Tribunal did not make here a positive finding of fraud but rather accorded the letter no weight. 12 In relation to grounds of review raised by the appellant below regarding the obligation of the Minister under s 424A(1) of the Act , the Federal Magistrate found no error to have been established. The country information and the Tribunal's comments on the implausibility of the letter transmitted by fax on 29 November 2003 from a Mr Baksi were excepted from any operation adversely to the Minister of s 424A(3) of the Act . Furthermore her Honour considered that the letter did not constitute a matter upon which the Tribunal relied upon as constituting the inconsistencies between the information provided to the delegate and that to the Tribunal, and further took the view moreover that the Tribunal's thought processes were not information falling within the scope of operation of s 424A(1) of the Act in any event. 13 The Federal Magistrate found in addition that there was no evidence to support the appellant's other grounds for review sought to be advanced in his submissions to the Court, and that the purported grounds for review sought by the appellant were in the nature of merits review of the Tribunal's decision. In the result, her Honour found no reviewable error was established and dismissed the application for review. The notice of appeal included the following grounds: the Tribunal failed to take into account relevant considerations and evidence; the Tribunal denied the appellant procedural fairness by failing to provide the appellant with a reasonable opportunity to respond to country information; the Tribunal failed to investigate the provenance of the letter from the Dum Dum Trinamool Yuba Congress, faxed on the 29 November 2003; the Tribunal made findings which were not open on the evidence; and that the Tribunal erred in finding that the appellant could avoid harm if he ceased to be involved in politics in India. 15 The appellant provided five pages of written submissions in support of the purported grounds of appeal. The Minister responded in detail to those submissions. When the appeal was called on for hearing, the appellant informed the Court to the effect that he had nothing to add beyond the scope and text of his written submissions. This reflects an unfortunate trend in the submissions of unrepresented appellants in migration cases. I will address below those written submissions of the appellant in any event, and by reference to the issue headings as formulated by the Minister. The appellant was in that regard a member of the TMC, which on the evidence before the Tribunal is a political party that exists in West Bengal, and not the remainder of India. In any event, at the Tribunal hearing the appellant asserted that the reason why relocation was not possible was because of his upper middle class origins, language and ethnicity, which generalities of description were inferentially or inherently addressed in the Tribunal's reasons. In those circumstances, the purported case that the Tribunal failed to take into account a relevant consideration was not made out. 18 In the appellant's written submissions, he also contended that the Tribunal failed to consider whether relocation was reasonable, since the police could still find him anywhere in India in relation to the alleged false charges. However that submission failed to recognise that the Tribunal rejected that claim for reasons which included the circumstance that the appellant had been able to live unhindered with relatives in Mumbai and that his departure to Australia was unhurried despite the receipt of a visitor's visa. 19 The appellant also asserted that the Tribunal failed to consider that the sporadic political violence it was said to have acknowledged as having occurred was a 'threat to life or liberty [or] significant harassment'; however the Tribunal did consider whether the violence, which it accepted occurred, would constitute serious harm within the meaning of s 91R(1)(b) of the Act and rejected the suggestion that it would do so. 21 The appellant also complained that he was not given an opportunity to respond to the Tribunal's concerns about the Dum Dum Trinamool Yuba Congress letter which he tendered; however, as Barnes FM observed, s 422B of the Act , SZBDF , and SZEGT v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCA 1514 at [29] (Edmonds J) constituted an answer to that suggestion. The Minister submitted that even if that were not the case, there was no denial of procedural fairness established, since the Tribunal did not find the letter to have been fabricated and thus there was therefore no error of the kind identified by a Full Federal Court in WACO . I believe it is unnecessary to consider the findings made in WACO in the light of the operation of s 422B. 22 Moreover the appellant complained that he was not given the opportunity to comment upon alleged inconsistencies in his statement and oral evidence, which the Tribunal allegedly relied upon. However the Tribunal's decision was not based on any finding of inconsistencies between his statements made to the Minister and his subsequent evidence given to the Tribunal. Nonetheless, assessments as to credibility are matters essentially for the Tribunal to undertake. In support of that proposition, the Minister referred the Court to Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407. 26 In relation to the second matter above, the Tribunal based its conclusion on the evidence that the appellant gave and in the course of which he described the activities he undertook under the instructions received from others. I find that the Tribunal's finding that the appellant's ' activities demonstrate that he would not be perceived by his adversaries as having political influence or profile ' was open on the evidence. Rather, as already outlined, the Tribunal found that he had not previously been subjected to persecution and did not have a profile likely to attract persecution in the future. Moreover the Tribunal established that the violence from the CPIM was sporadic, not state sponsored, and further that there was in place effective state protection. 28 After making the foregoing findings, which were sufficient in scope to dispose of the appellant's claims, the Tribunal made the alternative findings that the appellant would be able to express his political views freely on his return to India, though he might need to exercise some caution in so doing during elections in CPIM strongholds. The Tribunal recognised that such restraints ' are limited in duration and scope, and do not amount to any oppression of his ability to express his political opinions which would give rise to persecution '. That alternative observation of the Tribunal was made in circumstances where the member had found that the inter-party violence in West Bengal was not systematic, and that the appellant was unlikely to be specifically targeted. Accordingly the Tribunal did not outline how the appellant could avoid persecution within the meaning of the Act , but rather whether the reasonable steps he could take to minimise the risk of being the victim of sporadic and election related violence could per se involve or constitute persecution. The Tribunal duly found to the negative of that proposition. 29 I would add that the appellant also claimed that the Tribunal 'ignored its undertaking' to give him the opportunity generally to make written submissions on any controversial issue as to inconsistencies or otherwise in his testimony. That claim was said by the Minister to be without foundation, and I think that is correct, upon the basis that it would appear that the Tribunal did not rely upon any inconsistencies per se , nor was there any suggestion in the Tribunal's reasons for decision or records relating to its decision to suggest that any such undertaking was given. Moreover the Tribunal did accept further evidence from the appellant's migration agent submitted after the hearing, being the letter from the Dum Dum Trinamool Yuba Congress. 31 Accordingly the appeal must be dismissed with 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 Conti. | whether breach established of s 424, 424a(1) and s 422b of migration act 1958 (cth) whether tribunal failed to take into account relevant considerations whether tribunal's findings were not open on evidence migration |
Between 1989 and 2007 she released eleven albums in Australia and has sold her albums both in Australia and in other countries. At various times in her career she has performed as a soloist with very well-known international musicians. Ms Rutter is also a composer. In late 1992, according to her evidence, she composed and wrote a melody which she called "Blo". The eight bars of the melody were written on a scrap piece of manuscript which was subsequently lost. In mid 1993 she wrote a complete musical piece based on the melody. The manuscript was in evidence. Her fourth album was entitled "Blo" and was released in 1996. This album included an arrangement of Blo. The essence of Ms Rutter's claim in the present proceedings is that her copyright as author of Blo was infringed when the first respondent which, as will be seen, was in 1999 granted a 12 month licence to reproduce the score of the melody for specified purposes, continued thereafter to do so without her permission. Brookland Valley Estate Pty Limited ("Brookland Valley") is the operating company of the Brookland Valley vineyard in the Margaret River region of Western Australia. The land upon which the vineyard is situated was acquired by the second respondent, the family trust company of Mr Malcolm Jones and his wife, Mrs Deidre Jones, in 1983. The first wines were produced in 1988. In 1993 the family trust, JFT (WA) Pty Limited ("JFT"), went into partnership with a company called Mulloway Pty Limited ("Mulloway"). In 1997 BRL Hardy Limited (later Hardy Wine Company Limited and then Constellation Australia Limited) ("BRL Hardy") acquired a 50% interest in the vineyard. From that time the business operated as a joint venture under the name of the first respondent in which BRL Hardy had a 50 percent interest, JFT a 25 percent interest and Mulloway a 25 percent interest. Proceedings against JFT were settled before the matter came to trial. Although Mulloway and BRL Hardy had, respectively, one and two representatives on the board of Brookland Valley, day to day management was retained by Mr and Mrs Jones with assistance from BRL Hardy. Mr Jones was managing director of Brookland Valley from 1997 until September 2004 and then acted as a consultant to Brookland Valley until December 2004. From 1997 to 2004 Mrs Jones was employed by Brookland Valley as the marketing manager. One was described as a "Margaret River" brand. The proposal for the third brand was discontinued a short time later but the proposal for the new Margaret River brand continued. Mrs Jones was closely involved, both professionally and personally, in the development of a marketing strategy. The development of that strategy became intimately connected with a statue (which Mr and Mrs Jones knew as "Pan", but which a witness in the proceedings identified as "Daphnis") which they had purchased in 1978. When we purchased the land to become the Brookland Valley Vineyard I came up with the idea of placing the statue on a rock on the land. The statue had become a symbol in our family of enjoying the good life, music, fun and wine. This was also our approach to making wine. Over the initial years of developing the winery the family often held parties around the statue and decorated it for Christmas, making it an important part of our family history. From 1990 when the Flutes Café was established I came up with the idea of placing the Pan statue on a rock at the front of the restaurant. We often played Pan music in the restaurant. The statue and story of Pan became strongly connected to Brookland Valley Vineyard and was often used in our marketing initiatives from the very beginning of the winery. I also came up with an idea to have music incorporated in the label and to have a CD produced which was associated with Pan and the second label. This CD could then be played in the Flutes Café and Gallery and in the restaurants and retail stores which stocked Verse 1. As such, I anticipated that there would be a need for a reasonably large budget to have a launch which would entice their attendance. My initial idea was to hire a local flautist in each city. I also came up with a mock up idea for the label to include an excerpt of a piece of music which was to be associated with the second label. My idea was that the piece of music on the label would be played by the flautist at the launch functions. I wanted the piece to be called Pan's Song. Also part of my concept was for a CD to be compiled with Pan's Song and some other tracks to be given away at the launch functions and to the retailers and restaurateurs as an incentive. It was decided that the Verse 1 range would be constituted, at least initially, by a white wine, a Semillon Sauvignon Blanc from 1999, and a red wine, a Cabernet Merlot from 1998. The proposed involvement of Ms Rutter was discussed. This was well received and all agreed support on this scale was required to achieve the sales distribution and growth targeted. Negotiations are continuing. This contract should be for a minimum of 2 years with agreement to make personal appearances, perform, endorse and provide exclusive rights to a CD of selected music tracks. A meeting in Sydney is planned for Tuesday 23 February to finalise the launch activities. They fell out in mid 1999 but before that happened negotiations had commenced with Mr Ferin to involve Ms Rutter in promotion of the Verse 1 range. The package includes use of Jane Rutter in the production of a piece of music and a CD. Mr and Mrs Jones and Ms Rutter each gave evidence about the conversation at that meeting. Mr Ferin was not called to give evidence by either Ms Rutter or Brookland Valley. I am satisfied that he was not, by the time these proceedings came to be heard and for a considerable time prior to that, in the camp of either side. No inference is available from the failure of either side to compel him to give evidence. However, the passage of time (ten years), the fact that nobody made any note of the meeting but relied instead upon recollection to attempt to recreate the substance of the conversation and that no independent version of events was available means that the evidence about what was said at the meeting needs to be approached with considerable caution. Both parties agreed that the arrangement between them had later been captured in a written form. However, a matter of considerable difficulty for the resolution of the present case is that no written contract was ever finally executed and there was some real lack of certainty about which documents should be regarded as stating the final terms of the agreement which was made. Nevertheless, resolution of those matters does not depend upon preferring any particular version of the conversation which took place on 23 February 1999. I am satisfied that, at that time, both Ms Rutter and Mrs Jones in particular were very enthusiastic, both about the concept and Ms Rutter's participation in it. The 1999 Australian Marketing Plan was presented to a meeting of the board on 25 February 1999, two days after the meeting with Ms Rutter in Sydney. Apart from the meeting on 23 February 1999, negotiations took place, up to mid 1999, through the agency of Mr Ferin. Central to the concept which Mrs Jones had developed was the provision by Ms Rutter of an original piece of music. She had in mind that the piece of music would be performed and promoted to the public in various ways. First, it would be performed for the purpose of creating a complimentary music CD upon which would also be recorded other pieces of Ms Rutter's music. The CD would be paid for by Brookland Valley and would be available to restaurants and bottle shops as a promotional tool associated with the Verse 1 range. Naturally, one benefit to Ms Rutter would be a greater exposure of the public to her music. Arrangements for the production of the CD were negotiated between Mr Ferin and Mr Hornabrook of BRL Hardy. The recording was made in early 1999. A second aspect of the overall arrangement was the proposal that Ms Rutter perform the original piece of music and other music on three occasions: 9 August 1999 in Melbourne, 11 August 1999 in Sydney and 20 November 1999 at the Brookland Valley vineyard. In due course it became necessary to alter the date and location of the third performance which occurred finally in mid 2000 in Brisbane. The third aspect of the arrangement was that Ms Rutter would provide a manuscript of the original composition for reproduction on the Verse 1 label. She provided the score of the melody of Blo and later played Blo at each of the three launches, in Melbourne, Sydney and Brisbane. While negotiations were going on about the terms upon which Ms Rutter would licence the use of her original composition she approved, on 13 May 1999, artwork for the label which in due course appeared on the Verse 1 range. The front label for Verse 1 wines showed an image of a young, impish, naked, male flautist, together with three staves (12 bars) of Ms Rutter's music. The back label included the words: "Pan's Song written by Jane Rutter". The complete musical piece of Blo lasts for around four minutes. These 30 odd notes form the expositional statement and are the most important part of the composition. Without this melody, the composition would not exist. The scale used is an Aeolian mode (A D Minor scale with an added note --- a flattened 7 th as well as a raised 7 th ). The scale has two 7ths in it which has an emotional, ethnic and historical relevance. The melody is Greek/Middle Europe and exotic in style. The rhythm is that of a Pagan dance. It has both Classical and Greek as well as cross-over influences. It is an unusual and distinctive melody and rhythm. If played on a flute, the first 4 bars would have a duration of between 10 and 13 seconds. It is the genesis of Blo. If played on a flute, the 4 bars would have a duration of between 10 and 13 seconds. The music in the first and second set of 4 bars is repeated several times throughout the entire 4 minute composition. As will be seen the label was changed in 2006. Thereafter, only the first stave of music appeared --- described by Ms Rutter as the crux of the melody. Indeed, despite the fact that Mr Jones gave evidence that he left all records connected with the negotiations at Brookland Valley Vineyard when he ceased to be managing director of Brookland Valley and the fact that there was evidence of a thorough search for such records, Brookland Valley was not able to produce any written record of, or arising from, the negotiations. Ms Rutter's records were incomplete. They consisted of documents which were sent to her from time to time by Mr Ferin. Some of them bore handwritten annotations by her which appeared to find reflection in later versions of the document. There were a number of documents transferred by facsimile from Mr Ferin to Ms Rutter. They included three draft agreements and some other documents, in the form of letters, dated 21 May 1999 intended, apparently, to be transmitted by facsimile to Mr and Mrs Jones. Mr and Mrs Jones both stated in their evidence that they had no recollection of ever seeing the letters apparently intended to be sent to them by facsimile. There is no other objective indication that they were. They might just as easily have been drafts of letters sent to Ms Rutter for her examination. I am not prepared to assume, in the absence of any evidence, that these communications were ever made by Mr Ferin to Mr and Mrs Jones. However, it is possible to make confident findings about a number of matters. On 28 July 1999, Mr Jones wrote to Ms Rutter. Mr Ferin had been dismissed only a matter of days before. In his letter Mr Jones described the essential features of the arrangement which had been agreed. He proposed a small number of changes to the terms of a draft contract which was obviously before him. He proposed to make payment of the bulk of the agreed payment within a matter of days and in fact did so. Indeed, by mistake, the payment was made twice and Ms Rutter refunded the overpayment. Those events, which require more detailed examination, provide a foundation for determining the written terms of the arrangement which, although not signed by Mr Jones and Ms Rutter, is nevertheless evidenced in writing and by the payment and acceptance of the contract payment then due. There were four drafts in evidence of a document entitled "Jane Rutter Agreement for Services". The fourth document post dated critical events and the time at which the contract was concluded. Nobody suggested that it accurately set out the concluded terms of the agreement. It requires no further attention. The first three documents were sent by facsimile transmission from Mr Ferin to Ms Rutter on 19 May 1999, 23 June 1999 and 29 June 1999 respectively. The documents were progressively more detailed. It seems to me possible to exclude two of the documents as the one before Mr Jones on 28 July 1999, when he wrote to Ms Rutter. I shall discuss this matter again in more detail when the specific terms of the contract, as I have found it, have been set out. However, it is possible to commence to narrow the field by reference to the surrounding circumstances. It is convenient to deal first with the document sent to Ms Rutter on 23 June 1999. Ms Rutter's evidence was inconclusive. However, it seems unlikely that the contract agreed was the version faxed to Ms Rutter on 23 June 1999. That document indicated that the contract would be between Ms Rutter, Mr Ferin and Brookland Valley Vineyards. The later version sent to Ms Rutter on 29 June 1999 indicated that the contract would be signed by Ms Rutter only and Brookland Valley Vineyards. A suggestion made by Mr Jones in his letter of 28 July 1999 --- "Change Address in document to Jane Rutter" --- is consistent with the later version of 29 June 1999. The second document contained handwritten notes by Ms Rutter which found substantial reflection in the third document. I think it unlikely that Mr Ferin sent this version as a neutral participant both to Ms Rutter and to Brookland Valley. He was representing Ms Rutter. I think it much more likely that it was sent to Ms Rutter for consideration, before being sent to Brookland Valley if acceptable to her. There are further matters of detail referred to shortly which also contributed to my conclusion that the second version did not form the basis of the final contract. The first document, of 19 May 1999, does not match the terms of the document which was obviously before Mr Jones at the time he made his suggestions for inclusion in the final contract. Mr Jones' evidence was that to the best of his recollection he only ever saw one version of the "Jane Rutter Agreement for Services". In his affidavit evidence he said in two places that he believed it was likely that document was the version sent by Mr Ferin to Ms Rutter on 29 June 1999 or an earlier version. In his oral evidence Mr Jones made some attempt to suggest that he probably had before him the first version and not some later version. I am not prepared to accept that evidence. As will be seen shortly Mr Jones, on 28 July 1999, made specific suggestions for final amendment of whatever document he had before him. Those suggestions cannot be reconciled with the terms of the first version. I am satisfied it was not the first version which was before him. The third document, sent to Ms Rutter on 29 June 1999, bore the notation "Draft #5". It is unclear whether this notation, which does not appear on any other version, referred to drafts given to Ms Rutter for her consideration or drafts provided to Brookland Valley. It is impossible to be certain that there was not some other document before Mr Jones of which no record now remains but, having regard to the terms of the proposals which he made and the general description that he offered Ms Rutter of the arrangement, I am satisfied that the version sent to Ms Rutter on 29 June 1999 reflects, in substance, the terms of the bargain finally concluded. At the time he made his final suggestions, Mr Jones also had before him a facsimile from Ms Rutter dated 27 July 1999. Ms Rutter and Mr Ferin had fallen out a few days earlier. In a facsimile dated 24 July 1999 Mr Ferin proposed, nevertheless, that he continue as event co-ordinator for the events which had been arranged, while engaging someone else to actually manage the events, and work with Ms Rutter, on the days in question. On 26 July 1999, Ms Rutter sent a facsimile transmission to Mr Ferin indicating her lack of understanding of the state of negotiations but protesting that a contract should earlier have been concluded. Mr Ferin replied on the following day indicating that Mr Jones had "agreed to pay $27,500 by this Friday," a figure which I will shortly explain. Mr Ferin also alerted Ms Rutter to the possibility that the proposed performance at Brookland Valley Vineyard in November might need to be postponed. He said that, subject to one or two matters, "there's no problems with the Agreement" from Mr Jones' standpoint. This gives further support to my conclusion that the document receiving Mr Jones' endorsement was not one of the early versions. As agreed you will deposit $27,500 into this account. The remaining $7,500 will be settled by 30 th November 1999. I would like this to be as successful as possible for you. I have turned down work for this to the tune of about $10,000 so how about settling $1,000 worth of Verse 1 wine on me?!! (as compensation). Please let me know your thoughts! The production run on this wine in 1999 is a maximum of 90,000 bottles. If we wish to continue to use your music and your name in future years production we must negotiate a further agreement and failing being able to negotiate the licence is at an end and we will discontinue the use of your music and name on our Verse 1 label. The product and label at all times remain the property of Brookland Valley Vineyard including the copyright and trademarks. You have no ownership of the label but you have a licence agreement with us regarding the use of your name and music. I suggest you give it to your legal adviser and he can contact me if he needs clarification. Thanks Jane. As soon as the contract is complete fax to us and we will sign and send a copy to you for signature. I received your fax with the details and yes I agree to give you $1000 worth of Verse 1 as compensation for the possible change on the Margaret River performance. A copy of his letter is attached. Dee will keep in close contact with you on this. He said he had and (sic) accompanist on hand and would inform you in the next day. Please let Dee know if this has been done. We have paid Roy $750 deposit for his $1500 total services. If it works well we will certainly be looking to continue the arrangement with you --- it has so much potential for both of us. The Friday upon which Mr Jones said payment would be made was 30 July 1999. On Monday, 2 August 1999 two amounts of $27,500 were credited to Ms Rutter's account. She refunded one payment and retained the other. She subsequently gave the performances which were required, commencing on 9 August 1999. She had already provided the composition to which the contract referred and had approved the final form of that composition for reproduction on the Verse 1 labels. I am satisfied that Ms Rutter concluded a contract with Brookland Valley which included the additional and modified terms suggested by Mr Jones. I am equally satisfied that Brookland Valley committed itself to a contract including those terms and the terms of the document to which they were addressed. Doing the best I can with the material I am satisfied on the balance of probabilities that the draft contract which was finally concluded, amended as suggested by Mr Jones, was the one sent to Ms Rutter by Mr Ferin on 29 June 1999. The Performer agrees to grant a licence to the Promoter to use her music and name for the marketing and promotion of the product on the terms and conditions set out hereunder . The product and Verse 1 label and marketing material including trademarks and copyright remain the exclusive property of Brookland Valley Vineyard at all times subject to the licence agreement as set out hereunder . This fee shall be payable as to the total amount of Item 4 on the schedule, payable to Jane Rutter on the date of this Agreement. All cheques are to be made payable to Jane Rutter. The Promoter shall however receive a 6 month non-exclusive sell off period for the Product which has already been manufactured prior to the expiration of this Agreement. All production equipment and personnel is subject to the Performer's consent. The Promoter agrees to provide 1 business class and 1 economy class airfare from Sydney to Perth (plus return) for the weekend of Saturday, November 20 th , 1999 (exact dates and times are to be confirmed). The Promoter will also provide 6 cab charge vouchers to the maximum value of $50.00 each for use by the Performer. The Performer, as the owner of the copyright in the composition, authorises the promoter to reproduce the composition on no more than 90,000 units of the Product. The Performer reserves all other rights in the composition. Interviews shall be organised by the Promoter or it's authorised agents to a maximum of nine (9) print interviews, nine (9) radio interviews and three (3) television interviews. The Performer's consent must be obtained in relation to the placement of any marketing and/or advertising material in any publication. Such approval shall not be unreasonably withheld. Any such extension will be subject to the terms and conditions of this Agreement excluding Clause 5.3 and schedules. The Promoter agrees to take such action and precautions as are reasonably necessary to ensure that no employee or guest of the promoter makes any unauthorised sound or video recording of the performances. The copyright in any unauthorised recordings should be deemed to vest in the Performer. If the Promoter defaults on any of its obligations the Performer will be entitled to, without demand on the Promoter, the full cost of damages for breach of contract from the guarantor referred to in this clause. If any such examination or audit discloses an underpayment to the Performer, the Promoter must reimburse the Performer's costs in conducting the examination or audit. Neither party shall assign that party's right, title and interest hereunder, in whole or in part, without the prior written consent of the other. This Agreement supersedes and extinguishes all prior agreements and undertakings and all representations or warranties previously given. Its application, interpretation and construction shall be governed by the courts of New South Wales and the parties hereto submit exclusively to the jurisdiction of such courts. That submission was based on the fourth change suggested by Mr Jones. It was suggested that the presence in the draft of "Brookland Valley Vineyards, Willyabrup, WA" could not be reconciled with Mr Jones' recitation, in his letter, of "Brookland Valley Vineyard" singular in relation to performance venues. The second version of the draft contract said "Brookland Valley Vineyards" as did the first version. The first version did not have a clause 2.2 to which Mr Jones' suggestions in his second suggested addition could possibly relate. I am satisfied, as I said earlier, that the first version was not the document which was before him. The second version is not materially different from the third version in any respect relevant to the present proceedings but there are one or two further matters that persuaded me that, despite the discrepancy referred to, the second version should not be regarded as that which was before Mr Jones. In the second version there appeared a clause 4.5, which did not appear in the third version. All artwork for such printed material must be forwarded to Ferin Music Australia or Jane Rutter for approval prior to publication. The Performer's consent must be obtained in relation to the placement of any marketing and/or advertising material in any publication. Such approval shall not be unreasonably withheld. Ms Rutter made a hand written comment referrable to the first sentence which said "I hate this". At the end of the proposed clause she said: "We need to discuss this". I think it unlikely that this provision remained in the draft contract over her opposition. It was not in the later version. In her oral evidence she was quite clear in her recollection that she was concerned about the use of particular images and photographs. Another matter is that the second version indicated that the venues in both Sydney and Melbourne had not been fixed whereas the third version identified at least the place of the Sydney performance. I do not think there is any foundation upon which I should prefer the second version to the third version. It is important for the ascertainment of the legal rights and obligations to which the parties bound themselves to come to conclusions about the actual terms of the contract between them. Later, when I come to address other issues, it will be permissible to refer to the representations which Mr Jones made in his letter of 28 July 1999 about the general character of the arrangement between Ms Rutter and Brookland Valley. For the moment it is sufficient to indicate that I see no material inconsistency between the terms of the contract which I have found and the explanation which Mr Jones gave about the arrangement. It is neither necessary nor appropriate to construe the terms of the contract by reference to Mr Jones' description of it. Construction of the contract should proceed by reference to the terms which I have found. Some features of those terms should be plainly identified. The association between the parties was for the purpose of the launch, marketing and sale of two varieties of wine labelled Verse 1: Semillon Blanc and Cabernet Merlot (Recital B). Not more than 90,000 bottles of wine were to be produced in 1999 with a label including Ms Rutter's music and name (clause 2.2 as amended). When the agreement expired (which would occur at the latest on 2 August 2000) unless Brookland Valley had exercised a renewal option there was not to be any distribution of further quantities of wine with labels which included Ms Rutter's name or music, subject only to a six month sell-off period for product which had already been manufactured (clause 2.3). Ms Rutter authorised the reproduction of her composition on no more than 90,000 bottles and reserved all other rights in the composition (clause 4.1). All those provisions were clearly expressed and, in my view, unambiguous. Brookland Valley had one option to extend the agreement for a further one year on the same terms and conditions (clause 5.3 and 6.1). Mr Jones confirmed in his oral evidence that he originally had in mind that further performances in the following year would be arranged if the initial arrangements proved successful. It was also clear from the evidence that a budget had been approved for a two year period by the board of Brookland Valley to undertake the marketing program devised by Mrs Jones. Brookland Valley did not exercise the option. As will be seen, shortly after the agreement was concluded, it moved away from, and outside the parameters of, the terms of the agreement. Ms Rutter was to be paid a "sponsorship" fee of $20,000 and a total of $15,000 for three performances, of which $7,500 was to be paid immediately and the balance after the final performance. Ms Rutter's evidence was that, at the time, she was commanding a performance fee in the order of $5,000 per performance. Accordingly the arrangements which were made for payment for performances were consistent with her professional arrangements at the time. There was debate in the proceedings about the matters to which the $20,000 "sponsorship" might relate. In accordance with the terms of the contract the $20,000 fee was related to "The Performers Sponsorship Services" identified in clause 4. It therefore included payment for the authorisation of reproduction of the original composition, provision of an accompanist on three occasions, availability for up to 21 interviews and not unreasonably withholding consent to the placement of marketing or advertising material relating to her. On the evidence only two or three interviews were required of her. There was no evidence which would support a conclusion that the obligations not to withhold consent unreasonably were onerous or particularly important. I am satisfied that the bulk of the $20,000 fee should be regarded as related, in one way or another, to the authorisation to reproduce the composition. The other matters are either relatively trivial or not ones which are capable of being assigned a particular value in money terms. I am satisfied that, even during the term of this agreement, Brookland Valley breached a number of its terms. It did not confine the marketing and sale of wine bearing labels which included Ms Rutter's name and music to the wine varieties Semillon Blanc and Cabernet Merlot. It did not confine production to 90,000 bottles with a label including Ms Rutter's music and name, even in the first year. It did not seek Ms Rutter's authorisation to reproduce her composition on additional bottles. Moreover, Brookland Valley continued to produce and distribute further and increasing quantities of wine with labels including Ms Rutter's name and music after the expiration of the agreement. Notwithstanding that it did not exercise its option to renew the agreement or ever thereafter seek to renegotiate it, it continued to reproduce Ms Rutter's composition and use her name without her authorisation and without any payment being made to her. The present proceedings, however, are not proceedings for breach of contract. They are principally proceedings under the Copyright Act 1968 (Cth) ("the Copyright Act ") for breach of copyright. Before turning to consider that cause of action in more detail it will be necessary to trace the later course of events and the ways in which Brookland Valley continued to use Ms Rutter's composition and name. This step had been recommended by Mr Jones in his managing director's report dated 12 August 1999. It seems inconceivable that Mr Jones could not have appreciated that the addition of an extra wine variety, and use of the label agreed with Ms Rutter, would be a step outside the agreement which he had made with her such a short time before. Thereafter, Mr Jones and Brookland Valley were to conduct themselves as though the contract with Ms Rutter did not exist and permission to reproduce her musical score was irrelevant, although it was only through the licence granted by the contract concluded on 2 August 1999 that Brookland Valley had obtained the right to use her original music on its labels. At a board meeting on Monday, 22 November 1999, Mr Jones proposed the immediate production of a Verse 1 Chardonnay. The meeting resolved to produce a Verse 1 Chardonnay. Mrs Jones was to be closely involved in the sales aspects. At a board meeting held on Thursday, 17 February 2000, Mr Jones suggested that a Shiraz be released under a Verse 1 label and the meeting resolved to proceed with that proposal as soon as practicable. At that same meeting Mr Whelan, who gave evidence in the present proceedings, reported that Verse 1 had been registered in and trademarked in Australia and England and was in the process of being trademarked in Canada. The trademark registered in Australia included a stave of the music supplied by Ms Rutter. At the board meeting on Monday, 8 May 2000, Mr Jones was asked for production and sales forecasts for Verse 1 for the next five years. He estimated "that the four varieties of the brand would total around 28,000 cases for 2000/01; 43,000 cases for 2001/02; 58,000 cases for 2002/03; 72,000 cases [for] 2003/04 and 90,000 cases [for] 2004/05". These estimates were for production and sale of 336,000, 516,000, 696,000, 864,000 and 1,080,000 bottles respectively. It is clear from these estimates that the initial arrangements agreed with Ms Rutter were very modest by comparison. By 2004/05, production was forecast to be twelve times as great as was originally estimated for 1999. At the board meeting on Tuesday, 21 November 2000 there was some discussion about the Verse 1 label. Mr Jones commented that this would unbalance the label and it would need to be redesigned. Mr Kennedy commented that he thought the whole package was very good and agreed that it should remain as is. All that was needed was to get out and sell the wine. The directors resolved that the label remain as is. I was opposed to the change. I felt that the design worked well with the whole concept I had developed for the range. The Verse 1 label remained substantially intact. In particular, those elements provided by Ms Rutter or attributed to her remained without change. Documents attached to the managing director's report for the December quarter 2000, which Mr Jones signed on 25 February 2001, recorded sales from August 1999 until December 2000. It will be remembered that the contract with Ms Rutter contemplated sales of 90,000 bottles of Verse 1 Semillon Blanc and Cabernet Merlot in a twelve month period with a six month run off period. The sales figures showed that Verse 1 Chardonnay commenced to be sold in April 2000, well within the twelve month period of the contract. The sales figures showed that, in the twelve months to the end of July 2000, 80,604 bottles of the original two varieties were sold. Sales of 90,000 of those two varieties were completed by the end of the following month. Under the contract that was the end of Ms Rutter's authorisation to use her original music on the Verse 1 label. Sales continued into the period which should have been subject of the option to renew the contract or the negotiation of a new contract. At the same time, in the initial twelve month period, 14,784 bottles of Verse 1 Chardonnay were sold. Another way of looking at the situation is that 90,000 bottles bearing the Verse 1 label were sold by some time during July 2000, before the expiration of the nominal period of the contract. The necessity to review the arrangement with Ms Rutter appears to have received no attention at all. At a board meeting on Monday, 7 May 2001 Mrs Jones presented the revised Verse 1 labels to the board. They were approved. This reiteration of the use of Ms Rutter's copyright material occurred at a time when she had given no authority for such use. It occurred within the period which would have been covered by any exercise of the option to renew the contract, which option was not in fact exercised. Thereafter the labels continued to be used and applied to generally increasing production until a complaint was first made. The proposed Verse 1 Shiraz had not initially been introduced but it was added to the range in due course in August 2001. The 2002 marketing plan, which was revised in November 2001, appears to suggest that sales doubled from 1999 to 2000 and again from 2000 to 2001. Sales in 2000 were recorded at 122,604 bottles and were forecast for years 2001, 2002, 2003, 2004 and 2005 at 255,084, 348,000, 396,000, 456,000 and 492,000 bottles respectively. The report records Mr Jones' belief that a potential was present for sales of 600,000 bottles by 2005. Actual sales, and forecasts, were more modest than the forecasts made in May 2000 but they were still substantially greater than the original arrangement, and increasing. By the time of his report on 9 February 2003 for the December quarter of 2002, Mr Jones was forecasting Verse 1 sales in 2003 of 509,820 bottles. The Verse 1 brand was well regarded in the market place and was now receiving considerable focus from the majors and key independents. For the full year Verse 1 achieved 119% of budget and a growth on the 2003 year of 130%. I am pleased to report that growth is continuing to gain momentum with July 2004 sales achieving 138% of budget reaching a record of 6,444 cases for the month. Whilst the Semillon Sauvignon Blanc continues to be the hero of the brand, the reds are now growing strongly since being line priced. Considerable activity is taking place with the majors and key independents and I am confident that the next six months sales will substantially exceed budget. Verse 1 has certainly gained its own sales momentum and I believe that over the next two years budgets will be well and truly exceeded. Throughout the whole of the period of his stewardship of Brookland Valley while the Verse 1 range was in existence, therefore, a period of about five years, the Verse 1 range had been marketed and sold with a label which prominently featured Ms Rutter's music and attributed the music to her. During the same period sales had increased substantially and the momentum had been maintained. There is no indication of any kind that those in day to day control of Brookland Valley held such a view. On the contrary, the evidence shows that such doubts about the effectiveness of the label as may have been expressed by some sales or marketing personnel were rejected. The only reasonable inference available is that the management of Brookland Valley were happy that the label was making a useful contribution to what was an increasingly successful brand and an extremely important one for the overall success of Brookland Valley as the minutes of the board meetings consistently recorded. It is quite clear from evidence to which I shall come that changes in the label which subsequently occurred came after Mr and Mrs Jones had left Brookland Valley. Even then unauthorised use of Ms Rutter's composition did not cease although the reproduction of the music diminished in size and the attribution to Ms Rutter ceased. In a sense this compounded the unauthorised use of the music itself. Not only did Brookland Valley continue to use something in respect of which it had no effective licence but it removed any acknowledgement or attribution that Ms Rutter was its creator. It was not until after the present proceedings were commenced that the use of Ms Rutter's music finally ceased. As earlier indicated, a separate arrangement was made with Ms Rutter for the production of a CD containing her music, the cost being borne by Brookland Valley. Before the expiration of the twelve month contract period, on 13 July 2000, Mr Jones sent a facsimile transmission to Ms Rutter's manager, Mr Robbie Porter. We felt that Jane could receive a lot of promotion from this release, which would represent a return to her in another way. However we think that the Verse 1 CD of Jane's is very good and we would like to keep the promotion with Jane going forward . On 2 December 2002, Mr Jones confirmed a purchase order for a further 2,000 CDs "packaged in the identical format including insert" for a figure of $5.00 plus GST for each CD. These are all tangible indications that the promotion of the Verse 1 concept, as devised by Mrs Jones and approved by the board, was thought to be assisted by an association with Ms Rutter and her music. In his affidavit Mr Jones said that if Ms Rutter had sought a further fee for the use of her music and name on the Verse 1 wine labels after the expiration of the contract he would have opposed the payment of such a fee and changed the label. I do not accept this evidence. I see no objective support for any suggestion that Mr or Mrs Jones would have made a substantial change in the labelling arrangements so soon after the launch of the Verse 1 brand and while it was, relatively speaking, in its infancy. On the contrary, the contemporaneous documentary evidence strongly supports a conclusion that both Mr and Mrs Jones were happy with the label and with other aspects of the arrangement as the continuing production and use of the CD illustrates. As has already been indicated, the label was used substantially unchanged through a period of very significant growth in sales. It was obviously not regarded as counter productive. On the contrary, I think the only reasonable inference is that it was regarded as making a useful contribution to the sales and marketing strategy for the Verse 1 wines. I see no reason to conclude that Brookland Valley would not have made a practical and reasonable commercial arrangement with Ms Rutter to enable the label to remain in use. It is not possible to give any serious credence to the suggestion that the mere fact that some further licence fee would be required would be sufficient to generate the level of resistance suggested by Mr Jones. The only suggested foundation for this retrospective prediction was that Mrs Jones had found Ms Rutter difficult to work with during the various launch functions. This evidence came chiefly from Mrs Jones. Passing reference only was made to it by Mr Jones who did no more than recount, in a summary form, statements he attributed to his wife. Mrs Jones in her affidavit evidence suggested that Ms Rutter was disorganised and demanding at the Sydney and Melbourne launch functions. She suggested that she decided at that time not to proceed with any similar functions in the future and secured the agreement of Mr Jones and Mr Hornabrook to that effect. Mr Jones did not give such evidence. Mr Hornabrook was not called to give evidence. There is no other record which supports Mrs Jones' assertions about the decision she said she took. However, any such decision, if in fact it was taken, was, on any view, a qualified one because Mrs Jones excepted from her asserted decision discontinuation of the music and name on the label. The effect of this exception, accepting her evidence at face value, is that whatever view was taken about future launch functions Mrs Jones recalls an active decision to continue the use of Ms Rutter's music and name on the Verse 1 label. That is entirely consistent with what the contemporaneous material shows for the remaining four years while Mr and Mrs Jones remained associated with Brookland Valley. It adds to my conviction that those aspects of the label were not regarded as being without value. Mrs Jones also asserted that she would not have countenanced payment of a further fee to Ms Rutter. I do not accept this evidence. I think it is clear from the evidence as a whole that the name and music were regarded as important elements on the label and it strains credulity to suggest that a sensible commercial arrangement would not have been reached to permit their authorised continuation. In particular, I am satisfied that, in Mrs Jones' mind, it was important that the concept she had devised be promoted as an authentic one. It is clear that the Verse 1 concept, and matters of detail concerning public relations for it, including the design of the label for wine bottles and for packaging such as cartons, were the special interest of Mrs Jones. She was responsible for negotiations and discussions with designers as well as for the original concept itself. Despite one answer which she gave to the effect that the provision of an original composition by Ms Rutter was simply a nice finishing touch (a characterisation which I do not accept), I am satisfied that it was a central element, and important to the authenticity and integrity of the whole concept, that Ms Rutter provide an original composition. That composition was to be, and was, advanced by reference to, in reliance upon and in association with Ms Rutter's undoubted reputation, especially in Australia. Mrs Jones regarded the identification, on the back label, of Ms Rutter as the composer of the music appearing on the front label as part of the concept she had in mind to market Verse 1 wines. Mr Kenneth Boundy, a marketing consultant who gave expert evidence for Brookland Valley, agreed that at the time Verse 1 wines were launched music was used as part of the "brand essence". He thought that Ms Rutter's involvement gave musical credibility and was "clearly of some perceived value to Brookland Valley in differentiating the product". The fact that some years later Brookland Valley, after the departure of Mr and Mrs Jones, first reduced the reproduced score to one stave of music consisting of four bars and then, faced with the commencement of the present proceedings, replaced it with something meaningless gives no reason to think that, at any relevant time, the element of the concept represented by Ms Rutter's composition had become regarded as without significance or value. I am satisfied that the contrary is the case. The fact that Brookland Valley did nothing to honour its obligations to Ms Rutter cannot assist it. From about 2 August 2000 it acted in disregard of her legal rights and without her permission or authority. It acted as though the use of Ms Rutter's music and name was a matter under its unilateral control. It was not. Brookland Valley continued, as part of its commercial exploitation of a successful product, to take the benefit of the arrangements which it had negotiated with Ms Rutter during 1999. However, despite taking the full advantage of her contribution, it disregarded both her legal and moral entitlement to share in some way in the commercial success of what was originally their joint endeavour and turned its back on the promise which it made to her in the letter of 28 July 1999. I place no weight on the evidence of Mr and Mrs Jones predicting what they would have done if Ms Rutter had approached them after twelve months seeking further payment for the use of her music and name. I prefer to judge the matter by reference to their conduct at the time rather than by reference to affidavits drafted for the purpose of the proceedings, with all the imponderables that such a process entails. No commercially significant reason was offered to support their ex post facto predictions. The objective material is consistent only with them each believing that continued use of the label in the form it bore was an appropriate and valuable contribution to their sales and marketing plans for Verse 1 wines. I do not regard it as realistic to suppose that some sensible commercial arrangement would not have been made had it been necessary to do so. He said that BRL Hardy acquired the Jones' family interest in the Brookland Valley Winery in 2005 and immediately took the opportunity to make changes to the labelling and packaging of Verse 1 in response to criticism. This misstates the position and I am satisfied that the position, indeed, has been overstated, probably with a view to making some point in the proceedings in Brookland Valley's interests. The true position is that Mr and Mrs Jones relinquished their roles in 2004. Thereafter little, if anything, appears to have been done about Verse 1 labelling before September 2005, twelve months later when the position was reviewed for other reasons. At that time Ms Shirley De Zolt had responsibilities with respect to marketing. Ms De Zolt was not called to give evidence in the proceedings. In September 2005 she prepared a design brief for Mr John Davies at Insight Design. In Australia, the entry level MR sub brand Verse 1 has achieved sales over 50,000 targeting 80,000-100,000 pa in the next 1-2 years in addition to developing export markets with similar growth patterns. Whilst not seeking a departure from our core brand elements, the design process does need to provide a scale of options to review. One factor mentioned was that the current pack "has begun to look tired". Otherwise the only other comment on any aspect of the label relevant to the present proceedings occurred in the course of making a number of points about the proportion of elements on the label. Perhaps to review the application of the notes to be blind embossed (not printed), or reduced, or moved to the back label or kept in colour but much smaller and softer. Ultimately more air is needed to quite a cluttered label. The presentation proposed that there be only a single stave of music. It said, in part, "Music --- too much of it, confusing, congestion". In the recommended design options there were some new elements. Some elements were to be retained and improved. One of those elements was the music. The change was described as follows: "Music --- cut back/more subtle & not overpowering. Off centred for contemporary look and not complete piece. In background". In January 2006 Ms De Zolt gave a presentation to the Hardy's sales team to present the finalised packaging and to explain the rationale behind it. The comment concerning the music was simply: "Music notes are at height of flute/more subtle". This music was still Ms Rutter's but the attribution which had previously appeared on the back label was removed. Ms Anna Falkiner was, at the time she swore an affidavit for use in the proceedings, the Senior Global Brand Manager (Western Australian Portfolio) for Constellation Wines Australia. She had been an employee of Constellation Wines from 2005. She took over from Ms De Zolt. She appears to have played no part in the redesign of the label in 2005/2006 but was nevertheless called to give evidence that was dismissive of both Mrs Jones' original concept and of any suggestion that Ms Rutter's name or music made any contribution to the Verse 1 label. She seemed unwilling to accept reasonable propositions in cross-examination, insisting for example that "Verse 1" was only a "sub-brand" although occasionally in unguarded remarks she used exactly the same terminology to which she was resistant in cross-examination. I did not find her evidence of any assistance on the question of the significance to be attributed to the conduct of those who preceded her. His letter was dated 26 September 2005. The letter was countersigned by Ms Rutter. It asked for copies of the contractual documentation and a full accounting of Ms Rutter's entitlements under the contract. The letter was received by Mr John Whelan, then company secretary and in-house legal counsel of Constellation Wines, on about 27 September 2005. Mr Whelan spoke with Mr Jones shortly thereafter and was told that Ms Rutter had been paid for the use of her music on the Verse 1 label. In early October 2005 he searched at the Brookland Valley Vineyard for any documents evidencing the contract but found none. I had intended to respond to Mr Bell on my return from Western Australia but overlooked doing so. As already indicated, plans went ahead to change the Verse 1 label but to retain Ms Rutter's music on it. This simple explanation requires further examination. Mr Whelan accepted, in cross-examination, that he was conscious at the time that Ms Rutter's musical work could only be used by Brookland Valley if there had been an assignment of copyright in writing or a licence granted. His enquiries had revealed neither. If there was an agreement, it was important to know how it was constituted and what its terms were?---Yes. No enquiries were made, directly or indirectly, of Ms Rutter. Mr Whelan was, on his evidence, which he gave in a straightforward and candid fashion, conscious of the fact that Ms Rutter's copyright in her music was being breached in an ongoing way, and had been for some time, unless she had licensed its use. Mr Bell's letter put any assumption to that effect in issue. Mr Whelan's own enquiries had not revealed the necessary permission. In my view Mr Whelan was on sufficient notice to make it imprudent in the extreme to leave matters as, in fact, they were left. On 22 December 2006 Gadens Lawyers, who now acted for Ms Rutter, wrote to the Hardy Wine Company in South Australia referring to and enclosing a copy of Mr Bell's earlier letter of 26 September 2005 and referring also to the fact that the reproduction of Ms Rutter's score on the label had been recently altered. Mr Whelan's explanation is that it is unlikely he would have seen it until he returned from his summer holiday in mid-January 2007 which was after the date which Gadens had stipulated for a reply --- 15 January 2007. That explanation does nothing to indicate why a response was not sent. As Mr Whelan indicated, the next step, which was foreshadowed in Gadens letter, was not taken until 10 April 2007 when the application and statement of claim were served. There was more than adequate time and opportunity for Mr Whelan to respond. The approach from Gadens was moderate in its terms. The lack of any response was surprising. The institution of proceedings was practically inevitable. Mr Whelan conceded that he knew of no basis upon which it could be asserted that Ms Rutter had given the necessary permission to reproduce her music after 2000. And what I want to know is has there ever been a position since then when you have become aware of material which has enabled you to form the view that there was a permission or licence granted in relation to the reproduction of the music on the label for the periods --- for the years 2000 and following through to 2006?---No. Mr Charleson's evidence was that when the proceedings were commenced action was taken to remove Ms Rutter's music from the label and a new label was used from about mid 2007. Steps were taken to notify wholesalers and retailers to destroy print material and point of purchase material containing images of the previous Verse 1 labels. However steps were not taken to prevent ongoing sales of Verse 1 wines bearing the label with Ms Rutter's music or even to stop use of the label at the point of production. A schedule attached to Mr Charleson's affidavit identified orders for printing Verse 1 labels for Cabernet Merlot, Chardonnay, Rosé (which had been added to the range), Semillon Sauvignon Blanc and Shiraz. The schedule covered the period from 17 January 2005 to 21 January 2009. It was apparent that, after commencement of the proceedings, 183,312 bottles of Verse 1 Cabernet Merlot were produced with labels showing Ms Rutter's music as were 118,272 bottles of Verse 1 Chardonnay, 15,240 bottles of Verse 1 Rosé, 815,760 bottles of Verse 1 Semillon Sauvignon Blanc and 26,364 bottles of Verse 1 Shiraz. Work orders for the production of such labels were given, after the commencement of the proceedings, on 11 April 2007, 18 April 2007, 20 April 2007, 2 May 2007, 7 May 2007, 16 May 2007, 8 June 2007, 11 July 2007, 25 July 2007 and 1 August 2007. Ms Rutter gave unchallenged evidence that on 26 October 2007 she was able to purchase a bottle of 2005 Verse 1 Chardonnay with the label containing three staves of music which had been in use since 2001. On 23 October 2008 she purchased a bottle of 2006 Verse 1 Cabernet Merlot with a label showing one stave of her music and on the same day purchased a bottle of 2006 Verse 1 Rosé with a label showing one stave of her music. On 24 October 2008 she purchased a bottle of 2006 Verse 1 Chardonnay with a label showing one stave of her music. There was no evidence given in the proceedings that Brookland Valley made any effort to stop selling bottles of wine in its possession which already bore labels containing Ms Rutter's music or to retrieve any such bottles from wholesalers or retailers. Presumably Brookland Valley was content to take its profit from those sales and simply see Ms Rutter in court. Mr Richard Toop is a musicologist. He gave both affidavit and oral evidence in the proceedings. He has an international reputation, particularly as an analyst of twentieth-century music. It was recognisable. ● The part of 'Blo' reproduced on the Verse 1 label from 1999 to 2005 (sic) was an immediately recognisable excerpt of 'Blo'. That part of 'Blo' is a significant, essential and material part of the composition. ● The part of 'Blo' reproduced on the Verse 1 label from 2005 (sic), although shorter, is also an immediately recognisable excerpt of 'Blo'. It also is a significant, essential and material part of the composition. There was no countervailing evidence. I accept Mr Toop's evidence. I conclude that the Verse 1 labels produced from 1999 until around 2007, which featured Ms Rutter's music, reproduced her original musical work in substantial part and published it in breach of her exclusive right to do so, except to the extent authorised by her in the contract made on or about 2 August 1999, for the period thereby identified. I do not accept a submission made by Brookland Valley to the effect that publication of the "music graphic" did not represent an infringement of copyright. No authority was cited to support the submission. For reasons given earlier, I do not accept, as Brookland Valley submitted, that the music was included on the label as a "decorative element". On the contrary, I am satisfied that it was essential to the concept, and its execution, that the music be authentic, original and associated with a high profile classical musician. The attempts made in the proceedings, in various ways, to dismiss those elements of the original concept seem to me to be the product of forensic revisionism rather than a faithful representation of events as they played out in 1998, 1999 and thereafter. Accordingly, Brookland Valley argued that no relief was available to Ms Rutter with respect to infringement of copyright up to 28 March 2001. No real answer was made to this submission and it should therefore be accepted. The result is that it will be necessary, at various points, to make an adjustment to the relief which would otherwise have been available to acknowledge this limitation. One question which was debated was the value, if any, of Ms Rutter's personal association with Verse 1 wines. Evidence was called from a number of witnesses about the value of celebrity endorsements in advertising and about the calculation of an appropriate fee. Notwithstanding these efforts, in my view the issue is not a relevant one in the present case. There was no indication on the Verse 1 labels that Ms Rutter was providing any form of personal endorsement for Verse 1 wines. Neither, in my view, does any inference to that effect arise from the attribution to her of authorship of "Pan's Song". Until 2006 Ms Rutter was shown simply as the composer of the music. In my view that fact, together with her undoubted reputation in Australia, added authenticity to the concept, as Mrs Jones desired. However, it is neither necessary nor appropriate in the present case to approach the question of the assessment of damages on the basis of attributing some value to a notional endorsement by Ms Rutter of Verse 1 wine. A clear case has been made out for damages for breach of copyright. It is not realistic to make an assessment of such damages on the basis that Brookland Valley would not have come to some arrangement with Ms Rutter concerning the use of her music and her name. It did in fact use her music and her name. The assessment of damages must be approached upon the basis that it would have been prepared to make a commercially sensible arrangement in order to do so. I reject a submission made by Brookland Valley that Ms Rutter is only entitled to the same amount it would have cost Brookland Valley to redesign the label to remove her music and name. The starting point for an assessment of what arrangement would have represented a reasonable commercial one in all the circumstances must commence with the bargain actually made. In that bargain $20,000 was assigned for sponsorship. The sponsorship responsibilities were identified in clause 4 "The Performers Sponsorship Services". The Performer, as the owner of the copyright in the composition, authorises the promoter to reproduce the composition on no more than 90,000 units of the Product. The Performer reserves all other rights in the composition. Interviews shall be organised by the Promoter or it's authorised agents to a maximum of nine (9) print interviews, nine (9) radio interviews and three (3) television interviews. The Performer's consent must be obtained in relation to the placement of any marketing and/or advertising material in any publication. Such approval shall not be unreasonably withheld. I think the number of varieties of wine should be regarded as of less importance than the total number of bottles to which labels containing Ms Rutter's music were to be attached. At the outset it was contemplated that 90,000 bottles to which labels would be attached would be produced in the contract period. In fact that number was exceeded. One suggestion made by counsel for Ms Rutter was that I should assess the position simply as though the sponsorship fee of $20,000 represented a royalty of 22.22 cents on each of 90,000 bottles. I do not think that would be a realistic approach. I am satisfied, however, that the sponsorship fee should, for reasons which will be explained, be regarded as including a lump sum licence payment of $15,000 and a royalty of 2 cents per bottle, as well as provision for the other matters referred to in clause 4. I think it reasonable to assume that the element of primary importance to the parties, at least at the time the original agreement was made, was a lump sum payment by way of a licence fee. However, in view of the shared expectation of a given production run, and the optimism for increased sales thereafter, it is unrealistic to think that some adjustment to accommodate the level of success of the range would not have been mutually agreeable. Although a royalty will not provide an appropriate measure of damages where it appears a copyright owner would not have been prepared to grant a licence (see Aristocrat Technologies Australia Pty Limited v D.A.P. Services (Kempsey) Pty Limited (in liquidation) [2007] FCAFC 40 ( "Aristocrat" ) at [27]), there is no suggestion in the present case that Ms Rutter would not have been prepared to do so. This element, however, should be a modest one. In my view a royalty of 2 cents per bottle meets that standard. At $1,800 for 90,000 bottles it would comprise a small part of the initial payment but was capable of affording some limited participation in a successful marketing endeavour thereafter. The calculation should be made for all sales of bottles to which were affixed labels bearing Ms Rutter's music, excluding the original 90,000 bottles to which the contract related and also excluding sales up to 28 March 2001. Some allowance needs to be made for the cost of an accompanist on three occasions (clause 4.2). I will attribute $400 for each occasion ($1,200 total) to this factor. There were only a small number of interviews which Ms Rutter was required to attend (clause 4.3). Of the remaining $17,000 I will allow $2,000 for other contingencies including interviews. The remainder of $15,000 seems to me to represent an appropriate core payment which, in substance, reflects the bargain which was made and which might reasonably be thought to have been acceptable to the parties for later years, supplemented by the modest royalty I have already discussed. Due to the six year limitation on Ms Rutter's right to claim relief, any payment referable to the period before 28 March 2001 must be excised. Accordingly, the $15,000 notional payment attributed to the period from 2 August 2000 to 1 August 2001 must be reduced pro rata to $5,178.08 (for the period of 126 days from 29 March 2001 to 1 August 2001). On Mr Charleson's evidence, printing of labels with Ms Rutter's music continued until 1 August 2007. Conveniently that identifies a span of exactly eight years from the making of the contract and seven years from its expiry. In my view Ms Rutter should be compensated firstly with an amount of $95,178 to represent the core payment I have isolated for each of those additional years, but again commencing on 29 March 2001. Then it becomes necessary to attribute a fee of 2 cents per bottle to sales made from 29 March 2001. Mr Charleson's evidence also enables sales to be calculated in the following way: 2000 - 30,060 bottles (120,060 sold from which the 90,000 bottles originally bargained for must be deducted); 2001 --- 270,012 bottles; 2002 --- 469,284 bottles; 2003 --- 567,084 bottles; 2004 --- 813,012 bottles; 2005 --- 920,760 bottles; and 2006 --- 1,366,776 bottles. In addition a calculation may be made from Mr Charleson's schedule of labels printed in 2007 bearing Ms Rutter's music (but excluding those which do not) of 1,332,744 bottles in 2007 to 1 August 2007. The total is 5,769,732 bottles. To recognise the limitation period excluding relief up to 28 March 2001, the whole of the net sales from 2000 (30,060) must be excluded. It is not possible to discern from the evidence what sales were made, in 2001, up to 28 March 2001 and which from 29 March 2001 on. I will therefore reduce the 2001 sales figure of 270,012 bottles pro rata to 205,653 bottles. The adjusted total is 5,675,313. On the approach I have taken I think Ms Rutter is entitled to further damages, in addition to the $95,178 already identified, of $113,506, giving a total of $208,684. In my view the disregard of Ms Rutter's rights was flagrant. Apart from breach of any contractual terms, the representations contained in Mr Jones' letter of 28 July 1999, about the substance of the arrangements then proposed by him, were perfectly clear. The acknowledgment that: "If we wish to continue to use your music and your name in future years production we must negotiate a further agreement and failing being able to negotiate the licence is at an end and we will discontinue the use of your music and name on our Verse 1 label" was dishonoured without apparent compunction. The agreement which Brookland Valley made with Ms Rutter was itself breached virtually immediately with the introduction of a new variety of wine. It was then breached when the agreed volumes were exceeded. Disregard of her rights continued after the expiry of the contract. Mr and Mrs Jones took what they wished from the arrangement with little apparent regard for Ms Rutter's entitlements and legitimate interests. Mr Jones' failure to honour the bargain which he had made with Ms Rutter or take any step to address her rights may not be dismissed as simple carelessness on his part. His representation to Mr Whelan to the effect that Ms Rutter had been paid in full for her contribution was manifestly incorrect. If that was the basis upon which he proceeded it was clearly not open to him to do so. If it was not, the position is, if anything, worse. The position did not improve when Mr and Mrs Jones ceased their involvement with Brookland Valley towards the end of 2004. Ms Rutter's enquiries about the matter, through Mr Bell, and the approach made on her behalf by Gadens, went unanswered even though it was quite apparent that there was a serious question about the right of Brookland Valley to use, and continue using, her music on its labels. Nothing was done until the proceedings were commenced and even then the steps that were taken were ones which displayed no real recognition of Ms Rutter's entitlements past, present or future. For a number of months the labels bearing Ms Rutter's music were reordered for every variety of Verse 1 wine. In my view, each of the elements identified in s 115(4)(b)(i) , (ia), (ib) and (iii) of the Copyright Act is engaged. The conduct of Brookland Valley was flagrant and it continued in disregard of Ms Rutter's rights even after it had been expressly brought to its attention. Brookland Valley continued to take the full benefit of the marketing program which it devised, even after Mr Bell's letter in September 2005. I do not accept the evidence given in the proceedings that I should regard the continued use of Ms Rutter's music as of no consequence. The new label, put into use from January 2006, continued to display it. I am fortified in my view that some account must be taken of the need for deterrence by the approach which was taken at various points. In the end, in one form or another the unsatisfactory and flagrant disregard of Ms Rutter's rights spanned a period of about eight years. The moderate attempts which she made to seek clarification of the position went without response. Even the commencement of the present proceedings appeared to bring insufficient recognition of the gravity of the problem. An estimate of additional damages is again necessarily broad but that is almost inevitable in cases of this kind (see Aristocrat at [52]). In my view a figure of $150,000 as additional damages is appropriate. The restriction of Ms Rutter's claims to the period from 29 March 2001 does not remove or relevantly qualify her entitlement to an amount for additional damages. Nor does it affect the amount which I have found is appropriate to be awarded. Under s 195AO of the Copyright Act that was an infringement of Ms Rutter's "moral rights" of attribution. Under s 195AZA , damages are available for loss resulting from the infringement but s 195AZB makes clear that there may be no double counting. In my view, the lack of attribution did not increase the loss flowing from breach of copyright in the original work which continued in 2006 and into 2007. There is no need to consider any separate order under s 195AZA. In my view such an order is not necessary. It is not appropriate in my view for the Court to grant an injunction which has no real work to do. However, she is not able to point to any damage which she has suffered as a result of that alleged conduct. It follows that damages would not be available on that account. She has not sought any form of declaratory relief in relation to the conduct of which she complained under this cause of action. No relief is therefore appropriate under the Trade Practices Act . I decline to award interest on the amount of additional damages. I regard that as a sum which reflects the elements referred to in s 115(4) of the Copyright Act rather than as compensation for direct loss (see also Federal Court of Australia Act 1976 (Cth) s 51A(3)(c)). However, there is no good reason why Ms Rutter should not be awarded interest on her compensatory damages. Until December 2008, the Federal Court Rules did not provide a guide to the calculation of an appropriate rate of interest and the practice of the Court was to award interest at the rate applied in the Supreme Court of the State or Territory in which the proceedings were heard (see e.g. GEC Marconi Systems Pty Ltd (t/as Easams Australia) v BHP Information Technology Pty Limited [2003] FCA 688 ; 201 ALR 55 at [6] --- [7]). There are two principal difficulties presented by any attempt to relate an appropriate rate of interest to the compensatory damages I have found are justified. First, the cash rate set by the Reserve Bank of Australia (if that was to be chosen as a guide) was somewhat volatile, moving up and down between 6.25% on 2 August 2000 (coincidentally) and 3.00% at the present time, having reached 7.25% on 5 March 2008. The average rates from 2 August 2000 were 5.41%. The addition of 4% as suggested by O 35 r 7A provides a range of 10.25% to 7.00%, peaking at 11.25%, with an average of 9.41%. Over the same period of time the rate applied by the Supreme Court of New South Wales ranged between 11% (from 1 September 2000) to 9% at the present time. In view of the next difficulty which I need to address it is in my view better in the circumstances of this case to fix a single rate of interest to be applied. In my view, an appropriate rate of interest to be applied uniformly over the whole period would be 9%. in one yearly or longer periods commencing on 2 August. In my view the fairest approach to this question would be to calculate interest on the 2 cent royalty I have determined from the conclusion of the respective sales periods --- end 2001, 2002, 2003, 2004, 2005, 2006 and 1 August 2007. The application of interest thereby occurs after actual sales rather than in anticipation of them. Interest should be applied to the date of judgment, 30 June 2009, which is generally fairly straightforward. The details are no longer important. Shortly before the trial Brookland Valley decided not to pursue the cross-claim, which may therefore be dismissed. 2. The cross-claim is dismissed. 3. The parties will be heard on costs. I certify that the preceding one hundred and twenty-nine (129) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | copyright musical work licence granted for limited period reproduction of a substantial part of the work outside the licence period. copyright infringement damages for flagrant infringement. copyright limitation period. interest awarded on compensatory damages rates of interest practice of the court interest rates applied by supreme court of new south wales introduction of order 35 rule 7a federal court rules uniform interest rate applied. interest not awarded on exemplary or punitive damages s 51a(3)(c) federal court of australia act 1976 (cth). intellectual property intellectual property practice and procedure damages damages |
These reasons for judgment use the terms employed in, and are to be read together with, the first judgment. 2 The contempts committed by Siminton fall into two categories. The first category consisted of Siminton dealing with, and giving instructions in relation to, the disposition of moneys in certain bank accounts in the manner set out in charges 1.1 and 1.2 of the first statement of charge and in charges 1.1, 1.2, 1.3 and 1.4 of the second statement of charge ('the disposal contempts'): see [16]-[30] of the first judgment. The second category, which consisted of a failure by Siminton to post notices on two websites, was the subject of charge 1.5 of the first statement of charge ('the website contempts'): see [38]-[41] of the first judgment. 3 APRA submitted that the disposal contempts amounted to criminal contempt. In particular, APRA submitted that the disposal contempts were 'a calculated and clandestine attempt to withdraw funds from the Terra Nova Cache account, in deliberate defiance of paragraph 2(b) [of the Sundberg J orders], indicating [Siminton's] attitude to the Court's authority. On the evidence before the Court, it is clear that Siminton's disposal contempts were of an extremely serious kind and constituted wilful disobedience and contumacious disregard of the Court's orders. The seriousness of the breaches is underlined by the fact that Siminton's conduct was precisely the kind of conduct against which Sundberg J sought to guard by the making of the orders the subject of the contempt charges. The conduct involved the actual transfer of large sums of money ($536 880.18, $38 000, $43 000, $5 000 and $10 000 respectively) and an attempted cash withdrawal from a Bendigo Bank account of $500 000, all of which occurred shortly after Siminton became aware of the Sundberg J orders. I would add that the failure of Siminton to obtain the cash withdrawal of $500 000 from the Bendigo Bank account came about fortuitously and not as a result of any change of mind on the part of Siminton. I am prepared to infer that the nature and sequence of the transfers effected by Siminton, and his attempt to withdraw a significant amount of cash from an account with which he had no previous association, were an attempt by Siminton to avoid detection by APRA. I can more readily draw that inference in the absence of any explanation of the transactions in question by Siminton. The seriousness of the disposal contempts is exacerbated by the fact that, as a result of the transfers made in breach of the orders, amounts of $5 000, $10 000 and $43 880.18 (ie $617 880.18 transferred to Agios account via Technocash less $574 000 transferred from that account to the Bendigo Bank account) appear to have been taken outside the direct protection of the Sundberg J orders. That observation is made on the assumption that the $574 000 transferred to the Bendigo Bank account (of which Siminton attempted to withdraw $500 000) is still within the direct protection of the Sundberg J orders. 5 Because of the belated compliance by Siminton with the Sundberg J orders in relation to posting notices on the two websites, the website contempts are less serious. Although the website contempts evidence a disregard by Siminton for the orders of the Court, they would not, standing alone, warrant a term of imprisonment. 6 The findings set out above are based on the evidence adduced at the hearing on liability and on APRA's written submissions on liability and penalty filed prior to the penalty hearing. Siminton's response to APRA's evidence and submissions was to continue to maintain, as he is entitled to do, that he 'is constrained from personally giving evidence in support of his plea by his exercise of the right against self-incrimination'. Another response was to file some material to the effect that his solicitor was making an endeavour to settle the main proceeding. Siminton also filed a statement by a friend stating that he was of good character. His counsel supplemented that statement from the bar table. The responses set out above are relevant to penalty but, having regard to the seriousness of the contempt, carry little weight on the issue of penalty. 7 Siminton's counsel also relied on the fact that Siminton had no prior contempt convictions and had eventually posted at least one of the requisite notices. I accept that both of those matters should be taken into account in Siminton's favour on the issue of penalty. 8 It was contended on Siminton's behalf that there is no real risk of ongoing defiance of the Court or disobedience such as would justify imprisonment. His counsel contended that the appropriate penalty was a fine or a suspended sentence. However, other criminal history is irrelevant: R v Giscombe (1984) 79 Cr App R 79 at 84. The court may also suspend the fine on terms. In so far as the distinction might be relevant to penalty, I am satisfied that the disposal contempts involved deliberate defiance of the Sundberg J orders and constituted a criminal contempt. As stated above, because the disposal contempts were disguised steps calculated to defeat, and which in part defeated, the purpose of the Sundberg J orders, they amount to particularly serious contempts. 11 Although Siminton has not gone into evidence about his contempts, I am prepared to give him the benefit of the doubt in relation to the website contempts, in that I am prepared to regard them as not involving deliberate defiance. Accordingly, in so far as it may be relevant to penalty, I treat those contemps as civil contempts. 12 Siminton has provided no evidence about his financial circumstances. However, APRA has adduced some evidence relevant to that matter. He was made bankrupt on 9 August 2001 and has failed to provide a statement of affairs or to deliver up his passport as required by the Bankruptcy Act 1966 (Cth) ('the BA '). As a discharge usually only occurs three years after the filing of a statement of affairs, the bankruptcy is likely to continue for at least three more years. Under s 58 of the BA , the property of Siminton, including 'after-acquired property' as defined in s 58(6) , vested in his trustee on his bankruptcy. A fine imposed on a bankrupt is not provable in bankruptcy (see s 82(3) of the BA ). There is no evidence that Siminton has any capacity to pay a fine and the interlocutory orders made in the proceeding prevent him from accessing any of the funds upon which he might otherwise lawfully draw upon to pay any fine. 13 In all the circumstances, the imposition of a fine on Siminton is not likely to have a significant effect upon him and, in any event, would be insufficient to vindicate the authority of the Court in respect of the disposal contempts. 14 Counsel appearing for Siminton offered an 'unreserved apology' on behalf of his client but stated that Siminton maintains his plea of not guilty and proposes to appeal. As was stated by RD Nicholson J in analogous circumstances in Australian Competition and Consumer Commission v Info4pc.com [2002] FCA 949 ; (2002) 121 FCR 24 at 57-58 [155] , such an apology does not 'demonstrate any remorse to be taken into account'. Siminton's counsel also proffered an undertaking to comply with all of the orders of the Court. That undertaking is to do no more than Siminton is obliged to do in any event. 15 In the result, there is no evidence upon which I would be prepared to act that Siminton has displayed any regret, remorse or contrition about his contempts. 16 I accept that imprisonment should be a last resort but, having regard to the circumstances outlined above, I am in no doubt that in relation to the disposal contempts a term of imprisonment is both appropriate and necessary to vindicate the Court's authority. I regard personal deterrence as remaining a significant factor but I regard general deterrence as being of particular importance in the present case. Freezing orders of the kind made by Sundberg J are commonly made by the courts in order to preserve the status quo pending an interlocutory or final hearing. If such orders were seen as being able to be disobeyed with impunity that would significantly undermine the ability of the courts to effectively administer justice according to law. 17 As with any deliberate defiance of the Court's orders, Siminton's disposal contempts have a severe and deleterious effect on the administration of justice. I observed in Australian Industry Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 629 at [79] that the rule of law in a democratic society does not permit any member of the society to pick and choose the laws or court orders that are to be observed and those that are not. 20 APRA submits that for each of the disposal contempts the appropriate penalty is a sentence of imprisonment of nine months and that for each of the website contempts the appropriate penalty is a sentence of one month, with the sentences to be served concurrently. 21 The Court has a broad discretion as to penalty. Having regard to the factors set out above and the matters put forward by counsel on behalf of Siminton, the appropriate term of imprisonment for the disposal contempts is 10 weeks. I would add that had there been any prior contempt convictions, the penalty would have been significantly greater. I am also not prepared to accede to Siminton's submission that any sentence of imprisonment should be suspended. In the present case, there are not sufficient mitigating circumstances to justify suspending the sentence. 22 As explained above, the website contempts did not involve deliberate defiance and therefore do not warrant imprisonment. Although I have expressed doubt as to the efficacy of a fine in respect of Siminton, I have decided that a fine of $5 000 is appropriate in respect of the website contempts. In arriving at that figure, I have given particular weight to the absence of any satisfactory explanation, regret, contrition or remorse on Siminton's part. 23 APRA sought to have Siminton pay its costs in respect of the contempt motions on a 'party-party' basis. I am satisfied that APRA is entitled to have its costs paid on that basis. Although APRA failed on its 'failure to file allegations', those allegations played a very small part in the contempt case. In the circumstances, I am prepared to order that Siminton pay APRA's costs of and incidental to the contempt proceedings on a party-party basis. As APRA pointed out, costs orders against a bankrupt are subject to s 58(3) of the BA . I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel J. | whether imprisonment is an appropriate penalty for a deliberate defiance of interim orders made by the court contempt |
2 On 24 June 2004, the AFP executed the Birchgrove warrant at Mr Oke's home in Birchgrove. In the course of the execution of the Birchgrove warrant, the AFP uplifted certain documents and items which were thought to fall within the terms of the search warrant, including Mr Oke's laptop computer. In essence, the proceeding now raises the legality of the seizure of the laptop computer. The nature of the attacks upon the legality of the execution of the warrant means that, incidentally, on some grounds the seizure of the other documents under the warrant is also attacked, but that was not the main focus of the contentions. Unlike the original warrant, that copy did not contain the name of the issuing officer on the first page, or a completed attestation clause on the final page. Mr Oke claims that the copy provided to him was also missing an attachment, referred to in the body of the warrant, containing the Law Council of Australia guidelines for the treatment of claims for legal professional privilege made in respect of documents covered by the warrant (the privilege notice). 4 Mr Oke contacted his solicitor, Mr Rydon, who subsequently attended at the Birchgrove premises. Mr Rydon claimed on Mr Oke's behalf that many of the uplifted documents, and in particular many of the files on the laptop computer, were subject to legal professional privilege. A series of discussions took place between the officers of the AFP and Mr Rydon as to how the search should progress in light of that claim. Ultimately, the laptop computer was removed from the premises by the AFP without having been opened and without any of its files having been inspected by the executing officer. The laptop computer was subsequently returned to Mr Oke, although the AFP has retained a copy of its hard drive. His application raises various issues regarding the provisions of Part IAA of the Act, and the interaction of those provisions with the common law of legal professional privilege, including the principle enunciated by the High Court in Baker v Campbell [1983] HCA 39 ; (1983) 153 CLR 52, that a document recording a privileged communication cannot be made the subject of a search warrant issued under s 10 (now s 3E) of the Act. 6 The validity of the Birchgrove warrant itself is not challenged. What is challenged is the validity of its execution. 7 A further issue arose on the amended application, but no longer arises. It concerned the purported return of the laptop computer, and then its re-seizure from Mr Oke, on 2 July 2004, apparently invoking s 3K of the Act. Senior counsel for the AFP during the hearing of the application acknowledged that the AFP's entitlement to retain the laptop computer or a copy of its hard drive was not enhanced by what occurred on 2 July 2004 or by s 3K of the Act. It is not therefore necessary to further address that issue. In particular, it must be specified in the warrant the offence to which it relates; the premises to which it relates; the kinds of evidential material that are to be searched for under the warrant; the name of the constable responsible for its execution; and whether the warrant may be executed at any time or only during particular hours. Section 3E(5)(e) requires the issuing officer also to state the time at which the warrant expires (which must be within seven days of its issue: s 3E(5A)). Subsection 3E(6)(a) further prescribes that a warrant in relation to premises must include certain information regarding the things that may be seized under the warrant, and the basis upon which that seizure is authorised. 10 Section 3H of the Act imposes certain disclosure obligations on the executing officer of a search warrant in relation to premises. During 2004, Mr Oke was the subject of a criminal investigation by the AFP regarding the alleged misappropriation of funds received by Ozone from the Department of Industry Tourism and Resources between 1998 and 2001. 16 In the course of the investigation, the AFP under s 3E of the Act obtained the issue of the Birchgrove warrant and another search warrant in respect of Ozone's business premises (the Silverwater warrant). The AFP executed, or at least purported to execute, both warrants the following day. 17 The Birchgrove warrant recited the issuing officer's satisfaction that there were reasonable grounds for suspecting that there was evidential material (within the meaning of the Act) at the Birchgrove premises. It authorised the executing officer or a constable assisting to search the Birchgrove premises for evidential material that satisfied all of the three conditions specified in the warrant, and to seize such evidential material in accordance with s 3F. 18 The first condition specified in the Birchgrove warrant concerned the physical form of the items to be seized (for example, files, papers, reports etc). The list of potential physical forms of the items was extensive and specifically included a laptop computer. The second condition was that the items relate to either Mr Oke, or to Ozone. The third condition was that there were reasonable grounds for suspecting that the item to be seized would afford evidence as to the commission of certain specified offences against the Act or against the Criminal Code Act 1995 (Cth). 19 The Birchgrove warrant in draft form was presented to the issuing officer. It left blank on page 1 the name of the issuing officer and on page 6 the details of its attestation, although the draft indicated that the issuing officer was "A Magistrate in and for the State of ...". The issuing officer inserted his name on page 1, and completed the attestation clause by inserting that it was issued in Sydney, New South Wales, on 23 June 2004, by adding "NSW" as the State of the issuing Magistrate, and by signing it and adding "JP" after the signature. Each page of the Birchgrove warrant was also stamped at the bottom with the stamp of the Local Court, The Downing Centre, Sydney. 21 Federal Agent Capaldo and several other members of the AFP arrived at the Birchgrove premises at approximately 7:00 am on 24 June 2004. Mr Oke was provided with a copy of the Birchgrove warrant. It was in its draft form, that is without the entries made by the issuing officer or the Local Court stamp. There is an issue whether it included the privilege notice. Several minutes after the AFP officers arrived at the premises, a tape recorder was activated which recorded most, but not all, of the events which followed. 22 The transcript of that tape recording, which was received in evidence and adopted by the parties as an accurate record, records a discussion between Federal Agent Capaldo and Mr Oke as to the contents of the Birchgrove warrant. Mr Oke immediately, and repeatedly, requested that he be permitted to call his lawyer before the search commenced. He complained that the Birchgrove warrant was "written in legalese" and suggested that it had been unlawfully issued. Federal Agent Capaldo did not initially permit Mr Oke to make a phone call but did, at approximately 7:10 am, leave a message with Mr Oke's solicitors in Adelaide on his behalf. Some time later, Mr Oke spoke briefly to a solicitor and subsequently, at around 8:00 am, faxed the copy of the Birchgrove warrant made available to him to that solicitor. 23 It was about 8.30 am when the search of the Birchgrove premises physically commenced. Mr Oke had by then been informed by his solicitor that arrangements had been made for a solicitor from the Sydney office of the firm (who turned out to be Mr Rydon) to attend. The search commenced, although Mr Oke requested that it be delayed until Mr Rydon arrived. He was informed by Federal Agent Capaldo that the Birchgrove warrant was lawfully issued, and that the search would therefore commence. 24 At 9:00 am, after attempting to make a telephone call without the approval of Federal Agent Capaldo, Mr Oke was arrested. He was taken to the AFP Headquarters several hours later and charged with defrauding the Commonwealth between December 1998 and June 2001, under the now repealed s 29D of the Act. That charge was withdrawn some weeks later. A little later Federal Agent Capaldo said she arrested Mr Oke because he was trying to telephone someone other than his solicitor, and later she said it was because "he has committed all these offences, and ... he was also attempting to contact someone which would hinder our investigation". And later she added that one purpose of his arrest was to ensure Mr Oke's appearance in Adelaide. 25 Mr Oke's solicitor, Mr Rydon, arrived at the Birchgrove premises about 9:10 am. He informed Federal Agent Capaldo that the privilege notice was missing from Mr Oke's copy of the Birchgrove warrant. Federal Agent Capaldo said the privilege notice was attached to the copy of the Birchgrove warrant when it was provided to Mr Oke, and that the Birchgrove warrant had been taken to pieces by Mr Oke. She produced another copy of the privilege notice to Mr Rydon. 26 Mr Rydon was informed that the search had commenced, and that the AFP officers were in the process of inspecting Mr Oke's documents. Mr Rydon, concerned to protect his client's rights in respect of those documents to which legal professional privilege may attach, attempted to make a "blanket" claim of privilege over all documents on the Birchgrove premises, until such time as he had inspected them ahead of the AFP. He was informed by one of the AFP officers that he could look at the documents as they (the AFP) did, but not before. You're entitled to deal with them as you see fit, and no doubt you will. The first objection is to the way in which you intend to deal with the claim for legal professional privilege that I've made on behalf of my client. We object to you looking at any documents. We object to the fact that you have looked at documents. And we object that you continue to look at documents without our right to prior --- prior inspection of those documents and assert or assess whether or not there is any claim for legal professional privilege. In the mean time, the search of the Birchgrove premises continued. She requested that Mr Rydon provide a written list of the documents over which legal professional privilege may be claimed. Not surprisingly, Mr Rydon responded that it would not be possible to produce such a list unless he was given a chance to inspect the large volume of paper files stored at the Birchgrove premises. In the mean time, the AFP officers continued to inspect various documents and electronic files held on Mr Oke's desktop computer. The AFP officers indicated they intended to continue to inspect documents, being conscious that if they saw clearly privileged documents they would somehow recognise and give effect to the privilege. 29 An issue arose in the process as to how the AFP would identify relevant evidentiary material, particularly that on computer, and whether, if some relevant evidentiary material were located stored on a computer, that would entitle the AFP to seize and inspect the computer and its stored data. Another issue arose as to whether, if relevant evidentiary material were stored on a computer and part of it was or may be subject to legal professional privilege or subject to a claim that part of it was or may be subject to legal professional privilege, the AFP could then take possession of the computer and inspect its stored contents at all or whether some other procedure had to be followed. The AFP planned to bring up on the screen the stored data (using an expert) and so that Federal Agent Capaldo could then inspect the displayed data to determine whether it might fall within the evidentiary material which the warrant permitted to be seized. Any material privileged from inspection on the ground of legal professional privilege would then be seen by the AFP before a specific claim to privilege would be made, and in the face of the "blanket" claim to privilege. After further discussion, it was proposed by the AFP that Mr Rydon could inspect the on-screen data at the same time as Federal Agent Capaldo. I understand now that you are prepared to deal with that claim with respect to all documents in this premises, and with respect to the computer hard drive on the basis of the guidelines which ought to have been attached to the warrant that was given to my client at the time the search commenced. On the basis that that's going to be the procedure followed I understand that what will now occur is that all relevant files that are going to be removed from the premises will be moved to a place you call [the exhibits registry]. And they will be retained there for the four day period that's referred to in the guidelines, during which time my client and others or myself will carry out an inspection of those and extract from those files those in respect to which we maintain a claim for privilege, and will probably also identify those which are completely irrelevant to the search warrant on its current terms. We will then go through the process of commencing proceedings in respect to which those have been identified...claim of privilege will be made...For the reasons which I've identified before, I am instructed that there could well be, and are likely to be, documents which could be properly the subject of a claim for professional privilege. I have not had a chance to go through the files to assess...whether those documents exist and whether they are located here. You've not allowed me the opportunity to do that in the manner that I suggested beforehand. The only way in which I can deal with it sensibly is to make a blanket claim, and having made a blanket claim you've now said that you're prepared to follow the guidelines in respect of that blanket claim. The process of collecting and describing the material then to be taken from the Birchgrove premises, without apparently any further inspection of it, except sufficiently to describe it for identification purposes for the AFP Property Seizure Records, took place. The laptop computer was one of the removed items. The process was completed shortly after 1.00 pm that day. The "seized" items, including the laptop computer, were subsequently moved to Adelaide and apparently preserved in the "exhibits registry". 32 The items taken from the Birchgrove premises were recorded on a "Property Seizure Record" which was prepared by the AFP's Property Seizure Officer and verified by Mrs Oke and another of Mr Oke's legal representatives. During that process, Mrs Oke was informed by the Property Seizure Officer that the files on the laptop computer had not been inspected because of the "blanket" claim of legal professional privilege. The Property Seizure Record lists the laptop computer as having been seized from Mr Oke's kitchen bench at 11:00 am. 33 In the latter part of that morning, Mr Rydon was given a document which Federal Agent Capaldo described as the original search warrant for the business premises of Ozone, that is, the Silverwater warrant. He immediately pointed out that it also did not have the privilege notice attached. He was given that separately. 34 On 26 June 2004, the AFP applied in the Adelaide Magistrates Court for an extension of the 72 hour period for which possession of the laptop computer might be retained, under s 3K(3B) of the Act. The hearing took place by telephone. Federal Agent Capaldo gave evidence that the laptop computer had been "seized pursuant to the [Birchgrove] warrant", and that there had been insufficient time to have it opened by an appropriate expert, and so she did not know if it had relevant evidence on it. The AFP Property Seizure Record confirmed that the laptop computer had been "seized". The magistrate dismissed the application, in essence because s 3K of the Act did not apply as, on the evidence, the laptop computer had already been seized pursuant to the Birchgrove warrant. As noted above, s 3K(2) permits the removal of a thing found at premises the subject of a search warrant for examination or processing in order to determine whether it may be seized under a search warrant, if two conditions are satisfied. As the seizure under the Birchgrove warrant had already taken place, on the evidence before the Magistrate, the laptop computer could not have been removed to determine whether it may be seized under the Birchgrove warrant. 35 Federal Agent Capaldo's evidence before the Magistrate also confirmed that the laptop computer had been seized without it having been examined, and without her having discerned that it was or contained any evidential material as specified in the Birchgrove warrant. She acknowledged that she did not know whether it contained such evidential material. 36 Subsequently, on 30 June 2004, the AFP asserted through its solicitors that the laptop computer had not been seized under the Birchgrove warrant but had been removed from the Birchgrove premises on 24 June 2004 under s 3K(2) of the Act. As the 72 hours possession then permitted by s 3K(3A) had then expired, the AFP indicated that it intended to return the laptop computer to Mr Oke, to immediately execute another search warrant in respect of it, and to again remove it for examination under s 3K(2). 37 On 2 July 2004, officers of the AFP attempted to return the laptop computer to Mr Oke in the street. It was placed at or near his feet. He did not handle it in any way. He claims he did not then take possession of it. A further search warrant was produced, issued on 2 July 2004, in respect of Mr Oke, and specifying (inter alia) his possession of the laptop computer, together with a letter of that date to Mr Oke asserting that the laptop computer was being removed from his possession under s 3K of the Act. It gave him a little under three hours to agree to a reasonable procedure for his claim to privilege to be agreed upon, after which the AFP proposed to proceed to examine the laptop computer. 38 As noted above, no reliance is placed by the AFP upon the purported retaking of possession of the laptop computer on 2 July 2004. However, that transaction led to these proceedings. A lengthy time was then devoted to an attempt to implement a mutually acceptable regime for the identification of the materials "seized" or "removed" from the Birchgrove premises which were the subject of legal professional privilege, including the contents of the laptop computer. These processes eventually stalled and the issues raised in the proceedings re-invigorated. 39 The laptop computer was subsequently returned to Mr Oke, after the AFP had created and retained an image of its hard drive. He also seeks an injunction requiring the respondent to deliver up, or destroy, all copies of the hard drive of the laptop computer, all electronic records obtained by the AFP from the laptop computer, and all documents containing information with respect to the contents of the laptop computer. 41 The respondent maintains that the Birchgrove warrant, and its execution, were valid, and that the laptop computer was legally seized pursuant to s 3F of the Act. In the alternative, the respondent relies upon an independent acquiescence to the uplifting of the laptop computer from the Birchgrove premises by Mr Rydon on Mr Oke's behalf. The name of the issuing officer is, however, included in the original Birchgrove warrant, a copy of which was required to be provided to the occupier of the premises pursuant to s 3H(1). Sub-section 3H(5) of the Act provides only for two items to be excluded from a copy of a search warrant made available to the occupier or the representative of the occupier. They are the signature of the issuing officer and the seal of the relevant court. Senior counsel for Mr Oke therefore submitted that the omission of the name of the issuing officer and the completed attestation clause from the copy of the Birchgrove warrant provided to Mr Oke meant that s 3H(1) was not complied with, and that as a consequence the execution of the Birchgrove warrant was unlawful and all seized items should be returned. 43 Spender J considered the validity of a series of s 3E search warrants which failed to name the issuing officer in Seeter Pty Ltd v Commonwealth (2004) 210 ALR 437. In that case, the attack was upon the validity of the warrants, rather than upon the validity of their execution. His Honour concluded at 453-454, [60]-[63] that the omission of the issuing officer's name did not invalidate the warrants. He noted at 453, [60] that each page of the search warrants under consideration bore the registration number and signature of the issuing officer, and the official stamp of the issuing authority. In those circumstances, Spender J was satisfied that the issuing officer had "adequately identified her capacity to issue the warrants": at 454, [63]. Although I was referred to that case by counsel, on reflection I do not think it assists in resolving the present issue. The Birchgrove warrant itself is not under attack, and it contains the name of the issuing officer as well as a completed attestation clause. 44 Part IAA of the Act was introduced by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth). It clearly prescribes specific powers and safeguards in relation to warrants and other matters in the investigation of Commonwealth offences, including safeguards of the rights of individuals in relation to whom the coercive investigatory powers of the Commonwealth are invoked. This provision has been included at the specific request of the ACT Chief Magistrate. Subsections 3E(5), (6) and (7) specify information which an issuing officer must state in a search warrant issued under that section. That information includes the time at which the search warrant expires: s 3E(5)(e). Section 3E(5A) directs that the time so specified must be not later than the end of the seventh day after the day on which the search warrant is issued. Those subsections do not expressly require the issuing officer to be described in, or to sign, the search warrant. 46 However, in my view, it is implicit that a search warrant will also bear on its face sufficient information to identify that it has in fact been issued by an issuing officer, so that any person entitled to see a copy of the search warrant under s 3H(1) can be satisfied as to its authenticity. That was the point made by Spender J in Seeter 210 ALR at 254, [63]. Section 3H(5) also supports the inference that a search warrant issued under s 3E should bear the signature of the issuing officer or some means of identifying that the issuing officer is in fact a person falling within the definition of "issuing officer" in s 3C(1) of the Act. That is because it expressly permits the copy of a search warrant made available under s 3H(1) not to include the signature of the issuing officer. The use of the seal of a court as part of that identification would not necessarily be expected, as the issue of a search warrant under the Act is an administrative or executive act rather than a judicial one. 49 As the only parts of the original Birchgrove warrant which s 3H(5) permitted to be excluded from the copy made available to Mr Oke were the signature of the issuing officer, and the seal of the Court, in my view, the copy of the Birchgrove warrant provided to Mr Oke did not, in the circumstances, satisfy the requirement of s 3H(1). It was not a copy of the Birchgrove warrant in at least two respects. One was that it did not have the name of the issuing officer on it. By reason of s 3H(5) that in itself may not be critical. Nor is the absence of the Court stamp. But because it did not have the attestation clause completed, it did not contain the information that it was issued in Sydney on 23 June 2004, apparently by a New South Wales magistrate. It was in the draft form presented to the issuing officer. It did not contain any marking to signify its authenticity or that it was issued by a person who had the capacity to issue search warrants. 50 The omission of the date on the attestation clause has the additional significance that the copy of the Birchgrove warrant provided to Mr Oke did not contain information by which Mr Oke could see that s 3E(5) was satisfied. It did not enable Mr Oke to know when it had been issued. And it did not therefore enable him to know the time at which the Birchgrove warrant expired or indeed whether it had already expired. 51 I shall address the question whether that non-compliance with s 3H(1) rendered the execution of the Birchgrove warrant invalid, after considering the further (and disputed) claim that the copy of the Birchgrove warrant given to Mr Oke also did not have attached to it the privilege notice. The transcript of the recording then made indicates that Mr Oke was given a copy of the Birchgrove warrant by Federal Agent Capaldo at about 7:10 am. He asked for permission to telephone his solicitor who was located in Adelaide. Federal Agent Capaldo was concerned that Mr Oke might contact some other person and warn that other person of the Birchgrove warrant. She therefore telephoned Mr Oke's solicitor on his behalf, but the solicitor was not available and a message was left for him. The solicitor returned the call at about 7:50 am and spoke to Mr Oke for about five minutes. 53 Shortly afterwards Mr Oke by facsimile sent to his solicitor in Adelaide the copy of the Birchgrove warrant he had been provided with. For that purpose he unstapled or unpinned the copy of the document he had been provided with. There were 13 faxed pages, including a cover sheet. The copy of the Birchgrove warrant comprised six pages. The remaining pages comprised the attachment to the Birchgrove warrant entitled " Crimes Act 1914 : Search of Premises: Rights of the Occupier" (five pages) and the attachment entitled "Claims for Public Interest Immunity" (one page). 54 I accept that the facsimile to Mr Oke's solicitor in Adelaide was then sent by facsimile to Mr Rydon in Sydney. He received the same document. 55 I am satisfied that the facsimile to Adelaide, and then to Mr Rydon in Sydney, did not include the privilege notice. Mr Rydon confirmed that he did not receive a copy of the privilege notice in that facsimile. His evidence on what he did receive from Adelaide was not challenged. The fact that Mr Rydon promptly raised its absence with Federal Agent Capaldo also tends to confirm his evidence. There is no reason why the solicitor in Adelaide would not have forwarded to Mr Rydon all that he had received. And the correspondence of the number of pages faxed (as recorded in the cover sheet) with the copy of the Birchgrove warrant without the privilege notice fits that conclusion. 56 There remain, as the submissions acknowledged, only two options: that the copy of the Birchgrove warrant given to Mr Oke did not have attached the privilege notice, or that Mr Oke somehow misplaced that particular page of it when unpinning the copy of the Birchgrove warrant, so that it was not sent by facsimile and was not later located by him when he gave that bundle of papers to Mr Rydon at about 9.10 am or later during the execution of that warrant. I discount the possibility that he deliberately did not send it by facsimile and otherwise secreted it for two reasons. There was no especial reason why he would elect not to properly inform his solicitor of the terms of the Birchgrove warrant, which was imminently to lead to a search of the premises, so that he could get advice about his rights. Secondly, it was not suggested to him in cross-examination, nor in submissions, that he had engaged in that subterfuge. 57 Federal Agent Capaldo disputed that the privilege notice was not attached to the copy of the Birchgrove warrant which was made available to Mr Oke on 24 June 2004. She thought it was attached. She described her usual practice in preparing for the execution of a search warrant. She would photocopy the original warrant and its attachments, and check that the copy to be made available matched the original. I accept that evidence. It is a sensible practice to adopt, and there is no apparent reason why the copy of the warrant should not match the original. 58 However, in my judgment, Federal Agent Capaldo did not fully follow that practice in this instance. It is not simply a matter of the privilege notice somehow being omitted in the copying. The copy of the Birchgrove warrant which was made available was not in fact a photocopy of the original Birchgrove warrant. There are undisputed differences, noted above. It was probably the proposed or draft warrant before it was issued, and as presented to the issuing officer. 59 On the whole of the evidence, I find that the copy of the Birchgrove warrant made available to Mr Oke on 24 June 2004 did not have the privilege notice attached to it, or provided with it. There is direct evidence to that effect from Mr Oke, because he said he forwarded by facsimile to his Adelaide solicitors the copy of the Birchgrove warrant which he had been given. I have found that the material sent by facsimile did not contain the privilege notice. In my view, the contemporaneous evidence points quite firmly to the privilege notice not having been part of the papers of the Birchgrove warrant made available to Mr Oke. The fact that the copy of the Silverwater warrant, when made available to Mr Rydon, also did not contain the privilege notice also tends to support that conclusion. The evidence of Federal Agent Capaldo to the contrary was, I assessed, based more upon her general practice than upon any precise recollection. Her memory of the specific format of the copy of the Birchgrove warrant which was provided to Mr Oke, not surprisingly, was a little vague: she did not recall if the pages of the copy were stapled, or fastened in some other way, or were loose. Moreover, the copy provided was not a copy of the Birchgrove warrant as issued, because of the missing information. I suspect that Federal Agent Capaldo, in this instance, copied the proposed warrant before it was issued and that either it did not then have the privilege notice as part of it or that the privilege notice through oversight was not then copied. 60 It is unclear whether the failure to attach the privilege notice constituted a breach of the Act. There is no requirement under the Act that a s 3E warrant contain a notice regarding an occupier's right to claim privilege over documents the subject of the warrant. In Saunders v Commissioner, Australian Federal Police (1998) 86 FCR 51, French J held that a search warrant issued pursuant to the Act was not invalid for failing to expressly limit its scope to documents the subject of legal professional privilege. The applicant nevertheless maintains that if the AFP chooses to include the privilege notice in the original warrant it must, pursuant to s 3H(1), be included in the occupier's copy. 61 I am not persuaded, in the circumstances, that the privilege notice was not "made available" to Mr Oke as part of the copy of the warrant. Section 5H(1) does not prescribe how or when the copy of a search warrant is to be made available. Whether it has been made available is a question of fact. Ideally, the copy should be made available at one time, and as early as possible. But having regard to the purpose of s 5H(1), if there were some delay in the commencement or progress of the search authorised by a search warrant, the copy might be made available at a later point in time if the purpose were not thereby frustrated. And, one can readily imagine, a page or pages of a copy might accidentally become removed from the copy prepared for presentation. In such a case, assuming the page or pages were otherwise significant (in the way identified above), the delay in providing them might not mean that they were not provided as part of the copy made available. If, upon inspecting the copy made available, the occupier noticed and drew attention to the fact that pages were missing, and they were then provided, I think s 5H(1) would have been satisfied. There are obviously many other possible circumstances. Having regard to the observations of Kirby J in Ousley v The Queen [1997] HCA 49 ; (1997) 192 CLR 69 ( Ousley ) at 144, whether there has been compliance is a matter of fact and degree. On the evidence in this matter, I find that the privilege notice was provided to Mr Rydon at a sufficiently early point in the process of the execution of the Birchgrove warrant that its earlier absence had not affected adversely any claim for legal professional privilege Mr Oke made or the way in which his claim for legal professional privilege was treated. I therefore find that the provision of the privilege notice in the circumstances completed (in that respect) the making available of the Birchgrove warrant. 62 It was submitted alternatively on behalf of Mr Oke that the later provision of the privilege notice meant that the Birchgrove warrant was not executed reasonably, and so was invalid, relying on Arno v Forsyth (1986) 9 FCR 576. The same findings lead me to conclude that there was not such unreasonableness in the execution of the Birchgrove warrant as to lead to its invalidity. There is nothing in the Act to suggest that the AFP can selectively determine which parts of a search warrant it will make available to the occupier, and which parts it will not. However, it does not necessarily follow that the effect of that breach is to invalidate the entire search. 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. Recognition of that purpose may yield a construction of the legislative words that is not necessarily narrowly defined. Neither of these objects can be insisted upon to the uttermost. The protection of the citizen is primarily protection for the innocent citizen against unwarranted, wrongful and perhaps high-handed interference, and the common sanction is an action of damages. The protection is not intended as a protection for the guilty citizen against the efforts of the public prosecutor to vindicate the law. On the other hand the interest of the State cannot be magnified to the point of causing all the safeguards for the protection of the citizen to vanish, and of offering a positive inducement to the authorities to proceed by irregular methods. The validity of such a warrant necessarily depends upon the fulfilment of the conditions governing its issue. The legislative imposition of those conditions reflects the balance struck between the desirability of an effective and efficient investigation of suspected criminal offences and the need to protect the right of an individual to enjoy that person's privacy and property. To insist on strict compliance with the statutory conditions governing the issue of search warrants is simply to give effect to the purpose of the legislation. 69 The consequence of the failure to comply with such statutory conditions may lead to the invalidity of the search warrant itself. George v Rockett is an example. Counsel for Mr Oke also relied upon certain observations in Woodroffe v National Crime Authority [1999] FCA 591 at [14] - [15] , but I do not consider that case advances Mr Oke's position simply because it concerned an application by the National Crime Authority to summarily dismiss a challenge to the validity of a search warrant and to the manner of its execution. Consequently, the Court was called upon only to determine whether the grounds of the challenge were arguable. The copy of the search warrant made available to the person challenging the validity of the execution of the search warrant was assumed not to have included the privilege notice. 70 It is necessary separately to address the omissions from the copy of the Birchgrove warrant made available to Mr Oke to determine whether any of them affect the validity of the execution of the warrant. I propose also to address the significance of the privilege notice on the assumption (contrary to my conclusion) that the privilege notice was not made available to Mr Oke as part of the copy of the Birchgrove warrant. 71 A preliminary observation, however, is that it would not have been intended that any omission from the copy of a warrant made available under s 3H(1) to the occupier of premises being searched would invalidate the execution of the search warrant. A photocopying error may have led to an insignificant corner of a page, or the numbering of a page, being left out. The process of photocopying may have blurred a small section of the text, but a section which did not in the circumstances have any particular significance. There may be other illustrations. 72 Moreover, subs 3E(5), (6) and (7) specify what the legislature considers must appear in a warrant. Those provisions appear to exhaustively state the matters the warrant must disclose to make it valid (see e.g. Ousley 192 CLR at 111). In general terms, they also define the extent of the authority conferred (see e.g. per Gaudron J in Ousley 192 CLR at 94), although s 3F then enlarges upon the extent of that authority. 73 Section 3E does not expressly require the name of the issuing officer to be included in the warrant. However, s 3H(5) indicates that the issuing officer will have signed the search warrant and by implication that the name of the issuing officer will appear on it. 74 The purpose of s 3H(1) has not been the subject of much judicial discussion. Nor was its purpose explored in the Review of Commonwealth Criminal Law: Fourth Interim Report , Canberra, November 1990 (the Gibbs Committee Report) which presaged the introduction of Part 1AA into the Act by the Crimes (Search Warrants and Powers of Arrest) Amendment Act 1994 (Cth). (The history of Part 1AA is discussed by the Full Court in Harts Australia Ltd v Commissioner, Australia Federal Police (1997) 75 FCR 145 at 147-148. ) In Wright v Queensland Police Service [2002] 2 Qd R 667, Holmes J at [30] referred to the ability of an occupier to whom a copy of a search warrant is made available being able "to ascertain the scope of the authority conferred by [the warrant] or the jurisdiction by which it was issued". That approach also is consistent with the approach of Spender J in Seeter 210 ALR 47. 75 In my view, that is the purpose of s 3H(1). The occupier of premises about to be searched is to have made available a copy of the search warrant so as to be able to see the nature and scope of the authority it gives. It must have the appearance of authenticity. Section 3H(5) was inserted, consistently with that purpose, to prevent the subsequent misuse of the copy of the warrant: see the Explanatory Memorandum to the Crimes (Search Warrants and Powers of Arrest) Amendment Bill 1994 (Cth), House of Representatives, p 8. 76 The copy of the Birchgrove warrant made available to Mr Oke was apparently unexecuted. It had nothing on it to indicate it had been issued by any person. Objectively, it may equally have been a draft of a proposed search warrant for which there may not yet have been any application, or for which an application may have been made and refused. Unless s 3H(1) is not intended to ensure that the occupier is satisfied of its apparently authorised issue so as to permit the search of the premises, in my view the copy of the search warrant made available to Mr Oke, omitting the name and description of the issuing officer and the details as to the date or place of its grant did not satisfy s 3H(1). It was not a copy of the Birchgrove warrant. 77 In Wright [2002] 2 Qd R 667, Holmes J concluded that providing a copy of a search warrant (secured by urgent telephone application) which did not contain the name of the issuer or the date and time of issue did not invalidate the warrant, because in the circumstances the absence of that information could not have affected the ability of its recipient to ascertain the scope of the authority it conferred or the jurisdiction by which it was issued (at [30]). It appears at [22] however that, in the circumstances, such information was required in a "prescribed authority form" prepared by the applicant for the warrant and that the search warrant itself contained all the information prescribed by s 73 of the Police Powers and Responsibilities Act 2000 (Qld). In other respects, the copy of the search warrant provided apparently had some indication as to its authenticity: see at [17]. 78 There is a further significance in the omission of the information about the execution of the Birchgrove warrant from the copy. Because the Birchgrove warrant expressed the time by which that warrant expired (so as to satisfy s 3E(5)(e) and s 3E(5A)) by reference to the date of issue, the copy made available to Mr Oke did not enable him to know that the Birchgrove warrant had not expired. The requirement that the issuing officer of a search warrant state in the warrant the time at which it expires reflects the seriousness of the intrusion which the search warrant permits. The issuing officer must be satisfied under s 3E(1) that there are reasonable grounds for suspecting that there is, or there will be within the next 72 hours, evidential material at the premises. The need to express an expiry time results from that legislative condition upon the issue of the warrant. Moreover, the warrant during its life, also authorises in circumstances the seizure of evidential material relating to other offences than those the subject of the issuing officer's satisfaction, and also authorises in certain circumstances the physical search of a person at or near the premises: s 3F(1)(d)(ii) and s 3F(1)(f). 79 In my view, because the omissions from the copy of the Birchgrove warrant made available to Mr Oke did not give him as the occupier any capacity to be satisfied that the Birchgrove warrant had in fact been issued, or that it was current, the purpose of s 3H(1) has not been met. The omissions from the copy of any detail of the issuing officer or the status of the issuing officer or of the date and place of its issue, therefore, in the particular circumstances, lead me to the conclusion that the execution of the Birchgrove warrant did not proceed lawfully. The consequence is that the "seizure" of the laptop computer was not lawful and it should be returned to Mr Oke. That is so although Federal Agent Capaldo told Mr Oke the date the Birchgrove warrant was issued. Section 5H does not reduce the consequences of non-compliance by allowing the oral supplementation of the document. I do not accept that orally telling Mr Oke the date of issue of the Birchgrove warrant means that the breach of s 3H(1) in the very respects which it is intended to secure means its breach should have no consequences. Moreover, the "operational realities" in which search warrants are executed do not suggest any reason why the copy of a search warrant made available under s 3H(1) should not fulfil the purpose of that provision. 80 In reaching that view, I am mindful that if the Birchgrove premises were unattended, the execution of the Birchgrove warrant may have proceeded lawfully even though the copy intended to be provided was incomplete. I do not think that consideration affects my conclusion. Kirby J in Ousley 192 CLR at 144 observed that "Courts properly tend to take a practical rather than an unduly technical view of challenges to warrants permitting intrusion into the property and privacy of those subject to them". The fact that, in different circumstances, the Birchgrove warrant might have been lawfully executed, or indeed the fact that the Birchgrove warrant itself was available to be provided to Mr Oke (but was not made available to him), does not diminish the significance of the non-compliance with s 5H(1) in the particular circumstances. 81 I am mindful that Federal Agent Capaldo had in her possession the Birchgrove warrant and could have made it available to Mr Oke. She did not however do so, but only provided a copy of the Birchgrove warrant in the form referred to above. 82 The omission of the privilege notice (assuming contrary to my view that, in this respect also, s 5H(1) was not complied with), does not have the same consequence. Its absence does not affect the capacity of Mr Oke to be satisfied of the nature of the authority being exercised or its extent. The copy of the Birchgrove warrant initially made available included the note quoted in [20] above. The fact that Mr Oke may have claimed legal professional privilege was therefore identified. 83 What was missing, initially, was the description in the privilege notice of the detailed means by which such a claim might be made. The privilege notice was also made available by Federal Agent Capaldo not long after Mr Rydon's arrival at the premises. 84 Even if it be accepted that the privilege notice was not made available to Mr Oke as part of the copy of the Birchgrove warrant, its absence does not in any substantive way detract from the purpose which underlies s 5H(1) in the circumstances. I do not consider, therefore, that the consequence of its absence, in the circumstances, was to invalidate the execution of the Birchgrove warrant. WAS THE LAPTOP COMPUTER VALIDLY SEIZED UNDER S 3F? However, in case I am wrong about the consequences of the non-compliance with s 3H(1), I think it is preferable that I should do so. 86 Subject to the applicant's contentions regarding "seizure" of documents to which legal professional privilege may attach, Federal Agent Capaldo was authorised to seize the laptop computer pursuant to s 3F(1)(c) if all of the three conditions set out in the Birchgrove warrant were satisfied in respect of that item. The first condition was satisfied: the warrant specifically listed a laptop computer as an item that might be seized subject to the other conditions of the warrant being satisfied. The second condition was satisfied: Mrs Oke informed Federal Agent Capaldo that the laptop computer belonged to Mr Oke. The remaining condition was that there were reasonable grounds for suspecting that the laptop computer would afford evidence as to the commission of the specified offences. The wording of the third condition of the Birchgrove warrant expressly picked up the language of the definition of "evidential material" in the Act, so as to authorise the seizure of an item pursuant to s 3F(1)(c) of the Act. 87 Essentially, therefore, what was required for valid seizure of the laptop computer (subject to issues of legal professional privilege) was that Federal Agent Capaldo had reasonable grounds for suspecting that the information on the laptop computer would afford evidence as to the commission of the alleged offences. The distinction drawn by Mr Oke's counsel in submissions between a "suspicion" and a "belief" is not helpful in resolving that question of fact. The question is whether Federal Agent Capaldo had reasonable grounds for that suspicion. 88 Mr Oke contended that Federal Agent Capaldo did not, at any time, hold the requisite state of mind which would have entitled her to legally seize the laptop computer pursuant to s 3F of the Act. It is common ground between the parties that the laptop computer was never switched on, and its files were never inspected by the AFP officers, during the execution of the Birchgrove warrant. 89 Federal Agent Capaldo gave evidence, which I accept, that she did not inspect the files on the laptop computer during the execution of the Birchgrove warrant firstly because of Mr Rydon's blanket claim of legal professional privilege; and secondly because she was advised by an AFP officer assisting that attempting to access the files may cause damage to the laptop computer. 90 The cross-examination of Federal Agent Capaldo exposed that there was some difference of opinion between her and certain other AFP officers as to whether the laptop computer had been "seized" pursuant to the Birchgrove warrant, requiring her as the executing officer to have had the belief on reasonable grounds that it contained evidential material relating to the offences to which the Birchgrove warrant related. Some officers considered that, in the events which happened, the taking of the laptop computer was a removal under s 3K(2) for processing or examining it to see if it could be seized under the Birchgrove warrant. Hence the application on 26 June 2004 under s 3K(3B) referred to above. As noted, that application was unsuccessful in essence because Federal Agent Capaldo's evidence then, as now, was that the laptop computer had been seized under the Birchgrove warrant. It also led to the application for the further search warrant on 2 July 2004, in the circumstances referred to above. 91 Federal Agent Capaldo's credit was challenged in part because of her being party to those events themselves, and in part because she used variously the words "seized" and "removed" in respect of the documents associated with those subsequent processes. The terms clearly have significantly different connotations under s 3E and s 3K. She acknowledged that, in June 2004, she did not appreciate fully the legal significance of those different terms, and to an extent used those terms in the materials referred to somewhat loosely and on the advice of others. I was impressed by her frankness in that regard, and rather than use that material to reject her evidence I think it tends to support the impression I formed of her as a witness of truth. I must add, however, that I also formed the view that she held a firm view as to the direction the general investigation was going, and that Mr Oke's attitude in the circumstances was an impediment to the process of the investigation, so that her dealings with him on 24 June 2004 were not amicable. My acceptance of her evidence generally leads to the finding that, at the time of the seizure of the laptop computer on 24 June 2004, Federal Agent Capaldo did believe that it contained evidential material in relation to the offences being investigated. 92 It does not necessarily follow that that belief was held on reasonable grounds. 93 Federal Agent Capaldo's evidence was that between February and June 2004, in the course of an investigation concerning Mr Oke and Ozone, she obtained information from various entities and persons regarding the alleged commission of the offences, including evidence as to the contents of the files stored on Mr Oke's laptop computer. She considered that those contents (or some of them) were likely to constitute evidential material for the purposes of the Act. 94 The material to support that belief, as identified by the respondent, includes the application for the Birchgrove warrant sworn by Federal Agent Capaldo (of which a redacted version only was received into evidence), and her affidavit of 18 January 2006 (of which also a redacted version only was received into evidence) as well as her oral evidence. The redacted version of the application for the search warrant gives background information only. In a general way, the affidavit of 18 January 2006 identifies sources of information which pointed to the laptop computer holding relevant evidential material. The sources are not revealed in that version of the affidavit. The cross-examination exposed that certain information elsewhere referred to in the affidavit, obtained in the course of the investigation, may not have been directly relevant to it. However, Federal Agent Capaldo did not rely on that part of the affidavit to support the belief referred to, and in context I think those other references were merely general descriptions of processes so as generally to be comprehensive. 95 As I accept Federal Agent Capaldo as a witness of truth, I accept that she did obtain information procured in the course of the investigation which pointed to the prospect of the laptop computer holding relevant evidential material. On that basis, I am satisfied that her belief that the laptop computer held such evidential material was held on reasonable grounds. I do not consider it was necessary for the contents of the laptop computer to have been accessed in any way on 24 June 2004 for such a belief to have been based on reasonable grounds. 96 Accordingly, subject to considering the contentions regarding the significance of the claim of legal professional privilege, in my judgment --- had the Birchgrove warrant been validly executed, contrary to my earlier conclusion --- the laptop computer would have been properly seized under that warrant. 97 The respondent contended alternatively that the AFP had at all relevant times been in lawful possession of the laptop computer by Mr Oke's acquiescence. That acquiescence is said to be the arrangement entered into at about 11.15 am on 24 June 2004 as recorded in [30] above. 98 I do not accept that contention. The arrangement was made in the face of officers of the AFP being in the process of executing the Birchgrove warrant, and doing so in a way which involved them asserting the entitlement to inspect any documents, whether the subject of legal professional privilege or not. Those officers assumed to themselves the entitlement to determine if a document might be privileged by their inspection of it, and only then would put it aside. They were not entitled to seize or inspect privileged documents, as discussed below. The offer of permitting Mr Rydon contemporaneous inspection did not entitle them to seize or inspect privileged documents. In any event, as the search was taking place by several officers in more than one room, the offer was a hollow one. 99 In those circumstances, the arrangement was no more than one as to the more appropriate management of documents seized under the warrant, there being no removal under s 3K(2). I do not accept that Mr Oke consented in any real way to the AFP taking and holding the seized documents, including the laptop computer. 101 In Baker v Campbell [1983] HCA 39 ; 153 CLR 52 , the High Court by majority concluded that, in the event that legal professional privilege attaches to and is maintained in respect of documents held by a legal firm, those documents cannot properly be made the subject of a search warrant issued under s 10 of the Act. Section 10 of the Act has since been repealed but it is similar, for present purposes, to the relevant parts of ss 3E and 3F. In Baker v Campbell it was assumed that the documents in issue were privileged, as the matter was heard on a case stated. There is no judge already seized of jurisdiction in the matter to determine the disputed claim. The interests of all parties must be protected pending a determination of the dispute. In my experience the procedural difficulties can be overcome consistently with that objective if the members respectively of the police force and the legal profession co-operate in a reasonable and responsible way. I do not think that it is necessary for the purposes of the stated case to explore the problem. The terms of that agreement form the guidelines contained in the privilege notice and which were attached to the original Birchgrove warrant. The executing officer or a constable assisting will prepare a list of the relevant documents in cooperation with the person claiming privilege. Subject to any agreement to the contrary, the person claiming privilege will have four working days after delivery to the third party in which to commence proceedings to establish the privilege claimed. If proceedings are commenced within that time the sealed container and the copy of the list will be delivered to the registrar of the court in which the proceedings have been brought. Nothing in this document prevents the executing officer from discussing a claim for privilege with the person raising the claim. If agreement can be reached on which documents are covered by legal professional privilege, and which are not, the third party will be asked to act in accordance with that agreement. 106 The respondent submitted that the effect of the decision in Baker v Campbell is only that a search warrant cannot be executed in a manner which abrogates or nullifies the claim of privilege. It was said that to "seize" a document or thing means to take it into lawful possession subject to the claim of privilege being determined, so that seizure under the Act was still possible even if the seized item may ultimately be recognised as privileged. 107 I do not accept either contention. In my view, Baker v Campbell decides that a search warrant cannot authorise the seizure of privileged documents. The Birchgrove warrant must therefore be read as authorising seizure of the documents that satisfy the conditions specified, provided that they are not documents subject to legal professional privilege. Nor does it decide that a search warrant cannot authorise the seizure of documents in respect of which there is merely a claim to legal professional privilege. That question did not arise. Nor, upon my reading of the judgments in Baker v Campbell , is there anything said in that case to support such a contention. 108 The "blanket" claim to legal professional privilege was made for the reasons discussed above. But whether the laptop computer contains only legal privileged documents, or any legal privileged documents, is not yet resolved. If it contains only legally privileged documents (a position I did not understand senior counsel for Mr Oke to contend on his behalf), then it has not been validly seized under the Birchgrove warrant. If it contains some legally privileged documents, then it has been validly seized but only to the extent that it contains documents not legally privileged. I am using the term "documents" as explained in ss 25 and 25A of the Acts Interpretation Act 1901 (Cth), and as discussed in Australian Federation of Air Pilots v Australian Airlines Ltd (1991) 28 FCR 360. 109 It is apparent that the privilege notice does not readily address documents stored electronically. Section 3K(2) is one means of dealing with such material, but that power was not exercised in this instance. It is also clear that the guidelines in the privilege notice are not mandatory; they are expressed as providing a procedure "to the extent to which it is possible" to follow it. The note about legal professional privilege in the Birchgrove warrant itself also stipulates that the guidelines in the privilege notice be followed as far as is reasonably practicable. Indeed, attempts to agree upon and implement an efficient and effective procedure to identify which, if any, contents of the laptop computer are in fact the subject of legal professional privilege, and so are not capable of being seized under the Birchgrove warrant, have to date been unsuccessful. See also the discussion of Spender, Madgwick and Finkelstein JJ in JMA Accounting Pty Ltd v Commissioner of Taxation [2004] FCAFC 274 ; (2004) 139 FCR 537 at [6] - [12] concerning the power of search and seizure under s 263 of the Income Tax Assessment Act 1936 (Cth). 110 In JMA Accounting the seizure of materials was so indiscriminate, in some instances, as to lead the Court to conclude that no reasonable effort was made to distinguish between the relevant and the irrelevant. That is not the submission presently being considered. Mr Oke's submission is that the laptop computer could not have been lawfully seized under the Birchgrove warrant because there was a blanket claim for legal professional privilege with respect to it. I have separately found that Federal Agent Capaldo did have the belief required to entitle her (subject to claims of legal professional privilege) to seize the laptop computer. The resolution of such claims might take weeks or even months; it is inappropriate for the search to be delayed for that amount of time. To put the matter in its proper perspective it is necessary to recall the purpose for legal professional privilege. It is to keep secret communications between a lawyer and his client, and where the communication is written, it is to prevent the document containing the communication from being read. Accordingly, the mere seizure of a document without it being read will not infringe the privilege: Allitt v Sullivan [1988] VR 621 at 640; Solosky v The Queen (1979) 105 DLR (3d) 745 at 758. A good deal of JMA's argument on this aspect of the appeal depended upon acceptance of the proposition that legal professional privilege will be infringed if a copy of a privileged document is taken, whether or not the original or the copy is read. That proposition is simply wrong. In Baker v Campbell the documents the subject of the search warrant were assumed to be privileged from disclosure or production on the ground of legal professional privilege. In that event, they could not be the subject of a search warrant under the Act. So, here, if the laptop computer and all its contents were to be so protected, it could not have been the subject of the Birchgrove warrant and its seizure would not have been authorised. The approach of the Full Court in JMA Accounting addresses the circumstances where there is a contested claim to such privilege and the practicality that it cannot be immediately resolved (and where s 3K(2) has not been availed of). 113 In my judgment, the seizure of the laptop computer is not presently shown to be the seizure of a document which is privileged, and so at present it is not shown to have been unauthorised by the Birchgrove warrant for that reason. 114 In my view, it is not possible, without determining whether all the files on the laptop are privileged, to decide whether the laptop was lawfully "seized". As noted above, the more likely prospect, based on Mr Oke's submissions, is that only some (if any) of its files are privileged. The respondent recognised that possibility by the arrangement about the terms under which it was seized. 115 The Court has not presently been asked by Mr Oke to determine whether all or any of the files on the laptop computer (or indeed any other documents purportedly seized from the Birchgrove premises) are in fact privileged. 116 Mr Oke's amended application filed 24 January 2006 sought a declaration that the documents listed in Schedule A to the application are subject to legal professional privilege and were unable to be seized by the respondent. The documents listed in Schedule A included the laptop computer. The Court was informed during closing submissions that Mr Oke's and the respondent's legal representatives were close to reaching agreement as to the characterisation of those documents (other than the laptop computer or its contents) as either privileged or not privileged. No declaration as to the status of those other documents is presently pursued. Also, no submissions were made as to whether the files on the laptop computer are actually privileged. 117 No determination that the files or any of the files on the laptop computer are privileged (which would necessarily mean that any attempt to seize those files would be unlawful) was sought. I do not consider that I should declare that its purported seizure was illegal simply because some of those files may be privileged. The evidence was that the laptop computer contains thousands of files, and that the process of isolating those files that are allegedly privileged, and the process of articulating that claim, would be an onerous one. But I do not think that takes Mr Oke's position any further. I have rejected the proposition that an occupier of premises the subject of an s 3E search warrant can prevent law enforcement officers from validly executing a search warrant simply by claiming that documents which, on their face, fall within the terms of the warrant, are privileged. The claim of privilege must ultimately be substantiated. That process requires co-operation between the occupier and the law enforcement agency. 118 During the course of execution of the Birchgrove warrant, Mr Oke through Mr Rydon and Federal Agent Capaldo (after a time) generally agreed to follow the procedures set out in the guidelines in the privilege document (although those procedures were not actually precisely followed by the AFP). They accepted that there was a conflict between Federal Agent Capaldo's apparent authority to take the laptop computer, and Mr Oke's claim to retain it on privilege grounds. They further accepted that, in order to preserve the parties' respective positions, it was necessary for the laptop computer to be taken into the possession of the AFP, but not inspected by the AFP, pending determination of the claim of privilege either by negotiation or by the usual judicial procedures. That is still the position. Until it is resolved, and subject to my earlier conclusion, I would not declare the seizure of the laptop computer to be unlawful merely because it or some of its contents are the subject of a claim to legal professional privilege. 119 There has been some judicial and academic comment to the effect that the guidelines, contrary to their objective, do not preserve legal professional privilege: see Commissioner of Australian Federal Police v Propend Finance Pty Ltd [1997] HCA 3 ; (1997) 188 CLR 501 at 537 (Gaudron J); Suzanne McNicol, "Unresolved Issues Arising From the General Guidelines Between the AFP and the Law Council of Australia" (1998) 72 Australian Law Journal 137. I note, however, that the law with respect to waiver of legal professional privilege has since been further refined by the High Court. It is now accepted that "it is inconsistency between the conduct of the client and the maintenance of the confidentiality which effects a waiver of the privilege": Mann v Carnell [1999] HCA 66 ; (1999) 201 CLR 1 at [28] . Mr Oke's conduct in objecting to the seizure of documents at his house was wholly consistent with the maintenance of their confidentiality. It seems unlikely that any waiver of privilege should be imputed in such circumstances. Furthermore, French J held in Saunders v Commissioner, Australian Federal Police (1998) 160 ALR 469 that legal professional privilege is not necessarily waived even where the occupier fails to claim privilege at the time of execution of the warrant. 120 On the material before me, I do not conclude that the purported seizure of the laptop computer was unauthorised by the Birchgrove warrant otherwise than because of the AFP's non-compliance with s 3H(1), because the claim of privilege has not been determined or accepted. Ultimately, the validity of its purported seizure under the Birchgrove warrant cannot be finally determined whilst the claim of privilege is unresolved. 121 It was not contended in final submissions that the search and seizure of items pursuant to the Birchgrove warrant was illegal because of the disregard, on the part of the AFP officers, of Mr Oke's claims of privilege in respect of the documents being inspected and searched until Mr Rydon's arrival, and indeed for some time thereafter. It is clear from the evidence that the search was carried out in several rooms before Mr Oke's legal representatives arrived and in spite of Mr Oke's assertions that there were documents in the house which were privileged. I have also referred above to the fact that Mr Rydon was not permitted to inspect the documents sought to be seized before the AFP officers inspected them, in order to determine whether a claim of privilege could legitimately be made in respect of those documents. 122 In my view, the conduct of the officers of the AFP in this regard was inappropriate. No particular reason was put forward at the hearing as to why it was necessary to conduct the search in a manner which made it almost impossible for Mr Rydon to make a coherent claim of privilege over the items at the Birchgrove premises. No doubt his "blanket" claim was a direct result of such conduct. The transcript recording the execution of the Birchgrove warrant reveals that, although the AFP officers were aware of an occupier's right to claim privilege over documents which may prima facie appear to fall within the warrant's terms, they had a limited understanding of what was required to give meaning to that right. As noted, the final submissions for Mr Oke did not seek to make such conduct the separate foundation for any relief, no doubt because subsequent events have enabled any claims to privilege on Mr Oke's behalf to be maintained. 124 I will make a declaration accordingly. 125 The consequence is that the documents, including the laptop computer (or the copy of the hard drive), seized on 24 June 2004 should be returned to Mr Oke. I will so order. I will also order that the respondent cause to be destroyed any records of the contents of any documents seized and inspected under the Birchgrove warrant, but that he may retain a sufficient description of the documents to record the documents which were in fact seized. 126 It is therefore unnecessary to put in place any procedures to determine whether all or any of the files held on the laptop computer are in fact privileged from inspection on the ground of legal professional privilege. But for my conclusion about the effect of non-compliance with s 5H(1), that would have been necessary to determine the lawfulness of the seizure of the laptop computer. No determination about the privileged status of other seized documents was sought. 127 Mr Oke seeks in addition declarations that the respondent did not execute a search warrant on Mr Oke on 2 July 2004 so as to take possession of the laptop computer from him, and that the respondent did not lawfully seize the laptop computer from Mr Oke on 2 July 2004 pursuant to a search warrant issued on that day. 128 He seeks those declarations because the respondent does not on this application rely on the purported return of the laptop computer to Mr Oke on 2 July 2004 and the immediate execution of a further search warrant in respect of it. The acknowledgment of the respondent to that effect is referred to above. 129 I do not propose to make declarations in those terms simply because I regard it as unnecessary to do so. The respondent has accepted that he cannot rely upon those events to support the status of the holding of the laptop computer. 130 I will also give the parties liberty to apply, in the event that that becomes desirable. 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 Mansfield. | powers of search and seizure crimes act 1914 (cth) s 3e search warrant copy of search warrant made available to occupier pursuant to s 3h(1) incomplete whether execution of warrant unlawful because the copy provided to the occupier did not contain the name of the issuing officer and the time at which the warrant expired whether execution of search warrant unlawful because the copy provided to the occupier did not have attached the guidelines for claiming legal professional privilege powers of search and seizure crimes act 1914 (cth) s 3e search warrant seizure of laptop computer whether executing officer had reasonable grounds for suspecting laptop contained evidential material where contents of laptop computer not inspected prior to seizure powers of search and seizure crimes act 1914 (cth) s 3e search warrant validity of execution of search warrant guidelines for treatment of claims of legal professional privilege whether possible to lawfully seize an item the subject of a disputed claim of legal professional privilege where documents the subject of a claim of legal professional privilege inspected by australian federal police during execution of search warrant administrative law administrative law legal professional privilege |
I shall use the names and descriptions contained in the earlier judgment. 2 Peter Jackson submits that it has succeeded in establishing a contravention of s 52 of the Trade Practices Act 1974 (Cth) and that there are no special circumstances which would affect the application of the general rule that a successful party should get its costs. It also submits that its costs should not be reduced by one-third under O 62 r 36A of the Federal Court Rules . 3 In my view, however, this case cannot be regarded as one in which Peter Jackson was successful, or even substantially successful. 6 It was not until the first day of the trial on 18 November 2008 that Peter Jackson was granted leave to further amend its statement of claim to allege the Limited Time representation. This was the only representation on which Peter Jackson succeeded at trial. Further, it obtained only a declaration and not an injunction. 7 The main complaint of Peter Jackson was the Second Suit Free representation. Based on this, it led expert evidence in support of a damages claim which in the first formulation was over a million dollars. This was said to arise from the closure of the Peter Jackson William Street store as a result of MSWD's misrepresentations. 8 The damages claim was substantially modified at trial, but even so Peter Jackson failed to establish that the closure of the William Street store had any connection with any wrongful conduct of MSWD. In reality, Peter Jackson obtained no tangible benefit from this litigation. 9 I think an order of costs that would fairly represent the respective success of the parties is that MSWD should receive all of its costs up to and including the first day of trial and thereafter 90 per cent of its costs. 10 In the circumstances therefore no question of one-third off reduction arises. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | several breaches of trade practices act 1974 s 52 alleged only one breach established declaration of contravention but no damages or injunction awarded costs |
The parties to the appeal are potential beneficiaries from the fund. Rebecca Webb is the only child of the late Christopher Webb. Jill Teeling claimed to be Christopher's de facto wife and dependant. Audrey Duckworth and Richard Webb are the executors of the estate of the late Olive Webb, Christopher's mother. They took no part in the appeal. Kim Webb is Rebecca's mother and Christopher's estranged wife. I frequently refer to the parties and the deceased, Christopher Webb, by their first names in these reasons. I do so only in order to ensure that my references to the parties do not cause confusion given that most share the same surname. An appeal from the Tribunal may only be brought on a question of law (s 46(1) of the Superannuation (Resolution of Complaints) Act 1993 (Cth)). The identification of questions of law is a jurisdictional requirement for the appeal. The fact the questions may involve questions of law is insufficient. The questions must be questions of law ( Birdseye v Australian Securities and Investment Commission (2003) 76 ALD 321; [2003] FCAFC 232 at [10] - [18] and Comcare v Etheridge (2006) 149 FCR 522 ; [2006] FCAFC 27 at [11] - [17] ). Many of the so-called questions (in fact, grounds) in the further amended notice of appeal are not pure questions of law. They are also difficult to comprehend and repetitive. Many do not accord with the submissions made on Rebecca Webb's behalf. The problems with the further amended notice of appeal go beyond mere infelicitous drafting. Despite this, and mindful that the dispute is about the distribution of money, I have determined the appeal by reference to the issues as they emerged by the completion of the hearing. (2) Was the Tribunal precluded from making a determination affecting the allocation of benefits to Olive Webb by the trustee of the superannuation fund given that no complaint had been made about that allocation (paras 2A, 2B, 2C, 2D and 4 of the further amended notice of appeal)? (3) Did the Tribunal wrongly focus on the trustee's reasoning process and thus fail to apply the requirements of ss 37(4) and (6) of the Superannuation (Resolution of Complaints) Act by not considering whether the actual decision of the trustee was fair and reasonable in the circumstances (paras 1 and 2 of the further amended notice of appeal)? (4) Did the Tribunal apply a policy resulting in an inflexible and mathematically exact apportionment and thus fail to apply the requirements of ss 37(4) and (6) of the Superannuation (Resolution of Complaints) Act (paras 1 and 2 of the further amended notice of appeal)? (5) Did the Tribunal fail to consider a relevant matter, being the effect of Christopher's death on the financial position of the beneficiaries, specifically Kim Webb (para 3 of the further amended notice of appeal)? (6) Did the Tribunal fail to deal with the complaint and, in giving excessive weight to the beneficiaries' financial dependence on Christopher, thereby ignore Christopher's nomination that his daughter, Rebecca, should receive half of the entitlement (paras 5 and 6 of the further amended notice of appeal)? (7) Did the Tribunal's apportionment of the death benefit go outside its power under s 37(4) of the Superannuation (Resolution of Complaints) Act by taking more than necessary from Rebecca Webb's share to remove the unfairness to Jill Teeling (paras 2E and 7 of the further amended notice of appeal)? Rebecca, their only child, was born in 1984. Christopher joined the National Mutual Tailored Superannuation Fund on 5 February 1988. Christopher and Kim separated in 1994. Christopher returned to live with his mother, Olive. Christopher and Kim never divorced. Nor did they divide their assets. They retained joint tenancies over the family home and a holiday home. Christopher and Jill Teeling began a relationship in 1997. On 29 February 2000 Christopher completed a form (change to member details) by which he left 25% of the benefit from the fund that would accrue on his death to his wife, Kim, 25% to his mother, Olive, and 50% to his daughter, Rebecca. Under the terms of the trust deed this nomination was not binding on the trustee. Clause 4(b) of Appendix A to the trust deed provided for the death benefit to "be paid to or for the benefit of the Dependants of that Member or of such one or more of them and to the exclusion of the other or others of them and in such proportions and manner as the trustee in its absolute discretion shall think fit". Christopher died on 28 August 2006. His wife, Kim, therefore automatically became the sole owner of the family home and the holiday home. The trustee of the fund wrote to the potential beneficiaries under Christopher's policy on 7 September 2007. There is a dispute about the effect of this letter. Their objections must reach us within 28 days of receiving this letter. ... In accordance with legislation, the Trustee is required to advise you of the date of this decision and in this instance, the date of the decision is the date of this letter, i.e. 7 th September 2007. This letter is over seven pages long. It sets out a detailed series of submissions on Ms Teeling's behalf. Much of the letter involves a submission explaining why Ms Teeling should be accepted to have been Christopher Webb's de facto partner and not merely his financial dependant. As part of this, the letter refers to the financial contributions Christopher gave to Jill in money and kind and the fact that adequate provision should be made for her from the fund. The letter also deals with other considerations. The solicitors submitted that the allocation to Kim Webb was grossly unfair, particularly having regard to her ownership of the family home and the holiday home and her long estrangement from Christopher. The letter requests an apportionment of the fund that more accurately reflected Christopher's planned use including his planned retirement with Jill. Olive Webb, Christopher's mother, died on 20 October 2007. The trustee of the fund responded to the complaint by a letter dated 13 December 2007. Again, there is a dispute about the effect of this letter. Failure to lodge a complaint with the Tribunal within that period will result in it being prohibited from reviewing the complaint. Ms Teeling claimed that the apportionment did not adequately provide for her future financial security. She complained about the apportionment to Christopher's wife, Kim, and to the estate of his mother, Olive. She described the apportionment as unfair and sought a greater share of the fund. Other provisions of the Superannuation (Resolution of Complaints) Act are also relevant. Section 101 of the Supervision Act requires a trustee of a regulated superannuation fund to establish arrangements to enable a person to make an inquiry or complaint and for proper consideration of any such inquiry or complaint. Section 37 of the Superannuation (Resolution of Complaints) Act is a key provision because it identifies the powers of the Tribunal in respect of a complaint under s 14. The estate of Olive Webb received no benefit from the fund. The Tribunal reviewed the circumstances of each potential beneficiary, particularly by reference to the financial support they received from Christopher (at [19]-[31]). The issue is not what decision the Tribunal would have made on the evidence before it. In reaching its determination, the Tribunal took the whole of the evidence and submissions into account. The Tribunal then dealt with each potential beneficiary. First (at [55]-[59]), with respect to the estate of Olive Webb, the Tribunal considered that a payment to the executors of the estate, who were not dependants of Christopher as defined in the trust deed, would not be a payment "to or for the benefit of the Dependants" as the deed required. Nor would such a payment satisfy legislative requirements (referring to reg 6.22 of the Superannuation Industry (Supervision) Regulations 1994 (Cth) which provides for fund benefits to be cashed in favour of either the member's legal personal representative or the member's dependants). In the Tribunal's view, the Trustee's decision to pay $250,000 to the Mother's estate was not fair and reasonable in the circumstances. Third (at [63]-[64]), with respect to Kim Webb, the Tribunal concluded that she was Christopher's dependant and would have continued to receive about $36,000 a year in support from him had he not died. Fourth (at [65]-[66]), with respect to Rebecca Webb, the Tribunal concluded that she was Christopher's dependant and received about $18,000 a year from him in support. The Tribunal considered it fair and reasonable to assume that this level of support would decrease when Rebecca ceased to be a full-time student and started work. The Tribunal noted that under the trustee's decision Rebecca was to receive far more than her mother Kim, even though her mother was more financially dependant on Christopher than Rebecca. The Tribunal is of the view that the Trustee did not do this and this has resulted in an unfair and unreasonable distribution to each of the beneficiaries. The Tribunal is not so satisfied. It appears to the Tribunal that the pattern of support was embedded and unlikely to change in the future. The Tribunal considers that this is a fair basis for the distribution of the benefit as it reflects the most likely future support each would have received; and specifically, the Tribunal has used the amount of the regular support provided by the Deceased Member to each of these beneficiaries as an indication of what would most likely have continued in the future had he lived and continued to share his income with all three of them, whether his income derived from superannuation or personal exertion; while there was a Nomination of Beneficiary form completed in early 2000, the circumstances of the nominated beneficiaries had changed as at the date of death, particularly the Daughter's future education expenses and ability to support herself. The submissions on Rebecca's behalf asserted that the Tribunal erred in law in concluding that Olive Webb was not Christopher's dependant at the relevant time. According to this submission the trustee made its allocation decision as required by the trust deed on 7 September 2007 and as notified in the letter of that date to the potential beneficiaries. Olive Webb was alive and dependant on her son, Christopher, for financial support at that time. This decision was preliminary only in the sense that it was subject to a process of appeal. The decision of 13 December 2007 was a further and separate decision. Further or alternatively, under the terms of the trust deed, a person's status as a dependant is to be determined at the date of the member's death. Olive Webb was still alive when Christopher died. The Tribunal thus misdirected itself in law. These arguments lack substance. The first argument is untenable on any reading of the correspondence from the trustee of 7 September and 13 December 2007. The terms of the letter of 7 September 2007 convey a preliminary, in the sense of a proposed, decision only. This preliminary decision was not subject to any right of appeal. It was subject to a right to make a complaint to the trustee about the preliminary allocation. As required by s 101 of the Supervision Act, the trustee would then have to consider that complaint. The reference to the Tribunal in the letter of 7 September 2007 is to put the recipient on notice that, unless the recipient make a complaint or objection to the trustee, the recipient cannot make a complaint to the Tribunal. Given s 19(1), this advice was correct. Accordingly, the letter of 7 September 2007 did not convey any operative decision of the trustee under the trust deed. To the contrary, the trustee made its decision on 13 December 2007, being a date after the death of Olive Webb. It follows that the Tribunal was required to "stand in the shoes" of the trustee as at 13 December 2007, not 7 September 2007. On that date, Olive Webb had already died. The second aspect of this argument requires consideration of the terms of the trust deed. If the construction advanced is correct, then it was submitted that the subsequent death of Olive Webb was not relevant. There are two answers to this argument. First, the question whether Olive was Christopher's dependant depends on the operation of the definition of that word in the trust deed. But the power of the trustee (and thus also the Tribunal) to make a payment depends on the operative provisions of the trust deed and the legislation (specifically reg 6.22 of the Superannuation Industry (Supervision) Regulations as referred to by the Tribunal). The trustee may only pay the benefit to the nominated classes including to or for the benefit of the dependants. A payment to a person's estate after their death, as the Tribunal correctly acknowledged, is difficult to reconcile with this requirement. To the extent that it involves ambiguity, the terms of the trust deed are to be construed as a whole in order to give effect to a harmonious scheme. Once this approach is adopted, I am satisfied that although Olive Webb was Christopher's dependant at the time of his death, the trustee did not have power to make a payment to Olive's estate consistent with its obligations to make payments only to or for the benefit of the dependants. Second, even if this be incorrect, it must also be recognised that the Tribunal's decision about the allocation to Olive Webb did not turn upon these issues of construction. This is because the decision, as the terms of [59] of the Tribunal's reasons disclose, depended on the Tribunal's view that it was not fair and reasonable in the circumstances for money to be paid to the estate of Olive Webb. This was a conclusion which the Tribunal was entitled to reach in all of the circumstances and is unassailable in this appeal. It follows that the questions in the further amended notice of appeal relating to this matter (paras 2A, 2B, 2C, 2D and 4) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (2) Was any complaint made about Olive Webb's share? The submissions on Rebecca's behalf asserted that, by reason of s 19(1) of the Superannuation (Resolution of Complaints) Act , the Tribunal had no jurisdiction to deal with Olive Webb's share of the fund as decided by the trustee because no complaint by Jill Teeling had been made about her share. This argument is untenable. It misconceives the complaint made. It also misconceives the powers and obligations of the Tribunal. As to the former (the scope of the complaint), it cannot be said that the complaint made by Jill Teeling's solicitors was limited to the trustee's failure to recognise her as Christopher's de facto partner. That was one of the complaints, but even that submission, properly understood, was a means to an end. The essence of the complaint was that the trustee's proposed distribution did not adequately provide for Jill's financial needs. She wanted a greater share of the fund in order to reflect her position as Christopher's de facto partner and to meet her needs. As there is one fund only, increasing the share given to Jill must decrease the share available to the other potential beneficiaries. It may be accepted that the complaint stressed that the share proposed to be given to Kim Webb, Christopher's estranged wife, was grossly unfair. But that was not the essence of her complaint. The complaint's essence was the unfairness of the amount Jill herself was proposed to receive from the fund. As to the latter (the Tribunal's powers and obligations), s 37(6) of the Superannuation (Resolution of Complaints) Act explicitly recognises that where one potential beneficiary seeks a greater share of a fund, then the interests of one or more of the other beneficiaries will require adjustment. It is for this reason that the Tribunal must affirm a decision if it is satisfied that the decision is fair and reasonable in the circumstances not only in relation to the complainant, but also in relation to any other person who has an interest in the death benefit. Further, s 19 of the Superannuation (Resolution of Complaints) Act does not advance the argument. The section serves to establish a procedure under which the Tribunal is not to deal with a complaint unless the complainant has attempted to have the matter resolved. This procedure was followed in the present case. It follows that the questions in the further amended notice of appeal relating to this matter (paras 2A, 2B, 2C, 2D and 4) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (3) Did the Tribunal wrongly focus on the trustee's reasoning process? The submissions on Rebecca's behalf asserted that the Tribunal erred in law by failing to consider whether the actual decision of the trustee was fair and reasonable in the circumstances. Instead, the Tribunal asked itself whether the trustee's reasoning process was somehow flawed. The focus of s 37(6) is upon the consequence or outcome of the decision in its practical operation, rather than upon the process by which the decision under review came to be made. Instead, the Tribunal considered that the process by which the trustee had reached its decision was flawed in that the trustee did not give weight to the likelihood and quantum of financial support. These arguments cannot be sustained. The first argument involves a strained reading of a few paragraphs of the Tribunal's reasons taken in isolation. The Tribunal was well aware of the requirements of s 37(6). It recited them in terms at [69] of its reasons. Its recognition of the limitation in the section is also apparent from the observation in [51] that the issue is not what decision the Tribunal would have made on the evidence, but whether the trustee's decision was fair and reasonable in all the circumstances in relation to its operation. The Tribunal did not set aside the trustee's decision because of any concern about inadequacies in the trustee's reasoning process. As it said in [69], the Tribunal was not satisfied that the decision was fair and reasonable in the circumstances in its operation in relation to the complainant, Jill Teeling, and the other beneficiaries. It was not fair and reasonable because it did not reflect the likelihood and quantum of future financial support those beneficiaries would have received had Christopher not died. The Tribunal's reasons simply do not reflect the error said to have arisen. It may be accepted that "[t]he role of the Tribunal under s 37(6) of the Complaints Act is not to decide for itself the correct or preferable decision: it must affirm a decision if it is satisfied that the operation of the decision the subject of review was fair and reasonable in the circumstances" ( Edwards v Postsuper Pty Ltd [2007] FCAFC 83 at [15] ). In so doing the "Tribunal may have to make its own findings of fact for the purpose of determining whether the decision is fair and reasonable in its operation in the circumstances". However, this is precisely the approach that the Tribunal took, as its observations in [51] disclose. It follows that the questions in the further amended notice of appeal relating to this matter (paras 1 and 2) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (4) Did the Tribunal apply a policy resulting in an inflexible and mathematically exact apportionment? The submissions on Rebecca's behalf asserted that the Tribunal erred in law because its decision resulted from the application of its own policy identifying factors relevant to an apportionment of a death benefit thereby replacing the test under ss 37(6) and (4) with something "inflexible and mathematically exact". The submissions drew attention to the Tribunal's reliance on a published policy which states that "[t]he Tribunal has found that a useful test in cases of contested distribution is to ask who would have continued to benefit from the member's income if the member had not died". In respect of this argument the submissions (properly, given the facts) disavowed any suggestion that the Tribunal had inflexibly applied this policy without considering the merits of the individual case. Instead the argument, insofar as I can understand it, suggested that the Tribunal erred by applying a precise mathematical approach to the apportionment rather than applying the test set out in s 37(6). This was said to follow from the fact that the Tribunal reached its percentage apportionments (52%, 26% and 22%) by reference to the relationship between the amount of financial support each beneficiary, other than the late Olive Webb, received (being $15,000, $36,000 and $18,000 or a total of $69,000). I am unable to discern any error or question of law arising from these submissions. The Tribunal had decided that it was not satisfied that the trustee's decision was fair and reasonable in the circumstances in its operation in terms of s 37(6). The Tribunal was entitled to take into account its published policy in order to discharge its obligation under s 37(4) (that is, exercising its powers for the purpose of placing the complainant as nearly as practicable in such a position that the unfairness, unreasonableness, or both, that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint no longer exists). It follows that the questions in the further amended notice of appeal relating to this matter (paras 1 and 2) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (5) Did the Tribunal fail to consider the effect of Christopher's death? The submissions on Rebecca's behalf asserted that the Tribunal erred in law by failing to consider that Christopher's death would change the needs and level of dependency of the beneficiaries. According to this submission Christopher had carefully planned his financial arrangements including the fact that Kim Webb, his estranged wife, would receive the family home and holiday home valued at $350,000 and $700,000 respectively. The Tribunal failed to take this into account and instead applied its policy (see [53]-[54] above). These submissions, properly analysed, are nothing more than a challenge to the merits of the Tribunal's determination. The submissions identify no matter which the Tribunal was bound to consider or not to consider consistent with the principles identified in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 39-41, which were sought to be invoked. Further, and contrary to the submission, the Tribunal did take into account this factor. At [22] the Tribunal noted: "[Kim Webb] owned two properties as joint tenant with [Christopher]... These properties passed to her by survivorship". It follows that the question in the further amended notice of appeal relating to this matter (para 3) must be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (6) Did the Tribunal fail to deal with the complaint and ignore Christopher's nomination? The submissions on Rebecca's behalf asserted that the Tribunal erred in law by ignoring the terms of the complaint. According to these submissions the complaint claimed that the trustee should have recognised Jill Teeling's status as Christopher's de facto and taken money from Kim Webb, Christopher's estranged wife, to give to Jill. The complaint did not seek any reduction of the share granted to Olive Webb, Christopher's mother, or to Rebecca Webb, his daughter. By these submissions it was sought to engage the principle that the Tribunal's function relates to the complaint. The claimed unfairness or unreasonableness, which was the subject of the complaint, is the central object of the review. The terms of s 37(4) confirm that this is so. These submissions confront a number of difficulties. First, and as discussed above, the complaint cannot be read so narrowly. The complaint did say that the share given to Kim Webb was grossly unfair but it did not ask for money to be taken from Kim Webb and given to Jill Teeling. It asked that the apportionment adequately provide for Jill Teeling's future financial security. The Tribunal did not ignore the complaint. The Tribunal correctly recognised that the question of Jill Teeling's status as a de facto partner was immaterial because the evidence established that she was Christopher's dependant. The Tribunal then considered the practical consequences of the trustee's apportionment in terms of the complaint. The Tribunal upheld the complaint by reason of the Tribunal's express finding in [69] that it was not satisfied that the trustee's decision was "was fair and reasonable in the circumstances in its operation in relation to the Complainant and any person who has become a party to the complaint and who either has an interest in the death benefit or claims to be, or to be entitled to benefits through, a person having an interest in the death benefit". In other words, the Tribunal in terms did that which the submissions assert it did not. The fact that the Tribunal's determination resulted in a substantial decrease in Rebecca Webb's share does not disclose any error or question of law. Again, properly considered, the submissions involve a challenge to the merits of the Tribunal's determination. Second, the submission about the Tribunal ignoring Christopher's nomination that his daughter Rebecca should receive half of his entitlement failed to explain why the Tribunal was bound to consider this factor in discharging its statutory function. Moreover, and contrary to the claim, it is apparent that the Tribunal did consider this factor as its reasons in [32] and [66] disclose. To the extent that these submissions asserted that the Tribunal placed excessive weight on the financial dependence of the beneficiaries they manifestly sought to trespass on the merits of the Tribunal's decision when the appeal is confined to questions of law. Further, and in any event, the factor of financial dependence is not irrelevant. Indeed, as the submissions for Rebecca Webb pointed out, the Tribunal was acting in accordance with its published policy which states that "[t]he Tribunal has found that a useful test in cases of contested distribution is to ask who would have continued to benefit from the member's income if the member had not died". The Tribunal's reasons do not disclose it taking into account this factor to the exclusion of other relevant factors. Indeed, The Tribunal expressly acknowledged other relevant considerations at [52] of its reasons for decision, namely "the wishes of the Deceased Member, the financial circumstances and the needs of the potential beneficiaries and the nature of the relationship between the beneficiaries and the Deceased Member". It follows that the questions in the further amended notice of appeal relating to this matter (paras 5 and 6) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. (7) Did the Tribunal's apportionment go outside its power? The submissions on Rebecca's behalf asserted that the Tribunal erred in law by making a determination outside of its power as confined by s 37(4) of the Superannuation (Resolution of Complaints) Act . The Tribunal concluded that Jill Teeling should receive 22% of the death benefit. By operation of s 37(4) , according to the submissions, the Tribunal's power to remove the unfairness was limited to an apportionment which took the proportion required from the shares granted to Kim and Olive Webb to increase Jill Teeling's share to this figure of 22% and no more. Instead the Tribunal varied the whole decision going far beyond what was necessary to ensure that the unfairness to Jill Teeling no longer existed. This submission cannot succeed in the face of the terms of s 37(4) construed in context, including s 37(6). Section 37(4) refers to unfairness or unreasonableness that the Tribunal has determined to exist in relation to the trustee's decision that is the subject of the complaint. It does not and could not rationally limit the Tribunal's power to a decision which ensures that unfairness or unreasonableness in relation to the complainant alone no longer exists. The reason it could not do so is obvious. Making a decision fair and reasonable for the complainant may make it unfair or unreasonable in relation to another potential beneficiary. This is why s 37(6) establishes a statutory requirement that the Tribunal affirm a decision if satisfied it is fair and reasonable in relation to not only the complainant but also other potential beneficiaries. In this case the Tribunal was not so satisfied (at [69]). As such, its powers under s 37(3) were enlivened but only in accordance with s 37(4). In accordance with that section the Tribunal had to exercise its powers for the purpose of placing the complainant as nearly as practicable in a position that the unfairness the Tribunal determined to exist in relation to the trustee's decision no longer exists. The unfairness the Tribunal determined to exist in this case was that the trustee's apportionment did not recognise either: - (i) that the late Olive Webb was no longer a dependant so that the money allocated to her was available for re-allocation, or (ii) the levels of financial dependence of Jill Teeling or the other dependants. Having found this unfairness to exist in relation to the trustee's decision it was open to the Tribunal to ensure that the unfairness to Jill Teeling, so far as practicable, no longer existed by the apportionment it proposed. The fact that this resulted in Rebecca's share decreasing to the benefit of Jill Teeling and Kim Webb does not disclose any error or question of law. Again, the submissions are a challenge to the merits of the Tribunal's decision. Insofar as these submissions reiterated that the Tribunal's decision was inconsistent with the requirement that the central object of the review be the complaint (as referred to above by reference to National Mutual Life Association of Australasia Ltd v Campbell at [15] and [32]), they overlook the scope of the complaint and the Tribunal's related factual findings. It was submitted that the Trustee should have considered the future superannuation plans of the Deceased Member in respect of the Complainant. It cannot be said the Tribunal misdirected itself as to the central object of the review for the purposes of s 37(4). This is particularly so in light of s 37(6)(b)(ii) which specifically directs the Tribunal to take into account the operation of the trustee's decision in respect of any person who has an interest in the death benefit. The Tribunal's task under s 37 is to determine whether the trustee's decision was fair and reasonable in the circumstances. Indeed, this is what the Tribunal did, as it stated in [67] of its reasons for decision. It follows that the questions in the further amended notice of appeal relating to this matter (paras 2E and 7) must each be answered in the negative. No error of law as asserted is apparent from the Tribunal's reasons. It follows that the appeal must be dismissed with costs. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | payment of a death benefit in superannuation fund complaint to superannuation complaints tribunal whether trustee's decision fair and reasonable relevant considerations in determining whether decision fair and reasonable scope of complaint scope of tribunal's powers. superannuation |
2 This notice of motion was heard by me this morning, pursuant to an order of Greenwood J of 25 June 2008, wherein his Honour ordered that any application for an order for service upon the first respondent by way of notice of motion be filed by 18 July 2008, and made returnable on 21 July 2008 at 9.30 am. 3 There was no appearance by the first respondent, and the second respondent, which had entered an appearance for the purposes of directions, made no submissions in relation to this matter. 4 The primary proceedings concern an application under the Patents Act 1990 (Cth) in respect of infringement of Australian Patent 750511 ("the patent"). The patent relates to an anti-flap clamp and has a term of 20 years from 10 April 2000. The applicant claims priority from 9 April 1999. 5 The first respondent in these proceedings is a company incorporated in Italy which manufactures products for motor homes, caravans and campervans, and exports those products to Australia. The second respondent is a distributor within Australia for products manufactured by the first respondent. 6 The applicant claims that since at least June 2005 the first respondent has exported into Australia a clip system known as Clip System F45i, which is sold in connection with the first respondent's line of caravan and recreation vehicle equipment, and which is promoted as a product securing awning systems. The second respondent is said to have imported into Australia the same clip system in connection with its caravan and marine equipment business, which it promotes as a product securing awning systems. 7 The applicant claims that the clip system used by the first and second respondents possesses a number of the integers of the product claims and method claims of the patent. The applicant also claims that the first respondent and the second respondent have authorised, procured, or directed an infringement of the patent by consumers in Australia, or in the alternative the supply by the respondents of the clip system to consumers in Australia constitutes an infringement of the patent by the respondents pursuant to s 117 Patents Act . 8 The applicant in this matter also claims additional damages pursuant to s 122(1A) Patents Act . 10 This morning Mr Philp for the applicant directed my attention to items 11, 12, 13 and 21 in the table in O 8 r 2 Federal Court Rules . Proceeding based on a breach of a provision of an Act that is committed in Australia. 12. Proceeding based on a breach of a provision of an Act (wherever occurring) seeking relief in relation to damage suffered wholly or partly in Australia. 13. Proceeding in relation to the construction, effect or enforcement of an Act, regulations or any other instrument having, or purporting to have, effect under an Act. 21. Proceeding seeking an injunction ordering a person to do, or to refrain from doing, anything in Australia (whether or not damages are also sought). 11 In this case, it is clear that the claim is based upon a cause of action allegedly arising in Australia, based on a breach of a provision of the Patents Act in relation to which the Federal Court has jurisdiction (s 154 Patents Act ). The breach of the Act claimed by the applicant has allegedly taken place within Australia. Further, the applicant claims injunctive relief in relation to damage suffered wholly or partly within Australia. In my view, there is no question that the Court has jurisdiction in this proceeding and that the proceeding is of a kind mentioned in O 8 r 2 items 11, 12, 13 and 21. 12 A more difficult question is whether or not the applicant has established a prima facie case in this matter. Mr Philp directed my attention to Caterpillar Inc v John Deere Limited and Others [1999] FCA 1503 ; (1999) 48 IPR 1 , where the Full Court considered the meaning of " prima facie case" in the context of O 8 r 3(2). It is clear from such decisions as Caterpillar [1999] FCA 1503 ; (1999) 48 IPR 1 and earlier decisions of the Full Court (including Sydbank Soenderjylland (A/S) v Bannerton Holdings Proprietary Limited (1996) 68 FCR 539 at 549) that in order to establish a prima facie case for the purposes of O 8 r 3(2), the court does not call for a substantial inquiry. The court requires only that there be material before the court, from which inferences are open and which, if translated into findings of fact, would support the relief claimed. 13 In this case, I am satisfied that a prima facie case exists for the purposes of O 8 r 3(2) Federal Court Rules . The first respondent has written to the applicant and informed it that, in relation to the allegedly infringing goods, it intends to continue selling the "Fiamma Clip System" in Australia. 2. The first respondent advertises on its website that its range of products, including the allegedly infringing goods, are available for purchase from a variety of retail outlets in Australia. 3. There is a New South Wales registered business name for Fiamma Australia, registered to Coast RV Pty Ltd, which lists its principal place of business as being in East Silverwater, New South Wales. 4. The facts in relation to the New South Wales entity Coast RV Pty Ltd demonstrate that the first respondent and others are likely to have an arrangement by which the allegedly infringing goods of the first respondent are sold in Australia. 5. The first respondent advertises on its website that it was present at the Queensland Caravan and Camping Show between 4 June 2008 and 10 June 2008, where it may have displayed the allegedly infringing goods for sale. 14 It is clear that the applicant's loss, if any, relates primarily to supply and distribution of the first respondent's goods to the Australian market. In this respect, the requirements of O 8 r 3(2)(c) are satisfied. 15 I accept the evidence of Ms Braad that Australia is party to a Convention as contemplated by O 8 r 3(2) relevant to service of legal proceedings on respondents in Italy. I refer, in particular, to the Convention between the United Kingdom and Italy regarding legal proceedings in civil and commercial matters signed in London on 17 December 1930, which came into force in Australia on 9 November 1933. 16 In my view, the applicant has satisfied the requirements of O 8 r 3(2), and I order that the first respondent be served in relation to these proceedings. 17 As to the issue of costs, in my view the appropriate order at this stage of the proceedings and in light of the lack of appearance by the first respondent is that the costs be reserved and that the Court, at a subsequent time, hear further submissions from the parties in relation to where the costs should lie. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application to serve originating process on party outside jurisdiction practice and procedure |
His Honour refused an application for an extension of time to apply pursuant to s 75(v) of the Constitution for an order to show cause why a decision of a delegate of the Chief of Army made on 3 November 2004 should not be quashed and, for consequential orders. That decision was that Mr Ferdinand's employment as a member of the defence force should be terminated pursuant to Regulation 87(1)(g) of the Defence (Personnel) Regulations 2002 (Cth). 2 The application was first made to the High Court on 17 March 2006. The matter was remitted to this Court by order of Crennan J on 4 May 2007, with the specific order that the time limits imposed by rr 25.06.1 and 25.07.2 of the High Court Rules 2004 would continue to apply to the application upon the remittal. It was necessary for the extension of time to be granted because r 25.06.1 of the High Court Rules required the application to have been made less than six months after the making of the termination order. Clearly, the application was made considerably beyond that time. 3 In his reasons for judgment, Ferdinands v Chief of Army [2008] FCA 1865 , Lander J refused to grant the extension of time sought because no proper explanation had been offered for the delay and because there was no prospect of Mr Ferdinands succeeding in obtaining an order setting aside the termination decision: at [41]. Is leave to appeal necessary? If the latter, no leave to appeal from his decision was necessary. If the former, s 24(1A) of the Federal Court of Australia Act 1976 (Cth) provided that no appeal lay from that decision without leave. Leave to appeal may be given by a single judge: s 25(2)(a). Under O 52 r 10 of the Federal Court Rules leave to appeal is given in accordance with principles discussed in Décor Corp Pty Ltd & Anor v Dart Industries Inc [1991] FCA 655 ; (1991) 33 FCR 397 , in particular having regard to two main considerations, namely, whether in all the circumstances the decision is attended with sufficient doubt to warrant its reconsideration by the Full Court, and whether substantial injustice would result if leave to appeal were refused supposing the decision to be wrong. 5 Counsel for the respondents drew attention to Paramasivam v Flynn [1998] FCA 1711 ; (1998) 90 FCR 489 ( Paramasivam ). That case involved an application for an extension of time to commence an action for damages in tort and for compensation for breach of fiduciary duty in relation to a series of sexual assaults upon that appellant against his guardian. The appeal from the dismissal of an application for an extension of time within which to have commenced those proceedings was dismissed, in essence because there was no real prospect of the claim succeeding. However, the Full Court (Miles, Lehane and Weinberg JJ) at 493 said that an order refusing an application to extend time to issue after the expiry of a limitation period may or may not be regarded as interlocutory since it may or may not finally determine the rights of the parties in respect of the subject matter of the action. The order appealed from did not simply refuse an application for an extension of time within which to issue proceedings, but it also entered summary judgment for the respondent. Consequently, the Full Court at 493 concluded that the orders were final in nature. 6 I do not consider that decision dictates that the decision of Lander J in the present matter was a final order so that no leave to appeal is necessary. That is because this proceeding, unlike the proceeding in Paramasivam , did not seek to enforce an existing alleged cause of action which had become statute barred by the elapse of time. In other words, there was no claimed legal right which Mr Ferdinands was seeking to enforce. His application was for an extension of time within which to apply for an order to show cause why the termination decision should not be set aside. It was necessary for him, even had he applied for such an order within time, to satisfy a Justice of the High Court (or if the matter were remitted to this Court, a judge of this Court) that it was appropriate for an order to show cause to be issued. That question is answered by determining whether the legal effect of the judgment is final or not. If the legal effect of the judgment is final, it is a final order; otherwise, it is an interlocutory order. See also Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423. The refusal of the application for extension of time within which to apply to show cause was interlocutory in nature as the legal effect of the judgment was not final. Further, Lander J dismissed the application on the basis that the application was, inter alia, an abuse of process and did not disclose a reasonable cause of action. 8 Accordingly, I consider that Mr Ferdinands correctly approached the matter on the basis that he required leave to appeal from the decision of Lander J. Should leave to appeal be given? In essence, he said it was in the interests of justice to grant leave. He briefly developed them orally. However, his submissions really amounted to no more than a way of describing the nature of his claim. They did not pay sufficient attention to the particular circumstances. I invited him to indicate where he contended Lander J had fallen into error in his consideration of that application for an extension of time to apply for the order to show cause. In my view, Mr Ferdinands was unable to indicate any such error either in the description of the history relevant to consideration of that application, or in identifying the grounds advanced by Mr Ferdinands in support of it, or in his Honour's consideration of those grounds. I shall advert to them again shortly. 10 There are two additional matters which Mr Ferdinands raised, apparently for the first time on this application. The first is his assertion that Crennan J had no power to remit the matter to this Court for hearing and determination. He had not objected to the remittal order when it was made, nor had he raised that point before Lander J. He did not develop any argument in support of the proposition. It is plainly wrong: see s 44 of the Judiciary Act 1903 (Cth). Secondly, he argued that the delegate of the Chief of Army had no power to terminate his employment in the way that had been done because ss 5 and 10 of the Defence Force Discipline Act 1982 (Cth) were "involved". Again, that matter had not been raised in his original application, nor before Lander J. No detailed argument was developed in support of the contention. As it was not raised previously, it is unfair to the respondents to have been confronted with it only on this application, and more importantly, as it was not raised before Lander J, it cannot provide a basis for demonstrating that his Honour's reasoning was erroneous and that leave to appeal from it should be given. 11 I return to the matters which were argued before Lander J. 12 Mr Ferdinands orally suggested in a general way that the history recorded by Lander J, and the description of the matters or grounds upon which the application to show cause was made were misunderstood by his Honour. Closer questioning of Mr Ferdinands indicated that he did not identify any particular respect in which his Honour misunderstood either of those aspects of his claim. I will not refer to the detail of them. He was unable to demonstrate any arguable error in those respects. 13 It became apparent in the course of his oral submissions on this application, that the thrust of Mr Ferdinands' complaint is that he was wrongly convicted in the Adelaide Magistrates Court of assault, and wrongly convicted by a Defence Force Magistrate of a separate assault upon a service personnel. He argued that the delegate of the Chief of Army was wrong to have taken into account those convictions in deciding to terminate his employment. As Lander J said at [8] in essence, "he seeks to use the proceeding to show cause to overturn those convictions". Moreover, as Lander J pointed out at [38], the proposed proceeding is an attempt to quash the decision by a collateral attack upon the conviction by the Defence Force Magistrate. 14 Mr Ferdinands was convicted by a Defence Force Magistrate of one charge of assault upon an inferior officer on 4 November 1999. He belatedly sought to appeal from that decision on 17 April 2001. The President of the Defence Force Disciplinary Appeal Tribunal on 15 August 2001 refused to grant an extension of time to appeal. He appealed from that decision also. On 16 August 2002, that Tribunal extended the time for filing of an appeal but dismissed the appeal. Mr Ferdinands then appealed to this Court from that decision. That appeal was dismissed on 11 February 2003: Ferdinands v Chief of Army [2003] FCAFC 10. He applied to the High Court for special leave to appeal from that decision. That application was deemed to be abandoned for failure to comply with the High Court Rules on 1 October 2003. As Lander J said, his application for an extension of time to apply for an order to show cause should not be granted when it was, or to the extent that it was, seeking to make a collateral attack upon that conviction. 15 The fact that Mr Ferdinands was seeking collaterally to attack the Defence Force Magistrate's conviction was reinforced by his complaints about the conduct of that hearing, in particular that certain witnesses had not been called and certain documents had not been produced which he claimed ought to have been produced on that hearing. 16 Mr Ferdinands raised an additional point on this application for leave to appeal, apparently for the first time, that he could not have been terminated by a decision of the delegate of the Chief of Army because, following that conviction, the prosecuting officer had asked for the termination of his employment, but the Defence Force Magistrate had imposed a lesser penalty. Hence, he said, the Defence Force Magistrate had decided that termination of his employment as a member of the defence force was not an appropriate penalty for the conviction, and the Chief of Army could not then reach a different view or impose an additional penalty. The proposition oversimplifies the grounds upon which the decision to terminate his employment was made. The material before the Court indicates that the facts and circumstances relating to the reason for terminating his service were that conviction, a conviction for assault in the Adelaide Magistrates Court on 27 February 2001, together with evidence about Mr Ferdinands' character then provided relative to penalty in that Court, the termination of his civilian employment on 21 November 2001, and more generally his attitude towards others and towards authority. The evidence does not support Mr Ferdinands' assertion. As the point was not raised before Lander J, even if it were correct, it could not show arguable error at first instance. And the proposition, even if correct, inappropriately conflates the punishment imposed for an offence with the assessment of suitability to remain in particular employment. 17 Mr Ferdinands also criticised the approach of Lander J in deciding whether there was an adequate explanation for the delay in making the primary application. His Honour properly identified the principles, as discussed by McHugh J in Gallo v Dawson [1990] HCA 30 ; (1990) 93 ALR 479 at 480. In my view, nothing was identified to suggest that his Honour has misunderstood or misapplied them. He recognised the disadvantage applicable to Mr Ferdinands by reason of his impecuniosity and by reason of his need to be self-represented. 18 So far as I can determine, although not dealt with in the draft proposed notice of appeal, the only other matter advanced on this application for leave to appeal was an assertion that Lander J had incorrectly struck out an affidavit of Mr Ferdinands of 4 May 2007 as an abuse of process. His Honour ruled that he would not receive paras [1]-[35] of that affidavit, but received the remainder of that affidavit. It was entirely proper to have rejected those paragraphs of that affidavit. They did not relate to any issue relevant to the primary application. They contained a series of unrelated and offensive allegations against persons who were not parties to it. The balance of that affidavit comprises matters which his Honour regarded as potentially relevant to the application which he was considering. He has not identified any matter in which Lander J might have fallen into error, even arguably so. He has not advanced any matter which specifically explains the delay between the making of the decision which he wishes to attack and the application for an extension of time to have made the application. In those circumstances, neither of the principles upon which an extension of time might be granted has been activated. 20 The application is therefore refused with costs. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | application for leave to appeal from decision of federal court judge whether leave required whether decision to refuse application for extension of time to apply to show cause was interlocutory or final practice and procedure |
There is no issue that the learned magistrate who made the determination subsequently complied with the requirements of paras (a) --- (c) inclusive of subs 19(9). Subsection 21(1) relevantly provides that within 15 days of the magistrate's determination of eligibility under subs 19(9) of the Act, a person may apply to this Court 'for a review of the order'. The review is by way of rehearing, rather than the more restricted function the Court exercises when engaging in judicial review in the strict sense: see Brock v United States of America [2007] FCAFC 3 ; (2007) 157 FCR 121 per Black CJ at [20] --- [31], Jacobson J at [45] --- [47] and Rares J at [73] --- [90]. Subsection 21(2) relevantly provides that the Court may, by order, either confirm the order of the magistrate, or quash the order and direct a magistrate to order the release of the person. Pursuant to subs 21(6)(d), the court to which the application is made shall have regard only to the material that was before the magistrate. Subsection 19(1) of the Act stipulates four conditions precedent or jurisdictional facts, the existence or satisfaction of which obliges the magistrate to conduct the proceedings. No issue is taken that all of these conditions were met. Subsection 19(2) of the Act stipulates four conditions precedent or jurisdictional facts, the existence or satisfaction of which must be met before a person is eligible for surrender in relation to an extradition offence for which surrender of the person is sought by the extradition country. No issue was taken that the conditions in (a) (production of 'supporting documents') and (b) (production of any other documents) were met; nor that the condition in (d) (lack of satisfaction as to substantial grounds for believing there is an extradition objection in relation to the offence) was met. The only live issue before the magistrate, and on review of the magistrate's determination before this Court, was whether the magistrate could be satisfied as to the dual criminality requirement in subs 19(2)(c) of the Act. The issue is whether the conduct or the equivalent conduct referred to in the subs 19(3)(c)(ii) authenticated statement, if committed in New South Wales, would be a criminal offence with a maximum sentence of imprisonment of at least 12 months: United States v Holt [1994] FCA 1115 ; (1994) 49 FCR 501 at 504; Zoeller v Republic of Germany (1989) 23 FCR 282 at 297 and 299 --- 300. No issue was taken with the accuracy of this summary, and it is set out verbatim in [12] and [13] below. Mr Mehl is charged with 10 offences, which fall into two categories. With the intention of implementing this agreement, Mr Mehl, El-Najarin and two others, caused a company ('Pluscall') operated by the four of them and of which Mr Mehl was Managing Director, to enter into a contract with a service provider ('Mobilcom'). At the time of entering into this contract Mr Mehl intended to separate the phones and the cards and sell them separately contrary to the promise made to Mobilcom in return for the discount; Mr Mehl and El-Najarin then received nine deliveries of pre-paid bundles from Mobilcom and sold the mobile phones separately from and without the cards to a third party or his company ('Telesonic') for resale in Eastern Europe; In order to conceal the fact that the bundles had not been sold to paying customers, and thereby avoiding the obligation of paying back advance commission received at an average of 15 euros per bundle, Mr Mehl and others misrepresented to Mobilcom that they had sold the bundles to paying end customers in regular business transactions by: registering the bundles in the names of persons selected at random from telephone books by Mr Mehl and others; and registering and activating several hundred bundles with a company called 'Titanid' that was not in truth, a paying end customer of any bundle. Pursuant to this agreement, a company ('Star.Way.Com') purchased telephone minutes from 'MCI', being a global telecommunications services provider. Mr Mehl and the two others intended in the initial phase to pay the invoices issued by MCI for the telephone minutes provided to Star.Way.Com, but at a later stage they intended to receive further minutes but to stop paying the invoices and to leave the charged sums unpaid. Some time after November 2004, in accordance with the agreement between Mr Mehl and the two others, and in accordance with the intention they had formed to do this, Star.Way.Com stopped paying the amounts charged for the telephone minutes they used. In order to conceal who the actual receiver was of these telephone minutes (namely a German company ('Mowatel')) Mr Mehl hired some racks (or electronic modules) in Paris to transfer the telephone minutes to Mowatel. Soon after November 2004, Star.Way.Com considerably increased its network time with MCI. MCI, on realising the increase, asked for increased security. Mr Mehl and the two others provided as security a forged bond in the sum of 200,000 euros dated 22 April 2005 and a further forged bond in the sum of 600,000 euros dated 6 May 2005. MCI continued to supply Star.Way.Com in the belief that supply was secured by these bonds. MCI is owed over 2.3 million euros by Star.Way.Com. Its case was principally predicated on the applicability of the provisions of s 178BA of the Crimes Act 1900 (NSW) ('the Crimes Act ') to the relevant conduct, but in the alternative, it relied on ss 176A , 178A and 179 of the Crimes Act with respect to the relevant conduct constituting the Category One Offences and s 474.2(1) of the Schedule to the Criminal Code Act 1995 (Cth) ('the Criminal Code ') with respect to the relevant conduct constituting the Category Two Offence. For conduct contravening them, all these provisions provide maximum penalties by way of terms of imprisonment of between five and ten years. According to the translated copy of the Arrest Warrant, the co-accused, El-Najarin, signed the contract with Mobilcom. There is no allegation that the applicant had any personal dealings with Mobilcom, that could be considered to have been deceptive. Thus, there is no allegation that the applicant practised a deception. (2) For s 178BA to be satisfied, there must be a causal connection between the deception practised and the advantage obtained. There is no issue that a financial advantage was obtained but whether it be the 15 euros advance commission or the 20 euros discount in respect of the purchase price, they were both obtained prior to the registration of the SIM cards, and for that reason there can be no causal connection between the two. (3) The registration of the SIM cards under false names could not constitute a relevant deception because registration occurred using a computer system called maui. The registration of the SIM cards occurred not through an employee of Mobilcom; where no person is deceived but rather a computer system, no criminal liability can attach: see In re Holmes [2005] 1 WLR 1857, 1862 --- 1863 at [11] --- [12] per Stanley Burnton J; Davies v Flackett [1973] RTR 8 per Bridge J; Kennison v Daire (1985) 38 SASR 404 per O'Loughlin J ('a machine cannot be the subject of deception'), cited with approval R v Baxter [1988] 1 Qd R 537, 539 per Connolly J and R v Fischetti (2003) 192 FLR 119, 124 at [22] per Gray J. In this context, the respondent may not place reliance upon the extended definition of deception in s 178BA(2)(b) of the Crimes Act because there is no suggestion that the applicant or his co-accused were not authorised to register SIM cards. On the contrary, it appears to have been the very purpose of the contract with Mobilcom. Therefore, the registration of the SIM cards was not a relevant deception for the purposes of s 178BA , even if the data entered was 'false'. The respondent relied upon the receipt of what are termed 'advance commission payments'. However, there is no suggestion in the copy of the arrest warrant or indeed in any document whatsoever, that the applicant was to apply such advance commission payments in any particular way, that being a requirement of s 178A. Overall, not one of the documents discloses the purpose of the advance commission payments. Although there is reference to such payments, the purported terms upon which such payments were purportedly made are not specified in any supporting document. Thus, there is insufficient information, upon which this Court could determine whether the conduct would also be punishable in New South Wales. (5) Moreover, there is no allegation that the applicant collected, or even received, any moneys. Since the terms of the contract are not set out in any detail whatsoever, it may, for example, have been that Mobilcom was contractually bound to pay at a particular point in time. Where moneys have not in fact been received, there can be no liability under s 178A Crimes Act . However, this argument suffers from the same defect as that relating to s 178BA. Firstly, the respondent suggests that the false pretence was the 'fraudulent registration' of the mobile telephones. However, there is no suggestion whatsoever that the act of registration was done in order to obtain the telephones; and nor could it be, since they were all obtained much earlier. Indeed, such a suggestion would be absurd, since the phones would have to have been already in the possession of Pluscall, before they could be registered. For liability to attach, the false pretence must occur before the property is obtained: R v Steels (1867) 32 JP 309. (7) Insofar as the respondent relies upon the concluding of the contract with Mobilcom, this too cannot found the basis for criminal liability, since there is no allegation that the applicant made any false pretence. Furthermore, there is no allegation that the respondent 'obtained any property' as required by s 179. At best, the company, Pluscall, obtained the property. Again, there could be no conviction pursuant to s 179 for the conduct alleged. As set out in respect of s 178BA , there is no allegation that the respondent employed such dishonest means. Accordingly, double criminality would not be satisfied in respect of s 176A. However, as before, there is absolutely no allegation that the applicant dealt with MCI, except in relation to the alleged provision of purportedly false bank 'bail bonds', a translation that is patently incorrect and inadequate. The word used in the original German document is 'Bürgschaft', which correctly translates into English as 'guarantee'. Notwithstanding that, and any other possible errors, absent an allegation that the applicant practised a particularised deception upon MCI, upon which it relied, the applicant could not be guilty of an offence contrary to s 178BA. (10) Reliance is also placed upon the fact that minutes were transferred to a company in Germany by Star.Way.Com. However, there is no allegation that this fact would in any way have impacted upon MCI's willingness to provide telephone minutes, upon condition that it is paid. Thus, this act cannot be said to be causal in respect of the granting of a financial advantage. (11) Thus, the only conduct, which might be said to be relevant, would appear to be the provision of the forged guarantees. However, the purported copy of the arrest warrant, and of course its translation, is, once again, inadequately vague. It merely states, 'The accused person as well as Houggati and Mohamed Kazzaz then provided as a security for the present and future demands of MCI from Star.Way.Com a forged bail bond ...' Once again, here the word 'demands' is quite misleading. The word 'Förderungen' in the original German correctly translates to 'claims', in the sense of legal claims. Apart from that, the warrant fails to disclose the precise conduct, which is alleged against the respondent. Did the applicant, in fact, provide the guarantee? Did he provide the guarantee to someone else, who, in turn, provided it to MCI? In particular, there is no allegation whatsoever that the applicant knew that the guarantee was forged. Additionally, the offence would not apply, had the same conduct occurred in Australia. In order to satisfy the provision, the person must obtain a gain from a 'carriage service provider'. That term is, in turn, defined by s 87 of the Telecommunications Act 1997 (Cth) to include persons providing a 'listed carriage service', a term defined by s 16 of the Act. These provisions demonstrate that there must be at least one point of connection with Australia. Since, the warrant does not allege that MCI had any connection with Germany, the conduct would not fall within s 474.2(1). The first of the applicant's submissions in relation to the non-applicability of s 178BA of the Crimes Act is that the Arrest Warrant contains no allegation that the applicant practised a deception on Mobilcom; it is said that there is no allegation that he had any personal dealings with Mobilcom; moreover, his co-accused, El-Najarin, and not he, signed the contract with Mobilcom. Clearly, this is an allegation that the applicant practised a deception on Mobilcom; the fact that one of them, not being the applicant, actually signed the contract on behalf of Pluscall --- there could be no suggestion that the Arrest Warrant alleges that El-Najarin signed the contract in his own right --- is beside the point. The second of the applicant's submissions in relation to the non-applicability of s 178BA of the Crimes Act is that there is no causal connection between the deception practised and the advantage obtained; whether the advantage obtained is the advance commission or the discount of the purchase price, they were both obtained prior to the registration of the SIM cards and for that reason there was no causal connection between the two. But the Arrest Warrant makes clear that the allegation is that, at least in the case of the advance commission, it would have to be paid back unless the SIM cards were registered. The third of the applicant's submissions in relation to the non-applicability of s 178BA of the Crimes Act is that because registration of the SIM cards was effected not through an employee of Mobilcom but through a computer system called 'maui', there could be no relevant deception. In this context, it was submitted that the extended definition of deception in s 178BA(2)(b) had no application because there is no suggestion that the applicant or his co-accused were not authorised to register the SIM cards; on the contrary, this was the very purpose of the contract with Mobilcom. There are, in my view, two answers to this submission. First, the Arrest Warrant alleges that the act of registration was done manually '... with the names of persons who had been picked randomly from telephone books by the accuses [sic] ...' and that it was only the activation of those registrations which were effected through the 'maui system'. That the Arrest Warrant suggests the acts of registration and activation are separate and discrete is not surprising; there are many other areas of economic activity where the act of registration or issue are separate and discrete from the activation of the card through which the relevant facility will be operated. Second, the suggestion that the applicant and his co-accused were authorised to register the SIM cards in the manner they did, by registering them in the names of persons picked randomly from the telephone directory, has no foundation in the Arrest Warrant or any other document; no such authority existed, on my reading of the Arrest Warrant, to obviate the operation of s 178BA(2)(b) of the Crimes Act . It follows, in my view, that the dual criminality requirement of subs 19(2)(c) of the Act in relation to the Category One Offences is satisfied by recourse to s 178BA of the Crimes Act ; it is unnecessary to have recourse to any other provision for reliance that the requirement is satisfied in relation to those offences. The applicant's submission as to the non-application of s 178BA of the Crimes Act in relation to the Category Two Offence relies on the absence of an allegation that the applicant practised a particularised deception upon MCI. The criticism here seems to be directed at the generality or vagueness of the alleged deception: 'The accused person as well as Houggati and Mohamed Kazzaz then provided as a security for the present and future demands of MCI from Star.Way.Com a forged bail bond ...'. It is said that the Arrest Warrant fails to disclose the precise conduct, which is alleged against the applicant. Did the applicant, in fact, provide the guarantee? Did he provide the guarantee to someone else who in turn provided it to MCI? In particular, it is said that there is no allegation whatsoever that the applicant knew that the guarantee was forged. Reference was made to what was said in Linhart v Elms (1988) 81 ALR 557 , 588 per Foster J. On my reading of the Arrest Warrant, there is no doubt that it alleges that the applicant, together with the others named, provided the bail bond (guarantee) to MCI, and not to some third party that provided it to MCI. It is true that there is no specific allegation that the applicant knew that the bail bond (guarantee) was forged, but the implication is self-evident. I am of the view that the dual criminality requirement of subs 19(2)(c) of the Act in relation to the Category Two Offence is satisfied by recourse to s 178BA of the Crimes Act . The application must be dismissed with 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 Edmonds. | eligibility for surrender dual criminality obtaining money or any financial advantage by deception whether the conduct or the equivalent conduct of fraudulently acquiring commission payments and other pecuniary profits from mobile phone service providers in the federal republic of germany would be a criminal offence with a maximum sentence of imprisonment for a period of not less than 12 months if committed in new south wales pursuant to subs 19(2)(c) of the extradition act 1988 (cth) extradition |
The proceedings before Sackville J were commenced by application and statement of claim filed on 15 February 2006 (each amended 16 February 2006). 2 According to the amended statement of claim the first six applicants are corporations incorporated under the laws of the State of Delaware in the United States of America (Universal, Fox, Columbia, Paramount, Warner and Disney). The seventh to thirteenth applicants are corporations incorporated in Australia (Universal Pictures, Fox South Pacific, Fox Australia, Columbia Tristar, Paramount Home Entertainment, Roadshow and Buena Vista Australia). It was pleaded that the USA corporations have exclusive control of the following cinematograph films: Universal --- Meet the Fockers (2004) and White Noise (2005); Fox --- Elektra (2005); Columbia --- Spanglish (2004); Paramount --- Alfie (2004); Warner --- Oceans 12 (2004); and, Disney --- National Treasure (2004). In addition, Roadshow was pleaded to have an exclusive licence to import into Australia the cinematograph film 'Racing Stripes' (2005). 3 It was asserted that Mr Hoey had 'from time to time offered or exposed for sale in Australia, and sold in Australia in non-Region 4 DVD format copies' of each of these films and that he had done so without the licence of the relevant applicant where 'he knew, or ought reasonably to have known, that the making of the copies in Australia by the importer would have constituted an infringement of copyright'. 4 Accordingly it was pleaded that Mr Hoey had infringed the copyright of the USA and/or Australian corporations in the identified films. The applicants sought that he be restrained and consequential relief. 5 The proceedings before Sackville J were undefended. Sackville J was satisfied by affidavits read in support of a notice of motion for default judgment 'that the respondent has infringed the copyright of the various applicants in the identified films by selling or offering for sale DVDs that constitute copies of the films. The evidence also satisfies me that, unless restrained, the respondent is likely to continue his infringing activities. ' Sackville J made the orders sought by the applicants in the motion which included restraining orders, an order for delivery up on oath of the infringing copies of the applicants' films and an inquiry as to damages, including additional damages under s 115(4) of the Copyright Act 1968 (Cth) ('the Act'). Costs on an indemnity basis. Such further or other orders as the Court sees fit. The extent of Mr Hoey's response (prior to the actual hearing of the charge against him) was to file a document in the form of an affidavit on 5 February 2007 and appear by video-link at a directions hearing on 19 March 2007. The affidavit was a fairly unstructured mix of requests for clarification of his rights, protestations that interference with his sale of the DVD material in question is unjustified and other generalised assertions about the issues raised in the original proceedings. This affidavit does not appear to me to respond, in any direct sense, to the charge of contempt. At the hearing Mr Hoey elected not to advance it as evidence (with the consequence that he would face cross-examination) and I ruled that I would treat it as a submission but give it no evidentiary weight. 8 The orders made by Sackville J extended beyond restraint with respect to the particular films which had been identified in the amended statement of claim. They were more general in their nature. It is as well to set out orders 1 to 9 in full. The Respondent deliver up on oath any copies in DVD format of the cinematograph films identified in paragraphs 1 to 7 above in the possession, power, custody or control of the Respondent. There be an inquiry as to damages payable by the Respondent pursuant to sections 115 and 116 of the Copyright Act 1968 and additional damages payable pursuant to s 115(4) of the Copyright Act 1968 . Although the films included those listed in a schedule which corresponded to those identified in the amended statement of claim that list was not restrictive. 11 Although the contempt charged in the present case is a 'civil contempt', it may, if proved, be punished by a fine or by imprisonment. The distinction between civil and criminal contempt was doubted in Australasian Meat Industry Employees' Union v Mudginberrie Station Pty Ltd [1986] HCA 46 ; (1986) 161 CLR 98 and in Witham v Holloway [1995] HCA 3 ; (1995) 183 CLR 525 the High Court held that 'all charges of contempt must be proved beyond reasonable doubt' (at 534). Accordingly, that is the standard of proof I must apply in the present case. 12 The breaches alleged in the statement of charge are, firstly, that Mr Hoey, either personally or by a servant or agent, sold the following films in breach of orders 1, 2, 3 or 6 --- 'United 93', 'The Fast and the Furious: Tokyo Drift', 'The Sentinel', 'Phat Girlz', 'RV', and 'The Wild'; secondly, that he exposed or offered 'The Shaggy Dog' for sale in breach of Order 6. Thirdly, although Mr Hoey delivered four boxes of non Region 4 DVDs to solicitors for the applicants containing 'approximately 211 DVDs' it is alleged that he failed to deliver up all relevant DVDs and failed to deliver up any DVDs on oath in breach of Order 8. It is further alleged that after dispatch of the DVDs actually delivered up Mr Hoey still displayed 'an estimated 1,612 region 1 DVDs' at his premises. 13 The factual foundation for the allegations in the statement of charge is to be found in a series of affidavits read in the case for the applicants. 15 There is no countervailing evidence and there is no reason not to accept as proven, to the requisite standard, the factual matters deposed to in these affidavits. I shall discuss in due course, whether (and to what extent) the facts established prove the allegations in the statement of charge. As a result, if you do not obey these Orders you may be imprisoned or your property may be taken . Such delivery up must be to Charles Alexander, Minter Ellison, 88 Phillip Street, Sydney NSW 2000 unless alternative arrangements are made by contacting us. We would be happy for such alternate arrangements to include delivery of the DVDs to our Melbourne Office. 17 Annexure A contains pictorial representations of trade marks owned by or licensed to the applicants as described in the letter of 4 July 2006. During the course of the hearing I was shown the way in which such trade marks typically appear upon DVD packaging of DVDs in the possession of, and offered for sale by, Mr Hoey. Universal Pictures has the exclusive licence to sell, let for hire or offer for sale or hire in Australia DVDs which embody films in respect of which Universal has the Australian rights. Universal Pictures is the exclusive distributor in Australia of 'United 93' and 'The Fast and the Furious: Tokyo Drift'. 21 Ms Cohen deposed that Universal Pictures has not agreed (nor been asked by Universal to agree) to Mr Hoey importing into Australia, selling, letting for hire or offering for sale or hire in Australia DVDs which embody films in respect of which Universal has the Australian rights or the two films identified above. 22 There was no countervailing evidence. Ms Cohen was not required for cross-examination. I am satisfied as to the matters to which she deposes. He deposed that the tenth applicant is the exclusive distributor in Australia of the film 'RV' and that it had not agreed to Mr Hoey importing into Australia, selling, letting for hire or offering for sale or hire in Australia that film or other DVDs embodying films in respect of which Columbia had the Australian rights. Nor had Columbia asked the tenth applicant to agree to Mr Hoey doing such things. 24 There was no challenge to this evidence. Mr Ayling was not required for cross-examination. I am satisfied that Mr Hoey had no right to import, sell, let for hire or offer to sell or hire 'RV' in a non-Region-4 format. He deposed that Buena Visa Australia is the sole distributor in Australia of 'The Wild' and 'The Shaggy Dog' and that it has not agreed to (or been asked by Disney to agree to) Mr Hoey importing into Australia, selling, letting for hire or offering for sale or hire in Australia DVDs which embody films in respect of which Disney has Australian rights including the two films mentioned above. Mr Fullerton was not required for cross-examination. I accept that his evidence proves the facts to which he deposes. He deposed that Fox South Pacific and Fox Australia are the only persons licensed to sell, let for hire or offer for sale or hire in Australia DVDs which embody the films in respect of which Fox has Australian rights and that they are the only persons with distribution rights in Australia in relation to 'The Sentinel' and 'Phat Girlz'. He further deposed that neither Fox South Pacific or Fox Australia had agreed (or been asked by Fox to agree) to Mr Hoey importing into Australia, selling, letting for hire or offering for sale or hire in Australia DVDs which embody films of Fox or the two films mentioned above. There was no challenge to this evidence. Mr Samuel was not cross-examined. I accept that his evidence proves the facts to which he deposes. There is no direct evidence of breach of orders 4, 5 or 7. 28 In this affidavit Ms Munn deposes to visits to Mr Hoey's business premises on a number of occasions before and after Sackville J made his orders. The conversations to which she deposes are of central importance to the proceedings. I am satisfied from evidence to which I will later refer that this affidavit was properly served upon Mr Hoey. There was no countervailing evidence. Ms Munn was not required for cross-examination. I am a Private Investigator licensed and registered to work in the state of Victoria. I regularly conduct investigations for the Australian Federation Against Copyright Theft Limited (AFACT). I have worked with AFACT since January 2004 (when it was established). Before that I worked with AFACT's predecessor the Australian Film and Video Security Office, beginning in June 2002. In April 2005 I was tasked by AFACT to investigate an establishment known as DVD Kingdom, situated at Shop 1-2, Corner of High and Sladen Streets, Cranbourne, Victoria ( DVD Kingdom ). I have undertaken training with AFACT to identify the region markings contained on DVDs. The category for Australian DVDs is Region-4. The identifying marks that indicate they are Region-4 DVDs are the coloured classification label on the front of the DVD, as well as the region code on the back of the DVD. An example of a Region-4 DVD cover is exhibited to this affidavit and marked VM1. DVD's from the US are Region-1 DVDs. The Region-1 DVDs can be identified on the front of the DVD by the black and white classification labels and the region code on the back of the DVD. The black and white classification label is generally put on the front of the DVD by the retail seller of the DVDs before they are put on display. An example of a Region-1 DVD cover is exhibited to this affidavit and marked VM2 . It is clear that such Region-4 DVDs as he held made up a small proportion of the total offered for sale. 31 Ms Munn deposes to four visits to Mr Hoey's business premises before the commencement of the original proceedings by application and statement of claim filed on 15 February 2006. On 18 April 2005 she had a conversation with Mr Hoey in which he said: 'We get our DVDs from the US'. She sighted 69 Region-1 DVDs for sale and purchased four Region-1 DVDs including three which were the subject of specific allegations in the original proceedings. 32 On 11 May 2005 she saw a further 19 Region-1 DVDs and purchased six of them. Five of them were the subject of specific pleading in the original proceedings. 33 On 7 September 2005 she purchased a further Region-1 DVD and on 6 October 2005 another. 34 During April and May 2005 she corresponded with Mr Hoey by email during which Mr Hoey gave her advance notice of a number of Region-1 DVDs that had been either delivered or were due to be delivered to his business. Ms Munn deposes to two visits during this period, 7 June 2006 and 1pm 5 July 2006. 37 On 7 June 2006 she purchased two Region 1 DVDs and saw available for sale, on a shelf marked 'New Arrivals', 14 others which she identified. 38 On 5 July 2006 she observed Mr Hoey unpacking six cartons containing Region 1 DVDs. Mr Hoey made a hand-written list for her of 15 titles. I knew they were Region-1 DVDs by the black and white classification labels on them. I did not count the number of Region-1 DVDs on display on 5 July 2006, however to the best of my recollection, the number of Region-1 DVDs on display on 5 July 2006 would have been approximately the same as on 22 August 2006, being 1,612. 40 Ms Munn deposed to visiting Mr Hoey's business premises on seven occasions after the orders made by Sackville J were served on him --- 28 July 2006, 11, 22 and 28 August 2006, 13, 14 and 19 September 2006. 41 She was offered Region 1 DVDs for sale. She deposes that on 28 July 2006 Mr Hoey said words to the following effect: 'Have a look at some of these Region 1 DVDs I had delivered last week. As I walked around the shop on 28 July 2006 I saw a glass cabinet with about 20 DVDs in it. They're all I have in Region-4. I counted the number of Region-1 DVDs on two shelves and counted 82 on one, and 98 on the other. I estimated there were a total of 1,656 Region-1 DVDs on display. I reached this estimate by multiplying 18 (the number of display shelves with Region-1 DVDs on them) by 92 (an approximate number of DVDs per shelf). While I was at the shop on 28 July 2006, a man came in and talked to Shannan. Then you just go home and set your DVD player on the code I give you and you will be able to play all regions. I shall deal in due course, and separately, with the evidence regarding failure to deliver up as required by Sackville J's orders. 43 At a visit on 11 August 2006 Ms Munn purchased three Region-1 DVDs including 'RV'. 44 It was on this occasion that a conversation occurred with respect to the one DVD in the statement of charge which is identified as 'exposed for sale' rather than being sold --- 'The Shaggy Dog'. This DVD was identified by Mr Hoey on 11 August 2006 as being due for delivery within the following week. 45 It was on a list of seven DVDs due for delivery given to Ms Munn during her visit on 11 August 2006. Another DVD scheduled for delivery at the same time as 'The Shaggy Dog' was 'V for Vendetta'. It had not. Nor had it arrived by the time of a visit by her on the following day, 22 August 2006. 47 The applicants invited me to conclude from the exchanges about 'The Shaggy Dog' and the failure of Mr Hoey to identify it as a Region-4 DVD, that he was offering it for sale in a Region-1 format. However, I do not think that the evidence about this matter proves the contention beyond reasonable doubt. There is no evidence of actual delivery, or that Ms Munn examined the DVD in the store, or that she purchased it. Nor is there evidence of any express representation that it was being offered for sale as a Region-1 DVD. 48 It is convenient, therefore, to record here that this element of the statement of charge is not established beyond reasonable doubt. 49 During the visit on 11 August 2006 Ms Munn counted 78 Region-4 DVDs which were mixed in with Region-1 DVDs. It is not clear how, if at all, this relates to what she saw on 28 July 2006 in a glass cabinet when about 20 DVDs were identified to her as Region-4 DVDs. 50 She visited again on 22 August 2006. On this occasion she 'counted exactly 1,612 Region-1 DVDs on display for sale'. There were some additional Region-4 DVDs amongst them but she does not say how many. 51 Ms Munn visited again on 28 August 2006. She saw and videoed Mr Hoey unpacking cartons of DVDs. Mr Hoey said to her words to the following effect: 'These are Region-1'. On this occasion she bought the Region-1 DVD 'United 93'. 52 She visited again on 13 September 2006 and purchased three Region-1 DVDs. Two are the subject of the present charge --- 'The Sentinel' and 'The Wild'. 53 She visited again on 14 September 2006 but does not, in her affidavit, identify any detail bearing upon the present issue. 54 She visited again on 19 September 2006. On this occasion she purchased two Region-1 DVDs each of which is the subject of the present charge --- 'The Fast and the Furious: Tokyo Drift' and 'Phat Girlz'. 55 I accept Ms Munn's evidence. It shows that Mr Hoey sold her six Region-1 DVDs in direct contravention of Sackville J's orders. It also raises serious questions about compliance with the order for delivery up on oath. Mr Warren counted and calculated that Mr Hoey was displaying approximately 2,000 region-1 DVDs and about 150 region-4 DVDs. He also observed about five DVDs labelled region-2. 57 Mr Warren also deposes to an encounter with 'Amanda' (a reference to Ms Reid, Mr Hoey's business and domestic partner). 58 The latter evidence is sought to be used to suggest aggravating conduct on Mr Hoey's part. I deal with it in that context later. Her affidavit was (apart from being filed as sworn) tendered in a redacted form to remove reference to what was accepted to be privileged material. The affidavit also, in its redacted form, makes reference to discussions with Ms Reid, Mr Hoey's apparent business and domestic partner. During these discussions, arguably, a form of compromise of the proceedings was sought but rejected. I have paid no regard to this part of the affidavit. 60 Ms Eadie deposes, relevantly, that on 6 July 2006 Minter Ellison received four boxes of Region-1 DVDs containing a total of 211 Region-1 DVDs. 61 I have been invited to conclude from this evidence and Ms Munn's that Mr Hoey failed to comply with order 8 as made by Sackville J. There are two elements to the breach alleged. The first is that Mr Hoey failed to deliver up all DVD copies in non-Region 4 DVD format of the films in his possession, power, custody or control identified in orders 1 to 7. The second is that he failed to deliver up any such copies on oath. In breach of Order 8, the Respondent has not delivered up all copies in DVD format of the cinematograph films covered by the orders outlined in paragraphs 2 to 8 in his possession, power, custody or control. These boxes contained approximately 211 DVDs. On Ms Munn's evidence Mr Hoey continued, as he had before, to offer for sale about 1,600 Region 1 DVDs after the orders were served on him. 64 However, Mr Hoey was able to demonstrate at the hearing, by the tender of DVD covers not marked with the trade mark of any of the applicants (and it was not disputed), that the applicants' trade marks did not cover the whole range of DVDs available for sale at Mr Hoey's business premises, whether Region-1 or otherwise. Ms Munn does not identify how many of the DVDs she counted were marked with the applicants' trade marks. However unlikely it may seem that the delivery of 211 DVDs represented all the DVDs marked with the applicants' trade marks in Mr Hoey's possession at the time of service of the orders upon him, I think to so conclude would be to cross the line from proof beyond reasonable doubt to some lesser standard. 65 In all the circumstances I do not find it established beyond reasonable doubt, on the evidence before me, that Mr Hoey has failed to comply with Order 8 by failing to deliver up all non-Region-4 DVDs marked with the applicants' trade marks in his possession, power, custody or control at 5 July 2006 when the orders made by Sackville J were served upon him. 66 However it is clear, and I am satisfied beyond reasonable doubt, that Mr Hoey has made no delivery up on oath of any DVDs, whether the 211 which arrived on 6 July 2006 or otherwise. 68 In the second of his affidavits sworn on 13 December 2006 Mr Jones deposes to personal service on Mr Hoey of the affidavit of Ms Eadie. 69 I am satisfied that these matters are established to the requisite standard. At that time she purchased four Region-1 DVDs including one the subject of the charge --- 'The Fast and the Furious: Tokyo Drift' which had earlier been purchased by Ms Munn on 19 September 2006. She also deposes to identifying 175 --- 180 Region-1 DVDs. 71 No affidavit of personal service of this affidavit was read in the proceedings, probably through inadvertence. However the matters to which Ms Moorhouse deposes do not add materially to the earlier evidence and the lack of evidence of personal service of this affidavit cannot improve the position for Mr Hoey. Now, Mr Hoey, is there anything more that you want to say to me? I want to direct your attention back to the specific DVDs that were purchased by Ms Munn. Is there anything you want to say to me to suggest that the sale of those DVDs from your shop did not represent a breach of orders? Hence my rejoinder. 75 I find that he has breached Orders 1, 2, 3 and 6 by selling Region-1 DVD copies of 'United 93' and 'The Fast and the Furious: Tokyo Drift' (Order 1); 'The Sentinel' and 'Phat Girlz' (Order 2); 'RV' (Order 3); and 'The Wild' (Order 6). I find that he is in breach of Order 8 by not delivering up on oath any copies of non-Region-4 DVDs marked with the trade mark of any of the applicants in his possession, power, custody or control as at the date of the service of the order upon him. In each case I am satisfied beyond reasonable doubt that these breaches have been established. Quite apart from Mr Hoey's wilful disregard of the Court's orders as specifically pleaded in the Statement of Charge, Mr Hoey has engaged in other conduct which shows his disregard of the Court's authority and procedures. These matters go to penalty. First, Mr Hoey completely disregarded the Court's processes in the underlying proceedings. At no point did he make an appearance in the proceedings or attend Court. Specifically, Mr Hoey, despite being served with the originating process, failed to enter an appearance by the required date or at any time. Mr Hoey also failed to comply with a direction made by the Court to file a Defence. Sackville J then made the Orders pursuant to O 35 r 3(2) of the Federal Court Rules at a hearing at which Mr Hoey entered no appearance. As Sackville J recorded in his Judgment, the motion seeking default judgment was duly served upon Mr Hoey but he chose not to appear and oppose the relief sought by the Applicants. It is also made plain by Mr Hoey's attitude towards an investigator he recognised as being involved in the underlying proceedings. When an investigator was visiting Mr Hoey's retail store after the Orders had been entered, Mr Hoey observed the investigator and said to him, inter alia , "I have read your affidavit" and then his agent or servant Ms Amanda Reid launched a vitriolic attack of verbal personal abuse at the investigator. After that verbal attack, both Mr Hoey and Ms Reid followed the investigator out onto the street where his motorcycle was parked, where he was again confronted by Ms Reid's personal abuse and foul language. As to the first, I do not believe that I should take into account, or hold against Mr Hoey, the fact that he chose not to appear or defend the earlier proceedings. That was his right. Nor was he obliged to appear to oppose default judgment or, later, respond to the statement of charge for contempt if he wished not to do so. I would not be prepared to regard that as 'disregard of the Court's authority and procedures' in a way which should bear upon the imposition of a penalty. 78 The allegation contained in para 14 of the applicants' written submissions set out above to the effect that an investigator had been subjected to 'a vitriolic attack of verbal personal abuse' by Mr Hoey's agent or servant Ms Reid, appears based upon matters recorded in the affidavit of Mr Warren sworn on 21 September 2006 to which I earlier referred. By contrast, affidavits sworn by two other investigators, Mr Jones and Ms Munn, give no indication of aggressive or inappropriate behaviour by Mr Hoey or any of his staff. Ms Munn, in particular, deposes to a series of conversations in which, although Mr Hoey obviously came to know of her involvement in the investigation into his conduct, there is no suggestion of any hostility exhibited towards her. Indeed it might reasonably be inferred that it was one such conversation, which took place on 2 February 2007, and Ms Munn's encouragement, that led to the first contribution which Mr Hoey made to the proceedings, represented by his hand-written 'affidavit' filed on 5 February 2007. 79 In the circumstances I do not think it is established that Mr Hoey's conduct in not complying with the orders made by Sackville J is accompanied by aggravating behaviour which should bear upon the fixation of an appropriate penalty. 81 Mr Hoey has been, according to the evidence, properly and effectively served with each relevant document in the proceedings including the judgment and orders of Sackville J. It is too obvious to be mistaken that these documents are connected with Federal Court proceedings and that they involve matters of considerable significance for him. 82 In an affidavit sworn by Ms Munn on 16 February 2007 (filed 20 February 2007) Ms Munn deposes to suggesting to Mr Hoey in a conversation that he had been avoiding service of documents. There have been a few other documents and I have just ripped them up or thrown them into the bin. But I haven't been avoiding anyone. Thereafter he can have been in no doubt as to the seriousness of the matter. The written submissions for the applicant filed on 14 February 2007, which were served on him by Ms Munn personally on 19 February 2007 make it clear on their first page that the applicants seek that he be imprisoned and/or fined. I attempted to make it clear to Mr Hoey in the one directions hearing at which he earlier appeared (19 March 2007) that the potential consequences for him were very serious. 84 Notwithstanding the requirements imposed upon him by Sackville J's orders, the clear notice to him of the potential consequences of his conduct and the opportunity he has had to comply with the orders, there is no indication that Mr Hoey has taken any active step in conformity with the obligations imposed on him. In the circumstances it is inevitable that I should conclude that his attitude has been one of deliberate and open defiance of the Court's orders. 85 In his 'affidavit' of 5 February 2007 (which I have accepted as a submission only) Mr Hoey made a general claim to lack of financial means. I cannot afford legal assistance or representation ... I am a small family business with children to provide for and barely make ends meet. I am merely trying to provide for my children and get by week to week. He is basically going to help me out so it's an opportunity there where I can do something else in life so I am never before the courts here or yourself again because I thought I was afraid to fly until I came here today, your Honour, and I think the Court has now made me more scared of that than flying. My father had a heart attack that year. He had a triple bypass. I was driving to and from Adelaide and I have made some mistakes in that period, your Honour. I am raising two kids. I don't want them being ashamed of their father going to gaol or anything like that. I want them to know that I am a good man and I do try to do the right thing and I don't want to disrespect the courts or any of the laws that are in front of me, your Honour. However, I do not feel in the circumstances that his expressions of concern (or even regret) at the last minute bear much weight in the face of the evidence of his breaches. The High Court of Australia has the same power to punish contempts as was possessed in 1903 by the Supreme Court of Judicature in England --- see s 24 of the Judiciary Act 1903 (Cth). All parties to these proceedings concede that the court has a discretion to impose a prison sentence, to fine, to make costs orders or to punish by any combination of such alternatives. I think that it is accepted these days that, generally, imprisonment is a punishment of last resort. But even that proposition must be subject to the nature and seriousness of the crime. The seriousness transcends matters such as the personal dignity of the judiciary, or the rights in this case of the Commissioner as a litigant in this court. The offence involves interference with the effective administration of justice, by impeding and perverting its course: Johnson v Grant (1932) SC 789 at 790 per Lord President Clyde. Contempt of court is a matter of basic public significance. Unless the laws of contempt are properly enforced our whole system of justice is at risk. I regard the offences committed by the respondents as being very serious. They amount to wilful disobedience of court orders over a sustained period of time and involve substantial amounts of money. In that case her Honour directed the issue of a warrant for a respondent's imprisonment for two months with the warrant to lie in the registry for twelve months and not be executed providing the respondent refrained from further contravention of the Court's orders. 90 It is well established that the Court has the power to impose a sentence of imprisonment, suspended on conditions if appropriate (see Hughes v Australian Competition and Consumer Commission [2004] FCAFC 319). 91 The range of penalties available for contempt of court in this Court was also recently discussed by Gray J in Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 ( Pattison ). His Honour referred to a judgment of Merkel J in Australian Industrial Group v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Australia & Ors (2001) 188 ALR 653. If a person wilfully disobeys and publicly defies an order to pay a fine imposed for contempt, the disobedience and defiance may constitute a further contempt. Further, conduct calculated to defeat the effect of a court order and treating the order as unworthy of notice may also constitute a contempt: see Seaward v Paterson [1897] 1 Ch 545 at 554-555 per Lord Lindley. For example if a person, such as an Attorney-General, has a duty to enforce a penalty order (which may also include committal to prison in default of payment) and refuses to discharge that duty, with the consequence that there will be no enforcement of the order, a serious issue of obstructing the course of justice may arise. I have made the above observations as it is clear that, in future, a court ought to make specific provision for enforcement of any order punishing a person for contempt. Plainly, if the position taken by the Attorney-General is maintained, it will be necessary for the Court in its order to make provision for the enforcement of that order. In most cases it will be sufficient if the order provided that, in default of payment, the District Registrar must apply to the Court for directions concerning the enforcement of the order. If that were done, there seems little doubt that the Court would have power to impose a sentence of imprisonment upon the application for directions for enforcement. If that be the case, there seems to be no reason why the Court could not impose a sentence of imprisonment in default of payment of the fine, or part of the fine, in the first place. I am not to be taken as suggesting that the Court ought to do this in every case. There will undoubtedly be many cases in which the Court takes the view that a contempt is insufficiently serious to warrant imprisonment, and that the contemnor's means are such that other enforcement methods will be sufficient to enable the fine to be collected, if it is not paid in accordance with the order. I am satisfied, however, that a sentence of imprisonment in default of payment of a fine, or part of a fine, is a course within the powers of this Court. Part payment was to reduce any period to be served by $500 for each day. The penalties I will impose address only the matters I have found proved. It remains necessary for him to comply properly with Order 8. Any further breach by Mr Hoey of Sackville J's orders will, of course, expose him to the possibility of further charges. 95 I have found that Mr Hoey breached Order 8 of Sackville J's orders by failing to deliver up on oath all relevant non-Region-4 DVDs in his possession, power, custody or control at the time of the service of Sackville J's orders on him. I propose to give him an opportunity to purge this contempt by delivering up on oath all such DVDs in his possession, power, custody or control at the time of service upon him of the orders I shall make. He should do so within 7 days. Otherwise, he is, within 14 days, to pay a fine of $10,000 in respect of this contempt. It is not possible for Mr Hoey to purge these acts of contempt. In the circumstances, at least a fine must be imposed in respect of each of these acts of contempt. I propose to impose a fine of $2,500 for each contempt. However, I will provide Mr Hoey with an opportunity to pay the total amount of $15,000 by payments of not less than $5,000 on or before each of the last working days of June, July and August 2007 respectively. In default of any payment due the total amount outstanding will become payable within 7 days. 98 I am satisfied that the aggregate amount of the fines I have fixed does not infringe the principle of totality. 99 The next question is whether I should make provision for the possibility that Mr Hoey will again disregard the orders made by the Court and simply not pay the fines I have imposed. Mr Hoey has shown no regard for the Court's processes (although it was entirely a matter for him whether he defended the proceedings before Sackville J) and has acted in open defiance of its orders. In the circumstances I am not confident that he will meet his obligations under the orders I will now make unless it is unmistakeably clear to him that further defiance of the Court's orders will be attended by immediate consequences. 100 Therefore, I propose to order that should Mr Hoey default in payment of the full amount of either fine, of $10,000 (should it become payable) or $15,000, he will go to prison for 30 days. In that event any fine outstanding will not abate but will remain payable and enforceable. 101 To give effect to this aspect of the orders I will order that a warrant issue for Mr Hoey's arrest and imprisonment for 30 days but that the warrant lie in the registry until the fines have been paid and be executed only in the event that Mr Hoey fails to make payment, as ordered, of the fines I impose on him. 102 The applicants have sought their costs on an indemnity basis. Such an order is not uncommon in contempt proceedings (see Degmam Pty Ltd (In Liq) v Wright (No 2) [1983] 2 NSWLR 354 at 358; Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No. 2) (1987) 15 FCR 64 at 86-7; Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd [2002] FCA 949 ; (2002) 121 FCR 24 at 58; Ripcurl International Pty Ltd v Phone Lab Pty Ltd [2004] FCA 1215) although it has also been held that there is no 'established practice' to this effect (see Australian Competition and Consumer Commission v World Netsafe Pty Ltd [2003] FCA 1501 ; (2003) 133 FCR 279) and such costs are not 'routinely awarded' (see Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350 per Moore J). An order for the payment of indemnity costs, where it is made, recognises both the public interest in ensuring that orders of the Court are complied with and the equity in ensuring, so far as possible, that an applicant required to take the further step of contempt proceedings should be protected by an appropriate costs order. 103 The applicants in the present matter have assumed the burden of enforcement of the orders made by Sackville J. On one view, however, that was a further step in vindication of their own commercial interests. An order to pay indemnity costs in this case would impose a further very substantial burden on Mr Hoey far exceeding the fines I have imposed. An order for costs of a more conventional kind will doubtless create a substantial obligation also. I have taken into account the nature of Mr Hoey's defiance of Sackville J's orders in the penalties I have fixed. In all the circumstances I do not think it appropriate, in the exercise of my discretion, to order the payment of indemnity costs. I will order simply, that Mr Hoey pay the applicants' costs as agreed or taxed. I certify that the preceding one hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | breach of orders re sale of dvds copyright sale of dvds contrary to order failure to deliver up on oath breaches found proved aggravating circumstances not proved. fines imposed opportunity to purge contempt fines permitted to be paid by instalment imprisonment in default of payment. whether indemnity costs should be awarded in contempt proceedings no established practice indemnity costs not awarded. contempt penalty costs |
Each gives rise to some nice points but, in the end, I am clear as to the course that should be taken. 2 As regards interest, TS&B Retail, the successful applicant, seeks interest on damages in the amount of $200,000 for which judgment will be given. A successful plaintiff is entitled to interest on a judgment debt for the period between the date when the cause of action arose and the date as of which judgment is entered unless good cause is shown to the contrary: Federal Court of Australia Act 1976 (Cth), s 51A. The rate of interest is not specified in the section but is left to the judge's discretion. The practice of the Federal Court is to apply the rate applicable in the jurisdiction in which the court is sitting unless that rate is penal or not "commercial": see generally GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55; ECML Pty Ltd v Essanda Finance Corp Ltd [1999] FCA 978 ; Namol Pty Ltd v AW Balderstone Pty Ltd (No 2) (1993) 47 FCR 388; Walker v Citigroup Global Markets Pty Ltd [2005] FCA 1866. 3 The cases have left at large what is meant by a "commercial" rate of interest. It could refer to what the plaintiff could earn on the money it has recovered if it had the money to invest or it could mean what it would cost the plaintiff to borrow the money. Another question is whether the rate should be the wholesale or retail rate each of which may be properly described as a "commercial" rate. 4 As a general rule the interest which a successful party is entitled to expect is the rate it would pay to borrow the money in the retail market. The average bank overdraft rate of interest charged to small businesses over the relevant period was close to 9% per annum. I have taken the trouble of checking the figures with the Reserve Bank of Australia's records to save the parties the time and trouble of obtaining what, on any view, is uncontroversial information. 5 The statute dealing with interest on claims in Victoria is the Penalty Interest Rates Act 1983 (Vic). The rate fixed under this Act is determined by reference, first, to what is described as an "appropriate institutional rate of interest". This rate is required to be a rate charged for loans or paid for borrowings by a public or commercial institution and which, in the opinion of the Victorian Treasurer, reflects prevailing commercial rates of interest. The institutional rate of interest may then be adjusted to include a penalty element in order to set the penalty interest rate. The penalty interest rate currently fixed under the Penalty Interest Rates Act is 12% per annum. This is well above a commercial rate of interest and so will not be applied here. 6 The unsuccessful respondents, while not contending that TS&B Retail should not have any interest, say that the period for which interest should run ought be less than the period mentioned in s 51A. The reason they say the period should be reduced is that TS&B Retail failed to bring the action on for trial with due diligence. 7 One policy behind the award of interest is to reimburse the plaintiff for having been kept out of his money by a defendant who has had the use of it himself in the meantime. Riches v Westminster Bank Limited [1947] AC 390, 400; Harbutt's Plasticine Ltd v Wayne Tank and Pump Co Ltd [1970] 1 QB 447, 468. In general, therefore, a defendant will not establish that he has been disadvantaged by any delay because he has had the use of the plaintiff's money longer than he should have been allowed to keep it: Marsh v Ruby [1975] VR 191, 193. But, as the cases show, delay can be relevant and certainly would have been relevant were a penalty rather than "commercial" rate of interest applied: Clarke v Foodland Stores Pty Ltd [1993] 2 VR 382. 8 In my reasons for judgment I explained that the damages awarded to TS&B Retail flowed from breaches of copyright committed between March 2003 and February 2004. While copyright infringement had taken place much earlier and continued much later, this infringement did not result in TS&B Retail suffering any compensable loss. Strictly speaking, the unsuccessful respondents should be charged interest on the damages as they accrued during the period from March 2003 to February 2004. I have not, however, broken down the damages by, say, a month to month calculation. It is, in my view, far simpler to allow interest to run from September 2003. 9 Accordingly I propose to award interest on $200,000 at 9% per annum (based on the average bank overdraft lending rates to small business during the relevant period) for the period 1 September 2003 to the date of judgment, rounded to the nearest thousand dollars. 10 As regards costs, two separate questions arise. The first is whether TS&B Retail should have its costs on a solicitor and client basis. In my reasons for judgment I said this might be appropriate and explained why that might be so. On further reflection I think there is no warrant for an order that costs be awarded on a solicitor and client basis. In particular I do not believe that they are warranted by the manner in which the unsuccessful respondents conducted their case. At one point I was tempted to conclude that TS&B Retail had been put to unnecessary expense because the unsuccessful respondents did not early on admit copying the drawings and confidential data. But Mr Cawthorn makes two good points by way of answer. First, TS&B Retail's claim in its original formulation was so confusing and broad that it did not encourage a sensible admission. Second, the broad claim was coupled with a claim in damages of around $3.5 million and was so unreasonable that the respondents had no real choice but to put TS&B Retail to its proof on every issue. As Mr Cawthorn said the respondents did nothing that was illegitimate in that regard. Moreover, as soon as TS&B Retail narrowed its claim, the admission of copying was made. 11 In these circumstances if I were to award costs on a solicitor and client basis that would only be by way of punishment and that is not permitted: Hamod v New South Wales (2002) 188 ALR 659, 665; Cirillo v Consolidated Press Property Ltd (No 2) [2007] FCA 179. 12 The second question is whether a Bullock or Sanderson order should be made in respect of the costs awarded in favour of Smith. Those orders derive from Sanderson v Blyth Theatre Company [1903] 2 KB 533 and Bullock v London General Omnibus Company [1907] 1 KB 264. The basis for the court's exercise of its discretion to make such an order in favour of a plaintiff is that he should be indemnified for all expenditure reasonably and properly incurred by him in procuring judgment: Besterman v British Motor Cab Co Ltd [1914] 3 KB 181, 186-187; Johnson's Tyne Foundry Pty Ltd v Maffra Shire Council [1948] HCA 46 ; (1948) 77 CLR 544, 572-573. The classic case is where the plaintiff is for reason of lack of knowledge unable to make an informed judgment of the party liable to him. So, for example, if two defendants blame each other for the plaintiff's loss, it is reasonable for the plaintiff to join them both and the unsuccessful defendant will be required to bear the costs of the successful defendant. In Gould v Vaggelas [1985] HCA 75 ; (1984) 157 CLR 215, 230 Gibbs CJ said that the test was whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant. 13 In my view there is nothing in the conduct of the unsuccessful respondents that makes it fair to shift to them the costs that must be paid to Smith to them. 14 There will be orders substantially in the form of the minutes submitted by the parties, to which will be added the appropriate orders for interest and costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | solicitor and client costs whether warranted bullock order sanderson order when applicable interest on judgment rate to be applied when state penalty interest rate to be applied period of interest relevance of delay costs practice & procedure |
On 17 April 1998 the appellant applied for a Family (Residence) (Class AO), subclass 806, on the basis that she was a "special need relative" of her father, the nominator. 2 "Special need relative" was then defined in reg 1.03 of the Migration Regulations 1994 (Cth) (the "Regulations"). The criteria for the grant of the visa included a requirement that appellant satisfy the definition of 'special need relative' both at the time of the application and at the time of the decision: cll 806.213 and 806.221 of Sch 2 to the Regulations. She claimed that she assisted her father with food preparation, accompanying him to the doctor and hospital, washing and household chores and emotional support and encouragement. In support of her application, the appellant submitted reports dated 21 May 1998 and 3 August 2001 by Dr Foenander and a report by psychologist Mr Irvin De Jon dated 15 May 1998. 5 A delegate of the first respondent refused the application on 17 October 2001. The appellant sought review of that decision before the Migration Review Tribunal (the "MRT"). The appellant submitted further supporting material to the MRT, which also heard oral evidence. In a decision dated 3 September 2004, the MRT affirmed the delegate's decision. The MRT found that, at the time of application, the appellant was not a special need relative of her father, the nominator. 6 The MRT accepted that the nominator suffered from various medical conditions that gave rise to a long term need for assistance. However, the MRT determined that this assistance could reasonably be obtained from other sources. In particular, the MRT was "not satisfied that the assistance needed could not at the time of the application have reasonably have been obtained from one or more or from a combination of the four other children of the nominator in Australia or from welfare, hospital, nursing or community services in Australia". 7 The MRT made a variety of factual findings that, in its view, supported this conclusion. These included: (1) at the time of application, the nominator resided with the family of one of his other children (although the evidence was unclear as to which child this was); (2) two other children were also close at hand; (3) sixteen months before the time of application, the nominator's daughter, Yolando Casas, had sponsored the nominator as an Aged Parent and it was expected that she would accept the ongoing responsibilities of that sponsorship; (4) two of the nominator's other children were registered nurses; and (5) the nominator's doctor was providing much of the needed medical assistance. 8 The MRT also concluded that the appellant was not able, at the time of application, to provide a level of assistance that was both substantial and continuing. The MRT found that while the nominator demonstrated a clear understanding of his medication, the appellant did not. Furthermore, the MRT noted that, at the time of application, the appellant did not have a vehicle or a driver's license. The MRT also found that the appellant had the financial need to work, and had been in continuing employment since 1998. 9 Having found that the appellant was not a special need relative at the time of application, the MRT did not consider whether the appellant satisfied the requirements of the visa at the time of decision. 10 By an application dated 14 January 2003, the appellant filed an application in the Federal Magistrates Court, pursuant to s 39B of the Judiciary Act 1908 (Cth), for review of the MRT's decision. In a decision of 3 September 2004, a Federal Magistrate dismissed the application for review. This is an appeal from that judgment. First, she claimed that the learned Federal Magistrate erred in failing to hold that the decision of the MRT involved a jurisdictional error in that the MRT determined whether the appellant was a special need relative at the time of application by reference to events that occurred after that date. Secondly, the appellant claimed that the learned Federal Magistrate erred in failing to hold that the MRT made a jurisdictional error when it failed to consider subjective factors when it concluded that the assistance required by the nominator could reasonably be obtained from other sources. 12 With respect to the first ground of appeal, the appellant submitted that the MRT erred in law when it concluded that it was not satisfied that the appellant was able to provide a level of assistance that was both substantial and continuing. First, the MRT wrongly considered the appellant's subsequent employment history as evidence that the appellant had a financial need to work at the time of application. The appellant contended that the Regulations require that, when the MRT determines whether an applicant was eligible for the visa at the time of application, only facts at that point of time may be considered. The appellant suggested that, when it relied on her subsequent employment history, the MRT improperly conflated the criteria for cl 806.213 (required to be satisfied at the time of application) and cl 806.221 (required to be satisfied at the time of decision). Secondly, in the appellant's submission, the MRT erroneously treated the fact that the appellant was working from September 1998 as negating her ability to provide the requisite assistance to the nominator as at the date of application. Thirdly, according to the appellant, paragraph 33, in which these findings appeared, was wrongly concerned with circumstances as at the date of the decision, even though the MRT purported to be ruling on the situation at the date of application. 13 The appellant noted the Federal Magistrate's comment (at [16]) that it was not clear that any error would have affected the MRT's decision because the appellant was required to continue to satisfy the requirements of the visa at the time of decision. Referring to Xiang v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 64 (" Xiang "), the appellant submitted that his Honour was in error in this regard. 14 In support of her second ground of appeal, the appellant argued that the MRT wrongly failed to have regard to the subjective aspect of the relevant regulation. Counsel cited Biyiksiz v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCA 814 (" Biyiksiz ") and Xiang . In Biyiksiz , Gray J held (at [20]) that "the words 'cannot reasonably be obtained' must be construed by reference to the reasonableness from the point of view of the person requiring assistance, and not only by reference to the reasonable availability of the assistance from other sources. " The appellant submitted that the MRT and the learned Federal Magistrate erred by failing to consider whether other sources of assistance were reasonably available from the point of view of the nominator. 15 The first respondent submitted that, contrary to the appellant's submission, the appellant had to make out both grounds of appeal in order to have the MRT's decision set aside. Referring to Truong v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1035 , the first respondent submitted that it was legitimate for the MRT to take into account evidence of events subsequent to the time of application if that evidence is probative of the relevant facts at the earlier time. The first respondent argued that, even if such evidence were not relevant, the MRT's error would, at most, be an error of fact. The first respondent also submitted that it was open to the MRT to regard the appellant's subsequent employment as relevant to her ability to provide continuing as well as substantial assistance as at the date of application. Further, the first respondent contended that, when regard was had to the context of the contested findings, it was clear that the MRT was referring to the correct date, which was the date of application. 16 With respect to the second ground of appeal, the first respondent submitted that there is no indication that the MRT did not consider the "reasonable obtainability" of assistance by the nominator as opposed to the "reasonable availability" of such assistance. Further, the MRT's conclusion was plainly open to it on the factual findings that it had made. This is because the appellant must satisfy each requirement of the visa to be eligible: see, e.g, Zahid v Minister for Immigration & Multicultural & Indigenous Affairs [2002] FCA 670 at [29] per Sackville J. 18 First, I reject the appellant's submission that the MRT failed to have regard to the subjective element of the regulation. In particular, fairly read, the MRT's decision is consistent with the reasoning of Gray J in Biyiksiz and the Full Court's decision in Xiang . 19 In Biyiksiz , the nominator was an elderly woman of a Kurdish Alevi background. She spoke no English, speaking Kurdish and a rare dialect of Turkish. The visa applicant had raised the concern that, if her mother was placed in a nursing home, her mother would be unable to communicate with the staff or other residents. The MRT had found that, regardless of these potential difficulties, places were available in nursing home facilities: see Biyiksiz at [14]. 20 Gray J found (at [22]) that the MRT fell into error because it "considered the question whether assistance could reasonably be obtained from welfare, hospital, nursing or community services from the point of view of the availability of assistance from those services, and did not consider whether the assistance was reasonably obtainable by the applicant's mother from those services". His Honour noted (at [17]) that, in Australia health and welfare services are highly developed. As a result, if the mere availability of assistance from those services meant that assistance was reasonably obtainable, then "there would be very few, if any, [special need] visas granted". Accordingly, Gray J held that the MRT should consider not simply whether other sources of assistance were available, but whether it was reasonable for the nominator to obtain such assistance. 21 The facts of this case can be distinguished from those in Biyiksiz and there is nothing in Xiang that would suggest error here. In this case, the MRT focussed on the availability of assistance from other family members. Importantly, the MRT noted that, at the time of application, the nominator was living with one of her other children and other children lived nearby. The appellant did not hold a driver's licence and thus another child transported the nominator by car. Also, one of the nominator's other daughters had recently sponsored him for an aged parent visa. In these circumstances, it was plainly open to the MRT not to be satisfied that the requisite assistance could not reasonably be obtained from one or more of his other children in Australia or public services. 22 It would be wrong to find error simply because the MRT failed to note explicitly that it was not just considering whether other sources of assistance were available but was directing its attention to whether the nominator could reasonably obtain such assistance. A reviewing court should not read the MRT's decision overly finely with an eye attuned to the perception of error: see Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 271-272 and 291 per Kirby J. Taking the reasons as a whole, there are no grounds to conclude that the MRT failed to address the correct question when it considered whether other forms of assistance could be reasonably obtained by the nominator. In fact, it is clear that the MRT did address the correct question and made its finding consonant with it. 23 Further, I reject the appellant's submission that the MRT relevantly erred when it relied on her subsequent employment history as probative, as at the date of application, of a need to work and her ability to provide the requisite continuing (and substantial) assistance. There is no reason why subsequent events cannot shed light on the circumstances as they existed at an earlier time. For example, "medical reports, later in time to earlier medical reports concerning the same person, may serve the evidentiary function of establishing the pre-existence of illnesses, disabilities or other physical or metaphysical conditions, for which there may or may not have been symptoms already manifest at the time of earlier reports": Koulaxazov v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 75 at [38] per Conti J; also Truong at [40] per Weinberg J. Moreover, a logical error in reasoning does not amount to jurisdictional error: see, e.g., VWST v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 286 at [14] - [18] per Kiefel, Marshall and Downes JJ. I find that the MRT made no logical or legal error when it considered subsequent events as probative of earlier facts. 24 As I noted at the hearing, if the paragraph in which the relevant findings appear were read in isolation, then it might be understood as referring to the circumstances existing as at date of the decision. This would be an incorrect way to read the MRT"s reasons; and it is plain from the surrounding context that the MRT was addressing the situation as at the date of application. 25 For these reasons, the appellant has not made out either ground of appeal. I would dismiss the appeal with costs. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | special need relative reference to events after the date of application whether assistance reasonably available from the nominator's perspective migration |
These are the reasons for those orders. As the hearing of the case has commenced it is best that I deliver these reasons promptly, even if this means that they are somewhat abbreviated. They all came into existence for the dominant purpose of providing legal advice or in connection with current or anticipated legal proceedings. It was an unincorporated body not constituted by statute. It will provide a national service. He was an Inspector pursuant to s 84(2) of the Workplace Relations Act 1996 (Cth) (the Act). 7 In cross-examination Alfred accepted that his role, having received a complaint, was to investigate that complaint either by himself or with others to see if there was sufficient evidence and if it was in the public interest for the Taskforce to take further action. After an investigation, a brief of evidence was to be completed for submission to one of the Taskforce's internal lawyers. 8 On 24 October 2003, Alfred received information concerning the action of certain 'CFMEU organisers' in relation to a construction project at 26 Market Street Wollongong. That was regarded as a complaint and was investigated by Alfred in conjunction with one Julie Siciliano, also employed by the Department of Employment and Workplace Relations attached to the Building Industry Taskforce and also an Inspector under the Act . A number of persons were interviewed and other steps taken in the period leading up to 10 November 2003. Relevant records relating to those steps have been discovered. On or about 10 November 2003, I formed a belief that proceedings would probably be commenced against the CFMEU, Peter Primmer, Michael Lane and David Kelly for breaches of the [Workplace Relations Act 1996] . I came to this belief after having interviewed Mr Grujoski, Mr Matlioski, Mr Krkovski, Mr Silvestri, Mrs Silvestri and Mr Hill. Up to 10 November 2003, each witness statement and record of interview was obtained for the purpose of investigating the complaint following the telephone conversation with Mr Picciau referred to in paragraph 4 above. After that date, all witness statements and records of interview were obtained for the purpose of obtaining legal advice and in anticipation of the commencement of legal proceedings. On or around 10 February 2004, after Ms Siciliano and I had completed our interviews I prepared a brief containing the statements and records of interview referred to in paragraphs 6 to 16 above and those documents over which privilege is claimed by the Second Applicant, for the in house legal counsel at the Building Industry Taskforce, Bill Clarke. The purpose of the brief was to seek advice about the commencement of legal proceedings. Alfred said that, by 10 November 2003, he had not spoken to all the people that he felt he needed to and he would take the initiative himself to speak to those people without necessarily being asked to do so. He could not recall whether the internal lawyer asked him to take further statements or not. The matter was not referred to Minter Ellison, the external lawyers, until 16 July 2004. The decision to proceed was made by the second applicant on 9 May 2005. The proceeding was commenced on 1 June 2005. 10 There was no great disagreement between counsel as to the principles to be applied in this matter. One threshold matter needs to be considered, namely, the operation, if any, of O 33 r 11 of the Federal Court Rules . I was referred to the decision of Graham J in Seven Network Ltd v News Ltd [2005] FCA 864 at [57] ---[59] in which, in similar circumstances, it was held that O 33 r 11 would apply and doubt was cast upon what I had said in Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 210 ALR 593 at [10]. Leave to appeal against the decision of Graham J was granted and, although the appeal was dismissed, the Full Court made clear that O 33 r 11 did not operate at the point of pretrial production of documents, effectively overruling the decision of Graham J in that respect ( Seven Network Ltd v News Ltd [2005] FCAFC 125 ; (2005) 144 FCR 379). As this dispute is essentially about discovery and inspection it is clear, in my opinion, that the question of privilege is to be governed by the common law as defined in Esso Australia Resources Ltd v Commissioner of Taxation (Commonwealth) [1999] HCA 67 ; (1999) 201 CLR 49 rather than by the provisions of the Evidence Act 1995 (Cth). In this case, the investigation included all interviews that took place prior to submission of the 'brief' to Minter Ellison. It is likely that those interviews took place upon the initiative of Alfred himself. The intervention of the internal lawyer was not established. In my opinion, the investigation of a complaint in this manner is a purpose in itself. 12 There was also a question as to whether or not proceedings should be commenced. That decision involved the obtaining of legal advice and also consideration of the public interest. As an investigation progresses, it is natural that the investigator's views as to the likelihood of proceedings ensuing will develop. It may be accepted that from 10 November 2003 onwards, Alfred was of the view that proceedings were more likely than not. He was, of course, not the decision maker nor at that stage did he have the benefit of any legal advice. For the purposes of argument it may be accepted that litigation was in reasonable prospect by 10 November 2003. Even on that footing, it cannot be concluded that the interviews after 10 November 2003 took place for the dominant purpose of obtaining legal advice about, or assisting in the conduct of, any such litigation rather than completing the task of investigation which had been begun months earlier. Where there is more than one purpose for an action, it is not necessary that either should 'dominate'. Barwick CJ, whose view in Grant v Downs propounding the test of dominant purpose has now been adopted by the majority decision in Esso Australia Resources , distinguished "dominant" from "primary" and "substantial". Lord Edmund-Davies in Waugh, in adopting the test propounded by Barwick CJ, was of the view that the element of clear paramountcy should be the touchstone. That, as it seems to me, shows the meaning of "dominant". That is an objective question ( Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 at 548E). The onus is on the party claiming the privilege to make it out ( Mitsubishi at [11]). 14 The mere involvement of an internal lawyer in an investigation does not, of itself, establish that seeking legal advice is the dominant purpose of an investigation. Furthermore, in the present case, there has been no attempt to fully explain the precise position of the internal lawyer (cf Arrow at [14]). This is not a case in which it was inevitable that the material would be provided to an external lawyer for advice and was collected only for that purpose. Privilege has not been established for interviews up to preparation of the brief for the internal lawyer. 15 On the other hand, formal signed statements were obtained after the matter was referred to the internal lawyer for preparation of the external brief. It can be inferred that these statements were obtained in aid of the brief for external advice then in preparation. | legal professional privilege discovery governed by common law original statements, records of interview and investigators' notebooks material came into existence for purpose of an investigation and for preparation of brief for internal and later external lawyers where more than one purpose it is not necessary that either should dominate purpose to be determined objectively evidence |
2 On 23 October 2003, I made orders establishing an elaborate protocol for discovery of documents by the many parties to the proceedings. The orders provide for the exchange of electronic indexes and images of discovered documents. The orders clearly contemplate that the parties may 'redact' those portions of 'partially relevant' documents that are irrelevant to any issue in the proceedings. 3 In practice, the parties have provided electronic copies of documents which effectively black out or omit those portions considered to contain irrelevant material. I was informed from the bar table that Telstra has masked 697 documents as partially irrelevant, while the applicants have masked 1,879 documents for the same reason. 4 Mr Sheahan SC, on behalf of the applicants, recognises that masking for irrelevance is specifically contemplated by the discovery orders. He also recognises that, while an unqualified order for discovery may require a party to produce unmasked copies of all partially relevant documents unless the Court grants relief from the requirement, it was appropriate for Telstra in the present case to mask the truly irrelevant portions of discovered documents: cf Gray v Associated Book Publishers (Aust) Pty Ltd [2002] FCA 1045 , at [9], [14]-[15], per Branson J; Australian Competition and Consumer Commission v McMahon Services Pty Ltd [2004] FCA 353 , at [12]-[13], per Selway J; Rio Tinto Ltd v Commissioner of Taxation [2005] FCA 1335 , at [16] ff, per Sundberg J, and authorities cited there. 5 Mr Sheahan says, however, that Telstra has frequently masked not only irrelevant material, but material that is directly relevant to issues in the proceedings. He submits that the only way the applicants can be protected against the risk that they have been denied access to relevant material is by an order requiring Telstra to make available the entirety of all documents masked for relevance. He points out that the 'unmasking' should not be a complicated process, having regard to the fact that production of documents has been effected electronically. Mr Sheahan also points out that any issue of confidentiality can be addressed by limiting access to the unmasked documents, at least initially, to the legal representatives. 6 In support of the applicants' contentions, Mr Sheahan gives fifteen examples of documents which he says have been either inappropriately masked by Telstra or in respect of which there are grounds for suspicion that relevant material has been inappropriately masked. Several of these examples concern documents that have been masked as irrelevant, but the masked portions of which have subsequently been annexed to statements of witnesses called by Telstra. In several other instances, Telstra has provided unmasked copies of documents to the applicants following complaints by them. In the remaining cases, Mr Sheahan argues that the documents themselves provide on their face a basis for suspicion that the masked material might indeed be relevant to the issues in the proceedings, or that it might at least be helpful in establishing the context for relevant information disclosed by Telstra. 7 In assessing the significance of the applicants' complaints, it must be remembered that this is an exceedingly large and very complex case. Scores of thousands of documents have been discovered. The task of masking documents for relevance, as the orders to which I have referred contemplate, cannot be easy. Exercising a judgment as to whether or not material is relevant to the issues in the proceedings is not a purely mechanical matter. It is inevitable, with maximum goodwill and diligence, that errors will be made. Since I assume that the applicants would have brought to my attention virtually all the cases of inappropriate, or possibly inappropriate, masking of which they are aware, I would regard the fifteen examples they identify as demonstrating a relatively low error rate on the part of Telstra. Certainly I would not be prepared to conclude that there has been any deliberate attempt by Telstra to mask material that is known to be relevant. 8 In my view, the remedy sought by the applicants is disproportionate to any problem that they may have identified. It appears that any complaint made in the past about apparently inappropriate masking has been addressed by Telstra. If particular documents on their face give rise to a suspicion that segments may have been inappropriately masked, I would be prepared to entertain an application seeking an unmasked version of the document. Indeed, as I commented to Mr Sheahan in argument, if it seems that the masked portion of a document might be helpful in providing context for unmasked material, there may well be grounds for treating such an application sympathetically. But to require Telstra to unmask all material masked for relevance would undo the protocol that the parties have chosen to adopt and to which they have adhered throughout the proceedings, including the first seventy days of hearing. 9 I should add that the applicants have known of a number of the matters about which they complain for a considerable period of time. No application was made for access to the masked material prior to the commencement of the hearing or indeed before the witnesses called by Telstra had substantially completed their evidence. To require Telstra to unmask all documents masked for relevance creates a real danger of disruption to the trial, as the applicants consider the significance of the unmasked material and perhaps seek to put fresh material to witnesses who have already given evidence. (I do not imply by this concern that any such material would necessarily be relevant to the issues in the proceedings. If the applicants wish to apply to gain access to the masked portions of particular documents, I shall consider their application. | whether inconsistently masked documents should be unmasked practice and procedure |
That all parties to these proceedings have leave of the Court to make use of the documents filed, served and/or produced in these proceedings that are referred to in the schedule hereto for any purpose connected with proceedings intended to be commenced in this Honourable Court by the first respondent for the winding up of the first applicant pursuant to sections 459A and/or 461(1)(k) of the Corporations Act 2001 (Cth). That the parties are to the extent referred to in Order 1 released from any implied undertaking to the Court to only use such documents for the purposes of these proceedings. Costs. Further or other orders. The documents produced by the Applicants pursuant to Order 1 of the orders made by Justice Gyles on 21 February 2005. Affidavit of Anthony Mark Loughnan sworn 16 December 2004 and exhibit AML1. Affidavit of David John McFarlane sworn 15 December 2004 and exhibit DJM1. Affidavit of Amit Ramesh Sule sworn 15 December 2004 and exhibit ARS1. Affidavit of Graham Christopher Oxland Murray sworn 8 December 2004 and exhibit GCOM1. Statement of claim filed 11 February 2005. Notice of motion filed on 24 February 2005 by the first, second, third and fourth respondents seeking security for costs. Affidavit of Mark Stewart Tucker sworn 9 March 2005 and exhibit MST1. Letter dated 15 August 2005 from Dibbs Abbott Stillman to Norman Waterhouse. Applicants' Outline of Submissions regarding security for costs dated 16 August 2005. Transcript of proceedings before Justice Edmonds on 16 August 2005. Mr Loughnan deposed that he intended to make an application for the winding up of ThoughtWeb Systems on grounds of insolvency and on just and equitable grounds. A copy of a draft originating process that he intended to file in the proposed winding up proceedings was annexed to his affidavit. The ground of insolvency on which the winding up of the first applicant will be sought is based on financial records of the first applicant that have been produced in answer to various notices to produce that have been issued in these proceedings. The allegation of insolvency is also based on admissions of impecuniosity made by the first applicant in connection with the first, second, third and fourth respondents' motion for security for costs filed on 24 February 2005 and heard before Justice Edmonds on 16 August 2005 and 22 September 2005. The just and equitable grounds on which winding up of the first applicant will be sought include the omission from the financial records and accounts of the first applicant of debts owed to me as a former employee of the first applicant. I am owed approximately $131,181.83 in respect of unpaid salary, bonus, annual leave, long service leave, superannuation and employment expenses. The component represented by salary, superannuation and employment expenses (being $99,687.35) does not appear to be recorded in the accounts of the first applicant produced to the court. I am informed by the second respondent, and believe, that he is a former employee of the first applicant and is owed approximately $57,821.30 by the first applicant in respect of unpaid salary, bonus, leave entitlements and superannuation. A component representing unpaid salary and superannuation does not appear to be recorded in the accounts of the first applicant produced to the court. I am informed by the third respondent, and believe, that he is a former employee of the first applicant and is owed approximately $65,390.34 by the first applicant in respect of unpaid salary, bonus, leave entitlements and superannuation. I am informed by Mr Mark Volpato, and believe, that he is also a former employee of the first applicant and is owed by the first applicant the sum of $111,618.00 in respect of unpaid annual leave and long service leave. I am informed by Mr Christopher Pope, and believe, that he is also a former employee of the first applicant and is owed the sum of $7,198.00 by the first applicant in respect of unpaid annual leave. It was accepted by counsel for Mr Loughnan that the implied undertaking --- not to use any document produced for any purpose other than in relation to the litigation in which it is produced --- prevented the use of these documents by Mr Loughnan in winding up proceedings against ThoughtWeb Systems without the leave of the Court. Counsel for Mr Loughnan suggested that it was not necessary to obtain the Court's leave to use the affidavit in winding up proceedings against ThoughtWeb Systems because Mr Loughnan could always re-swear that affidavit from his own knowledge. He was less certain about the documents in AML1 and invited counsel for ThoughtWeb Systems to indicate which documents, if any, in AML1 are subject to the implied undertaking. Counsel for ThoughtWeb Systems was initially disinclined to participate in that task but on the second day of the hearing he said there was nothing in the documents comprising AML1 or DJM1 and ARS1 (as to which see (3) below) which would suggest they came from his side of the bar table, and on that basis he could not say that the use of those documents would infringe any implied undertaking. As to the documents comprising DJM1 and ARS1, the concession of counsel for ThoughtWeb Systems on the second day (see (2) above) seems to accept that none of these documents is subject to any implied undertaking proscribing their use for unrelated purposes. The pleadings it makes have been opened and it seems to be common ground that there is no implied undertaking attached to this document. Counsel for Mr Loughnan conceded that this affidavit had not been read and that neither it nor the report which is MST1 could be used by Mr Loughnan in proceedings to wind up ThoughtWeb Systems. Counsel for Mr Loughnan indicated that he did not strongly press (whatever that means) the Court for leave to have recourse to "IAM14" and that he did not press for leave of the Court to have recourse to "IAM15". He conceded it exhibited confidential documents namely, GCOM5, which were referred to in pars 2 to 8 and indicated that use of such documents was, to that extent, not sought. He assumed the affidavit had been read on the occasion of an ex parte hearing on 14 October 2005 when I made certain restraining orders. Any right of access to that affidavit and to the materials, [in] particular GCOM5, would be upon the basis that that order restricting access and disclosure is not in any way varied nor the undertakings released by us seeking to use this affidavit. To that extent, your Honour, I would be content to this affidavit only being utilised to the extent that it does not rely upon paragraphs 4 to 8 inclusive. That may be the easiest way to deal with our use. I probably talk too much. Paragraphs 4 to 8 detail the nature of certain matters that are set out --- that gave rise to issues of confidentiality. The affidavit has been read in the normal course. We would say that we can use it in other proceedings, except that in respect of GCOM5, there is a confidentiality order and undertakings have been filed with the court, signed by myself and the legal representatives, to the extent that we wish to use this affidavit, I would be content, as would be my clients, or my client, Mr Loughnan, on this application. And he is the only person who is actually seeking this leave, I should say, your Honour. ... If the affidavit is used, it not be sought to be used in anyway to include anything in paragraphs 4 to 8 inclusive. To that extent subject to leave of the court to the documents produced they [sic] are intended to be also the subject of the Notice of Motion filed on 28 September 2005. Whatever be the reason, as the call was withdrawn, nothing was produced and no documents are to be the subject of the notice of motion filed on 18 September 2005 that are not set out in the schedule to that notice. In the circumstances, for the purposes of the motion, I do not propose to further consider Mr Murray's affidavit of 11 October 2005 nor, subject to what is said in [29] and [30] infra, the annexures and exhibits thereto. The same principles apply to documents produced under compulsion where, in the New South Wales Supreme Court at least, the relevant form under which the documents are produced contains an express undertaking in those terms. Save as respects the gravity of the contempt no distinction is to be drawn between those documents which have and those which have not been admitted in evidence; to make use for some collateral or ulterior purpose of the special advantage obtained by having possession of copies of any of an adverse party's documents obtained upon discovery is, in my view, a contempt of court. They are private. They need not necessarily contain confidential or commercially sensitive material to have that quality. It exists because of the nature of the documents, and the circumstances in which they came to be released to the other party, and not necessarily because of their contents. I think that it is more a matter of justice and fairness, to ensure that his privacy and confidentiality are not invaded more than is absolutely necessary for the purposes of justice. As Lee J points out in Bailey v Australian Broadcasting Corp [1995] 1 Qd R 476 at 484 while the basis of a party's obligation to limit the use of discovered documents is expressed in terms of an implied undertaking to the court, its underlying rationale can be traced to broader notions of public policy. In Riddick v Thames Board Mills Ltd [1977] QB 881 at 895; [1977] 3 All ER 677 at 687 Lord Denning MR noted that the reason for compelling discovery lies in the public interest in discovering the truth so that justice may be done between the parties. That public interest is to be put into the scales against the public interest in preserving privacy and protecting confidential information. The balance comes down in the ordinary way in favour of the public interest of discovering the truth that is in making full disclosure. The implied undertaking extends beyond documents produced on discovery to other court documents: see eg Ainsworth v Hanrahan (1991) 25 NSWLR 155 at 166-8, 169-70. The undertaking has been held to apply to witness statements and affidavits: Central Queensland Cement Pty Ltd v Hardy [1989] 2 Qd R 509] . In this context he cited with approval the observations of Hobhouse J in Prudential Assurance Co Limited v Fountain Page Limited [1991] 3 All ER 878 at 886. 18 It is now well established that the release or modification of the implied undertaking will not be lightly given. In the Federal Court, special circumstances have been held to exist where "there is a special feature of the case which affords a reason for modifying or releasing the undertaking and [the feature] is not usually present. " It is unnecessary to consider whether the dispensing power should be so broadly defined. It is relevant to note only that the obligation enforceable as an undertaking to the Court in the case of a curial order is not unqualified. It does, I think, emerge that some overriding public interest might be a good example, but not the mere furtherance of some private interest even where that private interest arises directly out of or is brought to light as a result of the discovery made. "Special" is one of those words which derive almost all their meaning from the context ... if all that is required is that, among the great number of cases in the court in which documents have been discovered, this one must evince some special feature which affords a reason for releasing or modifying the undertaking, there will be no difficulty. Circumstances in which there is a legitimate reason why documents discovered in one proceeding should be made available in another will, viewed in this way, be rare. In the ordinary course, the ordinary rule should apply, there being no special circumstance to suggest otherwise. While I would not, with great respect, have thought that circumstances of that kind would be quite so hard to visualise as Hobhouse J expressed them to be in Prudential Assurance , the fact remains that it will ordinarily be no easy matter to secure the court's indulgence. The matter then becomes one of the proper exercise of the court's discretion, many factors being relevant. It is neither possible nor desirable to propound an exhaustive list of those factors. But plainly they include the nature of the document, the circumstances under which it came into existence, the attitude of the author of the document and any prejudice the author may sustain, whether the document pre-existed litigation or was created for that purpose and therefore expected to enter the public domain, the nature of the information in the document (in particular whether it contains personal data or commercially sensitive information), the circumstances in which the document came into the hands of the applicant for leave and, perhaps most important of all, the likely contribution of the document to achieving justice in the second proceeding. Thus, the modification or release should be no greater than is necessary or appropriate to meet the interests of the administration of justice or the public interest. Further, in determining whether to exercise its discretion to grant the modification or release sought, it will usually be necessary for the Court to identify with precision the documents to be released and the purpose of that release. 29 The submission which lies at the heart of Mr Loughnan's case is that he is an undisputed creditor of ThoughtWeb Systems for $3,200. That his standing as an undisputed actual creditor, not just a contingent or prospective creditor, for that amount is not in issue; so much flows, it is submitted, from the acknowledgement of such a debt in the financial statements of ThoughtWeb Systems as at 28 February 2005 which was voluntarily put before the Court through Mr Murray on behalf of ThoughtWeb Systems. According to this submission, the only reason leave for the use of documents (to which an implied undertaking against such use may be attached) is sought, is not to prove Mr Loughnan's standing as a creditor, but to prove the view he has formed, namely, that ThoughtWeb Systems is insolvent. 30 In my view, this central submission is flawed. Whatever the legal consequences that attach to disclosure of a liability in a company's financial accounts, and arguably it is no more than an acknowledgement that such a claim is made by the putative creditor, it says absolutely nothing about whether or not the claim is disputed. Every day companies are issued with income tax assessments with the amount of tax assessed being disclosed, correctly in my view, as a liability in the financial accounts from the time of assessment. But this says nothing about whether or not the liability is disputed. 32 Thus it is submitted by counsel for ThoughtWeb Systems that Mr Loughnan has a threshold problem --- that even if he were granted leave to use the documents he seeks to rely on to prove the insolvency of ThoughtWeb Systems, the Court would be reluctant to hear the matter where there is a disputed debt involved. Section 459P of the Corporations Law ... provides that amongst those with standing to apply to have a company wound up are its creditors, even if they be prospective or contingent creditors. Indeed all the predecessors of s 459P , here and in the United Kingdom, similarly so provided. This followed the recommendations to the Board of Trade of the United Kingdom Amendment Committee of 1908: see at par below. By virtue of s 459P , such an applicant is required to establish a debt, in order to have standing to bring the winding up proceedings. However, where there is a bona fide dispute of substance as to the existence of the debt, it cannot be said that the claimant is a creditor who has the right to bring proceedings. I would prefer to rest the jurisdiction directly on the comparatively simple propositions that a creditor's petition can only be presented by a creditor, that the winding-up jurisdiction is not for the purpose of deciding a disputed debt (that is, disputed on substantial and not insubstantial grounds) since, until a creditor is established as a creditor he is not entitled to present the petition and has no locus standi in the Companies Court; and that, therefore, to invoke the winding-up jurisdiction when the debt is disputed (that is, on substantial grounds) or after it has become clear that it is so disputed is an abuse of process of the court. In CVC Investments Pty Ltd v P & T Aviation Pty Ltd (1989) 18 NSWLR 295, however, Cohen J came to a different conclusion. He did so in a case of some complexity. It appears that the winding up applications were made on the basis of presumed insolvency. However, the question of actual insolvency was also considered (at 299 and 303), though without concluding there was a situation of actual insolvency. Thus his statements of principle were not limited to a context where the only basis of the plaintiff's application was presumed insolvency, though actual insolvency was not found. The fact that there is a ground for winding up in existence does not give that claimant any greater standing. If the company is insolvent then it is a matter for a creditor, established as such, or one of the other persons designated under s 383 of the Code, to bring the matter to the court. It is necessary for the court to make a careful scrutiny of the evidence in order to establish the genuineness of the alleged dispute and the substance of the defence or cross-claim. If there is a likelihood that the debt may be owing even in part then the question of the solvency of the company may become relevant in the consideration of the court's discretion. ... I prefer the view of Cohen J in CVC Investments. I therefore conclude that an applicant to wind up a company claiming standing as a creditor but who fails to establish that standing, thereby commits an abuse of process of the court, which is not avoided by demonstrating that the company is actually insolvent. The court only has to consider the question of solvency after the initial threshold of standing has been passed. Before that, it is irrelevant. As illustrated here, the mere application to wind up can have devastating commercial consequences, reinforcing the need for not making an exception for general insolvency without warrant from the words of the statute. There is the ever-present danger of an unqualified claimant using the winding up procedure as a threat to force concessions from the company concerning a claimed debt. Such a result is quite contrary to the fundamental basis of bankruptcy legislation. This basis denies preference to one creditor over another, a fortiori where the first may not have that status of creditor in reality. The public interest in bringing insolvent companies to winding up can be pursued by others, in particular the Australian Securities Commission: see s 459P(l)(f) (and note also s 459P(1)(g)). The legislature's proper concern with premature triggering is reinforced by the fact that where a contingent or prospective creditor applies, as compared to an ordinary creditor, the application requires leave of the court and that in turn requires a prima facie case of insolvency (s 459P(2) and (3)). 34 If that be right then his case that he needs the use of the documents for which leave is sought to prove that ThoughtWeb Systems is insolvent has a hollow ring about it. Even if that be wrong, I am not persuaded that the documents, in respect of which leave is sought to use in winding up proceedings against ThoughtWeb Systems, are likely to contribute to achieve justice in such proceedings, '... perhaps [the] most important of all [of the special circumstances to be considered]': Wilcox J in Springfield Nominees , supra, at 225. 35 There are no other special circumstances, or at least none which have been identified, which would warrant a grant of leave. The documents "IAM4" to "IAM7" were produced in response to the compulsory processes of the Court; the maintenance of any implied undertaking is all the more stronger in such circumstances: Moage , supra, at 176 per Gzell J. The alternative remedies available to Mr Loughnan to recover his debt other than by recourse to a winding up of ThoughtWeb Systems cannot be ignored. 37 While it forms no part of the reasons underlying my conclusion on the issues raised by the motion, at the time of the hearing I formed the preliminary view that the motion was brought as a strategy which, if it succeeded by having ThoughtWeb Systems wound-up, would enable Mr Loughnan to exert greater influence over the ultimate outcome of the mainstream proceedings by way of settlement, compromise or otherwise than he could possibly exert by recourse to the means otherwise available to him. Because I initially thought this might impact on my conclusion, I decided to put consideration of the motion to one side and revisit it at a later date. I have to say that this has not helped; I have not changed the preliminary view I formed at the time of the hearing although, as my conclusion in no way depends on this preliminary view, the delay it has occasioned is to be regretted. | implied undertaking in relation to documents produced in proceedings where respondents sought to use documents against applicant company in proposed winding up application whether release from undertaking appropriate whether special circumstances whether winding up application an abuse of process. contempt of court |
On 15 June last I made orders extending the convening period for the meeting of creditors required to be held under s 439A of the Act to midnight on 23 July 2007. I reserved consideration of any application to further extend that period indicating that, if a case were made out, I would exercise the power provided for by s 447A to achieve that end. Reasons for that decision were given together with reasons in relation to an extension of the convening period in relation to the related Estate Property group of companies (the Group) ( Hayes, in the matter of Estate Property Group Ltd (Administrators Appointed) [2007] FCA 935). Those various judgments, together with the judgment relating to the Estate Property group of companies to be handed down contemporaneously with these reasons ( Hayes, in the matter of Estate Property Group Limited (Administrators Appointed) [2007] FCA 1329) , explain the background to this application, which need not be repeated here. Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) (the Act ), Part 5.3A of the Act is to operate in respect of Australian Capital Reserve Limited (administrators appointed) as if the convening period for the meeting of creditors of Australian Capital Reserve Limited (administrators appointed) required to be held under section 439A of the Act is extended to midnight on 31 August 2007. As soon as practicable, the Applicants post a copy of these orders on the pwcrecovery webpage, in respect of Australian Capital Reserve Limited (administrators appointed) and publish in The Australian newspaper notification of the substance of these orders. The Applicants' costs of the proceedings be paid as a cost of the administration of Australian Capital Reserve Limited (administrators appointed). Costs of Permanent Nominees (Aust) Limited be reserved. Adjourn the proceedings for mention on 13 August 2007 at 9.30 am. The Applicants have liberty to apply on 24 hours notice. Direct that these orders be passed and entered forthwith. These are those reasons. 3 The fate of this company, Australian Capital Reserve Limited (Administrators Appointed) (ACR) depends entirely upon the recoverability of loans made by it to other companies in the Group for the purposes of real estate development. It virtually follows that the convening period for the second meeting of the creditors of ACR should be extended in line with that of the Group as it is only when there is a report as to those companies that the administrators of ACR (the Administrators) can prepare a meaningful report. However, there are two special features pertaining to ACR which require consideration. 4 The first is that ACR is a secured creditor in relation to the loans to other companies in the Group, albeit usually ranking after other mortgagees. As such, the Administrators have been involved, together with other secured lenders, in the investigations and deliberations by the administrators of the Group of companies and have taken their own expert real estate advice. They, thus, have sources of information not available to ordinary creditors of the Group. Nonetheless, there is a good case for coordinating the administrations as all companies are members of the same corporate group with the same information relevant to all. 5 The second feature is that the only creditor of ACR in the strict sense in respect of public investors is Permanent Nominees (Aust) Limited (Permanent) which is trustee for the holders of notes (noteholders) issued to the public by ACR pursuant to an unsecured note trust deed dated 10 March 2000 and a deed of amendment of unsecured notes trust deed dated 28 March 2001. The consent of Permanent to the successive extensions of the convening period, as overwhelmingly the largest creditor of ACR, was put forward as an important factor in favour of approval of the extension sought. The proof of debt lodged by Permanent on behalf of noteholders was in an amount of $331,010,805.70, and that on its own behalf was in the amount of $100,000.00. The number of noteholders is in the vicinity of 7,000. 6 When the matter first came on, the gist of the evidence on behalf of Permanent was that a relevant officer had reviewed the evidence to be relied upon by the Administrators in seeking a further extension and supported that extension. I indicated that a fuller account of what was being done by Permanent, particularly in relation to communications with noteholders, should be provided and that it would be appropriate for Permanent to be represented to explain the position. That led to the filing of further evidence and the appearance of senior counsel for Permanent thereafter. 7 The requirement for a trustee in situations like the present comes from Pt 2L.1 of Ch 2L of the Act. In short, a body offering debentures in the stated circumstances must enter into a trust deed that complies with s 283AB and appoint a trustee that complies with s 283AC (s 283AA ). 10 The duties of a borrower company pursuant to Pt 2L.2 include making its financial and other records available for inspection by the trustee or persons appointed by the trustee (s 283BB(c)) , a duty to notify the Australian Securities and Investments Commission (ASIC) of the name of the trustee within 14 days (s 283BC) , a duty to replace the trustee in the event of a vacancy (s 283BD) , a duty to inform the trustee about charges (s 283BE) and the duty to give the trustee and ASIC quarterly reports (s 283BF). 11 The trustee's duties are set out in Pt 2L.4 and, in particular, s 283DA. 13 Part 2L.8 deals with the powers of the Court --- s 283HA provides a general power to give directions and determine questions and s 283HB sets out specific Court powers. 14 Clause 4 of the trust deed between Permanent and ACR contains an acknowledgement by ACR that it is indebted to Permanent for the amount owing in relation to each note. The power to issue notes is limited to a total of $25 million without the written consent of Permanent and there are obligations as to backing of notes by the holding of net tangible assets. Clause 9 gives power to Permanent to institute proceedings to enforce the payment of the amount owing and provides that "a noteholder is not competent to, and must not institute the proceedings for, the enforcement of this Deed". All of the reporting by ACR is to Permanent and all inspection of records of ACR is by Permanent. There is no requirement for information to be provided by Permanent to noteholders and no provision for meetings of noteholders, except on application by persons holding not less than 10 per cent in value of all notes then on issue. There are a number of provisions which purport to limit the duties of the Trustee or limit or exclude liability on the part of the Trustee. The remuneration of the Trustee was $5,000 upon acceptance and an annual fee in relation to principal amounts of more than $50 million of $20,000 plus $125 per additional $1 million plus payment of various expenses. 15 This analysis supports the position taken by the Administrators that, so far as ACR is concerned, the only creditor is Permanent, a position supported by Permanent. That is of enormous practical convenience to ACR and its Administrators but leaves individual noteholders in the hands of Permanent with no provision for, or requirement of, communication by it to noteholders. Permanent has statutory, contractual and fiduciary duties and is subject to direction in some respects by meetings of noteholders and by the Court. Enforcement of those duties by individual noteholders is, of course, another matter. 16 There has been no communication by Permanent to noteholders since the administration commenced. A meeting of creditors was held on the afternoon of 4 June 2007 simultaneously in each of Sydney, Melbourne and Brisbane, having been convened by the administrators originally appointed to ACR but ultimately chaired by Mr Greg Hall, one of the then newly appointed Administrators. A number of noteholders attended. It is said that that meeting was called in consultation with Permanent. At the meeting the Chairman said that the Administrators would report to noteholders in writing within a month, that they would maintain a website on which information relevant to noteholders would be available and that the Administrators and their staff would be available to deal with noteholder queries. 17 The Administrators have maintained a website since about 4 June 2007 with information which would be of interest to noteholders. It includes a noteholder change of address procedure and an email address for queries. Although it is said that Permanent could utilise the website, it has not done so. On or about 3 July 2007 a document entitled "ACR Noteholder Update --- 2 July 2007" with a document entitled "Frequently Asked Questions --- Dated: 2/7/2007" and a personalised covering letter to each noteholder seeking confirmation as to the details of their investment as compared with the records of ACR was sent by the Administrators to noteholders. The draft was provided to Permanent prior to them being sent and copies have been posted on the website. The Administrators maintain an "infoline" telephone number which noteholders can ring and speak to a member of staff. 18 Permanent has liaised closely with the Administrators and it has been satisfied at a responsible level that the further extension of the convening period is appropriate. It has taken the view that it is not necessary that there be any endeavour to seek directions as to the decision to be made, either from noteholders or otherwise. It takes the view that the supply of information to the noteholders from the Administrators is adequate and that the costs of independent notification by it are not justified. It is understood by Permanent that voting as to the fate of ACR at the second meeting will be a different matter. 19 I was persuaded that an extension could properly be granted without further communication to noteholders principally because Permanent took the initial step of facilitating the appointment of separate administrators for ACR, in place of the administrators who were appointed to all of the companies in the Group, because of the special position that ACR played in the structure and the significance of the interests of the members of the public who, as noteholders, had provided the finance for the operations of the Group. Those Administrators are able to concentrate on the interests of ACR alone. Thus, in a practical sense, the Administrators and Permanent have similar interests at this stage in maximising the position of ACR and so the position of noteholders who comprise the overwhelming body of creditors. 20 Permanent's costs of appearing were reserved. They were incurred as the result of a suggestion by the Court and can be seen as part and parcel of the application by the Administrator. On the other hand, Permanent has statutory (and other) duties in relation to a vast number of investors without any other voice that made an appearance appropriate. On that basis, the costs can be seen to be incurred as part of Permanent's duty as a trustee and best dealt with between trustee and beneficiaries. However, as Permanent supported the Administrator's position, and was effectively brought to Court, the costs of doing so should be regarded as costs of the administration. That should not include costs connected with the affidavits that were filed. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles. | second extension of convening period for second meeting of creditors of company in administration interrelation with administration of other companies in corporate group role of trustee for unsecured noteholders corporations |
The proceedings concern an agreement between the applicant (Horizon) and the first respondent (GlobeCast) for the transmission, via satellite, of television content provided by the applicant. The dispute between the parties involves the interpretation and scope of the transmission agreement, the quality of the transmission service and the payment of invoices issued by GlobeCast to Horizon. 2 On 20 May 2006, GlobeCast purported to terminate the agreement, allegedly because Horizon failed to pay certain disputed invoices. On 23 May 2006 Horizon, treating the alleged termination by GlobeCast as a repudiation, purported to terminate the agreement. GlobeCast continued to broadcast the television content for a short time after this however, on 2 June 2006 Horizon obtained an ex parte injunction restraining GlobeCast from any further transmission of the material. Horizon alleged that GlobeCast had breached its copyright and had made misrepresentations to its customers. The injunction has since been discharged by consent, on terms that GlobeCast agrees not to transmit the relevant channels. 3 This Court has jurisdiction to make an order for security for costs both under the Corporations Act 2001 (Cth) s 1335(1) and the Federal Court of Australia Act 1976 (Cth) s 56 ; see also the Federal Court Rules O 28 r 3 and r 5. The Court may stay or dismiss the proceedings if the security is not provided. 4 The decision to order security for costs is discretionary and it is well accepted that the Court's discretion in this matter is unfettered. There are however, general principles that guide the Court in the exercise of its discretion. Whether the application for security has been brought promptly. The strength and bona fides of the applicant's case. Whether the applicant's impecuniosity was caused by the respondent's conduct the subject of the claim. Whether the respondent's application for security is oppressive in the sense that it is being used merely to deny an impecunious applicant a right to litigate. Whether there are any persons standing behind the applicant who are likely to benefit from the litigation and who are willing to provide the necessary security. Whether the persons standing behind the applicant have offered any personal undertaking to be liable for the costs and, if so, the form of any such undertaking. Whether the applicant is in substance a plaintiff or the proceedings are defensive in the sense of directly resisting proceedings already brought or seeking to halt the respondent's self-help procedures. The respondents accept that impecuniosity, of itself, is not a sufficient reason to order security ( Cowell v Taylor (1885) 31 Ch D 34 at 38) however the inability of an applicant to meet the costs of a successful respondent not only "opens the jurisdiction for the giving of security" but is also a significant consideration in the exercise of the Court's discretion: Pearson v Naydler [1977] 1 WLR 899 at 906; Rosenfield Nominees v Bain & Co (1988) 14 ACLR 467 at 470. 6 The respondents submit, however, that there is an additional reason why Horizon's impecuniosity should weigh heavily in the Court's consideration of their application. They allege that it is the result of calculated and deliberate conduct directed towards frustrating the processes of the Court. The respondents submit that statements made by officers of Horizon, indicating an intention to strip the company of its assets so that there would be no assets available to meet claims made by the respondents, invite this conclusion. 7 In support of their application the respondents relied on affidavits made by employees of GlobeCast, namely: Nitish Gawde, Direct to Home Broadcast Manager and Mike Lattin Chief Executive Officer. Both gentlemen gave evidence of comments made by Mr Seymon Pinchuk, a director of Horizon at meetings on 27 April and 19 May 2006, in the course of discussions about the disputed invoices. In response to demands made by GlobeCast for Horizon to pay the amounts in the disputed invoices, Mr Pinchuk is alleged to have threatened to "wind up" or "bankrupt" or "close down" the company so that no one would be paid. They also claimed that Mr Pinchuk referred to Horizon as "just a $2 company" or said that he would "make it" a $2 company. 8 In his evidence Mr Pinchuk denied that such comments were ever made. He said that at the meeting on 19 May he told GlobeCast that he was getting old and "having a lot of stress" and that if GlobeCast closed down the television channels it would "ruin the business" but that he did not threaten to close down the business. Mr Pinchuk also denied ever using or even understanding the phrase, "$2 company". Despite these denials I was not impressed by Mr Pinchuk's evidence. I accept that there were some language difficulties; Mr Pinchuk is a Russian speaker and his English is not perfect. Nevertheless, I had the distinct impression that his English fluency was greater than some of his responses would indicate. It was noticeable that he had less difficulty with the questions on re-examination than he did with those on cross-examination. Moreover many of his answers on cross-examination were evasive and unconvincing including his failure to remember significant aspects of an important meeting and his professed ignorance about legal and financial aspects of the business. 9 Neither Mr Gawde nor Mr Lattin were shaken on cross-examination. They consistently maintained that Mr Pinchuk had made the statements referred to in [7] above. While I accept that Mr Pinchuk made these statements it is not entirely clear however whether, in making these statements, Mr Pinchuk was threatening to strip the company of its assets or merely referring to the fact that the company had no assets and thus would be unable to meet any costs order. 10 Of more concern was the evidence concerning the transfer of Horizon's assets to another company, or perhaps a trust, in which Mr Pinchuk's son apparently has some interest. On this issue Mr Pinchuk was less than forthcoming both as to the nature of the arrangement and the payment to Horizon. He pleaded ignorance as to the details, claiming that this was all left to the lawyers. On the basis of the evidence, I am satisfied that there is a reasonable chance that any assets that might have been available to meet a costs order are likely to be out of the reach of the respondents, should an order be made in their favour. For this reason, in the circumstances I am satisfied that the respondents should have some security for their costs in this proceeding. 11 For completeness, I note that while there are many other factors that may be relevant to the exercise of the Court's discretion, in my view none of these factors is relevant to this application. Those factors include the strength or weakness of the applicant's case which in certain circumstances, may be important. In this case however, it is a neutral factor; the respondents have conceded, for the purpose of this application only, that the applicant has made a bona fide claim with a reasonable prospect of success. Other factors that may be relevant include whether the respondent's conduct may have been the cause of the applicant's distressed financial position, whether the application is oppressive or whether the applicant is, in substance if not form, in the position of a defendant. Horizon sought to rely principally on the latter factor. I do not accept that Horizon, who initiated the proceeding and seeks, amongst other things, damages, is in this proceeding in substance in the position of a defendant. 12 In their notice of motion the respondents seek security for their costs in the amount of $83,720. In support of their claim for this amount they rely on the affidavit of Mr Dean Rutherford, a solicitor employed by the solicitors for the respondents. According to Mr Rutherford the respondents' costs in this matter to date are $63,390.14. He estimated the future costs of defending Horizon's claims to be between $100,600 and $138,600. This range was the aggregate of estimates of the costs of elements in the future conduct of the matter including discovery, drafting pleadings, preparing affidavit evidence of 5-10 witnesses, preparing the matter for hearing as well as the cost of the hearing itself. The amount of $83,720 was arrived at by taking $119,600 as the median point in the range of costs estimated and assuming that, if successful, the respondents could expect to recover 70% of that amount --- that is $83,720. 13 Mr Rutherford did not give any details of his experience in dealing with litigation of this kind or of his claims to expertise in estimating costs of litigation. Nevertheless, on their face, the estimates he has made seem reasonable and his evidence was uncontested and therefore I am minded to order security to be provided in the amount requested by payment into Court in a form satisfactory to the Registrar. At the hearing of the present application however, both counsel indicated that should the Court be prepared to order security they would appreciate some time to reach agreement on the form of the security. I shall therefore allow a short time for the parties to attempt to reach agreement. I propose to order that the respondents by 17 November 2006 submit short minutes of order providing for security in a form consistent with the above or in a form otherwise agreed between the parties. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Stone. | security for costs discretion to order security for costs transfer of applicant's assets impecuniosity security for costs ordered procedure |
On 13 January 2006 she was injured whilst performing her delivery duties on a motorcycle. A claim was made and ultimately resolved by a decision of the Administrative Appeals Tribunal on 21 April 2009: Hughes v Australian Postal Corporation [2009] AATA 260. The Tribunal concluded that Ms Hughes continued to suffer from the effects of an injury to her lower back and left hip joint. The Tribunal further concluded that Ms Hughes was not entitled to compensation for permanent impairment pursuant to sections 24 and 27 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) ("the 1988 Act"). The conclusion of the Tribunal as to permanent impairment is not in issue in this appeal. In the hearing before the Tribunal, Ms Hughes gave evidence. Her claim was sought to be supported by medical evidence from Dr Fearnside (a neurosurgeon) and Dr Ginnane (Ms Hughes' general practitioner). The Corporation relied upon the medical evidence of Dr Maxwell (an orthopaedic and spinal surgeon), Dr Brennan (a neurosurgeon), Dr Dan (a neurosurgeon), Dr Holman (an orthopaedic surgeon), Dr Horsley (an orthopaedic surgeon) and Dr McGee-Collett (a neurosurgeon). The Corporation now appeals to this Court from that part of the Tribunal's decision whereby it concluded that Ms Hughes continues to suffer from the effects of the injury to her lower back and left hip joint and that the Corporation continues to be liable. Reliance is placed by the Corporation upon s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the 1975 Act") and s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("the 1977 Act"). The jurisdiction being exercised is nevertheless constrained by the requirement that the appeal be " on a question of law ". (b) Whether the Tribunal made findings that were not supported by any evidence. (c) Whether the Tribunal failed to consider a submission worthy of serious consideration. In summary form, the Corporation contended that the account of the injury provided by Ms Hughes could not have caused the particular injury as found by the Tribunal. The jurisdiction of this Court to entertain the present " appeal " was not put in question. But there was no dispute on the hearing of the present appeal between the Corporation and Ms Hughes as to the object or purpose sought to be achieved by provisions such as s 43(2B) or the manner in which s 43 and other like provisions are to be applied to any particular decision of the Tribunal. The dispute was whether the Tribunal in the present proceeding had done that which it was required to do by s 43(2B). There was thus no dispute that " sufficient reasons " must be provided " to make the system of appeals effective and to fulfil its assumptions ": Roncevich v Repatriation Commission [2005] HCA 40 at [62] , [2005] HCA 40 ; 222 CLR 115 at 135 per Kirby J. It must be possible " to discern from the reasons given the actual reasoning process adopted ": Comcare Australia v Mathieson [2004] FCA 212 at [61] , 79 ALD 518 at 531 per Weinberg J. "... [T]he tribunal will have discharged its duty under s 43 if its reasons disclose its findings of fact, the evidence on which they were based and the logical process by which it moved from those findings to the result in the case ": Secretary, Department of Employment and Workplace Relations v Homewood [2006] FCA 779 at [40] , 91 ALD 103 at 111 per French J. See also: Comcare v Davies [2008] FCA 393 at [31] to [33], 173 IR 294 at 302 to 303. There was also no dispute that the requirement to provide " findings on material questions of fact " does not impose a requirement to make findings on all questions of fact; it is a requirement to set out those findings of fact which a tribunal does make and a requirement to refer to the evidence on which those findings were made. In its terms, it requires no more than that the Tribunal set out the findings which it did make. Neither expressly nor impliedly does this section require the Tribunal to make , and then set out, some findings additional to those which it actually made. In Singh , significance was attached to the use of the word "material" in s 430(1)(c). It was said that "material" in the expression "material questions of fact" must mean "objectively material". Even if that were right, it would by no means follow that the Tribunal was bound to set out findings that it did not make. But it is not right to read "material" as providing an objective or external standard of materiality. A requirement to set out findings and reasons focuses upon the subjective thought processes of the decision-maker. All that s 430(1)(c) obliges the Tribunal to do is set out its findings on those questions of fact which it considered to be material to the decision which it made and to the reasons it had for reaching that decision. Understanding s 430 as obliging the Tribunal to set out what were its findings on the questions of fact it considered material gives the section important work to do in connection with judicial review of decisions of the Tribunal. It ensures that a person who is dissatisfied with the result at which the Tribunal has arrived can identify with certainty what reasons the Tribunal had for reaching its conclusion and what facts it considered material to that conclusion. Similarly, a court which is asked to review the decision is able to identify the Tribunal's reasons and the findings it made in reaching that conclusion. The provision entitles a court to infer that any matter not mentioned in the s 430 statement was not considered by the Tribunal to be material. This may reveal some basis for judicial review by the Federal Court under Pt 8 of the Act, or by this Court in proceedings brought under s 75(v) of the Constitution . For example, it may reveal that the Tribunal made some error of law of the kind mentioned in s 476(1)(e) of the Act, such as incorrectly applying the law to the facts found by the Tribunal. It may reveal jurisdictional error. The Tribunal's identification of what it considered to be the material questions of fact may demonstrate that it took into account some irrelevant consideration or did not take into account some relevant consideration. Given a statutory requirement to set out " findings on material questions of fact ", the absence of any reference in the reasons for decision of the Tribunal to those findings of fact material to the decision to be reached may preclude a conclusion that the Tribunal impliedly took various considerations into account: Wan v Minister for Immigration and Multicultural Affairs [2001] FCA 568 at [27] , [2001] FCA 568 ; 107 FCR 133 at 140. The requirement that there be " a reference to the evidence or other material on which those findings were based " has received arguably less consideration than other aspects of s 43. It is, however, clear that the requirement that there be " a reference to the evidence " does not impose a requirement that the Tribunal refer to every piece of evidence relevant to a particular finding: cf Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 184 at [46] , [2003] FCAFC 184 ; 75 ALD 630 at 641 per French, Sackville and Hely JJ. And the requirement to make " a reference to the evidence " is confined to a requirement that there be a reference to the evidence of " those findings ", namely the Tribunal's findings " on material questions of fact ". In Applicant WAEE , their Honours made reference to whether an " issue has at least been identified at some point ". A mere passing reference to evidence, however, may not be sufficient compliance with the requirements imposed by s 43(2B). The mere fact that an administrative tribunal refers to information or evidence does not of itself mean that the tribunal has given that evidence proper consideration: SZGYT v Minister for Immigration and Citizenship [2009] FCA 705 at [24] per Edmonds J. The reference in s 43 to " other material " is a reference to " material " which may not be evidence, including such materials as an agreed statement of facts or policy statements: Milbourn v Repatriation Commission [2009] FCA 176 at [29] , [2009] FCA 176 ; 174 FCR 486 at 492 per Graham J. But s 43(2B) does not impose any constraint as to the manner in which the Tribunal is to make " reference " to either evidence or other material upon which it proceeds to " base " its findings. The greater the conflict in the evidence, the greater may be the need for the Tribunal to make " reference " to the conflicting evidence and to set forth that evidence upon which it proceeds to " base " its findings, and to set forth its reasons for rejecting some evidence and accepting other evidence: Copperart Pty Ltd v Commissioner of Taxation [1993] FCA 462 ; (1993) 30 ALD 377 per Hill J. Although there is no necessity for the Tribunal to refer to every piece of evidence adduced before the Tribunal, a failure to advert to relevant evidence may lead to a conclusion that it has been ignored: Waldron v Comcare Australia [1995] FCA 1154 ; (1995) 37 ALD 471 at 477 per Burchett J; Centrelink v Dykstra [2002] FCA 1442 at [20] . It may be that some evidence is irrelevant to the criteria and some contentions misconceived. Moreover, there is a distinction between the tribunal failing to advert to evidence which, if accepted, might have led it to make a different finding of fact ... and a failure by the tribunal to address a contention which, if accepted, might establish that the applicant had a well-founded fear of persecution for a Convention reason. The tribunal is not a court. ... It is an administrative body and not a court and its reasons are not to be scrutinised "with an eye keenly attuned to error". Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. A Tribunal's compliance with all aspects of s 43(2B) --- be it the requirement to set forth its " reasons ", the requirement to include " findings on material questions of fact " or the requirement that there be " a reference to the evidence or other material " --- is a matter of substance and not form: Dodds v Comcare Australia (1993) 31 ALD 690 at 691 per Burchett J; Comcare v Davies , supra , at [33]. The statutory requirement, it is to be recalled, has as a principal objective the exposure of the reasoning process of the Tribunal to judicial scrutiny. There must be sufficient compliance with each aspect of s 43 such that judicial scrutiny is not frustrated. But the manner in which the Tribunal discharges its responsibility to comply with s 43(2B) must inevitably depend upon --- among other things --- the nature of the cases coming before the Tribunal, the nature of the evidence and legal complexity of each case, and the particular style in which Tribunal members choose to express themselves. The less important a particular matter may be to the conclusion reached by the Tribunal, the less the need for the Tribunal to " refer to " or deal in any depth with the evidence relevant to that matter: e.g. Lafu v Minister for Immigration and Citizenship [2009] FCA 733 at [28] to [30] per Jagot J. A failure to refer to evidence of little ultimate significance to the conclusion reached may not permit an inference that such evidence has not been considered. And there was also no dispute that reasons provided for an administrative decision are not to be scrutinised in an " over-zealous " manner: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259. In that case, a Full Court of the Federal Court (Neaves, French and Cooper JJ) collected authorities for various propositions as to the practical restraints on judicial review. It was said that a court should not be "concerned with looseness in the language ... nor with unhappy phrasing" of the reasons of an administrative decision-maker [(1993) 43 FCR 280 at 287]. The Court continued [(1993) 43 FCR 280 at 287]: "The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed [See McAuliffe v Secretary, Department of Social Security [1992] FCA 483 ; (1992) 28 ALD 609 at 616]. In the present context, any court reviewing a decision upon refugee status must beware of turning a review of the reasons of the decision-maker upon proper principles into a reconsideration of the merits of the decision. To the extent that the Corporation in the present appeal seeks to raise a contention as to whether or not there was " any evidence " in support of particular findings, it may be noted that in Australian Postal Corporation v Sellick [2008] FCA 236 at [91] , [2008] FCA 236 ; 101 ALD 245 at 264, Bennett J observed that " [a] decision made under an enactment is invalid if there is a total absence of evidence to satisfy an essential element of the decision ". But what must be shown to establish " no evidence " remains unclear. Generally speaking, a finding of fact is not reviewable by the court. But it has long been established that an insupportable finding of fact may be set aside. This is because the question whether there is any evidence of a particular fact is a question of law. Further, whether a particular inference can be drawn from facts is also a question of law. In the province of judicial review the making of findings and the drawing of inferences in the absence of evidence is an error of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33 ; (1990) 170 CLR 321 at 335-6; [1990] HCA 33 ; 94 ALR 11 per Mason CJ. Precisely what must be shown to make out a case of "no evidence" has been the subject of much judicial comment. In a recent decision in the Supreme Court of Victoria, Roads Corp v Dacakis [1995] 2 VR 508 at 520, Batt J said that a finding of fact will only be open to challenge as an error of law if there was no evidence to support it and that such a finding would not be open to challenge merely because it was not reasonably open on the evidence. Batt J went on to say that an inference will be open to challenge if it was not reasonably open on the facts. There is no doubt that the first proposition is correct. It follows directly from what was said by Mason CJ in Bond as well as many other cases in Australia although the position might be different in England. Most of the important cases are collected in the judgment of Phillips JA in Powley v Crimes Compensation Tribunal (CA(Vic), 16 December 1996, unreported). It is not clear whether the second proposition accurately states the law and I notice that Batt J himself had some doubt about it. The difficulty comes about from a passage in the judgment of Mason CJ in Bond at CLR 360 where his Honour said that "an inference will be reviewable on the ground that it was not reasonably open". In my view there is a very real possibility that the use of the word "reasonably" in the passage quoted was not intended to make less onerous the task of challenging, as an error of law, the drawing of an inference. Certainly Phillips JA did not think so in Powley : see his reasons at 12-14. Irrespective of the precise test to be applied before finding there is " no evidence ", evidence exists to support the Tribunal's findings in the case at hand. Ms Hughes' description of events around the injury involved adduction (away from the midline) of her left leg rather than adduction (towards the midline). Both Professor Fearnside and Dr Maxwell considered gluteal tendinopathy to result form [sic] an adduction of the leg rather than abduction. There was some evidence relating to twisting. Professor Fearnside presumed that there had been a twisting from the manner of the fall. Dr Maxwell said in effect that if she [sic] was any twisting at that point that could have caused the injury. She was asymptomatic before the incident on 13 January 2006 and continues to experience symptoms. Australia Post therefore continues to be liable for the effects of the injury pursuant to sections 16 and 19 of the Act. That form of movement was described as " adduction ". By way of contrast, " abduction " is the movement which occurs where the leg moves sideways as opposed to twisting. There was some unresolved debate as to whether the Tribunal had correctly employed the term " adduction " at the outset of its findings at paragraph [43]. The Corporation contended that the Tribunal's conclusion expressed at paragraph [45] was founded upon its finding at paragraph [43] that the " hip injury " was a " gluteal injury " occasioned by a " twisting " movement and that there was no evidence of any such injury. The Tribunal erred, so it contended, because the Tribunal's reasons for decision did not include any reference to the evidence or other material on which its finding of liability for that " gluteal injury " or that form of " injury to [the] left hip joint " was based. The case for the Corporation was that there was no evidence to support any such finding. The Corporation accepted the account of the " incident " or " accident " suffered by Ms Hughes on 13 January 2006. She was suspended momentarily off the bike and "did the splits", with her left hip lower than her right. She felt a popping sensation in her hip and a burning sensation in her hip and lower lumbar region. Her right leg was hooked over the seat, "semi bent" and her left leg was "directly straight out, as in the splits". She was unable to reach the right-hand handle bar to access the kill switch. She placed her left hand on the fence and "walked" herself up, enabling her to let the bike go with her right leg. She rested for a short while and then resumed her deliveries. The Corporation also placed reliance upon a similar account provided by Ms Hughes to the medical practitioners, including Dr Fearnside. His report repeats the same description that she " did the splits ". The Corporation submitted that the manner in which the medical witnesses approached their task further supported its claim that there was a lack of evidence of an injury occasioned by a " twisting " movement. One medical expert (for example) said that he " perhaps ... omitted to ask her about rotational elements ...". Another expert stated that he " didn't get any specific history of particularly twisting; it was more of an abduction strain to her hip " and that " there was no particular twisting injury she related to me ". The case for Ms Hughes was that paragraph [43] of the Tribunal's reasons for decision should not be given the significance or prominence advanced by the Corporation. The submission on her behalf was that the principal finding was that set forth at paragraph [45], namely a simple finding that she continued to suffer from the effects of the injury to her lower back and hip joint sustained during the course of her employment. Alternatively, it was contended on her behalf that there was evidence of a " gluteal injury " occasioned by " twisting ". The first Ground of Appeal has not been made out. It is considered that the Tribunal's reasons adequately disclose the manner in which it proceeded and that its conclusion as to the liability of the Corporation was supported by the evidence. It matters not whether the reading of the Tribunal's reasons as advanced by the Corporation or on behalf of Ms Hughes prevails --- on either approach, it is not considered that the Tribunal committed any appellable error. On either approach, the Tribunal accepted that the accident occurred on 13 January 2006. And it further accepted that Ms Hughes had " a total absence of any symptomatology of the lower back or hip prior to 13 January 2006 " and accepted that as at April 2007 she " continued to suffer from the effects of the injury to her lower back and left hip joint sustained during the course of her employment ...". The medication being taken by Ms Hughes was said to be consistent with the evidence that she gave. This, together with the other medical evidence summarised by the Tribunal in its reasons for decision, would support the conclusion expressed at paragraph [45]. Paragraph [45] is, however, clearly susceptible of the interpretation sought to be ascribed to it on behalf of the Corporation. Paragraph [45] is within that part of the reasons for decision which sets forth what may be regarded as the Tribunal's account of its findings on " material questions of fact " --- and the inference is that the finding at paragraph [43] was " material " to the ultimate conclusion reached at [45]. But the Tribunal's reasons, when read in their entirety, expose a more generally expressed conclusion that Ms Hughes continues to suffer from an injury to her left hip or joint. To confine that conclusion by reference to whether or not there was a " gluteal injury " and to then isolate the evidence relevant to an injury occasioned by a " twisting " of the joint is to not read the reasons for decision in their entirety. Any looseness of language as may emerge from paragraph [45] does not lead to a conclusion that the Tribunal has not resolved the claim as advanced on behalf of Ms Hughes. Even if, however, the Tribunal's reasons were confined to a finding that the only injury suffered by Ms Hughes was a " gluteal injury " occasioned by " twisting ", it is further considered that there was evidence in support of that finding. As the Tribunal recognised, " some evidence " of that was to be found in what had been said by Dr Fearnside. For the purposes of s 43(2B) of the 1975 Act, the requirement that there be a " reference to the evidence " is satisfied if the Tribunal identifies in a meaningful manner the evidence upon which it relies in making a finding on a " material question of fact ". The evidence to which " reference " is made need not be set forth in its entirety. Section 43(2B) merely requires that there be a " reference " to the evidence. It may not be sufficient in a particular case if the Tribunal merely refers to the evidence of a particular witness or simply states that there was evidence but without identifying the evidence it had in mind. If an identified witness only gives evidence on one discrete matter relevant to a finding on a material question of fact and that evidence is brief and succinct, it may be a sufficient compliance with s 43(2B) if the Tribunal simply refers to the evidence given by that witness without more. Much may depend upon the factual issues in dispute in any particular case and the nature of the evidence being given by a number of witnesses. It may also be the case that a failure on the part of the Tribunal to expressly refer to the evidence of a particular witness or to refer to identifiable evidence may not be a failure to comply with the terms of s 43(2B) or that any such failure is non-prejudicial. The evidence relied upon may be readily identifiable even in the absence of any express reference to it on the part of the Tribunal. But, given the requirements imposed by s 43(2B), and where a contention is advanced that there is " no evidence " to support a particular fact, it may not be permissible for this Court when entertaining an " appeal " to itself review the evidence given before the Tribunal with a view to itself determining whether there was evidence upon which the impugned finding of fact may have been based. The task of making findings of fact and the task of referring to the evidence are tasks entrusted to the Tribunal. Likewise, the task of explaining the decision reached is a task which only the Tribunal itself can discharge. But such difficulties may presently be left to one side. In the present proceeding the Tribunal at paragraph [43] of its reasons for decision identified both the witness upon whom it was relying --- Dr Fearnside --- and that part of his evidence which it had in mind --- namely, his evidence that he had " presumed that there had been a twisting from the manner of the fall ". That " reference to the evidence " is sufficient to enable the following parts of his evidence to be identified. So that was a feature in the history that required further investigation. In the physical findings she had a restriction of hip movement, in particular internal rotation of the hip. Internal rotation of the hip places on stretch the muscles and the attachments of the gluteal muscles to the femur. The gluteal muscles run from the sacrem or the tailbone to the back of the femur and they, when they contract, rotate the hip and the leg outwards. So if one performs the opposite action of internally rotating the hip, it places those muscles and the tendons on the stretch. So if there is an inflammatory reaction or there has been an injury, then pain will occur in the local region and that was so with her. Thirdly, the investigations by way of ultrasound and also by way of MRI, the ultrasound being that of 28.2.06 and the MRI of 15.6.06, did show abnormality at the insertional levels and I therefore concluded that she had sustained an injury to those attachments. Again, I thought that the mechanism of the injury could have caused such an injury. She put her left foot down after she pulled up the motorbike. Her right foot was on the brake. She put her left foot on the ground and it slipped on some flame tree seed pods and she sustained a forced abduction injury, which means the leg going out, and in that I would anticipate that there would be a rotational element as well because that would be usual, which left her right leg hanging over the bike and her left foot was angled between the concrete of the footpath, I think, and a fence, that's right. Now my handwritten notes confirm that and after that she lent herself up against the fence with the left hand and climbed off the bike. In fact she said that she let it fall to the ground. I have got an indication there that the bike was fully laden with mail. So it was presumably heavy to manipulate. There was thus an objection taken on behalf of the Corporation to the evidence being given upon the basis that " [t]here was never any evidence about a twist in the leg ". If you were to presume that there was a twisting, does that have any significance to the type of injury that you have diagnosed?---No. I mean I suppose it makes it more possible that she sustained an injury either or both to the back and to the leg. There's generally a rotational [element] in these sorts of injuries and I mean perhaps I omitted to ask her about rotational elements but I thought that I obtained a fairly concise history of that. The Tribunal was not bound to only have regard to such parts of the evidence as the Corporation now wishes to emphasise. The evidence of Dr Fearnside to which the Tribunal referred cannot simply be dismissed, as the Corporation sought to characterise it, as but a " presumption " as to what had happened on 13 January 2006; his evidence was evidence as to the present medical condition of Ms Hughes and evidence as to how such conditions occur. There is a further basis upon which the Corporation's first Ground of Appeal should be rejected. Not only is it impermissible for the Corporation to seek to confine the basis of the Tribunal's decision to a conclusion as to " gluteal injury " and to thereafter seek to isolate the evidence referable to that injury, such a course is equally impermissible when reference is made to the claim in respect to the " injury " for which compensation was claimed. Section 14 of the 1988 Act provides that Comcare is liable to pay compensation " in respect of an injury suffered by an employee ... ". Section 53 requires notice to be given " of the injury " and s 54 provides that compensation is not payable " unless a claim for compensation is made ..." that complies with certain requirements set out in that section. Section 54 is a procedural prerequisite to an entitlement to compensation: Lang , supra , at [43]. The claim as made by a claimant is to be given " a broad, generous and practical interpretation ...": Abrahams v Comcare [2006] FCA 1829 at [18] , [2006] FCA 1829 ; 93 ALD 147 at 152; Australian Postal Corporation v Sellick , supra , at [55]. Section 24 provides for the payment of compensation for " permanent impairment " and s 25 provides for the " interim payment of compensation " pending the final determination of a claimant's disability. Section 26 provides that " an amount of compensation payable to an employee under section 24 or 25 ... shall be paid to the employee within 30 days after the date of the assessment of the amount ". Before that Tribunal, Ms Hughes in her Statement of Facts, Issues and Contentions claimed to be " entitled to compensation in respect of permanent impairment to her lower back and left hip joint, including bowel bladder dysfunction, pursuant to section 24 and 26 of the Act ". In the present proceeding, the decision the subject of review by the Tribunal was the decision refusing compensation in respect to the " injury " as claimed by Ms Hughes. The issues as identified by the parties relevant to the Tribunal's decision-making processes did not then seek to confine the injury to that of a " gluteal injury " occasioned by " adduction " or " twisting ". Nor, it is considered, was the Tribunal in its reasons for decision attempting to narrow down its finding to either: the resolution of a claim founded upon a " twisting " movement; or the resolution of the claim as strictly described in the account given by Ms Hughes of the events of 13 January 2006. Indeed, given the expertise of the medical member of the Tribunal, it would be surprising if such a distinction was not well understood. Section 7(2)(b) of the 1975 Act provides for the appointment of persons to the Tribunal who have " experience ... in ... the practice of a profession ... " and such a member is " entitled to use his or her experience in interpreting and weighing the material and in reaching conclusions on technical matters ": cf Application by Chime Communications Pty Ltd (No 2) [2009] ACompT 2 at [7] , 257 ALR 765 at 770. But the reference by the Tribunal to the difference in the nature of the physical movements to which reference had been made in the evidence is not a sufficient basis upon which to conclude that the Tribunal was thereafter confining its attention to the resolution of a claim founded upon that difference alone and to the resolution of a claim for compensation in respect of an injury different to that originally claimed in February 2006 and as identified in the statement of issues as filed by the parties. It should finally be noted that there is not considered to be a clear distinction as between the claim as made by Ms Hughes and her description of the manner in which the accident or injury on 13 January 2006 occurred. Both the claim and the description are but a means of communicating to a decision-maker a description of the injury for which compensation is claimed and how that injury occurred. Either may give content to the other and the two should be read together. Given the absence of any reference in her description of the accident or injury to any " twisting " movement and her description of having done the " splits ", it is perhaps understandable that the Corporation accepted Ms Hughes' account and did not question her as to whether there was any " twisting " movement involved. The Corporation may have wished to confine her account of the events to as narrow a factual description as possible. But the task of the Tribunal, however, was to reach the " correct or preferable " decision. And, in discharging that task, s 33(1AA) of the 1975 Act imposes upon the person who made the decision under review the responsibility of using " his or her best endeavours to assist the Tribunal to make its decision ... ": Harris v Secretary, Department of Employment and Workplace Relations [2007] FCA 404 at [19] , [2007] FCA 404 ; 158 FCR 252 at 257 per Gyles J. In the present proceeding, the potential significance of a " twisting " movement or " adduction " as opposed to " abduction " was a matter that did not emerge only during the course of the hearing before the Tribunal. It was a matter of significance that had been identified as early as 6 November 2006 in a report provided to the Corporation by another orthopaedic surgeon, Dr Horsley. This, if anything, would tend to stretch the adductor tendons. In this position, in fact, the gluteus medius and minimus tendons are relaxed. I find it difficult to understand why there would be mild tendinosis with the type of injury she describes. The failure to further question Ms Hughes as to the movement experienced during the accident on 13 January 2006 did little to " assist " the Tribunal. The procedures of the Tribunal, it must be recalled, are not adversarial but designed to facilitate the Tribunal making the " correct or preferable " decision in a manner which is " fair, just, economical, informal and quick ": s 2A. The responsibility imposed by s 33(1AA) remains irrespective of whether or not an applicant before the Tribunal is represented or unrepresented. To this end the role of the parties is to assist the tribunal in reaching its decision. The tribunal expects departments and agencies involved in the review process to have an understanding of that role. The non-adversarial role of the Tribunal is of paramount importance. Indeed, with reference to the distinction between adversarial and inquisitorial procedures, it has been noted that a " perceived dichotomy " exists between " an adjudication of the evidence presented and ... a search for the truth ": Thawley T, "Adversarial and Inquisitorial Procedures in the Administrative Appeals Tribunal" (1997) 4 AJ Admin L 61 at 63. Given these tasks and responsibilities it is not considered appropriate to either confine Ms Hughes' claim or her account of the accident or injury in any artificial manner. The evidence of Dr Fearnside supports the conclusions he reached and his " presumption " --- even if that is how his evidence is to be properly characterised --- was supported by a " generous and practical interpretation " of both the claim as made and the account of the events that occurred on 13 January 2006. In contrast to the present set of circumstances is the decision in Tralongo v Malios [2007] VSC 239 , 27 VAR 74 where a misstatement in the decision of a medical panel as to the history provided by a claimant led to a conclusion that a decision of the panel should be set aside. In the present proceeding it is considered that the account provided by Ms Hughes was clearly at the forefront of the mind of the medical practitioners and the Tribunal itself. The first Ground of Appeal is thus rejected. By September 2006 she had been prescribed Endone, a narcotic for her occasional severe pain. She has developed a variety of symptoms. She told Dr Fearnside in October 2007 she has continued to experience back, left buttock and left hip pain; also that she had developed left sided sciatica with referred pain to the foot. She also described having alternate cold and burning feelings in the left hip and buttock region and had experienced some paraesthesia in her right buttock and thigh, but no sciatica. Also since January 2006 she had been constipated and also experienced loss of bladder sensation and some urinary incontinence. Her left hip has deteriorated and that pain also fluctuates. Her hip is more troublesome than her back. Nonetheless since late August 2007 she has worked 7 hours 21 minutes each work day and does 1---1½ hours overtime most days. That might occur once a month, although it occurred three times one month. On behalf of the Corporation it is contended that " the Tribunal failed to include in its Reasons a reference to the evidence or other material on which " the finding at paragraph [41] was based, namely that Ms Hughes' symptoms had " spread to other areas ". Reference was again made on behalf of the Corporation to the evidence of the medical witnesses. One witness, for example, Dr Brennan, had said that he " [did] not see a structural ... cause to the bladder dysfunction related to her spine ". Another witness, Dr Fearnside, had said that Ms Hughes' radicular complaints were " non-verifiable ". A further witness indicated that " [t]he report of bladder and bowel symptoms ... appear to have no objective neurological basis ". It was contended by the Corporation that " there was no evidence before the Tribunal to the effect that those tests or consultations had established a causal connection between the symptoms and the 13 January 2006 incident ". The Corporation obviously accepted that it was for the claimant to set forth her symptoms --- but contended that such an account did not establish that those symptoms had been caused by the January 2006 accident. Again, however, the Ground of Appeal is to be rejected. The Tribunal set out the account provided by Ms Hughes of her symptoms (at paragraphs [8] to [14]) and thereafter (at paragraph [41]) made the finding of present relevance --- namely, the finding that the symptoms had " spread to other areas ". Paragraph [41] is contained in that part of the Tribunal's reasons for decision under the heading " Findings ". And there is indeed no reference in that part of the Tribunal's reasons where it makes its " Findings " to the evidence or other material on which its findings are based. But it is not considered that paragraph [41] can be construed and read in isolation from the balance of its reasons for decision. Dr Brennan noted that it was of concern that Ms Hughes developed a "change in bowel and bladder habit", "loss of sensation, the sensation of incomplete emptying, and a need to urgently use the toilet where her bladder is very full. She is no longer able to use her bowels unless she [has] some aperient. " Ms Hughes complained of "pain and irritability around the left hip. " Dr Brennan stated that Ms Hughes possibly "developed a disc herniation at L5/S1 and may have cauda equina compression" and recommended a repeat MRI. " On 11 July 2006, Dr Brennan reported (T24, 2007/2281) that the repeat MRI did not indicate a structural cause to the bladder dysfunction related to Ms Hughes' spine. Dr Brennan stated that "patients with chronic pain can develop reflex bladder dysfunction due to the disturbance of normal neurological control related to the constant pain input. There is considered to be no failure on the part of the Tribunal to make a finding and to refer to the evidence on which its findings were based. Section 43 of the 1975 Act does not require that reasons for decision be expressed in any particular way or according to any particular formula. The manner in which Tribunal members may express their reasons for decision is as diverse as the manner in which Judges of this and other Courts express their reasons. The reasons for decision of the Tribunal in the present proceeding, and the manner in which it has expressed its findings and referred to the evidence before it, are expressed in sufficiently clear terms such that a conclusion can safely be reached on appeal that the Tribunal has referred to the evidence upon which it reached the finding of present relevance. According to the Corporation, that submission was its submission that " the Tribunal should reject or heavily discount the evidence of the respondent because of discrepancies between the findings made in investigations of the respondent's pathology, the findings made by expert witnesses in their examinations of the respondent, and the respondent's reports of pain ". A failure on the part of the Tribunal to resolve a submission advanced before it for resolution may give rise to a " question of law " within the meaning of and for the purposes of s 44(1) of the 1975 Act. And the failure on the part of the Tribunal to mention a submission or particular evidence advanced before it may give rise to an inference that the submission or the evidence has not been taken into account during the decision-making process. Or, if the submission or evidence has been taken into account, a failure to refer to the submission or the evidence in the reasons for decision may expose a failure to comply with the requirements of s 43 of the 1975 Act. But not every failure to hear and resolve every submission necessarily gives rise to such a question. Not every failure by the Administrative Appeals Tribunal to mention a contention advanced on behalf of a party will amount to a failure to comply with the requirements of s 43(2) of the Administrative Appeals Tribunal Act 1975 , or demonstrate that the contention was not considered in deciding the matter before the tribunal. But this submission concerning the ascertainment of profit was worthy of serious consideration and was seriously advanced to the tribunal. It ought, therefore, to be inferred that the submission was inadvertently overlooked by the tribunal either when the reference was being decided or when the reasons for the decision were being committed to writing (cf Sullivan v Department of Transport (1978) 20 ALR 323 at 353). In either event there has been, in my opinion, an error of law by the tribunal, so that the power of this court which s 44(1) of the Administrative Appeals Tribunal Act 1975 confers to decide the appeal "on a question of law" is available. The failure of the tribunal to carry out the duty to consider and determine each question of law and fact relevant to the determination of the reference to it of the respondent's decision, or the failure to carry out the duty imposed by s 43(2) of that Act, as the case may be, has brought about a miscarriage of justice by preventing this court from affording the parties a determination whether the tribunal's decision was vitiated by error of law: see Pettitt v Dunkley [1971] 1 NSWLR 376. Subsequently, in Australian Postal Corporation v Sellick , supra , at [35], Bennett J also referred to the need to address a submission of " substance " or a submission which would have " affected the outcome ". See also: Zoia v Secretary, Department of Employment and Workplace Relations [2008] FCA 988 at [29] per Siopis J; Defence Force Retirement and Death Benefits Authority v House [2009] FCA 302 at [29] per Collier J. A failure on the part of the Tribunal " to respond to a substantial, clearly articulated argument relying upon established facts " may constitute a constructive failure to exercise jurisdiction: cf Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26 at [24] to [25] [2003] HCA 26 ; , 73 ALD 321 at 326 per Gummow and Callinan JJ. The comments there made in respect to a failure on the part of the Refugee Review Tribunal have been applied by the Full Court of this Court in respect to a decision of the Administrative Appeals Tribunal: Industry Research and Development Board v Bridgestone Australia Ltd [2004] FCAFC 56 at [26] , [2004] FCAFC 56 ; 136 FCR 47 at 58. There can be no question in the present proceeding that the submission advanced on behalf of the Corporation before the Tribunal, namely the submission as to the weight to be given to Ms Hughes' evidence, was indeed " a submission worthy of serious consideration ". Questions as to the weight to be given to the account provided by Ms Hughes and the evidence of the medical experts were placed at the forefront of the Corporation's case. Reason for reservation arose due to Ms Hughes' own evidence. Reason for reservation also arose from the qualifications expressed by some of the medical experts, one of whom (for example) stated that " [o]n physical examination there were no abnormal signs " and by reason of such objective evidence as an MRI exposing no " structural (i.e. surgical) cause to the bladder dysfunction related to her spine ... ". But, on a fair reading of the Tribunal's decision, it is again apparent that it did consider the submission being advanced. The Tribunal on numerous occasions throughout its reasons exposes the necessity for it to carefully consider the account being advanced by Ms Hughes and the discrepancies in the evidence. It considered the evidence she gave and proceeded to resolve what evidence could be accepted, including the medical evidence. There were aspects of the medical evidence which were problematic, and there were credit issues which emerged. We formed the view that having regard to her evidence and the evidence of Mr Webb that Ms Hughes had "gilded the lily" in describing her educational qualifications and her career, finding it unlikely that both doctors had mis-heard her work history. Further, her evidence, supported by the notes of Dr Ginnane, is as to a total absence of any symptomatology of the lower back or hip prior to 13 January 2006. There was medical evidence that she attended Dr Singh on 16 January 2006 and that, on examination, showed a reduced range of movement in the left hip, and that movement was painful. It is somewhat bizarre though, in our view, that Ms Hughes made no connection between the incident on 13 January 2006. However, we accept her evidence that she did not attend earlier because she thought the pain would subside. Again though, she did not mention what had happened on 13 January 2006, although Dr Ginnane was prepared to issue a WorkCover certificate. The manner in which the Tribunal resolves competing submissions, and the manner in which it expresses those submissions, is a matter for it to determine. That which is required, however, is for it to be readily apparent that a submission of " substance " or one " worthy of consideration " has in fact been addressed and resolved. The Tribunal discharged that task in the case at hand. No separate submissions were advanced on behalf of either the Corporation or Ms Hughes as to whether it was appropriate for the Corporation to file both an appeal pursuant to s 44 and also rely upon s 5 of the 1977 Act. No submission, for example, was advanced on behalf of Ms Hughes that applications may not be made pursuant to both s 44 of the 1975 Act and s 5 of the 1977 Act. In other cases such a submission has been advanced: e.g. Australian Postal Corporation v Sellick , supra , at [92] to [95]. Both parties sought costs in the event that they should prevail, the proposition common to both parties being that costs should follow the event. There is no reason why costs should not follow the event in the present proceeding. The Applicant is to pay the costs of the Respondent. I certify that the preceding seventy (70) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | adequacy of reasons a reference to the evidence or other materials no evidence inquisitorial procedure duty to assist the administrative appeals tribunal the injury for which compensation was claimed nature of injury evidence in support administrative law compensation |
The Tribunal had affirmed a decision of the delegate of the then Minister for Immigration and Multicultural Affairs under the Migration Act 1958 (Cth) ('the Act') to refuse to grant a protection visa to the appellant. On 20 March 2006 the appellant lodged an application for a Protection (Class XA) visa with the then Department of Immigration and Multicultural Affairs. (3) In order to leave China, she bribed a government official to issue a passport. She was assisted by a Mandarin interpreter. (6) She did not speak with people at the practice sessions and does not know any other Falun Gong practitioners. (8) She did not want to return to China for the sake of her health. She claimed that she was required to attend a study session in 2003, which was a form of house arrest and that she was brainwashed not to practice Falun Gong. She claimed that several people were assigned to a room, were not allowed any contact with people outside and had no freedom. She was also shown a video tape of a protest in Tiannamen Square, shown photographs of Falun Gong practitioners who had gone insane, was told that Falun Gong was anti Government and was given newspapers and books which contained anti Falun Gong messages. The appellant was unable to remember the address, but claimed that she left the study session centre after 3 months. She said that after her release she became ill and started practising Falun Gong in her home when she started to recover. She claimed that although she was not arrested or detained again, she was dismissed from her company, due to her association with Falun Gong. When queried about her involvement in Falun Gong in Australia, the appellant claimed that she had attended public Falun Gong sessions on three occasions in a park in Sydney, but did not speak to the people who were involved in the session, nor did she know any other Falun Gong practitioners in Sydney. When informed by the Tribunal that she did not have a very good knowledge of Falun Gong practice and that her knowledge was not consistent with her claims, the appellant stated that she was mainly a Buddhist and that she only had a rudimentary knowledge of Falun Gong and did the exercises on her own. When queried about her previous claim that she practiced Falun Gong with a group of practitioners, the appellant alleged that they were all beginners. Although the Tribunal accepted that she may have observed others practising Falun Gong in China, it was not accepted by the Tribunal that she had ever practiced Falun Gong herself, as she displayed little or no knowledge of the basic principles of the Falun Gong practice and belief, and her level of knowledge of Falun Gong was not consistent with a person who had practised Falun Gong since 2001, as the appellant claimed at the hearing. It follows that there were aspects of the appellant's evidence at the hearing which were inconsistent. For example, she originally claimed that she learnt Falun Gong exercises by observing other practitioners, but later stated that people could not practise Falun Gong in public and that she had learnt from videos. She also firstly claimed that she was a member of a group of Falun Gong practitioners, but later claimed that she did the exercises on her own and that no-one had formally taught her Falun Gong. The Tribunal did not accept that the appellant was arrested and detained for re-education in 2003 or at any time as a result of any Falun Gong practice. The Tribunal considered the appellant's evidence regarding the arrest and re-education to be vague and overly generalised. The Tribunal did not accept that the appellant was restricted from leaving China for reasons of association with Falun Gong. Furthermore, if as the appellant claimed she had bribed an official to assist her departure from China, the Tribunal did not accept that such bribery was related in any way to Falun Gong or to any Convention related reason. The Tribunal did not accept that the appellant attended Falun Gong practice sessions in Australia and found that whilst the appellant may have observed others in Sydney, her inability to describe basic principles suggested that she did not participate in the sessions. The Tribunal was not satisfied that the appellant had a well founded fear of persecution for any of the Convention reasons and consequently was not satisfied that the appellant was a person to whom Australia has protection obligations under the Refugee Convention (as amended by the Refugees Protocol). The criteria for the grant of a protection visa under s 36(2) was not satisfied. The Tribunal had not addressed my claim that I was sacked by my employer and forced to retire. Thus, the Tribunal failed to consider the whole of my claims. The Tribunal does not accept that I ever practiced Falun Gong only because I do not know Falun Gong very well. The fact is that I ever practiced Falun Gong. Although the amended application was in substitution for the earlier grounds stated, Smith FM considered both sets of grounds. In relation to the amended grounds his Honour rejected ground 1 on the basis that, while the Tribunal did not mention the appellant's claim to have lost her employment at the end of her detention in the key paragraphs under the heading "Findings and Reasons", it had earlier identified the claim as part of the appellant's application to the delegate and noted that the statement containing it had accompanied the appellant's review application. The Tribunal, as he stated was clearly aware of that element of the applicant's claims" and dealt with it as part of a more general conclusion. This approach was in my opinion correct: WAEE v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCAFC 184 at [47] . The Federal Magistrate rejected ground 2 of the amended application, on the basis that it was, in effect, a request for impermissible merits review. This finding and approach were correct: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6 ; (1996) 185 CLR 259 at 272. It is not reasonable that the Refugee Review Tribunal did not accept that I am a Falun Gong practitioner while the Tribunal accepts that I have ever observed other persons practice Falun Gong in China. The decision made by the Tribunal is illogical. 3. I believe that my fear of persecution is well-founded. There is nothing, in my opinion, which is either not reasonable or illogical in this finding. Observing other practitioners of Falun Gong, of itself, says nothing about whether the appellant was or was not herself such a practitioner. The finding of fact of the Tribunal that she was not a practitioner of Falun Gong was the product of the Tribunal's evaluation of the credibility of the appellant's testimony based on internal consistency, inherent implausibility and consistency with independent country information that was clearly within the Tribunal's jurisdiction: Re Minister; Ex parte Durairajasingham [2000] HCA 1 ; (2000) 168 ALR 407 (HCA) at [67]; W148/00A v Minister (2001) 185 ALR 703 (FCAFC) at [64]-[65]. The Tribunal, as the primary fact finder, has stated in its findings that it did not believe the appellant to be a Falun Gong practitioner. Although the Tribunal must give reasons for its decision, it is not required to give reasons for each particular finding in relation to the appellant's claims ( Re Minister; Ex parte Durairajasingham at [67]). In any event an error of fact does not amount to error of law: Abebe v Commonwealth [1999] HCA 14 ; (1999) 197 CLR 510 at [137] . To grant relief for such an error would be to grant merits review, which is impermissible ( Wu Shan Liang at [272]). No jurisdictional error is made out. No particulars are provided as to why. Although this ground is confined to the decision of the Tribunal, upon a review of that decision, and that of Smith FM I am unable to find any substance to this ground. In any event such a challenge appears to be directed implicitly, towards the Tribunal's findings of fact which are beyond challenge before this Court. No jurisdictional error has been made out. The appeal must be dismissed. The appellant should pay the costs of the first respondent, fixed at $2,800. | appeal from decision of the federal magistrates court application for a protection visa whether jurisdictional error no point of principle. migration |
The application before Smith FM sought judicial review of a decision of the Refugee Review Tribunal ('the Tribunal') signed on 11 April 2008. The Tribunal 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 ('the protection visa') to the applicant. On 26 November 2007 the applicant lodged an application for the protection visa with the Department of Immigration and Citizenship. A delegate of the Minister refused such application on 28 December 2007. On 29 January 2008 the applicant applied to the Tribunal for a review of the delegate's decision. 3 The applicant claimed to have well-founded fear of persecution in the PRC resulting from her practice of Falun Gong. She claimed that she has practised Falun Gong since 1998. The applicant claimed that in June 2002 she was apprehended by a policeman whilst she was distributing Falun Gong pamphlets. She claimed that she was beaten by the policeman and was subsequently placed in a detention centre for eight months. The Tribunal found that the applicant's demeanour and her responses to its questions were evasive. 5 Due to the Tribunal's adverse credibility finding, it gave no weight to a document allegedly probative of the applicant's release from detention in the PRC in 2002. 6 The Tribunal expressed concerns over the applicant's stated motivation for leaving the PRC. The applicant stated that she did not have a fear of persecution while in the PRC and would not have departed if it were not for the Olympic Games. The Tribunal considered this claim to be inconsistent with the applicant's claimed involvement in Falun Gong, her alleged desire to practise Falun Gong and the claim that she had been detained for her involvement with Falun Gong. 7 The Tribunal did not accept that the applicant had practised Falun Gong in the PRC or had suffered any persecution as a consequence of such claimed practice. 8 As to the applicant's alleged practice of Falun Gong in Australia, the Tribunal noted that the applicant had demonstrated only a limited knowledge and understanding of Falun Gong. While it was satisfied that the applicant had had some involvement with Falun Gong in Australia, the Tribunal disregarded the evidence of her conduct in Australia under s 91R(3) of the Migration Act 1958 (Cth) ('the Act') as it was not satisfied that she had engaged in the activities otherwise than for the purpose of strengthening her claims to be a refugee. 9 The Tribunal was not satisfied that the applicant was a person to whom Australia owed protection obligations under the Convention Relating to the Status of Refugees 1951 as amended by the Protocol Relating to the Status of Refugees 1967 . The Tribunal accordingly affirmed the decision of the Minister's delegate. 11 Before Smith FM the applicant claimed that the Tribunal decision was affected by jurisdictional error as it 'did not weigh' her evidence. The applicant also claimed that she was denied procedural fairness as a result of the quality of the interpretation before the Tribunal. 12 Smith FM found no substance in the first ground of review. His Honour found that the Tribunal had carefully considered the evidence provided by the applicant and that the Tribunal had not overlooked any such evidence. 13 In considering the applicant's second ground of review, Smith FM observed that there was no evidence that the interpreter provided by the Tribunal had performed its function defectively. Smith FM found that there was no evidence indicating that the applicant had been denied the opportunity to appear, give evidence and present arguments as required under s 425 of the Act. 14 Smith FM also found that the Tribunal had applied s 91R(3) of the Act without error. Smith FM could not identify any jurisdictional error in either the procedures or the reasoning of the Tribunal. 15 Smith FM was not satisfied that the applicant's application raised any arguable case for the granting of relief. His Honour accordingly dismissed the application pursuant to r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth) ('the FMC Rules'). The Federal Magistrate did not provide an opportunity to the applicant to provide more documents. The Federal Magistrate did not consider the applicant's application reasonably. The affidavit also alleges that the Federal Magistrate did not consider the information provided by the applicant. 17 The applicant filed a second affidavit attaching photographs of the applicant apparently engaged in Falun Gong related activities. 18 Smith FM's decision is interlocutory (see r 44.12(2) of the FMC Rules) and accordingly leave is required to appeal from such decision to this Court: see s 24(1A) of the Federal Court of Australia Act 1976 (Cth). 19 Under O 52 r 5(2) of the Federal Court Rules (Cth) ('the Rules') the applicant should have filed her application for leave to appeal by 26 August 2008. Her application for leave to appeal was out of time by 10 days, having been filed on 5 September 2008. Accordingly, pursuant to O 52 r 5(3) of the Rules the applicant requires an order that O 52 r 5(2) be dispensed with, as well as leave to appeal from the interlocutory decision of Smith FM under s 24(1A) of the Federal Court of Australia Act 1976 (Cth). 20 However, the Court can only consider whether to grant leave to appeal from Smith FM's interlocutory decision if the Court first makes an order dispensing with compliance with O 52 r 5(2) of the Rules. Accordingly, the Court must first consider whether compliance with such sub-rule should be dispensed with. There appears to be no valid reason why such considerations should not also apply to an application seeking an order of the Court that dispenses with the 21 day time limit prescribed by O 52 r 5(2) of the Rules. 22 As to delay, the applicant claimed at the hearing before the Court that her ignorance of Court procedure resulted in her failure to comply with O 52 r 5(2) of the Rules. Because the applicant is unrepresented and the delay is not extensive, the Court is prepared to accept this explanation. 23 There is no evidence before the Court that the Minister would be prejudiced if the Court were to grant an order dispensing with compliance with O 52 r 5(2) of the Rules. 24 In considering the merits of the substantial application, the Court observes that the first ground alleging bias by the Tribunal had not been raised before Smith FM. Accordingly leave would be required for the applicant to raise such ground on appeal: see Iyer v Minister for Immigration and Multicultural Affairs [2000] FCA 1788 at [22] - [24] . Leave may be granted if it is 'expedient in the interests of justice to allow the new ground to be argued and determined' : see VAAC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168 at [26] . Such consideration requires the Court to consider the merits of the ground sought to be raised: see Iyer at [24]; VAAC at [26]. 25 As no transcript of the Tribunal hearing has been put before the Court, the only evidence before the Court of the Tribunal's conduct of the proceeding is the Tribunal hearing record and the Tribunal decision itself. The Court observes that ' [i] t is likely to be a rare and extreme circumstance that a lack of good faith on the part of the administrative decision-maker will be apparent by reference only to the reasons for the decision themselves' : see SBBF v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCAFC 358 at [16] ; see also SBBS v Minister for Immigration and Multicultural and Indigenous Affairs (2002) 194 ALR 749 at [44]; SCAA v Minister for Immigration and Multicultural and Indigenous Affairs [2002] FCA 668 at [38] . In the present proceeding the Tribunal decision reveals no bias against the applicant. 26 At the hearing before the Court the applicant was asked whether she wished to provide any evidence in support of her allegation of bias. Although she provided no such evidence, the applicant did make oral submissions in support of her allegation. The applicant claimed that she did not answer questions properly before the Tribunal because of her memory, and that the manner in which the Tribunal conducted the hearing made her nervous. The Court considers that such submissions do not constitute a claim of either apprehended or actual bias. 27 There is no evidence before the Court in support of a claim of bias. In these circumstances the Court considers that the first proposed ground of appeal is without merit. 28 The second ground of the proposed appeal claims that Smith FM did not provide the applicant with a chance to provide further documentation. No particulars are provided in support of such ground. 29 In Smith FM's decision his Honour observed that the applicant 'has been given the opportunity to file an amended application and evidence' . There is nothing in the Federal Magistrate's decision that suggests that the applicant made any request that she be afforded a further opportunity to provide additional documents. The Court considers that the second draft ground of appeal is without merit. 30 The third draft ground of appeal claims that Smith FM did not consider the applicant's application 'reasonably' and her affidavit additionally claims that Smith FM did not consider the information provided by the applicant. 31 At the hearing the applicant supported such allegation with the submission that Smith FM did not consider the photographs she provided depicting her involvement in Falun Gong related activities in Australia. The Court observes that no photographs were provided to Smith FM and his Honour made no finding in relation to any such photographs. The Tribunal was provided with photographs of the applicant participating in Falun Gong related activities in Australia, however these were disregarded pursuant to s 91R(3) of the Act. The Court finds no error in the Tribunal's application of s 91R(3) of the Act. 32 It is apparent from the applicant's oral submissions that she seeks an impermissible merits review of the Tribunal decision: see Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others [1986] HCA 40 ; (1986) 162 CLR 24 at 40-42; Chan Yee Kin v Minister for Immigration and Ethnic Affairs (1989) 169 CLR 379 at 391-392; NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 at [10] . There is no jurisdictional error apparent in the Tribunal's decision or in the decision of Smith FM. The Court is satisfied that there is no merit in the applicant's substantial application. 33 The Court accordingly declines to make an order dispensing with compliance with O 52 r 5(2) of the Rules. It follows that it is not necessary for the Court to consider whether leave should be granted to appeal from the interlocutory decision of Smith FM. 34 The Court dismisses the applicant's application. I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | considerations applicable to the court's determination whether to dispense with compliance with the time requirements in o 52 r 5(2) of the federal court rules (cth). practice and procedure |
The assessments resulted from an audit of the affairs of the appellant. The issues on the appeal concern the ascertainment of gross sales and the deduction of purchases in connection with a retail business carried on by the appellant. 2 Under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) an appeal lies to the Federal Court only on a question of law. 3 In October 1995 the appellant commenced a duty free retail business in Springvale, Victoria. In January 2002 the Australian Tax Office conducted an audit of the appellant's affairs. An assessment was issued for 1997 and an amended assessment for 1998. After extensive discussions with the appellant's then accountant, objections were allowed in part. 4 The business was financed by gifts, loans or capital contributions from the appellant's family, and in particular his father. The appellant admitted that he was not knowledgeable about business practices and record-keeping requirements. 5 The appellant's original 1997 return showed sales of $1,101,758 which he said was based on bank deposits. When the appellant said that invoices were a more reliable basis for assessing income, the Commissioner agreed to accept a figure of $884,533 based on invoices, provided that the difference between that amount and the bank account deposits (which on the Commissioner's calculation amounted to $1,084,705) did not represent assessable income. 6 Over several months, between May and August 2003, the appellant attempted to provide details of this amount. He said the difference between the bank deposits and the sales invoices represented gifts or loans from his father used as working capital. Neither he nor his father had kept any record of such gifts or loans, save for the amount referred to in [7] below. 7 In evidence before the Tribunal the appellant claimed $240,000 as the amount of his father's contributions. This amount was obtained from a Betterment Statement produced by the Commissioner from an earlier audit of the father's affairs. This amount had been included as expenditure by the father "as set up costs for the son's business" for the 1996 year. But no record of either father or son was produced to confirm that or any other amount, except that the appellant did produce his own banking records and a credit card statement of his father as evidence of a total of $44,800 provided by his father on 8 July 1996. 8 The Tribunal at [12] was prepared to accept that $44,800 of the bankings represented funds provided by the father, but this left some $155,000 to be explained. However, as the Tribunal had noted at [10], the evidence of the appellant was that he used cash from sales for personal drawings and not all cash sale receipts were banked. There was no record produced of the unbanked amounts. In the Tribunal's view it was quite possible that such unbanked receipts equalled or exceeded the $44,800. As a consequence the Tribunal was not satisfied that the appellant had discharged the onus of proof to demonstrate the actual, or even reasonable, figure of gross revenue. 9 As to purchases, the appellant produced a computer generated list of purchases for the 1997 year which totalled $943,278. This figure exceeded the amount shown in his amended tax return ($872,117) by $71,161. It is assumed, although not demonstrated in evidence, that it is argued that this list calculated purchases on an accrual basis whereas the figure in the amended return was on a cash basis. Again there is no accounting evidence to demonstrate any reconciliation between the two figures of purchases or that any amounts in the list produced do not relate to expenses other than purchases . In addition there is no evidence that this list of purchases has been reconciled with the amounts shown as opening and closing stock to produce a correct figure for cost of sales. Given this complete lack of appropriate accounting evidence it is not possible to be satisfied that net income has been overstated by $71,161. While counsel for the Commissioner accepts that a question whether a finding was based on no evidence would be a question of law, the present case has to be considered in light of the onus of proof imposed on the taxpayer by s 14ZZK(b)(i) of the Taxation Administration Act 1953 (Cth). The appellant has to prove not only a case of error, but what the correct assessment was: Trautwein v Federal Commissioner of Taxation [1936] HCA 77 ; (1936) 56 CLR 63 at 88, Federal Commissioner of Taxation v Dalco [1990] HCA 3 ; (1990) 168 CLR 614 at 623. Questions as to what were the true amount of the appellant's gross income and purchases in the 1997 year were questions of fact. For the reasons explained by the Tribunal, the appellant did not establish any different figures from those assessed by the Commissioner on the basis of the appellant's own financial records, such as they were. 13 The appeal will be dismissed with costs. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Heerey. | assessments following audit of business difference of approximately $217,000 between sales invoices and bank deposits said to be gifts and loans of capital from father of appellant only approximately $45,000 of such contributions recorded not all sales banked figure for purchases said to exceed figure in amended assessment by approximately $71,000 no accounting reconciliation income tax |
Reasons for decision were given orally by the Tribunal on 7 November 2007 and subsequently written reasons were provided on 4 December 2007. As originally filed, the Respondent to the proceeding was the Tribunal member. 2 Before the Tribunal the Applicant had sought to review a decision refusing to grant " exceptional circumstances " relief pursuant to the Farm Household Support Act 1992 (Cth). The provision of relief for " exceptional circumstances " was part of the Drought Assistance Package announced by the then Prime Minister on 30 May 2005. 3 The proceeding in this Court was not commenced until 23 April 2008. Accordingly, the Applicant seeks an extension of time within which to appeal. The Draft Notice of Appeal which was filed together with the Application seeking the extension of time was handwritten. The Draft Notice of Appeal fails to attempt any identification of the questions of law sought to be raised, should an extension of time be granted. 4 The Application was first before the Court on 26 May 2008 -- but on that date there was no appearance for the Applicant and the proceeding was stood over to 2 June 2008. Prior to that date, the Applicant had contacted the Registry of this Court and requested to appear on that occasion by means of a telephone hookup. That request was declined and the Applicant again failed to appear on 2 June 2008. 5 On that second occasion, a solicitor from the Australian Government Solicitor appeared and sought an order that the name of the Respondent be changed to " Secretary, Department of Education, Employment and Workplace Relations ". That order was made and a Notice of Appearance was filed. Perhaps somewhat surprisingly, an application was then made for the proceeding to be dismissed pursuant to O 35A, r 3(1)(a) of the Federal Court Rules . It is, however, a power to be exercised " cautiously ": Lawson v NSW Minister for Land & Water Conservation [2007] FCA 8 at [22] . 7 At least two factors militated against dismissing the proceeding on 2 June 2008. First, the failure of the unrepresented Applicant to appear was only the second occasion that the matter had been before the Court. No Notice of Motion had been filed seeking such an order, although the Respondent Secretary had apparently caused a letter to be forwarded to the Applicant foreshadowing that the dismissal of the proceeding may be sought. Second, given the Applicant's request to appear by telephone hookup, it would have been a manifestly harsh exercise of discretion to summarily terminate his proceeding at such an early stage in circumstances where it was apparent that he did wish to be heard -- even if only by way of telephone. There was certainly no " history of non-compliance ": Lenijamar Pty Ltd v AGC (Advances) Ltd [1990] FCA 520 ; (1990) 27 FCR 388 at 396). 8 On 2 June 2008 the proceeding was stood over for hearing to today. Prior to that date the Registry of this Court notified the Applicant of the orders made on 2 June 2008, including giving notification that the hearing was to take place at 10.15am on 11 July 2008. The Applicant appeared in person today and gave an unsworn account as to the facts leading up to the filing of his Application in April 2008. The solicitor appearing for the Respondent Secretary was content for his factual account to be given in that informal manner. 9 Today a further application was made on behalf of the Secretary to again amend the name of the Respondent. The name as provided on 2 June 2008 was incorrect and the correct name is " Secretary, Department of Families, Community Services and Indigenous Affairs ". An order further amending the name of the Respondent should be made. The Applicant did not oppose that amendment being made provided -- as he put it -- the person responsible for the decision had his " head on the chopping block ". 10 The facts relevant to the Applicant's Application are within a narrow compass and have been taken from the decision of the Tribunal, the Affidavit filed on behalf of the Respondent which set forth the decision-making process, and the Applicant's unsworn account. 11 On 31 January 2007 the Applicant completed a form titled " Claim for Drought Assistance: Small Business Income Support Payment ". That claim was thereafter construed as an application for an " exceptional circumstances relief payment " as authorised by the 1992 Act. The qualifications to receive such payments are those prescribed by s 8A of the 1992 Act. 12 Of immediate relevance to the entitlement of the Applicant to receive the " exceptional circumstances relief payment " is the fact that he was receiving " newstart allowance " both at the time that he made the application and at the time of the Tribunal hearing. A " social security benefit " is defined by s 3(1) of the 1992 Act as having the same meaning as in the Social Security Act 1991 (Cth). And s 23(1) of the 1991 Act defines a " social security benefit " as including " newstart allowance ". 13 Section 12(1) thus provides that the " exceptional circumstances relief payment " sought by the Applicant was " not payable ". Given the terms of s 12(1) the Tribunal was " bound " to make the decision that it did: cf Dunning v Secretary, Department of Family & Community Services [1999] FCA 1605 at [10] , [1999] FCA 1605 ; 57 ALD 577 at 579, per Merkel, Goldberg and Weinberg JJ. See also: Re Cobon and Department of Family and Community Services [2001] AATA 549. 14 The application as made on 31 January 2007 was rejected by Centrelink on 14 March 2007 and that decision was affirmed on 30 May 2007. On 4 July 2007 the Social Security Appeals Tribunal affirmed the decision under review rejecting the claim for an " exceptional circumstances relief payment "; as did the Administrative Appeals Tribunal by its decision in November 2007. I am a very hard working, reliable person and I will do anything to explore every avenue to improve my circumstances. I am aware that relief is being paid to large business supplying the rural community. I have made this application for exceptional circumstances relief payment believing that a small grant would assist me in restarting my contracting business. I have completed this to the best of my ability and have had this explanation typed. I went to get help to complete the forms correctly at the Dubbo Legal Aid Centre and I was humiliated and given no assistance what so ever. I will abide by your decision but I feel I have to keep trying to get off social security. 16 Accepting as factually accurate that which is set forth in that letter, and as again recounted during the course of the Applicant's submissions to this Court today, it is regrettable that a few moments of time in the provision of preliminary legal advice at an earlier stage may have explained to the Applicant the reason why a claim for an " exceptional circumstances relief payment " -- or, indeed, a claim for " farm help income support " -- was bound to fail. The Applicant's attendance at the Legal Aid Centre (on his account) took less than 15 minutes. The apparent failure to provide meaningful advice has not only resulted in proceedings before the Social Security Appeals Tribunal and the Administrative Appeals Tribunal and this Court, but has also exposed the Applicant to understandable distress. 17 The Applicant's Application for an extension of time in which to appeal to this Court from the decision of the Administrative Appeals Tribunal was equally bound to fail. 18 Appeals from decisions of the Tribunal to this Court are confined to " a question of law " and are to be filed within 28 days: Administrative Appeals Tribunal Act 1975 (Cth), s 44(1) and (2A)(a). Prima facie the rule is that proceedings commenced outside the prescribed 28 day period ought not to be entertained: Jeilles v Secretary, Department of Employment & Workplace Relations [2007] FCA 1590 at [9] . There is, however, a discretion to extend that time. The principles relevant to that discretion have been conveniently set forth by Wilcox J in Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 and those principles have since been repeatedly applied in a variety of contexts in which an extension of time is sought: eg, Bahonko v Nurses Board of Victoria (No 4) [2007] FCA 1449 at [47] ---[48], [2007] FCA 1449 ; 97 ALD 721 at 730; SZGCA v Minister for Immigration & Citizenship [2008] FCA 224 at [4] . 19 One consideration relevant to an application for an extension of time is whether an explanation has been provided as to why an appeal was not filed within time. Although it is to be expected that an acceptable explanation will normally be given, there is no rule that such an explanation is an essential precondition to the granting of an extension of time: Comcare v A'Hearn [1993] FCA 498 ; (1993) 45 FCR 441 at 444 per Black CJ, Gray and Burchett JJ. In the present proceeding the Applicant explained to this Court that he was provided with a copy of the decision of the Tribunal in late January 2008 and thereafter he was given the " run around " when he attempted to get the " paperwork " necessary to be completed for the purposes of an appeal. Of some concern is the apparent difficulty that the Applicant experienced when seeking to obtain advice in respect to the Tribunal's decision and his difficulty in obtaining access to a draft notice of appeal . On his account, the Applicant attempted to pursue his right of appeal but was not provided with the necessary advice or information so as to enable an appeal to be filed. No prejudice was claimed by the Respondent should an extension be granted. 21 In the context of the present Application , it is considered that the principal consideration relevant to an adverse exercise of the discretion to extend time is an assessment as to whether the Applicant has an arguable case. The " obvious strength or weakness " of an applicant's case is of relevance to the exercise of the discretion: Lucic v Nolan (1982) 45 ALR 411 at 417 per Fitzgerald J; Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 349. Although in many cases it may neither be appropriate nor practicable to attempt a full investigation of the merits of an appeal when considering whether an extension of time should be granted, the present proceeding is one in which the merits of the decision of the Administrative Appeals Tribunal can readily be assessed. [4] However, whatever entitlement a person may have under that provision, the payment cannot be made to any person who is in receipt of a social security benefit. This is made clear by s 12(1) of the Farm Household Support Act 1992 which says that exceptional circumstances relief payment: ... is not payable to a person if the person is receiving a social security benefit, a social security pension or a service pension. [5] During the telephone hearing I asked Mr Jarrett whether he had been receiving newstart allowance when he made his claim for exceptional circumstances relief. He said he had been. I also asked him whether he is still receiving newstart allowance. He said that he is. In fact, the documents lodged with the Tribunal by Centrelink show that he has been receiving newstart allowance since 1999 and that he is still receiving it now. [6] Newstart allowance is a "social security benefit": see s 3(1) of the Farm Household Support Act 1992 and s 23(1) of the Social Security Act 1991 . [7] Mr Jarrett is not entitled to receive an exceptional circumstances relief payment because he was receiving newstart allowance when his claim for the relief payment was assessed. 23 That conclusion, it is considered, is manifestly correct and any appeal would have no prospects of success. An extension of time is not appropriate in such circumstances: Lockett v Military Rehabilitation & Compensation Commission [2006] FCA 946 ; Riverside Nursing Care Pty Ltd v Secretary, Department of Health and Aged Care [2003] FCA 1065 at [18] ---[20], 76 ALD 773 per Merkel J. 24 Considerable reservation was expressed at the outset of the hearing today as to whether the claim for assistance as made in January 2007 was confined to an application for an " exceptional circumstances relief payment ". The claim form was not so confined; nor was the claim form expressly confined to a claim for payment under the Farm Household Support Act 1992 (Cth). Notwithstanding that ambiguity, it would nevertheless appear that it was this claim form which was to be completed if an " exceptional circumstances relief payment " was sought. 25 Whatever may have been the consequences of that ambiguity, however, no difficulty in the present proceeding arises by reason of the fact that the Applicant understood, when completing the form and when making his claim in January 2007, that he was making a claim for an " exceptional circumstances relief payment ". So much is apparent from the terms of his letter annexed to the Application as filed in this Court. 26 In any event, and as submitted on behalf of the Respondent Secretary, the decision of the Administrative Appeals Tribunal was a decision affirming a decision refusing such a payment. The jurisdiction of the Tribunal which was being entertained was a jurisdiction to review a decision of the Social Security Appeals Tribunal: Social Security (Administration) Act 1999 (Cth), s 179. And the only decision of the Social Security Appeals Tribunal was a decision in respect to an " exceptional circumstances relief payment ". The jurisdiction of this Court conferred by s 44 of the 1975 Act is again confined to entertaining an appeal " on a question of law, from any decision of the Tribunal ". Confined to the decision as made by the Administrative Appeals Tribunal, no question of law arises such as to warrant an extension of time being granted in respect to that decision. The jurisdiction conferred by s 44, it should be recalled, is more narrow than a jurisdiction to entertain an appeal from a decision " involving a question of law ": TNT Skypack International (Aust) Pty Ltd v Commissioner of Taxation [1988] FCA 119 ; (1988) 19 ATR 1067 , 82 ALR 175. 27 Given the lack of any prospects of success on appeal, consideration need not be given to such other factors as may otherwise have been relevant to the exercise of the discretion, including the failure to identify -- or, at the very least, attempt to identify -- the " question of law " which the Applicant wished to have resolved on appeal. 28 Even had an extension of time been granted, an appeal would have been dismissed. 29 It remains a matter for the Respondent Secretary to consider whether the Applicant may be entitled to any other form of relief. Both prior to and during the course of the hearing today it should be noted that the Secretary has quite properly provided assistance to the Court as to all matters relevant to the decision to be made. That assistance has gone beyond simply advocating the case sought to be advanced by the Secretary. It was the assistance which is to be expected of a " model litigant " and was appreciated. 30 In different circumstances, the decision in this matter may have been reserved. Whether the decision had been reserved or not, the conclusion would not have changed. The outcome of the Application for an extension of time would have been the same. The Applicant has travelled to Sydney from near Dubbo for the purposes of the hearing and an ex tempore judgment has at least served the purpose of communicating to him in person the decision which has been reached and the reasons for that decision. The name of the Respondent be changed to " Secretary, Department of Families, Community Services and Indigenous Affairs ". 2. The Application for an extension of time as filed on 23 April 2008 be dismissed. 3. The Applicant to pay the costs of the Respondent of and incidental to the Application . I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. | application for extension of time application refused explanation for delay no prospects of success administrative appeals tribunal |
On 20 March 2003 he lodged an application for a protection (Class XA) visa with the Department of Immigration and Multicultural and Indigenous Affairs under the Migration Act 1958 (Cth) ('the Act'). On 27 May 2005, a delegate of the Minster for Immigration and Multicultural Affairs refused to grant the appellant a protection visa and on 16 June 2005 the appellant applied for review of that decision by the Tribunal. 3 On 6 December 2005 the Tribunal decided to affirm the delegate's decision not to grant the appellant a protection visa. The appellant was notified of the Tribunal's decision on 3 January 2006. The appellant filed an application for judicial review of the Tribunal's decision in the Federal Magistrates Court on 27 January 2006. His application for judicial review was dismissed by Hartnett FM on 2 March 2006 pursuant to r 44.12 of the Federal Magistrates Court Rules 2001 . On 22 March 2006, the appellant sought leave to appeal against the decision of Hartnett FM, which was granted by Black CJ on 9 August 2006. I was also educated in Colombo. I was in Kurunegala from 1982 --- 1985 with my parents, who were actively involved in politics. That due to a family problem we moved to Colombo. My boss would mostly send Tamil people overseas who would use our travel company and they would often pay more. We only had a small amount of Sinhalese and Muslims who would go overseas. He had some weapons and other documents which were the property of the LTTE, when he was apprehended at Katunayake airport. He was arrested for being a Tamil tiger and was taken into custody. He told the security forces that he was travelling through Amman Travel and that two of the employees of Amman Travel had helped him. Whilst searching the office, I was in my office talking to a customer. They asked me to open a cupboard and when I opened it, inside they found a bag. They asked me who owned the bag. I told them I had no knowledge. They then opened the bag and inside the bag they found weapons, batteries, wires and some documents. I stressed to them that the bag did not belong to me. However, the police and CID did not believe me and suspected me of being a Tamil Tiger. I was then arrested and taken into custody, where I was interrogated. I was taken to various places. This reaffirmed their view that I was a Tamil Tiger and I was kept in custody for nearly ten months. I was only released, after a payment of money was made to the police. They came with police and took me into custody where I was physically abused. That in the meantime, I encountered problems because of the change in government. The PA government people had given some air tickets which belonged to the forces, which had been sold by our travel agency for a discount price to the public. The police and CID came to the office regarding this and I was taken into custody. There was a recent incident which happened at Urogodawatha in a mosque close to my home town. The police suspected me and took me into custody, where I was interrogated and tortured. I was released. That because of the fear I was in, my father made arrangements for me to leave the country. My father gave my passport and money to an agent. The agent was told about my situation and the agent told me he would do everything. The agent then gave me a passport and told me that I must travel on that passport. We then came to Singapore and then to Melbourne airport. I asked for my passport, but the agent did not give me the passport. The agent then came outside the airport and gave me a photocopy of the passport and took the original passport with him. The agent left and I have never seen him since. In its findings, the Tribunal stated that it did not accept the appellant's claims and found him to be entirely lacking in credibility. The Tribunal found his claims to be inconsistent with the independent evidence, internally inconsistent at the hearing and so far fetched as to be fanciful. • The appellant did not have a well-founded fear of harm arising from his religion as a Muslim. • The appellant's claims in respect of his fear of harm arising from his relationship with his mother lacked credibility. • The appellant's claims and evidence in regard to his detention in October 2001 for ten months and release after payment of a bribe in August/September 2002 lacked credibility. • The arrest or questioning in relation to the appellant's boss dealings with tickets was a purely criminal matter. Any problems in the future arising from the illegal sale of tickets would be a common law offence and not a Convention-related matter. • The appellant accepted that he was targeted by customers who were disgruntled about losing their money and felt cheated by the appellant's employer. • The evidence and claims about being taken to the police station lacked credibility. Independent evidence indicated that the police do not mistreat Muslims in Colombo. Her Honour observed in her reasons that, at the hearing, the appellant was invited to put forward oral arguments to elaborate his grounds that the Tribunal failed to consider his claims and evidence, and had breached common law or statutory duties of natural justice (at [3]-[4]). 9 Her Honour considered that the appellant was unable to elaborate on his claims and dismissed the application pursuant to r 44.12 and fixed costs in the amount of $1,000. It made findings of fact open to it on the evidence before it. It put matters relevant to the decision to the applicant asking him for comment including in relation to country information before the Tribunal. The Tribunal put to the applicant evidence which appeared to contradict his claims to afford the applicant an opportunity to respond. It found the application to be "entirely lacking in credibility. Further, I conclude that no arguable case could be adduced by or on behalf of the applicant. I will make an interlocutory order dismissing the application and costs will follow the event. There by [sic] the Tribunal breached sections 36 & 65 of the Migration Act 1958 and in particular 36(2) which defines " refugee ". 12 I have given the appellant opportunity today to make further submissions, both at the beginning of the hearing, and in response to the submissions made by the first respondent. 14 A failure to deal with a particular piece of evidence is neither a failure to take into account a relevant consideration nor a failure to deal with a claim. 15 The Tribunal found that the appellant was a Muslim who spoke Tamil, and relied on country information, which the Tribunal found included material that there are no Tamil Muslims in Sri Lanka. However, one piece of country information sourced from the Documentation, Information and Research Branch ('DIRB') of the Immigration and Refugee Board (Ottowa) referred to by the Tribunal does indicate that there are Tamil Muslims in Sri Lanka. It seems to me, however, that this does not demonstrate an error of law, and clearly no jurisdictional error, merely because the Tribunal, in this respect, may have made a wrong finding of fact ( 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). 16 In my view, the appellant's allegation that the Tribunal did not consider his claim as a Tamil Muslim cannot be made out in this case. The Tribunal clearly did consider this claim. The circumstance that a finding of fact may have been erroneous in the Tribunal's consideration of the claim does not in the circumstance of this case permit the setting aside of the Tribunal's decision. 17 It was further claimed by the appellant that the Tribunal failed to consider that he belonged to a social group by being a Tamil Muslim. The claims and the evidence in support had to be supplied by the appellant himself in as much detail as is necessary to enable the Tribunal to make a finding of fact. It is clear that the Tribunal is entitled to rely upon what the appellant himself puts to the Tribunal, and it is not required to make out a case for him: see Prasad v Minister for Immigration and Ethnic Affairs (1985) 6 FCR 155 at 169-70 per Wilcox J; Abebe v Commonwealth of Australia [1999] HCA 14 ; (1999) 197 CLR 510 at 576, [187] per Gummow and Hayne JJ. 18 In my view, reading the material of the appellant before the Tribunal, he did not claim as a separate part of his submission to be part of a social group as a basis for his claim to have a well-founded fear of persecution. As Allsop J made clear in Htun v Minister for Immigration and Multicultural Affairs (2001) 194 ALR 244 at 259, [42], the only relevant considerations are the integers of the appellant's claim of persecution. Once the integers of the claim have been put forward, only then do such claims become relevant considerations which need to be dealt with by the Tribunal. 19 In any event, the Tribunal did make a finding in relation to the appellant's claims as a Tamil Muslim, and it is difficult to see what further the Tribunal could have done in this respect once it made a finding that the appellant's claims as a Tamil Muslim were not to be accepted. The Tribunal found specifically in this regard and set out clear reasons in support of it. The applicant gave evidence at hearing, that in 1985 his mother enrolled the applicant in school in Colombo, and then she returned to live in Kurenagala. The applicant stated that after 1989 he had "no details about her". The Tribunal asked the applicant if it was correct to say that after 1985 he did not live with his mother again. The applicant confirmed that he lived with neither his mother nor his father after 1985 when he was six. He resided with his grandmother, and four aunts (mother's sisters). Indeed, his NIC (National Identity Card) indicates his permanent residential address as Grandpass (Colombo). By his own evidence, he has had little contact with his mother since he was six years old --- 20 years ago. Given the applicant's lack of contact with his mother, and the fact that his NIC (National Identity Card) would demonstrate to the authorities that he has lived in Grandpass (Colombo) for some considerable time and not with his mother, as well as his education and employment all having taken place in Colombo, the Tribunal cannot be satisfied that the applicant would be considered to be associated with his mother or imputed with a likewise political opinion. The applicant has not provided any documentary evidence to support these allegations, and the Tribunal finds his claim to have had problems arising from his relationship with his mother to lack credibility. It cannot be satisfied that the applicant has a well founded fear of harm for reason of his membership of a particular social group (his family --- namely his relationship to his mother). Clearly in this particular instance, the Tribunal indicated the basis of the lack of credibility. I find no error of law in relation to that ground of appeal. Information must be provided to the appellant in writing if that information relates to a reason, or part of the reason, for the Tribunal affirming a decision of the delegate. It is also clear that relief is not to be refused on discretionary grounds merely because there has been no unfairness: see generally SAAP v Minister for Immigration and Multicultural Affairs [2005] HCA 24 ; (2001) 215 ALR 162. 23 It seems to me that unless s 424A(3)(a) applies, then the appellant would be entitled to have the decision of the Tribunal set aside. For s 424(3)(a) to apply there must be information that is not specifically about the applicant or another person and is just about a class of persons of which the appellant or another person is a member. I am satisfied that s 424(3)(c) does apply in the circumstances of this case, and there is nothing in the character of the selected country information to make that provision inapplicable. 24 In those circumstances, there is no obligation on the Tribunal to give the appellant any information that is not specifically about the appellant or another person. The relevant information the Tribunal relied upon in its decision is in accordance with the usual country information, and is about a class of persons of which the appellant is a member: VAAC v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 74 ; (2003) 129 FCR 168 at 174, [20] . 25 So far as needs be considered for the purposes of this case, s 424A is an exhaustive statement of the Tribunal's obligation to provide information to the appellant: s 422B. | application for protection visa applicant claimed to be a tamil muslim jurisdictional error relevant consideration an integer of the applicant's claim a finding of credibility is a finding of fact migration |
The decision in question is that of the respondent, an employee of the Australian Taxation Office (ATO). The applicant has issued four other sets of proceedings against individual officers of the ATO. The events with which each proceeding is concerned are related. The reasoning on determination of each proceeding is also similar. The respondent objects to the competency of the application on the basis that the decision the subject of the application was a decision making or forming part of the process of making assessments under the A New tax System (Goods and Services Tax) Act 1999 and is excluded by Sch 1 of the ADJR Act. Alternatively, the respondent contends that the applicant does not have standing to bring the application. Ivyside claimed GST input tax credits with respect to various purchases in relation to the company. On 22 May 2007, Mr Michael Parker (the respondent to matters WAD79 of 2008 and WAD81 of 2008) advised the applicant that the claims at 'label G11' on his activity statement for the period July to September 2006 would be disallowed because valid tax invoices were not produced to substantiate the amount of GST credits claimed. The ATO subsequently issued the applicant notices pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) and s 353- 10 of the Taxation Administration Act 1953 (Cth) (TAA). On or around 3 October 2007, the ATO issued the applicant an amended assessment and penalties for the July to September quarter of 2006. It is said that the respondent in making that decision has acted oppressively towards the applicant, is acting in breach of the Taxpayer's Charter and in breach of the ATO Receivables Policy, has abused his power and has purposefully caused mental and emotional pain and suffering on the applicant. However, in an affidavit in support of his application, the applicant stresses that the decision of which review is sought is not that decision but rather the decision of the respondent to deny and refuse him the right to an informal review of the GST issue relating to a company of which he is the director, public officer and shareholder. The applicant stresses that it was not the decision made by the respondent on or around 3 October 2007 to raise a tax assessment or an amended statement or penalties for the relevant quarter. Accordingly, these reasons focus on the substituted ground of complaint. The respondent complains that there was no evidence put forward which could possibly support the allegations of oppressive, harassing or unlawful behaviour or, indeed, any conduct other than the alleged issue by the respondent of the amended assessment in relation to the GST liability of Ivyside. Assuming that the complaint is that of refusing the informal review, the respondent points to the fact that there is no evidence that such a review was sought, refused or agreed to. These submissions are correct. As observed in Mirvac Homes (NSW) Pty Limited v Airservices Australia (No 1) [2004] FCA 109 by Branson J, the provision in the Federal Court Rules for the filing and service of a notice of objection to competency is intended to encourage a respondent to inform the applicant promptly that the jurisdiction of the Court is in issue. The filing of a notice of objection to competency also places the Court on notice that its jurisdiction to make the orders sought by the applicant in the proceeding is challenged. The Court must then decide, before it makes the orders sought by the applicant or any substantive orders, whether it has jurisdiction to proceed ( R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; (1979) 143 CLR 190). In Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 , Finkelstein J at [239] expressed the view that, where an issue which is properly characterised as jurisdictional is raised, it should be dealt with at the outset although a different approach was taken in Khatri v Price [1999] FCA 1289 ; (1999) 95 FCR 287 per Katz J at [14]). Whether or not it is necessary to resolve the jurisdictional issue at the outset, it appears to me that the current jurisdictional argument is succinct and independent in the sense that it can be resolved without any other evidentiary enquiry. If the argument is correct, there seems no obvious reason in this case why consideration of the jurisdictional challenge should be further deferred. Deferral has not been sought by the applicant. (As distinct from raising opposition to the objection). He contends that the respondent's decision or conduct is reviewable in this Court and it falls within the class of decisions to which the ADJR Act applies. Section 5 of the ADJR Act provides that a person aggrieved by a decision to which the Act applies may apply to the Court for an order of review on certain grounds. Section 6 of the ADJR Act provides for review of conduct, engaged in, being engaged in or proposed to be engaged in for the purpose of making a decision to which the ADJR Act applies. It is apparent from the definition of 'decision to which this Act applies' in s 3 of the ADJR Act that the Act only applies where there is a making of, proposal to make or requirement to make a decision, the decision is of an administrative character, and the decision is made under an enactment. It is clear that a "decision to which this Act applies" must be a decision of an administrative character, that it may be made in the exercise of a discretion, and that it must be made under an enactment. But these characteristics provide little guidance as to the meaning of the word "decision" upon which the definition in s.3(1) is based. First, the reference in the definition in s.3(1) to "a decision of an administrative character made ... under an enactment" indicates that a reviewable decision is a decision which a statute requires or authorizes rather than merely a step taken in the course of reasoning on the way to the making of the ultimate decision. Secondly, the examples of decision listed in the extended definition contained in s.3(2) are also indicative of a decision having the character or quality of finality, an outcome reflecting something in the nature of a determination of an application, inquiry or dispute or, in the words of Deane J., "a determination effectively resolving an actual substantive issue ". Thirdly, s.3(3), in extending the concept of "decision" to include "the making of a report or recommendation before a decision is made in the exercise of a power", to that extent qualifies the characteristic of finality. Such a provision would have been unnecessary had the Parliament intended that "decision" comprehend every decision, or every substantive decision, made in the course of reaching a conclusive determination. Finally, s.3(5) suggests that acts done preparatory to the making of a "decision" are not to be regarded as constituting "decisions" for, if they were, there would be little, if any, point in providing for judicial review of "conduct" as well as of a "decision ". On the one hand, the purposes of the A.D.(J.R.) Act are to allow persons aggrieved by the administrative decision-making processes of government a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of "decision" is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen C.J. and Lockhart J. appeared to emphasize the first of these considerations in Australian National University v. Burns , there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret "decision" in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process. With the exception of s.3(2)(g), the instances of decision mentioned in s.3(2) are all substantive in character. Moreover, the provisions in sub-ss. (1), (2), (3) and (5) of s.3 point to a substantive determination. In this context the reference in s.3(2)(g) to "doing or refusing to do any other act or thing " (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s.16(1)(b) or in par. (e) of Sched.1 or par. (a) of Sched.2 to the A.D.(J.R.) Act any contrary implication. These exclusions from the A.D.(J.R.) Act or from s.13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. Views on whether or not particular decisions or conduct constitutes a reviewable decision have not always been unanimous (for example, Guss v Federal Commissioner of Taxation [2006] FCAFC 88 ; (2006) 152 FCR 88). Not only are there questions as to whether conduct constitutes a decision but also whether it is a decision taken under an enactment. For a decision to be reviewable it must be one 'for which provision is made by or under a statute', the provision should be more specific than general (for example, Hutchins v Commissioner of Taxationn (1996) 65 FCR 269 and Electricity Supply Assn of Australia Ltd v Australian Competition & Consumer Commission [2001] FCA 1296 ; (2001) 113 FCR 230). A general authorisation for a body to act in a certain way is not usually regarded as being sufficient to qualify a decision as being one made under an enactment: Salerno v National Crime Authority (1997) 75 FCR 133. A decision will only be "made ... under an enactment" if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice. In the language of Fox ACJ in Evans v Friemann (1981) 35 ALR 428 at 431 the relevant decision or conduct did not constitute a decision which was final and conclusive for immediate purposes at least. It was not the ultimate or operative determination of an issue as distinct from the determination of issues arising in the course of making such an ultimate decision ( Social Services, Director-General of v Chaney [1980] FCA 87 ; (1980) 31 ALR 571). That complaint appears to have been (emphatically) replaced by the applicant with a complaint to refuse an informal review. In my view, the alleged actions or conduct of which complaint was originally raised by the applicant simply formed part of a process of leading up to the making of a decision by the Commissioner to disallow the GST input credits claimed by Ivyside. The alleged failure to informally review is not a relevant decision or conduct. Further and as a distinct ground, even if there were an appropriate basis for review, it could be advanced only by the company, Ivyside not by the applicant. However, if this were the only issue standing in the way of the competency of this application, I may have granted any application to amend the identity of the applicant, or for that matter, the respondent. The difficulty with the competency of the application however, in my view, is much more fundamental, going to jurisdiction. The respondent's jurisdictional objection to competency must be upheld and the claim dismissed. The applicant is to pay the costs of the respondent to be taxed if not agreed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | judicial review application brought pursuant to administrative decisions (judicial review) act 1977 (adjr act) to review decision of respondent objection to competency of application whether decision open to review meaning of 'decision' under adjr act whether substantive determination whether applicant has standing to bring application administrative law |
The licence permits them to use the premises at 34-38 Pipe Road, Laverton North, for purposes of warehousing goods. Between October 2005 and November 2005 quantities of Affair cigarettes owned by Eastern Enterprises Pty Ltd were placed into storage at the warehouse. The cigarettes had been imported into Australia in February 2004 but had not been entered for home consumption. On 12 November 2006, the cigarettes were stolen. Following the theft, the applicant, a Collector of customs, demanded that the respondents pay to the Commonwealth $127,364.30 as the customs duty payable on the cigarettes at the rate in force at the date of the demand. The demand was not satisfied. This action has been brought to recover the amount. The question is whether the respondents are required to pay that sum. 2 Duty of customs is imposed by the Customs Tariff Act 1995 (Cth). Section 15 relevantly provides that the duty is imposed on "goods imported into Australia on or after 1 July 1996". The Customs Act is also relevant. Section 68 of that Act states that goods that are imported are required to be entered: (a) for home consumption; (b) for warehousing; or (c) for transhipment. Section 132 provides that, subject to irrelevant exceptions, the rate of duty payable on goods is the rate in force when the goods are entered for home consumption. Section 132AA provides that in the case of goods entered for home consumption the "[t]ime by which the duty on the goods must be paid [is the t]ime of entry of the goods for home consumption". Finally, s 153 provides that duties shall constitute debts payable by the owner and are recoverable at any time in any court of competent jurisdiction. 3 The authorities establish that the effect of these provisions is as follows. First, while there is no definition of "importation" in the Customs Act , goods are deemed imported into Australia when they are brought from abroad on board a vessel or ship for purposes of being landed: Chief Executive Officer of Customs v Tony Longo Pty Ltd (2001) 52 NSWLR 458 at [110]. Second, goods are dutiable under the Customs Act on importation: Tony Longo 52 NSWLR 458 at [118]; The Collector of Customs (Vict) v Wilh Wilhelmson Agency Proprietary Limited [1956] HCA 74 ; (1956) 102 CLR 147 at 157. Third, the goods remain dutiable whether or not they are entered for home consumption: Tony Longo 52 NSWLR 458 at [115]-[118]; Collector of Customs for the State of New South Wales v Southern Shipping Company Limited [1962] HCA 20 ; (1962) 107 CLR 279 at 296. Fourth, and this is a qualification on the third proposition, the obligation to pay the duty is suspended until the goods are entered: Customs Act s 132AA. 4 In the first instance, the obligation to pay customs duty falls on the "owner" of the goods in question. "Owner" is an expression that is given a wide meaning in s 4 of the Customs Act . The owner is not, however, the only person who may be liable for duty. When the Customs Act was first enacted, Part V (comprising ss 78 to 110) dealt with the warehousing of goods. Section 78 provided that dutiable goods might be warehoused in a licensed warehouse. Section 92(4) provided that the licensee of any warehouse shall "[p]ay the duty on all warehoused goods removed from his warehouse except by authority and on all warehoused goods not produced to the officer on demand unless such goods are accounted for to the satisfaction of the Collector". 5 A broader provision, s 35A , was introduced into the Customs Act by Act No 37 of 1957. 6 Section 35A has a greater scope of operation than s 92. First of all, it covers a wider class of persons. Section 92 imposed liability only on the holder of a warehouse licence whereas s 35A deals with the liability of every person entrusted with the care of dutiable goods. Secondly, s 92 was only engaged in the circumstances when: (1) goods were removed from the warehouse without authority; or (2) dutiable goods were not produced to an officer on demand. Section 35A , on the other hand, covers those cases as well cases involving the loss, theft, or destruction of dutiable goods, which may be outside s 92. 7 The respondents put forward three propositions, any one of which, they say, relieves them from liability. Each proposition lacks nothing in ingenuity. Two are somewhat troublesome. 8 First, the respondents contend that whatever be the ambit of s 35A , it was not intended to cover a warehouse licensee, whose liability was dealt with by s 92 alone. This contention is founded on two grounds: (1) the location of s 92 in a division concerned with licensed warehouses; and (2) the unlikelihood that Parliament intended that liability be imposed on a licensee by two potentially overlapping provisions. 9 While the argument is not without its attraction, it cannot be accepted. First of all, the two sections (ss 35A and 92) only partially overlap. More importantly, s 35A is an extremely broad provision which, according to its plain language, will cover the licensee of a warehouse. There is, in my view, no good reason to read it down. 10 I should explain why acceptance of their first proposition is of importance to the respondents. In 1980, s 92 was repealed by Act No 110. It was replaced by other sections which did not repeat s 92(4). The argument put is that following the amendment Parliament intended to eliminate the responsibility of warehouse licensees to pay duty on goods removed from their warehouse without authority. 11 The ordinary place at which imported goods are stored prior to entry for home consumption is a licensed warehouse, and thus to exclude warehoused goods from the scope of s 35A would have a significant negative impact upon customs revenue. As a general rule Parliament is usually concerned with increasing the revenue; thus, in the absence of a clear statement that warehouse licensees are in fact excluded from the statutory regime, I can see no reason to impute this intention to Parliament. Rather, I think it more reasonable in the circumstances to conclude that when s 92 was repealed Parliament did not insert a substitute for s 92(4) because the view was taken that s 35A covered the field. 12 The respondents' second proposition is built primarily on the fact (not in dispute) that when the Affair cigarettes were stolen they were "stale", in that they had passed their "use by" date. Additional support for the proposition is drawn from evidence that the cigarettes were not packaged in conformance with applicable statutes and regulations (ie they could not be legally sold in Australia without repackaging) and are in any event a brand not ordinarily sold within Australia. The argument is that because the cigarettes were stale, improperly packaged, and without an established market in Australia, they had no value and thus could not be dutiable. There is some attraction in a proposition that goods which have no value should not be subject to duty. However, the argument overlooks certain important facts and ignores the structure of the Customs Act . 13 As regards the facts, the cigarettes themselves did have a value when they were imported --- they were not then stale. The packaging argument does not change this fact because the packaging of cigarettes is extrinsic to their value; there is nothing to say that the cigarettes could not have been repackaged in conformity with law and then sold. Similarly, the evidence that Affair cigarettes are a brand not ordinarily sold within Australia is not of itself sufficient to establish that they have no market value. Indeed, the very fact that someone thought to import them into this country suggests that they had some value. 14 But there is a more fundamental flaw in the respondents' market value submission. Even if I were to accept that the cigarettes had no value at the time of importation, the duty payable on cigarettes is not an ad valorem duty but a duty imposed at a fixed rate on each individual cigarette, without reference to brand name or market value. If following importation goods diminish in value, provision is made for a refund, rebate or remission of duty. This is dealt with by s 163 of the Customs Act and the Customs Regulations . Regulation 126 sets out the circumstances in which refunds, rebates and remissions may be made. Those circumstances include: (a) where the goods on which duty has been paid or is payable have deteriorated or been damaged, lost or destroyed before they become subject to the control of Customs; (b) where goods on which duty has been paid or is payable have deteriorated or been damaged or destroyed while subject to the control of Customs; and (c) where goods on which duty has been paid or is payable have been lost or stolen while subject to the control of Customs. If this, or any other regulation, is applicable, then an application for rebate may be made; but at the same time, that a rebate or remission may be available is not a defence to an action for the recovery of the duty. 15 In their last submission, the respondents contend that in order to succeed under the facts and circumstances of this case it was incumbent upon the applicant to establish both that the respondents had failed to keep the Affair cigarettes safely (s 35A(1)(a)) and that they had not accounted for the cigarettes to the satisfaction of a Collector (s 35A(1)(b)). The point of this submission is that the object of s 35A is to protect the revenue, and the revenue will not be harmed by the entry into home consumption of valueless cigarettes. Hence, so the argument went, the Collector, having voluntarily sought an accounting, was required as a matter of law to be satisfied the goods had relevantly been accounted for. 16 It may be that the premise that lies behind this argument is that the conditions in s 35A(1) are cumulative and not alternative conditions. But, as the cases say, they are alternative bases for imposing duty: Southern Shipping at 287 and 299, 305; Sidebottom v Giuliano [2000] FCA 607 ; (2000) 98 FCR 579. In other words, it is not a condition precedent to the making of a demand that an accounting first has been sought. 17 Acknowledging this authority, counsel for the respondents made a far subtler argument. (b) of the sub-section. The use of the word "or" in introducing the paragraph may at first sight appear to create some difficulty but if the purpose of the section is kept in mind I think that difficulty disappears. If the undoubted fact is that a custodian of goods has failed to keep them safe from the danger of going into consumption without payment of duty as, for example, where readily saleable goods have been stolen, par. (b) need not be called in aid by the Collector. But cases may easily be imagined in which the disappearance of the goods leaves it doubtful whether they may have gone into consumption or that it is likely that they will do so. If so, par. (b) may be invoked and the custodian may be required by the Collector to account for the absence of the goods in such manner as to satisfy him that the revenue has not suffered and, in the absence of an explanation which satisfies the Collector of that fact, the obligation to pay imposed by the latter part of the sub-section may be enforced. In the present case, the explanation given by the defendant for the disappearance of the goods was that they had been stolen and the probabilities were, in these circumstances, that they would go into consumption. The defendant failed to safeguard them against that danger and there was no need, in these circumstances, for the Collector to request the defendant to account for them. Nevertheless he did so and the account was not one upon which he was bound to be satisfied that the revenue had not suffered or would not be likely to suffer. See also Wilh Wilhelmson 102 CLR at 159. 18 The first three sentences of this passage establish, as the respondents accept, that the demand and accounting provisions are alternative. However, counsel placed great reliance on the emphasised portions of the passage distinguishing "readily saleable" goods from those unlikely to go into home consumption. He argued further that even though a Collector may not be required to request an accounting, he may voluntarily do so, in which case his discretion to accept or reject that accounting is not unfettered. 19 I will accept, without deciding the issue, that Owen J's views are correct. I am also prepared to accept for the sake of argument that: (1) even where a Collector is not required to request an accounting, he or she may nevertheless do so, particularly in a case such as this where the goods are not "readily saleable"; and (2) the Collector's discretion to then accept or reject the accounting is not completely unfettered. 20 Arguably, a voluntary request for an accounting was made in this case. The evidence was that on 13 November 2006, a Collector informed agents of the respondents that if they could not account for the goods, then a demand would be made. Prior to making the demand on 3 July 2007, the respondents informed the Collector of facts adverted to earlier, including that the cigarettes were unlikely to enter the home market because they were stale and were a brand not ordinarily sold in Australia. 21 The respondents contend that if this account was, in the words of Owen J, "one upon which [the Collector] was bound to be satisfied that the revenue had not suffered or would not be likely to suffer," then the demand should not have been made. (Strictly speaking, the respondents never explicitly challenged the validity of the demand, but it is tolerably clear that this is the point of their accounting argument. ) In oral argument, counsel conceded that the Collector has a discretion whether to accept an accounting and that the only way to show that an exercise of the discretion had miscarried would be to show that the Collector, on the facts before him, had no alternative but to be satisfied that the respondents had suffered. 22 In this case, always assuming for the sake of argument that the views of Owen J represent binding authority, I do not consider that the Collector was bound to be satisfied by the respondents' accounting. The unchallenged evidence was that one Mr Lee, attempting to sell stale and unmarked Affair cigarettes to sailors, managed in the course of 18 months to sell roughly 300 packets at $1.50 per packet. When it was put to counsel that this evidence showed only that the threat to the revenue from the stolen cigarettes was on the light side, but not that there was no threat, he argued that no reasonable Collector would consider it a threat such as to justify rejection of the accounting given. 23 One problem with this submission is that this action is an action for a debt. There is no cross claim to review the reasonableness of the Collector's decision to bring the action. Putting that problem to one side, the only way the respondents could succeed under Owen J's test would be to demonstrate that there was no threat to the revenue. For example, suppose the facts were that, at the time of the theft, the cigarettes were not just stale, but were waterlogged and covered in mould. In those circumstances it might be accepted that, on Owen J's approach, the Collector, having requested an accounting, was bound to be satisfied by the response given. 24 That is not this case, however. Here, the facts were such that it was open for the Collector to consider that there was still some risk of loss to the revenue. Thus he was not bound to be satisfied by the accounting given. 25 Although I need go no further, because it might be said there is some unfairness about the result in this case I ought to say a few words about that topic. First of all, it is distinctly possible that s 35A can produce unfair results. For example, the duty to keep goods safe has been held to be nearly absolute: Southern Shipping at 287 (stating that only force majeure might be an exception to the duty); see also Sidebottom at [11]. Thus, short of a showing that, say, Godzilla had stomped the warehouse, the respondents could not avoid liability for a failure to keep dutiable goods safe, no matter how many precautions they had taken in an attempt to safeguard the cigarettes. Moreover, even under Owen J's approach, a Collector is not required to request an accounting where the duty to keep safe has been breached. Thus, even in the hypothetical of the waterlogged and utterly worthless cigarettes, if a Collector were to simply present a demand without mentioning an accounting, that would be the end of the matter. 26 What then is a person in the position of the respondents, who has failed to keep goods safely but considers that the loss of the goods poses little threat to the revenue, to do? The answer is the second response to the charge of unfairness. The respondents' proper course is to seek a refund, rebate, or remission of the payment under s 163 of the Customs Act and reg 126, on any qualifying basis. If the application for remission is wrongly rejected by the Collector the applicant can then seek merits review of that decision before the Administrative Appeals Tribunal. Alternatively, the applicant may seek judicial review of the decision. 27 I will order that the respondents pay the applicant the amount claimed in the demand together with the costs of this action. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | customs duties when obligation incurred obligation incurred on importation not entry for home consumption whether lack of market value is relevant to whether goods are "dutiable goods" whether section 35a duty to keep safe is applicable to warehouse licensees whether a collector must be satisfied by an accounting for lost or stolen goods that the goods had little value at the time of the loss or theft customs |
Under s 36(2) of the Act the criterion for a protection visa is that the applicant for the visa is (relevantly) a non-citizen in Australia to whom the Minister is satisfied Australia has protection obligations under the Refugees Convention as amended by the Refugees Protocol (meaning, in accordance with s 5(1) , the 1951 Convention relating to the Status of Refugees and the 1967 Protocol relating to the Status of Refugees). Section 474 of the Migration Act protects "privative clause decisions" (defined to include decisions with respect to protection visas) from challenge other than on the grounds of jurisdictional error. They arrived in Australia on 14 May 2006. On 22 June 2006 the appellants applied for protection visas with the Department of Immigration and Citizenship. A delegate of the first respondent refused the applications on 16 September 2006. On 9 October 2006 the appellants applied to the Tribunal for a review of that decision. The Tribunal affirmed the delegate's decision on 21 November 2006. 3 The second appellant did not make any specific claims under the Convention. The appellants' appeal to this Court relates only to the circumstances of the first appellant. The first appellant claimed persecution by reason of his involvement with the Muslim Ittehed Majlish (MIM) party in Hyderabad and subsequent refusal to join the Telegu Desham Party (TDP). 4 For convenience I refer to the first appellant as the appellant except where necessary to distinguish between the evidence before the Tribunal of the first and second appellants (when I refer to the appellant husband and appellant wife respectively). 5 On 15 July 2008 the appellants filed a notice of appeal to this Court from the orders of the Federal Magistrates Court. The notice of appeal specifies three grounds, the first and third of which overlap. For convenience I have identified the substance of the first and third claims together in summary form. The appellant claims that the Federal Magistrates Court should have found jurisdictional error in that:- (i) in breach of the Migration Act and the requirements of procedural fairness, the Tribunal did not give the appellant written details of evidence adverse to his claims and an opportunity to comment on that evidence (being evidence his wife gave at the hearing in circumstances where the Tribunal's decision was influenced by alleged inconsistencies between that evidence and the claims of the appellant), and (ii) the Tribunal wrongly found that the appellant did not take threats to his safety seriously and that those threats did not constitute serious harm. The primary judge dealt with arguments to the same or a similar effect. The Tribunal was entitled to make the factual findings it did in deciding whether it was satisfied that the appellant was a person to whom Australia owed protection obligations under the Convention. As the primary judge observed merits review is not available. The appellant's second claim is an invitation to impermissible merits review of factual findings that were open to the Tribunal on all of the evidence. 7 The first and third claims require (and received from the primary judge) more detailed consideration. As the primary judge found, the Tribunal put the appellant wife's evidence to the appellant husband during the hearing. Hence, s 425 of the Migration Act was satisfied. The starting point is thus s 424A of the Migration Act and related provisions. (2) The information and invitation must be given to the applicant: (a) except where paragraph (b) applies - by one of the methods specified in section 441A ; or (b) if the applicant is in immigration detention - by a method prescribed for the purposes of giving documents to such a person. (2A) The Tribunal is not obliged under this section to give particulars of information to an applicant, nor invite the applicant to comment on or respond to the information, if the Tribunal gives clear particulars of the information to the applicant, and invites the applicant to comment on or respond to the information, under section 424AA. (3) This section does not apply to information: (a) that is not specifically about the applicant or another person and is just about a class of persons of which the applicant or other person is a member; or (b) that the applicant gave for the purpose of the application for review; or (ba) that the applicant gave during the process that led to the decision that is under review, other than such information that was provided orally by the applicant to the Department; or (c) that is non-disclosable information. 10 Section 422B of the Migration Act provides that Div 4 of Pt 7 (in which s 424A is located) "is taken to be an exhaustive statement of the requirements of the natural justice hearing rule in relation to the matters it deals with". 11 It is also necessary to identify (as the primary judge did) the parts of the Tribunal's statement of decision and reasons that underlie them. 12 The Tribunal's statement of decision and reasons is divided into parts. The third part is entitled "claims and evidence". In that part the Tribunal, amongst other things, set out the material available as part of the original application, the application for review, the hearing and from other sources. In dealing with the material that became available at the hearing the Tribunal noted inconsistencies within the appellant's material and between the appellant's material and that provided by his wife. The appellant husband, during oral evidence, said that between January 2005 and May 2006 (after he claimed to have received threats and suffered an attack on his shop due to his political activities) he continued to live at home but went to Madras, Bombay and Delhi to make inquires about going overseas. He was thus at home in Hyderabad for only two to three months. His uncles lived in Madras and Bombay. His shop was finished because there was no one to look after it in his absence. The Tribunal pointed out that, at the beginning of the hearing, the appellant husband had said he lived in Hyderabad. The appellant responded that he did but as there was no embassy in Hyderabad he went to the other cities to make inquires and repeated that he had only spent two to three months in Hyderabad. His wife and mother continued to live in Hyderabad. 13 The Tribunal also asked the appellant husband more detailed questions about his shop. The appellant husband said the shop was attacked in January 2005 (after the elections in September 2004 and threats he had received but had not taken seriously until the attack on his shop). 14 The Tribunal took evidence from the appellant wife. The appellant wife said her husband had lived in Hyderabad from January 2005 until they came to Australia and had not lived anywhere else during that period. She said that her husband closed the shop after it was attacked which was in September 2004. They received assistance from her father. The applicant stated he has an uncle in Mumbai and he made trips to Mumbai to inquire about coming to Australia. The Tribunal noted that the applicant said earlier that he only spent two months in Hyderabad while his wife stated that he continued to live there. The applicant said that his wife meant that he lived in Hyderabad but travelled to other areas. The Tribunal asked the applicant to comment on the fact that his wife said that the attack on the business occurred in September 2004 while the applicant husband said it was in January 2005. The applicant husband said it happened in January 2005. The applicant said that may be his wife had a bad memory and may be she had forgotten. 16 In that part of its statement entitled "findings and reasons" the Tribunal accepted that the appellants were nationals of India. There were also significant differences in evidence of the applicant husband and applicant wife concerning important aspects of the claims. The Tribunal does not rely on such inconsistencies in reaching its decision and does not consider these to be adverse to the applicant. The Tribunal found the applicant not to be a credible witness. Many aspects of his oral evidence changed as the hearing progressed. During the hearing the appellant displayed extremely limited knowledge about MIM and was unable to provide consistent information or information about when he joined the party, the procedure for joining, or how many seats the party won in elections. The appellant could not explain why he was only targeted after the election in September 2004 and had not brought his membership card to the hearing despite bringing his tax card from India. For these reasons the Tribunal considered that the appellant's involvement in the MIM party was minor with the consequence that there was no real chance of the appellant being persecuted for this reason. (2) The Tribunal did not accept that the appellant and his shop had been attacked due to his refusal to join the TDP. The Tribunal said this claim "lacked details". The evidence the appellant gave about his business was inconsistent. The appellant did not bring to the hearing evidence he said he had about his claimed assault and hospitalisation related to the attack on his business. The Tribunal did not accept that the appellant, his wife or shop had been attacked. (3) The Tribunal found that the appellant's evidence about threats from the TDP party related to the period between September 2004 and January 2005 and no other time. Further, that the appellant had not taken the threats seriously so they could not amount to serious harm. (4) The Tribunal considered the appellant's conduct inconsistent with the existence of a well-founded fear of persecution because he claimed that the threats started after September 2004 and he was physically harmed and his business ransacked in January 2005. When asked where he resided he initially said at home in Hyderabad and subsequently said that he moved to other areas and only spent two to three months in Hyderabad. He explained this inconsistency by saying his home was in Hyderabad but he lived elsewhere. The Tribunal did not accept this evidence and found the appellant to be "evasive on this issue". The Tribunal did not accept that the appellant resided anywhere other than Hyderabad. (5) The Tribunal noted that the appellant said his wife and mother continued to reside in the family home in Hyderabad after the threats and attack. The Tribunal considered that if the appellant feared for the safety of his wife and mother due to the threats against them by the TDP they would not continue to reside in the family home in Hyderabad. Further, that the appellant's conduct in taking more than a year to leave India was inconsistent with the appellant having a well-founded fear of persecution. (6) The Tribunal considered that the appellant had not provided any details of fear or persecution for being a Muslim member of the MIM party in a Hindu area. The Tribunal said that in the absence of any evidence it was not satisfied that the appellant had a well-founded fear of persecution because of his religion. (7) Having regard to all incidents reported by the appellant, singularly and cumulatively, the Tribunal was not satisfied that there was a real chance of the appellant being persecuted for any Convention reason in the foreseeable future. (8) The Tribunal also noted that the appellant said the MIM and TDP parties were only active in the state of Andrha Pradesh. The Tribunal did not accept the appellant's claim he would be recognised in other states because it did not accept that the appellant had a high profile within the MIM party. Consequently, the Tribunal found that any persecution the appellant might face was localised and it would be reasonable for the appellant to relocate to another part of India given that he had run his own business, come to Australia, and gained employment. Therefore the applicant does not satisfy the criterion set out in s 36(2) for a protection visa. Further, that independent country information was within the exception in s 424A(3)(a). Hence, evidence given by one applicant relevant to another applicant is not within the exception in s 424A(3)(b) ( SZGSI v Minister for Immigration and Citizenship (2007) 160 FCR 506 ; [2007] FCAFC 110). For s 424A to be engaged, however, the evidence must constitute information that would be the reason or part of the reason for affirming the decision under review. (2) The Tribunal commenced its findings and reasons with the statement that inconsistencies between the evidence of the appellant and his wife were not relied upon or considered to be adverse to the appellant. (3) The obligation in s 424A does not require notice to be given "of every matter the Tribunal might think relevant to the decision under review" ( SZBYR v Minister for Immigration and Citizenship (2007) 235 ALR 609 ; [2007] HCA 26 at [15] ). In the context of s 424A the meaning of "information" is related to "the existence of evidentiary material or documentation, not the existence of doubts, inconsistencies or the absence of evidence" ( SZBYR at [18]). On this basis the Tribunal's appraisal of the inconsistency between the evidence of the appellant and his wife was not "information" within the meaning of s 424A. (4) However, it was necessary to consider whether the evidence given by the wife and that of the appellant itself engaged the obligation in the section. Had there not been other evidence to the same effect from the applicant before the Tribunal at this time, it may well be that a statement from another person that the applicant continued to live in the place where he allegedly claimed to fear experiencing harm would be such that, if true, it would "undermine" his claim to have a well-founded fear of persecution. However the Tribunal had the same information provided to it by the applicant at the commencement of the Tribunal hearing --- that he had lived at his address in Hyderabad until coming to Australia in May 2006. He subsequently said he moved to other areas and only spent two to three months in Hyderabad. Any reliance that might thereafter be placed by the Tribunal on what the wife said later on the same issue would not necessarily be because of the statements of fact contained in her evidence as such, but rather because of inconsistency between what she said and the applicant's changed evidence to the Tribunal to the effect that he had spent only two to three months in Hyderabad after January 2005 (and see SZKLG [SZKLG v Minister for Immigration and Citizenship (2007) 164 FCR 578 ; [2007] FCAFC 198 at [33] ). Similarly the wife's evidence as to the date when the business was attacked would be relevant because of its inconsistency with the applicant's evidence. 65. On the approach taken by Heerey J in MZXBQ [MZXBQ V Minister for Immigration and Citizenship (2008) 166 FCR 483 ; [2008] FCA 319] any appraisal of such inconsistency in evidence would go to the applicant's credibility, rather than being of itself such as to undermine the applicant's claims to have a well-founded fear of persecution as claimed. In those circumstances it cannot be said that the questioning of the applicant wife and her answers would be of dispositive relevance to the Convention claims advanced by the applicant before the Tribunal. As the first respondent submitted, consistent with the approach taken in SZBYR at [17] --- [18] and MZXBQ at [27], the appraisal of inconsistency and the credibility finding that resulted do not constitute information for the purposes of s.424A(1). Nor do the Tribunal's thought processes in respect of the applicant's credibility (see VAF [VAF v Minister for Immigration and Multicultural and Indigenous Affairs (2004) 206 ALR 471 ; [2004] FCAFC 123 at [24] ]). 66. Moreover, if in some circumstances it is appropriate to have regard to the Tribunal reasons for decision in determining whether a s.424A(1) obligation arose at a prior time (see SZEEU [SZEEU v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 150 FCR 214 ; [2006] FCAFC 2] and SZICU [SZICU v Minister for Immigration and Citizenship [2008] FCAFC 1 at [25] )], not only did the Tribunal expressly disavow any reliance on the differences in the evidence of the applicant husband and the applicant wife, but in the particular circumstances of this case there were also significant differences in the evidence of the applicant husband himself which provided a basis (and hence could be said to be part of the reason) for the Tribunal's failure to accept that the applicant resided anywhere other than Hyderabad and supported its view that the applicant's conduct was not consistent with the existence of a well-founded fear of persecution. In Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 72 ; (2005) 225 CLR 88 the High Court stated that s.424A did not apply to information consisting of a letter about the applicant's claims received by the Department because in its findings and reasons the Tribunal stated that it "gave no weight" to the letter. The Tribunal said, in its reasons, that it did not act on the letter or the information it contained. That is reason enough to conclude that s 424A was not engaged. 67. This provides an alternative basis for concluding that s.424A did not apply to the wife's evidence at the hearing. I also note for completeness that, as the reasons for decision indicate, the Tribunal made known to the applicant the "substance" of what his wife said at the hearing relevant to the issues for determination. No failure to comply with s.425 in the sense considered in SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63 ; (2006) 228 CLR 152 or a lack of procedural fairness in the manner considered in VEAL is apparent. 19 SZBYR establishes a number of propositions. Section 424A is a mandatory provision. Contravention involves jurisdictional error. The operation of the section is not limited to the pre-hearing stage but depends on the criteria for the making of the decision independent from the Tribunal's particular reasoning on the facts in the case. The criterion established by s 36 of the Migration Act is whether the appellants are or are not persons to whom Australia owes protection obligations under the Convention. Viewed in that light the information in the applicant's statutory declaration in SZBYR , if believed, did not contain in terms a rejection, denial or undermining of the appellants' claims. Rather, the content (if believed) would tend to support the application to overturn the decision to refuse the protection visa. In context, "information" in s 424A relates to evidentiary material or documentation not gaps in such material, lack of details, inconsistencies, disbelief about such material or other thought processes, appraisals or conclusions by the Tribunal. In other words the focus must be on the evidence or material in question (documentary or oral). The effect of s 424A is "not to create a back-door route to a merits review in the federal courts of credibility findings made by the Tribunal" (at [21]). 20 The primary judge's principal conclusions were: - (i) the appellant wife's evidence that her husband continued to live in Hyderabad at all times after the claimed attacks following the September 2004 elections (if taken in isolation) could be seen as undermining his claim to a well-founded fear of persecution, (ii) however, in this case the appellant husband had given the same evidence as the wife at the beginning of the hearing before the Tribunal, being the evidence he later changed or qualified, (iii) accordingly, the appellant wife's evidence (in the face of the appellant husband's evidence to the same effect at the beginning of the hearing) was relevant not because of the facts therein asserted but because of inconsistency affecting an appraisal of the appellant husband's credibility, and (iv) for these reasons, the substance of what the appellant wife said did not contain a rejection, denial or undermining of the appellants' claims and was thus not "information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review" within the meaning of s 424A. 21 The respondent Minister supported these conclusions submitting that the Tribunal's reasons (specifically, the questions put to the appellant husband about the inconsistencies between his evidence and that of the appellant wife) could not properly be used to infer that, at any time, the Tribunal considered the material would be the reason, or a part of the reason, for affirming the decision under review. The respondent Minister: - (i) described this as impermissible speculation contrary to the reasoning in SZBYR at [22] and MZXBQ at [25], (ii) emphasised the function of the words "in their terms" in SZBYR at [17], and (iii) noted that the appellant bore the onus of proving any breach of s 424A. 22 It is true that SZBYR and MZXBQ speak against the use of the Tribunal's reasons to determine compliance with s 424A on the basis that the "use of the future conditional tense ("would be") rather than the indicative strongly suggests that the operation of s 424A(1)(a) is to be determined in advance - and independently - of the Tribunal's particular reasoning on the facts of the case" ( SZBYR at [17]). It is for this reason that the focus of the inquiry must be the provision under which the protection visa was sought (s 36) and whether the information contains any "rejection, denial or undermining of the appellants' claims to be persons to whom Australia owed protection obligations". 23 I accept the respondent Minister's submission that the appellants' onus to establish breach must not be overlooked. I accept also that the appellants may only discharge the onus "in accordance with proper legal requirements and by inference not suspicion ..." ( Parramatta City Council v Hale (1982) 47 LGRA 319 at 345). I do not accept that the terms of s 424A mean that any attempt to draw inferences about the Tribunal's consideration necessarily descends into impermissible speculation. Much will depend on the nature of the material said to constitute the information within the meaning of s 424A. I also do not accept that the evidence of the appellant wife needed to demonstrate any patent falsity of the appellant husband's claims before s 424A might be engaged. SZBYR at [17] --- [18] and SZKLG (2007) 164 FCR 578 ; [2007] FCAFC 198 at [32] do not impose that threshold requirement. 24 The issue is not easy to resolve. Nevertheless, the conclusion I have reached is different from that of the primary judge. As the primary judge observed, any assessment of the existence of a well-founded fear of persecution would be affected by evidence about the appellant husband having continued to live in his home in Hyderabad. The appellant wife's evidence, in my view, remained relevant to the assessment of the existence of the claimed well-founded fear of persecution despite the husband's initial evidence to the same effect. In other words, the husband's initial evidence about where he lived did not mean that the wife's evidence was relevant only as part of an assessment of the husband's credibility. The nature of the appellant wife's evidence must also be considered. Her evidence about where her husband lived after the claimed attacks was centrally relevant to the substance of his claims of persecution in Hyderabad for political and religious reasons. For these reasons, I consider that the facts of this case enable and require an inference to be drawn about breach of s 424A. 25 The fact that, ultimately, the Tribunal did not use the wife's evidence to assess the substance of the claim (as opposed to the husband's credibility) is not an answer. Applicant VEAL of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs (2005) 225 CLR 88 ; [2005] HCA 72 , to which the primary judge referred, was decided before SZBYR . More importantly, the parties in VEAL effectively conceded that s 424A had no application (at [11]). SZEEU (2006) 150 FCR 214 ; [2006] FCAFC 2 and SZHXK [2007] FCA 759 , also referred to by the primary judge, pre-date SZBYR . The observation in SZICU [2008] FCAFC 1 at [25] leaves open the question of the permissibility of examining the Tribunal's decision when determining the application of s 424A reasons in the light of the High Court's decision in SZBYR . The respondent Minister submitted that SZBEL v Minister for Immigration and Multicultural Affairs (2006) 228 CLR 152 ; [2006] HCA 63 at [33] --- [43] established that the Tribunal was not obliged to raise the inconsistencies between the evidence of the appellants because it did not use that material to dispose of the appeal. SZBEL primarily concerned s 425 of the Migration Act which provides that the Tribunal "must invite the applicant to appear before the Tribunal to give evidence and present arguments relating to the issues arising in relation to the decision under review". It is not inconsistent with the reasoning in SZBYR about the obligations imposed by s 424A. Further, and insofar as the Tribunal's reasons are relevant to the present task, disavowal of reliance on the information is itself potentially ambiguous rather than determinative of the issue given the terms of s 424A. 26 The husband's presence at the hearing and the questions the Tribunal put to him about the inconsistency between his evidence and that of his wife also does not assist the respondent Minister. While those circumstances presumably would have excluded any claim to a breach of the common law obligation of procedural fairness, the obligation in s 424A cannot be satisfied by oral notice. The particulars must be provided in the form of a document (ss 424A(2) and 441 ) or consistent with the obligations in s 424AA. The respondent Minister did not submit that the Tribunal complied with s 424AA during the hearing. 27 I also do not accept that this was a case in which no useful result could ensue from the grant of relief. The observation in SZBYR at [29] related to a case where the Tribunal made a factual finding of a lack of any nexus between the claims and the Convention. This meant that the Tribunal, irrespective of any other issue, was bound to refuse the application for review of the decision declining the grant of a protection visa. The observation in MZXBQ at [31] concerned an issue that was peripheral to the claims. The same cannot be said in the present case. 28 For these reasons I consider that the appeal should be upheld and consequential orders made. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | application for a protection visa whether wife's evidence to tribunal constituted "information" within the meaning of s 424a whether wife's evidence relevant only to credibility of husband's claims whether tribunal complied with s 424a. migration |
They represent a native title claim. The applicants then were Matthew John Munro and Suzanne Blacklock. They brought the claim on behalf of the "Ncoorilma Tribe", which they described also as the "Ncoorilma Munros". The land in respect of which a determination was sought that native title existed was land surrounding Inverell in New South Wales. It extended well to the north of the Gwydir Highway, west to Warialda and Bingara, south-west to Barraba and Manilla, east almost to Glen Innes and south-east towards Armidale and Uralla. On 17 November 1999 a notice of motion was filed seeking to amend the application. The purpose of the amendments were said to be to "clarify the information provided in the original application". Seven new applicants were to be substituted for the original two. Those seven applicants were Mr Alexander Munro, Mr Allan ("Jimmy") Blacklock, Mr Shane Levy, Mr Anthony Munro, Mr Ronald Connors, Mr Anthony Lonsdale and Ms Jill Connors. At the very least, close attention would be needed to identification and establishment of the elements of a claim for native title by these particular claimants in this particular area. The matter was allocated to the docket of Gyles J. Apart from some formal amendments and procedural exchanges concerning persons desiring to be heard, or not heard, in the proceedings, things moved at a fairly leisurely pace until, on 30 April 2002, Gyles J directed that the applicants provide an outline of lay evidence by 1 July 2002. On 12 September 2002, the lay evidence not having been filed, time was extended by consent until 30 September 2002. On 1 October 2002 the applicants filed a very brief statement of the matters to be addressed in the evidence of eight persons. It cannot be said that those brief statements were, in any sense, an outline of evidence which complied with the directions made by Gyles J. However, at least it appeared to be foreshadowed that it was within the capacity of the applicants to address the matters described. Seven other identified witnesses were to give evidence of a similar character. It is important to bear this representation, about the availability of the identified kinds of evidence, in mind when consideration is given to the course of events thereafter. It appears that Gyles J intended, presumably in response to an indication from the applicants that it was necessary or desirable, that preservation evidence be taken at about this time. On 3 December 2002 he listed the matter provisionally for the taking of preservation evidence on 10 June 2003. However, on 25 March 2003 the dates reserved for the hearing of preservation evidence were vacated. Again matters seemed to move slowly. On 7 March 2005 seven outlines of evidence were filed. The longest were three to four pages in length. Some were shorter. They dealt in only the most summary way with the matters of the kind earlier foreshadowed, and not with all of those matters. On 27 April 2006 Gyles J directed that the matter be listed on 3 October 2006 "at a venue to be advised for directions and for the taking of evidence". On 9 August 2006 Registrar Kavallaris made a series of directions concerning a hearing to take preservation evidence. Although the directions principally concerned the evidence to be given by four identified persons there was included a direction that the applicants "file and serve a brief outline of a statement of facts and contentions on or before 17 November 2006". In 1788 at the time of sovereignty there was an Aboriginal community of people spread through out [sic] the claim area who were bound together and distinguished from other Aboriginal peoples, by various factors, including common acknowledgement and observance of laws and customs, including in relation to land and in particular by kinship connections. The claimant group are descendant from that Aboriginal community of people who were living in the claim area as at the date of sovereignty. At the time of sovereignty responsibility for and control of particular area of land and waters were exercised by subgroups or families but the laws and customs under which the subgroups possessed the rights and interests were the laws and customs of the broader community of people. The harshness of the environment meant the Aboriginal community at the time of sovereignty required a large area for food collection. Since the time of sovereignty although there have been major changes in the lifestyle and many traditional practices have disappeared the member[s] of the claim group have continued and continue to define themselves as the descendants of the Aboriginal people who inhabited the claim area at the time of sovereignty and to share a body of beliefs and to acknowledge and observe traditional laws and customs including in relation to land and waters such that it has a connection with the claim area within the meaning of section 223(1) of the Native Title Act . The rights and interests that attached to land and waters at the time of sovereignty included exclusive rights and the right to exclude others. The claimant group no longer asserts rights to exclusive use or the right to exclude others but maintains the right to speak for country and the obligation to protect sites. The statement of facts and contentions bore no apparent relationship either to the matters which, it had earlier been said in 2002, would be the subject of evidence in the proceedings. Although the matter was not, at that time, in my docket, by arrangement with Gyles J I took the evidence which the applicants wished to have preserved over three days from 5 to 7 December 2006, sitting on country and at Inverell. In the result, evidence was called only from Earl Francis Munro and Susan Margaret Blacklock, two of the grandchildren of John Munro and Sarah Harrison. That evidence has been preserved both on video and in transcript. Self-evidently, it was only the beginning of an evidentiary process which, if the claim was to be seriously maintained, would require much greater attention and development. Shortly thereafter the proceedings were formally transferred to my docket but, I regret to say, I was not able to cause them to progress any more rapidly than they had previously. Earlier attempts had been made to mediate the matter but without success. Further attempts were made but they also were unsuccessful. On 23 October 2007 I ordered that mediation cease and that the matter be referred to a registrar for the purpose of a case management conference with a view to the matter being prepared for hearing within 12 months of that date --- i.e. before the end of 2008. Over the ensuing 12 months or so Registrar Kavallaris had a number of case management conferences and made orders with a view to preparing the matter for hearing. One or more genealogies showing the biological, adoptive or other connections of each witness to the Original society and/or any relevant subgroup thereof or other connections of each witness to the Original society and/or any relevant subgroup thereof. A description of the relationship between the traditional laws and customs now acknowledged and observed by the Applicant group and the traditional laws and customs which were acknowledged and observed at the time of sovereignty by the Original society. Each site or area is to be allocated a number for ease of reference. An outline of the facts to be relied upon by the Applicant group to prove an historical connection with the claim area. Broadly speaking, the claimant group was identified as members of a family tracing ancestry to John Munro and his brother Jim, who were said to be the sole survivors of an original indigenous community occupying the claimed area at the time of sovereignty, most of whose members had been killed by settlers and police. The members of the claimant group were said to be bound to each other, and to the land in the claimed area, by ongoing and shared participation in traditional practices and the observance of traditional laws and customs, notwithstanding accommodation to European settlement in the area. Accompanying the Points of Claim was a document which purported to address the requirements of the orders in 4 (b) to (e). It contained a list of 86 proposed lay witnesses. No expert witness statements were provided. The applicants did not comply with the orders in 4(g) and (h) or provide the documents referred to in paragraph 10 of the schedule. On 13 November 2008 Registrar Kavallaris was informed that the applicants did not propose to call any expert witness. She ordered that the applicants, by 27 February 2009, file documents "setting out in consecutively numbered paragraphs the substance of the evidence in chief of each lay witness" and she extended the time for compliance with orders 4(g) and (h) and paragraph 10 of the schedule to the same day. The matter came before me on 13 March 2009. The orders made by Registrar Kavallaris on 13 November 2008 had not been complied with in any respect. On 13 March 2009 I made orders granting the applicants an extension of time to 31 March 2009 to comply with orders made by Registrar Kavallaris on 13 November 2008. I fixed the matter for hearing for two weeks on country commencing 30 November 2009 and for a further two days on 15 and 16 February 2010. I made a further order that if there had still not been compliance with the orders by 30 April 2009 the hearing dates for the matter would be vacated and the matter would stand dismissed without further order. The context in which those orders were made is of some significance. When it had become clear that mediation would be unavailing, I informed the parties on 23 October 2007 that the matter should be made ready for trial within 12 months. That expectation was reflected in the orders which I made on that day. It was with that in mind that the orders of 26 November 2007 were made by Registrar Kavallaris. The orders which I made on 13 March 2009 included a further buffer of one month from 31 March 2009 to 30 April 2009 before the proceedings would stand dismissed. It must have been apparent that the time had come for the applicants to put their case forward, if they had a case which was capable of being advanced. Despite the extension of time which was granted, the claimants did not comply with Registrar Kavallaris' orders by the time required --- i.e. 31 March 2009. They did not seek any further extension from the Court. Instead, they filed documents, which were nominally outlines of evidence, on 17 April 2009, 23 April 2009, 29 April 2009 and 30 April 2009. According to an amended list of witnesses filed on 30 April 2009, the applicants now proposed to call evidence from 45 persons. It was estimated that their evidence would each take at least 30 minutes and, in some cases, up to two hours. The most recent statements were generally around two pages in length. Eight were dated late in March 2009. A number were undated. The bulk were dated in April 2009. One, a longer statement of six pages which was filed on 30 April 2009, was dated 15 November 2001. Even then, not all the orders made by Registrar Kavallaris were complied with. Although the applicants also filed on 30 April 2009 a "family tree" to comply with Order 4(g) made on 26 November 2007, the documents required by Order 4(h) and those referred to in paragraph 10 of the schedule to those orders were still not filed. As Registrar Kavallaris' orders had not been complied with, as the orders made on 13 March 2009 had not been complied with, as the non-compliance continued on 30 April 2009 and as the claimants had taken no steps to seek any further extension of time the proceedings stood dismissed and the hearing dates were vacated. On 9 July 2009 a notice of motion supported by affidavit was filed seeking the reinstatement of the proceedings and an extension of time in which to file the remaining outstanding documents. It should be noted that an attempt had been made to appeal from the orders of 13 March 2009 by a notice of appeal filed on 21 May 2009. That appeal was discontinued on 15 July 2009. The relief sought by the notice of motion was in substance: Orders made on 1 May 2009 be vacated. The applicants be granted an extension of time to file the outstanding documents. The first form of relief sought is misconceived. No separate order was made on 1 May 2009. However, that is of no particular significance now. The matter which requires attention is whether the applicants should be granted a further extension of time, notwithstanding that the proceedings stand dismissed. The power of the Court to extend time, notwithstanding that the earlier order has taken effect, is undoubted (see FAI General Insurance Company Ltd v Southern Cross Exploration NL [1988] HCA 13 ; (1988) 165 CLR 268 ; R D Werner & Co Inc v Bailey Aluminium Products Pty Ltd (unreported, Federal Court of Australia, Woodward, Jenkinson and Foster JJ, 2 May 1988) and Sammy Russo Meat Supplies Pty Ltd v Australian Safeway Stores Pty Ltd [1999] FCA 1381). The power is to be used to relieve against injustice. From amongst the various respondent parties to the present proceedings there was active opposition to an extension of time from the first respondent and NTSCORP. The matters they relied upon were broadly similar. One complaint was that the statements eventually filed during the month of April were short, formulaic in nature and advanced upon the basis that they would be supplemented orally at the hearing. Under that law the claimant group are the native title holders. I was shown meeting places and sacred sites in the claim area. ' In some instances some named examples of places or sites are given. In particular, no maps showing the name (or names) and locations of sites, places and localities within the claim area which are referred to in statements or reports or are to be referred to in evidence were filed or served and no table identifying the features, history, mythological connections or other attributes which are said to give the site, place or locality in question its significance were filed or served. A map and accompanying schedule has been provided to the State by email (after request by the State) on 6 August 2009. The schedule lists 34 named places of which only 6 of the names are mentioned in the 45 'Outlines of Evidence'. In addition, the 'Outlines of Evidence' mention at least 22 names of places that are not included in the document provided by the Applicants and are not readily identifiable. The material that was not provided in accordance with the Court[']s orders and that which has still not been provided is essential to the process of understanding, scrutinizing and assessing the Applicant's case. Its relevance and importance arises because it is the detail concerning patterns of behaviour and the affiliations that exist between people and particular places which reveals the laws and customs that must exist if native title rights and interests in land are to be found to exist. This operates in at least three ways: first the laws and customs as acted upon and described by witnesses are relevant to the question as to whether there has been continuity in the existence of the society to which members of the Applicant group belong; secondly the laws and customs are relevant to the question of whether the connection that is required by s223 of the Native Title Act 1993 exist and thirdly, the detail of how land and waters have been and are used or enjoyed is relevant to the ascertainment of the content of any rights and interests that may exist. When I asked Mr Neumann about the character and substance of the documents filed as outlines of evidence he accepted that in order to attempt to provide adequate support for the applicants' claim it would be necessary for there to be very substantial supplementation of the material filed in a number of ways and that there was no prospect that the claim could succeed upon the material filed alone. Even in the areas where material has been filed it does not, in substance, meet the requirements imposed upon the applicants to disclose the case upon which they propose to rely or satisfy the orders which were earlier made. Indeed, the material now filed makes no attempt even to meet the description of material said, in 2002, to be available to the applicants to address and sustain their claims. Despite the passage of over 11 years it does not appear that the applicants are in a position to mount the kind of factual case that would be necessary to put forward their claim at a sufficiently respectable level to raise a case for serious attention. Mr Neumann is obviously in a difficult position. He is acting without fee and depends upon the energies of the applicants to respond to the Court's directions. Nevertheless, I am not satisfied that, if I now gave leave to file what is said to be the outstanding material not already provided, the applicants would then have complied with the directions which were made on 13 March 2009. In particular I am not satisfied that it could reasonably be said that they have filed outlines of evidence disclosing the substance of the evidence in chief upon which they would rely. On the contrary, it seems to me that if the proceedings are reinstated there would still need to be substantial supplementation of the material filed. It is not going too far to say that the real case of the applicants, in terms of facts and particulars sufficient to support their claim, would only appear later, if it emerged at all. In those circumstances, a further extension of time, and reinstatement of the proceedings, would result only in a situation where, despite the filing of material during April 2009 and the additional material which the applicants desire now to file, the orders which I made on 13 March 2009, and those which were made by Registrar Kavallaris on 13 November 2008, would still not have been complied with. In the meantime, the respondents would be forced to attempt to prepare their cases in virtual ignorance of the facts to be asserted. As it is impossible to foresee all of the circumstances under which the rule might be sought to be used, it is undesirable to make any exhaustive statement of the circumstances under which the power granted by the rule will appropriately be exercised. We will not attempt to do so. But two situations are obvious candidates for the exercise of the power: cases in which the history of non-compliance by an applicant is such as to indicate an inability or unwillingness to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period and cases --- whatever the applicant's state of mind or resources --- in which the non-compliance is continuing and occasioning unnecessary delay, expense or other prejudice to the respondent. Although the history of the matter will always be relevant, it is more likely to be decisive in the first of these two situations. Even though the most recent non-compliance may be minor, the cumulative effect of an applicant's defaults may be such as to satisfy the judge that the applicant is either subjectively unwilling to co-operate or, for some reason, is unable to do so. Such a conclusion would not readily be reached; but, where it was, fairness to the respondent would normally require the summary dismissal of the proceeding. The proceedings have now been on foot for a little over 11 years. It seems quite apparent that the applicants are unable to organise themselves in a way which will permit reasonable and timely compliance with the Court's orders. Perhaps they lack any particular incentive or motivation to do so at the present time, although the material before me is insufficient to reach a firm conclusion to that effect. What is clear is that the latest default is the last in a series of similar defaults. I am satisfied that there would be real prejudice to the respondents actively opposing the notice of motion if the proceedings were reinstated. On the other hand it is difficult to identify any prejudice to the applicants of any permanent or ongoing kind from the dismissal of the proceedings. No costs are sought from the applicants. It is not suggested that any form of estoppel would arise. A further claim might be made if necessary and appropriate. Although Mr Neumann, on behalf of the applicants, has suggested that they might lose their right to negotiate flowing from the registration of their claim, any proposal in relation to future acts affecting the land which is the subject of the claim would be the subject of notice in accordance with s 29 of the Native Title Act 1993 , in response to which appropriate claims might be formulated and lodged. Ultimately, what is required is the exercise of a judicial discretion having regard to the interests of justice. I am not satisfied that the interests of justice require the orders sought in the notice of motion or any interference with the orders made on 13 March 2009. The notice of motion will be dismissed. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Buchanan. | native title claim self-executing orders made which came into effect upon non-compliance with orders no application for further extension of time in which to comply applicants in consistent and ongoing default prejudice to respondents if proceedings reinstated no prejudice to applicants if proceedings remain dismissed. practice and procedure |
Within seven (7) days, the Respondent/Cross-Applicant do one of the following in respect of each document contained in the Schedule to this notice of motion ('documents'): (a) the Respondent/Cross-Applicant either: (i) deliver a copy of the document to the solicitors for the Applicant/Cross-Respondent; or (ii) produce the document for inspection by the solicitors for the Applicant/Cross-Respondent. (b) the Respondent/Cross-Applicant file and serve an affidavit deposing: (i) that the document does not exist and has never existed; (ii) the circumstances in which the document ceased to exist or passed out of the possession, custody or power of the Respondent/Cross-Applicant, and what has become of it. Within 14 days after the date of this Order the Applicant make discovery of all correspondence passing between the Applicant and SCV from June 2006 in relation to any matter in issue in the proceeding. Five sitting days have been allocated. Given the proximity of the trial date, it seems to me especially desirable that judgment be delivered as soon as possible after the close of submissions. As those submissions concluded at almost 5 pm, it was not possible so to do on 26 June 2008. 3 Fig Tree was once known as Village Life Limited. It and Prime are parties to 12 wholesale management service agreements. Under those agreements, Fig Tree was engaged to manage 12 retirement villages owned by Prime. The agreements have lengthy terms, in excess of 20 years. A dispute has arisen as to whether Prime has validly terminated each of those 12 agreements, as a consequence of their having been repudiated by Fig Tree. Fig Tree's position is that it has not so repudiated, that the agreements are in place, and that Prime should be restrained from acting upon a purported termination. This position is made controversial by Prime which has an opposing view. The relief sought by the parties reflects their respective positions. 4 I shall now consider, in detail, the merits of each application for interlocutory orders. At the time when Fig Tree's notice of motion was filed this month it apprehended that Prime's list was incomplete in the way categorised in the schedule to that notice of motion. Subsequent developments have now overtaken that position. On 24 June 2008, a supplementary list was delivered, accompanied by a further affidavit from Mr Tomlinson, a solicitor in the employ of Prime's solicitors, Madgwicks. These are in respect of the following categories of document, taking the numbering from the schedule to the notice of motion: 1, 4, 9, 22 and part of 36. 7 Fig Tree's detailed submission in respect of each of these categories has been helpfully ordered in a schedule to its counsel's outline of submissions, which I have read and placed on file. I shall deal with the present controversy category by category. No consent was then obtained from Prime. SCV nonetheless came to perform services at the retirement villages in what it, at least, styled as a "transition. " Inter alia on the pleadings, Fig Tree alleges, and Prime contests, that Prime in any event elected to affirm the wholesale management services agreements and thereby lost the right to terminate them. 9 Prime's riposte, which is controversial in the proceedings, is that though Prime had some knowledge of an "assignment agreement," it did not become aware of the nature and extent of the changes to its own contractual relationships, as contemplated by the assignment agreement, until mid September 2007; and, further, that it did not become aware of the nature and extent of SCV's involvement in the management of the villages until mid to late October 2007. 10 In its pleading, Fig Tree, inter alia , questions the veracity of Prime's pointing to the state of awareness claimed. Reference is made to the terms of a product disclosure statement, dated 6 July 2007, which was issued by Prime to the public for the purpose of soliciting investment in units offered by it. It is contended that it may be inferred that Prime, by its directors and executive officers, believed to be true and, further, or alternatively, accepted as a satisfactory status quo, the facts referred to in the product disclosure statement concerning SCV. 11 In this regard, attention is drawn by Fig Tree to particular statements in the product disclosure statement as well as to the very nature and character of the document concerned. Particular attention is given by Fig Tree to para 6.3 at page 31 and para 12.1.7 at page 101 of the product disclosure statement. In each of those paragraphs one finds reference to SCV. The terms of those paragraphs are too lengthy to set out in detail. They are exhibited to the material which has been read on the application. 12 It is submitted on behalf of Fig Tree that if, contrary to its primary position, its entry into the assignment agreement could be regarded as repudiatory, Prime has elected to affirm the wholesale management services agreements and lost its right to terminate them. It seems to me as a matter of principle that in this issue a question necessarily will arise at trial as to the sufficiency of knowledge of Prime. Prime takes the position that Fig Tree is seeking to go behind the affidavits of documents that have been delivered. That is the position which it takes in respect of each of the controversial categories of documents. 13 Prime highlights rightly, in my respectful submission, that the fact that it has prepared a supplementary list does not, in any way, lead to a conclusion that one should not regard the presumption of conclusivity as still present. In this regard it points to observations made by inter alia Branson J in Brookfield v Yevad Products Pty Ltd [2002] FCA 1376. In turn, those particular submissions are contested by Fig Tree. It is true that one does not lightly go behind a discovery affidavit. Prima facie, such an affidavit is conclusive, but that prima facie position may be displaced in the circumstances described in O 15 r 8. Even if displaced, there remains a discretion to exercise. Would it, for example, be unduly oppressive to order the filing of a further affidavit having regard to the potential utility to the party complaining of the document or category of documents? More generally, is it in the interests of justice so to order? 16 Having regard to the evident input from experts, evident on the face of the product disclosure statement, its very nature and the paragraphs identified in the product disclosure statement, it seems to me inherently likely, or to put more accurately, it seems to me that there are grounds for a belief that there may be, or may have been, documents in category 1. It is not necessary in an application of this kind for an applicant to prove to demonstration that there are such documents. There may well not be. Rather what is necessary is that grounds for a belief be engendered. 17 What Prime knew and when is, in my opinion, hardly a peripheral issue on the pleadings. I do not regard it as oppressive to make an order in respect of an affidavit of documents in respect of category 1. 19 Part of the amended statement of claim is devoted to Prime's alleged public misleading representations concerning Fig Tree. Paragraph 29 makes reference to media releases made by Prime. These properties represent a relatively small component (circa 6%) of gross income flows to Prime Trust. Earlier this year Village Life Ltd announced it had sold its management rights to SCV Group Ltd and shortly thereafter SCV Group Ltd announced that it had taken operational control of these premises. Following advice from senior counsel, the Responsible Entity on behalf of Prime Trust had advised Village Life Ltd that it does not have the power to assign its rights and responsibilities in each WMSA without Prime Trust's consent. It is not the intention of Prime Trust to consent to the assignment and we consider each WMSA to be repudiated. Prime Trust emphasizes that this matter will have no adverse consequences for the existing residents of the properties; for them it is business as usual. Similarly, no adverse impact on returns to Prime Trust unitholders from this action is anticipated. 21 In my opinion, it is established that there is, again in terms of O 15 r 8, grounds for a belief that some document recording advice given by senior counsel may be, or may have been, in existence. It seems inherently unlikely that the text of the media announcement would be the only repository of such advice in a matter like this. I would not be disposed to make an order for a further affidavit of documents if, whatever that repository might be and even if it had not earlier been discovered, the contents were clearly privileged. 22 It seems to me, though, having regard to the terms of the announcement, that any privilege in so much of any advice from senior counsel as is referred to in that announcement has been waived by Prime. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law" 37 . This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege. . . . What brings about the waiver is the inconsistency, which the courts, where necessary informed by considerations of fairness, perceive, between the conduct of the client and maintenance of the confidentiality; not some overriding principle of fairness operating at large. Depending upon the circumstances of the case, considerations of fairness may be relevant to a determination of whether there is such inconsistency. 24 There is certainly a temporal element in the word "following" which appears in the media release. In context, though, my opinion is that there is not only such an element. It also seems to me that it carries with it an indication that the course of action described and position taken is in conformity with senior counsel's advice. Why else, one asks rhetorically in a matter such as this with its evident seriousness in a public announcement, does one make such a reference to senior counsel? It is, of course, the case that senior counsel's advice to Prime may have ranged much more widely than that described in the media release. I can see no waiver of any such wider ranging advice apparent on the face of that media release. 25 It is conceivable, therefore, that there may well be, at least prima facie , some residual privilege claim available. I propose, therefore, to order that a further affidavit of documents be provided in respect of the category four documents. In so ordering I reserve expressly such claims of privilege in respect of documents within that category as may be just. Those claims will obviously be subject to the conclusions which I have reached in respect of waiver. It is not necessary to set out its terms in detail. That is because the fate of the application in respect of category 9 seems to me, correctly with respect, as was submitted by counsel on behalf of Fig Tree to turn on the outcome of category 1. There will, therefore, be an order for a further affidavit in respect of category 9. As it transpired in the course of the interlocutory proceedings and as I understood the position on behalf of Prime only item four within category 22 became, in the end, controversial. In other words, it seemed that it was accepted that there ought to be a further affidavit in respect of items 1, 2 and 3 in category 22. Item 4 is described as documentation concerning the meeting specified as schedule for 15 August 2007 between SCV and Prime. 28 Fig Tree's position is that in relation to this document grounds for a belief in terms of O 15 r 8 arise from an email dated 10 August 2007 from one Tracey Jamieson of SCV to one Penny Berkshire of Prime and one Kim Jacques of Prime. That lists three attachments. Those attachments are described in Fig Tree's submission. The email refers to a meeting scheduled for 15 August 2007 between SCV and Prime. It foreshadows the preparation of an agenda for the meeting "to ensure SCV team members are available to assist with any inquiries. " Fig Tree's submission is that it is likely, I prefer to put it, that there are grounds for a belief, that some documentation exists such as an agenda specifically referred to in that email in addition to diary notes, memoranda, minutes of the meeting. I agree. There will be an order then in respect of each of the documents in category 22. It is submitted that the result in respect of category 36 that is submitted on behalf of Fig Tree turns upon the result in categories 1 and 4 and for like reasons. I agree. For that reason I do not set out in detail the terms of category 36. There will be an order in respect of a further affidavit in respect of category 36. In short then, insofar as presently pressed, Fig Tree's notice of motion succeeds. Those documents are presently confidential exhibits JPT27 and 30. 31 The orders made on 28 November 2007 envisaged liberty to apply. There is a very helpful passage in respect of the position which obtains in relation to orders which have been made by consent in the judgment of McPherson J in his then capacity as Senior Puisne Judge of the Supreme Court of Queensland in Fylas Pty Ltd and Vynal Pty Ltd (1992) 2 Qd R 593 at 599 and also 601. The whole passage is too lengthy conveniently to set out in reasons delivered ex tempore. For a long time the rule has been that, "The contract of the parties is not the less a contract, and subject to the incidence of a contract because there is superadded the command of a Judge. 33 The explanation was, he said, that it was not an attempt to modify the contract implicit in the order or undertaking. It was an application in accordance with the contract and, as such, the exercise of an express right reserved by the contract to the party bound by the terms of the order or undertaking. Prime developed at some length a submission that, having seen the manuals which are presently confidential exhibits, there was nothing confidential about them. Fig Tree, at some length, contested this. The consent orders incorporated an agreed position in respect of the manuals. Liberty to apply was reserved to work out questions concerning the operation of those orders. I do not read the reservation of liberty to apply as a reservation of or an invitation to raise questions concerning the confidentiality of the manuals. 34 It is quite apparent from the material read before me that the orders made by consent in November last year obviated, for reasons which were thought good at the time, any contest concerning an issue in relation to the confidentiality of such documents. I see no reason not to hold Prime to its bargain concerning the status of those manuals. Particularly that is so having regard to the relative proximity of the hearing of the application to the date of trial and the length of time which has elapsed since November last year. It also seems to me that there will not be any unjust inhibition of Prime's forensic position if the present position with respect to those manuals is maintained. 35 Prime sought to broaden the category of the present exception with respect to the confidential exhibits so as to embrace the following, taking the wording from the terms of a document which became exhibit 1 on the hearing of the applications: residents of some unknown extent but at least a Mr Hurst and managers, namely, surnames only, Deane, Mankoff, Donnelly, Hodgson and McLean. Fig Tree voiced a concern in relation to the status of these managers. The articulated forensic purpose for the expansion of the exemption category was to facilitate the giving of evidence as to departures in practice from the manuals. I can well understand the place of such evidence in the context of the position that Prime seeks to advance at trial. However, preservation of the present exemption does not, in my opinion, prejudice Prime's forensic position. The alleged departures are pleaded at some length on behalf of Prime. Oral evidence in these subjects is able to be given without access to the manuals by either the witnesses identified in exhibit 1 or, for that matter, those not there identified. Such evidence would not, in any way, breach the terms of the order made by consent on 28 November 2007. This aspect of Prime's notice of motion fails. It is submitted on behalf of Prime that there is nothing in Fig Tree's list to indicate it has described documents which are of the same nature. Complaint is made of Pt 2 , sch 1 of Fig Tree's list. It is submitted that one sees they are groups of documents whose only similarity is that the same claim of privilege is made out. This, it is submitted, is a mere blanket claim. O 15 r 6(4), requires that the grounds for a claim of privilege will be identified in respect of any document in respect of which a claim is made. Prime emphases the word "any. 39 A party seeking disclosure is not entitled to have such a description as would enable the formation of a prima facie view as to the correctness of the claim of privilege. 40 In Kyocera Mita Australia Pty Ltd v Mitronics Corporation Pty Ltd [2005] FCA 242 , Stone J dismissed an application for an order which would have required a defendant to provide a list which specifically identified each document in respect of which a claim for privilege was advanced. The categories have been identified not by description of the legal privilege that is claimed but by description of the documents themselves. The discovery has been verified by affidavit. In the circumstances, I am of the view that the costs involved in a matter that has been going for such a long period of time as this far outweigh any benefit from identifying and describing the documents individually in the way Kyocera seeks. 41 While the practice adopted by Fig Tree may not, at least to some, be an exemplar of perfection, it adequately recites in paras 1 to 3 of Pt 2 of Sch 1, the grounds upon which privilege is claimed in those parts of the documents in Pt 1 of Sch 1. A solicitor has certified that list. The observations made by Stone J seem to me to be apposite in the circumstances of this case. In particular, I am not satisfied that the costs of striving for any further precision at this stage of the proceedings are warranted. This aspect of Prime's notice of motion fails. 43 The detail of Fig Tree's submissions as to why no such discovery should be ordered appears at para 61 of its outline. Again, the exigencies of the moment do not conveniently admit of setting that out in full. 44 Having regard to what is there said, the arguments advanced on behalf of Prime as to the relevance of the documents in this particular category are not persuasive. This aspect of the application fails. Mr Tomlinson, in exhibits to his affidavit has given examples of what has been done in this regard. There are many documents indeed which have been masked out. How the masking out was done is explained in an affidavit of Ms Freyling, a solicitor in the employ of Minter Ellison, the solicitors for Fig Tree. She and two others, respectively described as a graduate and a research clerk (each presumably, therefore, not a solicitor), were involved in a process of masking out. Sometimes in cases thought to be doubtful, advice was taken from a more senior practitioner within the firm. Ms Freyling swears, and it is worth recording that she was not cross examined in this regard, that some 90 to 95 per cent of masking out was on the basis of "relevance" with the balance being privilege. 46 Regrettably, the basis of that differentiated position in relation to masking out is not the subject of any discrete recording, nor very frequently is it apparent on the face of a masked out document as to why the masking out has been undertaken. 47 In Gray and Associated Book Publishers Aust Pty Limited [2002] FCA 1045 , 23 August 2002, one aspect of an interlocutory controversy before Branson J was self indulged masking out seemingly, in that case, on the basis of an asserted private right of confidentiality. However, it is clear that the power of the court to order that a discovered document be produced for inspection by another party is a discretionary power (see order 15, rule 11). Further, order, 15 rule 5 relevant provides "the court shall not make an order under this order for the filing or service of any list of documents or affidavit or other documents or for the production of any document, unless satisfied that the orders are necessary at the time when the order is made. " What is "necessary" within the meaning of order 15, rule 5 is that which is reasonably necessary in the interests of a fair trial and of the fair disposition of the case (Trade Practices Commission v CC (NSW) Pty Limited (1995) 58 FCR 426 at 436-437 Lindgren J). Where there is a valid claim for privilege in respect of the portion of the document withheld from inspection, this practice is based on a positive right to withhold from inspection that part of the document. However, there is no such positive right in respect of portions of documents sought to be withheld from inspection on the grounds of confidentiality or irrelevance (Telstra Corporation v Australis Media Holdings (McLelland CJ in Eq, 10 February 1997, unreported)). In my view, where in this Court categories of documents are required to be discovered and thereafter made available for inspection, the true obligation on the party giving discovery is the same as that identified by McLelland CJ in Eq in Telstra Corporation v Australis Media Holdings by reference to Pt 23 of the New South Wales Supreme Court Rules . If in such cases the party giving discovery desires to withhold, by making or otherwise, production of part of a discoverable document on the ground that that part does not contribute to the satisfaction of any of the criteria by reference to which the class of documents is described, then it may be that a case can be made for giving effect to that desire, but in my view, unless there is some relevant qualification in the order for discovery, the order requires that the whole document be produced unless there is an agreement to the contrary by the party to which discovery is being made, or unless relief from the requirement, for example by making certain portions is obtained from the Court. As in Gray , Fig Tree did not obtain the agreement of Prime to the masking of portions of its discovered documents, nor did it seek relief from the Court from its prima facie obligations to allow full inspection of its discovered documents. Should that practice now, nonetheless, be authorised by the Court? I share with Mackenzie J, whose concern is evidenced in Menkens v Wintour [2007]) 2 QdR 40, the view that it is salutary to keep in mind another passage from McLelland CJ in Telstra, in which his Honour emphasises a need for caution in exercising a discretion to allow parts of a document to be concealed. If for this, or any other, reason, masking on the grounds of alleged irrelevance would detract from a proper understanding of the meaning and significance of the admittedly relevant parts of the document, then such masking is not justified. 50 Minor though the sample may be in terms of the masked documents I do apprehend, from those which have been exhibited to Mr Tomlinson's affidavit, that there is just such a risk in this case in relation to the masking which is being performed. 51 Under the rules the right to access another party's documents is qualified; discovery or inspection of discovered documents are matters for the exercise of a discretion as to whether or not to impose the requirement by Court order. Only what is necessary to ensure justice inter partes should be the subject of such an order, see again O 15 r 15. That I take to be a paramount consideration. Subject to that, and in a non-exhaustive way, O 15 r 2(5) sets out considerations which are relevant; their weight depends, of course, on the circumstances of the particular case. 52 Ms Freyling deposes that the process of preparation of Fig Trees two lists of documents involved a review of approximately 30,000 documents and the ultimate discovery of 2005 documents comprising about 38 Lever Arch folders of documents, a process which took weeks to perform. That process, of course, has been undertaken. The "culling", to use a perhaps inelegant term, took weeks. What is left, though, is not 30,000 documents but, rather, 2005 documents. She further deposes to the steps which, in her opinion at least --- and, again, that was not challenged in cross-examination --- would have to be taken to comply with the orders sought by Prime and to an estimate that the ultimate cost of so doing might be in the order of 114 hours of her time, costing in the order of $27,360. 53 Those, of course, would be costs as between a solicitor and client, assuming, of course, that the client is in some way bound to pay for such an exercise. I am not sitting as a taxing officer and, therefore, apart from an element of mild surprise, form no view as to the worth of that estimate. 54 There is no doubt that the Court can modify the general position in relation to the provision for inspection of the whole of the document if the circumstances of a case so require. In the proceedings before me, Fig Tree has not furnished complete copies of even the documents which are exhibited to Mr Tomlinson's affidavit and that provision might, if only to a limited extent, have offered some opportunity to assess the quality of the forensic value-judgments as to relevance which have been made in the masking-out exercise. 55 On behalf of Prime, the submission was advanced that it was difficult indeed to form a view as to the quality of those forensic value judgments from what was left. I share that particular concern. I remind myself, as well, that orders concerning categories of documents for discovery have been made by consent many months ago. Prime was entitled to expect, having regard to the orders made and the ordinary practice of the Court, that inspection would follow in the ordinary way of complete documents subject, of course, to just claims of privilege. Prime's complaint does not strike me as a precious one; it does not question for one moment the integrity or good faith of those involved in the masking-out exercise. There should not be, as a result of the orders that I propose to make, any inference drawn at all in relation to integrity or good faith. 56 It is submitted that there is no utility demonstrated in requiring the provision for inspection of complete documents; I respectfully disagree. I have already voiced agreement with concerns voiced by Mackenzie J and made reference to a risk that I apprehend is present. 57 It may very well be that in relation to many of those 2005 documents that this particular risk, presently apprehended, proves to be unfounded. If so, though, that will be wisdom of hindsight. At present, it seems to me that Prime has been presented, in a way the nature and extent of which it is not possible, on the materials to hand, fully to judge, with, at least, some and probably many documents which have about them a quality of sterility and depravation of context so far as their meaning is concerned. There is, in my opinion, forensic utility in the ordinary position prevailing. That Fig Tree may incur further expense in the provision of unmasked copies is a consideration, but it is outweighed by the considerations that I have mentioned. 58 A concern also that I have is that, at this stage, one ought not encourage what I regard as a practice which is irregular. Irregular, in the sense that no Court order and, for that matter, no prior agreement was sought. I am concerned also, though, that Fig Tree should not be deprived of just claims of privilege in respect of its discovered documents. I therefore propose to order that such of the masked documents as are subject to a claim for privilege be excluded from production, save for that Fig Tree must produce the documents which it has discovered in its lists. I reserve liberty to apply in respect of any dispute as to the validity of a claim for privilege. Subject, though, to that, I propose to order that unmasked copies of Fig Tree's discovered documents be produced for inspection. 59 A task for Fig Tree is to review some 2005 documents to determine whether the claim for privilege or a view about relevance was the basis for masking. That is doubtless a burden, but the category of documents for decision making is much narrower than 30,000. I should have thought that the exercise would be able to be done within seven days from today. Inspection of documents should follow forthwith thereafter. I direct the parties to bring in short minutes to give effect to the orders that I propose in the reasons for judgment just delivered. 60 In my view, there were two major issues which were agitated. Major in the sense of the taking of time both in relation to preparation as well as submission, both oral and written, in relation to the applications made by Prime in its notice of motion. They were what one might term the confidentiality order question and the redaction issue. The other issues on the notice of motion, which was filed by Prime, were doubtless important to the parties, but did not take anywhere near the time. I also have a view that, in respect of them, that they ought, really, to have been able to be resolved without particular forensic controversy. They seem to be, though, add-ons, as it were, perhaps even by way of extras, that would follow from coming to Court in any event in respect of major issues of controversy. In respect of Fig Tree's notice of motion, I order that Prime pay the costs of and incidental to that notice of motion, to be taxed. 2. b In relation to the relief sought in paragraphs 2(a) and (b), Prime pay the costs of and incidental to that aspect of the notice motion, to be taxed. c In respect of the relief sought in paragraph 2(c), Fig Tree pay the costs of and incidental to that aspect of the notice motion, to be taxed. d In respect of the relief sought in paragraph 3, Prime pay the costs of and incidental to that aspect of the notice motion, to be taxed. 3. I do not make any particular direction to the taxing officer in respect of the allowance of the attendance of three counsel on behalf of Fig Tree on the hearing of that notice of motion, but, rather, expressly reserve as a question for taxation as to whether or not there ought to be separate allowance for three counsel. 4. I will vacate the order made yesterday in respect of the ability to access a transcript of the proceedings freely. 5. Save in respect of exhibits to affidavits read in respect of which there is a subsisting order for confidentiality, the order in respect of the restriction of access to affidavits read yesterday is vacated. 6. I direct that each of the outlines of submissions which are placed on the Court file be placed in a sealed envelope marked "Not to be open without the leave of the Court or a Judge. | discovery whether further discovery should be required whether grounds for a belief that documentation exists whether legal professional privilege waived by limited disclosure whether confidentiality orders made by consent should be varied whether blanket claims for privilege have been made whether parts of discovered documents may be masked for confidentiality practice and procedure |
The appellant arrived in Australia on 22 July 2004 and made an application for a protection visa on 27 July 2004. The appellant claimed that he had well-founded fear of persecution as a practitioner of Falun Gong. His claims included that he promoted Falun Gong to his employees, friends and relatives, that he became the 'head of the branch' in his area, and that he was detained and tortured. 3 On 3 August 2004 a delegate of the first respondent refused to grant a protection visa. On 8 September 2004 the appellant lodged an Application for Review of that decision with the Tribunal. 5 The Tribunal found the appellant's claims were very vague and general and lacked key details and key dates. The Tribunal noted the appellant never claimed to have been harassed in the four and a half years that he lived at the same address in China and that he was issued with a passport in 2001 without any difficulties. The Tribunal was satisfied that having left China in September 2001 the appellant did not take the opportunity to seek refugee status or claim asylum in another country. The Tribunal accepted the appellant voluntarily chose to return to China. It noted that if the appellant had been subjected to serious harm for a Convention reason while in detention for 4 days in late 1999, and had a well founded fear of again experiencing serious harm because he was a Falun Gong practitioner, he would not have been willing to return to China in 2001. 6 The Tribunal was satisfied the appellant did not practise Falun Gong in the four months that he had been in Australia and that he had not made any efforts to join with other Falun Gong practitioners since his arrival in Australia. This demonstrated the appellant's lack of dedication, commitment and ongoing interest in Falun Gong. 8 The decision of Smith FM found no jurisdictional errors on the grounds raised. In relation to a breach of s 424A(1) of the Act , Smith FM was not satisfied that the prior information was not also given by the appellant at the hearing. Although Smith FM stated that parts of the Tribunal's decision were poorly expressed, his Honour was of the opinion that the Tribunal had addressed the appellant's claims, had identified rational reasons for its findings and thus its reasoning was open on the material before it. In relation to the grounds of apprehension of bias, it was open to the Tribunal to make an adverse finding in the relation to the appellant reference to Falun Gong as a religion on the basis of the independent country information. 10 At the hearing of the appeal before me the appellant submitted in relation to the ground of bias that the Tribunal did not believe that the appellant would be persecuted if he returned to China. The appellant made no submissions in relation to the other grounds of appeal specified in the notice of appeal. On an application such as this, the Court is required to determine whether the Federal Magistrate has erred rather than the Tribunal. Nevertheless, the Court will consider this allegation. 12 The appellant claimed, in substance, that the Tribunal was biased against him as it did not accept his claim. It is also willing to accept that he helped organise small group practices of up to some 12 people from his residential neighbourhood and they practiced [sic] in a home but it does not accept that in any accepted sense he was a leader of the group or could more widely be regarded as head of the area with organisational responsibilities. I am not persuaded that this element of the Tribunal's reasoning was not open to it, and I do not consider that the point made by the Tribunal might give rise to a reasonable apprehension of bias. Smith FM relied upon the decision in Re Refugee Review Tribunal; Ex parte H (2001) 179 ALR 425; [2001] HCA 28 in which the High Court held that the apprehended bias must be determined by an objective standard of a fair minded lay observer. Applying such test Smith FM was unable to conclude that any bias existed as claimed. The Court considers that Smith FM was entitled to make the finding above on the evidence before him. Accordingly, the Court will consider whether there is any basis for these assertions. 17 Smith FM found that parts of the Tribunal's reasoning were poorly expressed but he concluded that the findings were open to the Tribunal on the information then available to it. 18 Smith FM referred to the findings of the Tribunal relating to travel taken in 2001 by the appellant and the fact that he had left China on two occasions and had been able to leave and return without difficulty. Smith FM also referred to the fact that the Tribunal was told by the appellant that he was not practising Falun Gong in Australia. It also referred to the fact that the appellant's claims were vague and general. The Tribunal also referred to a brief period of detention in 1999. This matter was raised with the first respondent. I therefore do not think that a breach of the Tribunal's duties under that section can be found. It did so because the appellant had lost his passport and a new one had been issued to him on 8 September 2004 and the Tribunal was concerned to know his travel activity. In these circumstances the above conclusion of Smith FM was open to him and I do not find any error in His Honour's finding. No error is apparent. 23 It follows that the appeal must be dismissed. The Court notes that consistent with the High Court's decision in SAAP and Another v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162, the Refugee Review Tribunal should be joined as a second respondent. 24 The first respondent seeks an order that its costs be paid in the sum of $2400. As this quantum is in the range of costs which is realistic, the Court will make such order. I certify that the preceding twenty four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | judicial review allegation of bias alleged failure to comply with s 424a of the migration act 1958 (cth) no error of law migration |
I have decided that the relief claim should be granted and I will give reasons immediately, although that will mean that they will be somewhat abbreviated. The application arises out of a failure to comply with a time limit referred to in s 708A(6)(a) and s 1012DA(6)(a) of the Act in relation to a placement of stapled securities by a publicly listed entity. The effect of the breach is that parties with whom the securities were placed would be inhibited from disposing of them for 12 months. Apart from that consequence it seems clear that some of those securities have been further traded and the unscrambling of those eggs is a question of some uncertainty. I am quite satisfied that the failure to comply with the relevant time limit was inadvertent due to personal circumstances of the responsible corporate officer. I am also satisfied that the steps to regularise the position were taken within a reasonable period once the defect was appreciated. The first port of call was to seek dispensation, as it were, from the Australian Securities and Investments Commission (ASIC). When that did not succeed, further advice was taken and this application was made to the Court and has been pursued with reasonable diligence. The purpose of the provisions in question is to ensure that, where what might be called the prospectus obligations in relation to the issue of securities are sidestepped by reason of appropriate circumstances, the purchasers of such securities receive the same relevant level of disclosure as might have been achieved by other means but without the more stringent and costly requirements of a prospectus and prospectus type provisions. It is submitted, and I accept, that the critical matter in a case of this kind is that circumstances which would call for disclosure in the interests of purchasers, but which might not be caught by the continuous disclosure regime, which are called "excluded information", should be disclosed. I am satisfied on the evidence, albeit, of course, this is done ex parte, that there was no "excluded information" which should have been, and was not, disclosed in the present case. So, if the time limits had been met, that would not have altered the information base of those concerned. That being the case, it is difficult to see that there is any substantial injustice to any party occasioned by regularising the situation save for the possibility that a purchaser may be able to prove that there was "excluded information" which should have been disclosed. However, it is submitted that a purchaser who was able to prove such circumstances would have independent causes of action available and, indeed, the causes of action which would have been available would have regard to these particular provisions. Put shortly, compliance in the circumstances here would not have improved the position of such a purchaser. Furthermore, as will be noted, there is a proviso to the order which gives some limited protection in relation to that situation. I might say that the evidence is that the great bulk of, perhaps all of, the persons who received placements are what might be called professional or sophisticated investors. Furthermore, the orders provide that each of those parties will receive notice of these orders and of the proviso which these orders contain. The orders sought to be made will be made pursuant to s 1322(4) and therefore subsection (6) is applicable and provides a barrier to the making of orders subject to the satisfaction of the Court as to the matters there listed. Counsel has referred me to a number of authorities as to the application of these provisions which establish that the provisions are remedial and are meant to have regard to the substantive effect of what is done and, in certain circumstances, may involve balancing interests which are affected ( Super John Pty Ltd v Futuris Rural Pty Ltd (1999) 32 ACSR 398; Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 128 FCR 581; Re Westpac Banking Corp (2004) 53 ACSR 288; Re Wave Capital Limited (2003) 47 ACSR 418; and Re Bounty Industries Ltd [2007] FCA 956). I am satisfied that the provisions in s 1322(6)(a) are disjunctive and not cumulative. In the present case, I am quite satisfied that all of the conditions are met no matter how the section is read. There is no question, in my view, of any dishonesty. I am satisfied that no substantial injustice has been, or is likely to be, caused to any person by reason of the making of an order. I am also satisfied that in the circumstances it is just and equitable that the order be made. I have indicated the extent to which I think there may be any disadvantage to any person which is not met by the orders and I weigh against that the severe effect upon those who have taken the placement. That effect is hardly a reasonable result bearing in mind that the default was not by those parties. All in all, I am satisfied that it is a very strong case for the application of these provisions. I should mention the significance of the unsuccessful application to ASIC in case that causes any concern. I say unsuccessful, although there had been no formal rejection of it. It had been considered at a level within the organisation which was not able to give the necessary dispensation, principally because of the fact that it concerned events which had taken place and was not restricted to things that might happen. However, as a matter of substance, there was concern within the ranks of the relevant officers as to whether or not there was "excluded information" not disclosed and that concern was drawn to the attention of the company. That question has been the subject of evidence before me which was not available to the officers of ASIC. Furthermore, ASIC has now been given all of this information, served with relevant documents in connection with this application and advised of the time and place at which the application will be made. It has indicated it has no objection to the orders made and has not chosen to appear. Counsel for the plaintiffs has listed a number of factors which point in the direction of approval. I do not need to reproduce those points now. I think they are well-founded. It should also be noted that all relevant parties, save for any purchasers from placees, appear to me to have been served with notice of the proceeding, although not in a formal sense of being made parties. It seems to me that would be going too far to directly involve such possible purchasers. The notice which is going to be given to ASIC, the Australian Stock Exchange and to the persons who would have sold to those purchasers does seem to me to give a reasonable possibility of the word getting out to any purchasers substantial enough to be interested in pursuing any remedies. I referred earlier to a proviso. That proviso appears in a decision of Hely J in Re Australian Wealth Management Pty Ltd [2005] FCA 311. It gives liberty for a party, who claims to have suffered substantial injustice by reason of the orders, to apply to vary or discharge them within a limited period. That is a prudent proviso in matters dealt with ex parte and there are no other parties albeit that many of the people concerned have notice of the proceeding. I will simply make orders in accordance with the short minutes of order which I have initialled and placed with the papers. | failure to comply with time limit in relation to placement of stapled securities failure to comply with time limit was inadvertent unlikely to be any substantial injustice to any party in dispensing with the time limit applied proviso that any party who later claims to have suffered a substantial injustice by reason of the orders has liberty to apply to discharge or vary them within a limited time corporations |
In that case his Honour dismissed an application for review of a decision of the Refugee Review Tribunal (the Tribunal) dated 29 January 2008. The Tribunal had affirmed a decision of a delegate of the Minister dated 16 October 2008 wherein the delegate refused the grant of a protection (class XA) visa to the appellant pursuant to the Migration Act 1958 (Cth) (the Act). He arrived in Australia on 26 August 2007 and applied for a protection (class XA) visa on 20 September 2007. The appellant claims that he is at risk of being persecuted by the Indonesian authorities. 3 The appellant claims that prior to 1998 he had a very close relationship with the Soeharto government. He claims that after 1998 he fell out of favour with the new Indonesian government because of that relationship. 4 The appellant claims that in 2001 the Indonesian government sent police to the appellant's workplace and questioned him. Despite finding no evidence of wrong doing, the appellant claims that the police believed the appellant had a plot to overthrow the new government and imprisoned him for six months. 6 On 24 December 2007, the Tribunal sent a letter by registered post to the appellant advising him that, based on the information before the Tribunal, it was unable to make a favourable decision. The appellant was invited to attend a hearing on 29 January 2008 to present arguments and give oral evidence. The appellant was also advised that non-attendance at the hearing could lead to a decision being entered without further notice. The appellant did not respond to the Tribunal's letter and the appellant was not present at the Tribunal hearing. 8 As the appellant did not attend the Tribunal hearing, the Tribunal decided to make its decision on the review without taking any further action to enable the appellant to appear before it. 11 Accordingly the Tribunal affirmed the decision of the delegate not to grant the appellant a protection (class XA) visa pursuant to s 426A of the Act. I really fear returning to Indonesia because I supported our former president Mr Suharto [ sic ]. 2. The Tribunal failed to consider I was ever put into jail when I was in Indonesia. 3. The Tribunal member did not fully consider that my fear is well-founded. The Tribunal failed to consider the relevant information of my claims. 2. The Tribunal does not fully consider my current situation. 3. The Tribunal failed to consider the likely chance of being jailed if I go back to Indonesia. The orders of the Federal Magistrates Court dated 14 February 2007 should be quashed. 2. There be an order requiring the Second Respondent reconsider the applicant's claims according to law. 16 At the hearing of the appeal before me, the appellant was self-represented and did not file written submissions. The first respondent was represented in Court by Mr Maycock, having previously filed written submissions on 13 November 2008. 18 Mr Maycock for the first respondent was content to rely on his written submissions. In this case I do not consider that the appellant has established either jurisdictional error in the decision of the Tribunal, or appellable error in the decision of the learned Federal Magistrate. 20 In relation to the first ground of appeal it is clear from the decision record of the Tribunal that the Tribunal did consider the appellant's claims and whether the appellant had a well founded fear of persecution. As the appellant did not attend the Tribunal hearing or submit any further material the Tribunal was unable to consider further information. It is not for the Tribunal to make a case for the appellant --- rather it is for the applicant before the Tribunal to make his or her case for consideration by the Tribunal. 21 In relation to the second ground of appeal I consider that there is little to distinguish this ground from the first ground of appeal to the extent that the appellant submits that the Tribunal did not give proper consideration to his case. I have nothing to add to my conclusion in relation to the first ground of appeal. 22 In relation to the third ground of appeal, his Honour noted that the Tribunal considered the claims of the appellant relating to being beaten by police, imprisoned for one month and the possibility of further prosecution, and that the Tribunal found that these claims were unsubstantiated. As the appellant did not attend the Tribunal hearing, the Tribunal was unable to consider any additional facts relating to the assertions of the appellant. To the extent that the appellant seeks to re-agitate the facts before the Tribunal, this is not the role of the Court: NAHI v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 10 at [10] . 23 I do not consider the grounds of appeal substantiated. In my view the appropriate order is that the appeal be dismissed, with costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application for a protection (class xa) visa migration |
Put shortly, I found that the Statement of Claim was, first, offensive, embarrassing and disclosed no reasonable cause of action and, second, the causes of action relied upon were in any event doomed to failure because they sought to impeach a consent order of a superior court of record without first having that order set aside. 2 The respondents have sought to be heard on the question of costs. They now seek an order that costs be awarded in their favour on a solicitor and client basis. 3 The jurisdiction of the Court to order costs is conferred by s 43 of the Federal Court of Australia Act 1976 (Cth). The section provides a broad and ample power which ought not be read down otherwise than in accordance with accepted principle. The discretion so conferred is informed by the ordinary practice of this Court that an unsuccessful party usually will be required to pay the costs of the successful party on a party and party basis. That practice, as was indicated in Re Wilcox; Ex parte Venture Industries Pty Ltd (1996) 141 ALR 727 at 729 and 732-733, is not departed from unless the justice of the particular case so requires or some special or unusual feature arises. 4 The courts in quite some number of cases have indicated types or categories of case in which the award of costs on a basis other than party and party may appropriately be ordered: see e.g. Colgate-Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 232-234. However, they have emphasised that the categories are not closed and that, even though circumstances may exist which are capable of warranting a more generous costs order than on a party and party basis, this does not compel that such an order be made: Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685 at 687-688. For present purposes it is unnecessary to consider the case law in any detail. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. I incorporate by reference my reasons for judgment delivered on 7 February 2007. First, what those reasons disclosed is that the claims made by the applicant had no prospects of success at all and that the applicant properly advised should have known that this was the case. Put shortly, he sought to pursue proceedings in tort against the respondents in respect of conduct said to have been engaged in by them in legal proceedings which resulted in costs being unnecessarily incurred by him. However, he needed in the circumstances to have set aside an order for costs made in the Supreme Court of South Australia in those proceedings. For as long as it remained on foot, the principle of res judicata applied to any attempt to bring the tort actions in question. This was pointed out at length and on a number of occasions to the applicant and his advisers. It was disregarded. Second, the actual causes of action pleaded against the respondents were, as counsel for the applicant ultimately accepted, offensive and embarrassing. Further, the Statement of Claim itself did not reveal the very cause of action which counsel for the applicant indicated he actually wished to plead. The nature of the pleading was such as to put the parties to considerable effort and expense both to penetrate what was being said for the purposes of divining what may have been alleged against them and adequately to respond to the statement. Third, in relation to all parties, the pleading made allegations of impropriety of purpose in the conduct of legal proceedings without anything which might indicate there was any reasonable prospect of success in relation to the making out of those allegations. In particular claims were made impugning the professional integrity of the fifth respondent which, in the circumstances, were wholly offensive. 6 I am satisfied that this is a matter in which it was unreasonable for the applicant to have subjected the respondents to the expenditure of costs in responding to the application. The application was a hopeless one and ought never have been brought in the form it was. The applicant may well have been badly advised. This though provides no excuse for so imposing upon the respondents. 7 I have ordered that the applicant pay the respondents' costs of the application on a solicitor and client basis. I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | action summarily dismissed unreasonable to have subjected the respondents to the expenditure of costs costs |
First, in August and September 2002, the First, Third and Fourth Respondents terminated the employment of 12 individuals employed at the South Grafton Abattoir for a prohibited reason or reasons that included a prohibited reason. Secondly, that each of the four respondents between mid September 2002 and December 2002 then refused to employ any one of 11 of those individuals, again for prohibited reasons. 2 Apart from a declaration of a contravention of s 298K of the Act, the Employment Advocate sought an order imposing on each respondent a penalty pursuant to s 298U(a) of the Act, an order pursuant to s 298U(c) of the Act requiring the respondents to pay the 12 individuals compensation for the affect upon each of them of the contravening conduct and an order in reliance upon s 356(b) of the Act that any penalty imposed upon the respondents be paid to the Applicant. 3 Section 298T(2)(d) of Div. 6 of Pt XA of the Act provides that the Employment Advocate may apply to the Federal Court of Australia for orders under s 298U concerning conduct in contravention of Pt XA. 4 On 30 June 2006, I published Reasons for Judgment and adjourned the matter to a date to be fixed to enable the Applicant to formulate short minutes of order reflecting the declarations to be made arising out of the findings contained in the reasons and to hear the parties in relation to further submissions concerning the principles governing the assessment of a compensation component described as general damages in the Applicant's Further Further Amended Statement of Claim, the principles governing whether, and if so, the basis upon which a penalty pursuant to s 298U(a) of the Act ought to be imposed, further submissions concerning the position in relation to Mr Blackadder and submissions concerning the principles guiding the circumstances in which an order might be made under s 356 of the Act that any penalty imposed upon any one or more of the Respondents be paid to the Employment Advocate ( McIlwain v Ramsey Food Packaging Pty Ltd [2006] FCA 828). 5 No final orders have been made in the matter consequent upon the published Reasons for Judgment. 6 On 3 August 2006, the matter was further reviewed and these directions were made ( McIlwain v Ramsey Food Packaging Pty Ltd (No. On Friday, 1 September 2006, the further hearing of these matters took place. 8 On 14 August 2006, the Applicant filed a notice of motion returnable 1 September 2006 by which the Applicant sought to further amend the application so as to seek an order pursuant to s 356(b) of the Act that any monetary penalty imposed upon any of the Respondents be paid to the individuals rather than the Applicant. The Applicant has filed and served written submissions in support of the orders sought. The Respondents object to the proposed amendment as it has been raised very late in the day. However, the Respondents are not able to point to any prejudice to the Respondents as any penalty that might be imposed upon any one or more of the Respondents would either be paid to the Consolidated Revenue Fund of the Commonwealth or the Employment Advocate or as might otherwise be ordered consistent with principle. An order under s356(b) of the Act that any penalty imposed on the respondents be paid to the persons named in paragraph 1 above. The evidence consists of an affidavit sworn 10 August 2006 by Mr Stuart Bruce Ramsey, the Managing Director of each of the four respondent companies. I am the Managing Director of each Respondent Company. With the assistance of various staff members I manage the business of the Respondent Companies. On 3 August 2006, Justice Greenwood dismissed a notice of motion made on behalf of my companies seeking a stay of any further hearing of the proceeding being Federal Court proceedings QUD66 of 2003 and ordered the Respondents' file and serve further affidavit material upon which they intend to rely in relation to the determination of the question of whether a penalty ought to be imposed upon any of my Respondents Companies. Annexed hereto and marked "SBR-1" are copies of draft accounts for 30 June 2006 for each of the Respondent Companies. Three of the companies are labour hire companies, with the execution of Ramsey Butchering Services Pty Ltd which ceased to be an employer at South Grafton Abattoir on or about 3 September 2001. All four (4) Respondent Companies own no assets of any significance and their sole income is a labour hire fee which is expended for the provision of that labour. The wholesale beef industry is in troubled times. Markets are hard to service. Appropriate cattle are not available. The South Grafton Abattoir as a total enterprise is losing thousands of dollars per week. It may shut shortly. I expect more abattoirs to close soon. Over the last ten (10) years the number of abattoirs has decreased. There are very few abattoirs now in existence. At the time of the stock shortage I obtained legal advice from my solicitor, Junior Counsel and Senior Counsel as to the appropriate method of arranging staff stand downs when closing the plant. Likewise when reopening the plant I again sought advice and acted on that advice. The attachment to the affidavit comprises the financial report (that is financial accounts) to 30 June 2006 for Ramsey Food Packaging Pty Ltd, Ramsey Food Packaging No. 2 Pty Limited, Ramsey Butchering Services Pty Limited and Ramsey Food Services Pty Limited. 12 The Applicant objects to aspects of Mr Ramsey's affidavit. As to the first three sentences at paragraph 4, the Applicant contends that these sentences are simply expressions of opinion. In addition, they are said to be 'so vague as to be useless in any consideration of the issues' now before the court. Even if the subject matter of each sentence is sufficiently specific and is shown to rest upon a foundation of fact giving rise to the conclusions, the matters are said, in any event, to be irrelevant. Further, the only matters in paragraph 4 that are said to be relevant are the matters going to the circumstances of the South Grafton Abattoir. 13 As to paragraph 5, the Applicant objects to the whole of it although it simply comprises three sentences. The basis for the objection is said to be that the matters are expressions of opinion as to what might happen in relation to other abattoirs, a statement that the number of abattoirs has decreased and an observation that there are very few abattoirs now in existence. All of these matters are said to be vague and irrelevant. 14 As to paragraph 6, Mr Ramsey says that he relied upon legal advice from not only his solicitor but also Junior Counsel and Senior Counsel as to the appropriate method of arranging stand downs when closing the plant. Further, Mr Ramsey says that when reopening the plant, he again sought advice presumably from each of the three previously nominated advisers and acted on that advice. The Applicant objects to paragraph 6 on the grounds that the statements are hearsay; the deponent has sought to suggest inferentially the advice he was given consistent with things he actually did; and the affidavit fails to disclose the advice itself. Accordingly, neither the Applicant nor the court, it is said, is in a position to make an informed assessment of the scope of the advice, its materiality to particular conduct by Mr Ramsey on behalf of the Respondents or the extent to which Mr Ramsey relied upon the advice or parts of it. Mr Ramsey has elected not to waive privilege in relation to the advice, nor attach a copy of any written advice to his affidavit, nor depose to the central and critical matters which provided the foundation for his election to act in any particular way. 15 In response to these matters, counsel for the Respondents says that as to paragraph 4, the assertions made by Mr Ramsey are simply a fact. The sentences depose to Mr Ramsey's state of mind. In any event, if the statements represent a matter of opinion, Mr Ramsey is qualified to give that opinion as he is the Managing Director of each respondent company. Further, paragraphs 4 and 5 are said to be relevant to the financial impact upon the Respondents of a penalty and the matter of public interest. The public interest is said to be reflected in the community interest in securing enduring employment at the South Grafton Abattoir particularly having regard to the historical circumstances surrounding the industrial arrangements which were put in place to enable the South Grafton Abattoir to recommence under Mr Ramsey's governance after the closure of the abattoir under the administration of R J Gilbertson Pty Ltd. Accordingly, counsel for the Respondents says that I should have regard to the financial circumstances confronting the Respondents based upon the evidence of the accounts and consider the public interest in future employment. Counsel also says that the three sentences making up paragraph 5 provide contextual relevance concerning the circumstances in which the South Grafton Abattoir operates. 16 As to paragraph 6, counsel says that the evidence that Mr Ramsey sought advice from his lawyers, obtained advice and acted upon it is relevant to Mr Ramsey's state of mind when considering the question of penalty. Counsel observes that it is simply a fact that needs to be taken into account in weighing where the balance lies in assessing a possible penalty. 17 I will admit the entirety of the affidavit into evidence. The evidence is largely unhelpful. Paragraph 4 comprises four short conclusionary sentences or statements of prevailing circumstances. There are no foundation facts supporting the statements and no attempt has been made to describe the environment within which the Respondents operate either in a direct sense or contextually so as to provide the court with a matrix of fact concerning the circumstances confronting the operational activity of each company. Mr Ramsey as Managing Director of each of the four Respondents must be in a position to express an informed assessment of that environment and those circumstances. 18 Similarly, paragraph 5 simply comprises three sentences. 19 As to paragraph 6, I propose to have regard to the fact that Mr Ramsey took legal advice. However, the brevity with which the matter is expressed does not place me in a position where I can weigh that fact in any meaningful way as I have no sense of the materiality of the advice, the scope of the advice or the extent to which Mr Ramsey relied upon it. In order to be helpful and properly serve the interests of the Respondents, the deponent would need to disclose the advice so as to give the point Mr Ramsey seeks to make by force of paragraph 6, some real coherence. I do not propose to repeat the detail of those reasons in the course of these considerations although it will be necessary to identify some aspects of the findings and the contextual events in these reasons arising out of the further hearing. These reasons are to be read in conjunction with the earlier reasons of 30 June 2006. 21 The material matters are these. 22 In August and September 2002 the First, Third and Fourth Respondents were the employers of the 12 individuals (among others) identified at [2] and [114] of the reasons. Those paragraphs identify the particular bilateral employment relationship between each individual and the relevant Respondent employer. The individuals are Brooks, Campbell, Susan Young, Swain, Blackadder, Delaforce, Forrest, Hambly, Michael McKenzie, Paul McKenzie, Moss and John Young. 23 Each individual was employed in a particular capacity undertaking work at the South Grafton Abattoir. The position each individual held is identified at [114] of the reasons. The history of the working engagement of each individual at the South Grafton Abattoir is described at [115]. The South Grafton Abattoir had for many years been owned and operated by R J Gilbertson Pty Ltd ('Gilbertson'). The abattoir had closed in December 1997 with Gilbertson asserting failing profitability and substantial accumulated losses. In approximately April 1998, the abattoir reopened under the new ownership and operational governance of Mr Stuart Ramsey acting on behalf of entities including the First Respondent, the Third Respondent and the Fourth Respondent. 24 The immediate events of termination involve these matters. On Monday, 19 August 2002, the Australian Industrial Relations Commission ('AIRC') made an order which had the effect of terminating a range of Australian Workplace Agreements ('AWAs') with effect from 23 September 2002 including AWAs signed by Blackadder, Brooks, Campbell, Delaforce, Forrest, Hambly, Michael McKenzie, Paul McKenzie, Moss, John Young and Susan Young. 25 On Wednesday, 21 August 2002, management of the South Grafton Abattoir placed a notice on the abattoir noticeboard to all employees advising that the plant continued to operate under a stock shortage for the purposes of the AWAs until advised otherwise. On 29 August 2002, a further notice was placed on the noticeboard referring to the notice of 21 August 2002 and notifying employees that there would not be sufficient stock to kill on Monday, 2 September 2002 and that certain consequences would flow from that event. The notice said that the Australasian Meat Industry Employees' Union ('AMIEU') had been advised of the position. Also on 29 August 2002, employees were handed a stock shortage notice. 26 On 10 September 2002, the individuals received a letter of termination from abattoir management and a further letter of clarification of the position on 13 September 2002. The events are described in detail at paragraphs [180] to [187] of the reasons. 27 The act of termination or dismissal had a certain pre-history. 28 Although Stuart Ramsey had conducted discussions with Ms Kathleen Evans, the secretary of the Newcastle and northern branch of the AMIEU, as described at [102] and [103] of the reasons, no agreement had been reached to establish an enterprise agreement. Rather, the First, Third and Fourth Respondents entered into AWAs with their employees at the various functional levels of operation of the abattoir. Those functional activities are described at [106] to [111]. 29 The Employment Advocate referred each of the AWAs to the AIRC for an approval hearing. The AIRC concluded that because the 'tally system' (see [107] of the reasons) adopted by the AWAs was more disadvantageous to employees than the relevant award with a follow through effect upon benefits, the AWAs failed to satisfy the 'no disadvantage test'. However, having regard to other factors, the AIRC concluded that it was not contrary to the public interest to approve the AWAs coupled with particular undertakings [117] --- [120]. 30 Each AWA had a nominal term of three years, from, by and large, the end of April 1998 although each AWA would remain in place after the date of nominal expiry until such time as the AWA was replaced or terminated. 31 On 15 February 2001, Stuart Ramsey convened and addressed a meeting of employees at the abattoir. At that time, many of the employees believed that a new agreement would be in place during April 2001 but no new agreement was to be proposed until October 2001. The delay was attributed to conduct on the part of Mr Davis and the AMIEU [123] - [131]. 32 On 3 October 2001, Stuart Ramsey proposed a certified agreement with a vote to be taken on 18 October 2001. The methodology was to take the prevailing AWAs and adopt certain variations to those instruments as the terms and conditions of the agreement. At a meeting on 3 October 2001 of abattoir workers chaired by Paul McKenzie, a decision was taken to establish a consultative committee to negotiate aspects of the proposal with Mr Ramsey. The members of the committee included Delaforce, Moss and Paul McKenzie. 33 Delaforce was expressing dissatisfaction on a number of grounds with working conditions [136] --- [144]. 34 On 5 October 2001, Mr Davis on behalf of the AMIEU wrote to Mr Ramsey advising that he proposed to meet with employees and discuss aspects of the proposal [145] --- [149]. 35 On 16 or 17 October 2001, a second proposal for an enterprise agreement was distributed by the abattoir. A critique of that proposal was prepared by the AMIEU. The proposal was to be voted upon by employees on 5 November 2001. 36 On 8 November 2001, a third proposal was put forward by the employer entities reflecting a further change. The vote occurred on 26 November 2001. 37 On 18 January 2002, the AIRC conducted a hearing of an application by the First, Second and Third Respondents and Paul Allen Contracting Services Pty Ltd for certification of an enterprise agreement. The AMIEU sought leave to intervene and oppose the application on a number of grounds. On 8 February 2002, Commissioner Bacon published his decision arising out of the application and referred the matter to the Full Bench. Commissioner Bacon also gave reasons for the intervention ruling in favour of the AMIEU confirming the continuing standing of the AMIEU to represent employee members of the Union in connection with the proposed enterprise agreement [157] --- [162]. 38 On 15 February 2002, Stuart Ramsey met with representatives of the employees. Some committee members said that they considered that they should go back to the award conditions. Some heated exchanges occurred concerning the impact or effect of award conditions upon the abattoir's operation [164] --- [165]. Further discussions took place concerning the question of whether the AMIEU would support certification of the agreement. A memorandum of understanding was proposed. No agreement was reached and the application for certification was withdrawn. 39 In April 2002, a second consultative committee was established. The members included Michael McKenzie, Brooks, Campbell and John Young. 40 On 11 April 2002, Alick Delaforce received notice from Stuart Ramsey concerning the introduction of a new bonus system and the terms upon which a bonus might be paid [171]. Alick Delaforce expressed dissatisfaction with the operation of the bonus system as did others [172] --- [174]. 41 During May, June and July 2002, meetings took place between employees at the abattoir and the AMIEU. On 14 May 2002, Alick Delaforce and Paul McKenzie collected complaint forms from production employees which were lodged with the office of the Employment Advocate. Alick Delaforce requested assistance from the AMIEU in making an application to the AIRC for termination of the AWAs. The applications were lodged on 30 July 2002. An order was made on 19 August 2002 which had the effect of terminating many of the AWAs effective from 23 September 2002. 42 On 19 July 2002, Alick Delaforce participated in a meeting of employees to discuss conditions and establish a third consultative committee. On 22 August 2002, a resolution was passed electing a third consultative committee and on 23 August 2002 notice was given to management by letter. The members of the third consultative committee included John Young, Trevor Moss, Paul McKenzie, Gregory Forrest, Terrence Brooks, Alick Delaforce and Susan Young. 43 The articulated basis for the dismissal of the employees including the 12 identified individuals the subject of the proceedings was a stock shortage. 44 On 16 September 2002, in light of the events and the termination letters of 10 September 2002 and 13 September 2002 [26] of these reasons, Alick Delaforce, Trevor Moss and Justin Davis sought a meeting with Stuart Ramsey to discuss re-engagement of Union members of the workforce. Justin Davis told management that all employees were prepared to work and would work if given work. Management said that the abattoir was offering work that day to only those individuals contacted by the abattoir [188]. On 17 September 2002, Justin Davis conducted (with Mr Brown) a meeting of workers outside the abattoir. As employees approached the security guards, the names of particular employees seemed to be checked off against a list. Some employees were able to enter, others not. Alick Delaforce asked the gate security guard whether his name was on a list of workers allowed to work that day and was told his name was not on the list. Later that day he was told in a telephone call from management that there would be work for him at the abattoir for the following day, 18 September 2002. 45 On the evening of Tuesday, 17 September 2002, Alick Delaforce and Trevor Moss conceived a compromise proposal to resolve the re-employment of all employees. A written proposal was given to management [190]. Stuart Ramsey refused to consider the compromise proposal until all workers rostered for that day, 17 September 2002, returned to work. 46 At [195] --- [202] of the reasons, conclusions are reached arising out of findings in relation to the events. ... Mr Ramsey knew or must be taken to have known that P F McKenzie, Brooks, Campbell, Forrest, M R McKenzie, J K Young and S J Young were members of the Union. Mr Ramsey also knew of the articulated dissatisfaction with conditions identified by Delaforce and Moss and the critique of conditions of employment prepared by the Union and the dissatisfaction expressed with conditions by members of the consultative committees. The first committee included Union members P F McKenzie, Moss and Delaforce; the second, M R McKenzie, Brooks, Campbell and J K Young; and the third, J K Young, S J Young, Moss, Forrest, Brooks, Delaforce and P F McKenzie. Having regard to the chronology of these events and the proximity of the timing between the successful applications for termination of the AWAs and the subsequent publication of the dismissal notices, an inference is open that dissatisfaction with working conditions in the context of the agitation by the AMIEU for better industrial conditions of employment was a reason for the dismissal of Delaforce, P F McKenzie, Moss, Brooks, Campbell, Forrest, M R McKenzie, J K Young and S J Young. The evidence of Mr Forrest at [306] shows that after the dismissals and upon re-engagement of employees (approximately 80 to 90 employees), Mr Ramsey expressed his view of the new environment in this way: 'This is how the place will be run now, no RDOs, one sick day and you will be gone, you will be paid the Federal award until such time as a new agreement is worked out. There will be no tally system and you will be paid in accordance with the weight per kilo of the box'. The issue of 'tally' calculations and its relationship with the weight of the beast was an issue for the employers from the outset of operations under Mr Ramsey. Further, having regard to the role of the AMIEU and the hostility on the part of Mr Ramsey towards the AMIEU, an inference is open that a workplace free of those Union members who had become closely associated with the Union position, acted as delegates, distributed material at the workplace and participated in consultative committees urging a different view of conditions of employment was a reason for dismissal of those individuals who were members of the Union. Mr Ramsey's notion that the abattoir would have to close and 'the company could not continue' if the AWAs were brought to an end and the award prevailed [164] or that the abattoir 'would not be viable' under such conditions [165] seems not to be so because within days of the abattoir issuing the termination notices of 10 and 13 September 2002 closing the abattoir, the abattoir was operating again by at least 17 September 2002 and, by 20 September 2002, at least 80 to 90 employees were re-engaged. An inference is open that closure of the abattoir was effected to displace the workforce, re-hire and leave aside at least the current claimants on the ground that these individuals were expressing dissatisfaction with conditions of employment and did so as members of the Union in circumstances where the Union was seeking better industrial conditions. The relevant events are set out at [204] --- [268]. The evidence provides a basis for inferring that as to Blackadder, Hambly and Swain, the termination of employment was carried out for a reason including that these men had become entitled to the benefit of an industrial order of the AIRC and to that end, had participated in a proceeding under an industrial law and had given evidence in a proceeding under an industrial law as contemplated by s 298L(1)(h)(j) and (k). The evidence in relation to the role of seasonal factors and the contended stock shortage are further addressed at [289] --- [304]. 49 In the period immediately after the dismissal of the 12 individuals, 11 of them took steps to seek employment during the re-engagement period. Mr Blackadder said he remained ready, willing and able to resume work. Mr Blackadder was told on each occasion that "there is no work available for you". At no time has anyone on behalf of abattoir management contacted Mr Blackadder to offer him work. Mr Blackadder was told he would be required to take payment of all accrued entitlements. All entitlements were paid and on 20 January 2003 Mr Blackadder received an Employment Separation Certificate from abattoir management. He asked whether he was allowed in according to a list held by the security guard. The guard made a call and asked, "Should I admit Colin Hambly?". After the call, the guard said, "You will not be admitted today or any other day". On 16 October 2002, Mr Hambly received an Employment Separation Certificate. He was told no work was available. On 13 February, the last occasion on which Mr Hambly made an inquiry of abattoir management, he spoke to Mr Marshall and asked whether any further employment would be available at the abattoir. Mr Marshall said he would send Mr Hambly by post an application form for work at the abattoir. No such form was sent. On 25 February 2003, Mr Hambly wrote to Mr Marshall saying, "When we spoke you indicated that you would also send me an application for employment form that I requested". Mr Hambly says he remained available for work until mid 2003. However, Mr Hambly did not keep copies of those letters. Mr Swain did not receive any offer of re-employment from the abattoir and on 16 October 2002 he was provided with an Employment Separation Certificate. Mr Swain has not heard from the abattoir since that date apart from a conversation he had with Mr Marshall on 18 January 2003 when Mr Swain said he wanted to apply for a boning job and was told the abattoir was not employing labour at that time. He says he was available for work. Mr Delaforce was told he was not on the list. On 29 November 2002 at 2.30pm, Mr Delaforce received a letter dated 28 November 2002 offering him work on 29 November 2002. At 3.20pm on 29 November 2002, Mr Delaforce attended the abattoir and told Mr Marshall that he was available for work. Mr Marshall noted Mr Delaforce's willingness to work. On 2 December 2002, Mr Delaforce sent a letter to Mr Marshall advising that he appreciated the offer of work for the day on 29 November 2002 but for the period Monday to Wednesday of every week Mr Delaforce had accepted casual employment elsewhere. Mr Delaforce advised that he would make himself available for work at the abattoir on Thursdays and Fridays. Mr Delaforce worked at the abattoir on 5 December 2002. On the afternoon of 5 December 2002, Mr Delaforce received a letter dated 4 December 2002 offering him employment for 5 December 2002. Mr Delaforce says he remained willing and able at all times to work subject to those occasions when he says he was compelled to take on casual work because the abattoir did not offer any continuity of employment. Mr McKenzie asked whether he could come back to work then. Mr Marshall said, 'Not at the moment, there is no work for you'. Mr Marshall said, 'We've just got so many coming in and there is not enough work for you at the moment'. Mr Marshall said he would let Mr McKenzie know when work was available for him. Mr McKenzie was told he was not on the list. On 18 September 2002, Mr McKenzie attended a meeting of workers outside the abattoir gate. Work was available for Mr McKenzie for 18 September 2002 but consistent with support to fellow workers, Mr McKenzie did not work that day. He was told it was not. Mr McKenzie again presented himself for work that day and was told by the security guard that his name was not on the list of workers to be allowed to enter the abattoir for work that day. Mr Marshall told him that he was not on the list of those to be offered employment that day. Mr McKenzie said to Mr Marshall, 'Can you call me and let me know when you are offering me work? ' Mr Marshall said, 'Okay'. Mr McKenzie asked 'When is that likely to be?'. Mr Marshall said, 'When work becomes available'. Mr McKenzie said that he had casual work elsewhere but would check the roster and see whether he could be available. He was available. He called Mr Marshall and told him he was available. Mr McKenzie was told to be available at 7 o'clock and asked Mr Marshall whether 'this will be a continuing thing'. Mr Marshall said, 'No, you are being offered work only one day at this stage'. Mr McKenzie asked when he could be expected to be offered more work and was told, 'when it becomes available, maybe'. Mr McKenzie presented himself to the supervisor on the slaughter floor and was told, "You will be doing hot neck boning. Have you done that before? " Mr McKenzie said he had never done that work. Mr McKenzie undertook the work with another fellow worker. Mr McKenzie found the work difficult and the foreman allocated him to another job. Mr McKenzie spoke to Mr Marshall and asked for work on the slaughter floor. On 28 November 2002, Ramsey Packaging wrote to Mr McKenzie asserting that Mr McKenzie had not disclosed an injury that prevented him from performing hot neck boning tasks. Mr McKenzie asserted that he had suffered some aggravation to his shoulder. A few days after 27 November 2002, Mr McKenzie made enquiries of Mr Marshall as to whether further work would be available and was told that there was no work for him. Mr McKenzie sought payment of entitlements, was paid and was given Employment Separation Certificates on 16 October 2002 and 23 December 2002. Mr Davis was present. Mr Davis advised Ms Mortimer that the abattoir workers had resolved that none of them would go back to work until all of the workers were allowed to work. Ms Mortimer said that Mr Ramsey would be 'sticking to his list of workers'. Mr Moss said he could not work that day in support of other workers not offered jobs. Mr Moss did not work that day in support of fellow workers. On that day Mr Moss, Mr Paul McKenzie and Mr Davis formulated a compromise proposal to try and secure a re-engagement for fellow workers. Mr Moss was engaged on 18 September in AIRC proceedings for the following day. Mr Moss was not offered any further work at the abattoir except that on 27 November 2002, Mr Moss received a letter from Ramsey Packaging dated 26 November 2002 offering him work for the following day, namely, 27 November. Mr Moss, in any event, could not work at the abattoir on that day because he had taken work in Casino. On 16 October 2002, Mr Moss received an Employment Separation Certificate from the abattoir. On 24 October 2002, Mr Moss asked Ms Mortimer whether there was any work available for him at the abattoir and was told no work was available. Mr Moss sought other casual work and secured a job as a boner in late October 2002 with North Coast Meat Company at Casino. Mr Moss worked there as a casual until August 2003 when his position was made permanent. He was working casually for that company on 26 and 27 November 2002. Mr Brooks entered the abattoir. On that day, Mr Ramsey stood outside the locker room before the workers including Mr Brooks went into the boning room. Mr Brooks says he heard Mr Ramsey say, "Now that this shit fight is over, you work with me, we'll be right. Everyone will be right and I'll have the new agreement in your hands in two weeks". At the completion of work on that day, Mr Broadrick told Mr Brooks that he would be notified when the abattoir required him again. On several days after 20 September 2002, Mr Brooks made enquiries about the availability of work and was told on each occasion by office staff that no work was available. Mr Brooks obtained other casual work. The only two days of work offered to Mr Brooks were 20 September 2002 and 27 November 2002. On 16 October 2002, Mr Brooks obtained an Employment Separation Certificate. He was not. On 18 September 2002, Mr Campbell again presented at the gate and asked whether he was on the list for work and was told he was not. Later that day, Mr Campbell was offered a day's work for the following day. He did not work that day, 19 September 2002, because of a commitment to support fellow workers not offered work. On 24 November 2002, Mr Campbell travelled to Queensland to look for alternative work. Mr Campbell was offered work for 27 November 2002 but was not able to work on that day as he was in the Mackay region seeking other work. In late December 2002, Mr Campbell was confronting financial difficulties and sought payment of any outstanding entitlements. He received them on 17 January 2003 together with a Separation Certificate. He was told that he was not to be allowed into the abattoir for work. On 19 September 2002, Mr Forrest was offered one day's work for the following day "to be paid at labourer's rates". On 20 September 2002, Mr Forrest presented for work and was allowed to enter the abattoir for work. Mr Forrest assembled his work clothing, got dressed, left the locker room and approached Mr Broadrick. Mr Ramsey was addressing 80 to 90 workers at that time. Mr Forrest says he has a clear recollection of Mr Ramsey saying, "This is how the place will be run now, no RDOs, one sick day and you will be gone, you will be paid the federal award until such time as a new agreement is worked out. There will be no tally system and you will be paid in accordance with the weight per kilo of the box". Mr Forrest handed Mr Broadrick a full Medical Clearance Certificate. Mr Broadrick gave the certificate to Mr Ramsey who told Mr Forrest in unpleasant language that he would not be undertaking boning work and if he did not like it he could leave. Three times the following week Mr Forrest presented at the gate of the abattoir and was told that his name was not on the list for work. Mr McKenzie was told that his name was not on the list. Each morning during the week starting Monday 16 September 2002, Mr McKenzie attended the front gate of the abattoir and asked whether he was on the list for work (except Friday 20 September 2002) and was told that he was not on the list. On Friday 20 September 2002, he was told he was on the list. Mr McKenzie went back to work as a boner that day. Mr McKenzie had not received any contact or telephone call but was simply advised on presenting at the gate that work would be available on that day. On the following Tuesday, Wednesday and Thursday, Mr McKenzie was told the same thing. On Thursday 26 September 2002, Mr McKenzie telephoned Mr Marshall and said that he would not attend the abattoir any longer to see if his name was on the list but would call each morning instead. Mr McKenzie made a telephone call to the abattoir every day for a week at approximately 6.00am and was told by Mr Marshall and Mr Allen that his name was not on the list for work that day. After taking these steps, Mr McKenzie told Mr Marshall in a telephone call to please let him know if further work would be offered to him. Mr McKenzie received no offer of work apart from 20 September 2002. On 16 October 2002, Mr McKenzie received an Employment Separation Certificate. On 16 December 2002, Mr McKenzie asked to be paid any outstanding entitlements. Mr Young asked whether work was available for his wife on that day. He was told Susan Young would not be required. Mr Young says that having regard to the resolution of the men, he did not present for work on 17 September 2002. On 19 September 2002, Mr Young handed a note of a request for the payment of entitlements to the guard at the abattoir gate. On 20 September 2002, Mr Young was told that he was not on the list for work that day. Mr Young did not receive any further offers of employment from the abattoir and has not worked there since. All of these 11 men had worked for the South Grafton Abattoir during the days of operation by Gilbertson. The relationship had been a long-standing one at least from March or April 1998 [307] in terms of Mr Ramsey's governance. ... It is true that on 16 September and 17 September 2002 a position had been taken by many of the workers that none of the former employees would return to work until all workers were allowed to work but these actions were part of the immediacy of a response to the dismissal conduct designed, in fact, to secure work for all. On 20 September 2002, Mr Forrest says that he heard Mr Ramsey addressing approximately 80 to 90 workers who had been re-engaged by that time. Mr Ramsey was explaining the new features of the conditions of employment which would prevail in the post re-engagement environment as compared with the previous conditions [306]. The evidence of these witnesses gives rise to an inference that in re-employing a cohort of employees to enable the abattoir to resume orthodox operations, a range of jobs or positions falling within the field of task specific activities characterising abattoir operations (see generally [106] --- [115]) were filled, that is, offers made and individuals employed and others not. The Applicant is not in a position to give evidence of which offer was made for what position to which individual on what particular day and the person who was appointed. That information lies within the knowledge of the respondents. Nevertheless, the abattoir opened. It functioned and continued to function. The evidence shows that by 20 September 2002, 80 to 90 people at least were re-engaged. I infer that all of the positions occupied and the tasks undertaken by the 12 individuals in issue here from which they were dismissed, remained as positions to be filled and were filled, among many other positions. An inference is open that Mr Ramsey took steps in response to the order of the AIRC effecting a termination of the AWAs to deal with the consequence of that order. Those steps did not involve abandoning processing operations and closing down the abattoir because it was sub-economic but involved steps to place the operations on the footing of a particular cohort of employees on particular preferred terms and conditions and one method was to invoke the stock shortage provisions, close the abattoir, terminate the contracts without severance, re-open, re-employ and re-commence operations in a new environment. The evidence of the centrality attached by Mr Ramsey to the preferred conditions and the conjunction of events do suggest as a matter of common experience that the steps taken by Mr Ramsey were designed to effect a reduction in the complement of workers and establish conditions on a footing more acceptable to him. The dismissal of all employees remains, nevertheless, a dismissal of each individual employee and the refusal to re-employ the former employees in contention here can fairly be seen, as a matter of inference, as part of a mechanism for effecting an enduring, final and operative dismissal for a reason related to historical dissatisfaction with conditions and Union agitation for perceived better conditions. In this case, the employer entities dismissed a cohort of employees. Some of those employees, from their individual standpoint, contend the dismissal was for a prohibited reason. They say the circumstances that give rise to that apprehension can be seen in the attitude of Mr Ramsey to the AMIEU, his hostility to the participation of the Union in the workplace and the consequences of Union engagement in various processes before the AIRC and the dissatisfaction nine of the 12 individuals were articulating about conditions of employment against the background of the steps taken by the Union. As to three of the individuals, their concern lies in the chronology of events arising out of their constructive dismissal and the subsequent treatment of the individuals consequent upon obtaining orders from the AIRC and particularly orders for reinstatement. The dismissal of the entire cohort of employees does not provide an answer to the essential character of the contravening conduct in respect of the particular individuals. The legislation provides a mechanism for an employer to demonstrate that the apprehended and thus alleged reasons for the dismissal are misplaced and incorrect by casting an onus upon the respondent to demonstrate otherwise. The same position obtains in relation to the conduct of refusing to employ the relevant individuals. In essence, the respondents say that in the case of each individual, the particular person was not available for employment, did not seek employment and was not denied employment. Moreover, before a refusal to employ an individual for a prohibited reason can arise, the individual must demonstrate that a vacancy was available to be filled. As to these matters, it is clear that the individuals did seek employment. Enquiries were made of management staff as to the availability of the work. Steps were taken to refuse immediate employment by some, but expressly for the purposes of trying to secure a return to work for all employees. Mr Delaforce and Mr Moss formulated a compromise proposal directed to securing the return to work for all employees. Some individuals were episodically offered employment on a day, sometimes after the event. Enquiries were made of management and in the immediacy of the dispute and enquiries were made at the gate as to those persons who were on the list for employment. The evidence demonstrates that jobs were available and vacancies were being filled. Subsequent offers, even though episodic, demonstrate that vacancies were there to be filled. Notwithstanding the lengthy period of employment on the part of the 12 individuals with the South Grafton Abattoir from the commencement of operations by Mr Ramsey and the pre-existing historical connection with the abattoir in the Gilbertson's days, none of these individuals (leaving aside Susan Young) were offered full time employment or any sustained period of casual employment. The historical factors which give rise to inferences that the alleged prohibited reasons were a reason for the conduct also give rise to inferences that those reasons were a reason for the refusal to employ the particular individuals. The proximity of the timing and evolution of the events are sufficiently related that there is a necessary inter-connection between the two. It seems to me, in having regard to the threshold conduct of a refusal to employ another person, required to be established by the Applicant before s 298V has any operation, the phrase logically contemplates the existence of a position to be filled or a position in prospect within the boundaries of reasonable temporal limitations. Evidence may demonstrate such a position or demonstrate in respect of a particular industry, a systemic process of casual employment or a recurrent demand within a particular industry for full time employees. It seems to me the Applicant would need to adduce some evidence of a vacancy or prospective vacancy and not simply a theoretical possibility of a position. In the context of this case, the approach adopted by North J does not need to be considered further because the evidence demonstrates that a process of re-engagement was taking place, vacancies existed and were being filled. Vacancies continued to become available and, in some cases, resulted in offers, although limited, being made to some of the individuals in contention here. The circumstances of the efforts made by the individuals and their evidence of vacancies being filled is clear [306]. Accordingly, s 298V operates and it has not been discharged. By paragraph 20 of the Further Amended Defence (Document 143), the First, Second and Fourth Respondents admit that in September, October and November 2002 each of those respondents commenced re-employing labour at the South Grafton Abattoir. I am satisfied that the evidence demonstrates there is no relevant differentiation between the respondents in terms of the dealings between employees and the broad operation of the South Grafton Abattoir. No doubt, particular entities associated with or related to Mr Ramsey or entities controlled by Mr Ramsey employ particular individuals and equally, there is very likely to be particular administrative or domestic arrangements between those companies in the provision or performance of services and tasks in connection with the operation of the abattoir. However, whatever the content of those internal arrangements might be, an abattoir requires individuals to perform work in order to function. Those individuals might be employed by any one of a number of companies and be supplied or deployed under contractual arrangements with other entities either related to or, in a practical sense, connected with the operator of the abattoir. For all practical purposes, the question is whether the abattoir as a functional operation, required a cohort of individuals in order to perform the various task specific functions and whether steps were put in place during the period of re-engagement to offer employment to individuals, irrespective of the particular recruiting vehicle or entity used for that purpose. The evidence does not establish whether the Third Respondent was seeking to employ any person in the relevant period. Accordingly, the conduct of refusing to employ is confined to conduct on the part of the First, Second and Fourth Respondents. One further observation should be made arising out of the earlier reasons. At [378] reference is made to a contravention of s 298K(1) with respect to the dismissal conduct on the part of all four Respondents. It is clear from the reasons that the discussion of the dismissal issue is in the context of the conduct of those entities that were relevantly employers of the 12 individuals, namely, the First, Third and Fourth Respondents. I do not propose to make any declarations in relation to conduct in connection with dismissal so far as the Second Respondent is concerned. In or about August and September 2002, the First Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Terrence Anthony Brooks, Rodger Charles Campbell and Susan Jane Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a member of the Australasian Meat Industry Employees' Union. In or about August and September 2002, the first respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Terrence Anthony Brooks, Rodger Charles Campbell and Susan Jane Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that each of those persons, being members of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his or her conditions. In or about August and September 2002, the First Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(h), namely, that he was entitled to an order of an industrial body. In or about August and September 2002, the First Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that he had participated in a proceeding under an industrial law. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Gregory Simon Forrest, Michael Robert McKenzie and Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a member of the Australasian Meat Industry Employees' Union. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Alick James Delaforce and Trevor Glen Moss for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a delegate or member of the Australasian Meat Industry Employees' Union. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Alick James Delaforce, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie and Trevor Glen Moss for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that each of those persons, being members of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his conditions. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Stephen Blackadder and Colin James Hambly for the reason, or for reasons which included the reason, proscribed by s 298L(1)(h), namely, that each of those persons was entitled to an order of an industrial body. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Stephen Blackadder, Alick James Delaforce and Colin James Hambly for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that each of those persons had participated in a proceeding under an industrial law. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that he had proposed to participate in a proceeding under an industrial law. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employees Stephen Blackadder and Alick James Delaforce for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that each of those persons had given evidence in a proceeding under an industrial law. In or about August and September 2002, the Third Respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that he had proposed to give evidence in a proceeding under an industrial law. In or about August and September 2002, the fourth respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that he was a member of the Australasian Meat Industry Employees' Union. In or about August and September 2002, the fourth respondent contravened s 298K(1)(a) of the Workplace Relations Act 1996 (Cth) by dismissing its employee John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that he, being a member of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his conditions. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Alick James Delaforce and Trevor Glen Moss for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a delegate or member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Alick James Delaforce and Trevor Glen Moss for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a delegate or member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Alick James Delaforce and Trevor Glen Moss for the reason, or for reasons which included the reason, proscribed by s 298L(1)(a), namely, that each of those persons was a delegate or member of the Australasian Meat Industry Employees' Union. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Colin James Hambly and Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(h), namely, that each of those persons was entitled to an order of an industrial body. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Colin James Hambly and Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(h), namely, that each of those persons was entitled to an order of an industrial body. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Colin James Hambly and Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(h), namely, that each of those persons was entitled to an order of an industrial body. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Alick James Delaforce and Colin James Hambly for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that each of those persons had participated in a proceeding under an industrial law. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, he had proposed to participate in a proceeding under an industrial law. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Alick James Delaforce and Colin James Hambly for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that each of those persons had participated in a proceeding under an industrial law. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, he had proposed to participate in a proceeding under an industrial law. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder, Alick James Delaforce and Colin James Hambly for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that each of those persons had participated in a proceeding under an industrial law. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, he had proposed to participate in a proceeding under an industrial law. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that he had participated in a proceeding under an industrial law. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that he had participated in a proceeding under an industrial law. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Gerard Swain for the reason, or for reasons which included the reason, proscribed by s 298L(1)(j), namely, that he had participated in a proceeding under an industrial law. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder and Alick James Delaforce for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that each of those persons had given evidence in a proceeding under an industrial law. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder and Alick James Delaforce for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that each of those persons had given evidence in a proceeding under an industrial law. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Stephen Blackadder and Alick James Delaforce for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that each of those persons had given evidence in a proceeding under an industrial law. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that he had proposed to give evidence in a proceeding under an industrial law. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that he had proposed to give evidence in a proceeding under an industrial law. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Paul Francis McKenzie for the reason, or for reasons which included the reason, proscribed by s 298L(1)(k), namely, that he had proposed to give evidence in a proceeding under an industrial law. In or about September, October and November 2002, the First Respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Alick James Delaforce, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie, Trevor Glen Moss and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that each of those persons, being members of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his conditions. In or about September, October and November 2002, the second respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Alick James Delaforce, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie, Trevor Glen Moss and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that each of those persons, being members of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his conditions. In or about September, October and November 2002, the fourth respondent contravened s 298K(1)(d) of the Workplace Relations Act 1996 (Cth) by refusing to employ Terrence Anthony Brooks, Rodger Charles Campbell, Alick James Delaforce, Gregory Simon Forrest, Michael Robert McKenzie, Paul Francis McKenzie, Trevor Glen Moss and John Kevin Young for the reason, or for reasons which included the reason, proscribed by s 298L(1)(l), namely, that each of those persons, being members of the Australasian Meat Industry Employees' Union which was seeking better industrial conditions, was dissatisfied with his conditions. The legislative expression of the objects of Pt XA in this regard is to be found in the prohibition upon nominated conduct by an employer carried out for a reason falling within the scope of s 298L(1). That statutory approach is the formulation that captures the prohibition upon conduct that discriminates against or victimises an employee. It is the conjunction of the conduct carried out for a prohibited reason (potentially among other reasons) that gives the s 298K(1) conduct its discriminatory character. 60 The consequence in this case of conduct of that character is that 12 individuals suffered a fracturing of the employment relationship, lost the right to derive a gross income from the relevant abattoir entity comprised of the components making up that remuneration and 11 of them were refused re-engagement when the re-engagement process commenced. It seems to me that there is an important point of distinction between the unlawful termination of an employment relationship on the one hand and a dismissal (coupled, in this case, with a refusal to re-employ) for a prohibited purpose contemplated by s 298L on the other hand, which involves a contravention of the statutory formulation for securing the object of prohibiting discrimination against or prohibiting victimisation of an employee. The circumstances of this case are not simply one of deprivation of employment but rather dismissal and refusal to employ on grounds exhibiting a particular vice the legislature has sought to expressly prohibit. 61 Each of the 11 individuals, the subject of a refusal to employ, took a number of steps to secure work. They are identified at [379] of the reasons. The steps taken were these. Blackadder received periodic payments from the Abattoir until 8 December 2002. No alternative employment was secured. 2 Terrence Anthony Brooks Only two days work was available at the Abattoir (20 September 2002 and 27 November 2002). Brooks secured three casual weeks of casual butchering work in September and October 2002 most of which was for Cashels Wholesale Meats at Coffs Harbour. Casual employment was secured with the North Coast Meat Company ('NCML') at Casino. At the date of filing of the affidavits, Brooks had been regularly working at NCML as a slicer in the boning room working the night shift for, on average, approximately 24-32 hours per week. 3 Rodger Charles Campbell Campbell's last day of work at Abattoir was 2 September 2002. Offered one day's work on 19 September 2002 at the Abattoir but did not work that day due to workers' resolution on 16 September 2002. Offered one day's work on 27 November 2002 at the Abattoir but was not able to work as Campbell was in Mackay looking for work. Unable to obtain alternative employment despite applying for work with two employment agencies and several builders. 4 Michael Robert McKenzie Obtained work 20 September 2002. Applied for some jobs in late October 2002. Gained casual work with Caringa Enterprises Inc. ('Caringa') as a support worker for disabled people. This work subsequently became permanent work as a permanent part time job. 5 Paul Francis McKenzie Offered work at the Abattoir on 18 September 2002. Elected not to work that day due to the 'workers' resolution'. Obtained casual jobs moving lawns 'here and there'. Obtained work as a support worker for disabled people with Caringa Support Services in Grafton: McKenzie was a casual worker from 29 October 2002 to mid 2003 and a permanent part time worker from mid 2003 onwards. Worked at Abattoir on 26 November 2002. 6 Trevor Glen Moss Secured work as a boner at NCML at Casino as a casual worker from mid October 2002 to August 2003 at which time Moss was employed as a permanent employee. 7 Gregory Simon Forrest No alternative employment secured. Received Centrelink payments from September 2002 to January 2003. Forrest was offered work for a day on 20 September 2002 at the Abattoir. He went to work, but upon being told that he could only work as a labourer and be paid labourer's wages rather than the remuneration applicable to a boner, notwithstanding a "Full Clearance", from Dr Michael Harding, Forrest left the Abattoir after an unpleasant conversation with Stuart Ramsey. 8 Colin James Hambly Hambly was initially constructively dismissed on 1 July 1999. A reinstatement order was obtained from the AIRC on 14 February 2000. Hambly has not been offered any work by the Abattoir since 1 July 1999. Centrelink payments have been made to Hambly from late September 2002 to 1 July 2003. 9 Alick James Delaforce Worked at the Abattoir on 5 December 2002. Did not work on 18 September 2002 due to 'workers' resolution'. Some casual tiling work was obtained during the week of 19 and 20 September 2002. Delaforce continued to work as a farm labourer until the middle of March 2003. Delaforce was at all times willing and able to work subject to those occasions when he was compelled to accept work at various places as no offers of employment were obtained from the Abattoir. 10 Paul Gerard Swain Swain was initially dismissed on 16 April 1999. On 6 June 2000, Swain obtained a reinstatement order. On 12 June 2000, Swain was placed on the payroll of Ramsey Packaging but was not required to report for work. Swain received accumulated entitlements in lieu of wages until those entitlements were discharged and thereafter normal weekly wages. Those weekly wages ceased at the end of August 2002. Swain was unemployed from "some time" in August 2002 until 10 September 2003. Swain received Centrelink payments from September 2003 and some work as a weed controller. 11 John Kevin Young No work secured at Abattoir. Four weeks work was obtained commencing 16 September 2002 comprising voluntary work for three days each week working in support of an aged care program described as the 'Sunshine Club'. Young obtained two weeks work commencing in late October 2002 comprising voluntary work for a fencing contractor. Young obtained work as a casual employee of that contractor until 30 March 2003. Since April 2003, Young has obtained regular work as a fencing contractor. 12 Susan Jane Young Susan Young obtained work as a casual cleaner from 15 October 2002. In the period 29 October 2002 to early December 2002, Young obtained work as a casual cleaner at the 'Blue Dolphin Caravan Park' at Yamba. Young was offered work on 29 November 2002 but was not able to take up that offer of work due to a house cleaning job. Since 31 July 2003, Susan Young has obtained work of 8 to 10 hours per week as a housemaid at 'Bent Street Motel', Grafton. The position in relation to Michael McKenzie was inadvertently deleted from the matrix at [380] of the reasons. It is this. The submission of the Respondents is made on the assumption of the period of compensation adopted in the reasons. 64 Accordingly, the economic loss flowing from the contravening conduct to be awarded to each individual is the amount set out at [380] of the reasons adjusted in the case of Stephen Blackadder to the amount set out at [63] herein and the amount in respect of Michael McKenzie is that set out at [62] herein. 65 Apart from the deprivation of earnings consequent upon the dismissal of the 12 employees and the refusal to employ 11 of them, the Applicant contends that each individual is entitled to compensation for the purposes of s 298U(c), (e) and (f) of the Act. The Applicant contends that these provisions, properly construed, are sufficiently broad that in a proper case they provide a foundation upon which a sum analogous to general damages might be identified as compensation for the disturbance, disruption, loss of opportunity and loss of secure employment occasioned by the termination of employment in breach of Pt XA of the Act ( Australian Municipal Administrative Clerical Services Union v Greater Dandenong City Council (No. 2) [2001] FCA 1076 at [15] per Madgwick J). Such sum ought to be a 'suitable and appropriately modest figure' per Madgwick J at [15]. 68 Analytically, the starting point is to examine the conduct in contravention of the Act. The second step is to determine those things that have occurred in the lives of the individuals affected by the conduct that bear at least some relation to the contravening conduct. The third step is to determine whether those things arise in respect of the contravening conduct. The fourth step is to determine whether it is appropriate in all the circumstances to make an order that the affected individuals be compensated for the relevant events. If so, the fifth step is to determine 'such amount as the Court thinks appropriate'. 69 In this case, the conduct found in contravention of the Act is the dismissal of 12 individuals by, variously, the First, Third and Fourth Respondents and the refusal to employ 11 of those former employees by the First, Second and Fourth Respondents, in the circumstances reflected in the declarations. The conduct of dismissal and refusal to employ is to be viewed as two closely related points on the continuum of conduct effecting an enduring, final and operative dismissal for a prohibited reason as found. Most of the 12 individuals dismissed by the First, Third and Fourth Respondents had experienced a working relationship with the operator of the abattoir for a considerable period and all of them had been employed from either March or April 1998 under the management of Stuart Ramsey. 70 Upon termination, 11 of the former employees sought to re-establish an employment relationship with the abattoir as the particular Ramsey entities quite rapidly recruited employees. Gregory Forrest gave evidence that on 20 September 2002 he presented for work and was allowed to enter the abattoir and observed and heard Stuart Ramsey addressing 80 to 90 workers at that time. 71 The circumstances confronting these individuals and the steps they took to secure work although reflected at [49] of these reasons bears some further examination. Colin Hambly, for example, attended the abattoir gate to seek work on the morning of 17 September 2002. He experienced an exchange with a security guard. Hambly asked whether he would be allowed to enter the abattoir for work according to a list held by the security guard. The guard made a call and asked, 'Should I admit Colin Hambly? ' After the call, the security guard told Hambly, 'You will not be admitted today or any other day. ' On 18, 19 and 20 September 2002, Hambly presented himself at the gate of the abattoir and asked whether he would be allowed to enter the abattoir for work. He was told that he would not be admitted for work. Colin Hambly made further enquiries by telephone to seek work at the abattoir. The last enquiry was made on 13 February 2003 of Mr Marshall on behalf of management. Hambly was told that a form would be sent to him by which he might apply for work at the abattoir. No such form was sent to him. 72 Similarly, Delaforce attended the gate of the abattoir on 17 September 2002 and asked a security guard whether his name was on a list of workers to be allowed to enter the abattoir for work that day. Delaforce was told his name was not on the list. He was told by telephone that work would be available for him the following day. On that day, Delaforce placed a proposal before management to try and secure a general resumption of work for all workers not just himself. Delaforce did not approach the gate or the security guard on 19 or 20 September 2002 as he was in Sydney before the AIRC in relation to proceedings concerning the termination of the contracts of employment. On 28 November 2002 at 4.15pm, Delaforce received a letter from the abattoir dated 26 November 2002 offering him work on 27 November 2002. On 29 November 2002 at 2.30pm, Delaforce received a letter dated 28 November 2002 offering him work on 29 November 2002. On 29 November 2002 at 3.20pm, Delaforce attended the abattoir and spoke with Mr Marshall. Delaforce told Marshall that he was available for work. On 2 December 2002, Delaforce sent a letter to Marshall advising that he had accepted casual employment at another enterprise but that he would make himself available for work at the abattoir on Thursdays and Fridays. On 4 December 2002, Marshall told Delaforce that there would be work for him on the following day on the slaughter floor. Delaforce worked at the abattoir on 5 December 2002. No other offers of work were made to Delaforce by the abattoir. 73 In the case of Paul McKenzie, he approached the abattoir gate and made enquiries of the security guard every morning of the week commencing Monday, 16 September 2002. McKenzie presented himself again each day throughout the following week and again the person on the gate told him each time that his name was not on the list for work. McKenzie made telephone calls to Marshall to seek work, without success. McKenzie then sought work in other places. McKenzie was offered work on 26 November 2002 for the following day. McKenzie asked Marshall whether this offer of work would be 'a continuing thing' and Marshall told him that he was 'being offered work only one day at this stage'. 74 Similarly, Moss made enquiries at the gate on 17, 19 and 20 September 2002 and was told by the security guard that his name was not on the list of those who were to be offered work. 75 Brooks presented on 17, 18, 19 and 20 September 2002. 76 Campbell presented himself to the security guard on 17, 18 and 20 September 2002. 77 Gregory Forrest presented himself to the security guard on the morning of 16 September 2002 at 6.00am and each morning during the course of the week. 78 Michael McKenzie made enquiries of Marshall on 13 September 2002 and was told his name was not on the list. He made further enquiries at the front gate of the abattoir each morning during the week commencing Monday, 16 September 2002 and was told each day that his name was not on the list. McKenzie worked as a boner for one day. On Monday, 23 September 2002, McKenzie presented for work at the gate and was told his name was not on the list. On the following Tuesday, Wednesday and Thursday, McKenzie was told the same thing. On Thursday, 26 September 2002, McKenzie told Marshall he would not present himself at the gate any longer to see if his name was on the list but would make a telephone call each morning instead. McKenzie made a telephone call to the abattoir every day for a week at approximately 6.00am and was told that his name was not on the list. On 2 December 2002, McKenzie received a letter from the abattoir dated 29 November 2002 which offered him employment 'for tomorrow 29 November 2002'. 79 In the case of John Young, he was offered work on 16 September 2002 for the following day. John Young was not willing to work on that day having regard to the workers resolution and the attempt to secure a return to work more broadly. No work was offered on 18 or 19 September 2002. On 19 September 2002, Young handed a note of a request for the payment of entitlements to the guard at the abattoir gate. On 20 September 2002, Young was told that he was not on the list for work that day. No offers of employment from the abattoir were put to him after 16 September 2002 and he has not worked at the abattoir since. 80 Accordingly, each of the employees experienced to a greater or lesser degree, a situation of presenting at the gate to be told that the individual's name was not on the list for work. 81 In order to secure work, the 11 individuals made enquiries and accepted employment at other enterprises in the manner indicated at [61]. Blackadder secured no alternative employment although the abattoir continued to pay him periodic payments until 8 December 2002. Brooks secured casual butchering work in September and October 2002 at Coffs Harbour and casual employment with NCML at Casino and regular work at NCML of 24 to 32 hours per week. Campbell was not able to work on 27 November 2002 at the abattoir being a day for which he was offered work, as he was seeking work in Mackay. Other work has been difficult to find. Michael McKenzie obtained work in late October 2002 as a casual support worker for disabled people which subsequently became permanent work. Similarly, Paul McKenzie obtained work as a support worker for disabled people on a casual basis and then on a permanent part time basis from mid 2003 onwards. Moss secured work as a boner at NCML at Casino as a casual worker from mid October 2002 to August 2003 at which time he was employed as a permanent employee. Forrest obtained work at the abattoir on 20 September 2002 but left the abattoir after an unpleasant conversation with Stuart Ramsey. Forrest derived earnings in the period to 30 June 2003 from Labourco Newcastle and Labourco Hunter. Hambly has not obtained work and has relied upon Centrelink payments. Delaforce obtained casual tiling work during the week of 19 and 20 September 2002 and work as a farm labourer until the middle of March 2003. Swain was placed on the payroll of Ramsey Packaging upon the AIRC reinstatement order of 12 June 2000 and continued to receive wages until August 2002. Thereafter, Swain was unemployed and received Centrelink payments. On 16 September 2002, John Young secured voluntary work for three days each week in support of an aged care program. Young also obtained two weeks work commencing in late October 2002 comprising voluntary work for a fencing contractor. He then worked as a casual employee of that contractor until 30 March 2003 and then secured regular work as a fencing contractor. 82 Susan Young obtained work as a casual cleaner from 15 October 2002, further work as a casual cleaner in the period 29 October 2002 to early December 2002 and since 31 July 2003 Young has obtained work of 8 to 10 hours per week as a housemaid at a Grafton hotel. 83 None of the former employees were challenged or cross-examined by the respondents. 84 The effect of this evidence is that employees who had experienced an association with the abattoir for some time and an employment relationship under the governance of Stuart Ramsey from either March or April 1998 also experienced dismissal from employment in circumstances the subject of the prohibition formulated to give effect to the important objects of Pt XA. The subsequent conduct reflected a degree of symmetry with the dismissal conduct because in respect of 11 of the individuals, the First, Second and Fourth Respondents then refused to employ them during the re-engagement period. 85 Each individual attempted to secure a restoration of the employment relationship and those attempts involved individuals presenting themselves at the gate to a security guard at what was a reasonably long term and familiar workplace, to enquire whether, each day, they would be offered employment that day. Sometimes, offers of employment on a particular day were made. Sometimes, offers after the event were made. Each employee, subject to the continuing remuneration paid by the abattoir to Blackadder, was compelled to examine other opportunities for employment either on a casual or permanent basis, either within the industry within which that employee had developed skills or in other industries where those skills might not be deployed. 86 I accept that the circumstances of the dismissal and the process of re-engagement of employees made it necessary for the 11 individuals to experience a process of presenting themselves at the workplace to determine whether they might that day or on any other day, secure work. I accept that the conduct of the individual of presenting himself to the process at the gate of the abattoir was something which occurred in respect of the contravening conduct and that it became necessary for each individual to seek out other opportunities for work. I accept that the dismissal conduct and the subsequent process of engagement with the abattoir by the 11 former employees in seeking a restoration of the employment relationship (and thus the experience of the refusal to employ), carried with it disruption and dislocation. The conjunction of the conduct bearing the character given to it by the Act and the events which occurred after the dismissal conduct and throughout the attempts to secure re-engagement, give rise to, in the case of employees who had experienced a long term relationship with the abattoir, particular disruption and dislocation and a loss of secure employment which in all the circumstances renders it appropriate that the affected individuals be compensated. 87 In reaching the conclusion that it is appropriate in the circumstances of the case to order compensation, I recognise that compensation must be confined within reasonable limits and that restraint is required ( Burazin v Blacktown City Guardian Pty Ltd (1996/1997) 142 ALR 144 at 156). In addition, not every termination of employment will attract compensation. In Burazin , their Honours Wilcox CJ, Von Doussa and Marshall JJ concluded that in the circumstances of that case, there were 'unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for distress unnecessarily caused to Mrs Burazin'. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACI Operations Pty Ltd [2006] FCA 122 at [11] , Marshall J concluded that something more than the usual element of distress which accompanies most terminations must be demonstrated although the notion of 'unusual and exacerbating circumstances' is not necessarily the test. In Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (Western Australian Branch) (1995) 63 IR 1 at 9, Lee J made a number of observations concerning those factors which might inform whether it is 'appropriate in all the circumstances of the case to make an order requiring the employer to pay to the employee compensation of such amount as the court thinks appropriate' in respect of a contravention of the relevant Division of the Industrial Relations Act 1998 (Cth) ('the IR Act') for the purposes of s 170EE of the IR Act. That particular legislation also set a cap upon the amount of the compensation that might be ordered. As a matter of general principle, Lee J considered that the court would have regard to 'what is reasonable in the circumstances' and would consider 'the detriment occasioned to the employee by the employer's contravention of the Act' and the extent to which 'it is reasonable to compensate the employee for such consequences'. In some cases, it may be appropriate to include in the measure of compensation a sum 'sufficient to compensate an employee for mental distress or injured feelings caused by a harsh, unjust or unreasonable termination of employment'. Although the statutory context is, of course, a different one, notions of what might be 'reasonable' are relevantly analogous to notions of what is 'appropriate'. A consideration of a compensable component of mental distress in the context of conduct characterised as an unjust or unreasonable termination of employment suggests such a consideration would be more so relevant in the circumstances of the prohibited purposes identified by the Workplace Relations Act 1996 (s 298L(1)) and the objects the Act seeks to achieve by force of the prohibition. 88 In determining that each employee ought to be paid compensation of $3,000 in the circumstances of the breach by the Greater Dandenong City Council of s 298K of the Act, Madgwick J made reference to Fryar v System Services Pty Ltd (1996) 137 ALR 321 at 330-331 per Von Doussa J. The Respondents say that Fryar's case is not an illustration of the exercise of such a jurisdiction. It seems to me that the reference by Madgwick J to Fryar's case was simply intended to recognise that at least in the context of a severance payment which is a form of compensation for the loss of 'non-transferable credits and entitlements built up through length of service such as sick leave, long service leave and for inconvenience and hardship imposed by the termination of employment through no fault of the employee' (Von Doussa J at 331, line 15), the inconvenience and hardship element 'includes the disruption to the employee's routine' and other matters. In point of principle, compensation in respect of the contravention of the Act might also take account of disruption and dislocation. 89 Having regard to all of these matters, I propose to order compensation of $3,000 in the case of Blackadder as the dislocation and disruption occasioned to him is, it seems to me, less than that occasioned to other employees as Blackadder continued to receive remuneration until 8 December 2002 which presumably ameliorated the immediacy of his sense of dislocation, disruption and distress. In respect of all other employees, I propose to order compensation of $4,000 in respect of this component of the compensation. Accordingly, compensation payable to Brooks, Campbell, Susan Young, and Paul Swain ought to be paid by the First Respondent. Compensation payable to Blackadder, Delaforce, Forrest, Hambly, Michael McKenzie, Paul McKenzie, and Moss ought to be paid by the Third Respondent, and compensation in respect of John Young ought to be paid by the Fourth Respondent. The First, Second, and Fourth respondents have contravened the Act by engaging in the refusal to employ conduct. The two classes of conduct are sufficiently inter-related or symmetrical that in assessing penalty, there are, in effect, 12 contraventions. At the time of those contraventions, the maximum penalty which the Court might impose in the case of a body corporate was $10,000 for each contravention (s 298U(a)(i)). The Court is simply directed to consider what is appropriate in all the circumstances of the case. 94 Having regard to the character and content of the contraventions, it cannot be contended that the contraventions are merely technical or trivial. Having regard to the findings contained in the reasons, and the findings extracted from the reasons and incorporated in these reasons, the conduct on the part of each of the respondents, as found, is serious. The maximum penalty which might be ordered constitutes $120,000. The circumstances in which the conduct took place and the consequences of the conduct have been already described. It should be recognised that the conduct strikes at the freedoms Pt XA seeks to protect. No evidence has been filed by the respondents other than the affidavit of Stuart Ramsey so as to raise any matters which might be taken into account in mitigation of a penalty. There is no evidence of any previous contravention on the part of any of the respondents. However, the factor of greatest significance in relation to penalty in the present case is the need to impose a penalty which will constitute a general deterrent to others who may be disposed to engage in prescribed conduct of a similar kind. In Leahy at [23] I cited the observations of Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR 41-815 to the effect that, for a penalty to have the desired effect, it must be imposed at a meaningful level and therefore must be such that a potentially offending corporation will see the penalty as not worth the prospect of gain. The WR Act strikes a balance between employers and their organisations on the one hand, and employees and their organisations on the other hand. Irrespective of whether the legislative pendulum has moved, or it is moving, away from or towards, enterprise bargaining agreements or individual contracts, the one legislative constant has been the protection conferred by the freedom of association provisions, or their statutory predecessors in Part XA. However, in recent years, industrial legislation has increasingly codified and prescribed what is acceptable, and what is unacceptable, industrial conduct. The legislature has, over time, also moved to increase the penalties that may be imposed in respect of unlawful industrial conduct. In my view, any light-handed approach that might have been taken in the past to serious, wilful and ongoing breaches of the industrial laws should no longer be applicable. In that case, the Court recognised the application of the ' totality principle ' in assessing penalty. Rather than determine a separate penalty in respect of each contravention, it is appropriate to determine a total penalty concerning the course of conduct which has given rise to the field of contraventions. The total penalty ought not to exceed what in the aggregate is appropriate for the entire course of contravening conduct ( Finance Sector Union v The Commonwealth Bank of Australia at [25] per Merkel J). 97 Stuart Ramsey contends that the South Grafton Abattoir as a ' total enterprise ' is losing thousands of dollars per week and may shut shortly. Contextually, he says that these circumstances are consistent with a wholesale beef industry that is in troubled times and where markets are hard to service. Mr Ramsey has an expectation that abattoir closures will continue to occur as they have in the past. The financial accounts show that Ramsey Food Packaging Pty Ltd has incurred accumulated losses for the financial year ending 30 June 2006 of $55,254 in addition to accumulated losses for the 2005 financial year of $40, 975. Ramsey Food Packaging No 2 Pty Limited has incurred accumulated losses in the financial year ending 30 June 2006 of $123,640 in addition to accumulated losses incurred in the 2005 financial year of $177,456. Similarly, Ramsey Food Services Pty Limited has incurred accumulated losses of $46,824 and $50,461 for the financial years ending 30 June 2006 and 30 June 2005 respectively. The financial accounts for Ramsey Butchering Services Pty Limited do not include a profit and loss statement for the company. The submission put to the Court by the respondents is that the Court should have regard to the prevailing financial circumstances affecting the nominated respondents, the risk of closure of the abattoir, and the abattoir's role in providing continuing employment with the result that the public interest is said to be served by imposing a penalty which might reflect both a deterrent upon conduct but which importantly is also facilitative in recognising the need for the continued operation of the abattoir. 98 These submissions might have been able to be developed in a meaningful and coherent way. However, the material is so brief and limited, it is difficult to usefully deal with the submission or the facts relied upon in support of it. By itself, the financial circumstances of the respondents cannot significantly mitigate the penalty. However, those circumstances, taken together with other considerations might usefully inform what is appropriate. Unfortunately, there simply is no sufficient factual foundation for a proper consideration of what is said to be relevant. 99 The same vice attends the submissions based upon the extent to which Mr Ramsey took legal advice. I propose to have regard to that fact as a fact. However, as I indicated at [19] the brevity with which the matter was expressed provides no real sense of the materiality of the advice, the scope of the advice, or the extent to which Mr Ramsey relied upon it. 100 Having regard to all these factors, I propose to discount the total maximum penalty of $120,000 by 30 per cent, thus resulting in a total penalty of $84,000. 101 As to the apportionment of that penalty, I accept the submission of the Applicant that there are notionally six corporations involved in the contravening conduct; three involved in the dismissal conduct; and three involved in the refusal to employ. Each corporation ought to bear one-sixth of the total penalty. Since the first and fourth respondents are participants in both classes of conduct, those corporations ought to bear two-sixths (that is one-third) each. The Second and Third Respondents should bear one-sixth each. In that event, the First Respondent would bear $28,000 as would the fourth respondent. The Second and Third Respondents would each bear $14,000. This approach is said to be consistent with what is sometimes described as the ' usual order ' in the sense that it is not uncommon for an order to be made pursuant to s 356(b) of the Act in favour of an Applicant union as the ' person or organisation applying for the penalty to enforce the award for the benefit of the union and it's members ' ( Gibbs v City of Altona (1988) 42 IR 255 at 262 per Gray J; Employees Federation of Australia v General Motors Holden Pty Ltd (1977) 32 FLR 100 at 111 - 114), or on the basis that ' an order that the penalty be paid to the applicant [union] will tend to encourage the enforcement of awards ' ( Electrical Trade Union of Australia v Sims Products Ltd C/A Bifco Batte r ies (1988) 42 IR 250; per Gray J; and Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (1996) 70 IR 284 at 286 --- 287 per Marshall J), or because the contravening conduct affects ' the legitimate interests of the applicant and it's members ' ( CFMEU v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at 233 --- 234 per Branson J). 103 The qualification upon the exercise of the power is that such an order ought not to be made if it will result in a windfall gain. Such a windfall might arise in circumstances where the party receiving the benefit of the order has already received compensation pursuant to s 298U both as to any economic loss in respect of the contravention and any non-economic loss in the nature of general damages. 104 In Automotive, Food, Metals, Engineering, Printing and Kindred Industry Union v DMG Industries Pty Ltd (1999) 89 IR 360 , the respondent undertook to pay the injured worker his lost wages and undertook to pay the Applicant union's legal costs in a fixed amount. The Applicant union also sought an order that any penalty imposed upon the respondent be paid, consistent with the usual order, to the union. Marshall J made an order that monies be paid to the affected individuals (two employees) rather than the union since its costs would be met in reliance upon the undertaking. Nevertheless, the authority is cited as authority for the proposition that individuals affected by the conduct ought properly have the benefit of an order even in circumstances where an undertaking has been offered to pay lost wages, (that is, a degree of restitution has occurred). 105 The present difficulty is said to be this. 106 The Employment Advocate is a statutory office established by s 150 of the Act. However, the holder of the office has no legal personality independent of the Commonwealth of Australia. An order for the payment of the penalty to the Employment Advocate is therefore an order for the payment of the penalty to the Commonwealth. The next level of the problem is said to be that the Employment Advocate and staff are subject to the Financial Management and Accountability Act 1997 (Cth) ('the FMA Act ') and the Constitution so far as the receipting and expenditure of public money is concerned (ss 81 and 83 of the Constitution ). Money received (by order or otherwise) by the Employment Advocate and staff form part of the Consolidated Revenue Fund referred to in s 81 of the Constitution and can only be drawn from the Fund under an appropriation consistent with the arrangements set out in the FMA Act and the Financial Management and Accountability Regulations 1997 . The Employment Advocate has developed a policy of paying penalties obtained as Applicant to those parties directly affected by the contravening conduct. However, securing an act of grace payment consistent with a parliamentary appropriation is perceived by the Applicant to be a difficult and cumbersome process and accordingly the Court is requested to make an order that the penalties be paid directly to the twelve affected individuals consistent with s 356(b). 108 The difficulty with the submission is that the imposition of a penalty under the Act is designed fundamentally to serve the public interest in acting as a deterrent to the particular Respondents and others generally from engaging in conduct of the kind the subject of the findings. In circumstances where an order has been made for compensation for both economic loss and a non-economic component concerning the disturbance, dislocation and loss of secure employment suffered by the individuals, there seems to be no good policy reason why the individuals should additionally have the benefit of an order for the payment to them of the penalty. The contravening conduct of dismissal is a repudiation of employment compounded by the refusal to employ 11 of the dismissed employees. The loss flowing from that conduct is the subject of the compensation order. As an exercise of the power pursuant to s 356(b), I will make an order that the penalty imposed pursuant to s 298U of the Act be paid to the Employment Advocate. In making these observations I do not seek to express any view as to the merits or otherwise of an act of grace payment consistent with requirements of the FMA Act. Schedule 5 of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) had the additional effect of renumbering the provisions of the Workplace Relations Act 1996 (Cth). For example, the renumbered provision conferring power on the Federal Court to award penalties in relation to contraventions of the Freedom of Association provisions, is s 807. However, the effect of Regulation 4.53 of the Workplace Relations Regulations 2006 (Cth) taken in conjunction with the definition of the relevant terms in the legislation including the terms 'pre-reform Act' and 'Reform Commencement' is that despite the repeal of Pt XA of the Workplace Relations Act 1996 (Cth) by the Work Choices Act, an application made to the Federal Court under s 298T prior to 27 March 2006 'continues and is to be determined under section 298U' of the Workplace Relations Act 1996 (Cth) as if the Act has not been amended. Accordingly, the source of the power to order a penalty or order compensation to be paid is s 298U of Pt XA as that Part stood immediately prior to the 'Work Choices Act' amendments. 110 As to the power conferred by s 356 of the Act (which is not a provision of Pt XA but Pt XIII) that section was amended by s 495 of the Financial Framework Legislation Amendment Act 2005 (Cth) so as to delete a reference to the term 'Consolidated Revenue Fund' in subparagraph (a) and substitute a reference to the term 'the Commonwealth'. Item 213 of Schedule 1 to the Work Choices Act further amended s 356 to omit the term 'monetary penalty' and substitute the term 'pecuniary penalty'. 112 As indicated, I propose to make an order that the pecuniary penalty be paid to the Employment Advocate. | consideration of the assessment of compensation pursuant to s 298u of the workplace relations act 1996 (cth) in respect of contraventions of s 298k consideration of the assessment of a penalty pursuant to s 298u consideration of whether a penalty so ordered ought to be paid to the individuals affected by the conduct consideration of the scope of declarations to be made. industrial law |
The decision in question is that of the respondent, an employee of the Australian Taxation Office (ATO). The applicant has issued four other sets of proceedings against individual officers of the ATO. The events with which each proceeding is concerned are related. The reasoning on determination of each proceeding is also similar. The respondent objects to the competency of the application on the basis that the decision to issue a demand for payment was not a decision to which the ADJR Act applies as it was not a decision made under an enactment. Alternatively, the respondent contends that the applicant does not have standing to bring the application. Ivyside claimed GST input tax credits with respect to various purchases in relation to the company. On 22 May 2007, Mr Michael Parker (the respondent to matters WAD79 of 2008 and WAD81 of 2008) advised the applicant that the claims at 'label G11' on his activity statement for the period July to September 2006 would be disallowed because valid tax invoices were not produced to substantiate the amount of GST credits claimed. The ATO subsequently issued the applicant notices pursuant to s 264 of the Income Tax Assessment Act 1936 (Cth) (ITAA 1936) and s 353- 10 of the Taxation Administration Act 1953 (Cth) (TAA). On or around 3 October 2007, the ATO issued the applicant an amended assessment and penalties for the July to September quarter of 2006. The applicant contends that the conduct was oppressive, in breach of the Taxpayer's Charter, an abuse of power and in breach of the ATO's Receivables Policy. The applicant complains of the 'purposeful mental and emotional pain and suffering' that the respondent is inflicting on him. In an affidavit in support of the application, the applicant clarifies that the decision to issue the demand was made by the respondent in an attempt to coerce him to pay the alleged amount. The respondent points to the fact that there is no evidence at all of any oppressive conduct in breach of the Taxpayer's Charter, an abuse of power or in breach of the ATO Receivables Policy. Indeed, the respondent points to the fact that there is no evidence provided of any decision made by the respondent personally. The only action taken by the respondent was to issue a payment demand as delegate of the Commissioner of Taxation (the Commissioner). The demand was against Ivyside for payment of $14,283.28 by reason of that company having failed to respond to a previous letter regarding its outstanding debt to the Commissioner. The respondent points to the fact that the issue for demand of a payment is an exercise by the respondent only of non-statutory powers as indicated in Guss v Federal Commissioner of Taxation [2006] FCAFC 88 ; (2006) 152 FCR 88 and Cooper J in Century Yuasa Batteries Pty Ltd v Commissioner of Taxation (1997) 73 FCR 528. As observed in Mirvac Homes (NSW) Pty Limited v Airservices Australia (No 1) [2004] FCA 109 by Branson J, the provision in the Federal Court Rules for the filing and service of a notice of objection to competency is intended to encourage a respondent to inform the applicant promptly that the jurisdiction of the Court is in issue. The filing of a notice of objection to competency also places the Court on notice that its jurisdiction to make the orders sought by the applicant in the proceeding is challenged. The Court must then decide, before it makes the orders sought by the applicant or any substantive orders, whether it has jurisdiction to proceed ( R v Federal Court of Australia; Ex parte WA National Football League [1979] HCA 6 ; (1979) 143 CLR 190). In Bray v F Hoffman-La Roche Ltd (2003) 130 FCR 317 , Finkelstein J at [239] expressed the view that, where an issue which is properly characterised as jurisdictional is raised, it should be dealt with at the outset although a different approach was taken in Khatri v Price [1999] FCA 1289 ; (1999) 95 FCR 287 per Katz J at [14]). Whether or not it is necessary to resolve the jurisdictional issue at the outset, it appears to me that the current jurisdictional argument is succinct and independent in the sense that it can be resolved without any other evidentiary enquiry. If the argument is correct, there seems no obvious reason in this case why consideration of the jurisdictional challenge should be further deferred. Deferral has not been sought by the applicant. (As distinct from raising opposition to the objection). The decision complained of did not constitute a reviewable decision as it was not a substantive determination. He contends that the respondent's decision to issue a demand is a decision made under an enactment to which s 5 of the ADJR Act applies. Section 5 of the ADJR Act provides that a person aggrieved by a decision to which the Act applies may apply to the Court for an order of review on certain grounds. Section 6 of the ADJR Act provides for review of conduct, engaged in, being engaged in or proposed to be engaged in for the purpose of making a decision to which the ADJR Act applies. It is apparent from the definition of 'decision to which this Act applies' in s 3 of the ADJR Act that the Act only applies where there is a making of, proposal to make or requirement to make a decision, the decision is of an administrative character, and the decision is made under an enactment. It is clear that a "decision to which this Act applies" must be a decision of an administrative character, that it may be made in the exercise of a discretion, and that it must be made under an enactment. But these characteristics provide little guidance as to the meaning of the word "decision" upon which the definition in s.3(1) is based. First, the reference in the definition in s.3(1) to "a decision of an administrative character made ... under an enactment" indicates that a reviewable decision is a decision which a statute requires or authorizes rather than merely a step taken in the course of reasoning on the way to the making of the ultimate decision. Secondly, the examples of decision listed in the extended definition contained in s.3(2) are also indicative of a decision having the character or quality of finality, an outcome reflecting something in the nature of a determination of an application, inquiry or dispute or, in the words of Deane J., "a determination effectively resolving an actual substantive issue ". Thirdly, s.3(3), in extending the concept of "decision" to include "the making of a report or recommendation before a decision is made in the exercise of a power", to that extent qualifies the characteristic of finality. Such a provision would have been unnecessary had the Parliament intended that "decision" comprehend every decision, or every substantive decision, made in the course of reaching a conclusive determination. Finally, s.3(5) suggests that acts done preparatory to the making of a "decision" are not to be regarded as constituting "decisions" for, if they were, there would be little, if any, point in providing for judicial review of "conduct" as well as of a "decision ". On the one hand, the purposes of the A.D.(J.R.) Act are to allow persons aggrieved by the administrative decision-making processes of government a convenient and effective means of redress and to enhance those processes. On the other hand, in so far as the ambit of the concept of "decision" is extended, there is a greater risk that the efficient administration of government will be impaired. Although Bowen C.J. and Lockhart J. appeared to emphasize the first of these considerations in Australian National University v. Burns , there comes a point when the second must prevail, as their Honours implicitly acknowledged. To interpret "decision" in a way that would involve a departure from the quality of finality would lead to a fragmentation of the processes of administrative decision-making and set at risk the efficiency of the administrative process. With the exception of s.3(2)(g), the instances of decision mentioned in s.3(2) are all substantive in character. Moreover, the provisions in sub-ss. (1), (2), (3) and (5) of s.3 point to a substantive determination. In this context the reference in s.3(2)(g) to "doing or refusing to do any other act or thing " (emphasis added) should be read as referring to the exercise or refusal to exercise a substantive power. I do not perceive in s.16(1)(b) or in par. (e) of Sched.1 or par. (a) of Sched.2 to the A.D.(J.R.) Act any contrary implication. These exclusions from the A.D.(J.R.) Act or from s.13 appear to have been introduced for more abundant caution and it would be unwise to take too much from them. Views on whether or not particular decisions or conduct constitutes a reviewable decision have not always been unanimous (for example, Guss [2006] FCAFC 88 ; 152 FCR 88). Not only are there questions as to whether conduct constitutes a decision but also whether it is a decision taken under an enactment. For a decision to be reviewable it must be one 'for which provision is made by or under a statute', the provision should be more specific than general (for example, Hutchins v Commissioner of Taxationn (1996) 65 FCR 269 and Electricity Supply Assn of Australia Ltd v Australian Competition & Consumer Commission [2001] FCA 1296 ; (2001) 113 FCR 230). A general authorisation for a body to act in a certain way is not usually regarded as being sufficient to qualify a decision as being one made under an enactment: Salerno v National Crime Authority (1997) 75 FCR 133. A decision will only be "made ... under an enactment" if both these criteria are met. It should be emphasised that this construction of the statutory definition does not require the relevant decision to affect or alter existing rights or obligations, and it will be sufficient that the enactment requires or authorises decisions from which new rights or obligations arise. Similarly, it is not necessary that the relevantly affected legal rights owe their existence to the enactment in question. Affection of rights or obligations derived from the general law or statute will suffice. In the language of Fox ACJ in Evans v Friemann (1981) 35 ALR 428 at 431 the relevant decision or conduct did not constitute a decision which was final and conclusive for immediate purposes at least. It was not the ultimate or operative determination of an issue as distinct from the determination of issues arising in the course of making such an ultimate decision ( Social Services, Director-General of v Chaney [1980] FCA 87 ; (1980) 31 ALR 571). The best guidance for this is the clear language of Mason CJ in Bond [1990] HCA 33 ; 170 CLR 321 that the decision will generally but not always entail a decision which is final or operative and determinative, at least in a practical sense and a conclusion reached that is a step along the way in the course of reasoning leading to an ultimate decision would not ordinarily amount to a reviewable decision unless the statute provided for the making of a finding or ruling on that point so that the decision, though an indeterminate decision, might accurately be described as a decision under an enactment. When it comes to the consideration of policy, the competing policies on the one hand of permitting aggrieved persons to challenge administrative decisions and on the other, enabling efficient administration of government processes provides some guidance. If the legislation has provided other means of challenging decisions rather than judicial review under the ADJR Act, at least insofar as policy is concerned, availability of a right of challenge is not withheld. In Edelsten v Health Insurance Commission (1990) 27 FCR 56 the Full Court held that the decisions of the Commission to refer a matter for investigation to a committee were not reviewable as they were not decisions affecting rights and were at a very early stage of the administrative process for determining a possible contravention. They were no more than steps in a process which might lead to an operative determination. The decisions lacked any quality of finality and were not substantive determinations. In Century Yuasa Batteries Pty 73 FCR 528 it was held that the Commissioner's decision to seek to recover an amount equal to withholding tax and penalty for late payment due by the applicant and the demand for payment of those sums was not reviewable because it did not constitute a substantive determination. This was because it lacked the necessary element of finality as liability for payment of those sums arose from the operation of the ITAA 1936 and not in consequence of any reviewable decision of the Commissioner. The decision to seek to recover an amount equal to the withholding tax and penalty for late payment from the applicant, and the demand for payment of the same within 14 days, is not a substantive determination. It determines nothing. As such the decision lacks a necessary characteristic of a reviewable decision ( Bond at 337; Hutchins at 274, 277). If the demand is not met by the applicant because of an erroneous view that it is not liable to make the payment, any liability for additional tax for late payment arises from the operation of the ITAA and not in consequence of any reviewable decision of the Commissioner. It is not final or determinative because it does not remove a benefit or expose an applicant to detriment to which it is not already subject. Equally, Cooper J held in Golden City Car & Truck Centre Pty Ltd v Deputy Federal Commissioner of Taxation (1999) 56 ALD 177 , a decision to commence proceedings for recovery of tax due under the ITAA 1936 is not a reviewable decision. See also Madera v Commissioner of Taxation [2004] FCA 1616 ; (2004) 141 FCR 95 at [21] per Stone J (at [18]-[22]). There was no substantive determination. There was no decision having the character or quality of finality. It was not a decision which affected in any way or in any direct sense the applicant's legal rights and obligations. Further and as a distinct ground, even if there were an appropriate basis for review, it could be advanced only by the company, Ivyside not by the applicant. However, if this were the only issue standing in the way of the competency of this application, I may have granted any application to amend the identity of the applicant, or for that matter, the respondent. The difficulty with the competency of the application however, in my view, is much more fundamental, going to jurisdiction. The respondent's jurisdictional objection to competency must be upheld and the claim dismissed. The applicant is to pay the costs of the respondent to be taxed if not agreed. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | judicial review application brought pursuant to administrative decisions (judicial review) act 1977 (adjr act) to review decision of respondent objection to competency of application whether decision open to review meaning of 'decision' under adjr act whether substantive determination whether applicant has standing to bring application administrative law |
The applicant, TS & B Retail Systems Pty Ltd (TS&B Retail), alleges that the corporate respondent, 3Fold Resources Pty Ltd (3Fold), copied 234 manufacturing drawings and 5 tables of data in which TS&B Retail holds copyright. TS&B Retail says 3Fold used the drawings and data to manufacture, supply and install shop fittings (including interior fittings, displays, stock presentations and shelves) for retailers who would otherwise have purchased those products and services from TS&B Retail. The main case, however, is against the individual respondents. They are the directors of 3Fold and the only ones likely to have assets to satisfy any award of damages TS&B Retail is able to recover. The case against them is that they procured 3Fold to breach the copyright. 2 In addition to the copyright infringement claim, there are claims for breach of confidence and subsidiary claims in misleading or deceptive conduct, misleading or false representations and unconscionable conduct in contravention respectively of ss 52 , 53 and 51AA of the Trade Practices Act 1974 (Cth). The Trade Practices Act claims were not seriously pressed at trial. TS&B Retail accepts in the event it succeeds in its copyright action, the other claims will become redundant. 3 It became common ground during the course of the proceeding that the 234 drawings and the 5 tables were copied. The action is defended on the basis that TS&B Retail does not own copyright in the drawings and that the tables are not protected by copyright. There is an additional defence to the copyright claim in relation to the drawings, namely that 3Fold sold products manufactured from the drawings to Kmart, which 3Fold says was licensed by the copyright owner to reproduce the drawings. In relation to the breach of confidence claim, the respondents deny that the drawings and tables were confidential and assert, if they were confidential, that any right to sue for breach of that confidence does not lie with TS&B Retail. In 1930, Silverwood & Beck Pty Ltd (S&B) was established to design, manufacture and construct interior fittings, displays and stock presentation shelving for Coles variety stores throughout Australia. In 1985 the plant and equipment, stock, goodwill, and "business records, documents and other information" of S&B were purchased by Trollope (Australia) Pty Ltd for $6.9 million. The combined business (by change of name or amalgamation) was called Trollope Silverwood and Beck Pty Ltd (TS&B). TS&B continued to design and manufacture shop fittings and related products. Its customers were major retail outlets such as Coles Myer Ltd (including Coles supermarkets and Kmart) (CML), Big W, Optus, Dick Smith Electronics, Shell and Woolworths. TS&B was owned and run by Barry Trollope (who had established Trollope Australia in 1969) and his son, Grant Trollope. 5 Within a few years TS&B grew to be a sizable operation. At the height of its business TS&B had around 500 employees. In the year ended 30 June 1999, it earned net profits of approximately $2.4m before tax. But its success did not last. Just two years later, TS&B's profitability had declined so significantly that the company was finding it difficult to pay its suppliers and continue operating. In the year ended 30 June 2001 it suffered a net loss of around $110,000. In the following year the net loss exceeded $4m. This was too much for the company's creditors. On 28 October 2002 a debenture holder, the National Australia Bank Limited, appointed John Lindholm and James Stewart, both of Ferrier Hodgson, Chartered Accountants, to be the receivers and managers of the company's assets and undertaking. On the same day the directors appointed Ian Carson and David Crosbie of Carson & McLellan PPB to be the administrators of the company. 6 Despite the receivers moving in, there was talk that TS&B might be able to trade out of its financial difficulties. It soon became apparent, however, at least to some of the employees, that the company would be wound up and their jobs would be lost. Among those concerned for their future were the individual respondents, Peter Vanderzaag, Francis D'Mello and Gary Smith. 7 Vanderzaag was the Operations Manager for TS&B's Business Unit. He had been in the shop-fitting industry for more than 25 years and had been employed by TS&B in various capacities including factory manager, warehouse manager and finally Operations Manager for the retail division. In that capacity, in which he had served for around 15 years, Vanderzaag was responsible for the delivery of services and projects to TS&B's major customers, including Kmart. 8 D'Mello, who was the Information Technology Manager for TS&B, had been with the company for over 15 years. He joined TS&B in 1986 to convert the company's then manual systems to computer based systems. Over the years D'Mello had assumed other responsibilities including the management of various computer systems upgrades and TS&B's "year 2000" compliance program. 9 Smith, who was the Constructions Manager (Retail Projects) for TS&B, had been with the company for about 5 years following a career in the army. He was initially responsible for reviewing the internal processes of TS&B and making recommendations to design and improve efficiencies. As Construction Manager, Smith focused on redesigning the installation procedures for TS&B's retail division. This included the procedures for the preparation of quotations, labour allocation, contract management, site control procedures and safety issues. 10 In view of their age (each was in his 40s or 50s), obtaining new employment was not going to be easy for the three men, despite their experience. Something had to be done to find work. So they decided to set up their own business to operate in the one area they knew well, namely the provision and installation of shop-fittings to retail organisations. 11 It may be that when the idea of setting up their own business was first mooted, the individual respondents thought they would face little by way of competition for old TS&B's clients once the TS&B business closed down. They may also have believed, at least for a time, that with TS&B's closure they were entitled to make use of TS&B's designs, drawings and data or, if not entitled, at least that they could use the drawings and data with impunity. If this is what they had in mind, they were seriously mistaken as they were soon to discover. 12 The individual respondents took little time to put their plan into action. By the beginning of November 2002 they had prepared a submission describing the services their new business would perform and provided that submission to Kmart, TS&B's largest client. They then met Peter Healy, the National Store Development Manager at Kmart, to discuss the submission. 13 It was around this time that 3Fold was incorporated. The shares in the company were held in equal number by Vanderzaag, D'Mello and Smith, each of whom was appointed a director of the company. The work each would perform for the company had been agreed: Vanderzaag was to be responsible for operations and business development; D'Mello for finance, administration and systems; and Smith for logistics and resources (including managing all installation works and project management). The idea was that 3Fold would offer shop fitting services, including project management, stock maintenance and installation and equipment supply to retail outlets. It was not intended that 3Fold manufacture shop fittings itself; rather that it would procure fittings from other manufacturers for supply to its customers. In effect, 3Fold's manufacturing operation was to be outsourced. It did, however, begin to seek out business. While this was taking place the individual respondents continued to work at TS&B, the business of which was beginning to be wound down by the receivers. As a consequence, most of TS&B's staff were, or were in the process of, being laid off. Among them was Smith who was told his employment would terminate on 11 December 2002. Only key staff that were required to finalise projects, wind down the business and maintain core operations that might attract a buyer, were retained. Vanderzaag and D'Mello were among the employees kept on. 15 As well as winding down the business the receivers were taking steps to sell TS&B's assets. Those assets had to be preserved in the meantime. To this end, the receivers put TS&B's employees on notice that when they left they should not take with them any of TS&B's property. For example, on 13 November 2002, Lindholm wrote to all employees reminding them of their obligations. This includes any material on your computer system. You are not permitted to keep any copies of any such material. Vanderzaag and D'Mello attended at least some of those meetings. Two others who play important roles in this case, Graeme Butler (a contract draftsman) and Lisa Oakes (who worked in administration and was responsible for data entry) also attended. Each manufacturing drawing illustrated a unit or assembly from various perspectives (plan, elevation, end view, section). Each drawing contained sufficient detail to allow TS&B (or another manufacturer) to manufacture the unit without having to view the unit itself. It depicted the overall presentation of the finished unit, including the presentation of each of its individual components, all dimensions for the unit and its individual components, along with details of each unit (such as materials used to produce it, part numbers and the method of manufacture or assembly). 17 TS&B also had isometric and design drawings for parts. Each isometric drawing depicted two sides of the part and either the top or bottom. According to Herbert Moffatt, the former Engineering Services Manager at TS&B, with the advent of the computer it was easier for a draftsman to produce an isometric drawing by first drawing the plan and elevation views of a part and then extending these to create the isometric drawing. Unlike a manufacturing drawing, not all aspects of the part, its individual components, dimensions or manufacturing details, are represented in an isometric drawing. For this reason, a part could not be manufactured directly from an isometric drawing. 18 In total, TS&B had between 15,000 and 25,000 drawings (including design, isometric and manufacturing drawings) of which 8,000 to 10,000 were current. Of these, 234 have been shown to have been copied. The customer and product information was stored, in electronic form, in tables within TS&B's database management system (a licensed version of Microsoft's SQL Server relational database management system). The critical data for the business was stored in five master tables ("tarcustomer", "tciaddress", "timkitcomplist", "timitemdescription" and "timitem"). The data was inputted, edited and accessed using TS&B's enterprise resource planning system, ACUITY. 20 For the most part, each fitting supplied by TS&B was made up of a number of component parts. The fitting and its component parts were each given unique identification numbers (called kit numbers and item numbers respectively). The timkitcomplist table stored the kit numbers for each unit, along with the item numbers of the parts which made up each unit. The table also listed the number of parts in each unit (sequence number) and the quantity of each part required (quantity number). The timitem table contained the item number for each part, the TS&B part number along with the cost and pricing of each part. A long description of each part and a short description (including a reference number for the manufacturing drawing associated with each part) were stored in the timitemdescription table. The remaining two master tables (tarcustomer and tciaddress) contained (among other things) a list of all TS&B's customer names and addresses as well as TS&B's suppliers. 21 The data was critical to TS&B's business as it allowed TS&B to efficiently break down customer orders into their constituent components and to determine what parts would be needed and in what quantities, where they could be sourced from and what the prices would be. TS&B could then use the ACUITY system to prepare a quotation or submit a tender expeditiously. 22 An example of the way in which this system worked is as follows. A Footwear Display (Gondola) Unit was given a kit number. This number was linked in the database with the item numbers of each of the parts used to manufacture the Footwear Display (Gondola) Unit. The cost and sale price of each component part, along with references to manufacturing specifications and drawings used by TS&B to manufacture each part and the details of external suppliers from whom the components could be purchased, would be linked with each part. If a customer placed an order for a Footwear Display (Gondola) Unit, TS&B could immediately break down that order and determine what parts would be needed, in what quantities, from whom they could be sourced and what the total cost and sale price of the unit would be. 23 Orders received by TS&B were typically for the refurbishment or fit-out of an entire store, rather than for a single unit or assembly. The process for the fit-out of an entire store or a refurbishment was similar. First, a customer would issue a floor or merchandise plan. The plan would identify each unit to be provided. Each unit was identified on the plan by a merchandise unit number. This number was determined by the customer. Next, "quantity surveyors" from TS&B would perform a "take-off" from the plan. This involved manually recording on a "master / take off sheet" the customer's merchandise unit number, the corresponding TS&B master numbers and the quantity of each unit on the plan. The master numbers and quantities were then keyed into the ACUITY system which would generate a "checking copy" that was used to verify the estimated quantity of each unit. The system then produced a "quotation breakdown" that listed the price of equipment used to make each unit. The next step was the production of a "quote consolidation" that listed the quantities of each component part required. The labour charges associated with the refit were calculated separately on a Microsoft Excel spreadsheet, based on the cost of labour and transport and the complexity of the job. All this information was used to prepare a final quotation for the fit-out which was sent to the customer. 24 If a quotation was accepted the customer would place a purchase order with TS&B. The system would then generate a "sales order", which was an internal document that listed each component part and the quantity that needed to be supplied to the customer for the specific job. The sales order also identified the drawing numbers for each component and the price of each part. If parts were to be supplied by another manufacturer the drawings would be provided to that manufacturer. This was only necessary where the manufacturer had not previously supplied the part to TS&B. For parts manufactured by TS&B, the system generated an inventory list which was used to check what parts were in stock. Employees in the manufacturing area used the purchase order to determine the raw material required to manufacture the required parts. The system would then generate a "despatch packing list" or pick list which identified the parts to be delivered for the job, the quantities required and the delivery date. Finally a "fixers file" was generated listing the customer's merchandise unit number, the corresponding TS&B master numbers and the component parts of each unit to be installed. This was issued to TS&B's on-site installers as a cross-check for the equipment delivered to the site. Other reports, such as lists of suppliers and invoices, could also be produced using the data in the database. 25 The use of the data created an efficient operation. TS&B could quickly and accurately gather the necessary information for it to respond to a complicated tender and, if a contract ensued, arrange for the manufacture and supply of the necessary parts. In Ansell Rubber Co Pty Ltd v Allies Rubber Industries Pty Ltd [1967] VR 37 Gowans J identified the factors relevant to establishing confidentiality to be: the extent to which the information is known outside the business; the extent to which it is known by employees and others involved in the business; the extent of measures taken to guard the secrecy of the information; the value of the information to the employer and to his competitors; the amount of effort or money expended in developing the information and the ease or difficulty with which the information could properly be acquired or duplicated by others. I would add to this the inherent nature of the information in issue and its purpose or function. 27 Information in the public domain is not confidential. For this reason the respondents claimed that the extent to which TS&B's manufacturing drawings had been made available to customers and suppliers required the conclusion that they were in the public domain. Vanderzaag said that drawings were frequently provided to some customers as a part of the design, research and development process. He referred to a shop-fitting brochure provided to Kmart as an example. However, the brochure contained only photographs and isometric drawings, not manufacturing drawings. Smith gave evidence that his dealings with Kmart involved constant use of plans and drawings and that the contents of TS&B's site document folders, which contained drawings relevant to a particular job, were shared with or provided to customers. Smith also said he was permitted to provide drawings to a client as and when required. 28 Barry Trollope denied most of these assertions. He did, however, concede that TS&B had provided manufacturing drawings to a small number of manufacturing contractors who were engaged to manufacture parts that were not manufactured by TS&B itself. He said the drawings were provided subject to them being kept confidential. TS&B did not always have these drawings returned. 29 Richard Cue, the former Design Manager at TS&B, said it was not TS&B's policy to distribute drawings "freely". He acknowledged that TS&B did provide isometric drawings to clients sometimes as part of a brochure, but said that TS&B did not distribute production drawings to clients. Both Trollope and Cue said that TS&B never made its drawings register or database available to customers or suppliers. According to Cue, the site files, which contained drawings, were not distributed to clients. When drawings were distributed to clients, Cue said the majority, apart from the initial sketches, bore TS&B's title block and a copyright notice. There were some minor exceptions, such as when Cue instructed one of the draftsmen to send an electronic drawing to Kmart in response to a request for assistance from Kmart in preparing a merchandising plan. 30 I considered the question whether TS&B issued manufacturing drawings to its customers for the purpose of an interlocutory decision: TS & B Retail Systems Pty Ltd v 3fold Resources Pty Ltd (2003) 57 IPR 530. In that decision, what persuaded me to lean in favour of TS&B Retail's argument that TS&B did not issue manufacturing drawings to its customers was that Kmart had been subpoenaed to produce, among other documents, "product drawings or design specifications prepared, compiled or otherwise supplied by 3fold or any 3fold subordinate related to or connected in any way with the Tender [for works to fit out Kmart stores]". In response, Kmart produced only isometric drawings that originated from TS&B. If the respondents' account were correct, and TS&B did provide customers with manufacturing drawings, one would expect other drawings to have been produced. I am satisfied my tentative view was correct, a view that is confirmed by what Trollope and Cue have said. 31 The drawings were available to employees as and when required, although access to the electronic drawings register was restricted. Cue said all electronic drawings (produced on AutoCAD, a computer aided drafting software package to produce drawings) were stored on a separate network and access was restricted to certain personnel, presumably those who needed to use the drawings to carry out their work. The draftsmen had access to the drawings register. Other personnel also had access. A hard copy of the latest version of all drawings was kept in a library to be used for reference purposes. Other sets were kept in the drawing office, the metals factory and the joinery factory. Vanderzaag said there were no restrictions on who could enter the metals office; although, of course, someone might ask questions if a person entered an area they had no reason to be in. 32 There is no doubt the drawings were important to the business and would have been of some value to competitors. Vanderzaag admitted as much. Despite their importance to the business and their value, there is nothing inherently "secret" about the drawings; they do not contain any information that cannot readily be obtained by other means, such as by viewing the final product. While TS&B did secure the drawings and restrict access to them, this most likely reflects the realities of any modern workplace, where personnel have access only to what they need to perform their jobs, rather than any particular desire to keep the drawings secret. Moreover, there was a belief that the drawings were protected by copyright, so there was no particular need for them to be kept secret. All in all, I do not think the drawings are confidential in the required sense. 33 As regards the tables, the respondents claim that TS&B's system was an ordinary business system, the component parts of which were not kept confidential, but were known to and made available to customers and suppliers. This was denied by Trollope and Cue. Cue said that the complete part number database and drawings register were not made available to customers or suppliers. Trollope said that the entire listing of part numbers was never disseminated, nor were the links between data in the tables. 34 On the other hand, there is evidence that some of the information contained in the tables was provided to customers and suppliers. D'Mello said that part numbers and descriptions (contained in the "timitem" and "timitemdescription" tables) went "forward and backwards" between Kmart and TS&B on a regular basis. Vanderzaag claimed that part numbers were used regularly by customers and manufacturers. He produced a product catalogue for "Silbeck Shelving" sent to customers in December 1993 as evidence of this. The catalogue did not contain information in exactly the same form as the "timitemdescription" table as it contained "generic descriptions" which differed from the "short description" in the table, notably because the generic description excluded any reference to the manufacturing drawing for each part. Part numbers had been provided to customers such as Kmart in the form of stock lists. Indeed the receivers provided Kmart with part numbers to assist them with the management of excess stock. Cue noted that, if required, some part numbers had been made available to customers and suppliers through the request and order process. For example, manufacturing drawings that contained references to the relevant part numbers were provided to certain suppliers. But the dissemination of part numbers was not wide-spread. Cue said that, with the exception of shelving orders placed by Kmart, he was not aware of any customer having referred to TS&B part numbers when issuing purchase orders for major refits. If the dissemination was significant, the part numbers would have been used by other customers. 35 TS&B's computer system, including the ACUITY software, was protected by passwords. Users' rights to access the system varied. While all employees had access to the information in the database, they were not generally able to view the information in the 5 master tables in tabular form. Instead, information was obtained by searching the database. Only certain employees, such as D'Mello and Oakes, could view the database in tabular form. 36 Oakes said that some of the information contained in the tables could readily have been obtained from other sources. For example, the customer information in the "tarcustomer" and "tciaddress" tables, including customer name, store name and store address could easily have been obtained from a customer or from the White Pages phone directory. Vanderzaag said that information contained in the "timitem" and "timitemdescription" tables was also readily available. 37 I accept that the tables were critical to business, that TS&B could not have operated without the information and that the company operated far more efficiently with the information compiled as it was in the tables within the database. Use of the data would save a competitor that was looking to manage inventory, manufacture or supply products, many hours of cataloguing, organising and setting up. With access to the information, set up costs would be lower and the competitor would be in a position to accept orders and begin manufacturing and supplying more quickly. 38 Nonetheless, it is inherently unlikely that all the information stored in the tables including all part numbers and descriptions were confidential. Thus, the price at which TS&B offered its parts for sale is not likely to be confidential. Conversely, information such as the cost (to TS&B of acquiring a part from another supplier) and the sale price of each part could easily be publicly available (if TS&B and its suppliers sold their parts to other customers). Other information, such as kit numbers, item numbers, sequence numbers and quantities of parts in a unit, along with references to TS&B's drawing numbers, was not publicly available and should be treated as confidential. On 13 November 2002, the same day that the receivers wrote to employees reminding them of their obligation not to misuse TS&B property, Vanderzaag and Smith met with representatives of Big W, one of TS&B's largest customers, to introduce their new business. In the following week Vanderzaag approached Kmart with a proposal that 3Fold be awarded a contract to supply material for Kmart's 2003 refurbishment program. 40 Between November 2002 and February 2003, Vanderzaag contacted various manufacturers to obtain quotes for parts that 3Fold intended to supply. Among them were manufacturers who had previously supplied products to TS&B. He sought from them quotes for the supply of the same products to 3Fold. Vanderzaag also approached suppliers who had not previously produced parts for TS&B. In their case Vanderzaag provided the supplier with the TS&B manufacturing drawing of the relevant part to enable a quotation to be prepared. He did not obtain the receivers' permission to use the drawings. He simply obtained a copy of the drawing from TS&B's office and passed it on. 41 The receivers soon discovered that Smith and Vanderzaag met with Big W. On 22 November 2002, following a discussion with Lindholm, Trollope advised Smith that he was not required to remain with TS&B until 11 December 2002 as previously agreed but that he should leave immediately. We received advice from one of TS&B's major clients that he had approached them to carry out work on his own behalf utilising TS&B Intellectual Property. When confronted with the matter this morning Gary acknowledged that the events had taken place and agreed to depart TS&B. We would be grateful for your ongoing support in this matter. 42 When Vanderzaag was told that Smith had been dismissed he tendered his resignation. Following a discussion with Trollope, Vanderzaag agreed to stay on until 20 December 2002. There is disagreement about whether Vanderzaag's resignation had been accepted by Trollope, or whether Vanderzaag in fact resigned in December 2002, but nothing turns on this. D'Mello was made redundant on the same day Vanderzaag's resignation took effect. 43 Late in the year the receivers realised they required more time to dispose of the assets than previously expected. Key personnel were still needed. Accordingly, the receivers retained (through 3Fold) Vanderzaag and D'Mello to stay on as consultants from 8 January 2003. At the time, the receivers were aware that the individual respondents were setting up a business and for that purpose had established 3Fold. The receivers did not, however, know that the individual respondents or, for that matter, 3Fold, were using TS&B's documents to operate their business. 44 Before he finally left TS&B, Vanderzaag approached other employees and offered them employment with 3Fold. D'Mello did likewise. One of the first TS&B employees to be recruited by D'Mello was Oakes. She was an Office Assistant at TS&B but was offered the position of IT Manager at 3Fold with responsibility for designing and setting up 3Fold's IT system. She was also to be in charge of office administration. The offer was too good to refuse. Oakes was being offered a far more senior position than she had ever held in the past. She quickly accepted the position. 45 In her last few days with TS&B Oakes copied the 5 master tables (tarcustomer, tciadress, timitem, timitemdescription, timkitcomplist) from TS&B's SAGE database onto a compact disk and took the disk home. Oakes said that she took the data to make her job easier when she got to 3Fold. No doubt she knew that 3Fold intended to use the data in the same way it had been used at TS&B. Most likely she was told this by D'Mello. 46 By early January, other TS&B employees had agreed to join 3Fold including Kellie Richardson, who was responsible for administration and data entry, and Joseph Morganti and David Chote, who performed takeoffs. Vanderzaag also approached Graham Butler, a Contract Draftsman with TS&B whom Vanderzaag believed possessed a copy of all of TS&B's manufacturing drawings. Vanderzaag offered Butler work as a contractor with 3Fold. 47 From early January 2003, Vanderzaag and others who were to become 3Fold employees used TS&B's systems to generate sales quotations for work to be done by 3Fold. By way of example, a quotation was prepared for fit-out of seven Kmart stores, namely West Lakes, Kotara, Wynnum West, Forrest Hill, Cannon Hill, Bundaberg and Burnie. Other quotations were prepared for the refurbishment of Kmart stores that was to be undertaken as part of its 2003 Phoenix roll-out project, a project that involved the refurbishment of approximately 30 Kmart stores throughout Australia. 48 Vanderzaag initially denied using TS&B's systems to prepare quotations but when faced with clear evidence to the contrary admitted they had been used to help establish the 3Fold business. Specifically, Vanderzaag conceded that under his instruction Chote or Morganti had performed takeoffs for 3Fold and then Richardson or Oakes had keyed the information into TS&B's systems to produce sales quotations for a tender relating to work resulting from the closure of a number of Holly's Restaurants at Kmart stores (the so-called Holly's Restaurant tender) and some of the projects on the Phoenix roll-out. 49 The respondents contend that they could have prepared the quotations without the use of the TS&B data. In this regard, Vanderzaag referred to a practice at TS&B of preparing "speed quotes" when urgent quotations were needed to obtain an advance payment from Kmart for parts already manufactured. According to Vanderzaag "speed quotes" were prepared without use of the TS&B system, and were always within 5% of the figure obtained when a full takeoff was performed. On the other side, Cue said that speed quotes were generally for minor projects and were not as reliable as takeoffs. I am inclined to agree with Cue. If Vanderzaag was right, and it was as efficient to prepare quotations without the use of the data, it is difficult to see why TS&B would have invested so much in developing their system or why the respondents would have bothered copying it. 50 The receivers, who were winding down the TS&B business, had decided that TS&B would not take on any new work after 28 October 2002. Nonetheless 3Fold's actions were quickly noticed by TS&B's management. The receivers also discovered 3Fold had been misusing the company's data and drawings. The receivers' solicitors, Mallesons Stephen Jaques, wrote to each individual respondent on 31 January 2003 detailing numerous alleged breaches by them of their contractual, equitable and statutory obligations. The allegations included that the individual respondents violated TS&B's intellectual property rights (in particular, copyright in numerous documents) and that the respondents had misappropriated TS&B's intellectual property. Specifically, the letter referred to the respondents having handed TS&B's drawings to a representative of Big W and to suppliers of equipment. The letter also referred to the respondents' use of TS&B part numbers and prices in an offer provided to Healy of Kmart. Reference was also made to the alleged "misuse of confidential information" concerning, among other things, TS&B's clients, TS&B's pricing and TS&B's intellectual property (in particular, drawings). 51 Mallesons claimed that the breaches, particularly in relation to Kmart, severely compromised TS&B's ability to trade out of its financial difficulties and jeopardised the receivers' chance of securing a sale of TS&B's business and assets. Mallesons sought various undertakings from the respondents, including that the respondents immediately return to the receivers all TS&B documentation (whether hard copy or in electronic form) and that they honour their obligations as to confidentiality with respect to TS&B's know how and trade secrets. 52 Business to Business Lawyers (B2B Lawyers), acting for the respondents, replied to the Mallesons letter on 4 February 2003. In their reply, B2B stated that 3Fold was establishing its business by relying on the personal knowledge and expertise of its directors only. The solicitors went on to say that there had been no misappropriation by the respondents and no use of TS&B's intellectual property. The respondents did, however, offer to return material in their possession if they received confirmation that no further action would be taken. The solicitors asserted that some documentation had been received when 3Fold had been appointed consultants to TS&B. During the trial Vanderzaag admitted that most of these statements were false. 53 On 12 February 2003, less than two weeks after Vanderzaag and D'Mello's consultancy had come to an end, 3Fold took possession of premises at 126-134 Fairbank Road, Clayton South. The individual respondents, along with Chote, Morganti, Oakes and Hak Seng immediately moved into the new premises. Richardson followed shortly afterward. 54 Oakes saved her copy of TS&B's data onto 3Fold's computer the day she began work at the Clayton South premises. Oakes knew which tables to copy as they were the main tables she had used to create reports while at TS&B. She then began creating 3Fold's own database based on the copied tables. This involved downloading the tables into her temporary directory and renaming them. Oakes then removed unwanted data from the "tarcustomer" table, linked the "tarcustomer" table with the "tciaddress" table (to link the store name with the store address), combined the "timitem" and "timitemdescription" tables, modified the part numbers, combined the "timkitcomplist" table with the "timitem" table and linked the kit number to the parts that make up each kit. 55 In the early stages of this proceeding the respondents claimed that the tables were only used on Oakes' personal computer. This claim was abandoned when it became apparent that it could not be supported. Still, Oakes attempted to distance her conduct from the others. For example, she said at one point that she never specifically discussed setting up the database with D'Mello. Later she said that she probably told Vanderzaag or D'Mello what she was doing. I think the true position is this. D'Mello knew that when Oakes left TS&B she took with her the disk containing the five tables. Indeed, it is likely that he suggested that Oakes take the data so it could be used by 3Fold. However that may be, D'Mello knew that Oakes had loaded the five tables onto the 3Fold server. I have no doubt that Vanderzaag knew as well. After all, he was responsible for attracting business to 3Fold and would, from the outset, have made use of the information on 3Fold's database for the purpose of obtaining work. 56 A few weeks after moving into 3Fold's new premises, Vanderzaag instructed Oakes to change the part numbers in the tables. Up to this point, each part number had followed TS&B's part numbering system in which each part number consisted of a customer code, a product code, a source code, a serial number and a finish code. For example, a typical TS&B part number might be 1-01M412-B3. In this case, the first digit "1" was the TS&B customer code for Kmart. The next two digits "01" represent the category of equipment, in this case a vertical upright. The next letter represented the material used to make the product; "M" stood for metal. The next three digits were a random serial number to differentiate different products within the same category. The final two digit code "B3" represents the finish, in this case a black powder coat. 57 The part numbers were not changed significantly so they could still be referable to Kmart's part numbers. Oakes said she changed "the first letter, the middle letter and the end --- the end little bit which is the colour code". The 3Fold part number after the change, for the vertical upright with TS&B part number 1-01M412-B3 became K101S412-B. That is, K was inserted into the customer code; a reference to Kmart; the letter "M" was replaced with the letter "S"; presumably a reference to steel rather than metal, the 3 was removed from the code B3. Similar changes were made to other part numbers, for example the source code "J" (for joinery) was replaced with a "T" presumably for timber. It is a work that conveys information. When one considers whether the particular information conveyed in the defendant's work is substantially the same as the like information conveyed by the plaintiff's work, the issue is whether the manner in which the defendant has displayed that information, or important aspects of it, is in substance the same as portrayed in the plaintiff's work. The manner of conveying the information was for practical purposes the same. If copyright, 3Fold's new numbering system could still be a substantial reproduction of the TS&B's original work. They received offers from three prospective purchasers. One offer was from 3Fold. The offer was to purchase the "intellectual property" owned by TS&B for $50,000. The respondents' case is that the purpose of the offer was to determine the scope of the intellectual property and what the receivers considered it to be worth. The respondents suggested that 3Fold did not wish to acquire the asset. Smith said that the individual respondents did not believe the offer would be accepted. Vanderzaag said if there was a chance of it being accepted, the offer would have been withdrawn. D'Mello described the offer as having been made "tongue in cheek". None of this is plausible. I am convinced the offer was made because the respondents believed the intellectual property (which included the drawings and data) was worth at least the amount of the offer and probably more. Why then did they downplay the offer? I think the reason is this. A point regularly made by the respondents throughout the trial was that even if TS&B had copyright in the drawings and data, they were of no value to 3Fold because it had the capacity at short notice to prepare its own drawings and data and would have been able to tender for work in any event. This does not sit well with an offer to purchase the intellectual property for $50,000. 60 The offer the receivers accepted came from TS&B Retail. The company had been incorporated on 4 February 2003 by Trollope. Although TS&B had failed, Trollope was of the view that the business could operate profitably provided it was conducted in a different manner. The difference related to the manufacture of parts. TS&B manufactured most of the parts it needed and maintained a large workforce for that purpose. This was an expense that TS&B Retail could not afford. The Trollopes (Barry and his son) decided that TS&B Retail would procure parts manufactured by others, including overseas manufacturers, or, if they were available, simply purchase them on the open market. 61 The terms of TS&B Retail's offer were set out in a letter dated 19 February 2003. The offer price was $652,250. This was more than the auction value of the assets. The Purchase Consideration will be apportioned between the Assets in such a manner as agreed and set out in the Asset Acquisition Agreement. The Purchase Consideration payable for the Assets is $652,250 plus GST to be satisfied by the payment by TS&B Retail to the Vendor on Friday 28 th February 2003. Possession of the Assets and risk in them will pass to TS & B Retail at completion of the transaction. The Vendor and TS & B Retail will if either party requires it enter into an agreement for the sale and purchase of the Assets (Asset Acquisition Agreement), to be prepared by TS & B Retail's solicitors, which will reflect the terms and conditions of this offer. Until such time as the parties enter into the Asset Acquisition Agreement, the terms and conditions of the agreement of the parties as set out in this offer will bind the parties, and the parties will do all things (including signing any document) reasonably required to give effect to the terms and conditions of this agreement. 62 The letter was received by one of the receivers, Lindholm, on 19 February 2003. He executed the letter and returned it to Trollope on the same day. Settlement was due on 28 February 2003. In the event, completion did not take place until 20 March 2003. 63 Before settlement, 3Fold began to enter into contracts to supply fittings. It was awarded contracts to fit-out two stores (Kotara and Wynnum) that formed part of Kmart's Holly's Restaurant tender. A contract to fit-out a third store, West Lakes, was awarded to 3Fold on 24 March 2003. The remaining four stores under the Holly's Restaurant tender (Forrest Hill, Cannon Hill, Bundaberg and Burnie) were awarded to TS&B Retail. 64 At about the same time, 3Fold was awarded contracts to fit-out thirteen Kmart stores (West Lakes, Kotara, Wynnum West, Morley, Castle Hill, Joondalup, Woy Woy, Gladstone, Innaloo, Goulburn and Armadale) as part of the Phoenix roll-out. 3Fold was awarded contracts to fit-out a further three stores (Mildura Launceston and Kardinya) on 24 March 2003. Three of these projects (Innaloo, Goulburn and Armadale) ultimately did not proceed. TS&B Retail received contracts for four stores (Dandenong, Shepparton, Traralgon and Albury) with the remaining ten stores going to Metro Products and BP Shopfitting (who were awarded nine stores and one store respectively). 65 Between February and March 2003 3Fold also received orders from Kmart to fit-out a further fifteen Kmart stores (Albany, Knoxfield, Ringwood, Cannon Hill, Figtree, Sylvania, Parramatta, Mulgrave, Minto, Warrnambool, Tooronga, Hornsby, Alexandria, Sylvania and Rowville). 66 The respondents maintain that the Phoenix contracts were awarded to 3Fold in November or December of 2002, before Vanderzaag and the others made use of TS&B's data to prepare quotations. That is not what Healy said. According to Healy the Phoenix contracts were not allocated to particular shop-fitting companies until January or February 2003. It is in my view clear that 3Fold used TS&B's data to quote for all the Kmart projects. Moreover, it intended to use TS&B's manufacturing drawings to fulfil any contracts it was awarded. 67 On 20 March 2003 Barry Trollope wrote to the receivers advising that "[TS&B Retail did] not require [the execution of] a formal Asset Acquisition Agreement to proceed to completion of the sale and purchase of the Assets. " In the letter TS&B Retail proposed that the sale be made on the terms set out in the letter along with those in the letter of 19 February 2003. TSB Retail believes this is an error, and that title, risk and possession in respect of the Assets will pass on Completion. Further details of the sale were set out including that the receivers and TS&B would provide assistance to TS&B Retail in relation to claims by third parties over plant and equipment. This was followed by a provision that, for the avoidance of doubt, a failure by the Vendor to accept the letter would not "affect the binding agreement [to sell the assets to TS&B Retail] created [by] the acceptance by the Vendor of the Sale Letter. Later that day the transaction was completed by the payment by TS&B Retail of the purchase price and the delivery by the receivers of the assets. 69 It is clear that the parties (the receivers and TS&B Retail) intended the arrangements set forth in the two letters to be binding; to constitute a contract. There is no reason not to give effect to their intention, provided it can be given effect in law. 70 To the extent it matters (and timing may be important) I treat the letter of 19 February 2003 as an offer to purchase the assets therein described and the receivers' signature as the acceptance of that offer, resulting in a binding contract. It is appropriate, I think, to regard the provisions of the second letter as a variation of that contract. At one time it was thought that the result of varying a contract was to produce a new contract: Williams v Moss Empires Limited [1915] 3 KB 242, 247. In United Dominions Corporation (Jamaica) Ltd v Shoucair [1969] 1 AC 340, 348, Lord Devlin said the old agreement would only be destroyed if that is what was intended. In Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10 ; (1957) 98 CLR 93 the distinction between recision and variation was discussed. The High Court accepted that the parties to an agreement may vary some of its terms by subsequent agreement. It was also accepted that the parties may rescind the earlier agreement, and this could be done expressly or by implication. The determining factor is always the intention of the parties as disclosed by their later agreement. 71 Did the agreement (or the agreement as varied) pass copyright in the drawings and data to TS&B Retail? Copyright is a species of property. It is capable of being assigned at law as personal or movable property: Copyright Act 1968 (Cth), s 196. To pass legal title the assignment must be in writing: Copyright Act , s 196(3). If the assignment is not in writing there may be an assignment in equity provided there is an express or implied agreement to assign. Here the parties accept that the receivers purported to assign TS&B's copyright in the drawings and data to TS&B Retail. The dispute is whether copyright subsisted in respect of those works and if it did whether TS&B was the owner of the copyright. 72 A rather more difficult question is whether, as TS&B Retail asserts, it took an assignment of TS&B's confidential information. According to the agreement there was an attempt to assign confidential information to TS&B Retail. The first letter records that "all intellectual property and proprietary rights ... including ... drawings, trade secrets, technical data formulae ... databases, know-how ... and similar industrial or intellectual property rights" was the contract's subject matter. 73 In Norman v Federal Commissioner of Taxation [1963] HCA 21 ; (1963) 109 CLR 9, 26 Windeyer J said, and Dixon CJ (at 16) agreed that "[a]ssignment means the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee. Anything that in the eye of law can be regarded as an existing subject of ownership, whether it be a chose in possession or a chose in action, can today be assigned, unless it be excepted from the general rule on some ground of public policy or by statute. " That is to say, the only thing capable of being assigned is property or a right in property. 74 Confidential information, however, is not property "in any normal sense": Boardman v Phipps [1966] UKHL 2 ; [1967] 2 AC 46, 128. Indeed it is not property at all. Confidential information is protected by equity by "the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained": Moorgate Tobacco Co Limited v Philip Morris Limited (No 2) [1984] HCA 73 ; (1984) 156 CLR 414, 438. A court of equity will protect information only if it is truly confidential and the confidence is worth preserving. 75 Although confidential information is not property and hence is not capable of being assigned, it now seems to be accepted that confidential information can be passed on by one person to another, and the person to whom it has been imparted can take action to protect the information. In Mustad & Son v Dosen [1964] 1 WLR 109 the liquidator of a company sold to the appellant the company's business including the benefit of trade secrets. One of the former employees took up employment with a competitor, with the intention of passing on trade secrets to his new employer. The appellants obtained an injunction to restrain the disclosure. In Douglas v Hello! Ltd (No 3) [2006] QB 125, 168 it was observed that the decision in Mustad & Son "supports the proposition that a purchaser of confidential information can restrain disclosure of that information in breach of confidence, but again the picture is complicated by the fact that the benefit of [the employee's] contractual obligation not to disclose the information was purchased by Mustad. In the Spycatcher case ( Attorney-General v Guardian Newspapers Ltd (No 2) [1988] UKHL 6 ; [1990] 1 AC 109, 281) Lord Goff said: "a duty of confidence arises when confidential information comes to the knowledge of a person (the confidant) in circumstances where he has noticed ... that the information is confidential, with the effect that it would be just in all the circumstances that he should be precluded from disclosing the information to others. The remedies that are available include an injunction and equitable compensation: Seager v Copydex Ltd (No 2) [1969] RPC 250; Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health (1990) 17 IPR 545; Aquaculture Corporation v New Zealand Green Mussel Co Ltd [1990] 3 NZLR 299. The Federal Court can grant this relief because it exercises equitable jurisdiction: Federal Court of Australia Act 1976 (Cth), s 5(2) and s 23. 78 The result is that TS&B Retail is entitled to maintain a cause of action for copyright infringement and breach of confidence for any alleged infringement that occurred from the time it became the owner of the copyright or entitled to share in the confidential information (as the case may be). But what of infringements that occurred while TS&B owned the copyright and was the only person entitled to protect the confidential information? TS&B Retail is not able to bring an action for an infringement that occurred prior to it becoming owner of the copyright and entitled to use the confidential information merely because it is the assignee: Taypar Pty Ltd v Santic (1989) 17 IPR 146, 152-153. No doubt for this reason the agreement has the receivers purporting to assign to TS&B Retail any claim TS&B may have had for breach of copyright and breach of its confidential information. 79 I said that the receivers "purported" to assign the causes of action for there is a general rule that a personal right to litigate cannot be assigned either at law or in equity, but an impersonal right in the nature of a proprietary right can be assigned provided the circumstances warrant it. Thus, it has been said that causes of action in tort, which are regarded as personal rights, cannot be assigned: Poulton v Commonwealth [1952] HCA 70 ; (1953) 89 CLR 540, 571, 602. The bar on assignments of personal actions would include actions in equity that are of a personal kind: Glegg v Bromley [1912] 3 KB 474, 489-492. An action for breach of confidential information is a personal action. 80 There is in England an exception to the bar on the assignment of personal rights. In Trendtex Trading Corporation v Credit Suisse [1982] AC 679, 703 Lord Roskill (with the concurrence of the other Law Lords) said: "In English law an assignee who can show that he has a genuine commercial interest in enforcement of the claim of another and to that extent takes a assignment of that claim to himself is entitled to enforce the assignment unless by the terms of the assignment he falls foul of our law of champerty, which, as has often been said, is a branch of our law of maintenance ... The Court should look at the totality of the transaction. If the assignment is of a property right or interest and the cause of action is ancillary to that property right or interest, or, if the assignee has a genuine commercial interest in taking the assignment and in enforcing it for his own benefit, I see no reason why the assignment should be struck down as an assignment of a bear cause of action or as savouring of maintenance. The cases for and against (the latter all being decisions of the Federal Court) are collected in Rickard Constructions Pty Ltd v Rickard Hails Moretti Pty Ltd [2004] NSWSC 1041 ; (2004) 220 ALR 267. It may be that the debate is now over for the High Court in Campbell's Cash and Carry Ltd v Fostif Pty Ltd [2006] HCA 41 ; (2006) 229 ALR 58 seems to have approved Trendtex . In any event, my own view is that the logic of Lord Roskill's view is inescapable. This is especially so when, as here, the cause of action is connected with, or relates to, rights or interests owned, or that will fall into the ownership, of the assignee. I do not agree. Since the mid 1980s employees of TS&B were involved in preparing, monitoring, updating and managing the drawings and parts database. As each new item was developed, it was assigned an individual part number, short and long description and cost and sale price. The unique drawing number for the part was included in the short description of the part, for ease of reference. The part number, together with the descriptions, prices and date were recorded in tables. From 1999 these tables were located on TS&B's ACUITY database. Once the information was in the database it could be automatically used in the quotation, manufacturing, warehousing, inventory control, delivery, installation and invoicing processes. 83 The evidence establishes that sufficient effort, skill and judgment was exercised in creating the tables and collecting the data to populate them to justify their protection as a literary work for the purpose of copyright: Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd [2002] FCAFC 112 ; (2002) 192 ALR 433; Autocaps (Aust) Pty Ltd v Pro-Kit Pty Ltd (1999) 46 IPR 339; TR Flanagan Smash Repairs Pty Ltd v Jones [2000] FCA 625. 84 There was an argument that copyright could not subsist in the tables as they did not supply intelligible information: Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd [2002] FCAFC 112 ; (2002) 119 FCR 491, 532. Alec Peterson, a certified practicing accountant with experience implementing enterprise resource planning software such as ACUITY, gave evidence that while information could be entered into the tables or viewed through enquiries or reports, the tables could not generally be viewed in tabular form. In the alternative, it was put that even if the tables did supply intelligible information they did not do so to anyone other than TS&B. There is really nothing in the argument. While the information may be more difficult to access in tabular form and is more easily understood when obtained from the database via a report that extracts only those pieces of information from the database that are relevant to a particular query, the information in the tables is intelligible. Not only that, the information is meaningful not only to TS&B employees but to others, as can be inferred from 3Fold's copying and use of the data. In any event, even if the information was meaningful only to TS&B's employees, that is not a reason for excluding the compilation as a work capable of copyright. One of the main issues in the case is whether TS&B owned the copyright in the drawings. Although the facts are messy, it has proved to be not too difficult to resolve the matter in TS&B Retail's favour. 86 The problem concerning ownership arises in the following way. First, TS&B "acquired" many drawings (and the copyright) from its predecessor. It may have "acquired" some of the drawings in suit. Second, almost all of the drawings have been revised. Typically with manufacturing drawings, and so it is with the drawings in suit, the changes are noted, but not always in a way that makes it possible, in the absence of the original drawings, to see precisely what has been changed. This is of particular significance. Copyright in each drawing will belong to the original "author", being the person who gives existence to the work: Sands & McDougall Pty Ltd v Robinson [1917] HCA 14 ; (1917) 23 CLR 49, 55. But in the case of changes to a drawing, if the changes are non-trivial, or the author contributes something recognisably his own, there will be, for copyright purposes, a new original work, the author of which will be the person who brought about the changes: University of London Press v University Tutorial Press Ltd [1916] 2 Ch 601; H Blacklock & Co Ltd v C Arthur Pearson Ltd [1915] 2 Ch 376; Interlego AG v Tyco Industries Inc [1989] AC 217; A-One Accessory Imports Pty Ltd v Off Road Imports Pty Ltd (1996) 65 FCR 478. Third, while the author of each change is identified on the drawing, some authors were employees of TS&B and others were independent contractors. Where the drawings were prepared or significantly amended by an employee, s 35(6) of the Copyright Act provides that the employer is the owner of the copyright. In the case of a drawing prepared or significantly amended by a contractor, he would be the owner of the copyright unless it had been assigned to his principal. 87 The respondents put TS&B Retail to its proof on ownership. It was therefore required to identify the author of each original manufacturing drawing, the extent of any amendment to the drawing, the identity of the person who made each amendment and establish that through these persons TS&B obtained or was entitled to claim ownership of the copyright. 88 TS&B Retail's task was made difficult by the fact that the practice at TS&B was to update an original drawing with any change however insignificant, as the changes were used for manufacturing and needed to be precise. To ensure that outdated versions of drawings were not mistakenly used in the manufacturing process, TS&B destroyed previous versions of a drawing once an amendment had been made. Further, from some time prior to 1995, most draftsmen at TS&B used AutoCAD. Amendments to drawings in AutoCAD were made to the current electronic copy of a drawing, in effect replacing the previous version of that drawing. This practice made it impossible in some cases to determine the scope of amendments made to a drawing. 89 The problem of establishing ownership of copyright was compounded because many relevant documents, including employment records --- necessary to determine whether the authors were employees or contractors --- were either still in the possession of the receivers or had been destroyed. 90 The author and, if amended, the amending author of each manufacturing drawing is identified on the latest drawing. The identification is by noting the author or amending author's initials. The date of the amendment also appears. A brief notation of the amendment is given. In many cases, the person who authored the original drawing is the person who amended it. 91 An examination of the drawings in suit shows that in total eighteen employees and contractors were the initial authors or amending authors. Of these, five were employees of TS&B. The employees were Keith Edwards, Adrian Mihovolic (both CAD documentors), Dean Jordan (a project development team leader), Dorota Borthowski and Richard Dalzell. Employment contracts were produced for Edwards, Mihovolic and Jordan. While employment contracts were not produced for the remaining employees, other documentation indicates, and I accept, that they were employees of and not contractors to TS&B. TS&B Retail says that another author, Les Cuccia, was also an employee, however there is insufficient evidence to say one way or the other. 92 The remaining twelve authors that could be identified, Gregor Bogdanski, Greame Butler, Sam Chen, Richard Hordejuk, Keith Gill, Benjamin Long, Shelley Li, Ignacy Roszowski, Pavel Molitoris, William Kline, Simon Minnahan and Andrew Polfreyman were retained by TS&B as independent contractors. Bogdanski, Butler, Chen, Bentley and Roszowski entered into contracts in their trading (business) name. Li contracted with TS&B through a company, Zulea Pty Ltd. Bogdanski, Butler, Chen, Bentley and Roszowski were treated as employees for the purposes of payroll tax, superannuation and Workcover; Li was only treated as an employee for the purposes of payroll tax. All were paid an hourly rate for their work, did not have PAYE (income) tax deducted and were not entitled to sick leave, annual leave or long service leave. They were paid an amount for providing their own computers. Unsigned contracts were produced for Bogdanski, Hordejuk, Li, Roszkowski and Molitoris. These were versions of contracts printed from a TS&B computer. Trollope explained that TS&B Retail was unable to find executed copies of the contracts as the receivers had taken what records they considered to be relevant and the remaining documentation had been removed and destroyed when TS&B's Clayton South premises were vacated. No contracts were produced for Butler, Polfreyman, Kline, Minnahan, Gill or Long. 93 TS&B Retail did argue that, like the employees, those classified as contractors were under a "contract of service" rather than a "contract for services" and were employees as a matter of law. In support of this argument it was put that TS&B exercised control over the manner in which these contractors worked, they generally worked from TS&B's premises, they were engaged on a continuing basis, they were paid periodically, they received superannuation, their hourly rate was adjusted to account for annual and sick leave, they were unable to delegate or subcontract work and were otherwise treated the same as employees. This was contradicted, at least in part, by evidence from Sally Baryla, a former accountant at TS&B responsible for the payroll, who said that the contractors could work for others if they had the time, and by Moffatt, the former Engineering Services Manager who said they could also work from home. On balance, and taking into account the terms of the unexecuted contracts that were produced, I consider it probable that the draftsmen were as their contracts provide, contractors and not employees. 94 In addition to the authors who could be identified, there were seven amending authors whose identities are not known. Their initials are "TI", "ARV", "DV", "EB", "FC", "PHIL" and "DS". It is impossible to determine whether they were employees or contractors. 95 Of the 234 drawings in suit, fifty-seven were "cross-reference drawings". These are electronic drawings of components (such as a levelling foot) that could be incorporated into a number of different parts. When drawing a part that contained one of these components, the cross reference drawing was imported into the drawing of the part. There are no details of the authors or amending authors of any of the cross-reference drawings. The cross-reference drawings were incorporated into twenty-seven manufacturing drawings. Whether this incorporation was sufficient to create a new work for copyright purposes will depend on the scope of each addition. An additional forty drawings were copied from previous drawings, the original author of which is unknown. Eleven others were either drafted by unknown authors or were copied from parts. 96 In total there are 60 drawings the authors and amending authors of which could not be identified. It turns out they are in the main cross reference drawings. Cue said that while a drawing and a cross-reference drawing incorporated into it could have different authors, the same group of draftsmen created both the finished drawing and cross-reference drawing. If all draftsmen who drafted the other drawings were employees or contractors who had assigned their copyright to TS&B, it can be inferred that the authors of the cross-reference drawings fall into those categories as well. 97 There are a number of drawings in respect of which it is impossible to determine who is the author because of the absence of evidence of the extent of each amendment made to the drawings. This category includes drawings prepared by contractors and later amended by employees, drawings prepared by employees and later amended by contractors and drawings prepared by persons unknown and later amended by contractors or employees. There are between eighty-six and one-hundred and one drawings that fall into this category, depending on whether the incorporation of the cross reference drawings into some of the drawings is sufficient to create a new original work. 98 TS&B employees were both the original authors and amending authors of only ten or eleven drawings. The employee owns the copyright. Contractors were the authors and amending authors of between sixty-three and seventy-seven drawings. These contractors owned the copyright unless it had been assigned to TS&B. Even if all amendments by employees resulted in original works, and amendments by contractors were found not to create original works, which is unlikely, TS&B would own the copyright in less than half of the drawings in suit. The remainder are drawings where the author is unknown or drawings were created and amended only by contractors. This shows the importance to TS&B Retail of the need to prove that the draftsmen who were contractors had assigned their copyright to TS&B. 99 The evidence that contractors did assign copyright to TS&B comes from four sources. The first is Baryla, the former accountant, who said that all contractors were sent a contract with the terms of their appointment, although not all signed the contract. TS&B took a contractor's act of invoicing and accepting payment to be acceptance of the terms of the contract, albeit unsigned. TS&B later required each to execute a written contract containing the terms of their services. 100 The second source is Moffatt who in his capacity as Engineering Services Manager was responsible for the draftsmen. Moffatt said that when he took up his position on 1 November 1995, he was instructed by the then Manufacturing Manager, Claude O'Keefe, to amend the form of contract then in use for contractors and have it signed by all contractors retained by TS&B. He said he carried out this instruction. At the time, TS&B only had two contract draftsmen, Li and Bogdanski. Both Li and Bogdanski signed the contract. Moffatt recalls later having contracts signed by Hordejuk, Roszkowski and Molitaris. Based on this evidence I conclude that all contractors signed the contract. The cases say that one means of proving that a thing has been done is to show that there is a general practice that the thing be done. It is sufficient for the evidence to establish (as it does here) a regular practice to do the thing, it is not necessary to prove that the practice was invariable: Connor v Blackstown District Hospital [1971] 1 NSWLR 713, 721; Olga Investments Pty Ltd v Citipower Ltd [1998] 3 VR 485. 101 Neither Moffatt nor Baryla could produce an executed contract. Trollope said the contracts were in files kept by the receivers and can no longer be found. Trollope did produce drafts of contracts with a number of former contractors (Bogdanski, Li, Hordejuk, Roszkowski and Molitaris). The drafts had been located by Cue and another employee, Max Crowe, in files and on a disk at TS&B Retail's Clayton South premises. They were identified by Moffatt as corresponding to the form of contract he had prepared for execution by the contractors. However, Cue said he understood all former employees and contractors had signed the acknowledgment. It is not clear on what basis he arrived at that understanding, so it cannot be given much weight. On the other hand, his evidence was not objected to so it cannot be ignored. All rights reserved. This drawing is copyright and confidential apart from any fair dealings permitted under copyright and no part may be reproduced by any person without written permission of the above company and is not to be used in any manner prejudicial to the interests of the company. Moffatt said that when he asked Butler to use the template and title block, Butler replied he did not want to use the title block as it took up the margin, which he needed. Butler later used AutoCAD including the title block. 104 The evidence leads to the inescapable conclusion that copyright in the drawings authored by contractors had been assigned to TS&B. The copyright was in turn assigned to TS&B Retail. In the same month 3Fold was awarded contracts by Kmart to fit-out stores in Launceston, West Lakes, Mildura and Kardinya. 106 Around 21 March 2003, CML (for Kmart) called for tenders in relation to "Gondolas & Associated Metal Products" to be used throughout Australia and New Zealand stores. The drawings for the tender were sent out on about 26 March 2003. A number of the drawings appeared to be manufacturing drawings that had originally been prepared by TS&B and then assigned to TS&B Retail. TS&B Retail raised the matter with their lawyers and a short time later CML withdrew the drawings, later replacing them with others it had prepared. 107 Contracts for the manufacture, supply and installation of metal gondola fixtures for the refurbishment and new store programs were awarded to TS&B Retail and Ausmart (50 per cent each) for a period of two years commencing August 2003. CML believed TS&B Retail and Ausmart could not take any further work and so entered into a contract with 3Fold for the manufacture, supply and installation of gondolas for miscellaneous and stand alone projects to be undertaken in the period April 2004 and August 2005. At the time Kmart decided that it "need[ed] to broaden the current shopfitters supplier base, due to capacity and risk reasons. In it, TS&B Retail sought interlocutory injunctions restraining the respondents from reproducing the drawings and using the data. The application was heard over four days. Judgment was delivered on 10 April 2003: TS & B Retail Systems Pty Ltd v 3fold Resources Pty Ltd (2003) 57 IPR 530. 109 When Oakes was told that the action had begun she destroyed the CD of copied data she had taken from TS&B and deleted from 3Fold's server all information on the tables apart from information that related to Kmart. I assume she did this on the instruction of one of 3Fold's directors, probably D'Mello. Oakes said it was at this time that she first told Vanderzaag and D'Mello how she had created the 3Fold database. As I said earlier, I simply do not believe that D'Mello or Vanderzaag did not from the outset know that the database had been taken from TS&B. 110 The actual fit out of stores under the Phoenix rollout was to take place between 30 April 2003 and 17 October 2003, with groups of projects beginning on 30 April, 19 May, 28 July, 11 August and 1 September 2003. While 3Fold had been awarded the contracts for this work before TS&B Retail became the owner of the drawings and data, it is likely after March 2003 3Fold had manufactured for its use the parts needed to complete these projects. The parts were manufactured from TS&B Retail's drawings. 111 It is not clear how much other work 3Fold obtained from Kmart. 3Fold made discovery of several supply agreements with Kmart. The first dated December 2003 was a "Supply Agreement" for the supply of products for a period of 12 months from 30 April 2003. The products were not itemised, although the agreement contained an estimate of purchases of $3.5m. The second agreement was executed in June 2004 and is entitled "Equipment Supply and Installation Agreement (Standalone and Miscellaneous Shopfitting Works)". It related to products for use in Kmart retail outlets. The agreement ran from 1 April 2004 to 1 August 2005. Finally, there is a "Contractor's Service Agreement" for the storage, assistance and movement of excess Kmart fittings and fixtures. This was to commence on 1 January 2005. The agreement had not been executed and appears to be a draft. 112 In January or February 2004, 3Fold was awarded contracts for three stores as part of Kmart's "Entertainment Expansion" tender. The stores were at Burwood, Belmont and Broadway. The remaining work under this program (for 88 stores in all) was put to tender in May 2004. On 25 June 2004 all were awarded to 3Fold. Kmart did not award any work to TS&B Retail and Ausmart because it considered they were fully committed on other projects and did not have the capacity to take on additional work. 113 There is evidence that between June and December 2003, TS&B Retail was having difficulty carrying out its obligations under contracts with Kmart. Kmart was forced to request 3Fold to supply equipment for contracts that had been awarded to TS&B Retail under the Phoenix rollout program, in particular for the fit out of stores at Wendouree, Wangaratta, Moonopara, Werribee, Shepparton and Rowville). Kmart's internal documents indicate that, in Kmart's view at least, "[TS&B Retail] had a lot of trouble supplying the contracted labour to [a refit project in Brunswick] over the six week fit out. " According to the author "[a]ll started out well, but half way through we were experiencing one, two or three men short on the job, due to manpower shortages with other Kmart and CML projects and commitments to our competitor. TS&B Retail's complaint concerned the production of a packing list that reproduced several part numbers and a drawing for shop fittings that reproduced other part numbers, the subject of the restraining order. The packing list and drawing were sent to K-Mart's Traralgon store. The motion was heard on 5 August 2004 and judgment was given in TS&B Retail's favour on 25 August 2004: TS & B Retail Systems Pty Ltd v 3fold Resources Pty Ltd (No 2) [2004] FCA 1101. 115 While the contempt motion was being heard, Vanderzaag instructed Oakes and Chote to change the 3Fold part numbering system entirely. Oakes said the part descriptions were 'cleaned up' at the same time. I take this to mean they were not changed significantly. Once the changes were made the part numbers no longer resembled TS&B Retail's part numbers. For a considerable time copying was denied both in relation to the data (in particular the tables) and the manufacturing drawings. When the application for an interlocutory injunction was heard, the respondents denied taking any information from TS&B. Although they conceded having in their possession drawings that originated from TS&B, they claimed that these had been obtained from Kmart. There was a change in position regarding the tables when the respondents delivered their amended defence on 3 October 2005, some 2 weeks before the trial. There it was conceded that the tables had been copied onto a compact disk by Oakes while still an employee of TS&B but that the compact disk was only used on her own computer and not loaded onto the server of 3Fold. Oakes said the same thing in an affidavit sworn on the day the amended defence was delivered. This story turned out to be false. 117 Ultimately it was also conceded that the drawings had been reproduced by 3Fold for the purpose of manufacturing parts for Kmart. The concession was first made in relation to some of the drawings in the amended defence and, later, in relation to all drawings by counsel at a directions hearing shortly before trial. During the trial Vanderzaag admitted that there had been extensive reproduction of the drawings. It must be said that the concession was not voluntary. Through discovery and the production of documents on subpoena it had become apparent that there had been copying of at least the drawings in suit. 119 First of all, Smith admitted what would in any event be obvious namely, that the information in the database was necessary for 3Fold to do business. I am satisfied it was both necessary and used. Second, while he was at TS&B, Vanderzaag had given instructions to staff to carry out takeoffs and to prepare quotations using TS&B's data. I am in no doubt he did the same at 3Fold. Third, the evidence shows the data was used by estimators as an aid to do takeoffs. Butler and some other TS&B contractors did much of their drafting work on their own computer, often working from home. The contractors, Butler included, had a portable hard drive on which they could store drawings. They were provided with the drawings for the purposes of the work they were engaged to undertake for TS&B. When his contract was terminated Butler either failed to return the hard drive or kept a copy of the drawings for himself. 121 In early 2003 Butler was retained by 3Fold as a draftsman. He provided 3Fold with all the drawings he had wrongly retained. They were then copied and had added to them the 3Fold logo in place of the TS&B logo. There was a suggestion by the respondents that Butler owned the hard drive and was entitled to retain the drawings. The suggestion was not supported by any evidence and I reject it out of hand. 122 3Fold provided the drawings to suppliers for them to manufacture the components 3Fold needed to fill orders from its customers. The suppliers recorded the information contained in the drawings, probably in computers which controlled the operation of the machinery used to manufacture the components. Once recorded, the supplier had no further use for the drawings. For repeat orders 3Fold was only required to provide the relevant part number. 123 As a result 3Fold was able to supply Kmart (its principal customer) with precisely the same fittings Kmart had previously purchased from TS&B. The argument is that pursuant to the terms of agreements between CML and TS&B, copyright in the drawings was either assigned to CML (Kmart's parent) or, in the alternative, that either CML or Kmart was entitled to obtain, copy and use the drawings and allow others to copy and use the drawings to supply shopfitting components to CML (or Kmart) in kind. 3Fold then says that it was authorised by Kmart to reproduce the drawings. 125 For this part of the case I am required to act on the basis that TS&B Retail has the onus of proving that CML or Kmart, and through them 3Fold, was not licensed to reproduce the drawings for that is an element of the cause of action for copyright infringement TS&B must establish: Avel Pty Ltd v Multicon Amusements Pty Ltd [1990] HCA 58 ; (1990) 171 CLR 88; Acohs Pty Ltd v RA Bashford Consulting Pty Ltd [1997] FCA 352. 126 By way of background, most of the 234 drawings in suit identify the "date drawn" and, if a drawing has been amended, the date(s) of each amendment. The drawings that are dated were created or amended (as the case may be) between November 1993 and November 2002, the majority having being created or amended after 1998. There are many drawings that do not bear a "date drawn". These may be drawings that came into existence before the system of dating came into operation. 127 Several agreements and drafts of agreements between TS&B and CML are in evidence. Only one is executed. Some of the agreements in draft may have been executed; others seem not to have been. Speaking very generally, each agreement (including the drafts) sets out the basis upon which TS&B would manufacture, supply and install shop fittings and fixtures for CML (Kmart). There are provisions dealing with quotations and ordering, price and payment, delivery and installation, risk and title, insurance, confidentiality, warranties, intellectual property, liability and indemnity and termination. In most cases there are also provisions concerning the ownership of the drawings for the parts and the parties' right to use those drawings. It has been assumed, not unfairly, if rights were conferred by those agreements on CML they could be availed of by Kmart. 128 It is convenient to begin the analysis with the agreement for which there is an executed copy. The agreement is entitled "Agreement for the Manufacture, Supply and Installation of Shop Fittings and Fixtures". The agreement outlines the terms and conditions upon which TS&B would manufacture, supply and install shop fittings and fixtures for CML at CML's premises. 129 The agreement is undated. Trollope said that he thought the agreement was executed in 1991. The respondents submit that the agreement is not limited in time and there is no evidence of its termination, therefore it was in effect at all times relevant to this action. This is not correct. Trollope said he believed the agreement was not in force after 1993. He explained that there had been several agreements between TS&B and CML, and their usual duration was two years. Healy, one of the few independent witnesses in this case, also said that agreements between TS&B and CML lasted on average between two and three years. I consider it highly improbable that the executed agreement was in force for longer than two or so years. 130 Whether the agreement operated to assign copyright in the drawings to CML nevertheless requires consideration. Rather for the purposes of this case, the question is whether any of the drawings comprised "Exclusive Use Intellectual Property". I put to one side Schedule B because, except where the date drawn is unknown, none of the drawings in suit were created before the agreement came into force. The issue is whether any of the drawings were "identified by the parties ... as Exclusive Use Intellectual Property". 132 On this issue the evidence is in conflict, at least to some extent. Trollope said there was no agreement that any of the drawings produced to satisfy Kmart's orders would be Exclusive Use Intellectual Property. He referred to one discussion with the managing director of Kmart in relation to a see-through shelf in which it was suggested that the product be used exclusively by Kmart. While nothing was formalised, there was it seems an informal agreement that TS&B would not offer this product to any other customer. Moreover, Trollope said that although CML paid for the development of certain drawings, often those drawings were used to make components for other customers. He instanced, by way of example, Shell, Repco and Caltex as customers for whom the drawings were used. Trollope went so far as to say that this was done with CML's knowledge. In other words, Trollope claims that TS&B was free to use all the drawings that had been partly paid for by CML. 133 Trollope's evidence is supported in part by Healy who had been dealing with TS&B since mid 1995 when he was responsible for coordinating Kmart's merchandising plans. Healy said that he did not recall any part or drawing having been identified as "Exclusive Use Intellectual Property". He did say that Kmart had an expectation that TS&B would not sell parts provided to Kmart to other retailers but, of course, an "expectation" does not amount to the identification by the parties of "Exclusive Use" property. 134 There is also the evidence of Cue, TS&B's Kmart Relationship Manager. He said that generally products that were made for Kmart were not supplied to other customers. To the best of his knowledge, no parts made for Kmart were ever used outside the CML Group. According to Cue, if TS&B needed to use the products developed for Kmart for other clients, Cue would ask Kmart for permission. Cue considered this to be a matter of "courtesy" rather than legal obligation. However that may be, his evidence does not support a finding that the parties had agreed that any parts be "Exclusive Use" property. 135 I accept that there need be no formal process for identifying any part as "Exclusive Use Intellectual Property" in order for it to be "identified" for the purpose of clause 13.1(b)(ii). The identification may be implied. So, if a drawing supplied by TS&B to CML or Kmart is recognised or acknowledged by the parties to be for the exclusive use of CML or Kmart that would be sufficient. On the other hand, when examining whether there is such an implication arising out of conduct it is the conduct of both parties that must be considered, for under the agreement there can be no unilateral identification of "Exclusive Use Intellectual Property". 136 In my view it is simply not possible to conclude any drawings or fittings, let alone the drawings in suit or the fittings to which they relate, were identified as "Exclusive Use". To make such a finding would require me to reject Trollope's evidence on this aspect. While his evidence has been troubling in some areas, I accept his statement that there was no designation of "Exclusive Use Intellectual Property". In no small measure his evidence was confirmed by Healy. If there had been an identification of any drawing as "Exclusive Use Intellectual Property", Healy would know. He would have been the person who, on CML's behalf, carried out the identification or he would have been told about it. 137 The second document is a proposal for a supply agreement prepared for Kmart by TS&B. The document is entitled "Kmart Benefits from a 3 Year Preferred Supplier Agreement with Trollope Silverwood and Beck for Supply and Installation of Fixtures and Fittings". The proposal is headed "final draft", is dated 6 January 1995 and is signed by Trollope. The "proposed period" for the agreement is 1 January 1995 to 30 December 1997. 138 The proposal included the terms of a proposed agreement. Aside from two changes and the names of the parties (the proposal was by Kmart rather than CML), the proposed agreement was in the same terms as the 1990-1991 agreement. Of the two changes, one was relatively minor, the other was significant. The minor change was that "Exclusive Use Intellectual Property" only incorporated Intellectual Property created prior to the date of the agreement if that intellectual property had been "agreed by the parties to be exclusive use Intellectual Property". The previous agreement had incorporated all drawings in relation to fixtures created prior to the agreement. The other change was the removal of the clause that assigned all intellectual property rights in "Exclusive Use Intellectual Property" to CML (Kmart). The proposed agreement contained no provision dealing with how "Exclusive Use Intellectual Property" --- which remained a defined term --- was to be treated. The proposed agreement otherwise provided that Kmart would be licensed to use the intellectual property where TS&B was unable or unwilling to provide the services or where TS&B was not contracted to provide the services and CML reasonably required the use of the intellectual property to maintain consistency throughout its retail outlets. 139 Trollope believes that a copy of this agreement was executed, but was not in force after 1997. An executed agreement was not produced by Kmart or CML on subpoena. Given the draft nature of the proposal, the absence of an executed copy and the obvious gaps in the agreement, I am reluctant to infer the agreement was signed by Kmart, at least in the form produced. Nothing really turns on this because I accept that if executed the agreement would only be in force for two or so years. 140 The third document is a draft agreement entitled "Shop Fittings & Fixtures Supply Agreement". A copy was produced by TS&B Retail and a different version came from Kmart. The agreement contains the terms and conditions upon which TS&B would supply and install shop fittings and fixtures for Kmart. The commencement date of the agreement is 1 March 2000. The term was 2 years. The agreement produced by TS&B was signed by Trollope on 28 February 2000 but does not bear the common seal of TS&B. Kmart is free to use and incorporate in Kmart's equipment any ideas, suggestions or recommendations provided by TS&B without payment of royalties. In consideration of this, Kmart agrees not to disclose, publish or disseminate any of the information referred to in this paragraph without prior written approval to do so from an authorised representative of TS&B. Schedule 2 refers to Ordered Goods which is defined as Goods as ordered by Kmart in accordance with the agreement]. That version is unsigned. It is the same as TS&B Retail's version, save for one important difference. In Kmart's version cl 4.2 does not appear. 143 Trollope said he believed the TS&B Retail version of the agreement had been signed by Kmart and governed the relationship of Kmart and TS&B until TS&B was wound up in January 2003. He does not recall ever having seen the Kmart version. Healy has a different recollection. He said that the last written contract in place between Kmart and TS&B terminated in about March 2000. According to Healy, no agreement was signed after that time because the parties could not agree on the terms. One reason Kmart would not agree with proposals that came from TS&B was that Kmart was reconsidering its practice of tendering each shop refit as a whole and wanted separate tenders for each component. Healy also said Kmart and TS&B could not agree on the price of certain parts. I am sure that Healy's version of events is correct. 144 The fourth document is a draft "Shop Fitting and Fixtures Supply Agreement" dated 1 March 2002 produced by TS&B Retail. The draft was provided to Trollope by Healy in May 2002. Trollope says the agreement was never entered into. Another version of the agreement, in what seem to be identical terms, was produced by Kmart. Healy said that the draft was rejected by TS&B. 145 Interestingly, both versions of the agreement had changes from a previous version marked up. The initial version appears to be similar to the Kmart version of the 2000 agreement. TS&B grants to Kmart an irrevocable, royalty-free, perpetual license to use (including the right to sub-license) the Intellectual Property in all such items and in the Goods (other than Developed Intellectual Property which is assigned under clause 10.1) in order to use, repair, maintain and replace any Goods or to complete or carry out the installation of Goods in a Store. Kmart may incorporate in its equipment any ideas, suggestions or recommendations provided by TS&B without payment of royalties or fees of any kind. The term is to be implied by custom. The only evidence of this custom was the agreements and drafts already referred to together with an agreement between Kmart and TS&B Retail for the supply by TS&B Retail of goods and services to Kmart. The agreement is entitled "Supply Agreement". The commencement date is 30 April 2003, although the agreement was executed by Kmart on 22 December 2003 and TS&B Retail on 6 January 2004. 148 By this agreement TS&B Retail assigned to Kmart all intellectual property rights arising from the provision of design services by TS&B Retail to Kmart. Design services include the preparation and drafting of isometric, manufacturing and schematic drawings for fixtures, shop fittings and related parts for use in Kmart's stores (cl 1.1). 150 In order to imply into an agreement a term arising by custom it is necessary to show by clear evidence of usage that the particular term is notorious in the sense that it is so well known and acquiesced in the market in which it is alleged to exist that everyone who conducts business in that market is assumed to contract on that basis: Young v Tockassie [1905] HCA 17 ; (1905) 2 CLR 470, 478; Summers v Commonwealth [1918] HCA 33 ; (1918) 25 CLR 144, 148; Thornley v Tilley [1925] HCA 13 ; (1925) 36 CLR 1, 8, 17; Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd [1973] HCA 22 ; (1973) 129 CLR 48, 60; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd [1986] HCA 14 ; (1986) 160 CLR 226. There is no such evidence of usage. On the contrary, when I have regard to the agreements and drafts that have found their way into evidence, the only conclusion available is that there is no custom as alleged, the differences in the terms being so great. Healy described the arrangement between Kmart and TS&B in which the license must be found. In other words, we would brief TS&B on a design of a particular item that we wanted for our stores or a particular fleet of items that we needed or a range of suite of items we needed for our store. They went away, did drawings for them, isometric type drawings, they would bring them back for our look and review. If we were happy with what they had drawn up, [we would] then go to the next stage which was called prototyping; we would build a prototype of those units. If Kmart were happy with that with that, we would then look to roll those particular suite of units out. The understanding was --- and it wasn't written in any one hard form or another, but the agreement was that if we rolled out that prototype that TS&B did the work on, then we had 50% reduction in our design costs. A discount of 50% of the total number of hours spent on design, drawing and development is also evident in a number of tax invoices from TS&B for the period 13 April 2000 to 4 December 2002, which were produced by Kmart on subpoena. Attached to each invoice was a 'Progress Review Sheet' that details the hours spent developing each item on which the invoice was based. 153 Cue said that he had been told by Robert Petterwood, the business unit manager of TS&B's retail division, that "there was an agreement between Kmart and TS&B whereby Kmart would contribute 100% of the prototyping costs and 50% of the design, drawing and development costs in relation to new products designed for TS&B by Kmart". Cue also said he was told by Briginshaw --- a manager at Kmart --- that "this contribution toward costs only extended to costs associated with development and design in relation to drawings up until a 3D isometric design drawing was signed off by Kmart". He went on to say that from his own knowledge from having prepared the Progress Review Sheets on which the invoices were based, the charge was made for hours spent drawing, development and design beyond the isometric stage. Those costs were not passed on to Kmart. 154 Healy seemed to be of the understanding that Kmart could only use isometric drawings. We believed we could use it for our own means. The production drawing or the isometric? According to Healy, Kmart would occasionally ask for a manufacturing drawing when specific information was needed, for example to coordinate other services such as computer cabling or wiring to run data or electricity to the fittings when installed. But otherwise the manufacturing drawings were not passed on. 155 There is evidence that Kmart was provided with and used isometric drawings. If Kmart wanted a supplier other than TS&B to produce a particular component that was the same as it had purchased from TS&B, Kmart usually provided the supplier with a sample of the product from which to produce manufacturing drawings or required the supplier to go to its stores and measure up the actual items in question. From time to time Kmart copied and used the isometric drawings obtained from TS&B, along with the physical products, to produce their own manufacturing drawings so that the component could be manufactured by other suppliers. These manufacturing drawings were occasionally provided to potential suppliers as a part of Kmart's tender package. These actions are indicative of a belief on the part of Kmart in relation to products designed for Kmart, that Kmart had either been assigned copyright in or had permission to use the isometric drawings. 156 The position in relation to manufacturing drawings is less clear. I have already mentioned that in March 2003, Kmart sent tenderers a CD containing drawings with specifications for a tender. The CD contained at least five manufacturing drawings bearing TS&B's logo and another four manufacturing drawings branded with Kmart's logo but which Trollope said were copies of TS&B's drawings. Trollope provided copies of these drawings to TS&B Retail's solicitors. In addition there are drawings attached within this e-mail that should form part of your pricing submission. Kmart drawings forwarded on the 21/03/03 that formed part of the original tender pack are now considered withdrawn and should not be used as the basis of your submission. Please base all quotations pertaining to Kmart on drawings contained within the provided CD. Kmart then went to the effort of hiring another supplier, Metro Shopfitters, to redraw the drawings. Minutes of a meeting of Kmart's Contract Advisory Panel held on 5 March 2003 suggest that it was not clear who owned the intellectual property. 157 It is difficult to know what to make of this as regards the use of the drawings in suit. To the extent that there were agreements in place between TS&B and CML (or Kmart) it is those agreements that are the repository of the rights of CML to use the drawings. On the assumption that there were no written agreements in place, and probably there were none after 2000, all one has to fall back on is the loosely described arrangement as outlined by Healy. It is, I suppose, possible to conclude that having paid for the preparation of the isometric drawings Kmart was entitled to make use of them without infringing copyright. I would not draw the same conclusion in relation to the manufacturing drawings for at least two reasons. First, Kmart did not contribute to the cost of their preparation and the cost involved was not insignificant. No doubt the cost of the drawings was covered, or intended to be covered, by the profit to be made on contracts with Kmart, but that is not the same as a direct contribution toward the cost of their preparation where the payment might give rise to some right to use the drawings. Secondly, Healy did not say specifically that it had been agreed that the particular components that were designed for Kmart could not be used elsewhere by TS&B. If it had been agreed that the components were for the exclusive use of Kmart that might support an argument that Kmart had the right to use the drawings, at least for some purposes, although the better view is that if it had any right at all it was to exclusivity and not to the use of the drawings to enable another manufacturer to make up components on its behalf. There are two answers to this argument. First, the respondents, on whom the onus on this issue falls, did not lead sufficient evidence to support the conclusion the product designers and draftsmen were joint authors. Secondly, even if there were such evidence, so far as I can tell all product designers were employees of TS&B and hence, as employer it would be owner of the copyright in any jointly authored work. 159 There was an attempt to rely on s 77 of the Copyright Act in defence to the claim for copyright infringement of the manufacturing drawings. No such defence had been pleaded in the amended defence. The argument came up during the course of the trial. However, I will not permit the respondents to rely on s 77. For one thing, it is far too late in the day to set up the statute midway through the trial. In any event, the defence had little prospect of success. Several conditions must be satisfied before s 77 applies. Those conditions are: (1) that copyright must subsist in an artistic work; (2) the corresponding design contained in the artistic work, when applied to an article, must result in a reproduction of the artistic work; (3) there is an industrial application of the design contained in the artistic work; (4) articles made to the corresponding design have been sold; and (5) the design has not been registered under the Designs Act. I am prepared to accept that each condition other than the second would be made out. I think, however, that the respondents have little prospect of making out the second condition. The "corresponding design" which must be applied to an article is a design in accordance with the definition in the Designs Act. There the word "design" is defined to mean "features of shape, configuration, pattern or ornamentation applicable to an article, being features that, in the finished article can be judged by the eye, but does not include a method or a principle of construction. " I think none of the features of the manufacturing drawings, when judged by the eye, were added for their visual effect. To my mind they are all purely functional. It is liable in damages for any loss suffered by TS&B Retail in consequence of that infringement. TS&B Retail seeks as well to recover damages from Vanderzaag, D'Mello and Smith. It is alleged that they aided, abetted, counselled, procured, authorised, directed, or were otherwise a party to the infringements making them liable in damages as accessories. Liability of that kind raises difficult questions to which I will now turn. The history is traced by Gummow J in WEA International Inc v Hanimex Corporation Ltd (1987) 17 FCR 274. At first blush one might imagine that "authorisation" is a simple concept and that it is easy to determine in relation to any given set of facts whether or not there has been an authorisation of copyright infringement. As we shall soon see nothing is further from the truth. 162 In Evans v E Hulton & Co Limited (1924) 131 LT 534 it was decided that the word "authorises" in the English equivalent of s 101 should be given its ordinary meaning. See also Monckton v Pathe Freres Pathephone Limited [1914] 1 KB 395. According to the Oxford Dictionary, that meaning is "to sanction, approve, countenance": For a time the leading case was Falcon v Famous Players Film Company [1926] 2 KB 474. There the author of a literary work assigned the performing rights for the United Kingdom to the plaintiff. Later he sold the motion picture rights to a United States company which made a film of the work and sent it, together with copies, to an English company, which made further copies and gave them to another English company which let out a copy to the proprietors of a picture theatre for exhibition. The hire fee of [sterling]20 was to be paid "on the first day of exhibition of the said film and in any event not later than the final day of such exhibition". The fee was shared by the three companies who were then sued for authorising the infringement of copyright by the proprietors by exhibiting the film. It was conceded ([1926] 2 KB at 485) that the three companies were to be treated on the same footing. The Court of Appeal found each was liable for authorising the breach of copyright. Bankes LJ noted ([1926] 2 KB 474, 491) that the object of introducing the word "authorise" into the definition of copyright was to get rid of the effect of decisions where it had been held that a defendant who for reward gave permission to a third person to present a play in breach of the owner's copyright did not "cause it to be represented" unless the person was the servant or agent of the defendant. Thus "cause" was substituted by "authorise". Bankes LJ followed Evans and Monckton in holding that "authorise" is to be understood in its ordinary dictionary sense of "sanction, approve and countenance". On that basis he said that the trial judge was amply justified in finding authorisation. Scrutton LJ ([1926] 2 KB 474, 495-497) arrived at the same conclusion basing his reasons on the terms of the hire contract. He found an implied term that the proprietors would exhibit the film in order for the hire fee to become payable. By the imposition of a contractual duty to show the film the defendants had in law performed the film themselves and may also have authorised the proprietors to do so. While also purporting to apply Evans and Monckton Atkin LJ's approach was narrower than that of the other judges. He said ([1926] 2 KB 474, 499) that the word "authorise" means "to grant or purport to grant to a third person the right to do the act complained of, whether the intention is that the grantee shall do the act on his own account, or only on account of the grantor. " He found there was authorisation within that meaning. 163 Several observations can be made about Falcon . The first is an observation about language. If Bankes LJ intended to quote from the Oxford Dictionary definition of "authorise", he made a minor error. The word "and" does not appear between "approve" and "countenance". In any event, as noted by Whitford J in CBS Inc v Ames Records & Tapes Ltd [1982] Ch 91, 109, the words in the definition are used disjunctively. 164 The second observation relates to the word "authorise" meaning "countenance". "Countenance", too, is a word which has a wide meaning. According to the Oxford Dictionary it means "to favour, patronise, sanction, encourage". It can also mean "condone". In the context with which we are concerned the English courts prefer a narrow construction. In Amstrad Consumer Electronics PLC v The British Phonographic Industry Limited [1986] FSR 159 Lawton LJ said (at 207) that the words "sanction" and "approve" may have a similar meaning to "authorise" but to the extent that "countenance" might mean "condone" that is a wider notion than "authorise", at least as the word is used in the English equivalent of s 101. 165 Third, and this is an important point, the defendants were held liable not merely for supplying the film to the proprietors but because they purported to grant to them the right to show it in opposition to the right of the true owner. Yet there are cases where the mere supply of the means to infringe copyright has resulted in a finding that the supplier had authorised the infringement. In Monckton Buckley LJ said, in relation to a defendant who had manufactured abroad and imported records which it sold without the plaintiff's consent, that "the seller of a record authorizes, I conceive, the use of the record, and such user [sic. ] will be a performance of the musical work. ": [1914] 1 KB 395, 403. In Evans Tomlin J held that a person who sold the several rights to certain stories with a view to their publication had by that sale authorised the printing and publication of those stories. These cases were approved by Bankes LJ and Atkin LJ in Falcon v Famous Players Film Company [1926] 2 KB 474, 498-499, 491; Atkin LJ expressly stating that they were correctly decided. Moreover, in Amstrad Consumer Electronics PLC v The British Phonographic Industry Limited [1986] FSR 159, 189-190 Whitford J considered that Monckton and Evans establish that there will be authorisation where the defendant intentionally places into the hands of the direct infringer a facility which he knows will inevitably be used for infringement. The object in each of the two cases (the sale of a record in one and a manuscript in the other) was a performance or publication being an act which was bound to infringe. 166 These cases establish two things. First, it is not necessary for the authoriser to impose an obligation on the direct infringer to perform the act which will infringe copyright. Something less will do. Second, in some circumstances there may be authorisation of an infringement although the person authorising has no control over the direct infringer at least at the time the infringement took place. This was a point made by Herring CJ in Winstone v Wurlitzer Automatic Phonograph Company of Australia Proprietary Limited [1946] VLR 338, 347-348. 167 Although control over the direct infringer at the time of infringement was not seen as critical it is now almost an essential element of authorisation. This approach can be traced back to the dance hall cases. Section 2(3) of the Copyright Act 1911 (UK), which was adopted by the Copyright Act 1912 (Cth), provided that a person who "permits" a theatre or other place of entertainment to be used for the performance of a copyright work for profit without the consent of the owner is deemed to infringe the copyright. In Performing Right Society Limited v Ciryl Theatrical Syndicate Limited [1924] 1 KB 1 a syndicate which was the lessee of a theatre engaged a band that played music in breach of copyright. The defendant, the managing director of the syndicate, had power to instruct the band not to perform any piece of music to which he objected and to dismiss the band if his instruction was not obeyed. In other words the defendant had "authority" over the band. The defendant, however, was found not to have authorised the infringement because, as explained by Bankes LJ (at 9), there was no evidence that the defendant "either knew or had reason to anticipate or suspect that the band in his absence were likely to give performances which would be infringements of copyright". Scrutton LJ agreed but for a different reason. He said (at 11) that: "The question is one of the liability for infringement of copyright by persons who do not actually take part in the infringing performance, but are more or less interested in the place of performance and have some control over the performers. The question was whether the defendant had "permitted" his theatre to be used for the performance in public of a work without the consent of the copyright owner. In their joint judgment Gavan Duffy and Starke JJ said (at 503): "Permission to do an act involves some power or authority to control the act to be done, and it is now settled that the permission contemplated by this sub-section is a permission relating particularly to the work the performance of which is complained of. Such a permission is not to be inferred from a merely general authority to use a theatre for the performance of musical works. " To a similar effect is the judgment of Higgins J, especially at 499-500. See also Performing Right Society Limited v Mitchell and Booker (Palais de Danse) Limited [1924] 1 KB 762, 767, 769; Canadian Performing Right Society Limited v Canadian National Exhibition Association [1938] 2 DLR 621. 169 The early juke box cases also identify control over the direct infringer as an important, if not decisive, factor. The principal case is Vigneux v Canadian Performing Right Society Limited [1945] AC 108, a decision of the Privy Council. The Vigneux brothers supplied coin-operated juke boxes with records to restaurants, cafes and other places attended by the public. The proceeds were divided between the Vigneux brothers and the owner of the establishment. In some instances the Vigneux brothers received a pre-determined share; in others a fixed amount irrespective of the number of plays. The latter was the arrangement in place in the case at bar. In the Supreme Court of Canada ([1943] SCR (Can. ) 348) the defendant relied upon certain statutory defences. The judgments concerned themselves with the construction of the relevant sections. In the Privy Council the arguments were similarly confined. But the advice given went beyond the arguments. As such they might, if necessary, claim to be protected by the subsection, but in their case no such claim is necessary, because, as their Lordships think, they neither gave the public performance of 'Stardust', nor did they authorize it. They had no control over the use of the machine; they had no voice as to whether at any particular time it was to be available to the restaurant customers or not. The only part which they played in the matter was in the ordinary course of their business, to hire out to Raes one of their machines and supply it with records, at a weekly rental of ten dollars. 170 The decision in Vigneux was considered in Winstone v Wurlitzer Automatic Phonograph Company of Australia Proprietary Limited [1946] VLR 338 a decision of the Supreme Court of Victoria. This is another juke box case in which a different result was reached. Herring CJ distinguished Vigneux on two grounds. First in the Victorian case there was no fixed rental payable for the juke box: each operation added to the defendant's profit. In other words, to adopt the language of Herring CJ (at 353): "The defendant company and the [infringer, a milk bar proprietor] were engaged in a joint venture for profit. " Second (and this is the point overlooked by the Privy Council), the defendant selected the records to be placed in the juke box and they included records in respect of which permission not been obtained from the copyright owner. "And so," explained the Chief Justice (at 354): "whenever a customer put his coin in the machine and set it operating, the public performance that took place was necessarily of one or more of the musical compositions that the defendant company had decided upon and no doubt, as it was financially interested in each and every operation of the machine, had selected with due regard to the profits to be derived by it from the user of the machine ...[Accordingly the defendant] was privy to and indeed actually participated in the wrongful act that might result from such use. " Put another way, the defendant had control over the content of the performances that occurred when the juke box was set in operation, such control deriving from the selection by the defendant of the records that had been placed in the juke box. 171 The modern law is to be found in the High Court in University of New South Wales v Moorhouse [1975] HCA 26 ; (1975) 133 CLR 1, a decision which has not received universal acceptance. The University, with a view to assisting its students, installed coin-operated photocopy machines in the University library. The machines remained under the control of the University, but it took no step to prevent students or staff from photocopying copyright literary works housed in the library. Included among the writings copied was the plaintiff's book of short stories. He sued the University alleging authorisation. The case was heard by a three member bench - McTiernan ACJ, Gibbs and Jacobs JJ. Counsel for Moorhouse based his argument on the fact that the University had the ability to control library users, the library and the machines and it knew of the possibility of copyright infringement. Accordingly, so it was submitted, the University was guilty of authorisation when it fails to exercise that ability and allowed the infringing conduct to occur. This argument was accepted. Gibbs J followed Falcon and Adelaide Corporation (albeit a case concerned with a differently worded section) and said (at 12) that the word "authorise" has its dictionary meaning of "sanction, approve, countenance". He also said it can mean "permit"; the words "authorise" and "permit" being synonymous. He then went on to say (also at 12) that "a person cannot be said to authorise an infringement of copyright unless he has some power to prevent it". He explained that the word "authorise" connotes a mental element and accordingly a person could not be said to authorise something to be done if he neither knew nor had reason to suspect that the act might be done. He concluded (at 13) that "a person who has under his control the means by which an infringement of copyright may be committed --- such as a photocopying machine --- and who makes it available to other persons, knowing, or having reason to suspect, that it is likely to be used for the purpose of committing an infringement, and omitting to take reasonable steps to limit its use to legitimate purposes, would authorize any infringement that resulted from its use. He said ((1975) [1975] HCA 26 ; 133 CLR 1 at 21), that the word "authorise" had a wide meaning, which encompassed cases of both permission and invitation. So, according to Jacobs J, the question that fell to be decided was whether in the circumstances the University had by implication (for it was certainly not expressed) invited students and staff to make such use of its photocopying facilities as they thought fit. He answered that question in the affirmative. 173 Obviously, Moorhouse must be understood in the light of its facts. It is different from cases such as Vigneux (at least as the Privy Council viewed the facts) for the reason that at all times the University was in a position to control the use of the means by which copyright was infringed. It was distinguished on this basis by the Court of Appeal in Amstrad Consumer Electronics PLC v The British Phonographic Industry Limited [1986] FSR 159, 207 per Lawton LJ and 211 per Slade LJ in a case where it had been argued unsuccessfully that a person who supplied Hi-Fi equipment with facilities for recording on blank tapes had authorised copyright infringement by purchasers who taped records in breach of copyright. See also, on appeal, CBS Songs Ltd v Amstrad Consumer Electronics PLC [1988] 1 AC 1013, 1054 where, following the citation of the passage from the judgment of Gibbs J where he dealt with control, Lord Templeman said "[whatever] may be said about this proposition, Amstrad have no control over the use of their models once they are sold. " Lord Templeman said that this proposition was too widely stated. He did not say in what respects it was too wide. I note that the passage from the text had been applied by Kearney J in RCA Corporation v John Fairfax & Sons Ltd [1982] RPC 91, 100, and was cited, seemingly with approval, by Gibbs J. 175 Several of the principles laid down in Moorhouse have been codified by statute. Section 101(1A) of the Copyright Act, which was inserted by s 87 of the Copyright Amendment (Digital Agenda) Act 2000 (Cth), provides that when considering whether a person has authorised a copyright infringement the court is required to take into account (a) the extent (if any) of the person's power to prevent the doing of the act concerned; (b) the nature of any relationship existing between the person and the person who did the act concerned; (c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice. Importantly, subs (1A) does not make any of the factors, or the absence of any of the factors, determinative of the result. For example, a failure to take reasonable steps to avoid a copyright infringement will not necessarily result in a finding of authorisation. Whether the finding is made will depend on all the circumstances. So it is with control. There may be a finding of authorisation even if the defendant has no power to prevent copyright infringement. Again, it will depend upon all of the circumstances. 176 All in all it is as true today as it was in 1946 when Herring CJ said that whether or not there has been authorisation is a question of fact and that "any attempt to proscribe beforehand ready-made tests for determining on which side of the line a particular case will fall, would seem doomed to failure": Winstone v Wurlitzer Automatic Phonograph Company of Australia Proprietary Limited [1946] VLR 338, 345. Nonetheless, there are some guidelines that can be given, albeit with varying degrees of confidence. Although the term is commonly used, the concept is not well defined. To be joint tortfeasors it is not sufficient that the independent wrongful acts of two persons have caused the same damage. Those persons are several tortfeasors. In Sir John Haydon's Case (1612) 77 ER 1150 at 1151 joint tortfeasors were described as "all coming to do an unlawful act, and of one party, the act of one is the act of all of the same party being present. " The rule goes back to when an action in trespass was principally criminal ( Sir Charles Stanley's Case (1663) 84 ER 1094) but has been extended. There are three classes of joint tort: where a party is vicariously responsible for the acts of another --- as in master and servant, principal and agent and partnership; when there is a breach of a joint duty, be it a statutory or common law duty; and concerted action. 178 As regards the third class (concerted action) to be joint tortfeasors the unlawful act must be for a "joint purpose" ( Clark v Newsam and Edwards (1847) 154 ER 55) or "concerted action... towards a common end" ( The Koursk [1924] P140, 152). In Thompson v Australian Capital Television Pty Limited [1996] HCA 38 ; (1996) 186 CLR 574 the High Court accepted as a correct description of joint tortfeasors that given by Sargeant LJ in the The Koursk [1924] P140, 159-160, namely that "there must be a concurrence in the act or acts causing damage not merely a coincidence of separate acts which by their conjoined effect cause damage". So, employing the language of criminal lawyers, all persons who aid or counsel direct or join in the commission of a tort are joint tortfeasors: Pratt v British Medical Association [1919] 1 KB 244, 254 citing Petry v Lamont (1841) 174 ER 424, 426. Intent, of course, is not an ingredient of the tort for we are dealing with the civil law, not criminal conduct. Erle J explained the cause of action in terms that are well known but worth repeating. He said (118 ER at 755): "It is clear that the procurement of the violation of a right is a cause of action in all instances where the violation is an actionable wrong, as in violations of a right to property, whether real or personal, or to personal security: he who procures the wrong is a joint wrong-doer, may be sued, either alone or jointly with the agent, in the appropriate action for the wrong complained of. It has been suggested that where, as in the present case, there is an allegation of procuring the infringement of a legal right (eg copyright) there is no separate tort of procuring but rather the offender is a joint tortfeasor. The cases are few, and the discussion of the point is brief. The principal authorities are Unilever Plc v Gillette (UK) Limited [1989] RPC 583, 603-608; CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] AC 1013, 1057, 1058; Credit Lyonnais Bank Nederland NV v Export Credit Guarantee Department [1999] UKHL 9 ; [2000] 1 AC 486; MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441 ; [2003] 1 BCLC 93, 107-111. 181 For my own part, I can see no reason in principle why the procurement of a civil wrong should not be a distinct tort. And, further, there seems to be no reason why procuring the commission of a statutory tort should stand on any different footing, unless, of course, the statute itself excludes that kind of claim. 182 This is not an idle point. Although it may be easy to determine whether particular conduct amounts to the procurement or inducement of a tort, breach of contract or other civil wrong, it will often be less easy to show, or it may sometimes be impossible to establish, that the defendant has a common purpose with the direct infringer. Even more important may be the quantification of damages. The basic measure of damage in relation to torts concerning property if the property is destroyed is either the market value of the property or the cost of repair. Consequential losses are also recoverable. But with the so called 'intentional torts', damages are at large; that is damages are not limited to the pecuniary loss that can specifically be proved: Ansett Transport Industries (Operations) Pty Ltd v Australian Federation of Air Pilots (No 2) [1991] 2 VR 636, 644-649. 183 Finally on this aspect it should not be forgotten that the tort that might compendiously be described as 'unlawful interference with trade or business' (an individual tort), owes its existence to Lumley v Gye see eg Rookes v Barnard [1964] UKHL 1 ; [1964] AC 1129; JT Stratford & Son Ltd v Lindley [1965] AC 269. 184 There is another area in relation to the tort of procuring in which the cases do not present a uniform approach. The difference of opinion relates to the circumstance in which a director or other officer may be held liable for procuring his company to violate a legal right. I had occasion to examine this issue in Root Quality Pty Ltd v Root Control Technologies Pty Ltd (2000) 177 ALR 231. There I suggested (177 ALR at 268) that for the director to be liable his "conduct must be such that it can be said of him that he was so personally involved in the commission of the unlawful act that it is just that he should be rendered liable. " My approach has not been accepted by other judges, although it was applied by the trial judge. The general tendency is to prefer the test laid down in Performing Right Society Limited v Ciryl Theatrical Syndicate Limited [1924] 1 KB 1 where Atkin LJ articulated the so called "direct or procure" test. 185 I see that the issue has come up in two decisions of the Full Federal Court, Allen Manufacturing Co Pty Ltd v McCallum & Co Pty Ltd (2001) 53 IPR 400 and Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157. In neither of them were the differences resolved. Indeed in Allen Manufacturing Co the Full Court suggested that the difference between the various views "may be more apparent than real". But, with great respect to the Full Court, that comment goes too far. There are several instances where, depending which test is applied, a different result will be reached. Moreover the "direct or procure" approach overlooks several problems that really must be resolved. The first is whether Said v Butt [1920] 3 KB 497 is to be treated as an exception. In Root Quality I said that Said v Butt indicated that it was necessary for there to be a separate rule for company officers. Even if Said v Butt is to be confined in its application to the case where an officer has procured his company to breach a contract, the question still to be resolved is whether that should be a limitation on the "direct or procure" test. The second matter that the supporters of the "direct or procure" test must resolve is the position of a director who does no more than carry out his constitutional role of voting at duly convened board meetings. See as to their position C Evans & Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317; PLG Research Ltd v Ardon International Ltd [1993] FSR 197; MCA Records Inc v Charly Records Ltd [2001] EWCA Civ 1441 ; [2003] 1 BCLC 93. In Charly Records Chadwick LJ, with whom Tuckey and Simon-Browne LJJ agreed, said (at para [49]): "[A] director will not be treated as liable if a company is a joint tortfeasor if he does no more than carry out his constitutional role in the governance of a company --- that is to say, by voting at board meetings. " Chadwick LJ did say at [50] that there was no reason why a person who happened to be a director should not be liable with the company as a joint tortfeasor if he were not exercising control through the constitutional organs of the company and the circumstances were such that he would be liable for his acts if he were not a director. Then, of course, liability would arise from his participation or involvement in ways which go beyond the exercise of constitutional control. 186 I have considered many decisions in Australia and elsewhere that have gone over this topic, as well as the articles which have been written about it and, albeit with some hesitation, I am not persuaded that my approach in Root Quality is in error. If anything, it is at least indirectly confirmed by the reasoning in a recent House of Lord decision, although only by way of analogy. The case concerns the dealing between a director and a third party. The question that arose was whether the director could be made personally liable for a dealing, or whether only the company could be liable. The case is Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830. The principle which the Law Lords adopted in the case of negligent advice or the negligent provision of services is that the director will be personally liable only if he had "assumed personal responsibility" for the advice or the provision of the services. If he has not assumed that responsibility an action will only lie against his company. Lord Steyn, who articulated this test, acknowledged at 837 that there were academic critics of the "assumption of responsibility" test. Nevertheless he thought there was no better rationalisation for the appropriate test. 187 That said, I wish to add a word or two to what I said in Root Quality , in particular to indicate what I think are the circumstances in which a director will be found liable for the tort of procuring. I put to one side the case of a company which is set up for the purpose of wrongdoing --- where it is the cat's paw or alter ego of the director. A director will be personally liable in relation to a particular infringement if his actions are outside the scope of his official duties, he personally participates in the event and his actions are deliberate, that is they are intentional and with knowledge of the consequences. As regards participation, I would, of course, include a director who specifically commands other officers or employees to carry out the infringing act. On the question of knowledge, I would necessarily include wilful blindness. What one is looking for then is a director who is the conscious moving force behind the infringing act: the knowing aider or abettor. Conspiracy is a crime that dates back to several statutes in the reign of Edward 1. The crime was described by Willes J in Mulcahy v The Queen (1868) LR 3 HL 306, 317 as being an "agreement of two or more to do an unlawful act, or to do a lawful act by unlawful means". This statement appeared in an opinion Willes J delivered to the House of Lords in response to questions put by the Lord Chancellor. The House of Lords approved the opinion. 189 The tort of conspiracy is of relatively modern origin, differing from the ancient tort of conspiracy which is the equivalent of malicious prosecution: Holdsworths A History of English Law (2nd ed., 1966 reprint) vol VIII p 392 et sec. The modern tort arose out of the great industrial dispute cases of the late 19th and early 20th centuries, in particular Quinn v Leathem [1901] AC 495; Mogul Steamship Company Limited v McGregor Gow & Co [1892] AC 25 and Crofter Hand Woven Harris Tweed Company Limited v Veitch [1941] UKHL 2 ; [1942] AC 435. While the elements of the tort were not worked out until relatively recent times, they are in substantial part based on the crime of conspiracy. In essence there are two types of actionable conspiracy, an unlawful purpose conspiracy and unlawful means conspiracy. The first kind of conspiracy is where the conspirators combine with the predominant purpose of doing injury to the plaintiff, and in fact damage him, even if their action, if done by an individual alone would not have been tortious. In Crofter at 462 Lord Wright said: "In this sense the conspiracy is the gist of the wrong, though damage is necessary to complete the cause of action". It is the concerted action for the illegitimate purpose that makes the action tortious, although this kind of conspiracy is anomalous as was explained by Lord Diplock in Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173, 188-189. 190 The second, and more usual, kind of conspiracy is where the conspirators actions are illegal (although not necessarily criminal) and their action causes the plaintiff to suffer damage. In this type of conspiracy it is not necessary to show that the conspirators acted with the predominant intention to injure the plaintiff: Lonrho Plc v Fayed [1992] 1 AC 448, 463-468, McKernan v Fraser [1931] HCA 54 ; (1931) 46 CLR 343, 361-362, 380-381; Williams v Hursey [1959] HCA 51 ; (1959) 103 CLR 30, 105, 122-123. But a necessary element is an intention to injure the plaintiff, but this requirement will usually be satisfied if the conspiracy is aimed or directed at the plaintiff and the damage caused was foreseen or was a foreseeable result of engaging in the conspiracy: Fatimi Pty Ltd v Bryant [2004] NSWCA 140 ; (2004) 59 NSWLR 678. What must be established is the agreement to commit an unlawful act, the commission of that act pursuant to the agreement and that the act caused the plaintiff's damage: Marrinan v Vibart [1963] 1 QB 234, 238; on appeal [1963] 1 QB 528. The agreement between the conspirators need not be express: it is sufficient if there be a tacit understanding between them, which may be inferred from conduct: R v Associated Northern Collieries [1911] HCA 73 ; (1911) 14 CLR 387. 191 Is there a difference between conspirators and joint tortfeasors? Joint tortfeasors are not necessarily conspirators. In Pratt v British Medical Association [1919] 1 KB 244, 254 McCardie J explained that if a tort be committed "then all who have aided or counselled, directed or joined, in the commission are joint tortfeasors ... [the] liability, however, of each is independent of the mere circumstance of combination. " On the other hand, when persons are engaged in wrongful conduct in concert, it is difficult to avoid the conclusion that as well as being conspirators they also are joint tortfeasors. Indeed, he was willing to take full responsibility for what had happened, perhaps because there was no other choice and perhaps also with a view to saving the others from personal liability if that were possible. 193 Vanderzaag's function in 3Fold was to get in orders from clients and arrange for those orders to be filled by, among other things, obtaining the necessary components from 3Fold's suppliers. For these purposes he used, or procured 3Fold's staff and suppliers to use, the drawings and the data. Indeed, Vanderzaag's use of the drawings and data goes back to the time he was working for TS&B. He copied the drawings and used the data to obtain quotes from suppliers. Later he directed staff, including Oakes and Richardson, to do take-offs and to prepare sales quotes using the copied data. 194 Further, Vanderzaag was instrumental in getting Butler to take a position with 3Fold. The purpose was to make use of TS&B's drawings. He arranged for copies of the drawings to be sent to suppliers to manufacture components for 3Fold. On his own admission, Vanderzaag continued to order or arrange for components to be manufactured based on the copied drawings, even after the interlocutory injunction had been obtained to restrain this conduct. 195 I suspect that Vanderzaag did not instruct Oakes to copy TS&B's data. But he must know that 3Fold was using data that had been taken from TS&B. He was sufficiently worried about the possible misuse of the data in February 2003 to instruct Oakes to alter the part numbers. Until August 2004 when the tables were substantially changed Vanderzaag knew that 3Fold was using TS&B's tables and did nothing to stop it. In my view, he gave his blessing to the conduct continuing. He began giving TS&B's data, especially details of master numbers, prices of components and the like to Vanderzaag for use in 3Fold's business while both of them were still with TS&B. He provided information to Vanderzaag whenever Vanderzaag needed any. Although D'Mello said he did not know whether the information was being used for the business of 3Fold or TS&B I have no doubt that when it was needed for 3Fold he knew this to be the case. One should not lose sight of the fact that the success of the 3Fold business was critical to the future of the three men who set it up. Each was a man of modest means and had a family to support. Each borrowed a not insignificant amount ($150,000) to put into the business. The manner in which the business was performing was of vital interest to all of them and I do not accept that Vanderzaag did not inform D'Mello what steps he, Vanderzaag, was taking to further the business's operations. 197 3Fold's use of the data stolen by Oakes was under D'Mello's control. He employed Oakes and put her in charge of IT and gave her instructions to set up the database. Despite his denials, I am of the view that D'Mello knew Oakes had taken the data from TS&B and used it to create 3Fold's database. D'Mello was the director responsible for IT at 3Fold and the suggestion that he did not know what Oakes was doing is fanciful. Then there are the inconsistencies in his evidence. For example at one point D'Mello said he did not appreciate that the tables had been copied until TS&B Retail applied for an interlocutory injunction. At another point he said he knew in February that part numbers, which had been taken from the tables, were being used by 3Fold. No doubt he saw that use. In any event his denials do not square up with the evidence of Oakes. She said that she told D'Mello and Vanderzaag what she was proposing with the tables and was given the "go ahead". She then created a derivative of the TS&B database by copying the five tables. D'Mello knew this had happened. He procured it to happen. 198 I suppose it is faintly possible that for a time D'Mello thought 3Fold could use the tables. Although the receivers had warned staff against making off with TS&B's information D'Mello said that he did not consider the information in the tables to be protected or confidential. But by his own admission he was disabused of that belief when he received Mallesons' letter of demand on 31 January 2003. 199 D'Mello's involvement in the use by 3Fold of the drawings in suit is less clear than his involvement with the data. D'Mello admitted talking to Smith and Vanderzaag about what was required to start 3Fold. It was common ground that the drawings were required by 3Fold. Yet D'Mello denied discussing with Vanderzaag or Smith how the drawings would be obtained. He explained that he believed the drawings were freely available and understood that 3Fold would obtain them from Butler. I do not believe that D'Mello was as disinterested and uninformed about a key aspect of his company's business as he claimed to be. I am sure he was involved in bringing Butler to 3Fold. Even if what he said is to be believed, D'Mello discovered that 3Fold could not use the manufacturing drawings when he received the letter of demand. That 3Fold continued to use the drawings thereafter could only have been the result of a conscious decision by Vanderzaag and D'Mello. Thus D'Mello sanctioned the conduct. Smith's focus was on setting up the business, including establishing the structure of the organisation and locating suitable premises. He directed all installation work and project management tasks. I believe that Smith had no involvement in getting Oakes to set up the 3Fold database, and using TS&B's data or in obtaining TS&B's drawings from Butler. 201 I am satisfied Smith found out soon enough that 3Fold was making use of TS&B's data. Smith was involved in invoicing and quoting. He said the systems for invoicing and quoting were designed by him and that while they were "identical" with the system at TS&B that was because he designed both systems. We now know that 3Fold copied the TS&B data. 202 Nevertheless what sets Smith apart from others in my view is that for the most part he was one step removed from the information technology and manufacturing processes at 3Fold. Unlike Vanderzaag and D'Mello, Smith did not instruct Oakes to use the TS&B data. He did not instruct Butler to hand over the TS&B drawings. He did not (except when it came to invoicing) use or instruct others to use the drawings or the data. He said of his role: "I was very much sort of the hands-on guy out the back". I think Smith was telling the truth when he said this. He was not, in my view, sufficiently involved to be an accessory. True it is he knew what was going on and, in a sense, may have acquiesced in 3Fold's conduct. But this not enough to street home accessorial liability. If the plaintiff seeks an accounting, the infringer is required to give up his ill-gotten gains. If he seeks damages the infringer is required to compensate the plaintiff for the loss he has suffered: Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50 ; (1968) 122 CLR 25, 32. Here TS&B Retail has elected to take damages. How are those damages to be calculated? 204 It has been said that in a copyright action the measure of damages to which the plaintiff is entitled is the depreciation caused by the infringement to the value of the copyright as a chose in action: Sutherland Publishing Company Ltd v Caxton Publishing Company Ltd [1936] Ch 323, 336. It is clear, however, that this is not the exclusive measure of damages for breach of copyright: Interfirm Comparison (Australia) Pty Ltd v Law Society of New South Wales [1977] RPC 137. A better statement of the principle to be applied is that the plaintiff is entitled to such damages as would as far as possible put him in the position he would have been in if there had been no infringement: General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1976] RPC 197, 212. That directs attention to the losses caused by the infringement. This approach is consistent with what Mason CJ described as 'the fundamental principle on which damages are awarded at common law' namely that 'the injured party is to be restored to the position ... in which the party would have been had the actionable wrong not taken place': Baltic Shipping Co. v Dillon [1993] HCA 4 ; (1993) 176 CLR 344, 362. 205 It is sometimes said in copyright actions that damages are at large: Fenning Film Service Ltd v Wolverhampton, Walsall & District Cinemas Ltd [1914] 3 KB 1171; Gerber Garment Technology Inc v Lectra Systems Ltd [1995] RPC 383, a patent case. What is meant by that statement is not explained. When damages are described as being "at large" judges sometimes mean that the plaintiff need not prove specific or special damage, but that seems to be confined to actions where damage is the gist of the claim. In other cases the reference is to the ability to recover damages not confined to pecuniary loss, for example loss of reputation can be taken into account. In a copyright case, however, the question should simply be one of causation. What has the plaintiff shown to be the loss caused by the infringement and what is the amount of that loss? 206 There are two common methods of assessing damages in copyright cases, dependent upon the nature of the work in suit. The first is the so-called licence fee (or royalty) method where the plaintiff recovers a sum equal to the fee that would fairly be charged for use of the copyright work: Performing Rights Society Ltd v Bradford Corporation [1921] MacG Cop Cas 309; Stovin-Bradford v Volpoint Properties Ltd [1971] Ch 1007. 207 The second occurs when the plaintiff and defendant are in actual or potential competition in relation to the copyright work. Then lost profit is usually the best measure of damage. The plaintiff must show that he has lost sales to the defendant as a result of the infringement and quantify the loss suffered. This requires the court to explore the counterfactual hypothesis of the contracts the plaintiff would have obtained absent the infringement and the costs associated with them. Necessarily the process will involve a degree of speculation, but that is no bar to recovery. The claim is not for loss of revenue but for loss of profits. The profits to be calculated are the lost net profits. By net profits I mean revenue less all costs including variable and indirect costs, but not including income tax. Care must be taken to ensure that costs savings are brought to account. If a plaintiff sells less of his products he will have less costs and that should be treated as a gain to be offset against the lost revenue which forms the basis of the computation of lost profits. The plaintiff is also entitled to recover indirect losses (such as damage to goodwill) as long as the cause is the infringement, the loss is foreseeable and is not unduly speculative. It will often be impossible to be precise in the calculation of lost profit. If needs be, the calculation can be rough and ready, with the benefit of any doubt favouring the plaintiff. 208 There is a question whether the relevant lost profits are those that would have been earned by the plaintiff from use of the copyright work alone or where, as here, the copyright work is employed by the plaintiff as part of a wider profit-making venture. While there was, at one point, doubt about the matter, modern cases permit the recovery of any secondary loss caused by the infringement. Secondary loss would include for example loss of sales of non-copyright work that is sold with the copyright work. Again, the issue is one of causation, and perhaps also of foreseeability: Gerber Garment Technology [1995] RPC 383; on appeal [1997] RPC 443. 209 The same approach is applied when the plaintiff seeks an account of profits. Dart Industries Inc v The Décor Corporation Pty Ltd [1993] HCA 54 ; (1993) 179 CLR 101 was a patent case. The defendant infringed the patent for a press button lid for a container. The profits for which the defendant was required to account were those derived by him on the sale of containers with the infringing lid. The rule that was applied was taken from Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50 ; (1968) 122 CLR 25, namely that a person who wrongly uses another man's industrial property --- patent, copyright, trade mark --- is accountable for any profits which he makes which are attributable to his use of the property which was not his. According to Windeyer J (122 CLR at 43): "If one man makes profits by the use or sale of some thing, and that whole thing came into existence by reason of his wrongful use of another man's property in a patent, design or copyright, the difficulty disappears and the case is then, generally speaking, simple. In such a case the infringer must account of all the profits which he thus made. " This language can be applied to a claim for lost profits. 210 In a copyright action s 115(4) permits an award of additional damages that are exemplary, aggravated or even punitive in nature: Concrete Systems Pty Ltd v Devon Symonds Holdings Ltd (1978) 20 ALR 677, 683. The power is more substantial than that available in the United Kingdom under an equivalent section of their Copyright Act. There only aggravated damages or their equivalent can be claimed: Beloff v Pressdram Ltd [1973] RPC 765; Redrow Homes Ltd v Betts Brothers Plc [1999] 1 AC 197. 211 Additional damages should only be awarded if the defendant's conduct deserves punishment or there is a need for deterrence: See also the decision on exemplary damages in Lamb v Cotogno [1987] HCA 47 ; (1987) 164 CLR 1, 8; XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd [1985] HCA 12 ; (1985) 155 CLR 448, 471. For example, if the defendant's conduct was vindictive, reprehensible or malicious then an award should be made. 212 I propose to say only a brief word or two about compensation in equity. First, I acknowledge that in England there are some cases which hold that compensation in equity is not available outside Lord Cairns' Act . See for example English v Dedham Vale Properties Ltd [1978] 1 WLR 93; Malone v Commissioner of Police of the Metropolis (No 2) [1979] 2 All ER 620. There is also the problem whether compensation can ever be awarded in the absence of a claim for an injunction although I note that the decision of the House of Lords in Nocton v Lord Ashburton [1914] AC 932 is authority for the proposition that this is not necessary. The principle that I would apply in this case is that stated by McLachlin J (as she then was) in Canson Enterprises Ltd v Boughton & Co [1991] 3 SCR 534. By analogy with restitution, it attempts to restore to the plaintiff what has been lost as a result of the breach; i.e., the plaintiff's lost opportunity. The plaintiff's actual loss as a consequence of the breach is to be assessed with the full benefit of hindsight. Foreseeability is not a concern in assessing compensation, but it is essential that the losses made good are only those which, on a common sense view of causation, were caused by the breach. Kenfield prepared two reports. In his first (substituted) report, Kenfield put TS&B Retail's loss at between $2,890,315 and $3,332,600 for the period 1 January 2003 to 30 June 2005. He arrived at that sum first by estimating the total value of contract work performed by 3Fold for Kmart during the period, according to 3Fold's accounts. The value of the contract work disclosed in 3Fold's accounts was within 5% of that reflected in Kmart's purchase orders. To calculate the loss Kenfield first estimated the range of profit TS&B Retail would likely have earned had it performed work. He did so by reference to the gross profits TS&B achieved for the year ended 30 June 2004 (24.79%) and the gross profits achieved on a sample Kmart job (21.5%). The sample Kmart job used was Kmart's Munno Para Store. In making this calculation Kenfield defined gross profit as "the surplus of sales value over the direct costs involved in obtaining those sales". He contrasted gross profits with net profits which he defined as gross profit less deductions for "all indirect (operating) expenses". This assumed that TS&B Retail could service the Kmart work with no additional indirect or operating costs. This may have been based on his assumption that "TS&B [Retail] had spare operating capacity"; there was insufficient evidence of this. 214 I note that Kenfield's report also refers to an "industry standard" rate of net profit of 12%. Were this applied to total sales to Kmart, the estimated loss would have been approximately $1,613,199 for the entire period (1 January 2003 to 30 June 2005). 215 Following receipt of the expert report from the respondents, Kenfield prepared a second report. In his second report, Kenfield confirmed the estimates of 3Fold's sales to Kmart during the relevant periods as reported in his first report. He re-calculated TS&B Retail's loss by reference to extra information obtained. Kenfield said the loss was at least $3,510,341. Kenfield's approach to calculating loss in the second report altered in at least two respects from the approach taken in his first report. Secondly, Kenfield calculated TS&B Retail's loss on the basis of a (notional target) net profit figure of 12%, rather than a gross rate of profit. First, I do not understand TS&B Retail to be alleging that, by infringing its copyright, 3Fold has adversely impacted the profitability of its other work (that is, work that TS&B Retail had actually performed). This being the case, TS&B Retail's actual sales over the period and, by extension, its anticipated net profit based on those sales, are not relevant to the calculation of damages. The position might be different if there were evidence, for example, that TS&B Retail had invested in larger plant and equipment than it would otherwise have done to service the Kmart work lost as a result of the respondents' breach of copyright. Then the costs of maintaining or operating the larger plant and equipment could, at lest in theory, reduce the profitability of work TS&B Retail retained. Absent evidence of this kind, the inclusion of anticipated profits based on TS&B Retail's actual sales (as measured against actual profits) has the effect of significantly inflating the amount of damages where TS&B Retail has failed to achieve the target 12% profit on its own sales. By way of illustration, Kenfield's method of calculating damages, were I to accept it, would lead to the result that TS&B Retail would have suffered losses of approximately $1,897,243 (being $623,000 in 2003 and $1,274,000 in 2004) even if 3Fold had made no sales at all to Kmart over the period. The reason for the discrepancy is TS&B Retail's lower than expected profitability on its own sales over the period. As Kenfield pointed out in his second report, TS&B Retail's results show a large net loss (76.61%) in 2003 and a net profit of just 0.66% in 2004. Kenfield said "I assume that these poor results are a direct consequence of achieving significantly lower revenues than were anticipated during the setting up of the new business". In the circumstances, I see no reason why the costs should, in effect, be attributed to the respondent's breach of copyright. If TS&B Retail's own sales are excluded the loss (at 12% profit) relating to the work 3Fold performed for Kmart during the period would be in the order of $1,613,097 being 12% of the $13,442,479 total sales to Kmart (as previously calculated). 218 The respondents' expert was Geoffrey Sincock from BDO Partners, Chartered Accountants. Sincock prepared three reports. The first report focused on the initial report prepared by Kenfield. I will return to the substance of the first report shortly. 219 Sincock's second report estimated the damages suffered by TS&B Retail on three bases, namely the diminution in the value of the copyright works, the fee TS&B Retail might have charged for the use of the copyright works and the loss of opportunity and potential profit. 220 As regards diminution in value of the copyright material, Sincock concluded that "on the assumption that the copyrighted works were in widespread use, there is no basis to calculate the diminution in value of the copyrighted works". As this conclusion is based on a false premise, namely that the copyright material was in widespread use, it is of little assistance. This same false premise underlies Sincock's conclusion that "there would be no basis for the applicant to charge a fee for the use of the copyrighted works". 221 Sincock then estimated the maximum loss suffered by TS&B Retail to be $17,170 before tax. He calculated this loss by first estimating the cost value of all parts in the copied drawings sold to Kmart between 21 January 2003 and 11 April 2003, being the period in which the respondents say the breaches were alleged to have taken place. He obviously assumed that the infringing conduct came to an end when the interlocutory injunction was granted. Sincock assessed the cost value of Kmart parts to be $645,649. Assuming a profit margin of 24.79%, being the gross profit margin actually achieved by TS&B Retail for the twelve months ending 30 June 2004 (the same margin as used by Kenfield), this implied lost sales of $858,462. For this estimate, Sincock adjusted potential lost profits by 88.16% to reflect TS&B Retail's operating expenses (adjusted to exclude fixed and one-off expenses) as a proportion TS&B Retail's total sales for the year ended 30 June 2003. On this basis he concluded that "if the estimate is based on the reported results for the relevant period, being the period ending 30 June 2003, after considering overhead expenses shows the potential for further losses by TS&B [Retail] for additional Kmart sales rather than potential profits". I do not accept that the business was this unprofitable. 222 Sincock's third report estimated what T&B Retail would recover if it had elected to take an account of profits for the breaches that occurred between 1 January 2003 and 30 June 2004 and all sales to Kmart were included not just sales of those parts attributable to the 234 drawings and 5 tables of data. As TS&B Retail elected damages, I need not consider this report. I note, however, that Sincock used Kenfield's estimated total sales figures for this report. 223 Given the substantial differences in approach between Sincock and Kenfield, it is necessary to resolve a few points before determining the appropriate measure of damages. 224 First, for the purposes of his reports, Sincock assumed that all breaches took place between 21 January 2003 and 11 April 2003, when the injunction issued. This was a reasonable assumption to make and no doubt quite a few people were surprised when it turned out to be false. But false it was. The respondents first breached TS&B's confidence and infringed TS&B's copyright in the tables of data as early as 6 January 2003, when Vanderzaag, Oakes and others used TS&B's systems to produce sales quotes for Kmart. The use of the copied data continued from between 12 February 2003, when Oakes saved the copied data onto 3Fold's server, until 3Fold's part numbers were altered for the second time in August 2004. 225 The respondents infringed TS&B's copyright in the drawings from November 2002, when Vanderzaag sent copies of TS&B's drawings to potential suppliers. It is not clear whether drawings were also sent to potential customers. At any rate, from about February 2003, 3Fold used or authorised manufacturers to use (in the sense of use for manufacture) TS&B's drawings to fulfil the refurbishment contracts awarded to it by Kmart. The first contract (for Kmart's Kotara store) was awarded on 10 February 2003 for delivery by 1 April 2003 with smaller contracts awarded on 4 February 2003. 226 It may be that from 10 April 2003 no respondent copied the drawings. However, 3Fold continued to procure a breach of the copyright by having parts manufactured by suppliers who used the drawings. The case was conducted on the basis that this put 3Fold in breach of copyright, no distinction being drawn between primary and accessorial liability. Parts were manufactured to the time of the hearing. So, the relevant period of infringement of copyright is January 2003 to August 2004 in respect of data and November 2002 to at least the trial in respect of the drawings. TS&B Retail must prove that, but for the infringements, TS&B Retail would have obtained the contracts. This requires consideration of the counterfactual, namely the likely state of affairs had 3Fold not infringed TS&B Retail's copyright. 228 Kenfield assumed that, absent any copyright infringement, TS&B Retail would have captured all of the business Kmart had awarded to 3Fold, in effect retaining a market share of around 80-90% of Kmart's work. This is unlikely for several reasons. First, the assumption does not allow for potential competition from 3Fold. I will discuss this shortly. Secondly, there is clear evidence that following the collapse of TS&B, Kmart decided not to pursue exclusive arrangements with any supplier. Instead, its strong preference was to put all work to tender. In an email from Kmart to Trollope dated 9 January 2003 Hani Zayadi, Kmart's Managing Director, said "we hope [TS&B Retail] succeed as we prefer not having all our eggs in one basket as in the past with [TS&B]... I [have] asked our team to expand the sourcing of our store fitouts to your competitors as well as to new overseas suppliers". During his evidence Healy said that Kmart had commissioned an independent study into the shopfitting industry which had concluded that it was not in Kmart's best interests to enter into exclusive arrangements. The review found that "if Kmart continues to rely so heavily on TS&B, then Kmart will continue to face capacity problems each time major new store or refurbishment programs are planned. Simply trying to find ways to justify continuing the status quo would mean Kmart will never have viable alternatives". Healy said "we had already done a bit of an analysis into the marketplace and worked out that we needed to... start seeking other retailers in the marketplace and look at different ways of sourcing product and not having all our risks in one area". Healy also testified that while exclusive relationships had worked well in the past "it didn't make sense to keep doing that, particularly with a lot of manufacturing starting to happen offshore". In addition to TS&B Retail, 3Fold and Metro (until June 2003) who were the main suppliers, Kmart also used Ausmart (from August 2003), BP shop-fitting and were looking for other (including overseas) suppliers. 229 As TS&B Retail would not have been awarded all the Kmart contracts that went to 3Fold, it is necessary to estimate the proportion TS&B Retail would have been awarded but for the infringement. One consideration for the purposes of this counterfactual is whether, and if so when, 3Fold would have obtained its own drawings and data by legitimate means. TS&B Retail claims (and Kenfield assumed) that as a result of the limited resources available to 3Fold when it commenced operations, 3Fold would have been unable to continue operating long enough to develop the necessary data and drawings to obtain or fulfil Kmart work. While I do not doubt that the respondents have benefited from the use of the copyright material, the assumption that 3Fold would never have been able to compete with TS&B Retail without infringing copyright or breaching confidence is, in my view, an overstatement. 230 It seems to have been common ground that drawings could have been prepared from either TS&B's isometric drawings, actual parts (which in some cases were stored in 3Fold's warehouse) or from photographs taken of parts in Kmart stores, without having to be drawn from scratch. There is evidence that Kmart (and competitors of TS&B) were allowed to produce drawings of their own from the final product. Cue gave evidence that: "If successful in a tender or quote, competitors of [TS&B Retail] would have to visit a Kmart store and obtain the crucial production information through measurements of components and/or photographs. The competitor would then prepare their own set of component manufacturing drawings". Likewise, while Trollope was concerned that CML should not continue to use manufacturing drawings that were obtained from TS&B as part of the tender process, no objection was raised when CML subsequently sent out its own drawings of the same parts. 231 To reproduce the 234 drawings from isometric drawings and parts or photographs of parts, according to Vanderzaag, would have taken approximately 2 hours per drawing on average, or 468 hours in total (3 weeks for 4 draftsmen). The cost to 3Fold would have been around $16,848. The cost of purchasing the drawings from another supplier would have been around $28,080 (at $120 per drawing) according to Vanderzaag. Kmart in fact hired another company, Metro Shopfitters, to prepare manufacturing drawings of products on Kmart's behalf. This could not have taken Metro long as the TS&B manufacturing drawings were withdrawn on 14 May 2003 and Metro ceased trading around May or June the same year. Thus the drawings were completed in less than 2 months. Cue also gave evidence on this topic. He said that to prepare a drawing from scratch would take between 30 minutes and 2 days, with an average of 8 hours per drawing. I take Cue to be referring to the time it would take to create a manufacturing drawing once a design had been approved and a prototype developed. On this basis, it would take 4 draftsmen 12 weeks to prepare the drawings. 232 This discussion assumes, as the parties appear to have assumed, that preparing manufacturing drawings from the finished product or from photographs of the final product is legitimate. It is not legitimate. It is just an alternative means of infringing copyright. To avoid infringing copyright the respondents would need to both design and draw equivalent products and parts from scratch. 233 To the extent that estimating the time to design and prepare a manufacturing drawing for a product may involve some degree of conjecture, I am inclined to err in TS&B Retail's favour. While not relevant to the question of infringement, as TS&B Retail is only pressing its case in respect of the 234 drawings, there is evidence that in order to fulfil orders from Kmart 3Fold needed more than the 234 drawings in suit. To fit out Kmart's West Lakes, Kotara and Wynnum, for example, Cue said that 3Fold needed 213 additional drawings. I suspect that to compete for other contracts other additional drawings would have been needed. Some allowance must be made for this in estimating the time it would take 3Fold to be in a position to compete for Kmart work. 234 The issue is how long would it take to develop the necessary manufacturing drawings without direct or direct copying. I consider eight to twelve months to be a reasonable estimate of the time required. 235 The question then arises whether 3Fold would have been able to survive long enough for the drawings to be developed. There are two reasons why I think 3Fold eventually would have produced its own drawings. First, the drawings were critical to running the business and the individual respondents would have done everything possible to make sure the business survived: They had little choice. They were facing long term unemployment and they and their families depended on the business succeeding. Secondly, Kmart's arrangements with 3Fold, at least for 2003, would have provided the bulk of the funding it needed to keep going. Kmart agreed to pay a 25% deposit upon receipt of the purchase order, along with payment in five equal instalments of 15% of the contract price throughout the course of each project. This was probably designed to minimise potential cash flow shortages for 3Fold. It may also be indicative of Kmart's desire to support more than one viable supplier. 236 As regards the data, Vanderzaag said that a non-infringing database could be created and populated with data in around 52 hours (less than a week for two people) at a cost of approximately $2,080. While the true cost is probably much higher, it is unlikely to be so prohibitive as to make competition impossible. The time taken to create the database and tables would not be significant (probably no more than a few months). 237 In light of the foregoing, for the purpose of determining the extent to which 3Fold's infringement diverted sales from TS&B Retail, I propose to act on the following assumptions. Had 3Fold not infringed copyright it would have competed with TS&B Retail for a small amount of the Kmart work from the outset, albeit at a competitive disadvantage. Over time, perhaps eight to twelve months, allowing for possible cash flow constraints, 3Fold would have developed its own manufacturing drawings which it could have used to fulfil Kmart contracts. Even if 3Fold had not itself developed the drawings by about February 2004, it is possible that Kmart would have developed its own manufacturing drawings for supply to shopfitters. However, Kmart did not want to be restricted to using one supplier. It is Kmart's intentions to keep and store its intellectual property in house in the future. Future design updates will be paid for in order for Kmart to retain the intellectual property. In my estimation by that time 3Fold would have been in a position to use its own or Kmart's drawings to legitimately compete with TS&B Retail for work. 239 Another factor to consider in assessing its losses is whether TS&B Retail would have been able to take on the work that had been awarded to 3Fold. Kenfield's calculations assumed that TS&B Retail had the capacity to take on all that work. His assumption is supported by Trollope who said that "the [TS&B Retail] business had unlimited capacity because it was manufacturing 85 to 90 per cent of its product overseas". But this is unlikely to be correct. Trollope himself said when the business started up it "had to be very, very, very skinny, evidenced by [the fact that it] didn't have any sales for three or four months". Moreover, by 2003, TS&B Retail was already experiencing difficulty with supplying equipment on time, which resulted in Kmart sourcing products from 3Fold and others. The value of work provided by 3Fold in relation to TS&B Retail projects in 2003 was approximately $250,000. Healy said there were "some instances where [TS&B Retail] couldn't supply all the equipment as per the contracted works". In his view "[TS&B Retail] could have supplied [the equipment] at the end, but [Kmart] didn't want to wait a month, two months, six weeks to get the equipment". He said "sometimes there [were] three, sometimes there [were] four, sometimes five, sometimes there [were] six week delays in some of the equipment". While denying that TS&B Retail lacked sufficient resources to perform the contracts awarded to it, Trollope did admit that he was aware that 3Fold had provided Kmart with some stock for jobs TS&B Retail had been awarded. Likewise, Cue said that certain additional parts had on occasion been supplied when TS&B Retail did not have them "immediately to hand". He said that "because the majority of [TS&B Retail's] supply is out-sourced from overseas suppliers ... delivery lead times of 3 to 5 months are not uncommon. This enables [TS&B Retail] to order on a job specific basis and avoid excessive costs associated with a large stock holding". It is worth noting also, that many Kmart jobs had delivery dates within 2 months of the date the purchase order was issued. 240 Even if I am wrong about TS&B Retail's capacity to do the work it would still have needed additional staff to fit and install the fixtures and fittings in order to take on further Kmart contracts. The evidence suggests that between 2003 and 2004, TS&B Retail experienced difficulties with supplying contract labour to its projects. For example, TS&B Retail had difficulty supplying the labour to several Kmart fit-out projects. According to one Kmart document "all started well, but half way through we were experiencing one, two or three men short on the job, due to manpower shortages with other Kmart & CML projects and commitments to our competitor". Healy confirmed this saying TS&B Retail were "trying their men between a number of different projects, not only for Kmart but a couple of other businesses as well. For example, Minutes of a meeting of Kmart's Contract Advisory Panel, which included Healy, of 5 March 2003 state that "Kmart will only use TS&B where there was no feasible alternative". TS&B Retail was awarded a substantial contract in August 2003, being 50 per cent of the contract to supply gondola and metal products to Kmart. Following this, Kmart considered TS&B Retail to be fully committed. When a tender for an entertainment expansion project came up in June 2004, Kmart's Contract Advisory Panel stated that TS&B was "fully committed to Kmart's new and Refit program" and that TS&B Retail and Ausmart were "not resourced to support any other project outside the new and refit program, and currently are experiencing resource challenges to meet their current commitments". Accordingly, Healy would not for a time offer the company any additional work. When asked in re-examination who Kmart would have retained to do the work if 3Fold was not available Healy said: "There's no guarantee we would've done the full amount of work anyway, given the capacity issues that we already had some concerns about. Other than 3Fold, the suppliers who could have competed for the contracts were Metro Products, BP Shopfittings as well as TS&B Retail. Metro ceased trading around June 2003. Another shopfitter, Ausmart, began taking Kmart work around August 2003. 243 Absent copyright infringement, it is likely that, until about June 2003 when Metro ceased trading, the Kmart contracts awarded to 3Fold would have been allocated to TS&B Retail, Metro and BP Shopfittings in the same or similar proportions as under the 2003 refurbishment tender. Under that tender, Metro Products was awarded 9 stores, BP Shopfittings was awarded 1 store (as they had done no work for Kmart in the past) and TS&B Retail was awarded 4 stores but on the basis that "Kmart [was] watching the progress of [TS&B retail] closely [and] should [they] get wind of any issues which effects TS&B [Retail's] ability to deliver ... [Kmart would] re-allot their stores between 3Fold, Metro and BP depending on each of those businesses capacity to pick up extra works". In other words, Metro would have been awarded around 65% of the 3Fold work, TS&B Retail would have been awarded roughly 30% of the work and the remaining 5% would have gone to BP Shopfittings. 244 From June 2003 until February 2004, when 3Fold would probably have been in a position legitimately to enter the market, the work would likely have been divided between TS&B Retail and Ausmart, as happened with the August 2003 tender for the gondola work. Thus each might be expected to obtain 45% of the Kmart work with a small proportion, perhaps 10%, going to BP Shopfittings or other suppliers. 245 Yet another difference between the experts is that Sincock calculates damages based on only those sales of parts included in the copied drawings, whereas Kenfield took account of all 3Fold's sales to Kmart. Sincock's approach is consistent with the respondents' argument that I should have regard only to that portion of the value of contracts that is attributable to the infringing conduct, and ignore income derived from other non-infringing sources such as installation, outsourcing and the provision of other products. I have already explained why this argument should be rejected. 246 In the general discussion on damages I said that the lost profit that is recoverable is the net profit. The facts of this case highlight the reason for the rule. Consider whether TS&B Retail is required to bring to account the additional variable and operating costs that would be incurred by taking on additional work. In his calculations Sincock did adjust profit for operating expenses. That is, he approached the calculation of damages on the basis of net rather than gross profit. He did so because he considered there would likely be an incremental increase in TS&B's expenses were it to take on a significant amount of new work. The alternative would be to assume that TS&B Retail could take on significant extra work at no additional cost. This is both unrealistic and inconsistent with the evidence, at least for the twelve month periods ending June 2003 and 2004, which suggests that as TS&B Retail's operating expenses increased, albeit not proportionally, as its total sales increased. 247 In his second report, partly in recognition of the need to determine net profit, Kenfield based his assessment on what Trollope described as the "industry standard" or "target" rate of net profit being 12%. That rate is close to the average (adjusted) net rate of profit achieved by 3Fold in the years ending 30 June 2003 and 30 June 2004. The rate, however, is materially higher than the rate achieved by TS&B Retail during the same years (-76.61% and 0.66% respectively). Kenfield's calculations suggest that TS&B Retail's net profit over the period would have risen to between 6 and 6.85% if it obtained all the Kmart business but at no additional cost. I am inclined to use a 9% figure as the applicable rate of net profit, as this takes into account (although perhaps not fully) the reality of TS&B Retail's operations at the time. This is broadly comparable to 3Fold's gross profit percentage on Kmart sales of 29.47% and the overhead factor of 20.95% proposed by Sincock based on 3Fold's management accounts for the twelve months ending 30 June 2003. 248 A calculation of damages based on any hypothetical counterfactual cannot be precise. A 'best case' scenario for the respondents would have 3Fold entering the market in June 2003, after only four months. The applicable net profit margin might be 6%. On this basis the loss to TS&B Retail would be around $25,500 (excluding additional damages), calculated as follows. The total price of all Kmart purchase orders (excluding GST) between January and June 2003 was $2,255,761. The total value of purchase orders placed before 20 March 2003, when TS&B Retail acquired the intellectual property, totalling $1,032,756, must be subtracted from this. The reason is that TS&B Retail cannot claim losses incurred before it became the owner of the copyright. I would add back $193,656 for purchase orders placed within two weeks of 20 March, on the basis that 3Fold would likely have ordered parts to service these contracts after TS&B Retail had acquired the drawings and data. The applicable net profit margin might be 12%. I should emphasise, if it is not already acutely obvious, that the assessment is necessarily imprecise. The various calculations the experts have performed and I have commented on may lead the way. But the process is not in the least a scientific one. To be frank, the task is much like an exercise of judicial discretion. The amount to be awarded is $200,000. 252 I will not give any damages on the assigned causes of action. For one thing, TS&B suffered no trading loss that it could pass on to TS&B Retail because the receivers had decided to close down the business. For another, I am not in a position to determine a deemed licence fee for there is simply no evidence upon which to base any assessment. In any event, the deemed licence would run for only a few months so the amount involved would, on any view, be insignificant. This is an extraordinary case. The respondents (other than Smith) set upon a course of using copyright and confidential material for their own gain, knowing what they were doing was wrong. This was despite warnings by the receivers, letters of demand from TS&B's lawyers and even an order of the court requiring them to desist. It is hard to think of a more powerful case for additional damages. The only point at which I hesitate, is in determining the quantum of additional damages. I have assessed the general damages for which the respondents (other than Smith) are liable to be $200,000. I think additional damages in the sum of $50,000 should be added to this amount. The usual rule as to the method of taxation should not, I think, be followed. This is a case where TS&B Retail can rightly ask for its costs to be taxed on a solicitor and client basis. On this issue I have had regard to the way in which the respondents have run their defence. The respondents put TS&B Retail to its proof on all kinds of issues which they knew TS&B Retail would likely prove, but hoping that TS&B Retail might slip up. As well they made several false denials; for example, they denied using the data (particularly the five tables) and copying the manufacturing drawings. These caused TS&B Retail to incur considerable additional expense to prosecute their claim. Indeed at every turn the respondents attempted to thwart TS&B Retail in the proof of its case. Thus at several interlocutory hearings when discovery was in issue the respondents resisted discovery of documents relating to its dealings with Kmart after 10 April 2003, being the day on which the interlocutory injunctions were granted. The argument which in no small measure found favour with me was that the respondents were subject to, and complying with, the restraining order so discovery of later documents was unnecessary. We now know that to be untrue. While a defendant cannot be prevented from engaging in tactics in an attempt to stave off a plaintiff's claim, that approach comes at a cost. The cost is that the unsuccessful defendant should be ordered to pay solicitor and client costs. I will hear the parties on the form of orders that should appropriately be made. | whether property whether assignable protection of confidentiality in hands of transferee whether contract rescinded or varied by subsequent contract intention of parties ownership whether works authored by employee or contractor amendments by copyright owner whether amendments create new copyright reproduction whether implied license to reproduce compilations of data whether sufficient skill, judgment and labour whether reproduced assignment of copyright whether to be inferred secondary infringement authorization significance of control copyright infringement method of calculation loss of business secondary loss additional damages when awarded license whether implied from custom and usage whether inferred from conduct onus of proof chose in action assignment where cause of action ancillary to right or interest in property whether void for maintenance or champerty accessorial liability of directors joint tortfeasors concerted action procuring or inducing infringement whether separate tort unlawful interference with trade or business conspiracy unlawful purpose unlawful means confidential information contract copyright damages evidence practice and procedure tort |
The requests were refused in each case pursuant to s 24A of the FOI Act because each relevant body was satisfied that all reasonable steps had been taken to find the documents and that they did not exist. 2 The government agencies or bodies named in the AAT proceedings, the fifth to tenth respondents in these proceedings, are CRS Australia ("CRS"), the Social Security Appeals Tribunal ("SSAT"), Centrelink ("Centrelink"), the Refugee Review Tribunal ("the RRT"), the Department Of Family And Community Services ("the Department") and the Human Rights And Equal Opportunity Commission ("HREOC"). 3 CRS provides vocational rehabilitation under the Disability Services Act (1986) (Cth) (" DSA "). A finding of fact has been made by the AAT that CRS does not provide rehabilitation services without the consent of a client and that CRS does not conduct surveillance. 4 Nevertheless, the applicant believes that, without her consent, CRS has been providing non-consensual treatment to her for a psychiatric disorder which she says she does not have, and that she has been subject to covert surveillance by CRS. 5 The FOI requests which the applicant made were for all personal information and health information held which related to her, spanning a lengthy period from 1986 to 2004. The information sought included email records of a number of persons including the fourth respondent ("Ms Smith"), as well as a Ms Louise Perrottet ("Ms Perrottet") and a Ms Andrea Howard ("Ms Howard"). 6 Ms Smith was an employee of CRS, at least up until 2002. She was also a personal friend of the applicant during the period from 1992 to 1999, when the friendship ceased. The applicant believes that during the time when Ms Smith was employed by CRS, she provided or was involved in the unauthorised provision by CRS of "eligible services" to the applicant under the DSA and that CRS has documents, including electronic material, which record that activity. The applicant also believes that Ms Smith lied to the AAT when she gave evidence on 1 November 2004 that her relationship with the applicant was purely personal and that there are no such documents. 7 The applicant firmly believes that Ms Smith has wrongly imputed a psychiatric disorder to her and that Ms Smith has, in breach of various Commonwealth statutes, including the DSA Act , the Sex Discrimination Act 1984 (Cth) (the " Sex Discrimination Act "), and privacy legislation, made contact with the applicant's family. 8 Ms Smith was a friend of Ms Perrottet. Ms Perrottet was also at one time an employee of CRS, having apparently left in 1994. She is not a party to these proceedings but she gave evidence in the AAT, which was accepted, that she was unaware of any activity by CRS concerning the applicant. 9 Ms Howard was a friend of the applicant and of Ms Perrottet. It appears that Ms Howard was not a friend of Ms Smith and she may not have known her. 10 The applicant has given sworn evidence that in 1999, Ms Howard told the applicant that "Bev Smith was no friend to you". This brief remark, the evidence on which does not establish the context in which it was made, eventually became the source of the applicant's belief that CRS, through Ms Smith, had engaged in unauthorised treatment and surveillance of her. 11 The applicant was, at various times, employed by some of the respondents. She was employed by the Department of Social Security (which is now Centrelink) from 1986 to 1992. She was a member of the SSAT from 1992 to 1997; she was employed by Centrelink from November 1997 to August 1998 and by the RRT from August 1998 to January 2001. She was never employed by CRS. 12 In January 2001, the applicant resigned from the RRT, or was, as she contends, constructively dismissed. At that time she believed that she had been discriminated against by the RRT, and from about 1995, in her employment with the SSAT. She believes that she was discriminated against on the basis of her marital status and because people wrongly attributed to her a disability or incapacity, that is to say, a psychiatric condition. 13 The FOI requests to which I referred above were made to CRS, the SSAT, Centrelink, the RRT, the Department, and HREOC in about early 2004. Applications for review by the AAT were filed in or about April 2004. 14 In about September 2004, the applicant sought, in each of the proceedings in the AAT, a direction pursuant to s 35(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (" AAT Act ") , that the hearing of her application take place in private, that her name and the names of witnesses not be published, that evidence given at the hearings be prohibited from publication, and that any written decision of the AAT have a restricted distribution. 17 On 1 November 2004, the applicant's proceeding against CRS in the AAT was before the second respondent to the present proceeding ("Senior Member Kelly") for hearing. The applicant made a further request under s 35(2) of the AAT Act for the hearing to take place in private and for suppression orders. Senior Member Kelly refused the request. 18 Evidence was given before Senior Member Kelly by a number of persons including Ms Smith and Ms Perrottet. 19 On 13 January 2005, before Senior Member Kelly had handed down her decision, the applicant commenced the present proceedings in the Federal Court. On 10 February 2005 she was given leave to file an amended application dated 14 January 2005. Relief is sought under s 39B of the Judiciary Act (1903) (Cth) (" Judiciary Act ") . 20 The amended application seeks four categories of orders against the various respondents. 21 The first category relates to the decision of Senior Member Allen dated 27 October 2004 refusing the applicant's application for orders under s 35(2) of the AAT Act . She seeks orders quashing the decision and removing it from publication. She also seeks an order of mandamus, requiring the President of the AAT to make orders under s 35(2) prohibiting the publication of the names of witnesses and their evidence in the various AAT proceedings. The applicant seeks an order prohibiting the learned member from making her decision and orders removing her from the conduct of the review. However, I refused to grant interlocutory relief which sought to prevent Senior Member Kelly from making her decision; see [2005] FCA 79. Leave to appeal from my judgment was refused by Hely J; see [2005] FCA 541. The request for such orders in the present proceedings has thus been overtaken by the publication of Senior Member Kelly's decision on 24 May 2005. 23 The third category is an order of mandamus directed to the President of the AAT ordering him to compel the attendance of witnesses who have been issued with summonses in the various AAT proceedings. 24 The fourth category is directed against Ms Smith. The applicant seeks orders preventing Ms Smith from giving false evidence in the AAT as well as an order prohibiting Ms Smith from imputing to the applicant a disability which she does not have. 25 Ms Smith's actions are said to be in breach of the Sex Discrimination Act , the Disability Discrimination Act 1992 (Cth) (" DDA ")and the DSA . A real question arises as to whether the Federal Court has jurisdiction in respect of the claims against Ms Smith. 26 The essence of Senior Member Kelly's decision of 24 May 2005 was that all reasonable steps had been taken by CRS to find the documents the subject of the applicant's request and that the documents do not exist. She found that any emails created by Ms Smith during her time at CRS were personal and would have been deleted. She also found that, apart from the applicant's belief, there was no evidence to suggest any connection between CRS and the applicant. 28 The applicant has filed a separate proceeding in this Court purportedly to appeal on a question of law from the decision of Senior Member Kelly. I heard that application immediately after the conclusion of the hearing in the present matter. It is the subject of a separate judgment. 30 All six matters in the AAT came before Senior Member Allen to determine the request for confidentiality orders. As I have said, the learned Senior Member handed down a joint decision on all the applications on 27 October 2004. 31 The reasons for Senior Member Allen's decision are short. He saw no authority in s 35 for a direction that an applicant's name be suppressed and that she be known by an acronym; see at [6]. 33 I will refer in more detail to that provision below. 34 As to the principles to be applied, Senior Member Allen referred to the judgment of Brennan J in Re Pochi and Minister for Immigration and Ethnic Affairs (1979) 26 ALR 247 (" Re Pochi") at 272 --- 273. His Honour said that an order excluding the public may be more justified than an order excluding a party but that strict criteria govern the making of such an order. There must appear to be a real possibility of injustice to, or a serious disadvantage upon, a party or a witness or it must clearly appear that publication of the proceeding would be contrary to the public interest. 35 Senior Member Allen also referred to the judgment of Merkel J in Herald & Weekly Times Limited v Williams [2003] FCAFC 217 ; (2003) 130 FCR 435 (" Herald & Weekly Times") in which his Honour adopted the observations of Kirby P in John Fairfax Group Pty Ltd (Receivers and Managers Appointed) v Local Court of New South Wales (1991) 26 NSWLR 131 (" John Fairfax" ). I do not regard possible embarrassment to an Applicant as a sufficient reason; see Kirby P (as he then was) in John Fairfax v Local Court (supra). It is not uncommon that during an AAT hearing some maladministration will be evidenced and it is proper that such bureaucratic failures be exposed. Similarly, errors of administration exposed in one matter may be applicable to numerous other matters. Invariably one of the parties to any review before the AAT is a government department or instrumentality therefore proceedings before the AAT should be in public, for to use the words of Lord Atkinson quoted above, the hearing of a case in public is 'the best security for pure, impartial and efficient administration of justice, the best means for winning for it public confidence and respect'. To create a review body that restricts, or worse denies, legal representation and then sits in private is to recreate the Star Chamber. She said that she had serious concerns about the reasons for personal information ever being collected and the lawful basis of CRS for doing so. 39 The applicant stated in her request that she had no disability or psychiatric condition or disorder and accordingly that she did not meet the criteria stated in s 18 of the DSA for the provision of services by CRS. If this is the case, I wish to make it clear that I am requesting under s 21A of the DSA the cessation immediate of any and all CRS involvement with me. I am also requesting that CRS, and certain officers like Bev Smith and Louise Perrottet and, (I am not sure if she has been a CRS employee), Anne Brimson (who still has to respond to complaints about her), respond to the complaints of unlawful discrimination under the Disability Discrimination Act (Cth) 1992 (the DDA) and the Sex Discrimination Act (Cth) 1984 (the SDA) that I lodged with the Human Rights & Equal Opportunity Commission on 16 September 2003. She said that it came as a shock to her to learn that Ms Smith was "pursuing a friendship with me with a well hidden financial interest or ulterior motive in mind". That involvement has included a belated and unsuccessful attempt to have me diagnosed (and thereby try to justify years of unlawful activity). I believe that Anne Brimson and Andrea Taylor have been involved very heavily in attempts to classify me as a person with particular psychiatric disabilities (such as dissociative disorder; schizophrenia; a manic or a bipolar disorder) and that this occurred with a great momentum when I commenced working at the RRT. I believe her activity has been encouraged by persons associated with a campaign of victimisation waged by Annette O'Neill, Jenny D'Arcy, Stephen Hodges, Lyn Rogers, Angela Becket and Amanda MacDonald of the SSAT, because of my 1995 complaint against Stephen Hodges. Indeed, I believe that CRS have become a vehicle for that victimisation. Anne Brimson's conduct and the related activity of CRS has been unlawful under both the DDA and the SDA, and unauthorized by the DSA and any other applicable legislation. If a person does not fall within the target group then no CRS activity can be lawfully undertaken. This she said was done without any lawful basis. Reference was made to the DSA, the DDA , the Privacy Act 1988 (Cth), the Information Privacy Principles and the National Privacy Principles. 45 The questions included "why did Andrea Howard say in 1999 'Bev Smith was no friend to you'? " and other questions concerning what health information CRS had about medication administered to the applicant without her consent and what surveillance had been conducted on her. 46 Other requests for information in wide terms appear to have been made to the other relevant respondents; see Lawrance v Administrative Appeals Tribunal [2005] FCA 1318. 47 On 8 March 2004, CRS replied to the applicant's request. CRS stated that all reasonable steps had been taken to find the documents and that none could be found or did not exist. 49 On 15 March 2004, the applicant requested an internal review from CRS under s 54 of the FOI Act of its decision to refuse access. 50 On 16 April 2004, CRS informed the applicant that it had conducted an internal review but that its decision under s 24A of the FOI Act was that all reasonable steps had been taken and that the documents could not be found or did not exist. 51 The applicant appears to have taken similar steps in respect of her other applications for information. 52 The applicant lodged her application for review by the AAT of CRS's decision on 29 April 2004. Applications for review by the AAT of the other decisions were made at about the same time. 53 On 10 May 2004, a conversation took place between the applicant and Ms Janine Wood ("Ms Wood"), the Legal Policy Manager for National Service Delivery Support for CRS. Ms Wood was the person who supervised the processing of requests for information under the FOI Act made to CRS. Bev stated she had been a friend of Ms Lawrance some years back dating from when they studied law together. She stated her only contact had been on a personal basis, through studying & then a friendship. At some point Ms Lawrance's behaviour changed and she accused Bev of interfering. Bev cut contact with Ms Lawrance and has not had any dealings with her since 1999. She recalls a letter from Ms Lawrance being passed on by a colleague 2 years ago, which had been sent to CRS. Bev left CRS permanently in 2002. She does not wish Ms Lawrance to know her contact details or home address, but would provide a statement regarding her dealings with Ms Lawrance if required. She would not wish to meet up with or face Ms Lawrance. She & Louise had discussed their concerns re Ms Lawrance's behaviour & mental state. Louise's background is social work), but when confronted by Bev with their concerns and suggestions that Ms Lawrance obtain professional help/support, Ms Lawrance became abusive. The summonses were issued under s 40 of the AAT Act . The persons to whom summonses were issued included Ms Smith. 55 On 6 October 2004, Ms Wood telephoned the AAT. The officer of the AAT who took the call made a note of the conversation. She has provided a lengthy written statement, in evidence, that sets out her involvement as she sees relevant in this matter, and hopes that this is sufficient. Janine wants to know what her obligations re the summonses are in this circumstance. The affidavits included a 77 page handwritten affidavit which set out her history of complaints. 57 The applicant's history, as set out in the lengthy affidavit, commenced with a complaint made by the applicant in 1995 of sexual harassment by a male colleague who was employed in the SSAT at that time. The applicant contends that having made this complaint, she encountered unlawful discrimination from that time onward. 58 The applicant stated in her affidavit that she has come to realise, with hindsight, as a result of the comment in 1999 said to have been made by Ms Howard, that from 1995 onwards, people were changing their behaviour toward her. She said she realised, again with hindsight, that this change of behaviour was due to a decision to impute her, "wrongly of course", with a psychiatric disorder. 59 The 1999 conversation between the applicant and Ms Howard, to which I referred earlier, was recorded in the affidavit. This was the conversation in which the applicant contends that Ms Howard said to the applicant "Bev Smith was no friend to you". The affidavit goes on to say that the applicant confronted Ms Smith about the conversation but that Ms Smith refused to discuss it and hung up on her. 60 The applicant gave evidence in the affidavit of a number of conversations with psychiatrists. She said she had two conversations with Dr McMurdo, one in December 1995 when Dr McMurdo said "there is no diagnosis", the other in April 2000 when the applicant says that Dr McMurdo told her "I do not think you are schizophrenic. " The applicant also refers in her affidavit to a conversation with Dr Margaret Pickles in 2002. The applicant says that the doctor told her "Canberra needs a diagnosis". The context in which these comments are said to have been made was not apparent on the evidence. 61 The effect of the affidavit is that the applicant has come to realise that people are wrongly imputing a psychiatric disorder to her, that CRS has conducted a program of treatment against her without her consent, and that CRS has her under surveillance. These acts are said to amount to unlawful discrimination, breaches of privacy and the provision of eligible services by CRS in breach of the provisions of the DSA. 63 Ms Wood affirmed that CRS only collects information about individuals who are CRS clients, employees or contractors, and that all its programs are registered. She said that where no file had been registered, no other documentation relating to an individual exists in the possession of CRS. 64 Ms Wood went on to affirm that extensive enquiries were made by CRS in response to the applicant's requests for information. She said that no records were retrieved for Ms Perrottet. She also said that Ms Smith's electronic documentation amounted to approximately 300 floppy discs. She said that a manual search of these documents would have to be made but that searches already conducted by CRS demonstrated that information about the applicant was unlikely to be found in Ms Smith's records. The equivalent of 300 floppy disks' worth of information was found to exist in relation to one former employee. Based on the amount of documentation and the fact that no evidence exists to indicate that any of the documentation may be linked to the applicant, I believe that it was not reasonable to search further for documents requested by the applicant. I wrote to the applicant on 16 April 2004 to affirm the decision to refuse documents under section 24A of the FOI Act. She said that the applicant has informed her that she (the applicant) does not have a disability and is not eligible for services under the DSA . They included Ms Howard and Mr Kessels. Ms Howard wrote to the AAT on 11 October 2004 stating that she had never had contact with CRS or the Department in relation to the applicant. She said the applicant had been continually issuing her with summonses and subpoenas about matters on which she had no knowledge. 68 By letter dated 13 October 2004, Mr Kessels asked to be discharged from his summons, stating that to his knowledge, he had no connection with the cases. On 25 October 2004, he sought indication as to whether the summons had been discharged, and stated that he would be prepared to give evidence by telephone. 70 Senior Member Kelly then stated that she was aware of the previous application for suppression orders, which was dealt with by Senior Member Allen. Upon hearing the applicant's submissions on the issue, she observed that the applicant had not put anything new of a nature that would cause her to make a different ruling from Senior Member Allen. 71 Ms Wood gave oral evidence. She said that CRS had found approximately 400 megabytes of electronic material for projects in which Ms Smith was involved, and that a manual search of the information would take, on a conservative estimate, approximately 100 hours to complete. 72 Ms Smith attended to give evidence in answer to a summons issued by the applicant. The transcript recorded that Ms Smith stated that her occupation was "HR Manager for Australian Quarantine Inspection Service. " She confirmed that she and the applicant were "very close personal friends" for a number of years, from about 1992 onwards. 73 The applicant then asked whether "from your experience of our friendship, I was the sort of friend who indulged in gossip or rumour mongering?". 74 Senior Member Kelly asked how such a question was relevant and, the witness having left the room, a debate took place between the learned Senior Member and the applicant about relevance. Senior Member Kelly drew the applicant's attention to what the learned Senior Member considered to be the real issue on the application in terms of Ms Smith's evidence; namely, did Ms Smith have any information about the applicant which she had recorded on CRS documents. All I want to know is whether she has created any records or any records about you on the CRS system. I'm not going to wander off around the country in terms of speculation about what might have been said here and there. What I am concerned with is what may be on the records which you seek access to. The applicant then asked whether Ms Smith recalled making a joke that Ms Smith was "paranoid about something". Senior Member Kelly interrupted and said "Ms Lawrance, I don't think so". 79 A debate then took place between the learned Senior Member and the applicant about relevance. It's not a matter for the Tribunal. So you may ask Ms Smith about matters which you think have given rise to this information, but it has to be relevant. 81 The learned Senior Member then herself asked a number of questions of Ms Smith about the conversation between Ms Smith and Ms Wood of 10 May 2004, which was recorded in the file note referred to above. 82 The applicant then asked Ms Smith about the conversation in which the applicant confronted Ms Smith on the telephone about the conversation with Ms Howard. Ms Smith agreed that she responded with anger and that she hung up the phone. Ms Smith said in her evidence that she considered that the applicant was accusing her of something of which Ms Smith had no knowledge and that she had not done. She said that she had given the applicant a lot of support over the years, and that she was angry about the applicant's accusation. 83 After some further debate, Senior Member Kelly permitted the applicant to ask questions about Ms Smith's recollection of the conversation recorded by Ms Wood in the file note. --- Okay. Yes, I did --- I did discuss with Ms Wood that --- during the period of our friendship that I did become concerned about you. Essentially, again, it was the concern of a friend. I remember we were studying --- we were supposed to be studying law together one day. I think it was when you had moved with my friends over to Clovelly and it was in your apartment --- it was in the apartment at Clovelly. And I remember you describing to me that --- that someone had been taking pictures of you naked in Grace Brothers or something along those lines. I'm sorry, can you just repeat that again? Unless it's necessary for you to hear it again. Can you say that again exactly when --- are you saying I said something like that? --- Yes. You said something along those lines. --- You thought that something was coming in to Sydney Harbour and I don't recall what it was. You were concerned that --- that you had been in Grace Brothers and someone had been taking pictures of you in the shop. --- The other thing that you said to me was --- we were sitting down and we were looking at my textbook and I don't recall which legal subject it was but you were concerned that the textbook had been changed; that someone had changed the textbook because they wanted you to fail the exam. --- The other reason I became concerned was that you brought documents over to my house one night and you asked me to hold them in safe-keeping and my girlfriend had reported to me at the same time that she had come home and found you burning documents in the bedroom in the flat. Can I just ask you, Ms Smith, have you created any documents when you were working at CRS that related to Ms Lawrance? --- No. --- No. Not that I'm aware of, no. The only thing I said to Janine is --- and I'm not even sure if email existed then. I used to pick Aroha up on the way to our legal studies from work and so I may have sent her an email to say, "I will pick you up at 5 o'clock", but I'm not even sure of that type of email. But, no, I've never created any other type of document at all relating to Aroha. --- No. No. My relationship with her was purely personal. It was a personal friendship. I would also put it to you, Bev, that what happened in 1999 appears to be something along the lines of people like Andrea Howard and possibly Andrea Taylor; no more about what you've been doing than I do and did not think very highly of you. No. Senior Member Kelly reminded the applicant that what was relevant was what evidence Ms Smith had about CRS documents. Ms Smith stated that she may at one stage have sent a personal email to the applicant about picking her up by car on their way to Sydney University. 89 The balance of Ms Lawrance's questions involved debates with Senior Member Kelly about relevance. 90 There was then cross-examination by the representative for CRS. Ms Smith stated that any email about giving the applicant a lift would have been deleted from the CRS computer, commenting "I would have no reason to keep it. It was of a purely personal nature". 91 The applicant was then allowed to re-examine Ms Smith. The applicant put it to Ms Smith that she was still trying to impute a psychiatric disorder to the applicant. Senior Member Kelly interrupted, rejecting the question as irrelevant. In the exchange that ensued, the learned Senior Member said that she did not want Ms Smith to be harassed. I will adjourn if you continue to behave in that way. In the course of examination in chief, there was debate between Senior Member Kelly and the applicant about the relevance of questions concerning matters outside CRS. The learned Senior Member interrupted to reject a number of such questions. 94 Ms Annette O'Neill ("Ms O'Neill") was called by the applicant. Ms O'Neill was a Senior Member of the SSAT from 1992 to 1997. The applicant asked her whether she had imputed a psychiatric disorder to the applicant. Senior Member Kelly ruled that the question was irrelevant. In any event, Ms O'Neill gave evidence in those proceedings that she had no knowledge of CRS involvement in any program concerning the applicant. 95 The applicant then gave evidence herself. She was asked a series of questions by Senior Member Kelly designed to elicit from the applicant whether she had any evidence indicating the provision to the applicant of eligible services by CRS under the DSA. The applicant's answers established that she had never been contacted by CRS, that she had not been invited to participate in an assessment program with CRS and that she had not been asked to participate in a rehabilitation program with CRS. During examination in chief, she was asked whether consent was required for the provision of services by CRS. Ms Carmody stated that consent is "a critical element of our whole program". She said that a lot of clients are mental health clients and that CRS would not go to their places of work without their consent. --- No. It's not. The client is present in their initial needs assessment. ---No. No, it's not. The clients --- when they attend their initial needs assessment, we have quite a structured process that we go through... and explain very clearly what rehabilitation entails and also their rights and responsibilities. It is in fact a --- for rehabilitation to be effective, it's a two way process, not only do we work with them to address the barriers and focus on what they can do, but we also need them to cooperate and participate in the program. So if those two elements aren't there, we're wasting government money. What would be the case if someone was an employee in a workplace and someone else, other than CRS, might be undertaking assessment services --- diagnostic and assessment services? Is there any scope in that situation for CRS to place people in the workplace to monitor the situation? For example, if it was a Commonwealth Employment workplace? --- A Commonwealth workplace? --- So their employer had organised that? Is there scope for CRS to have people in a workplace to monitor that kind of situation? --- No. No. We don't have a role there. We do a whole range of work for Commonwealth agencies but it's very clearly on a purchaser and provider arrangement. If there isn't a clear agreement where we have a clear role in undertaking the assessment or providing the program, then we have no role to be there. The AAT said that two letters from Mr Kessels had come to the AAT's attention. These were the letters to which I referred earlier in which Mr Kessels sought to be discharged from his summons or to give evidence by telephone. 101 The letter requested the applicant to advise Senior Member Kelly's associate whether she wished to reopen the hearing to take Mr Kessel's evidence. The letter went on to say that if the applicant wished to reopen, Senior Member Kelly would hold a directions hearing to argue that question. 102 The letter also stated that Senior Member Kelly's associate had left a message about the matter on the applicant's mobile phone. 104 The learned Senior Member observed at [7] that under s 61(1) of the AAT Act , the onus of proving these matters was on CRS. 105 Senior Member Kelly set out at [8] --- [18] a full consideration of the applicant's evidence. Ms Lawrance provided comprehensive affidavit evidence (Exhibits A1 and A2) as well as giving oral evidence. She believes "in hindsight" that CRS has collected information about her unlawfully without her knowledge, that the information collected is inaccurate and that it has been unlawfully disclosed. She now believes that CRS had an involvement in her employment during her period with the Commonwealth of Australia and generally since she left that employment, including attempting to have her diagnosed with a disability such as schizophrenia and/or a personality disorder. She believes that CRS has become a 'vehicle' for her victimisation by various individuals during her employment on the SSAT and the RRT. She believes that CRS has contacted friends of hers who have no connection to her employment, and relatives, without her knowledge. She formed these views after reading the Disability Services Act (1986) (Cth) in 2004. Having perused the Act she states 'I considered the drastic change in behaviour of ex-friends ... and the incredible unlawful discrimination that I encountered' (at two specified workplaces in 2001 and 2002), 'and in the provision of education, good & services and accommodation in 2002-2004, and the radical change in conduct of my relatives in the last few years, it occurred to me that I had been wrongly placed on some sort of programme under (the Act). It has occurred to me that this may have happened during my Commonwealth employment as well as currently'. She believes that various individuals, including employees of CRS and other Commonwealth bodies have involved themselves in her employment at the SSAT, Centrelink and the RRT. She learnt of 'the existence of some form of public service surveillance .. mid 1999'. She did not know whether she had been under surveillance before that time. I understand the reference to 'mid 1999' to be to when a former friend told her 'Bev Smith is no friend to you'. Ms Lawrance had never introduced the two and they had never met or spoken. She was "astounded" by the comment and was given no explanation for it and still does not understand what was meant. According to Ms Lawrance when asked about that comment, Ms Smith's reaction was extraordinarily defensive and she hung up. It was that comment that has caused Ms Lawrance to believe that Ms Smith had a 'professional interest in her'. Ms Smith was formerly employed by CRS. Ms Lawrance does not know 'who was undertaking the surveillance nor what it was done for. I still do not know these things, however it seems that it may have been undertaken by CRS ... either alone or in conjunction with the NSW Department of Health'. Ms Lawrance also asserted that the same friend who had made the comment to her about Ms Smith had told her in 2000 that another friend had been in contact with her employers, although she had never expanded upon what it was that the other friend was doing in emailing people about her. She had never expected that had been the case. Further remarks were made to her in 2004 to similar effect which have led Ms Lawrance to believe that that other friend had been involved in 'information-sharing about me, with employers of mine or with an agency like CRS Australia, or some other similar agency'. I can state that this has only occurred because of the activity of CRS Australia. It is very obvious not onloy that [a friend] had a source of information about my workplace that was not I, but that that source of information (and lies) wsas in all probability CRS Australia. There is no way that my friends in the past would ever have treated me like this. Their mistakes in so doing are attributable to the conduct of CRS and the lies whidch that organisation have disseminated about me. She believes that 'this may have something to do with Bev Smith'. Ms Lawrance also set out comments and reactions of other friends, relatives and doctors apparently unconnected wsith her employment, which support her belief that someone has been spreading lies about her. She referred to a relative making comments which wrongly imputed a psychiatric disorder to her. In 2002 a doctor told her 'Canberra needs a diagnosis'. That doctor never treated her and did not have consent to treat or assess her. In 2003 another doctor whom she had seen once before in 1994 and from whom she sought file notes, told her that a close relative was observing her. She asserted that doctor's file notes indicated that a third person had consulted with the doctor in 1994 when a considerable amount of false information had been given about her and that the file notes also referred to an assessment having been undertaken of Ms Lawrance of which she was unaware and to which she had not consented. At paragraph 42 of her affidavit Exhibit A1 she refers to various matters mentioned above, plus one other, and states 'it is evident that CRS Australia have a substantial number of documents about and in relation to me'. The Senior Member also found that both were former friends of the applicant; see [19]. 107 Senior Member Kelly referred to the evidence of Ms Wood's file note of a conversation between Ms Wood and Ms Smith. The effect of her findings at [20] was that Ms Smith had no dealings with the applicant as a CRS employee but only on a personal level. She also found that any email about arranging a lift to university would have been deleted. 108 Senior Member Kelly found at [21] that no document was created following a discussion between Ms Smith and Ms Perrottet about the applicant's behaviour and mental state. 109 The effect of Senior Member Kelly's findings about Ms O'Neill's evidence was that CRS was not aware of any program of treatment of the applicant under the DSA. Senior Member Kelly said at [24] that "[i]nitially she said yes, but later said no". 111 The learned Senior Member then turned to consider the question of whether all reasonable steps were taken by CRS to find the documents requested by the applicant. She made a series of findings in favour of CRS at [26] --- [36]. I find on the evidence that CRS does not collect or store an individual's sensitive personal or health information unless that person is a client, employee or contractor of CRS. Vocational rehabilitation is a voluntary process and all CRS vocational rehabilitation programs are provided in consultation with the client. The service would not be provided with the consent of a third party only. The informed consent of the client is necessary. CRS does not conduct surveillance. It is not an investigative agency. CRS conducted searches of documents for employees, contractors and clients. No records were found relating to Ms Lawrance. Searches were also made of the client databases (Nexus and its predecessor, CRMIS) which contain an index identifying files held relating to clients, human resources/employees and finance records of contractors/vendors. There are various retention periods for different categories of client records. However, the records of Nexus go back to 1999 and are not destroyed when the documents are destroyed. It includes historical data from its predecessors CRSMIS and RUMS dating back to 1987. A number of variants of Ms Lawrance's name were searched unsuccessfully. Inquiries were made of CRS Payroll and Finance teams to find out whether she had ever been an employee, contractor or vendor. No records were retrieved. If Ms Lawrance had been a client of CRS between 1986 and 2004, an electronic record of her involvement would have been created. All correspondence about clients, including correspondence via e-mail and facsimile is kept in hard copy on the client file, until disposed of in accordance with the CRS Records Disposal Authority. Searches were unable to find any contact with relatives of Ms Lawrance. Two difficulties were knowing the surname of the relatives,, and where they might have contacted CRS. CRS searched its electronic archives for relevant e-mails and other documentation in relation to Ms Smith and Ms Perrottet. No records were found relating to Ms Perrottet. Electronic holdings relating to Ms Smith were found. They included e-mail and other documentation, amounting to approximately 400 megabytes of material. A manual search would be required to determine whether any of the material was relevant. Each e-mail would have to be opened and each attachment as well. Other documents would have to be reviewed individually. I accept Ms Wood's oral evidence that the process of reviewing the material to identify matches to requested information and suitable for release is a lengthy one. It would take four days to recover the material from IT services and on a conservative estimate 100 hours to review it. I do not consider it reasonable to require a search of the electronic records relating to Ms Smith. I accept her evidence that her relationship with Ms Lawrance was purely one of friendship. Any e-mail records which Ms Smith created would have been to Ms Lawrance about giving her a lift and in all probability would have been deleted. Ms Smith was not involved in any activity relating to CRS activities and Ms Lawrance. Apart from Ms Lawrance's belief, arrived at in hindsight, there is no other evidence to suggest that there was any connection between CRS and Ms Lawrance. I am satisfied on the evidence that all reasonable steps have been made to find the documents the subject of Ms Lawrance's request. In coming to that conclusion I have borne in mind Deputy President McDonald's discussion of s 24A in Re Cristovao and Secretary, Department of Social Security (1998) 53 ALD 138 at 145. It is not reasonable to require further searches for the information to which Ms Lawrance seeks access. Her belief was formed in 2004 when she found the Disability Services Act (Cth) 1986. For her, that legislation provided a coherent explanation of various comments and incidents which had occurred in her private and working life over a number of years. Given CRS's role as a provider of vocational rehabilitation services, its practices, the information it stores and its storage procedures, I am satisfied that if it held information about a program or service relating to Ms Lawrance, it would have been found by the searches it undertook. I accept that Ms Lawrance genuinely holds the belief that CRS may have had an involvement in her life, however, I am satisfied on the evidence that CRS has never had any such involvement. I find that the documents to which Ms Lawrance has requested access do not exist. She affirmed the decision of CRS made on the internal review in April 2004. The statement was annexed to an affidavit sworn by the applicant on 2 March 2006 and tendered as part of her case. 115 Although the applicant does not accept that this be so, it is plain that the statement was provided by Ms Smith to Ms Wood between the date of the two file notes referred to above; that is, 10 May 2004 and 6 October 2004. It was provided for the purpose of the hearing in the AAT but it was not used at the hearing. The first file note states that Ms Smith would provide a statement. The second states that Ms Smith "has provided" a written statement. 116 The statement describes the friendship between the applicant and Ms Smith, how it developed and how it ended. The statement describes the onset of Ms Smith's concerns about the applicant's mental state and the discussions Ms Smith had with Ms Perrottet in an effort to assist the applicant. 117 The statement also contains a recollection that Ms Smith contacted the applicant's sister to express her concerns for the applicant's welfare. 118 The statement is to the same effect as Ms Smith's oral evidence in the AAT. 120 In considering the applicant's attack on Senior Member Allen's decision, it is to be borne in mind that the applicant's requests for orders under s 35(2) of the AAT Act were made in extremely wide terms. What the applicant sought was complete suppression of the fact of the hearing and everything related to it. She sought orders directing that the hearing take place in private, that her name and the names of witnesses be prohibited from publication, and that evidence and any documents filed in the AAT not be published. 121 Although she did not say so expressly in her s 35(2) application, the effect of it would also have been to seek prohibition of publication of decisions of the AAT, and the reasons therefor. 122 The application was supported by generalised assertions in terms set out in the excerpts from the letter of 30 September 2004 set out at [15] above. The assertions were to the effect that the applicant continues to be the subject of unlawful discrimination and inaccurate defamatory material that is prejudicial to her reputation. 123 On the basis of the applicant's generalised assertions, Senior Member Allen was of the view that no reason had been shown why justice could not be done without the making of a suppression order. 124 Senior Member Allen took into account the embarrassment and damage which may flow to the applicant from publication. This is evident from his quotes from Re Pochi , Herald & Weekly Times and the remarks of Kirby P in John Fairfax . 125 The learned Senior Member specifically stated that he did not regard embarrassment as a sufficient reason for an order, citing John Fairfax in support. 126 The essence of Senior Member Allen's reasons for refusing the order was that he was not satisfied that the assertions made by the applicant outweighed the public interest in the open administration of justice. 127 There is no basis for an assertion by the applicant that Senior Member Allen failed to have regard to relevant considerations, nor her assertion that he failed to have regard to her submissions. The learned member took into account all of the matters to which the applicant points, including the public interest and his reasons are not open to attack. 128 Insofar as the applicant asserts that Senior Member Allen failed to take account that the applicant was not suffering a disability or alternatively that he took into account an irrelevant consideration by proceeding on the basis that she was under a disability, this complaint is unsupportable. So too is the submission that the Senior Member erred in failing to take into account whether the applicant had been the subject of eligible services by CRS. The issue on the s 35(2) application was not whether the applicant did, or did not, suffer from a disability, nor the alleged CRS services. 129 Rather, the issue was whether the public interest in open justice must give way to another public interest, namely the real possibility of doing injustice in a particular case or of inflicting a serious disadvantage on a party or a witness. This was evident from Senior Member Allen's reference to the well established authorities on this question. 130 The applicant also complains that she was not provided copies of the letters of Ms Howard, Mr Kessels, and another witness seeking to be discharged from their summons to give evidence. The applicant submits that this amounts to a denial of procedural fairness and a breach of s 39 of the AAT Act , as she was not given the opportunity of inspecting and making submissions in relation to the letters. However, the submission cannot succeed, for the letters were irrelevant to the issue before the Senior Member. 131 So too was the fact that the Applicant was not cross examined on her affidavit. The AAT did not have a duty to resolve factual differences between the Applicant and witnesses on questions of fact which were irrelevant. 132 Nor is there any basis for the complaint that the joint hearing and joint reasons of Senior Member Allen constituted a denial of procedural fairness. 133 Section 33(1)(a) of the AAT Act provides that the procedure of the AAT is, subject to the AAT Act and the regulations and any other enactment, within the discretion of the AAT. Mr Marcus, for the fifth to ninth respondents, properly accepts that the discretion must be exercised lawfully and that it cannot be exercised in a way which would amount to a denial of procedural fairness to a party. 134 However, on the material before me, there is nothing to make good the assertion that there was a denial of procedural fairness in the approach adopted by Senior Member Allen. No transcript of the hearing of the application was put before me, and there is nothing to suggest otherwise than that all of the applications for suppression orders were made on the same basis and on the same material. It would follow that the legal and factual issues were identical in each application under s 35(2). See NAOA v Minister for Immigration, Multicultural and Indigenous Affairs [2004] FCAFC 241 at [21] ; cf Minister for Immigration, Multicultural and Indigenous Affairs v NAMW [2004] FCAFC 264 ; (2004) 140 FCR 572 at [121] --- [122]. 135 It may have been open to Senior Member Allen to conduct separate hearings and write separate reasons. But to do so may well have been inefficient and hence in conflict with s 33(1)(b) of the AAT Act . 136 In any event, there was no material detriment to the applicant in the course adopted. Acccordingly, there was no breach of the rules of natural justice. 137 Finally, the Wednesbury unreasonableness complaint cannot be sustained. Section 35(3) of the AAT Act provides that the basis of the consideration of an application is that hearings should be held in public. What Senior Member Allen was required to do was to "pay due regard to any reasons given to the Tribunal" for a suppression order. 138 Even if it be assumed that different decision makers might have come to different views in the balancing of public and private interests, this is at odds with any attack on the decision of Senior Member Allen in a Wednesbury sense. 139 Moreover, bearing in mind the real issues in the substantive hearing, namely whether the relevant agencies had conducted adequate searches for documents and the generalised assertions of the applicant as to the effect on her reputation and the damage she would suffer, it cannot be suggested that the decision was unreasonable. 140 Senior Member Allen was required to pay due regard to the matters put by the applicant. As I have said, it is clear that he did so. Similarly, there was no error on the part of Senior Member Kelly in declining to make suppression orders on 1 November 2004. No new matters were put to the learned senior member and the decision was not assailable. 141 As to the orders sought by the application in the nature of mandamus, requiring the President of the AAT to make suppression orders under s 35(2) , I do not propose to make such orders; this follows from my conclusions above. 143 Accordingly, the applicant's complaints must turn upon her appeal on questions of law under s 44(1) of the AAT Act . She has lodged an appeal which is matter NSD 909 of 2005. I heard the appeal immediately after the conclusion of the present matter. It will be the subject of a separate judgment. This is apparently intended to ensure the attendance of witnesses such as Ms Howard. 145 Section 61 of the AAT Act provides that a person is guilty of an offence if the person is given a prescribed summons and fails to attend or to appear, unless excused. Section 63 creates an offence for conduct amounting to contempt. 146 The application for mandamus cannot be sustained. Both of these sections are offence provisions. They do not impose any duty on the AAT or any officer, let alone the President. There is nothing which could properly be made the subject of an order of mandamus; M Aronson, B Dyer and M Groves, Judicial Review of Administrative Action (3 rd Ed 2004) ("Aronson") at 329. 148 The applicant contends that the Court's jurisdiction is enlivened pursuant to s 75(v) of the Constitution and s 39B(1) of the Judiciary Act , upon the ground that Ms Smith is an officer of the Commonwealth. 149 Alternatively, she relies upon s 39B(1A)(c) of the Judiciary Act , contending that she has a matter arising under laws made by the Parliament. She points to the provisions of the DSA and the other laws of the Commonwealth to which I have referred, which she says have been breached in imputing to her a disability. 150 I will deal first with the question of whether the Court has jurisdiction on the basis that an injunction is sought against Ms Smith as an officer of the Commonwealth. 151 The transcript of 1 November 2004 records that Ms Smith gave her occupation as the Human Resources Manager for the Australian Quarantine Inspection Services ("AQIS"). The applicant disputes the accuracy of the transcript. This is nothing more than an assertion. But even if I draw the inference which the applicant asks me to do in the absence of evidence from Ms Smith, namely that Ms Smith is still employed by CRS, that does not confer jurisdiction on the Court. 152 I should add that the inference the applicant asks me to draw flies in the face of a statement in the file note of 10 May 2004 that Ms Smith left CRS permanently in 2002. 153 The reason why the Court does not have jurisdiction pursuant to s 75(v) is that even assuming Ms Smith was an officer of the Commonwealth (which she may have been as an employee of AQIS), she did not act in her capacity as such an officer. 154 It is plain from the discussion in Aronson at 27-33 that it is a requirement for jurisdiction under s 75(v) that the person against whom the constitutional writ is sought be an officer of the Commonwealth and act in that capacity. 155 As Aronson observes at 28, the ground of judicial review which is embraced within s 75(v) is that the officer has acted without power. This may be because the officer's action is unconstitutional or unauthorised by statute or by law or is otherwise committed in jurisdictional error. 156 Thus, although persons may be officers of the Commonwealth for some purposes, eg as employees of a government agency, that will be irrelevant where the impugned decision is that of the body corporate; see Vietnam Veterans' Affairs Association of Australia NSW Branch Inc v Cohen (1996) 70 FCR 419 at 432 per Tamberlin J; see also Aronson at 31. 157 As Aronson states at 33, the main point of s 75(v) is to ensure judicial supervision of the execution of Commonwealth statutes and the exercise by the Commonwealth of common law and executive powers. 158 Nothing which Ms Smith is said to have done falls within this description. She was summonsed by the applicant to give evidence on an application to review the decision of CRS to refuse access to documents. What Ms Smith said in the witness box, or in her statement given to CRS in connection with the application, had no connection whatsoever with her duties or functions as an officer of the Commonwealth. No issue of want of power or want of jurisdiction was in any way involved in Ms Smith's actions. 159 Nor is jurisdiction enlivened by the applicant's assertion that Ms Smith's statements or actions amount to a matter arising under laws made by the Parliament within s 39B(1A)(c) of the Judiciary Act . 160 It is true that the applicant claims rights under Federal laws such as the DSA and that she claims breaches of rights or duties which owe their existence to Federal laws; see the discussion of the well established authorities in Transport Workers Union of Australia v Lee (1998) 84 FCR 60 at 65-67 (Black CJ, Ryan and Goldberg JJ). The questions explored by the applicant with Ms Smith as to the circumstances in which their friendship ceased, the imputation of a disability, and contact with relatives, were irrelevant to that issue. 163 It was therefore not necessary for there to be a decision on those questions and no matter arose under the DSA or the other Federal statutes to which the applicant referred. 164 Nothing that was said by the High Court in the recent decision on federal jurisdiction in Sweedman v Transport Accident Commission [2006] HCA 8 assists the applicant in the present case. There the Court was concerned with choice of law rules applicable in the County Court of Victoria in respect of a motor accident. The accident occurred in New South Wales between vehicles registered respectively in Victoria and New South Wales and driven respectively by Victorian and New South Wales resident drivers. 165 The majority Justices observed at [33] that the County Court was exercising federal jurisdiction and that federal law controlled and required under s 80 of the Judiciary Act the applicable law. No such questions arise in the present case. 166 Here, no debate as to whether there may be the excessive long-arm jurisdiction, which concerned Callinan J in dissent at [102], is triggered. This is a case in which no issue of federal jurisdiction is engaged by the complaints made against Ms Smith. 167 Moreover, as Hely J observed in Lawrance v Administrative Appeals Tribunal [2005] FCA 541 at [39] there is an additional problem with the applicant's claim. A witness appearing before the AAT has the protection conferred by s 60(3) of the AAT Act . As his Honour said, the applicant's claim for an injunction would run counter to the immunity given by that section even if it were established that Ms Smith lied at the hearing before Senior Member Kelly. 168 In any event, Senior Member Kelly accepted the evidence of Ms Smith. That was a finding of fact made within jurisdiction. 170 The applicant has made a number of similar applications on interlocutory motions and I have declined to make such orders. 171 As Bowen CJ said in Australian Broadcasting Commission v Parish (1980) 29 ALR 228 at 234, open justice is the underlying assumption of s 50. There is nothing to suggest that publication of my reasons, or even publication of the applicant's name, would frustrate the administration of justice or any other public interest. 172 Whilst publication may affect the applicant's reputation or cause her embarrassment or perhaps even damage, those factors are essentially of a private nature. Even if they bear on matters of public interest, they cannot tip the scales against the public interest in open justice. 173 I decline to make the order sought. 175 Her reasons include submissions that the respondents have behaved unreasonably, that her claim is made in public interest litigation and that the case involves her personal liberty; see Ruddock v Vadarlis (No 2) [2001] FCA 1865 ; (2001) 115 FCR 229 at [29] . 176 I reject the applicant's submissions. Nothing has been put to persuade me that costs ought not to follow the event. | review of decision of administrative appeals tribunal ("aat") application for confidentiality orders whether failure to take into account relevant considerations whether wednesbury unreasonable principle of open justice public interest real issues in substantive proceeding no error in aat decision jurisdiction whether officer of commonwealth whether acting in capacity as an officer whether matter arising under laws made by the parliament administrative law practice and procedure |
The patent application was filed on 6 July 2001. I found the proposed amendments allowable under s 102 of the Patents Act 1990 ('the Act') but, in the exercise of the discretion afforded by s 105 of the Act, declined to allow the amendments ( Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2009] FCA 1019). I indicated in my reasons that I considered it appropriate that Servier pay the applicant's costs of the application, which was dismissed. However, as the parties had not made submissions on costs, I indicated that that order would be stayed to give the parties an opportunity to make submissions if they wished to do so. Servier submits that although the ultimate result was in Apotex's favour and Apotex is entitled to have costs of the hearing, it is appropriate to allow a discount in Servier's favour to account for Servier's success in relation to the allowability of the amendments under s 102. Servier points out that the issues as to whether or not the amendments were allowable under s 102 of the Act were complex and involved evidence from two experts. In those circumstances, where half of the hearing time concerned those issues, Servier submits that Apotex's entitlement should be discounted by 50%. There are a number of reasons why, in my view, it is appropriate that Servier pay Apotex's costs, despite its success in establishing that the amendments are allowable under s 102: It follows that, in this case, it is appropriate that costs follow the event. There is no need to make a further order for costs, as the stay on the order previously made will have automatically expired. I certify that the preceding six (6) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bennett. | application to amend patent dismissed amendments allowable under s 102 of the patents act 1990 (cth) amendments refused by exercise of discretion under s 105 of the patents act 1990 (cth) whether costs should be discounted in favour of party seeking amendment costs |
2 The appellant, a citizen of Bangladesh, arrived in Australia on 7 November 2003, and on 18 December 2003 made application to the then Department of Immigration and Multicultural and Indigenous Affairs for a protection visa. That application was refused on 18 February 2004. On or about 15 March 2004, the appellant made application for review of the delegate's decision. Ultimately that application was refused by the Tribunal on 13 October 2004. On 15 November 2004, an application for review of the Tribunal's decision was filed in the Federal Magistrates Court, being an application which was followed by an amended application filed on 15 June 2004. He claimed that when this was seen by Muslim people, they targeted and threatened him forcing him to leave under the threat of death. That His Honour erred in failing to hold that Section 61 of the Australia Constitution imposes on the Respondent an inexcludable requirement of due Process including procedural fairness. That His Honour erred in failing to hold that Section 424A(3)(a) of the Migration Act is in breach of such requirement of due process and therefore ultra vires section 61 of the Australian Constitution . That consequent upon the foregoing, His Honour erred in failing to hold that the Following information amounted to a breach of such constitutionally guaranteed right of due process, or in the alternative constituted procedural unfairness amounting to jurisdictional error. That the Second Respondent had regard to selected "Independent Country Information" in relation to Bangladesh in circumstances where country files was entirety held by the Respondent and available to the Tribunal, were not available to the Applicant. That the Second Respondent failed to consider all relevant materials, including Independent Country Information which was its possession (but not available to the Applicant) as to the persecution of Islamic Fatowa in Bangladesh. That His Honour erred in failing to hold that Section 424A(3) of the Migration Act. That His Honour erred in failing to find that the Applicant was apostate and liable to severe physical punishment guided by the Islamic Shari -a- Law (Fatwa). In the circumstances therefore, and in the light of the Minister's objection to the appellant raising new issues on the appeal, each of the issues purportedly so raised must be rejected as matters validly falling for resolution. 7 Counsel for the Minister acknowledged that in some circumstances in migration cases, the rule in Coulton v Holcombe [1986] HCA 33 ; (1986) 162 CLR 1 at 7---8 may be relaxed or modified in order to accommodate natural justice requirements which are said to arise in such cases, but that there was nothing of an exceptional or unique situation involved in the proceedings below, in particular since the appellant was there represented by experienced counsel, and had then the opportunity to make any of the points he has sought to ventilate in the present appellate context. In those circumstances, so the Minister further contended, the appellant was bound by the case which he ran below. There is clear substance in that submission. 8 In any event, counsel for the Minister submitted with justification, that the matters raised by the present notice of appeal were at best formulaic, as well as being without merit, especially when considered against the Tribunal's reasons for decision. Thus the suggestion in grounds 1 to 3 and 7 of the notice of appeal that s 424A of the Migration Act 1958 (Cth) was constitutionally invalid, as the Minister submitted, is without merit, the section having been construed on numerous occasions by the Federal Court, and also by the High Court, without any suggestion of, much more authority for, the proposition that the same is invalid, or otherwise violates any limitation or constraint evident in the Constitution . Moreover, as the Minister further pointed out, the fourth ground contained an amalgam of supposed grounds of jurisdictional error, none of which has any basis in fact or in law, whilst the ground identified as the sixth ground (being in fact the fifth ground) alleged bias on the part of the Tribunal without any purported or proffered basis in substance. 9 In the result, no jurisdictional error was isolated by the appellant in the Tribunal's decision, or in the reasons for judgment of Emmett FM. 10 At the hearing of the appeal, the appellant was unrepresented. He did not attempt orally to articulate anything of substance in support of the appeal, nor when invited to do so did he add anything in support of the grounds of appeal, or otherwise. All that he asserted by way of purported testimony in chief was that 'I am away from country for six years', and 'if you want I can bring some more documents, but I need time for that'. When invited so to do, he declined to add anything in reply. 11 What however the applicant did file in advance to the Court was a so-called 'Written Argument in supporting of the Applicant's Case' consisting of four pages, which had not been provided at any time to the Minister or her legal representatives. I adjourned the hearing for a short time to enable the Minister's counsel to read the same. The document bore the date 20 March 2006. 12 The author of the document appeared to have some content of familiarity with migration law. 14 Counsel for the Minister further submitted that the written submissions were in any event directed essentially to the merits of the Tribunal's decision, and provided no substance to the claims of denial of procedure fairness. Moreover she submitted that the truth and reality was that the Tribunal did not believe that the appellant had the subjective fear which he claimed; and that much of the submissions comprised simply formulaic expressions of legal propositions which did not address the facts found by the Tribunal; much of what was submitted in the written material constituted merely a re-agitation of the merits of the Tribunal's decision. 15 The Minister's response was plainly correct. Even if the appellant should be allowed to tender these submissions in support of the appeal without notice to the Minister, the reality is that they constituted a purported rehearing of misconceived errors, including errors of law, which exposed no error in the reasons for decision of the Federal Magistrate's Court below. 16 What the appellant sought to do in reality was an attempt to burden the Court and the Minister with a farrago of misconceptions, wrongful quotations and a fresh hearing of the merits of a case for review of the Tribunal's decision without any basis on the merits, and to ignore the reasons for decision of Emmett FM notwithstanding his purported appeal from her judgment and orders. Even if the appellant's submissions had borne any appearance of merit according to law, they were submission that fell to be disposed of by the Federal Magistrates Court below, and to attempt to agitate the same on appeal to the Federal Court, without even prior notice to the Minister, amounted in reality to an abuse of process. 17 The appeal must be dismissed 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 Conti. | no special or particular principle arising abuse of process of the appellate procedure migration |
The Warning Label, the subject of that application appears on the physical exhibit of the 'Wavestar' and is replicated in the physical exhibit on the DMC product. The allegedly infringing products ('the DMC products'), are described by DMC in its packaging as an 'inflatable wave rider'. 2 These proceedings were commenced on 24 October 2006 by the filing and service of an Application, Statement of Claim, and affidavits in support of the claim, for interlocutory relief. 3 The evidence does not support a conclusion that the applicant is the owner of copyright in the warning, whatever that copyright is. Consequently, I decline to make any interlocutory order in respect of the alleged breach of copyright. 4 In respect of the claim for infringement, the matters in dispute seem to be whether there is an arguable case on infringement of the Registered Design, whether the Registered Design is valid, whether the balance of convenience favours the grant of the injunctions sought, and whether damages would be an adequate remedy. 5 By way of background, it is sufficient to note that the applicant applied for the Registered Design on 24 December 2001, which was granted on 27 May 2003. Since September 2004, the applicant has, via a licensee Britz Innovation Pty Ltd and a related company, Kalinin Pty Ltd (which trades as Britz Marketing), been selling a surfmat called the Wavestar. The applicant contends that the Wavestar is an embodiment of the Registered Design. This appears to be the central legal question on the application for interlocutory relief. 6 In June 2005, Mr Binkin, an associate of the applicant, provided a sample of the Wavestar to a director of the first respondent, Mr Corrick, and endeavoured to persuade him that he should licence the design of the Wavestar from the applicant. Mr Corrick was provided with artwork, which came from the applicant. I am satisfied that the sample of the Wavestar and the artwork contained clear notification of a Registered Design, and the artwork and sample contained the Warning which presently appears on the physical exhibit of the Wavestar. It is to be expected, I would have thought, that there was copyright in somebody in that formulation of the Warning. 7 After the meeting and the supply of the sample and artwork, Mr Corrick indicated he was not interested in pursuing a licence for the product. Until only recently, there was no further communication between the parties. 8 In January 2006, the applicant and Britz Marketing entered into an exclusive distributorship arrangement in relation to the Wavestar surfmat. In about February 2006, Mr Corrick commenced negotiations with the National Rugby League and the Australian Football League, who licenced the first respondent (DMC) to use their trademarks for sporting teams for application on surfmats. The applicant was unaware of the negotiations between Mr Corrick and the football entities. 9 On 8 September 2006, Mr Arenson, a director of the applicant, learnt that the first respondent was supplying a surfmat to Amart All Sports, and that the surfmat supplied to Amart All Sports by the first respondent was said to be strikingly similar to the Wavestar. 10 On 22 September 2006, he saw a reproduction of the DMC product and, then, spoke to Mr Corrick. He later wrote to him on 24 September. Both the letter and the conversations drew Mr Corrick's attention to the similarities in design between the Wavestar and the DMC surfmat, and also to the fact that the Warning Label on the DMC surfmat was a direct copy of the Warning on the Wavestar surfmat. In particular, both surf mats contained the assertion, 'The shape of this inflated product is a Registered Design. In that application, Mr Corrick was said to be the designer. No documents supporting his design exist, for the good reason that, in fact, the DMC product is a direct and complete copy of the Wavestar. 12 It is now conceded that the DMC surfmat is indeed a copy - and a deliberate copy - of the Wavestar. This, in my view, had to be so. The visual comparison leads to that conclusion. The fact that the Wavestar was left with Mr Corrick, the comparison of the two and the identity of the words used in the Warning on the back of the DMC surfmat and, in particular, ' the shape of this inflatable product is a Registered Design ', lead inevitably to the conclusion that the DMC product is a direct copy of the Wavestar. 13 The words on the Wavestar reflect the contention by Mr Arenson that the Wavestar is an embodiment of the Registered Design. The presence of those words on the DMC product is, in my opinion, damning evidence of copying by DMC of the Wavestar. 14 While now conceding that the DMC is a copy of the Wavestar, Miss Downes, counsel for the respondents, contends that the Wavestar is not an embodiment of the Registered Design, with a consequence that a copy of the Wavestar does not infringe the Registered Design. Next, she contended that the Registered Design was invalid, based on what was said to be the art prior to the priority date given to the Registered Design in suit. 15 However, the evidence in this respect suggests to me that the surfmats known prior to the priority date were basically rectangular in shape. I am satisfied, for interlocutory purposes, that the applicant is the owner of a valid Registered Design. 16 Indeed, the attack on the validity of the Registered Design is seriously undermined by DMC's own application for registration of the design of the DMC product, which application is tainted with dishonesty and fraudulent claims. I accept that it has been acknowledged that that application will be withdrawn or otherwise expunged. 17 The principles governing the grant of interlocutory relief are well established, and have recently been reaffirmed by the High Court in Australian Broadcasting Corporation v O'Neill [2006] HCA 46 (' O'Neill ') at pars 19 and 65 and following. In O'Neill , the High Court affirmed the approach adopted by the High Court in Beecham Group Limited v Bristol Laboratories Pty Limited [1968] HCA 1 ; (1967-68) 118 CLR 618. The term of the registration has been extended, so the evidence establishes, since its initial grant, and has current renewal until 24 December. 19 The Designs Act 2003 (Cth) ('the 2003 Act') came into effect on 17 June 2004. However, by virtue of ss 146(3) and 153(3) of the 2003 Act, the Designs Act 1906 (Cth) ('the 1906 Act') continues to apply for the purposes of determining the question of validity and infringement of designs registered pursuant to the terms of the 1906 Act. 20 Section 30 of the 1906 Act governs the question of infringement. Furthermore, the existence of that sort of individuality is to be determined by the eye and not by measuring dimensions . It follows that a design need not have the precision of a working drawing; it concerns the shape or configuration of an article, as it appears to the eye. If a design applied by another has the features that are characteristic of the registered design and are so arranged that to the eye the resulting shape is substantially the same, there is infringement, whereas if the same features are arranged so that to the eye the resulting shape is different, there is, in the absence of fraudulent imitation, no infringement. The inflated DMC product possesses each of the features identified in the applicant's written submissions, with the exception that the handles do not protrude from the top of the surfmat as depicted in the Registered Design. The handles on the Wavestar also do not protrude from the top of the surfmat, as depicted in the Registered Design. 25 The interior detail of the DMC product, particularly the interior ribbing, is not depicted in the Registered Design. The ribbing on the DMC product is identical to the ribbing on the Wavestar. No detail of ribbing is depicted in the Registered Design. 26 The applicant submits that the ribbing feature is purely functional. The significance of that feature, and of the difference in the location of the handles on the two physical surfmats in evidence, compared with the Registered Design, is ultimately a matter for final trial. 27 For present purposes, being the interlocutory purposes, I am satisfied that, to the eye, the shape of the DMC product is substantially the same as that of the Registered Design. It is, in my opinion, strongly arguable that the design, which has been applied to the DMC product, is an obvious imitation of the Registered Design. The test for fraudulent imitation requires less objective similarity between the Registered Design and the impugned product. The High Court, in Polyaire and K-Aire Pty Ltd [2005] HCA 32 ; (2005) 221 CLR 287 ( 'Polyaire' ) was concerned with, amongst other things, the question of fraudulent imitation. Frequently, of course, probably usually, changes will have been introduced for the purpose of disguising copying or, perhaps, because of a conscious desire to come as close as possible to the registered design while avoiding infringement. But, as this case illustrates, particular changes may be introduced for other compelling reasons; and there is no obvious reason why that should defeat a claim of fraudulent infringement. It seems inevitable that, if the Wavestar is an embodiment of the Registered Design, then the DMC product is a fraudulent imitation. The design of the Wavestar and the DMC product is almost identical. It could not have been independently created. It is now admitted that the DMC product is a copy of the Wavestar. That conclusion is the explanation, it seems to me, of the identical ribbing structure and the same construction materials. 32 So, also, is the embarrassing identity of the direct words of the warning label, including the imprinting of the words: 'The shape of this inflatable product is a Registered Design' . 33 It is not denied that Mr Corrick was supplied with a sample of the Wavestar surfmat and had discussed obtaining a licence of the design. It seems plain that there is a strongly arguable case of obvious imitation or fraudulent imitation of the Registered Design. 34 The next major question is where the balance of convenience lies and whether the plaintiff is likely to suffer injury for which damages will not be an adequate remedy. In April 1967, after the plaintiff had been building up in Australia a substantial business in ampicillin over a period of several years, the defendant announced its intention of marketing hetacillin in Australia. The plaintiff on 10 May 1967 warned the defendant that if it began to do so proceedings for infringement of the patents would be taken. It was in the face of this warning that the defendant commenced the acts now complained of, and the action was thereafter instituted without delay. Any goodwill the defendant may since have built up for hetacillin would of course be destroyed or damaged by granting an injunction, but that was a risk the defendant took with its eyes open. If it be not restrained, it will presumably take advantage of the time before the hearing to subject the goodwill of the plaintiff's established trade in ampicillin to the prejudice of competition from a product which the defendant maintains has some points of superiority. In no meaningful sense could matters be said to be kept in status quo if in these circumstances the defendant were left free to pursue its course, merely keeping an account of the profits it makes. 35 In this particular case, the applicant is shown to be an established manufacturer and supplier of the Wavestar surfmats. It is strongly arguable that that product has the benefit of the protection of the Registered Design. It has been creating a market for its product and supplying its product to distributors since 2004. 36 Earlier this year, the applicant entered into an exclusive distributor arrangement with Britz Marketing. I accept that its fortunes are tied to its ability to distribute its products via Britz Marketing. The Wavestar is now exclusively sold by Britz Marketing under the name Wahu Wavetube. That surfmat is sold in an extensive range of shops, including Toyworld, Big W, Rebel Sports, Target, and Toys R Us. Mr Britz says the Wahu Wavetube has been heavily promoted. 37 Since the first respondent began, in October 2006, to sell the DMC product, Amart All Sports has ceased all sales of the Wahu Wavetube and has acquired, instead, the DMC product. I accept that the inability to sell surfmats to the applicant's design to Amart has a significant impact on the ability of the applicant to make sales. 38 In respect of the question of what injury other than damages the applicant might suffer, I think that there is a serious over-statement of those risks in the evidence on behalf of the applicant. Mr Britz says that the continued sale by DMC of its product, pending a final hearing, would result in Britz Marketing 'seriously considering' sourcing surfmats from a different and cheaper source. He also says that, if the DMC products continue to be sold, he will have no alternative than to go to another design, so that he can pitch a new product for shops for next season's sales. I think there is a deal of exaggeration in the injury inherent in each of those aspects of the relationship between Britz Marketing and the applicant. 39 Nonetheless, in my judgment, the balance of convenience strongly favours the grant of the injunctions sought. The chronology of events, and in particular the history of the design of the DMC product - that is to say no design, but a direct copy - indicates that the respondents have decided to import and distribute the DMC product with their eyes open to the likely consequences of so doing. 40 It was submitted by Mr Burley of counsel on behalf of the applicant that, ' No reasonable trader, having received the sales pitch from Mr Binkin [in June 2005] for the Wavestar, could reasonably ignore the existence of the rights [claimed in the design]'. Mr Burley put to the Court that a reasonable trader could not expect that it would not be exposed to the danger of legal proceedings of the type currently brought. I accept these submissions. 41 The strength of the applicant's case of deliberate copying by the first respondent favours the grant of the interlocutory injunction. The impugned DMC products are clearly and objectively a deliberate copy of the Wavestar. The person responsible for the design and manufacture of the DMC product knew that the product was a copy of the Wavestar, and knew of the claim that the design of the Wavestar product was protected by a Registered Design. In those circumstances, it seems to me that DMC has embarked on a task of ordering and importing the impugned products with its eyes wide open as to the potential consequences of do doing, namely, that it will be exposed to the present application. 42 It is an important consideration that the injunction in respect of restraining sales by DMC would not serve to prevent retailers from selling stock, title in which has already passed to them. I note, also, that the products are not perishable, and I have given directions so that there can be a final trial on the questions of infringement and validity heard in early December of this year. 43 I acknowledge that the issue of an injunction will cause loss or injury to DMC, but I am satisfied that any loss or damage suffered by the respondents, as a consequence of the grant of the interlocutory injunctions until the trial of those issues, will be covered by the proffered undertaking as to damages offered on behalf of the applicant. 44 On that undertaking, I order that, pending the trial of the questions of invalidity and infringement of the Registered Design in suit, or further earlier order, the first respondent be restrained by itself, its directors, officers, servants or agents, from manufacturing, importing, distributing, promoting, offering for sale, or selling, anywhere within Australia, any article of the design exemplified in exhibit 13 in these proceedings. 45 I order that the costs of the interlocutory application be reserved. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender. | interlocutory injunction whether arguable case raised by the applicant whether balance of convenience favours the granting of an injunction whether damages an adequate remedy in the circumstances injunction granted whether infringement of a registered design test for fraudulent imitation whether copy of product protected by a registered design whether applicant was owner of copyright in warning label practice and procedure intellectual property copyright |
2 The originating process, filed on 13 March 2006, seeks orders convening a meeting of members to consider a members Scheme of Arrangement. The scheme involved is an acquisition of transfer scheme which utilises Part 5.1 of the Corporations Act 2001 (Cth) ("the Act "). The proposal is that the scheme shareholders shares are transferred in consideration for 40.5 cents cash per share to Kaplan Australia Pty Limited ("Kaplan"). 3 Kaplan is a subsidiary of Kaplan Inc which is in turn a subsidiary of the Washington Post Company which is publicly listed on the New York Stock Exchange. 4 The scheme consideration is approximately $55 million with a maximum consideration of just less than $56.7 million. 5 Mr Oakes SC of counsel has provided me with helpful written submissions in support of his application for an order convening a meeting. It is unnecessary to refer to the submissions in any detail but I will leave the submissions with the court papers. 6 Today's application is supported by a number of affidavits as follows; Mr David Mackay sworn 13 March 2006, Mr Warren Jacobson sworn 23 March 2006, Mr Wayne Lonergan sworn 22 March 2006, Mr D.W. Stammer sworn 17 March 2006, Mr A.B. Davis sworn 23 March 2006 and Mr Hal Jones sworn 22 March 2006. 7 A number of exhibits to those affidavits have also been put in evidence; they are exhibit WJ1 to Mr Jacobson's affidavit, exhibits HJ1, HJ2 and HJ3 to Mr Jones' affidavit and exhibit WRL2 to Mr Lonergan's affidavit. 8 Also in evidence is a letter from ASIC dated 24 March 2006 which sets out ASICs policy in relation to the provision of a letter under s 411(17) of the Act . The policy referred to in the letter is that the " s 411(17) letter" is not provided until the second court hearing. 9 One of the matters raised by Mr Oakes' submission is what I can call the "credit risk issue" which arises from the necessary lead time before the payment of the cash consideration. I am satisfied that the scheme adopts a version of the model which was approved by Gyles J in Re Tempo Services Limited (2005) 53 ACSR 523. I note also that the evidence includes a letter from the Washington Post Company dated 10 March 2006 in which that company unconditionally undertakes to Kaplan to provide Kaplan with the scheme consideration. 10 One other matter which I raised with Mr Oakes is that the scheme provides for a takeover of the scheme company which could have proceeded under the provisions of Chapter 6 of the Act . 11 In Ford's Principles of Corporations Law at [24.060] the authors set out the authorities which have considered this question. The authors conclude that the effect of the cases is to preserve the availability of the Scheme of Arrangement procedure to achieve a friendly takeover offer notwithstanding s 411(17) as long as the scheme includes essential elements which could not be achieved under Chapter 6. 12 In the present case there does not appear to be such essential elements, however, the letter from ASIC which is exhibit B indicates that ASIC does not at present have any intention of opposing the orders which would be sought at the second court hearing, and Mr Oakes has indicated that he anticipates that they will produce to the court on the second court hearing a statement in writing by ASIC in accordance with s 411(17)(b) so that it would appear unlikely that any issue in relation to this section will arise at the second court hearing. 13 I am satisfied that the evidence referred to in the affidavits mentioned above is in accordance with the usual practice taken into account by a court in exercising its discretion to order the convening of a meeting under s 411. I am also satisfied that the draft short minutes of order incorporate the usual practice. The drafting protocols of the applicable orders are usefully summarised in [31] of Mr Oakes' written submissions. 14 Accordingly, I propose to and I will make orders in accordance with [1] to [6] of the short minutes of order which I will sign and date with today's date and place with the papers. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | scheme of arrangement first court hearing orders made to convene meeting of members corporations |
The applicant is a company incorporated in Finland. It manufactures, distributes and sells mobile phones, and mobile phone accessories. 458364 for NOKIA in class 9; (b) Australian Registered Trade Mark No. 490781 for NOKIA AND DEVICE in class 9; (c) Australian Registered Trade Mark No. 808735 for NOKIA in class 16; (d) Australian Registered Trade Mark No. 867057 for NOKIA in classes 9, 18, 25, 38, 41 and 42. The evidence upon which the applicant relies establishes that the applicant is the registered proprietor of those trade marks. 2 The Application was supported by a Statement of Claim filed on 26 March 2008. The respondent did not file a Defence but, on 10 April 2008, he appeared by his then solicitors. (b) On or about 30 October 2007, the Respondent sold one (1) mobile phone handset with mobile phone accessories including one (1) mobile phone desk stand, one (1) mobile phone earpiece, one (1) mobile phone handsfree earpiece, one (1) mobile phone carrying pouch, one (1) mobile phone user guide booklet, one (1) mobile phone quickstart guide, one (1) mobile phone legal addendum booklet, one (1) mobile phone features booklet, one (1) mobile phone software CD-ROM and two (2) mobile phone batteries each bearing one or more of the Nokia Trade Marks or one of more trade marks which are substantially identical with or deceptively similar to one or more of the Nokia Trade Marks from his "eBay store" called "Super-E-World", which is located within the online auction website www.ebay.com.au, which mobile phone handset and mobile phone accessories were not made by or under the licence or authority of the Applicant. The said mobile phone handset and mobile phone accessories may be inspected during office hours on reasonable notice at the offices of the Applicant's solicitors. The Imported Items were seized by the Australian Customs Service ("Customs") pursuant to a Notice of Seizure to Objector dated 19 February 2008 as a part of a consignment of goods addressed to the Respondent at 1/6 Omar Street, Maidstone, Victoria. The Imported Items were not made by or under the licence or authority of the Applicant. (d) From a date unknown to the Applicant to the date of the issue of the Application herein, the Respondent has manufactured or caused to be manufactured, imported or caused to be imported, advertised, offered for sale, distributed, supplied and sold many other mobile phone products and accessories not made under the licence or authority of the Applicant each bearing one or more of the Nokia Trade Marks or one or more trade marks which are substantially identical with or deceptively similar to one or more of the Nokia Trade Marks. Pars (a) and (d) of the particulars to this pleading are very similar. Par (a) is concerned with "a variety of mobile phone accessories", while par (d) is concerned with "many other mobile phone products and accessories". Otherwise, these paragraphs are substantially the same, and provide little assistance in identifying the acts of the respondent said to constitute infringement. Par (b) of the particulars is concerned with a sale on "eBay" on 30 October 2007, some five months before the institution of the proceeding. Par (c) is concerned with items seized by Customs in circumstances to which I shall refer below. 3 The making of the sale on eBay on 30 October 2007 to which the applicant's Statement of Claim refers is established on the evidence before the court. The sale was made to Ms Rachel Nielson, an employee of a private inquiry agency engaged by the applicant. Through eBay, Ms Nielson made access to an "online store" which was advertising for sale a "New Nokia 8800 Limited Edition Gold Aussie Unlocked". The respondent was responsible for that entry in the online store, and was offering that item for sale. Ms Neilson purchased it, for a price of $563, plus $18 postage. On about 6 November 2007, she received her purchase, and it consisted of the items referred to in par (b) of the particulars to which I have referred. 4 The online store to which Ms Nielson had access for the purpose of purchasing her 8800 phone and accessories also promoted the sale of other models of supposedly Nokia phones. Likewise, the email which Ms Nielson received confirming her purchase referred to other supposedly Nokia phones which were available for purchase in the same way. I am satisfied that it was the respondent who was responsible for these entries in the online store, and that he was thereby offering for sale phones and accessories which he held out to have originated from the applicant, but which did not do so, and used the applicant's trade mark for the purpose. Pursuant to s 134(b)(ii) of the Trade Marks Act , the delegate informed the applicant that the "designated owner" of the seized goods was the respondent. 3. Within seven (7) days of the date of these orders, the Respondent deliver up on oath to the Applicant or its duly authorised agent for destruction under supervision all goods in the possession, power, custody or control of the Respondent, his employees or agents or otherwise howsoever to which any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Nokia Trade Marks has been applied without the licence or authority of the Applicant. 4. Within seven (7) days of the date of these orders, the Respondent deliver up on oath to the Applicant or its duly authorised agent for destruction under supervision all catalogues, price lists, brochures and other documents and materials in the possession, power, custody or control of the Respondent, his employees or agents or otherwise howsoever bearing any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Nokia Trade Marks without the licence or authority of the Applicant. Within seven (7) days of the date of these orders, the Respondent file and serve on the Applicant an affidavit setting out (and exhibiting all relevant supporting documentation (including, but not limited to, any purchase orders, invoices and receipts) in the possession, power and control of the Respondent whether by himself, his employees or agents) the full details of the supplier of each product that the Respondent has purchased, imported, distributed and sold to which any of the Nokia Trade Marks or any name, word, mark, sign or device which is substantially identical with or deceptively similar thereto has been applied without the licence or authority of the Applicant, such details to include full address, email address, telephone number, corporate and business details. 6. Within fourteen (14) days of the service of these orders upon him, the Respondent make discovery verified by affidavit to the Applicant in respect of all purchases and sales by him or on his behalf of all items bearing the Nokia Trade Marks, or any of them or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Nokia Trade Marks, without the licence or authority of the Applicant. 7. The respondent pay the Applicant damages for infringement of the Nokia Trade Marks, to be assessed together with interest thereon, or, at the option of the Applicant, the Respondent account for the profits made by him by his infringements of the Nokia Trade Marks and pay the Applicant the amount found to be due on the taking of such account, together with interest thereon. The Respondent pay the Applicant's costs of the proceeding to date. Annexure A, referred to in par 1 of these orders, listed the items seized by Customs on 19 February 2008. 7 On 12 June 2008 the court ordered, by consent, that the goods seized by Customs be forfeited to the Commonwealth and disposed of as directed by the Chief Executive Officer of Customs. 8 On 10 July 2008, the respondent filed his list of documents in purported compliance with par 6 of the orders made on 4 June 2008. Copy of Proforma invoice dated 5 January 2008 from March Technology Limited to Albert Liu. 2. Handwritten note dated 1 November 2007 3. Copy of ebay email dated 31 October 2007 from rachelmackeown to [email protected] 4. Copy of Invoice from Yi Tong Communication Equipment Co no. 03087881 dated 3 October 2007. Copy of Bank Statement for transactions for period 30 October 2007 for ANZ bank account no. 5111-91259 in the name of Yan Liu. In purported compliance with par 5 of the orders made on 4 June 2008, the respondent exhibited a copy of the invoice referred to in item 1 of his list of documents (see par 8 above). He stated that that invoice was for the purchase by him of the goods seized by Customs. He exhibited also a copy of the invoice referred to in item 4 of his list of documents. That invoice was mostly written in the characters of a language other than English, but it included numerals in the arabic style. Counsel for the applicant invited me to infer that the invoice related to one "8800" mobile phone, and I shall do so. The respondent also exhibited to his affidavit a copy of an email he received from "Rachel Mackeown" dated 31 October 2007 (although wrongly referred to in the affidavit as being dated 5 November 2007), being a copy of the email referred to in item 3 of his list of documents. It seems that the sender of the email was in fact Rachel Nielson, and that the email referred to her online purchase of 30 October 2007. 10 In his affidavit affirmed on 27 June 2008, the respondent said that he did not have any goods to deliver up pursuant to par 3 of the orders made on 4 June 2008, and that he did not have any catalogues, price lists, brochures or other documents to deliver up pursuant to par 4 of those orders. 11 The day after the filing of the respondent's list of documents and his affidavit of 27 June 2008, 11 July 2008, was the return date for a notice to produce served by the applicant on the respondent. All purchase orders or like documentation, shipping documentation, delivery documents and correspondence relating to products acquired by the Respondent from March Technology Limited which bear the Nokia Trade Marks (as defined in paragraph 1 of the Application) or any of them or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Nokia Trade Marks. 2. All purchase orders or like documentation, shipping documentation, delivery documents and correspondence relating to products acquired by the Respondent from Yi Tong Communication Equipment Co which bear the Nokia Trade Marks or any of them or any name, word, mark, sign or device which is substantially identical with or deceptively similar to any one or more of the Nokia Trade Marks. The respondent did not comply with the notice to produce. 12 The respondent's solicitors ceased to act for him on 29 August 2008. 13 On 24 September 2008, the respondent was ordered to attend for examination before a Registrar of the court on 5 November 2008. He did not so attend. Counsel for the applicant appeared before me on 5 November 2008 and invited me to deal with the respondent on the basis that his failure to attend amounted to contempt in the face of the court. I was not prepared to do so. The applicant did not otherwise move that the respondent be dealt with for contempt. 14 On 5 November 2008 I ordered that the proceeding be fixed for the assessment of the applicant's damages on 11 December 2008. Such an assessment was required by par 7 of the orders made on 4 June 2008, and upon it being done those orders will have done their work. The assessment proceeded (in the absence of the respondent) as ordered on 11 December 2008. These reasons deal with that matter. 15 Counsel for the applicant submitted that the number of goods seized by Customs, and the online promotional activity in which the respondent was apparently involved, justified the inference that the respondent was most probably engaged in the importation and sale of counterfeit Nokia mobile phones on a commercial scale. He drew my attention to documents which would support the inference that the phone which the respondent sold to Ms Nielson for $563, or a phone having similar specifications, would most likely retail for about $1,100. He asked me to infer that the applicant had lost substantial sales as a result of the respondent's activities. He drew my attention to well-known authorities which established that, if the court was satisfied that an applicant has suffered damage as a result of the relevant respondent's unlawful conduct, it must do its best to assess the quantum of the damages, even if a broad estimation, or even guesswork to an extent, is involved: see Sony Computer Entertainment Australia Pty Ltd v Stirling [2001] FCA 1852 , [7]. Counsel invited me to conclude that the loss and damage suffered by the applicant in the present case was probably in the region of $50,000 to $100,000. 16 There are a number of difficulties with the approach which I am being invited to take by counsel for the applicant. The applicant has provided virtually no evidence of the way it conducts its own business. Critically, there is no evidence of the money loss suffered by the applicant each time a sale of a mobile phone is not made. There is, for example, no evidence of the applicant's gross profit on the wholesale sale of a particular phone, or of phones of a particular type. It may be one thing to estimate the number of sales which the applicant may have lost as a result of the respondent's activities, but it is not possible to place a dollar value upon the applicant's loss without information of the kind to which I have referred. 17 While I accept that the court may often be required to use broad estimations, and even sometimes guesswork, where the assessment of damages is concerned in a case such as the present, I would not be prepared to tread that path where the applicant had it within its power to improve the accuracy of the evidentiary base required for the calculation of damages, but has not done so: see Winning Appliances Pty Ltd v Dean Appliances Pty Ltd (1995) 32 IPR 65 , 67-68. 18 However these considerations may be, there is a more fundamental problem with the approach which I have been invited to take by counsel for the applicant. Counsel submitted that the orders made by the court on 4 June 2008 constituted final judgment in the applicant's favour. I agree. So far as par 7 of those orders is concerned, the only question which arises is the assessment of damages to which the applicant is entitled on that judgment. However, the only respect in which the orders of 4 June 2008 involve findings against the respondent relates to his importation of the items seized by Customs on 19 February 2008. In no other respect is there a finding, by consent or otherwise, that the respondent infringed the applicant's trade marks. In the circumstances, the assessment of damages for which par 7 of those orders provides must be limited to damages arising from the unlawful conduct constituted by that importation. 19 The mobile phones seized by Customs never found their way to the respondent. They were forfeited to the Commonwealth, and disposed of as directed by the Chief Executive Officer of Customs. Whatever may have been the situation generally, it is clear that the applicant did not lose any sales as a result of the respondent's importation of those mobile phones. Neither was the applicant's reputation or standing damaged in any way. Counsel for the applicant was unable to identify any respect in which the applicant suffered damage as a result of the importation of those mobile phones, and, for my own part, I cannot see any. The need to make estimations, or to engage in guesswork, does not arise in the present case, since I am not satisfied that the applicant has suffered any damage at all as a result of the unlawful conduct which was the subject of final judgment in its favour. 20 Counsel for the applicant referred me to Nokia Corporation v Mai [2003] FCA 924. In that proceeding, Kenny J acceded to an application for summary judgment, and ordered that the then respondent pay the applicant damages for infringement of the Nokia trade marks, such damages to be assessed (or, at the option of the applicant, that the then respondent account for the profits made by him). The case did not involve the assessment of damages as such. Further, the consent declaration made by Kenny J was not limited to the then respondent's act of importing goods which were, before arrival on the market, seized by Customs. In the circumstances, Mai is of no assistance to the applicant in overcoming the difficulties which I consider stand in its way in the present proceeding. 21 In the circumstances, I am in a position similar to that of Besanko J in Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 2) (2008) 76 IPR 763. Like his Honour, I propose to award nominal damages only in the sum of $10. 22 The applicant has sought its costs of the assessment. The respondent did not appear, and thus did not oppose the making of any such order. However, the applicant has failed on the only question which arose on the assessment, in which circumstances I am not minded to make a costs order in its favour. I accept that the award of nominal damages reflects, in a sense, the applicant's success in the proceeding generally, but the assessment was a discrete component in relation to which the applicant sought a specific costs order. Because it failed on that component, I do not propose to require the respondent to pay its costs thereof. 23 On the other hand, the applicant is entitled to its costs generally in the proceeding, including reserved costs, save to the extent that any previous order provides otherwise. I shall make an order in those terms. 24 Against the prospect that I might make an award of damages in a sum less than $100,000, the applicant sought an order avoiding the operation of O 62 r 36A of the Federal Court Rules . It was submitted that "this is an appropriate course in relation to matters involving infringement of intellectual property rights", in which respect the applicant relied upon Sony and upon Futuretronics.com.au Pty Ltd v Graphix Labels Pty Ltd (No 3) [2008] FCA 896. However, as I have indicated, the principal relief sought in these proceedings was injunctive relief. The applicants have been successful in their claims for injunctive relief. Having regard to the technicalities that are involved in the Trade Marks Act 1995 , it is appropriate that claims for infringement of trade marks be brought in the Federal Court. The Federal Court has experience and expertise in dealing with matters involving intellectual property generally and trade mark infringement in particular. I refer to LED Builders Pty Ltd v Hope [1994] FCA 1353 ; (1994) 53 FCR 10 , Fasold v Roberts (unreported, Sackville J, 11 September 1997 MG942 of 1992), Australasian Performing Right Association Ltd v Pashalidis [2000] FCA 1815 and Australian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 64 IPR 57. 26 Turning to the authorities referred to by Besanko J in Futuretronics (No 3) , LED Builders was a copyright case in which Tamberlin J took the view that the proceeding could not have been more suitably brought in a district or local court. It appeared to his Honour that there was no jurisdiction in those courts to deal with copyright infringement. Especially is this so in relation to claims for small monetary amounts in matters such as copyright. If the rule is allowed to apply automatically in all cases where a sum, less than $100,000, is recovered, this can lead to harsh results in situations where there is no other more appropriate court. This in turn could lead to situations where parties may be discouraged from entering into settlements by reason of the potential cost penalty. Fasold v Roberts was in part a copyright case, in which a submission was made that Tamberlin J had been wrong (in LED Builders ) to suppose that a copyright proceeding could not have been brought in the District Court of New South Wales. Sackville J accepted that submission, noting that State courts, within the limits of their respective jurisdictions, were invested with Federal jurisdiction in all matters in which original jurisdiction could be conferred on the High Court. As Tamberlin J said in LED Builders, it is appropriate that copyright infringement cases be brought in this Court. In the circumstances of the present case, there was a good deal to be said for the copyright claim being severed from the non-copyright claim. But even if that had been done, it still would have been appropriate for the copyright claim to have been brought and heard in this Court. Pashalidis was a copyright case in which Moore J was concerned to review a decision of a taxing officer applying subrule (1) of O 61 r 36A according to its terms. In addition, the evidence, which is referred to in my judgment of 2 August 2000, reveals that APRA made numerous attempts to have the respondent procure a licence to perform (or authorise the performance of) the relevant works before commencing these proceedings. There is nothing to suggest that APRA did not then prosecute these proceedings with reasonable diligence in what is an appropriate forum. I propose to order that the costs ordered to be paid to APRA not be reduced under O 62 r 36A(1). Metro on George was a copyright case in which Bennett J referred to LED Builders , to Fasold v Roberts and to Pashalidis . Her Honour said that "generally, the court has taken the view that copyright litigation is appropriately commenced in this court, even where the claim is small in monetary terms" (64 IPR at 58 [8]). Her Honour referred to the complexity of the issues before her, to the fact that the proceeding was a test case, and to the representation of both sides by senior counsel experienced in copyright matters. She expressed the view that the proceeding was appropriately commenced in the Federal Court. 27 It has been observed that subrule (1) is independent of subrule (2) and, therefore, that the circumstance that the proceeding could have been brought in another more suitable court is not relevant to the exercise of the court's discretion under subrule (1): see McCormick v Riverwood International (Australia) Pty Ltd [2000] FCA 32 , [22] and Axe Australasia Pty Ltd v Australume Pty Ltd (No 2) [2006] FCA 844 , [3]. Where the court is of the view that the proceedings should have been brought in another court or where judgment is for a sum less than $100,000 and the circumstances are such that the court should not exercise its discretion to reduce the amount allowable for costs, there will be a reduction in the costs to be paid by one-third. Subrule (1) of O 62 r 36A operates only when a party is awarded judgment for less than $100,000 on a claim for a money sum or damages. In such a case, the subrule sets up a presumption that the costs ordered to be paid should be reduced by one third of the amount otherwise allowable. It is for the party who would be entitled to the benefit of the costs order to persuade the court that the subrule should not operate according to its terms. Subrule (2), by contrast, operates with respect to all proceedings (save those excluded by subrule (3)), even those in which the successful party has been awarded a judgment for more than $100,000. In such a case, it lies upon the party seeking to avoid the normal application of the Federal Court costs scales to persuade the court that the proceeding "could more suitably have been brought in another court or in a tribunal". 28 Subrules (1) and (2) operate independently in the way I have described. That they do so does not, in my opinion, mean that the availability of another court or tribunal in which the proceeding might more suitably have been brought should always be regarded as irrelevant to the exercise of the discretion arising under subrule (1). In a case in which less than $100,000 is recovered, I cannot understand why the successful applicant might not submit that the subrule should not operate according to its terms because of the absence of any more suitable court or tribunal in which the proceeding might have been brought. Subrule (2) would be irrelevant in such a case because of the presumptive operation of subrule (1), but the negative of the situation which gives rise to the operation of subrule (2) need not, in my opinion, always be irrelevant to the discretionary exclusion of the operation of subrule (1). Indeed, it was the very absence of another more suitable court or tribunal for copyright cases that led Tamberlin J to exercise his discretion in LED Builders to exclude the operation of subrule (1). This assumption has been associated with the comments later made by Sackville J and Besanko J, amongst others, that it is appropriate that copyright cases be commenced in the Federal Court. 29 However, it cannot, in my view, be said that the policy behind r 36A(1) is that proceedings in which less than $100,000 is recovered should, prima facie , have been commenced in some other court or in a tribunal. The rule which applies in the absence of an order to the contrary is that, in any proceeding in which less than $100,000 is recovered, the costs must be reduced by one-third. The rule would so apply even in a situation in which no other court, and no tribunal, might have entertained the claims in question. 30 In Axe , Finkelstein J considered that r 36A(1) reflected two different but related principles. The first is that is it essential to keep down the costs of a small claim. Unless this principle is invoked the costs of small claims will often (perhaps more often than not) exceed the quantum of the claim. That places a very unfair burden upon an unsuccessful defendant who, in any event, will bear his own costs. The rule should encourage a plaintiff to negotiate with his solicitor and with counsel on a rate of fees that are appropriate to small claims. A benchmark may be fees charged in litigation in inferior courts, such as a District Court or a Magistrates Court. The second, but necessarily subsidiary, principle is that plaintiffs should be discouraged from prosecuting small claims to judgment, especially small claims where the costs will be significantly greater than the quantum of the claim. I would associate myself at least with the first of his Honour's observations. I consider that the principal concern of r 36A(1) is that small claims should be accompanied by small costs orders. Where there is a hierarchy of courts with jurisdictional limits dependant on the amount claimed, the costs available to a successful party will differ according to the court in which the action is brought; and that in turn will depend upon the amount claimed. Recognising that proceedings of modest monetary potential might be, and commonly are, brought in the Federal Court, the framers of r 36A went part of the way to providing a lower scale of costs for such proceedings, although tied to the amount awarded rather than the amount claimed. These policy considerations apply regardless of whether the action in question might have been commenced at lower cost elsewhere (although, as I have observed above, such a circumstance cannot be universally excluded from the range of discretionary considerations which the court might take into account in deciding whether to avoid the operation of the subrule). 31 It follows that, even though it may be accepted that copyright (and, I am prepared also accept for present purposes, trade mark) cases are appropriately brought in the Federal Court, it is still within the scope of the policy of r 36A(1) that costs be reduced by one-third in such cases where the amount recovered as damages is less than $100,000. I am disposed to look to factors other than that the present proceeding is a trade mark case as a basis for excluding the operation of the subrule as sought by the applicant. 32 The present case did not involve a claim for a money sum only, but that circumstance does not render r 36A(1) inoperative: see Shahid v Australasian College of Dermatologists (No 2) [2008] FCAFC 98 , [14]. However, the fact that the applicant sought other remedies might have the result of shifting the centre of gravity of the case away from the money award to such an extent that it would be unjust to allow the subrule to operate in the circumstances. The applicant sought injunctions, declarations, delivery up and damages or an account of profits. The extent to which the pursuit of the non-money remedies became the focus of the exertions of the applicant's legal representatives is not apparent to the court, in part because, at a very early stage, the applicant secured the consent of the respondent to the grant of those remedies. The applicant is the moving party for an order excluding the operation of r 36A(1) and, on the state of the evidence, I do not think it has made good a case for such an order on the ground that the non-money aspects of its claims were the more substantial ones. 33 Taking a broad view of the applicant's claims in the proceeding, they do not strike me as involving any degree of complexity. The Statement of Claim is in eight paragraphs extending over four pages. I have set out the single allegation of infringement above. As the particulars disclose, there were two occasions upon which infringements were, as alleged, detected by the applicant. In other respects, the pleading strikes me as being in something of a standard form. This is not intended as a criticism, of course. Rather, it is intended to highlight the relatively uncomplicated nature of the facts in issue. Neither did the case throw up any difficult or novel questions of law. It had none of the "technicalities" to which Emmett J referred in Sony . As trade mark cases go, the present proceeding must be regarded as very much towards the uncomplicated end of the spectrum. 34 From what I can gather, the chief difficulty encountered by the applicant lay in establishing in what other infringing conduct (ie other than the importation of the goods seized by Customs and the single sale to Ms Nielson) the respondent had been involved. That difficulty arose because the respondent effectively absented himself from the proceeding once he had complied with the court's orders of 4 June 2008. But the difficulty, in my view, is such as is commonly encountered by litigants at all levels --- perhaps more so in simple proceedings of modest potential in monetary terms than in proceedings in which the stakes are higher and it is, therefore, more likely that all parties will consider it to be in their interests to be professionally represented at all times. In any event, once the applicant had consented to final judgment in the terms that it did on 4 June 2008, the difficulty became moot. It does not provide a reason to exclude the operation of r 36A(1). 35 For the above reasons, I am not disposed to make an order excluding the operation of O 62 r 36A(1) in the circumstances of the present case. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup . | infringement of trade mark respondent imported mobile phones bearing 'nokia' trade mark whether damages available where mobile phones imported but seized by customs before reaching market whether damages available where no evidence of monetary loss suffered by infringing conduct. infringement of trade mark whether damages available where no evidence of monetary loss suffered by infringing conduct whether costs ordered to be paid in proceedings in which less than $100,000 is recovered should be reduced by one third of the amount otherwise allowable. intellectual property damages |
On the same day I made orders in matter VID 188 of 2006 that the respondent make discovery of documents comparable to those listed in [2(a), (b), (d), (e) and (f)]. Pursuant to the orders in [2], the respondent made discovery by filing a list of documents in which he said: he has in his possession the documents enumerated in Schedule 1; and the documents enumerated in Part II of the Schedule are privileged from production on the ground set out in column 5 of that part. The applications are supported by an affidavit sworn by their solicitor which discloses that she wrote to the respondent's solicitors seeking in VID 1594 copies of document 1 in Part I of the Schedule and documents 1 (part) and 2 (part) in Part II , and in VID 188 copies of document 1 in Part 1 and document 1 (part) in Part II. The solicitor said that her clients did not accept the respondent's claim of public interest immunity and asked that copies of the documents be made available in full. The solicitor asked why the respondent had not listed as a document in his possession the security assessments made for each client. The respondent's solicitor replied stating that document 1 in Part I of each list was as a National Security Classified document available for inspection at its office and providing redacted copies of documents 1 and 2 in Part II of the Schedule in VID 1594 and document 1 in Part II of the Schedule for each applicant in VID 188. In response to the enquiry about the security assessment, the respondent's solicitor advised that the facsimile sent by ASIO to DIMIA (now DIAC) constituted the security assessment. The respondent filed a confidential affidavit in support of his claim to public interest immunity. In it he stated that disclosure of some of the information in the affidavit would be likely to prejudice national security. For this reason he requested, amongst other things, that the portions of the affidavit highlighted in yellow be viewed only by the Court, and that the yellow parts not be copied, reproduced or recorded in any way. The respondent says he has examined the documents for which immunity has been claimed, and in his opinion disclosure of the documents and the yellow parts of his affidavit would prejudice Australia's national security, for the reasons he goes on to explain. The balance of the affidavit is in two parts: "Class Claim" (pars 9-69) and "Contents Claim" (pars 70-74). The contents claim is no longer relevant. The applicants accept that the redactions the respondent has made to the documents the subject of that claim have been satisfactorily explained. They are content to receive the documents in their redacted form. These are documents 1 and 2 in the table at [4] and document 3 (in relation to each applicant in VID 188 of 2006) in the table at [5]. The respondent identifies the documents the subject of the class claim as follows: No. This secrecy can extend to neither confirming nor denying if certain activities have occurred, as to do so could compromise current or future activities or operations, expose ASIO's collection and analysis methods or place officers or other persons at risk. Under the heading "Security assessments" the respondent describes the process involved in making more complex security assessments, which were less than 3% of assessments made in the financial year ending 30 June 2008. The process involves deploying a range of investigative powers and methodologies in order to acquire information from a wide range of sources. That information is then used by ASIO to assess whether a particular person poses a direct or indirect threat to Australia's national security. Where a complex case warrants the generation of a Final Appreciation, it ordinarily takes the form of an ASIO minute, in which ASIO records not just its assessments as to whether or not an adverse security assessment should be issued in relation to a particular individual, but in which it also sets out the investigative process, the security issues that have been identified and required resolution, and the methods used to gather evidence or corroborate information. The respondent expresses the opinion that it is imperative that Final Appreciations be as comprehensive as possible in the information they contain, including the reasoning and evidence the investigative branch considers supports an adverse assessment. This is because the administrative consequences flowing from an adverse assessment can be severe, and because the consequences of failing to issue such an assessment where one is warranted can also be severe. If any information were to be withheld from the Final Appreciation as a result of a concern that, if it was included, that information might thereafter be disclosed, that would impair ASIO's capacity to give accurate advice to government and my capacity to make appropriate decisions in relation to whether adverse security assessments should be issued. He says that the assessment itself contains little information that, if disclosed, would prejudice national security. The assessments have been provided to the applicants subject to very minor redactions. The respondent says it is the documents on which a security assessment is based, namely the Final Appreciation (however that document is headed) and any associated DGBN, that cannot be disclosed without damaging the public interest. Documents in this class invariably contain specific detail as to the reasons why persons are assessed as a risk to Australia's national security (if they are so assessed), and specific detail of the intelligence sources and methods used by ASIO in obtaining relevant information and conducting its assessment functions. They are documents that are often highly classified and that disclose ASIO's sources, methods and capabilities to a high level of detail. Further, they do so in a manner that readily permits ASIO's methodology and interests to be identified. They are, therefore, one of the classes of documents held by ASIO that require the greatest level of protection. That follows because in such a case access to very sensitive information is sought by one of the very small number of people whom ASIO assesses to be most likely to use such information in a way that would damage Australia's national security. None of the text has been redacted. There are minor redactions of one word at the head and foot of each page, not forming part of the text. The last paragraph (par 33) preceding significant redactions to the next five pages of the text (pars 34-62 except for five lines of an unnumbered paragraph) states that there are four specific features of the information commonly found in Final Appreciations that support the proposition that, as a class, ASIO should not be required to disclose those documents save in the most exceptional circumstances. It is apparent from the text that resumes after the redactions end that the ensuing material has dealt with three of the specific features referred to in par 33. Paragraph 62 deals with the fourth feature --- "Prejudice to on-going investigations". The respondent states that the revelation of the extent of ASIO's knowledge in relation to a person who is of security interest is potentially extremely damaging to Australia's national security. Armed with that knowledge, such a person will be able to ascertain where there are gaps in ASIO's knowledge or coverage of the person's activities, and then to exploit those gaps in a way that may remain unknown to ASIO. The disclosure of a Final Appreciation to the subject of an adverse security assessment may, for example, reveal: The respondent says that subjects of security assessments will often be interviewed by ASIO. This will be noted in the Final Appreciation, and will often provide an insight into the kind of information that ASIO sought to elicit during the interview, ASIO's assessment of the answers that were given and the techniques it used in seeking that information. The respondent concludes the "prejudice to on-going investigations" topic by observing that the disclosure of the Final Appreciation document would therefore frequently reveal important information concerning ASIO's methodology, in addition to the specific information about ASIO's state of knowledge. Two paragraphs of the affidavit dealing with "prejudice to on-going investigations" have been redacted (pars 64 and 68). They are documents that, as a class, should be required to be disclosed only in the most exceptional circumstances, and not in these cases. The unredacted parts of the affidavit contain additional information. When hearing a public interest immunity claim, the court endeavours to follow procedures that will ensure that the hearing does not defeat the very public interest that the claim seeks to protect. For that reason the court will often receive documents and affidavits without making them available to the parties or their legal representatives. But we would add that, even if there had been, the procedure of ordering production of documents for inspection by the legal representatives of one of the parties, even upon a restricted basis, before the claim for immunity had been decided by the court, was open to serious question. Whatever the safeguards, it represents an encroachment upon the confidentiality claimed for the documents. And in this case, public interest in their immunity from disclosure was of the highest order. If inspection of documents is necessary to determine the question of immunity (and in this case it was not) then it ought to be carried out by the court before ordering production for inspection by a party. No doubt this may in some cases cast a heavy burden on the court, but it is unavoidable if confidentiality is to be maintained until a claim for immunity is determined. Northern Land Council and Alister concerned inspection by the court of the documents over which privilege was claimed. In Gypsy Jokers Crennan J spoke more broadly of "information in documents", "certain material relied on for determination of a proceeding" and "confidential material before a court", which was not revealed to a party seeking it. In The Queen v Bebic (unreported, 27 May 1982) the Court of Criminal Appeal of New South Wales dealt specifically with the disclosure of the contents of an affidavit tendered in support of a public interest immunity claim. He submitted, however, that the affidavit should not be placed on the file, that is to say that it should be read only by the Court and not disclosed to the party calling, on the footing that the contents of the affidavit would or might themselves compromise the claims for privilege. However, it may well be that that course is, in certain cases, of which this is one, no more than a logical extension of the established practice of the Courts inspecting the allegedly privileged documents itself. The same approach was taken by Lockhart J in Haj-Ismail v Minister for Immigration Multicultural and Ethnic Affairs (No 2) (1982) 45 ALR 379 at 389 in relation to a statement of reasons signed by the Acting Attorney-General disclosing the grounds for his objection to the production of documents for national security reasons. In more recent cases it appears to have become a matter of course for "confidential" affidavits supporting public interest immunity claims to be restricted to the judge. See, for example, R v Smith (1996) 86 A Crim R 308 at 310, Dodds v The Queen [2009] NSWCCA 78 at [55] and R v Meissner (1994) 76 A Crim R 81 at 85. In some of the cases considered above, reference is made to disclosure of confidential information to legal advisers subject to appropriate undertakings. Such undertakings were offered in the present case. There are many cases in which access has been denied to legal advisers who have offered undertakings on the ground that the risk to national security flowing from inadvertent disclosure is simply too high. There is an elaborate discussion of this risk in Regina v Khazaal [2006] NSWSC at [31]-[39]. See also Traljesic v Attorney-General (Cth) [2006] FCA 125 ; (2006) 150 FCR 199 at [22] - [23] . Having carefully studied the redacted parts of the respondent's affidavit I have concluded that they should not be made available to the applicants' legal advisers, even on the giving of appropriate undertakings. There are many cases that establish that courts should attach very considerable weight to the view of what national security requires as is expressed by the responsible officer. See for example Leghaei v Director-General of Security [2007] FCAFC 56 at [56] - [58] , [62]. Although usually expressed in connection with the inspection of protected documents themselves, those observations apply also to an affidavit, such as that sworn in this case, which supplies the reasons for the claim to privilege. In the open part of his affidavit the respondent says that the disclosure of the redacted portions of his affidavit would be likely to prejudice national security. In the balance of the affidavit, in particular the redacted parts, he explains the basis for his opinion. Having read those parts, I am satisfied that the opinion is soundly based. Accordingly, the respondent may rely on his affidavit in support of his public interest claim without providing to the applicants' legal representatives the redacted parts thereof. But the veil is not penetrated merely by a plaintiff's deposition that he is not a security risk. That, after all, may be the very matter which is under investigation. In seeking to establish an exceptional case the applicants' point out that they may be unable to make out their cases if the claim to immunity is upheld. The authorities establish that this consequence of the outcome of the process of balancing public interest immunity against the public interest, upon which the applicants rely, of having conventional access to evidentiary material, is not exceptional. Thus in the Scientology case at 76-77 Brennan J referred to the obstacles in a plaintiff's path in judicial review proceedings against the Director-General arising out of the restrictions imposed upon discovery in aid of proving what is and is not relevant to security. In the same case at 61 Mason J noted that a successful claim for privilege may exclude from consideration the very material on which a plaintiff hopes to base his argument. These observations of Mason J were quoted with approval by Gummow, Hayne, Heydon and Keifel JJ in Gypsy Jokers Inc 234 CLR at [24]. In that case at [5] Gleeson CJ said that the consequence of success of a claim for public interest immunity against disclosure of information is that the information is not available as evidence to be taken into account in deciding the outcome of judicial review proceedings. The Court would not be able to have regard to some, or perhaps any, of the information on which a public official's belief was based. I have referred in connection with the respondent's affidavit to the great importance that is attached to the respondent's opinion as to the damage to national security incident upon disclosure. Obviously that is also the case in relation to the disclosure of the documents over which privilege is claimed. I have summarised the respondent's reasons for his opinion about the possible effects of disclosure of the documents in question. This is all derived from the open parts of his affidavit. The Final Appreciations and related briefing notes set out the reasoning process that underlies the making of security assessments, which are the key mechanism by which ASIO advises government that particular individuals pose a threat to national security. If documents falling within this class were required to be produced, ASIO would be giving information about its knowledge, assessments and methodology to the very people to whom it is most important that national security information is not disclosed: cf Alister 154 CLR at 454-455 per Brennan J. As the respondent has deposed, the relevant class is "one of the classes of documents held by ASIO that require the greatest level of protection" first, because of the inherent sensitivity of the information that is routinely contained in such documents, and second, because of the detrimental consequences in terms of the quality of decision-making that would be likely to follow if ASIO officers were forced to omit particular kinds of information from Final Appreciations and related briefing notes due to the risk that those documents will become available to persons the subject of security assessments. The applicants contended that the respondent was not able to make a class claim. It was said that he seeks to describe as a class claim documents which he considers constitutes a Final Appreciation and documents related thereto. That description, they say, does not constitute an identifiable class. The table in the affidavit (set out at [9]) refers to an internal email, an internal minute and a briefing note. It does not refer to any Final Appreciation. By way of contrast, the applicants assert that Cabinet documents constitute a clear class claim. Here they say the so-called class claim involves the respondent asserting for himself that particular documents constitute Final Appreciations. I do not think that is a fair description of the respondent's claim. As I understand it, the applicants do not assert that the Final Applications and documents related thereto are not capable of constituting a class. Rather they say that the documents described by the respondent as an internal email, an internal minute and a briefing note do not fall within the identified class. Having regard to what is said at [35], I would have inferred, without looking at the documents, that each of the "ASIO Internal Minute dated 7 September 2005 (re: Parkin)", the "ASIO Internal Minute dated 30 June 2005 (re: Mohammed Sagar)" and the "ASIO Internal Minute dated 30 June 2005 (re: Mohammed Faisal)" was what the respondent described as a "Final Appreciation (however that document is headed)". I would also have inferred, again without looking at the documents, that the "ASIO Briefing Note to Director-General of Security dated 30 June 2005 (re: Mohammed Sagar)" and the "ASIO Briefing Note to Director-General of Security dated 30 June 2005 (re: Mohammed Faisal)" were DGBNs. I was uncertain about the status of the "ASIO internal email dated 7 September 2005 (re: Parkin)", and called for the documents in order to determine whether it fell within the class claimed. Each Internal Minute fits the description given by the respondent of a Final Appreciation. Each Briefing Note accords with his description of a DGBN. The "ASIO internal email dated 7 September 2005 (re: Parkin)" is a covering note transmitting the Internal Minute to the respondent. It contains a brief summary of the Internal Minute. It fits the respondent's description recorded at [21] that "Final Appreciation documents, and summaries thereof , are documents the disclosure of which is very likely to damage Australia's national security" (emphasis added). On the basis of the material in the respondent's affidavit, aided by my inspection of the documents, it is clear to me that the matters relied on by the applicants do not outweigh the public interest identified by the respondent. The contrast asserted by the applicants between Cabinet documents ('a clear class claim') and the respondent's description here (see [34]) is not helpful. That is because of the range of documents, with different levels of Cabinet connection, that may fall within the description but not necessarily qualify for immunity. At the top of the chain will be the Cabinet minutes considered in Northern Land Council [1993] HCA 24 ; 176 CLR 604. Lower down will be documents and communications between a Minster and the head of department relating to cabinet proceedings and material prepared for cabinet. Further down the chain are documents relating to the formation of government policy at a high level. Then will come other documents concerned with policy making including minutes by junior officials and correspondence with outside bodies. See S ankey v Whitlam [1978] HCA 43 ; (1978) 142 CLR 1 at 39. In Conway v Rimmer [1968] UKHL 2 ; [1968] AC 910 at 952 Lord Reid said of this last-mentioned category --- "I do not think that it is possible to limit such documents by any definition". Accordingly, both 'Cabinet documents' and 'final appreciation documents' have a penumbra of uncertainty surrounding them. The applicants' submission that unlike the former the latter is not an identifiable class posits a false contrast. Five weeks after I had reserved my decision the applicants' counsel submitted a memorandum drawing my attention to a recent decision of the House of Lords in Secretary of State for the Home Department v AF (No 3) [2009] 3 WLR 74. No leave was sought to file additional material, no prior notice was given to the respondent, and the respondent submits that I should not receive the memorandum. On many occasions the High Court has said that the hearing is the time and place to present arguments, and has explained why unauthorised post-hearing submissions will generally not be received. See for example Carr v Finance Corporation of Australia Ltd (No 1) [1981] HCA 20 ; (1981) 147 CLR 246 at 258, Eastman v Director of Public Prosecutions (ACT) [2003] HCA 28 ; (2003) 214 CLR 318 at [27] - [31] and Re Chief Commissioner of Police (Vic) (2005) 214 ALR 522 at [22]. The decision drawn to my attention does not bind me and was decided before the hearing of the present motion. It is a decision the House of Lords felt obliged to arrive at because of a decision of the European Court of Human Rights based on articles of the European Convention on Human Rights which have no counterpart in Australian law. I decline to receive the memorandum. I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | discovery inspection asio adverse security assessments public interest immunity affidavit of asio director-general partially redacted copy provided to applicants whether applicants' counsel entitled to unredacted copy upon giving appropriate undertakings class claim to "final appreciation documents and summaries thereof" whether adverse security assessment documents fall within identified class. practice and procedure |
Part 3 - 90 of the ITAA 1997 was introduced by s 3 and Sch 1 to the New Business Tax System (Consolidation) Act (No 1) 2002 (Cth). 2 It arises by way of an appeal against a private ruling given by the Commissioner of Taxation under Div 359 of Sch 1 to the Taxation Administration Act 1953 (Cth) (the TAA). The private ruling was sought by Envestra Limited (Envestra) by application made on 19 December 2005. As the Commissioner had not made a decision on the application by 1 January 2006, the application was, pursuant to s 31 of Act No 161 of 2005, treated as if it were an application for a private ruling under Div 359 of Sch 1 to the TAA. 3 The Commissioner responded to the private ruling question in the negative on 10 July 2006. That ruling applied to the year of income of Envestra ended 30 June 2003. 4 A taxpayer dissatisfied with a private ruling may object to it, and Pt IVC of the TAA applies to the objection: s 359-60. Envestra objected to the private ruling. The objection was disallowed on 6 February 2007. An appeal lies against the Commissioner's disallowance of the objection against the private ruling: s 14ZZS of the TAA. 5 To explain the private ruling and the basis upon which the private ruling was sought, it is necessary to refer in a little detail firstly to the legislation and other relevant instruments, and secondly to the factual background. It is not necessary to refer to the definition of entity or entities, except to note that it includes a company or companies. Relevantly, it permitted a parent company to consolidate, so that its subsidiaries were treated as part of the parent company (called the head company) of the group for taxation purposes rather than retain their separate income tax identities. The head company would inherit the income tax history of the subsidiary members when they became subsidiary members of the group. That process obviously required rules, including to set the cost for income tax purposes of the assets that a subsidiary member would bring into the group. 7 Section 700-5 of the ITAA 1997 explains that the "single entity rule" determines how the income tax liability of a consolidated group will be ascertained. It says that the basic principle is contained in the Core Rules in Div 701, but in essence indicates that a consolidated group consists of an Australian resident head company and all of its Australian resident wholly owned subsidiaries. 8 Division 701 contains the "Core Rules". It is necessary to note some of them. 9 Necessarily, that leads to the need for a company which becomes a subsidiary member of a consolidated group to have the tax cost of its assets fixed at an appropriate amount for the single unit taxing process. That is done by provisions aimed at fixing the tax cost for the assets of the subsidiary company reflecting the cost to the group of acquiring the subsidiary company. That amount consists of the cost of the group's *membership interests in the joining entity, increased by the joining entity's liabilities and adjusted to take account of the joining entity's retained profits, distributions of profits, deductions and losses. 11 Subdivision 705-A outlines the methodology by which the tax cost setting amount of an acquired subsidiary assets is calculated. Again, there was no significant dispute in the way that happens. It is a four step process. The first is to calculate the allocable cost amount of the joining entity. The next step is to reduce the allocable cost amount by the taxed cost setting amount applied to the joining entities retained cost based assets. It is then necessary to identify the excluded assets which have no amount of allocable cost amount allocated to them, and finally it is necessary to allocate the remaining allocable cost amount across the joining entities reset cost based assets in proportion to their market value. That is a complicated process. The present appeal concerns only the first of those processes. That is, it concerns the working out of the allocable cost amount of the subsidiary joined into the group. 12 The way that is done is specified in s 705-60. It is not necessary to set out the whole of that provision, as it is only the second step in the process which is of significance to the present proceeding. 13 Section 705-70 then explains how the second step is to be taken in working out the allocable cost amount. It contains the critical provision for the purposes of the present appeal. The standards must be in writing and must not be inconsistent with this Act or the regulations. The election must be made in writing by the directors. ESL and EQL at relevant times owned gas distribution networks in South Australia and Queensland respectively. 17 At the time Envestra acquired the shares in ENGL and EQL, on 1 July 1997, the assets owned by ESL and EQL including the gas distribution networks in South Australia and Queensland respectively, were re-valued for financial reporting purposes based upon the price paid for the shares acquired by Envestra. 18 That revaluation for accounting purposes took place during the year ended 30 June 1998. As a consequence, at and subsequent to 1 July 2002, the written down cost and the carrying value of the assets comprising the gas distribution network in South Australia owned by ESL and the gas distribution network in Queensland owned by EQL have been recorded in the books of accounts of ESL and EQL at a significantly higher carrying value than the written down value. There was a significant difference in the written down revaluation increment of those assets in the books of account of ESL and EQL as at 1 July 2002. It is not necessary to identify precisely the difference between written down cost and carrying value. 19 In the year of income ended 30 June 2003, Envestra applied an accounting standard entitled AASB 1020 --- Accounting for Income Tax --- (Tax Effect Accounting) issued by the AASB on 30 October 1989 (the 1989 AASB 1020) to the preparation of its consolidated financial statements. It also applied Urgent Issues Group Abstract 52 --- Income Taxes Accounting under the Tax Consolidation System (May 2003 version) in accounting for the formation of the consolidated group pursuant to the ITAA 1997. 20 In December 1999 the AASB had issued a revised version of AASB 1020 --- Income Taxes (the 1999 AASB 1020). 21 The 1999 AASB 1020 applies to each entity required to prepare financial reports in accordance with Pt 2M.3 of the Corporations Law and which is a reporting entity which holds those financial reports out to be, or form part of, a general purpose financial report. The operative date for the 1999 ASB 1020 to commence was originally prescribed as the half-year ending on 31 December 2002 or as the financial year ending on or after 30 June 2003. Before it came into force, the operative date was extended so that it was to commence for the to half-year ending on 31 December 2004 or for the financial year ending on or after 30 June 2005. In practical terms, because of the intervention of International Accounting Standards, it did not in fact come into force on that operative date. Clause 2.3 of that standard provides that "when operative" it supersedes the 1989 AASB 1020 as amended by Accounting Standard AASB 1025 "Application of the Reporting Entity Concept and other Amendments". The 1999 AASB 1020 was gazetted on 9 December 1999. 22 On 16 June 2004 the directors of Envestra and the directors of its subsidiaries including relevantly ESL and EQL made an election for the purposes of s 334(5) of the Corporations Act to apply the 1999 AASB-1020 to the preparation of the financial statements of Envestra and its subsidiaries to the year ended 30 June 2004. Envestra and its subsidiaries did not apply the 1999 AASB 1020 until after the directors resolved to do so on 16 June 2004. It was not applied in the preparation of the financial statements of Envestra as the head company of the consolidated group, nor in the preparation of the financial statements of Envestra or its subsidiary companies for the year ended 30 June 2003 prepared to comply with their accounting obligations under the Corporations Act . The 1989 AASB 1020 was used and applied in the preparation of those accounts. 23 Having so elected on 16 June 2004 to apply the 1999 AASB 1020 (the election of Envestra and ESL and EQL), Envestra as the head company asserts that a deferred tax liability of ESL relating to the South Australian gas assets in the amount of $153,380,061 can be measured as at 1 July 2002, and a deferred tax liability of EQL relating to the Queensland gas assets in the amount of $31,387,421 can also be measured as at that date by application of the 1999 standard for the purposes of determining Envestra's tax liability as the head company of the consolidated group. As Envestra identifies it, the issue is whether the deferred tax liability of $153, 380,061 measured in accordance with the 1999 AASB 1020 on 1 July 2002 is a liability of ESL on that date under subs 705-70(1) of the ITAA 1997, and secondly whether the deferred tax liability of $31,387,421 measured in accordance with the 1999 AASB 1020 on 1 July 2002 is a liability of EQL on that date under subs 705-70(1) of the ITAA 1997. 25 In respect of each of those deferred tax liabilities measured in accordance with the 1999 AASB 1020, Envestra contends that on and before 1 July 2002 ESL and EQL were each entitled to make an election under s 334(5) of the Corporations Act to apply the 1999 AASB 1020 and that, had each of those entities made such an election on or before 1 July 2002, each would have been required by the AASB 1020 to recognise those amounts respectively as liabilities in any statement of their financial position for a period including 1 July 2002. That is, additional deferred tax liabilities in respect of the assets of EQL and ESL would have been recognised in the financial statements of those entities. Consequently, it is argued, those amounts are accounting liabilities in accordance with the 1999 AASB 1020 of each of those entities, because they are liabilities at the joining time "that can or must be recognised" in that entity's statement of financial position. 26 It is the construction of the words "that can or must be recognised" in s 705 - 70 (1) of the ITAA 1997 which is the focus of the contention. Envestra contends through senior counsel that the words "can or must" should be given their full meaning, and that the word "can" imports possibility, as distinct from obligation. If under an applicable accounting standard there is a recognised liability, it must be recognised at an appropriate time, there being no discretion. The word "can" is said necessarily to import the capability of becoming a liability, depending upon a choice such as the making of an election of the type provided for by s 334(5) of the Corporations Act , in this case the choice to adopt an available accounting standard. As the argument runs, it is not whether Envestra could or should have, or did, adopt the 1999 standard. The fact that such a liability was not recognised in the financial statements of ESL or EQL at the joining time, 1 July 2002, because the 1999 standard had not been adopted at the joining time by ESL or EQL or by Envestra does not matter, because the emphasis (it is submitted) is not upon what the company actually did, but what it might have done. It is what the statute allows, not what the company did, that is said to be the criterion prescribed by s 705 - 70 (1) by use of the word "can". 28 On the other hand, senior counsel for the Commissioner put two responses based upon the wording of s 705 - 70 (1). The first is the reference to step two being calculated by adding up the amounts of each thing that, in accordance with accounting standards or statements of accounting concepts made by the AASB, is a liability of the joining entity at the joining time. As the 1999 AASB 1020 was not operative at the joining time, or indeed (as is common ground) until 1 July 2005 and, in fact, never became operative, it was not at the joining time an operative standard, at least in the absence of an election contemplated by cl 2.2 of the 1999 AASB 1020 either at the joining time or in the period up to the completion of the 30 June 2003 financial statements. The alternative way in which it might have become operative, was not activated until 16 June 2004, after the financial accounts of Envestra to 30 June 2003 had been completed. Hence, it is said, the working out of the liability for which the applicant Envestra contends is not in accordance with accounting standards or statements of accounting concepts made by the AASB at the joining time because there had been no election under s 334(5) to adopt the 1999 AASB 1020 at that time or indeed in the period of time up to the time when the financial accounts to 30 June 2003 of Envestra were formally completed and adopted. There is, it is contended, ample scope for the word "can" to do work bearing in mind that within accounting standards there is interpretative scope, as well as there being within the statements of accounting concepts areas which are not mandatory and which leave room for discretionary decisions. In Commissioner of Taxation v Murry [1998] HCA 42 ; (1998) 193 CLR 605 Kirby J at 632 referred to authorities indicating that taxation statutes should generally not be narrowly construed. His Honour said that each case must depend upon its own statutory language and apparent statutory purposes. Neither party on this appeal suggested any particular policy behind s 705 - 70 which helpfully informed its construction in the present circumstances. 30 It is not disputed by the Commissioner that Envestra, and ESL and EQL, could have elected on or before 1 July 2002 (or, indeed, at any time until the formal adoption of the financial accounts of ESL and EQL respectively for the financial year ended 30 June 2003) under s 334(5) of the Corporations Act to apply the 1999 AASB 1020 to the statement of the financial position of ESL and EQL or to the consolidated financial statements of Envestra and its group. Had they done so, it is also common ground that the deferred tax liabilities of ESL and EQL measured in accordance with the 1999 AASB 1020 would have been liabilities of ESL and EQL under s 705 - 70 (1) of the ITAA for the purpose of working out the allocable cost amount of each of ESL and EQL joining the Envestra consolidated group. There is no apparent policy behind Pt 3 - 90 of the ITAA 1997, or in particular s 705 - 70 , which suggests such an outcome would be inappropriate. 31 But does the word "can" in s 705 - 70 (1) in its context mean that the possible adoption of the 1999 AASB 1020 by Envestra, ESL and EQL at 30 June 2002 (or until their financial accounts to 30 June 2003 were approved by their directors) enlivens s 705 - 70 (1)? Or does the word "can" in its context have some different meaning and function? It is a trite starting point, recognised by those rhetorical questions that it is desirable, where possible, to give meaning to every word used in a statute: Chu Kheng Lim v Minister for Immigration Local Government and Ethnic Affairs [1992] HCA 64 ; (1992) 176 CLR 1 at 12-13; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 29 ; (1998) 194 CLR 355 at 382. 32 The context of s 705 - 70 in Div 5 Subdiv 705-A has its place in the methodology by which the tax cost setting amount of a subsidiary member of a consolidated group is worked out. It is part of the process by which the head company's cost of becoming the holder of the joining entity's assets is determined for tax purposes. Consequently, the tense of the relevant provisions including s 705 - 70 is important. It is expressed in the present tense, as a step in a complex process. It requires that at a particular time each accounting liability that is a liability of the joining entity at the joining time be added up. Each accounting liability of the joining entity, at that particular time, must be one that "can or must be recognised" in the statement of the joining entity's statement of financial position. And it requires that the accounting liability must have that character by reason of or in accordance with the AASB accounting standards. 33 Accounting standards of the AASB are not totally prescriptive. They may contain provisions which require or permit matters of judgment, and matters of choice. The use of the words "can or must" can therefore readily function as alternatives in relation to the AASB accounting standards which in fact apply in the determination of the accounting liabilities of a joining entity at the joining date. Some standards will direct the recognition of a particular accounting liability, and some will permit of a judgment or discretion as to whether a particular accounting liability is recognised. I do not think it is necessary to look to accounting standards which might have, but in fact did not, apply at the relevant time to give meaning and function to the word "can" in s 705 - 70 (1). Indeed, if that were contemplated by that provision, it would have been more appropriate to use words such as "could have been" or "may have been" as well as "can or must" in that provision. I think the use of the present tense points only to accounting standards which in fact apply in the determination of the accounting liabilities of the joining entity at the joining time. Although in a quite different context, I note that the expression "can comply" in s 1 of the Sex Discrimination Act 1975 (UK) and in s 1 of the Race Relations Act 1976 (UK) has been given a practical operative meaning rather than one which encompasses what is theoretically possible: Price v Civil Service Commission [1978] 1 All ER 1228; and Mandla (Sewa Singh) v Dowell Lee [1983] 2 AC 548 per Lord Fraser at 565-566 respectively. 34 The significance of tense in the construction of s 23(g)(iii) of the ITAA 1936 was discussed by the Full Court of this Court in Cronulla Sutherland Leagues Club Ltd v Commissioner of Taxation (1990) 23 FCR 82 , especially per Lockhart J at 89 and per Beaumont J at 116. Of course, that case addressed a quite different context, so it merely provides an indication that tense may be a significant indicator to the proper construction of a taxation statute. See also Brookton Co-op Society Ltd v Commissioner of Taxation (Cth) [1981] HCA 28 ; (1981) 147 CLR 441 per Mason J at 451 and per Aickin J at 461-469. 35 I note that the 1999 AASB 1020 was not generally in operation. It had the potential to come into operation relevantly to the determination of the accounting liabilities of ESL and EQL at the joining date by those entities (and perhaps also Envestra) making an election to apply it to the financial year ending 30 June 2003 under s 334(5) of the Corporations Act . But no such election was made. The accounting standard applicable to the determination of the taxation liabilities of ESL and EQL at the joining date was the 1989 AASB 1020. Without that election, ESL and EQL could not have recognised in their statement of financial position at the joining date the deferred tax liabilities which the present dispute is about. So, in my view, they were not able to recognise those liabilities as accounting liabilities at the joining date. They might have been able to had an additional fact existed (the election) so as to make the 1999 AASB 1020 operative in relation to their statements of financial position at the joining date, but in the absence of that step at the joining date I do not consider that they could do so. 36 I appreciate the submission on behalf of Envestra that it is not directly to the point that, for the purposes of complying with the financial reporting obligations under the Corporations Act in the year ended 30 June 2003, ESL and EQL did not apply the 1999 AASB 1020. I accept that contention. But it does not support the applicant's contention that "can or must" in s 705 - 70 (1) allows for the application of the 1999 AASB 1020 in the absence of the step (the election) necessary to enliven its operation in determining the taxation liabilities of ESL and EQL as joining entities at the joining time. That is a separate question, but for the reasons I have given I consider the contention should be rejected. 37 In my judgment, on its proper construction, the deferred tax liability of ESL and the deferred tax liability of EQL, each measured in accordance with the 1999 AASB 1020 on 1 July 2002, are not respective liabilities of ESL and EQL under s 705 - 70 (1) of the ITAA 1997 as at that date. I consider that the ruling of the Commissioner was correct in law. Consequently, the application must be dismissed. 38 Envestra must pay the Commissioner's costs of the application. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. | tax cost setting rules consolidated groups calculation of allocable cost amount of a joining entity consolidated group electing not to apply an accounting standard to financial statements prepared in joining year subsequent adoption of an accounting standard whether deferred liabilities of a joining entity ought to be recognisable in accordance with the subsequently adopted standard meaning of "can or must be recognised" under s 705 -70(1) of the income tax assessment act 1997 (cth) financial reporting obligations accounting standards made pursuant to the corporations act 2001 (cth) proper meaning of "can or must" under s 705 -70(1) of the income tax assessment act 1997 (cth) construction of statutes use of tense whether use of present tense contemplates present as well as future possibilities taxation corporations statutory interpretation |
I have found that Telstra is in breach of the relevant provisions of the Access Agreement by reason of its conduct and doubt whether, in the exercise of my discretion to grant declaratory relief, anything is to be gained by merely recording conclusions reached in my reasons for judgment. However, I am happy to hear the parties on the issue of relief in relation to the matter of liability in the proceeding at a mutually convenient date. First, that the same conduct involved a breach of the duty of confidentiality owed by Telstra to Optus; and second, that it also involved unconscionable conduct in contravention of s 51AA of the Trade Practices Act 1974 (Cth) ('the TPA'). It is appropriate that I do so, or decline to do so, before the proceeding moves forward to the next phase. 2) [1984] HCA 73 ; (1984) 156 CLR 414 , there exists a general equitable jurisdiction to grant relief against actual or threatened abuse of confidential information not involving any tort or breach of contract (at 438 per Deane J in delivering the judgment of the High Court). But where there exists a contract, the position is not as clear. Nevertheless, where, as here, there is not only a contract between the parties, but a contract which, in its terms, defines 'Confidential Information' on an exhaustive basis (cl 1.1 of the Access Agreement) and regulates the obligations of each party in relation to the Confidential Information of the other party on a comprehensive basis (cl 15 of the Access Agreement), there is, in my view, no reason for the intervention of equity for the simple reason that there is no need for its intervention to achieve justice between the parties for conduct which is common to both the finding of breach of contract and the ground relied on for equitable intervention. But it does not follow from that finding that the common conduct is also unconscionable conduct in contravention of s 51AA of the TPA. The special disadvantage may be constitutional, deriving from age, illness, poverty, inexperience or lack of education --- Commercial Bank of Australia Ltd v Amadio [(1983) [1983] HCA 14 ; 151 CLR 447]. Or it may be situational, deriving from particular features of a relationship between actors in the transaction such as the emotional dependence of one on the other --- Louth v Diprose [(1992) 175 CLR 62]; Bridgewater v Leahy [1998] HCA 66 ; (1998) 194 CLR 457. (ii) Set aside as against third parties a transaction entered into as the result of the defective comprehension by a party to the transaction, the influence of another and the want of any independent explanation to the complaining party --- Garcia v National Australia Bank Ltd [1998] HCA 48 ; (1988) 194 CLR 395. (iii) Prevent a party from exercising a legal right in a way that involves unconscionable departure from a representation relied upon by another to his or her detriment --- Waltons Stores (Interstate) Ltd v Maher [(1988) [1988] HCA 7 ; 164 CLR 387] ; Commonwealth v Verwayen [(1990) [1990] HCA 39 ; 170 CLR 394]. (iv) Relieve against forfeiture and penalty --- Legione v Hateley [(1983) [1983] HCA 11 ; 152 CLR 406] ; Stern v McArthur [(1988) [1988] HCA 51 ; 165 CLR 489]. (v) Rescind contracts entered into under the influence of unilateral mistake --- Taylor v Johnson [(1983) [1983] HCA 5 ; 151 CLR 422]. It is a term which has various shades of meaning according to its context. There are different thresholds of conduct in various categories, all of which may be described as unconscionable --- G Dal Pont, "The Varying Shades of 'Unconscionable' Conduct --- Same Term, Different Meaning" (2000) 19 Aust Bar Rev 135 at p 165. In the context of that law as it presently stands, unconscionable conduct is that which supports the grant of relief on the principles set out in specific equitable doctrines. Five categories of case are set out above. The imposition of the prohibition precedes any actual or notional judicial decision. The judge deciding a case under s 51AA will be asking himself or herself whether he or she would have been prepared to grant relief at equity on the basis of an assessment of the conduct in question as unconscionable. See also the discussion in Dietrich, "The Meaning of Unconscionable Conduct under the Trade Practices Act 1974" (2001) 9 Trade Practices Law Journal 141. But as already noted, the terms of the section are not limited to those categories. Although the section is confined by the parameters of the "unwritten law", it is the unwritten law "from time to time". Neither the explanatory memorandum nor the second reading speech can be treated as imposing qualifications which are not found in the words of s 51AA. On the other hand, equitable doctrine does not presently provide a remedy against conduct simply on the basis that it is unfair in the opinion of a judge. It cannot be applied to unconscionable conduct at large. As Gummow and Hayne JJ recently observed in Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63 ; (2001) 208 CLR 199 at 245; [2001] HCA 63 ; 185 ALR 1 at 28, "the notion of unconscionable behaviour does not operate wholly at large". In this respect it is not necessary to pass upon the correctness or otherwise of Olex Focas Pty Ltd v Skodaexport Co Ltd [1998] 3 VR 380 which was concerned with the grant of interlocutory relief and the existence of a serious question to be tried rather than any concluded view as to the construction of s 51AA. (b) In its capacity as a carrier of telecommunications traffic generated by Optus' customers, Telstra had access to Optus' traffic information which was confidential. (c) Such information was capable of being used by Telstra in its capacity as a competitor of Optus for the purpose of Telstra's marketing, promotional and related activities and, consequently, to the benefit of Telstra as a competitor of Optus and to the detriment of Optus' business interests. (d) Optus was unaware as to the nature of the use that Telstra was or may have been making of the information and, consequently, for the impact or potential impact of such use on Optus' business interests. (e) Telstra unreasonably failed to inform Optus of the above matters and, specifically, of the nature of the use that Telstra was making or may have been making of the information in question; but set about to keep its use of Optus' information and Telstra's breach of contract secret. (f) In these circumstances, Optus was under a special disadvantage in dealing with Telstra such that there was an absence of any reasonable degree of equality between them in relation to Telstra's continuing access to and use of the information, and Optus was unable to make any reasonable judgment as to what was in its business interests as regards Telstra's continuing access to and use of the information. (g) The above matters were known to Telstra or ought reasonably to have been sufficiently evident to Telstra as to make it unfair or unconscientious that Telstra use and continue to use the information for the purposes referred to above. (b) Central to the unconscionability claim is a contention that Optus was at a relevant disadvantage vis-a-vis Telstra. This contention should be rejected. Optus was not at a relevant disadvantage vis-a-vis Telstra. Indeed, a contention that a corporation the size of Optus could ever be at a special disadvantage is somewhat novel. The time for determining the issue of special disadvantage is the time at which Access Agreement was entered into, being the time at which the parties entered into an agreement to govern their respective dealings with one another. Optus was at no special disadvantage vis-à-vis Telstra in relation to these negotiations. Optus was perfectly placed to protect itself by having a capable firm of solicitors with relevant expertise representing it and appropriate terms included in the Access Agreement. This it did. (c) Insofar as questions of limitation periods and entitlement to relief arise in relation to the unconscionability claim, Telstra was content that those issues be addressed at the second stage of the hearing should the Court find, contrary to the submissions made above, that Telstra has in fact engaged in unconscionable conduct. I am of the view that the Access Agreement did not result from the knowing exploitation by Telstra of any special disadvantage of Optus whether constitutional or situational: the first category referred to in Samton Holdings ([48]). I am also of the view that this is not a case where equity needs to intervene to prevent Telstra from exercising a legal right in a way that involves unconscionable departure from a representation relied upon by Optus to its detriment: the third category referred to in Samton Holdings ([48]). The other categories there referred to are irrelevant. While the Full Court itself acknowledged the list may not be exhaustive, the fact that the terms of the Access Agreement were ultimately concluded in the way they were such that the conduct of Telstra which is impugned in this case was found to be a breach of contract would suggest that Optus was not only aware, which it undoubtedly was, that Telstra would have access to Optus' traffic information but that its disadvantage in this respect --- it did not have access to Telstra's traffic information --- was nevertheless counter-balanced by the restrictions on the use and disclosure of such information. The fact that Telstra acted in contravention of those restrictions does not make its conduct unconscionable. It follows that I also decline to find that Telstra engaged in unconscionable conduct in contravention of s 51AA of the TPA. I will direct the parties to bring in short minutes of order to give effect to these reasons and the reasons published on 30 April 2009, as well as to move the proceeding to its next phase. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Edmonds. | duty of confidentiality 'confidential information' defined in agreement between the parties equitable intervention is not necessary where alleged conduct is common to both the finding of breach of contract and the ground relied upon for equitable intervention. unconscionable conduct as defined by s 51aa of trade practices act 1974 (cth) 'unconscionable conduct' includes conduct in respect of which a judge in equity would have been prepared to grant relief the access agreement between the parties did not result from the knowing exploitation of any special disadvantage impugned conduct did not prevent applicant from exercising a legal right in a way that involves unconscionable departure from a representation relied upon by applicant to its detriment otherwise not unconscionable conduct. equity trade practices |
The persons who sought the registration and consented to become members were Danny Mihailidis and Andrija ('Andro') Glavinic, although Mr Glavinic has little recollection of his participation. The replaceable rules referred to in Part 2B.4 and s 135 of the Act were expressly excluded by the applicant's Constitution and have no application to it. As a proprietary company (see s 45A of the Act) the applicant was not required to hold an annual general meeting (cf s 250N of the Act in respect of public companies). As a small proprietary company (see s 45A(2) of the Act) the applicant was not required to prepare an annual financial report or directors' report unless directed to do so by shareholders with at least 5% of the votes or by the Australian Securities and Investments Commission (see ss 292(2) , 293 , 294 , 295 and 298 of the Act). The applicant has no bank account in its own name, as opposed to in a representative capacity. It has never 'earned $1' and never lodged an income tax return on its own account. The applicant did open a bank account at the Woden Plaza branch of St George Bank Limited on 25 October 2001 into which, inter alia, three cheques for $50,000 each were deposited on 29 October 2001. From about February 2002 it maintained a bank account at National Australia Bank Limited. That account was styled 'Canberra Residential Developments Pty Limited Business Management'. As at 27 March 2003 it had a credit balance of $110,939.40. Notwithstanding the fact that the applicant was not required by the Act to hold an annual general meeting, clause 4.1 of the applicant's Constitution contemplated that the company in general meeting could resolve to conduct annual general meetings in which case such meetings were to be held until such time as the relevant requirement may have been dispensed with in accordance with clause 4.2. There is no evidence to indicate that the members of the applicant ever resolved to conduct annual general meetings in accordance with clause 4.1 of the Constitution . The evidence of Mr Francesco Antonio ('Frank') Porreca, a director of and also a shareholder in the applicant, was that the company in general meeting never passed any such resolution that he could remember. He wasn't sure that he had ever attended a meeting of the applicant's shareholders. Mr Robert Cobanov could only recall a general meeting of shareholders of the applicant being called to remove Mr Danny Mihailidis as a director. That removal was effected on 20 July 2004. Subject to s 249H(2) of the Act, meetings of members of the applicant required at least 21 days notice thereof (see s 249H(1) of the Act and clause 5.2 of the applicant's Constitution). Under clause 6.1(b) of the applicant's Constitution no business could be transacted at any general meeting unless a quorum of members was present at all times during the meeting. The requisite quorum was the attendance of two members present in person. Under clause 8.2 of the applicant's Constitution the minimum number of directors was expressed to be one and the maximum was ten. Clause 8.2 also provided for the first directors to be appointed by the members who signed the Constitution for the purpose of registering the applicant (i.e. Messrs Mihailidis and Glavinic). Once appointed as a director his or her tenure was, subject to disqualification or removal, unlimited in point of time. Clause 8.6 empowered the applicant by ordinary resolution passed at a general meeting of members to increase or reduce the number of directors and clause 8.8 empowered the applicant by ordinary resolution to remove any director and appoint another person in his or her stead. In addition, clause 8.7 empowered the directors to fill casual vacancies and to appoint additional directors. The original directors of the applicant appointed on 19 October 2001 were Andrija Glavinic, Robert Cobanov, Francesco Antonio Porreca, Danny Mihailidis and Spiros Brendas, the first respondent. The first respondent ceased to be a director of the applicant on 11 April 2003. On 20 July 2004 two new directors were appointed, namely John Domitrovic and Drago Novakovic, following the removal of Danny Mihailidis on that day. In the case of the applicant clause 12.5 of the Constitution required the attendance of two directors to constitute a quorum at meetings of directors. An historical company extract prepared by the Australian Securities and Investments Commission in respect of the applicant on 29 August 2006 reveals that the applicant had eight shares on issue as at that date and that a total of $8 had been paid in respect of those shares. The eight shares were held as to two by Andrija Glavinic, as to two by Danny Mihailidis, as to two by Robert Cobanov and as two by Francesco Antonio Porreca. A former shareholder who had held one share was the first respondent. When there were five shareholders there were, according to Mr Porreca, only five shares on issue. However, when Mr Brendas ceased to be a shareholder three additional shares were issued to even things up amongst the remaining four shareholders. Upon the registration of the applicant, Robert Cobanov, Andro Glavinic, Frank Porreca, Danny Mihailidis and Spiros Brendas were appointed as secretaries. Robert Cobanov, Andro Glavinic and Frank Porreca still hold office as such. Mr Brendas ceased to be a secretary of the applicant on 11 April 2003 and Mr Mihailidis ceased to be a secretary of the applicant on 20 July 2004. On 20 July 2004 John Domitrovic and Drago Novakovic were appointed as additional secretaries of the applicant. Failure to make and/or to record such disclosures as aforesaid shall not operate to avoid or render voidable any such contract transaction or arrangement. I infer that the Act fell within the relevant definition as a 'future statutory modification' of the Corporations Law. Between 26 February 2003 and 26 March 2003 the sole director and secretary of the fourth respondent was Malcolm John Weston. On 26 March 2003 Mr Weston ceased to be a director and secretary, his place on the board being taken by Graham Leonard Brand, the Chief Executive Officer of Morgan & Banks Investments Pty Limited and the first respondent, Spiros Brendas, who also became its secretary. There are 100 shares on issue in the fourth respondent, 50 of which are held by Graham Leonard Brand and 50 of which are held by Kenoss Pty Limited ACN 008 544 232, the third respondent. The second respondent in the proceedings, Beverley Rose Brendas, is the wife of the first respondent, Spiros Brendas. They were the 34 parties of the first part to the Deed, jointly and severally called the ' Joint Venture Members '. 34 persons or groups of persons whose names and addresses were set out as 'Principals' in Schedule 2 to the said Deed executed same as the parties of the second part. They were jointly and severally called the ' Principals '. In 28 instances the 'Principal' was an individual and in the remaining 6 the relevant principal was two or in one case, four separate individuals. The applicant was the party of the third part to the said Joint Venture Deed, and was called the ' Manager '. The occasion for the execution of the Canberra Residential Developments (No 1) Joint Venture Deed on 12 February 2002 was the earlier acquisition by the applicant of Block 4 Section 1 Gungahlin (the 'Horse Park Estate' later referred to as 'Horse Park 1') for $16.5 million by restricted auction on 13 December 2001, the relevant 10% deposit being funded by contributions from the 34 parties who later became Joint Venture Members under the Joint Venture Deed. The Joint Venture Deed recorded that the Joint Venture commenced on 13 December 2001 (see clause 3.1). The restricted auction was one where bidding was restricted to persons who had applied in advance for and secured the right to bid at the auction and who had agreed to execute and deliver a form of 'Undertaking Of Compliance With The National Code Of Practice For The Construction Industry'. On about 5 December 2001 the Gungahlin Development Authority advised Mr Mihailidis, as chairman of the applicant, that the applicant was accepted as an eligible bidder at the restricted auction of Horse Park 1 on 13 December 2001. The firm of solicitors who prepared the Joint Venture Deed for the parties to it was known as Bradley Allen. That firm was apparently retained following the formation of a 'group' to collectively buy broadacre land and develop it. The person who would appear to have initiated the idea that a group be formed was Mr Danny Mihailidis. The sequence of events would appear to have been that Mr Mihailidis, a builder in the Australian Capital Territory, spoke to a number of other builders in the Territory with a view to forming a collective buying group. Some of the people whom he approached early on would appear to have included Ivan Ivankovic, Drago Novakovic, Gojko ('George') Dosen and Andro Glavinic. The initial group meeting would appear to have taken place at the Austrian Club at Mawson in the Australian Capital Territory, one evening in 2001. It was attended by about 6 or 7 builders. After some 'talking around' the group would appear to have expanded to become about 12 in number. At that stage a meeting was held when the aim was expressed that the group should be expanded to 20. The initial meeting would appear to have taken place a couple of weeks before contact was first had with Mr John Bradley of Bradley Allen. Following the consideration of a couple of firms' names Bradley Allen was selected as solicitors for the emerging group. The suggestion that Bradley Allen be considered for such appointment apparently flowed from Mr Mihailidis, who had had some previous dealings with the firm. The initial instructions would appear to have been conveyed to Mr Bradley by Mr Mihailidis. Various meetings took place some, at least, of which would appear to have been attended by Mr Glavinic. It would appear that the group considered the possibility of forming a joint venture, a partnership and/or a proprietary limited company. The proposal that a joint venture be considered apparently emanated from Mr Bradley, who also explained why the group needed a company. Each Joint Venture Member has a corresponding Principal and vice versa as set out in Schedule 3 . Each Principal is a director of the corresponding Joint Venture Member. In Schedule 3 not only were the relevant syndicate or joint venture members' names recorded but also the relevant Australian Company Numbers were added. Where the corresponding Principals were shown their respective addresses were also included. Paitres Pty Ltd Danny Mihailidis 2. Katarina Homes Pty Ltd Andrija Glavinic 3. Porreca Homes Pty Ltd Silvio Piero Porreca 4. Cobanov Investments Pty Ltd Robert Cobanov 5. Kenoss Pty Ltd Spiros Brendas 6. Stylemark Investments Pty Ltd Simon (Sime) Gulan 7. Aztec Homes Pty Ltd Bozo Ikic 8. Mark Porreca Pty Ltd Mark Porreca 9. Anita Constructions Pty Ltd Gojko Dosen 10. MTJ Pty Ltd Ivan Tijan 11. Mascot Homes Pty Ltd Denis Nickolas Vidovic 12. Amanda Homes Pty Ltd Jozo (Joseph) Glavinic 13. I & D Homes Pty Ltd Drago Novakovic and Ivan Ivankovic 14. Twilight Homes (ACT) Pty Limited Ivica (Ivan) Bacic 15. MHK Enterprises Pty Ltd Mico (Mice) Kljusuric 16. B & T Homes Pty Ltd Ivan Bulum 17. Jukic Homes Pty Ltd Josip Jukic 18. Libertas Homes Pty Ltd Joe Zdravko Ostojic 19. Galovac Pty Ltd Joso Tokich 20. Lemezina Bros Pty Ltd George Lemezina 21. Victory Homes Pty Ltd Vince Crncevic Phillip & Anton Homes Pty Ltd and Antophil Pty Ltd t/as PA & A Partnership Drago Domazet 23. I & A Homes Pty Ltd Anto Vujica and John Tisot 24. Rosedale Homes Canberra Pty Ltd Nicholas Joseph Andric and Bryan Anthony Carroll 25. Pinto Homes Pty Ltd Walter Pinto 26. ACT Builders Pty Ltd Boris Domitrovic and John Domitrovic and Don Sipinkas and Tony Milosis 27. Hodome Pty Ltd and SZ Investments Pty Ltd Jere Susa and Zeljko Susa 28. Zelic Homes Pty Ltd Frank Zelic 29. Mostar Pty Ltd Zdenko Cvitanovic 30. Patrician Homes Pty Ltd Stefan Stefanac 31. Ivan & Vesela Ostojic Ivan Ostojic 32. Golem Homes Pty Ltd Zeljko Golem 33. Cobvec Developments Pty Ltd Tony Vecchi and Robert Cobanov 34. In three columns it listed the syndicate or joint venture members, a monetary amount and a 'Portfolio Share' such as '10/470' against their respective names. In each instance the relevant denominator was 470 and the fractions recorded together totalled the whole, or 470/470. The relevant monetary amounts were the 'initial capital contributions paid by each Joint Venture Member to the Manager to be invested and managed in accordance with the provisions of the Deed'. Each amount was defined as the relevant 'Joint Venture Unit Investment'. It was anticipated that Horse Park 1, a greenfields site, could be developed and subdivided in three stages to create 470 separate lots. It was contemplated that there would be a legal partition of the land beneficially owned by the joint venturers as tenants in common, with a division of the lots amongst the joint venture members pro rata according to their respective fractional financial interests, which the joint venture members as builders, perhaps with the exception of the third respondent, could then turn to account. The Joint Venture Members have agreed to form a Joint Venture called the CANBERRA RESIDENTIAL DEVELOPMENTS (NO 1) JOINT VENTURE (called the "Joint Venture" ) for the purposes of acquiring the Land undertaking the Project and the then division of the Residential Blocks to issue in accordance with the Portfolio Share to the total number of Portfolio Shares of the Joint Venture Members. Recital F to the Joint Venture Deed was a somewhat curious one, which suggested a measure of misunderstanding by the draftsman of the applicant's status as a company with a Constitution which provided for the appointment of directors in accordance with that Constitution . They bear no resemblance to the requirements for the passage of a 'special resolution' of members of a company such as the applicant, under the Act, in terms of the required percentage in favour or the length or form of the requisite notice of meeting. Clause 29 provided for ' Meetings of Members of the Joint Venture and Annual General Meetings '. But clause 29.2(e) and (f) was not determinative of his entitlement. It is, perhaps, possible to construe the relevant part of the Joint Venture Agreement as some sort of proxy agreement whereby those persons who were principals of syndicate or joint venture members and also directors of the applicant agreed to exercise their powers as members of the applicant in accordance with the will of a simple majority of joint venture members voting at a duly convened meeting of such members. In my opinion, the relevant provisions of the Joint Venture Deed should not be so construed. It would seem to me that the parties to the Joint Venture Deed simply sought to arrogate to themselves the right to determine the composition of the board of directors of the applicant from time to time regardless of the provisions of clause 8 of the applicant's Constitution. Apart from other considerations Mr Frank Porreca was not a joint venture member nor was he a principal for his parents' company, Porreca Homes Pty Limited. According to Mr Brendas, Mr Frank Porreca became a director of the applicant because of his father, Silvio Piero Porreca. Frank Porreca was described as a 'learner builder'. The directors of the applicant were not, as such, parties to the Joint Venture Deed and Frank Porreca was neither a party nor a signatory in any capacity. This case is concerned with the pursuit of land development opportunities other than that for which the Canberra Residential Developments (No 1) Joint Venture Deed provided. In determining what, if any, obligations may have fallen upon any of the directors of the applicant in respect of developments other than the Horse Park 1 development, it is necessary to consider the terms of the Joint Venture Deed and the relationship between the syndicate or joint venture members on the one hand and the applicant as the 'Manager' on the other, in some detail. Each Joint Venture Member shall not be required to make any further contributions of capital to the Joint Venture, other than as provided for in Clause 6, unless otherwise agreed by a Special Majority at a duly convened meeting of Members of the Joint Venture. Through the acquisition of the Land, the undertaking of the works required by the Deed, and then issue of the Residential Leases at cost price to the Joint Venture Members, the Joint Venture Members should be able to achieve both a developer's profit on land as well as a builder's profit on construction. It may be observed that the collective buying group which emerged from Mr Mihailidis' initiative expanded to become a group of 34 which together constituted the joint venture members under the Joint Venture Deed. The syndicate or joint venture members having contributed monetary amounts towards a fund for the purchase and development of Horse Park 1, the applicant, as trustee for the joint venture members, then proceeded to acquire Horse Park 1 and pay the deposit from that fund. The syndicate or joint venture members thereupon became the joint beneficial owners of Horse Park 1 as tenants in common in undivided shares which shares were equal to their respective fractional financial interests which had 470 as their common denominator. The Manager may enter into legally binding arrangements and transactions in that capacity and may enter into binding arrangements and transactions and execute all documents and agreements as the Manager shall in its absolute discretion deem appropriate. The Manager may delegate any of the powers vested in it by this sub-clause to any person. The Manager shall not be under any liability in respect of any loss arising out of the carrying on of any business as aforesaid. That remuneration shall be deemed to accrue from day to day. Furthermore, the Directors may be paid or reimbursed all travel and other expenses incurred by them in the course of carrying out the business of the Company. Such expenses shall form part of the Joint Venture Outgoings and shall be paid out of the Gross Joint Venture Income or shall be reimbursed to the Manager together with interest thereon at a rate of 12% per annum out of Gross Joint Venture income in the event that the Manager has already paid such expenses (and which shall be deemed to be a Manager's Loan for the purposes of this Deed). Before the auction I and the other directors of CRD held a number of meetings with prospective syndicate members. Our objective was to form a syndicate made up of local builders to purchase and develop the land. The intention was that CRD would hold the land on behalf of the syndicate members and develop it as a residential subdivision. Once the development had reached the stage that the Government would issue leases for the residential blocks, they would be allocated among the syndicate members. The members would have to put up some money initially to be used as a deposit for the purchase of the land. The balance of the cost of the raw land, the cost of engineering services and civil works, financing costs and all other costs of developing the subdivision were intended to be paid using funds to be borrowed by CRD from the National Australia Bank. These loan funds would be repaid from funds to be provided by the syndicate members, in each case in proportion to their individual block allocations, when each of the three stages of the development reached practical completion. Later, when the government was ready to issue the leases for the individual blocks, each lease would be registered in the name of the syndicate member to whom the block had been allocated. The intention was that syndicate members would pay for the residential building blocks allocated to them at cost price (that is, at the cost to CRD of purchasing, developing and subdividing the land without paying a developer's profit to CRD). That way, if syndicate members decided to sell their blocks as vacant land they would have the opportunity to make a developer's profit on the sale. If they decided to sell their blocks as house and land packages, they would have the opportunity to make a developer's profit on the sale of the land and a builder's profit on the construction of the house. The rule that a person in a fiduciary position is not entitled to make a profit without the knowledge and assent of the person to whom the fiduciary duty is owed is not limited to cases where the profit arises from the use of the fiduciary position or of the opportunity or knowledge gained from it. The basis of the rule is that a person in a fiduciary position may not place himself in a situation where his duty and interest conflict (per Gibbs J in Consul Development Pty Limited v D.P.C. Estates Pty Limited [1975] HCA 8 ; (1975) 132 CLR 373 ('Consul') at 393). A person under a fiduciary obligation shall not put himself in a position where his interests and duty conflict or, if conflict is unavoidable, shall resolve it in favour of duty and shall not, except by special arrangement, make a profit out of his position (per Dawson J in Hospital Products at 142). A fiduciary can defeat a claim to account for profits acquired by reason of his fiduciary position and by reason of the opportunity resulting from it only on the ground that the profits were made with the knowledge and assent of the person to whom the fiduciary obligation was owed (per Gibbs CJ in Hospital Products at 73). The equitable rules are exceedingly strict (per Gibbs CJ in Hospital Products at 73). The archetype of a fiduciary is the trustee but it is recognised that there are other classes of persons who normally stand in a fiduciary relationship to one another --- eg partners, principal and agent, director and company, master and servant, solicitor and client, tenant-for-life and remainderman. There is no reason to suppose that these categories are closed (per Gibbs CJ in Hospital Products at 68). The principle, so far as it applies to directors, was expressed by Lord Cranworth L.C. in Aberdeen Railway Co v Blaikie Brothers (1854) 1 Macq. Such agents have duties to discharge of a fiduciary nature towards their principal. And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect. Hurley v BGH Nominees Pty Ltd (1984) 10 ACLR 197 was a decision of Walters J in the Supreme Court of South Australia. There are aspects of his Honour's judgment with which I respectfully disagree. The first defendant, BGH Nominees Pty Ltd was a company in which there were six shares on issue, two of which were held by Noel Joseph Hurley, whom I would understand to have been the first plaintiff and one of which was owned by Noel J Hurley Pty Limited which I would understand to have been the second plaintiff. The other three shares were held by the second defendant, Robert Brian Heath. BGH Nominees Pty Limited carried on business as trustee of a trading trust of which the beneficiaries were Mr Hurley, Noel J Hurley Pty Ltd and Robert Heath Nominees Pty Ltd. BGH Nominees Pty Limited carried on its business from premises occupied pursuant to a lease which expired on 30 June 1981. Mrs Heath would appear to have been the third defendant and another company controlled by Mr Heath, Mr Yipod Pty Ltd, the fourth defendant. The plaintiffs suing as shareholders in BGH Nominees Pty Limited claimed that Mr Heath had breached his fiduciary duty as a director of BGH Nominees Pty Limited in that while holding office as a director he entered into a transaction for the purchase of the freehold of the premises which were occupied by BGH Nominees Pty Limited under the lease. It was claimed that Mrs Heath and Mr Yipod Pty Limited participated in and took advantage of Mr Heath's breach of fiduciary duty to the company. As it transpires the matter was heard by Walters J over a protracted period of time. The hearing occupied two days in May 1982 after which the matter went to the Full Court of the Supreme Court of South Australia on an interlocutory appeal brought against the decision of Walters J dismissing an application on the part of the defendants that the action be dismissed on the plaintiffs' opening and the pleadings. The appeal was heard on two days in June 1982 after which the Full Court delivered its reserved judgment on 23 July 1982 dismissing the appeal. Thereupon the trial resumed before Walters J on a series of dates in March, June and July 1984, following which his Honour delivered his reasons for judgment on 18 July 1984. In that situation, it seems to me that he acquired the property in a fiduciary capacity and as a constructive trustee for [BGH Nominees Pty Ltd] , and I so find. I think it would be entirely unreal if a director were allowed to address his mind simply to the interests of the company and not to the additional consideration whether the transaction sought to be impugned was for the benefit of the shareholders or, indeed, the beneficiaries of a trust of which the company is trustee. Any failure by the directors to take into account the interests of creditors will have adverse consequences for the company as well as for them. And I do not think it can rightly be said that the fiduciary responsibility of a director is owed simply to the company by virtue of his status as a director and that it does not extend to responsibility to shareholders or, indeed, to beneficiaries of a trust of which the company is trustee. The duty of the directors to the company is clear ... but it is not at present clear what duty they owe to the beneficiaries. Any breach of duty by a director to the company is a breach of fiduciary duty, not a breach of trust. The director's duty to the company is quite separate and distinct from the company's duty to the beneficiaries. What of the director's duty to the beneficiaries? The law has not been fully developed in this area. Contractual and fiduciary relationships may co-exist between the same parties. In situations where the basic contractual relationship has provided a foundation for the erection of a fiduciary relationship it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them. The fiduciary relationship cannot be superimposed upon the contract in such a way as to alter the operation which the contract was intended to have according to its true construction (per Mason J in Hospital Products at 97 and 99; see also per Deane J in Moorgate Tobacco Co. Limited v Philip Morris Limited [No. 2] [1984] HCA 73 ; (1984) 156 CLR 414 at 436). Reliance is placed by the applicant upon James Birtchnell v The Equity Trustees, Executors and Agency Company Limited [1929] HCA 24 ; (1929) 42 CLR 384 ('Birtchnell'). In that case James Birtchnell and Lawrence Alfred Birtchnell (the appellants) brought an action against the respondents, The Equity Trustees Executors and Agency Company Limited and one Reginald Stanley Porter, as executors of the will of the late John Porter, claiming, firstly, an account of all monies paid by one Spreckley to the said John Porter in respect of and arising from sales of land and of all monies which the respondents had received or were entitled to receive in respect of or arising from such sales from Spreckley or his legal personal representatives, secondly, payment to each of the plaintiffs of one-third of such monies, and, thirdly, such other relief as might be just. The matter came before Irvine CJ in the Supreme Court of Victoria who held that the purchases and sales involved in the dealings under consideration were not part of the relevant partnership business, that the purchases and sales were carried through the books of the partnership for convenience and that there was no express or implied agreement that the scope of the business be extended to include the carrying on of a general business in land speculation and further that there never was any intention that a new partnership was to exist in such business. By a majority the High Court allowed the appeal to it and ordered that the judgment of Irvine CJ be discharged. The High Court further ordered that an account should be ordered of monies derived by John Porter from his dealings with Spreckley in relation to three particular Estates. The majority in the High Court consisted of Isaacs, Rich and Dixon JJ. Rich J's judgment included a short statement of his reasons. He did, however, indicate that he had read the judgment of Dixon J, as his Honour then was, and agreed with it. Dixon J said at 409 that it was necessary to begin by ascertaining the subject matter over which the fiduciary obligations extended (see also per Gibbs CJ in Hospital Products at p73). The partnership between the two Birtchnells and John Porter had been in relation to a land agency business, one of estate and financial agents and auctioneers, which they had carried on since 1889. After John Porter's death in 1927 the two surviving partners discovered that he was sharing in the profits arising from some speculations in land which were carried out through the firm's agency by one of its clients. They sued John Porter's executors to compel them to account as for profits obtained by him without disclosure by availing himself of his position as a partner. Dixon J agreed with Irvine CJ's finding that the partners were not disabled from investing and speculating in land for their own separate advantage. However he observed that it did not follow that a partner could, consistently with his duty, secretly share with a client of the firm the profits of a speculation which the client employed the firm to carry out on his behalf. The partnership agreement was varied in 1908 in a manner which supposed that the firm itself had acquired or would acquire interests in land. The partners acquired interests in the profits of 33 land speculations all save for three of which were entered into after discussion among and with the concurrence of all three partners. In the three remaining cases the approval of all the partners was subsequently given. It subdivided land for clients, and sold it in allotments, and it performed the perhaps more difficult service of collecting the purchase-money for which it accounted after deducting commission. In all such business the firm looked for opportunities to secure, in addition, a share of the proceeds, and it obtained such a share, sometimes as a further reward for services or as an incitement to additional exertion in realising the land, and sometimes as a result of investing capital in the speculation. It followed that the partnership was entitled to avail itself of any opportunity to embark upon such a transaction which came to the knowledge of the partners or any of them and knowledge and information acquired by a partner as to the readiness of a client to share such profits, as to the conditions upon which he would do so, and generally as to every fact bearing upon the terms which the partnership might negotiate with him, were all matters which no partner could lawfully withhold from the firm and turn to his own account. The relation between such a client and the partnership was a matter affecting the joint interests which each member was bound to safeguard and protect and no member could enter into dealings or engagements which conflicted or might conflict with those interests or which gave him a bias against a fair discharge of his duty in that respect (see per Dixon J at 410-412). It appeared that John Porter and Spreckley arranged not later than 27 June 1925, and probably long before that date, to share the profits to arise from the realisation of land through the agency of the firm by subdivision, sale of allotments on terms, and collection of the instalments, and that much if not all of this land was acquired by Spreckley through the firm in order that it might be realised in that manner. It was implicit in Irvine CJ's judgment that he considered that John Porter had concealed from his partners the fact that he possessed or had acquired a special advantage over them in the transaction. Dixon J considered that the evidence left no doubt that this was so. Dixon J observed that the specific occasion and cause of John Porter being admitted to participate in the profits of the real estate transactions involving Spreckley were not established. His Honour entertained a series of possibilities. If so, he took advantage for himself of an opportunity which arose in the transaction of the firm's business in connection with one of its clients and of a nature which the firm was entitled to consider, and use for itself. The knowledge of Spreckley's readiness to share profits at all was information to which the firm was entitled, and this information Porter failed to disclose. He pursued his separate interests, where the joint interests should have been consulted, and excluded the partnership from a benefit or chance of benefit which arose out of the connection of the firm. But, if so, Porter simply diverted to himself remuneration he was bound to earn for the firm. But if this were the true character of the transaction, it can scarcely be differentiated from additional remuneration. Even if the actual object of such a gift was not to induce Porter to give to Spreckley's business energy, time and care which ought to have been more equally distributed over the various concerns of the firm, its tendency would manifestly be to do so. Indeed, the diaries disclose a preoccupation on Porter's part with the subdivision and sale of Whitethorn and Belgravia which goes far to justify the plaintiffs' complaint that he devoted himself almost exclusively to Spreckley's business. A partner, who is apparently performing the functions undertaken by the firm but is really advancing his separate interest, has a bias against the fair discharge of his duty to his partners. This alone might suffice to disable Porter from secretly taking the gift supposed, and keeping it for himself. But in fact it is only a part, one aspect, of the considerations from which this consequence ensues. The thing given, a right to participate in the client's profits, was an advantage the pursuit of which fell within the scope of the partnership business. The inducement which the firm could hold out to a client in order to obtain this advantage on the joint account consisted in the promise or expectation of an expenditure upon his affairs of greater energy, time, care and enthusiasm. This is the very thing that the acquisition of such a right would tend to promote in the individual partner whether he acquired it by gift, contract or otherwise. Finally the willingness of the client to divide the profits with one partner formed ground for thinking that he might be ready to make some profit-sharing agreement with the firm itself for their mutual advantage, and this was information which one partner could not suppress to forward his separate interest. These considerations combine to make it inconsistent with his fiduciary obligation to conceal the fact, and to take a separate interest without the partners' knowledge and consent. Indeed, it has been said that a stronger case of fiduciary relationship cannot be conceived than that which exists between partners. ... The relation is based, in some degree, upon a mutual confidence that the partners will engage in some particular kind of activity or transaction for the joint advantage only. In some degree it arises from the very fact that they are associated for such a common end and are agents for one another in its accomplishment. ... The subject matter over which the fiduciary obligations extend is determined by the character of the venture or undertaking for which the partnership exists, and this is to be ascertained, not merely from the express agreement of the parties, whether embodied in written instruments or not, but also from the course of dealing actually pursued by the firm. Once the subject matter of the mutual confidence is so determined, it ought not to be difficult to apply the clear and inflexible doctrines which determine the accountability of fiduciaries for gains obtained in dealings with third parties. Of the duties imposed by these doctrines, one ... is that which forbids a partner from withholding from the firm any opportunity of advantage which falls within the scope of its undertakings, and from using for his own exclusive benefit, information, knowledge or resources to which the firm is entitled. John Porter's failing was that, as a partner in a firm, he secretly shared profits from land speculation, with a client of the firm, where the client had employed the firm to carry out the land speculation on the client's behalf. There is no correspondence between Birtchnell and the facts of the present case. Apart from other considerations, what is in issue in this case is an alleged breach of fiduciary duty said to be owed by the first respondent to the applicant. The case is not one brought by the third respondent' s 33 fellow joint venturers in which breaches of fiduciary duties said to be owed by the third respondent to the other joint venture members were alleged. It is also important to distinguish a joint venture from a partnership. In this case the parties were emphatic that they were not to be treated as partners. No joint venturer gained any authority to act as agent for or to bind any or all of the other joint venturers. An enterprise described as a 'joint venture' may well bear the characteristics of a partnership and thus be properly described as a partnership, as was the case in United Dominions Corporation Limited v Brian Proprietary Limited [1985] HCA 49 ; (1985) 157 CLR 1 ('Brian'), but in many instances joint venturers will go to no ends of trouble to ensure that they are not seen to be partners. That was certainly the case in relation to the Horse Park 1 joint venture (see s 7 of the Partnership Act 1963 (ACT). As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots' law, "adventure") will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as ... joint ownership. Clearly, the joint venture in this case had no interest in 'mutual' profit. It was formed so as to allow a capital asset in the form of broadacre land to be acquired and developed so as to permit its subdivision into numerous residential leasehold estates which could then be allocated to the several joint venture members according to their respective financial contributions. In some respects it could be compared with a collective of independent grocery stores acquiring product in bulk and then dividing it amongst themselves to enable stock in trade to be acquired at a cheaper price than would otherwise be the case. In Consul , Gibbs J found, at 399, that a manager/director of the respondent, which conducted a business of acquiring dilapidated properties, renovating them and reselling them at a profit, would not be in breach of his fiduciary duty to the respondent or any of the other companies in the group which were, together, controlled by Mr J W Walton, solicitor, were he to buy a property which Mr Walton had, uninfluenced by him, decided not to buy. Where a director of a company has been excluded from all decision-making and all participation in the company's affairs, with the consequence that his influence is such that he might as well have resigned, his duty to the company is diminished. Provided that he does not use the company's property, his duty may be reduced to vanishing point (per Sedley LJ in In Plus Group Ltd v Pyke [2002] 2 BCLC 201 at [89]-[90]). In the circumstances of this case it is necessary to identify the scope and character of the applicant's undertaking, and thereby ascertain the subject matter over which the fiduciary obligations of the directors of the applicant extended. In so doing, it is appropriate to have regard to the nature of the applicant and the purposes for which it was formed, the terms of the Joint Venture Deed constituting the Horse Park 1 joint venture and the limitations imposed thereby upon the undertakings of the applicant and also to the course of dealing actually pursued by the applicant as opposed to matters which some of the joint venture members may have had in contemplation and which may in certain limited circumstances have led to an expansion of the applicant's activities. The scope and character of the applicant's undertaking is not to be determined, for present purposes, by reference to its statutory powers. In another era one would have addressed corporate capacity by reference to the true meaning of a company's memorandum of association. But that is not the issue in the context of a claimed breach of fiduciary duty by a director of a company registered in 2001. The scope and character of a company's undertaking should be ascertained for present purposes by seeking to ascertain the general intention and common understanding of the members (see generally per Dixon J, as his Honour then was in H.A. Stephenson & Son Limited (in liquidation) v Gillanders, Arbuthnot and Company [1931] HCA 47 ; (1931) 45 CLR 476 at 487. See also per Menhennitt J in Re Tivoli Freeholds Ltd [1972] V.R. 445 at 470-472). In the context of clauses 2.5 and 3.2 of the Joint Venture Deed it is difficult to see how the scope and character of the undertaking of the applicant could be expanded beyond its role as trustee and manager of Horse Park 1, in the absence of an amendment to the Joint Venture Deed or a unanimous resolution of the joint venture members. There was no such amendment or unanimous resolution proposed or passed at any time. As will be apparent later, this is really the beginning and the end of the matter. The raison d'etre for the incorporation of the applicant was to serve as the trustee for and manager of the Canberra Residential Developments (No. 1) Joint Venture. One only has to turn to Recital F, the definition of 'Directors' in clause 1.1 and to the provision for the remuneration of 'Directors' in clause 24.3 of the Joint Venture Deed to see that the undertaking of the applicant was inextricably intertwined with and limited by the undertaking of the joint venture itself. It is clear that the function of the Joint Venture Deed was to regulate the relationship between the members of the joint venture and also to provide for the management of it by the applicant. It is equally clear that as the 'sole and exclusive manager' of the Horse Park 1 joint venture, the applicant's role was, as the Joint Venture Deed indicated, that of a 'bare trustee agent and representative of the Joint Venture Members in accordance with [the] Deed' (see clauses 4.2, 4.3, 22.2 and 39.1). Notwithstanding the registration of the applicant on 19 October 2001, almost four months before the execution of the Joint Venture Deed on 12 February 2002, the joint venture was expressed to commence on 13 December 2001, being the date upon which the applicant acquired Horse Park 1 as trustee for the 34 parties whose contributions funded the relevant deposit and who later became joint venture members under the joint venture deed. It will be recalled that Mr Bradley, as solicitor for the emerging group, had proposed the joint venture structure and the need for a company to serve the joint venture members as the applicant did. A fiduciary is liable to account for a profit or benefit if it was obtained (1) in circumstances where there was a conflict, or possible conflict of interest and duty, or (2) by reason of the fiduciary position or by reason of the fiduciary taking advantage of opportunity or knowledge which he derived in consequence of his occupation of the fiduciary position (per Mason J in Hospital Products at 107). Any profit or benefit obtained by a fiduciary is held by him as a constructive trustee. Once it is established that the fiduciary is liable to account for a profit or benefit which he has obtained there can be no objection to his being held to account as a constructive trustee of that profit or benefit. It can make no difference that it was not his duty to obtain the profit or benefit for the person to whom the duty was owed. What is important is that the advantage has accrued to him in breach of his fiduciary duty or by misuse of his fiduciary position. The consequence is that he must account for it and in equity the appropriate remedy is by means of a constructive trust (per Mason J in Hospital Products at 107-8). Equity does not assume jurisdiction to punish a fiduciary for misconduct by making him account for more than he actually received as a result of his breach of fiduciary duty (per Mason J in Hospital Products at 109). In a situation where the fiduciary has so mixed an indeterminate profit with his own property as to render the identification of the gain impossible, in such circumstances the whole will be treated as trust property, except so far as the fiduciary may be able to distinguish what is his own (per Mason J in Hospital Products at 109). The form of inquiry which ought to be directed will vary according to the circumstances. In each case the form of inquiry to be directed is that which will reflect as accurately as possible the true measure of the profit or benefit obtained by the fiduciary in breach of his duty. One approach more favourable to the fiduciary, is that he should be held liable to account as constructive trustee not of the entire business but of the particular profits which flowed to him in breach of his duty. Another approach, less favourable to the fiduciary, is that he should be held accountable for the entire business and its profits, due allowance being made for the time, energy, skill and financial contribution that he has expended or made (per Mason J in Hospital Products at 110). If the breach of fiduciary duty is a sine qua non in the sense that the pursuit of the activity for the purpose of obtaining the legitimate profit or benefit could not have been undertaken as a practical business operation on its own without seeking also to obtain the forbidden profit or benefit, then there is much to be said for the view that the fiduciary's liability to account should extend to all profits and benefits (per Mason J in Hospital Products at 114). When a party to a fiduciary relationship acts in breach of his fiduciary obligations and obtains an advantage for himself at the expense of and without the knowledge or consent of the party to whom the duty was owed, the party in breach is bound to account to the other party for the improper advantage which he obtained (per Gibbs CJ in Brian at 8). A fiduciary is under a duty to refrain from pursuing, obtaining or retaining for himself any collateral advantage in relation to the matter the subject of the fiduciary duty without the knowledge and informed assent of those to whom the duty is owed (per Mason, Brennan and Deane JJ in Brian at 13). In Farah Constructions Pty Limited v Say-Dee Pty Limited [2007] HCA 22 ; (2007) 230 CLR 89 ('Farah Constructions') the High Court quoted the rule and proceeded to comment upon it at [111] et seq. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees. In Barnes v Addy itself, the Court of Appeal in Chancery (Lord Selborne LC, James and Mellish LJJ) upheld the decision of Wickens V-C that two solicitors, Mr Preston and Mr Duffield, had not received any trust property and had no knowledge of any dishonest and fraudulent design to make them parties to the breach of trust by the sole trustee. It was insufficient that Mr Preston had been alive to the danger of the course of appointing a sole trustee and that Mr Duffield had prepared the appointment of that trustee. Farah Constructions Pty Limited was to be responsible for managing the development application, constructing the development, and selling the land. Profits were to be shared equally. The development application for the land was refused by the local council, in part because the site was said to be 'too small to achieve its full development potential and return a positive urban design outcome'. The property which Farah Constructions Pty Limited and Say-Dee Pty Limited had acquired was 11 Deane Street, Burwood. Thereafter, Mr Elias, who controlled Farah Constructions Pty Limited, his wife and each of his two daughters entered into contracts to acquire one unit each in a building located at 15 Deane Street, Burwood and one of four units each in a building at 20 George Street, Burwood. Then another company controlled by Mr Elias, Lesmint Pty Limited acquired 13 Deane Street, Burwood. Say-Dee Pty Limited in a cross-claim against Farah Constructions Pty Limited, Mr Elias, Mrs Elias and each of their two daughters and Lesmint Pty Limited claimed declarations that they held their respective interests in the land at 13 and 15 Deane Street and 20 George Street on constructive trusts for a partnership between Farah Constructions Pty Limited and Say-Dee Pty Limited. The High Court held that Farah Constructions Pty Limited owed a fiduciary duty to Say-Dee Pty Limited which required disclosure of information obtained from the council relating to the amalgamation of joint venture land with adjacent land and information that neighbouring properties were available for purchase. However it also found that Farah Constructions Pty Limited had fulfilled its obligations of disclosure. In relation to Mrs Elias and the two daughters the Court was concerned to address the rule in Barnes v Addy , had it been found that Farah Constructions Pty Limited had been in breach of its fiduciary duty to Say-Dee Pty Limited. Hence the imposition of constructive trusts over the items of property in the names of Mr Elias and Lesmint was an available remedy. The position was much more controversial in relation to the three units in No 15 in the names of Mrs Elias and her two daughters. After noting that in Royal Brunei the Privy Council had discounted the utility of the Baden categorisation, Nourse LJ in BCCI went on to express his own view that the categorisation was often helpful in identifying the different states of knowledge for the purposes of a knowing assistance case. Further, Consul also indicates that category (iv) suffices. However, in Consul , Stephen J held that knowledge of circumstances which would put an honest and reasonable man on inquiry, later identified as the fifth category in Baden , would not suffice. Gibbs J left open the possibility that constructive notice of this description would suffice. Barwick CJ agreed with Stephen J. In this way, there is accommodated, through acceptance of the fourth category, the proposition that the morally obtuse cannot escape by failure to recognise an impropriety that would have been apparent to an ordinary person applying the standards of such persons. Some breaches are well intentioned, some are trivial. The result was what his Lordship called the deliberate relaxation of the law by s 3 of the Judicial Trustees Act 1896 (UK). This conferred a power of curial relief in respect of breach of trust where the trustee had acted 'honestly and reasonably' and 'ought fairly to be excused'. There is no such general power of dispensation in respect of loss caused by breach of duty owed by other fiduciaries. The original Application was superseded by an Amended Application filed 30 November 2006 which was itself replaced by a Further Amended Application filed 19 November 2007. Under the Further Amended Application relief was not sought under s 1317H of the Corporations Act 2001 . 2 in respect of the purchase and development of land known as Horse Park 2. The applicant alleged that as at 27 March 2003 the group of 51 intending members of what might become joint venture no. Prayer for relief 7 was predicated upon the third respondent knowingly or alternatively dishonestly assisting Mr Brendas to commit the breaches of fiduciary duty said to have been owed by him to the applicant. Prayers for relief 9 and 10 were predicated upon the fourth respondent knowingly or alternatively dishonestly assisting Mr Brendas to commit the breaches of fiduciary duty said to have been owed by him to the applicant. Counsel for the applicant, Mr Orlov, submitted that there were two available formulations of the duties of the directors of the applicant in this case. Firstly, a duty, arising from the joint venture deed of 12 February 2002, to act in the interests of the applicant in performing its functions and duties as Manager under the joint venture deed of 12 February 2002 including such other functions and duties as it may have been directed to perform from time to time by the members of the joint venture. Alternatively, it was a duty, arising under the joint venture deed and as a result of conduct outside the scope of the deed, to act in the interests of the applicant in performing its functions and duties as Manager under the joint venture deed made 12 February 2002 and such other functions and duties as the applicant undertook voluntarily to perform for the benefit of the joint venture as a whole. The applicant drew a distinction between its activities as Manager in respect of the Horse Park 1 joint venture and other activities in which it was said to have engaged, which took the form of 'spotting' --- identifying other properties for possible acquisition by the joint venture members, pre-registration enabling the applicant to bid at restricted government land auctions with a view to purchasing same for the benefit of the members of joint venture no. 1 and purchasing land at such restricted government land auctions. The applicant placed reliance upon two notes appearing in Frank Porreca's record of the Annual General Meeting of syndicate or joint venture members of joint venture no. 1 held on 19 November 2002. The resolution was said to be to the effect that the applicant should consider all upcoming government land auctions for further development opportunities, including sites that may be suitable for multi-unit development by the members. His evidence in respect of the second note was that an 'expansion' of the joint venture to include new members was 'discussed'. It is clear that the discussion did not lead to any resolution being proposed or considered. Mr Porecca's evidence in respect of a resolution is inconsistent with the formal minutes of the meeting which make no mention of such a resolution. First option will go to existing members for the purchase of these additional blocks There is an option to look at all auctions including unit sales. The applicant submitted that in relation to properties other than Horse Park 1 which it spotted or had been spotted and for which it secured pre-registration rights to bid at the relevant restricted government land auction, a standard procedure was followed whereby on the letterhead of the applicant invitations were extended to all members of the joint venture no. 1 to record expressions of interest in becoming part of a syndicate of persons to make up a joint venture no. 2. Those invitations to lodge expressions of interest called for expressions of interest to be lodged by a specified time on a specified date with specified requirements for the contribution of moneys which collectively would be applied to pay the relevant deposit if the matter were to proceed to a purchase. The applicant submitted that until the closing time for the submission of expressions of interest it held its knowledge of the available purchase of another property and its pre-registration in relation to the possible purchase of that property in trust for all 34 members of joint venture no. 1. The submission progressed to say that from the closing time for expressions of interest the benefit of the pre-registration was held for the benefit of those who expressed interest and paid their deposit which may well have involved a lesser number of members of joint venture no. 1 than the 34 identified in the Joint Venture Deed. The applicant accepted that it was constrained not to pre-register for land auctions except for the benefit of the members of joint venture no. 1. It was not, because of the relationship established by the Joint Venture Deed, permitted to pursue pre-registration on its own account and for its own benefit on the premise that it may put together a joint venture of which it might become the Manager. The applicant acknowledged that it could not replicate an arrangement such as joint venture no. 1 for its own benefit. It reached this conclusion on the basis that it was always open to the 34 members of joint venture no. 1 to decide to purchase a property for which it may have secured pre-registration and, in the circumstances, it could not, without breaching its own fiduciary duties to the members of joint venture no. 1, place itself in a position where its duty and interest conflicted. The problem with the applicant's argument seems to me to lie in the transition from an arrangement whereby it is said that the applicant held the relevant pre-registration for the benefit of the 34 members of joint venture no. 1 up to and including the closing time for expressions of interest in respect of the possible acquisition of another property and that thereafter it was held for the benefit of those who expressed an interest in proceeding to become members of a joint venture or syndicate of purchasers of the new property. Were the applicant to avoid a breach of its own fiduciary duty to the members of joint venture no. 1 it would need the informed consent of all of the non-participants in the new enterprise. It is common ground that there was never any unanimous resolution by the 34 members in joint venture no. 1 to proceed with the acquisition of any other property. By clauses 2.5 and 3.2 the joint venture members bound themselves one with the other and also with the Manager not to purchase any other property to be subject to a joint venture arrangement between them without the unanimous approval of all of the joint venture members. Not only was there no such unanimous approval, but also there was no express informed consent of those who elected not to submit an expression of interest in participating in any of the other property acquisitions that were contemplated from time to time. It would seem to me that there was no evidence from which informed consent may be implied simply by the failure of individual joint venture members to sign up for participation in the purchase of other properties. The members had agreed that unanimity was required for there to be any other collective purchases and the applicant was a party to the joint venture deed (see Maguire v Makaronis [1997] HCA 23 ; (1997) 188 CLR 449 at 466-7). They had rights to a level playing field such that the applicant would not be used as a vehicle for purchasing and developing other greenfields properties which may work to the benefit of those who chose to participate, but to the detriment of those who did not. Another unanimous resolution case was Japan Abrasive Materials Pty Ltd v Australian Fused Materials Pty Ltd [1998] HCA 30 ; (1998) 16 ACLC 1 ,172, which concerned a joint venture company where a shareholders' agreement required a unanimous vote on certain matters. Absent a unanimous decision under the shareholders' agreement, no duty arose on the part of the directors to exercise their voting powers in the interests of the company as a whole. Counsel for the applicant submitted that the informed consent of non participants would be implied but this would seem to be inconsistent with the terms of clauses 2.5 and 3.2 of the Deed in the absence of an amendment to the Deed or, arguably, express written consent. The applicant also submitted that from 12 February 2002 it was open to any individual joint venture member or collection of joint venture members or, indeed, the fourth respondent, to bid at any auction for the purchase of any land. The only relevant qualification was that if the members voted unanimously to purchase a particular property then the members would automatically lose their individual rights to bid against the collective. They were the 60 parties of the first part to the Deed, jointly and severally called the ' Joint Venture Members '. Sixty persons or groups of persons whose names and addresses were set out as 'Principals' in Schedule 2 to the said Deed executed same as parties of the second part. They were jointly and severally called the ' Principals '. In 51 instances the 'Principal' was an individual and in the remaining nine the relevant principal was two or in one case four separate individuals. The applicant was the party of the third part to the said joint venture deed and was called the ' Manager '. The occasion for the execution of the Canberra Residential Developments (No 2) Joint Venture Deed on 23 February 2004 was the earlier acquisition by the applicant of Block 25 Section 1 Gungahlin and Block 2 Section 1 Harrison (collectively known as 'Harrison Estate 1') for $42 million by restricted auction on 13 August 2003. The joint venture deed recorded that the joint venture commenced on 13 August 2003. The Canberra Residential Developments (No 2) Joint Venture Deed was, like the Canberra Residential Developments (No 1) Joint Venture Deed, prepared for the parties to it by the firm of solicitors known as Bradley Allen. Of the 60 syndicate or joint venture members named in the Canberra Residential Developments (No 2) Joint Venture Deed, only 24 would appear to have been syndicate or joint venture members under the Canberra Residential Developments (No 1) Joint Venture Deed. Whilst the remaining ten members of the Canberra Residential Developments (No 1) Joint Venture did not, apparently, participate in the second joint venture, different companies associated with seven of the Principals in the first joint venture did become syndicate or joint venture members in the second joint venture. The remaining 29 syndicate or joint venture members in the second joint venture were all new participants with no association with the first joint venture. Kenoss Pty Limited, the third respondent, was not a syndicate or joint venture member in the second joint venture. Indeed, before the purchase of Harrison Estate 1 by the applicant on 13 August 2003, Mr Brendas, the first respondent, had already ceased to be a director of the applicant, having resigned on 11 April 2003. On that date he ceased to be both a director and also a secretary of the applicant. For example, on 15 November 2001, L J Hooker Commercial conducted a land auction on behalf of the ACT government offering an 18 hectare parcel of land for sale by restricted auction and 7 other much smaller parcels of land for sale by open auction. On 26 September 2002 L J Hooker Commercial offered 6 parcels of land for sale on behalf of the ACT government, one site having a land area of 54,813 m 2 and the other 5 lots having much smaller areas. As one might expect, Danny Mihailidis, Andro Glavinic, Robert Cobanov, Frank Porreca and Spiros Brendas were alert to offers by the ACT government of greenfields sites for sale including sites such as Horse Park 1 which had been acquired by the applicant at a restricted auction, the Gungahlin Development Authority having sent Mr Mihailidis a facsimile as 'Chairman' of the applicant on or about 5 December 2001, advising that the applicant had been accepted and was eligible to bid at the auction of Horse Park 1 on 13 December 2001. On or about 27 February 2003 Andro Glavinic completed an ' APPLICATION FOR THE RIGHT TO BID AT THE RESTRICTED AUCTION AND INDUSTRIAL CONDUCT UNDERTAKING ' in respect of the auction of 'Condor 4 Estate', 'Horse Park II Estate', 'Dunlop 4 West Estate' and 'Block 6 Section 157 Belconnen'. That application, albeit in Mr Glavinic's own name stated that the applicant was a 'Joint Venture' and identified the 'names and addresses of principals' as Canberra Residential Developments Pty Ltd, the applicant, of which Mr Glavinic was said to be the Deputy Chairman. Notification of the forthcoming restricted auction for Horse Park 2 was given in the 'Canberra Times' newspaper on Saturday 20 February 2003. Some 11 or 12 applications to bid at the restricted auction were received and accepted. The approved parties included Kenoss Pty Limited, the third respondent, for whom the relevant 'Contact Person' was Spiros Brendas, the first respondent, Canberra Residential Developments Pty Ltd, the applicant, for whom the relevant 'Contact Person' was Danny Mihailidis and Canberra Land Developments Pty Ltd, the fourth respondent, for whom the relevant 'Contact Person' was Mal Weston. By letters dated 21 March 2003 the Gungahlin Development Authority advised each of the applicant, the third respondent and the fourth respondent that they were eligible to bid at the auction for 'Horse Park 2 Estate'. It will be apparent that there had been something of a parting of the ways between Messrs Mihailidis, Glavinic, Cobanov and Frank Porreca on the one hand and Mr Brendas on the other before 27 March 2003. As indicated earlier Mr Brendas ceased to be a director and secretary of the applicant on 11 April 2003. As it transpires 12 persons became registered bidders for Horse Park 2 on 27 March 2003. Danny Mihailidis was the registered bidder in respect of the applicant, Mal Weston was the registered bidder in respect of the third respondent and Ian Hansen was the registered bidder in respect of the fourth respondent. On 26 March 2003 Mr Weston had ceased to be a director and secretary of the fourth respondent. On that day Mr Brendas became a director and secretary of the fourth respondent and Graham Leonard Brand also became a director of the fourth respondent. The bidding for Horse Park 2 commenced at $7 million and concluded with a successful bid of $25,300,000 on behalf of the fourth respondent. There were some 73 intermediate bids before the fall of the hammer. On the day prior to the auction of Horse Park 2 and the other greenfields sites which were being auctioned along with it, a meeting took place attended by Danny Mihailidis, Andro Glavinic, Frank Porreca and Robert Cobanov. It is clear that consideration was given to setting bid limits for the new group of 51 intending joint venture members in respect of the Dunlop, Condor and Horse Park 2 sites. Apparently the word 'ROULEN' in Croatian translates into English as 'round'. Of the 74 unsuccessful bids which preceded the fourth respondents' successful bid for Horse Park 2, some 50 bids were cast which were greater than the maximum of $19 million contemplated by Messrs Mihailidis, Glavinic, Frank Porreca and Robert Cobanov at their meeting on 26 March 2003. The level at which Mr Mihailidis stopped bidding is not entirely clear. It would appear to have been in the vicinity of $20-21 million. At that stage there were some three bidders still vying for the property. One of those dropped out, leaving the final bidding to the fourth respondent and a third party. When cross-examined about the meeting on the eve of the Horse Park 2 auction, Mr Glavinic acknowledged that Mr Brendas had not been invited to attend the meeting. Is that right? The third respondent itself owned shares in Kenoss Contractors Pty Limited which had been registered on 6 September 1995. 149,997 shares in that company were apparently held by the third respondent, the remaining three shares being held as to two by the second respondent and as to one by Joanne Brenda[s]. The third respondent also owned 49 shares in Petra Civil Pty Limited, a company registered on 5 November 1999. The remaining 51 shares were held by Dimitri Brendas. At all material times the sole director of Petra Civil Pty Limited was the first respondent who was also the company secretary. In addition the third respondent owned half the issued shares in the fourth respondent which had been registered on 26 February 2003. The remaining shares were registered in the name of Graham Leonard Brand. When the emerging group, which ultimately grew to become the 34 syndicate or joint venture members in the first joint venture, was contemplating the acquisition of large greenfields sites back in 2001 it took advice from Young Consulting Engineers Pty Limited and also Northrop Consulting Engineers in relation to likely development costs. One property in respect of which advice was taken was 'Dunlop 3 Estate'. It would appear that the third respondent did not end up taking a larger percentage, such as 20 per cent. Clause 6 of the Canberra Residential Developments (No 1) Joint Venture Deed was headed ' Subdivision & Allocation of Residential Blocks '. As expeditiously as possible the Engineer, in conjunction with the Valuer shall cause to be prepared a draft Subdivision Implementation Plan of the Land and a Subdivision Design. The civil engineering works for Horse Park 1 fell behind, leading to differences of opinion as to what, if any, extensions of time should be allowed. Spiro Brendas has reported at several CRD Directors' meetings that he was experiencing problems and delays with Staff, Subcontracts and Suppliers, not having contracts, nor working to a scheduled and detailed programme. There was an allegation that in doing so Petra Civil Pty Limited relied upon certain representations that were said to have been made earlier in September 2002 and which were referred to in the letter of 16 December 2002. There are three things to note about this letter of Youngs. First, Youngs refused to extend the date for Stages 2 and 3, contrary to what had been promised by John Bradley. Secondly, it purported to include as a reason for the 3 week extension of time granted for Stage 1 "minor delays due to wet weather". You should note that John Bradley made no mention of wet weather, the sole reason for the extension of time being the delay in the dates for the drawings named. Numerous excuses have been propounded. The important point is that they sowed the seeds for an estrangement between Messrs Mihailidis, Glavinic, Frank Porreca and Robert Cobanov on the one hand and Spiros Brendas on the other. Also it appears that it will be likely that Petra Civil will be in default with Stages 2 and 3. As to date we have not received a reply that adequately explains Petra Civil's revised program. The uncooperative behaviour from Petra Civil has given CRD cause to doubt as to whether Petra Civil has the capability to complete this project. Spiro also said he did not instruct anyone to write a letter in that form. The next development occurred on or about 11 February 2003. A typed agenda for a 'DIRECTORS MEETING' to be held at the Croatia Deakin Soccer Club on 11 February 2003 was brought into existence. As a result he shouldn't be involved with continuous discussion of contractual and progress reports of activity on site. credit from his bank. Our position is that we are concerned with Spiro being on the Board, because he has started the proceedings. He said he will talk to his solicitor and will give us his answer after that talk, and will make a decision. We said to him why he goes to CRD and not to Yangs [Youngs] , he also said it's Yang's [Young's] fault that he has no contract with Yangs [Youngs] so he goes to CRD. We achieved nothing with Spiro. Whilst Mr Brendas was not recorded as an intended 'attendee', it would appear that the meeting was attended by Messrs Mihailidis, Glavinic, Frank Porreca, Robert Cobanov and Brendas. When confronted with documents in the witness box he was unable to read them in a comprehensible way. In the circumstances the lack of any notes by him as to what transpired at these meetings is readily explicable. It is clear that a group comprising Messrs. Mihailidis, Glavinic, Frank Porreca and Robert Cobanov called on National Australia Bank Limited on 3 March 2003 to address the question of financing the purchase of greenfields land that was then coming up for sale including Horse Park 2. The apparent exclusion of Mr Brendas from the meeting with the Bank on 3 March 2003 appears to have been deliberate. Mr Frank Porreca's evidence was that his personal position as at 3 March 2003 was that he did not want Mr Brendas as a director of the applicant involved in the up and coming auction on 27 March 2003. On 6 March 2003 Mr Mihailidis circulated an 'expression of interest' form by email to Messrs Glavinic, Frank Porreca and Robert Cobanov. Mr Brendas was not copied with that form. The form contemplated an expression of interest in participating in a joint venture to bid for 'Dunlop 4 Estate' and/or 'Condor 4 Estate' and/or 'Horse Park II Estate Gungahlin'. If you wish to discuss any issues please don't hesitate to call Danny Mihailidis on Mobile: 0407 223 177. It would appear that a 'Without Prejudice Meeting' was called to take place at the office of Petra Civil's solicitors on 11 March 2003. The participants at the meeting were the applicant, Petra Civil Pty Limited, Kenoss Contractors Pty Limited and Young Civil Engineers Pty Limited. The meeting would appear to have been attended by Mr Ian Gilespie-Jones, Allan Hassani and Mr Brendas representing Petra Civil Pty Limited, Mrs Brendas representing Kenoss Contractors Pty Limited, Ray Young, Mitchell Alexander and David Smith representing Young Consulting Engineers Pty Limited, Messrs Mihailidis, Glavinic, Robert Cobanov and Frank Porreca representing the applicant and Mark Flint of Bradley Allen, the applicant's solicitors. On 12 March 2003 a meeting took place attended by Messrs Mihailidis, Frank Porreca, Robert Cobanov, Spiros Brendas and Andro Glavinic. Yes, it was. Towards the end of the meeting, yes. Yes. Danny, from what I can recall, Danny was just that fired up. Whilst there were differences of opinion between the other witnesses as to whether the meeting was heated or not, I find that it was heated in the manner in which Mr Cobanov described it. As to whether there was any place for Mr Brendas on the board of the applicant or in any future joint venture involving the development of greenfields sites, the evidence of Mr Cobanov is important. Again, I just remember it was very heated and it was all banning of Spiro. Yes, words to that effect. I believe it was probably after Spiro left as --- when I think back about it, yes, because Danny never had the guts to say things right to Spiro's face so, Yes. Quite right. Any further discussions to do with Petra are to be agendaed by Spiro through Danny --- Acknowledge & approved by all. Also added by Dany (sic) that any items to be discussed by CRD about Petra then Spiro will be excused from the meeting → Agreed and supported by all. Dany (sic) , Andro, Spiro , Robert & Frank. I believe so. Yes. Further meetings took place on 18 March and 19 March which involved Danny Mihailidis, Robert Cobanov, Frank Porreca and Andro Glavinic. The first three of these gentlemen appear to have had a meeting with representatives of National Australia Bank Limited on 18 March 2003. All four appear to have had a meeting on the same day with 'potential new members' and on the following day another meeting appears to have taken place with a 'group from' the first joint venture. It is quite apparent that Mr Brendas was not a participant in any of these meetings. The inference seems obvious to me that he was deliberately excluded on the basis that Messrs Mihailidis, Glavinic, Frank Porreca and Robert Cobanov did not want him to be involved in a Horse Park 2 joint venture, with the applicant serving as the manager. As it happened, Messrs Mihailidis, Robert Cobanov, Frank Porreca and Andro Glavinic sought to secure, on this occasion, 50 members for a new joint venture on the basis that each would put in $50,000 to fund the deposit for whatever purchase might be made, if any, on 27 March 2003. The last item on the agenda was 'Land Release Report'. Mr Glavinic's notes on his copy of the agenda are not easy to follow. It may be that apart from the misspelling of a number of English words, he has used words in the Croatian language. We have to get prepared for auction, together with our members. 1. As previously indicated such an application for the right to bid in respect of Condor 4 Estate, Horse Park II Estate, Dunlop 4 West Estate and Block 6 Section 157 Belconnen was signed by Mr Glavinic on 27 February 2003. On 4 March 2003 an internal memo was sent from the manager of 'Property Development & Investment Group 2' to 'Property Finance Manager & SCB, PD & IG' within National Australia Bank Limited in relation to the possible involvement of Canberra Residential Developments Pty Limited and others in the purchase of Condor 4, Dunlop 4 or Horse Park 2. This is done to reduce stamp duty costs and all members are aware of this requirement to pay prior to titles issuing. With stage 1 we made the call and all funds were received within 5 days of call. Our call for the funds is made once each stage achieves practical completion. They perceive that shareholders will number between 30 & 40 and require indicative approval to go to Auction to bid for 2 of the 3 englobo Land auctions that will occur this month. It is important to note that there is only a couple of land releases each year. The ACT Government expects to put the land to auction around the end of March 2003. Kenoss would set up a joint venture vehicle in conjunction with its equity partner or a share base consistent with its equity investment. This development is immediately adjacent to the proposed purchase. That chapter included a table headed ' RESIDENTIAL, COMMERCIAL & COMMUNITY LAND RELEASES 2002 --- 2003 ' after the sentence reading 'The following is a draft land release program for the ACT market for the coming next 2 years'. One of those sites was Gungahlin --- Horse Park Stage II. On or about 4 March 2003 Mr Gerard Abbey of Raine & Horne Real Estate wrote a letter to Mr R Drummond at National Commercial Finance Pty Limited which was copied to Mr Mal Weston of Kenoss and Bernie Bryant of BDB Property Consulting regarding 'Horse Park 2 Estate'. I believe a commitment to 100 plus blocks will be obtained from 3 --- 4 builders within 48 hours of the auction. I would be happy to secure these sales at $145,000, allowing the major builders the initial choice of blocks across the whole of the development. These should be held back to obtain the premium. Site is to be auctioned on March 27, 2003. Advice is provided by finance directors (Gordan (sic) Brand), consultant (Richard Drummond) and legal (Gerrard Toltz). Drummond is the driver behind property activities. ... the contracting firm of Kenoss is well regarded ... . No negative comments could be provided regarding capabilities. On about 20 March 2003 Gerrard Toltz sent an email to Ian Gilespie-Jones, the solicitor for the third respondent enclosing a proposed Joint Venture Agreement between Morgan & Banks Developments Pty Limited for whom Mr Toltz acted and the third respondent. Following the making by the fourth respondent of the successful bid for Horse Park 2 and the fall of the hammer, a deposit of $2,530,000 was paid to the Gungahlin Development Authority on 27 March 2003. Half of the deposit of $1,265,000 was paid by 'Morgan & Banks' and the other half of $1,265,000 was paid by Kenoss Pty Limited. On 27 March 2003 a joint venture agreement was entered into between Morgan & Banks Developments Pty Limited, the third respondent and the fourth respondent. A 'Shareholders Agreement' was also entered into between the same parties on the same day. Clause 29.2(a) of the Joint Venture Deed had required an annual general meeting of the joint venture to be held on or prior to 31 October in each year. It is important that you attend. The evening will be very informative and there may be many questions that need answering. It would be expected that all would attend so that we can share a Christmas toast. The attendance sheet seems to suggest that approximately 30 individuals were there. ELECTION OF COMMITTEE/Board of Directors There was unanimous decision by all to retain the existing composition of the Board of Directors until the following AGM. MOTION CARRIED. These were Richard Drummond of National Commercial Finance Pty Limited who undertook spotting activities in respect of real estate investments for Morgan & Banks. Mr Drummond was not entitled to payment of a fee in relation to his introduction of Horse Park 2 to Morgan & Banks. Rather, he was entitled to a profit share and was paid an ongoing fee for assisting with the development. He wasn't paid an upfront fee and he only received a share of profit if a certain return was achieved. Mr Drummond's fees were to Morgan & Banks Developments Pty Limited's account and Mr Weston's fees were to Kenoss Pty Limited's account. The other witnesses for the applicant were Messrs Robert Cobanov, Frank Porreca and Andro Glavinic. On a number of issues I found Mr Cobanov's memory to be quite uncertain. Amongst other things, his evidence displayed a misunderstanding on his part of the role of directors in relation to a company and demonstrated an inability to distinguish a joint venture from a company. Mr Frank Porreca professed to having an inability to remember much of what had transpired in 2001-2003. I found his evidence to be unreliable. I found Mr Glavinic to be straightforward and reasonably astute. Given the passage of time between the events of 2001-2003 and the giving by Messrs Robert Cobanov, Frank Porreca and Andro Glavinic of their oral evidence in November 2007, I must say that I have found their contemporaneous manuscript file notes of greater assistance than their oral evidence in discerning the facts. The only witness called for the first, second and third respondents was Mr Spiros Brendas. He had been born in Greece and came to live in Australia in 1964. As previously mentioned he is illiterate. He is unable to read or write in the English language, especially when confronted with the handwritten notes of others. When he was asked to turn to specific pages within Exhibit A Volume 1, a large bundle of documents in chronological order commencing at page 0.01 and running through to page 263, he had an obvious difficulty in finding the relevant pages. Notwithstanding these difficulties he presented as an astute businessman. The fourth respondent did not call any witnesses. It was brought into existence, firstly to serve as a bare trustee of land acquired by it on behalf of syndicate members who had made contributions to the cost thereof, and, secondly, to manage and implement the development of that land and its distribution, in divisible lots, amongst the relevant syndicate members. By becoming a party to the Canberra Residential Developments (No 1) Joint Venture Deed dated 12 February 2002, the applicant became the trustee of Horse Park 1 for the 34 syndicate or joint venture members who had contributed to the cost thereof and the manager of the development in accordance with the terms thereof. The rights and liabilities of the applicant and of the 34 syndicate or joint venture members were regulated by the Joint Venture Deed. In the circumstances, the fiduciary relationship between the applicant and the 34 syndicate or joint venture members had to be consistent with and conform to the terms of the Joint Venture Deed. It was not open to the applicant to purchase other broadacre land on behalf of some but not all of the 34 syndicate or joint venture members who made contributions to the cost thereof for development and distribution in divisible lots amongst such members, nor was it open to the applicant to do so on behalf of some but not all of such members and others. Whilst identifying other properties for possible acquisition by the 34 syndicate or joint venture members and undertaking pre-registration to enable the applicant to bid at a restricted government land auction with a view to purchasing same on behalf of such syndicate or joint venture members, may have been or become a proper activity for the applicant to engage in, consistent with its obligations under the Joint Venture Deed, it had no authority to purchase any land at such a government land auction without the unanimous approval of all 34 syndicate or joint venture members. In the absence of a willingness on the part of the third respondent to approve the purchase of Horse Park 2 by the 34 syndicate or joint ventures members, it was not open to the applicant to purchase Horse Park 2 for itself or on behalf of others without breaching its fiduciary and other duties to such syndicate or joint venture members. It was not open to the applicant to advance the interests of some, but not all, of the 34 syndicate or joint venture members and others by facilitating the acquisition of broadacre land, the development thereof and the distribution amongst them of divisible lots, to the disadvantage or potential disadvantage of the non-participating syndicate or joint venture members. It was not part of the business of the applicant to find and secure land for competitors of any of the builders who were members of Joint Venture No 1. At no time, whether before or after 19 November 2002 did the applicant's business or undertaking, consistent with its obligations under the Joint Venture Deed, include the pursuit of the purchase of broadacre land such as Horse Park 2 for a 51 member syndicate, including some but not all of the 34 syndicate or joint venture members from Joint Venture No 1. Mr Brendas, as a director of the applicant, undoubtedly owed fiduciary duties to the applicant, notwithstanding the relationship between the applicant and the 34 syndicate or joint venture members whereunder directors of the applicant were treated by such members as a corporatised committee of such members with Mr Frank Porreca lacking standing to serve as a member of such a committee. To whom is he a fiduciary? What obligations does he owe as a fiduciary? In what respect has he failed to discharge these obligations? And what are the consequences of his deviation from duty? In this case Mr Brendas owed his duty to the applicant. However, given the strictures imposed on the applicant by the Joint Venture Deed, there was no possibility of Mr Brendas securing an advantage in respect of Horse Park 2 for himself at the expense of the applicant. Mr Brendas did not acquire his knowledge of the ACT Government's offer to sell Horse Park 2 at auction on 27 March 2003 by virtue of his position as a director of the applicant. In the absence of any unanimous resolution of the 34 syndicate or joint venture members authorising the purchase on their behalves of Horse Park 2, of which Mr Brendas must have been well aware, it was perfectly proper for him to pursue the purchase by the fourth respondent of Horse Park 2. His position was similar to that of the Manager/Director in Consul who bought a property which Mr Walton had decided not to buy, only, in Mr Brendas' case, he knew that Horse Park 2 was a property which the applicant could not buy, consistent with its obligations to the 34 syndicate or joint venture members of Joint Venture No 1. Furthermore, Mr Brendas was in a position where, once the 51 member syndicate, which the other members of the board of the applicant sought to have it serve as trustee and manager in respect of Horse Park 2, had reached their agreed limit (of which Mr Brendas had no knowledge) and they ceased to bid, there was nothing to preclude Mr Brendas' interests from pressing on in competition with the other remaining bidders to secure Horse Park 2 for the fourth respondent. In addition, Mr Brendas, and by inference the third respondent, had been peremptorily excluded from any participation in what became a 51 member syndicate, which the other members of the board of the applicant sought to form notwithstanding the constraints imposed on the applicant by the Joint Venture Deed. In my opinion, he could not, in the circumstances, have been under any duty to refrain from seeking to secure Horse Park 2 for the fourth respondent at the auction on 27 March 2003. Mr Brendas did not owe any fiduciary duties to the 51 members of the proposed syndicate, nor, for that matter, did he owe any fiduciary duties directly to the 34 syndicate or joint venture members in Joint Venture No 1. In my opinion the applicant's submission that after 19 November 2002, if not before, a director of the applicant was not permitted to pursue any opportunity to acquire broadacre land released for sale at restricted government land auction for his own benefit or for the benefit of any company in which he was interested, or of which he was a director, without the prior informed consent of the applicant, should be rejected. There was no scope for a director of the applicant to prefer his own interest to that of the applicant or to use some special information of the applicant to his advantage such as might give the applicant the right to claim the advantage as its own, in the circumstances of this case. It follows that, by his involvement in the purchase by the fourth respondent of Horse Park 2 Mr Brendas did not breach any fiduciary duty owed by him to the applicant. In the circumstances it could not be said that any of the second, third and fourth respondents engaged in "knowing assistance" of Mr Brendas in breach of his fiduciary duties. Whilst it is unnecessary to address the equitable defences raised by the respondents, it would seem to me that, given that these proceedings were not instituted until 14 September 2006 i.e. approximately three and a half years after the purchase of Horse Park 2 by the fourth respondent, the applicant clearly stood by and allowed profits to be made of which it now seeks an account. It would seem to me that a defence of laches would succeed, were it necessary to take such a defence into account. In addition, the conduct of the other directors of the applicant and thus the applicant would make it inequitable to order an account. An applicant may not stand by and permit a respondent to make profits and then claim an entitlement to those profits (per Mason CJ, Brennan, Deane, Dawson and Gaudron JJ in Warman International Limited v Dwyer [1995] HCA 18 ; (1995) 182 CLR 544 at 559. Given the wrongful involvement of the applicant in pursuing the acquisition of Horse Park 2 for the 51 intending members of the new syndicate, it would be appropriate to deprive the applicant of any relief, to which it was otherwise entitled, on account of its own unclean hands. No court of equity will aid a man to derive advantage from his own wrong (per Isaacs J in Meyers v Casey [1913] HCA 50 ; (1913) 17 CLR 90 at 124). In the foregoing circumstances, the Further Amended Application filed 19 November 2007 should be dismissed with costs. I certify that the preceding two hundred and sixty-nine (269) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Graham. | fiduciary duties owed by a director of a trustee company developing land on behalf of a syndicate of builders who formed a joint venture to do so whether duties breached when the joint venture deed precluded the acquisition of further land without the unanimous approval of all members of the joint venture and, in the absence of any such approval, a company in which the director was interested acquired other land held: there was no breach of fiduciary duty by the director equity |
2 The applicant for relief applied for a Protection (Class XA) Visa on 12 March 2005. On 13 April 2005 a delegate of the Minister refused the application and on 14 April 2005 the applicant applied to the Tribunal for a review of that decision. The Tribunal conducted a review and on 5 October 2005 decided to affirm the decision not to grant a protection visa. 3 The applicant submits that the Tribunal made three errors of law which went to its jurisdiction. Before identifying the alleged errors and considering whether the applicant's submissions should be accepted, it is convenient to identify the applicant's claims before the Tribunal. The applicant told the interviewing officer of his general circumstances and his movements on leaving Iran in January 2005. He gave details of his family circumstances. He said that he had a friend who was of the Baha'i faith. 5 The Tribunal then examined the claims made by the applicant in his application for a protection visa. The applicant said he was an Iranian citizen and a Shi'a Muslim. He said that he had military service obligations in Iran. He said that he left Iran legally and that he had no difficulty in obtaining a passport with an exit permit valid until the Persian New Year. He said that his friend of the Baha'i faith had left Iran and gone to America. He said that his association with that friend and his parents in Iran had brought him to the attention of authorities. The authorities thought the applicant had converted to the Baha'i faith and on one occasion they took him to the police station where he was questioned. The applicant said that he was fearful because he had attended Baha'i 'sessions' and knew a lot about the faith. He said that he and his cousin had attended an anti-government protest in Shiraz in July 2003. His cousin had been arrested and then imprisoned. The applicant said if he returned to Iran he would be arrested for not having a passport. He would also be required to do military service which he did not want to do. He said that if the authorities believed that he had converted to the Baha'i faith he would be executed. 6 The Tribunal then examined the claims made by the applicant during an interview with the delegate of the Minister on 15 March 2005. It is not necessary for me to set out all the details of what was said by the Tribunal. The applicant said that he was not a Baha'i. He said that he was a practising Muslim, but he did not pray or attend mosque. He gave details of the Baha'i sessions he attended and said that he made no commitment at the sessions. The applicant's main problem was that he was suspected of being of the Baha'i faith. 7 The Tribunal then set out the information and evidence put before it at the review hearing. The applicant reiterated a number of the claims already outlined. He said that the authorities did not prevent him leaving Iran. As far as his possible military service was concerned the applicant said that if the authorities knew he was associated with the Baha'i faith 'they would really hassle him in the military'. He gave further details of his association with his friend of the Baha'i faith and that friend's family and of his questioning by the authorities. The applicant described his involvement with the Baha'i faith and said that he intended to convert to that faith. He said that he had not mentioned that intention earlier because he was frightened to divulge everything when he arrived. The applicant said that the authorities in Iran already suspect him of having converted to the Baha'i faith. 8 After the hearing, the Tribunal received a further submission from the applicant. You did not say at any stage prior to the hearing, that you wished or intended to convert. Your comments are to be in writing and in English. They are to be received at the Tribunal by Friday, 16 September 2005 . With the submission the Tribunal received a photocopy of a letter from the applicant's mother and a certified translation thereof. This letter is important because the applicant submits that the Tribunal did not have proper regard to it. The contents of the letter are adequately summarised by the Tribunal. He was detained for two days and was released on bail (giving his house deed as security). Three days later they came again and interrogated the family about [Applicant] and accused the applicant and his family of converting to Baha'i. Even before these contacts security people were patrolling the house. The home phone was bugged, and she did not want the applicant to call. [Applicant]'s father had also been detained and questioned. The letter concludes that the applicant has caused them headaches, and (although concerned at being far from him) urges him to "just leave us alone and forget about us", and is signed his loving mother. The ability to travel in and out of Iran through legal exit/entry points is a reliable indication that a person is of no particular adverse political or security interest. Such a person would not warrant inclusion on a black list which is kept, or arrest. 2. A person who applied for political asylum abroad but who failed would not face serious harassment on his or her return to Iran. 3. There is a general obligation on young men in Iran to perform a period of military service. 4. Those persons who practise the Baha'i faith in Iran are the subject of discriminatory treatment by reason of that fact. However, there is no evidence that those who are friends with a Baha'i family suffer discriminatory treatment. 13 First, he submits that the Tribunal erred in not addressing his claim that he had a well-founded fear of persecution because the authorities in Iran would think that he was of the Baha'i faith. In other words, the Tribunal did not address his claim that even though he was not of the Baha'i faith, he would be persecuted because the authorities would think that he was of that faith. Secondly, he submits that the Tribunal erred in not addressing his claim that he would be persecuted during the performance of his military service. Thirdly, he submits that the Tribunal erred in not having proper regard to the letter from his mother. 14 As to the first submission, in my opinion, the Tribunal did address the applicant's claim that he had a well-founded fear of persecution because the authorities in Iran thought or might think that he was of the Baha'i faith. The Tribunal accepted that the applicant had a Baha'i friend and attended Baha'i gatherings in Iran. It accepted that Baha'i is a persecuted religious minority in Iran, and that a convert from Islam to the Baha'i faith would be at an even greater risk of persecution than someone born into a Baha'i family. 15 The Tribunal found that the applicant was not of adverse interest to the Iranian authorities. It did not accept that he was detained and questioned as he claimed or that the authorities harassed his family as he claimed, 'notwithstanding the letter from his mother'. The Tribunal was satisfied that had the applicant been under investigation as he claimed, he would have been blacklisted and he would not have been able to leave the country. It said that the fact that he was able to do so was a reliable indication that he was not of interest to the Iranian authorities. It said that its finding that the applicant was not of interest to the Iranian authorities was reinforced by the absence of information indicating that Iranians had been targeted merely for being friends with a Baha'i family. Furthermore, it said that if the authorities were aware that the applicant was attending Baha'i meetings, the country information suggested that it was most improbable that this would not have been an 'explicit' subject of his interrogation, or that he would have been released without charge. In my opinion, these findings were open to the Tribunal. The critical finding is that the applicant was not of interest to the Iranian authorities and that negated a conclusion that the authorities thought that he had converted to the Baha'i faith. 16 The Tribunal went on to deal with the applicant's claim that he intended to convert to Baha'i. He gave evidence of such an intention, and it was appropriate for the Tribunal to consider that question in view of the evidence that those of the Baha'i faith are a persecuted religious minority in Iran. The Tribunal said that it was not satisfied that the applicant intends to convert to the Baha'i faith. It noted that in his interview with the delegate, the applicant had said that he was not of the Baha'i faith and that he was still a Muslim. At that point he had a clear opportunity to state that he believed in the Baha'i faith and wished to formally convert. 18 The Tribunal said by way of conclusion that it did not accept that the applicant faced a real chance of serious harm in relation to 'his real or imputed religion'. The findings made by the Tribunal were open to it and it did address the claim that he intended to convert and would be persecuted as a result, and the claim that he would be persecuted because the authorities in Iran considered that he had converted. The applicant's first challenge to the Tribunal's decision must be rejected. 19 As to the second submission, this submission is related to the first. The laws requiring military service applied to all and there is no evidence that if he failed to perform military service he would suffer a harsher penalty for a Convention reason. Insofar as the applicant was saying that he would suffer persecution during his period of military service because the authorities considered that he was of the Baha'i faith, that submission must fail for the reasons that the first submission fails. 20 As to the third submission, the Tribunal set out in its reasons for decision a full description of the contents of the letter from the applicant's mother and that description is set out in [10] above. It made specific reference to it in the context of its finding that it was not prepared to accept that the authorities in Iran had harassed his family. That harassment was said to have taken place because of the interest the Iranian authorities took in the applicant. The Tribunal was entitled to conclude for the reasons it gave that the applicant was not of adverse interest to the Iranian authorities and therefore to reject his story that he had been detained and questioned. It was entitled to reject the assertion that his family had been harassed and it is clear that it took into account the letter from the applicant's mother in deciding whether it should reach that conclusion. The Tribunal had regard to the letter from the applicant's mother and did not err in the way alleged by the applicant. The third submission must be rejected. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko . | application for prerogative relief where applicant is iranian citizen seeking protection visa where tribunal affirmed minister's decision not to grant protection visa whether tribunal addressed applicant's claim that iranian government mistakenly thought him to be of a particular faith whether tribunal addressed applicant's claim that he would be persecuted during compulsory military service whether tribunal erred in not having proper regard to documentary evidence supplied by applicant. migration |
2 It is necessary to set out some of the circumstances to explain the background of this application. 3 Mr Legge was made bankrupt on 22 March 2004 on a petition which was brought by Mackinlays, a firm of solicitors. The petition was founded upon a default judgment of the Perth Local Court which Mackinlays obtained against Mr Legge in respect of unpaid legal fees. 4 Mr Legge applied to the Federal Magistrates Court to annul the bankruptcy and on 2 March 2007 the Federal Magistrate dismissed Mr Legge's application to annul his bankruptcy. Parties to that application were Mackinlays, Mr Legge, and it also appears from the appeal book that the Official Trustee appeared before the Federal Magistrates Court with leave. 5 Mr Legge then appealed against the decision of the Federal Magistrates Court. In the meanwhile, and before the appeal was heard, Mr Legge succeeded in obtaining an order from the Western Australian Magistrates Court setting aside the default judgment which had been obtained by Mackinlays. 6 I heard the appeal on 10 March 2008. The parties that appeared at that appeal were Mr Legge and Mackinlays. The Official Trustee appeared by leave. The appeal concluded by the Court approving consent orders which allowed the appeal and ordered the annulment of Mr Legge's bankruptcy. I gave reasons for approving the consent orders ( Legge v Mackinlays Solicitors [2008] FCA 345). The day after the consent orders were made and before they were extracted, Mr Simonsen wrote to the Court by email saying that he was not happy with the orders, that he was a creditor of Mr Legge and that he had not been given notice of the annulment application made by Mr Legge in the Federal Magistrates Court in 2006. 7 I directed that the District Registry not extract the orders and I listed the matter for mention on 20 March 2008. The District Registrar asked the Official Trustee to notify all of the creditors of the mention hearing. The Official Trustee did that. The Official Trustee also sent a copy of my reasons to each of the creditors. The only person who appeared at the hearing on 20 March 2008, other than the parties to the appeal and the Official Trustee, was Mr Simonsen. At the hearing I advised Mr Simonsen that if he wished to make any application, he should file and serve a notice of motion and an affidavit in support of that application, by 4 pm on 27 March 2008, failing which the orders made on 10 March 2008 would be extracted. 8 On 27 March 2008, Mr Simonsen filed a notice of motion and an affidavit. However, Mr Simonsen did not serve the notice of motion and the affidavit before the expiry of the time limit. This was because he was not given a listing date by the Registry until 28 March 2008 and also because he posted the notice of motion and affidavit to each of the two parties and the Official Trustee. I am prepared to extend the time for the service of the notice of motion and the affidavit until 4 pm on 3 April 2008. 9 In his affidavit filed in support of the motion, Mr Simonsen said that he was a former business partner of Mr Legge and that the business partnership had terminated and the accounts were not yet settled. However, he claims that Mr Legge owes him money arising from the partnership including a partnership debt which he settled with somebody else. The Official Trustee has admitted a proof of debt in respect of Mr Simonsen, only to the extent of $100, but Mr Simonsen has deposed that he is in dispute in the Federal Magistrates Court with the Official Trustee in respect of claims arising from the partnership with Mr Legge. 10 Mr Simonsen went on to depose that he had not been served with the notification by Mr Legge of the Federal Magistrates Court proceeding to annul his bankruptcy. I did not become aware of this requirement until after the appeal was underway. It was sometime later when I was speaking with Ms Heljo Cameron of ITSA, that she made me aware of the subsequent appeal and that it was at this time I was informed by her that the appellant ("Legge") was aware of the requirements to serve creditors. I told her that I had not been served with anything. 11 The first question is the standing of Mr Simonsen to make this application. 12 Mr Simonsen was not a party to the annulment proceeding before the Federal Magistrates Court and he is not a party to the appeal before this Court. However, the Court has power to make a person a party to an appeal even if the person was not a party to the proceeding below. The power is to be found in O 52 r 14(2) of the Federal Court Rules . The question is whether I should exercise the power to permit Mr Simonsen to become a party to the appeal. I will not exercise the power to do so, for the following reasons. 13 The complaint that Mr Simonsen makes is that he was not served with notice of the annulment application before the Federal Magistrates Court. 14 Mr Legge has given evidence that Mr Simonsen was given the notice but I will proceed on the assumption, without so finding, that Mr Simonsen was not served with the notice of the proceeding. The evidence shows that Mr Simonsen learned from the conversation that he had with Ms Cameron from the office of the Official Trustee, that Mr Legge had made an application for the annulment of his bankruptcy to the Federal Magistrates Court and had been unsuccessful in that application. The evidence is also that Ms Cameron, told Mr Simonsen that he should have been served with notice of the application. Further and significantly, Mr Simonsen also knew from those discussions with Ms Cameron that Mr Legge had appealed against the decision of the Federal Magistrates Court and that the appeal was on foot. 15 However, notwithstanding those facts, Mr Simonsen made no effort to become a party to the appeal. Instead, Mr Simonsen awaited the outcome of the hearing of the appeal and then for the first time, raised with the Court, albeit informally, his complaint about not having been notified of Mr Legge's annulment application to the Federal Magistrates Court. 16 In my view, it is now too late for Mr Simonsen to apply to become a party to the appeal. It was open to him to take that action before the hearing of the appeal but he did not do so. It would undermine the principle of finality in litigation if, after the outcome of the appeal, I were to permit a person to become a party to an appeal, in respect of a complaint of which he had knowledge prior to the hearing of the appeal. In these circumstances, I do not exercise the power to permit Mr Simonsen to become a party to the appeal. I, therefore, dismiss the motion. 17 I also note that Mr Simonsen attached to his affidavit a costs agreement. However, it was not a costs agreement between Mackinlays and Mr Legge in respect of the charges made by Mackinlays which were the subject of the default judgment. This is apparent from para 11 of the affidavit of Mr Alistair Mackinlay which was sworn on 4 October 2006. I say this without prejudice to any arguments which Mackinlays may wish to make in the Western Australian Magistrates Court in respect of any proceedings they may take against Mr Legge, but on the evidence that is before this Court, that is the position. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis. | whether person should be permitted to become a party to an appeal after orders made in the appeal practice and procedure |
He was 13 years old. He died from the effects of anaphylactic shock after taking a mouthful of food containing peanut. The food was supplied to him by the staff of Scotch College then acting as officers of the Scotch College Cadet Unit. The food containing peanut was supplied to him despite his parents having advised that Nathan had a severe peanut allergy. He died because those responsible for his health and safety failed in their duty to take all reasonably practicable steps to protect his health and safety. That duty arose under s 16(1) of the Occupational Health and Safety Act 1991 (Cth) (the Act). The Court is asked to make a declaration of contravention, and to impose a pecuniary penalty on the respondent, the Commonwealth of Australia (the Commonwealth), for the contravention. At the same Scotch College cadet camp six cadets were lost in the bush for 18 hours. The person with a radio who was supposed to remain with them in the bush left them alone, taking the radio with him. Again, those responsible for the health and safety of these six cadets failed to take all reasonably practicable steps to protect their health and safety and thereby contravened s 16(1) of the Act. The Court is asked to adjourn the proceedings in relation to this incident because written undertakings relating to the fulfilment of obligations under the Act have been given to and accepted by Comcare. The civil remedies available are declarations of contravention (cl 2), pecuniary penalty orders (cl 4), injunctions (cl 14), remedial orders (cl 15) and undertakings (cl 16). In this proceeding Comcare seeks declarations of contravention, a pecuniary penalty order, and an adjournment of part of the proceedings following the giving and acceptance of a written undertaking. (2) The person must not withdraw or vary the undertaking without the written consent of Comcare. (3) If proceedings relating to whether a declaration should be made against a person under clause 2 have commenced, the court may adjourn the proceedings if Comcare requests the court to do so on the grounds that Comcare considers that an appropriate written undertaking by the person under subclause (1) is in force. (5) Comcare or an investigator may apply to a court for an order under paragraph (4)(b) if the person has breached, is breaching, or proposes to breach the undertaking. However, in order to prove criminal liability it must be established that the breach caused death or serious bodily harm, and that the perpetrator was negligent or reckless. The maximum penalty which may be imposed for a criminal contravention is significantly higher than the penalty which may be imposed for a civil contravention. For instance, the maximum penalty for criminal liability for breach of s 16(1) is 4,500 penalty units equating to $495,000, rather than the maximum civil penalty available which is $242,000. The duty under s 16(1) is stated to be imposed on an employer. Section 5 defines employer relevantly to mean the Commonwealth. The duty is imposed in favour of employees. The Act deems cadets undertaking cadet activities to be employees so that the Commonwealth is made liable for any failure to comply with s 16(1) in respect of the cadets. Section 10 of the Act imposes duties on the Commonwealth as employer of cadets and specifies that such duties are to be performed by a particular person or body as the employing authority. Anything done by that person or body in their capacity as employing authority has the effect as if it had been done by the Commonwealth (s 10(1)(b)). Section 5 of the Act defines "employing authority" as the person or body specified in the regulations to be the employing authority in relation to a class of Commonwealth employees. Item 3 of reg 4(1) of the Occupational Health and Safety (Safety Arrangements) Regulations 1991 (Cth) specifies the Chief of Army as the employing authority of members of the Australian Army Cadets. The Scotch College Cadet Unit is a unit of the Australian Army Cadets. During activities undertaken by the cadet unit, the cadets are, in law, treated as employees of the Commonwealth. As a result it was the Commonwealth which owed to cadets a duty to take all reasonably practicable steps to protect their health and safety during activities as cadets. It was the Chief of Army who, as employing authority, had to perform the duties imposed by the Act. This proceeding has two separate parts. One is concerned with the death of Nathan Francis, and the other is concerned with the loss of the six cadets in the bush. That part of the proceeding concerned with the death of Nathan Francis will be dealt with first. When he was one year old he was diagnosed with having asthma. When he was about 4 years old he was diagnosed as having a severe allergy to peanuts. He started at Scotch College in 2005 in year 7. It was compulsory to join one of several activities. The cadets was not Nathan's first choice. It was his third. He joined in March 2007. In order to be accepted as a cadet he had to attend a medical examination and submit a record of the outcome of it to the cadet unit. The medical examination record form asked for any advice that may assist in the treatment of the child if any medical condition exists. Nathan's mother wrote in response to this question "Use of EpiPen for peanut allergy". A cadet camp named Bivouac 2007 was organised by the Scotch College Cadet Unit for 29 to 31 March 2007 at the Wombat State Forest near Gisborne in Central Victoria. Before the cadet camp Nathan's parents were required to complete a number of forms including a parental authorisation form. In a section dealing with medical conditions, Mrs Francis wrote "yes" next to the word "allergies". In answer to the question "Does your child have any severe allergies (if yes, please state each one)" Mrs Francis circled "Yes" and wrote "PEANUTS --- but all nuts to be avoided". The Australian Army Cadets Policy Manual 2004 published by the Army governed the procedures of cadet units and required the compilation of a list of medical conditions including allergies of all cadets attending camps. The manual stipulated that the list was to be available in the event of a medical emergency on a camp, and also required it to be sent to central Army administration. It did not require the medical information to be circulated in relation to the distribution of food to cadets. From the forms returned by the parents of cadets Ms Joanne Fisher, a member of staff of Scotch College and the administrative secretary to the cadet unit, compiled a list of the medical conditions of each of the cadets who were to attend the camp. She was assisted by Mr Robert Papuga, a teacher at Scotch College who was a Lieutenant in the cadet unit. He was in charge of A Company to which Nathan belonged, and was responsible for producing a list of the medical conditions of each cadet in that company. He was assisted by another teacher, Mr Geoffrey Dans, who was a Second Lieutenant in the cadet unit and an advisor to A Company. The final form of the list showed that Nathan suffered from asthma and peanut allergy and noted that all nuts were to be avoided. A composite list which showed medical issues in relation to all cadets attending the camp indicated that six other cadets also suffered from peanut allergy. Mr Papuga sent a copy of the final form of the list to Mr Peter Riley. Mr Riley was also a teacher at Scotch College and was a Major in the cadet unit. He was Second in Charge and Safety Officer of the camp. They are to be reminded that a large amount of time and money has been invested into the menu for Bivouac. The ration pack was a plastic bag packed tightly with items of food contained in tubes, tins, packets and pouches. The ration packs contained two main courses. These were in pouches. On the outside of each pouch was a stamp with the name of the food inside that pouch. There were five different ration packs designated by letters from A to E. The C pack contained a main meal pouch stamped with the words "Beef Satay" and another stamped with the words "Sausages & Vegetables". These descriptions were barely legible. They were stamped in a light grey colour on a fawn background. A copy of the front of the beef satay pouch is appended to these reasons as Schedule A. Whilst the description on the pouches did not identify the ingredients of the food in the pouch, there were, within the tightly packed plastic bag containing the food, two A4 sheets folded together into a small rectangle. One sheet set out the menus or contents of each of the five different ration packs. The other set out the ingredients of all of the foods in all five of the ration packs. A copy of each of these sheets is appended to these reasons as Schedule B. The ration packs are designed for use by Australian Defence Force (ADF) personnel in the field. People with allergies are not permitted to join the ADF. Food labelling legislation does not apply to the ration packs as they are produced for use by the ADF internally and are not for sale. The distribution to about 300 cadets took about 20 minutes and was supervised by Mr Norman Bain. He was assisted by several cadets. The ration packs were distributed at random. The cadets were not given any information about the contents of the packs apart from being told that E packs were suitable for vegetarians. The medical information required to be and in fact supplied by parents was not provided to Mr Bain to identify cadets who had allergies to food or any other special requirements. C packs were issued to Nathan and also to Nivae Anandaganeshan, and Gene van den Broek. Each of these cadets had notified that they had peanut allergy. The C pack contained beef satay which was made with peanut butter. Mr Bain had been employed by Scotch College for 23 years as the College Marshall. That position involved a number of jobs which teachers did not do such as holding detentions and acting as Fleet Manager. Before that he had been in the Regular Army for 21 years including time as a recruiter. There he became aware that the ADF did not allow people with food allergies to join. Mr Bain was a Major in the cadet unit and acted as one of the Quarter Masters. After a morning navigation exercise Nathan returned to the campsite with members of his section. At about 1.30 pm they sat down to prepare lunch. Ryan Melville, a year 10 student and the Corporal in the section, was near Nathan. He looked very panicked so I went over to him and asked him what was wrong. I was standing probably about 5 metres away from him. Nathan said "I'm allergic to peanuts, and I think I just ate something with peanuts in it". Because my brother is allergic to peanuts I knew what to look for and through first aid training I knew the symptoms. I asked him if he had an Epipen with him, which he said he did. I asked him where it was and he said it was in his webbing, which was on the ground beside him, and he got it out from his front right ammo pouch. He then gave me the Epipen, so he could put his webbing on which was still on the ground, he put his webbing on while I moved his ration pack which was a "C" pack and was sitting on the other side of where he was sitting. I asked him if it was his ration pack and he said yes that it was. It was definitely a "C" pack. While we're walking Nathan told me [he] had swallowed one mouthful of his lunch and that he spat the second one out. When we got up to the A company HQ I sat him down on a chair, and removed his japara, and jacket, [and] he removed his webbing. I put his EpiPen down on a table on top of the first aid kit and alerted everyone to its position. That took less than a minute. He arrived there at 2.05 pm. Dr Anne Waterhouse, the voluntary medical officer at the camp, administered Nathan's EpiPen. Nathan was transferred into a vehicle to be taken to hospital. An ambulance was called. At 2.11 pm Nathan became unconscious. At 2.48 pm the ambulance arrived from Daylesford. The ambulance officers observed that Nathan exhibited no signs of life. At 3.42 pm Nathan was taken by air ambulance helicopter to the Royal Children's Hospital in Melbourne. He arrived at 4.20 pm. Dr Simon Young pronounced him dead on arrival. Anaphylaxis is a serve acute allergic response which may cause severe asthma like symptoms as well as shock leading to cardiorespiratory arrest. On 8 May 2007 the Acting Chief of the Defence Force issued an order prohibiting the use or consumption of ration packs by cadets. He also ordered a review of the sufficiency of food warning and labelling standards for ration packs and the adequacy of ADF and cadet policies regarding the management of people, particularly children, with severe food allergies. Major General Grant Cavenagh conducted the review and reported on 22 June 2007. On 30 March 2007 the Army notified Comcare of Nathan's death. Section 41(1)(b) of the Act provides that an investigator who is a member of the staff of Comcare may conduct an investigation concerning a breach or possible breach of the Act. Stewart Williams had been appointed as a Comcare Occupational Health and Safety Investigator under s 40(2) of the Act. Between 3 April 2007 and 29 May 2008, Mr Williams conducted an investigation into Nathan's death. The investigation was undertaken in co-operation with Victoria Police acting on behalf of the Victorian State Coroner. Evidence collated during the investigation comprised witness statements, documents, reports and other material which occupied eight large lever arch folders. On the basis of this evidence Mr Williams prepared a report and gave it to Comcare on 29 May 2008 pursuant to s 53(1) of the Act. The CRPs supplied contained a satay beef food pouch. The satay beef food pouch contained peanuts or peanut protein. As a result Cadets Francis, Anandaganeshan and van den Broek were exposed to the risks to health and safety particularised at paragraph 15 below. The one-man CRPs include five different menus, menu A to menu E. Each menu contains a different mixture of foods. At all relevant times, menu C included one pouched meal of beef satay which included peanuts in its ingredients. The CRPs were distributed to the AAC cadets by the SCACU Quartermaster, Major (AAC) Norman Bain. Cadet Francis was issued with a CRP C pack as were Cadets Anandaganeshan and van den Broek. No action was taken to correlate the information that was complied in the Nominal Medical Roll with the contents of CRPs. As a result Cadet Francis was exposed to the risks to health and safety particularised at paragraph 15 below. Shortly after heating the pouch Cadet Francis was observed to taste a mouthful of the beef satay meal before immediately reacting and spitting it out. Cadet Francis drank water immediately and requested assistance. During this journey Cadet Francis informed Major (AAC) Riley that he had "eaten something". Major (AAC) Riley had been given Cadet Francis' EpiPen for use should it be necessary. Dr Waterhouse carried out emergency CPR treatment with the assistance of three SCACU officers, Major (AAC) Riley, Lieutenant (AAC) Demeris and Lieutenant (AAC) Collins. SCACU secretary Ms Fisher was present during the treatment. the CRPs) or substances (i.e. On 8 April 2009, Comcare accepted an undertaking from the Commonwealth through the Chief of Army. In part the undertaking related to the death of Nathan. By the undertaking the Commonwealth and the Chief of Army admitted liability for the breaches of s 16(1) alleged in [11], [12], [13], [14] and [16] of the Statement of Claim which are set out in [35] of these reasons. Further, in relation to Nathan's death, the Chief of Army undertook to do the things listed in Sch 1 of the undertaking and to report to Comcare concerning compliance with the undertaking. Such a risk may be life threatening for people who suffer from a severe food allergy. Parents may consider it is in their child's best interest not to allow participation of their child in the proposed activity. In the event that the child is allowed to attend a catered cadet activity, the parents may choose to provide, at their own expense, sufficient food to cover the duration of the activity. Restrict the distribution of combat ration packs that have been produced prior to 1 July 2008 to ADF personnel only and prohibit the distribution of such combat ration packs to members of the public and the AAC. Pay for the publicity prepared by Comcare, including publication of an advertisement confirming the entering into of this Undertaking in a daily metropolitan newspaper in each capital city of each State and Territory of Australia. Publish an appropriate statement in the ADF internal publications. Develop and implement, at the ADF's own cost, in respect of army cadets, an Anaphylaxis Policy by 30 June 2009. Such Policy is to be developed in conjunction with medical advisors (as agreed in consultation between Comcare and the ADF) who specialise in allergens, immunology and respiratory diseases. Comcare sought such an order against the Commonwealth. Having admitted liability for contravention of s 16(1) in relation to Nathan's death, the Commonwealth agreed that a pecuniary penalty should be imposed. There was however no agreement between the parties as to the amount of the penalty. Comcare argued that the contravention was in the worst case category and should attract a pecuniary penalty in the range of $220,000 to $242,000. The Commonwealth accepted that a substantial penalty was appropriate but contended that the case was not in the worst case category. The Agreed Statement of Facts is cross referenced in many places to the report of Mr Williams, the Comcare Investigator. When the application came on for hearing on 9 April 2009 the Court indicated that it would be appropriate for the Court to have access to the report of Mr Williams. Following this indication Comcare arranged for the eight folders constituting the evidence upon which the report was based as well as the final report to be sent to the Court. It has been used in these reasons to amplify and explain some of the agreed facts. The Commonwealth relied on an affidavit sworn on 8 April 2009 by David Thomas Mulhall. In the course of submissions by counsel for Comcare it appeared that there might be some further evidence which could assist the Court in determining the appropriate level of the pecuniary penalty including evidence from Nathan's parents, Mr and Mrs Francis, evidence concerning the state of knowledge at the time in the school community about peanut allergy, and evidence as to the knowledge of Scotch College about peanut allergy and any steps taken by the school to address the issue. The parties assisted the Court by supplementing the evidence in these areas. Whilst the pain of the loss of a 13 year old son is, on the one hand, obvious, and, on the other hand, indescribable, it seemed wrong for the Court not to hear from those most closely affected. There was a danger that the result of the proceedings being based on a largely agreed outcome could be seen as bypassing those left who are most closely affected by the events. It was likely that Mr and Mrs Francis could give the Court a deeper understanding of the context of the events and the events themselves, as well as some evidence of any steps taken by the Commonwealth to ease their pain and demonstrate acceptance of responsibility for Nathan's death. In the case of victims of criminal acts, legislation now provides for courts to hear their voices through victim impact statements: for example see Div 1A of Pt 6 of the Sentencing Act 1991 (Vic). That legislation broadened the type of evidence which a court could consider in the course of sentencing in criminal cases: R v Dowlan [1998] 1 VR 123 at 138-9 per Charles JA. But even at common law a criminal court was entitled to take into account the impact on a victim in order to assess the severity of criminal conduct: R v Medini [2002] VSC 12 at [45] . In Director of Public Prosecutions v DJK [2003] VSCA 109 ( DJK ) Vincent JA explained the value of victim impact statements in a way which is equally applicable to evidence given by those affected by the failure of employers to comply with their occupational health and safety obligations. He said at [17] - [18] that such statements: ... constitute a reminder of what might be described as the human impact of crime. They draw to the attention of the judge who would of necessity have to consider the possible and probable consequences of criminal behaviour, not only its significance to society in general but the actual effect of a specific crime upon those who have been intimately affected by it. The statements provide an opportunity for those whose lives are often tragically altered by criminal behaviour to draw to the court's attention the damage and sense of anguish which has been created and which can often be of a very long duration. For practical purposes, they may provide the only such opportunity. Obviously the contents of the statement must be approached with care and understanding. It is not to be expected that victims will be familiar with or even attribute significance to the many considerations to which a sentencing judge must have regard in the determination of a just sentence in the particular case. Nor would it normally be reasonable or practicable for a sentencing judge to explore the accuracy of the assertions made. Nevertheless, there has been an increasing level of appreciation by the courts of the value of victim impact statements. In my view they play an important role with respect to an aspect of the criminal law to which reference is not often made. They play their part in achieving what might be termed social and individual rehabilitation. Rehabilitation, in this sense, is not perceived from the perspective of the offender, but from that of those persons who have sustained loss and damage by reason of the commission of an offence. ... It seems to me that the process of social and personal recovery which we attempt to achieve in order to ameliorate the consequences of a crime can be impeded or facilitated by the response of the courts. The imposition of a sentence often constitutes both a practical and ritual completion of a protracted painful period. It signifies the recognition by society of the nature and significance of the wrong that has been done to affected members, the assertion of its values and the public attribution of responsibility for the wrongdoing to the perpetrator. If the balancing of values and considerations represented by the sentence which, of course, must include those factors which militate in favour of mitigation of penalty, is capable of being perceived by a reasonably objective member of the community as just, the process of recovery is more likely to be assisted. If not, there will almost certainly be created a sense of injustice in the community generally that damages the respect in which our criminal justice system is held and which may never be removed. Indeed, from the victim's perspective, an apparent failure of the system to recognize the real significance of what has occurred in the life of that person as a consequence of the commission of the crime may well aggravate the situation. Counsel for Comcare indicated that an invitation had already been extended to Mr and Mrs Francis to give evidence but had not been taken up. He said that Comcare would facilitate their attendance if they now wished to give evidence. In view of the tragic circumstance of Nathan's death the Court indicated that Mr and Mrs Francis could give their evidence in less formal surroundings than the courtroom, and that a certain level of privacy could be arranged at the time when the evidence was given. Although the Court could provide a degree of privacy to Mr and Mrs Francis when they gave evidence, it was made clear to them that a transcript would be taken of their evidence, the parties would be able to question them at a later date on the transcript, and the transcript would be publicly available in the usual way. These requirements follow from the entitlement of the parties to the proceeding to natural justice, and from the open nature of Court proceedings. Mr and Mrs Francis took up this invitation. On 15 May 2009, they gave evidence in a small conference room in the presence only of myself, my Associate and the transcript operator. The parties and Scotch College had access to the transcript and decided not to question Mr and Mrs Francis. Mr and Mrs Francis' evidence has been of considerable assistance to the Court. Nobody can fail to understand the depth of the grief that Mr and Mrs Francis feel but the trouble they took to tell the Court about that grief has added a further dimension to the Court's understanding of the context in which this decision must be made. They explained the enormous gap in their family resulting from the loss of Nathan. Mrs Francis vividly explained how she felt when she reflected on the fact that Nathan's death was preventable. them. So it's this feeling of frustration. It should not have happened, and you know, we gave --- I can understand if they were camping and a tree fell on him; he fell off a cliff, God forbid; he was in a car accident or something. You can almost understand that. If a child is sick in hospital with an illness, you understand what's going to happen, you expect the death, you have got time --- you know, there's a bit more --- it's never okay, but it's --- there's a reasoning. But there was no reasoning with Nathan's death. You know, there was so much --- you know, there was so many people involved. Even if one person showed a bit of initiative, he would have been okay. There were four packs. If he got any of the other ones, he'd still be okay. It wasn't as if he made the choice, or you know, he made a wrong choice. They took --- you know, it was given to him. You know, he'd been on camps before, so there was no reason to even suspect that there would be a problem with his meals, because it was --- they knew about it, and so, for us, that's the hardest thing for me, and I'm sure for Brian, is that it just should not have happened. We should be enjoying Nathan in year 11. The school had no peanut allergy policy, so there was no --- the school tuck shop, at the school, there was no ban on any peanut products whatsoever. The school was utterly ignorant to the consequences of ingestion of peanuts to someone who had an allergic reaction to it. We feel very betrayed by that and we want to make sure that schools like Scotch College don't rely upon their 150-odd year history but they are on the curve or ahead of the curve. You would expect them to be ahead of the curve. So for the Principal of the school to say we have no policy, we don't understand, yet a State school out in the outer suburbs does have a policy in place. I have a sister-in-law who is a teacher, who was both a teacher in the State system and now in the private system. These policies were in place. Scotch College didn't have that policy. She related that about six months after his death the junior school held an international day. At this time her younger son, Justin, attended the junior school. The boys were to bring food representing all parts of the world as part of an international food fair. As Mrs Francis had not received any notice about avoiding peanuts in the food to be brought to the school, she rang and then went to see the teacher in charge. As a result the event was cancelled on the day, and the food which had been brought to school was thrown out. To Mrs Francis this demonstrated that the junior school had not learned from Nathan's death. Never. Never. Never. And I think that's something he should be very ashamed of. They said that the Chaplain had been superb and the new Principal, Mr Ian Batty, recently came to their home and was most understanding on the occasion of the second anniversary of Nathan's death. Throughout their evidence Mr and Mrs Francis referred to the responsibility of Scotch College and of its conduct and the conduct of its teachers rather than the conduct of the Army. The Court commented 'you keep talking about the school, the case keeps talking about the Army'. I haven't used the word "Army" because when I have spoken to Stewart [Williams --- the Comcare Investigator], and asked him questions --- there was no Army personnel involved, so to speak. There was not one Army personnel at that camp, there was not one Army personnel who took the papers, there was not one Army personnel who issued meals. So that's why I say "school". The Court fixed a time within which they had to indicate whether or not they required to question Mr and Mrs Francis. Each indicated that they did not wish to do so. The evidence of Mr and Mrs Francis is a good example of the purpose of such evidence as explained by Vincent JA in DJK [2003] VSCA 109. The extent to which their evidence is directly relied upon in the sentencing process is described later in these reasons. Initially the only prior knowledge of peanut allergy on which Comcare relied against the Commonwealth was the Australian National Audit Office Report in 1996 which was in limited in its terms and will be discussed later. But general knowledge suggested that peanut allergy awareness was a very live issue in the school community by March 2007. Comcare responded to the Court's request by filing an affidavit sworn on 11 May 2009 by Dr Jo Ann Douglass. Dr Douglass is a specialist physician and Head of the Department of Allergy, Asthma and Immunology Service at the Alfred Hospital in Melbourne. She was a member of the Allergy and Anaphylaxis Working Party established in 2006 by the Victorian Department of Health Services. The Working Party was chaired by Dr Robert Hall, the Chief Health Officer for Victoria, and included paediatric allergy physicians, representatives of general practitioners, consumer advocacy groups, representatives of the Office for Children and the Department of Education and Training. It held its first meeting on 13 September 2006. The working party developed guidelines which were published in November 2006 by the Office of School Education and entitled "Anaphylaxis Guidelines: A resource for managing severe allergies in Victorian Government schools" (the Guidelines). The document acknowledges the contributions of various bodies including the Association of Independent Schools of Victoria. This request arose from the fact that the cadet camp was run entirely by people who were teachers or other staff of Scotch College even though, for the period of the camp, the Commonwealth was responsible for their actions or omissions in safeguarding the health and safety of the cadets for the purposes of s 16(1) of the Act. In response to this request Scotch College filed an affidavit sworn on 13 May 2009 by Ian Thomas Batty. Mr Batty is the Principal of Scotch College. He explained the medical management system in place at the school. Entrants to the senior school in 2006 had to complete a medical card. One question asked was whether the student suffered from allergic reactions. The medical cards were transferred to the school health centre. Hard copy medical alert lists were generated from this information and distributed to year level coordinators who in turn passed on the information to classroom teachers. The overriding principle in assessing penalty is that the amount of the penalty should reflect the Court's view of the seriousness of the offending conduct in all , the relevant circumstances: Coochey v Commonwealth [2005] FCA 1165 ; (2005) 149 FCR 312 and the cases there cited. The relevant circumstances will vary from case to case and by reference to the objects of the particular legislation which has been contravened. The applicant contends that guidance may be had from decisions relating to penalty under State occupational health and safety laws which import like obligations on employers. 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. 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". I nevertheless consider that, despite the differences between the New South Wales and the Commonwealth legislation, and bearing in mind that these are civil and not criminal proceedings, the considerations enumerated above, mainly enunciated in decisions of the New South Wales Industrial Commission, provide useful, analogical, general guidance as to the approach to be taken in consideration of penalties under the Commonwealth Act. Particularly in cases involving a serious breach of the OH & S Act, subjective factors, such as a plea of guilty, co-operation with the investigation and subsequent measures taken to improve safety, must play a subsidiary role in determination of penalty to the gravity of the offence itself. He argued that the risk of a cadet suffering an allergic reaction to peanuts contained in a ration pack was both foreseeable and foreseen. This was, he argued, a significant aggravating factor. The Australian National Audit Office report in 1996 drew attention to the risk of ADF personnel suffering allergic reactions as a result of lack of awareness of the ingredients in the ration packs. Army could also investigate the development of alternative components to allow use by personnel with medical conditions that preclude consumption of current components. However, there was no warning of the dangers of food allergy on the ration packs, and no indication of the ingredients on the beef satay pouch in the ration packs provided to Nathan and Nivae Anandaganeshan and Gene van den Broek. Then, Mr Rozen contended that the grave consequences, particularly Nathan's death, but also the exposure of Nivae Anandaganeshan and Gene van den Broek to the danger of death, pointed to the seriousness of the risk to safety that arose from the contravention of s 16(1). Next, it was contended that the threat to safety in this case arose from a systemic failure rather than from the inadvertence of the victim or a momentary lapse of supervision. Here, parents were required to advise the camp organisers of any medical conditions of the cadets. The cadets were not permitted to bring their own food on the camp. The medical details were collated but the list was not given to those responsible for distributing food to the cadets. There was thus a failure to have a system whereby the medical details relating to food allergies were available to those distributing the ration packs, and no sufficient attention was given to the potential risk to cadets with food allergies. Comcare accepted that the Commonwealth did not consciously or deliberately disregard the safety of cadets. There was no conscious decision to flout the law. Mr Rozen said that in Trooper Lawrence 163 FCR 2007 Madgwick J held that, absent such features, a case could not fall within the worst category. Mr Rozen, however, contested this view and argued that the absence of such features did not remove the case from the worst category. 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. I doubt that he was seeking to lay down a general principle concerning the operation of the section. Such a reading would not sit comfortably with the approach of his Honour expressed in [116] --- [117]. There His Honour emphasised that the overriding principle in assessing penalty is that the amount should reflect the Court's view of the seriousness of the offending conduct in all the circumstances. It is possible to imagine cases of the extreme end of seriousness, perhaps involving multiple fatalities, where the maximum penalty would be ordered even though there was no deliberate flouting of the law. In the criminal law it is established that a maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is prescribed. His death was a tragedy --- a shock and deep loss keenly felt in the Defence, Cadet and wider communities. Army failed in its duty to ensure that cadets in the circumstances of Nathan Francis did not consume combat ration packs containing ingredients to which they were allergic. This was a preventable death. The death of Nathan Francis exposed systemic faults involving the procedures and policies relating to the supply and permitted consumption of foodstuffs that might contain food allergens, namely Combat Ration Packs, to food allergic persons. In oral submissions Mr Livermore explained that the Commonwealth accepted liability for contravention of the Act and also accepted that the contravention was a serious breach of the duty imposed by the Act. Following enquiry from the Court he said that the level of seriousness could properly be reflected in a pecuniary penalty of 75% of the maximum, that is, $181,500. He also submitted that it would be appropriate to discount that figure by between 10-25% to allow for the Commonwealth's early acceptance of liability and cooperation in the conduct of this proceeding. The resulting figure would be in the range of $136,125 to $163,350. Mr Livermore argued that this case was not in the worst category. He relied on the following factors to support this conclusion. The first step taken by the Army following Nathan's death was to prohibit the use of ration packs by cadets. This was done promptly on 8 May 2007. At the same time the Acting Chief of the Defence Force ordered a review into the sufficiency of food warning and labelling standards for ration packs, as well as the adequacy of ADF and cadet policies regarding the management of people, particularly children, with severe food allergies. The review was undertaken by Major General Cavenagh who reported on 22 June 2007 with recommendations concerning improved labelling of ration packs and improved management of food allergy in cadet units. Further, the undertaking accepted by Comcare obliges the Commonwealth to take a number of steps including improved labelling of ration packs produced in the future, limitation of use to the ADF of ration packs already produced, prohibition on the use of ration packs by cadets unless properly labelled, and the development and implementation of an anaphylaxis policy for cadets by 30 June 2009. The Commonwealth also relied on evidence that the Army had taken a number of actions which showed it was a generally responsible organisation attentive to its obligations to protect the health and safety of its members and responsive to the matters which resulted in Nathan's death. In his affidavit Brigadier Mulhall set out some proactive initiatives to improve safety including the establishment of the Directorate of Army Safety Assurance with eight full-time staff, the establishment of the Directorate of Army Health to provide leadership and accountability ensuring that soldiers receive the highest standard of health care possible in prevailing circumstances, the establishment of the Army SAFE Advisory Service with the role of completing biennial safety system audits and the engagement of 65 part-time staff, the development of an Army Incident Management System, the development of a 17 element Occupational Health and Safety Management System, the development of military risk management and the inclusion of safety competencies within the Army's training continuum. Further, the Army has employed ten full-time Occupational Health and Safety staff within the Army cadet organisation and will address leadership, governance and assurance and risk management issues in the Army cadet organisation. Finally, the Army will conduct a trend analysis of reported incidents and update the Army cadet's risk profile annually in March each year. These matters were put before the Court to demonstrate that the Commonwealth was serious in its commitment to health and safety, and has devoted significant resources to the issue. The evidence, so it was said, assists to take the case out the worst category. One marker of the worst category case would be the general approach of an employer which demonstrated a cavalier approach to health and safety. In a similar vein, Mr Livermore relied upon features of the incident in question to show that, whilst the contraventions were undoubtedly serious, the context in which it occurred demonstrated that it was an isolated failure within a general pattern of care and attention for the health and safety of the cadets. Thus, there were comprehensive procedures in place, and carried out, for the camp to be conducted safely. For instance, a risk management plan was compiled and local ambulance, hospital and police were notified of the intention to hold the camp. Further, although not formally required, an experienced medical practitioner attended the camp. A medical roll was compiled and, although not supplied to Mr Bain at the critical time of distribution of the ration packs, it was a valuable tool available at the camp in the case of medical emergencies. Additionally, although the individual food pouches were not labelled, a list of ingredients was included in the ration pack. Then, Mr Livermore pointed out that Nathan was competently attended to in the course of the emergency. A further part of the general background of responsible practice of the Army in health and safety issues was the fact that the ADF did not recruit people with food allergies because it could not guarantee the provision of safe food. If a member of the ADF was found to have a serious food allergy they would be presented to a Medical Review Board with a view towards discharge. Finally, Mr Livermore noted that there had been no previous incident of a fatality in the ADF from an allergic reaction to food from the ration packs. Then Mr Livermore referred to two Victorian Court of Appeal cases in addition to reference to the guidance provided by Madgwick J in Trooper Lawrence [2007] FCA 662 ; 163 FCR 207. These references were designed to throw some light on the analysis of the facts in the present case. However, the width of the factual enquiry in each particular case makes comparison with the facts of other cases of rather limited assistance. Each case must be assessed on its own facts. With that reservation in mind, I deal first with Director of Public Prosecutions v Yarra Valley Water Limited (2006) 159 IR 395 ; [2006] VSCA 279. In that case an employee was killed when the endplate blew off a stretch of pipe and struck him. The pipe was being pressure tested by a contractor. The contract required the testing to be done with water which was the recognised method. Instead, the test was conducted with air, thereby causing the accident. First, this case results from a tragedy. The victim of the offence lost his life in the course of his work through no fault of his own. That could have been avoided if the respondents had known more about the techniques employed in their operations. It is because of their failure to know and to take appropriate action that they fall to be punished. refers in her reasons; for there was here no attempt to cut corners for the sake of supposed economies or any calculated disregard of the safety of men. To the contrary, and despite the fact of the offending, the evidence bespeaks two organisations committed to the safety of their workforce and whose modus operandi was to do and pay for what they understood to be necessary to achieve it. The tragedy here came about because of a lack of knowledge and ultimately human error. No one denies that the nature and gravity of these offences was serious and therefore that they warranted substantial penalties. General deterrence is the pre-eminent sentencing consideration in matters of this kind and therefore any contravention of s 21 of the Occupation Health and Safety Act 1985 which results in death or serious injury is liable to be visited with heavy penalties. But for the reasons essayed by King, A.J.A. in her judgment, the level of culpability in this case was not high and it is apparent from the improvements made to the respondents' systems since the offences were committed that there is no need for specific deterrence. It should also be understood that both respondents were without any prior convictions and according to the evidence each had a well deserved reputation for safety in the workplace. There had been a number of injuries suffered by workers in the past and reports highlighting the potential danger of the machine. The risk of injury was obvious. The Court of Appeal allowed the appeal against sentence and imposed a penalty of $180,000 for each of two counts of the Victorian statutory provision equivalent to s 16(1) of the Act. There are several features which identify the contravention as particularly serious. Nathan was 13 years old. It was his first cadet camp. He was possibly the youngest boy on the camp. The breach of duty in this case involved the failure to take care of a child. The respondent had a special responsibility given Nathan's youth to ensure that his safety was protected. Further, the danger of harm to people suffering food allergy was made known to the ADF by the 1996 Australian National Audit Office report. And, in the year prior to the camp there was renewed attention to the dangers of food allergy in schools. The State government working party on which the Association of Independent Schools of Victoria was represented had formulated its guidelines by the end of 2006. I infer from the change in the Scotch College medical form for use in the 2007 enrolment that the school was aware of the peril of anaphylaxis to people suffering food allergy. And I infer from the establishment of the working party and distribution of the Guidelines that food allergy in schools was a matter of general community concern at the time of Nathan's death. Then, the Scotch College Cadet Unit notified parents that cadets were not expected to provide their own food. The Unit required medical information and Nathan's parents provided that information. Despite this, the Commonwealth supplied ration packs with food containing peanut and failed to take the simple precaution of having the medical details available when the ration packs were distributed. That would have allowed those supervising the distribution to ensure that boys suffering food allergy did not receive ration packs containing peanut. The consequence of the breach of duty for Nathan was as serious as can be --- he lost his life. This consequence is a strong marker of the seriousness of the breach. Furthermore, two other young boys were placed at risk of a similar fate. There are several matters particularly relevant on the question of mitigation. It is accepted by Comcare that the Commonwealth deserves a discount for early acceptance of liability and cooperation in arriving at the Agreed Statement of Facts and in the conduct of these proceedings. Further, the Commonwealth did not ignore the Australian National Audit Office report. As a result of the report ingredient lists were included in the ration packs. Tragically, this response was inadequate, but the fact of a response should be taken into account. The prompt and decisive step of prohibiting use of the ration packs by cadets following Nathan's death and the requirement that ration packs produced in the future contain ingredient lists on the individual pouches of food demonstrated a timely and effective reaction to the tragedy. I put less weight on the wider health and safety initiatives referred to by Brigadier Mulhall as mitigating factors because, whilst the list seems impressive, the Court would need to know more about the substance of the actions and the motivations for them before regarding them as significant mitigating factors. Similarly, the fact that the cadet camp was otherwise well organised is a matter of only small significance in assessing the seriousness of the particular breach. Indeed, bearing in mind the Lost Section incident, it is not altogether clear that the evidence supports the conclusion that the camp was otherwise well organised. The Army did send a letter of apology to Mr and Mrs Francis and repeated the apology in generous terms in open court. This counts for something. To provide care for those affected by the tragedy demonstrates some acceptance of responsibility for the consequences of the breach of duty. However, the letter came more than a year and a half after Nathan's death. It was belated. It may be argued that the pastoral actions of Scotch College should be taken into account for the benefit of the Commonwealth. To attend to those who have suffered as a result of conduct in contravention of the Act may indicate contrition. However, the evidence of Mr and Mrs Francis shows that the efforts of Scotch College had both positive and negative elements. Mr and Mrs Francis were critical of the lack of engagement of the previous Principal at the time of Nathan's death, but appreciative of the support of the Chaplain and the current Principal in later days. Overall, I treat this as a neutral factor in this case in assessing the mitigating factors relevant to the Commonwealth. The purposes of imposing a pecuniary penalty include punishment and specific and general deterrence. In relation to punishment and specific deterrence, the public exposure of the shortcomings of the Commonwealth's attention to health and safety is more likely to be an effective deterrent against future contraventions than the imposition of a pecuniary penalty. Clause 4(3) of Sch 2 of the Act provides that "The penalty is a civil debt payable to the Commonwealth". As the respondent is the Commonwealth, any pecuniary penalty will be payable to itself. Under these circumstances the payment itself will not be a punishment or act as a deterrent to the Commonwealth. The requirement that the penalty be payable to the Commonwealth where the Commonwealth is the wrongdoer is an irrational and an undesirable legislative provision. Its absurdity is reflected in the terms of the order which must be made, namely that the Commonwealth pay a pecuniary penalty, which penalty is to be paid to the Commonwealth. It cries out for some alteration. For instance, the pecuniary penalty could be made payable in whole or part to victims or relatives of victims of the contravention on certain criteria: see also Trooper Lawrence 163 FCR at [133]. Or, at least, the penalty could be made payable for some identified health and safety improvement measure or to some body concerned with the advancement of occupational health and safety. The setting of a pecuniary penalty amount does however have a function as a general deterrent. No doubt the amount of the pecuniary penalty will be noted by those bound by the Act and also those bound by State equivalents. In this respect the amount of pecuniary penalty serves a valuable purpose in advancing awareness of the need for compliance with legislative health and safety standards. Taking into account all the above factors the appropriate penalty in this case is 1910 penalty units equating to $210,100. Five of the cadets were year 9 students. The sixth student was a year 10 student. He was a Corporal. They were supposed to return by 4.00 pm. They did not return on that day. When they realised that they were disorientated and lost they remained in the bush overnight. The terrain was rough. The members of the lost section were not experienced in navigation exercises. They managed to return to the campsite at 11.00 am on 31 March 2007 after being missing for 18 hours. The section was placed under the supervision of Sergeant Murphy. He had a portable radio. He left prior to 12 noon and did not return. He retained the radio. He was not replaced. Thereafter the section was under the command of the year 10 student and without adequate communication equipment. The cadet unit had, as required by Army cadet procedures, filed a written risk assessment prior to the commencement of the camp. That risk assessment required that the section retain a radio communication device for the duration of the navigation exercise. The Commonwealth admitted liability for the failure to ensure that the lost section retained possession of a radio during the course of the navigation exercise. The parties agreed that the appropriate remedy for the Lost Section incident was for the Court to adjourn the proceeding insofar as it related to that incident in return for the Commonwealth giving to Comcare an undertaking in writing as provided for in cl 16(1) of Sch 2 of the Act to address the heath and safety issues which gave rise to the incident and indeed health and safety issues of cadets more generally. Write to the individual members of the Lost Section and the family of those cadets expressing regret that the members of the Lost Section became lost during the navigation exercise and spent a night in the bush. Provide Comcare with a final copy of the letter referred to in paragraph 2. Produce a field activities handbook to assist in the planning and conduct of Australian Army Cadets (AAC) field activities which is to be published and circulated to AAC personnel from 28 February 2009. Provide Comcare with a copy of the proposed field activities handbook prior to publication. Issue directions personally, or through an appointed delegate, that where a risk assessment for an AAC exercise requires communication equipment to be issued, the exercise must be conducted in its entirety in accordance with the risk assessment. Review the AAC Activity Approval process so as to include notification of certain activities to Emergency Services, such process to be amended and finalised on or before 31 December 2008. Develop a standard operating procedure for the mandatory reporting requirements on lost or overdue cadets for AAC field activities, such procedure to be concluded by 28 February 2009. The standard operating procedure will contain the criteria and checklist by which 'lost' or 'overdue' is to be determined. Comcare will be provided with a copy of the standard operating procedure document. Implement the findings of its internal review conducted into occupational health and safety ("OHS") training systems and Army Cadet Staff ("ACS") commencing from 1 March 2009. Provide Comcare with copies of the review findings arising out of the review into OHS training systems and ACS course implementation material referred to above. Implement the revised AAC OHS Risk Management policy and procedures progressively commencing from 1 March 2009. Comcare will be provided with a copy of these documents. Provide Comcare with copies of the policies and procedure arising out of the AAC OHS Risk Management Investigation on or before 1 September 2009. Implement the findings of the review of the AAC Activity Approval process, including notice of certain field activities to Emergency Services from 1 March 2009. Produce guidance material for ACS relating to OHS leadership by 30 October 2009 and provide copies of such material to Comcare. Commence an AAC internal OHS audit program from 1 March 2009. Copies of the aggregated results will be provided to Comcare on a quarterly basis as to the progress and outcome of such audit procedures. Design a new AAC Risk Management process which is consistent with the ADF's Military Risk Management process and suitable for AAC personnel, with progressive implementation from 1 May 2009. Provide Comcare with copies of the AAC Risk Management process upon completion. Conduct a trend analysis of reported OHS incidents and update the AAC Risk Profile annually from March 2009 and thereafter on an annual basis. Provide regular reports on the status of actions listed in Items 1 to 17 above to the Deputy Chief of Army ("DCA") on a quarterly basis. Pay Comcare's reasonable costs (including legal costs) associated with investigation of the Lost Section, the Proceeding, negotiating this Undertaking and monitoring compliance. If the parties are unable to agree on reasonable costs, they shall refer the assessment of such costs to a legal costs consultant agreed between the parties or in default of an agreement, a costs consultant nominated by the President of the Law Institute of Victoria. Present on the Army's approach to planning and conduct of youth development related field activities at a public forum such as the annual Safety In Action conference in 2009 or 2010. Arrange for distribution of published material by the conference organiser. The section is curious because it does not stipulate whether the adjournment ordered is ever to come to an end, and if so, what consequence the ending of the period of the adjournment has on the proceeding which has been adjourned. One imagines that the concept is that if there has been no breach of the undertaking in the period of the adjournment, the proceeding would then be struck out without any declaration being made. In other words, the adjournment option is a way to deal with lesser contraventions in a fashion which allows the respondent to avoid the Court making a declaration of contravention. That is the intention of the parties in this case. Paragraph 1 of Sch 1 of the undertaking in substance admits a contravention of the Act in respect of the Lost Section incident. Clause 2(1)(a) of Sch 2 of the Act obliges the Court to make a declaration of contravention if it considers that a person has breached, inter alia, s 16(1) of the Act. Where, as here, the undertaking effectively admits the contravention, it may not be possible for the Court to avoid the conclusion, and hence the obligation to make a declaration. The issue was not ventilated at the hearing and may be left to an adjourned date for hearing. Clause 16(3) of Sch 2 of the Act has three preconditions, namely, that proceedings for a declaration of contravention have been commenced, that Comcare has requested the Court to adjourn the proceedings, and that the request is on the grounds that Comcare considers that an appropriate written undertaking is in force. The third precondition may raise an issue of construction. The view which Comcare must hold is that an appropriate undertaking is in force. Is it sufficient for the Court to be told that Comcare has such a view, or must the Court be satisfied that the view is held by Comcare on reasonable grounds? The issue was raised by the Court with counsel for Comcare. He chose to call evidence from Comcare to satisfy the Court that the view of Comcare that the undertaking was appropriate was made on reasonable grounds. The evidence was given by Martin Nicholas Dolan in an affidavit sworn on 11 May 2009. Mr Dolan is the Chief Executive Officer of Comcare. He explained that the undertaking was offered by the Commonwealth in the course of a mediation. The mediation was conducted by a Registrar of the Court pursuant to an agreement of the parties. Mr Dolan accepted the undertaking on behalf of Comcare. In his affidavit he stated: Comcare's Enforcement Policy dated August 2005 provides a list of the factors that Comcare considers when determining whether a written undertaking is an appropriate alternative to civil proceedings or a criminal prosecution. For instance, the obligation to publish a Field Activities Handbook without specifying the nature and scope of the contents of such a handbook is expressed in fairly general terms. However, this undertaking is to be given to Comcare not to the Court and is designed to serve a practical purpose which is probably well understood by those involved with health and safety issues without the need for greater specificity. In any such proceedings, the Employer may not object to Comcare tendering this Undertaking. As this is the first case in which the Court has been called upon to address the requirements of cl 16(3) of Sch 2 of the Act some particular attention has been given to the terms of the provision. In the present case the width of some of the terms of the undertaking do not raise any practical problems. In his affidavit Brigadier Mulhall states that the matters covered in [4] to [10] inclusive of Sch 1 of the undertaking have been completed, and the matters covered in [11] to [19] both inclusive have been either commenced or are in progress in accordance with the undertaking. As Comcare has not controverted this evidence, it can be concluded that the terms of the undertaking are workable and sufficient. The evidence of Mr Dolan and Brigadier Mulhall satisfies me, if such satisfaction be necessary, that Comcare's view that the undertaking is appropriate was made on reasonable grounds. There is a final matter to be addressed. When the camp began those same teachers and staff assumed Army ranks and uniforms. There were no Army personnel at the camp other than the teachers and staff of the school. The teachers and staff ran the camp. But they did not do so as teachers and staff of Scotch College. For the purposes of the Act the health and safety of the boys became the responsibility at law of the Commonwealth. That legal transformation explains why this proceeding has been brought against the Commonwealth and not against Scotch College. Comcare has a statutory function in relation to the Commonwealth. Thus, Comcare conducted its investigation focused on the responsibilities of the Commonwealth. Counsel for Comcare contended that any investigation of the training or knowledge of the teachers and staff at Scotch College would have been beyond the statutory power to investigate. This contention is open to argument. The concern of the Court is limited to a determination of the proceeding brought under the Act. However, in the course of that task it has become clear that there is need for a wider enquiry into the deficiencies which led to Nathan's death. The operation of the cadet unit is a joint responsibility of the school and the Army. SBU are restricted to drawing their cadet membership from the students of the parent school or affiliated schools (as approved by the School Heads and Commander AAC). There are 42 SBU of which the majority are in NSW and VIC. In the majority of SBU the cadet program is conducted as an integral component of the school's co-curricular activities. SBU draw most of their adult staff from the school staff and old-boys of the School. The School Head makes most of the decisions in relation to the operation and activities of the SBU, generally with minimal involvement by Army. This situation reflects the historical ownership of such units by their parent School, in come cases for over 140 years. It may be that it could not legally do so. However, the Court was also told that no inquest had yet been held concerning Nathan's death, and that the Coroner often determined not to hold an inquest where an investigation and proceeding such as the present had been conducted. It is my strong recommendation that the Coroner conduct an enquiry into this matter. There has so far been no opportunity for the role of Scotch College in the death of Nathan to be examined in public. The Court invited its contribution in this proceeding. In the end the participation of Scotch College was limited. Given the scope of the proceeding before the Court that is not surprising and no criticism can be levelled at the school for its actions in that regard. The Court has been confined to examining the liability of the Commonwealth. However, the finding that the Commonwealth is liable under s 16(1) of the Act does not mean that no other person or body was responsible for the Nathan's death. The circumstances presented to the Court raise a question whether Scotch College through its teachers and staff bear some responsibility for these events. That is a question which requires examination. I certify that the preceding one hundred and twenty-seven (127) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice North. | occupational health and safety breach of duty of employer to take all reasonably practicable steps to protect the health and safety of employees camp for cadets organised by scotch college cadet unit death of cadet with peanut allergy due to consumption of food with peanuts systemic failure to ensure appropriate use of medical information collated for purpose of camp when distributing food pecuniary penalty sought factors to take into account civil proceedings use of victim impact statements occupational health and safety breach of duty of employer to take all reasonably practicable steps to protect the health and safety of employees group of cadets lost overnight without proper communication equipment request for adjournment based on the applicant considering that an appropriate undertaking is in force whether court must be satisfied undertaking is reasonable industrial law practice and procedure industrial law |
This application for review raises an important question as to the proper interpretation of ' the applicant ' in s 61(2) of the Act, which interpretation has ramifications for the function of the Act in the determination of native title in relation to an area. 6 The question is whether ' the applicant ' means all of the persons authorised by the native title claim group and no fewer; or, whether it means all of the persons authorised by the native title claim group, who, at any particular time, are willing and able to act. 7 The choice is of importance because if the first interpretation is correct, if one or more of the group of persons authorised by the native title claim group dies, the application is not made by ' the applicant '. Equally, if one of the group of persons authorised by the native title claim group, having consented to be one of ' the applicant ', changes his or her mind and is unwilling to be one of ' the applicant ', the application made by the remaining members of the persons authorised by the native title claim group is not 'the applicant' for the purpose of the Act, and the application is therefore incompetent. 8 Proceedings QUD 16 of 2006 in the Federal Court is known as the Butchulla Land and Sea Claim. The Butchulla Land and Sea Native Title Determination Application was commenced by an application for a native title determination filed in the Federal Court on 18 January 2006 ('the application') pursuant to s 61 of the Act. 9 The making of the application followed a meeting of the members of the native title claim group at Hervey Bay on 9 April 2005 ('the authorisation meeting'). 10 At the authorisation meeting, a resolution that ' the members of the Butchulla Land and Sea Claim no longer authorised the current applicant ' was passed, and the members resolved to remove the then applicant, being the listed named persons. 11 The decision-making process at the authorisation meeting was discussed between the Butchulla people and an anthropologist, Mr Peter Blackwood, who was in attendance at the meeting, and Mr Blackwood recorded the decision-making process on a white board for the claim group to read and discuss. 12 The authorisation meeting was also recorded on video. 13 In relation to the Butchulla Land and Sea Claim, Ms Fiona Campbell, the Senior Solicitor employed by the Gurang Land Council in Bundaberg, says that Gemma Cronin, the daughter of Malcolm Burns, nominated Sheena McBride and Malcolm Burns as applicants. On this basis, Mr Elston asked the claim group if they accepted the authorisation of these applicants. The claim group consented to this. 15 I note that Mr Malcolm Burns attended an authorisation meeting on 23 October 2004, but not the meeting on 9 April 2005. Nonetheless, he made it known to the Gurang Land Council that he wanted to be 'an applicant', and Gemma Cronin, who nominated Malcolm Burns, is his daughter. Kym Elston then asked the rest of the claimants if there were any objections to the applicants nominated. 20 In November 2005, the Native Title Registrar's Delegate provided a preliminary assessment of a draft Form 1. 21 On 30 November 2005, two of the 18 named persons who constituted 'the applicant', namely Malcolm Burns and Sheena McBride, withdrew. I am doing this as I am unhappy with the process that has been followed & feel that it has undermined our Owens Clan's position. The total lack of respect shown to our Elders & their proven connection to their traditional lands is unacceptable. 23 The application was then referred to the Native Title Registrar for registration testing. 24 On 23 February 2006, Ms Campbell received, by email, a letter from the National Native Title Tribunal with the Registrar's Delegate's preliminary assessment of the application, providing an opportunity to amend the application or provide additional information by 6 March 2006. 25 Subsequent to the preliminary assessment by the Native Title Registrar's Delegate, an amended application was filed in the Federal Court, ' so as to best meet the requirement of the registration test' . 26 On 7 March 2006, the Court gave leave for the application to be amended in accordance with that amended application. 27 On 6 March 2006, Ms Campbell wrote, amongst other things, concerning the authorisation process, specifically the ' withdrawal of applicants Malcolm Burns and Sheena McBride'. Other situations where the Native Title Act is silent include those where applicants pass away and where applicants are unable to provide instructions because they are non compos mentos [sic]. In these cases the remaining Applicant(s) continue to make decisions on matters(s) relating to the claim. We are aware of Indigenous Land Use Agreements that have been authorised by applicants and registered by the National Native Title Tribunal, where one or more applicants have passed away before the authorisation process. In effect there has been no replacement of the Applicant. The word "replace" as mentioned in section 64(5) Native Title Act is in the context of a positive action. This section is also worded for applications that have already been filed in the Court, as per the word "amended". In the present situation, the two Applicants removed themselves before the Application was filed in the Court. This section is very broad and provides the applicant the power to ..."deal with all matters arising under the Act in relation to the Application. " In the present context, I would submit that this would include the ability to make decisions regarding their continued role as Applicants for the claim. Section 61(2)(c) and (d) is more specific in its terms in regard to the Applicants, stating that ..." (c) the person is, or the persons are jointly, the applicant and "(d) none of the other members of the native title claim group or compensation claim group is the applicant. " In the present situation where two applicants have removed themselves without consulting the claim group or other applicants, the remaining applicants have been left to make decisions. We submit that there is nothing in the Native Title Act to stop the remaining applicant being the joint applicant. The meeting would involve a reasonably large number of people, with a number of claimants living off country. Ms Campbell noted, ' Similarly, where applicants pass away, authorisation meetings are not held to reaffirm that the applicant is authorised, or to replace applicants' . 30 On 24 March 2006, the Gurang Land Council received a letter dated the previous day from the National Native Title Tribunal with the registration test reasons for decision attached. Those reasons referred to a letter dated 22 February 2006 from Just Us Lawyers that contained information adverse to the application for registration. 31 On 5 April 2006, the National Native Title Tribunal withdrew the registration test decision, attached the letter of 22 February 2006 from Just Us Lawyers, and gave the applicant named in the amended application an opportunity to provide submissions by 27 April 2006. By way of the traditional decision making processes of the Gary Owens clan, our clients have determined not to authorise the Native Title Claim and to the extent that it purports to be made on their behalf it is not authorised by them. 34 On 12 May 2006, the Gurang Land Council was advised that the Delegate of the Native Title Registrar had decided not to accept the amended application for registration. The reasons for that decision (which the Gurang Land Council received on 23 May 2006) indicated that the Delegate decided that the amended application failed to satisfy the conditions in s 190C(4) of the Act. In particular, the Delegate considered that, although the Native Title claim group had, at the meeting in Hervey Bay on 9 April 2005, authorised the making of the application and had authorised the 16 persons who then comprised the applicant as well as two other persons, namely Malcolm Burns and Sheena McBride, to make the application on their behalf, the native title claim group had not authorised the 16 persons who constituted the applicant to make the application, in circumstances where Malcolm Burns and Sheena McBride had declined to be included as applicants at a time subsequent to the Hervey Bay meeting but before the application was lodged. 35 The gravamen of the Delegate's decision, which is the crucial question on this application, is that, ' The applicant as authorised by the group is not the person or persons jointly who filed the application '; with the consequence that the Delegate could not ' be satisfied that the application as filed is properly authorised '. 36 The application for review challenges the conclusion that the requirements under ss 190C(4) regarding authorisation were not met, and also alleges that the Delegate erred in concluding that the application failed the merits test in ss 190B(5) , (6), and (7) of the Act. There was no information before the delegate as to how large the group was. A single judge is bound by the decision of the Full Federal Court in the State of Western Australia v Strickland [2000] FCA 652 ; (2000) 99 FCR 33 at [65] - [67] to conduct a review under s.190D(2) of the NTA of issues of fact as well as law. The submission by the Attorney-General was that the matter should be remitted to the Registrar to consider the application according to law. 41 There is no dispute as to the relevant legal principles. Under s 190A of the NTA, the Registrar is given power by the NTA to make decisions in respect of "registration" of an application made to the Court. The Registrar does not exercise a power delegated by the Court in respect of the Court's exercise of jurisdiction in a matter, but the Registrar does exercise administrative power in respect of a matter in which the Court has, and is then exercising, jurisdiction. Under s 190A(6) , the Registrar is obliged to accept the claim for registration if it satisfies all of the conditions in s 190B (which deals mainly with the merits of the claim) and in s 190C (which deals with procedural and other matters). If it does not satisfy all those conditions, the Registrar must not accept the claim for registration. They effectively separate clearly the judicial decision-making processes under the NT Act from the administrative processes relating to registration. Registration is not a precondition to the application for the determination of native title proceeding to hearing, or to it being summarily dismissed: eg, Moran v Minister for Land and Water Conservation (NSW) [1999] FCA 1637 ; Quall v Risk [2001] FCA 378 ; Landers v South Australia [2003] FCA 264 ; (2003) 128 FCR 495. The requirements it principally refers to are those in ss 61(1), 61A and 251B of the NT Act. Its detailed submissions looked extensively to the material available to the Registrar under s 190A(3) to support the claim that the Registrar erred in a reviewable way in deciding to accept the application for registration. The first step in the contention is that s 190B(5) requires more than a focus upon the three particular matters specified in subcl (a), (b) and (c). They refer to the assertions that the native title claim group and its predecessors have an association with the claim area, that they have and observe traditional laws and customs giving rise to the claim, and that the claim group continues to hold the (claimed) native title in accordance with those traditional laws and customs. If, despite the Registrar being satisfied of those matters, the Registrar was not satisfied of a sufficient factual basis for each of the claimed native title rights and interests claimed, then it is contended the registration must be refused. The assertion is then made that the Registrar assumed from evidence of continued occupation in accordance with tradition the necessary foundation for the specifically claimed native title rights and interests. Moreover, it is argued, the Registrar is not entitled to have regard to the material within or accompanying the application to determine whether s 190B(5) is met, but that the Registrar in this matter did so. There is nothing in s 190B(5) or in s 190B generally which indicates that the assertions in the application itself may not be considered by the Registrar in addressing the condition imposed by s 190B(5). In both WA v Strickland at [88]-[89] citing with approval Strickland v NTR at 261, and Martin at [23]-[26], the court was prepared to consider the material included in the application as material relevant to the satisfaction of the condition imposed by s 190B(5). The Registrar then, in fact, looked at the extensive material available beyond the application to address the condition. Section 190B(6) requires the Registrar to consider that, prima facie, at least some of the native title rights and interests claimed can be established. It is necessary that only the claimed rights and interests about which the Registrar forms such a view are those to be described in the Native Title Register: see s 186(1)(g). It is therefore clear that a native title determination application may be accepted for registration, even though not all the claimed rights and interests, prima facie, can be established. Section 190B(6) requires some measure of the material available in support of the claim. It does not itself require some weighing of that factual assertion. That is the task required by s 190B(6). As counsel for the Territory also pointed out, addressing s 190B(6) may also require consideration of controverting evidence. Indeed, in Martin at [22] and [27] French J pointed out that the Registrar had erred in formulating the questions posed by s 190B(5) as being whether he was satisfied as to the existence of the three matters referred to in subcl (a), (b) and (c). The intervenor does not argue against that contention, given the decision of the Full Court in Western Australia v Strickland [2000] FCA 652 ; (2000) 99 FCR 33. I had previously expressed a view different to that in Strickland (in Powder v Registrar, National Native Title Tribunal [1999] FCA 913 ; (1999) 92 FCR 454) but consider that I am now bound by the decision of the Full Court. In Strickland the Full Court held that the power given by s 190A to the Registrar by the NTA to make decisions in respect of the registration of an application made to the Court is the exercise of an administrative power in respect of a matter in which the Court is exercising jurisdiction. The legislation does not specify the nature or the extent of the Court's review under s 190D(3) or impose any limitation upon the material that may be taken into account. Jurisdiction is conferred by s 190D(2) and (3) in the broadest of terms (at [64]). A review under s 190D is not restricted to considerations and determination of a question of law. Section 190D(4) makes it plain that the review extends to determinations of issues of fact. The NTA does not proceed upon the premise that determinations of fact in the relevant controversy have been settled by the administrative determination and that the only matter in respect of which jurisdiction is conferred upon the Court is any controversy on questions of law. The Honours said that 'the review proceeding enlivens the jurisdiction of the Court in respect of the whole matter' (at [65], referring to TNT Skypak International (Aust) Pty Ltd v Commissioner of Taxation (Cth) (1998) 82 ALR 175 at 178, 180 --- 181). Their Honours concluded that it was Parliament's intention that the right of review would place before the Court the controversy constituted by the issues of fact and law raised between the parties and that, upon a ground of review being established, appropriate orders may be made to do justice as between parties. As his Honour observed (at [12]), they separate the judicial decision-making processes under the Act from the administrative processes relating to registration. The Tribunals task, his Honour considered, was not one of finding the real facts in every respect on the balance of probabilities or some other basis. Its role was not to supplant the role of the Court in adjudicating upon the application for determination of native title or generally to undertake a preliminary hearing of the application. Section 190C is largely directed to the terms of the application, as does s 190B(3) (at [16]). Section 190C(2) did not involve the Registrar going beyond the application nor require the undertaking of some form of merit assessment. So far as concerned the description of the native title group, its focus was not upon its correctness but upon the adequacy of the description, so that the members of it could be ascertained (at [36] and [37]). The Court is able to freshly determine issues of fact and substitute its view of the correct or preferable decision for that of the decision-maker: Evans v Native Title Registrar at [37] citing Northern Territory of Australia v Doepel at [29]. The Court's power on review includes the ability to direct the Registrar to accept the Application for registration and to include details of the Application on the Register of Native Title Claims. In my view if an authorisation meeting names 18 people as comprising the authorised applicant --- then that is the applicant . In no way do I doubt the capability or otherwise of the remaining 16 persons, the requirement is that the applicant of the claim is properly authorised --- which I cannot find as met in this instance. 50 The expression ' the applicant ' in s 190C(4)(b) takes its meaning from s 61(2) and s 251B. These provisions make it necessary to examine ' who are the persons authorised to make the application '. The Delegate found that it was the 18 people collectively who were so authorised. There was nothing in the terms of the authorisation to indicate (as there might have been) that some subgroup of the persons comprising the applicant was authorised to make the application in certain circumstances. Section 61(2) purposely uses the expression " the applicant " rather than " the applicants ". It provides that persons " are jointly the applicant", not that " the persons are jointly and severally the applicant". It does not say that "the persons or some of them are jointly the applicant" . It does not say that " the persons are jointly to be called the applicant". 53 The contention on behalf of the applicant for judicial review is that, properly construed, ' the applicant ' in s 61(2) is constituted by the group of persons authorised by the meeting or so many of them as are able and willing to continue to constitute ' the applicant '. 54 In Butchulla People v Queensland and Others [2006] FCA 1063 ; (2006) 154 FCR 233, Kiefel J ruled against an argument similar to that being put by the intervener in this case. There being no express term concerning the authorisation as to the authority to the contrary, statutory or otherwise, the presumptions usually applied to personal appointments would operate. That is to say, their authorisation will continue until revoked and whilst they are willing and able to act in their representative capacity. The requirement of the NTA, that persons authorised act together, is not a term or condition of appointment. It is a statutory requirement having as its purpose the efficient prosecution of claims. Once the authority given by the claim group is seen to be directed to each of the persons authorised and subject to those terms it follows that the inability of one to continue does not affect the authorisation of the others. It is not an approach which cuts across any statutory provision or purpose. Unlike the respondents' approach it is consistent with the nature of the rights associated with claims to native title determination. The authorisation given by the claim group must be seen in this light. This view of authorisation does not however prevent revocation if it were considered to be necessary. 56 For my part, I do not see the authorisation of a number of persons as an 'applicant' as being an appointment of each of them 'jointly and severally' to deal with the matters arising with the matters in relation to an application. I accept that s 61(2) contemplates an authorisation of persons to act collectively, rather than each of them personally. 57 However, I think that an appointment of a group of persons jointly to be an 'applicant' by a meeting of a native title claim group is an authorisation for the named persons to act, or so many of them as remain willing and able to act. It is these persons who constitute the 'applicant'. There is, in my opinion, an implication in an authorisation of a group to act collectively in a representative capacity that that authorisation has to be understood as recognising the vicissitudes that accompany joint action, particularly where (as is frequently the case) the persons authorised to make an application for a native title determination are elderly, and subject to the possible incidents of old age. 58 No differentiation, it seem to me, is to be made as to the capacity of a person in a group to act, and that person's willingness to continue to act as a member of the group. 59 In the view I take of the matter, there is no requirement for there to be an express qualification to that effect, as the submissions of the Attorney-General suggest. Rather, the position is that an authorisation of a group of people to act has to be understood as meaning the authorisation of so many of them as continue to be willing and able to discharge their representative function. 60 It is important to remember that the persons who are authorised by a native title claim group to make an application are not authorised merely to make the application, but also to ' deal with matters arising in relation to ' the application. If one person comprising an 'applicant' were to die, it would be contrary to the purpose of the Native Title Act to require there to be a further authorisation meeting to authorise another group of persons (perhaps constituted by the remaining members of the ' originally specified persons ') to be the 'applicant'. Such a frustration of proceedings, perhaps proceedings well advanced, would be antithetical to the purpose of the Native Title Act . That is the paramount consideration, but the gross waste of time and resources also serves to indicate that an interpretation of 'applicant' which avoids all of these consequences is clearly to be preferred. The Act should therefore be read as having a legislative purpose of wiping away or at all events ameliorating the "national legacy of unutterable shame" that in the eyes of many has haunted the nation for decades. Where the Act is capable of construction that would ameliorate any of those injustices or redeem that legacy, it should be given that construction. That would be so even if it meant giving a strained construction to or reading words into the Act. In an extrajudicial speech, Lord Diplock once said that "if ... the Courts can identify the target of Parliamentary legislation their proper function is to see that it is hit: not merely to record that it has been missed". Until the Form 1 application for a claimant determination has been filed with the Court, there is not an application for the purposes of the Act. Once the proceeding has been commenced by the filing of an application in the Federal Court, the applicant will usually be the group as a single entity rather than one or more of the persons who comprise the group. This is consistent with the Federal Court Rules , O 4 r 2(1), (which requires the person claiming relief to be called 'an applicant'), and with O 73 of the Federal Court Rules , which relate to representative proceedings. 65 In some instances, the term ' the applicant ' is used in the Act to refer to the group of people who, as a group, are deemed to be 'the applicant' for the purposes of bringing and prosecuting the claim. In other circumstances, it is used to refer to each person (who must be a member of the claim group) who has been authorised to be an applicant. It is not meaningful to speak of an affidavit sworn by a group of persons, or an affidavit deposing to what that group of persons believes. The 'applicant' in s 62(1) , in my view, is a reference to each of the persons who comprises 'the applicant' for the purposes of s 61 of the Act. 68 While the judgment of Kiefel J in Butchulla People v Queensland and Others [2006] FCA 1063 ; (2006) 154 FCR 233 is the only case that is directly on point, there are other cases which contain observations supporting the conclusion that it is not mandatory that ' the applicant ' consist of all of the persons authorised to be ' the applicant ' by an authorisation meeting, and no fewer. That sub-paragraph relevantly provides that the Court may of its own motion, or on the application of a party, order that a person cease to be a party where the person has ceased to be a proper or necessary party. The State submitted that Ms Dimner was not a party to the application. It submitted that she is one of the persons who are jointly the applicant within the meaning of s 61(2)(c) of the Act. That is so, but in my view, she is also a party within the meaning of Order 6 rule 3 because she is named as one of the eight joint applicants who seek the relief (albeit in a representative capacity) described in the principal application. Her Honour referred to the named applicants as ' those said to represent the native title claim group ' and to the 13 named applicants as the ' co-applicants ' and also the ' three dissident co-applicants '. Throughout those reasons, and in the orders, Kiefel J referred to ' applicants '. And consistent with the approach of Carr J in Central West Goldfields People v State of Western Australia [2003] FCA 467 , her Honour contemplated the use of O 6 of the Federal Court Rules to ' resolve the deadlock' by removing the ' dissident co-applicants'. The respondents submit that another authorisation meeting must be convened. They submit that the "applicant" authorised for the purpose of native title claim proceedings has something of a corporate character and cannot be viewed as made up of individual applicants. This can be seen from the requirement of s 61(2)(c) that the persons authorised are jointly the "applicant", it is submitted. It is that entity, here composed of 11 persons, which has been authorised and not a smaller one. It refers to all the persons who together make up "the applicant" for the purpose of the application. It also to refers to each person who has been authorised to be the applicant, in conjunction with others. It is submitted that the term should not be confined for all purposes to the meaning given by s 61(2)(c) NTA. If that were so the "applicant" in native title claim proceedings would cease to exist if it transpired that just one of the persons making up "the applicant" was not a member of the native title claim group, ceased to be a member of that group, ceased to be authorised, or died. Regard must be had to the evident purpose and policy of the provisions and an attempt should be made to construe them so as to give effect to that purpose and achieve unity of all the statutory provisions: Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28 ; (1998) 194 CLR 355 at 381-382. It may be assumed that since the persons authorised have a common interest in the subject matter of the claim acting jointly should not present a difficulty. Regrettably this is not always the case. In any event the section seeks a workable and efficient method of prosecuting claims for native title determination, one which limits the potential for dispute which might stifle the progress of claims. And, whilst it obliges those authorised as representatives to co-operate with each other, it does not say that they are bound together in the way in which the respondents contend. The requirement that they act together does not imply that their ability to continue to act is dependent upon each other person authorised also continuing in the role. If that were the case it must arise from the terms upon which persons are authorised by the claim group. That is to say, their authorisation will continue until revoked and whilst they are willing and able to act in their representative capacity. Section 61(1) item (1) requires that the person or persons who bring an application is a member of the claim group, and s 190C(4) requires the Native Title Registrar to be satisfied that, ' The applicant is a member of ... of the ... claim group. 77 Section 66B contemplates that individual members of a claim group can bring an application for an order that ' ... the members jointly, replace the current applicant for the application. ' One of the grounds for such an application is that the '... members are authorised by the claim group to make the application and deal with matters arising in relation to it . 79 For the above reasons, the Native Title Registrar by his Delegate erred in refusing to accept the application, and the decision should be set aside. 80 The applicant seeks an order directing the Registrar to accept the application for registration and to include details of the application on the Register of Native Title Claims. The intervener submits that if the Court concludes that the Delegate's decision should be set aside, as I do, the appropriate form of further relief is an order requiring a Native Title Registrar to consider the application according to law. Only those rights and interests are taken into account for the purposes of subsection 31(2) (which deals with negotiation in good faith in a "right to negotiate" process) and subsection 39(1) (which deals with criteria for making arbitral body determinations in a "right to negotiate" process). 84 Section 86(1)(g) of the Native Title Act assumes that the Registrar has applied s 190B(6) and has decided which of the native title rights and interests in the claim can prima facie be established. The Registrar has not properly applied s 190B(6) in this case. 85 The only basis on which it is submitted on behalf of the Attorney-General that the matter should be remitted to the Registrar is the requirement under s 186(1)(g) for the Register to record those native title rights and interests which the Registrar considers ' prima facie could be established'. It is true that not all of the claimed native title rights and interests can be established on a prima facie basis on the material presently available. So much seems to have been conceded by the applicant. However, all that the relevant registration test in s 190B(6) requires is that prima facie one or more of the rights and interests claims can be established. 86 Section 190A(3)(a) of the Act contemplates that the Register can later be amended to allow for the inclusion of further native title rights and interests. This provision provides for the registration test to be applied in a timely way. Had the application been earlier registered, the applicant would have acquired valuable procedural rights in respect of future acts occurring after the date on which the application ought to have been registered. 87 There is evidence that a number of 'low-level' rights are 'prima facie established' on the material. These include rights to hunt and fish on the land and waters; access to move about on the land and waters; to camp on the land, and to gather and use natural products. 88 The question, it seems to me, is simply what particular rights and interests should be included on the register under s 186(1)(g). It seems to me that the four rights earlier referred to satisfy the requirement of 'prima facie establishment' on the material. To gather and use natural products. That application for indemnity costs was not pressed, but the applicant did press its claim for costs on the ordinary basis. The matters to be taken into consideration in making an order are left to the Court as a discretion to be exercised judicially. But the starting point will be that each party will bear their own costs unless the Court determines that it is appropriate in the circumstances to make an order for costs. That course is an appropriate course for the Registrar to take in proceedings such as this for judicial review. 95 In my view, it is not the case that the Registrar, ' has unreasonably maintained his position' by allowing the authorisation point under s 190C(4) of the Act to remain contested, as the applicant alleges. 96 Given those circumstances, I do not think it would have been appropriate for the Registrar to consider the revocation of the registration and decision; further, in the circumstances, there was, in my view, no power in the first respondent to revoke or vary the decision in respect of registration. 97 The exception provided in s 190(3A) gives power in relation to a registration decision to be reconsidered, following the provision of further information by the applicant. That has application in the present case. It is also significant, in my opinion, that the Act provides for a procedure by which an application for registration may be reconsidered, namely, judicial review. The legislation does not specify the nature or the extent of the Court's review under s 190D(3) or impose any limitation upon the material that may be taken into account. Jurisdiction is conferred by s 190D(2) and (3) in the broadest of terms. A review under s 190D is not restricted to considerations and determination of a question of law. Section 190D(4) makes it plain that the review extends to determinations of issues of fact. The NTA does not proceed upon the premise that determinations of fact in the relevant controversy have been settled by the administrative determination and that the only matter in respect of which jurisdiction is conferred upon the Court is any controversy on questions of law. The Honours said that ' the review proceeding enlivens the jurisdiction of the Court in respect of the whole matter ' ... Their Honours concluded that it was Parliament's intention that the right of review would place before the Court the controversy constituted by the issues of fact and law raised between the parties and that, upon a ground of review being established, appropriate orders may be made to do justice as between parties. Once exercised, it is spent. Even if I be wrong in that conclusion, this is not a case where the Registrar ought properly to have resiled from the registration decision in the light of the decision of Kiefel J in the Butchulla People case, and when that decision was made. The fact that the Attorney-General has sought to argue in this case that her Honour's decision in the Butchulla People case was wrong powerfully underlines the lack of imperative necessity to resile from the registration decision, and, if there was power to resile, it was not unreasonable not to resile. 100 In my judgment, the circumstances contemplated by s 85(2) of the Act do not apply in the present case. There will be no order as to costs. 101 The decision of the Delegate of the Native Title Registrar made on 12 May 2006 is set aside. I direct the Native Title Registrar accept the claim for registration and enter into the register the following rights: the right to hunt and fish on the land and waters; the right to access and move about on the land and waters; the right to camp on the land; and the right to gather and use natural products on the land. I also direct the Native Title Registrar consider what other rights should be included in the register, having regard to the entire application and the other material in support of it. | application applicant registration of application authorisation of a number of persons to act as an applicant whether native title registrar correct in deciding not to accept amended application for registration effect of resolutions passed at authorisation meeting withdrawal of members of the applicant after authorisation meeting but before registration of claim whether further authorisation meeting required proper interpretation of ' the applicant ' in s 61(2) application of the merits test in s 190b appropriate relief registration of rights on native title registrar under s 186(1)(g) whether appropriate for native title registrar to revoke decision whether appropriate for court to exercise its discretion to make an order for costs whether actions of registrar unreasonable in the circumstances whether registrar unreasonably maintained his position native title relief costs |
The dam incorporates an upstream fishway, an associated fish hopper and a downstream fishway. 2 The Respondent, Burnett Water Pty Ltd ("Burnett Water") constructed, operates and owns the Paradise Dam. Burnett Water is a wholly owned subsidiary of SunWater Limited. The dam became operational in or about November 2005. It remains operational. 3 The purpose of the fishways is to permit any normally sized Australian lungfish ( Neoceratodus fosteri ), also commonly known as the Queensland lungfish, to move upstream and downstream of the dam without injury. Absent such fishways, the dam prevents this movement. 4 Australian lungfish occur naturally in only a few coastal river systems in Southeast Queensland. The Burnett River system is one of these. Lungfish can lay claim to be the oldest surviving vertebrate species. The lungfish has long been a protected species. 5 One contemporary reflection of Parliamentary recognition of the importance of affording protection to the lungfish is to be found in a requirement arising under the Environmental Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) for the construction and operation of the Paradise Dam, a "controlled action" for the purposes of that Act, to have Ministerial approval. Ministerial approval for the construction and operation until 1 January 2052 of the dam, subject to conditions, was initially given on 25 January 2002. On 8 August 2003 the conditions of approval were varied by the Minister so as to add a further condition, condition 3, that Burnett Water install a fish transfer device on the dam suitable for lungfish with a requirement that the fishway commence when the dam became operational. Ancillary conditions relating to the lungfish were also then added by variation. 6 The applicant, Wide Bay Burnett Conservation Council Inc. ("the Conservation Council") is a body corporate incorporated under the Associations Incorporations Act 1981 (Qld) in 1993. Its objects include the protection or conservation of, or research into, the environment, particularly in the Wide Bay Burnett Region. The correctness of this assertion is not formally conceded by Burnett Water although it has not as yet advanced any detailed submission as to why it should not be concluded that the Conservation Council has this status. There is evidence before me from the Conservation Council's President, Reginald Thornton, a retired CSIRO research scientist, which at least prima facie admits of a conclusion that it is an "interested person" for the purposes of the EPBC Act. For present purposes I shall assume that it is. (b) The entrances to the upstream fishway and downstream fishway are too small for fully grown lungfish to enter. (c) The caged container in the upstream fishway is too small for fully grown lungfish. (d) The upstream fishway and downstream fishway do not operate continuously. (e) The downstream fishway is not suitable for lungfish to move or migrate downstream of the dam when water levels in the dam are beneath EL 62.0 m (57% of the full storage capacity of the dam) because the inlet to the downstream fishway is constructed above this height. (f) Lungfish are likely to be injured by the speed at which they are transported through the downstream fishway and the small dimensions of the pipes and downstream release pool. (g) Lungfish, particularly juveniles, are susceptible to predation while moving through the upstream fishway and the downstream fishway. (h) Lungfish exiting the upstream fishway or the downstream fishway are susceptible to predation at the release point. (i) Due to the matters raised in paragraphs 6(a)-(h), the upstream fishway and the downstream fishway are not likely (more than 50% probable) to allow any normal sized lungfish to move upstream and downstream of the dam without injury irrespective of the water level in the dam. (ii) Causing a greater number of lungfish to move downstream in flood events over the dam spillway and, thereby, increasing mortality in the lungfish population due to death or injury of lungfish on the spillway. (iii) Unless restrained by the Court the impacts in paragraphs 8(b)(i) and (ii) will continue during the operation of the dam for the indefinite future. Section 142A of the EPBC Act separately provides for an offence constituted by a reckless contravention of an approval condition. An individual who commits an offence against s 142A may be imprisoned for up to 2 years or fined up to 120 penalty units or both. For individuals the penalty for a breach of s 142B is up to 60 penalty units. 14 Obviously enough, of these punishments only a fine is applicable in the case of a corporate offender. As to that, the effect of s 4B(3) of the Crimes Act 1914 (Cth) is that a body corporate may be fined up to 5 times the maximum amount that an individual may be fined. I note in passing that executive officers of bodies corporate that contravene ss 142 or 142A or 142B are also amenable to a suit for a pecuniary penalty or, as the case may be, prosecution for an offence: ss 494 and 495 respectively. 15 Burnett Water has sought a stay of these proceedings or that they be stood out of the Court's list. It seeks that such an order continue in force until such time as the Minister for the Environment, Heritage and the Arts or a responsible officer in his Department either completes an investigation under ch 6 Pt 17 of the EPBC Act in respect of its compliance with condition 3 of its approval, advises it whether or not condition 3 will be varied or amended or confirms in writing to it that no criminal proceedings will be instituted against it or its officers in respect of conduct substantially the same as that relied upon by the Conversation Council in these proceedings. 16 At the time when Burnett Water's application was called on for hearing the Minister sought leave to intervene in the proceeding. 17 If only to permit the Minister to make such submissions as he may be advised concerning the stay application I granted the Minister leave to intervene on the basis that this leave and whether to grant it only on the terms sought would be the subject of consideration after judgment had been given in respect of Burnett Water's stay application. I stood over the Minister's application accordingly. In the result, the Minister did not offer any substantive submissions in respect of the stay application. 18 It should also be recorded that the Conversation Council has made application for discovery in respect of particular categories of documents concerning the construction and operation of the fishways on the dam. That application also has been stood over pending the disposal of the stay application. 19 That the Court has a general power to control its proceedings and that this includes a power to grant a temporary stay of those proceedings in various circumstances is not in doubt. The authority cited by Burnett Water for this proposition, Sterling Pharmaceuticals Pty Ltd v The Boots Company (Australia) Pty Ltd [1992] FCA 72 ; (1992) 34 FCR 287 at 290 certainly exemplifies this but in the different context of similar proceedings pending in a foreign jurisdiction. But in the civil court it would be a matter of discretion, and not of right. There is, I say again, in my judgement, no principle of law that a plaintiff in a civil action is to be debarred from pursuing that action in accordance with the normal rules for the conduct of civil actions merely because so to do would, or might, result in the defendant, if he wished to defend the action, having to disclose, by an affidavit under Order 14, or in the pleading of his defence, or by way of discovery or otherwise, what his defence is or may be, in whole or in part, with the result with the result that he might be giving an indication of what his defence was likely to be in the contemporaneous criminal proceedings. The protection which is at present given to one facing a criminal charge --- the so-called 'right of silence' --- does not extend to give the defendant as a matter of right the same protection in contemporaneous civil proceedings. 20 Jefferson Ltd v Bhetcha , its initial Australian reception and the relationship, if any, between the discretion described by Megaw LJ in the passage quoted and the "felonious tort rule" were considered by Wootten J in McMahon v Gould (1982) 7 ACLR 202 in what has proved to be an influential judgment. In that case Mr McMahon, in his capacity as the liquidator of The Dominion Insurance Company of Australia Limited commenced proceedings against the directors of that company, including Mr Gould, for the recovery of sums of money. He alleged that the sums of money in question had been withdrawn from the company's account and misapplied and as a result the directors were guilty of fraud and breach of duty owed to the company. Mr Gould was, at the time already facing criminal proceedings directly related to the sums in question. He applied to the Supreme Court for a general stay of the liquidator's proceedings pending the termination of those criminal proceedings. 22 The first reported consideration in Queensland of the discretion described by Megaw LJ in Jefferson Ltd v Bhetcha is the judgment of Connolly J in Black & White Cab Co Limited v Kelk [1984] 2 Qd R 484. That case was a civil proceeding in which Mr Kelk was a defendant to a claim for an injunction to restrain the use of allegedly confidential knowledge and damages for an alleged breach of his duty of trust and confidence. Though he had entered an appearance, he had filed no defence. In the meantime an indictment had been presented against him alleging an offence of making improper use as an employee of corporate information to gain an advantage for himself or another person. His Honour (at 485) described the passage which I have quoted above from the judgment of Megaw LJ in Jefferson Ltd v Bhetcha as "highly persuasive" and decided (at 487) to follow it. McMahon v Gould does not appear to have been drawn to his Honour's attention although two earlier New South Wales decisions in which Jefferson Ltd v Bhetcha had been considered and which were in turn considered by Wootten J were. In the result, Connolly J dismissed the stay application, fixed a time for the filing of a defence and counterclaim and permitted the entry of interlocutory judgement for damages to be assessed in default of the delivery of the same. His Honour allowed (at 488) that, if the criminal trial were imminent, it may well be the proper course to postpone the trial of the civil action until after verdict observing that this was a matter which could be resolved when the civil action was closer to trial. 23 Later factual exemplars of the application of the discretion described by Megaw LJ in Jefferson Ltd v Bhetcha and of the guidelines set out by Wootten J in McMahon v Gould abound. The most recent of these appears to be a judgment delivered last month by Robson J of the Victorian Supreme Court in Australian Securities and Investments Commission v Flugge [2008] VSC 473. That case is noteworthy for a number of reasons. Firstly, it exemplifies that an exercise of the discretion in question in a civil proceeding may be sought even where related criminal proceedings have not been instituted but are instead "on the cards", i.e. a "reasonable possibility". Secondly, it contains a reflective discussion of whether the guidelines stated in McMahon v Gould should continue to be applied in light of later High Court authority. Thirdly, there is to be found in it consideration of observations made by Finkelstein J of this Court concerning the danger of a civil court's making declaratory judgments or granting injunctive relief if a matter is likely to end up before a criminal court. It submits they should be followed in the present case. There are, however, indications that the principles may require review by an appellate court. In Yuill v Spedley Securities Ltd Kirby P referred to McMahon v Gould as "the existing law. " His Honour indicated, however, that one day it may be appropriate for the guidelines referred to by Wootten J in McMahon v Gould to be reconsidered. Kirby P said that the guidelines do not take specifically into account the primacy of the administration of criminal justice in our legal system. In Niven v SS Beazley JA of the New South Wales Court of Appeal said there was force in Kirby's opinion although the case before him was not the case to reconsider McMahon v Gould . In Baker v The Commissioner of Federal Police Gyles J said that in view of Reid v Howard there was some merit in the view that there should be reconsideration of the manner in which the McMahon v Gould line of authorities is now applied so as to decide whether too little weight is given to the practical as well as legal prejudice to the accused and to the primacy of criminal proceedings in our justice system. There is no doubt that Reid v Howard does re-affirm the importance of the privilege against self-incrimination, and does not give any encouragement to think that any devaluation of the principle which may apply in the United Kingdom will be applied in Australia. [31] Gyles J said, however, that any such reconsideration would need to be undertaken either by the Full Court of the Federal Court of Australia or the High Court. This approach to McMahon v Gould was also adopted by Gray J in Elliot v APRA . Gray J did hold that the line of authority in McMahon v Gould was not constructed by way of any exception to the privilege against self-incrimination or self-exposure to a penalty. [32] Nevertheless, in Trade World Enterprises Pty Ltd v DCT Nettle JA (with whom Redlich JA agreed) said the relevant principles applicable to the exercise of discretion on an application for adjournment or stay were conveniently set out by Young CJ in Philippine Airlines v Goldair (Aust) Pty Ltd where Young CJ cited with approval the guidelines in McMahon v Gould . So do I. Locally in Queensland, Daubney J reached a like conclusion last year in Osric Investments v Probst [2007] QSC 293 at [12]. 26 In Australian Securities and Investments Commission v Flugge , Robson J felt constrained, as had others before him, to suggest that an appellate court may wish to reconsider McMahon v Gould . Insofar as McMahon v Gould recognises the existence of a power which a court has to control proceedings in a civil action by the granting of a stay of those proceedings where the interests of justice so require, I respectfully doubt whether there is any general need for a reconsideration of that case. It is important not to elevate particular factual circumstances calling or not calling for the exercise of that power into statements of principle. It seems to me that Wootten J was not endeavouring to do anything other than to set out guidelines. I do not approach this matter on the basis that the occasions for the exercise of the power are closed. What is required is a balancing of the interests of the applicant and respondent in a civil proceeding having regard to any statutory context relevant to that civil proceeding and to any impending or prospective criminal proceeding. A separate but not unrelated consideration is whether the civil proceeding or at least its then prosecution might be regarded as an abuse of the process of the court. Such considerations will especially loom where the applicant in a civil proceeding is an emanation of the Crown and seeks declaratory relief and the imposition of pecuniary penalties in circumstances where a respondent is or is in jeopardy of facing criminal proceedings in respect of substantially the same conduct. I note that such a prospect particularly influenced Robson J in his suggestion that McMahon v Gould may need to be reconsidered by an appellate court. 27 The judgment of Finkelstein J considered by Robson J was that given by his Honour in Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd (2007) 164 FCR 487. The general rule in a company case is that a civil court will usually be the appropriate court to deal with a contravention of the Corporations Act. But the court should be wary of granting relief, including the grant of a declaration or an injunction, if the case is likely to end up before a criminal court. Ordinarily, a civil court should not intervene in those circumstances unless its failure to do so will result in irreparable injury. That strict rule need not be applied if the case involves undisputed facts and the issue raised gives rise to a question of pure law. Then a declaration can be a very useful remedy. As Barwick CJ said in Commonwealth v Sterling Nicholas Duty Free Pty Ltd that is the kind of case "which contributes enormously to the utility of the jurisdiction. (Internal footnote references omitted. 29 In the present matter Burnett Water has in the end brought its stay application after filing its defence rather than at the first directions hearing. No criminal or even civil penalty proceedings instituted by or on behalf of the Commonwealth are presently pending against it or any "executive officer" in respect of any of the matters alleged in the statement of claim. Prosecution or civil penalty proceedings are two of the options open to the Minister to consider under the EPBC Act, as his Department's policy and correspondence with Burnett Water recognise. So, too, is the seeking of injunctive relief under s 475 of the EPBC Act by the Minister himself. None of these options has yet been abandoned by the Minister or his Department. Yet other options theoretically open to the Minister to consider are the variation of the conditions of the approval, the suspension of the approval or its revocation: ss 143, 144 and 145 respectively. 30 Even though it is settled now that the privilege against self incrimination does not apply to corporations: Environmental Protection Authority v Caltex Refining Co Pty Ltd [1993] HCA 74 ; (1992-1993) 178 CLR 477 , note also s 187 of the Evidence Act 1995 (Cth), it does not follow that Burnett Water is for that reason not entitled to seek a stay of the present proceedings. A prior civil proceeding may still in theory have a potential to embarrass a respondent corporation in relation to its defence of a later civil penalty or criminal proceeding. It is though for that corporation to demonstrate that this is more than an abstract concern. 31 A compliance audit of the dam having regard to the EPBC Act was completed by the Department in January 2008. That identified a "partial non-compliance" with, materially, condition 3 of the Ministerial approval. By October 2008 a revision in respect of the original modelling used to set the parameters of the fishways, a review of the monitoring program in respect of the fishways and the seeking of advice in respect of the possibility of an ameliorating "retrofit" to the fishways were occurring. A report on these subjects was expected to be received within 2 months. It is not yet to hand. After its receipt the Department will give further consideration to the course of action it should take. The prospect of either criminal or civil penalty proceedings is but a bare contingency at the moment. 32 In the meantime, according to preliminary report of 2 December 2008 provided by Professor Jean Ross of Macquarie University who has a research interest in the Australian lungfish, a concern remains about the impact of the dam and the present state of the fishways in relation to the future of that species in the Burnett River. Moreover, due to habitat loss associated with the construction of the Paradise Dam and upstream and downstream water infrastructure, there is a potential for overcrowding at the remaining spawning sites. 33 The objects of the EPBC Act (s 3) include the protection of the environment and the promotion of biodiversity. Having regard to the very occasion for the imposition of condition 3 in the Ministerial approval, the evidence of Professor Ross and the objects of the EPBC Act, there are public interests at large in the present proceeding other than a potential embarrassment of Burnett Water and the administration of justice in relation to any civil penalty or criminal proceedings. There is a public interest character in the injunctive relief which may be granted by the Court pursuant to s 475 of the EPBC Act. Section 475 of the EPBC Act and its related provisions form part of a much larger enforcement scheme contained in the 21 divisions of Pt 17. The provisions include the conferral of powers of seizure and forfeiture, powers to board and detain vessels and authority to continue a pursuit on the high seas. 20 It is an important and distinctive feature of Div 14 of Pt 17 of the EPBC Act that, like s 80(4) of the TP Act, the Federal Court is expressly empowered to grant an injunction restraining a person from engaging in conduct whether or not it appears to the Court that the person intends to engage again in conduct of that kind and, even, whether or not there is a significant risk of injury or damage to the environment if the person engages or continues to engage in conduct of that kind: see s 479(1)(a) and (c). 21 The public interest character of the injunction that may be granted under s 475 of the EPBC Act is also emphasised by other elements in Div 14 of Pt 17. Thus, as we have noted, standing is conferred upon 'an interested person' to apply to the Court for an injunction. Likewise, the traditional requirement that an applicant for an interim injunction give an undertaking as to damages as a condition of the grant is negated. Indeed, s 478 provides, expressly, that the Federal Court is not to require such an undertaking. These modifications to the traditional requirements for the grant of injunctions have the evident object of assisting in the enforcement, in the public interest, of the EPBC Act. This does not of course mean that the traditional requirements are irrelevant: see ICI Australia Operations Pty Ltd v TPC at 256-257. 34 An "interested person" may initiate proceedings for injunctive relief in circumstances where, for one reason or another, the Minister may be unable or unwilling so to do. Further, a condition precedent to the granting of that relief is the proof of a contravention of the EPBC Act. That formal declarations to this effect have not been sought in the application may therefore in substance be a distinction without a difference. However, the present proceeding is of a quite different type to that which provoked the observation made by Finkelstein J in the passage which I have quoted from Australian Securities and Investments Commission v HLP Financial Planning (Aust) Pty Ltd . 35 The EPBC Act is not unique in providing for the granting of injunctive relief in circumstances which may attract either a civil penalty or a criminal prosecution. Section 80 of the Trade Practices Act 1974 (Cth) has, from the very commencement of that Act well over 30 years ago, permitted either an emanation of the Commonwealth in the form of what is now called the Australian Competition and Consumer Commission (ACCC) or any other person to institute proceedings for injunctive relief grounded in a finding of a contravention of Pt IV or Pt V of that Act. That there exists a theoretical contingency that a respondent's conduct may at the behest of the ACCC attract a civil penalty proceeding or a prosecution has not in the past proved to be a fertile source of precedent in relation to the staying of proceedings for injunctive relief under the Trade Practices Act initiated by a private person. An analogous conclusion is open in respect of the proceedings by private persons for injunctions grounded upon a breach of State fair trading statutes. 36 The EPBC Act does, by Subdivision B of Div 15 of Pt 17 of ch 6 (ss 486A to 486D) make some provision with respect to the relationship between criminal and civil penalty proceedings under that Act. I do not though discern in that Subdivision any implication that a proceeding for an injunction initiated by an "interested person" ought to be stayed even temporarily pending the making of a decision by the Minister as to whether civil penalty or criminal proceedings ought to be initiated in respect of the same conduct. Indeed, the absence of any reference in this Subdivision to a proceeding under s 475 of the EPBC Act is noteworthy. 37 There has been no submission on the part of Burnett Water that there has been any collusion between the Conversation Council and the Minister or officers of his Department such that one might regard the Conservation Council as a stalking horse for the Commonwealth. The Conservation Council appears on the evidence to have made its own investigations and taken its own counsel with respect to the initiation of the present proceeding. Nonetheless, that the Minister has sought to intervene in the proceeding introduces a dynamic which was not present when they were instituted. The avowed basis upon which leave to intervene is sought is superficially limited with there being no avowed interest in separately seeking a role in the proof of any contravention of the EPBC Act. Even if the Minister had not sought to intervene, the present proceeding is a public one. Either the Minister or one of his officers would be entitled to observe and take notes of the evidence given in the proceeding. 38 The present case is nothing like Australian Securities and Investments Commission v Flugge where a conclusion that criminal proceedings against the defendants was a reasonable possibility was readily open having regard to recommendations made in a the report of a recently completed Royal Commission. The audit report does not recommend that a criminal proceeding or even a civil penalty proceeding be instituted. 39 Taking into account all of the considerations which I have mentioned, and balancing all of the public interests at large, it seems to me that, as matters presently stand, the case for even a temporary stay of the proceeding is neither compelling nor even persuasive. That is not to say that the granting of a stay is a remedy forever foreclosed to Burnett Water. Circumstances may change in which case it is at liberty again to bring an application. 40 The application should be dismissed. In the event of that occurrence, the Conservation Council did not seek any order as to costs other than that they be costs in the proceedings. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan. | high court and federal court procedure staying proceedings application for stay of proceedings where criminal or civil penalty proceedings against the respondent a contingency but not a real possibility whether civil proceedings should be stayed temporarily temporary stay refused practice and procedure |
The act of bankruptcy alleged in the petition is the failure of the respondent to comply with a bankruptcy notice issued on 9 October 2007. The notice was served in respect of a final order for costs made on 20 April 2007 in contempt proceedings in the Supreme Court of Victoria. The judge made an order that the applicants' costs of the contempt proceeding, including reserved costs, be paid by the respondent on a solicitor-client basis. These costs were taxed and allowed at $123,587.41. The question for determination is whether the bankruptcy notice is valid. 2 Section 40(1)(g) of the Bankruptcy Act 1966 (Cth) provides that a debtor commits an act of bankruptcy "if a creditor who has obtained against the debtor a final judgment or final order ... has served on the debtor ... a bankruptcy notice ... and the debtor does not ... comply with the requirements of the notice". The Bankruptcy Act also provides that a bankruptcy notice must be in accordance with the form prescribed in the regulations: s 41(2). According to those regulations the notice must be in accordance with Form 1: Bankruptcy Regulations 1996 (Cth), reg 4.02. Clause 2 of Form 1 requires a "copy of the judgments or orders relied upon by the creditor [to be] attached" to the bankruptcy notice. 3 The only order that was attached to the bankruptcy notice was the order made by the taxing master following the taxation. The taxing master's order was in the following terms: "The costs of the [applicants] are taxed and allowed in the sum of $123,587.41 to be paid by the [respondent]. " The respondent challenges the validity of the bankruptcy notice. He says that an order of the taxing master is not a final order or final judgment for the purpose of the Bankruptcy Act . 4 In most jurisdictions, upon the completion of a taxation of a bill of costs, the taxing master issues a certificate of taxation or an allocatur. Until that point the quantum of the costs are necessarily indeterminate. But after the certificate or allocatur is issued the costs become a "sum certain": Watkins Ltd v Ranger Uranium Mines Pty Ltd (1985) 35 NTR 27 , 32. The certificate or allocatur amounts to an authority for the enforcement of the amount allowed by the taxing master: Garrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662, 678. But the liability to pay costs depends upon the order made by the court that costs be paid by one party to another. It is that order (ie the order of the court) that is a final judgment for purposes of the Bankruptcy Act : Re Cartwright; ex parte Cartwright v Barker [1975] 1 WLR 573. 576. The taxing master's certificate or allocatur is not a final judgment for that purpose: Re Crump; ex parte Crump (1891) 64 LT 799. 5 In 1986 the Victorian Supreme Court rules changed. The new rules did away with the taxing master's certificates and allocaturs. Now when costs are taxed, the taxing master may "make a final order with respect to the amount at which he or she allows the costs or of his or her disallowance of the costs": Supreme Court (General Civil Procedure) Rules 2005 (Vic), O 63 r 56(2). 6 It seems to me that the order made by the taxing master is not a final order for the purposes of the Bankruptcy Act . This is because all that the master is permitted to do by O 63 r 56(2) is to make an order that either certifies the amount of costs that are payable or certifies the amount of costs that have been disallowed. The master is not given the power to make an order requiring one party to pay to another party the costs so certified. 7 Taxing masters in Victoria use a pro forma form of order which is in the following terms "The cost of the ________ are taxed and allowed in the sum of $________ to be paid by the ________". The pro forma order is not sanctioned by the rules. Nor is it prescribed by any regulations. It is a form that has simply been adopted by the taxing master as the means by which he will carry out his function under O 63 r 56. The pro forma order does not, however, alter the fact that all the taxing master can do is exercise the powers conferred upon him by the Supreme Court Act 1986 (Vic) and the rules. It is, in my view, clear that neither the statute nor the rules authorise the taxing master to make an order in the form which he employs. 8 It follows that the obligation pay the costs which the taxing master has taxed must be found elsewhere. In cases where the costs are taxed pursuant to an order, the obligation to pay the costs is to be found in the order itself. The order cannot be enforced until the costs have been taxed and a final order from the master is issued. In cases where: (a) the rules require one party to pay another party's costs (see for example O 26 r 3(7)); or (b) the parties have agreed in writing that costs payable by one party to another be taxed, then those costs may be taxed without an order for taxation (O 63 r 10). Once the taxing master has made a final order with the respect to those costs, the order "may be enforced in the same manner as a judgment for the payment of money" (O 63 r 11(1)). In the first case the judge's order, and in the second case the taxing master's order, is a final order for bankruptcy purposes. 9 Unfortunately this view is not shared by the Supreme Court. In Scott v Evia Pty Ltd [2008] VSC 324 , Hansen J held that a taxing master's order is a judgment that is enforceable in the same manner as any other judgment for the payment of money. He held that a taxing master has power not only to determine the quantum of costs but also to compel one party to pay another party's costs. He gave the following examples in support of his contention (at [34]): (a) where it is desirable to identify that a party's liability to pay costs is limited to a percentage of the total, or some other part of, the taxed costs; (b) where the liability to pay costs is defined, in whole or in part, in respect of issues; (c) where a number of orders produces a single taxed amount; and (d) if there are multiple parties and the liability to pay costs varies between them and even includes percentage and issue orders. 10 It may be true that the taxing master's final order can stipulate, in an appropriate case, what proportion of the taxed costs a particular party is liable to pay. However, in each instance it is not the taxing master who makes the decision as to the appropriate proportions. He is only entitled to implement the order of the judge directing how the costs are to be paid. That is to say, the taxing master is only performing a ministerial function by giving effect to a judge's order. 11 As regards the operation of O 63 r 11 Hansen J said (at [36]): "The rule is enabling and clarificatory to the extent it provides. It is to be understood as making plain that an order made by the taxing master [which is not made pursuant to a curial order] ... is enforceable in the same manner as a judgment for the payment of money. " It will be apparent that this is not the view I take of the rules. I am of the opinion, as expressed in my earlier decision in Commonwealth Bank of Australia v Horvath (Junior) [1999] FCA 143 ; (1999) 161 ALR 441 , that O 63 r 11 makes it clear that an order of a taxing master is not generally enforceable as a judgment or else why would the rules have provided that in some circumstances it can be enforced as a judgment: see Re Swinton & Co. and Richez,; Re Mortimer and Kirkpatrick (1982) 33 B.C.L.R. 36 , a case decided in different circumstances. 12 Moreover, the view that I take is consistent with that taken by the seminal practice book, Williams, Civil Procedure - Victoria. Before the order of the Taxing Master is enforced, it must be authenticated and filed in accordance with O 60: see rr 60.01, 63.56(4). In the case of costs taxed under a judgment or order, that is, a judgment or order of a judge or a master that a party pay costs, strictly, the liability of the party to pay the amount at which the taxing master allows costs arises from that judgment or order, not from the order of the taxing master. Nonetheless, the order of the taxing master must be authenticated before the amount for costs can be levied by warrant of execution. 13 Neither the foregoing nor my view that Scott is wrongly decided provides the answer to this case. The reason is this. In common with other common law jurisdictions, in Victoria, subordinate legislation either means what it says or, in cases of difficulty, means what judges say it means. If a judge of the Supreme Court holds that a particular rule is to be given a particular construction then, whether the construction be right or wrong, that holding binds those who must enforce the rules until the judgment is set aside. Put simply, the power of the taxing master and the effect of his orders depend not only upon the language of the rules, but also upon the construction which has been placed upon them by judges in the relevant jurisdiction. 14 What that means for the present case is this. The officers of the Supreme Court who enforce judgments will enforce any final order made by a taxing master. This will occur because that is what Scott decided. That practice must be given affect for the purposes of the Bankruptcy Act . 15 The respondent also opposes the petition on the following grounds: (a) the respondent is not insolvent; (b) the respondent has valid claims against the applicants; and (c) the applicants' petition is not made bona fide. It seems to be common ground that these issues should be remitted for determination by a magistrate. Orders will be made accordingly. So far as the costs are concerned, in my view, they should be borne by the respondent. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein. | bankruptcy notice founded on final order supreme court taxing master's order whether final order bankruptcy |
The right of appeal is limited to an appeal on a question of law: Administrative Appeals Tribunal Act 1975 (Cth) s 44. 2 The applicant was overpaid a parenting payment under the Social Security Act 1991 (Cth) ('the Act'). Before the Tribunal there was no dispute that there had been an overpayment and the amount of overpayment was not in dispute. By reason of s 1223 of the Act the overpayment was a debt due to the Commonwealth. The applicant claimed that the Secretary should have waived the right to recover the debt under s 1237A(1) and (1A) of the Act. In the alternative, he claimed that the Secretary should have exercised the discretion to waive the right to recover the debt under s 1237AAD of the Act. On the appeal to this Court that conclusion was not challenged. 4 The Tribunal member rejected the claim for waiver under s 1237AAD on the ground that he did not consider that there were special circumstances making it desirable to waive the debt. On appeal to this Court, the applicant challenged the Tribunal member's approach and findings with respect to that issue. Although he made no express finding in terms of s 1237AAD(a) the other findings of the Tribunal member negate any suggestion that the decision-maker could not be satisfied of the matter referred to in s 1237AAD(a). Those findings are summarised below. He did find that the debt was not capable of being written off under s 1236(1) and (1A) of the Act and there is no challenge to that conclusion. It is not a pre-requisite to the satisfaction of the matter in s 1237AAD(c) that it be appropriate to write off the debt: Secretary, Department of Social Security v Hales (1998) 82 FCR 154 at 163-164 per French J. 6 As I have said, the focus of the applicant's challenge on the appeal was to the Tribunal member's approach and findings with respect to the question of special circumstances. In considering whether there were special circumstances, the Tribunal member failed to take into account a relevant matter, namely, that the applicant had changed his position by spending the overpayment which had been caused, primarily at least, by an error of the respondent. He has elderly parents, one of whom, his father, has emphysema. He lives with his parents and son in a house on property at Torrensville ('the Torrensville property'). The applicant is the registered proprietor of the Torrensville property. Until July 2001 the applicant was employed by ACI. He resigned from his employment at that time to care for a Ms Cecilia Bannan and to help his mother with the care of his son. Ms Bannan is the applicant's fiancée and she was seriously injured in a traffic accident in 1998 and was wheelchair-bound. Upon his resignation from his employment the applicant received a termination payment of $100,000 and had access to non-preserved superannuation benefits of $117,000. He used those funds to purchase a residential property at Flinders Park ('the Flinders Park property') on 15 January 2002 for the sum of $209,500. In December 2004 Ms Bannan moved into the Flinders Park property to save rent and to assist the applicant financially. 9 Prior to July 2001 the applicant had had no contact with Centrelink. At that time, he contacted Centrelink but was told that he had to use all his available funds before any benefit would be paid. In March 2002, the applicant's circumstances changed and he lodged a claim with Centrelink for a parenting payment. Do you (or your partner) own (or partly own) real estate other than the home in which you live? This includes properties in Australia and overseas. Please ask Centrelink for a Mod R for each property. The Tribunal member found that the applicant answered all the questions in the claim form honestly and to the best of his knowledge. He omitted seeing the notation under the question that required him to complete and attach a real estate Module R for the Flinders Park property. It confirmed his benefits and, among other things, required the applicant to advise Centrelink if his assets other than financial investments were more than $39,469. The Tribunal member found that the applicant failed to thoroughly read the letter and was not aware of his obligation to inform Centrelink of any increases in his financial investments or other assets. The Tribunal member accepted that the applicant's failure was an innocent mistake. 12 The applicant commenced receiving the parenting payment (single) based upon the application he had lodged with Centrelink. 13 The applicant was interviewed by officers of Centrelink in June and December 2002. The issue of the applicant's increased assets was not raised. The applicant believed that he had made full disclosure of his financial position when lodging his application in March 2002 and that no further disclosure was required. 14 The Tribunal member found that during an interview with an officer of Centrelink on 9 November 2004 the applicant was shown details of all the financial investments and assets recorded for him with Centrelink. He noted that the amounts for his savings and managed investments were still recorded and that there was no record of his purchase of the Flinders Park property. Based on the information given to it by the applicant, on 9 November 2004 Centrelink raised a debt of $30,385.82 in respect of the overpayment of the parenting payment. 15 During the relevant period, namely, 4 April 2002 to 3 November 2004, there was an assets limit for the parenting payment (s 500Q(1) and (2) of the Act) and, taking into account the Flinders Park property, the applicant was not entitled to the parenting payment. The Tribunal is satisfied and so finds that the respondent received an overpayment of Parenting Payment (Single) during the period from 4 April 2002 to 3 November 2004. The overpayment occurred because the respondent failed to advise Centrelink that his assets other than financial investments (ie the Flinders Park property) were valued at more than $39,469. The Parenting Payment (single) should not have been paid to the respondent as the value of his assets exceeded his assets value limit as provided in s 500Q(2) of the Act. The amount of the overpayment is a debt recoverable under s 1223(1) of the Act and is not capable of being written-off under s 1236(1) and (1A) of the Act. 17 The applicant challenged the respondent's decision to raise the debt. On 21 March 2005, the original decision-maker reviewed and affirmed her decision and on 27 May 2005 an authorised review officer reviewed and affirmed the decision of the original decision-maker. On 11 July 2005 the applicant successfully appealed to the Social Security Appeals Tribunal and that Tribunal set aside the respondent's decision and substituted a decision that an amount of $27,385.82 should be waived under s 1237AAD of the Act, leaving a recoverable balance of $3,000. The respondent applied to the Tribunal for a review of that decision. The Tribunal found that that was not the case because it did not accept that the applicant had not contributed to the error which gave rise to the overpayment. The Tribunal said that the applicant failed to ask for a Module R from Centrelink when he completed his application form in March 2002, but even if that did not contribute to the error, the applicant's failure to advise Centrelink of the increase in his assets (other than financial investments) when he received the notification letter dated 4 April 2002 did contribute to the error and to the overpayment. The fact that the applicant did not thoroughly read the notification letter could not excuse him from his obligation to notify Centrelink about a matter that might affect the payment to him of the parenting payment. Those conclusions were not challenged on appeal, although, for the purposes of his argument in relation to s 1237AAD of the Act, the applicant submits that Centrelink had made a significant error in not identifying the need for a Module R when the applicant's claim form was received and it was this error which was the main contributing factor giving rise to the overpayment. Centrelink's error was the main contributing factor giving rise to the overpayment and, had Centrelink acted correctly, the overpayment would not have occurred. Furthermore, the error was perpetuated by the failure of officers of Centrelink to raise the issue of increased assets with the applicant during the interviews in June and December 2002. 2. As a result of the raising of the debt, the applicant had suffered a breakdown. He had gone through a horrific time, had suffered physically and was still very vulnerable. 3. The applicant had a significant ongoing role as a carer for his incapacitated fiancée and his aged parents, including his father who is ill. In the circumstances he would have little or no opportunity for employment. 4. The applicant would find it very difficult to repay the debt because of his financial circumstances. It would be unreasonable to expect the Torrensville property and the Flinders Park property to be sold. The applicant's parents believed the Torrensville property to be their property and the applicant and his fiancée intended to use the Flinders Park property as their home. He referred to the decision of the Tribunal in Re Beadle v Director-General of Social Security (1984) 6 ALD 1 where it was said that the circumstances must be unusual, uncommon or exceptional, and the reasons for judgment of Kiefel J in Groth v Secretary, Department of Social Security (1995) 40 ALD 541 where her Honour referred to a circumstance taking the case out of the usual or ordinary case. The Tribunal member also referred to observations of the Full Court of this Court in Riddell v Secretary, Department of Social Security (1993) 30 ALD 31 and of French J in Secretary, Department of Social Security v Hales (supra). I will discuss the relevant authorities later in these reasons. 21 The Tribunal member referred to the fact that financial hardship alone was not sufficient. The Tribunal member said that for the purposes of s 1237AAD what constitutes special circumstances must be considered on a case by case basis. He seemed to say that to be relevant, an applicant's financial circumstances must be straitened or worse. 22 The Tribunal member referred to a case where an administrative error by Centrelink was the predominant reason for the overpayment, 'rather than the Centrelink inaction that occurred in the [applicant's] case'. The Tribunal has had regard to other authorities on special circumstances. As was inferred earlier, what circumstances are "special" will vary from case to case. The Tribunal has come to the conclusion that the matters referred to in paragraph 31 above, on an overall analysis, cannot properly be regarded as circumstances which are special. Apart from the Centrelink error itself, the Tribunal accepts that the debt would be a significant burden for the respondent and that it has affected him physically and emotionally. He has various roles and responsibilities, not to mention his financial circumstances. The imposition of the debt has obviously impacted (or will impact) upon his future plans concerning the properties he owns at Torrensville and Flinders Park. On the other side of the equation, the respondent has significant assets (if his preserved superannuation benefits and his two properties are taken into account) which, on the evidence, have a total value of around $683,000. Ms Riley has submitted that the respondent's property at Torrensville and his superannuation entitlement should be excluded, when considering his assets, pursuant to ss 1118(1) and 1118B(1) of the Act. These provisions deal with the calculation of a person's assets for social security benefits purposes, rather than in determining a person's capacity to repay a debt arising from an overpayment of benefits. The Tribunal is of the view that ss 1118(1) and 1118B(1) are of no relevance in the present case. There is evidence also that the respondent pays the costs of his son's attendance at a private school, the fees for which are some $3,000 per annum. The Tribunal is not satisfied that special circumstances exist that make it desirable to waive, under s 1237AAD of the Act, the debt that has been raised by Centrelink. The Tribunal finds that there is nothing unusual, uncommon or exceptional about the respondent's case that would justify some other conclusion. The respondent is not a person who is impecunious and in straitened circumstances. He has significant assets and his case is one where the taxpaying public would be entitled to expect that, in the ordinary course, the benefits paid to him, which he was not entitled to receive, will be recovered. 25 The Tribunal member concluded his reasons by saying that he had sympathy for the applicant's position and that it was his strong recommendation to the respondent that satisfactory arrangements be made with the applicant to enable repayment of the debt over an extended period. He submits that the Tribunal member said that to constitute special circumstances the circumstances must be 'unusual uncommon and exceptional'. The applicant submits that that was the test formulated by the Tribunal in Re Beadle and Director-General of Social Security (supra) but it was not the test approved on appeal by the Full Court of this Court: Beadle v Director-General of Social Security (1985) 60 ALR 225. Nor, submits the applicant, is the test consistent with other authority of this Court including Dranichnikov v Centrelink (2003) 53 ATR 270 and Ryde v Secretary, Department of Family and Community Services [2005] FCA 866. The applicant submits that the correct test as to what constitutes special circumstances is whether the circumstances take the case out of the ordinary. The qualifying adjective looks to circumstances that are unusual, uncommon or exceptional. Whether circumstances answer any of these descriptions must depend upon the context in which they occur. For it is the context which allows one to say that the circumstances in one case are markedly different from the usual run of cases. This is not to say that the circumstances must be unique but they must have a particular quality of unusualness that permits them to be described as special. For example, where the delay beyond six months was due to the claimant's being misled by a departmental officer or was due to the negligence of a third party it might be thought the normal six months would be inappropriate; that special circumstances had been shown which warranted a longer period. More difficult would be questions of ignorance, illiteracy, isolation, illness and the like. It would depend upon the circumstances of the particular case whether these constituted special circumstances. We do not think it is possible to lay down precise limits or precise rules. The matter is one for the Director-General bearing in mind the purpose for which the power is given. The phrase "special circumstances", although lacking precision, is sufficiently understood in our view not to require judicial gloss. To succeed the appellant needs to point to some error of law on the part of the Tribunal which would show its decision was wrong. We do not consider any error of law has been shown. While we would place less emphasis on one dictionary definition of "special", we are in broad agreement with the approach of the Tribunal and are in agreement with its conclusion. We would dismiss the appeal. The decision maker clearly also determined that the circumstances were such that they were not exceptional or unusual so that waiver could not be made as a matter of discretion under s 101. That equates "special circumstances", as that expression is used in the Administration Act with either exceptional circumstances or unusual circumstances. The origin of the test apparently adopted by the Secretary appears to be the decision of the first instance Judge in Beadle v Directory-General of Social Security (1985) 60 ALR 225. That was a decision under previous legislation, the history of which is referred to by French J in Secretary of Department of Social Security v Hales (1998) 82 FCR 154. The Full Court in Beadle comprising Bowen CJ, Fisher and Lockhart JJ, however, was of the view that it was not possible to lay down precise rules as to what constituted special circumstances under the then s 102(1)(a) of the Social Security Act 1947 (Cth). Their Honours point out that the question whether there were special circumstances was one for the decision maker (in that case the Director-General) bearing in mind the purpose for which the power was given. The reference to the first instance decision from which the words "unusual, uncommon or exceptional" come was not actually affirmed by the Full Court. To some extent the question whether there were special circumstances must depend on how it came about that the error occurred. Again that is not a matter to which the decision maker apparently averted. Other cases which have considered analogous words such as "special reasons" has tended to conclude, albeit in different contexts, that what is required will be circumstances which distinguish the case in consideration from the usual case. There will be a requirement that the circumstances are such that takes the case out of the ordinary: Jess v Scott (1986) 12 FCR 187 and the cases in various contexts in the decision which Lockhart, Shepherd and Burchett JJ discuss. One particular argument his Honour was required to consider was whether the reference in s 1237AAD(b) to 'other than financial hardship alone' meant that there must be financial hardship before a finding of special circumstances can be made. His Honour rejected that argument and in the course of doing so made some general observations as to the concept of special circumstances. A constellation of factors, including financial circumstances, may fall within it. The express exclusion of financial hardship alone as a special circumstance is an indicator that it would otherwise be included. This gives some measure of the range of circumstances which will qualify as special. But as a matter of grammar and ordinary logic, the exclusion of financial hardship alone as a special circumstance does not mandate its inclusion in the range of matters constituting such circumstances for the purpose of enlivening the Secretary's discretion. It is inappropriate to constrain that flexibility by imposing a narrow or artificial construction upon the words. It may be that there will be few cases in which the Secretary will be satisfied that there are special circumstances in the absence of financial hardship. It may be that there are few cases in which having found special circumstances to exist, the Secretary would exercise the discretion to waive in the absence of financial hardship. But to anticipate the limits of the categories of possible cases by imposing on the language of the section a fetter upon its application which is not mandated by its words, is to erode its useful purpose. In other words, the Secretary is not obliged to waive the debt even if the three conditions are satisfied. 32 In Ryde v Secretary, Department of Family and Community Services (supra) Branson J considered the provisions of s 1237AAD and in particular whether the Tribunal in that case had erred in concluding that special circumstances meant circumstances which were 'unusual, uncommon or exceptional'. Her Honour referred to the first passage from the reasons for judgment of the Full Court in Beadle set out in [28] above. It is that there be shown a special reason why the appeal should be permitted to proceed, though filed after the expiry of twenty-one days. In that context, the expression "special reasons" is intended to distinguish the case from the usual course according to which the time is twenty-one days. But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. The Full Court in Beadle did not endorse the view expressed by the Tribunal in Re Beadle and Director-General of Social Security (1984) 6 ALD 1 at 3 that circumstances are special only if they are " unusual, uncommon or exceptional" . In the context in which the Tribunal reached this conclusion, it is to be understood as having made a judgment that neither hardship nor unfairness made it desirable to waive all or part of the applicant's debt because the applicant's circumstances were common-place rather than special. While, as French J pointed out in Hales , the evident purpose of s 1237AAD is to enable a flexible response to the wide range of circumstances which could give rise to hardship or unfairness, the statutory requirement for " special circumstances " discloses an intention to proscribe waiver in ordinary cases. The hardship or unfairness to which French J referred must be understood to be hardship or unfairness sufficient to justify departure from the general rule in the particular case. I also note that the authorities have emphasised time and again the importance of maintaining flexibility in determining what constitutes special circumstances. The danger is that the test will be overstated if the word 'exceptional' is emphasised. It was not the intention of Parliament to confine the exercise of the discretion to an exceptional case. There is less risk of overstatement if the words 'unusual' or 'uncommon' are emphasised. Those words indicate, correctly in my view, the fact that there must be something that distinguishes the case from the ordinary or usual case. It may not be easy to postulate the ordinary or usual case other than in quite general terms and, in doing so, close attention must be given to the particular statutory context. 34 It is true that in expressing his conclusions the Tribunal member said that there was nothing unusual, uncommon or exceptional about the applicant's case. However, his reasons must be read as a whole and when that is done I do not think that he applied too demanding a test. The first point to note is that contrary to the applicant's submission he did not apply a test of 'unusual, uncommon and exceptional' as distinct from 'unusual, uncommon or exceptional' as submitted by the applicant. ... It would of course follow that if one were to conclude that something unfair, unintended or unjust had occurred that there must be some feature out of the ordinary. It is the essential nature of the provision to create a broad discretion to meet the great variety of circumstances which must occur, raising considerations of individual hardship, need, fairness, reasonableness, and whatever else may move an administrator, keeping in mind the scope and purposes of the Act, to make a decision one way or the other. Thirdly, this is not a case where the facts suggested that a precise formulation of the test was necessary or likely to be decisive. It seems to me to be implicit at the very least that the Tribunal member did not consider that there were any features which meant that the case was unusual or out of the ordinary. 37 I reject the applicant's first submission. 38 The applicant's second submission is that in considering the financial hardship to the applicant if he is required to repay the debt including his capacity to repay the debt, the Tribunal erred in taking into account as assets of the applicant the Torrensville property and the applicant's preserved superannuation benefits. The applicant submits that although he is the registered proprietor of the Torrensville property his parents are the beneficial owners of the property and that he could not sell it. The applicant submits that his preserved superannuation benefits are not presently payable to him. He submits that he will not be entitled to those moneys until at least three years from now. 39 In his reasons, the Tribunal member referred to the fact that the Torrensville property had been purchased in 1974, that funds of the applicant's father had been used, and that he (the applicant) had borrowed the balance of the purchase price from a bank. The loan had been secured by a mortgage over the property. He noted the applicant's evidence that he had intended to transfer the Torrensville property into his father's name or make a declaration of trust, but had not done so. 40 The evidence before the Tribunal was to the effect that the Torrensville property was purchased for about $24,000. The applicant's father paid $8,000 towards the purchase price and the balance was borrowed by the applicant and secured by a mortgage over the property. The mortgage instalments were paid by the applicant. The applicant said in evidence that he has a line of credit with the St George Bank of $50,000 of which there is presently about $20,000 outstanding. The evidence suggests that that line of credit is secured by a mortgage over the Torrensville property, although the Tribunal member seems to have found that the property is not the subject of any mortgage or encumbrance. 41 In his reasons, the Tribunal member referred to the fact that the applicant's preserved superannuation benefits of approximately $100,000-$110,000 will become due to him in approximately three years. The evidence appears to have been to that effect. 42 The applicant's second submission was put in terms of the Tribunal taking into account irrelevant considerations, namely, the applicant's interest in the Torrensville property and his interest in the preserved superannuation benefits. As I have said, the applicant submits that he has no interest in the Torrensville property or, in the alternative, no immediately realisable interest in the property and no immediately realisable interest in the preserved superannuation benefits. On the face of it, those issues are issues of fact. If there were incorrect findings of fact with respect to those issues, those findings of fact would not be overturned so as to expose a question of law. The appeal to this Court is limited to an appeal on a question of law and there is no right of appeal if a question of law is only exposed if findings of fact are overturned: Copperart Pty Ltd v Federal Commissioner of Taxation (1993) 26 ATR 327. Furthermore, even if a question of law is exposed, this Court does not then have a mandate to review the decision generally: TNT Skypak International (Aust) Pty Ltd v Federal Commissioner of Taxation (1988) 19 ATR 1067. 43 The relevant matter for the purposes of examining the question of special circumstances in s 1237AAD(b) is financial hardship and, as part of that notion, the applicant's capacity to repay the debt. I would characterise the applicant's submission as a submission that the Tribunal member did not give proper and genuine consideration to a relevant matter, namely, financial hardship, and the applicant's capacity to repay the debt. On the one hand, if the Tribunal member simply made findings of fact which the applicant challenged that would not give rise to an alleged error of law of the type I have identified. On the other hand, if the Tribunal member overlooked relevant evidence that might give rise to a conclusion that he had not given proper and genuine consideration to the matter of financial hardship, and the applicant's capacity to pay the debt. If there was no evidence to support a material finding of fact that may give rise to a similar conclusion and, in addition, it might be an error of law in its own right. 44 On appeal, counsel for the applicant referred me to cases such as Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7 ; (1988) 164 CLR 387, Giumelli v Giumelli [1999] HCA 10 ; (1999) 196 CLR 101 and Plimmer v Wellington Corporation (1884) 9 App Cases 699, and submitted that the Tribunal member should have found that the applicant had no beneficial interest in the Torrensville property, or at least no interest that could be realised in the foreseeable future. In the context of the applicant's preservation benefits, counsel for the applicant made submissions as to the effect of provisions of the Superannuation Industry (Supervision) Act 1993 (Cth). 45 It is not clear to me that these precise arguments were put to the Tribunal. Certainly, if they were put, they were not developed to the extent they have been developed before me. I have read the evidence before the Tribunal and I doubt that firm findings along the lines suggested by the applicant could be made in relation to the Torrensville property. I do not think it is appropriate that I express any firm conclusions, but I can say it is far from clear that the applicant has no claim in relation to the beneficial interest in the Torrensville property. He is the registered proprietor of the Torrensville property. As I have said, it would seem that the line of credit from the St George Bank is secured by a mortgage over that property. Even if it is not, there is no evidence as to whether the line of credit was granted on the assumption that the applicant was both the registered proprietor and beneficial owner of the Torrensville property. 46 In the circumstances, the Tribunal member adopted a broad approach to the question of financial hardship and the applicant's capacity to repay the debt and I do not think that he erred in law in doing so. I refer to paragraphs 38 and 39 of the Tribunal's reasons set out in [23] above. I think the Tribunal member was aware of the various claims on the applicant and his plans in relation to the properties. It might be said that he should have placed more weight than he did on the possible claims on the Torrensville property and restrictions on the use of the preserved superannuation benefits, but in view of the evidence he was entitled to conclude that the applicant owned assets of considerable value, and any error (if there was an error) rises no higher than an error of fact. In addition, the Tribunal member was entitled to take into account the fact that the applicant had the resources to pay private school fees of $3,000 per annum and that it appeared that the two properties were free of registered mortgages or other encumbrances. Even if he erred and the Torrensville property was security for a debt of approximately $20,000 that is an error of fact and, in any event, would not have a material bearing on the result. I think the fact that the Tribunal made a strong recommendation to the Department that satisfactory arrangements be made with the applicant to enable repayment of the debt over an extended period is further evidence that the Tribunal member was aware of and took into account the difficulties the applicant said that he faced. 47 I do not think the Tribunal member erred in law in his approach to the question of financial hardship and the applicant's capacity to repay the debt and the applicant's second submission must be rejected. 48 The applicant's third submission is that the Tribunal member failed to take into account a relevant consideration, namely, that the applicant had changed his position as a result of the respondent's error. The applicant referred to cases dealing with the recovery of money paid to a person by mistake ( Lipkin Gorman (a firm) v Karpnale Ltd [1988] UKHL 12 ; [1991] 2 AC 548; David Securities Pty Ltd v Commonwealth Bank of Australia Ltd [1992] HCA 48 ; (1992) 175 CLR 353). I reject the applicant's submission. The Tribunal member was not obliged to approach the matter in this way. He clearly took into account the respondent's error and the nature of the error. He took into account the financial hardship the applicant might suffer if required to repay the debt. I do not think the fact that the applicant might have spent the moneys which are the subject of the debt on ordinary living expenses is of any particular significance. The significant matter was financial hardship and the applicant's capacity to repay the debt, and, as I have said, those matters were addressed by the Tribunal member. I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | appeal from decision of administrative appeals tribunal where applicant overpaid parenting payment under social security act 1991 (cth) where tribunal member found no special circumstances arose and rejected claim for waiver of debt whether tribunal member applied correct legal test meaning of 'special circumstances' whether tribunal member took an irrelevant matter into account by having regard to applicant's interest in real property and superannuation benefits payable in the future whether tribunal member failed to take into account a relevant matter in that the applicant had changed his financial position as a result of the overpayment. social security |
The applicant receives a pension pursuant to the Act. That entitlement will continue unless s 24A operates to terminate it. Where a veteran would be entitled to the special rate pursuant to s 24 , save for the fact that his or her incapacity is not shown to be permanent, the special rate will be payable pursuant to s 25 for the period during which the incapacity is likely to continue. 4 The applicant was born on 7 May 1980 and joined the Australian Regular Army on 9 March 1999. He completed two tours of duty in East Timor, the first from 20 September 1999 to 19 February 2000 and the second from October 2001 to April 2002. On 26 February 2004 the respondent, pursuant to s 25 , increased the rate of pension to the special rate with effect from 11 December 2003 and until 11 December 2005. On 25 August 2004 the Veterans Review Board varied the decision by determining that payment at the special rate should continue until 25 August 2009. The applicant applied to the AAT for review of that decision, seeking a determination in his favour pursuant to s 24. At the hearing there was a conflict between the evidence of two psychiatrists, Dr Rogers, who had treated the applicant, and Dr Cook, who examined him at the request of the respondent. It should be noted that permanence does not refer to a condition incapable of responding to treatment at some stage but certainly one that is static and constant and likely to persist for an indefinite period in the future. He did not expect any substantial improvement in the applicant's condition. 7 Dr Cook accepted that the applicant was suffering from a post-traumatic stress disorder, a major depressive disorder and alcohol dependence. At the present time he cannot work even for eight hours per week, and I do not see that improving in the short term. However the possibility of improvement still exists and, in my opinion, there is an approximate 50% chance that Mr Leigh will be able to re-enter the work force over the next four or five years, even if it is within a limited/part time capacity. Having regard to his age and other positive aspects of his background, Dr Cook considered that there were prospects of some significant improvement. However he accepted that permanent incapacity was a possibility. The reference in Dr Cook's report to limited part-time work reflected his practice with respect to "return to work" programs. He would recommend that a patient return to work for about twelve hours per week, four hours per day for three days. Thereafter, he would consider increasing it to perhaps 20 hours a week, with a view to seeing how the patient performed. Dr Cook did not expect that the applicant would ever fully recover but hoped that he might return to work and remarry successfully. 9 In his reasons the Deputy President set out the applicant's history, including his military history, the development of his symptoms and the diagnosis of his condition. It is not inconsistent with the notion of permanent incapacity that the pensioner's position should be reviewed from time to time. Unexpected improvements in the person's condition, advances in medical science, the achievement of fresh skills, or even changes in the labour market, could bring to an end an incapacity which had been thought to be permanent. The first is whether it is more likely than not that the disability will terminate (or fall below 85% in the sense --- referred to above) at some time in the future. Even if the answer to this question is "yes" I think it would be inaccurate in the context of employment to describe as "temporary" a condition which was likely to last for a number of years. Hence the two elements of degree of likelihood of improvement and time span for that improvement, should be weighed together in determining what is permanent and what is temporary. The greater the likelihood of substantial improvement and the earlier that it is likely to occur, the more accurate will be a "temporary" label. He considered that the Social Security Act required that persons receiving benefits fall into one of these three classes and that 'an incapacity which was not temporary was automatically permanent' . He contrasted that position with that which obtains under ss 24 and 25 of the Act. 12 The observations made by Woodward J may well be applicable for present purposes, subject to two qualifications. Firstly, invalid pensions, sickness benefits and unemployment benefits are not analogous to pensions (including benefits payable pursuant to ss 24 and 25), payable to veterans who suffer from war-caused injuries or diseases. Sickness benefits, the invalid pension and unemployment benefits are properly characterised as social security payments . They do not reflect any particular obligation owed by the Commonwealth to recipients other than the general social duty to ensure the well-being of all citizens, which duty is discharged by provision of the benefits prescribed in the Social Security Act . However a pension payable pursuant to Part 2 of the Act is by way of compensation for injury or disease incurred in, or as the result of, war service. See s 13. In other words, it recognises the special obligation of the Commonwealth to compensate a person who has an injury or disease as the result of war service and any attendant incapacity. A determination pursuant to either s 24 or s 25 is only as to the rate at which the pension is paid. Any applicant for a benefit pursuant to either section will be entitled to a pension under some other provision of Pt 2 of the Act. The second distinction which I would draw between the regime prescribed by ss 24 and 25 and that to which the decision in McDonald related is that Parliament has clearly distinguished between persons who satisfy the requirements of s 24 and those who only satisfy the requirements of s 25. The obligation of the Administrative Appeals Tribunal, and of this Court, is to give effect to that distinction, not to achieve consistency in the interpretation of terms as used in this Act and in other legislation. That was, I think, the point which the Deputy President was making concerning the applicability of the remarks in McDonald to the present case. 13 Whether or not a particular incapacity is permanent is a question of fact. I do not understand Woodward J to have purported to lay down an exhaustive definition of the word "permanent". If the Deputy President misunderstood the question posed for his consideration, then he erred in law. However it is not to the point that he may have considered that words used by Woodward J in an earlier case, concerning other legislation, were inapposite to describe the notion of permanence as it is used in the Act. 14 The Deputy President concluded that the word "permanent", when used in s 24, means 'for a period longer than just a few years hence' . Implicit in that conclusion is the proposition that a demonstrated incapacity for 'a few years' would not, at least in this case, be a basis for a favourable determination under s 24. The Deputy President placed weight upon the fact that in the relevant second reading speech in connection with the Repatriation Legislation Amendment Bill 1985 (Volume H of R 142, 13-31 May 1985, page 2646) the Minister observed that the purpose of the special rate of pension was to provide for severely disabled veterans of a relatively young age 'who could never go back to work and could never hope to support themselves or their families' . Use of the word "never" supports the Deputy President's approach. However, he did not say that s 24 requires that a decision-maker be satisfied that the veteran's incapacity will continue for the rest of his or her life. In this respect his reasons reflect a similar approach to that adopted by Woodward J. 15 In the present case, the Deputy President preferred the evidence of Dr Cook to that of Dr Rogers. In other words, he accepted Dr Cook's evidence that there was a 50 percent chance that the applicant would be able to re-enter the workforce over the next four or five years, although perhaps in a limited or part-time capacity. The limited or part-time capacity was that referred to by Dr Cook in his evidence and certainly exceeded the eight hours per week limit prescribed for the purposes of s 24. The Deputy President's preference for the evidence of Dr Cook over that of Dr Rogers is beyond challenge in these proceedings. Given that view of the evidence, it was open to the Deputy President to conclude that he was not satisfied as to the permanence of the applicant's condition, and therefore to treat his application as falling within s 25 and not s 24. In other words, it cannot be said that as a matter of law the applicant's incapacity, as found by Dr Cook, was permanent for the purposes of the Act. The Deputy President's reasons disclose no error of law. His conclusions were fairly open on his view of the evidence. 16 The appeal must be dismissed with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. | pension, meaning of permanently incapacitated, meaning of temporarily incapacitated, meaning of foreseeable future, where tribunal preferred evidence of one expert to that of another, whether tribunal misunderstood the question posed. veterans affairs |
The Tribunal had affirmed a decision of a delegate of the Minister for Immigration and Citizenship to cancel the appellant's Preferential Relative (Migrant) (Class AY) (Subclass 104 (Preferential Family)) visa under s 109(1) of the Migration Act 1958 (Cth) (the Act) because of a breach by the appellant of s 101 of the Act. 2 Neither the Class AY nor the Subclass 104 visas are provided for any longer in the Migration Regulations 1994 (Cth) (the Regulations). Those visas were removed from the Regulations by the Migration Amendment Regulations 1999 (No. 13) (Cth). Regulation 5 of those amending regulations was a transitional provision, however, and provided that the amendments only applied to applications for visas made on or after 1 November 1999. Therefore, as the appellant in this case applied for his visa on 25 September 1998, he was still eligible to apply for a Subclass 104 visa, notwithstanding that the provision for that Subclass of visa was later repealed. The application form is the form on which a non-citizen applies for a visa. However, s 99 deems any information that a non-citizen gives or causes to be given to the Minister, an officer or a Tribunal reviewing a decision under the Act in relation to the non-citizen's application for a visa to be an answer to a question in the non-citizen's application form for the purposes of the sections mentioned in s 99. 7 Apart from deeming the information referred to in s 99 to apply to the application form, s 99 has the effect of deeming the information to apply to the non-citizen passenger card: s 102(b). Section 99 also operates on s 104 which requires a non-citizen to inform the relevant officer if the answer to a question on the non-citizen's application form becomes incorrect, and s 105 which requires a non-citizen to advise the relevant officer if it becomes known to the non-citizen that an answer on the application form or passenger card or other information referred to in the section was incorrect when given. 8 Section 109 empowers the Minister to cancel the visa if there has been non-compliance by the visa holder with ss 101, 102, 103, 104, 105 or 107(2). Before a visa is cancelled notice must be given to the applicant under s 107 to enable the visa holder to respond. The Minister has to consider any response by the visa holder and decide whether there has been non-compliance by the visa holder in the way described in the notice: s 108. 9 The Minister, after deciding under s 108 there has been non-compliance by the visa holder and after considering any response to the notice given under s 107, and after having regard to any prescribed circumstances, may cancel the visa: s 109(1). Where the Minister is empowered to cancel the visa under s 109(1), the Minister must do so if the regulations declare circumstances to exist in which a visa must be cancelled. This appeal concerns the notice which may be given under s 107 and must be given before s 109 operates to empower the Minister to cancel the visa. On 25 September 1998 the appellant lodged an application with the then Department of Immigration and Multicultural Affairs (the Department) for a visa on remaining relative grounds, as the last remaining family member not yet in Australia. The visa was granted on 26 March 2002 and the appellant entered Australia on 9 April 2002. 12 In his visa application filed on 25 September 1998, the appellant said that he was not in a de facto relationship and did not have a child. 13 On 17 September 2001 the appellant was interviewed by an officer of the Australian Consulate by telephone in relation to his visa application and said that he lived alone; had no children; was not in a de facto or long-term relationship; was not married; and had no intention to marry. 14 On 16 January 2003 a spouse application was lodged by the appellant's wife, Ms Su Yun Lu, for a visa. She was sponsored by the appellant. In that application Su Yun Lu said that she married the appellant on 28 October 2002. In her application she said that she had been previously married to Guo Bin Wu from 16 August 1998 until his death on 14 February 2001. She said that her child Bao Li Lu was a child of that marriage. 15 Su Yun Lu was interviewed by an officer of the Department on 7 May 2003 in a Departmental Inquiry into whether she had provided the Department with false documents. She maintained at that interview that she had not provided false documents to the Department and she continued to maintain that she had been married to Guo Bin Wu and that he was the father of her child and was dead. The officer of the Department told Su Yun Lu that he did not believe her and that the only way to resolve the issue was to undergo DNA testing. The officer told her that he suspected that the appellant was the father of her child. She was offered the option of DNA testing to prove her claims were correct. She was also requested to provide a marriage certificate of her marriage to the appellant, her child's original birth certificate and any other evidence that would prove that she had in fact been married to Guo Bin Wu. 16 Su Yun Lu refused to undergo DNA testing. However, she admitted that the appellant was the father of her child who was born on 4 June 1999. She admitted that she had been in a relationship with the appellant since 1998 but said that they had not married because the appellant wanted to go to Australia and he would have been unable to obtain a visa if he were married. She admitted that Guo Bin Wu did not exist and that she had obtained a false death certificate for Guo Bin Wu and a false birth certificate for her child. 17 The child Bao Li Lu was born after the appellant made his application for a visa but before he was interviewed by the Australian Consulate on 17 September 2001. 18 On 2 June 2003 a document entitled "Notice of Intention to Consider Cancellation" under s 109 of the Migration Act was sent to the appellant for breach of s 101 of the Act. It then referred to Su Yun Lu's application for migration to Australia and her subsequent interview by an officer of the Department of the Australian Consulate at Guangzhou. At this interview your spouse, Ms Lu, Su, admitted that she had provided bogus documents to the Department with her application. Ms LU, Su also admitted that she had resided with you since 1998. Ms LU, Su also stated that the child's birth certificate submitted with her application was also a bogus document. Ms LU, Su admitted that you were the father of her child. Hence, I am of the opinion, that you may have provided incorrect information on your Application for Migration to Australia, lodged with the Australia Consulate on 25 September 1998. I also note that in completing the above application form, you failed to provide details of your defacto spouse, Ms LU, Su. I also note that you failed to provide details of your child, LU, Bao Li, who was born on 4 June 1999. Based on this information, I believe that you may have provided incorrect information in relation to your defacto spouse and your child on your application for the class 104 visa. I also believe that your intentions, prior to the lodgement of the Application for migration to Australia, may have been to provide incorrect information in order that you would be eligible for the class 104 permanent residence visa. If you did not comply with section 101 , your visa may be cancelled. It does not matter whether you deliberately or inadvertently did not comply. The Migration Act 1958 gives you the opportunity to comment on this possible ground for cancellation and to give a written answer why your visa should not be cancelled. The appellant was also directed to his continuing obligations under ss 104 and 105 . 21 On 25 June 2003 the appellant's solicitors responded to the notice and submitted a statutory declaration of the appellant which was dated 23 June 2003. 22 The solicitors argued that the appellant had not provided any incorrect information to the Department. They asserted that his circumstances had not changed during the period that warranted him notifying the Department. 23 The appellant said in his statutory declaration that he and his wife met in 1994 and fell in love in 1996. In or about August 1998 they became intimate but did not commence to live together, except that his now wife would stay at his place for the night from time to time. In September 1998 they realised that she was pregnant. He requested that she have an abortion but she refused. As a result, their relationship soured. The appellant then applied for migration. He did not want to see her again and did not want to have anything to do with the baby. When the baby was born in June 1999 it was not known by the town in which his wife lived that he was the father. She refused to let him see the baby until about 2001. He said that they never lived together as a family until they married. He did not provide any financial support to her and the child before the appellant migrated to Australia. 24 On 30 July 2003 a decision was made by a delegate of the Minister to cancel the visa. On 7 August 2003 the appellant applied to the Tribunal for a review of that decision. The son, LU Baoli, was born in June 1999, after his migration application was lodged in September 1998. In other words, the Review Applicant, in September 1998, did give correct information in his application form that he was not married and that he did not have a child or children. Therefore, the Review Applicant complied with Section 101 of the Migration Act . Was the Review Applicant marred (sic) on 17 September 2001? No. We know he got married on 28 October 2002. Is it correct to say that the Review Applicant did not have any children on 17 December (sic) 2001? A boy, LU Baoli, was born to the Review Applicant's current wife on 04 June 1999. Although he was the genetic father of the boy, the Review Applicant never provided parental care or lived with the boy prior to his migrating to Australia. The baby was born out of wedlock and was not financially and emotionally dependent on the Review Applicant by 17 December (sic) 2001. In that sense, the statement he purportedly made on 17 December (sic) 2001 that he did not have any children is the correct information. However, on 29 August 2005 the Federal Magistrates Court by consent remitted the matter to the Tribunal. The second Tribunal was differently constituted. 26 The appellant made submissions to the Tribunal which also indicated that even if there was a breach the visa should not be cancelled because of the appellant's son's future as a "black child" and the appellant's political opinion due to his brother's history of opposition to the Chinese authorities. 27 On 30 September 2005 the Tribunal wrote to the appellant's solicitors, pursuant to s 359A of the Act, inviting the appellant to comment on information that the Tribunal considered would be the reason or part of the reason for affirming the delegate's decision. He was asked to comment on the answers he gave in his 25 September 1998 visa application to question 17, where he said that he was never married and question 18, where he said he had never previously been married or been in a de facto/common law marriage. 28 He was asked to comment on the telephone interview of 21 (sic) September 2001 when he was interviewed by telephone by the Australian Consulate General where he had said that he lived at the address specified on the application form; that he lived alone; he had lived there since 1984; he had not previously been married and was not currently married; he had not been in a de facto relationship and was not currently in one; he was not currently in a long term relationship; and he had never been engaged and did not have any intention to marry in the near future. 29 He was further asked to comment on "Ms Lu Su Yun's" interview of 7 May 2003 where she admitted that she had provided the Department with a false birth certificate for Lu Bao Lin and a false death certificate for the child's alleged father, Guo Bin Wu, and her subsequent admission that the appellant was the child's father and that they had been living together since 1998. A notice in the same terms was sent again on 26 October 2005 to the appellant's authorised representative. 30 On 7 November 2005 the Tribunal received a response to that letter from the appellant's solicitors. The appellant had by then changed solicitors.  He was not married, or in a defacto marital relationship, or engaged, or in a long-term relationship, at the time the subclass 104 visa application was decided.  Lu Bao Lin is his son. Ms Lu Sun Lun is the mother of the child.  He supported Lu Bao Lin financially, as his mother could not (as his son was a "black child") but he did not live with his son or his now wife. His son was born out of wedlock and without approval from the authorities. Lu Bao Lin was, and continues to be, a dependent child of the applicant. 2. The applicant has been residing in Australia for a significant period of years. He is settled in Australia. 3. The applicant would face problems on return to the PRC, given his political opinion and his brother's history opposing the PRC authorities. 4. The applicant's son faces a future of discrimination and hardship in the PRC, as he is a "black child". The applicant does not want to see his son suffer in the PRC as a result of the "black child" status. The applicant would like to raise his son in Australia, where his son would be treated as an equal and have opportunities that would otherwise be denied him in the PRC. 5. He has married the mother of his son, and they are in a committed marital relationship. Her application for migration to Australia would fail, if his visa remains cancelled. They would like to have a life together in Australia. The hearing was scheduled to take place on 11 January 2006. 33 On 10 January 2006 the appellant wrote to the Tribunal explaining that he had misled his first solicitors in relation to the support which he had given his son and that he had not told the truth to the first Tribunal in relation to the financial support given his son. Separately, he wrote on the same day confirming a previous statement in relation to the disagreement between himself and his now wife in relation to the question of abortion. Suyun was sacked sooner after she was pregnant, she had no income and could only relay on her family, and sometimes she works as a casual. After I seriously discussed with my family, and considered carefully by myself I agree to pay for Baolij's expense [1]. Normally I provided RMB 300 Yuan every month. And I gave some extra money to Baoli during special days, such as Chinese New Year, his birthday or when he was sick. All these were given by cash as in China the bank system is poor. In China most of personal business, trade off are using cash, even state owned companies like to pay for salary and wages using cash. When I got my salary every month I gave some money to Zhida, Suyun's fourth elder brother as we worked in same company and were living very close, Zhida then gave the money to Suyun [2]. After I had migrated to Australia in April 2002 I agreed that Suyun, as the Child's mother directly took money from my superannuation, which was allowed to withdraw as I had permanently resigned and moved to Australia. The money is used to pay for Baoli in next two years. It included Baoli's living expense, kindergarten (education) fee. The copies [3] of receipts show that Suyun, the child's mom took all money from my superannuation account in June 2002. 35 His brother also wrote to the Tribunal on the same day providing similar information in relation to the appellant's political activities. 36 The appellant attended before the Tribunal hearing on 11 January 2006. The applicant, supported by his brother, has effectively stated that he did support his child and that his child was dependent on him at the time the cancelled visa was granted. This is a major backflip in the light of previous evidence given to DIMIA and the MRT, in which he stated that he did not support his child. The applicant, and his brother, set out why he said what he did to DIMIA and the MRT in the written statements submitted this morning. It is submitted that the applicant, being under a mistaken belief that it would help his case to deny his support of his child, proceeded down that path and stated that he did not support his child. He wishes now to confirm his support of his child, and will provide supporting documents (in the way of a bank transfer of his pension to his now wife (the mother of his child) and through letters of support from his wife and his brother in the PRC[)], to confirm how he supported his child while he was in the PRC. We will forward those statements, which should be forthcoming from the PRC within a month. The solicitors then addressed the question of the exercise of the Tribunal's discretion. 38 On 27 January 2006 the appellant's solicitors wrote to the Tribunal enclosing a copy of a proceeding initiated by the appellant in the Federal Magistrates Court in which the appellant sought judicial review of a decision of the Refugee Review Tribunal made on 14 September 2004, which had affirmed a decision of a delegate of the first respondent not to grant the appellant a protection visa. 39 The Tribunal gave notice that it would conduct a further hearing on 22 March 2006. I did not want to admit (tell) that I had a black child. I have been supporting the child for nearly whole time of child even though I broke up with my girlfriend. I believed that I would get trouble if I told the truth that I had a black child, and I had financially supported him. I did not want to lose my visa. I feel very sorry to say that I did not tell the truth. I hope it is understandable and I believe you are a sympathy person. His attention was drawn to his mother-in-law's evidence which was to the effect that he did not support his child and that, in those circumstances, he may have been ineligible for a grant of a visa because he had an overseas near relative (a non-dependent child) who resided in the same country as he did at the time of his application. 41 On 26 April 2006 the appellant lodged yet another further submission. When I filled up the application form I did not have any child, and I was not told that I would have a baby. Suyun Lu found and told me she had been pregnant after I applied for the immigration visa. When I was told that Suyun Lu was pregnant I firstly did not believe that I should be responsibility for this accident. This was told to the tribunal member during the last hearing (first) time. And secondly I did ask Suyun, Lu to abort. I did not suppose I would have a baby. The reasons have been stated in previous statement. Furthermore, even if I was told the accident before I handed in the application form (I should stress here again, in fact I was not told at that time), I could say nothing until the child was born, (and further in China was allowed being registered). I do not think anyone could declare he/she has a child by law rather than by medicine only because who has a fertilized egg cell or embryo. Due to Baoli's mother broke Chinese birth control policy she lost her job, and sequentially was not able to financially afford him. Thus I have to provide financial support to Baoli. I care and control Baoli through undertaking financial commitment. According to the principle of comparative advantage we know that in developing (poor) country, especially in China, capital factor or money, the rare resource is more important than labor factor or labor work, the fruitful resource. I believe that my financial support (money) for Baoli's subsistence is also very important. In addition, I had some say in how he was looked after. I often enquired Baoli's uncle, Zhida for Baoli's situation. I always asked Zhida to convey my greeting to Baoli, and do pass my opinion for teaching child to Baoli's mother. Sometimes I advised Suyun Lu to be patient through the phone, told her how to teach the boy when Baoli was naughty, and also told her how to give Baoli a good early stage children education. Occasionally I talked with Baoli through the phone or directly, and influenced him. Therefore, generally speaking Baoli is a dependent child of mine. 44 The Tribunal accepted that when the appellant submitted his application for a visa he correctly answered the question that he did not have a child because the child was born after the application was lodged. The Tribunal, however, was of the view that his subsequent answer to the Australian Consulate on 17 September 2001 meant that the appellant had failed to comply with s 99. In relation to the submission regarding the information in the notice relating to the review applicant's child (who was born at the time of the review applicant's interview with the Australian Consulate in 2001 but not at the time of lodgement of the visa application), s.99 of the Act provides that any information which a non-citizen gives, causes to be given or that is given on his or her behalf to the Minister or Tribunal is taken for the purposes of section 101(b) to be an answer to a question in the non-citizen's application form, whether the information is given orally or in writing and whether at an interview or otherwise. The Tribunal does not accept the submission that s.99 relates solely to information provided in the process of the review of the decision. The review applicant has confirmed that when he was interviewed by the Australian Consulate on 17 September 2001 in relation to the visa application that he told an officer of the Department that he did not have any children. There is no dispute that the review applicant has a son, Baoli Li who was born on 4 June 1999. 100. Based on the above information, the Tribunal finds that the review applicant provided incorrect information to a Departmental officer on 17 September 2001. Accordingly, the Tribunal finds that the review applicant gave the Department incorrect information in relation to his application for a Subclass 104 visa. Section 99 makes it clear that the incorrect information that the review applicant gave orally at an interview is taken to be an incorrect answer for the purpose of paragraph 101(b) of the Act. The Tribunal therefore finds that the review applicant did not comply with section 101 of the Act in the way described in the notice. 47 The Tribunal then had regard to a consideration of the exercise of the discretion to cancel the visa which was necessary because this was not a case where the Regulations required the Minister to cancel a visa: s 109(2) of the Act. 48 First, it considered what the likely effect of that information would have been on the decision to grant the appellant a visa if the correct information had been given. In considering that matter it considered the conflict of evidence as to whether the appellant supported his child prior to his marriage to the child's mother. It concluded, as a matter of fact, that the appellant did not support the child and therefore the child was not dependent on him. On that basis the Tribunal found the appellant had, at the relevant time, namely September 2001, an "overseas near relative". It found that the appellant knew that if he disclosed that he had a child, that might have affected his application for a visa. 49 The Tribunal considered his present circumstances. It had regard to his brother's financial circumstances as a result of a failed business venture; the appellant's mother's dependence upon a government pension; and the appellant's dependence upon that pension. It had regard to the fact that the appellant had worked until November 2004 and during that time had paid tax. 50 It had regard to the appellant's behaviour after the appellant's "non-compliance with s 101 came to light in 2003 when the review applicant was attempting to sponsor his current wife". On his own admission, the review applicant gave untruthful evidence to the Department in a statutory declaration and in sworn oral evidence to the previous Tribunal relating to the financial support of his child. The review applicant also provided a false statement from his mother in law. It took into account that the appellant had not worked since November 2004 when he had been made aware that a condition of his Bridging visa (8101) prevented him from doing so. It noted that the appellant had made an application for a protection visa in Australia but that that had been denied and the delegate's decision to refuse the grant of a protection visa had been affirmed by the Refugee Review Tribunal. It took into account that the appellant had brought an application in the Federal Magistrates Court seeking judicial review of the decision of the Refugee Review Tribunal which was to be heard on 14 June 2006. It determined that that was a matter for the Federal Magistrates Court and the Refugee Review Tribunal if it became charged with an obligation to further review that application. 52 It found that the appellant's claims did not raise any humanitarian grounds which would have impacted upon the exercise of its discretion. The Tribunal has found that the review applicant knowingly provided incorrect information to the Department in September 2001 and that he did so in order to meet the requirements for a visa for which he would otherwise not have been entitled. The Tribunal has found that if the likely effect of the correct information would have been that the visa would not have been granted. The Tribunal has also found that since that time, the review applicant was aware that false documentation was provided to the Department in relation to his sponsorship of Ms Lu for a spouse visa and that this was done so that his Subclass 104 visa would be unaffected. The Tribunal has also found that following the cancellation the review applicant knowingly provided false information to the Department and the previously constituted Tribunal. The Tribunal has considered that in so doing the review applicant has shown considerable disregard for Australia's immigration laws. The Tribunal has also found that the review applicant worked in breach of Condition 8101 on his Bridging visas, but has found that in the circumstances that this is not a serious breach. The Tribunal has not accepted that the cancellation will result in a breach of non- refoulment obligations or that Australia will breach any other conventions if the visa is cancelled. The Tribunal has also not accepted that the rights of his child or wife will be seriously affected by the cancellation or that there are any other humanitarian issues raised by the cancellation. 148. Against this evidence, the Tribunal has accepted that the review applicant has made some contribution to the community through the payment of tax and that he has been in Australia for a reasonably lengthy period. The Tribunal has also accepted that the review applicant's mother and brother will be affected to some extent by the cancellation and that his wife wishes to be reunited with her husband and hopes that they can reside together in Australia with their son. The Tribunal has weighed these factors against the extremely adverse findings that the Tribunal has made above regarding the provision of false and misleading evidence and fraudulent documentation. The Tribunal concludes that the adverse circumstances considerably outweigh the circumstances favouring the review applicant in exercising the discretion to cancel his visa. Accordingly, the Tribunal has found that the section 107 notice was valid and that there was non-compliance by the review applicant in the way described in that notice. The Tribunal has considered the review applicant's responses in relation to that notice and has also had regard to the prescribed circumstances in regulation 2.41. The Tribunal has found that the adverse circumstances in favour of cancelling the visa outweigh the circumstances favouring the review applicant for not cancelling the visa. The Tribunal finds that in all the circumstances the Preferential Relative Subclass 104 visa previously held by the review applicant should remain cancelled. An amended application was filed on 25 October 2006. 57 Three grounds were relied upon. First, that the Tribunal constructively failed to exercise its jurisdiction or acted in excess of its jurisdiction by affirming the decision under review before complying with s 359A of the Act. Secondly, the Tribunal misapplied the law to the facts or misinterpreted the applicable law. Thirdly, the Tribunal failed to take into account a relevant consideration in the exercise of its discretion. 58 The first ground asserted that the Tribunal failed to comply with s 359A of the Act in relation to the appellant's answers to Q61 and Q67 of the visa application, being questions requiring him to list his children. 59 The second ground contended that the notice failed to comply with s 107 of the Act as it did not set out the purported non-compliance by the appellant. It was contended that the notice did not specify which subsection of s 101 of the Act was breached by the appellant and did not state the Minister was considering cancelling the visa. Instead, it was framed in terms of a possible breach coming to the Department's attention. Reliance was placed on the decision of Uddin v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 218 ; (2005) 149 FCR 1 which concerned the requirements of a notice under s 119 of the Act. 60 The third ground complained that the Tribunal failed to take into account a relevant consideration, namely the appellant's contribution to the community. It was contended that s 109(1)(c) of the Act required the Tribunal to have regard to any prescribed circumstances which, by reason of reg 2.41, included the appellant's contribution to the community. 61 The Federal Magistrate considered each of the grounds but was of the view the Tribunal's decision did not disclose jurisdictional error. 62 His Honour found the notice complied with requirements of the Act and, in particular, s 107 by setting out particulars of the breach. The Federal Magistrate distinguished Uddin [2005] FCAFC 218 ; 149 FCR 1 and said that the requirements for a notice under s 119(1) differ from those for a notice under s 107(1). Because s 107(1)(a) of the Act required the Minister to give particulars "of the possible non-compliance", his Honour was of the view that the opening words of the notice that had been sent to the appellant formed part of the particulars of the possible non-compliance. The notice, appropriately, set out the whole of s 101 because there was a possibility that both paragraphs (a) and (b) of that section had been breached. The appellant was on notice that he would have breached ss 101(a) and 101 (b) of the Act by failing to disclose details of his de facto relationship and child. Consequently, the Federal Magistrate found that the notice provided a description of the possible non-compliance. 63 In relation to the alleged failure by the Tribunal to comply with s 359A of the Act, the Federal Magistrate found the Tribunal did not rely on the information given in the visa application. His Honour said that at the time of the application the answers given were correct. The Tribunal, he found, relied on the answers about the appellant's child in the 17 September 2001 interview and the other materials to show that those answers were incorrect. The appellant had given true answers at the time of application. However, because his circumstances had changed, his replies to the same questions on 17 September 2001 were untruthful. His Honour was of the view that the giving of the false information in 2001 was because of the provisions of s 99 and that this was sufficient to constitute a breach of s 101(b) of the Act. 64 The Federal Magistrate accepted that if the Tribunal had failed to take into account a relevant consideration that would amount to jurisdictional error if the decision maker was bound to take into account that matter in making the decision. 65 Regulation 2.41(k) requires the Tribunal, in considering the prescribed circumstances in s 109(1)(c) of the Act, to have regard to "any contribution made by a holder to the community". The Federal Magistrate observed the appellant's contribution to the community was generally referred to by the Tribunal. Although his contribution was not specifically mentioned by the Tribunal, his Honour did not consider it was necessary to do so. In any event, the Federal Magistrate noted the Tribunal found that any positive factors were outweighed by the adverse findings regarding the false evidence. 66 His Honour dismissed all three grounds in the application and dismissed the application. The Court erred in finding that a letter dated 2 June 2003 and said to be issued pursuant of s 107 of the Migration Act 1958 (Cth), complied with the requirements of that section. 2. The Court erred in finding that the second respondent complied with s 359A Migration Act 1958 (Cth) by failing to take give the requisite notice in relation to Q61 and Q67 of Form 47 completed by the Appellant. 3. It did not, so it was contended, because the notice opened: "It has come to the Department's attention that you may not have complied with s 101. " The notice did not, it was submitted, comply with s 107 and state that the Minister considered that the visa holder had not complied with ss 101, 102, 103, 104 or 105, or with subsection 107(2) in response to a notice under the section. 69 I should mention one complaint which was not made by the appellant. The appellant did not seek to rely upon the fact that the notice was given by a woman in the NSW Character Section of the Department of Immigration and Multicultural and Indigenous Affairs who did not claim to be a delegate of the Minister. In other words, the appellant did not rely upon the absence of proof of the author's delegated power. It was sufficient, it was conceded, if in fact the author was the delegate of the Minister. 70 The appellant contended before the Federal Magistrates Court, and again on appeal, that in construing s 107 the Court could have regard to the construction which has been given to s 119 in Uddin [2005] FCAFC 218 ; 149 FCR 1. 71 That decision is not directly on point because s 119 is not in pari materia with s 107. Section 119 obliges the Minister in giving notice to notify the visa holder "that there appears to be grounds for cancelling [the visa] and give particulars of those grounds and of the information ... because of which the grounds appear to exist. " Section 107, on the other hand, obliges the Minister to give a notice "giving particulars of the possible non-compliance. " There is in s 107 no obligation to state the grounds. However, some aspects of the Court's reasons in Uddin [2005] FCAFC 218 ; 149 FCR 1 are instructive. 72 In my opinion, s 107 is only engaged where the Minister, or relevantly a delegate of the Minister, has concluded that the holder of a visa has not complied with one of the sections or subsection mentioned in s 107(1). It is only in that case that the Minister or the delegate is entitled to give notice to the visa holder in accordance with that subsection. Section 107(1) is engaged because the Minister, or a delegate of the Minister, has reached a state of mind where they consider that the holder of a visa has not complied with a relevant section. Those words indicate the circumstances in which a notice may be given: Uddin [2005] FCAFC 218 ; 149 FCR 1 at [24] . 73 It follows therefore that if a notice is to be given under s 107 of the Act, the Minister or the Minister's delegate must have reached a state of mind whereby the Minister or the Minister's delegate considers that one or more of the sections or the subsection mentioned in s 107(1) has not been complied with. However, that, in my opinion, does not mean that the Minister or the Minister's delegate only has to suspect that there has been non-compliance. The Minister or the Minister's delegate must consider that there has actually been non-compliance before either one is entitled to give the notice. 75 However, that does not mean that the notice must contain an assertion to that effect. Section 107 does not require that the notice include a statement to the effect that the Minister or the delegate considers that the visa holder has not complied with the sections or subsection mentioned in s 107(1). Paragraphs (a) to (f) of s 107(1) sets out the required content of the notice. I therefore reject the contention that the notice does not comply with s 107(1) because the notice does not assert that the Minister had the statutory state of mind. 76 However, that does not mean that the notice could be given. When the Minister or the delegate is considering a visa holder's response the Minister or the delegate must first consider whether s 107 was ever engaged. 77 It appears from the notice that the Department had concluded that the appellant may not have complied with s 101. That is made clear not only by the opening words but also by the wording included in the body of the notice. The notice said that the appellant "may have provided incorrect information". It then asserted that the application failed to provide details of the appellant's de facto wife and child which caused the delegate to believe that the appellant "may have provided incorrect information". That was not, in my opinion, sufficient to engage s 107(1) and to permit notice to be given under that section: cf. Gidaro v Secretary, Department of Social Security (1998) 83 FCR 139 at 148-149. The statutory state of mind had not been reached. The notice was, in my opinion, defective in that the notice could not be given. 78 The appellant also argued that the notice failed to particularise the visa holder's possible non-compliance as required by s 107(1)(a). 79 If the Minister or the Minister's delegate has reached the statutory state of mind to which I have referred, then any notice which is given must in all other respects comply with s 107. That means that the notice must give particulars of the possible non-compliance required in s 107(1)(a) and include in the notice all of the other matters referred to in the paragraphs to s 107(1). 80 In my opinion, this notice did not particularise the possible non-compliance. It was not sufficient to state that the appellant might have breached s 101 of the Act. More was necessary. If both paragraphs of s 101 were to be relied on, then the notice needed to give particulars of the facts and circumstances which gave rise to the possible breach of each of the paragraphs. It is not enough to generically claim that the visa holder has breached a section of the Act without giving particulars of the facts and circumstances which are said to give rise to the possible breach of the particular section. 81 If I am wrong about s 107 never being engaged and the delegate was entitled to give the notice which was given, the notice in my opinion failed to comply with s 107 in that it did not particularise the possible non-compliance. Because particulars of the non-compliance were not given, it meant that the appellant could not give a written response to the notice disputing there was non-compliance and showing there was compliance as provided for in s 107(1)(b). The giving of a notice which complies with s 107 of the Act is a statutory precondition to the exercise of the Minister's or delegate's power to cancel the visa: cf. Tien v Minister for Immigration and Multicultural and Indigenous Affairs [1998] FCA 1552 ; (1998) 89 FCR 80 ; Zhou v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1078 ; (2004) 139 FCR 60. 82 In my opinion, for that second reason, the notice given did not comply with s 107. In my opinion, the decision to cancel the visa must be quashed. 83 However, there is another reason why in my opinion the decision cannot stand. The Federal Magistrate also fell into error, in my opinion, in his consideration of the third ground. Section 109(1)(c) of the Act requires the Minister or the Minister's delegate to have regard to any prescribed circumstances in considering whether the visa ought to be cancelled. Regulation 2.41 prescribes any contribution made by the (visa) holder to the community as a prescribed circumstance: reg 2.41(k). Thus, there was an obligation upon the delegate to give consideration to that matter. On review the Tribunal exercises all the powers and functions of the decision maker under review. It does not appear that the Tribunal gave specific consideration to that matter except that it noted that the appellant said that when he was working he paid tax which the Tribunal said indicated that the appellant "made some contribution to the community. Whilst the Tribunal was entitled to make the adverse findings that it made in relation to the appellant's conduct, that did not relieve it of its obligation to comply with the injunctions under s 109(1)(c) and reg 2.41(k) to specifically enquire into any contribution made by a holder to the community. 86 A reading of the Tribunal's reasons shows that it did not make that enquiry. It was not excused from doing so for the reason given by the Federal Magistrate. The Tribunal thereby failed to exercise its jurisdiction. 87 The Minister contended that in the event that it was thought there had not been compliance with s 107, relief should be refused "given that the appellant has upon his own admission repeatedly sought to deceive the Australian immigration authorities. " In support of that contention, the Minister relied upon NAWZ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 199 at [10] - [13] . 88 There may be circumstances where the applicant's conduct clearly evidences bad faith either in regard to the application for the visa, the review proceedings or curial proceedings that follow which make it appropriate to refuse to grant the discretionary relief under s 75(v) of the Commonwealth of Australia Constitution Act 1901 (Cth). However, this is not one of those cases. The Minister's submission would put this Court in a position where it would have to form judgment as to the appellant's conduct in his application for the visa and in the review proceedings. If this Court were to refuse the issue of the Constitutional writs, in my opinion, it would be tantamount to finding on this appeal that the appellant's visa should have been cancelled. That seems to be very much like a decision on the merits which should be avoided. Moreover, the appellant was not warned in the proceeding before the Federal Magistrate or before the Minister's written submissions were filed that the Minister would seek to have the appeal dismissed on that ground. It seems to me that if the Minister had wished to support the judgment appealed from on that ground the Minister should have filed a notice of contention as required under O 52 r 22(3) of the Federal Court Rules 1979 (Cth). 89 I will not therefore, in the exercise of my discretion, refuse to order the issue of the Constitutional writs. 90 The appellant sought orders that the Tribunal's decision be quashed and the matter be remitted. The orders sought should be made. In my opinion, the appeal must be allowed. The order made by the Federal Magistrate should be set aside. In lieu thereof, there should be an order that the decision made by the Tribunal on 11 May 2006 should be quashed. There will be an order remitting the appellant's application for review of the delegate's decision to the Tribunal for further consideration according to law. The respondent must pay the appellant's costs in the Federal Magistrates Court and on appeal. I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander. | where notice of intention to consider cancellation sent pursuant to s 107 whether a notice issued under s 107 must assert that the delegate or minister considers the visa holder has not complied whether the delegate had concluded the appellant did not comply with the requirements of the act before sending a notice pursuant to s 107 whether the notice was sufficiently particularised whether the tribunal was required to specifically consider reg 2.14(k) appeal allowed. migration |
Approval is required under that subsection because the agreements may continue for a period well in excess of three months. The company is a member of the Allco Group of companies. It is one of many companies in that corporate group that have entered into liquidation in recent times. There are two agreements which are the subject of the application. The first is a power of attorney. The second is a deed of acknowledgement. The reasons why the liquidators seek the Court's approval to enter into the documents is explained in the evidence of Neil Geoffrey Singleton, who is one of the liquidators of the company. Mr Singleton's evidence, and the other evidence in support of the application, is explained in written submissions provided to me by the solicitors for the liquidators. I do not propose to refer to the submissions in any detail, but I will mark them as MFI-1 and they will be placed with the Court papers. I propose to make the orders which are sought for the reasons that are set out in the submissions. In brief terms, the company was a "servicer" of a loan book which it conducted as agent for the original trustee of the trust, under which the trust carried on a securitisation business. The company was to originate financing facilities as agent of the original trustee, which was anther member of the Allco group. However, in error, the company entered into about 9000 financing facilities and securities in relation to the securitisation business in its own name, without disclosing the agency of the company in the constituent documents. On or about 18 July 2008, BNY Trust (Australia) Registry Limited replaced the original trustee as trustee of the trust. Following the voluntary administration of the company, the new trustee appointed Pepper Australia Pty Ltd as servicer of the trust. The mortgage origination and securitisation business of the trust is in run off and it is estimated that the run off period will occupy approximately five years. The liquidators consider that the preferable means by which to transfer control of the financial facilities and securities to the new trustee is to execute the power of attorney and the deed of acknowledgement. The principles which govern the exercise of the Court's power under s 477(2B) have been considered in a number of authorities. ... Any activity which marks a substantial deviation from the activity of "leading the horse back to the stable" is, generally speaking, outside the power of the liquidator. However, human activity is so diverse that there will be situations where the liquidator cannot lead the horse back to the stable by the direct route. He may have to pause along the way because the path is blocked by some litigation or other impediment. Giles J there observed that the Court will not ordinarily interfere unless there can be seen to be a lack of good faith, an error or law or principle, or real and substantial grounds for doubting the prudence of the liquidator's conduct. They have retained the services of, and acted upon the advice of, leading solicitors to advise them in relation to the liquidation of the company. The liquidators have satisfied themselves that: The power of attorney which is the subject of the present application is an irrevocable power of attorney and will survive the company's deregistration. Such a power of attorney is authorised by legislation in New South Wales, Victoria, Queensland, Western Australia and the Northern Territory. The relevant legislative provisions are referred to in MFI-1 and it is unnecessary for me to repeat them. As is observed in MFI-1, the position is less certain in Tasmania, South Australia and the Australian Capital Territory, however this difficulty is overcome because the proposed deed provides for an assignment of the financial facilities and securities to the trustee as may be required. The reason why the application has been made to the Court rather than to a committee of inspection or by way of a resolution of the creditors is explained in MFI-1. It is also pointed out there that the new trustee had consented to the application. The servicer has been served with the application and supporting affidavits. It has not responded to the correspondence, but that is not a reason why I ought not to make the orders which are sought. Accordingly, I propose to make orders 1 and 2 in the originating process, save that in paragraph 2 reference is to be made to clauses 4.2 and 4.3 of the deed. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jacobson. | application for an order under s 477(2b) of the corporations act 2001 (cth) for approval of entry into power of attorney and deed by company's liquidators good faith and proper purpose survival of power of attorney following deregistration of company application granted. corporations |
For the purposes of this application, I shall refer to the respondents to the substantive action as 'the respondents' notwithstanding that they are the applicants in this notice of motion. Similarly, I shall refer to the applicants to the substantive action as 'the applicants'. 3 This application for security for costs comes in the context of a dispute which has been the subject of multiple applications during the course of 2006 including adjournment of the original date of the trial ( Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd [2006] FCA 920) , a recent unsuccessful application for security for costs brought by the respondents ( Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 3) [2006] FCA 1498) , and delays because of extensive objections to evidence (some of which have not yet been determined). As a result of developments including extensive and complex argument concerning objections to evidence of witnesses of the applicants, the non-appearance of a key witness for the applicants and foreshadowed amendment to his evidence, and other unforeseen complications during the course of the two weeks of the trial (which re-commenced 13 November 2006 following the adjournment in July 2006), the hearing of the matter was not completed during the time allocated. 4 After I ordered the applicants to open their case on Wednesday 15 November 2006, the applicants requested that the Court adjourn for that day while they consulted their legal representatives. The respondents consented to this adjournment. However in Court on Thursday 16 November 2006, Mr Bell on behalf of the respondents indicated that if the hearing was adjourned to a future date prior to the applicants opening their case, his clients would be making another application for security for costs in the sum of $200 000. Despite my reservations as to the applicants opening their case in light of the clear risk that the trial would not conclude at the end of two weeks, and problems faced by the lack of availability of Counsel after that time which would prevent the trial running beyond that time, both the applicants and the respondents indicated that they preferred the trial to commence. Accordingly, I allowed Mr Perry on behalf of the applicants to make opening submissions on Thursday 16 November 2006. 5 By midway through last week it was clear that, despite lengthy hearing days commencing at 9.30 am and ending at times close to 6.00 pm and efforts by both Counsel and this Court, the trial would not conclude by Friday 24 November 2006. Evidence in chief and cross-examination of the second applicant extended from Friday 17 November 2006 until Wednesday 22 November 2006. Indeed by Friday 24 November 2006 although the applicants had closed their case, only three witnesses out of twelve had been called by the respondents. Because of workload commitments of the Court and lack of availability of Counsel, the hearing of the substantive matter has now been adjourned until 8 May 2007. 6 At approximately 5.00 pm Wednesday 22 November 2006, Mr Bell on behalf of the respondents sought leave in Court to file and serve a notice of motion returnable at 2.15 pm on Friday 24 November 2006, by which the respondents sought further security for costs. I granted leave for the notice of motion to be filed and served, but deferred until the following day a decision as to whether the notice would be returnable on Friday, to allow the applicants to consider their position in relation to an abridgment of time, and to formulate submissions. 7 On the afternoon of Thursday 23 November 2006 I ordered the Court to be adjourned while I considered the issue of whether time for hearing of this notice of motion should be abridged. I subsequently ruled that time in respect of this matter be abridged, that the requirements of O 19 r 3 Federal Court Rules be dispensed with in relation to the motion filed by the respondents on 22 November 2006, and that the notice of motion should be returnable on Friday 24 November 2006. In this case, the notice of motion was filed in Court at approximately 5.00 pm on Wednesday 22 November 2006. If the notice of motion were heard on Friday afternoon at 2.15 pm, obviously less than two full days notice would have been provided between serving the notice and the hearing. 2. The discretion of the Court to order that the requirements of O 19 r 3 be dispensed with appears to be unfettered. However that discretion must be exercised judicially. 3. At the hearing on 16 November 2006, Mr Bell for the respondents, in, as he said 'laying all the cards on the table', indicated that if the trial were pushed away to the earliest convenient date, the respondents would be renewing their application for security for costs. The comments of Mr Bell that day were made in the context of submissions as to whether the trial should proceed at that time. However, despite the efforts of Counsel and this Court to conclude the hearing during the scheduled time, it was clear by early during the week commencing 20 November 2006 that the trial would not conclude by Friday 24 November 2006. Further, given the history of this matter and the comments of Mr Bell noted above, the fact that the respondents would be making an application for further security for costs if the trial did not end during the scheduled two weeks could be of no surprise to anyone, including the applicants. 4. The respondents relied on affidavits filed in March and June 2006. This material was not new, and has been before the applicants for some time. 5. I had previously heard, and dismissed, an application for security for costs by the respondents on 9 November 2006. While the circumstances then were not the same as those before me in considering the issue of abridgment of a fresh application for security, it was clear that the issue of security for costs had recently been raised substantively by the parties in this Court in relation to this case, and would have been considered by the applicants. 6. The respondents had already filed their submissions in support of this notice of motion. This was done at the same time as the notice of motion was filed. 7. The parties were before me until the following day, and Counsel had all indicated that they are not available the following week to argue the substantive matter or an application for security for costs. While this in itself was not determinative, and indeed as pointed out by the High Court in State of Queensland v JL Holdings Pty Ltd [1997] HCA 1 ; (1997) 189 CLR 146 the interests of justice are not subordinated to issues of case management, in light of the history of this case, the availability of Counsel, and the fact that these issues were not new, it was in my view reasonable that this notice of motion be heard on Friday 24 November 2006. 11 Notwithstanding these submissions however, I ruled that the notice of motion should be heard. I noted that I had provided my reasons the previous day, which remained applicable. • There was no issue of the notice of motion being returnable instanter ; indeed as the notice of motion had been filed and served on the previous Wednesday, service was abridged only by one day. • Mr Perry for the applicants indicated that he had had the opportunity to peruse 150 cases on the topic of security for costs the previous evening in relation to issues raised by the respondents in their written submissions. Although not conclusive, the opportunity the applicants had had to research the case suggested in the circumstances that the applicants had had time to consider the issues raised in the notice of motion. • The resolution of this issue was clearly of importance to the respondents and, as acknowledged by Mr Perry, the applicants. • The respondents were prepared to rely on their written submissions, and consent to the applicants supplementing their oral submissions by written submissions. Subsequently, the parties have filed extensive written submissions in support of their positions. 12 Accordingly, notwithstanding the time of day it was in my view appropriate that the notice of motion be heard. The first and third applicants provide by 4.00 pm on 20 December 2006 security for the first and second respondents' costs of the proceedings in the sum of $200 000 or such other sum as is ordered by the Court, to the satisfaction of the Registrar of the Court. 2. The proceeding by the first and third applicants be stayed as against the first and second respondents until provision of that security or until further order of the Court. 3. The first and third applicants pay the first and second respondents' costs of and incidental to the notice of motion to be taxed. 4. Any other orders that the Court deems appropriate. 14 On Friday 24 November 2006, Mr Perry made oral submissions supported by written submissions in reply to the submissions of the respondents. I gave leave to the applicants to file in Court an affidavit of Michael Anthony Graham, an expert costs assessor. Mr Bell indicated that he was prepared to waive his right to cross-examine Mr Graham. 15 I gave leave to the applicants to supplement their submissions by further written submissions to be filed and served by 9.00 am on Monday 27 November 2006. I gave leave to the respondents to make further written submissions in response by 10.00 am on Monday 27 November 2006. Additional written submissions have, with consent, been provided by both parties. The trial to date, 13 November 2006 to 24 November 2006, including the objections. 2. Preparation for the trial, conservatively five days. 3. For 6 November 2006, the day the objections should have been heard but for the failure of the applicants to deliver the objections by the 31 October 2006. 4. Extensive written submissions will be prepared for the final hearing date and preparation otherwise for continuation of the trial: five days. 5. Continuation of trial for five days hearing. The applicants suffered no disadvantage whatsoever by the conduct of the respondents in moving for further security in the sum of $200 000 on Friday 24 November 2006 at 5.05 pm. 2. The Court may order security for costs already incurred: Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497. 3. The evidence of Mr James McLellan, an expert witness in respect of costs for the respondents, assessed the costs, including preparation and hearing, for a 10 day trial at $347 413, the costs per day following being $8166 (totalling, for a further eight days being seven days in May 2007 and one day in July 2006, $65 328). The total amount in costs for the trial is accordingly $412 741. 6. As the respondents have already paid $150 000 towards security for costs, an order for a further $200 000 is appropriate in all the circumstances of this case. Short notice was given by the respondents for this application. 2. It is admitted that the first and third applicants are unable, from their own resources, to meet any costs order made against them in these proceedings. 3. The respondents have not adduced any new factual evidence in support of the application to justify the costs of $217 229. 4. It is inappropriate to consider future costs in light of the affidavit of Mr McLellan. 5. Mr McLellan made no calculation of the costs now claimed, and there is no suggestion that a person experienced in the calculation of legal costs has turned their mind to claims made in items 4-7 of the schedule. 6. No authority was cited by the respondents or principle enunciated to support the contention that in exercise of its discretion the Court will order security for costs already incurred, particularly where there has been an earlier unsuccessful application. 7. Mr Graham's evidence is that the daily rate for party and party costs is $7124.25, making a total of $21 372.75 for the further three days of the trial. Accordingly, in all the circumstances if the Court decides to exercise its discretion to order further security then the appropriate quantum of such security is $21 372. 8. The effect of Mr Graham's evidence is that the costs claimed at items 1, 2, 3 and 6 of the schedule are not appropriate to form part of an order for security because they have already been incurred and because they have been dealt with by the orders made by the Court on the two previous security for costs applications. 9. In giving his evidence, Mr Graham relies on the fact that all that remains to be done in relation to the witnesses is cross-examination and re-examination. 10. The facts in Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd were not relevant to this case; further the observations of French J in that case concern the issue of power rather than discretion. Neither Bryan E Fencott and Associates Pty Ltd v Eretta Pty Ltd nor another case, Southern Cross Exploration NL v Fire and All Ricks Insurance Co Ltd (1985) 1 NSWLR 114, are authority for the proposition that the Court has power to order security for costs already incurred in the circumstances of this case. 11. The fact that the respondents have relied on previous affidavits filed by them in support of earlier applications for security for costs is a tacit admission that nothing that has occurred since those affidavits were filed. 12. The respondents chose not to cross-examine Mr Graham, and in those circumstances Mr Graham's evidence as to the quantum of any appropriate security order is uncontested. 13. There is no admissible evidence before the Court to support the assertion that the trial will take a further seven days to complete. The only admissible evidence which comprehends the extent to which the trial has been heard and the likely further duration of the trial is Mr Graham's evidence in which he gives his expert opinion that the trial will take a further three days to complete. This estimate is based on a consideration of the remaining witnesses to be cross-examined by the applicants and has regard to the fact that written submissions are likely to be required. 14. It is inappropriate for the Court to take into account any of the evidence adduced thus far at the trial because the evidence is incomplete and no findings of fact have yet been made, including in relation to whether the third applicant was trading whilst insolvent or whether Mr Tracy had transferred property to which he was beneficially entitled in order to defeat creditors. 15. As the respondent had failed in its most recent application for security for costs ( Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 3) [2006] FCA 1498) and had not appealed the decision, the decision created an estoppel against a further application based on the facts extant at the date of the order. The policy reason for such an estoppel is that, had the applicants known on the date upon which the Court dismissed the most recent security for costs application that they would have to provide a further $200 000 security, they may have elected to discontinue the proceedings at that point, thereby saving the costs of the 10 day trial because of their inability to meet the further security order. This is prejudice which cannot now be remedied. 16. Mr McLellan's evidence is unhelpful in that it does not contain any assessment of the likely further duration of the trial having regard to the witnesses already dealt with or remaining witnesses; whether the respondents are able to obtain an order for security for incurred costs or whether the respondents are estopped from obtaining further security; or whether the respondents are entitled on a party and party basis to obtain an allowance for preparation for trial more than once. 21 The first question is whether in the circumstances of this case the first and second respondents are entitled to an order for security for costs against the first and third applicants in these circumstances. 22 If the answer to the first question is in the affirmative, the second question relates to the quantum of costs in respect of which the first and second respondents are entitled to have security, and the third question relates to the date by when an amount in respect of security for costs would be payable. 23 It does not appear to be in dispute that, if an order for security for costs is made, it is appropriate to order that the matter be permanently stayed pending the payment of the amount ordered. ARE THE FIRST AND SECOND RESPONDENTS ENTITLED TO AN ORDER FOR SECURITY FOR COSTS AGAINST THE FIRST AND THIRD APPLICANTS UNDER EITHER SECTION 56 FEDERAL COURT ACT OR SECTION 1335 CORPORATIONS ACT ? Section 56(2) vests the Court or Judge with a discretion to order the security to be of such amount and given at such time and in such manner and form as the Court or Judge directs. 25 Although O 28 r 3 Federal Court Rules refers to matters the Court may take into account when considering an application for an order for security for costs under s 56 of the Act, it is clear that the rule is not intended to be an exhaustive statement of the factors the Court may consider, nor does the rule limit the power of the Court under s 56 ( Bell Wholesale Co Pty Ltd v Gates Export Corporation (1984) 2 FCR 1 at 2-3). 26 The first and third applicants in this case are corporations, one of which is currently subject to a Deed of Company Arrangement within the meaning of Pt 5.3A Corporations Act 2001 (Cth). Accordingly, s 1335 Corporations Act is also relevant. Accordingly, it is not necessary for me to consider this issue separately. 28 Notwithstanding the long-standing principle that the door of the court should not be barred to a prospective applicant because of impecuniosity (Bowen LJ in Cowell v Taylor (1885) 31 Ch D 34 at 38, Full Court of the Federal Court in Cherry v Read (unreported, Black CJ, Sackville and Finn JJ, 21 November 1996 at 8), and note cases discussed in GE Dal Pont Law of Costs LexisNexis Butterworths 2003 at p 955) the protective object of an order for security for costs is well known. A defendant is protected against the risk that a costs order obtained at the end of the day may turn out to be of no value by reason of the impecuniosity of the plaintiff. 30 (For similar statements considering the purpose of an award of security for costs, see Lord Aldborough v Burton (1834) 2 My & K 401, 39 ER 997; Harpur v Ariadne Australia Ltd (1984) 2 Qd R 523 at 530; Re Energy Drilling Inc (unreported, Federal Court of Australia, Gummow J, 3 May 1989) at [24]; Microcorp Pty Ltd v Terran Computers Pty Ltd (unreported, Federal Court of Australia, Northrop J, 26 June 1992) at 16; Phoenix Court Pty Ltd v Melbourne Central Pty Ltd [1998] 753 FCA (19 June 1998); Silveira v Australian Institute of Management [2001] FCA 1358 at [6] ; Rocter Tanks Pty Ltd v Adam [2001] SASC 196 at [25] ; Fiduciary Ltd v Morningstar Research Pty Ltd (2004) 208 ALR 564; Wollongong City Council v FPM Constructions Pty Limited [2004] NSWSC 523 at [19] ; La Rosa Constructions Pty Limited v PWR Developments Pty Limited [2004] NSWSC 235 at [7] ; Baygol Pty Ltd v Huntsman Chemical Co Australia Pty Ltd t/a RMAX [2004] FCA 1248 at [9] ; Interline Hydrocarbon Inc v Brenzil Pty Ltd [2005] QSC 109 at [34] . For a natural person, the basic rule is that he will not be ordered to give security for costs, however poor he is... In the case of a limited company, there is no basic rule conferring immunity from any liability to give security for costs. However the differing approaches are reflected by the broad terms of s 56 Federal Court Act, and the specific terms of s 1335 Corporations Act which apply where there is evidence that a corporate plaintiff is insolvent. An individual who conducts his business affairs by medium of a corporation without assets would otherwise be in a position to expose his opponent to a massive bill of costs without hazarding his own assets. The purpose of an order for security is to require him, if not to come out from behind the skirts of the company, at least to bring his own assets into play. If however he is already available for whatever he is worth, the object of the legislation is seen to be satisfied. 34 It is well-settled that the court is vested with a discretion to award --- or not --- security for costs, and that the power is wide with the need to exercise the discretion judicially being the only relevant limitation ( Bell Wholesale at 3). That such applications should be brought promptly. 2. That regard is to be had to the strength and bona fides of the applicant's case. 3. Whether the applicant's impecuniosity was caused by the respondent's conduct subject of the claim. 4. Whether the respondent's application for security is oppressive. 5. Whether there are any persons standing behind the company who are likely to benefit from the litigation and who are willing to provide the necessary security. 6. Whether persons standing behind the company have offered any personal undertaking to be liable for the costs. 7. Is the party against whom security is sought in substance a plaintiff. Whether there are any particular discretionary matters peculiar to the circumstances of the case. 36 Obviously the factors of the individual case will to a significant degree determine the outcome because it is incumbent on the judge, in exercising discretion, to consider the circumstances of the case at hand. 37 The first and second respondents have sought an order for an award of security for costs in respect of their costs of these proceedings, essentially those not covered by the previous order of the Full Court. The onus is on them to satisfy the Court that it is a proper exercise of the Court's discretion to make such an order. It is clear that the costs represented in their application relate to costs incurred both during the 10 days of trial already held, and future costs. I propose to deal first with security in respect of costs yet to be incurred, and then consider the application of the respondents in respect of costs incurred during the 10 days of trial already held. The first and third applicants were ordered earlier this year to pay the first and second respondents security for costs up to the end of the first day of trial in the sum of $150 000: Sunstate Orchards Pty Ltd v Citrus Queensland Pty Ltd [2006] FCAFC 93. To paraphrase Emmett J in Checked-Out Pty Ltd v Eagle Eye Inspections Pty Ltd [2001] FCA 1475 at [26] , for reasons I detail below I do not see any reason at all to depart from the view of the Full Court in making an order that security for costs were payable, and note that the Full Court did not preclude a subsequent application at an appropriate time. 2. The first and third applicants have admitted that they are unable, from their own resources, to meet any costs order made against them in these proceedings. This admission of the applicants means that under both s 56 Federal Court Act and s 1335 Corporations Act the Court has a broad discretion, fettered only by the requirement that the Court act judicially, to order the applicant to give security for the payment of the respondent's costs (Branson J in Hopeshore Pty Limited v Melroad Equipment Pty Limited [2004] FCA 1445 at [3] ). 3. The application was filed and served on 22 November 2006 once it was clear that the trial would not finish on 24 November 2006, and the matter has been adjourned until May 2007. There is no issue of delay in respect of this application in respect of future costs. 4. Although the courts have shown reluctance to order security for future costs in respect of part-heard trial, on the basis that, if the applicant cannot provide security, it runs the risk of having wasted costs of the trial days already heard, the fact that the length of the proceedings was not foreseen is a factor which may influence the court to exercise its discretion in ordering security for those costs (see comments of Street CJ in Buckley v Bennell Design and Constructions Pty Ltd (1974) 1 ACLR 301 at 308). 5. In my view it is not appropriate to form any views as to the strength of the applicants' case at this stage of the trial (cf comments of Hill J in Equity Access Ltd v Westpac Banking Corporation (1989) ATPR 40-972 at 50,636). It is clear however that there are triable issues, and it has not been suggested to me that the case of the applicants is frivolous. 6. Insofar as this application is concerned, it is clear that the first and third applicants are unable to satisfy a costs order. I do not need to go to the evidence which has been heard to be so satisfied. Further, in my view the impropriety of reaching conclusions in this respect works both ways --- clearly the respondents strongly deny that their conduct has caused the impecuniosity of the first and third applicants (indeed it is a basis of the litigation), and in my view it is not proper at this stage when some, but not all, of the evidence has been heard, to make any findings as to this issue. I believe it is acceptable, however, to note evidence given in Court by Mr Hambleton, the administrator under the third applicant's deed of company arrangement, that in his opinion there was a strong prospect that the third applicant was insolvent from incorporation (TS 23 November p 572 ll 24-25). 7. Although the applicants contend that the reliance by the respondents on previous material filed in respect of security for costs is a tacit admission that nothing has occurred to justify this application for security for costs, I cannot accept that contention. Plainly, circumstances have altered. A trial which was listed for 10 days --- being the best estimate of Counsel as communicated to the Court --- is now manifestly running over that time. I shall consider this issue later in this judgment in relation to quantum. However I fail to see how the respondents, in relying on evidence of Mr McLellan that the costs for each day beyond 10 days would be $8166, is a tacit admission of the kind submitted by the applicants, notwithstanding that the affidavit of Mr McLellan was filed 27 March 2006. In my view the only 'admission' of the respondents in this respect is that their trial costs beyond 10 days would not exceed $8166 per day, and would not increase in the 2007 calendar year. 8. There is no evidence before me that the effect of an order awarding security for costs would be to stultify the litigation. Indeed as was clear during the hearing it would be the second applicant, Mr Tracy, who would be providing any security for costs ordered (TS 23 November 2006 p 585 ll 25-27). As pointed out by Jessup J in Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279 at [49] , there is an intrinsic connection between the 'stultify factor' and the 'persons standing behind' factor as described by Beazley J in KB Cable . That the second applicant and his wife, Mrs Adrienne Tracy, are principal beneficiaries (and in the case of the second applicant, the principal architect), of the litigation before me is also clear from the evidence (for example TS 17 November 2006 p 194 ll 31; TS 17 November 2006 p 219 ll 41-43; TS 20 November 2006 p 233 ll 16-19, and exhibit R15). Further, that Mr and Mrs Tracy are of considerable means was made clear from evidence before the Court, including a balance sheet describing assets and liabilities of the second applicant, Mrs Tracy and their companies as at 12 November 2004 (exhibit R14). The first and third applicants appear to be impecunious, however there is no evidence before me that the second applicant or Mrs Tracy are at a similar financial disadvantage notwithstanding the events which have resulted in the litigation before me. No undertakings have been provided by the second applicant or any other person as to the costs to which the first and third applicants may become liable. Accordingly in such circumstances security for costs may be ordered to ensure that those who stand to benefit from the litigation undertake some of the risks. ( Rosenfield Nominees Pty Ltd v Bain & Co (1988) 14 ACLR 467 at 472-473; Acohs Pty Ltd v Merck Ltd [1997] FCA 573 ; Costa Vraca v Bell Regal Pty Ltd [2003] FCA 65 at [77] ; Harpur v Ariadne at 532; Bell Wholesale Co Ltd v Gates Export Corporation (1984) 2 FCR 1 at 4; Bryan E Fencott Pty Ltd v Eretta Pty Ltd (1987) 16 FCR 497 at 511; Interline Hydrocarbon at [35]; Acohs Pty Ltd v Ucorp Pty Ltd [2006] FCA 1279 at [49] - [51] . Are the respondents entitled, as part of an award of security for costs, to their costs representing the 10 days of trial already held? 41 I note that the applicants contend that the evidence of Mr McLellan for the respondents was unhelpful because the witness did not depose as to whether the respondents were able to obtain an order for security for incurred costs or whether the respondents were estopped from obtaining further security. I do not accept the applicant's submissions in this respect. Whether the respondents are entitled to security for incurred costs or are estopped in the current circumstances is in my view an issue to be decided by this Court, not a costs assessor, however expert. 42 As I have already noted, the respondents brought an application for security for trial costs 10 days before the trial was due to re-commence, which application I heard two days before the trial re-commenced. I held that, in the circumstances, the delay in bringing the further application was unacceptable, and dismissed the application: Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 3) [2006] FCA 1498. Clearly in making that order I did not preclude any subsequent application for security for costs. 43 Stephen Colbran notes in his text Security for Costs (Longman Professional, 1993) at 41, that prior to the enactment of the Supreme Court of Judicature Act 1873 (UK) [36 & 37 Vict, c 66) security for costs did not apply to past costs and nor would further security be required for a new trial (although an interesting exception to this rule appears to be in the case of Harvey v Jacob (1817) 1 B & Ald 159, 106 ER 59 where the plaintiff, having been convicted of a felony and receiving a sentence of transportation to Australia, was ordered to give security for costs retrospective and prospective). However in 2006 the discretion of the Federal Court vested by s 56 Federal Court Act and s 1335 Corporations Act is very broad, and there is nothing in the terms of either section which would in any way limit the discretion of the Court or its jurisdiction to order security for costs already incurred by the respondents. Indeed, a review of the case law indicates that it is not uncommon for courts to order security for costs already incurred. Examples of cases where such orders have been made are Brocklebank & Co v King's Lynn Steam Ship Co (1878) 3 CPD 365; Massey v Allen (1879) 12 ChD 807; JWH Turner & Co Ltd v O'Riordan (1923) 40 WN (NSW) 64; Estates Property Investment Corporation Ltd v Pooley (1975) 3 ACLR 256; Procon (Great Britain) Ltd v Provincial Building Co Ltd [1984] 1 WLR 557; and Bryan E Fencott (and see the discussion of this topic in Colbran at pp 291-292). 44 This application is of particular interest because it has been brought 10 days into a trial which has been adjourned and is expected to run another seven days. Two cases where similar applications were brought are Southern Cross Exploration and Equity Access . 45 In Southern Cross , the defendants brought an application for security for costs after 65 days of trial, in circumstances where it was anticipated that the trial would continue for another 30-40 days. The defendants sought security for the costs of the whole of the proceedings, namely for the costs they had already incurred as well as for the costs of the remainder of the trial. Waddell J held that the words of s 533(1) Companies (New South Wales) Code were in sufficiently wide terms to give the court power to make an order for security in respect of costs which had been incurred before the making of the order ((1985) 1 NSWLR 114 at 122). His Honour considered that the defendants' delay in making what was their first application for security for costs was a most important factor to be taken into account in the exercise of the court's discretion in this case (at 123). The defendants in that case submitted that it could not reasonably have been foreseen that the trial of the proceedings would take as long it had taken and was estimated to take in the future, and that therefore a late application was justified. The plaintiffs have incurred very substantial costs in relation to the proceedings to date and have been allowed to do so by the defendants in the absence of any intimation of any application for security for costs. It would clearly be highly unjust to make such an order in respect of costs already incurred. 47 In Equity Access the matter was heard for three days, and then adjourned for two months when it was expected to continue for a further two and a half days. I so conclude because it seems relatively clear at the moment that the applicant could not meet an order for costs if such were made even in respect of the costs not yet incurred. In cases where security for costs have been awarded in respect of costs already incurred, there is often a catalyst which distinguishes the case from the usual circumstance where security is awarded in respect of prospective costs, and therefore justifies the application. 2. In my view it would be oppressive to require the first and third applicants to now pay security for costs for those 10 days of trial already held, when they could reasonably rely on the decision in Citrus Queensland Pty Ltd v Sunstate Orchards Pty Ltd (No 3) [2006] FCA 1498 as meaning that they were not subject to a security for costs order in respect of that part of the trial. Although Mr Bell on behalf of the respondents made no secret of the fact that, if the trial did not commence within the scheduled time, his clients would be making an application for security for costs in the sum of $200 000, in my view to allow the respondents to have security for costs which have already been denied would be unjust in the circumstances. 3. Following on from this point, I note that I had dismissed the application by the first and second respondents for security for costs for that part of the trial just heard, on the basis of delay in bringing that application . Notwithstanding that the matter has now been adjourned, that the respondents indicated that they would seek security for costs if the trial did not get underway, and that the respondents were prompt in renewing their call for security for costs in respect of the trial dates once it was clear that the trial would not conclude within the scheduled 10 days, nothing has occurred which impacts on the reasons I gave dismissing the application of the respondents in respect of security for costs for the 10 days of trial. 4. The fact that the trial was not completed within the 10 days could substantially be attributed to such actions which could properly be laid at the feet of the applicants including the failure of the applicants to comply with earlier directions in relation to exchanging objections to evidence (thus requiring valuable scheduled trial time to be spent dealing with such issues), an adjournment requested by the applicants for the entirety of Wednesday 15 November 2006, and the failure of a key witness of the applicants to appear at Court which required me to stand down the Court while I considered an appropriate ruling in the circumstances. Having said that, it appeared that, despite my formal direction that the parties seek to resolve objections to evidence in advance of the trial and further attempts by Counsel on this score, the respondents' objections to evidence required two days of trial time --- which was considerably more than had been anticipated. Further, while no blame at all attaches to Counsel the fact remains that the examination, cross-examination and re-examination of the second applicant extended over four days, which also appeared to be considerably more than had been anticipated. Accordingly, in light of these developments it would be unfair to lay fault for the failure of the trial to finish during the allotted time completely at the feet of the applicants. 49 Like Waddell J in Southern Cross and Hill J in Equity Access , weighing all the factors as best I can, in my view the appropriate conclusion in this case is that the respondents are entitled to an award for security for costs in respect of future costs, but not in respect of costs for that part of the trial recently heard. 51 I noted earlier in this judgment that the first and second respondents have sought $200 000 for the purposes of this notice of motion. This amount includes both costs of the matter resuming in May 2007, as well as costs incurred in November 2006 as a result of the 10 day trial period during which this notice of motion was heard. 52 Whilst the applicants do not concede that further security of costs should be ordered, evidence of Mr Graham, a costs assessor retained by the applicants, which was filed in Court on 24 November 2006, suggests that if costs are ordered, they should be in the amount of $22 372.75, being $7124.25 per day for three remaining days of trial and $1000 for general attendance. Any costs associated with the 10 days of trial just held and preparation costs are strongly disputed, and indeed I am of the view as I have stated that costs already incurred (including in respect of the 10 day trial period) should not be awarded. Accordingly I make no order in respect of costs identified by the respondents in items 1, 2, 3 and 6 of the Schedule set out earlier in the judgment. 53 I am prepared however to order security in the amount of $75 000, being in respect of seven further days of trial and further preparation for the May 2007 hearing. Although the applicants' costs assessor, Mr Graham, has deposed to a view that the trial will take a further three days, as distinct from the seven days which have now been allocated, I do not accept this view. During the 10 days of trial in November (of which seven days was hearing) Counsel made opening submissions and the evidence of only six witnesses was given. Nine witnesses of the respondent remain to be heard. This includes the second respondent, Mr Strahley, who I anticipate will be in the witness box for some time. Further, the seven days allocated in May 2007 includes closing submissions from Counsel, and dealing with the respondent's objections to the applicants evidence. On two occasions during the second week of the hearing I advised Counsel that I intended to list this matter for a further seven days in May 2007 (see TS 23 November 2006 p 585 ll 12-17 and TS 24 November 2006 p 775 ll 45-47. I note that on the second occasion the transcript reads that I indicated eight days, however, I believe it was understood by all parties in the room that I meant seven days being the 8-16 of May 2007). A listing for this matter for a period of seven days commencing 8 May 2006 has been made by the Federal Court Registry. At no time did either Counsel demur from this estimation. In my view this is a fair estimate of the time required and the respondents should be entitled to security for costs for seven further hearing days. I have compared the estimates of Mr McLellan in his affidavit filed 27 March 2006 ($8166 per day being fees for senior and junior counsel and the professional fees for the lawyers per day of trial) and Mr Graham in his affidavit filed 13 April 2006 ($7124.25 per day being fees for senior and junior counsel, the professional fees for the lawyers and the transcript fees per day of trial). In my view it is reasonable to order $50 000 in respect of the seven days of trial remaining. 2. Although the applicants dispute that any security for costs should include further preparation time, in my view it is appropriate to order security to encompass costs for further preparation. Notwithstanding the submission of Mr Perry that the applicants' case has now closed and that the majority of the work to be done henceforth is by Counsel for the applicants (TS 24 November 2006 p 755 ll 4-19), an adjournment part way through the trial will inevitably result in additional preparation costs being incurred by the parties prior to the resumption of the hearing: Brown v Rodgers [2006] FCA 713. It is to be expected that Counsel for the respondents will need to prepare once again for the May 2007 hearing. This is particularly so in light of the --- unfortunately --- lengthy adjournment of this matter from November 2006 to May 2007. In any event, as a general rule, costs of and incidental to an application include costs reasonably incurred both in the litigation and in preparation for the litigation ( Re Gibson's Settlement Trusts [1981] 1 All ER 233, Higgins v Nichol (No 2) (1972) 21 FLR 34, Liverpool City Council v Commonwealth of Australia (1993) 46 FCR 67, and I also note O 62 r 19 which contemplates preparation costs included in a taxation). It is reasonable that an award of security for costs should include preparation as well as trial time: The Council of the City of Sydney v Goldspar Australia Pty Ltd [2004] FCA 1023. In this matter the respondents claim five days preparation. Mr McLellan estimates preparation by senior and junior counsel at $5500 per day in total. Although the applicants dispute that further preparation for the trial is recoverable by the respondents, I note that in the affidavit of Mr Graham filed 13 April 2006 Mr Graham accepts the daily rate for preparation by Counsel except to the extent that the figure should be discounted by 10 per cent on the basis that no allowance should be made for GST. In my view it is reasonable to order the first and third applicants to pay security for costs in the sum of $25 000 in respect of preparation. 3. In making an order for security for costs the Court does not set out to give a complete and certain indemnity to a respondent, nor is it to be assumed that the applicant will fail in the proceeding: Brundza v Robbie & Co [No 2] [1952] HCA 49 ; (1952) 88 CLR 171 at 175; Menhaden Pty Ltd v Citibank NA (1984) 1 FCR 542 at 547; Caruso Australia Pty Ltd v Portec (Australia) Pty Ltd (1984) 1 FCR 311 at 314; Re Quad Consulting Pty Ltd (unreported, Federal Court of Australia, Burchett J, 28 June 1991 par 7); Bryan E Fencott at 515; Billinudgel Pastoral Co Pty Ltd & Ors v Westpac Banking Corp & Ors [1997] FCA 863. In my view the quantum of costs I have ordered is reasonable in the circumstances, taking into consideration the estimates of the expert witnesses for both parties, the likely length of the resumed hearing and the need for preparation after a lengthy adjournment. I do not consider it necessary to make any award in respect of general attendance. No submissions have been made by the applicants as to any time frame issues or other difficulties associated with this course. Mr Perry has urged however that the matter is not urgent, given the adjournment of this matter for six months. In the notice of motion however the respondents sought an order for payment of security for costs by 20 December 2006, in default of which the matter should be stayed. 55 In light of my order for payment of what is a relatively large sum, I consider it important to seek to balance the rights of the respondents with the practicalities of the applicant raising the money and satisfying the costs order. An order requiring the payment of security for costs within one month of the order of the Court is not uncommon or unreasonable in the circumstances. Accordingly in my view it is appropriate to order the first and third applicants to pay the sum of $75 000 by way of security for costs, by way of unconditional bank guarantee in that sum, or otherwise to the satisfaction of the District Registrar of the Queensland District Registry of the Court, by 5 January 2007. I also order that the proceeding by the first and third applicants be stayed as against the first and second respondents until provision of that security or until further order of the Court. The first and third applicants pay the sum of $75 000 by way of security for costs, by way of unconditional bank guarantee in that sum, or otherwise to the satisfaction of the District Registrar of the Queensland District Registry of the Court, by 5 January 2007. 2. The proceeding by the first and third applicants be stayed as against the first and second respondents until provision of that security or until further order of the Court. 3. The costs of the first and second respondents of and incidental to this notice of motion be reserved. | whether respondents are entitled to an order for security for costs guidelines which courts typically take into account in determining such applications whether court satisfied that order for security is a proper exercise of discretion security previously ordered up to the first day of the trial whether circumstances have changed first and third applicants corporations which cannot meet a costs order second applicant and his wife beneficiary of litigation whether award of costs would stultify litigation whether security for future costs should be ordered where trial part heard trial adjourned part heard to resume in may 2007 whether, in the circumstances, respondents are entitled to an order for security for costs for 10 days trial just heard previous unsuccessful application for costs in respect of those trial days whether facts distinguish case from the usual circumstance where security is awarded in respect of prospective costs whether oppressive to require security for costs to be paid for part of trial already heard quantum whether further preparation costs for part heard matter should be given where hearing to be adjourned for over five months when security for costs payable security for costs security for costs security for costs |
The respondent contends, by notice of motion, that the appeal is incompetent on the basis that the orders from which the appeal is brought are interlocutory in nature, and as a result, the appeal is incompetent in the absence of a grant of leave by the Court: s 24(1A) of the Federal Court of Australia Act 1976 (Cth). 2 The circumstances giving rise to the respondent's application are as follows. On 18 April 2008, the appellants (who were described in the notice of appeal as applicants) filed a notice of appeal in which they sought to appeal against the following orders made by a Federal Magistrate on 28 March 2008. The respondent (the applicant in the proceedings before the Federal Magistrate) instituted proceedings against the appellants (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 Workplace Relations Act 1996 (Cth) (WR Act). In his application, the respondent sought orders for reinstatement, compensation, and the imposition of a penalty on the appellants. 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 appellants: Barhoum v All Districts Coating Pty Ltd & Ors [2008] FMCA 172 . The Federal Magistrate, however, was of the view 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 had not been resolved when the notice of appeal was filed and have only comparatively recently been determined by the Federal Magistrate: Barhoum v All Districts Coating Pty Ltd & Anor (No 2) [2008] FMCA 924. 4 The usual test for determining whether an order is final or interlocutory is whether the order, as made, finally determines the rights of the parties: Bienstein v Bienstein [2003] HCA 7 ; (2003) 195 ALR 225 at [25] ; Licul v Corney ; [1976] HCA 6 ; (1976) 180 CLR 213 at 225. In applying the test, the appellate court is required to look at the consequences of the order itself and to ask whether it finally determines the rights of the parties in a principal cause pending between them: Hall v Nominal Defendant [1966] HCA 36 ; (1966) 117 CLR 423 at 443; Bienstein v Bienstein at [25]. The circumstances in Citigroup were as follows. The respondent (Mr Mason) had instituted proceedings in the District Court of New South Wales claiming unpaid leave entitlements as well as orders imposing a penalty on the appellant. Although the respondent was successful in his claim for unpaid leave entitlements and judgment was given in his favour, the District Court stood over for further hearing the issue of whether it was appropriate to impose a penalty on the appellant in all the circumstances. Nevertheless, the appellant appealed under s 853 of the WR Act to the Federal Court in respect of the District Court's judgment ordering payment of respondent's unpaid annual leave entitlements. 6 Although it was not strictly necessary for her Honour to reach a conclusion on the matter, her Honour indicated that she was strongly disposed to the view that the orders from which the appeal was brought were interlocutory in nature. The claim for a penalty to be imposed on Citigroup remained to be determined. For the same reason, the dispute between the parties, which involved both Mr Mason's annual leave entitlements and the issue of whether a penalty should be imposed on Citigroup, was not finally resolved in the making of that order. The order summarily dismissing part of the cross-claim was held to be interlocutory. Although dealing with a summary judgment, it is tolerably clear from the analysis of both Rares J (at [71]) and Gordon J (at [172] to [191]) that an order or judgment which does not finally dispose of all issues between the parties in an application or action is an interlocutory order or judgment. 8 The orders made by the Federal Magistrate on 28 March 2008, against which the appeal was lodged, were interlocutory. Accordingly, leave to appeal ought to have been sought. The appeal is incompetent and should be dismissed. I should finally note that when the matter first came before the Court, the question was raised about the appellants filing, in addition to the notice of appeal, an application for leave to appeal. For whatever reason, the appellants elected not to take the step of seeking leave then or since but rather sought to defend the filing of the notice of appeal on the basis that the orders were final. Filing an application for leave to appeal is a step that is very often taken as a precautionary measure by parties wishing to appeal an order where there is some doubt in their minds or those of their legal advisers about whether the order is interlocutory or final. 9 The respondent has sought an order that his costs be paid from 8 May 2008. On that day a letter was written on behalf of the respondent to the solicitor acting for the appellants suggesting that the appeal was incompetent (because the orders were interlocutory) and it would be necessary for the appellants to seek leave. In that letter, those acting for the respondent indicated they would oppose both an extension of time in which to seek leave and the grant of leave. The costs are sought on the basis that from 8 May 2008 the appellants have, by an unreasonable act, caused the respondent to incur costs, enlivening the power to order costs under s 824(2) of the WR Act. It may be that the relevant section is s 666(1)(b) but they are to the same effect. 10 Although there exists some uncertainty as to whether s 824(1) of the WR Act operates to restrict the capacity of the Court to award costs in the exercise of the Court's appellate jurisdiction (see Goldman Sachs JBWere Services Pty Limited v Nikolich [2007] FCAFC 120 at [380] --- [382] per Jessup J; c.f. Kronen v Commercial Motor Industries Pty Ltd (CMI Toyota) [2008] FCAFC 171 at [35] ), it is not necessary for me to consider this issue as I am satisfied that the appellant's conduct from 8 May 2008 was such that the respondent is entitled to his costs under s 824(2). Ordinarily, it would be difficult to say that a party acted unreasonably in filing an appeal against orders where there may be some uncertainty about whether they were interlocutory or final orders. Historically, whether orders are interlocutory or final has been viewed as a notoriously difficult question to resolve. However, as noted earlier, the appellants did not take the precautionary step of applying for leave (and applying to extend time in which to seek leave), but instead took the approach of resisting the respondent's motion to dismiss the appeal as incompetent and, indeed, in doing so seeking an order that their costs be paid. In my opinion, the conduct of the appellants in its entirety was unreasonable and precipitated what, in substance, was an unnecessary contest about whether the orders were interlocutory or final. The respondent has incurred costs as a result of that unreasonable conduct. The respondent should have his costs from 8 May 2008. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Moore. | appeal from order of federal magistrates court whether such order was interlocutory in nature whether appeal competent practice and procedure |
The Tribunal had affirmed a decision of a delegate of the extant Minister for Immigration and Ethnic Affairs ('the Minister') to refuse to grant a protection visa to the appellant. 2 The appellant, a citizen of the Ukraine, claimed to have a well-founded fear of persecution because of his political opinion. In his initial application for a protection visa the appellant claimed to have been a member of the Christian-Democratic Party of Ukraine ('the CDPU') since 1997 and that he had actively participated in the political life in the city of Ternopil. The appellant alleged that persecution began during the last election campaign when he was threatened and attacked because he was campaigning for the CDPU candidate and against President Kuchma. The appellant claimed that following the election, Kuchma's administration commenced a campaign of political terror and reprisal against political activists such as the appellant. The appellant claimed that if he were to return to the Ukraine he would be imprisoned. 3 A prior decision of the Tribunal ('the first decision') was set aside and remitted for fresh determination. Upon remittal the Tribunal wrote to the appellant on 5 July 2005 pursuant to s 424A(1) of the Migration Act 1958 (Cth) ('the Act') at the address of his authorised recipient, requesting that the appellant provide additional information including his original CDPU membership card; original passport; originals of any documents that the appellant wished the Tribunal to consider including those previously submitted to the Tribunal; comments on the accuracy of the summary of evidence in the decision of the Tribunal dated 20 December 2002; reasons for fearing persecution in the Ukraine given the change in presidency and changed political climate; and any other claims or arguments the appellant wished the Tribunal to consider ('the first s 424A(1) letter'). The s 424A(1) letter also stated that the newly constituted Tribunal would listen to a tape recording of the previous hearing in order to decide whether it would be necessary to hold a further hearing. The Tribunal requested that such information be provided to it by 19 July 2005. On 4 August 2005 the Tribunal wrote to Mr Slater ('the second s 424A(1) letter'). Please note that Mr [SZHLM] has not been sent a copy of this letter. It is important that you tell the review applicant about the contents of this letter. by 19 July 2005. The information requested from you comprised documents which are apparently in your possession in Australia, or your comments on particular matters. The Tribunal's letter was sent to your then authorised recipient by facsimile massage, [sic] and you are taken to have received it on 5 July 2005. When the Tribunal received notification, on 11 July 2005, that you had appointed a new authorised recipient, the Tribunal sent him a further copy of its earlier letter, on 12 July 2005, drawing his attention to the fact that the requested information was to be provided within the time set out in the earlier letter. Although more than two weeks have elapsed since 19 July, and 30 days have elapsed since you were taken to have received the Tribunal's request, the Tribunal has not received any response from either you or your migration agent. Independent information was provided to the appellant relating to such change in the political climate in the Ukraine. Based upon such information, the Tribunal stated that it could conclude that the fear of persecution, as articulated in the Application for Review, was no longer applicable. Such letter also stated that since no new claims had been identified, the Tribunal did not believe that there existed a well-founded fear of persecution. 7 On 23 August 2005 the Tribunal received additional information from Mr Slater as requested in the first s 424A(1) letter and the second s 424A(1) letter. Such letter referred to the letters of the Tribunal dated 5 July and 4 August 2005. On that date the Tribunal affirmed the decision not to grant a protection visa to the appellant. The Tribunal also found that even if the remittal imposed upon it a fresh obligation to invite the appellant to a hearing, the appellant was not entitled to appear before it because he had failed to respond to the request for further information as contained within the first s 424A letter within the time provided. Accordingly, by virtue of ss 424C(1) , 425 (2)(c) and 425 (3) of the Act, any obligation of the Tribunal to afford a hearing was discharged. 10 The Tribunal made findings that the appellant's claimed fear of harm from those who were convicted of stealing the appellant's horses would not constitute fear for a convention reason; that the secret service would not harm the appellant in the future because of any past involvement in the CDPU; that the appellant was never a member of the CDPU; and that the change in political circumstances in the Ukraine was such that the appellant's claims did not, in any event, give rise to a well founded fear of persecution. He is not a refugee. 13 The appellant submitted that there had been a denial of procedural fairness in light of the principles applied in SZBEL v Minister for Immigration and Multicultural Affairs [2006] HCA 63 ; (2006) 231 ALR 592 because the Tribunal had rejected the appellant's claims on five grounds which were not obviously open to it on the material presented to it. 14 Barnes FM found that the Tribunal placed the appellant on notice by both the first s 424A(1) letter and the second s 424A(1) letter that the Tribunal might not have a further hearing and gave the appellant an opportunity to address the issues of concern to the Tribunal. Barnes FM found that there was no error in the exercise of discretion by the Tribunal to not hold a second hearing. 15 Barnes FM found that s 424C(1) of the Act applied because the appellant had been invited to give additional information and had not given it within the time provided. Accordingly, pursuant to ss 425(2)(c) and 425 (3) the appellant was not entitled to appear before the Tribunal. Her Honour contrasted the situation in SZBEL [2006] HCA 63 ; 231 ALR 592 to the circumstances in the case before her, observing that in the present case there was no existing obligation upon the Tribunal to invite the appellant to a hearing and to give evidence and present arguments in relation to the issues under review. Her Honour also found that it had not been established that the Tribunal made its decision on the basis of matters not obviously open on the material before it. Accordingly, no lack of procedural fairness was established and Barnes FM dismissed the application. However it was pointed out to the appellant that the Tribunal's decision referred to the documents which he had forwarded and made specific reference to each of them in its decision. 18 The appellant relied upon a document entitled ' Appellant's Comments to the Tribunals Decision' . Such document sought, inter alia, to revisit four of the five factual issues which had been determined adversely to him by the Tribunal. In addition the appellant relied upon a document of the International Helsinki Federation for Human Rights entitled ' Human Rights in Ukraine One Year After the "Orange Revolution "' ('the document'). The document provides a human rights assessment of the Ukraine one year after the Ukrainian elections in December 2004. The document was dated 19 December 2005 which clearly post-dated the consideration of the proceedings by the Tribunal. Even if such document was relevant to the issues on appeal, it would only have related to factual aspects of the Tribunal's decision and therefore it relates only to matters which are not for this Court to consider in the review: see Servos v Repatriation Commission (1995) 129 ALR 509. 19 The appellant also submitted that the second Tribunal made its decision based upon documents provided to the first Tribunal hearing. However, there is no reason why documents provided in respect of the first Tribunal hearing could not be used in the second hearing. The second Tribunal's decision clearly indicates that it had sought additional information and considered the further submissions made by the appellant's agent in response. The Tribunal's duty to review the Minister's decision under s 414(1) of the Act continues until one of the outcomes described in s 415(2) of the Act is reached: see Applicant NAFF of 2002 v Minister for Immigration and Multicultural and Indigenous Affairs [2004] HCA 62 ; (2004) 221 CLR 1 at [26] . 20 Whilst the appellant made no submissions directly relating to the grounds of appeal referred to in his Notice of Appeal, the Court will nevertheless consider such grounds. 21 The appellant's first ground of appeal claims that the Tribunal failed to identify to him five bases upon which it made its decision. The first basis for the Tribunal's decision which the appellant claims was not identified to him was the finding that the threat of harm to the appellant in relation to the horse theft was not related to a Convention reason. Barnes FM noted that this issue was raised at the Tribunal hearing and that the Tribunal had written to the appellant informing him that it would listen to the tapes of the first Tribunal hearing and give the appellant an opportunity to comment on that decision. It was clear that the basis for the appellant's claimed persecution was in issue: see SZBEL [2006] HCA 63 ; 231 ALR 592 at [36] . 22 As a second issue, the appellant claimed that the Tribunal failed to inform him that one of the reasons that it would find an absence of persecution was because the appellant's letter sent to the Tribunal following the refusal of the Minister to grant a visa dated 20 April 2000 did not refer to persecution. The appellant was not entitled to assume that the issues considered by the Minister to be critical were the only issues of concern to the Tribunal. The Tribunal was empowered to consider matters in addition to those raised before the Minister, as requested by the appellant, and to make a decision upon them: see Applicant NAFF of 2002 221 CLR [22]-[25]. 23 The third issue raised by the appellant claims that the Tribunal erred in not identifying to him the conflict between the appellant's statement dated 11 December 2002 and the submissions prepared for him in 2005 relating to his claims. Such conflict was obvious on the face of the documents and arose after the Minister's decision. As such the Tribunal was entitled to rely on such issue in making its finding without expressly informing the appellant that it would be relying on such inconsistencies in reaching its decision: see Commissioner for the Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 590- 591. 24 The fourth issue raised by the appellant claims that the Tribunal failed to tell the appellant that it was not satisfied that corruption in the Ukraine would adversely impact on the appellant for a Convention reason. The claim of corruption was raised by the appellant in response to the Tribunal's invitation to comment on the change in the political climate in the Ukraine. Because of the inadequacy of the appellant's explanation which might provide a link between the alleged corruption and his persecution, there was no obligation on the Tribunal to specifically state to the appellant that it might reject his assertion as a basis for his claim to be a refugee: see Pilbara Aboriginal Land Council Aboriginal Corporation Inc v Minister for Aboriginal & Torres Strait Islander Affairs [2000] FCA 1113 ; (2000) 103 FCR 539 at 557 and Kioa v West [1985] HCA 81 ; (1985) 159 CLR 550 at 633. Further the Tribunal is not required to give the appellant a running commentary of its reasons: see SZBBL v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 834 at [11] . 25 The fifth issue related to the appellant's claim to fear persecution if he were to return to the Ukraine because he sought protection in Australia. Such claim was made late in the course of the review by the Tribunal. However for the reasons provided in the above paragraph, there was no error by the Tribunal assessing such claim on its face without making an express indication to the appellant that it may reject it. 26 It is apparent that the issues of concern to the Tribunal were made abundantly clear to the appellant by the first s 424A(1) letter and the second s 424A(1) letter. The appellant's responses to the Tribunal's invitation to comment addressed those issues. In SZBEL [2006] HCA 63 ; 231 ALR 592 which applied the decision of the Full Court of this Court in Alphaone 49 FCR 576 the Court held that a tribunal is not obliged to put to an applicant its own appraisals of the material before it unless they are not an obvious and natural appraisal of that material. The meaning of obvious and natural in this context has been considered in numerous decisions: see Somaghi v Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100 at 108. In a body proceeding by inquisitorial methods, procedural fairness may require bringing the attention of the applicant to critical facts that appear to contradict, or cast doubt on, his or her claim. Where an observation about an applicant's case is one that is obvious and natural to the circumstances that evoked it, it is usually unnecessary for it to be specifically called to notice . As such there was no obligation on the Tribunal to specifically identify them to the appellant as issues that could be relied upon by the Tribunal in making its decision. This ground of appeal is accordingly dismissed. 29 Barnes FM held that the Tribunal was correct in determining that pursuant to ss 424C(1) and 425 (3) of the Act the appellant lost his entitlement to appear before the Tribunal because the appellant failed to respond to the first s 424A(1) letter and relied upon SAAP v Minister for Immigration and Multicultural and Indigenous Affairs [2005] HCA 24 ; (2005) 215 ALR 162 at [19] . 30 Before the Court, the respondent relied upon the decision in Liu v Minister for Immigration and Multicultural Affairs [2001] FCA 1362 ; (2001) 113 FCR 541 at 553 in support of its submission that the Tribunal was not required to hold a hearing. However the facts in that decision are distinguishable since different statutory provisions applied. The Tribunal member had resigned after the hearing and before delivering any decision. Pursuant to s 428 of the Act, another person may be authorised to hear evidence in such circumstances. The statutory provision specifically authorised the continuation of the review by another person. In the present proceedings, the decision of the first Tribunal was set aside due to jurisdictional error and the proceedings were remitted for determination according to law. No question arises of another person continuing the same review as is envisaged by s 428 of the Act. 31 Despite the time limit fixed by the first s 424A(1) letter, the Tribunal sent its second s 424A(1) letter extending the time for submission of further evidence and, due to its own omission from such letter wrote again on 10 August 2005 extending the time for compliance to 24 August 2005. The requested information was received by the Tribunal on 23 August 2005 within the time limit set by the Tribunal. Accordingly the Court is unable to agree with her Honour that the appellant failed to comply with the time limit imposed by the Tribunal and that s 424C(1) of the Act applied to disentitle the appellant from a hearing. 32 By sending the first and second s 424A(1) letters it was clear that the Tribunal required additional information to enable it to determine the application before it. If after the receipt of such further information the Tribunal was still unable to make a decision favourable to the appellant it had an obligation pursuant to s 425 of the Act to invite the appellant to appear before it. The fact that a previous hearing was held did not discharge this obligation in view of the fact that the Tribunal had requested further information. The Tribunal made its decision in the absence of making further inquiry of Mr Slater as it was invited to do, and without inviting the appellant to appear at a hearing. 33 In SZILQ v Minister for Immigration and Citizenship [2007] FCA 942 the appellant sought a second Tribunal hearing after the Tribunal's initial decision had been quashed and the proceedings had been remitted to the Tribunal. The appellant provided material to the second Tribunal which included a testimonial from a local pastor attesting to the appellant's religious observance in Australia. The Tribunal denied the appellant's request for a further hearing. In an appeal to this Court from a decision of the Federal Magistrates Court which affirmed the Tribunal's decision to refuse to grant a protection visa to the appellant, the appellant claimed that the Tribunal had not complied with its obligations under s 425 of the Act insofar as that obligation related to the Tribunal's consideration of s 91R(3). The Court upheld the appeal, finding that the right of the appellant to satisfy his onus of proof under s 91R(3) was not afforded. However, that mistakes the nature of the obligation under s 425(1). The RRT itself found it necessary to take a further step to comply with s 424A after the earlier decision was set aside. An additional element then emerged, in respect of which the appellant had not been given an opportunity to give evidence and present arguments at an oral hearing. In those circumstances the obligations under s 425(1) were not fully met. The original decision of the Tribunal, having been set aside had 'no operative effect': see SZILQ [2007] FCA 942. The reconstituted Tribunal was required to carry out its statutory functions as if the first hearing had not taken place. The Tribunal's duty required it to seek further information under s 424A(1) and in the absence of a finding in favour of the appellant was required to invite the appellant ' to appear before the Tribunal to give evidence and present arguments relating to the issuing arising in relation to the decision under review' pursuant to s 425 of the Act: see Applicant NAFF of 2002 221 CLR at [26] ---[27]. 36 Accordingly the appeal is upheld and the proceedings is remitted to the Tribunal for determination according to law. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | obligation of a reconstituted tribunal to issue a second invitation to hearing to an applicant when a hearing has already been held. migration |
I decided that it was premature to determine an application under s 564 of the Corporations Act 2001 (Cth) (the Act) for an order that the second defendant (DCT), an unsecured creditor of Hardy Bros (Earthmoving) Pty Limited (in liq) (the Company), should be given an advantage over other unsecured creditors in the liquidation of the Company on account of the DCT's having funded certain litigation. The background facts were set out in detail in the Earlier Reasons and I will not repeat them. In these reasons I will use the acronyms and other abbreviated forms of reference that I used in the Earlier Reasons. Subsequently an affidavit by Mr Chamberlain made on 3 November 2009 and an affidavit by Sarah Ann Hutchinson also made on 3 November 2009 have been read in support of the application for approval under s 477(2B). Ms Hutchinson was an employed solicitor at KP Farmer and Associates, who were Mr Chamberlain's solicitors. That firm became part of Mr Chamberlain's present solicitors, Shaw Reynolds Bowen and Gerathy Lawyers (SRBG), in February 2009. Ms Hutchinson is now employed by SRBG. In his affidavit Mr Chamberlain gives a detailed account of the DCT's investigations into tax minimisation schemes of the kind exemplified by the First Transaction, the Second Transaction and the payment of the dividend of $350,000 referred to in the Earlier Reasons. According to Mr Chamberlain, the subject matter of the Transactions Proceeding was one of hundreds of cases that had been investigated by the DCT involving an aggressively marketed tax avoidance scheme known as a "Ralph Restructure". The DCT had entered into funding agreements with other liquidators throughout Australia to pursue recovery actions in respect of Ralph Restructure and other tax avoidance schemes throughout Australia. The DCT was of the opinion that court approval was not required for these funding agreements, but wished to obtain its own advice on that question in respect of liquidators generally, and requested Mr Chamberlain to allow time for this to be done before he made any application in respect of the First Indemnity or the Second Indemnity. In May 2007 when Mr Chamberlain entered upon discussions with the DCT about funding of the Transactions Proceeding, he instructed Ms Farmer to canvass the necessity for court approval. On 14 September 2007, Ms Farmer provided to Ferrier Hodgson comments on a form of "Funding and Indemnity Agreement" in another case, expressing the opinion that in that particular case court approval was not necessary as the DCT was to provide funding in tranches and the terms of the funding in each case was relatively limited. In the same case an officer of the Australian Taxation Office (ATO) wrote to Ferrier Hodgson suggesting that where the DCT provided an indemnity to a liquidator, and the company in liquidation was not a party to the agreement, s 477(2B) did not apply. On 19 September 2007 Ms Farmer wrote to Ferrier Hodgson expressing disagreement with this stance of the ATO. On 8 October 2007 Mr Chamberlain entered into the First Indemnity. In late 2007 an officer in the ATO invited Ms Farmer to provide a briefing paper in relation to the issues that she saw as relevant to the provision of an indemnity. On 1 February 2008 Ms Farmer provided the briefing paper to the ATO. On 18 September 2008 Mr Chamberlain entered into the Second Indemnity. According to Ms Farmer's affidavit, on 10 June 2009 an officer of the ATO informed Ms Farmer that the DCT had obtained counsel's advice, which suggested that an application should be made for court approval in respect of indemnity agreements entered into by a liquidator on the company's behalf. Two months later, on 10 August 2009, the application commencing the present proceeding was filed. It was not satisfactory that Mr Chamberlain left the question of approval in the hands of the ATO. Section 477(2B) prohibits a liquidator from entering into agreements of the kind described in the subsection without court approval (or the approval of a committee of inspection or of the creditors). I appreciate that Mr Chamberlain was placed in a difficult situation. The present case was one of hundreds, perhaps thousands, of similar cases and the ATO needed to resolve its position in a consistent manner in relation to all of them. Mr Chamberlain should, however, have declined to enter into the Indemnities until either the Court's approval was obtained, or Ms Farmer was persuaded, perhaps by counsel's opinion, that her own view that approval was required had been erroneous. In favour of a grant of approval now are the considerations noted in the Earlier Reasons that, when the Indemnities were entered into, the DCT was the only creditor of the Company that had lodged a proof of debt and that it was the creditor that was providing the funding. In all the circumstances, for the reasons set out above and in the Earlier Reasons, I accept Mr Chamberlain's explanation for his delay in seeking approval, and approval will be granted nunc pro tunc under s 477(2B) of the Act. At [79]-[80] of the Earlier Reasons I stated that where an approval nunc pro tunc is to be given, it is appropriate that there also be an order under s 1322(4)(d) of the Act extending the period for applying for that approval to the date of the giving of the approval, and a declaration under s 1322(4)(a) of the Act that the making of the Indemnity agreement without prior approval did not render it invalid. Something further needs to be said about the first of these propositions. Section 1322(4)(d) of the Act empowers the Court to make an order "extending the period for doing any act, matter or thing or instituting or taking any proceeding" under the Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made). There has been a difference of judicial opinion as to whether it is appropriate to extend time in a case such as the present. Orders extending time were made by Warren J (as the Chief Justice then was) in Empire (Aust) Nominees Pty Ltd (in liq) v Vince (2000) 35 ACSR 167 (see [15]-[16]) and by Gordon J in Stewart, in the matter of Newtronics Pty Ltd [2007] FCA 1375 (see [30]). However, in Re Read and Another [2007] FCA 1985 ; (2007) 164 FCR 237 ( Read ), French J (as the Chief Justice then was) expressed disagreement with the approach taken in those two cases. His Honour was of the opinion (at [32]-[39]) that s 1322(4)(d) of the Act could not be relied upon to extend time under s 477(2B). French J's reason was that s 477(2B) did not specify a "period for" the making of an application for approval under s 477(2B). Importantly, all three judges were of the view that although s 477(2B) required that approval be sought and obtained before the agreement in question was entered into, approval might be granted subsequently, on a nunc pro tunc basis. This presents a paradox: in virtually every case of an application for approval nunc pro tunc , the application will in fact be made after the agreement was entered into, so it could be said to be inherent in the right to seek, and the power to grant, approval nunc pro tunc that the requirement that the application be made before the agreement is entered into is not absolute, and that an extension of time is not required. I prefer not to embark on any further discussion of the two lines of authority or the making of a choice between them, and will simply make an order that if and to the extent that an extension of time is required, time is extended. For more abundant precaution, I will also give a direction under s 479(3) of the Act, as French J did in Read , that Mr Chamberlain may act on the Indemnities as if he had entered into them with the Court's prior approval. No doubt in giving approval nunc pro tunc and extending time under s 1322(4)(d) and giving a direction under s 479(3) and making a declaration under s 1322(4)(a) , I am being excessively cautious, but this does no harm. One day after the Earlier Reasons were delivered, the Supreme Court of New South Wales made orders by consent in the Construction List Proceeding and the Proof of Debt Interlocutory Proceeding. These included an order that RGH be admitted to prove as an unsecured creditor in the winding up of the Company in the sum of $700,000.00, and that the Company pay RGH's costs of the Construction List Proceeding agreed in the sum of $25,000.00 as an expense of the winding up. Otherwise, orders were made to the effect that the Construction List Proceeding and the Proof of Debt Interlocutory Proceeding were dismissed, all costs orders made in them were vacated, and, subject to the costs order just noted, the parties were ordered to bear their own costs of both proceedings. Mr Chamberlain has annexed a Receipts and Payment Schedule to an affidavit by him of 3 November 2009. A copy of that Schedule (the Schedule) is annexed to these reasons for judgment. Between 15 June 2009, the date as at which the Schedule annexed to the Earlier Reasons was prepared, and 3 October 2009, the date as at which the Schedule annexed to these Reasons was prepared, four further monthly instalments of $60,000.00 have evidently been paid. Accordingly, the "Contribution as per Deed of Settlement" item has risen from $1,280,000.00 to $1,520,000.00. Commensurately the amount of the instalments yet to be paid has fallen from $1,095,000.00 to $855,000.00. As can be seen from the Schedule, as at 30 October 2009 Mr Chamberlain had $1,622,938.06 as cash at bank. The instalments of $60,000 per month payable by the Hardys will increase this amount by $855,000. According to Mr Chamberlain's affidavit, it will take the Hardys three years to pay this sum, but in fact it will take them only fifteen months. Contrary to what I previously thought, payment of the instalments by the Hardys is secured. It is secured by a registered second mortgage over real estate subject to a registered first mortgage to National Australia Bank Limited. Mr Chamberlain states that the property was valued in December 2008 at $4.5 million and that the first mortgage was for a maximum of $1,750,000, leaving $2,750,000 as the value of the security. I proceed on the basis that it is highly likely that the $855,000 will be recovered over time. It will be noted from the Schedule that "Estimated Current Legals & Work in Progress" is $450,000. I assume that the sum of $450,000.00 includes Mr Chamberlain's costs of this proceeding and the amount of $25,000.00 for RGH's costs of the Construction List Proceeding referred to at [26] above, and that Mr Chamberlain's costs of the Construction List proceeding are included either in that amount or in other items in the Schedule. Proofs of the following debts have been admitted. In the Earlier Reasons I set out (at [57]-[67]) three scenarios that Mr Chamberlain had identified. In light of the fact that RGH's claim has now been quantified at $700,000.00, Mr Chamberlain has now prepared two scenarios: the first, if the DCT is paid its principal claim in full, and the second if the DCT receives no advantage at all for its claim. (I note that in his two Scenarios Mr Chamberlain has shown the DCT's debt as $1,303,047.35 but the correct figure in accordance with the DCT's proof of debt is $1,300,273.53 and I will proceed on the correct figure. It is therefore necessary to address the extent and nature of the risk that the funded recovery action will fail, and the extent of any consequent risk that the funds made available for the litigation might be irrecoverable. It appears from Spigelman CJ's judgment in the Brown case, at [40], and Brownie J's observations in the Household Financial Services case (at 296---7), that one has regard to factors including: whether the amounts involved are small; the value recovered; the size of the funding creditor's debt compared with other debts; the proportion that the funding creditor's expenditure bears to the amount recovered; whether the money advanced by the funding creditor has been refunded; whether other unsecured creditors oppose the distribution proposed to the funding creditor; whether other creditors have been given the opportunity to join in the funding and have failed to do so; and the public interest in encouraging creditors to provide indemnities so as to enable assets to be recovered. Nor is there any suggestion of a disturbance of the priority debts and claims provided for in s 556(1) of the Act. In the Earlier Reasons I summarised the effect of the Indemnities as follows: The First Indemnity was dated 8 October 2007. By it the DCT agreed to indemnify Mr Chamberlain in respect of funding up to a maximum sum of $350,000 inclusive of GST. The First Indemnity provided for how this amount was to be paid and expended. It included an unlimited indemnity by the DCT in respect of any costs order made against Mr Chamberlain. The Second Indemnity was dated 18 September 2008. By the Second Indemnity the DCT undertook to indemnify Mr Chamberlain in respect of funding up to a maximum sum of $198,665.47 inclusive of GST, payable progressively. The Second Indemnity also contained an indemnity against any costs order made against Mr Chamberlain but subject to a limit of $1,973,400. As noted in the Earlier Reasons at [35], the DCT provided Mr Chamberlain with funding to the extent of $266,286.77 to prosecute the Transactions Proceeding. Mr Chamberlain has reimbursed the DCT in that sum. As noted by Austin J in the passage set out at [34] above, the fact that reimbursement in full has occurred is one consideration relevant to the exercise of the discretion under s 564. In TJF EBC , Barrett J gave the funding creditor an advantage by stipulating that it should receive in priority to all other creditors 80% of the funds remaining for distribution to creditors in the winding up after allowing for priority claims under s 556(1) , with the remaining 20% being paid to other creditors. In Jarbin Pty Ltd v Clutha Ltd (in liq) [2004] NSWSC 28 ; (2004) 208 ALR 242 , Campbell J noted (at 104) that an alternative approach is to give the indemnifying creditor an advantage calculated as a percentage of the investment that that creditor made in funding the litigation. His Honour noted that in assessing that percentage, one would need to take into account that the indemnifying creditor had not only a risk of losing the investment made, but also a risk of being liable to pay other expenses of the liquidator and the liquidator's solicitors, and possibly the costs of the other side. Campbell J noted (at [107]) that the funding creditor's entitlement could be compared, as a rough check, to the premium that would have been demanded by a litigation funder. RGH submits that the Transactions Proceeding, although apparently complex, was not risky. RGH submits that there is no evidence before the Court that it was considered to be risky, although I note that in para 54(b) of Mr Chamberlain's affidavit of 7 August 2009, he claims there was a significant exposure to the risk of an adverse costs order. RGH submits that the Court should infer that if evidence to that effect was available, Mr Chamberlain would have adduced it. RGH also makes the following submissions: RGH points out that if the DCT was given the priority sought by Mr Chamberlain, the DCT would be paid $1,300,273.53 (RGH's submissions wrongly state $1,300,723.63), leaving Mr Chamberlain with $322,664.53 cash at bank ($1,622,938.06 minus $1,300,273.53). From this amount, the "Estimated Current Legals & Work in Progress" of $450,000.00 would be payable (Mr Chamberlain does not seek to disturb the s 556(1) priorities). In other words, not only would RGH and the Hardys have to rely on the monthly instalments totalling $855,000.00 to receive anything, but so too, in part, would Mr Chamberlain himself. RGH has addressed submissions to the question of the absence of an offer of indemnity by RGH. In the Earlier Reasons I touched on this question at [30]-[31]. I accept that Ms Farmer, Mr Chamberlain's then solicitor, did not request RGH for funding or an indemnity, either at the meeting between her and RGH's solicitor, Mr Graham, on 22 June 2007 or at any other time. Ms Farmer did tell Mr Graham at that meeting, however, that Mr Chamberlain had sought funding to pursue the Transactions Proceeding by the DCT, and that he was awaiting a reply from the DCT, as he had been since February 2007. It would have been a simple matter for Mr Graham to have sought RGH's instructions as to whether RGH was prepared to join in. Through Mr Graham, RGH in effect acquiesced in the DCT's funding of the further prosecution of the Transactions Proceeding. It is true that when Ms Farmer sought the "consent" of RGH as a contingent creditor to the First Indemnity, Mr Graham quite reasonably replied that he needed a copy before he could advise his client, and Ms Farmer declined to release it on grounds of confidentiality (notwithstanding Mr Graham's reasonable proffering of a confidentiality undertaking). The important point for present purposes, however, is that those exchanges related to RGH's consenting to the First Indemnity and that RGH did not itself take the initiative of offering to fund on any terms. It is not to be overlooked that at that time RGH's own claim against the Company for unliquidated damages was in its early stages. The DCT's claim, on the other hand, was for a liquidated amount. Moreover, the Transactions Proceeding raised tax-related issues with which the DCT, but not RGH, would have been familiar or in which the DCT would have had a greater interest. In the circumstances, it is not unreasonable to think that RGH would not have been as ready as the DCT was to commit funding to the prosecution of the Transactions Proceeding. In any event, there is no evidence that RGH would have been willing to join in funding the Transactions Proceeding if asked, or would have been prepared to do so if provided more information in relation to particular matters. I infer from all the circumstances that RGH was content to take the role of a bystander as distinct from itself becoming an investor in the Transactions Proceeding. At paras 32-37 of his written submission, Mr Docker, counsel for RGH, makes the following helpful submissions: Taking the first approach set out in [10] above [a percentage of the funds remaining after payment of priority debts and claims], an appropriate percentage of the net funds available for distribution which should be allocated for advantage to the DCT is 1/3 rd . ... The effect of this approach would be as follows: the DCT would be entitled to 1/3 rd of the total amount available, $2,027,938.06, being $675,979.35 by way of priority; the balance of the DCT's debt, being $624,294.28 ($1,300,273.63 [sic] - $675,979.35) will rank with the other unsecured debts; the total of the non priority unsecured debts will be $1,699,294.28 ($700,000 + $375,000 + $624,294.28); the total available for distribution to the non priority unsecured debts will be $1,351,958.71 ($2,027,938.06 - $675,979.35); the percentage recovery on unsecured debts will be 79.5% ($1,351,958.71/$1,699,294.28 x 100) this means that: the DCT will get a total of $1,172,293.30 ($675,979.35 + $496,313.95) which is 90.1% of its debt; RG&H will get $556,500.00, which is 79.5% of its debt; and Hardys' [sic] will get $298,125.00, which is 79.5% of their debt. If the alternative method referred to in [10] above is used [a percentage of the investment made by the indemnifying creditor in providing funding] and the priority is calculated by reference to the amount invested by the DCT, $266,286.77, the above approach is supported. That is, the DCT will be receiving in priority an amount ($675,979.35) which is more than 2½ times the amount it invested as well as being reimbursed for the amount it invested. A third way of checking the approach is by reference to what a litigation funder would have received. If the figure of 40% of the amount recovered is used (although the examples in Jarbin Pty Ltd v Clutha Ltd ... suggest the figure is often lower) the amount the DCT would receive ($1,172,293.30) exceeds 40% of the recovery of $2,600,000. The above figures do not take account of when the distributions will be made. The instalment payments add a level of complexity to the exercise. In short, the DCT should share the burden of the late payments with the other unsecured creditors. Presumably, the DCT was consulted about the settlement which resulted in the instalment regime. However, if the DCT seeks to be paid immediately, it should receive less. Assuming the creditors all share in the delay, this would mean that the current amount available for distribution would be treated as one distribution and so would each instalment payment. For example, if $1,200,000 was available for distribution now: DCT would get 1/3 rd , being $400,000, as a priority; and the other $800,000 would be distributed rateably amongst the 3 unsecured creditors in accordance with their non priority debts. In an example with $60,000, the DCT would get $20,000 as a priority and the remaining $40,000 would be distributed rateably amongst the 3 unsecured creditors in accordance with their non priority debts. Mr Dawson, counsel for Mr Chamberlain, submits that the merits based standing of the DCT as funding creditor outweighs that of RGH and the Hardys in the following respects in particular: RGH elected not to lodge a proof of debt until the settlement of the Transactions Proceeding in November 2008, immediately prior to the scheduled hearing. The DCT entered into the Indemnities in circumstances in which it was the only creditor who had lodged a proof of debt in the winding up, and it is not "just" for the purposes of s 564 to recognise the interests of RGH asserted at such a late stage over those of the DCT; as noted above, there is no evidence that RGH would have funded the Transactions Proceeding; and the Hardys, being the only other creditor, do not oppose the DCT's application. In my opinion, RGH's submissions understate the risk that was associated with the Transactions Proceeding. The pleadings are in evidence. They include a second further amended statement of claim and the separate defences of the first to sixth defendants and the seventh to twelfth defendants. The plaintiffs were the Company and Mr Chamberlain as its liquidator. The first to sixth defendants were the Hardy interests and the seventh to twelfth were the Company's accountants. These director loans were outstanding at the time of the Restructure. As part of the Restructure the directors' loans were repaid. The Liquidator alleged that the repayment of the director's [sic] loans constituted "unfair preferences" within the meaning of sections 588FA , 588FC and 588FE of the Corporations Act (Cth). RGH submits that these characteristics are not necessarily to be equated with riskiness. I agree. They are, however, suggestive of it. The greater the complexity and length, often the more opportunities for a slip. A person driving a motor vehicle on a 1,000 kilometre journey is usually thought of as exposed to a greater risk than one who drives on a ten kilometre journey. Yet close attention to any particular ten kilometre stretch of the longer journey may not, in isolation, expose a risk greater than that associated with the short trip. It seems to me just, taking into account all of the considerations listed by Austin J in the passage quoted at [34] above, that the DCT should receive an advantage by receiving 92.5% of the DCT's debt. I readily concede that I have arrived at this percentage as the mid-point between the 100% of Mr Chamberlain's Scenario 1 and the 85% of his Scenario 2. In my view however, that mid-point fairly reflects all of the considerations referred to and in particular, (1) the ordinary rule that subject to s 556(1) , unsecured creditors are to be treated equally, and (2) the fact that the DCT provided funding coupled with an indemnity in respect of any adverse costs order, in respect of complex, lengthy and costly litigation attended by at least a significant risk of an adverse result, which has generated the only funds available to unsecured creditors. Although I arrived at 92.5% quite independently by the process mentioned, as it transpires it is only a little above the 90.1% in para 32 of RGH's submissions (see [48] above). This 92.5% of $1,300,273.53 is $1,202,753.02, leaving $825,185.04 for the other two unsecured creditors, RGH and the Hardys. This amount of $825,185.04 represents 76.76% of the amount of $1,075,000.00 ($700,000.00 + $375,000.00) owed to RGH and the Hardys respectively. All three creditors should have to bear the disadvantage of waiting for payment of the monthly instalments and any risk of default in the payment of the instalments. Each dollar to be distributed should therefore be apportioned as to 59.31% to the DCT and 40.69% to RGH and the Hardys, as between those two pro rata according to the amounts of their debts. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lindgren. | winding up application under s 477(2b) of corporations act 2001 (cth) for approval nunc pro tunc of agreement between liquidator and creditor for funding of litigation to recover for benefit of unsecured creditors considerations relevant to exercise discretion application under s 564 of act for order that funding creditor be given advantage over other unsecured creditors on account of recovery made as a result of the funding considerations relevant to exercise of discretion. corporations |
Exactech Inc, through its Australian distributor, Orthotech Pty Limited, has recently introduced into the Australian market a prosthetic knee called the Optetrak RBK. 2 Global claims that the distribution, promotion and marketing of the Optetrak RBK in Australia by Orthotech and Exactech constitute misleading and deceptive conduct. Global also claims that Orthotech's and Exactech's distribution, marketing and promotion of the Optetrak RBK under that name suggest a commercial association between Global on the one hand and Orthotech and Exactech on the other, whereas, in truth, no such association exists between those parties. Thus it is said by Global that Orthotech and Exactech have contravened ss 52 , 53 (c) and 53 (d) of the Trade Practices Act 1974 (Cth) (the Act). 3 Mr Sam Scott-Young is a director of Orthotech and controls that company's day to day business. Global claims that Mr Scott-Young was knowingly concerned in Orthotech's breaches of the Act. It was derived by Mr Ribot and Mr Banks, the founders of Global, as an acronym for the term 'rotating bearing knee'. Coincidentally the initials RBK are an abbreviation for 'Ribot Banks Knee'. Mr Ribot's evidence was that this played some part in the selection of the name. 5 The respondents contend that rotating bearing knee is descriptive of a particular type of prosthetic knee, that RBK is an acronym for rotating bearing knee and that RBK is therefore itself descriptive. 6 It is well established that, ordinarily, the use of a descriptive trade name ensures that it is not distinctive of a business and that its application to other like businesses will not ordinarily mislead the public; Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Limited [1978] HCA 11 ; (1978) 140 CLR 216 at 229. 7 However, even if the acronym RBK is descriptive, its use by another trader may, upon a consideration of all the circumstances, amount to misleading conduct if the acronym has acquired a secondary meaning so as to be distinctive of Global's product; Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 at 447. 8 Importantly, Global accepts that whether or not RBK is descriptive, it cannot succeed in these proceedings unless it establishes that the acronym RBK is distinctive of its product. That is the essential issue in these proceedings. 9 In Equity Access , Hill J said at 448 that the distinction between descriptive and fancy names is not black and white; rather, there is a continuum. Thus, if the name RBK is closer along the continuum toward descriptive names, the heavier the onus will be upon Global to establish a secondary meaning. Also, small differences in other names will usually be adequate to avoid confusion; Hornsby Building at 229; Equity Access at 448. 10 Thus, the second issue in the case is whether RBK is descriptive. In a sense it is an unnecessary issue because Global's claim stands or falls on the question of whether the acronym RBK is distinctive. Nevertheless, there was a good deal of evidence on the issue of descriptiveness and I will therefore address the question. 11 In order to determine the first and second issues, it is necessary to consider the various types of prosthetic knees that are available in the Australian market. It is also necessary to understand the way in which participants in the market, that is to say, orthopaedic surgeons, describe the various types of prosthetic knees. 12 A key dimension to the way participants describe products is a well known habit in the medical profession of abbreviating descriptive terms to their initial letters. Three letter abbreviations seem particularly common. Thus, it is necessary to have regard to the use of acronyms and the way in which acronyms are applied to the relevant products. 13 The third issue is whether the distribution, promotion and marketing of the Optetrak RBK under that name would involve misleading and deceptive conduct. Related to this is the question of whether the use of the acronym RBK in conjunction with the name Optetrak implies a commercial association between Orthotech/Exactech and Global. 14 The commercial association issue is also to be considered in light of the fact that between 2002 and 2004 Global distributed products for Orthotech and Exactech while at the same time selling its own RBK. 15 The question of whether the conduct of Orthotech and Exactech is misleading or deceptive, or likely to be so, must be determined by reference to the class of prospective purchasers of the Optetrak RBK; Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44 ; (1982) 149 CLR 191 at 199; Campomar Sociedad Limitada v Nike International Limited [2000] HCA 12 ; (2000) 202 CLR 45 at 85, at [102] --- [103]. 16 Prosthetic knees are purchased by orthopaedic surgeons specialising in knee replacements and by the purchasing departments of hospitals. The nature of the market and the way in which prosthetic knees are ordered and implanted require close consideration. This is because the whole of the circumstances must be looked at in order to determine whether the impugned conduct is misleading or deceptive; Puxu at 199. His experience dates back to at least 1981. 20 In about 1992, Mr Ribot ceased his relationship with DePuy and became a distributor for the Australian subsidiary of a large American owned orthopaedic product manufacturer, Zimmer Holdings, Inc. Mr Ribot and Mr Banks distributed Zimmer's products in New South Wales up to about 1995. Zimmer's leading product is the Zimmer mobile bearing knee which is known as the Zimmer MBK or the MBK. 21 In about 1995, Mr Ribot and Mr Banks became New South Wales distributors for DePuy. During about 1997 and 1998, Mr Ribot and Mr Banks discussed the possibility of establishing a company to develop and manufacture in Australia prosthetic knees and other prosthetic products for sale in Australia as well as in overseas markets. 22 Mr Ribot left his employment with DePuy in 1999 to establish Global in partnership with Mr Banks. Global was established to develop and sell a prosthetic knee based on the DePuy LCS, but with substantial changes. Mr Ribot and Mr Banks believed that their changes to the LCS knee would produce a better product. 23 Mr Ribot and Mr Banks, through Global, developed a prototype of their RBK prosthetic knee by about the middle of 2000. The knee was listed with the Therapeutic Goods Administration under the product name RBK Total Knee System on 16 August 2000. 24 In the course of developing the RBK, Mr Ribot and Mr Banks had many conversations with orthopaedic surgeons in Australia to advise them that the RBK would come onto the market under that name. The surgeons who were approached included Drs Mark Haber, John Ireland, Peter Hannaford and Robert Breit. The two last-mentioned surgeons gave evidence in these proceedings. 25 The first Global RBK was implanted by Dr John Ireland in October 2000. The purchase order, dated 27 October 2007, which seems to have been for the first implant, named Global Orthopaedics as the supplier. It stated that the goods were a "consignment for RBK TRK. " The initials TRK are an acronym for 'total knee replacement', although the usual acronym for that term is TKR. 26 From 2000 to October 2002, Mr Ribot and Mr Banks promoted the Global RBK to orthopaedic surgeons in face to face meetings. They provided the surgeons and the surgeons' staff with promotional material in the form of a brochure entitled "The RBK Total Knee System. A Guide for Orthopaedic Staff". 27 The brochure gives a detailed description of the knee and the procedure for implanting it. The brochure describes the RBK Total Knee System as comprising three components. These are, a chrome cobalt, anatomical femoral component and a polyethylene insert which is free to rotate within the inner cone of the tibial component. 28 Global distributed approximately 150 copies of the first version of the brochure. The first version was replaced in October 2002 by a newer version with the same title. As with the initial version of the brochure, the revised version was distributed by Global to surgeons in face to face meetings. Global has distributed approximately 2000 copies of the revised brochure. 29 The revised brochure is replete with references to the RBK and the RBK Total Knee System. insert, which is designed to freely rotate within the inner cone of the tibial component. The underside of the tibial component features four fixation spikes, which are designed to provide additional resistance to torsional forces and to provide additional fixation. One method was to send out a flyer with information about the RBK to orthopaedic surgeons in New South Wales known by Global to have implanted prosthetic knees. There were approximately 250 of those surgeons. Global also sent 150 flyers to other orthopaedic surgeons around Australia. The flyers described Global's knee as the RBK. 31 Another method of promotion was on Global's website. Information about Global's RBK was first posted on the website in October 2002. insert, which is designed to freely rotate within the inner cone of the tibial component". 34 There is evidence before me of the number of monthly visits made to Global's website in the period April 2005 to March 2006. It is not possible to say which individual pages on the website were visited. 35 Global has employed other methods of promotion including attending meetings of the Australian Orthopaedic Association, known by its acronym 'AOA', the distribution of posters and hosting and/or attending smaller meetings of orthopaedic surgeons in Australia and internationally. 36 At the AOA meetings and the smaller meetings, Global's representatives described the knee as the RBK. Global also referred to the knee as the RBK in its posters and flyers for the smaller meetings. It is listed on the Nasdaq. It designs, manufactures and markets orthopaedic implants. It distributes its products through independent distributors in the USA and internationally. 38 Exactech began designing and manufacturing its knee prostheses under the Optetrak brand name in the USA and internationally in about 1992. The Optetrak brand name is the subject of trademark protection. 39 In about 1993, Exactech adopted a naming convention under which its knee and hip prostheses are given the Optetrak name followed by an acronym for the generic description of the product. 40 From about the middle to late 1990's Orthotech began selling some of Exactech's knee prostheses in Australia. These were the Optetrak CR, or cruciate retaining knee, the Optetrak PS, or posterior stabilized knee, and the Optetrak CC, or constrained condylar knee. 41 These knees were all fixed bearing knees, rather than mobile bearing knees. I will refer later to the distinction between fixed and mobile bearing knees. For present purposes it may be assumed that a rotating bearing knee is a form of mobile bearing knee. 42 It is not clear from the evidence when Exactech began the design and development of the Optetrak RBK. It was referred to within Exactech by that name from about June 2003. 43 By no later than 3 August 2004 Exactech knew that Global manufactured and sold its knee in Australia under the RBK name. Nevertheless, Exactech decided to proceed upon the basis that the brand name Optetrak RBK would sufficiently distinguish its knee from Global's RBK. 44 Exactech made sales of the Optetrak RBK in Europe commencing in April 2005. It has sold the prosthesis under that brand name in nine European Union countries and in Tunisia, Turkey and New Zealand. 45 Orthotech sold the first Optetrak RBK in Australia in November or December 2005. The unit was sold and implanted in Queensland at the Noosa Private Hospital. 46 Mr Ribot first learned of the promotion and sale of the Optetrak RBK in Australia in February 2006. 47 At about the same time Exactech sent invitations to Australian orthopaedic surgeons to attend an international meeting in Hawaii to discuss the Optetrak RBK and various other Optetrak products. The invitation stated that the program would include discussion of the design rationale and clinical performance of the "Optetrak RBK &tm; (Rotating Bearing Knee)". 48 By no later than March 2006, Orthotech released to the Australian market a promotional brochure describing the Optetrak RBK. 50 There are numerous references in the brochure to the acronym RBK without linking it to the Optetrak name. The last page of the brochure states that the product is not available for sale in the United States. 51 On 17 March 2006 Orthotech, Exactech and Mr Scott-Young consented to interlocutory injunctive relief restraining the respondents from promoting, marketing and distributing a prosthetic knee under the name 'Optetrak RBK' or 'RBK' in the Australian market. The products included prostheses manufactured by Exactech and sold under the Optetrak brand name. The products did not include the Optetrak RBK which had not yet been introduced in Australia. 53 Thus, from 1 January 2002 to September 2004, Global was promoting and distributing prosthetic knees for Orthotech and Exactech under the Optetrak brand, while at the same time promoting and selling the Global RBK under the name RBK Total Knee System. 54 There was also an earlier informal distribution arrangement between Global and Lima International Pty Limited, a related company of Orthotech, which dated back to July 1999. 55 In about early December 2001, Dr Albert Burstein, a director of Exactech, visited Australia and met with Mr Ribot. The visit was partly social and partly business. Mr Ribot showed Dr Burstein the Global RBK, and discussed manufacturing issues with him. 56 In July 2002, Global appointed Orthotech as the exclusive distributor in Queensland of Global's RBK. Mr Ribot and Mr Banks traveled to Queensland and trained Orthotech staff on the Global RBK to enable them to distribute it. However, that distributorship agreement lasted for only about two months and was brought to an end in early September 2002. 57 Whilst the distribution arrangements were on foot between Global and Orthotech, they had joint stands at AOA meetings and at some other industry events attended by orthopaedic surgeons where the range of Global and Orthotech products were displayed together. However, the application was not pursued and Global allowed it to lapse. 59 In February 2005, Exactech applied for the registration of RBK as a trade mark in Australia. The Trade Marks Office initially declined to accept the application stating that the RBK is a well known acronym for 'right below knee', that is to say, an amputation. 60 At the same time, Exactech also applied to register 'Rotating Bearing Knee' as a trade mark. The Trade Marks Office declined to accept it upon the basis that those words are descriptive of rotating bearing knees. 61 Exactech has informed the Court that it will allow both of those trade mark applications in Australia to lapse. 62 Exactech has applied to register RBK as a trade mark in other countries. In some, it has been rejected upon the basis that it is an acronym for right below knee. 63 In the United States, Exactech has applied for, and received acceptance of RBK as a trademark. A prosthetic knee seeks to replicate the normal planes of movement of the knee. These components are implanted by cutting away some bone of the femur and tibia. and are inserted with or without the use of orthopaedic bone cement, or are 'partly cemented'. 68 An additional variation occurs depending on the state of particular ligaments in the knee of the patient. A prosthetic knee might be designed so as to be, firstly, 'cruciate retaining' (CR), where the posterior cruciate ligament is intact and functioning, and retained as part of the operation of the prosthesis. Secondly, 'posterior stabilised' (PS) where there is no anterior or posterior cruciate ligament function. And thirdly, 'condylar constrained' (CC) where there is compromised residual medial and lateral collateral ligament support. 69 Prosthetic knees come in a variety of forms, the two main categories being 'fixed bearing knees' and 'mobile bearing knees'. The essential difference between these categories is the design of the tibial component, and the interface between the plastic component and the tibial base plate. 70 Prior to the development of mobile bearing knees, surgeons only implanted fixed bearing knees. 71 A fixed bearing knee can only flex and extend; it cannot rotate freely. The plastic component is fixed fast to the tibial plate; there is no movement between the plastic component and the tibial base. This design involves only one interface for wear within the prosthesis, so any forces which in a normal knee lead to gliding or rotational movement increases wear on the contact between the femoral component and the fixed plastic component. 72 Mobile bearing knees were devised around 25 years ago in New Jersey, USA. A mobile bearing knee is able to rotate as well as flex and extend. This is because in addition to an interface between the plastic component and the femoral component, there is an interface between the lower surface of the plastic component and the upper surface of the tibial component. This allows gliding and rotation movements. 73 In a mobile bearing knee, the plastic component tends to be flat at the bottom where it sits on the tibial component. Where it is connected with the femoral component, the plastic component is curved. This increases the surface area of contact between the components, which reduces pressure on the bearing and within the device as a whole, reducing the most common form of wear in a knee implant. 74 Mobile bearing knees more closely replicate the normal planes of movement of the knee. The design allows for freedom of movement in all planes, permits greater stability and enables less wear of the device, particularly the plastic component. This latter feature increases the lifespan of the device. 75 Since the invention of the mobile bearing knee, there have been further refinements in the design and there are now several categories of mobile bearing knee. 76 It is uncontroversial that 'meniscal bearing knees' and 'rotating platform knees' are two such categories. However, there is conflicting evidence as to whether a third form, rotating bearing knees, joins the other two as a generic category of prosthetic knee. The respondents argue this to be so; initially, the applicant resisted such a suggestion, maintaining that it is a term peculiar to the applicant's product. However, it seems to me that, ultimately, the effect of Global's case was to abandon its contention that rotating bearing knees are not a sub-class of mobile bearing knees. In any event, the evidence satisfies me that they are. 78 The evidence indicates that approximately 80% of the Australian market is dominated by large companies such as DePuy, Smith & Nephew, and Zimmer, which supply orthopaedic products internationally. Global and Exactech are amongst a few smaller, but successful companies in the market who compete for the remaining 20% of the market share. 79 The applicant has sold an average of 400 'RBK Total Knee Systems' each year since 2000; representing just over 2% of the total market for prosthetic knees. Exactech's market share for the Optetrak RBK is even smaller; evidence from the respondents suggests that this is because it was only released in November 2005, but that it is expected that the market share will continue to grow. Sales of the Optetrak RBK ceased in March 2006 when the interlocutory injunction was ordered. 80 In 2003-2004, there were more than 25,000 total knee replacement surgeries in Australia. At a cost of approximately $10,000 per operation, including about $4,000 --- $7,000 for the knee prosthesis, the market for knee prostheses is worth approximately $100,000,000 --- $175,000,000 per annum. It would appear that these specialists, numbering 250, carry out the bulk of total knee replacement operations in Australia. 82 Knee prostheses are selected by these orthopaedic surgeons. Patients are normally not aware of the type of prosthesis a surgeon will purchase and implant. In private hospitals, the choice of knee is entirely that of the particular surgeon; in some public hospitals, although the decision about which knee to use is made by the surgeon, prosthetics are supplied in larger volumes by way of a tender arrangement with a particular manufacturer or distributor and the surgeon uses a prosthesis under tender. 83 Marketing of the products is primarily through individual appointments involving an orthopaedic surgeon and a sales representative from an orthopaedic company. Other ways that orthopaedic surgeons are exposed to advertising include the annual meeting of the AOA and professional development conferences run by the AOA, and in relevant journals, such as the Journal of Bone & Joint Surgery and the Journal of Arthroplasty. 84 Surgeons may also be exposed to different prosthetic knee products through smaller conferences, meetings and dinners arranged by a particular orthopaedic company, through advertising sent to them by post, and through word of mouth recommendations by other surgeons. 85 Factors which may influence whether a surgeon agrees to meet with a sales representative include firstly, the reputation of that company and the surgeon's opinion of the reliability and level of service of the company; secondly, the knowledge, training and reputation of the representative; thirdly, whether the representative is promoting an innovation in the market; and finally, whether the surgeon is satisfied with the products they currently use for total knee replacements. 86 When a sales representative meets with an orthopaedic surgeon, they will discuss the product with the surgeon and provide documents, such as guides to the use of the product. The sales representative may detail the points of differentiation between the product and other products on the market, so the surgeon is kept up to date on competing products available. 87 There is evidence that surgeons routinely use a particular prosthetic knee product they consider best suits their technique and approach to total knee replacement surgery. The core factors which a surgeon considers in determining which prosthetic knee to use include experience of that surgeon and/or colleagues with the product; the history of the product, and in particular whether it has needed frequent revisions after initial implantation. The expertise and marketing skills of the sales representative may also come to bear, as does the surgeon's confidence in the company providing the product. In addition, surgeons may be influenced by the local product support available for that prosthesis, which is usually provided directly by the sales representative. 88 For a surgeon, changing the preferred type of implant used is a significant and time consuming process; the sales representative is an active participant in the process, and it is not a decision which is undertaken lightly. The surgeon needs to be confident about the product, and the complexity of the implantation procedure for each particular product means a surgeon may practice a new implantation on numerous occasions before attempting the procedure on a patient. 89 There is evidence that sales representatives are active participants in the process of a surgeon changing the type of implant they use. It may be said that there is strong brand loyalty in the market. 90 One indication of the close relationship which develops between the surgeon and the sales representative is that the surgeon is usually on a first name basis with the representative. Often, the surgeon makes direct contact with that sales representative to order a prosthesis, or for any questions after an implantation. Many types of prosthetic knee products comprise initials and three letter abbreviations, and it is common practice in the industry to refer to products by their initials. 93 Global's RBK prosthesis is packaged in a number of very large boxes and tubs. The tubs are a distinctive blue colour. I was shown a sample of the prosthesis as packaged for sale. The sample was not tendered but photographs of the complete set of boxes and tubs were in evidence. A prosthetic knee is ordered as and when required for a specific operation, and a surgeon would rarely keep a stock of products. 95 Contact is made with the sales representative or distributor of the relevant product to arrange delivery of the prosthesis and instrumentation necessary to undertake the operation. Usually, instrumentation is lent to the surgeon for the operation, and then returned to the supplier once the operation is concluded. 96 There is evidence before me that when a particular product is ordered, the surgeon is conscious of the company it is being ordered from and will often know the sales representative from that company. 97 Prior to commencing an operation, the surgeon verifies that all the required items for the surgery are present in the operating theatre, so that any oversight or mistake in the ordering or delivery of the prosthesis and instrumentation required should be able to be addressed. 98 It appears that it is also common for the sales representative from the supplier company to attend the surgery as part of the 'after sales service'. The representative stands toward the back of the theatre; they are not scrubbed for the surgery but remain present in the theatre throughout the operation. You would not select a product, would you, as your routine choice of a knee prosthesis unless you had had a face to face meeting with the representative of the company that was --?--That is correct. And indeed you would not only have met with and talked to the representative but it is the general practice, is it not, for the representative to attend to the surgery?---In early cases, yes. The LCS is the best known mobile knee prosthesis in the Australian market. 101 The DePuy LCS is often called a rotating platform knee but the evidence makes it clear that it may also be called a rotating bearing knee. The inventors of the LCS knee referred to it as a rotating bearing knee and Mr Ribot gave it that description when he was employed by DePuy. 102 Dr Rowden, a witness for Global, accepted that the LCS knee could be called a rotating bearing knee. He said that this was the proper description for the LCS knee and for Global's RBK prosthesis. 103 There is little difference between the LCS knee and Global's RBK, although it may be that the Global knee contains some improvements. 104 What differentiates the rotating platform knee or the rotating bearing knee from the fixed bearing knee is that the plastic piece between the femoral and tibial components rotates. It rotates on the platform but the platform does not rotate. It is the bearing that moves or rotates. That is why it is proper to describe both the DePuy LCS knee and Global's RBK prosthesis as rotating bearing knees. 105 In its promotional brochure Global described its prosthesis as the "RBK Knee System (Rotating Bearing Knee). " In the original form of its website Global described the knee as the "Rotating Bearing Knee (RBK)". At some time prior to the introduction of the Optetrak RBK, Exactech began to design a mobile bearing knee. The evidence does not specify precisely when the design process began. 107 Global concedes that the Optetrak RBK falls into the category of knees that should properly be described as rotating bearing knees. 108 Thus, Global does not dispute that Exactech is entitled to call its knee a rotating bearing knee. What it does dispute is Exactech's right to use the acronym RBK as part of the name of the knee. 109 Although Exactech was fully aware no later than 3 August 2004 that Global's knee was known as an RBK, Global does not contend that Exactech adopted the RBK acronym for the purpose of appropriating to itself any part of Global's trade or reputation; cf Australian Woollen Mills Limited v FS Walton & Co Limited [1937] HCA 51 ; (1937) 58 CLR 641 at 657. 111 By that date Global had taken steps to market its product to a substantial portion of the target market of about 680 surgeons in Australia. Nevertheless, the evidence of Global's reputation in the name RBK was quite scant. It consisted of seven sources. 112 First, Mr Ribot gave evidence that Global had approached 90% of the relevant orthopaedic surgeons in New South Wales, 40% of those in Queensland, 30% in Victoria and most of those in South Australia and Western Australia. 113 It may be accepted that those surgeons were shown the prosthesis and that it was marketed to them under the RBK name. But that evidence was in general terms and, of itself, does not provide a sufficient basis for inferring the establishment of a reputation in the name. 114 Second, brochures were sent to the target market. However, the numbers printed and sent were quite small. There were 150 of the initial form of the document and approximately 2,000 of the later edition. Again, the figures are too low to enable me to make the necessary finding. 115 Third, there was the description of the RBK prosthesis on Global's website. The website consisted of about 85 pages, five of which referred to the Global RBK. 116 In my view it is likely that a substantial number of the persons who visited the site would have looked at the pages for the Global RBK. This is because that prosthesis is properly described as Global's flagship product by reason of its volume of sales. 117 Nonetheless, even if I assume that all of the visits were to those pages, the numbers are simply too low to be capable of establishing a reputation in the name RBK. 118 Fourth, there is evidence of actual sales. Global has sold over 2,000 of its RBK prostheses since the knee was introduced in late 2000. These knees were sold to at least 54 orthopaedic surgeons in Australia. 119 Once again, the numbers are very low when they are compared with total sales of approximately 25,000 total knee replacements in Australia in one year, 2003-2004. 120 Fifth, there is some evidence of advertising expenditure but it is put forward in summary form as part of total marketing and promotional costs. The evidence was part of a confidential exhibit appearing at Vol 5, page 254 of the Court Book. 121 Much of the expenditure is not, strictly speaking, advertising. In any event, it is impossible to tell from the exhibit how much expenditure was directed toward promotion of the RBK name. In short, the figures are too low and the expenditure too generalised to be capable of an inference of reputation in the RBK name. 122 Sixth, there are prosthetic knee users' conferences and flyers and posters for those conferences. The comments I have previously made about small numbers apply equally to this aspect of marketing. 123 Seventh, there is the AOA Registry. Global relied upon the fact that its prosthesis appeared in tables of leading prosthetic products used in total knee replacements and, in particular, that it was described by the acronym RBK. 124 I accept that readers of these tables would either know, or in some instances work out for themselves that the letters RBK are a reference to Global's RBK prosthesis. But I cannot accept that this establishes a basis for inferring that there is a sufficiently wide reputation in the acronym to be distinctive of Global's prosthesis. 125 Even if all of the different sources of reputation relied upon by Global are considered together, they do not support a finding that RBK is distinctive of Global's rotating bearing knee. This concession was at odds with the evidence he gave in [24] of his affidavit and his reluctance to make the concession reflected badly on his credit. 127 Mr Ribot also conceded, eventually, that the Optetrak RBK falls into a category of knees that should be referred to as a rotating bearing knee. Indeed he said that the DePuy LCS should properly be described as a rotating bearing knee rather than a rotating platform knee. 128 Notwithstanding this, Global contends that the acronym RBK is not descriptive of its prosthesis. Global submits that it is illogical to contend that because rotating bearing knee is descriptive, its acronym must also be descriptive. 129 However, Global's submission ignores the well established habit in the medical profession of abbreviating three-word descriptive terms to their three initial letters. 130 Global went so far as to contend that the evidence of the respondents' witnesses as to the common usage of the phrase "rotating bearing knee" and the acronym RBK were unsubstantiated assertions. However, I do not accept that contention. 131 It is true that there is evidence of only two published articles in which reference has been made to rotating bearing knees. But two witnesses whose evidence I accept, Drs Morris and Caldwell, understood the letters RBK to be an acronym for rotating bearing knee. 132 A third witness for the respondents, Dr Morgan, gave evidence to the same effect. Dr Morgan also said that he hears the term rotating bearing knee used regularly at revision knee arthroplasty meetings. That evidence was contradicted, at least in part by Dr Hannaford, who said he had not heard the phrase used at a conference recently attended by Dr Morgan. 133 Dr Morgan was not a satisfactory witness. He had a tendency to try to force his answers on the cross-examiner. He gave the impression of an advocate for his clients' case. However, Dr Hannaford is not an independent witness. He is a paid consultant for Global. He seemed for the most part to be a fair witness. But evidence that a person did not hear certain words at a lengthy conference is hardly conclusive. 134 It may be that Dr Morgan's evidence as to the extent of the use of the term "rotating bearing knee" is an exaggeration. I do not need to make that finding because it is plain that the phrase is descriptive, even if it is not in common use. 135 Moreover, it seems to me that the acronym RBK, as used in the target market of orthopaedic surgeons, is, at very least a long way toward the descriptive end of the continuum to which Hill J referred in Equity Access. I make that finding based upon the practice of using acronyms in the medical profession and upon the basis of the evidence of Drs Morris, Caldwell and Morgan as to their recognition of the RBK label. 136 It follows that I would need to be satisfied to a reasonably high standard that the acronym has acquired a secondary meaning amongst orthopaedic surgeons who carry out total knee replacements; Guide Dogs Owners' & Friends' Association Inc v Guide Dog Association of NSW and ACT (1998) 42 IPR 481 at 502. The acronym would need to be close to a household word for the product amongst those surgeons; British Sugar PLC v James Robertson & Sons Limited [1996] RPC 281 at 306. 137 I have already found that the evidence does not satisfy me that the RBK acronym has become so closely associated with Global's RBK as to be distinctive of that prosthesis. The same finding disposes of the claim that RBK has acquired a secondary meaning. 138 Global's submission that no other prosthetic knee was referred to in Australia by the name RBK does not advance its case. Nor does the dearth of references to that acronym in the literature or on the worldwide web. Nevertheless, I will deal with the issue of misleading conduct in the context in which the claim is made by Global. 140 I have already referred to the principles which apply where a trader adopts a name composed of descriptive words. I have also referred to the principle that the relevant section of the public must be identified by reference to whom the conduct is to be tested. 141 All that needs to be reiterated before turning to the question which arises is the principle that the conduct must be determined by reference to its effect on the hypothetical ordinary or reasonable member of the class; Puxu at 199, 210-211; Nike at [102] --- [103]. 142 Also, whether or not the impugned conduct constitutes misleading or deceptive conduct is a question of fact to be determined objectively in the light of all the surrounding circumstances; Taco Company of Australia Inc v Taco Bell Pty Limited (1982) 42 ALR 177 at 202; Puxu at 199, 210-211; Nike at [100]; Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 ; (2005) 212 ALR 357 at [39] . 143 In the present case, the Optetrak RBK is marketed under that name and Orthotech and Exactech have indicated that it is their intention not to market the product without using the Optetrak name in conjunction with the RBK acronym. 144 Global made much of the tendency in the medical profession, and amongst suppliers, to refer to the product only by its acronym. Thus it was submitted that both Global's RBK and the Optetrak RBK may soon be described solely by the RBK acronym. 145 However, there are two short answers to this submission. First, the hypothetical reasonable purchaser is a sophisticated and experienced medical practitioner. Second, the checks and balances in the process of ordering and implanting the prosthesis are sufficient to dispel anything more than a fanciful possibility that the purchaser will be misled; cf Nike at [105]. 146 There was no dispute about the first of these propositions. The second was supported by a body of uncontroversial evidence. The evidence as to the checks and balances may be summarised as follows. 147 First, it is plain that the suppliers of knee prostheses market their products to the surgeons who implant prosthetic knees. They do so in face to face meetings so that, as a consequence, the suppliers' representatives develop a personal relationship with the surgeons. 148 Second, the decision to purchase a knee prosthesis is likely to be a carefully considered one having regard to the cost of the prosthesis, which is in the order of $7,000; Puxu at 211. 149 Third, as a matter of professional practice, a surgeon is likely to take care in the selection of the prosthesis. The considerations to which Dr Breit referred in the passage set out at [99] above, demonstrates the close involvement of the surgeon in the decision making process. 150 Fourth, surgeons tend to have a preferred brand of prosthesis. Dr Breit's observations point to the care which would be taken in a decision to switch brands. 151 Fifth, even if a mistake were to occur, perhaps in the doctor's office or in the ordering department of a hospital, the evidence satisfies me that the mistake would be picked up and rectified in all but the most exceptional circumstances. 152 This is because the prosthesis will be packaged in distinctive packaging and the products are bulky and easily recognisable. It is true that both products seem to have similar functions. Both involve sacrifice of the posterior cruciate ligament. Both can be implanted with or without cement. However, different surgical instruments are required to implant them. 153 The nature of the product and the procedure in place at the hospital where the operation is to take place indicate that there would be two levels of the process at which any mistake would be detected. These are, first, the nurses and theatre staff and, second, the surgeon, prior to commencement of surgery. 154 Moreover, if, as appears from some of the evidence, the sales representative is present during the operation, this would add to the checks and balances against error. 155 Global sought to meet this difficulty in its case by pointing to the possibility that the mistake would not be detected until the patient is on the operating table. Global submitted that this could result in the need to reschedule an operation to a later date. 156 However, the evidence of Dr Morgan, as supported by that of Dr Caldwell, satisfies me that this would be unlikely to occur. At worst, the operation would take place on the same day, later in the surgeon's list. 157 Global submitted that whether a representation is misleading or deceptive (or likely to be so) depends on the circumstances in which it is made, not on what might happen at a future point of time; Medical Benefits Fund of Australia Limited v Cassidy [2003] FCAFC 289 ; (2004) 205 ALR 402 at [43] . 158 I do not consider those observations to be in point. The procedures to which I have referred in the hospital ordering and implanting process are concerned with the detection of errors rather than the correction of misleading or deceptive conduct. 159 At most, the position seems to me to be analogous to that which was described as temporary and commercially irrelevant confusion by Lockhart J in Lumley Life Limited v 1OOF of Victoria Friendly Society (1989) 16 IPR 316 at 323-324. This does not constitute misleading conduct; see also Equity Access at 449. 161 The evidence does not support Global's alternative contention that a commercial association would be implied from the past distribution arrangements between Global and Orthotech. 162 Dr Morris was aware that Global had at one time been a distributor for Orthotech. He said that Global sold the Global RBK clearly marked as a Global product. He also said that Optetrak products, when distributed by Global, were always promoted and sold as a separate product line, not manufactured by Global. 163 The evidence of Dr Morris does not address the position when Orthotech was Global's distributor. However, the evidence is that the same distinguishing procedures were adopted. Photographs of Global's stand at AOA meetings during the time of the distributorship arrangement supports this finding. 165 Exactech relied in this proceeding upon the proposition that the language which is used in the market for prosthetic knees is international. The literature supported this proposition. 166 Notwithstanding this, the statements made by Dr Miller and by Exactech's trade mark attorney set out at [63] and [64] above, are at odds with the case successfully made by Exactech in the present proceeding. 167 Moreover, whilst those statements are made in the context of the position in the United States, they do not appear to me to be correct. This may have some impact upon the validity of the registration in the USA; although of course that is not an issue which arises in these proceedings. Nevertheless, there is tension in Exactech's contention, successfully made before me, that a trader cannot obtain exclusivity for the acronym RBK whilst seeking to maintain that exclusivity in the USA. | ss 52 , 53 (a), 53 (c), 53 (d) trade practices act 1974 (cth) |
By decision dated 20 th May 2008 the Respondent determined to cancel the Applicant's Carer Payment from 7 th May 2008, and to raise a debt of $91,396.50 in relation to the Applicant's previously paid Carer Payment, Austudy and Newstart Allowance payments. All such payments were made under, and in accordance with, provisions of the Social Security Act 1991 (Cth). The decision to cancel the Applicant's Carer Payment was based on the Applicant's failure, without reasonable excuse, to provide documents and information to the Respondent as required by various notices sent to the Applicant in January 2008 and April 2008 regarding his income and assets between 1999 and 2007. The Applicant sought review by the Social Security Appeals Tribunal (SSAT) of the decision. By decision dated 8 th August 2008 the SSAT set aside the decision of 20 th May 2008 and substituted a decision that: (i) the Applicant's Carer Payment be suspended rather than cancelled from 7 th May 2008; and (ii) the Respondent further consider the raising of the debt and the amount of any such debt in accordance with certain directions of the SSAT. The Applicant applied to the Administrative Appeals Tribunal for review of the decision of the SSAT dated 8 August 2008. By decision dated 18 th March 2009 the Tribunal affirmed the decision of the SSAT (the suspension of the Applicant's Carer Payment), and directed that the decision to raise and recover debt against the Applicant be referred back to the Respondent for reconsideration in light of the further information provided at the hearing. By decision dated 10 th August 2009, and having considered the material provided in the course of the Tribunal hearing, the Respondent cancelled the Applicant's Carer Payment and affirmed the earlier decision to raise and recover the said debt. By further amended application to the Court filed on 19 th August 2009 the Applicant sought orders, inter alia, that the Respondent's decision of 10 th August 2009 be quashed, and that the Respondent make a decision as the Applicant's entitlements according to law. On 26 th November 2009 the Respondent made a fresh decision setting aside the decision of 10 th August 2009. The decision of 26 November 2009 determined that: (i) the Applicant's Carer Payment would revert to being suspended in accordance with the decision of the Tribunal of 18 March 2009; (ii) the original debt of $91,396.50 at this time no longer existed; and (iii) any monies recovered from the Applicant in respect of the debt would be reimbursed. The Applicant's failure to provide the Respondent with information and documents sought by the Respondent in the various notices of January and April 2008, it is said, continues. The actual issue before the Court turns first and foremost on provisions of the Social Security (Administration) Act 1999 (Cth). Section 63 of the Act enumerates the various powers of Centrelink to require information from a benefits recipient. Section 192 confers a general power on Centrelink to require a person to supply information and s 81(1) gives the Secretary a power to cancel or suspend payment to a person who has not complied with a notice which, inter alia, has been given under s 192. The point I would emphasise in this contrast is the discretion given under s 80(1) requires either cancellation or suspension of a social security payment while s 81(1) provides a discretion to cancel or suspend. As noted in the factual outline, Mr Cosenza received notices requesting information on 7 January 2008 and 30 April 2008. The Tribunal was satisfied that each of the notices was a valid one under s 63 of the Act: see Reasons of 18 March 2009, [19]. While the Tribunal was satisfied that Mr Cosenza made a response to the best of his ability to the 7 January 2008 notice, it found that he did not give all the information required in the 30 April 2008 notice within the time specified in them: Reasons [20]. In the Tribunal's view he did not have a reasonable excuse within the meaning of s 63(9) of the Act for not complying with the notices issued on 30 April 2008: Reasons [20]. I should indicate, though it is not strictly relevant given the circumstances of this matter, that s 85 of the Act makes express provision for reconsideration by the Secretary of a decision to cancel or suspend which can lead to a determination that a social security payment was now payable. The obvious premise of this provision is that the Secretary on the reconsideration decision is possessed of such information as can provide the relevant level of satisfaction. The final statutory provision I should note is s 126 of the Act. He gave oral evidence as did several investigative officers from Centrelink. The principal issue before the Tribunal related to the SSAT decision that the Carer Payment to Mr Cosenza should be suspended with effect from 7 May 2008: see Reasons [3]. In [25]-[26] of its Reasons, the Tribunal made the following observations and findings: Mr Cosenza was able to provide little evidence to the Tribunal relating to the activities of ISMA and the Sarjem Family Trust. This was surprising, given that he had been a director of Cosdean Investments Pty Ltd, on and off, until 9 August 2006. As trustee of the Emjamdean Trust, he would also have been instrumental in the sale of the properties at Trimmer Parade to the Sarjem Family Trust and, on the evidence of Mr Kennedy, which was not seriously challenged by Mr Cosenza, he was actively involved in the ultimate sale of the Trimmer Parade townhouses. He was also hesitant to comment about the dispute between Cosdean Investments Pty Ltd and The Football Federation of Australia. As a director of the company for the year ended 30 June 2006, he certainly made no mention of the gross trading profit of Cosdean Investments Pty Ltd of $153,900, of purchases of $212,000, of sales of $144,000 and of closing stock of some $222,000. In the Tribunal's opinion, these matters all raised questions that necessitated the provision of further information to Centrelink in response to the notices that had been issued on 30 April 2008. For the reasons and on the basis of the findings above, there must be doubts as to Mr Cosenza's current and past Social Security entitlements. Mr Cosenza submitted that suspension of his Carer Payment was a breach of natural justice and his legal entitlement to have some benefit paid to him. The Tribunal has sympathy for his position, but the doubt about current entitlement remains and while it does it is appropriate that the Carer Payment be suspended. In his closing, Mr Parker said that the respondent wished to pay Mr Cosenza a Carer Payment but, in the absence of more information concerning his involvement in ISMA and Cosdean Investments Pty Ltd, had been unable to calculate the correct amount of his entitlement. He suggested that the additional information provided at the hearing, including that contained in the letter from Mr De Pizzol, should go a long way towards enabling the respondent to make an assessment of what benefit could be paid to Mr Cosenza. It is that the Reasons clearly contemplated a further decision being made by the Secretary (via a delegate) concerning whether and, if so, in what amount a carer's benefit should be paid. The Tribunal also noted that the SSAT found there was sufficient evidence before it to raise doubts about Mr Cosenza's current and past Social Security entitlements. The Tribunal as well addressed this matter in its decision. Each of those decisions was taken, as noted earlier, by a departmental official on 10 August 2009. I am also writing to you about the debt for $91,396.50 which was raised for the period 13 November 2000 to 7 May 2008. We have considered the limited additional information which we have been able to obtain and have made decisions to affirm the correctness of the original decisions to cancel your payments from 08 May 2008 and to raise and recover the advised debt of $91,396.50. Nothing which has been provided to us fromany (sic) source establishes that you ever had any entitlement to any of the payments you received. (Emphasis added. These were superseded by the decisions of the SSAT which in turn were superseded by the decision and direction of the Tribunal. Nothing turns on this because of the decision to which I next refer, although I should note in passing that a further amended application was filed on 19 August challenging the 10 August decision. It too was overtaken by events. On 26 November 2009, consequent on a review undertaken under s 126 of the Act, the 10 August decisions were revoked. I raised an issue at the beginning of the hearing with the parties so as to understand the status of the 26 November decisions. As with the 10 August decisions which it replaced, both determinations of 26 November were in obvious effectuation of the subsequent decisions foreshadowed in the AAT's reasons for decision. As I earlier indicated, the Tribunal concluded that Mr Cosenza had failed without reasonable excuse to comply with notices issued to him on 30 April 2008 and that these notices were ones made under s 63 of the Act. In consequence, s 80(1) of the Act was brought into play such that the Secretary, hence the Tribunal, was to determine that a social security payment was to be cancelled or suspended. As I earlier foreshadowed the Secretary, hence the Tribunal, had no choice but to make one or other of these decisions. It had no more general discretion in the matter: cf s 81(1). The Tribunal clearly found Mr Cosenza in default in relation to compliance with the s 63 notices and considered that while the doubt about current entitlement remained it was appropriate that the Carer Payment be suspended. While the Reasons suggest that a decision as to Mr Cosenza's entitlement to a Carer's Payment would be made primarily (but not necessarily exclusively) in reliance upon information provided at the Tribunal hearing, the Reasons by no means discountenanced the further provision of evidence by Mr Cosenza given the areas identified by the Tribunal "that necessitated the provision of information to Centrelink in response to the notices that had been issued on 30 April 2008": Reasons [25]. On the contrary. I have asked the respondent, if it felt able to do so, to provide me with assistance as to the statutory process that was being followed by the delegate on 10 August 2009 and which was reviewed by the Secretary on 26 November 2009 pursuant to s 126 of the Act. The respondent later advised it would not be providing further submissions in this matter. In these circumstances, and given the events which have happened, it would seem to me that the decisions taken, first, by the delegate and, then, by the Secretary insofar as they related to the Carer Payment were decisions taken by reference to the provisions of s 80(1) of the Administration Act. Considered in the context of that Act and in particular s 118(11) (which contemplates a decision to suspend under s 80 and then a subsequent decision to cancel under the same section: see also Acts Interpretation Act 1901 (Cth) s 33(1)) , the delegate's decision was a s 80 cancellation decision; the Secretary's decision was a vacation of that decision which restored the status quo, ie suspension in accordance with the Tribunal's decision. The apparent presupposition in both decisions --- consistently with the Tribunal's decision --- was that Mr Cosenza, having not complied with the s 63 notices, was a person to whom, for s 80(1) purposes, the social security payment was not payable. Insofar as concerns the decision of Secretary related to the setting aside of delegate's decision to raise and recover the debt of $91,396.50 consequent upon the Tribunal's direction to reconsider that matter, no challenge to the Secretary's decision has been foreshadowed. The essence of Mr Cosenza's complaint about the respondent's conduct is that it is over a year and a half since the Carer Payment was cancelled, although it is now only suspended since the Tribunal's decision. A decision by the respondent on his entitlement should be made within a reasonable time but such has not occurred. The short answer to this appears, as I understand it, to inhere in the scheme of the Act. Unless and until Mr Cosenza complies with the 30 April notices, the Carer Payment is not payable. In consequence the Secretary can only suspend or cancel the payment. The former course has been adopted. In light of the Tribunal's conclusions (at Reasons [25]) that further information needed to be provided in response to the 30 April notices, if the present stalemate is to be ended, Mr Cosenza has the remedy in his own hands. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finn. | social security law decision to cancel applicant's payments and raise a debt following non-compliance with s 63 notice to provide information some further information provided at administrative appeal tribunal hearing tribunal still not satisfied that all s 63 information sought provided further decision to suspend payments, cancel debts raised and reimburse monies recovered continued non-compliance with s 63 notice decisions of delegate and secretary taken by reference to s 80(1) of social security (administration) act in circumstances of continued non-compliance secretary's discretion under s 80(1) limited to cancellation or suspension. administrative law |
On 30 June 2003 the appellant lodged an application for a protection visa with the Department of Immigration Multicultural and Indigenous Affairs on the grounds that she feared persecution because she was a Falun Gong practitioner. A delegate of the first respondent refused the application for a protection visa. The appellant applied to the Refugee Review Tribunal (the Tribunal) for a review of that decision. The decision of the Tribunal as originally constituted was set aside and the review application was referred back to the Tribunal for rehearing. The appellant attended a hearing before a differently constituted Tribunal. The Tribunal asked the appellant a number of questions about Falun Gong. The Tribunal found the appellant to be an unreliable and untruthful witness and rejected her application. The appellant sought judicial review of the Tribunal's decision in the Federal Magistrates Court. One of the grounds relied on was bias. Before the Federal Magistrate, the appellant claimed that the Tribunal asked her "misleading questions" and that she had been "bullied" by the interpreter. The appellant asked that the Federal Magistrate listen to the tape of the Tribunal hearing, which she had with her, to substantiate her claims. The Federal Magistrate declined to listen to the tape. The Federal Magistrate dismissed the appellant's application for judicial review. The appellant appeared in person before me. She complained that the Tribunal had been biased and that the Federal Magistrate should have listened to the tape. I have construed the appellant's contention to be that the Federal Magistrate erred in failing to receive into evidence the tape recording of the proceeding which the appellant relied upon in support of the ground of review founded on apprehended bias. In my view, the appeal should be allowed. She gave evidence that she practiced (in China) at least three times a week and that she practices in Australia at least once a week. The applicant's knowledge in all of these areas was minimal. The applicant either did not know, or in many instances was wrong in her answers. The applicant stated that she cannot say. The Tribunal asked where the master got the ideas of Falun Gong from. The applicant stated that she does not know. The applicant stated that she does not know. The applicant stated that she cannot say. The applicant stated that "she forgot". The applicant stated that she does not know. The applicant stated that she does not know. The applicant stated that it was in 1992. The Tribunal asked when in 1992. The applicant stated that it was September, (independent evidence states that it was 22 May 1992). The applicant stated that it was in 1999 (evidence shows that it was 24 July 1996). The applicant stated it was 1999. The Tribunal asked the applicant when in 1999. The applicant stated that it was 21 September 1999 (independent evidence shows it was 29 July 1999). The applicant stated that she has forgotten. The Tribunal asked the name of any book Li Hongzhi has written. The applicant stated that she cannot. The Tribunal asked the applicant if she wished to give an explanation for her lack of knowledge about the organisation she claimed to have been involved in for ten years. The applicant declined to do so. The appellant appeared in person before the Federal Magistrate. The transcript of the hearing before the Federal Magistrate was not in evidence. However, it is evident from the reasons of the Federal Magistrate that the appellant complained to the Federal Magistrate about the way she had been questioned by the Tribunal - which she characterised as "misleading" --- and that she had been bullied by the interpreter. It is also apparent that the Federal Magistrate refused the appellant's application that he listen to the tape of the Tribunal hearing which the appellant had with her. The Federal Magistrate explained why he did not admit the tape into evidence. They were questions both about the applicant's actual knowledge of the Falun Gong movement and the master Li Hongzhi and her own association with the movement. During the course of the hearing today the applicant told me that she wished the court to hear the tape because, she said, a lot of the questions that were asked by the Tribunal were misleading. I asked her if she could give an example and she gave me one which, so far as I now recall, was when the master left China for the United States. That question is contained in the court book as were some of the other questions that she referred me to. In the end the applicant indicated that as these questions appeared to be available to me from the court book it was not necessary to listen to the tape. I cannot say that any of them are misleading and I cannot really say that any of them are totally irrelevant although one might be forgiven for questioning whether knowledge of when the master left China for the United States, his date of birth and the date that an arrest warrant was issued for him by the PRC authorities are necessarily relevant in determining whether an applicant is a genuine adherent. She does not tell the court that she made any complaint about the interpreter until today to anyone. She has not produced any independent evidence of this allegation. To the extent that the bullying might be manifested in the tape recording I would gain nothing from listening to that because I do not understand the Mandarin language and it would definitely require some expert opinion being provided from a person who does understand Mandarin and the nuances of interpretation. I am, therefore, unable to take this complaint of the applicant's any further although I note that it is unlikely to constitute the type of conduct that would allow a court to find that the provisions of s 425 of the Migration Act 1958 (the "Act") had not been complied with. The Federal Magistrate treated the appellant's complaint about the nature of questioning by the Tribunal and the allegations of "bullying" by the interpreter as being separate to the allegation of bias. The Federal Magistrate went on to consider the question of bias and said he was not satisfied that the appellant had established either actual or ostensible bias in the actions of the Tribunal. The Federal Magistrate found that the appellant had "not assisted the court by the provision of any particulars" from which a conclusion of bias could be drawn. The Federal Magistrate dismissed the application. The first ground was that the Tribunal was biased. The effect of what the appellant said to me by way of oral submission was that the Tribunal had asked questions which indicated that it had a closed mind on whether she was a Falun Gong practitioner and that the Tribunal and interpreter had acted oppressively during the hearing. The appellant also said that the Federal Magistrate should have listened to the tape of the hearing before the Tribunal. As I have previously mentioned, I have treated the appellant's complaint to be that the Federal Magistrate erred in failing to accept the tender of evidence advanced to support the appellant's complaint of apprehended bias. Moreover, the need to ensure that the person who will be affected by the decision is accorded procedural fairness will often require that he or she be plainly confronted with matters which bear adversely on his or her credit or which bring his or her account into question. Similar questions by a judge in curial proceedings in which the parties are legally represented may more readily give rise to an apprehension of bias than in the case of inquisitorial proceedings. If that should happen, a fair-minded lay observer or a properly informed lay person might readily infer that there is no evidence that the witness can give which can change the decision-maker's view. That is, that the hearing was conducted in a matter that might give rise to the inference in the mind of a fair-minded lay observer that the Tribunal did not have an open mind on the question of whether she was a Falun Gong practitioner. In my view, in the overall context of the appellant's complaint, the Federal Magistrate took too literal a view of the appellant's complaint by treating the complaints as to the "misleading" questions and the bullying by the interpreter as discrete complaints rather than incidents of a complaint of apprehended bias. Some of the questions the Tribunal asked of the appellant appeared to be sufficiently peripheral as to cause some concern to the Federal Magistrate. It was at least arguable that the questions were capable of causing a fair-minded lay observer to query whether questions of this kind would be asked by a person seeking fairly to test whether the appellant was an adherent to Falun Gong. Further, the Federal Magistrate correctly expressed some disquiet about the use of the word "infinitesimal" by the Tribunal in describing the appellant's knowledge of Falun Gong. In other words, there was enough before the Federal Magistrate to preclude a finding that the appellant's claim of apprehended bias was so frivolous or otherwise devoid of merit, that she should not be permitted to advance evidence in support of it. Although new evidence will not generally be admitted on the hearing of an application for judicial review, evidence of what occurred at a hearing in support of a complaint about the absence of procedural fairness or bias in relation to the hearing, is an exception to the general rule, and may be admitted. (See MZXLD v Minister for Citizenship [2007] FCA 1912 at [10]-[11]). In my view, the Federal Magistrate erred, in the circumstances of this case, in failing to admit the tape of the hearing as evidence in support of an allegation of apprehended bias. This occurred because the Federal Magistrate failed to treat the complaint about the so called "misleading" questioning and oppressive behaviour by the interpreter as comprising incidents of a complaint of apprehended basis. It was not a sufficient answer to the appellant's real concern to point out, as did the Federal Magistrate, that the questions which the appellant could remember as being objectionable, were recorded in the Tribunal's reasons and that there was, therefore, no need to listen to the tape. This missed the point that the appellant was trying to make, namely, that the unreasonableness of some of the questions indicated a predisposition on the part of the Tribunal to find that the appellant was not a Falun Gong practitioner and the hearing was conducted in a way that reflected that attitude. Further, it was no answer for the Federal Magistrate to say that he would derive no assistance from the tape because he did not understand Mandarin. It may have been possible for the Federal Magistrate at the very least to discern from the tone of the interchanges whether there was substance to the appellant's complaint. In any event, the Federal Magistrate could have used the services of an interpreter. In other words, the Federal Magistrate erred in determining, as he, in effect, determined, that the tape could not possibly be of any probative value in respect of the allegation of apprehended bias. In my view, therefore, the appeal should be allowed and the application for judicial review should be referred back to the Federal Magistrate for rehearing. | judicial review allegation of apprehended bias by the refugee review tribunal applicant tried to tender the tape recording of hearing before the tribunal federal magistrate refused to admit tape recording into evidence migration |
They have been heard together. Two separate proceedings are involved, although the parties in each proceeding are the same. Bradken Resources Pty Limited ( Bradken ) is the applicant in both and Lynx Engineering Consultants Pty Limited ( Lynx ) is the respondent in both. Both proceedings are concerned with Australian Patent Application Number 749848 for an invention titled "Side Reinforced Bulk Material Transport Container" ( the Patent Application ). The Patent Application was lodged by Lynx. 2 Proceeding NSD 439 of 2007 ( the Appeal Proceeding ) is an appeal by Bradken from part of a decision of a delegate of the Commissioner of Patents ( the Commissioner ) to reject the opposition to the Patent Application filed by Bradken. Lynx has filed a cross-appeal in the Appeal Proceeding. 3 Proceeding NSD 2461 of 2007 ( the Threats Proceeding ) is a claim by Bradken that a letter of 11 October 2007 ( the Threats Letter ) to BHP Billiton Iron Ore Pty Limited ( BHP ) constitutes unjustifiable threats by Lynx within s 128 of the Patents Act 1990 (Cth) ( the 1990 Act ). The Threats Letter was written by Watermark Patent and Trade Mark Attorneys acting for Lynx. 4 Prior to the commencement of both the Appeal Proceeding and the Threats Proceeding, Lynx had commenced proceedings numbers WAD 219 of 2006 and WAD 217 of 2007 in the Western Australia Registry of the Court. On 13 February 2008, those proceedings were consolidated by order of the Court ( the Confidential Information Proceeding ). The respondents in the Confidential Information Proceeding are ANI Corporation Limited, trading as "ANI Bradken Rail Transportation Group" ( ANI ), Bradken, Bradken Limited and WorleyParsons Services Pty Limited ( WorleyParsons ). 5 It appears to be undisputed that it would be desirable for the Appeal Proceeding and the Threats Proceeding to be managed together, since the outcome of the Appeal Proceeding could have a bearing on issues in the Threats Proceedings. However, Lynx has applied in each of the Appeal Proceeding and the Threats Proceeding for an order that each proceeding be transferred to the Western Australia Registry and that, when transferred, it be managed together with the Confidential Information Proceeding. 6 Bradken, in its turn, has applied for orders striking out certain paragraphs of the Defence filed by Lynx in the Threats Proceeding. In the Defence, Lynx relies, inter alia , on s 129(b) and 57 of the 1990 Act. However, Lynx also alleges in the Defence that Bradken should be denied relief by reason of the conduct that it alleges against Bradken in the Confidential Information Proceeding. 7 It is desirable to say something about the provisions of the 1990 Act that are relevant to the Threats Proceeding. I shall then say something about each of the three proceedings in order to place in context the issues raised by the three applications presently before the Court. However, I shall first say something about the regime for public inspection of documents relevant to a patent application. That regime is relevant to one of the questions raised by the strike out motion. 9 Under s 29(1) of the 1990 Act, a person may apply for a patent by filing a patent request. Section 49(1) provides that the Commissioner must accept a patent request and complete specification relating to an application for a patent if certain prerequisites are satisfied. Under s 49(5)(b), where the Commissioner accepts a patent request and a complete specification, the Commissioner must publish a notice of the acceptance in the Official Journal . 10 Under s 53 of the 1990 Act, where a patent application is made, the Commissioner must publish prescribed information about the applicant and the application. Section 54(1) provides that, where a complete specification filed in respect of an application has not become open to public inspection, the Commissioner must , if asked to do so by the applicant, publish a notice that the complete specification is open to public inspection. Under s 54(3), where a complete specification has been filed in respect of an application, the prescribed period has ended and the specification is not open to public inspection, the Commissioner must publish a notice that the specification is open to public inspection. 11 Section 55(1) then provides that, where a notice is published under s 54, the specification concerned and other prescribed documents are open to public inspection. Section 55(2) provides that, where a notice is published under s 49(5)(b) in relation to an application, the documents specified in s 55(2) that have not already become open to public inspection become open to public inspection. Under s 56, except as otherwise provided by the Act, documents of the kind mentioned in s 55 must not be published or be open to public inspection. 12 Section 57(1) provides that, after a complete specification relating to an application has become open to public inspection, and until a patent is granted on the application, the applicant has the same rights as he or she would have had if a patent for the invention had been granted on the day when the specification became open to public inspection. The reference to a claim in paragraphs (a) and (b) is a reference to a claim of a standard patent or application for a standard patent. 15 Section 130(1) of the 1990 Act provides that the respondent in proceedings under s 128 may apply, by way of counter-claim, for relief to which the respondent would be entitled in separate proceedings for an infringement by the applicant of the patent to which the threats relate. Section 130(2) permits the applicant to apply in the proceedings, after the respondent has applied by way of counter-claim, for the revocation of the Patent. The provisions of the Act relating respectively to infringement proceedings and revocation of a patent apply mutatis mutandis to such proceedings. The Commissioner accepted the Patent Application on 4 July 2002. 17 On 4 October 2002, Bradken filed a Notice of Opposition to the grant of a patent pursuant to the Patent Application. On 13 March 2007 a delegate of the Commissioner made a decision that the opposition did not succeed except in relation to certain claims. The delegate directed that Lynx be given leave to file amendments in relation to those claims. The Appeal Proceeding was brought by Bradken in respect of that decision. 18 On 11 May 2007, Lynx filed amendments to the Patent Application pursuant to the leave given by the delegate ( the Lynx Amendments ). On 16 July 2007, Bradken filed submissions in relation to the Lynx Amendments. However, notice of acceptance of the Lynx Amendments was published on 1 November 2007. On 31 January 2008, Bradken filed an opposition to the Lynx Amendments. Lynx also claims a declaration that those three respondents have breached a duty of confidence owed to Lynx in respect of the Lynx Copyright Works on the basis that the information contained in the Lynx Copyright Works is unpublished confidential information of Lynx ( the Lynx Confidential Information ). Lynx further claims a declaration that the respondents have engaged in misleading and deceptive conduct under ss 52 and 53 of the Trade Practices Act 1974 (Cth) ( the Trade Practices Act ). Lynx also claims consequential relief in respect of the alleged infringement of copyright, breach of duty of confidence and misleading and deceptive conduct. 20 Lynx alleges that Bradken used, and procured and joined in the use of, the Lynx Confidential Information knowingly to manufacture, or join in and procure the manufacture of, railway wagons that are the subject of the claimed invention of the Patent Application and to market such wagons and sell them or offer them for sale. Lynx asserts that, by doing so, Bradken achieved a head start in relation to the manufacture, offering for sale, marketing and sale of such wagons because it avoided the need for independent design, development, marketing and manufacture. Lynx alleges that products designed, developed, marketed and manufactured by Bradken involve the use of the Lynx Confidential Information in breach of contractual and equitable obligations of confidence. Bradken also claims damages pursuant to s 129 of the 1990 Act. • At all material times, Lynx was also indirectly engaged in negotiations with BHP for the supply to BHP of railway wagons for the bulk transport of materials. • Lynx was aware that Bradken was engaged with BHP in such negotiations. • On 11 October 2007, Lynx caused the Threats Letter to be sent to BHP. • The Threats Letter conveyed that Lynx intends to bring proceedings against BHP in respect of any use or proposed use of railway wagons supplied to BHP by Bradken. 22 In the Threats Letter, Lynx's patent and trademark attorneys assert that Lynx is the owner of the Patent Application and a copy of the specification is enclosed with the Threats Letter. After referring to the history of the Patent Application and the Appeal Proceeding, the Threats Letter draws attention to s 117 and s 13 of the 1990 Act. Section 13 specifies the exclusive rights that are given to a patentee by a patent. Section 117 specifies when a patent is infringed by the supply of a product by one person to another. 23 In its amended defence filed in the Threats Proceeding ( the Defence ), Lynx denies that the Threats Letter contains threats within s 128 of the 1990 Act. 24 Lynx then says, in paragraph 15, that the acts about which any threats were made by the Threats Letter would infringe the rights of Lynx under s 57 of the 1990 Act in respect of the claims of the Patent Application that Lynx would have had, if a patent for the invention the subject of the Patent Application had been granted on the day on which the complete specification became open to public inspection. (b) The infringements are certain railway wagons manufactured and supplied to date and the offer to manufacture and supply such wagons ( Bradken Wagons ). (c) The claims of the complete specification of the Patent Application on the day on which that complete specification became open to public inspection are substantially the same as the Relevant Claims and would have been infringed by the infringements referred to in (b) above if a patent had been granted on the day on which that complete specification became open to public inspection. 26 In paragraph 17 of the Defence, Lynx asserts that the acts of Bradken, to which the Threats Letter related, were assisted, facilitated and made possible by the wrongful acts and conduct of Bradken complained of in the Confidential Information Proceeding. Lynx also asserts in paragraph 17 that, by reason of the conduct complained of in the Confidential Information Proceeding, Bradken is not entitled to, and should be denied, the relief sought against Lynx in the Threats Proceeding. • Bradken used and procured and joined in the use of, the Lynx Confidential Information and did so knowingly, to manufacture or join in and procure the manufacture of Bradken Wagons and to market and sell or offer Bradken Wagons for sale. • By so doing, Bradken avoided independent design, development, marketing and manufacture of the Bradken wagons and achieved a head start in relation to the manufacture, offering for sale, marketing and sale of those wagons. • Bradken acted in concert with ANI, Bradken Limited and WorleyParsons. • A patent would have been granted but for Bradken's opposition to the Patent Application and the appeal in the Appeal Proceedings and Bradken's opposition to the Lynx Amendments. • Products designed, developed, marketed and manufactured by Bradken involving use of the Lynx Confidential Information in breach of contractual and equitable obligations of confidence are the products in respect of which it is alleged that Lynx has made unjustified threats. • Conduct of Bradken, of which complaint is made in the Confidential Information Proceedings, in using the Lynx Confidential Information in breach of contractual and equitable obligations of confidence is thus directly and immediately related to the declaratory, injunctive and other relief claimed by Bradken against Lynx in the Threats Proceeding. • So far as the conduct of Bradken, of which complaint is made in the Confidential Information Proceedings, is found and held to have been in breach of contract or to have contravened the provisions of the Trade Practices Act and to have constituted infringement of copyright, that wrongful conduct is, in the same manner as the wrongful use of confidential information referred to above, directly and immediately related to the declaratory, injunctive and other relief claimed by Bradken against Lynx in the Threats Proceeding. Section 31A requires the Court to consider the question of whether there is a real issue of law or fact to be decided. The Court must conduct an enquiry into the merits of the issues of law. While the enquiry should not necessarily be for the purpose of resolving the legal questions, that can be done. The object is not simply to determine whether the argument is hopeless, but whether the argument is sufficiently strong to warrant the matter going to trial. If the Court can resolve contested legal issues at a summary hearing, without undue delay, it may be preferable to do so in the interests of saving costs and time. Where there is a real issue of law, the Court can hear and decide it without the need for a trial or evidence. Once the issues of law are resolved, it may be clear, one way or the other whether the matter should be allowed to go to trial (see Jefferson Ford Pty Ltd v Ford Motor Company of Australia Limited [2008] FCAFC 60 at [23] and [131]). 29 Bradken's application is to strike out paragraphs 15, 16 and 17 of the Defence filed by Lynx. However, in the course of the hearing, Lynx foreshadowed amendments that answered Bradken's complaints about paragraph 15. I shall deal separately with each paragraph of the Defence that Bradken seeks to have struck out. Bradken asserted that subparagraph 15 (iii) could not be relied upon because the Lynx Amendments were not published until 1 November 2007, some weeks after the date of the Threats Letter. 31 However, Lynx has now made clear that paragraph 15 (iii) was not intended to assert a separate defence based only on claims included in the complete specification following the Lynx Amendments. The three subparagraphs of paragraph 15 were simply intended to accord with the language of s 57 , which is incorporated, by reference, in s 129(b). It follows from the language of s 57(1) that, for the rights granted by that provision to be an answer to a claim under s 129, the acts in respect of which alleged threats were made, that took place before the date of the grant of a patent, must be shown to have infringed, not only a claim of the patent as eventually granted, but also a published claim of the complete specification as it stood at the time when the relevant act occurred . In the context of the Threats Proceeding, no act had occurred as at the date of the Threats Letter. Nevertheless, the existence of the Patent Application will still constitute a defence to the claim under ss 128 and 129 for unjustifiable threats, if Lynx can show that the acts to which the Threats Letter relates would have infringed claims of the putative patent as granted, as well as claims in the complete specification of the Patent Application at the time when the acts in respect of which the threats are made occurred. 32 Thus, it is necessary for Lynx to assert that the acts to which the Threats Letter relates would have infringed claims of the complete specification of the Patent Application at the time when those acts occurred, being a time after the date of the Threats Letter. Lynx may have to accept that, in the events that have happened, if a patent is granted in respect of the Patent Application, it may be limited to claims of the complete specification as amended by the Lynx Amendments. However, so long as the claims in the complete specification, as amended by the Lynx Amendments, do not go beyond the claims of the complete specification as originally published and made available for public inspection, Lynx may be entitled to the Defence contemplated by s 129(b). Bradken does not suggest otherwise. It follows that paragraph 15, in its amended form, should be permitted to stand. Thus, paragraph 16 appears to be based on the assumption that the Defence contemplated by s 129 is available only after a patent has been granted. That appears to me to be a misconception. 34 It may be that the conduct of Bradken, in appealing from the delegate's decision and opposing the Lynx Amendments, has delayed the grant of a patent to Lynx. That will depend upon the outcome of the Appeal Proceeding and the outcome of the opposition to the Lynx Amendments. However, the clear language of s 129(b) indicates that a defence to unjustifiable threats can be founded upon the contingent rights conferred by s 57(1) , notwithstanding that s 5 does not confer a right to start a proceeding prior to grant of a patent. That is to say, even though a patent has not been granted, the contingent rights conferred by s 57(1) can be relied upon as an answer to a claim under ss 128 and 129. The fact that Bradken has exercised its statutory rights to appeal from the decision of the Commissioner's delegate and to oppose amendments to the Patent Application cannot disentitle Bradken to the relief that it might otherwise be entitled pursuant to ss 128 and 129. Paragraph 16 should be struck out. Bradken contends that the Court should resolve those doubts at this stage of the Threats Proceeding. There is something to be said for such an approach if the resolution of the question would either dispose of, or substantially shorten, the Threats Proceeding. 36 The first question that arises in relation to that contention is whether the use of the word "may" in s 129 signifies discretion or whether the context in which it is used indicates that it is no more than the grant of a power, such that, if the circumstances for the exercise of the power are established, the power must be exercised. Lynx contends that the power to grant an injunction conferred by s 129 of the 1990 Act is to be construed as a power in the auxiliary jurisdiction of a Court of Equity. It says that an express provision conferring a power to grant injunctions is discretionary, in the sense in which injunctions and declarations generally are discretionary in a Court of Equity; in such circumstances, the Court has a discretion to refuse relief on the basis that the person seeking that relief has been guilty of an impropriety, in the legal sense, in a matter pertinent to the claim, being impropriety that is directly and immediately related to the rights asserted by the claimant. 37 The meaning of the word "may" in a particular statutory context does not depend upon its abstract meaning but upon the particular context in which the word is used. The particular context may indicate circumstances in which the power is to be exercised, such that, in those circumstances, the word "may" means "must". That is to say, while the word is normally used to confer authority, the context of its use might be such as to indicate that that authority must be exercised if the relevant circumstances are such as to call for the exercise of the authority. In those circumstances, the word is not used to give a discretion, but to confer a power upon the Court, the exercise of which depends, not upon the discretion of the Court, but upon the proof of the particular circumstances in which the power arises (see Finance Facilities Pty Ltd v Federal Commissioner of Taxation [1971] HCA 12 ; (1971) 127 CLR 106 at 134-135). 38 Section 33(2A) of the Acts Interpretation Act 1901 (Cth) ( the Acts Interpretation Act ), which was inserted in 1987, applies to the 1990 Act. Section 33(2A) provides that where an Act assented to after the commencement of that provision provides that a person, court or body may do a particular act or thing, and the word may is used, the Act or thing may be done at the discretion of the person, court or body. Under s 2 of the Acts Interpretation Act that definition will apply except so far as the contrary intention appears. The definition would indicate that at least a discretion is conferred on the Court as to whether and what relief, within s 128(1), should be granted. The perhaps more difficult question is how far that discretion extends, and what considerations are relevant to its exercise. (See also New South Wales Diary Corporation v Murray Goulburn Co-operative Company Ltd [1990] HCA 60 ; (1990) 171 CLR 363 at 391, EOS Australia Pty Ltd v Expo Tomei Pty Ltd (1998) 42 IPR 277 at 287, Maine Industries Pty Ltd v Advanced Engineering Group Pty Ltd (2008) 166 FCR 312 at 342-3) . Irreparable damage may be caused by unjustifiable or groundless threats of legal proceedings in relation to an alleged monopoly. Accordingly, it would not be surprising that there should be a strict provision with regard to such threats. The second part of s 129 ( the unless clause ) may suggest that the only answer that may be made to an action for threats is to prove that the acts that are the subject of the threats would infringe an existing patent or would infringe a patent if granted pursuant to a subsisting application. Thus, there is no strong affirmative reason why the remedies under s 129 are discretionary, in the sense in which the remedies of declaration and injunction are discretionary in a Court of Equity (see Norbert Steinhardt and Son Ltd v Meth [1961] HCA 33 ; (1961) 105 CLR 440 at 447-448). 40 On the other hand, it cannot be thought that the Parliament intended that it would be obligatory for the Court, in all circumstances where a prima facie basis for relief under ss 128 and 129 is made out, to grant a declaration or an injunction. For example, where the moving party does not press for all of the relief contemplated by the provisions, the Court would not insist on granting all of that relief (see Benmax v Austin Motor Co Limited (1953) 70 RPC 284 at 296). Once the making of a threat has been established, it is prima facie unjustifiable unless the person making the threat establishes that it was justified. The Court may grant the relief applied for unless the person threatening infringement proceedings establishes that the relevant conduct infringes or would infringe a valid claim of a patent or prospective patent. Nevertheless, such relief should not be granted by consent or in default of defence or appearance at trial unless it is established to the satisfaction of the Court that it is proper to do so. 41 However, the Court has a discretion as to whether to grant all of the relief contemplated, assuming the moving party presses for such relief. For example, where a declaration will be adequate to vindicate the position of the moving party, and it is unlikely that there will be any further unjustifiable threats, the Court may, in the exercise of its discretion, decline to grant an injunction ( Occupational and Medical Innovations Limited v Retractable Technologies Inc (2007) 73 IPR 312 at 325). Further, where the Court concludes that a patent, if valid, would have been infringed and the threats related only to bringing proceedings alleging such infringement of that patent, and there was no evidence that the threats were likely to be repeated because infringement proceedings had in fact been commenced, the Court may decline to exercise the discretion to grant relief (see JMVB Enterprises Pty Ltd v Camoflag Pty Ltd (2006) 67 IPR 68 at 108). In addition, where the Court revokes the patent that is relied upon by the respondent, in a proceeding brought under ss 128 and 129, the Court may conclude that there is no reason to make a declaration that the threats were unjustified, since the revocation of the patent of itself establishes that. The Court may therefore, in its discretion, while granting an injunction against the making of further threats, decline to make a declaration (see Townsend Controls Pty Ltd v Gilead (1989) 16 IPR 469 at 475). 42 However, those principles are not decisive of the question raised by paragraph 17 of the Defence filed by Lynx. Assuming that there is some discretion in the Court where the moving party has established a prima facie entitlement to relief, there will still be a question as to the nature of the factors or matters that the Court may take into account or have regard to in deciding whether to refuse relief under ss 128 and 129. Of course, that question will arise only in circumstances where the Defence afforded by the unless clause in s 129 has not been established. 43 Ultimately, Bradken's contention must be that the matters, which Lynx asserts in paragraph 17 of the Defence are relevant to the exercise of any discretion, are not in fact relevant to the exercise of any discretion that the Court has. That is to say, Bradken contends that, even if it be established that it were guilty of breach of confidence, infringement of copyright and contravention of the Trade Practices Act as alleged in paragraph 17, that would not disentitle it to the relief under ss 128 and 129 that it claims in the Threats Proceeding. That is to say, any disentitling conduct alleged must relate to the conduct that is the subject of complaint under s 128 and s 129, namely, the making of threats that are not justified. 44 Bradken's contention, of course, must be considered in the context of the assumption that the threats in the Threats Letter, assuming that it contains threats, are unjustifiable. That is to say, the contention proceeds on the basis that Lynx is not able to demonstrate that the acts to which the Threats Letter relates would infringe any patent that might be granted pursuant to the Patent Application, whether amended or not. 45 Lynx contends that it would be unconscionable for Bradken to insist upon its rights under ss 128 and 129 in circumstances where the conduct complained of in paragraph 17 enabled Bradken to develop and exploit the product about which Lynx has made the alleged threats that are the subject of the Threats Proceeding. Lynx says that the allegations made in paragraph 17 raise matters that encompass misconduct that is directly and immediately related to Bradken's allegation of unjustifiable threats. It says that those allegations establish a direct and immediate connection, namely, that the breaches of confidence, infringement of copyright and contravention of the Trade Practices Act alleged enabled Bradken to do the acts that Lynx alleges would be an infringement of a patent if one is granted to Lynx pursuant to the Patent Application. Lynx argues that the alleged impropriety is therefore directly relevant to whether or not Lynx can establish its defence under s 129 and whether Bradken can succeed in obtaining the relief it claims in relation to the alleged threats. 46 However, that indicates a misconception in the approach adopted by Lynx. That is to say, the question of discretionary refusal of relief raised by paragraph 17 only arises if Lynx fails to establish the Defence contemplated by s 129 on the basis of the rights conferred by s 57. If that defence is established, the question of discretionary refusal simply does not arise. If that defence is not established, Lynx cannot rely on any prospective infringement of the rights it would have if a patent were granted pursuant to the Patent Application. That is to say, the reason why the Defence would not be established would be that Lynx has failed to establish that it has prospective rights pursuant to the Patent Application under s 57 of the 1990 Act. 47 If the Threats Letter makes threats as alleged by Bradken, the threats concern the conduct of BHP. That is to say, Bradken alleges in the Threats Proceeding that Lynx threatened BHP with infringement proceedings or other similar proceedings. The unless clause in s 129 does not give a right to make threats. Rather, it operates as a statutory defence to proceedings in respect of conduct that is otherwise unlawful. Section 129 does not afford a statutory defence to Lynx on the basis that the conduct about which the threat complains is allegedly in breach of other legal obligations or entitlements. 48 Even if it be the fact that, in connection with its negotiations with BHP, Bradken infringed copyright owned by Lynx or wrongfully used confidential information of Lynx or contravened the Trade Practices Act , those matters have no necessary connection with what must be assumed to be an unjustifiable threat by Lynx of a proceeding alleging infringement of claims of a patent or claims of a patent that might contingently be granted. Section 130 can be called in aid by a respondent to a proceeding alleging unjustifiable threats. Thus, Lynx could file a counter claim in the Threats Proceeding for relief to which it would be entitled in separate proceedings for infringement of the patent to which it would be entitled. On the assumption that must be made, that the threat made by Lynx is unjustifiable, any such counter claim would fail. Even if the Lynx Copyright Works and the Lynx Confidential Information relate to the subject matter of the Patent Application, that will be no answer to the assertion that Lynx has made unjustifiable threats in relation to a monopoly that it does not have, and will not have, as a consequence of the Patent Application. 49 I would be disposed to conclude that the matters alleged in paragraph 17 of the Defence filed in the Threats Proceeding would not constitute a discretionary bar to the grant of relief under ss 128 and 129, in the sense that they might be in a Court of Equity, assuming the right to such relief is otherwise established by Bradken. However, the matter is not beyond argument. 50 Further, the facts alleged in paragraph 17 could have a real bearing on the question of damages that Bradken may have sustained as a result of the alleged threats. In the Threats Proceeding, Bradken claims an order that Lynx pay damages pursuant to s 129 and that an enquiry be held to determine the nature and extent of Bradken's loss and damage occasioned by reason of the alleged threats and to assess the quantum of that loss and damage. If it be the fact that Bradken has been guilty of breach of confidence, infringement of copyright or contravention of the Trade Practices Act , as alleged in paragraph 17, that could well have a bearing on the question of whether any loss or damage that it may have suffered was caused by the alleged threats. Accordingly, I am not satisfied that there is no reasonable prospect that the matters alleged in paragraph 17 would not be relevant in determining whether to grant the relief claimed by Bradken. At this stage, Bradken has not particularised its loss or damage. It is possible that, when it has done so, it would be apparent that there is no interrelationship between the loss and damage claimed by Bradken and the matters alleged in paragraph 17 of the Defence filed by Lynx. That, however, is a matter for another day. 51 Accordingly, paragraph 17 should be permitted to stand, at least at this stage of the Threats Proceeding. There is no real opposition to the proposition that the Threats Proceeding and the Appeal Proceeding should be managed together with the Confidential Information Proceeding if paragraph 17 is allowed to stand. 53 However, following the completion of argument in relation to the motions, Bradken applied for summary dismissal of the Confidential Information Proceeding. The parties therefore asked that the Court not yet determine the question of transfer of the Threats Proceeding and the Appeal Proceeding to the Western Australia Registry. If the Confidential Information Proceeding were to be dismissed summarily, there would be no reason to transfer either of the New South Wales proceedings to Western Australia. The three motions should be stood over pending the determination of the summary dismissal application brought in connection with the Confidential Information Proceeding. While Lynx has had a certain degree of success in relation to the strike out application, much of that success is the result of clarification of its defence. In the circumstances, I would be disposed to order that the costs of the strike out application be the parties' costs of the Threats Proceeding. However, if either party wishes to seek any other order, I will give directions for the making of written submissions. I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett. | patents unjustified threats ss 128 and 129 of the patents act 1990 (cth) assuming the threat was made and that the defence under s 129(b) is not established, whether the court has a discretion to decline to grant relief sought by an applicant meaning of the word "may" in the context of s 129 whether certain matters are relevant to the exercise of the discretion whether breach of contract and confidence, or infringement of copyright or contravention of certain provisions of the trade practices act 1974 (cth) by the applicant in relation to the conduct to which the threats related is relevant to the exercise of the discretion to decline to grant relief under s 129 whether the applicant's having "dirty hands" is relevant to the exercise of the discretion whether the discretion is like the discretion to decline to grant relief in the auxiliary jurisdiction of a court of equity patents unjustified threats ss 128 and 129 of the patents act 1990 (cth) the defence available under ss 57 and 129 (b) in an unjustified threats proceeding whether, for the defence to be available, the conduct, which was the subject of the threats, must infringe the claims of the complete specification as published at the time of the threats and as published at the time at which the conduct will occur if that conduct has not yet occurred at the time the threat was made whether the defence is only available after the grant of the patent which is the subject of the application referred to in s 57 summary judgment s 31a of the federal court of australia act 1976 (cth) application to strike out certain allegations in a defence intellectual property intellectual property practice and procedure |
He applies pursuant to s 39B of the Judiciary Act 1903 (Cth) against the Commissioner in his capacity as an officer of the Commonwealth concerning matters arising under the law made by the Parliament under the Income Tax Assessment Act 1936 (Cth) (the ITA). He also applies under s 5(1)(e) of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (the ADJR Act) against the Commissioner in his capacity as an officer of the Commonwealth concerning matters arising under the law made by the Parliament, namely, the ITA. 2 The relevant garnishee notice was issued pursuant to s 260-5 of Sch 1 of the Taxation Administration Act 1953 (Cth) (the TAA) on 19 November 2007 and in turn issued to the National Australia Bank Ltd (NAB) (the Notice). The Notice required the NAB to pay to the Commissioner the sum of $7,214,177.82 or so much of that sum as was available. 4 In addition, Mr Uratoriu seeks orders quashing and setting aside the Commissioner's decision to issue the Notice. 5 For the reasons expressed below, I consider the grounds are not made out and the application should be dismissed. It is also common ground that the Commissioner assessed Mr Uratoriu for additional income tax in respect of those years in a total sum of $4,345,766.47. 12 Before issuing the Assessments, the Commissioner conducted an audit pursuant to the provisions of the ITA. In the course of that audit the Commissioner determined that Mr Uratoriu derived income from entities related to him and that income had not been the subject of income tax returns by Mr Uratoriu. 14 Notices of objection were raised on 17 August 2006 by Mr Uratoriu. The objections related to the entirety of the sums assessed by the Commissioner and the entirety of the amounts which had been the subject of the Notice. On 26 November 2007, the Commissioner disallowed the objections. Mr Uratoriu appealed on 5 December 2007. He has disputed the assessments and continues to do so. Mr Uratoriu disputes that any alleged outstanding amounts are due to the Commissioner. 15 The grounds of objection raised by Mr Uratoriu are essentially that he received the funds from the various related entities identified by the Commissioner in repayment of loans he had made to them. Further, to the extent that it is asserted that dividends were paid to him from various corporate entities, he says that those entities had not made a profit and therefore had no surplus funds to distribute. Finally, in relation to the house which was sold and in respect of which, again, income was derived, he says that the house in Rosebay, Sydney was his principal place of residence and was not solely owned by him. Mr Uratoriu has instructed his accountants to complete the accounts of the related entities. Progress has been made in that regard and he says that he intends to rely on the correct accounts which are prepared in that manner in order to oppose the assessments and dispute the alleged outstanding tax debts. • Further, Rocket Transport Services Pty Ltd, Vicwal Pty Ltd, Pinot Nominees Pty Ltd, Albergo Holdings Pty Ltd and Kingsline Pty Ltd, were also all indebted to myself and my partner Ms Clapp and all funds received from these entities were repayments of funds advanced. • The dividends which the First Respondent has deemed that I have derived from Albergo Holdings Pty Ltd, Pinot Nominees Pty Ltd, Rocket Transport Services Pty Ltd and Winmarley Pty Ltd were also repayment of funds advanced. • In rejection of the First Respondent's allegation that I derived a capital gain as a result of receiving the proceeds from the sale of the liquor store owned by Albergo Holdings Pty Ltd, the funds received was for the repayment of funds advanced. • The First Respondent has estimated that I obtained liquor for my own use from Albergo Holdings Pty Ltd. This amount as estimated by the First Respondent is $20,000.00 per year. I never used goods or received goods to the value estimated by the First Respondent. My solicitors have provided me with a copy of the First Respondent's ruling which sets out what are the values for estimated goods taken for personal use for different industries. The First Respondent's estimate of $20,000.00 in my circumstances is excessive. Annexed hereto and marked with the letters "LAU8" is a copy of that ruling. • The First Respondent has alleged that I received foreign sourced income from Main Freight Ltd in the amount of $550,000.00. This amount was consideration from Main Freight Ltd for the purchase of PLI Pty Ltd. From the $550,000.00 approximately $400,000.00 was taken by the First Respondent as a debt owing by PLI Pty Ltd. The balance of $100,000.00 was returned to me as a repayment of funds advanced. From 1997 to 2001 I was a shareholder of East-West Freight Pty Ltd together with Mr Thomas Heaney. Over a four year period Winmarley Properties Pty Ltd, Vicwal Pty Ltd and myself advanced approximately $4,300,000.00 to East-West Freight Pty Ltd for working capital. • In 2001 I transferred the 6 shares that I held in East-West Freight Pty Ltd to Mr Heaney for no consideration as the shares still had no market value. To date I have only received $1,897,000.00. Annexed hereto [and marked with the letters "LAU9"] is a copy of a Statutory Declaration from Thomas Heaney dated 18 December 2006. I engaged a builder to refurbish and renovate the property. After he completed the works, the builder claimed that he was entitled to 50% of the property in consideration of his efforts in the renovation. This matter was tried in Supreme Court of New South Wales and the Court found that the builder was the beneficial owner of 50% of the property. The property was auctioned to the public as a result of the Court's decision and I purchased the 50% interest in the property from the builder for $450,000.00. This property was my principal residence for a period of time. In any event, the First Respondent has not taken into account the $450,000.00 of expenses incurred from improving the Property. Annexed hereto and marked with the letters "LAU10" is a copy of the decision of the Residential Tribunal of New South Wales and Supreme Court of New South Wales. • I expect that [my accountants] will shortly be in a position to confirm the above statements given that they are currently constructing the relevant accounts to provide the particulars of my taxation position to the First Respondent. The background information as to the tax audits and assessments is relatively uncontentious at least for the purposes of the matters falling for consideration in these proceedings. Of course the liability is in dispute. Ms Logue produced chains of correspondence between solicitors for Mr Uratoriu and the Commissioner. The Commissioner contends that the chronology relied upon by Mr Uratoriu does not reveal the full relevant circumstances relied upon by the Commissioner in issuing the Notice. 17 The Commissioner points out that the audit of Mr Uratoriu's affairs was conducted from March 2003 until May 2006. That audit covered the income tax returns for the years ended 30 June 1997 to 30 June 2004 and gave rise to the tax audit notices of amended assessment to which reference has been made above. 18 In addition to a total of $4,345,766.47 additional income tax assessed there was a further sum assessed for shortfall penalties for the income years ended 30 June 2001 to 30 June 2004 in the total of $1,353,616.55. 19 The Commissioner made a determination to issue the Notice on 19 November 2007. The issue of the section 260-5 notice was an efficient, cost effective and appropriate way of securing part payment of the tax assessed pursuant to the assessments. 2. The size of Mr Uratoriu's debt is significant and will continue to escalate quickly with the imposition of the general interest charge. 3. All payment negotiations have been unsuccessful. Mr Uratoriu has never made any payments towards the amounts claimed in the Supreme Court actions. 4. In June 2006, Mr Uratoriu advised the ATO that he was not in a position to pay 50% of the debt. 5. To date, Mr Uratoriu has not provided the Commissioner with adequate financial information in order for the Commissioner to determine his true financial position. 6. Mr Uratoriu's debt was established via an ATO audit conducted on the financial years ended 30 June 1997 to 30 June 2004 inclusive. 7. Mr Uratoriu has a long history of failing to meet his tax obligations (such as gross understatements of tax and consistent late lodgment of returns and only after lodgements have been demanded). Mr Uratoriu continues to have outstanding lodgment obligations. During the audit process, he was not co-operative in respect of the Commissioner's inquiries, avoided answering questions and refused access to his records. 8. Mr Uratoriu is considered to be of significant risk to the revenue. 9. I had regard to the objections lodged by Mr Uratoriu in respect of the income tax and penalty assessments. I considered that the fact the liability was in dispute was an insufficient reason not to issue the section 260-5 notice. 10. The section 260-5 notice was a way to secure funds unconditionally in contrast to the taxpayer's offers of payment. 22 In Edelsten his Honour (at 112) referred to the decision of Mason J in Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40 ; (1986) 162 CLR 24 at 40. His Honour concluded 'in this context, the power of attachment of debts was given in order that the tax might be collected, subject to the discretions to which I have referred, from the source subjected to the power'. 23 Edelsten was cited with approval by Finkelstein J in Saitta Pty Ltd v Federal Commissioner of Taxation [2002] FCA 1105 ; (2002) 125 FCR 388. His Honour held in that decision that notices issued under the current statutory provision (s 260-5) which reflected the former s 218 were also to be guided by the principles articulated by Burchett J. However, in Saitta , Finkelstein J distinguished Edelsten on the basis that the taxpayer in Saitta was not disputing liability, unlike Edelsten and unlike Mr Uratoriu. 24 Mr Uratoriu contends that the Commissioner cannot validly decline to consider the dispute as being genuine when there is at least doubt as to whether the assessments are correct. It is submitted that the assessments have been made in order to shift to Mr Uratoriu the burden of proving that the assessments were incorrect. By doing that, it is submitted, the Commissioner has placed misguided importance on the taxpayer's burden of proof, notwithstanding the existence of prima facie evidence that the assessments were excessive. Mr Uratoriu submits that while there is an onus on taxpayers under s 14ZZK(b) of the TAA set out above, that such an onus does not apply until the parties are in the Administrative Appeals Tribunal or alternatively in this Court in order to review an objection decision. It is argued that it is only at that point that the taxpayer has the onus of showing the assessment is excessive. To support this, Mr Uratoriu relies upon the difference in wording between s 14ZU of the TAA and s 14ZZK(b) of the TAA which is also set out above. 25 Mr Uratoriu complained that the Commissioner could have attempted other alternatives which could have been supervised by a judicial officer in order to seek payment. It is submitted the Commissioner was under a duty to form bona fide views about whether the issue of the Notice was appropriate and whether the assessments were excessive when discharging his duty to properly consider whether to issue the Notice. It was submitted that the Commissioner does not have the right to totally ignore prima facie evidence that the assessments are wrong simply because that evidence does not live up to the Commissioner's idea of sufficient proof. 26 It was submitted on behalf of Mr Uratoriu that contrary to the view expressed by the Commissioner on the burden of proof that a taxpayer has when objecting against an assessment in accordance with s 14ZU of the TAA, the objector is only required to make the objection in the approved form, lodge it with the Commissioner within the required period and state in it fully and in detail the grounds on which the objector relies. In doing so, it is said, that will be sufficient to object to an assessment and importantly for the purposes of the present argument will support a genuine dispute existing and having been raised by the taxpayer. 27 Mr Uratoriu says that there is no doubt that there is a genuine dispute and that he is presently undertaking substantial work in relation to identifying and collating all information necessary so that he can adduce evidence in support. (The evidence in this regard was to have been filed by 30 June 2008). 28 In my view the Commissioner has not reversed the onus as contended. The only basis for that conclusion on the expressed reasons may be reason number 5 but that lack of proof goes to the financial position of Mr Uratoriu, not the alleged tax liability itself. It was the risk as to the financial position that the Notice was seeking to minimise. 29 As to the contention that there is a genuine dispute, it is impossible on the materials presently before the Court to determine whether or not this is so. It may be that Mr Uratoriu will ultimately have complete success. Equally, the opposite is also possible. However, after an audit over several years involving numerous entities, the Commissioner has concluded that the relevant debt is due for the purposes of exercising his discretion. It is not a situation in which the Commissioner accepts that any part of the claimed debt is not due. Further, while Mr Uratoriu has listed several bases to support judicial review, the substantive argument goes only to the merits of the debt being due. That is an argument for another day. Mr Uratoriu has been unable to point to any aspect of the statutory requirements or the consideration expressed in Edelsten in relation to the exercise of the discretion that have not been applied. In these circumstances, the Commissioner will generally not demand payment of the disputed debt until 14 days after the objection has been determined. 31 In the present circumstances Mr Uratoriu says that there is no evidence that funds or assets were being dissipated nor could there be any reasonable grounds for the belief that the revenue was at risk. The Commissioner is therefore, according to Mr Uratoriu, obliged to act in accordance with the published recovery policy as Mr Uratoriu has a reasonable and legitimate expectation that he will be treated in accordance with the Commissioner's own published policies. Reliance is placed on Deloitte Touche Tohmatsu v Deputy Commissioner of Taxation (1998) 40 ATR 435 at 450 and Snow v Deputy Commissioner of Taxation (1987) 14 FCR 119. Equally, in relation to this aspect of the challenge, it is clear that the Commissioner has formed the view which he has expressed in the reasons published to Mr Uratoriu that 'Mr Uratoriu is considered to be of significant risk to the revenue'. 32 Once again, the Commissioner has expressed the view that there is a risk and that Mr Uratoriu has not satisfied him to the contrary. Under the policy, the Commissioner is entitled to reach a view as to that matter. It is not a situation in which the Commissioner has issued a notice without reaching a view on that topic. 33 Mr Uratoriu has also relied upon that fact that he has entered into negotiations over a considerable period of time and has attempted to pay up to 50% of the alleged taxation liability even though it is disputed and that in doing so has complied with the Commissioner's policy in relation to the recovery of disputed debts (the Policy). He says that the Commissioner's refusal to entertain a payment arrangement in accordance with the Policy is manifestly unreasonable. 34 Mr Uratoriu points out that the Commissioner relies on a statement Mr Uratoriu made in June 2006 that he was not in a position to pay 50% of the debts. However, there was no indication from the Commissioner as to whether that response from Mr Uratoriu related to 50% of the total debt or 50% of the primary tax debt as required by the Commissioner pursuant to Ch 28 of the Commissioner's receivables policy. In addition, the Commissioner has also refused what Mr Uratoriu says is a reasonable offer to pay an amount of $2 million in satisfaction of 50% of the alleged outstanding tax debt consistent with the legitimate expectation that the Commissioner would accept such an offer given the terms of the receivables policy. Mr Uratoriu has a long history of failing to meet his tax obligations (such as gross understatements of tax and consistent late lodgment of returns and only after lodgements have been demanded). Mr Uratoriu continues to have outstanding lodgment obligations. During the audit process, he was not co-operative in respect of the Commissioner's inquiries, avoided answering questions and refused access to his records. It was rejected because the offer represented what the Commissioner contends was only 19% of the total outstanding liabilities of Mr Uratoriu and those entities. Further, there was no evidence provided to demonstrate that Mr Uratoriu or the other persons or entities had the capacity or ability to meet the payment. Nor did Mr Uratoriu provide any accounts prior to the issuing of the Notice. This was also a factor taken into account by the Commissioner on the question of whether there was in reality a 'genuine dispute'. They are not grounds that are centrally concerned with the process of making the particular findings of fact upon which the decision-maker acts. In the absence of some positive indication of the considerations on which a grant or refusal of consent is to depend, the discretion is "unconfined except in so far as the subject matter and the scope and purpose of the statutory enactments may enable the Court to pronounce given reasons to be definitely extraneous to any objects the legislature could have had in view", to use the words of Dixon J in Browning (1977) 74 CLR, at p 505. In that case his Honour went on to remark, (as he had done earlier in Swan Hill Corporation v Bradbury (1937) [1937] HCA 15 ; 56 CLR 746 , at p 758), "on the impossibility, when an administrative discretion is undefined, of a court's doing more than saying that this or that consideration is extraneous to the power". 38 Mason J (as his Honour then was) in Peko-Wallsend [1986] HCA 40 ; 162 CLR 24 at 39-40 concluded that it could only be made out that a decision-maker failed to take into account a consideration where the subject matter, scope and purpose of a statute indicates some implied limitation on factors to which a decision-maker may legitimately have regard. In a circumstance such as the present where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of a discretion are similarly unconfined. 39 Mr Uratoriu has not pointed to any matter that the Commissioner was bound to take into account in deciding to issue the Notice. In particular, the fact that Mr Uratoriu disputed his tax liability was not such a matter. It was accepted by the Commissioner, however, that he must have regard to the particular position of the individual taxpayer: Edelsten 83 ALR 99 and Saitta [2002] FCA 1105 ; 125 FCR 388 ; 192 ALR 385 at [16] and [18]. The Commissioner contends that the evidence clearly shows that he did just that. I accept this submission. 40 In contrast to Saitta , as observed by Finkelstein J, a particular feature of the Edelsten decision was the Commissioner's actual acceptance that the notices of assessment which had been issued were too high. The other conspicuous factors in Edelsten were that the payments, the subject of the garnishee notice, constituted almost the whole of the taxpayer's income and were required to meet not only a proportion of his living expenses but also the expenses of his medical practice. Further, there existed, a genuine non-scheme dispute which was ignored. None of those features apply in the present circumstances. The case is therefore more like Saitta [2002] FCA 1105 ; 125 FCR 388 than Edelsten 83 ALR 99. 41 The Commissioner's statement of reasons clearly suggests that regard was had to all the matters raised by Mr Uratoriu. 42 I am also satisfied that the exchanges of correspondence indicate that the Commissioner took into account the matters set out in Ch 12 and Ch 28 of the Receivables Policy. More importantly, the weight to be given to those matters including the policy itself was a matter for the decision-maker to determine: Sean Investments Pty Ltd v MacKellar (1981) 38 ALR 363 at 375 per Deane J and Peko-Wallsend [1986] HCA 40 ; 162 CLR 24 at 41. It cannot operate as a mask for a merits review when such review is not available. Nor can it under another guise permit the review of a decision on the grounds of substantive unfairness. It is not enough to demonstrate that the decision reached is one on which reasonable minds might differ, even with some vigour. Nor is it sufficient to show that a different conclusion or course of action could reasonably have been arrived at or taken: Friends of Hinchinbrook Society Inc v Minister for Environment and Others (No 2) (1997) 69 FCR 28 at 59-65. 44 In my view the decision taken was neither improper nor unreasonable and was certainly not so devoid of plausible justification that no reasonable person could have taken that course: Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 at 290. 45 The grounds for the relief sought have not been made out. The application will be dismissed. The applicant is to pay the costs of the respondent to be taxed if not agreed. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher. | garnishee notice issued on taxpayer's bank under s 260-5 taxation administration act declaration sought that notice invalid principles governing exercise of discretion recovery of taxation liabilities assessments subject to appeal ato receivables policy alleged exercise of power for an improper purpose whether failure to take into account relevant considerations whether reliance on irrelevant considerations reasonableness alleged exercise of discretionary power in accordance with rule or policy without regard to individual circumstances whether legitimate expectation that receivables policy would be applied allegations not sustained income tax administrative law |
Four of the grounds of appeal are the same as the grounds of the application before the Federal Magistrates Court. Two grounds are new. In his oral submissions in support of the appeal (insofar as relevant), the appellant said that he had not attended the hearing before the Tribunal as he did not speak English well and was misled by friends. As a result he was not able to defend his statement in support of his visa application and wished the matter to be remitted to the Tribunal so he could do so. As to the four grounds which were put to the Federal Magistrates Court (grounds 2, 3, 4, and 5 in the notice of appeal) I can see no error in the Federal Magistrate's reasoning. As to ground 2 (failure by the Tribunal to consider an integer of the appellant's claim, being whether a Shia Muslim was at risk of harm in Pakistan from hard-line Sunni Muslims and not able to access effective protection), the Federal Magistrate (at [23]) found that, as the first respondent ( the Minister ) submitted, the Tribunal's role was to make factual findings with respect to the particular appellant, not Shia Muslims in Pakistan generally. As the appellant had not appeared before the Tribunal, it had insufficient evidence to make any specific finding about the appellant's claims of his fear of harm by reason of being a Shia Muslim. Consistent with the reasoning of the Federal Magistrate, I see no jurisdictional error in this aspect of the Tribunal's reasoning. As to ground 3 (unfairness in that the Tribunal did not use independent country information to evaluate the appellant's claims), the Federal Magistrate (at [24]) found that the Tribunal had no obligation to use independent country information or to conduct any independent inquiry. As the Federal Magistrate pointed out, referring to Minister for Immigration and Multicultural and Indigenous Affairs v SGLB (2004) 207 ALR 12 ; [2004] HCA 32 and SZBKB v Minister for Immigration and Multicultural Affairs [2005] FCA 1811 , the Tribunal is not required to engage in any independent investigation. This has been more recently affirmed by the High Court in Minister for Immigration and Citizenship v SZIAI (2009) 259 ALR 429 ; [2009] HCA 39. No error is apparent in the Federal Magistrate's approach to this issue. As to ground 4 (failure to consider the appellant's claims of his fear of persecution because of membership of the Shia Muslim community), the Federal Magistrate (at [25]-[27]) concluded that the Tribunal considered the appellant's claims as made in his visa application. The Tribunal, however, was not satisfied that the claims, without additional material, could be accepted as amounting to a well-founded fear of persecution as required. I agree with this characterisation of the Tribunal's reasoning process. It discloses no jurisdictional error. Ground 5 alleges that the appellant satisfies the four key elements in the Convention definition of "refugee" (that is, the Convention relating to the Status of Refugees (189 UNTS 150, entered into force 22 April 1954) as amended by the Protocol relating to the Status of Refugees (606 UNTS. 267, entered into force 4 October 1967)) but the Tribunal failed to consider these matters and thus committed a legal and factual error. The Federal Magistrate (at [28]-[29]) held that the Tribunal considered these matters in terms in its decision. I agree. The Tribunal referred to all of the elements of the definition of "refugee" by reference to the definition in the Convention as amended. The Tribunal simply was not satisfied on the available material that the appellant met that definition. This finding was open to the Tribunal. The Federal Magistrate also considered the Tribunal's decision more generally (at [30]-[61]) and was satisfied that no jurisdictional error was apparent. The Federal Magistrate's review included the fact that the Tribunal proceeded to determine the matter in the appellant's absence under s 426A of the Migration Act 1958 (Cth) (which provides that if an applicant is invited to the hearing at the Tribunal but does not attend, the Tribunal may make a decision on the review without taking any further action to allow or enable the applicant to appear before it). The Federal Magistrate (at [36]-[38]) concluded that, in the circumstances of the present case, the Tribunal was entitled to exercise its powers under s 426A. I agree and can see no error in the Tribunal so doing. The Federal Magistrate (at [43]-[60]) also considered a submission about the effect of the reasoning in SZNAV v Minister for Immigration & Citizenship (2009) 229 FLR 461 ; [2009] FMCA 693 in which it was held that a pro-forma acknowledgment letter engaged the application of s 424(2) of the Migration Act . The Federal Magistrate declined to follow the approach in SZNAV . The decision in SZNAV has been subsequently overturned in Minister for Immigration and Citizenship v SZNAV [2009] FCAFC 109. Hence, no error is apparent in the approach of the Federal Magistrate. Indeed, I can see nothing wrong with any aspect of the Federal Magistrate's reasoning in this case. As to the two new grounds, I agree with the Minister's submission that leave should not be granted to the appellant to raise these maters which were not raised before the Federal Magistrates Court. Be that as it may, I can see no substance in the grounds. Ground 1 (the Tribunal took into account an irrelevant consideration, acted on a wrong footing and had no basis for its decision) lacks any particulars. I can see no basis for the claim in any event. Ground 6 (alleging jurisdictional error as the Tribunal did not give the appellant a chance to "precede his statement", did not communicate properly by reason of an erroneous postal address and that the appellant provided no documents related to the decision) is difficult to understand. Consistent with the appellant's oral submissions, I construe the first aspect as a claim that the Tribunal did not hear from the appellant and thus denied him the opportunity to defend his statement in support of his visa application. However, as the Federal Magistrate found, the Tribunal was entitled to determine the matter without hearing from the appellant because he was invited to attend the hearing, indicated he wanted to attend, and then failed to appear without contacting the Tribunal to provide any explanation. I construe the second aspect as relating to the hearing before the Federal Magistrates Court. The appellant initially failed to appear at that hearing ( SZNHU v Minister for Immigration & Anor [2009] FMCA 316). He applied to set aside the order dismissing his application based on an incorrect address and was successful in so doing ( SZNHU v Minister for Immigration & Anor No. 2 [2009] FMCA 589). He attended the substantive hearing that then occurred ( SZNHU v Minister for Immigration No. 3 [2009] FMCA 777). Nothing in this sequence of events suggests any error by the Tribunal. I construe the third aspect as a submission that, because he did not attend the Tribunal hearing, the appellant could not provide relevant documents. That, however, was a consequence of his failure to appear before the Tribunal and the Tribunal's decision to determine the application under s 426A of the Migration Act . As the Tribunal was entitled to do so, nothing in this aspect of the appellant's complaint can found a conclusion of jurisdictional error. For these reasons the appeal must be dismissed with costs. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | whether failure by federal magistrates court to consider appellant's alleged risk of persecution whether tribunal fell into error in failing to obtain independent country information whether tribunal failed to consider whether appellant satisfied the definition of "refugee" whether tribunal fell into error in determining the appellant's application for review in the appellant's absence no jurisdictional error migration |
The applicant also asks the Court to make a finding that the respondent had breached the award by failing to pay employee apprentices in South Australia the fares and travel patterns allowance (cl 38) in respect of each day when those apprentices attended trade school. The applicant also seeks the imposition of a penalty on the respondent under s 719 of the Act for a breach of the award. I have not heard submissions on the question of penalty and the application has proceeded on the basis that if the applicant is successful in terms of the interpretation it seeks and the finding it asks the Court to make, then the parties will make submissions on the question of penalty. 2 I was advised by the applicant that should it be successful then it is likely that the recovery of underpayments can be dealt with by agreement between the parties. In addition, the applicant called as witnesses two men who have each completed an apprenticeship with the respondent. They were briefly cross-examined by the respondent. Both witnesses were honest and straightforward, and I accept their evidence. The respondent tendered a document but did not call any oral evidence. 5 The applicant is an organisation of employees registered under the Act. The respondent is an employer who employs apprentices in the trades of carpentry, carpentry and joinery, joinery, cabinet-making, brick-laying, painting and decorating, painting, solid plastering, fibrous plastering, wall and ceiling lining and roof tiling. 6 The applicant and the respondent are respondents to the award. The award was made by the Australian Industrial Relations Commission under the Act. 7 The applicant has standing under s 718 of the Act, in that it is an organisation of employees registered under the Act with members employed by the respondent and whose industrial interests the organisation is entitled, under its eligibility rules, to represent in relation to work carried on by its members for the respondent. If the breach as claimed by the applicant is made out, the employees previously referred to are employees who are affected by the breach of the applicable provision of the award. 8 The respondent requires its apprentices to enter into contracts of training as an express term of their contracts of employment. Under the contract of employment, it is an obligation of an apprentice to attend trade school. Failure to attend trade school without good reason will result in an apprentice suffering consequences, at the initiative of the respondent, pursuant to the demerit point scheme points system in the apprentice induction package, such as an official warning. I will explain what the apprentice induction package is in due course. He is 26 years of age and he is a building and construction worker. He works for ceiling and wall contractors. He undertook a wall and ceiling lining apprenticeship. He commenced the apprenticeship in 2001 and he finished at the end of 2005. At the start of his apprenticeship he was apprenticed to Adelaide Fibrous Plasterboard Linings. In 2003 and towards the end of the second year of his apprenticeship, he was apprenticed to the respondent. 10 As part of his apprenticeship with the respondent, Mr Maurici attended trade school. That was how it was described in the evidence and submissions. In fact, trade school was a Technical and Further Education College at Gilles Plains. He was under an obligation to go to trade school. 11 At the beginning of his apprenticeship with the respondent, Mr Maurici was given a document entitled 'Master Builders' Group Training Scheme Apprenticeship Induction Package'. Mr Maurici understood that this document was his contract with the respondent. He understood that it was a condition of his employment with the respondent that he comply with the requirements set out in the induction package. 12 Mr Maurici was required to sign certain pages of the induction package, including a page entitled 'Conditions of Employment'. For the first three months apprentices will be on probation. The probationary period is counted as part of the terms of indenture. The apprentice will also be required to attend trade classes at a TAFE college or approved training college on a weekly block release. Annual leave is to be taken at the discretion of MBGTS and will not be normally granted when it would require an absence from the training college. 14 Mr Maurici went to trade school for one-week blocks for approximately one week every month. He went with other apprentices employed by the respondent. Some of the other apprentices had to complete part of a module at the Technical and Further Education College at Tea Tree Plaza and those apprentices had to make their way there in their own motor vehicles. 15 Mr Maurici said that most apprentices brought their own tools with them to trade school. He described the toolboxes and said that they would be very difficult to carry on public transport or if an apprentice rode a bicycle or walked to trade school. To the best of Mr Maurici's recollection, everyone attending trade school travelled there by private motor vehicle. 16 If an apprentice failed a module at trade school then he or she would have to repeat that module. Host employers of the apprentice became 'annoyed' if that occurred. 17 Mr Maurici said that he understood it was a condition of his employment that he complete all trade school requirements in the year that they were undertaken. He said that the wages of apprentices are a percentage of the 'trades rate'. He said that he was paid for attending trade school, and that in the weeks that he went to trade school he was paid on the basis of a standard 40-hour week. Mr Maurici said that, on occasions, Adelaide Fibrous Plasterboard Linings contacted him at trade school about work issues. 18 In cross-examination, Mr Maurici agreed that neither the respondent nor those teaching at the trade school issued or made a direction to the apprentices that they bring their own tools. 19 Mr Andrew Harrison was the other witness called by the applicant. He is 28 years of age and he is a carpenter who works in the building construction industry. His current employer is Essential Carpentry. He was an apprentice employed by the respondent and he started his apprenticeship in 2000 and finished it in December 2004. He had a number of host employers during his apprenticeship, including Baulderstone Hornibrook and Essential Carpentry. 20 Mr Harrison said that attending trade school was part of his employment as an apprentice. He said that he was given the induction package at the commencement of his apprenticeship, and that he understood that this contained the 'rules' of his employment. 21 Mr Harrison attended trade school at the Technical and Further Education College at Marleston. He states that in the first and second year of his apprenticeship, he did eight lots of one-week blocks of trade school, and in the third year, he did six lots of one-week blocks of trade school. He did not attend trade school in the fourth and final year of his apprenticeship. 22 Mr Harrison said that other apprentices employed by the respondent attended trade school at Marleston. He said that he and the other apprentices were required to bring their own tools and that they were required to attend other sites to examine things like foundations. His recollection was that this occurred on two occasions. He said that they had to drive their own motor vehicles from trade school to the other sites, although on one occasion a bus had been arranged. 23 Mr Harrison said that each apprentice took his own nail bag to trade school as they were not supplied by the school. He said that in addition to the nail bag, other tools were taken to trade school and he described those other tools. He said that the tools that the trade school did supply were old or outdated or of poor quality or worn out. He said that using the tools provided at trade school would have made it harder to successfully complete the work required. 24 Mr Harrison was paid for his attendance at trade school. He was paid on the basis of a 40-hour week. In his induction session with the respondent, Mr Harrison raised the issue of whether he would be paid for travelling to trade school and he was told that he would not be paid for that activity. 25 The contract of training between the respondent and Mr Harrison was put before me. Apprentices employed by the respondent were employed on the terms and conditions set out in the induction package. It was a condition of their employment that there be a contract of training. The contract of training was regulated by the provisions of the Training and Skills Development Act 2003 (SA) and prior to that Act, the Vocational Education, Employment and Training Act 1994 (SA). 2. The respondent 'hired out' or 'leased out' the apprentices to employers, and when they were working for a host employer they were paid a wage and a travel patterns allowance under cl 38 of the award. 3. Apprentices employed by the respondent were required under a contract of training to attend trade school and, generally speaking, they did so in one-week blocks. They were paid for a 40-hour week when they attended trade school. They were not paid the travel patterns allowance under cl 38 of the award. Again, generally speaking, they took their own tools to trade school because it was more convenient to do so or because they were of better quality than the tools provided by trade school. There was no legal requirement that they provide their own tools when attending the school. On occasion, apprentices attending trade school went to work sites as part of their training. On occasion, apprentices attending trade school would receive telephone calls from their host employer about work issues. The allowances shall however be taken into account when calculating the annual leave loading. On the first year rate - 75% of amount prescribed. On second year rate - 85% of amount prescribed. On third year rate - 90% of amount prescribed. On fourth year rate - 95% of amount prescribed. For example, cl 19.3.5 refers to training and it expressly provides that if training is undertaken during normal working hours the employee concerned shall not suffer any loss of pay. Clause 39.2 deals with trainees and cl 39.2.4(b) provides that an employee attending off-the-job training in accordance with the contract of training shall be permitted to be absent from work, without loss of pay or continuity of employment. 30 The proper approach to the interpretation of the provisions of an award has been the subject of observations in the authorities. The provisions of the Acts Interpretation Act 1901 (Cth) are also relevant. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read. 33 The provisions of the Acts Interpretation Act 1901 (Cth) and, in particular, s 15AA and s 15AB are also relevant. The Act applies because the award is an instrument and does not fall within the exceptions of a legislative instrument within the meaning of the Legislative Instruments Act 2003 (Cth) (see s 7(1) item 18 of that Act) or a rule of court: s 46. 34 The starting point is the terms of the award itself. It seems to me that three particular matters should be noted. 35 First, cl 38.1 provides an indication of the purpose of the travel patterns allowance. Unlike many other industries where a worker in the industry reports to the same place of employment every working day, a worker in the building and construction industry may be required to travel significant distances to his places of employment over a period of time. If this occurs the cost and inconvenience of travelling to work increases. 37 Secondly, and this is perhaps no more than a development of the first matter, the travel patterns allowance is payable irrespective of whether in fact the worker incurs additional expense or suffers inconvenience. Under cl 38.1.2 a fixed amount is payable per day and the amount is not calculated by reference to how far a worker must travel. " The fares allowance is determined at a fixed amount per day and is to be paid irrespective of whether the employee incurs any expense in travelling between his home and his particular place of work and return. An employee whose home is alongside his then place of work is just as entitled to be paid the fares allowance as an employee who may be forced to travel many kilometres at great expense from his home to his place of work. The word is used not only in cl 38.1.2 of the award but also in cl 38.10.1. 39 It seems to me that although the matter is not clear, the terms of the award support the interpretation advanced by the respondent, namely, that apprentices attending trade school are not entitled to the travel patterns allowance. I say that for two reasons. First, if one has regard to the purpose of the travel patterns allowance, the payment of the allowance to a worker who attends trade school does not seem to be within that purpose. In the case of trade school, the location of the place the worker is required to attend does not vary. I think that point holds good even though I recognise that the allowance itself is not calculated by reference to actual cost incurred or inconvenience suffered. Secondly, although the meaning of the word 'work' will vary, depending on the context, I do not think that one would ordinarily consider that an apprentice attending trade school was employed on 'work'. 40 The applicant emphasised the fact that the contract of employment between the respondent and an apprentice envisaged and required that the apprentice would enter into a contract of training and would undergo training. The respondent accepted that there needed to be an approved contract of training under s 41 of the Training and Skills Development Act 2003 (SA) and that if there was not the contract of employment would be frustrated (s 37). The applicant submitted that training was an integral part of an apprentice's employment and part of the 'work' he performed. Furthermore, there was, the applicant submitted, no clear distinction between work and training in terms of benefit to the employer because training is of benefit to the employer in that the more skilled an employee is, the more value he is to his employer. The factual assertions may be accepted and, to a point, so may the submissions themselves, but to my mind, they are not of sufficient force to outweigh the interpretation I would place on the award as set out above. 41 The applicant submitted that there were no authorities of direct assistance. It referred to Master Builders' Association as authority for the proposition that if an employee is required by his contract of employment to perform an activity, in that case driving to and from work, then that will be considered part of his work even though it is not the main activity he is required to perform. The applicant also referred to Mrs P Davies v Neath Port Talbot County Borough Council [1999] ICR 1132 where the Employment Appeal Tribunal in England held that a union representative who attended a training course was engaged in work and made observations as to the benefits to the employer of such training. In my opinion, the statutory and regulatory context of these cases is so different from that under consideration in this case that they are of very little assistance. 42 The applicant submitted that an amendment to the award made on 1 November 2004 supported the interpretation it advanced. When a school based apprentice attends off-the-job training, not at the school in which they are enrolled, they shall receive 25% of the allowance as prescribe in clause 38.12.1. Why otherwise, asked the applicant, would it be necessary to specifically say that school-based apprentices are not to be paid the allowance for days they attend school? Even if it was appropriate to use the amendment in this way, other questions arise. For example, the amendment specifically provides that school-based apprentices are to receive a lower proportion of the allowance for attendance at training other than at the school at which they are enrolled. It might be asked why there was a need for a specific provision if they were otherwise covered and why the allowance is such a low proportion of the allowance specified in cl 38.12.1. I do not find the amendment to the award to be of any assistance in interpreting the award. 44 The respondent submitted that the common principles as to the nature of contracts of apprenticeship support the interpretation of the award for which it contends. In Wiltshire Police Authority v Wynn [1981] QB 95. Lord Denning MR referred to the distinction at common law between a contract of apprenticeship and a contract of service. If the primary purpose was work for the master --- and teaching a trade was only a secondary purpose --- it was a contract of service. But if teaching a trade was the primary purpose --- and work for the master was only secondary --- then it was a contract of apprenticeship. Ever since the settlement cases of the 18 th and 19 th centuries, the common law has held that the court must look at the principal object of the contract in deciding whether or not a contract of service exists. Where the primary object of the contract is teaching or learning, then there is no contract of service. In Horan v Hayhoe [1904] 1 KB 288 it was held that an apprentice jockey was not employed under a contract of service although in the ordinary course of his training and for the purpose of learning his business he performed the duties of a stable-boy during a considerable part of the day, was paid wages and was given free board and lodgings. He was not employed as a servant. The principal object was teaching and learning. The fact that the conditions of engagement are consistent with a contract of service is not decisive if the principal object of the relationship is teaching and learning. In placing emphasis on the terms of engagement of the police cadet rather than on the principal object of the relationship, in my judgment the Employment Appeal Tribunal fell into error. Although enforceability depends on the contract being in writing ( Kirkby v Taylor [1910] 1 KB 529) an employer who has acted upon an oral contract of apprenticeship will be held to it as if it were in writing ( McDonald v John Twiname Ltd [1953] 2 QB 304). Although modern legislation has for its own purposes assimilated apprenticeships to contracts of employment (see the Employment Protection (Consolidation) Act 1978 s 158(1) and, for example, s 49, which affects minimum periods of notice), the contract of apprenticeship remains a distinct entity known to the common law. Its first purpose is training; the execution of work for the employer is secondary (see Wiltshire Police Authority v Wynn [1981] 1 QB 95 at 109, 110 and 113-114). The distinctive features of a contract of apprenticeship were discussed by Vice President Ross in Fetz v Qantas Airways (1997) 77 IR 443 at 454 and by the Full Bench of the Commission on appeal ( Qantas Airways v Fetz (1998) 84 IR 52 at 65-66). 47 The common law principles as to the features of a contract of apprenticeship are not directly relevant. They do show that a distinction was drawn between training and work for an employer and that is a distinction which, for the reasons I have given, is reflected in the terms of the award. To that extent they provide general support for the interpretation for which the respondent contends. The same might be said of the fact that the framers of the award saw the need in cl 19.3.5 and cl 39.2.4(b) to provide that an employee engaged in training during normal working hours is not to suffer any loss of pay. Nevertheless, my conclusion as to the proper interpretation of the award is based primarily on the matters I referred to earlier. I will hear the parties as to costs and any other orders. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Besanko. | interpretation of award national building and construction industry award 2000 where award applies to apprentices in south australia where award makes provision for payment of travel patterns allowance in relation to travel to work where apprentices covered by award participated in training whether travel patterns allowance payable in respect of travel to trade school approach to interpretation of awards. industrial law |
The potential source of that apprehension is the circumstance in which the trial judge decided, of his own motion, during the case of the fifth respondent, Mr Fuchun Xiao ('Mr Xiao'), to admit three paragraphs from an affidavit of a witness not called by the first respondent, the University of New South Wales ('the University'). The appellant has also raised a number of other grounds of appeal which require consideration. Mr Xiao was also a student for the degree of Doctor of Philosophy at the University in 1999. In 1999, each of the appellant and Mr Xiao engaged in some part-time work for the University in the course of their studies. 3 The proceedings below were brought against not only the University and Mr Xiao, but also three other persons, who appear to have had some connection with the University. The evidence reveals that the second respondent was the appellant's thesis supervisor, that he in turn had some responsibility to the third respondent who was an Associate Professor at the University at the time. I am not clear about the role of the fourth respondent. No relief is sought against the second, third and fourth respondents in this appeal and they did not appear. 5 Next, the appellant asserted that in about 2000, she passed Mr Xiao's room and saw pornographic images on the computer screen, although she did not enter the room and was not invited to do so. Lastly, she complained that in or about August or September 2001, Mr Xiao provided her with assistance to install Acrobat reader software from the internet onto her computer and in the course of that assistance he sexually harassed her by showing her about three pornographic pictures in which there was a naked man with a naked woman who were ' intending to have sex '. The appellant alleged that on this occasion when she saw the pornographic pictures she was shocked and asked Mr Xiao not to do it but that he showed her other pornographic pictures and she instructed him to leave. Additionally, the appellant asserts that on 3 and 30 August 2004 Mr Xiao victimized her and subjected her to mental distress by verbal abuse, including a threat to kill. 6 Mr Xiao denied all those claims. The University denied that it was vicariously, or otherwise, liable for Mr Xiao's conduct. Because both Mr Xiao and the appellant were unrepresented at the hearing, his Honour endeavoured to clarify with each of them, when they were seeking to lead evidence, precisely what material they wished to proffer. At that stage Mr Xiao had not filed any affidavits in support of his case notwithstanding the fact that he had been served with the proceedings about 17 months before and, in the interim, had been served with a number of other documents relating to the proceedings. The appellant had wished on that occasion to proceed against Mr Xiao at the hearing the next day. She said she would not then be ready to proceed with the hearing in respect of the other respondents including the University, that the proceedings against them were separate and that she was only ready to proceed against Mr Xiao. 8 During the discussion between his Honour, Ms Oakley, who appeared at all times for the University, and Mr Xiao, Ms Oakley said that the University was the subject of the same claim as against Mr Xiao. His Honour identified that claim as being made on the basis that the University was vicariously liable for Mr Xiao's actions. His Honour made clear to the appellant (transcript 10 March 2005 p 14 lines 1-10) that the University was entitled to be a party to the hearing involving Mr Xiao if that were to proceed separately, as was then envisaged. 9 Ultimately his Honour made directions which vacated the hearing for 11 March 2005, ordered Mr Xiao to file a response to the application against him and any affidavit evidence on which he proposed to rely by 4 April 2005 and fixed the hearing of the matter for 6 April 2005. His Honour indicated from a practical point of view that the matter against the University and the second and third respondents, for whom Ms Oakley appeared, would not be able to go ahead in the April hearing. Instead, as his Honour recorded in the judgment ([2005] FMCA 463 at [2]), he heard the claim against Mr Xiao separately on the basis that it was severable from the claims against the other respondents, and was ready to be heard, whereas the other claims were not then ready. 11 By s 57 of the Federal Magistrates Act 1999 (Cth) ('the FM Act') formal defects or irregularities are not to invalidate proceedings in the Federal Magistrates Court unless that court is of opinion that substantial injustice had been caused by the defect or irregularity and it could not be remedied by an order of the Federal Magistrates Court. 12 The appellant complained that the procedure adopted by his Honour was not what she wanted and that she only wanted his Honour to hear the issues involving Mr Xiao without making any orders. However, I am of opinion that his Honour was entitled to treat the appellant's request as a request for a separate determination of the issues between her and Mr Xiao, and, so far as it was affected thereby, the University. 13 In Grounds 13 and 14, the appellant now seeks to have the proceedings involving her, Mr Xiao and the University recombined with her other proceedings. All parties before his Honour appear to have seen the matter involving Mr Xiao as discrete and severable. The appellant sought such a separation. Having achieved what she sought, I do not consider that she should obtain a reversal of that resultant separation on appeal. 14 It was undesirable to order a separate hearing where issues as to credit were clearly involved in respect of the appellant and, if it called evidence from witnesses, those witnesses of the University who gave evidence. However, it was open to his Honour to order a separate hearing in the exercise of the jurisdiction of the Federal Magistrates Court which included statutory commands to proceed without undue formality and to endeavour to ensure the proceedings were not protracted (see s 42 of the FM Act). 15 The failure to make an order identifying a separate issue and proceeding upon determination of the informal issue amounted to a formal defect or irregularity which, in my opinion, caused no prejudice in the conduct of the proceedings which were heard by the trial judge on 6 April and decided on 16 May 2005: cp: Australian Security and Commission v Ampolex Limited (1995) 38 NSWLR 504 at 511C-D per Kirby P; Australian Coastal Shipping Commission v Curtis Cruising Pty Limited (1989) 17 NSWLR 734 at 753; applying Harkness v Bell's Asbestos and Engineering Ltd [1967] 2 QB 729 at 735-736. Whatever other orders may be appropriate it is necessary for the appeal to be allowed so that that order can be set aside and an appropriate separate question framed for determination in accordance with these reasons for judgment. At the conclusion of the appellant's evidence, the trial judge asked Mr Xiao whether he proposed to rely on his affidavit of 4 April 2005 which led the appellant to argue that the evidence should be rejected. Now, there was something else that I thought might be relevant . Yes, the affidavit of Carol Kirby filed on 14 January 2005, paragraph 3. In paragraph 3 in her affidavit of 10 January 2005 she refers after some introductory paragraphs to paragraphs 28, 30, and 31 of Ms Huang's affidavit of 29 October last year. She refers to the written complaint of June 2002 and her investigation. I think for completeness I should receive paragraphs 1 to 3 of Sybille Frank's affidavit of 10 January 2005 for the purposes of today's proceedings. Now, Ms Huang, did you want to ask Mr Xiao any questions about his affidavit? Rule 1.03(2) of the Federal Magistrates Court Rules 2001 (Cth) ('the Rules') is to the same effect and r 1.03(3) requires that court to apply its rules in accordance with the above objects. Rule 1.03(4) requires the parties to assist the court by avoiding undue delay, expense and technicality. By s 63 of the FM Act a Federal Magistrate may question witnesses in proceedings if the judge is of the opinion that the question is likely to assist in the resolution of a matter in dispute or the expeditious and efficient conduct of the proceedings. 20 Next, by s 64, the Federal Magistrates Court can take testimony orally or by affidavit and may make directions to that end. A request may be made by a party to the proceedings to have a deponent in an affidavit appear as a witness to be cross-examined, subject to rules of court (ss 64(4) and (5)). If a request is made for the attendance of a person to be cross-examined and he or she does not appear, the court is required to give the matters in the affidavit such weight as it thinks fit in the circumstances (s 64(6)). By r 15.04 the Federal Magistrates Court may of its own motion call any person as a witness in the proceedings and give directions as to examination and cross-examination. The Court also has the power to dispense with the rules under r 1.06 where to do so is in the interest of justice. Rule 1.06(2) provides that if in a proceeding, the Federal Magistrates Court gives a direction or makes an order that is inconsistent with any of the rules, the direction or order of the court prevails in that proceeding. 21 When his Honour admitted the evidence of Ms Frank, he made no direction or order under s 64(6) or r 15.04. His Honour does not appear to have turned his mind to this issue. (I have not heard argument as to the validity of r 15.04 and will not express any view on that question. In Shaw v The Queen [1952] HCA 18 ; (1952) 85 CLR 365 at 379, Dixon, McTiernan, Webb and Kitto JJ said that in Titheradge v The King [1917] HCA 76 ; (1917) 24 CLR 107 the High Court had denied that a presiding judge in a criminal trial had power to call a witness if he (or she) thought that the imperative demands of justice so required. Dawson J affirmed that view in Whitehorn v The Queen [1983] HCA 42 ; (1983) 152 CLR 657 at 684 where he said that Shaw v The Queen [1952] HCA 18 ; (1952) 85 CLR 365 had held that Titheradge v The Queen [1917] HCA 76 ; (1917) 24 CLR 107 was authority for the proposition that no distinction was to be drawn in Australia between criminal trials and civil actions with regard to the power of a judge to call a witness. However, Gibbs CJ and Brennan J, reserved their positions on this issue (152 CLR at 660). 23 In Titheradge v The King [1917] HCA 76 ; (1917) 24 CLR 107 at 116, Barton J said that where the right of a judge to call a witness exists --- and R v Apostilides [1984] HCA 38 ; (1984) 154 CLR 563 at 575 [5] accepts that it does in the conduct of a criminal trial --- it must be exercised with extreme caution. His Lordship denied the power of a judge to call a witness against the will of a party ([1910] 1 KB at 332, 333; see too per Powell J in Clark Equipment Credit Australia Ltd v Como Factory Pty Ltd (1988) 14 NSWLR 552 at 567F-568A and IF Sheppard, 'Court Witnesses --- A Desirable or Undesirable Encroachment on the Adversary System? ' (1982) 56 ALJ 234 at 235) but accepted that where the parties acquiesced in a witness being called by the judge, a judge may do so provided that the parties have a right to cross-examine. 24 These cases resulted in it being held that, where a judge impermissibly called a witness, the result of the trial was a miscarriage of justice. 25 In Obacelo Pty Ltd v Taveraft Pty Ltd (1986) 10 FCR 518 at 540 Wilcox J expressed the view in obiter dicta , that in a civil action, a trial judge has power to call a witness, even over the opposition of a party, but that the discretion to take such a course should be exercised sparingly and with great care. (See too Wigmore on Evidence (Chadborn Revision) Vol 9 SS2483 where the learned author emphatically asserts the right of a judge in a civil case to call a witness. ) Wilcox J said this view was consistent with the principle adopted in R v Apostilides [1984] HCA 38 ; (1984) 154 CLR 563 in respect of criminal trials. Unless his Honour meant by the word 'sparingly' to encapsulate the concept of the power being exercisable only '... in the most exceptional circumstances' (154 CLR at 575 [5]), I am unable to agree that the power in a civil case may be exercised more freely, absent statutory authority. 26 Our system of justice involves, fundamentally, an adversarial process in which the court acts as an independent umpire, applying the law to its view of the facts elicited in evidence chosen and adduced by the parties, not the court. Of course, there may be exceptions in civil proceedings, such as the jurisdiction of courts involving the welfare of a child, where the ascertainment of the child's best interests may not be able to be left solely to adversarial contest, because in that situation each party's interests are potentially different to, or distinct from, that of the child the subject of the parties' forensic battle. 27 So, it is vital to guard against an absolute prohibition of a judge's power of calling witnesses because some circumstances in which courts exercise jurisdiction are not wholly adversarial. But the power, according to the authorities to which I have referred, exists to prevent, not occasion, a miscarriage of justice which the judge perceives would otherwise occur. Before forming such a view, over the opposition of the parties and, where appropriate, their legal representatives, a trial judge would obviously need to consider whether the conscious choice of the parties not to call the witness properly can be overborne by the court while preserving the appearance and actuality of judicial impartiality. For a judge to use his or her power to override the choice of the parties as to what evidence they will adduce in order that the judge may decide their dispute is a drastic step which must only be available even in civil proceedings '... in the most exceptional circumstances' ( R v Apostilides (1984) 154 CLR at 575 [5]). The exercise of such a power removes the court from its usual and necessary position outside, and places it within, the forensic arena (cp: Yuill v Yuill [1945] P 15 at 20). 28 At the end of the day, if the absence of a witness occurs and this affects the quality of the evidence properly before the court, the result will still be fair as between the parties, if the judge acts on that limited material, even though it may be thought to be unsatisfactory. The latter, but not the former, consequence may be the fault of the parties in their selection of the evidence or it may be that the parties have each decided that the witness would be of no assistance (cp: Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854 at 920H-921C per Lord Roskill; DA Ipp 'Judicial Intervention in the Trial Process' (1995) 69 ALJ 365 at 373-375). 29 In any event, the trial judge in admitting Ms Frank's evidence, to the extent that he considered the basis of its admissibility at all, did no more than express a view that it was relevant. There was no necessity to admit that evidence. The circumstances of the proceedings were unexceptionable and raised no occasion on which it could be said that it was appropriate, on any of the tests above, to admit Ms Frank's evidence in the way in which his Honour did. 30 I am satisfied that Ms Frank's evidence was not properly received and that in the circumstances there was no basis for the trial judge to have admitted or used Ms Frank's evidence. WAS THERE AN APPEARANCE OF BIAS? His Honour noted that required him to have a high degree of satisfaction that the events alleged by the appellant happened. His Honour found as supporting his conclusion that he did not have that high degree of satisfaction. Among other things, he relied on the fact that the appellant had made no complaint about Mr Xiao's alleged conduct until more than twelve months afterwards although she had been expressly given the opportunity to make a complaint in 2002 ([2005] FMCA 463 at [32]). 32 A fair-minded observer sitting in the court room might wonder why, when the University was represented, it had not led any evidence from Ms Frank, yet his Honour had gone through the papers and had found an affidavit by her and had then identified parts of it as being 'relevant' and as ' effectively confirm[ing] ' that the appellant had not, in any written material lodged with the University, raised any allegations against Mr Xiao in 2002. By saying ' I think for completeness I should receive paragraphs 1, 2, 3 of Sybille Frank's affidavit of 10 January 2005 for the purposes of today's proceedings' his Honour was deciding of his own motion to admit material which no party had put before him as her, his or its evidence at the hearing. Ms Frank was not required to be present or to be available for cross-examination. That principle gives effect to the requirement that justice should both be done and be seen to be done (R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256 at 259, per Lord Hewart CJ), a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed. However, it is a most unusual, indeed extraordinary, step in contested litigation for a judge to tender of his or her own motion material from an affidavit which a party, who is legally represented in the proceedings, has chosen not to read and to allow that material to go into evidence untested, on the basis that it in effect makes stronger a case against the party adversely affected by the reception of that evidence. 35 A fair-minded person reasonably might consider that the judge was seeking to add emphasis to the appellant's failure to make complaints against Mr Xiao and also that the judge had read through all of the affidavit material which by then had been filed by the University in the larger proceedings. As I was informed by Ms Oakley from the bar table, that material included affidavit evidence which had been filed on behalf of the University contradicting the appellant's claims of sexual harassment by some of the other respondents, and also of plagiarism of her work by the second respondent who was her thesis supervisor. 36 On the other hand, the only material to which his Honour referred and which his Honour noted in open court as having relevance, is what might be regarded as the relatively anodyne confirmatory material from Ms Frank. His Honour does not refer to any other material to which he had regard. 37 I have no hesitation in assuming that his Honour set out in his reasons for judgment fully, honestly and accurately all of what he took into account in coming to his decision to dismiss the appellant's complaint relating to Mr Xiao. Nor is it necessary or appropriate to inquire further into this question for the issue here is relevantly whether what occurred gave rise to the appearance of a possibility of an absence of an impartial mind on the part of his Honour as Callinan J explained in Antoun v The Queen [2006] HCA 2 ; (2006) 224 ALR 51 at 76-77 [81] - [83] , Haydon J agreeing at 78 [91]; see too per Gleeson CJ at 57 [22]. But what I, as a judge, or any lawyer for that matter, knows or assumes that a judicial officer referred to or took into account in deciding a matter when regard is had to the judicial officer's fulfillment of the duty to give reasons for judgment, is one thing. It is quite another thing for a fair-minded lay observer to be precluded from forming a reasonable apprehension that, in the present factual context, the judge might not have brought an impartial mind to the resolution of the dispute. The likelihood that the lay observer would not lies at the heart of the requirement of the appearance as well as the reality of impartial justice. She was not to know that what his Honour did was extraordinary. Nor did counsel for the University intervene to suggest that what his Honour proposed to do was inappropriate. In Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568 at 572 Brennan, Deane and Gaudron JJ held that waiver was the consequence of a legally represented party failing to object to judicial conduct reasonably capable of being regarded as conveying an apprehension of bias. It was applied by the New South Wales Court of Appeal in relation to a litigant in person in Wentworth v Rogers (No 12) (1987) 9 NSWLR 400 at 421-422. Where a person is not legally represented or advised, it will always be necessary to consider whether he/she had the knowledge necessary to found waiver. But, in most cases, unrepresented parties, however intelligent or worldly, will not have a sufficient familiarity with the practice and procedure involved in litigation to know when a judicial officer has gone potentially too far. Not only do unrepresented parties usually feel the ordinary, but very real, stress and nervousness which being in court generates but they are entitled and are likely to assume that the judicial officer is doing his or her job fairly and according to law. So something which is unusual to a lawyer may not strike an unrepresented party as such. An unrepresented party may think what has occurred is how courts do things, and so not realize immediately that anything legally wrong has occurred, however upsetting the judicial officer's conduct may be. 40 So much will depend on the facts of the particular case that further generalized discussion by me is not fruitful. In Vakauta v Kelly [1989] HCA 44 ; (1989) 167 CLR 568 at 571-572, Brennan, Deane and Gaudron JJ considered how far a trial judge could express preconceived views about expert medical witnesses who frequently in the past had given evidence before him. In the passage in his judgment in [ Re Watson: Ex parte Armstrong [1976] HCA 39 ; (1976) 136 CLR 248 at 294] to which we have referred, Jacobs J pointed to the undoubted fact that "it is confidence in his own integrity which supports [a judge] not only in his judgment but in all his words and conduct". Knowledge of his or her own integrity can sometimes lead a judge to fail to appreciate that particular comments made in the course of a trial may wrongly convey to one or other of the parties to the litigation or to a lay observer an impression of bias. For example, the appearance of impartial justice could be compromised if the words or actions of a trial judge conveyed the impression that preconceived adverse views about a particular medical witness were influencing the judge's approach to the case to an extent that the judge was entering the arena to denigrate the witness or to oppose the witness' views or that the judge was biased against the party who had called that particular witness or that the judge was likely to be concerned, in the judgment actually deciding the case, to vindicate the preconceived adverse views about the witness by findings contrary to whatever views that witness might express. 42 This case is not like the circumstances in Gillette Australia Pty Ltd v Energiser Australia Pty Ltd (2002) 193 ALR 629; [2002] FCAFC 223 where the trial judge had erroneously included in his judgment, as having been read and being credible, material from affidavits which, in fact, had never been read in the proceedings. The appellant had conceded in cross-examination that she had not made in her very lengthy complaint to the University, to which Ms Frank's evidence related, any mention whatever of Mr Xiao (Transcript 6 April 2005 pp 44 line 25 --- 45 line 5) and that the first time she had written to the Human Rights and Equal Opportunity Commission in July 2002, the appellant had made no mention of a complaint involving Mr Xiao (Transcript 6 April 2005 pp 48 line 32 --- 49 line 22). 45 Moreover, the appellant agreed that prior to her complaint to the Human Rights and Equal Opportunity Commission of 31 October 2002 she had made no complaint against Mr Xiao relating to being shown a photograph of a naked man and a naked woman in August or September 2001 (Transcript 6 April 2005 pp 52 line 25 --- 53 line 14). Accordingly, it was submitted that the admission of the material of Ms Frank's affidavit did not, as a matter of substance, affect the outcome of the proceedings or create any substantive adverse consequence for the appellant in the proceedings. ... No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it. That qualification is that an appellate court will not order a new trial if it would inevitably result in the making of the same order as that made by the primary judge at the first trial. An order for a new trial in such a case would be a futility. ] If a judge, said Lord Greene, should himself conduct the examination of witnesses, "he, so to speak, descends into the arena and is liable to have his vision clouded by the dust of conflict". ' That was, of course, said in the context in which a judge was not allowed to call witnesses (see Jones v National Coal Board [1957] 2 QB at 64). These considerations may not be entirely apposite for the Federal Magistrates Court if r 15.04 is a valid exercise of the rule-making power. Certainly, as noted above, there will be situations for example (and I do not intend to be exhaustive) in which that court is called upon to exercise its jurisdiction in which it may be necessary or desirable for the court to have information from witnesses, particularly in cases involving the Family Law Act 1975 (Cth) where welfare of a child may be in issue and where the relevant parties before the court may each have interests which the court regards as not properly able fully to inform it of what might be in the overall best interests of the child. 49 However, in a case like the present, I am of opinion that it was not appropriate for his Honour to have used Ms Frank's affidavit in any way, although the parts of the affidavit which his Honour used were simply confirmatory of what the appellant herself had accepted in her cross-examination and also of what the objective evidence revealed. The trial judge here was disqualified because he crossed the line. The trial did not conform to law. One does not know what, if anything, his Honour discarded in order to assess what he said was relevant to use from the other material in the file. Why did his Honour need to review any of the other material that was not formally before the court placed there in the ordinary way by the parties seeking to have their dispute properly ventilated? 51 In one sense it may be possible to say that the material used from Ms Frank's affidavit would have made no difference. In my opinion that material was capable of falling into such a category. However, the evidence of Ms Frank in this case did not assist the appellant's case at all. At worst it bolstered the case of the University and Mr Xiao as to her lack of complaint and made her case look thinner. There was no need for the evidence of Ms Frank to be called in aid for that purpose, for the very reasons which the University has sought on this appeal to say that the evidence would have made no difference. The trouble is that his Honour saw fit himself to introduce that evidence, after the appellant had given evidence and without any attention to the rules of the court providing for making directions about examination and cross-examination of the witness whose evidence it was. 52 I am of opinion that a fair-minded person could reasonably have apprehended that his Honour was seeking to assist the respondents' cases by introducing the evidence. Excessive judicial intervention in proceedings sometimes raises issues of fact and degree as to how far a judge is or is not entitled to go. Thus Wood CJ at CL noted that the line that a trial judge walks when asking questions of a witness is a narrow one ( R v Esposito (1998) 45 NSWLR 442 at 472B-C; see too Galea v Galea (1990) 19 NSWLR 263 esp at 280-282 per Kirby ACJ). But the issue here really is whether a fair-minded person could reasonably have apprehended that his Honour's introduction and use of Ms Frank's evidence indicated that he was not being impartial. 53 However, could this have made any difference to the outcome of the trial? Obviously there was material available for his Honour to assess one way or the other as to which witnesses' accounts he accepted. The objective evidence clearly supported that introduced, irregularly, from Ms Frank. If the appellant's account of the incident in 1999 had been accepted, I am of opinion that it was capable of being characterized, depending on the facts, as an engagement by Mr Xiao in unwelcome conduct of a sexual nature in relation to the appellant in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated that the appellant would be offended, humiliated or intimidated within the meaning of s 28A(1) of the Sex Discrimination Act . The character to be attributed to the incident in 2001 likewise may have depended upon the circumstances, although it is less likely to have resulted, had it been left to be taken alone, in a finding of a contravention of s 28A. 54 As Gaudron and Gummow JJ noted in Re Refugee Tribunal ex parte Aala [2000] HCA 57 ; (2000) 204 CLR 82 at 116-117 [80] - [81] it is sufficient that a denial of natural justice deprives the appellant of the possibility of a successful outcome (applying Stead v State Government Insurance Commission [1986] HCA 54 ; (1986) 161 CLR 141 at 147). By itself, Ms Frank's evidence admitted by his Honour would not have altered the outcome. It is the fact that his Honour actively intervened in the proceedings by tendering that evidence in circumstances which did not appear to warrant it which gives an indication that a fair-minded observer of the proceedings could reasonably have apprehended that his Honour was seeking to make the case against the appellant by assisting those to whom she was opposed. 56 I have anxiously given consideration as to whether it could be said that his Honour's conduct could have made no difference (see e.g. Goldsmith v Sandilands (2002) 190 ALR 370; [2002] HCA 31 ; Re Ruddock; Ex parte Applicant S154/2002 (2003) 201 ALR 437 at 444 [28]-[29]; [2003] HCA 60) but I have come to the conclusion the course his Honour took is so irregular that the breach of the rules of procedural fairness cannot be regarded as not possibly having affected the outcome. A different judicial officer may have taken a different view as to the appellant's credibility and that of Mr Xiao and if that had happened, the outcome may have been different. The appellant argued that because Mr Xiao had failed to file an affidavit in the 17 months preceding his actually doing so on 4 April 2005, that somehow precluded his Honour from allowing the affidavit to be read by Mr Xiao in his defence at the trial. The appellant said that this was unfair to her in some way. However, the affidavit effectively denied what the appellant's version of events was in relation to the critical incidents, the subject of her claim. She was in a position to cross-examine Mr Xiao about those matters and she did so. His Honour made no error in admitting the affidavit to evidence. The appellant did not ask for an adjournment or claim that she was prejudiced so that she was not able effectively to conduct her case by reason of the late service. In those circumstances, there is no substance in this ground of appeal and I would dismiss it. It is obvious from the transcript that Ms Oakley used the contents of Mr Xiao's affidavit of 4 April 2005, in which he substantively denied the allegations made by the appellant, as a basis for cross-examination. The appellant interpreted Ms Oakley's conduct, as counsel for the University, as being, in some way, tantamount to the University taking over Mr Xiao's defence. I am of opinion there is no substance in this ground of appeal. The University was entitled to defend its own interests, particularly where it was claimed that it would be vicariously liable for whatever might be found to have occurred between Mr Xiao and the appellant were it to give rise to liability under the Sex Discrimination Act . I would dismiss this ground of appeal. It was for his Honour to form a view as to which witnesses' evidence, whether in whole or in part, he accepted, having seen or heard them. His Honour gave reasons for preferring Mr Xiao's evidence to that of the appellant and I can discern no error in those reasons, nor has the appellant demonstrated any such error. I see no reason for disturbing his Honour's conclusion on credibility and reliability of the witnesses based on my review in exercising the appellate jurisdiction of the court of the record of the trial ( Fox v Percy [2003] HCA 22 ; (2003) 214 CLR 118 at 125-129 [22] - [31] ; CSR Ltd v Della Maddalena [2006] HCA 1 ; (2006) 224 ALR 1 at 6-9 [13] - [24] per Kirby J, Gleeson CJ agreeing at 3 [1]). 60 Quintessentially, the issue at the trial was which of two witnesses' conflicting accounts should be preferred. The ability of his Honour to see and hear the witnesses, form an assessment of their reliability and veracity, and to then draw conclusions based on the whole of the material properly before him cannot be gainsaid in a case such as this. There are no incontrovertible facts or glaringly improbable conclusions arrived at by his Honour having regard to my review of the record of the trial. I would dismiss this ground of appeal. But these grounds elaborate but do not advance the fundamental challenge addressed in relation to ground 3. For example, ground 8 asserts that there was evidence to support that there was no dispute about the facts between Mr Xiao and the appellant as to what had occurred in respect of each of the three complaints. That is patently insupportable on the material before his Honour and affords no basis for appellate intervention. The appellant has a tendency to reiterate many times a point, and these grounds appear to do just that. There is no substance in any of them and I dismiss them. In other words if the affidavit is contradicted by more reliable evidence then I will prefer that other evidence, so that affidavit is before me. He said that the appellant turned to ask another student, a Mr Kim, for help and that Mr Kim said that he did not know how to do it but that Mr Xiao might. Mr Park said that the appellant went to the other side of the office and talked to Mr Xiao who then followed the appellant to her office to provide her with assistance. Next, Mr Park says that on 11 November 2003, the appellant came to see him about the matter and asked him whether he remembered what had happened to which he responded 'Yes' (see Appeal Book C 391-392). 64 I am of opinion that this evidence could not have any bearing on the outcome of the case. While it is correct that Mr Xiao said that he could not recall providing assistance to the appellant in 2001, his Honour noted that the affidavit of Mr Park provided some corroboration of the appellant's assertion ([2005] FMCA 463 [28]). Thus his Honour took into account Mr Park's affidavit. 65 The affidavit was not contradicted by Mr Xiao or other evidence. Mr Xiao could only say that he did not remember providing assistance to the appellant in 2001 [29]. As his Honour pointed out, if Mr Xiao had sexually harassed the appellant in 1999 by showing her material which she found to be sexually harassing of her, it is hard to understand why the appellant asked him for further assistance in 2001 [27]. His Honour found that it was possible that Mr Xiao did show the appellant a pornographic image in 2001 but did not find on the Briginshaw standard that he was satisfied that this did in fact occur [32]. It is difficult to believe that a person who claims to have been sexually harassed by being shown pornographic images two years beforehand, would voluntarily go with the alleged harasser, no resolution having occurred in the meantime between them, to operate a computer again. When what was being sought was assistance in installing software from the internet to read or download material from the internet, the likelihood that the internet would be accessed by the alleged harasser was overwhelming. And, if what had occurred previously had in truth been harassment, it is unlikely that the victim would ask the harasser for further help. However, I make no finding on this aspect of the ground of appeal. 68 The complaint in relation to Mr Park was identified by the appellant as including the fact that on 5 April 2005 she requested him to attend the hearing to which he responded that he could not help in the court and tried to have her see the third respondent, Professor Winder, for approval to attend the court hearing (see the appellant's submissions pars 188-190). 69 What this amounts to is that the appellant did not serve a subpoena on Mr Park in advance of the hearing requiring him to attend to give evidence. Had she done so, this issue could not have arisen. The lack of knowledge of procedure which the appellant advances as a basis for her being able to seek relief on this ground and other grounds, is no basis at all for seeking relief. Moreover, it is quite unreasonable for the appellant to have only sought to ask Mr Park to attend court the day before the hearing. Had she made the request well in advance of the hearing so that he could have organized his affairs, she may have then discovered his unwillingness and have been able to seek a subpoena in time. In my opinion this ground is without merit and ought to be dismissed. 71 His Honour refused to accept Ms Wang's affidavit into evidence because first, she was not available for cross-examination and secondly, it was irrelevant to the issue of sexual harassment which his Honour had to decide. That was because the allegation of threatening behaviour by Mr Xiao, said by the appellant to amount to victimization, related to events which allegedly had occurred well after the termination of the complaint by the Human Rights and Equal Opportunity Commission. His Honour said that the allegations appeared to extend to unnecessary and probably inappropriate attempts at service upon Mr Xiao by the appellant and Ms Wang ([2005] FMCA 463 at [7]). 72 The reason why Ms Wang was not available for cross-examination is that she had been in Singapore when, again, on 5 April 2005 the appellant sought to have her attend for cross-examination (see appellant's submissions par 194). For the same reasons as I gave in respect of Mr Park, this part of the basis of the ground of appeal is without substance and should be dismissed. 73 The appellant put to his Honour that Ms Wang's evidence was relevant on two bases, first because it went to victimization or a threat to kill her (Transcript 6 April 2005 p 11 lines 1-5) and secondly because it amounted to conduct by Mr Xiao which sought to intimidate her from prosecuting her proceedings in the court (Transcript 6 April 2005 p 12 line 13, p 13 line 4). I am of opinion that neither basis made the affidavit admissible as evidence in chief. The circumstances in which the alleged incident occurred involved repeated service by persons on behalf of the appellant on Mr Xiao such as might provoke a fairly tempestuous reaction. That was the very kind of reaction which Mr Xiao is alleged to have exhibited. In my opinion it was open to his Honour to reject the evidence on the basis that the evidence, having regard to the context that Mr Xiao responded to being served at his home with more documents, was incapable of being evidence demonstrating an attempt to victimize or intimidate the appellant from bringing her case. 74 Moreover, Ms Wang's evidence was irrelevant to the issues before his Honour. No complaint had been made to the Human Rights and Equal Opportunity Commission by the appellant in respect of the alleged behaviour of Mr Xiao to which Ms Wang sought to depose. The jurisdictional basis provided by s 46PO of the Human Rights and Equal Opportunity Commission Act 1986 (Cth), requiring a complaint to have been terminated by the President and for the President to have given a notice to any person in relation to the termination was not satisfied. The appellant's complaint to the Commission had been terminated on 28 July 2003, over a year before the alleged events to which Ms Wang deposed. 75 In my opinion there is no substance in this ground and it should be dismissed. To the extent that ground 14 also seeks to have this claim of 'victimization' heard with other proceedings, it must also fail for the same reasons. That is hardly surprising, since the hearing finished on 6 April 2005 and no leave was given to file further evidence, nor was I referred to any motion by which leave was sought. The appellant did not address any oral argument on this point. In her affidavit of 4 July 2005, which is to be treated as a submission, the appellant describes the affidavit of 19 April 2005 as dealing with the issue of the vicarious liability and ' students' and employees' conducts '. The issue of the University being vicariously liable for any conduct of Mr Xiao whether as an employee of the University together with the appellant or as a student has no relevance if, as his Honour found, the alleged incidents did not occur or could not have amounted to an harassment. 77 The second affidavit of 5 May 2005 is described in the affidavit/submissions of 4 July 2005 as relating to 'my severe suffering, chemistry and employment backgrounds, losses, costs'. Again, this material was not relevant in the event that the proceedings were dismissed in relation to the alleged conduct of Mr Xiao. I can see no error, even if it were permissible, without leave, to file and rely upon such material after judgment had been reserved for permitting the appellant to rely upon this matter. The appellant did not refer to any motion she put before his Honour to reopen the proceedings. Just as it is impermissible to file further submissions ( NT Power Generation Pty Limited v Power and Water Authority [2004] HCA 48 ; (2004) 219 CLR 90 at 159 [192] per McHugh ACJ, Gummow, Callinan and Heydon JJ) without the leave of the court after the hearing has concluded, further evidence cannot be filed without leave. The appellant advanced no basis as to why she should have been permitted to reopen and I would accordingly dismiss this ground of appeal. I certify that the preceding seventy eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. | procedural fairness the power of a judge to tender evidence at general law apprehension of bias whether the evidence tendered by the judge could possibly have made any difference to the outcome of the case unrepresented litigant waiver administrative law |
This is an application under s 134(4) of the Bankruptcy Act 1966 (Cth) ("Bankruptcy Act") for a direction as to whether, in realising the interest of the bankrupt in the estate of his late uncle, David Simon Julian De Marnay-Houston ("the deceased") who died leaving a will dated 13 April 1991 ("the will"), the applicants may join the co-beneficiaries under the will in calling upon the executor of the will, Perpetual Trustees Victoria Limited ("Perpetual"), to effect an in specie distribution of the residuary estate of the beneficiaries. 2 The application is supported by an affidavit of Gess Michael Rambaldi sworn on 21 August 2008 and some other affidavits of a formal kind. The application was served on the Deputy Commissioner of Taxation (who did not appear) and the bankrupt. The bankrupt, although not a party, was represented with leave. I am indebted to his representative, Mr O'Brien, and to the trustees' counsel, Mr Randall, for their submissions. • On about 6 October 2005, the bankrupt filed his statement of affairs. • On 13 August 2007, the deceased died leaving the will. • Under the will, the deceased appointed Perpetual, the bankrupt and his brother Ian Nairn Houston, as trustees of the will. • The deceased left his residuary estate to five parties, one of whom is the bankrupt. • By virtue of s 58(1)(b) of the Bankruptcy Act , the bankrupt's interest in the deceased's estate is an interest which vests in the trustees as after acquired property. • On 28 November 2007, Perpetual obtained probate of the deceased's will. • The Inventory of Assets and Liabilities lodged by Perpetual in support of its application for probate discloses assets valued in excess of $15 million including approximately $10 million in shareholding ("the Shares"). • The bankrupt was recently discharged from his bankruptcy. 5 Mr Rambaldi deposed, in his affidavit of 21 August 2008, that: (1) the investment value, as at 27 June 2008, made up of shares, cash and units in a property trust held for the benefit of the bankrupt estate was $1,954,467.88; (2) the "discounted" capital gain disclosed was $304,615.77; and (3) he estimates the sale of the bankrupt's interest in the Shares would crystallise a tax liability of approximately $141,077. Furthermore, the trustees have received proofs of debt in the bankrupt estate which have been admitted to prove in the amount of $2,220,889. 6 In the circumstances that have arisen, the trustees may elect to obtain an in specie distribution of the bankrupt's interest in the Shares or for Perpetual to sell the bankrupt's interest in the Shares and distribute the sale proceeds to them. The other four beneficiaries of the will have elected to obtain an in specie distribution of their interest in the Shares. Perpetual made distributions in specie to the other beneficiaries on 23 April 2008. The bankrupt's entitlement was put into a sub-account pending instructions. 7 Issues have arisen concerning the possible capital gains tax and other consequences associated with an in specie distribution, as outlined in the affidavit of Mr Rambaldi and counsel's submissions. In particular, on one view, the creditors of the bankrupt estate would receive what might be regarded as a "windfall" in that the bankrupt estate would take the benefit of the share sale whilst not having to meet capital gains tax. This tax liability would fall on the (now discharged) bankrupt, with the real possibility that he would be unable to meet it. The Commissioner might, of course, bring fresh bankruptcy proceedings if the Commissioner considered this a proper course. The trustees are concerned that, if they call for an in specie distribution, they may not be acting in accordance with the duties imposed upon them as trustees and officers of this Court as set down in Ex Parte James; In re Condon (1874) LR 9 Ch App 609 (" Ex parte James "). The money was irrecoverable under ordinarily principles. The Court of Appeal in Chancery held that, in such a case, the trustee was not bound strictly by the law. I am of opinion that a trustee in bankruptcy is an officer of the Court. He has inquisitorial powers given him by the Court, and the Court regards him as its officer, and he is to hold money in his hands upon trust for its equitable distribution among the creditors. The Court, then, finding that he has in his hands money which in equity belongs to some one else, ought to set an example to the world by paying it to the person really entitled to it. In my opinion the Court of Bankruptcy ought to be as honest as other people. (2) Except in the most unusual cases, the claimant must not be in a position to submit an ordinary proof of debt. The rule is not to be used merely to confer a preference on an otherwise unsecured creditor, but to provide relief for a person who would otherwise be without any. (3) In all the circumstances, it was not fair for an honest person to keep the money. (4) When the rule applies, it applies only to the extent necessary to nullify the enrichment of the estate. 10 It will be apparent from this discussion that the principle in Ex parte James has generally been invoked in different circumstances from the present. The decision in Re Ayoub; Ex parte Silvia (1983) 67 FLR 144 (" Re Ayoub ") is, however, of some assistance. In Re Ayoub , the bankrupt had purchased liquor and office equipment from four suppliers, on credit, who were unaware of his bankruptcy. The trustee sought a direction from the Court, pursuant to s 134(4) of the Bankruptcy Act , as to whether he would be justified in paying out the claims of the subsequent creditors of the assets of the estate in priority to unsecured creditors. Morling J declined to apply the rule in Ex parte James on the basis that it would not be unconscionable for the trustee to require the four creditors to pursue their rights by taking fresh bankruptcy proceedings against the bankrupt: see ss 58 and 59 of the Bankruptcy Act . That is, to require the four creditors to take fresh proceedings would not amount to inequitable conduct of the kind that had been regarded as sufficient to invoke the rule in Ex parte James . It was not to the point that the exercise of those rights might prove fruitless. 11 Turning to the present case, if the trustees call for an in specie distribution and subsequently sell the Shares, any tax liability that might arise in consequence would fall to be dealt with under the law. If it falls on the now discharged bankrupt, who fails to meet it, then the Commissioner may pursue his rights as may be advised. 12 Mr O'Brien highlighted that the circumstances that had arisen might be thought to work contrary to the will of the deceased. For the reasons mentioned at the hearing, this consideration does not lead me to reach a different conclusion. 13 Therefore, in all the circumstances, acknowledging that there are difficulties, I do not consider it unfair or unconscionable, in the sense referred to in Ex parte James , to direct that the trustees call upon Perpetual to make an in specie distribution of the bankrupt's interest in the Shares to them, and I would make the direction sought. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | application for a direction under s 134(4) of the bankruptcy act 1966 (cth) the bankrupt being one of the beneficiaries under a will before recent discharge from bankruptcy whether bankrupt's trustees may join in co-beneficiaries in receiving in specie distribution of shares under the will not unfair or unconscionable in the sense of ex parte james; in re condon (1874) lr 9 ch app 609 direction granted bankruptcy |
The proceeding came before Sundberg J on 15 December 2005, when his Honour made a number of orders that were sought, and made, without notice to the respondent. Among those orders was an order that the applicant apply again today to the duty judge for interlocutory orders. In the meantime, notice of the proceeding has been given to the respondent. 2 On 23 December 2005 Merkel J as duty judge made orders, preventing the respondent from leaving Australia, and requiring him to deliver up any passport held by him. Subsequently, on 29 December 2005, a notice of motion was filed in the Court, seeking to punish the respondent for contempt of Court in contravening the orders made by Sundberg J on 15 December 2005. That notice of motion is not before me today, because the applicant and the respondent both desire time to file further material in relation to it, and I have determined to adjourn it to 30 January 2006, to be dealt with by the duty judge if the docket judge should be unavailable. 3 It is necessary, therefore, to deal with the question whether any interlocutory orders should be made pending the hearing and determination of the proceeding in its entirety. Counsel for the respondent has made a number of submissions, including the submission that the orders made on 15 December 2005 ought not to have been made. I do not sit as an appeal court from Sundberg J and I therefore do not deal with that submission. The question for me is whether orders should be made that will cover the situation from now until the hearing and determination of the proceeding. In order to determine that question, I am required to apply the twin test of whether there is a serious question to be tried, and whether the balance of convenience favours the granting of injunctive relief. 4 Plainly, there is a serious question to be tried as to whether the respondent has acted in breach of ss 7 and 66 of the Banking Act 1959 (Cth) ('the Banking Act '). Section 7 creates an offence of carrying on any banking business in Australia, not being a body corporate, and without an order in force under s 11 determining that the section does not apply to the person. The offence created by the section is a fresh offence on each day on which it occurs. Section 66 of the Banking Act , in substance, prohibits a person from assuming or using in Australia the words 'bank', 'banker' or 'banking' in relation to a financial business, or words of like import. 5 There is no doubt that there is evidence to establish a serious question to be tried as to whether the respondent has contravened both of those sections. The respondent has represented himself to be involved with an entity he calls the Principality of Camside. By means of a webpage, or webpages, on the internet, he has represented to the public that the Principality of Camside is able to accept deposits from members of the public. The websites have used the words 'bank', 'banker' and 'banking', or words of similar import, that make it clear that the purpose of the operation, which is known as the 'Terra Nova Cache', is to receive deposits and to use them to give financial returns to the members of the public who have contributed to them. 6 There is evidence that such funds as have been collected by way of deposit have been conveyed to an organisation called Silverstone Global Investments ACN 109 672 095, for the purpose of investment. There is nothing to indicate that the transfer of funds to Silverstone Global Investments has been anything other than by way of loan from the recipient of the deposits. 7 There is ample evidence that the respondent has at least a high degree of power to control the activities of the Principality of Camside and the Terra Nova Cache, and that he is the one who has actively solicited deposits of funds from members of the public. Members of the public have deposited funds. There is plenty of evidence, on information and belief, to that effect. Counsel for the respondent has objected to the receipt of such evidence, saying that those who have provided statements to investigators from the applicant should be required to give their evidence on oath. It is clear that evidence of a hearsay nature, given on information and belief, with the source of the information, is admissible on an application of this nature. I am content to receive the evidence, and to give it such weight as it deserves. 8 There is abundant evidence that there is no authorisation of the respondent, the Principality of Camside, or the Terra Nova Cache, to carry on the business of banking in Australia, or to use the words the use of which is prohibited by s 66 of the Banking Act . Nor is there in force any determination under s 11 of the Banking Act that s 7 does not apply to the respondent. 9 There can be no doubt, also, that the balance of convenience favours the grant of injunctive relief. The respondent, as part of the selling point for soliciting deposits, has sought to suggest that in some way the funds so deposited can be placed outside the scope or authority of Australian laws, for taxation and other purposes. There is no doubt that there is an element of misleading of the public in the seeking of deposits. There is also evidence that, since the making of the orders of 15 December 2005, freezing the assets over which the respondent has control for the protection of the depositors, the respondent has attempted to withdraw a substantial sum of money, in defiance of those orders. The sum of $500 000 was transferred into the bank account of a friend of the respondent, and the respondent then became an authorised signatory to that account. 10 The question then is, what orders would be appropriate? I am satisfied that it would be appropriate to enjoin the respondent from receiving money from members of the public, by way of deposit in the Terra Nova Cache or the Principality of Camside, from assuming or using the words 'bank', 'banker' or 'banking' or any words or phrases of like import in relation to his business, and from advertising or representing or stating that he will carry on the business of banking. 11 It is also appropriate, in my view, to make orders endeavouring to ensure that any assets over which the respondent does have control will be frozen effectively. With one exception, I propose to make the orders sought today by the applicant in that respect. The applicant was prepared to make concessions that would have allowed the respondent to withdraw $500 a week from whatever funds would otherwise be available to him, but for the freezing orders, for his living expenses, and his reasonable legal expenses in defending the proceeding. I have some disquiet about that, because the material before me is absolutely silent as to what other sources of funds the respondent may have available to him, and as to what means he may have of meeting his legal costs and of discharging his living expenses, without resort to any of the frozen assets. I therefore decline to adopt those concessions. 12 What I will do is to make a general exception that the applicant may consent in writing to allow the respondent to make withdrawals from assets for various purposes, one of which would obviously be for the repayment of deposits to members of the public who have provided the money. I appreciate that the applicant is unwilling to be involved in arbitrating the extent to which living expenses should be allowed, but it has been prepared to allow $500 a week. If the amount requested is no more than that, then the applicant could well be persuaded to approve it. As an alternative, I propose to reserve liberty to apply, so that the respondent can apply to the Court, supported by an affidavit as to his means, for an order that he be permitted to withdraw money for the purposes of living expenses and legal expenses. 13 I propose also to make an order similar to one made by Sundberg J, requiring that, on any webpage dealing with the Principality of Camside or the Terra Nova Cache, the respondent ensure that a notice appears, stating in clear terms: that the Terra Nova Cache is not authorised to carry on banking business in Australia and not authorised to receive moneys on deposit or lend moneys; that the Principality of Camside is also not so authorised; that it is an offence under ss 7 and 66 of the Banking Act to carry on banking business without authorisation, and an offence under ss 8 and 66 of the Banking Act for a corporation to carry on banking business in Australia without authorisation; and that neither the Terra Nova Cache nor the Principality of Camside has any authorisation or permission to use the word 'bank', 'banker' or 'banking' in connection with its business. 14 Otherwise I propose to make orders that will facilitate the hearing of the notice of motion for contempt on 30 January 2006. Those orders will be by way of timetabling of the filing of material. They will include a dispensation from the provision, found in O 40 r 8 of the Federal Court Rules , requiring personal service of a notice of motion, a statement of charge and supporting affidavits, in a case of contempt of court. That dispensing order is made by consent. Counsel for the respondent has indicated that he proposes to raise in the proceeding a constitutional issue of the kind that requires the service on each of the Attorneys-General for the Commonwealth, the States and the Territories of a notice pursuant to s 78B of the Judiciary Act 1903 (Cth). 15 The orders I make will make provision for the service of that notice at an early date, so that there can be sufficient time for the Attorneys-General to reply before 30 January 2006, and the proceeding may continue on that date. The notice of motion filed on 29 December 2005 be adjourned to 11.15 am on 30 January 2006, to be heard by the duty judge if the docket judge is unavailable. On or before 23 January 2006, the applicant file and serve on the solicitors for the respondent any further affidavit on which it may seek to rely in support of the notice of motion filed on 29 December 2005. By consent, personal service on the respondent of the notice of motion filed on 29 December 2005, the statement of charge, the affidavits of David John Harley, sworn on 22 December 2005, and Matthew Paul Wylie, sworn on 14 December 2005, 22 December 2005, and 23 December 2005, and any affidavits filed pursuant to paragraph 5 of this order, be dispensed with. On or before 25 January 2006, the respondent file and serve any affidavit on which he may seek to rely in opposition to the notice of motion filed on 29 December 2005. On or before 13 January 2006, the respondent serve any notice raising an issue of a kind referred to in s 78B of the Judiciary Act 1903 (Cth), in accordance with that section. The costs of today be reserved. Amongst other activities which it is not authorised to do, it is not authorised by Australian law to receive moneys on deposit or lend moneys. THE PRINCIPALITY OF CAMSIDE is NOT authorised to carry on banking business in Australia. Amongst other activities which it is not authorised to do, it is not authorised by Australian law to receive moneys on deposit or lend moneys. It is an offence under section 7 and section 66 of the Banking Act 1959 for a person to carry on banking business in Australia without authorisation. It is an offence under section 8 and section 66 of the Banking Act 1959 for a corporation to carry on banking business in Australia without authorisation. NEITHER TERRA NOVA CACHE NOR THE PRINCIPALITY OF CAMSIDE nor any associated entity has permission under the law of Australia to use the word 'bank', 'banking' or 'banker' in connection with its business. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray. | interlocutory orders whether serious question to be tried that respondent carrying on banking business, or using words 'bank', banker' or 'banking' in relation to a financial business whether balance of convenience favours grant of injunction evidence of attempted flouting of previous order whether assets should be frozen whether funds should be available for living expenses and legal fees banking and finance |
For convenience the respondents will be referred to hereafter as 'the Moskalevs'. 2 On 30 June 2006 Driver FM dismissed an application made under s 46PO of the Human Rights and Equal Opportunity Act 1986 (Cth) ('the HREOC Act') which claimed discrimination by the Department in the provision of accommodation to the Moskalevs contrary to ss 5 , 6 and 25 (1)(b) of the Disability Discrimination Act 1992 (Cth) ('the DDA'). Despite the dismissal, his Honour ordered the Department to re-assess the eligibility of the first respondent ('Mr Moskalev') for priority housing under the Department's priority housing policy entitled 'Department of Housing --- Policy ALL0040A Priority Housing' ('the Priority Housing Policy'). 3 The issue arising in these proceedings is whether the order requiring the Department to reassess the Moskalevs' eligibility to be considered for priority housing was made ultra vires. For various reasons those applications did not proceed. Thereafter offers of public housing were made by the Department to the Moskalevs. These offers were declined by the Moskalevs on the basis, inter alia, of the medical needs of Mr Moskalev. Dr Alex Aristoff certified that due to Mr Moskalev's medical condition, he would benefit from having his own bedroom, preferably in a free standing house. 5 In May 2005 Mrs Moskaleva lodged a complaint with the Human Rights and Equal Opportunities Commission ('the Commission') on behalf of herself and Mr Moskalev alleging disability discrimination. Additional medical evidence was provided from Tania Alexander a senior clinical psychologist, which also suggested that a free-standing house might benefit Mr Moskalev. 6 The Commission considered that the complaint raised allegations of discrimination by the Department against the Moskalevs in the provision of accommodation under the terms of the DDA and the HREOC Act. Specifically, the Commission considered that the complaint raised issues under ss 6, 11 and 25 of the DDA. Such sections respectively provide the definition of indirect discrimination, the definition of unjustifiable hardship, and render discrimination based on disability in the provision of accommodation unlawful. 7 On 30 May 2005 the Commission, being satisfied that there was no reasonable prospect of the matter being settled by conciliation, terminated the complaint of discrimination pursuant to s 46PH(1)(i) of the HREOC Act at the request of Mr Moskalev. 9 A hearing took place on 19 June 2006 during which Mr Moskalev conducted the proceedings. Apointed [sic] to the priority Housing List. To be given a non atendent [sic] 4 bedroom freestanding house on Chester Avenuer [sic] nomber [sic] 54. His Honour found that the Department's decision not to accept the medical evidence did not constitute direct discrimination under the DDA. 11 Driver FM also found that Mr Moskalev had not been indirectly discriminated against by the Department. His Honour found there was no evidence that a higher proportion of people without Mr Moskalev's disability would have met the relevant condition in the Priority Housing Policy which required applicants to establish that they are unable to resolve their housing needs themselves in the private rental market. 12 Despite Driver FM making no finding of direct or indirect discrimination by the Department against Mr Moskalev under the DDA, his Honour considered that the Department had given inadequate consideration to the cumulative medical evidence provided to the Commission. As I noted in Tyler v Kesser Torah College [2006] FMCA 1 , at [108] s.46PO(4) of the HREOC Act is not an exhaustive statement of the orders that may be made by the Court in proceedings under the Act. In my view, even where unlawful discrimination is not established, the Court may, in appropriate circumstances (as here) use s.15 of the Federal Magistrates Act 1999 (Cth) to correct administrative error. The Department submits that the order of Driver FM in effect required the Department to review the exercise of its statutory functions under the Housing Act 2001 (NSW) ('the Housing Act ') and as such the reasoning of Driver FM constituted an impermissible merits review of the Department's determination of the Moskalevs' application for priority housing. 15 The Department also submits that in the absence of a finding of unlawful discrimination no occasion arose for Driver FM to consider any question of judicial review of the Department's administrative actions. Its affairs are conducted by the Director-General of the New South Wales Land and Housing Corporation (see: s 6(2) of the Housing Act ) who has responsibility for maintaining and overseeing the operations of the Corporation in the name of the Department (see s 6(7) of the Housing Act ). The objects of the Housing Act are to ensure the provision of social housing to persons with demonstrable need for such assistance in New South Wales. The Housing Appeals Committee is an internal committee of the Department established as a second level avenue of appeal. The Department acknowledges that it is bound to observe both State and Commonwealth anti-discrimination legislation in relation to the provision of housing. Section 71 (contained in Ch III) of the Constitution vests the judicial power of the Commonwealth in the High Court of Australia, in such other federal courts as the Parliament creates, and in such other courts as it invests with federal jurisdiction. The width of the power provided by s 23 was considered in Jackson v Sterling Industries Limited [1987] HCA 23 ; (1987) 162 CLR 612. At 618 Wilson and Dawson JJ referred to the power under s 23 of the Federal Court Act as an implied power. Section 15 has been used, for example, as a power to issue subpoenas (see: Rana v Fergusson & Ors (No 1) [2003] FMCA 293) , to issue orders in the nature of Mareva injunctions (see: Mather v Luttrell Ltd & Ors [2003] FMCA 62) , to make orders for indemnity costs (see: SZBCE v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FMCA 1933) , and to prevent abuse of the Court's procedures (see: SZDCJ v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 1500). In each case, the Court possessed jurisdiction to make the order as being ancillary to the jurisdiction already possessed by it pursuant to a Federal statute. 23 Driver FM considered that he was authorised to make the order by virtue of s 15 of the FMA ' to correct administrative error '. His Honour concluded that the Department did not fully assess the extent of the medical evidence relating to Mr Moskalev and accordingly ordered the Department to re-consider the merits of the Moskalevs' application for priority housing. However the order was made after his Honour determined that there was no discrimination under the HREOC Act. 24 Driver FM, referring to his decision in Tyler v Kesser Torah College [2006] FMCA 1 considered that even if unlawful discrimination has not been established s 15 of the FMA could be used to correct administrative error. Due to the ancillary nature of orders that may be made under s 15 of the FMA, such observation is valid provided that the Court in making the order is exercising a source of federal jurisdiction. 25 Driver FM had before him a claim alleging discrimination under the HREOC Act. Such claim, if upheld could give rise to relief of a kind proposed by the order. However section 46PO(4) of the HREOC Act does not provide any power to make declarations or orders against a party where there has been no finding of unlawful discrimination. The Court can only make orders ' if the court concerned is satisfied that there has been unlawful discrimination ' (see s 46PO(4)). Accordingly if the claim by the Moskalevs to be appointed to the priority housing list was ancillary only to their claim under the HREOC Act, there was no jurisdiction to make the order following the finding that there was no unlawful discrimination. Since there was no jurisdiction under s 46PO(4) of the HREOC Act, an alternate source of federal jurisdiction other than s 15 of the FMA is necessary to support the order. It is therefore necessary to consider whether the power to make the order lies in any associated jurisdiction of the Court, since the order could only be justified if a separate and different cause of action had been raised which the Court could deal with pursuant to s 18 of the FMA. Once federal jurisdiction is attracted, it is not lost because the claim or assertion which attracted it has not been substantiated or has been displaced by some countervailing fact. Once attracted, by whatever path attracted, the jurisdiction persists to enable the Court to resolve the matter. 27 There are however, limits to the type of matter which can properly be described as 'associated' with the jurisdiction of a federal court. To be outside the accrued jurisdiction, however, the other matter must be separate and disparate from the matter in relation to or in connexion with which federal jurisdiction has been attracted. The Constitution , however, makes it clear that the attached claim must be part of the matter that attracts jurisdiction; closeness of association is not enough. Conversely, claims which are "completely disparate" (378), "completely separate and distinct" (379) or "distinct and unrelated' (380) are not part of the same matter. 31 Section 18 of the FMA provides a source of jurisdiction in associated 'matters'. A 'matter' must be a justiciable dispute and not merely a legal proceeding. 76 means a legal proceedings, but rather the subject matter for determination in a legal proceedings. In our opinion there can be no matter within the meaning of the section unless there is some immediate right, duty or liability to be established by the determination of the Court. 32 Two observations may be made. First, the facts and evidence relating to the claim of the Moskalevs' alleging discrimination are different to those relating to the administrative review of the Department's decision pursuant to its Priority Housing Policy and are not 'inseverable' (see: Gibbs J in Fencott v Muller 152 CLR 593). The Court accepts the submission of the Department that there was no requirement for it to adduce evidence of its procedures relating to the operation of the Housing Appeals Committee in view of the only matter before Driver FM, namely the claim of discrimination. The order requires the Department to undertake a merits review of its determination in relation to the Moskalevs' application for priority housing when such question did not arise either as a federal or as an associated matter. 33 Second, the request of the Moskalevs' to be placed on the priority housing list did not constitute a separate 'matter' for the exercise of the Court's jurisdiction. The claim for such order was ancillary to the claim of discrimination under the HREOC Act. Accordingly s 18 of the FMA cannot be used as a source of jurisdiction to justify the order. In the absence of any finding of unlawful conduct by the Department there was no jurisdiction under s 15 of the FMA which could support the order and the request to be placed on the priority housing list does not constitute an 'associated matter' under s 18 of the FMA. It follows that the order was made ultra vires. 35 Section 23 of the Federal Court Act empowers the Court to make orders and to issue writs of such kinds as the Court considers appropriate. The Court will accordingly set aside the order. I certify that the preceding thirty-five (35) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Cowdroy. | jurisdiction of federal magistrates court of australia extent of jurisdiction to make orders under s 46po(4) of the human rights and equal opportunity commission act 1986 (cth) associated jurisdiction. administrative law |
2 Chick Vic was incorporated on 7 April 1987. From 1 February 1992, its directors were Alan Chick and the first defendant, David Jenkins. 3 On 30 April 1999, Mr Chick, Mr Jenkins, their wives and certain related companies entered into a "Business Dissolution Deed" (the Deed). By the Deed, the Chicks and their related companies ended their involvement in Chick Vic. From that date, Chick Vic's directors were Mr Jenkins and the second defendant, his wife Vivienne Jenkins. 4 Mrs Jenkins formally resigned as a director on 22 September 2000. 5 The nine plaintiffs are eight building sub-contractors based in Albury and Wodonga. (The second and third plaintiffs, Mr and Mrs Fletcher, were members of a partnership at the relevant time. ) In the period from 30 April 1999, Chick Vic had engaged each of them in relation to a variety of building projects. 6 By a resolution of Mr Jenkins, Christopher Chamberlain, a partner in the firm of Nicholls & Co based at Wagga Wagga, was appointed as Chick Vic's administrator on 11 January 2001. By a resolution of creditors, Mr Chamberlain was appointed as Chick Vic's liquidator on 7 February 2001. Chick Vic's winding up is yet to be completed. 7 The plaintiffs claim that the defendants contravened ss 588G(2) or (3) of the Corporations Law (the Law) or, alternatively, the Corporations Act 2001 (Cth) (the Act). It was amended from time to time. Notwithstanding its age, it was heavily amended only a week before the trial commenced: see Tru Floor Service Pty Ltd v Jenkins [2006] FCA 119. I will call the current amended pleading "the statement of claim". Argument then ensued as to whether the defendants were disabled from making a no case submission by reason of having tendered exhibits during cross-examination of the plaintiffs' witnesses. 12 The defendants relied on O 32 r 4(4) of the Rules of Court for the proposition that a party who has tendered documents in evidence may not make a no case submission. Subrule (1) empowers the Court to give directions as to the "order of evidence and addresses and generally as to the conduct of the trial". Subrule (2) deals with "the order of evidence and addresses ... as provided by the following sub-rules of this rule", namely sub-rs (3) to (6). Subrule (3) provides that the party to begin may make an address opening his case and may then adduce evidence. If the opposite party adduces evidence, that party may make an opening address before adducing evidence, and after the conclusion of that evidence may make a closing address, whereupon the party to begin may make a closing address: sub-r (6). 13 Subrule (4) does not expressly provide for the case where, at the conclusion of the plaintiff's evidence, the defendant has tendered a document or thing in evidence. Subrules (5) and (6) deal only with cases that fall within sub-r (4). In that situation the gap is to be filled pursuant to sub-r (1): the Court gives directions as to the order of evidence and addresses. Likely directions will be to the effect of those contained in r 49.01(6)(b) of the Rules of the Supreme Court of Victoria. Rule 49.01(1) corresponds with this Court's O 32 r 4(1). Rule 49.01(3) is to substantially the same effect as O 32 r 4(2). Rule 49.01(4) corresponds with O 32 r 4(3). Rule 49.01(5) is to substantially the same effect as O 32 rs 4(4) to (6). Subrule (6)(b) states the effect of Weller v O'Brien [1962] 1 WLR 885, which held that a defendant who elects to call no evidence loses the right of last address if he has put a document in evidence in the course of cross-examining on the plaintiff's case. 14 Weller was displaced in England and Wales by O 35 r 7(3) of the Rules of the Supreme Court (RSC), introduced in 1967. Which course it chooses to follow would depend on how it viewed Weller . 15 I do not think O 32 r 4(4) has any bearing on a no case submission. As indicated, subrules (2) to (4) are concerned with the order of evidence and addresses. However, that gap is to be filled by directions as to the order of evidence and addresses: for example, that the defendant does not have the right of last address enjoyed by a defendant who has not so tendered a document or thing and who does not adduce evidence, or alternatively, that he does have that right. Similarly, in a passage concerned solely with no case submissions in this Court, the sixth Australian edition of Cross on Evidence renders (at 297) the presently relevant effect of Rasomen and Protean (Holdings) Ltd (rec and mgr apptd) v American Home Assurance Co [1985] VR 187 at 237 (Full Court), namely that there is no general rule that requires a party making a no case submission to elect to call no further evidence if some evidence has already been led, or if exhibits have been tendered during cross-examination, without any reference to sub-r (4). The plaintiffs' counsel responded. I then reserved my decision on the no case submission and on whether the defendants should be required to elect not to call further evidence. This course was followed in reliance on Protean at 237-240, Rasomen at 498-499 and Compaq Computer Australia Pty Ltd v Merry (1998) 157 ALR 1 at 6-9. ) Young CJ expressed a similar view at 215 and Fullagar J agreed with what Tadgell J had said. 18 In Protean the trial judge had not adopted the course I have described at [17]. Rather he had indicated that he would both entertain the no case submission and rule on it without requiring an election to be made by the moving party. While Tadgell J did not think this an incorrect approach, his Honour clearly considered preferable that described at [17]. To that end the Judge might find it useful to allow the submission to be made and answered without first requiring an election to be made, before deciding whether he will rule on it, ie to take the second course summarized above .... When that course is followed the Judge will know, before he commits himself to rule, whether the no case submission is (a) that there is no evidence at all in support of the respondent party's case, ie accepting all the evidence at face value, no case has been established in law ..., or (b) that, although there is some evidence in support of the respondent party's case, the Judge should not act on it because, for example, it is so unsatisfactory or inherently unreliable or equivocal that he should find that the burden of proof resting on the respondent party has not been discharged ..., or (c) a combination of (a) and (b). MUST THE DEFENDANTS ELECT NOT TO CALL FURTHER EVIDENCE? However, the judge has a discretion to depart from the general rule where the particular circumstances require it. It has been said that in deciding which course to follow, the judge will be guided by the nature of the case, the stage it has reached, the particular issues involved and the evidence that has been given. The imposition of the requirement that the moving party make an election before the judge entertains the submission or rules on it will depend on the just and convenient disposition of the litigation. See Protean at 238 and Rasomen at 504. See, for example, Protean at 238, Rasomen at 504, J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (Western Australian Branch) (No 2) (1992) 38 FCR 458 at 461-462 and Union Bank of Australia Ltd v Puddy [1949] VLR 242. In the first place ... something may turn on the nature of the case itself. ... [W]here, as in the case before me, fraud is alleged, it may often be wrong to suggest that a party should submit himself to cross-examination before it is seen that there is really some evidence against him. In the second place, it would seem that the exercise of the discretion must generally involve an estimating of probabilities. If I accede to the application made to me, I may save the parties a great deal of time and expense, or I may cause them much greater expense and delay in the event of a new trial being ordered. In order to assess these probabilities, it seems to me that it must generally be necessary to form some preliminary estimate of the evidence before ruling as to whether the submission is to be entertained without election. I felt clearly of opinion that the balance of convenience was heavily in favour of this course. The case for the defendant, consisting of the opening and examination in chief, with very little cross-examination, had lasted over three and a half days. Then, coming to determine the application on its merits, I have felt satisfied that there was no case for the plaintiff to answer on defence or counterclaim. They may not be, and probably are not, the only considerations, but those are two and I think both are present in this case. This action has now been going for the best part of four days and I have heard the evidence only of the plaintiffs and their witnesses and that only on the issue of liability. The particulars with regard to damages which were given this morning are such as to indicate that the plaintiffs' case before it is concluded will take some further considerable time, and on both those aspects of liability and of damage the defendants would have the opportunity to call evidence, and there has been an indication in cross-examination that if the case goes to its full conclusion evidence will be called by the defendants on both those aspects. Those cases, and this case it is to be noted, are cases in which the Judge is sitting without a jury, and while jury cases stand on a somewhat different footing, even in those cases the Court has recognised ... that where there may be an unnecessary loss of time and money, it may be proper for a Judge to hear, at the close of the plaintiff's case, an application for judgment for the defendant. 22 Sampson and Puddy were referred to with approval by Mason and Jacobs JJ (with whom Barwick CJ agreed) in Stevenson v Barham [1977] HCA 4 ; (1977) 136 CLR 190 at 203. Stephen J dissented in the result, but agreed with what Mason and Jacobs JJ said about election. 23 In exercising his discretion not to require the defendant to elect, the trial judge in Protean at 192-193 relied heavily on the time the case had already lasted, and the time that might be saved by hearing the no case submission. Where no reference at all to the evidence is required. Where a reference to the evidence is required only to establish that there is an evidentiary hiatus or failure to adduce any evidence as to an essential element in the cause of action. Where it is argued that on a consideration of the evidence adduced by the plaintiff taken at its highest from the plaintiff's point of view, the evidence could not support the causes of action pleaded. The situation where it is contended that although there is some evidence to support the plaintiff's claim, it is so weak and unreliable that it should be dismissed without calling upon the defendant. No question of election arises in that situation. Likewise, consideration of a submission of no case to answer in category 2 should not involve an election. 25 In relation to categories 3 and 4, Perry J states the position that should "normally" obtain. That accommodates taking a different course in the exercise of the discretion in a particular case. Guidelines such as those his Honour offered provide a useful starting point in the general run of cases. But there is one guideline more powerful than any others, namely that the discretion is to be exercised in the light of the facts and circumstances of the particular case. 26 The circumstances in Residues Treatment & Trading pointed strongly towards the application of the general rule. The trial had proceeded for 47 days spread over two and a half months before the no case submission was made. The transcript occupied more than 3,500 pages. The argument on the preliminary question whether the defendants should be put to their election occupied three and a half days. The no case submission related to only some of the causes of action pleaded against the defendants. Whatever the outcome of the submission, the action would proceed in relation to the principal relief sought against them. 27 The matters referred to at [26] are not present in the instant case. What takes this case outside the "normal" course are the likelihood that significant time and money will be saved by entertaining the no case submission, the fact that part of what is alleged against the defendants is an offence involving dishonesty (see [7]), and my prima facie impression that the plaintiffs' case on insolvency is not strong. The weight of the first of these considerations is acknowledged by Perry J at 70. The second was not a feature of Residues Treatment & Trading . The third is a matter it is proper to take into account. 28 The considerations that led Finkelstein J in Merry not to require the respondents to elect can usefully be noted. The first was the nature of the allegations made against them. It was alleged that they were involved in a scam to defraud Compaq. The cause of action that they procured a breach of trust required proof of dishonesty. The second factor related to the efficient disposition of the case. The respondents' evidence would have taken well over a week. The considerable expense thus involved suggested that the respondents should not be required to go into evidence before the merits of the applicant's case had been ruled upon. The final factor was the Judge's impression that the applicant's case had weaknesses. His Honour's conclusion was that both the interests of justice and the efficient disposition of the case indicated that the respondents should not be put to their election. 29 All three factors relied upon in Merry exist in the present case: an offence of dishonesty, the saving of court time and expense, and the perceived weakness of the plaintiffs' case on insolvency. 30 I do not understand the plaintiffs to have submitted that the tendering of exhibits required the defendant to elect not to call further evidence. Rather, the contention was that tendering the exhibits disabled them from making a no case submission. I have dealt with that at [11] to [16]. In any event, had such a submission been made, I would have rejected it. There is no general rule that requires a party making a no case submission to elect to adduce no further evidence if some evidence has already been led, or if exhibits have been tendered during cross-examination. In a particular case, the fact that the party has taken steps of this kind will be one of the circumstances to be taken into account in the exercise of the discretion whether to require an election. See Protean at 237 and Rasomen at 505. 31 Again, O 32 r 4(4) does not have the effect that a party is obliged to elect to adduce no further evidence by reason of having tendered exhibits during cross-examination of the plaintiff's witnesses. What I have said at [30] is applicable in this context. 32 Contravention of s 588G(3) is an offence, one element of which is that the director's failure to prevent the company incurring the debt was dishonest. I have referred to the cases drawing attention to the position where fraud is alleged. The "gross fraud" referred to by Fullagar J (junior) in Protean was in fact arson --- it was alleged that the insured had lit or connived at lighting the fire. In my view the words of Fullagar J (senior) in Puddy are apposite here --- it would be wrong for the defendants to be subjected to cross-examination on the dishonesty component of the offence before it is seen that there is some evidence of the insolvency component. 33 In the present case the plaintiffs' case took two weeks. The parties have thus already been put to great expense, both in terms of time and money. It is clear from what has thus far transpired that the defendants' case would have lasted at least the remaining week allocated to the proceeding. Mr Jenkins' affidavit evidence alone (including exhibits) occupies 982 pages of the Court Book. His evidence touches all aspects of the case: solvency, his awareness of the company's ability to pay its debts, and the quantum of the debts. I would be surprised if he were cross-examined for less than three days. In those circumstances, as was the case in Sampson and Puddy , there may be a considerable saving in time and expense to the parties if the application is heard. 34 Finally, having heard argument on the no case submission, I entertained serious doubts as to the viability of the plaintiffs' case on insolvency. 35 Accordingly, for those three reasons, I do not require the defendants to elect whether to call further evidence as a condition of ruling on the no case submission. The insurer raised defences that the insured had lit or connived at lighting the fire and had falsely represented, and failed to disclose, to the insurer material facts. The trial judge allowed the insured to split its case. The insured adduced evidence on matters on which it had the onus of proof, but elected to call no evidence in relation to the defences until all the evidence for the insurer on the defences had been called. The insurer then went into evidence on its defences. At the close of the insurer's case the judge allowed the insured to submit that it had no case to answer in respect of the defences without being put to its election whether or not to call evidence in relation to the defences. The insured's submission was upheld, and being of opinion that the insured had made out its case for indemnity, the judge entered judgment for it. 37 On appeal it was contended by the appellant that, in deciding the no case submission, the trial judge "embarked upon the wrong exercise". It was said his Honour had proceeded as if his function was to reach a final judgment on the facts, with inferences drawn and applied, as if he were deciding at the end of the whole case. His proper function, it was contended, was 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 to draw those inferences. An alternative argument was that the evidence revealed a prima facie case in respect of each of the defences, sufficient to require an answer by the insured. 38 All members of the Full Court rejected those contentions. Tadgell J, with whom Fullagar J agreed, distinguished (at 239) between a case where the no case submission is that there is no evidence at all in support of the respondent party's case and one where it is that, although there is some evidence to support it, the judge should not act on it because, for example, it is so unsatisfactory or inherently unreliable or equivocal that he should find that the burden of proof resting on the respondent party has not been discharged. 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. It has been said that 'when there is no jury, the proposition 'no case to answer' may obviously mean far more than, 'is there evidence on which a jury could find for the plaintiff? ' It merely means, would you, the Judge, on the evidence given, find for the plaintiff? 39 This approach has been approved in many cases. 40 Accordingly, I proceed on the basis that my present function is no different from that which has to be performed by a judge who has heard all the evidence in the ordinary way, and who has to give final judgment. In both situations, a judge must make findings of fact, after assessing the quality of the evidence. Therefore, an excess of current liabilities over current assets is not conclusive of a company's insolvency and "cannot be more than a rule of thumb" as to the same: Quick v Stoland Pty Ltd (1998) 157 ALR 615 at 623 per Emmett J. Further, "[a] temporary lack of liquidity must be distinguished from an endemic shortage of working capital whereby liquidity can only be restored by a successful outcome of business ventures in which the existing working capital has been deployed": Hymix Concrete Pty Ltd v Garrity (1977) 13 ALR 321 at 328 per Jacobs J. Finally, a failure to pay a debt is not, without anything else, conclusive of insolvency. First the words of s 95A must be construed as they stand, without addition or subtraction. Second, the law both before and after the enactment of s 95A is unequivocally and emphatically clear that insolvency is, first and last, a question of fact 'to be ascertained from a consideration of the company's financial position taken as a whole. In considering the company's financial position as a whole, the Court must have regard to commercial realities. Commercial realities will be relevant in considering what resources are available to the company to meet its liabilities as they fall due, whether resources other than cash are realisable by sale or borrowing upon security, and when such realizations are achievable': Southern Cross Interiors Pty Ltd (in liq) v Deputy Commissioner of Taxation [2001] NSWSC 621 ; (2001) 53 NSWLR 213 at 224. ) I agree "that insolvency is, first and last, a question of fact". Section 95A speaks of objective ability to pay debts as and when they become due and payable, but ability must be determined in the circumstances as they were known or ought to have been known at the relevant time, without intrusion of hindsight. 45 Notoriously, there is an apparent conflict in the authorities as to whether, and to what extent, a court should take into account creditors' forbearance in pursuing (by whatever means) the payment of debts that, according to the terms of the relevant agreement, are due and payable. That is, if a debtor is entitled to, say, 45 days' credit, when is that debt due and payable in a s 95A sense ? At the end of the 45 days? Or at the end of some longer period which the creditor has, customarily, tolerated --- as opposed to one supported by, say, an estoppel or a variation of the relevant agreement? I would not consider such an issue to be a question of law to be decided by the application of a rigid rule. Rather, the statute appears to focus attention upon what it is reasonable to expect in a given set of circumstances, such a consideration being made by someone operating in a practical business environment. Attention is focused at whether a person would expect that at some point the company would be unable to meet a liability. Such a question is necessarily a factual one to be decided in light of all the circumstances in the case. At one end of the spectrum a company may be operating in an industry where a code of practice of paying 60 days after invoicing has arisen, despite stated terms of 30 days. If the company has a large number of creditors, it may be reasonable to expect that all of them would not suddenly insist on being paid in 30 days. At the other end of the spectrum would be a case where a single creditor had granted an indulgence on one occasion. It may well not be reasonable to expect a repetition of that event. He would have regard to the fact that the credit policy of any particular creditor might suddenly change and require any outstanding debts to be paid forthwith. The possibility of such a change could result from any one of a number of factors including the fact that the creditor is itself experiencing financial stringency or, as the circumstances of this case illustrate, a change in management. A reasonable and prudent director must found his expectations on reasonable grounds. An expectation that creditors will continue to permit late payment of accounts is founded on hope and optimism, not on reason. It is a policy fraught with danger and would only be adopted if the company was experiencing a temporary lack of liquidity. A reasonable and prudent director would acknowledge that, while his company might have enjoyed periods of grace in the payment of its debts, there could be no reasonable expectation that that situation would continue. Apart from these considerations, he would recognize that the very fact that the ability of a company to continue to trade depends on indulgences from its creditors points to the conclusion that it is unable to pay its debts as and when they fall due. In other words, a reasonable and prudent director will, generally speaking, be directing his attention to whether the company will be able to pay its debts on the date stipulated for payment. (See also Powell v Fryer [2000] SASC 97 at [32] - [33] per Prior J. Any reluctance by creditors to enforce legal rights was not relevant to the approach under the relevant section. The commercial likelihood of enforcement of the company's debts cannot override the substance of what is involved in the determination of that question. 47 In Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation [2001] NSWSC 621 ; (2001) 53 NSWLR 213, Palmer J reviewed at length the authorities on determining solvency. It is certainly possible to read the fifth proposition as being expressed in prescriptive terms; but even there, I think, his Honour was stating, in effect, the basis upon which the courts have generally assessed the significance of indulgences that were shown to have been granted. But I do not so read what Palmer J said. The case before his Honour fell into the former category. The case before me, on the pleading, is likewise a case of actual insolvency; as the defendants point out in para 2 of their written submissions 'this is not a case of insolvent trading'. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality ... it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature or consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent likelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters 'reasonable satisfaction' should not be produced by inexact proofs, indefinite testimony, or indirect inferences. ) As noted at [7], the plaintiffs claim that the defendants contravened ss 588G(2) and (3) of the Law or the Act. Section 588G(2) is a civil penalty provision. Section 588G(3) creates an offence requiring proof of dishonesty. I think it appropriate, in deciding whether the case against the defendants has been proved, to, in the words of s 140 , "take into account the nature of the cause of action [and] the gravity of the matters alleged". That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary 'where so serious a matter as fraud is to be found'. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. ) That was the approach taken to s 588G by Mandie J in Plymin at [367]. As to the "debate" I referred to in the opening sentence of this paragraph, it is also the approach supported by Mr Odgers SC in his text I referred to earlier. It involves eight substantial sub-contractor creditors of Chick Vic (see [5]). This multiplicity of creditors in a proceeding under s 588G (and its predecessors) is itself uncommon. Most of the cases cited at [43] to [48] involved a liquidator or a single creditor seeking to recover one debt (or a series of debts). 52 However, the multiplicity of creditors is far exceeded by the multiplicity --- and variety --- of debts they seek to recover. Some arose when those creditors entered into written contracts with Chick Vic. Generally, those debts are for substantial sums. Those contracts necessarily described in some detail the scope of the works to be performed by the relevant sub-contractor. Inevitably and invariably, that scope changed in the course of the relevant project. Sub-contractors received oral instructions to perform works outside the scope. At the latest, the performance of those instructions gave rise to variations of the initial contract. The amounts involved in the plethora of variations pleaded in the statement of claim range from tens to tens of thousands of dollars. The statement of claim goes to great lengths to outline when the relevant instruction was given by Chick Vic, when it was confirmed in writing by Chick Vic and when the relevant sub-contractor invoiced Chick Vic for the work. Unfortunately, that leaves unanswered the crucial question of when exactly the instruction was accepted, whether by some statement to that effect or its performance, thus giving rise to a contract. Further, some of the debts sought to be recovered are in the nature of unpaid retention moneys. That is, amounts that, pursuant to the relevant written contract, Chick Vic deducted from payments to sub-contractors and retained pending practical completion of the relevant project and the expiry of the relevant defects liability period. 53 The circumstances described at [51] and [52] explain the form of the pleading as to Chick Vic's insolvency. However, s 95A speaks of a person who " is solvent [because] the person is able to pay all the person's debts, as and when they become due and payable". (The emphasis is mine. ) Additionally, s 588G makes liable a person who fails to prevent the occurrence of a particular event --- the incurring of a debt --- at a time when the company of which he or she is a director is insolvent (or will become insolvent because of that occurrence). 55 I will deal with the no case submission in the following manner. First, I will decide whether Chick Vic was insolvent at the starting point. Then, I will decide whether Chick Vic was insolvent in the first, second and/or third periods. If Chick Vic was not insolvent in any of those periods, then I must find that Chick Vic was not insolvent for the duration. The Deed entered into on that date annexed Chick Vic's financial accounts for the nine months up to 31 March 1999 (the Deed accounts). According to the Deed accounts, Chick Vic had a trading loss of $1,094,243.00 in that period and a net asset deficiency of $1,285,503.00 at 31 March 1999 --- being the shortfall between total assets of $2,607,811.00 and total liabilities of $3,893,314.00. Further, according to Kenneth Lamb, a chartered accountant of the firm Scott Partners called by the plaintiffs as an expert witness, the Deed accounts show that Chick Vic had a working capital deficiency --- a shortfall between current assets and current liabilities --- of $2,367,778.00 as at 31 March 1999. I will deal with the matters raised by Mr Gunst before I deal with Mr Lamb's evidence as to Chick Vic's insolvency at the starting point. And you appealed and the matter was sent back for a retrial. Is that right? The Full Court report is in volume four of the Federal Court Reports at page 269, your Honour. On appeal the matter was sent back for a retrial?---I don't think that is right, is it. The --- on appeal the earlier decision was turned over. They have approached the matter only in the most general manner. Right, well, you do remember in general terms that the Registrar of Bankruptcy put you up for striking off and a Judge of this Court made such an order in May 1984, now that I jog your memory, don't you?---I remember that, yes. In Re Lamb; Ex parte Registrar in Bankruptcy (1984) 1 FCR 391 at 399, Sweeney J said: "The status of [Mr Lamb] as an employee is ... fatal to his continued registration as a person qualified to act as a trustee. " However, at 400, his Honour said: "Nothing in these reasons is intended in any way to reflect upon the character or competence of the respondent or of his employers. " On appeal, in Lamb v Registrar of Bankruptcy (1984) 4 FCR 269 at 277, Smithers ACJ said what Mr Gunst attributed to Northrop J and immediately went on to say that: "However, on the evidence it does not appear that [Mr Lamb] will not have the necessary independence. 59 Mr Gunst also took Mr Lamb to the letter containing his terms of engagement. It is addressed to Mr Lamb and David Wright (also of Scott Partners) from James Sloan, solicitor for the plaintiffs. According to Mr Gunst, the letter made clear to Mr Lamb that his task was to report --- come what may --- that Chick Vic was insolvent at the relevant time. Though the letter could have been more circumspect, it does not bear such an interpretation. In any case, the real questions raised by the letter are whether Mr Lamb thought it was pressuring him to reach a certain conclusion and, if so, whether he resisted that pressure. I am satisfied that the answer to the first of those questions is clearly that he did not. 60 Much was also made of the fact that Mr Lamb had not, until a few days before the trial, been provided with or read the "Guidelines for Expert Witnesses in Proceedings in the Federal Court of Australia" (the Guidelines) nor, before the trial, been an expert witness in this Court. Before he read the Guidelines, Mr Lamb had sworn five affidavits in the proceeding --- including that which exhibited his report. There is nothing inside or outside the Guidelines that suggests that the evidence of an expert witness who has failed to read them should not be admitted --- or should be given less weight than otherwise would be the case --- for that reason alone. Of course, a failure to comply with the Guidelines might, on the facts of a particular case, produce one or other of those results. 61 Finally, Mr Gunst pointed to two errors in Mr Lamb's evidence as proof of his partiality. Re-examination made clear that one of them --- in relation to the extent of Chick Vic's overdraft and guarantee facility with the National Australia Bank --- was not an error at all. As to the other, paragraph 17 of Mr Lamb's report purports to list the projects Chick Vic was engaged in at the starting point, ascribing to them a value of $386,496.00. Mr Lamb said during examination-in-chief that paragraph 17 was incorrect. Rather than the amount relating to then current projects, it pertained to the bank guarantees given by Chick Vic in respect of completed and current projects that were outstanding at the starting point. Mr Gunst suggested that Mr Lamb's failure to correct that error --- which had been drawn to his attention by Mr Jenkins in one of his affidavits --- in one of his four affidavits following that to which he exhibited his report, showed that he saw his task as that of an advocate for the plaintiffs. In my view, that failure does not bear the weight that Mr Gunst seeks to put on it. However, the error itself is something that I must take into account when assessing the report on its merits. 62 The attack on Mr Lamb as a mere advocate for the plaintiffs was mounted on many fronts. It failed. I will not exclude his evidence on the ground that he was not an impartial expert witness. Mr Lamb admitted the error to which I referred at [61]. Otherwise, he maintained his views in a manner that did not cause me to doubt his impartiality. Indeed, he remained remarkably composed during cross-examination despite Mr Gunst's frequently argumentative and provocative questions. 65 Mr Lamb denied the propositions set out at [63](a) to (d). He added that he was, in any case, "responsible" for the report. In so far as the propositions set out at (a) and (b) were meant to suggest that the report did not reflect Mr Lamb's opinion, that suggestion should be rejected: nobody who observed Mr Lamb give evidence could say that he was not intimately familiar with the report and its contents. The proposition set out at (c) is irrelevant as there was no suggestion that the report omitted to deal with particular documents that contradicted Mr Lamb's opinion. Whether the proposition set out at (d) is correct is something that will emerge from my assessment of the report on its merits. At paragraph 14 he quotes a note to the Deed accounts. Paragraph 15 says that Chick Vic's overdraft and guarantee facility with the National Australia Bank had a limit of $1,500,000.00. Paragraph 17 is the erroneous list to which I referred at [61]. The available work on hand had a gross value of $386,496. The company needed an injection of equity to enable it to continue, and subsequent projects had to be profitable to contribute to ongoing costs and profit to improve the Chick Vic financial position. However, those matters cannot alone be the basis of a finding that Chick Vic was insolvent at the starting point. The trading loss and the net asset deficiency figures are balance sheet rather than cash flow measures of Chick Vic's position. As to the working capital deficiency figure, I refer to what I cited at [43] from Quick . Further, Mr Lamb has admitted that the work on hand figure is incorrect. However, notwithstanding his concession of error, the incorrect figure must be taken to have remained a basis for the opinion expressed in his report. Chick Vic may have suffered from a substantial, though variable, working capital deficiency at the starting point and throughout the duration. But, on the other hand, Chick Vic did not in that period exhibit some of the classic characteristics of insolvent companies. I was taken to only one instance where a cheque it drew was dishonoured upon presentation. There is no evidence as to why the cheque was dishonoured. According to its book-keeper, it only exceeded its overdraft limit once --- and that was due to an oversight on her part. Its books were properly kept and they did not need to be reconstructed when it went into administration. Indeed, the administrator was able to account for all moneys. The staff's salaries, superannuation and other entitlements were paid on time. Taxes and charges (including workers' compensation premiums) were paid on time. There was no evidence that it frequently changed suppliers or was subjected to the indignity of only being able to procure supplies on a cash on delivery basis. Of course, it is by no means necessary or sufficient that a company display some or all of these characteristics before it can be found to have been insolvent. However, for a Court to be able to find as a fact that a company was insolvent --- in that it was not able to pay its debts as and when they became due and payable --- it must normally have some evidence apart from the company's accounts. 69 The plaintiffs have recognised the need for such evidence. Though it is not the only such evidence, the plaintiffs make much of a purported practice by Chick Vic of holding cheques "in the drawer". That is, they say that Chick Vic habitually drew cheques in favour of creditors --- thus reducing the relevant creditor's balance in its books --- and then retained those cheques until a point in time at which it could be confident that their presentation would not cause Chick Vic to exceed its overdraft limit. If it were proved that such a practice existed, it would be powerful evidence that Chick Vic was insolvent --- and not just because it would help explain why Chick Vic did not display some of the characteristics to which I referred earlier. Some of these cheques have been signed and therefore it would seem these cheques have been authorised for payment, however it appears that Chick Vic had insufficient facilities to release the cheques to the creditors. There were substantial unpresented cheques drawn and not issued. There was a disparity between cheques that had been written at that time and the balance in the cheque account?---Yes. ) In the emphasised part of the above exchange, Mr Lamb seems to be referring to financial information that Chick Vic provided to its then accountants in April 1999. That material included a summary document entitled "Chick Group Cash / Cash Equivalent Projections --- Immediate Outlook" which showed, under "Amounts Owed", that Chick Vic had $963,000 worth of cheques "held / in mail" at 14 April 1999. (Mr Lamb's second affidavit refers to that document and that figure. ) That document also projected, on the basis of figures as at 14 April 1999, that Chick Vic would have a working capital deficiency of $2,350,000.00 at 30 June 1999. ) As appears from the evidence of Ms Mann at [116], the hypothesis put to Mr Lamb found in the emphasised part of the above exchange accurately describes Chick Vic's practice in drawing and delivering cheques. 73 Clearly, Mr Lamb's evidence cannot support a finding that Chick Vic had a practice of deliberately withholding cheques until they could be safely presented --- whether at the starting point or in any of the periods. In particular, he said that Mr Wright "worked on the ... issue ... that is in paragraph 35". Chick Vic admit in their own correspondence that it is experiencing cash flow problems and have advised that ' if and when we are able to recover outstanding progress payments, delay costs and retention monies we will pay any outstanding instalments ....' The repayment schedules are over long terms and therefore this is an indication that Chick Vic was unable to pay its debts when they fell due. The majority of the repayment schedules have been signed by David Jenkins. During the inspections of the books and records of Chick Vic it appears that creditor correspondence for the period January 2000 to September 2000 was missing. The plaintiffs did not mention it in their comprehensive written submissions, examination-in-chief or their closing oral submissions. Indeed, I was not taken to any correspondence of the sort described and quoted in paragraph 35. Having regard to this and the doubt as to its provenance, I will attach no weight to paragraph 35. He deposed in his second affidavit that the Commercial Club project resulted in a loss of only $5,400.00 to Chick Vic. He also deposed that he had been told that the Saudi Arabian Embassy project resulted in a loss of $348,000.00 and was unaware at that time that it had actually resulted in a profit of $1,700,000.00. (The $348,000.00 figure represented a reduction in projected profit --- which reduction became a loss for accounting purposes. ) In cross-examination, he admitted that he had been a partner of KPMG in its Albury office for 14 not 24 years. Nonetheless, I do not consider these errors affect the weight I should accord to his evidence. 78 However, apart from the financial information referred to at [71], Mr Tobin's evidence as to Chick Vic's solvency was limited. According to him, KPMG never saw the Deed accounts. Further, notwithstanding his concerns in April 1999, he did not at that time --- or at any other point in 1999 --- think Chick Vic was insolvent. There is insufficient evidence to supplement that opinion to an extent that would allow me to find that Chick Vic was insolvent at the starting point. The fact that the transaction effected by the Deed was for no consideration is of scant probative value. So is Chick Vic's receipt of a letter of demand on 28 April 1999 from Ross Ried Bricklaying Pty Ltd --- which seems to be in respect of an invoice in the amount of $80.00. Finally, as appears from [78], Mr Tobin's evidence destroys the plaintiff's case. Each of Mr Lamb, the two witnesses subpoenaed by the plaintiffs and the plaintiffs themselves gave evidence relevant to all three periods. On occasion, it may be necessary to refer to evidence that goes to the starting point rather than, or in addition to, the periods. Notwithstanding its location in these reasons, I took such evidence into account in reaching my conclusion at [79]. Its apparently anomalous location is simply a matter of convenience. Chick Vic was insolvent at 30 April 1999. Chick Vic was insolvent at 31 January 2000. Pursuant to section 588E(3) of the Corporations Law, Chick Vic was and remained insolvent for the period 31 January 2000 to 23 January 2001, when an Administrator was appointed. The trading result for the year ended 30 June 1999 was a loss of $357,049. Construction revenue was $13,347,214 and construction margin was $715,380 or 5.36% of construction revenue. This indicates that cheques were being drawn and held before being issued. Chick Vic was insolvent as at 30 June 1999. As at 30 June 2000, the working capital deficiency was $3,785,753, without making any provision for uncollectable trade debtors which were carried in the balance sheet at $3,410,936. As at 30 June 2000, $687,097 of trade creditors were over 90 days old. The actual listing of trade creditors showed $4,101,579 as owing, whereas the balance sheet showed only $3,552,895 owing to trade creditors. The overdraft in the balance sheet was $1,589,550 against a facility of $900,000. The trading result for the 2000 year was disastrous with a gross construction loss of $869,847 and an overall loss of $1,986,611. Chick Vic was clearly insolvent at 30 June 2000. Chick Vic prepared a schedule showing Project Margin Contributions. The Republic Apartments contract in Sydney had a gross loss of $1,680,437 in the 2000 financial year. It is clear that the Republic Apartments, Sydney contract has been a major cause of the poor 2000 year trading result. According to the Chick Vic file the Republic Apartments, Sydney contract commenced in 1999. The budgeted margin was 5.65% of total expected revenue. The total costs of the project were $8,580,368 according to company records against which $5,872,208 was recovered. By the end of January 2000, the Republic Apartments, Sydney job had proceeded to a stage where the directors of Chick Vic would have known it was exceeding the cost estimate and was trading at a loss. Chick Vic was clearly insolvent at 31 January 2000 and having regard to the huge loss on the Republic Apartments project, should have ceased trading. Chick Vic continued to trade after the end of January 2000, and commenced a contract in January 2000, known as West End Plaza Redevelopment. The practical completion of the contract was achieved on 26 November 2000. The West End Plaza contract showed a gross margin of $1,216,163 to 30 June 2000 and with works cost adjustments an expected project margin of $282,727. As at the date of Administration, namely 23 January 2001, a summary of the creditor position was [total creditors of $4,311,673 --- made up of Republic Apartments creditors of $830,142, West End Plaza creditors of $3,121,883 and other creditors of $359,648. The creditors for the West End Plaza contract have remained unpaid notwithstanding that the West End Plaza contract was profitable. This is a clear indication of insolvent trading. The report's conclusions are set out at [81]. The proportion alone does not disclose why creditors are not being paid on time. I will deal with each of these points in turn. However, I reiterate what I said at the end of [68]. 86 I am dealing with a no case submission. Although Mr Lamb agreed that an increase in the value of a property available to Chick Vic would enable it to seek an increase in its overdraft limit, resort to the defendants' evidence would be necessary to sustain the contention at [85](a). 88 In his second affidavit, Mr Lamb points to three particular instances where such a provision should have been made. They relate to the starting point and the second and third periods. First, though the financial information referred to at [71] showed a debtors' balance of $944,068.76, "the amount included as recoverable on the calculation of the overall cash position was $796,000 as at 14 April 1999. " That suggested that Chick Vic had doubts as to the collectability of the difference between the two amounts. However, that disparity --- which is not a large one in the context of this case --- does not alter my view that Chick Vic was not insolvent at the starting point. Secondly, by December 1999 the proprietor of the Sturt Mall project made clear that a claim by Chick Vic for $1,272.344.00 was disputed. That dispute led Chick Vic to commence proceedings. However, Chick Vic sought only $800,000.00 in those proceedings. Further, consultants engaged by Chick Vic to assess the amount sought in the proceedings advised that it was "valid" as to between $580,000.00 and $600,000.00. (In fact, the proceedings were settled in November 2000 for $200,000.00. ) Thirdly, in April, September and November 2000, the proprietor of the Republic Apartments project made clear that a claim by Chick Vic for $505,239.00 would not be paid. Otherwise, Mr Lamb was unable to say what provisions should have been made. As to the first period, all he could point to was the fact that in October 1999 Chick Vic wrote back its debtors' balance by $287,000. 89 In any case, the argument over whether or not provisions should have been made is one that goes to the reliability of Chick Vic's accounts and illustrates the point made by Emmett J in Quick (see [43]). You have a review, you have got to put in your financials as often as not, but as long as you are continuing to trade the overdraft will roll over. Now, let me suggest to you again, as I did before we turned to that document, that from the point of view of considering the solvency of a company as distinct from writing a balance sheet for it, it is quite --- it was quite wrong for you to take into account the outstanding bank overdraft limit?---I don't agree with that. But the point of my assessment is that it is on the basis of the total current assets and the total current liabilities. Let us say this company had borrowed this money not on overdraft but on a fixed 20 year mortgage with capitalised interest so that there were no interest payments payable year by year and the money wasn't repayable for 20 years. Would you take that into account in determining the question of solvency of this company in let us say 30 June 2000?---No, because it wouldn't be a current liability. Much the same can be said of the point about Chick Vic's hire-purchase contracts and leases (see [85](d)) and depreciation (see [85](e)). By contrast, he conceded that depreciation was irrelevant to his determination that Chick Vic was insolvent at the starting point and throughout the duration. Despite the limited nature of the concession, I accept as sound the propositions put by Mr Gunst to Mr Lamb in respect of the overdraft, hire-purchase contracts, leases and depreciation. Mr Lamb's answers to Mr Gunst's questions on all those issues --- of which the passage set out above is but one example --- showed that, though he purported to espouse the (correct) view that insolvency could not simply be divined from a company's accounts, he proceeded --- most likely unconsciously --- on the basis that Chick Vic's continuing working capital deficiency showed that it was insolvent at the starting point and through to 31 January 2000. It may be that Mr Lamb's treatment of those issues was correct from an accounting point of view. But that is not the basis upon which I must approach them. 91 Finally, the fact that statutory accounts are prepared on a going concern rather than liquidation basis is of scant probative value in determining whether the company that is the subject of those accounts was insolvent at the time they were prepared. He was subpoenaed to give evidence by the plaintiffs. That meeting was organised, at the defendants' behest, by Brian Curphey, a solicitor of the firm Kell Moore. It was put to him that he did more than give "general advice" as to the meaning of insolvency as defined by s 95A. In particular, it was put that, having explained some of the classic characteristics of insolvent companies that I described at [68] (and others, including the commencement of proceedings), he went on to ask Mr Jenkins whether Chick Vic displayed any of them and, on the basis of Mr Jenkins' answers in the negative, advised Mr Jenkins that there was "good reason to believe" that Chick Vic was not insolvent. 96 I accept Mr Chamberlain's evidence that at the meeting he gave only "general advice" as to the meaning of insolvency (as defined by s 95A) and gave no opinion as to whether or not Chick Vic was insolvent. This is consistent with his unchallenged evidence that neither before nor at the meeting was he provided with any document outlining Chick Vic's financial position. I do not accept that it is inherently improbable that he did no more than give such "general advice" on the ground that Mr Curphey could have given such advice, which indeed he did, in writing, after the meeting. However, I find that Mr Jenkins volunteered the information as to Chick Vic's lack of the characteristics to which I referred at [95] in response to Mr Chamberlain's enumeration thereof. In his evidence, Mr Chamberlain allowed that that may have happened. And he was concerned about his position, and he may have to consider the appointment of an administrator. Later, in early January 2001, he met the defendants at their home, where Mr Jenkins "indicated that ... as a consequence of his inability to recover, in particular, this large debtor, he now seriously had to consider the appointment of an administrator". 98 Mr Chamberlain was appointed as administrator on 11 January 2001. In none of them did he investigate whether Chick Vic was insolvent before 30 June 2000. Nor did he otherwise so investigate. Thus, his evidence is largely confined to the third period. 100 The first report was delivered on 30 January 2001 and can be described as provisional. It estimates that Chick Vic had a deficiency of $3,622,259.00 at 11 January 2001. At that time, Mr Jenkins "became aware not only of the trading losses incurred on the Republic [Apartments] project, which were crystallizing well before this period" but that the proprietor of that project was disputing the claim to which I referred at [88]. This figure [is] considered high. 101 The second report was delivered on 24 October 2001. H]owever, I believe this can be extended back to include at least 1 July 2000. ) Notwithstanding the foregoing, Mr Chamberlain told Chick Vic's creditors that he did not intend to pursue the defendants for insolvent trading --- but said that he had already given his consent to this proceeding. 102 The third report is dated September 2003. It maintains that Chick Vic was insolvent at 30 June 2000. 103 Annexed to the third report are Chick Vic's accounts for the year ending on 30 June 2000 prepared by Chick Vic's then accountants, Howard and Schnelle. Those accounts disclose a deficiency of $2,502,562.00, trade debtors of $3,410,936.00 (plus retentions receivable of $295,405.00) and trade creditors of $3,552,894.00 (plus retentions payable of $526,433.00). However, Mr Chamberlain observes that the figure for trade debtors does not include a provision for two doubtful debts. (By far the largest of those is that in respect of the Sturt Mall project to which I referred at [88]. ) Making provision for those reduces the figure for trade debtors to $2,583,843.00. Further, making provision for unpresented cheques worth $562,210.00 increases the figure for trade creditors to $4,641,537.00. A comparison of the revised figures for trade creditors and trade debtors discloses a working capital deficiency of $2,057,694.00. This debt has never been acknowledged by the [proprietor] as due and in turn they have lodged a claim in this administration for damages of $629,760 as a consequence of the purported breach of contract. I am unaware of the figures involved nor the anticipated period of the contract if granted. The schedule also reflects [Chick Vic's] habit of drawing cheques prior to the close of the month and holding same until funds became available. I am of the opinion the processing of these payments prior to month's end was done to keep the Aged Creditors Analysis reflecting [Chick Vic] operating within terms of trade. The cheques were then randomly released upon funds becoming available. ) Mr Chamberlain was unable to explain the discrepancy between the figure for the overdraft account balance at 30 June 2000 shown in the table above and the same figure in the table set out in the last passage quoted at [101]. Nor could he say which was the correct figure. (Other evidence shows that the former figure is the correct figure. H]owever, I believe this can be extended back to include at least 1 July 2000. According to the second report, "the [transfer] clearly occurred in late October 2000 with the documents backdated to 30 June 2000". I cannot see how the backdating supports the belief --- if that is what Mr Chamberlain was suggesting in the second report. Month by month - - -?---Yes. The terms of trade of this company were, at least for sub-contractors, that invoices would be received. If they were received during a month but by the 28th and not thereafter, they would be noted as received in that month. If it was the 28th or later they would be rolled over and noted as received in the following month. That they would then become due and payable 45 days after the end of the month in which they were so noted as received. Now, do you have some understanding; have you heard that before?---Yes, yes, most definitely. ) Mr Gunst then, again, took Mr Chamberlain through the table set out at [104]. Mr Chamberlain agreed that it showed that moneys were flowing in to and out of Chick Vic. His evidence discloses an untenable assumption on his part that all unpresented cheques at any date were due and payable on or before that date. His evidence that he failed to test that assumption fatally undermines the only basis on which he could say that Chick Vic had that practice. He admitted as much. 109 In each of the first two passages set out at [107], Mr Gunst put to Mr Chamberlain a situation where debts in respect of which cheques were drawn and held were not due and payable until 45 days after the end of the month in which those cheques were printed. That was not the situation at Chick Vic. However, that does not affect my conclusion at [108]. In any case, Mr Gunst correctly described the situation at Chick Vic in the second emphasised passage in the second quote at [107]. Mr Chamberlain replied that he was aware of it. 110 There remains the question of the import of Mr Chamberlain's answer to Mr Gunst's last question (see the third quote at [107]). Does it amount to a retraction of his opinion that Chick Vic was insolvent --- whether at 30 June 2000 or "September / October 2000"? The passage quoted at [106] suggests that it does not. Rather, the answer is a retraction of that opinion to the (substantial) extent it is based on Chick Vic's purported practice of deliberately withholding cheques until they could be safely presented. It is another reason why Mr Chamberlain's evidence alone cannot support a finding that Chick Vic had such a practice. 111 Moreover, contrary to what I have set out at [103], Mr Chamberlain agreed with Mr Gunst that there was "nothing unusual" about the fact that Chick Vic's accounts made no provision for the debt in respect of the Sturt Mall project to which I referred at [88]. The proceeding against the fourth plaintiff remains on foot. I have already explained that it cannot support a finding that Chick Vic had a practice of deliberately withholding cheques until they could be safely presented (see [108]). The remainder of his evidence largely relates to Chick Vic's accounts. Further, his observation in his second report that revenues in respect of the West End Plaza project were insufficient to pay past, current and anticipated debts (see the last paragraph of the third passage quoted at [101]) is, on its own, neither here nor there --- particularly in light of the fact that he could not say that any particular creditor was not paid on time (see [112]). Mr Lamb made a similar observation, though in stronger terms, in his report (see paragraph 34 of the extract therefrom at [82]). Those observations are to some extent contradicted by Ms Mann's evidence (see the second passage quoted at [117]) and the evidence of each of those plaintiffs who signed a standard form of statutory declaration (see [137] to [139]). She was subpoenaed to give evidence by the plaintiffs, which she did before Mr Chamberlain gave his evidence. 115 Ms Mann impressed me as a conscientious witness. In her evidence, she was careful not to stray beyond the bounds of her essentially administrative and clerical role at Chick Vic. She emphasised that, whatever her concerns as to Chick Vic's financial position, she did not have the "big picture" --- that is, an awareness of the potential contracts that Mr Jenkins was working to secure. For the same reason, she was the "eternal pessimist" to his "eternal optimist". (b) However, any invoice received after the twenty-eighth day of the month was deemed to have been received in the following month. (c) Therefore, for example, payment in respect of an invoice received on 28 September was due "in the middle of November". (d) Cheques were drawn by way of Chick Vic's accounting software. (e) Once a cheque had been drawn, that software assumed that it had been presented (and paid). (f) Therefore, the drawing of a cheque reduced a creditor's balance as shown in the accounting software --- even if that cheque had not been presented (and paid). (g) Ordinarily, a large batch of cheques --- over a hundred --- in respect of payments due in the following month was drawn in a monthly "cheque run" that took place "usually around the middle of the month or perhaps in the third week of the month or thereabouts". (h) Therefore, the vast bulk of cheques drawn in a cheque run did not need to be delivered immediately because the payments in respect of which they were drawn were not due. (i) Instead, such cheques were signed --- largely by Mr Jenkins --- and then placed in a locked cabinet. They were withdrawn from the cabinet when the time came to deliver them. And I may have discussed some people or he would have told me who it was important to pay. But my recollection is fairly vague in the beginning but there was --- I know there was a process and maybe we interacted and discussed it at some time. But I just generally felt that the most important thing was that the bank overdraft was not exceeded, which goes without saying, I guess, and that the people were paid in accordance with when they were owed. But certainly, I wouldn't have been getting many calls every day if payments were out on time, and it was a juggling act to ensure that subcontractors remained on site. There was no problem with [the] West End Plaza [project], they were paid. But with the Republic [Apartments project], we weren't realising the claims that were lodged, and therefore, the claims were paid for a lot less than what was being lodged due to those variations that hadn't been approved. So when, I think the question was, what did I do when things were tight, and there wasn't any money to pay, it became a juggling act to sort out who needed to be paid the most, and whose cheque would be delayed. She had to consult Mr Jenkins more and more frequently as to whether specific cheques should be delivered --- though Mr Jenkins "always scrutinised the invoices". 119 Further, Ms Mann had to deal with sub-contractors who would call Chick Vic's office to inquire as to when they would receive payment. The number of those calls --- many of them repeated calls from the same sub-contractors --- increased markedly throughout that year. At any one time, she had on her desk a "pile" or "pyramid" of about eighty messages to return such calls made in the last few days. 120 Moreover, in March 2000, Chick Vic was forced to stop work on the West End Plaza project for about two months due to site contamination. Can you recall any particular occasion on which bills haven't been paid because of a lack of funds prior to October 2000?---No, I can't remember any specific creditor that had not been paid on time, and I think when you draw, maybe, hundreds of cheques a month, it is possibly --- yes, I mean, that is too difficult for me to answer. And you were asked if you could recall any specific creditor not being paid on time, and you said you couldn't recall a specific creditor not being paid on time. What was your recollection in general, as to payment of creditors. Were they being paid on time?---Well, I think if they were being paid on time, it was with a great deal of difficulty. And as I said, I can't nominate a specific creditor that was not paid on time. I was asked about the last two months, and it was extremely tight then, and I think that --- you would only need to look through that final list of creditors, and that would show the current creditors, say, in January, would be current, December would be 30 days, and go back to November, and see who was outstanding there, and see if the company could pay those outstanding claims from November in the middle of January, if it was 45 days. And I can't say for sure, or nominate one creditor, that wasn't paid on time, but as I say, the --- to find that out, you only need to research the records of Chick Vic. When did that juggling process that you have mentioned commence?---Well, from my recollection of it it commenced in December 1999. 123 In December 1999, Ms Mann (presciently) remarked to Chick Vic's receptionist that "we wouldn't be here in 12 months' time" because of the Republic Apartments project. She did not convey that concern to Mr Jenkins. The [progress] claim [by Chick Vic], it must have been November's claim came in and from memory it was in excess of 600,000 and I think we realised a bit over 300,000. And at that time, because it was on Christmas, the cash flow is stretched to the limit because you close down over Christmas and so did the sub-contractors and they also had wages to pay because they close down for a period of time. Everyone demands to get paid which is fair enough, and on the face of it I couldn't, only in my opinion, I couldn't see that the Republic would improve in a way that it was going and I really felt that in 12 months time it probably would break the company's back. Ms Mann described that discrepancy as "unusual". Moreover, the document does not show when that amount was paid. I am still clear about the liquidity, and what it had in store for the next 12 months ... [b]ecause I ... made that comment to the receptionist, and that is exactly what I felt at the time I made it. Again, she did not convey her concern to Mr Jenkins. 124 It was not until September 2000 that Ms Mann shared with Mr Jenkins her concerns as to the damage the Republic Apartments project was causing to Chick Vic's financial position. A document she had prepared for the purposes of the accounts disclosed that Chick Vic had suffered a loss of approximately $1,700,000.00 on that project. When she showed the document to Mr Jenkins, she said "there is your black hole". She agreed that Mr Jenkins was "devastated" at the news --- which, it seems, was the catalyst for the meeting described at [94]. Though she was unable to say how frequently she prepared them, she said it was "probably weekly or monthly". However, Ms Mann stopped preparing them "maybe six months before" Chick Vic went into administration after Ms Jenkins described one of them as "bullshit". Because they were --- they were debts that were longstanding, particular Pacific Holdings. I think that was outstanding since I arrived there. And when you are looking at doing a short term cashflow, you can't count on a court case may be happening in the next four weeks, it's long term projection. Further, in relation to the Sturt Mall debt referred to at [88], she agreed that she was not "across the detail of the rights and wrongs of [the dispute] or the likelihood of recovery ... [or] whether it was likely that that money would be recovered, or whether the proprietor had the money". 126 Ms Mann was also asked about the cancelled cheques referred to at paragraph 36 of Mr Lamb's report (see [70]). Various --- for want of a better word --- innocent explanations for the cancellation of those cheques were put to her. In one instance she disagreed with the explanation. In seven instances she was unable to say whether she agreed or disagreed. In all other instances, she agreed. 128 The overwhelming burden of Ms Mann's evidence was as to the period from December 1999 until Chick Vic's administration --- that is, as to the second and third periods. Her evidence was that she did not see Chick Vic's financial position as problematical until December 1999 --- almost half way through the second period. 129 Ms Mann's evidence suggests that Chick Vic deliberately withheld some cheques until they could be safely presented. However, her evidence does not disclose the extent to which Chick Vic engaged in that practice. 130 Moreover, Ms Mann's evidence as to the late payment of sub-contractors is of a very general nature. That is not intended as a criticism of her. However, she said "you would only need to check from a sub-contractor's payment report, when a cheque --- when an invoice came in, and when a cheque was presented" (see the second passage quoted at [117]) and "it could easily be shown by looking at when a cheque was drawn, comparing it to when it was due, the payment, and then researching it through the bank statement, when it was actually presented" (see the first passage quoted at [121]). The plaintiffs had not undertaken such an exercise by the time I reserved my decision on the no case submission. 131 Ms Mann's concerns as to Chick Vic's financial position are those of a person with an intimate knowledge of important aspects of the company's financial affairs --- but by no means a complete knowledge. Indeed, as I noted at [115], Ms Mann was careful not to claim such knowledge for herself. Further, the catalyst for her concerns may have arisen from a misunderstanding on her part (see [123]). 132 For those reasons, Ms Mann's evidence cannot, on its own, support a finding that Chick Vic was insolvent in the second or third periods. In addition, that evidence --- such as it was --- tended to undermine their case. 134 On 22 December 2000, the first plaintiff initiated two proceedings against Chick Vic. Ian Paterson, general manager of the first plaintiff, deposed in his second affidavit in this proceeding that "I had no reason to believe that the payment claims sought in [those] proceedings would not be met once the 'prodding' of [those] proceedings brought pressure on David Jenkins to pay these claims". It is unclear whether that happened. Mr Chamberlain's evidence was that Mr Jenkins mentioned those proceedings to him either at the meeting referred to at [97] or in a telephone call requesting that meeting. It wasn't reducing. They were getting longer. " He agreed that that statement was correct. 136 Moreover, the first plaintiff provided eleven trade references for Chick Vic in the period from 11 October 1999 to 20 November 2000. They seem to have been completed by staff of the first plaintiff other than Mr Paterson. The references were in forms issued by the entity seeking them. The first plaintiff was called upon to complete the form and return it. The forms sought the duration and volume of the first plaintiff's trade with Chick Vic and the terms on which Chick Vic paid the first plaintiff's invoices. Most forms also sought an indication as to whether Chick Vic in fact paid those invoices within those terms and, sometimes, as to its payment record in a general sense. The first plaintiff's responses were that Chick Vic paid invoices within 45 to 60 days and that the first plaintiff considered its payment record "good", "OK" or "satisfactory". Moreover, Mr Paterson himself provided a laudatory trade reference for Chick Vic on 30 March 1999. However, that document is addressed "TO WHOM IT MAY CONCERN". Mr Paterson confirmed that the passage quoted above was correct. 138 The second plaintiff made a statutory declaration containg the passage quoted at [137]. Though he could not recall seeing or signing the declaration, he confirmed that it was his signature on the declaration. Moreover, he accepted the proposition that he was "not positively saying [he had] never seen it at any time in the last five and a half years". Although the second plaintiff could not recall signing the declaration, he confirmed that the passage quoted at [137] was correct. 139 David Allen of the eighth plaintiff, Terrence Jones of the fourth plaintiff and Andrew Robin of the sixth plaintiff also made statutory declarations contaning the passage quoted at [137]. Each confirmed that his declaration was correct. 140 Beyond confirming that their declarations were correct, the second plaintiff and Mr Robin said nothing of note in relation to Chick Vic's insolvency. 141 Russell Delaney of the fifth plaintiff, Cyril Przibella of the seventh plaintiff and Vincent Robertson of the ninth plaintiff also said nothing of note in relation to Chick Vic's insolvency. I have already referred to Mr Jones at [139]. Some time after Chick Vic went into administration, he was succeeded as general manager of the fourth plaintiff by John Wagner. In cross-examination, Mr Jones said that some of Chick Vic's payments to the fourth plaintiff were late, but that late payment was not unusual in the building and construction industry. However, after about July 2000 Chick Vic's payments were no longer "consistent". Nonetheless, Mr Jones agreed with the proposition that "at no time in the year 2000 was there any conduct by Chick [Vic] that made [him] suspect that Chick [Vic] wouldn't be able to make payment[s]. " In cross-examination, Mr Wagner agreed with a similar proposition that in the period leading up to Chick Vic's administration "[t]here was nothing unusual about the commercial arrangements, the terms of trade, the doing of work or the paying of bills that might have given rise to any suspicion at all that Chick Vic was in any sort of financial trouble". In deciding that question, I take the approach set out at [50]. 146 It has not been proved that Chick Vic was insolvent in any of the periods. It follows that it has not been proved that Chick Vic was insolvent for the duration (see [55]). It is clear that Chick Vic suffered from a substantial, though variable, working capital deficiency throughout the duration. It is also clear that Chick Vic suffered substantial losses throughout the duration. Further, Chick Vic's accounts disclose a relatively high proportion of aged creditors. Beyond that, the evidence that Chick Vic was in fact unable to pay its debts as and when they became due and payable is scant and far too vague to act upon. The extent to which Chick Vic deliberately withheld cheques until they could be safely presented remains unclear. Similarly, the extent to which sub-contractors were paid late remains unclear. Those extents might have been made clearer had the plaintiffs undertaken the detailed scrutiny of Chick Vic's records suggested by Ms Mann (see [130]). After all, neither Mr Chamberlain nor Mr Lamb had done so --- thus exposing their evidence to the (well-founded) criticism that it relied on assumptions that had not been tested. There is some evidence that it was because of liquidity problems. However, there is also some evidence that the plaintiffs saw it as common practice in the building and construction industry. In any case, the evidence is, again, far too vague to act upon. Indeed, it is so vague that any question that may arise from the (apparent) conflict between the authorities on the relevance of creditors' forbearance --- canvassed at [45] to [48] --- does not arise for determination in these reasons. 147 Of course, common sense dictates that, even if it has not been proved that Chick Vic was insolvent in the third period, Chick Vic must have been insolvent at some point in the period before its winding up commenced. The company did not simply fall in a heap on 7 February 2001. However, it is for the plaintiffs to prove the point at which insolvency began. The evidence is such that that date can only be guessed at. Hazarding such a guess --- thus potentially making the defendants liable to pay debts incurred by Chick Vic on and after that date --- would be contrary to the approach set out at [50]. As it has not been proved that Chick Vic was insolvent at the starting point or in any of the periods, I must uphold the no case submission and dismiss the proceeding. I see no reason why the ordinary rule that the plaintiffs pay the defendants' costs should not apply. I certify that the preceding one hundred and forty-eight (148) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Sundberg. | director's duty to prevent insolvent trading by company submission of no case to answer that company insolvent whether company insolvent relevance of company's accounts submission of no case to answer whether rules of court preclude a party who has tendered a document from making no case submission whether party making no case submission should be put to election before no case submission decided discretion of court not to require election circumstances in which discretion can be exercised task for court in deciding no case submission corporations practice and procedure |
As a result the Union applied to the Court to approve a scheme which would enable the Branch to function effectively. On 4 August 2009, such a scheme was approved by the Court: see Health Services Union, in the matter of the Health Services Union [2009] FCA 829. Under the scheme, the National Executive of Union declared all elected offices in the Branch vacant and an Administrator was appointed pending the conduct of elections. Under the timetable which was subsequently fixed for the conduct of the election, nominations for all Branch positions were called for on 1 October 2009. Nominations closed on 14 October 2009. Ballot papers were posted to members on 5 November 2009. The ballot will close on 7 December 2009 and it is expected that the poll will be declared for all positions on 8 December 2009. At least three candidates have been nominated for each of the elected offices within the Branch. Most of these candidates have formed themselves into "teams" which are led by the member of the team who has been nominated for the position of Branch Secretary. The three team leaders are Ms Diana Asmar, Mr Doug Byron and Mr Marco Bolano. Mr Jamie Martorana and Ms Carol Carmichael are members of Mr Bolano's team. The evidence suggests that two other employees of the Union, Ms Tanya Tromp and Mr David Irwin, are supporters of that team. Some of the candidates are paid employees of the Branch who work as organisers or in other roles. The Administrator appointed under the scheme approved by the Court, Mr John Vines, has been concerned to ensure that the resources of the Union were not used to support the election campaigns of any candidates. Staff who are required to do so are required to notify me by email of any such instances. This will mean that our resources will be thinly spread. Your continued professionalism in the face of these difficulties will be greatly appreciated". The employees concerned are Mr Bolano, Mr Martorana and Ms Carmichael. Ms Asmar alleges that these employees (or some of them) have: These complaints were raised with Mr Vines by solicitors acting on behalf of Ms Asmar. As a result he has issued further directives and sought an explanation from at least one employee arising from complaints. On 4 November 2009, Ms Asmar filed an application for an inquiry relating to the election pursuant to s 200 of the Fair Work (Registered Organisations) Act 2009 (Cth) ("the Act"). " Section 190 provides that an organisation or branch commits an offence "if it uses, or allows to be used, its property or resources to help a candidate against another candidate in an election under this Part for an office or other position". The application suggests that the Court has power to make interim orders under s 204 of the Act. During argument, counsel for Ms Asmar did not seek to rely on this provision but pointed, somewhat tentatively, to s 208 as providing power for the Court to make the interim orders sought. For reasons which will become apparent, I do not find it necessary to determine whether or not the Court has power to make interim orders in the course of an election inquiry which is instituted in the course of an election (and before the poll has been declared). This is because s 201 of the Act requires the Court to be satisfied that there are reasonable grounds for the application, made under s 200, before any inquiry is taken to have been instituted. It will not be so satisfied if the grounds relied upon could not, even if made out, constitute "an irregularity in relation to an election for an office in the organisation". The question whether there is such an irregularity lies at the heart of this jurisdiction. Nor will it be so satisfied if the allegations of fact relied upon in the application do not at least offer good grounds for suspicion that there has been such an irregularity. The Court will not entertain an application of a speculative nature based upon the applicant's opinion that there has been an irregularity unless that opinion rests upon some substantial factual foundation. Necessary conditions to establish the requisite state of satisfaction can be multiplied. It is harder to state what is sufficient to satisfy the Court beyond the words of the section itself which require a an evaluative judgment at this preliminary stage". Insofar as it dealt with the sending of SMS messages to the mobile phones of members, it suggested that a small number of members had received messages supporting the Bolano team. It is not clear, on the evidence, how, whoever it was who sent the messages, obtained the mobile telephone numbers of the members to whom messages were sent. In the few cases in which the deponent of an affidavit received a message, the deponent said that he or she had provided Mr Bolano or some other person associated with his campaign with his or her telephone number but had not done so for the purpose of receiving campaign material. Some of these deponents were shop stewards at their workplaces and it is understandable that they would have provided Mr Bolano, an organiser, with their telephone numbers to facilitate contact on Union business. What is important, for present purposes, is that there is no evidence that enables me to infer that Mr Bolano or anyone else obtained mobile telephone numbers of members by resort to Union records. The evidence relied on by the applicant supports the allegation that Union meetings were convened at some hospitals using notices on Union letterhead. Those meetings were attended by some Union employees who, although supposedly on leave, were said to be present on Union (as distinct from electoral) business. Those employees used the meetings to encourage members to vote for the Bolano team. Mr Bolano and other employees said to have been involved have not, as yet, denied that such conduct occurred. In fairness to them, it must be said that some of the affidavits on which the applicant relies were not served until late on 4 November 2009. Such conduct as is alleged, if it occurred, would have constituted contraventions of the directions given by Mr Vines. It does not, however, follow that such conduct constituted an irregularity for the purposes of the Act. It would only have done so had it given rise to a contravention of s 190. That could only have happened if the Union (or, possibly, the Branch) used or allowed its property or resources to be used to assist Mr Bolano and members of his team in the course of the election campaign. Counsel for the applicant accepted that neither the Union nor the Branch had used Union resources in convening and conducting the workplace meetings. She submitted, however, that the Union and/or the Branch had, nonetheless, allowed the property and resources of the Union to be used because action had not been taken to prevent the impugned conduct of the Union employees occurring. I do not accept these submissions. The evidence establishes that Mr Vines had taken reasonable steps to ensure that the Union's property and resources were not used for electoral purposes. He issued clear directives requiring employee candidates to take leave during the campaign and not to use any of the Union's property and resources to support their candidacy. If these directives were not obeyed it was no fault of Mr Vines and it cannot, in my opinion, be said that, by inaction, he allowed the alleged misconduct to take place. The evidence establishes that members of the Bolano team distributed leaflets and posters which contained the material about which the applicant complains. There is evidence that the slogan "Stronger Together" was used from time to time in Union publications, but it cannot be said that the slogan was in any sense the property or a resource of the Union. Mr Bolano appears to have chosen to use the slogan to identify his team but there is no evidence to suggest that the Union or the Branch allowed this to occur. The clothing worn by members of the Bolano team, when the photographs appearing in campaign leaflets and posters were taken, was clothing supplied by the Union. It was worn by officials in the course of their daily duties. Similar clothing was available to be purchased by members. I do not consider that such clothing can properly be considered to be the property or resources of the Union. It is open, on the evidence, to conclude that the various items of clothing were given to employees by the Union. There is no suggestion that the Union asserted any property rights in the clothing or that the employees were under an obligation to return the clothing on the occurrence of any particular event. As Kirby J said in Re Jarman; Ex parte Cook (No 2) [1996] HCA 7 ; (1996) 136 ALR 233 at 241, the institution of an inquiry under s 201 is a serious matter. The onus is on an applicant to persuade the Court that there exist reasonable grounds for the application. For the reasons given I am not satisfied that there are reasonable grounds to consider that any irregularity has occurred in relation to the election. I would, therefore, dismiss the application by the applicant for an inquiry. It follows that no interim orders can or should be made in the proceeding. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | application for an inquiry under s 200 of the fair work (registered organisations) act 2009 (cth) whether reasonable grounds exist for such an application whether any irregularities have occurred in the conduct of an election for offices in theunion whether the union had allowed the property or resources of the union to be used to help a candidate against another candidate during the conduct of the election process industrial law |
Mr Carey was a witness for Lanepoint at the trial of this action. It is unsatisfactory in the extreme that this motion has been brought at this juncture. Indeed, it was filed a few days before the date fixed for delivery of the judgment. There is a strong public interest together with legitimate private interests that such applications be brought at the earliest opportunity. In this case there is an added element of public interest involving, as it does, the corporate regulator. Strictly, what the respondent is seeking, in effect, is that I not deliver judgment in the substantive application in which the Australian Securities & Investment Commission ("ASIC") seeks an order that Lanepoint be wound up. Lanepoint was required to rebut the statutory presumption of insolvency under s 459C(2)(c) of the Corporations Act 2001 (Cth). Judgment was listed to be delivered on 23 March 2009, the same day upon which the motion was returnable. I thought it preferable in these circumstances to defer the delivery of the judgment. I have concluded that, even were there grounds for objection based in apprehension of bias, and in my view there are not, the right to object has been waived by Lanepoint. I set out the reasons for this conclusion below. Nonetheless, I consider it appropriate to deal with these late objections apart from the question of waiver. There was a further motion in a related matter also seeking that I recuse myself. There, the only issue for determination was the question of costs. The motion was, by consent, discontinued on 23 March 2009. I then delivered judgment in the matter: Australian Securities & Investment Commission v Bowesco [2009] FCA 257. The trial of the action took place over three days between 25 and 27 March 2008. In her first affidavit she authorises Mr Carey to swear an affidavit on behalf of Lanepoint for the purposes of the motion. She deposes in her second affidavit to having been present in Court when I made the disclosure concerning my brother-in-law to which I refer below. She told her brother, Mr Carey, about the fact of the disclosure a matter of days after it was made. He said that he would take the matter up with Lanepoint's counsel. His retainer it seems was terminated recently and Lanepoint appointed Metaxas & Hager as its solicitors and who filed the present motion. He is not currently a shareholder or beneficiary of Lanepoint. Nonetheless, he deposes in his affidavit to being "interested" in Lanepoint and that he has been the person who engaged and instructed solicitors to act for it in the substantive application. This interest is said to arise by reason of his children being beneficiaries in the Dyson Family Trust, a discretionary trust the trustee of which is Bowesco Pty Ltd. Lanepoint is a wholly owned subsidiary of Bowesco. . . I asked Mr De Kerloy for his advice as to what action should be taken and he recommended that nothing be done and I accepted that advice. I gave evidence on the first and second days of the trial. The application against Bowesco has been dismissed without opposition from ASIC. My sister did not then inform me that Mr Kerloy had then informed His Honour that the Respondents were not concerned by His Honour's disclosure. . . . I am the former managing director of the Westpoint group of companies. York Street Mezzanine Pty Ltd is now in liquidation and I contend that its failure triggered the collapse of the Westpoint group. Any person who invested money in York Street Mezzanine Pty Ltd has lost their money. Mr De Kerloy was dismissive of my concerns. In 2008 I continued to meet with Mr De Kerloy every 2 or 3 weeks and I continued to raise with him my desire that Justice Gilmour should disqualify himself. Mr De Kerloy would not bring an application and the applications had not been resolved. After April 2008 I did not take any steps to bring on a motion because Mr De Kerloy was negotiating with Simon Read, the liquidator of the Westpoint Income Fund, Lanepoint's only alleged creditor, and if those negotiations were successful there would have been nothing left for His Honour to decide except for Bowesco's application for costs. The negotiations with Read broke down over the last few weeks although they had proceeded for more than 8 months or thereabouts. There was a proposed agreement, but it was subject to Read's requirement for a release by me for him in respect of unrelated matters with which I would not agree. As a result of the failure of the negotiations I asked Mr De Kerloy to bring a motion for His Honour to disqualify himself and he again declined to act on such a motion. I was then required to engage another solicitor to bring this application. It is correct that, a very long time ago, I was briefed to appear as counsel for, I think, the then Commissioner for Corporate Affairs upon several complaints in the then Perth Court of Petty Sessions against Mr Carey. I am prepared to proceed on the footing that this occurred in or about 1980 as Mr Carey suggests. Mr Carey states that the charges concerned alleged insolvent trading. I will proceed on the basis that Mr Carey is broadly correct in his characterisation of the charges. My recollection, correct or not, is that Mr Carey was convicted on all counts but that these were quashed on appeal. At the commencement of the third day of the trial on 27 March 2008, I made disclosure in the following terms to the parties concerning an investment made by one of my brothers-in-law in a company in the Westpoint Group. I couldn't remember the name of it but I made inquiries last night and it was the company called York Street Mezzanine Pty Ltd, which I think may have something to do with the Westpoint group. However, I felt it important to tell the parties of that fact. Thank you for the disclosure. Mr Slater? We wouldn't take issue with that. If you wish to call Mr Nairn, you can do so, Mr de Kerloy. Lanepoint is concerned that Mr Carey's credibility had become an issue in the case in respect to the accounting treatment of loans recorded as having been made to the Westpoint Income Fund which the respondent contended were erroneous and which had been corrected. The test as to whether there is an apprehension of bias is whether "a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide": Ebner v Official Trustee in Bankruptcy [2000] HCA 63 ; (2000) 205 CLR 337 at [6] ; Johnson v Johnson [2000] HCA 48 ; (2000) 201 CLR 488 at [11] ; Antoun v R [2006] HCA 2 ; (2006) 224 ALR 51 at [1] , [51], [82]; Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55 ; (2006) 229 CLR 577 at [110] . The application of this principle requires two steps. First, it requires the identification of what it is said might lead a judge to decide a case other than on its legal and factual merits. Second, there must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits: Ebner v Official Trustee in Bankruptcy at [8]; Smits v Roach [2006] HCA 36 ; (2006) 227 CLR 423 at [53] , [56]. This, he says, is an integral part of the process that those seeking to advance a case tell counsel a range of facts some of which will become admissible as evidence and be put before the court and others which may never see the light of day in that context, but nonetheless have the capacity to effect counsel's perception of the defendant. A subsidiary proposition put by counsel for Lanepoint was that I would have been counsel in circumstances where Mr Carey gave evidence in his defence and where I had advanced the case against him, leading to the result invariably in those circumstances, that I would be more inclined to form a positive view of the case that I presented and an adverse view of the evidence which was presented by Mr Carey. Accordingly, Lanepoint submits that I may have left the court in my capacity as prosecutor with the perception that Mr Carey was an unreliable or untrustworthy person. I do not accept those submissions. It is not deposed to by Mr Carey nor submitted by counsel for Lanepoint that Mr Carey's credibility was at issue in the prosecution which occurred nearly thirty years ago. It was not, having regard to the broad nature of the prosecution as I have accepted it to be for present purposes, inevitable that his credibility was put in issue. The central issue in such a prosecution would more likely be whether the relevant company or companies were or were not solvent at the material times. There is no reasonable basis, in my opinion, on the material, to conclude that I must have formed or likely formed an adverse opinion as to Mr Carey's character and integrity as a result of the prosecution many years before. The fair-minded lay observer could not reasonably assume, without more, that the investment had been lost because Mr Carey was disreputable or for that matter dishonest or reckless or negligent. Companies can fail despite the best efforts of competent and diligent directors. Accordingly, I do not find the matters relied upon to have been made out. Mr Carey's credibility was not an issue at trial. Mr Carey was convicted. In neither case has the necessary first step been established, namely, the existence of facts which might lead me, as a judge, to decide the case before me other than on its legal and factual merits. Furthermore, there is no logical connection between the matters, as I have found them to be, and the feared deviation from the course of deciding the case on its merits. On the first day, and given the belated public concern by Lanepoint as to an apprehension of bias on my part emerging from my past professional involvement with matters concerning Mr Carey, I made further disclosure to the parties of a matter about which I had made enquiries at the end of the previous week before the first day of hearing. It concerned the fact that I had been briefed as senior counsel for a defendant in an action in the Supreme Court of Western Australia who was being sued by Mr Carey for damages for alleged defamation. The extent of my involvement was I believe, and as I disclosed to the parties, that I offered general guidance pre-action and at an early stage of the proceeding and that I may have settled the defence. I did not, however, appear on the client's behalf in court at any stage. My involvement it appears ended sometime prior to 1 July 2004 and the action had not then passed the discovery phase. Upon making the disclosure, counsel for Lanepoint informed me that he had already discussed that matter with Mr Carey although it was not then asserted as a ground for my recusal in this case. Nonetheless, I afforded counsel for Lanepoint a short adjournment in order to confirm that this further matter would not be relied upon. Following that adjournment, I was informed that Lanepoint now intended relying upon the content of my further disclosure as a further ground of apprehended bias on my part. Counsel for Lanepoint informed me that in the Supreme Court action against the person for whom I had been briefed, Mr Carey alleged that she had defamed him at a dinner party in the presence of, amongst others, Mr Carey's former wife. She too was named as a defendant. The alleged libel was to the effect that Mr Carey was having an extra-marital relationship with his then personal assistant and further that he was unable or unwilling or was refusing to pay his bills. Lanepoint submits that taken in isolation this would not constitute a ground for my recusal but taken together with the other matters relied upon it created, in effect, an accumulation of reasons for my doing so. I do not consider that a fair-minded lay observer would reasonably conclude that I might not bring an impartial mind to the question of the solvency of Lanepoint as a result of my having acted in the defamation matter instituted by Mr Carey whether viewed separately or together with other matters. There is no logical connection between the fact of my acting as counsel and the concern that I would not have brought an impartial mind to deciding the present litigation. At the time I made disclosure concerning my brother-in-law's investment, Ms Carey, the then director of Lanepoint was, I am told by counsel for Lanepoint, in Court. It is not to the point to consider whether counsel for Lanepoint declined to object without instructions being taken from Ms Carey. So much is evident from what was said by Gleeson CJ, Heydon and Crennan JJ in Smits v Roach at [45]-[48]. The Court is generally entitled to rely upon what counsel states on behalf of his or her client on such matters. Mr Carey knew of the matter which was the subject of my disclosure from as early as the beginning of April 2008. It was, belatedly, conceded in argument by counsel for Lanepoint that as and from about four weeks from the 27 March 2008, the third day of the trial, Lanepoint had impliedly waived its right to object to my hearing the case on the ground that my brother-in-law had lost his investment in a company in the Westpoint Group. This then leaves only the matter of the prosecution and the defamation action. Mr Carey deposed not only that he recalled the matter of his prosecution and my involvement but says that it was of such concern to him that on the first day of the trial he raised it with counsel for Lanepoint. Nonetheless, Lanepoint, at least through Mr Carey, and I infer, to the knowledge of Ms Carey, accepted counsel's advice not to take any objection to my hearing the matter. Lanepoint is bound by that election. Lanepoint, through Mr Carey, was aware of my acting in the defamation suit. It took no steps to have me disqualify myself. It is clear that, following the trial, Lanepoint, whether by Mr Carey or Ms Carey, determined not to instruct other solicitors to bring an application for my disqualification but elected, rather, to pursue negotiations with the liquidator of the Westpoint Income Fund in the hope that it could reach an agreement which would result in Lanepoint being in a position to establish its solvency. As Mr Carey's affidavit discloses, those negotiations broke down "over the last few weeks". As a result he asked his solicitor and counsel Mr De Kerloy to bring a motion that I disqualify myself, but he declined to act. Mr Carey then engaged his present solicitors to do so. There has been, in respect to each of the grounds relied upon to demonstrate an apprehension of bias, a waiver by Lanepoint of its right to object. However, even had there been no waiver I would not recuse myself as, in my opinion, the test for an apprehension of bias, on any of the grounds relied upon, has not been met. The motion ought be dismissed with costs. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour. | application for trial judge to disqualify himself whether apprehension of bias whether waiver motion for disqualification filed shortly before judgment due to be delivered. courts and judges |
2 Nicholls FM, on 10 December 2007, dismissed an application to review a decision of the Refugee Review Tribunal (the Tribunal), which had been signed on 22 March 2007 and handed down on 23 March 2007, affirming a decision of a delegate of the first respondent to refuse to grant the applicant a protection visa. 3 I ordered that the appeal be dismissed; the appellant pay the respondents' costs to be taxed, if not agreed, and I indicated that I would deliver reasons for the making of those orders at a later date. These are those reasons. 4 The appellant, a citizen of the People's Republic of China (China), arrived in Australia on 17 January 1998 and applied for a protection visa on 18 August 1998. This application was refused by a delegate of the Minister, the first respondent, on 15 October 1998. That decision was affirmed by the Tribunal on 19 May 1999, the decision being handed down on 20 May 1999. 5 It appears that the appellant remained in Australia until his detention in 2006, and the Minister, on 13 December 2006, exercised his power to allow the appellant to make a second application for a protection visa pursuant to s 48B of the Migration Act 1958 (Cth) (the Act). 6 The appellant applied for a protection visa on 18 December 2006, which was refused by a delegate of the Minister on 8 January 2007. The appellant applied to the Tribunal for review on 11 January 2007. The Tribunal conducted a hearing on 2 March 2007, and, on 6 March 2007, wrote to the appellant pursuant to s 424A of the Act. 7 The Tribunal rejected the appellant's claims to fear persecution for reason of his Christian religion or breach of family planning laws in China. It found his explanations for this unconvincing, and that this also raised serious doubts about the veracity of his claims and his credibility generally. It further considered that the delay in baptism raised serious doubts about his claims and his credibility. On this basis, the Tribunal found the applicant did not have a well-founded fear of Convention related persecution, and affirmed the decision under review. 9 At the hearing in the Federal Magistrates Court for review of the decision of the Tribunal, the applicant was represented by Mr J Gormly of Counsel, and the Minister was represented by Mr T Reilly of Counsel. Counsel for the appellant was granted leave to file an amended application, in which the appellant claimed that the Tribunal did not comply with s 424A of the Act as the letter sent to the applicant by the Tribunal pursuant to that section was sent after the Tribunal hearing. 10 It was contended for the appellant, on the basis of the remarks made in SZBYR v Minister for Immigration & Citizenship (2007) 235 ALR 609 ; [2007] HCA 26 ( SZBYR ) at [17]-[19], that s 424A required a letter to be sent prior to any Tribunal hearing. 11 Nicholls FM dismissed this argument for two reasons. First, his Honour held that s 424A was not to be so construed, holding that SZBYR had not overturned comments in SAAP v Minister for Immigration & Multicultural Affairs (2005) 228 CLR 294 ; [2005] HCA 24 ( SAAP ) indicating that s 424A could be complied with after the Tribunal hearing. Secondly, his Honour accepted the submission on behalf of the Minister that s 424A(1) was not engaged by any material relied on by the appellant, given what was said about the meaning of "information" in SZBYR , at [17]-[18]. 12 The Notice of Appeal to this Court repeats the claim that was argued unsuccessfully before Nicholls FM. The Notice of Appeal does not indicate in what respect it was contended that his Honour's decision was wrong. 13 The Grounds of Appeal alleged that the Federal Magistrate erred in considering only whether the Tribunal's subjective appraisal of the material was "information", and considering not the material itself. This ground fails because it is apparent that the Federal Magistrate did consider the material itself. 16 On the assumption which is contrary to that conclusion, the Notice of Appeal asserts non-compliance with s 424A , claiming that that section requires compliance with it prior to the hearing. His Honour erred in finding that s 424A imposed no obligation on the Tribunal to give notice of any "information" prior to a hearing. The point rejected by the Full Court in that case was argued by the same counsel who appeared for the appellant before Nicholls FM. 19 It follows that Ground 4 must fail. 20 It is for these reasons that, on 20 May 2008, I made the orders dismissing the appeal and ordering the appellant pay the respondents' costs to be taxed, if not agreed. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Spender . | procedural fairness whether letter sent by refugee review tribunal to applicant pursuant to section 424a of the migration act must be sent before hearing whether material relied upon by the tribunal was "information" within s 424a of the act held that there is no temporal element to s 424a such that it must be sent prior to hearing tribunal therefore complied with s 424a held that the material relied upon was not "information" appeal dismissed. migration |
The design is in respect of a particular style of mattress. Registration was effected on 2 September 1996 with a priority date of 26 July 1996. Chiropedic sues the respondent, Radburg Pty Ltd, for infringement of its design. Radburg denies infringement and also cross-claims for the cancellation of the registration. One of the grounds upon which it relies to support its cross-claim is that the design was not novel. With the consent of the parties this issue is to be determined before the trial on infringement. 2 It is common ground that between 20 and 23 July 1996 (that is, before the priority date) Chiropedic exhibited a mattress to which the design was applied at the National New Products Parade Fair that was held at the Melbourne Exhibition Centre. The fair had been organised by the Furnishing Industry Association of Australia (Vic/Tas) (FIAA). The publication at the fair will invalidate the registration for want of novelty unless s 47 of the Designs Act is attracted. Although this section does not appear in the current legislation, the validity of the design in suit is to be determined under the provisions of the superseded statute: Designs Act 2003 (Cth), s 151(3). 3 As a general rule, any prior disclosure of a design destroys its novelty. There are a limited number of exceptions to this rule. Under the 1906 Act one of the exceptions was found in s 47. Just what that means, though, is not clear. First of all, it is not clear whether the exhibitions at which a non-prejudicial disclosure could be made were: (1) an official international exhibition and (2) an officially recognized international exhibition; or (1) an official exhibition (whether international or not) and (2) an officially recognized international exhibition. Secondly, each of the words or expressions "official", "officially recognized" and "international" have more than one meaning. 5 Despite the vigorous protests by Mr McGowan SC, the starting point for the resolution of these problems of construction is the Paris Convention for the Protection of Industrial Property which was opened for signature on 20 March 1883. The Minister who introduced the Bill for the Designs Act 1906 said that cl 47 had been taken from the Patents, Designs and Trade Marks Act 1883 (UK). He was incorrect. Perhaps he had been misled by the marginal note to cl 47, which referred to s 58 of the UK Act. In fact, the corresponding section in England was s 57, but its wording was quite different from that of s 47. Section 57 permitted prior publication at an industrial or international exhibition provided it had been certified by the Board of Trade. 6 However that may be, it is clear s 47 was based on Art 11(1) of the Paris Convention. Nonetheless, the conclusion that the operative language in s 47 is copied from Art 11(1) is inescapable. The alternative, that the similarity in language is mere coincidence, is one I simply cannot accept. 7 It is necessary to go back to Art 11 because of the rule that when a statute incorporates a treaty as part of domestic law, it is presumed that Parliament intended to import into domestic law a provision that has the same effect as the provision in the treaty: Koowarta v Bjelke-Petersen [1982] HCA 27 ; (1982) 153 CLR 168, 265; Applicant A v Minister for Immigration and Ethnic Affairs [1997] HCA 4 ; (1997) 190 CLR 225, 231, 240, 251-252, 272-273, 292. 8 For the purposes of interpreting the expression "official or officially recognized international exhibitions" in Art 11(1) it is permissible to have regard to preparatory work. While this kind of material can be used only to a limited extent to construe a domestic statute ( Acts Interpretation Act 1906 (Cth), s 15AB), in the international field "the practice of resorting to preparatory work is widespread": McNair, Law of Treaties (1938) at 412. For treaties which enter into force after 27 January 1980 see the Vienna Convention on the Law of Treaties , Arts 31 and 32. 9 The idea of a convention to deal with industrial property was first raised at the Universal Exhibition held in Vienna in 1873. The Vienna Exhibition had been planned for 1859, but the war in France and the Austrian struggle for power with Prussia intervened. Then the Lower Austrian Trade Association proposed an international exhibition and it was approved by the Emperor, Franz Joseph. The Vienna Exhibition had over 1700 exhibitors from more than 30 countries: J Findling (ed), Historical Dictionary of World's Fairs and Exhibitions, 1851-1988 (1990); J Allwood, The Great Exhibitions (1977). 10 Five years later, at the Paris Exhibition (another major international exhibition this time organised by the French Government), it was agreed that a permanent commission would be established to draft the Paris Convention. The main object of the Paris Convention was to secure to foreigners the same protection for industrial property (patents, designs and trademarks) as was enjoyed by foreigners in their country of nationality. This was the so-called principle of equal protection. 11 Of concern to a number of delegates was the risk of piracy of works on display at international exhibitions. Some States had passed laws to prevent this kind of piracy. For example, the purpose of s 3 of the Designs Act 1850 (UK) (13 & 14 Vict, 104) was to provide protection against piracy for foreign exhibitors at the Great Exhibition of 1851, sometimes called the Crystal Palace Exhibition. It gave them the opportunity of finding "either manufacturers or capitalists" to take up their invention or design before going to the trouble and expense of obtaining registration: Minutes of Evidence of Select Committee of House of Lords to Consider the Bill for the Designs Act 1850, 12 March 1851, at 9. In May 1855, France enacted similar legislation which provided protection for industrial inventions and manufacturing designs admitted to the Paris International Exhibition of 1855: Y Plasseraud and F Savignon, Paris 1883 Genesĕ Du Droit Unioniste Des Brevets (1981) at 98. 12 Article 11 required contracting States to enact legislation that would grant temporary protection to industrial property exhibited at certain exhibitions. The article was drafted in general terms. It was intended to do no more than lay down the broad subject matter of legislation that contracting States were to introduce, leaving it to those States to decide upon the precise means of achieving the stated ends: Professor G Bodenhausen, Guide to the Application of the Paris Convention for the Protection of Industrial Properties (1968) at 149 (Bodenhausen). 13 The discussions of the delegates involved in the drafting of the Convention suggests that the "exhibitions" referred to in Art 11 were all to be "international" in character. Moreover, the drafters understood "international exhibitions" as being infrequent, large-scale and multinational events. 15 It is my view, then, that in the expression "official or officially recognized international exhibition" the words "official" and "officially recognized" each modify "international exhibition". If Mr McGowan's reading were correct Art 11 would not include "official international exhibitions" even though they were precisely the type of exhibitions being discussed by the delegates. 16 The 1883 Convention was also concluded in French, that text also being authentic. It is permissible to have regard to the French text in the case of ambiguity or obscurity. In this connection he adopts the argument of a French lawyer who was asked to comment on the text. Regrettably, the French lawyer was informed of Mr McGowan's preferred construction of Art 11 before putting forward his views. This is because 'reconnues' has been conjugated from the verb 'reconnaître' ('to recognise') which can be conjugated with the auxiliary 'to be' and, therefore, when taking the form of a past participle, takes the form of the object of the sentence. In this case 'reconnaître' has been conjugated in the feminine case [sic] and plural form and must therefore be a reference to the word 'exhibition'. 'Exhibition' in French being a feminine noun and, in this case, it is plural. For one thing, regardless of whether "reconnues" modifies "expositions" or "expositions internationales", it will be declined (the past participle is being used as an adjective, not a verb, and thus it is declined rather than conjugated) in the same way. For another thing, the structure of the sentence is not phrased so that "internationales" modifies "officielles" but rather so that it modifies "expositions". On the lawyer's construction "internationales" is not attached to a noun. I do not accept that the French text suggests a different construction of Art 11(1) from the one I prefer. 18 In any event, a problem with the French lawyer's interpretation of Art 11 is that, even on its own terms, it does not support the interpretation favoured by Mr McGowan. As noted, Mr McGowan submits that the English version of Art 11 to be interpreted to read "official exhibition or officially recognized international exhibition. " The French lawyer, on the other hand, interprets the French text to read "official international exhibition or officially recognized exhibition. " If each view is correct the two authentic treaty texts do not agree as to which type of exhibition must be international. Established international law, codified in Art 33 of the Vienna Convention, requires that "when a comparison of the authentic texts [of a treaty] discloses a difference of meaning which the application of articles 31 and 32 does not remove, the meaning which best reconciles the texts, having regard to the object and purpose of the treaty, shall be adopted". In this case, the only meaning which would reconcile the French and English texts is one in which "official or officially recognized" is understood to modify both "international" and "exhibition", so that the whole phrase reads "official international exhibition or officially recognized international exhibition" in both languages. 19 As regards the meaning of "official" the background to the Paris Convention suggests that it was a reference to State sponsorship. All the great exhibitions of Europe, beginning with the Great Exhibition of 1851, had been organised or financially supported by a government. For example, the Great Exhibition was managed by a Royal Commission chaired by Prince Albert and included the Prime Minister, Lord John Russell. The exhibitions in Dublin (1853), Paris (1885), London (1862), Dublin (1865) and Paris (1867) were also government run. The exceptions were the exhibitions held in the United States, such as the New York Exhibition of 1853-1854 and the Philadelphia Exhibition of 1876. They were privately organised but were hosted by cities which bore some of the not inconsiderable cost. 20 Prima facie, then, s 47(1) is to be given the meaning that I have attributed to Art 11. But the prima facie meaning can be displaced. There are several features of s 47 which suggest that the prima facie meaning has been displaced. The first is s 47(2). There one finds, twice used, the expression "official exhibition, or an officially recognized international exhibition. " This suggests that "official" and "officially recognized" are to be understood as modifying only "exhibition" and not the compound "international exhibition. " It is difficult to avoid the conclusion that the language of s 47(2) controls the construction of s 47(1). It would be absurd to provide for a certificate from the Minister under s 47(2) that an exhibition was an "official exhibition" if such an exhibition were not covered by s 47(1). 21 The second feature is the heading to s 47. Ordinarily, the section headings in an Act form no part of the statute: Acts Interpretation Act, s 13(3). But, where, as here, a provision is ambiguous, the heading to the section may be looked at to resolve the ambiguity: Acts Interpretation Act, s 15AB(1)(b)(i). The heading to s 47 reads "official or international exhibitions". The disjunctive juxtaposition of "official" and "international" supports the view that an "official exhibition" is distinct from an "international exhibition", rather than a type of international exhibition. 22 The final point is that on the second reading of the Bill, the Minister said of s 47 that it covered "official or international exhibitions". It is true that the Minister was incorrect as to the source of s 47 --- the 1883 Act refers to an "industrial or international exhibition" and the 1850 Act to a "public exhibition". Nonetheless, the Minister's statement supports the view that Parliament understood the phrase "official or officially recognized international exhibition" to mean both officially recognized international exhibitions and non-international yet official exhibitions. 23 If the construction of s 47(1) is controlled by s 47(2) the result is not so "incongruous" or "irrational" as would require a court to correct an obvious legislative error: 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. It is evident that s 47 is a remedial or beneficial provision offering a registration grace period in order to encourage (or not deter) the participation of designers in exhibitions. It should, therefore, be construed broadly. Moreover it is, I suppose, possible that parliamentary counsel who drafted s 47 intended to broaden the scope of the European prior publication exception so as to further encourage designers to test the viability of their designs prior to registration. The protection given by Art 11(1) is very narrow and many think it should be broader. See V Di Cataldo, 'From the European Patent to a Community Patent' 8 Columbia Journal of European Law 19, 24-25 (2002); K M Curesky, 'International Patent Harmonization Through the WIPO: An Analysis of the US Proposal to Adopt a "First-to-File" Patent System' 21 Law and Policy in International Business 289, 298-99 (1989) (noting that the novelty requirements of continental patent and design law have been criticised as overly strict, particularly in comparison with US laws allowing a general registration grace period without regard to the form or manner of prior publication). 24 The result is that s 47(1) should be read so that the publication of a design at either (1) an official exhibition or (2) an officially recognized international exhibition is not a novelty-destroying prior publication. 25 I do not, however, accept that an official exhibition includes an exhibition organised by a private person or body, such as a private trade association. First, it does not conform with the meaning of Art 11(1). Second, it lacks any limiting principle. If "official" is taken to implicate any body having officers (as Mr McGowan would have it), an exhibition organised by a large private corporation, which of course has officers, might qualify. So also might exhibitions organised by small corporations or neighbourhood associations. At a minimum, the approach proposed by Mr McGowan would entangle the courts in difficult issues of fact while robbing designers and exhibitors of certainty as to whether a particular exhibition did or did not qualify for s 47(1) protection. The net effect would be to encourage litigation without concomitantly encouraging designers to exhibit or test their designs. 26 The only suggestion that "official" is not intended to refer to the involvement of a government is in Phillips, Protecting Designs: Law on Litigation (1994). There (at 287) the author suggests with regard to s 47 that "arguably an exhibition organised by [a] relevant trade or industry association will come within [the] ambit" of those terms. The history to which I have referred does not bear this out. The use of the word "official" is designed, in my opinion, to draw a distinction between public and privately organised exhibitions. It refers to an exhibition that is organised by a government: see Oxford English Dictionary definition of "official" at [4a]. The "government" may be federal or state or a local government authority. 27 In the instant case, the fair was organized by an industry association, the FIAA, and not by a government authority. Accordingly, it cannot qualify as an official exhibition for the purposes of s 47(1). 28 This still leaves open the possibility that the fair was an "officially recognized international exhibition. " "Officially recognized" can be defined in opposition to "official," which effectively means "officially organized. " An exhibition will be "officially recognized" if it is recognized by the federal or state government or any local government authority. Two obvious indicia of governmental recognition are: (1) the provision of public funds to fund the exhibition, particularly if given upon terms and conditions; and (2) the open participation of one or more ranking government officials at the opening, closing, or other formal ceremony or proceeding of the exhibition. While there will be other indicia of government recognition, it is neither necessary nor possible to provide an exhaustive list. The best indicia is that which may be readily ascertained ex ante from public information and thus provide prospective exhibitors with sufficient certainty as to whether an exhibition could qualify for protection under s 47(1). 29 In the present case, the fair was funded by a $200,000 grant from the Victorian government upon various conditions, including that the exhibition be opened to the general public for at least one day and that no goods be sold to the public. The fair was opened by the Minister for Small Business. On these facts, it is clear that the fair was an officially recognized exhibition. 30 The final issue is whether the fair was "international". The ordinary and natural meaning of "international" is "of or relating to different nations or their citizens. " Mr McGowan submitted, based on this definition, that an exhibition could be characterized as international either by virtue of the nationality of the goods and exhibitors or by virtue of the nationality of the visitors to the exhibition. Mr Samargis, on the other hand, put the argument that the international character of an exhibition can be determined only by reference to the goods and exhibitors. 31 Mr Samargis has the better argument. First, his approach is supported by what little authority there is: see Bodenhausen at 151. Second, his argument has the great virtue of certainty and clarity --- any prospective design registrant or exhibitor would be able to ascertain with a glance at an exhibition guide or list of exhibitors the nationality of the goods and exhibitors. By contrast, lists of visitors and their nationalities are not so easily or publicly found, if at all. And one must not lose sight of the fact that the exhibitions which were the backdrop to the Paris Convention were international because of their exhibitors. 32 In my view an exhibition is international if there are foreign exhibitors exhibiting foreign goods (with foreign being defined as a nationality other than that in which the exhibition is hosted). 33 Mr Samargis also submitted that for an exhibition to be truly international it requires exhibitors from at least three nations (ie, the host country and two others). This is a departure from the ordinary dictionary definition of international. But it is an approach that sits comfortably with Professor Bodenhausen's views that for an exhibition to be international "it must include the exhibition of goods coming from foreign countries": Bodenhausen at 151. 34 Even if Mr Samargis' approach is wrong, and an exhibition can be "international" where there are exhibitors from only two countries (the host and one other), the FIAA fair held in Melbourne in 1996 was not an international affair. There were 257 exhibitors whose products were on display. Out of the total exhibitors, 250 manufacturers were Australian and the balance were from New Zealand. Without wishing to be disrespectful, the New Zealand contingent was inconsequential, relatively speaking. Whatever be the characteristics of an "international exhibition" they are not met by an exhibition which is essentially an Australian exhibition. In my view, for an exhibition to be international in character there must at least be a significant foreign presence. 35 I should explain what I mean by "significant foreign presence. " First, the quantitative presence of foreign exhibitors, both in relative and absolute terms (here 7 exhibitors out of 257), is a factor. The greater the foreign presence, the more likely it is that an exhibition will be an "international exhibition. " Second, the quality of the foreign exhibitors is a factor; and by "quality" I mean both the geographic location and the importance of the foreign state(s) in the relevant industry. For example, if an exhibition is held in Canada and the only foreign exhibitors or goods are from the United States (or if, as in this case, the exhibition is held in Australia and the only foreign exhibitors are from New Zealand), the exhibition is more likely to be a "regional exhibition" rather than an "international exhibition. " On the other hand, if a fashion exhibition is held in Australia and the only foreign exhibitors are from Italy or France (or, for example, if a computer software exhibition is held in the US and the only foreign exhibitors are from India or China), the exhibition is likely to be an "international exhibition" due to the importance of those countries in the fashion design field (or computer industry) and the geographic separation between the States involved. This, of course, cannot be, and is not intended to be, an exhaustive list of the factors, or the way they might be applied in combination, to determine whether an exhibition had a "significant foreign presence" so as to make it an international exhibition. 36 In virtue of the fact that the prior publication of the design in suit is not covered by s 47 of the Designs Act the registration of the design must be cancelled. I will hear the parties on the precise form of the orders that should 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 Finkelstein. | validity of registration publication prior to registration publication at trade fair whether official exhibition or officially recognized international exhibition official exhibition international exhibition designs words and phrases |
The Tribunal had earlier affirmed the first respondent Minister's decision to refuse the grant of a protection visa. Leave to appeal is required from this Court because the Federal Magistrate dismissed the application on the ground that it does not raise an arguable case for the relief claimed pursuant to r 44.12(1)(a) of the Federal Magistrates Court Rules 2001 (Cth). Such a procedure is interlocutory in nature: see r 44.12(2) of the Rules . 2 The applicant is a citizen of India who arrived in Australia on 27 March 2007. He claims to be an active member of the Bharatiya Janta Party in Kerala State. He claims a well founded fear of persecution due to his support for the BJP. He claims that because of his political views, imputed or otherwise, he has suffered arrest, attacks and mistreatment. 3 The applicant applied for a protection visa on 10 April 2007. A delegate of the first respondent Minister rejected that application. The delegate noted that the applicant was free to relocate to another part of India where the applicant's localised problems would not continue. 4 The applicant sought merits review of the Minister's decision by the Tribunal. The applicant was invited to give oral evidence and present arguments to the Tribunal and did so with the assistance of an interpreter. The Tribunal considered the applicant's claims, questioned him about them and considered independent country information. 5 The applicant sought judicial review of that decision in the Federal Magistrates Court. The applicant's amended application in that court relied on several grounds of review. The learned Federal Magistrate considered all the grounds and concluded that none of them was made out by the applicant and that they did not raise an arguable case for the relief claimed. The application was dismissed. 6 The applicant now seeks leave to appeal from the judgment of the court below. 7 Grounds one and two of the draft notice of appeal are drafted in the broadest terms and have not been particularised by the applicant. 8 The second ground of appeal is similarly vague and broadly stated. The Federal Magistrate considered all the grounds for review contained in the applicant's amended application. This proposed ground lacks merit. In fact, the present Tribunal's decision did not turn upon those principles. In any case, that judgment can be distinguished from the current matter because the Tribunal found that the applicant did not have a well founded fear of persecution. Therefore, the issue of relocation did not arise before the Tribunal. 12 On 20 May 2008, one day after the filing of the first respondent's written submissions in the application for leave to appeal, the appellant's solicitors filed a notice of appearance. Those solicitors also filed brief written submissions. The submissions do not address any grounds raised in the proposed notice of appeal. Instead they refer to that ground of the application raised in the court below which alleged a denial of procedural fairness by reference to s 424A of the Migration Act 1958 (Cth). The submissions contend that the Tribunal denied the applicant procedural fairness by failing to give him the particulars of country information relied on in coming to its decision. Recognising that s 424A(3) provides a complete answer to that submission, the written submissions rely on s 424AA. They allege that it is arguable that the Tribunal failed to carry out the procedure required by s 424AA. It does not compel the Tribunal to orally give an applicant any particulars of country information which it intends to rely on. This will complement the RRT's existing obligation under section 424A , in that, if the RRT does not orally give information and seek comments or a response from an applicant under section 424AA , it must do so in writing, under section 424A. The corollary is that if the RRT does give clear particulars of the information and seek comments or a response from an applicant under section 424AA , it is not required to give the particulars under section 424A. This is the effect of ss 2 and 33(b) of the Migration Amendment (Review Provisions) Act 2007 (Cth), which commenced on 29 June 2007. The applicant lodged his application for review on 25 June 2007. Section 424AA did not apply to his review. In this regard see SZLTC v Minister for Immigration and Citizenship [2008] FMCA 384 at [15] per Driver FM. 14 This new argument was not raised before the court below and is not mentioned in the proposed notice of appeal. As the applicant was previously unrepresented, the Court was prepared to allow the issue to be raised as the matter was the subject of submissions served on the Minister earlier in the week. In any event, it is a submission which has no merit. It does not disclose an arguable case for review of the Tribunal's decision or any arguable appeal point in the proposed appeal. 15 The applicant has not demonstrated that the decision below is attended with sufficient doubt to warrant its reconsideration on appeal, or that a substantial injustice would result if leave to appeal were refused. 16 The applicant's application for leave to appeal is dismissed, with costs. I certify that the preceding sixteen (16) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. | protection visa leave to appeal application from judgment of federal magistrates court whether decision attended by sufficient doubt to warrant reconsideration whether substantial injustice would result if leave to appeal were refused, supposing the decision to be wrong whether refugee review tribunal failed to accord procedural fairness in accordance with s 424aa of the migration act 1958 (cth) whether s 424aa operated at time of review application held : application dismissed migration |
They are Indian citizens. They have disclosed that they were previously members of an organisation known as the "Exclusive Brethren", having ceased their involvement with the organisation in 1997. Since then, they have been involved in establishing what they describe as "a pioneering, record-breaking education research organisation" called the "BOSS School" in Mumbai. They claim that, over the past three or four years, they have come into conflict with the Exclusive Brethren and that members of that organisation have committed a range of criminal offences against them and their colleagues at the BOSS School. Their claims were reported to the Australian Federal Police ('the AFP"). Federal agents considered the claims but declined to take action. The applicants then had resort to this Court. This proceeding was commenced by an application filed on 31 October 2008. In that application, two of the applicants (the third was later joined) sought the issuing of mandatory orders against the AFP, the Commonwealth Government and the Immigration Department. The respondents have moved the Court for orders under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) ("the FCA Act") that the proceeding be dismissed. The respondents filed written submissions in support of their application. The applicants filed detailed written submissions in opposition to the application. The hearing of the respondents' application was fixed for 5 November 2009. When the matter was called on there was no appearance by any of the applicants. Evidence presented by the respondents indicates that Ms Priscilla D'Souza departed Australia on 3 March 2009, and that her two sisters had departed Australia on the morning of the hearing. No forewarning of their departure had been given to the respondents or to the Court. None of them is the holder of a visa which would entitle her to return to Australia. It cannot, therefore, be predicted when, if ever, they may again be present in this country. In these circumstances, I determined that the hearing should continue and that I would take into account the written submissions filed on both sides. The application sought: The respondents contend that the applicants have no reasonable prospect of obtaining any of the relief sought in the application. The section empowers the Court to give summary judgment in favour of a respondent if it is satisfied that the applicant "has no reasonable prospect of successfully prosecuting the proceeding". This will be the case even if the application cannot be characterised as either hopeless or bound to fail. Plainly, s 31A was, as Lindgren J held in White Industries Aust Ltd v Federal Commissioner of Taxation [2007] FCA 511 ; (2007) 160 FCR 298 at 310, designed "to lower the bar for obtaining summary judgment" from the level that had been fixed by the High Court in Dey v Victorian Railways Commissioners [1949] HCA 1 ; (1949) 78 CLR 62 at 91-2 and General Steel Industries Inc. v Commissioner for Railways (N.S.W. ) [1964] HCA 69 ; (1964) 112 CLR 125 at 128-130. Although the standard which must be met by a respondent who seeks summary judgment under the FCA Act has been expressed in a variety of different ways, where, as here, an application is made under s 31A, the Court is required to give close attention to the statutory language and to apply that test to the exclusion of all others: see PZ Cussons (International) Ltd v Rosa Dora Imports Pty Ltd [2007] FCA 1642 ; (2007) 74 IPR 372 at 375 (per Kenny J). The applicants have filed extensive affidavit evidence in support of their claims. Much of this material would, had it been objected to, have been ruled to be inadmissible. It is not, however, necessary for the purposes of the present application, to rule on the admissibility of any of the evidence on which the applicants sought to rely. This is because the respondents advanced their summary judgment application on the grounds that the Court lacks the jurisdiction to grant some of the relief sought and that, where it has jurisdiction, the relief sought is not, for legal reasons, able to be granted. The Court has jurisdiction, under s 39B of the Judiciary Act 1903 (Cth) ("the Judiciary Act "), to deal with a proceeding in which the writ of mandamus is sought. The writ is available to compel a public official to perform an act "which the applicant is entitled to have done, and without the doing of which he cannot enforce or enjoy some right which he possesses": R v Arndel [1906] HCA 7 ; (1906) 3 CLR 557 at 566-7 (per Griffith CJ). Put more simply, the writ of mandamus requires a public official to perform a public duty. The applicants can succeed against the AFP only if the AFP has a duty to commence criminal proceedings against the named individuals for the offences which are nominated in the application. I put to one side issues such as whether the AFP, as distinct from individual police officers, can be said to have a duty to initiate prosecutions and whether the powers of the Director of Public Prosecutions might impinge on any common law power a police officer might have had to initiate criminal proceedings. I also put to one side the question of the standing of the applicants to apply for an order that the AFP commence criminal proceedings against persons who are not alleged to have engaged in criminal conduct against any of the applicants. There is a further question, to which I will return, about the effect of the exercise of ministerial discretion in the decision-making processes which must precede the laying of charges of genocide and crimes against humanity. The AFP is established under the Australian Federal Police Act 1979 (Cth) ("the AFP Act"). Members of the AFP are subject to the administrative direction and control of the AFP Commissioner: see s 37(1). The functions of the AFP include the provision of police services in relation to the laws of the Commonwealth: see s 8(1)(b)(i). Members of the AFP have the same powers and duties as are conferred on a police constable in the place in which the member is acting: see s 9(1)(c)(i) and (v). The result of this legislative scheme is that AFP officers have the same powers and duties (in relation to the enforcement of Commonwealth laws) as a police constable in the State in which the AFP officer is working would have with respect to State law enforcement. In this way the powers and duties imposed by common law on constables are, subject to any statutory exception, conferred and imposed on AFP officers. The presently relevant question is whether any AFP officer is under a common law duty to charge the named individuals with the offences identified by the applicants. The answer to this question must be "no". Sometimes, persons are dissatisfied by the response which they receive when they complain to the police about what they see as criminal conduct. Occasionally these disgruntled citizens have sought the issue of writs of mandamus to police officers requiring that the officers investigate allegations, make arrests or commence prosecutions. Courts have consistently held that the writ will only be granted in exceptional cases. This is because policing powers carry with them a wide measure of discretion such that it usually cannot be asserted, as a matter of law, that a police officer is under any unqualified duty to exercise particular powers. For instance, it is for the Commissioner of Police of the Metropolis, or the chief constable, as the case may be, to decide in any particular case whether inquiries should be pursued, or whether an arrest should be made, or a prosecution brought. It must be for him to decide on the disposition of his force and the concentration of his resources on any particular crime or area. No court can or should give him direction on such a matter . He can also make policy decisions and give effect to them, as, for instance, was often done when prosecutions were not brought for attempted suicide" (emphasis added). There are many mysteries in this world. Some of them involve possible commissions of crime. It is not, however, the responsibility of police officers to investigate all of them. Indeed, the role of the police is not to investigate whether, at large, there has been a breach of the law. Rather, their duty is to investigate whether there has been a breach of the law for which an identifiable person might be convicted if prosecuted. The requirements of the AFP Case Categorisation and Prioritisation Model are consistent with this view. Among other matters militating against the prospect of obtaining a conviction will often be the lapse of time since the alleged offence" (emphasis added). AFP officers examined the circumstances and sought advice from the Director of Public Prosecutions. On being advised that the material disclosed no offence, the AFP advised the applicants that it would take no further action. The applicants applied for writs of mandamus to require the AFP to investigate their complaint. The application was summarily dismissed by Kenny J on the ground that it was bound to fail. This was because the AFP was not under any relevant duty and, in any event, no tenable basis had been shown for the allegation that the AFP officers were in breach of any duty. Her Honour quoted with approval the observations of Lord Denning MR in Blackburn . When the applicants attended to make their complaint to the AFP they were received by Federal agents Mr Nicolas Read and Mr Wade Howell. The group met for approximately half an hour during which time the applicants made various allegations of conduct that they alleged constituted criminal offences under Australian law. On the following day two Federal agents were assigned by Mr Read to consider the allegations. The speed with which the allegations were examined was unusual. Federal agent Read considered that the assessment of the allegations should be accorded a high priority because of the seriousness of the offences which had, allegedly, been committed. After a detailed consideration by his officers, Federal agent Read concluded that the allegations and materials provided by the applicants did not disclose any Commonwealth offence. In those circumstances he determined that no further action should be taken and the applicants were so advised. The applicants, however, seek to turn the expedition with which the matters raised by them were considered to their advantage. They submit, without evidence, that the allegations could not properly have been considered in a little over a day. It is to be remembered that all that was considered during that time by the two officers was whether it appeared that offences might have been committed against Australian law. This judgment fell to be made on the basis of the information supplied by the applicants. There is no reason to doubt that the officers gave proper consideration to the question of whether an initial inquiry should be instituted into the complaints made by the applicants. A bone fide view was formed that no further action should be taken. In these circumstances no further duty, enforceable by a writ of mandamus, arose. There is another obstacle in the path of the applicants. The offences of genocide and crimes against humanity are provided for in Division 268 of Chapter 8 of the Criminal Code Act 1995 (Cth) ("the Code"). Section 268.121 of the Code provides that proceedings for an offence under Division 268 must not be commenced without the written consent of the Attorney-General. Thus, even if the AFP, on completion of a full investigation, decided that there was evidence that one or both of these offences had been committed, it could not institute criminal proceedings against anybody in the absence of the Attorney-General's consent. A writ of mandamus could not compel the AFP to do so. The applicants draw attention to the provisions of s 268.121(3) which permit a person to be arrested and charged with an offence under the Division before the necessary consent has been given. The applicants contend that AFP officers could be ordered by the Court to arrest and charge the alleged offenders without waiting for the Attorney-General's written consent. That is a doubtful proposition but one which need not be further considered. On the material before them, the Federal agents were in no position to arrest or charge anybody and could not be compelled to do so. In any event an arrest or the act of laying charges is not the same thing as commencing criminal proceedings. In the context of s 268.121, a distinction is drawn between arrest and charging on the one hand and the commencement of criminal proceedings on the other. The latter step involves the initiation of the curial processes which lead to a trial. It can be taken only with the consent of the Attorney-General. The application seeks the issue of a writ of mandamus requiring the AFP to begin such proceedings, not requiring the charging or the arrest of alleged offenders. In the absence of a relevant duty, a writ of mandamus could not be issued against the AFP. This part of the application is bound to fail. This pressure would be brought to bear through international institutions such as the United Nations and the Commonwealth of Nations, and by urging other governments to apply pressure on India. The Court cannot, at the urging of an applicant, order the Commonwealth government or any officer of the government to take any step unless the Court is empowered to make a particular order and the preconditions for the making of the order have been established. It must, therefore, be assumed that when the applicants refer to the making of "orders" against the Commonwealth government they are referring to orders of mandamus which the Court has power to grant under s 39B of the Judiciary Act . Under s 39B(1) the Court has jurisdiction "with respect to any matter in which a writ of mandamus ... is sought against an officer or officers of the Commonwealth" (emphasis added). The respondents contend, correctly, in my view, that the Court may not direct the Commonwealth government to act in the way sought by the applicants because the issues involved are not justiciable and, as a result, are not "matters" in the necessary sense. Such non-justiciable issues include agreements and understandings ... between the Australian and foreign governments... Those issues do not give rise to "matters" in the sense necessary for the exercise of federal jurisdiction". Issues which are not justiciable and fall outside the proper domain of federal courts include "issues arising out of international relations": see Minister for Arts, Heritage and Environment v Peko-Wallsend Ltd (1987) 15 FCR 274 at 307 (per Wilcox J, with whom Bowen CJ agreed). In Thorpe v Commonwealth of Australia (No 3) [1997] HCA 21 ; (1997) 144 ALR 677 , the plaintiff commenced a proceeding in the High Court seeking declarations that the Commonwealth owed certain obligations to Aboriginal people, that it ought to move the United Nations General Assembly for an advisory opinion from the International Court of Justice as to the legal rights of Aboriginal people and that the government should negotiate with him about the terms of the foreshadowed resolution of the United Nations General Assembly. Kirby J set aside the plaintiff's written statement of claim for want of jurisdiction. The reason why no such case could be found is plain enough although the explanation may be advanced in various ways. It might be said that the subject matters of the declarations are not the kind of "immediate right, duty or liability" grounded in a legal norm which would present a "matter" to enliven the jurisdiction of this court under the Constitution . This was the Commonwealth's primary argument. But it might also be said that the issues presented by the declarations lacked "judicially discoverable and manageable standards for resolving" a justiciable issue. Traditionally in this country, as under like constitutional provisions in the United States, the courts have been extremely reluctant to pass upon the conduct of international relations". In either event, the court's duty is plain. It should stop the proceedings forthwith. It will thereby send the parties to the other branches of government, or to other public fora, in which they can make their complaint". They wish the Commonwealth to engage other sovereign governments and international institutions in an attempt to have the Indian government act in a particular way. The conduct of Australia's international relations falls within the province of the executive government. In the absence of legislative restraint it is a matter for the government to determine the issues which it chooses to raise with foreign governments and the manner in which it will pursue those issues with foreign governments. The choices which the government makes in dealing with international relations are a matter for it and are not justiciable. They do not give rise to "matters" with which the judicial branch may deal. In my view, the Court thus lacks jurisdiction to entertain this part of the applicants' case. A delegate of the Minister rejected their applications. They appealed, unsuccessfully, to the Refugee Review Tribunal. In this proceeding they apply for a writ of mandamus to direct the Immigration Department to grant the visas which the Minister's delegate has already refused to grant. Under the Migration Act , visas are granted by the Minister or a delegate of the Minister. The Immigration Department has no power to grant visas. The Department has no duty enforceable by a writ of mandamus or otherwise to issue protection visas to the applicants. For that reason alone the application is bound to fail. The application would also have failed had it been directed to the Minister or a delegate of the Minister. This is because the application would necessarily involve the Court directing the Minister or a delegate how to exercise power conferred on them under the Migration Act , and to do so in a way in which they, having considered the applicants' applications, have determined not to be appropriate. This would be tantamount to judicial review of the decision-making process. The applicants invoke the original jurisdiction of the Court. That jurisdiction is circumscribed by s 476A of the Migration Act , in respect of decisions (including decisions to grant or refuse visas) made under that Act. The Court does not have original jurisdiction in relation to decisions made regarding applications for protection visas. As a result, the Court cannot accede to the applicants' application insofar as it relates to the grant of protection visas to them. Judgment should be entered for the respondents against each of the applicants. The applicants should pay the respondents' costs of the proceeding, including the present application. These notices of motion have been brought in the proceeding but have sought relief which extends far beyond that sought in the application. These notices of motion have, for example, sought the issue of the writ of mandamus to the Commonwealth to require it to issue provisional arrest warrants for the arrest of a number of Indian judges, and to compel the Commonwealth to petition the United Nations Security Council to take certain action in India in relation to the BOSS school and those associated with it. Had these notices of motion sought to amend the application so as to include claims for relief of this kind, the applications would, inevitably, have been refused for the same reasons which have led to the respondents succeeding in obtaining judgment pursuant to s 31A of the FCA Act. In the event, as the application has been struck out, there is no proceeding within which the motions may any longer be pursued. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice TRACEY. | application for writ of mandamus whether mandamus may be issued against members of the australian federal police whether the court may make orders directing the commonwealth government to apply diplomatic pressure on foreign governments or take certain action in united nations fora whether mandamus may be issued against the department of immigration and citizenship, the minister for immigration and citizenship or one of the minister's delegates when summary judgment may be given under s 31a of the federal court of australia act 1976 (cth) administrative law practice and procedure |
Application for leave to the applicant to issue process against the respondent be declined. Mr Mahmoud did not appear in those proceedings, but subsequently as late as 16 May 2006 he made application to the Court for eleven orders, including an annulment of that sequestration order. 5 Mr Mahmoud appeared in person before me on 26 June 2006 at 3.00 pm with a view to seeking an annulment of the sequestration order as a matter of urgency, by reason of pending enforcement by the respondent Body Corporate of a Local Court judgment apparently entered in North Sydney Local Court on 1 December 2003 for possession of a certain home unit the subject of Strata Plan 811. 6 Mr Mahmoud has been also engaged in litigation in the Supreme Court of New South Wales before Rothman J in relation to the respondent Body Corporate, though it has been very difficult to distil with any precision the nature and substance of the causes of action involving Mr Mahmoud either in North Sydney Local Court or the Supreme Court. One matter is evident, namely that Mr Mahmoud presently seeks an annulment against a sequestration order made by the Federal Magistrates Court on 23 May 2005 at the instance of the Body Corporate. 7 In ex parte proceedings before me on 26 June 2006, Mr Mahmoud made complaint concerning what he asserted to be the illegality and impropriety of the hearing before Barnes FM, but he was unable to articulate a bases in law in support to that sweeping allegation. I've read Federal Magistrate Barnes' decision and obviously you know more of the detail than I but I've read it and I just can't see just from my reading of it where there is an error in the Federal Magistrate's decision. Don't you see that as a very gross error in the law? According to justice I must be served and know there is a hearing. I wasn't told about that, sir, and when you see those people play the vicious games, in annexure G in my affidavit for today it shows you how they also did not serve me with an amendment to their application to the CTT. Sir, I am a subject of organised criminal people destroying my life for seven years, sir, and what I think of this is that the Supreme Court is not going to do what you think. The Supreme Court says it is going to issue a writ to the sheriff for the sheriff to come to get me out. Until this moment I even didn't have time to do my tax return what I have the record there while they owe me money, owe me money. You do not have an idea about the situation of torture I am in. It's hard to explain, sir, but there is a time crisis unprecedented, time crisis for me going on for seven years. Now, the Court has no jurisdiction, has no power to get somebody called agent having a shop in the street organising himself criminally to create the Owners Corporation and then he has that information of the court in that, sir. The court has no jurisdiction to rule that I am not under his, I am, sir, the spokesman of the Owners Corporation, before you now is Owners Corporation, sir, and the owner as well. There is nobody else. All this... letter and the documents before you, sir, the extensive documents execute everything what I am saying. All I am appealing you now is just only interim order to a new sequestration order and then the man who is sitting here, this would prevent the sheriff coming to my unit to drag me out, this is what they are going to do, not pay the rates, and then I will find myself on the street and at the same time, ridiculously speaking, I have a proceeding here, a new sequestration order which is rendered meaningless. Whilst I would like to record that Mr Mahmoud was not at all unpleasant or overbearing in his appearance before the Court, and was in obvious distress, there is simply no basis that I have been able to identify whereby at least this Court can extend to him any juridical relief concerning his apparent eviction from the home unit in Ashfield. 9 If there was any conceivable basis for convention of any process of mediation between a representative of the Body Corporate and Mr Mahmoud, so much would be welcome from my distant and essentially uninformed perspective, but so much appears to be too late in the day, as it were, Mr Mahmoud and his protagonist having been locked in apparent irreconcilable dispute for some years, with little or no prospect of resolution. 10 I therefore would decline the provision of any interim relief from this Court. I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. | application for annulment of sequestration order prior litigation in federal magistrates court leave to issue process refused upon basis of no apparent juridical basis bankruptcy |
Both have been filed by Ms George. In the application Ms George seeks leave to appeal from the judgment of a Federal Magistrate of 9 February 2009 and his Honour's Orders 1, 2, 3, 4, 5, 6, 9 and 10 ( Fletcher v George & Ors (No 6) [2009] FMCA 69). (4) This section does not limit any powers that the Federal Magistrates Court has apart from this section. In the amended notice of motion the applicant seeks the following orders: Under Federal Court Act 1976 s 29(1) request a stay on court orders dated 9 February 2009 numbered 1, 2, 3, 4, 5, 6, 9, 10 pending the outcome of the Supreme Court matter file number 3747/2008. Request a stay on hearing the notice of appeal dated 18 February 2009 pending the outcome of the Supreme Court matter file number 3747/2008. The appellant relies upon affidavits dated 5 March 2009, 14 February 2009 in the name of Lauren Kay George for the above matter and Supreme Court Orders dated 18 February 2009 and transcripts dated 9 February 2009 and 18 February 2009. The appellant makes application to the court under ss 303 , 29 , 178 , 30 (1)(a)(b), 149 (4), 149J of the Bankruptcy Act 1966 . The appellant be deemed to have been discharged from bankruptcy on 25 February 2009 under s 149(4) of the Bankruptcy Act 1966 . The objection lodged by the First Respondent under s 149F(1) be removed under s 149J. That all assets prematurely seized by the first respondent pleaded in the amended statement of claim dated 23 December 2008 be returned to the appellant in the same working and registered condition as that seized. To be delivered to the 130 Landing Place Moggill Queensland 4070 address no later than 9 March 2009, pending the outcome of the Supreme Court trial issues dated 23 April 2008. That the parties to the matter, comply with the Supreme Court Order dated 18 February 2009 point 4 and bring any application that relates to trial issues as described within the amended statement of claim dated 23 December 2008 to the attention of Justice Fryberg who maintains the full conduct of the trial matter and not before the Federal Magistrates Court. Both Ms George's application and notice of motion are supported by affidavits filed in these proceedings. The first, second, third and fourth respondents were represented by Counsel (in the case of the first, second and third respondents) and a solicitor (in the case of the fourth respondent). There was no appearance by the fifth respondent who informed the Court that she was prepared to abide by the orders of the Court. The affidavit sworn by Ms George on 11 February 2009 in support of her application is of considerable length. There are more than 30 annexures thereto, constituting numerous volumes of material. Written submissions in these proceedings have been filed by Ms George as well as by the first, second, third and fourth respondents. The matter came before Dowsett J on 6 March 2009. His Honour indicated during the hearing that in his view it would be appropriate for the matter to go on appeal and be heard by the Full Court. It became clear however during the hearing that, because of late service by the respondents of material referable to Ms George's application for a stay of the orders of the Federal Magistrate below, Ms George was not in a position to proceed with her application for a stay. Accordingly his Honour adjourned the hearing without making any orders. The matter was moved to my docket and the parties appeared before me on 10 March 2009 for me to consider the orders sought by Ms George. There has been extensive litigation between Ms George and the respondents in this matter. The primary litigation in the federal Courts has been in the Federal Magistrates Court where there have been numerous hearings and orders of that court, however this Court has also heard applications by Ms George (including this application). Further, Ms George had earlier commenced proceedings in the Supreme Court of Queensland, and it appears that an application in that court has been set down for hearing next month. The matter is complicated not only by the plethora of hearings and the number of parties, but also by the fact that while Ms George has clearly invested a great deal of time and effort into preparing her case both in this Court and the court below, her submissions, affidavits and pleadings exhibit the familiar problems associated with those of self-represented litigants, and frequently lack precision and relevance. Some time during 2008 Ms George commenced proceedings in the Supreme Court of Queensland (Supreme Court proceedings 3474 of 2008) claiming that property at 130 Landing Place Moggill, the registered proprietor of which was the second respondent in these proceedings, was actually held on trust for her minor son, and that Ms George was the trustee of that trust. On 7 November 2008 the first respondent filed an amended application in the Federal Magistrates Court seeking, inter alia , declarations that: On 18 November 2008 the Federal Magistrate directed, in summary, that: any documents filed in Supreme Court proceedings 3474 of 2008 be taken as filed in the Federal Magistrate Court proceedings; Ms George's application for stay of hearing the proceedings in the Federal Magistrates Court pending resolution of her proceedings in the Supreme Court be dismissed; Ms George finalise her pleadings in the Federal Magistrate's Court. On 1 December 2009 Ms George filed an application for leave to appeal the 18 November 2008 Orders of the Federal Magistrate. On 5 December 2009 I dismissed Ms George's application with costs. On 9 December 2008 in the Federal Magistrates Court proceedings the first, second and third respondents applied for summary judgment in respect of para 3 of the first respondent's amended application. The Supreme Court made the file of its own proceedings available to the Federal Magistrates Court for the hearing before the Federal Magistrate. The file was returned to the Supreme Court at an indefinite date, possibly during December 2008. Copies of the evidence in the Supreme Court proceedings --- although possibly not all of it --- were apparently delivered to the Federal Magistrate on either 6 or 9 February 2009 pursuant to an affidavit of Nicholas Humzy-Hancock sworn 6 February 2009. The evidence before me is unclear as to the circumstances attending the delivery of this material to the Federal Magistrate. On 9 February 2009 the Federal Magistrate delivered judgment in relation to first, second and third respondents' application for summary judgment. That as at 24 February 2006 the legal and beneficial ownership of Lot 13 on SP145714, County of Stanley, Parish of Moggill, Title reference 50440445 vests in Applicant as trustee of the bankrupt estate subject to the registered mortgage number 710055137 registered in favour of National Australia Bank Ltd ABN 12004 044 937. That as at 24 February 2006 the legal and beneficial ownership of the Toyota landcruiser with the licence plate 590FXR, VIN Number: JT11UJA509019411 (V), Engine Number: 1FZ0444996 vests in Applicant as trustee of the bankrupt estate. That as at 24 February 2006 the legal and beneficial ownership of the Hanoverian mare known as Stellamarra with the microchip number 939000001109809 vests in the Applicant as trustee of the bankrupt estate. That Deed of Settlement between the Applicant and Susan Jane Wilson dated 28 October 2008 remains valid and enforceable and that it be performed. That there be no order as to costs between the Fifth Respondent and the other parties to the application. That in respect of Order 7 of these Orders there be liberty to apply by the First Respondent, Lauren Kay George. That each party making an application for costs against any other party to the application file and serve upon the other party the subject of such application a written outline in support of such application, including a minute of proposed orders, on or by 4.00pm on 13 February 2009. That any person in possession or control of the horse Stellamara with the microchip number 939000001109809 part with possession of the horse into the power of the applicant Trustee in Bankruptcy for Lauren Kay George or his nominee forthwith upon such demand by such person for possession of that horse. That the application be adjourned for further mention to 9.30am on 25 February 2009 in the Federal Magistrates Court of Australia at Brisbane. On 18 February 2009 Fryberg J ordered that the Supreme Court proceedings involving the parties be set down for hearing in that Court for three days in April 2009. I understand from the submissions of the parties in these proceedings that Fryberg J said that there was no issue estoppel in the Supreme Court arising from the decision of the Federal Magistrates Court because, inter alia : further trusts raised by Ms George had not been considered in the Federal Magistrates Court; and the Federal Magistrate considered different questions to those before the Supreme Court of Queensland. There are potentially seventeen grounds of appeal, and for convenience I shall continue to refer to them as "grounds of appeal" although clearly I am not, in this judgment, determining an appeal from the decision of the Federal Magistrate. At the hearing before me however it was clear that Ms George was confining her application for leave to appeal (as well as seeking a stay on the orders of his Honour below) to, in summary, the following grounds: The concurrent proceedings in the Supreme Court have been set down for hearing. It would be in the interests of justice that the orders of the Federal Magistrate be stayed pending the outcome of the Supreme Court proceedings (cf grounds of appeal 4,5,6, 13). There is strong evidence that the property at 130 Landing Place Moggill is subject to a trust in favour of Ms George's minor son. There is also strong evidence that a fraud has been perpetrated by the second and third respondents in relation to the property (cf grounds of appeal 6, 7, 8). It is clear that the Federal Magistrate in his orders of 9 February 2009 did not, in making his decision, take into account a substantial amount of evidence which favoured Ms George. Indeed: there was no reference to much of the documentation, including receipts, which Ms George had tendered as evidence in the Supreme Court proceedings, and which should have been before his Honour; it appears that the Supreme Court file and the evidence therein had only been before his Honour for a short time after 9 December 2009 when it was returned to the Supreme Court, and that the material therein may not have been delivered back to the Federal Magistrates Court until the day his Honour delivered his judgment on 9 February 2009; exactly when the material in the Supreme Court file was returned to the Federal Magistrates Court is unclear, although it was apparently returned by way of the affidavit of Nicholas Humzy-Hancock sworn 6 February 2009; the material annexed to the affidavit of Mr Humzy-Hancock did not contain all the material filed in the Supreme Court proceedings by Ms George. A stay was opposed on the grounds that: The fourth respondent, which is the registered mortgagee of 130 Landing Place Moggill, opposed both leave to appeal and the grant of a stay on similar grounds to those contended by the first, second and third respondents. However, I consider that the issue raised by Ms George as to whether all of her evidence was properly available to the Federal Magistrate during the time his Honour was preparing the judgment, and therefore whether all of that evidence was taken into consideration by his Honour in his judgment, raises a question of justice such that an appeal from the decision of his Honour should be heard. Further, I am satisfied that both Ms George, and her minor son who is not a party to these proceedings, would suffer substantial injustice should leave to appeal be refused. In the circumstances, I consider it appropriate to grant Ms George leave to appeal against his Honour's orders of 9 February 2009 as sought in her application. In relation to Ms George's application for a stay of his Honour's Orders, while I note the principles arising from such cases as Cambridge Credit Corporation (1985) 2 NSWLR 685 brought to my attention by the first, second, third and fourth respondents, I consider that a refusal to order a stay would substantially frustrate any success Ms George would have should her appeal to the Full Court be successful. Accordingly, it is for this reason that I am prepared to exercise my discretion in favour of Ms George and order a stay of the orders of his Honour of 9 February 2009 numbered 1, 2, 3, 4, 5, 6, 9 and 10 pending delivery of judgment in Ms George's appeal. I am not prepared to make an Order in the terms sought by Ms George in para 2 of her amended Notice of Motion --- as has been observed by both Dowsett J and myself during the course of these proceedings, if there is an error in the decision of the Federal Magistrates Court it is for the Federal Court to review on appeal. Further, as I indicated to the parties at the hearing before me, I am not prepared to make the orders sought by Ms George in paras 4, 5, 6 and 7 of her amended Notice of Motion before me (TS 5 March 2009 86 ll 28-30). Instead, the hearing of those paragraphs is adjourned to a date to be fixed. Finally, I do not consider that it is appropriate that I make an Order in the terms sought by Ms George in para 3 of her amended Notice of Motion, being an order by which she apparently seeks recognition of her reliance on certain material and on Supreme Court Orders. Nor do I consider it either appropriate or desirable that I should make an order in the terms sought by Ms George in para 8 of her amended Notice of Motion, being referable to proceedings in the Supreme Court of Queensland. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. | application for leave to appeal orders of federal magistrate application for stay of orders of federal magistrate pending related proceedings in supreme court question of whether all of applicant's evidence was before federal magistrate prejudice to applicant if leave to appeal and stay of orders not granted prejudice to respondents practice and procedure |
The appellant has appeared in person this morning, supported by an interpreter, and in the course of making some observations in support of the appeal, the appellant expressed concern that the Tribunal did not seem to appreciate that he had been injured in the course of an industrial workplace accident which I will mention in more detail shortly. 2 The appellant also expressed concern that the Tribunal did not believe him. His concern is that he was, in fact, telling the truth to the Tribunal. The appellant also relies upon a question of inconsistency in evidence before the Tribunal and complains that there was no inconsistency because his evidence was misunderstood by the Tribunal. However, the appellant reinforces that contention by saying that, "What I said was true" therefore, 'I must have been misunderstood'. It can be seen therefore that in simple terms the appellant is concerned about the inconsistency really as a legacy of a concern that his evidence on the facts was not accepted as correct. 3 The notice of appeal before the Federal Court is in identical terms to the application made before Emmett FM and in truth therefore, the question alive before this Court is whether her Honour fell into error, the contended error being a failure to apprehend error on the part of the Tribunal. The appellant is a citizen of the People's Republic of China. The appellant arrived in Australia on 31 August 2005 and applied for a protection visa on 12 September 2005. On 31 October 2005 the Minister's delegate refused to grant the appellant a protection visa. 4 On 28 November 2005, the appellant applied to the Tribunal for review of the delegate's decision. The Tribunal affirmed the delegate's decision on 18 January 2006. However, that decision was set aside by consent by order of the Federal Magistrates Court. On 22 September 2006, the appellant appeared at a hearing before a differently constituted Tribunal. The appellant's claims to a well-founded fear of persecution for a Convention reason were set out in a statutory declaration annexed to his application for a protection visa. These claims were confirmed by the appellant at the hearing before the Tribunal. In essence, the appellant, a painter by trade, claimed to fear persecution from Chinese authorities arising out of protests in Fuqing in March 2005 which he claimed to have helped to organise. 5 The protests which the appellant claimed were made the subject of suppression actions by Chinese authorities on the ground of anti-government activities arose out of a failure of a construction company to compensate victims on a workplace accident in December 2004. The applicant stated that Mr Lin employed 30 painters for the job. The applicant stated that under the contract for the job the company would be responsible for providing workers compensation insurance for Mr Lin's painters. The applicant stated that the working conditions were unsafe and no insurance was provided. In December 2004 six painters fell and four were seriously injured and two died. The applicant claimed that an investigation by government officials and the company concluded that the accident was the fault of the painters and as a result, the company refused to pay compensation to the painters and their families. The applicant claimed that the accident was due to inadequate scaffolding and work conditions provided by the company. The applicant stated that he and Mr Lin believed that the investigators into the accident had been bribed. The applicant claimed that the protests grew from about 40 to 50 people to about 400 to 500 people and had the effect of significantly disrupting construction of the Fuqing mall. The applicant claimed that he escaped into hiding with a friend in Xiamen city. 7 The Tribunal accepted that the contract provided that the company was responsible for work safety and insurance. The Tribunal also accepted that an accident occurred in December 2004 in which two painters were killed and four injured. The Tribunal further accepted that the appellant himself seriously injured his legs and ankles in the accident and spent a period of eight months recovering in two hospitals. While the Tribunal accepted that an investigation was held into the accident it did not accept the appellant's claims that officials failed to investigate properly or were bribed. The Tribunal found that the company failed to pay compensation notwithstanding a prima facie case of liability to do so under the contract. The Tribunal rejected the appellant's claims that he asked Mr Lin to arrange insurance. 8 The Tribunal reached a number of conclusions and I will briefly recite several of them. However, it does not accept that this led to him being a person of interest to the authorities because he was Mr Lin's deputy and that his protests against the company were regarded as anti-government as claimed. The Tribunal has noted that the applicant's evidence in regard to Mr Lin's role in providing insurance for the painters was conflicted and he may have been arrested because of the compensation issue. The Tribunal then concludes that in view of these contradictions in the appellant's evidence, the Tribunal does not believe him to be a credible witness. In consequence, the Tribunal concluded that although the appellant has claimed that he fears arrest on his return to the People's Republic of China because he was regarded by the authorities as Mr Lin's deputy, the Tribunal placed weight on the fact that he was not arrested and was allowed to leave China without any difficulty. 10 The Tribunal further concluded that it did not accept the appellant's claim that he was forced to flee China and that protection from authorities was his reason for doing so. The Tribunal further concluded that it did not accept that he played a significant if any role in organising the seven protests. The Tribunal further concluded that in view of the appellant's limited education and functional illiteracy, the Tribunal did not believe that the appellant had sufficient leadership skills to allow him to emerge as a person of concern to the authorities either now or in the foreseeable future. 11 The Tribunal concluded that the appellant gave evidence to the Tribunal that the protests over compensation ended in March 2005 and there was no indication from him that he would continue to pursue his claims should he return to China. As a result, the Tribunal was not satisfied that the appellant held a well-founded fear of persecution for a Convention reason. In the Federal Magistrates Court, the appellant raised essentially three grounds. The first was that an error of law occurred in the Tribunal's decision-making giving rise to a jurisdictional error. That ground is not supported by any further elaboration. 12 The second ground is that there was a procedural error in the Tribunal's decision and that error rests upon a failure on the part of the Tribunal to comply with its obligations under s 424A(1) of the Migration Act 1958 (Cth) (as amended). That contention rests upon a proposition that the Tribunal identified four grounds upon which there was a conflict in the evidence of the appellant and that in reaching a conclusion as to conflicting evidence (and therefore a finding about the appellant's credibility), the Tribunal failed to comprehend and understand what exactly was put to the Tribunal. 13 The further ground is one of bias on the part of the Tribunal. 14 As to the ground based upon the conflicting evidence, Emmett FM noted at [32] of her Honour's reasons a section of transcript which led the Tribunal to express its concern about inconsistency. In reliance upon the material and that section of transcript, the Tribunal formed its conclusionary view about the credit of the appellant. At [36] of her Honour's reasons, her Honour notes that the findings of fact made by the Tribunal were open to it and the appellant in essence seeks to challenge those findings of fact. 15 Those conclusions on the part of her Honour resonate with what has been said this morning by the appellant because in oral submissions with the assistance of an interpreter, the appellant essentially contests the findings of fact expressing concern that statements which he believed to be true were found, not to be true. That conclusion was plainly open to the Tribunal. The Tribunal is doing no more than evaluating the evidence before it, summarising the applicant's evidence and identifying those aspects of the applicant's evidence that it found to be contradictory. 17 Accordingly, in relation to the first two grounds of jurisdictional error and procedural error, the appellant has not established those grounds. The third ground raised before this Court, like the ground raised before her Honour, is a ground of bias. There are no proper particulars given of that allegation either, of course, as to actual bias or apprehended bias. An allegation of actual bias is a very serious matter and an allegation of apprehended bias is also serious. It must be supported by proper particulars and proper evidence and cannot simply be made as a supplementary or additional ground unsupported by any material. Her Honour at [43] to [47] dealt with those contentions and I find no identified error in her Honour's reasoning on those matters. 18 One additional matter ought to be mentioned and that goes to an aspect of the contention both before this Court and before the Federal Magistrates Court that the Tribunal failed to understand the content or substance or thrust of the appellant's evidence before the Tribunal. As I indicated earlier, that contention now seems to rest upon the notion that what the appellant said before the Tribunal was true and the Tribunal failed to recognise the truth of that evidence rather than a conclusion that the evidence must have been misunderstood. I can find no basis for concluding that the evidence was misunderstood by the Tribunal. There was an assessment of the evidence and a view was formed that there were conflicts in the evidence which led the Tribunal to the ultimate view that the evidence could not be accepted. That view gave rise to the conclusion that the applicant before the Tribunal had not demonstrated a well-founded fear of persecution for a Convention reason. That remains the position before this Court in the sense that no error of law has been demonstrated on the part of her Honour. Accordingly, the inevitable result must be that the appeal is 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 Greenwood. | consideration of an appeal from the federal magistrates court raising the question of whether the refugee review tribunal was entitled to rely upon conflicts in the evidence of the appellant so as to ground an adverse finding of credibility leading to a conclusion that the appellant had not satisfied the tribunal of a well-founded fear of persecution for a convention reason migration |
The notice of motion seeks an order that the respondents produce for inspection certain documents listed in the respondents' amended list of documents filed on 16 March 2009, as well as associated orders for costs. The documents which the applicant seeks the respondents produce are all the subject of a claim for legal professional privilege. The amended list of documents adopts a format of identifying the number of pages and the date of a document with a description such as "Privilege: Email from Robert Bromwich counsel to Antonino Calcopietro Legal Services concerning IRC consideration in Gibson matter". The applicants challenge the claim for legal professional privilege, essentially, on two grounds. The first ground is that the respondents have not, by admissible evidence, properly established the basis of any claim for privilege. The second is that, insofar as such a basis is established, there has been an issue waiver with respect to the maintenance of the privilege. In order to understand these claims, it is necessary that I give some short background to the proceeding as a whole, and the evidence on which the respondents rely. The proceeding was commenced by application. The further amended application filed 30 October 2007 seeks damages under ss 42, 43 and 68 of the Fair Trading Act 1942 (NSW) and for breach of duty. The further amended statement of claim filed on 30 October 2007 alleges that the first and second applicants were subcontractors performing works for the respondents for a relatively lengthy period of time before 2002. In or about June 2002, the provision of services to the respondents became the subject of a contract known as the "Willowdene Head Contract" and the "Transfield Head Contract". These contracts permitted Willowdene Constructions Pty Ltd and Transfield Services (Australia) Pty Limited to engage subcontractors with the approval of the first respondent, with such approval not to be unreasonably withheld. Each of these contracts contained a term that the first respondent was entitled to prohibit Willowdene and/or Transfield from using any person or subcontractor in the performance of works under the contract if the first respondent's representative reasonably regarded that person or subcontractor as incompetent, negligent or otherwise unsuitable. This right flowed from clause 16 of the Department's General Conditions of Contract for maintenance contracts. In the further amended statement of claim, the applicants say that on 24 March 2004 the Principal's representative under the Willowdene Head Contract, for and on behalf of the first respondent, issued to Willowdene a notice purportedly given under clause 16 of that contract prohibiting Willowdene from using the second applicant in the performance of any works under that contract. The applicants also plead, in effect, that nobody informed them about, or provided them with any opportunity to respond to, allegations relating to alleged misconduct of a Departmental employee, and a pending investigation by the Department into any alleged association of the applicants with a Department employee. Further, the applicants claim that neither the Principal's representative (nor any other representative, employee or agent of the first respondent) at any time prior to the conduct pleaded, carried out any such investigations or provided the applicants with an opportunity to be heard about the proposed conduct. Finally, the applicants plead that the opinion held and expressed by the Principal's representative for and on behalf of the corporation on 24 March 2004, namely, that the second applicant was an unsuitable contractor, was unreasonable. The reference in the pleadings to the opinion held and expressed on 24 March 2004 is to the notice given by the first respondent to Willowdene under clause 16 of the general conditions of contract. That notice states that, in accordance with clause 16, the Principal's representative directs that the contractor is prohibited from using the persons and/or entities named in Schedule 1 in the performance of the works, as the Principal's representative reasonably regards them as unsuitable on account of the matters raised in Schedule 2. Schedule 1 refers to CPR Property Pty Limited, being the second applicant in the proceeding. Schedule 2 states "The persons and/or entities' involvement in a pending investigation by the Department into their association with a Departmental employee, and certain allegations of misconduct made against the employee arising there-from". In their amended defence to the further amended statement of claim filed 24 March 2009, the respondents admit the issue of the notice under clause 16, and say that "Clause 16 speaks for itself". They rely on clause 16 as if it were fully pleaded in the amended defence. They also deny certain of the allegations, including, in para 20 a denial of the corresponding para 20 of the further amended statement of claim, and plead that there were a number of separate investigations into the allegations of improper association and breach of the Department of Housing Code of Conduct by a Departmental employee, Mr Gibson, CPR Property and Mr Hine, carried out between March 2003 and 24 March 2004. The respondents also deny para 21 of the further amended statement of claim, that is, the allegation that the opinion reached was unreasonable. The respondents rely on two affidavits in support of the claim for privilege. The first affidavit, sworn by Chris Valacos, appears mainly to relate to matters not in issue between the parties, namely that the Department's legal branch is independent of the Department's commercial activities. The second affidavit, of Antonino Calcopietro, solicitor, is more on point. In effect, Mr Calcopietro is a senior solicitor working in the legal services branch of the first respondent. He reviewed all of the disputed documents and, in short, his position appears to be consistent with that taken in the amended list of documents, namely, that each document was privileged on the basis that it either was for the dominant purpose of legal advice and/or was for the purpose for anticipated litigation. The applicants' submissions may be summarised as follows. First, that it is clear that the common law relating to legal professional privilege applies because this is a pre-trial matter, referring to Seven Network Ltd v News Ltd (2005) 144 FCR 379 ; [2005] FCAFC 125 and Apotex Pty Limited v Le Laboratoires Servier (2008) 79 IPR 100; [2008] FCA 1466 at [26] as well as Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 ; [2006] FCAFC 86 at [43] in particular. The respondents do not demur from this position and I proceed on the basis that the common law applies. As to the claim for legal professional privilege generally, the applicants say it is for the respondents making the claim to establish the facts giving rise to the privilege ( Rich v Harrington (2007) 245 ALR 106 ; [2007] FCA 1987 at [7] ). According to the applicants, it is insufficient for a party on a global basis simply to assert that documents were brought into existence for the purpose of legal advice and/or in anticipation of litigation. Moreover, a document brought into existence for the purpose of the investigation cannot be privileged because it is not for the relevant, dominant purpose. Second, the applicants say that the doctrine of issue waiver applies. The touchstone for issue waiver is whether there is inconsistency between the maintenance of the privilege and the conduct of the respondents. In this case, the applicants say that the notice under clause 16 expressly puts in issue or asserts that the agent of the second respondent formed an opinion, namely, that the second applicant was unsuitable on account of the matters raised in Schedule 2. Further, the notice itself asserts that this opinion was reasonably reached. In these circumstances, the applicants say that matters going to the formation of that opinion and whether or not the opinion was reasonably reached are necessarily the subject of an issue waiver. The applicants support this by reference to various authorities including, in particular, Commissioner of Taxation v Rio Tinto Limited at [61]. According to the applicants, what is required is a fact based inquiry. The applicants accept that issues of degree are involved and that more than a mere denial of an assertion is required. However, in this case, the applicants say that there is substantially more than a mere denial because the notice under clause 16 itself asserts both the existence of an opinion and its reasonableness. The defence of the respondents also unambiguously asserts both the formation of the opinion and its reasonableness. Thus, say the applicants, it is inconsistent for the respondents to maintain the privilege in circumstances where their own notice directly puts in issue the existence of the relevant state of mind and its reasonableness. Schedule 2, which I have already quoted, makes no reference to legal advice. In this sense, say the respondents, legal advice is not put in issue. Given the need to find inconsistency between the respondents' conduct and the maintenance of the privilege, one should conclude either that there is no inconsistency or that this case is at the lower end of the range from the obvious to the less obvious. Both parties consented to me reviewing the documents. I have undertaken that review. On the basis of that review and the submissions which I have heard, it seems clear to me that there are documents over which legal professional privilege has been claimed which are either not privileged because: - (i) they relate solely to the investigation rather than the provision of any legal advice; and (ii) could not have been created in anticipation of litigation in the sense that they relate to administrative matters with respect to the investigation. There are also documents over which privilege has been maintained which relate directly to the formation of the relevant opinion either before the opinion was formed, or refer to circumstances in existence before the opinion was formed, even though the documents themselves have been brought into existence after the opinion was formed. Having looked at the documents and heard the submissions, I accept that this is a case where there is not a mere denial of an obligation as in DSE (Holdings) Pty Ltd v Intertan Inc (2003) 127 FCR 499 ; [2003] FCA 384. It is a case where the circumstances necessarily lay open to scrutiny certain confidential communications. I am satisfied, at least in respect of some of the documents I have seen, that there is an inconsistency between the maintenance of the privilege and the conduct of the respondents, being their conduct in issuing the notice under clause 16 itself, and expressly relying upon and pleading the entirety of the clause in their defence, and otherwise denying the applicants' assertion of the unreasonableness of the opinion. In other words, the respondents' conduct has itself put in issue certain matters which might otherwise attract legal professional privilege. (2) The respondents are to pay the applicants' costs of the notice of motion filed on 9 April 2009 as agreed or taxed. (3) The exhibits be returned. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. | discovery whether documents attract legal professional privilege issue waiver practice and procedure |
The parties subsequently filed written submissions on costs, the disposition of which now falls for determination. 2 The central issue in this proceeding was whether the Lowes had established that, on account of defects in construction and design, the truck was unfit for the purpose of interstate long-haul transport. If so, they claimed damages for breach of implied contractual conditions as to fitness for purpose and merchantability, relying on s 71 of the Trade Practices Act 1974 (Cth) ("the TPA"): see Lowe v Mack Trucks Australia Pty Ltd [2008] FCA 439 (" Lowe v Mack Trucks "). The Lowes also pursued a claim under s 52 of the TPA, to the effect that two of the respondent's sales representations were misleading and deceptive, or likely to mislead or deceive. At trial, however, the Lowes failed to make out their case. In Lowe v Mack Trucks at [264], I concluded that the applicants had not shown that, on the balance of probabilities, the truck was not of merchantable quality and was unfit for the purpose of interstate, long-haul goods transport. Nor had they shown that the truck was other than as represented to them by the respondent's sales representative in March 1998. The respondent argued, however, that, in respect of two matters, it was entitled to an award of costs on a solicitor-client basis. The respondent submitted that the applicants' conduct with respect to these matters was sufficiently exceptional to warrant an award of indemnity costs. Morrison to MacLean [sic] is not such an unusual event as to warrant departure from the usual rule. Whilst acknowledging that portions of MacLean's [sic] reports and evidence were not proceeded with, that merely achieves a truncated outcome which has saved costs. The alternative may have seen more time utilised in dealing with the evidence of MacLean [sic] with the result that the extended evidence of MacLean [sic] would ultimately have been rejected (given the findings made in respect of his evidence). In those circumstances, a solicitor client costs order would not have been warranted. It follows that by reason of the decision taken at trial to save time, a solicitor/client costs order is not warranted. Costs would have necessarily been incurred in examining the data and conferring with experts and with counsel, regardless of the time when the data was produced. The trial saw many delays occasioned by the availability of witnesses, the production of documents by both sides, the availability of the Court, and the like. Such delays are to be expected in the course of a lengthy trial and do not warrant a departure from the usual rule as to costs. The power, which is discretionary, must be exercised judicially: see Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J. Within this general discretion, it is accepted that costs ordinarily follow the event, with the result that a successful litigant receives costs in the absence of special circumstances justifying some other order: see Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at 234 per Black CJ and French J. 6 The usual rule is that costs are payable on a party and party basis, unless the circumstances of the case warrant a departure from the normal course: see Colgate-Palmolive Company v Cussons Pty Limited (1993) 46 FCR 225 (" Colgate-Palmolive ") at 233 per Sheppard J and the Federal Court Rules (Cth), O 62. In that case, Sheppard J considered the circumstances in which indemnity costs might be awarded, referring, amongst other things, to "misconduct that causes loss of time to the Court and to other parties" although, as his Honour concluded, "[t]he question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis": see Colgate-Palmolive at 233-234. The Full Court reconsidered the appropriateness of an indemnity costs award in Re Wilcox: Ex parte Venture Industries Pty Ltd (No 2) (1996) 72 FCR 151 (" Re Wilcox ") at 152-153 per Black CJ and 156-158 per Cooper and Merkel JJ. They are not awarded as a means of deterring litigants from putting forward arguments that might be attended by uncertainty. Rather, they serve the purpose of compensating a party fully for costs incurred, as a normal costs order could not be expected to do, when the Court takes the view that it was unreasonable for the party against whom the order is made to have subjected the innocent party to the expenditure of costs. In particular, the Court may award indemnity costs in respect of misconduct that causes loss of time to the Court and to other parties: see Tetijo Holdings Ltd v Keeprite Australia Pty Ltd [1991] FCA 187 per French J, referred to with approval in Colgate-Palmolive at 233 and Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 (" Ugly Tribe ") at [7] per Harper J. In Xat Ky v Australvic Property Management Pty Ltd (No 2 ) [2007] FCA 1785 , Middleton J awarded indemnity costs to prevent the plaintiffs being out of pocket where "there was a considerable loss of time, inconvenience to the parties and the Court, and a wilful disregard to established law in the attempts to re-open the case ... and in the application for a restraining order": see [12]-[13], [29]. 8 The same principles with regard to indemnity costs are applied in other Australian courts. In Ugly Tribe , Harper J referred (at [7]) to the need for special circumstances to justify departure from the usual rule, instancing "[c]onduct which causes loss of time to the Court and to other parties" and "[t]he failure until after the commencement of the trial, and without explanation, to discover documents the timely discovery of which would have considerably shortened, and very possibly avoided, the trial". As his Honour said, however, "[t]he categories of special circumstances are not closed". As Mason P, with whom Meagher JA and Clarke A-JA agreed, said in Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616, "the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation" before departing from the usual party and party costs order. 9 The respondent argued that the applicants' abandonment and replacement of the first two reports prepared by Dr McLean should attract indemnity costs. Dr McLean ultimately prepared three reports for the applicants. At trial, he gave substantial viva voce evidence and was cross-examined. Dr McLean's first report was dated 1 September 2004 and filed around 9 September 2004, pursuant to orders made on 21 April 2004. These orders also fixed a trial for December that year. As it happened, the trial did not proceed at that time, but the applicants later included Dr McLean's report in the Court Book prepared for the trial last year. In February 2006, Dr McLean prepared a supplementary report, which was filed on 24 February 2006, pursuant to an order dated 10 February 2006 also providing for the meeting of experts, which was held shortly after this. Lastly, Dr McLean prepared a "Final Summary Report" dated 23 April 2007, which was apparently served on the respondent on 26 April 2007. 10 The applicants commenced to present Dr McLean's evidence on 3 May 2007, on the fourth day of the trial, when they determined only to rely on the third of his reports (of 42 pages) and to abandon the first two reports (save for his curriculum vitae). Counsel for the applicants stated that "the third report represent[ed] a summary of the salient features of" the two earlier reports. Before advising the Court and the respondent of their abandonment of the first two reports, counsel for the applicants stated that the first two reports contained some material that did not relate to the current litigation. Counsel also agreed (as was plain to see) that the first report (over 129 pages in length) was difficult to comprehend and suffered from other defects. 11 In its written submissions, the respondent submitted that the applicants' "conduct in abandoning the lengthy and highly complex reports at such a late stage in the proceeding caused significant unnecessary expense ... including (a) [c]osts incurred in obtaining expert opinion in respect of the reports; [and] [c]osts incurred as a result of solicitor and counsel time spent reviewing the reports". 12 I accept that the circumstances attending Dr McLean's first two reports justify an award of indemnity costs. In preparing for trial, it was to be expected that the respondent would retain its own expert to review and respond to them; and that its lawyers would also spend time in reading and attempting to come to grips with them in some appropriate way. The difficulties attending Dr McLean's first report were plain for all to see. The report was lengthy, detailed and, in places, incomprehensible. This alone might justify an award of indemnity costs. The preparation and service of a third report in the month before trial suggests that the difficulties with the first report were understood on the applicants' side. The applicants did not, however, advise the respondent at any time prior to trial that they did not intend to rely on either the first or supplementary reports. Indeed, they did not state that this was their position until shortly before Dr McLean was called to give evidence, by which time it may safely be assumed that the respondent's counsel and the respondent's experts had spent considerable time and effort in seeking to deal with the contents of the first two reports. A good deal of this time and effort turned out to be wasted when the applicants stated their final position. 13 The applicants pointed out that courts regularly express a preference for the evidence of one witness over another, without awarding indemnity costs. This is so, but witness preference is not the basis upon which I would award indemnity costs here. It is also possibly correct to say, as they do, that had they not abandoned their reliance on these reports, the trial may have been unjustifiably extended. The applicants' decision not to continue to rely on these reports is not in contest. What justifies the award of indemnity costs is their late abandonment of the reports, the first and longest of which suffered from the defects to which I have referred. 14 The respondent also submitted that the applicants' failure to disclose the FORS raw data until the fifth day of the trial should attract an award of indemnity costs. In examination in chief, Dr McLean gave evidence that the applicants had given him a CD-ROM containing FORS raw data, which he had analysed and used in compiling his third report. At the time Dr McLean gave this evidence, the applicants had not given discovery of this data. It was plain enough that they ought to have done so and hearing time was subsequently lost to give Mr Morrison an opportunity to examine the relevant material. 15 Plainly enough, the applicants ought to have made discovery of this material at a much earlier date. Its importance was clear enough. I accept that some hearing time was lost and expenditure incurred by the respondent in consequence of the applicants' default. In view of the obvious importance of the data, the clear need to allow the respondent an opportunity to examine it, and the inevitability of additional cost and delay in the event discovery was not given at the proper time, it seems to me that the respondent's application for indemnity costs in respect of this matter is justified. 16 The applicants are no doubt correct in their observation that the respondent would have incurred costs in examining the data had it been given to its advisers at the proper time. The point is, however, that this was significant material, which was not discovered when it should have been, with adverse consequences for the respondent's preparation and for the conduct of the hearing. I would further order that the applicants pay such of the respondent's costs as fall within in (a) and (b) above on an indemnity basis, to be taxed in default of agreement. 18 In its written submissions, the respondent also drew attention to the fact that it had made discovery of a large number of documents that it regarded as of a commercially sensitive nature, including schematics and engineering drawing for every component in the vehicle the subject of the proceedings. The respondent stated that it was concerned to ensure that there were no copies of these documents in circulation "as they remain of significant value in a highly competitive business". It sought an order for return of such documents. The applicants acknowledged that "such documents were provided with an implied undertaking as to confidentiality which continues to bind [them]", but did not otherwise oppose the making of the order sought. Accordingly, I would make an order in the terms the respondent sought. That is, I would order that, upon the expiration of time in which to appeal from my judgment of 4 April 2008 or the determination of any appeal from that judgment (whichever is later), all documents relating to the schematics and/or construction of any vehicle designed and/or manufactured by the respondent which have been provided by the respondent to the applicants in any form whatsoever (whether paper, electronic or otherwise) and any copies of such documents, whether in the possession of the applicants, their legal representatives or witnesses called by them, be returned to the solicitors for the respondent. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kenny. | principles relevant to an award of costs whether court should depart from the ordinary rule costs |
Subsets and Splits